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Hall v. Triad Financial Services

October 10, 2007

MICHAEL A. HALL, INDIVIDUALLY AND ON BEHALF OF ALL OTHER PEOPLE SIMILARLY SITUATED, PLAINTIFF,
v.
TRIAD FINANCIAL SERVICES, INC. DEFENDANT.



The opinion of the court was delivered by: Reagan, District Judge

MEMORANDUM AND ORDER

A. Introduction and Background

On February 2, 2007, Michael Hall filed a putative class action suit against Triad Financial Services in Marion County, Illinois. Hall alleged that Triad: (1) wrongfully repossessed manufactured homes without notice, (2) wrongfully resold repossessed manufactured homes without notice, and (3) wrongfully resold repossessed manufactured homes below their fair market values to favored dealers in order to drive up the deficiency. For each violation, Hall requested compensatory and punitive damages. Hall also requested injunctive relief against Triad.

Triad was served with the complaint on February 12, 2007. On March 14, 2007, Triad timely filed a notice of removal in this Court claiming that the jurisdictional requirements of the Class Action Fairness Act (CAFA) were satisfied.

Hall moved to remand the case to state court on March 27, 2007 and argued that Triad failed to meet its burden of proof on the issue of the amount in controversy. On October 5, 2007, the Court held a hearing on the motion to remand. For the reasons stated below, the Court GRANTS the motion.

B. Analysis

CAFA and the Burden of Proof

CAFA gives federal district courts original jurisdiction over class actions in which:

(1) the proposed classes have at least 100 members in the aggregate, (2) the amount in controversy exceeds $5 million, exclusive of interest and costs, and (3) minimal diversity of citizenship exists between the parties. 28 U.S.C. § 1332(d)(2); Hart v. FedEx Ground Package System, Inc., 457 F.3d 675, 677 (7th Cir. 2006). Consequently, such cases may be removed to federal court under 28 U.S.C. § 1441, which states: any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

The party seeking removal bears the burden of establishing that all requirements for federal jurisdiction are satisfied. Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005). The proponent of federal jurisdiction must show by a preponderance of the evidence that the amount in controversy requirement is met. Oshana v. Coca-Cola Co., 472 F.3d 506, 511 (7th Cir. 2006). Where the complaint is silent as to the amount of damages and does not state that the class will seek an amount below the jurisdictional minimum, the removing party must provide a "good-faith estimate of the stakes" that is plausible and supported by a preponderance of the evidence. Id.; Brill, 427 F.3d at 449 ("part of the removing party's burden is to show not only what the stakes of the litigation could be, but also what they are given the plaintiff's actual demands"). "Once the proponent of jurisdiction has set out the amount in controversy, only a 'legal certainty' that the judgment will be less forecloses federal jurisdiction." Brill, 427 F.3d at 448 (citing St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938); Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955 (7th Cir. 1998)).

The amount in controversy is determined by evaluating the plaintiff's complaint "and the record as a whole." Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 404 (7th Cir. 2004) (citing Uhl v. Thoroughbred Tech. & Telecommunications, Inc., 309 F.3d 97, 983 (7th Cir. 2002)). The Court may examine only the evidence which was available when the case was removed, or which sheds light on the situation existing at the moment of removal. Harmon v. OKI Systems, 115 F.3d 477, 479-80 (7th Cir. 1997).

In the case at bar, Triad, the removing party, has failed to show by a preponderance of the evidence that the amount in controversy exceeds $5 million.

Damages Under Counts 1 and 2

Hall alleges three classes in his complaint: (A) Illinois residents whose homes have been repossessed without adequate notice within the past ten years, (B) Illinois residents whose repossessed homes have been sold by Triad without adequate notice within the past ten years, and (C) Illinois residents whose repossessed homes have been sold for ...


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