SW Legal studies in Business

All Parts of Class Action Test Must Be Met for Removal to Federal Court
Description

Appeals court held that a federal district court properly refused to remove a class action suit from state court to federal court. Federal law allows removal if the amount in controversy exceeds $5 million. Defendant failed to show that much was likely to be at stake, so the suit will be heard in state court.

Topic Court Procedure
Key Words

Class Action; Class Action Fairness Act; Amount in Controversy

C A S E   S U M M A R Y
Facts

Amoche and others sued GTL, an insurance company, in New Hampshire state court, alleging that GTL owed refunds for a part of their credit insurance premiums. Amoche sought to represent a class of New Hampshire consumers who were due similar refunds under the terms of their policies. GTL filed a notice of removal, claiming federal jurisdiction under the Class Action Fairness Act (CAFA). The federal district court granted the plaintiffs’ motion to remand the case to state court. GTL appealed.

Decision

Affirmed. CAFA provides for removal to federal court of state class actions that satisfy the statute’s diversity and class size requirements and have more than $5million in controversy. The defendant, GTL, has the burden of showing federal jurisdiction. Here, there was diversity of citizenship and a class of adequate size, but GTL could not show with “reasonable probability” that the amount in controversy exceeded $5 million. The trial court properly reviewed the evidence by both parties as to the amount in controversy and found the $5 million requirement unlikely to hold.

Citation

Amoche v. Guarantee Trust Life Insurance Co., 556 F.3d 41 (1st Cir., 2009)

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