Argument preview: Justices to mull pleading standard for removal
on Sep 26, 2014 at 11:18 am
As the leaves change for the fall in Washington, the Justices may cast their thoughts back to their own days studying Federal Courts in law school, when they consider Dart Cherokee Basin Operating Co. v. Owens on the second day of the Term. The question presented could have come straight out of a law-school exam.
The Class Action Fairness Act (the “CAFA”) allows defendants to remove class actions to federal courts if they involve at least one hundred putative class members and at least $5 million in controversy. The question presented is whether a notice of removal is adequate if it simply asserts the facts necessary to satisfy the jurisdictional bar, without attaching evidence that documents the truth of those facts. Because Dart had failed to do so, the Tenth Circuit held that its notice was defective. The Supreme Court has agreed to review Dart’s challenge to that holding.
Dart’s brief on the merits is succinct and to the point. Indeed, its lawyers seem to have taken the recent admonition by Chief Justice John Roberts that they should keep their briefs short to heart, and then some: its principal brief on the merits does not even fill 23 pages – that is, less than half of the normal length. And Dart packs a compelling argument into those twenty-three pages. Presumably the biggest thing Dart has going for it is the general sense that federal courts are supposed to prefer “notice” pleading, and that requirements of particularized detail are either outmoded or reserved for the specific areas covered by enactments like Rule 9 and the Private Securities Litigation Reform Act.
But specifically, Dart homes in on the statement in 28 U.S.C. § 1446(a), which states that the notice of removal need only “contain[n] a short and plain statement of the grounds for removal.” Those words, of course, call to mind the requirements in Rule 8 for “a short and plain statement” of the basis of jurisdiction and the cause of action. And Dart shows that the echo is not an accident – in 1946, the adopters of Section 1446 took its language from the 1938 version of Rule 8, which already contained the familiar phrase.
For his part, Owens emphasizes a different paragraph – Section 1446(c)(2)(B), which deals with allegations related to the amount in controversy and states that removal is proper “on the basis of an amount in controversy asserted [in the notice of removal] if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the [required threshold].” Essentially, Owens argues that subsection (c)(2) is more specifically directed at the amount in controversy allegations, while (a) is more specifically directed at the other jurisdictional allegations. Then, relying on the requirement that the district court must “fin[d], by the preponderance of the evidence” whether the threshold is met, Owens contends that the court cannot make the finding without evidence. Essentially, Owens argues that Dart’s argument inserts into (c)(2) a qualification that the finding is necessary only if the plaintiff contests the allegations.
Surely the most interesting filing in the case is the elegant amicus brief by Public Citizen in support of Owens. Public Citizen abjures any attempt to contest the merits. Rather, focusing on the odd procedure under the CAFA, Public Citizen argues that the Court in fact does not have jurisdiction to decide this case. Ordinarily, of course, the party seeking removal cannot appeal a district court order remanding the matter to state court. But in the CAFA, Congress made an exception providing that “a court of appeals may accept an appeal from an order granting” a motion to remand to state court. Procedurally, what happened here is that court of appeals did not accept the appeal, and Dart Cherokee filed a petition for a writ of certiorari seeking review of that decision.
Public Citizen argues that the court of appeals has all-but-unreviewable discretion to accept or refuse to accept an appeal, and that when it doesn’t accept the appeal the case is never “in” the court of appeals. Because the Court’s certiorari jurisdiction extends only to cases “in the courts of appeals,” Public Citizen argues, the case is beyond the Court’s reach. At most, Public Citizen contends, the Court has the ability to review the decision whether to accept an appeal, as opposed to the propriety of the underlying remand order.
Dart has a good response – that the Court a few years ago reviewed a case in the same procedural posture, without noticing any jurisdictional problem. And Dart also can emphasize the broad reach the Court often has given its jurisdictional statutes. But my sense is that the jurisdictional question will seem a lot more contestable to the Justices than the issue on the merits. We’ll have an early opportunity to see whether the Court’s new policy – taking a week after the first Conference for a second look before granting review – has reduced the need to dismiss cases from the Court’s argument calendar. The Justices surely won’t be happy if they lose both this case and Indy Mac from the October sitting!