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Dart Cherokee Basin Operating Co., LLC v. Owens - 574 U.S. 81, 135 S. Ct. 547 (2014)

Rule:

When a plaintiff invokes federal-court jurisdiction, the plaintiff’s amount-in-controversy allegation is accepted if made in good faith. 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.

Facts:

Respondent Owens filed a putative class action seeking compensation for damages class members allegedly sustained when petitioners underpaid royalties due under certain oil and gas leases. Petitioner Dart removed the case to the Federal District Court, invoking the Class Action Fairness Act of 2005 (CAFA), which gives federal courts jurisdiction over class actions if the amount in controversy exceeds $5 million. Petitioner purported that the underpayments totaled $8.2 million. The district court granted respondent’s remand motion. Petitioner appealed.

Issue:

Did the district court err in ruling that petitioner’s amount-in-controversy allegation failed for want of proof?

Answer:

Yes.

Conclusion:

The court held that as specified in §1446(a), or the procedure for removal of civil actions, a defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold; the notice need not contain evidentiary submissions. The district court erred in remanding this case for want of an evidentiary submission in the notice of removal, and, erred in ruling that petitioner’s amount-in-controversy allegation failed for want of proof.

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