In Rodriguez v. AT&T Mobility Services LLC, ___ F.3d ___ (9th Cir. Aug. 27, 2013), the Ninth Circuit construed the U.S. Supreme Court's first, and so far only, CAFA decision, Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345 (2013) (discussed in this blog post).
Standard Fire addressed whether the plaintiff could avoid federal jurisdiction under CAFA by stipulating that classwide damages did not exceed $5 million or by attempting to waive damages above that figure. The answer was no, although this did not relieve the defendant (as the removing party) of its burden to prove that the amount-in-controversy requirement was met.
In Rodriguez, the parties agreed that Standard Fire required reversal of the district court's remand order, which was issued before the opinion in Standard Fire. The Ninth Circuit directed the district court to reconsider the remand motion. Slip op. at 7.
Regarding the burden of proof, the panel determined that Standard Fire overruled Lowdermilk v. U.S. Bank National Association, 479 F.3d 994 (9th Cir. 2007) (discussed here), which had imposed a "legal certainty" standard, instead of an ordinary preponderance of the evidence standard, for countering the complaint's amount-in-controversy allegations:
The reasoning behind Lowdermilk's imposition of the legal certainty standard is clearly irreconcilable with Standard Fire. We hold that Standard Fire has so undermined the reasoning of our decision in Lowdermilk that the latter has been effectively overruled. A defendant seeking removal of a putative class action must demonstrate, by a preponderance of evidence, that the aggregate amount in controversy exceeds the jurisdictional minimum. This standard conforms with a defendant's burden of proof when the plaintiff does not plead a specific amount in controversy.
A lead plaintiff of a putative class cannot reduce the amount in controversy on behalf of absent class members, so there is no justification for assigning to the allegation weight so significant that it affects a defendant's right to a federal forum under § 1332(d)(2). Our reasons for applying a legal certainty standard are now clearly irreconcilable with intervening Supreme Court authority. Accordingly, Lowdermilk has been effectively overruled by Standard Fire.
Slip op. at 14, 15.
Back when Standard Fire was first handed down, a blog reader emailed me to suggest that it overruled Lowdermilk. It turns out this reader was right on according to Rodriguez.