The Eighth Circuit recently held that a district court “applied the wrong legal standard” when it remanded a case after removal under the Class Action Fairness Act (“CAFA”). In Leflar v. Target Corp.,[1] the district court held that “all doubts about federal jurisdiction” must be in favor of remand. While this presumption may apply to “mine-run diversity cases,” the Eighth Circuit reinforced that no anti-removal presumption applies under CAFA.
The district court then “compounded its error” by erring in its analysis of the amount-in-controversy. In Leflar,the complaint alleges that Target violated the Magnuson-Moss Warranty Act’s Pre-Sale Availability Rule (“PSAR”). The PSAR requires a seller to make available written warranties on certain consumer products before sale. The complaint requested only injunctive relief. Target supported removal with two declarations containing sales information and one post-removal declaration estimating compliance costs at $7.5 million. The district court did not “mention . . . the post-removal declaration”. The Eighth Circuit ruled that, through this omission, the district court “effectively denied” Target its opportunity at removal.
The Eighth Circuit did not expressly hold that the two declarations containing sales information were enough to satisfy the amount-in-controversy. After mentioning the $1.58 million in laptop sales and over $5 million in television and accessories sales, the Eighth Circuit noted that “[n]either convinced the court that the amount in controversy exceeded $5 million.”
The Eighth Circuit’s decision is good for any defendant who faces a class action in state court. Moreover, given that the requested relief was an injunction, this decision further supports that relying on sales figures is a viable option for removal when only injunctive relief is requested.
[1] Leflar v. Target Corp., No. 22-3468 (8th Cir. Jan. 9, 2023).