United States District Court, N.D. Illinois, Eastern Division
MICHAEL B. JOHNSON, on behalf of himself and on behalf of those similarly situated plaintiffs, Plaintiffs,
PUSHPIN HOLDINGS, LLC, et al., Defendants.
CHARLES P. KOCORAS, District Judge.
This case comes before the Court on Plaintiff Michael B. Johnson's ("Johnson") renewed motion to remand. For the reasons set forth below, Johnson's motion is denied.
On September 11, 2013, Johnson, a North Carolina resident, filed this action, individually and on behalf of a putative class of similarly situated plaintiffs, in the Circuit Court of Cook County, Illinois ("Illinois State Court"), against Defendants Pushpin Holdings, LLC ("Pushpin"), Jay Cohen, Leonard Mezei, Ari Madoff, Alisha Ross, Louisa Tatbak, Shaun Redwood, GNC Holding, LLC ("GNC Holding"), and CIT Financial USA, Inc. ("CIT Financial") (collectively "Defendants").
Johnson alleges that on August 21, 2013, a default judgment was entered against him for $3, 660.29, in favor of Pushpin, in Cook County, Illinois. According to the Cook County Small Claims Court complaint, Pushpin originally acquired the claims against Johnson based on a lease agreement between Johnson and CIT Financial. CIT Financial later assigned its rights to GCN Holding, which were subsequently re-assigned to Pushpin.
Johnson alleges in his six-count complaint that Defendants violated the Illinois Consumer Fraud and Deceptive Business Act ("ICFA"), 815 Ill. Comp. Stat. Ann. 505/2, by filing and threatening to file lawsuits against Johnson and other members of the putative class without being properly registered as a foreign company or debt collection agency, which itself is a violation of the Illinois Collection Agency Act ("ICEA"), 225 Ill. Comp. Stat. Ann. 425/1. Johnson also alleges malicious prosecution, abuse of process and fraud.
Defendants removed the case pursuant to 28 U.S.C. §§ 1446 and 1453, premising federal jurisdiction on the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). Johnson sought the remand of this case back to Illinois State Court arguing that the class claims were less that the requisite minimum $5 million threshold to maintain a CAFA suit in federal court. See 28 U.S.C. § 1332(d)(2). On February 21, 2014 this Court granted Johnson's motion for remand and subsequently Pushpin appealed. See Johnson v. Pushpin Holdings, LLC, 2014 WL 702316 (N.D. Ill. Feb. 21, 2104). On May 1, 2014, the Seventh Circuit reversed this Court's determination that remand was appropriate, concluding that absent Johnson's irrevocable commitment to obtain less than $5 million for the class, Defendants' representations concerning the estimated damages recoverable by the class warrant further consideration. In its remand order, the Seventh Circuit stated, "[t]he judge will have to determine anew whether the amount in controversy reaches the statutory minimum, thus barring remand." Johnson v. Pushpin Holdings, LLC, 748 F.3d 769, 773 (7th Cir. 2014).
Under CAFA, a defendant may remove a class action to federal court as long as the case satisfies the statute's special diversity and procedural requirements. CAFA vested district courts with original jurisdiction over any class action where the amount in controversy exceeds the sum or value of $5, 000, 000 (exclusive of interest and costs) and where there is minimal or incomplete diversity of citizenship among the parties. 28 U.S.C. § 1332(d)(2). The proper protocol for assessing removal claims was laid out in Brill v. Counrtywide Home Loan, Inc., 427 F.3d 446 (7th Cir. 2005). The removing party, as the proponent of federal jurisdiction, bears the burden of describing how the controversy exceeds $5 million. This is a pleading requirement, not a demand for proof. See Id. at 448. A removing defendant does not need to "confess liability in order to show that the controversy exceeds the threshold." Id. at 449. "[T]he 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.... The demonstration concerns what the plaintiff is claiming (and thus the amount in controversy between the parties), not whether the plaintiff is likely to win or be awarded everything he seeks." Id.
Once the proponent of federal jurisdiction has explained the plausibility of the defendants liability exceeding $5 million, cf. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), then the case belongs in federal court unless it is legally impossible for the plaintiff to recover that much. ABM Security Services, Inc. v. Davis, 646 F.3d 475, 478 (7th Cir. 2011).
Johnson renews his motion to remand by arguing that removal of this case to federal court was defective, due to the lack of subject matter jurisdiction under CAFA. Johnson's continued protestations are based on the Defendants' alleged failure to establish that Johnson's collective class claims could clear the $5 million threshold and meet CAFA's federal jurisdictional requirements. At the outset it is important to note that Johnson's complaint does not set a cap on recovery of under $5 million, nor does the complaint include a stipulation or affidavit limiting recovery to under $5 million. Absent an "irrevocable commitment to obtain less than $5 million dollars for the class" the Court must determine the validity of Defendants' arguments concerning the plausibility of Johnson's potential recovery. Johnson, 748 F.3d at 773.
Johnson is adamant that his calculations of fees are correct, including:
(1) compensatory damages, $355, 407.62; (2) recoverable attorney's fees and litigation expenses, $33, 311.66; and (3) the maximum permissible punitive damages, using 9:1 multiplier, (9 × $355, 407.62) $3, 198, 668.58; totals $3, 587, 387.86, which represents the maximum amount that the class could recover and supports remand back to Illinois State Court. However Johnson's calculations are ...