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Spivey v. Vertrue

April 8, 2008

QUINTEN E. SPIVEY, INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
VERTRUE, INC., DEFENDANT.



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

MEMORANDUM AND ORDER

Before the Court is Plaintiff's Motion to Remand (Doc. 11). The matter is fully briefed and ready for disposition.

I. Factual Background/Procedural History

On November 2, 2007, Defendant Vertrue, Inc., ("Vertrue") removed this action from the Circuit Court, Twentieth Judicial Circuit, Monroe County, Illinois. This putative nationwide class action is based on Vertrue's alleged unlawful and deceptive membership billing practices.

Plaintiff alleges that Vertrue, which describes itself as an "integrated marketing services company," markets and sells at least 22 membership programs which purport to provide savings on various consumer goods and services. Complaint, ¶¶ 10, 11, 15. For these memberships, Vertrue charges monthly fees ranging from approximately $9.95 to $19.95 or annual fees ranging from approximately $169.95 to $199.95. Id. at ¶ 11. Plaintiff alleges that there is little or no demand for Vertrue's membership discounts, and Vertrue's success as a business enterprise depends on its ability to "cram" consumers with membership charges. Id. at ¶ 12. This cramming consisted of imposing its membership fees directly against consumers' credit cards, debit cards and bank accounts without consumers' knowledge or authorization. Id. at ¶ 13. Vertrue also made it virtually impossible for consumers to cancel their memberships and, thus, to discontinue repeated unauthorized charges to their accounts. Id. at ¶ 14.

Plaintiff asserts claims under the Illinois Consumer Fraud Act, 815 ILCS 505/1, et seq., the Illinois Credit Card and Debit Card Act, 720 ILCS 250/1, et seq. and for unjust enrichment and conversion. The Plaintiff class is identified as

All Illinois residents whose credit cards, debit cards, or bank accounts were billed for one of more of Vertrue's memberships during the period from September 25, 2002 to the present without either written authorization or recorded verbal authorization.

Plaintiff seeks remand of this action to state court, contending that Vertrue's removal relied exclusively on 28 U.S.C. § 1332(d)(2)(A), as modified by the Class Action Fairness Act of 2005 ("CAFA"), but Vertrue failed to present competent evidence that the amount in controversy equals or exceeds the $5 million necessary to invoke the CAFA. As a result, this Court lacks subject matter jurisdiction and should remand this action to state court.

II. Legal standards

A. Removal

Removal of actions from state court to federal court is governed by 28 U.S.C. § 1441, which provides that "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." 28 U.S.C. § 1441(a). The defendant has the burden of establishing that an action is removable, and doubts concerning removal must be resolved in favor of remand to the state court. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005).

B. Diversity Jurisdiction under the CAFA

Under the CAFA, federal courts have jurisdiction in diversity, with exceptions not at issue here, see 28 U.S.C. § 1332(d)(3), (d)(4), (d)(5), (d)(9), over class actions with one hundred or more class members, see 28 U.S.C. § 1332(d)(5)(B), in which any member of the plaintiff class is a citizen of a state different from that of any defendant, or any member of a plaintiff class or any defendant is a foreign state or a citizen or subject of a foreign state. See 28 U.S.C. § 1332(d)(2). In a class action in which the CAFA's requirement of minimal diversity is met, a federal court has jurisdiction if, after aggregating class members' claims, more than $5 million, exclusive of interest and costs, is in controversy. See 28 U.S.C. ...


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