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SUPREME COURT OF THE UNITED STATES
_________________
No. 13–719
_________________
DART CHEROKEE BASIN OPERATING COMPANY, LLC, et al.,
PETITIONERS
v. BRANDON W. OWENS
on writ of certiorari to the united states court of appeals for
the tenth circuit
[December 15, 2014]
Justice Ginsburg delivered the opinion of the Court.
To remove a case from a state court to a federal court, a
defendant must file in the federal forum a notice of removal
“containing a short and plain statement of the grounds for
removal.”28 U. S. C. §1446(a). When re-moval is based on diversity
of citizenship, an amount-in-controversy requirement must be met.
Ordinarily, “the matter in controversy [must] excee[d] the sum or
value of $75,000.” §1332(a). In class actions for which the
requirement of diversity of citizenship is relaxed,
§1332(d)(2)(A)–(C), “the matter in controversy [must] excee[d]the
sum or value of $5,000,000,” §1332(d)(2). If theplaintiff’s
complaint, filed in state court, demands mon-etary relief of a
stated sum, that sum, if asserted ingood faith, is “deemed to be
the amount in controversy.” §1446(c)(2). When the plaintiff’s
complaint does not state the amount in controversy, the defendant’s
notice of removal may do so. §1446(c)(2)(A).
To assert the amount in controversy adequately in the removal
notice, does it suffice to allege the requisite amount plausibly,
or must the defendant incorporate into the notice of removal
evidence supporting the allegation? That is the single question
argued here and below by the parties and the issue on which we
granted review. The answer, we hold, is supplied by the removal
statute itself. A statement “short and plain” need not contain
evidentiary submissions.
I
Brandon W. Owens, plaintiff below and respondent here, filed a
putative class action in Kansas state court alleging that
defendants Dart Cherokee Basin Operating Company, LLC, and Cherokee
Basin Pipeline, LLC (collectively, Dart), underpaid royalties owed
to putative class members under certain oil and gas leases. The
complaint sought “a fair and reasonable amount” to compensate
putative class members for “damages” they sustained due to the
alleged underpayments. App. to Pet. for Cert. 34a, 35a.
Invoking federal jurisdiction under the Class Action Fairness
Act of 2005 (CAFA), Dart removed the case to the U. S.
District Court for the District of Kansas. CAFA gives federal
courts jurisdiction over certain class actions, defined in
§1332(d)(1), if the class has more than 100 members, the parties
are minimally diverse, and the amount in controversy exceeds $5
million. §1332(d)(2), (5)(B); see
Standard Fire Ins. Co. v.
Knowles, 568 U. S. ___, ___ (2013) (slip op., at 3).
Dart’s notice of removal alleged that all three requirements were
satisfied. With respect to the amount in controversy, Dart stated
that the purported underpayments to putative class members totaled
more than $8.2 million.
Owens moved to remand the case to state court. The notice of
removal was “deficient as a matter of law,”Owens asserted, because
it included “no evidence” proving that the amount in controversy
exceeded $5 million. App. to Pet. for Cert. 46a, 53a. In response,
Dart submitted a declaration by one of its executive officers. The
declaration included a detailed damages calculation indicating that
the amount in controversy,
sans interest, exceeded $11
million. Without challenging Dart’s calculation,Owens urged that
Dart’s amount-in-controversy submissioncame too late. “[The]
legally deficient [notice of removal],” Owens maintained, could not
be cured by “post-removal evidence about the amount in
controversy.”
Id., at 100a.
Reading Tenth Circuit precedent to require proof ofthe amount in
controversy in the notice of removal itself, the District Court
granted Owens’ remand motion. Dart’sdeclaration, the District Court
held, could not serve to keep the case in federal court. The Tenth
Circuit, as the District Court read Circuit precedent, “has
consistently held that reference to factual allegations or evidence
out-side of the petition and notice of removal is not permitted to
determine the amount in controversy.” App. to Pet.for Cert. 26a,
and n. 37 (citing
Laughlin v.
Kmart Corp., 50
F. 3d 871, 873 (1995);
Martin v.
Franklin Capital
Corp., 251 F. 3d 1284, 1291, n. 4 (2001);
Oklahoma
Farm Bureau Mut. Ins. Co. v.
JSSJ Corp., 149 Fed. Appx.
775 (2005)).
Ordinarily, remand orders “[are] not reviewable on appeal or
otherwise.” §1447(d). There is an exception, however, for cases
invoking CAFA. §1453(c)(1). In such cases, “a court of appeals may
accept an appeal from an order of a district court granting or
denying a motion to remand.”
Ibid. Citing this exception,
Dart petitioned the Tenth Circuit for permission to appeal. “Upon
careful consideration of the parties’ submissions, as well as the
applicable law,” the Tenth Circuit panel, dividing two-to-one,
denied review. App. to Pet. for Cert. 13a–14a.
An evenly divided court denied Dart’s petition for en banc
review. Dissenting from the denial of rehearing en banc, Judge
Hartz observed that the Tenth Circuit “[had] let stand a
district-court decision that will in effect impose in this circuit
requirements for notices of removal that are even more onerous than
the code pleading requirements that . . . federal courts
abandoned long ago.” 730 F. 3d 1234 (2013). The Tenth Circuit
was duty-bound to grant Dart’s petition for rehearing en banc,
Judge Hartz urged, because the opportunity “to correct the law in
our circuit” likely would not arise again.
Id., at 1235.
Henceforth, Judge Hartz explained, “any diligent attorney
. . . would submit to the evidentiary burden rather than
take a chance on remand to state court.”
Ibid.
Dart filed a petition for certiorari in this Court requesting
resolution of the following question: “Whether a defendant seeking
removal to federal court is required to include evidence supporting
federal jurisdiction in the notice of removal, or is alleging the
required ‘short and plain statement of the grounds for removal’
enough?” Pet. for Cert. i. Owens’ brief in opposition raised no
impediment to this Court’s review. (Nor, later, did Owens’ merits
brief suggest any barrier to our consideration of Dart’s petition.)
We granted certiorari to resolve a division among the Circuits on
the question presented. 572 U. S. ___ (2014). Compare
Ellenburg v.
Spartan Motors Chassis, Inc., 519
F. 3d 192, 200 (CA4 2008) (a removing party’s notice of
removal need not “meet a higher pleading standard than the one
imposed on a plaintiff in drafting an initial complaint”), and
Spivey v.
Vertrue, Inc., 528 F. 3d 982, 986 (CA7
2008) (similar), with
Laughlin, 50 F. 3d, at 873 (“the
requisite amount in controversy . . . must be
affirmatively established on the face of either the petition or the
removal notice”).
II
As noted above, a defendant seeking to remove a case to a
federal court must file in the federal forum a notice of removal
“containing a short and plain statement of the grounds for
removal.” §1446(a). By design, §1446(a) tracks the general pleading
requirement stated in Rule 8(a) of the Federal Rules of Civil
Procedure. See 14C C. Wright, A. Miller, E. Cooper, & J.
Steinman, Federal Practice and Procedure §3733, pp. 639–641 (4th
ed. 2009) (“Section 1446(a) requires only that the grounds for
removal be stated in ‘a short and plain statement’—terms borrowed
from the pleading requirement set forth in Federal Rule of Civil
Procedure 8(a).”). The legislative history of §1446(a) is
corroborative. Congress, by borrowing the familiar “short and plain
statement” standard from Rule 8(a), intended to “simplify the
‘pleading’ requirements for removal” and to clarify that courts
should “apply the same liberal rules [to removal allegations] that
are applied to other matters of pleading.” H. R. Rep. No.
100–889, p. 71 (1988). See also
ibid. (disapproving
decisions requiring “detailed pleading”).
When a plaintiff invokes federal-court jurisdiction, the
plaintiff’s amount-in-controversy allegation is accepted if made in
good faith. See,
e.g.,
Mt. Healthy City Bd. of Ed. v.
Doyle,429 U. S. 274,276 (1977) (“ ‘[T]he sum
claimed by the plaintiff controls if the claim is apparently made
in good faith.’ ”) (quoting
St. Paul Mercury Indemnity
Co. v.
Red Cab Co.,303 U. S. 283,288 (1938);
alteration in original). Similarly, when a defendant seeks
federal-court adjudication, the defendant’s amount-in-controversy
allegation should be accepted when not contested by the plaintiff
or questioned by the court. Indeed, the Tenth Circuit, although not
disturbing prior decisions demanding proof together with the
removal notice, recognized that it was anomalous to treat
commencing plaintiffs and removing defendants differently with
regard to the amount in controversy. See
McPhail v.
Deere
& Co., 529 F. 3d 947, 953 (2008) (requiring proof by
defendant but not by plaintiff “bears no evident logical
relationship either to the purpose of diversity jurisdiction, or to
the principle that those who seek to invoke federal jurisdiction
must establish its prerequisites”).
If the plaintiff contests the defendant’s allegation,
§1446(c)(2)(B) instructs: “[R]emoval . . . is proper on
the basis of an amount in controversy asserted” by the defendant
“if the district court finds, by the preponderance of the evidence,
that the amount in controversy exceeds” the jurisdictional
threshold.[
1] This provision, added to §1446 as
part of the Federal Courts Jurisdiction and Venue Clarification Act
of 2011 (JVCA), clarifies the procedure in order when a defendant’s
assertion of the amount in controversy is challenged. In such a
case, both sides submit proof and the court decides, by a
preponderance of the evidence, whether the amount-in-controversy
requirement has been satisfied. As the House Judiciary Committee
Report on the JVCA observed:
“[D]efendants do not need to prove to a legal certainty that the
amount in controversy requirement has been met. Rather, defendants
may simply allege or assert that the jurisdictional threshold has
been met. Discovery may be taken with regard to that question. In
case of a dispute, the district court must make findings of
jurisdictional fact to which the preponderance standard applies.”
H. R. Rep. No. 112–10, p. 16 (2011).
Of course, a dispute about a defendant’s jurisdictional
allegations cannot arise until
after the defendant files a
notice of removal containing those allegations. Brief for Dart
14.
In remanding the case to state court, the District Court relied,
in part, on a purported “presumption” against removal. App. to Pet.
for Cert. 28a. See,
e.g.,
Laughlin, 50 F. 3d, at
873 (“[T]here is a presumption against removal jurisdiction.”). We
need not here decide whether such a presumption is proper in
mine-run diversity cases. It suffices to point out that no
antiremoval presumption attends cases invoking CAFA, which Congress
enacted to facilitate adjudication of certain class actions in
federal court. See
Standard Fire Ins. Co., 568 U. S.,
at ___ (slip op., at 6) (“CAFA’s primary objective” is to “ensur[e]
‘Federal court consideration of interstate cases of national
importance.’ ” (quoting §2(b)(2),119Stat.5)); S. Rep. No.
109–14, p. 43 (2005) (CAFA’s “provisions should be read broadly,
with a strong preference that interstate class actions should be
heard in a federal court if properly removed by any
defendant.”).
In sum, as specified in §1446(a), a defendant’s notice of
removal need include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold. Evidence
establishing the amount is required by §1446(c)(2)(B) only when the
plaintiff contests, or the court questions, the defendant’s
allegation.
III
As in
Standard Fire Ins. Co., 568 U. S., at ___–___
(slip op., at 2–3), we granted review in this case after the Court
of Appeals declined to hear an appeal from a remand order. Neither
party in that case or in this one questioned our review authority
under28 U. S. C. §1254(1) (“Cases in the courts of
appeals may be reviewed . . . [b]y writ of certiorari
upon the petition of any party . . . before or after
rendition of judgment.”).[
2] An
amicus
brief filed in support of Owens by Public Citizen, Inc., however,
raised a jurisdictional impediment.
Section 1453(c)(1), Public Citizen noted, provides that “a court
of appeals
may accept an appeal from an order ofa district
court granting or denying a motion to remand a class action to the
State court from which it was removed[.]” (Emphasis added.) Because
court of appeals review of a remand order is discretionary, see
supra, at 3, and the Tenth Circuit exercised its discretion
to deny review, Public Citizen urged, “[b]oth parties ask this
Court to decide an issue that is not properly before it.” Brief for
Public Citizen 6. “Absent grounds for reversing the court of
appeals’ decision to deny permission to appeal,” Public Citizen
asserted, “the merits of the district court’s decision are not
before any appellate court, including this one.”
Ibid.
Satisfied that there are indeed “grounds for reversing the
[Tenth Circuit’s] decision to deny permission to appeal,” we find
no jurisdictional barrier to our settlement of the question
presented. The case was “in” the Court of Appeals because of Dart’s
leave-to-appeal application, and we have jurisdiction to review
what the Court of Appeals did with that application. See28
U. S. C. §1254;
Hohn v.
United States,524
U. S. 236,248 (1998). Owens, we reiterate, did not contest the
scope of our review.
Discretion to review a remand order is not rudderless. See
Highmark Inc. v.
Allcare Health Management System,
Inc., 572 U. S. ___, ___ (2014) (slip op., at 4) (“matters
of discretion are reviewable for abuse of discretion” (internal
quotation marks omitted)). A court “would necessarily abuse its
discretion if it based its ruling on an erroneous view of the law.”
Cooter & Gell v.
Hartmarx Corp.,496 U. S.
384,405 (1990). This case fits that bill.[
3]
There are many signals that the Tenth Circuit relied on the
legally erroneous premise that the District Court’s decision was
correct. In an earlier case, the Tenth Circuit, following the First
Circuit’s lead, stated considerations that it regards as relevant
to the intelligent exercise of discretion under §1453(c)(1).
BP
America, Inc. v.
Okla-homa ex rel. Edmondson, 613
F. 3d 1029, 1034–1035 (2010)(adopting factors set out in
College of Dental Surgeons of Puerto Rico v.
Connecticut
Gen. Life Ins. Co., 585 F. 3d 33, 38–39 (CA1
2009)).[
4] When the CAFA-related question
presented in an appeal from a remand order is “important,
unsettled, and recurrent,” the First Circuit instructed, a court of
appeals should inquire: “Absent an interlocutory appeal, [will the
question] in all probability escape meaningful appellate review.”
Id., at 39. Or, as phrased by the Tenth Circuit, if a
district court’s remand order remains undisturbed, will the case
“leave the ambit of the federal courts for good, precluding any
other opportunity for [the defendant] to vindicate its claimed
legal entitlement [under CAFA] . . . to have a federal
tribunal adjudicate the merits.”
BP America, 613 F. 3d,
at 1035. See also
Coffey v.
Freeport McMoran Copper &
Gold, 581 F. 3d 1240, 1247 (CA10 2009) (noting that “the
purpose of §1453(c)(1) isto develop a body of appellate law
interpreting CAFA”(brackets and internal quotation marks omitted)).
Thus, the Tenth Circuit’s own guide weighed heavily in favor of
accepting Dart’s appeal. That the Court of Appeals, instead,
rejected Dart’s appeal strongly suggests that the panel thought the
District Court got it right in requiring proof of the amount in
controversy in the removal notice.
In practical effect, the Court of Appeals’ denial of review
established the law not simply for this case, but for future CAFA
removals sought by defendants in the Tenth Circuit. The likelihood
is slim that a later case will arise in which the Tenth Circuit
will face a plea to retract the rule that both Owens and the
District Court ascribed to decisions of the Court of Appeals:
Defendants seeking to remove under CAFA must be sent back to state
court unless they submit with the notice of removal evidence
proving the alleged amount in controversy. See
supra, at 3.
On this point, Judge Hartz’s observation, dissenting from the Tenth
Circuit’s denial of rehearing en banc, see
supra, at 4,
bears recounting in full:
“After today’s decision any diligent attorney (and one can
assume that an attorney representing a defendant in a case
involving at least $5 million—the threshold for removal under
CAFA—would have substantial incentive to be diligent) would submit
to the evidentiary burden rather than take a chance on remand to
state court.” 730 F. 3d, at 1235.
With no responsible attorney likely to renew the fray, Judge
Hartz anticipated, “the issue will not arise again.”
Ibid.
Consequently, the law applied by the District Court—demanding that
the notice of removal contain evidence documenting the amount in
controversy—will be frozen in place for all venues within the Tenth
Circuit.[
5]
Recall that the Court of Appeals denied Dart’s petition for
review “[u]pon careful consideration of the parties’ submissions,
as well as the applicable law.” App. to Pet. for Cert. 13a. What
did the parties submit to the Tenth Circuit? Their presentations
urged conflicting views on whether a removing defendant must tender
prima facie proof of the amount in controversy as part of the
removal notice. And what was “the applicable law” other than the
rule recited by the Tenth Circuit in
Laughlin and follow-on
decisions,
i.e., to remove successfully, a defendant must
present with the notice of removal evidence proving the amount in
controversy.[
6]
From all signals one can discern then, the Tenth Circuit’s
denial of Dart’s request for review of the remand order was
infected by legal error. The District Court erred in ruling that
Dart’s amount-in-controversy allegation failed for want of proof,
but that error was driven by the District Court’s conscientious
endeavor to follow Circuit precedent. The parties trained their
arguments in the Tenth Circuit, as they did here, on the question
whether Dart could successfully remove without detailing in the
removal notice evidence of the amount in controversy. See Tr. of
Oral Arg. 47 (acknowledgment by Owens’ counsel that “the issues
. . . provided to . . . the Tenth Circuit were
very similar to what you see in this Court, with the exception of
[the question raised by Public Citizen] whether this Court has
jurisdiction”). Dissenting from the denial of rehearing en banc,
Judge Hartz explained at length why the Tenth Circuit “owe[d] a
duty to the bench and bar” to correct the District Court’s
misperception and to state as the Circuit’s law: “[A] defendant
seeking removal under CAFA need only allege the jurisdictional
amount in its notice of removal and must prove that amount only if
the plaintiff challenges the allegation.” 730 F. 3d, at 1234,
1238. In this regard, we note, the Tenth Circuit has cautioned
against casual rulings on applications like Dart’s. “The decision
whether to grant leave to appeal” under §1453(c), the Tenth Circuit
stressed, calls for the exercise of the reviewing court’s correctly
“
informed discretion.”
BP America, 613 F. 3d, at
1035 (emphasis added); see
supra, at 8–9.
Recall, moreover, that Owens never suggested in his written
submissions to this Court that anything other than the question
presented accounts for the Court of Appeals’ disposition. If Owens
believed that the Tenth Circuit’s denial of leave to appeal rested
on some other ground, he might have said so in his brief in
opposition or, at least, in his merits brief. See this Court’s Rule
15.2;
Granite Rock Co. v.
Teamsters,561 U. S.
287,306 (2010). He said nothing of that order, for he, like Dart,
antici-pated that the question presented was ripe for this Court’s
resolution.
In the above-described circumstances, we find it an abuse of
discretion for the Tenth Circuit to deny Dart’s request for review.
Doing so froze the governing rule in the Circuit for this case and
future CAFA removal notices, with no opportunity for defendants in
Dart’s position responsibly to resist making the evidentiary
submission. That situation would be bizarre for a decisionmaker who
did not think that the amount in controversy in diversity cases is
a matter a removal notice must demonstrate by evidence, not merely
credibly allege.[
7] And if the Circuit precedent
on which the District Court relied misstated the law, as we hold it
did, then the District Court’s order remanding this case to the
state court is fatally infected by legal error.
Careful inspection thus reveals that the two issues Public
Citizen invites us to separate—whether the Tenth Circuit abused its
discretion in denying review, and whether the District Court’s
remand order was erroneous—do not pose genuinely discrete
questions. Instead, resolution of both issues depends on the answer
to the very same question: What must the removal notice contain? If
the notice need not contain evidence, the Tenth Circuit abused its
discretion in effectively making the opposing view the law of the
Circuit. By the same token, the District Court erred in remanding
the case for want of an evidentiary submission in the removal
notice. We no doubt have authority to review for abuse of
discretion the Tenth Circuit’s denial of Dart’s appeal from the
District Court’s remand order, see
supra, at 8, and in doing
so, to correct the erroneous view of the law the Tenth Circuit’s
decision fastened on district courts within the Circuit’s
domain.[
8]
* * *
For the reasons stated, the judgment of the U. S. Court of
Appeals for the Tenth Circuit is vacated, and the case is remanded
for further proceedings consistent with this opinion.
It is so ordered.