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Redman v. 5 Star Flash, Inc.

United States District Court, N.D. Illinois, Eastern Division

October 5, 2016

SCOTT D.H. REDMAN, individually and on behalf of all others similarly situated, Plaintiff,
5 STAR FLASH, INC., an Illinois corporation; E & E TAXI COMPANY, an Illinois corporation; BOULEVARD CORP., an Illinois corporation; MIKHALIACABS SIX, INC., an Illinois corporation; BLUE RIBBON TAXI ASSOCIATION, INC., an Illinois corporation; SBJ CAB CO., an Illinois corporation; and CREATIVE MOBILE TECHNOLOGIES, LLC a New York limited liability company; and VERIFONE, INC., a Delaware corporation, each individually and on behalf of others similarly situated, Defendants.



         Scott D.H. Redman (“Redman”) brought this putative class action suit against Defendants 5 Star Flash, Inc. (“Five Star”), E & E Taxi Company (“E & E”), Boulevard Corp. (“Boulevard”), Mikhalia Cabs Six, Inc. (“Mikhalia”), Blue Ribbon Taxi Association, Inc. (“Blue Ribbon”), SBJ Cab Co. (“SBJ”), Creative Mobile Technologies, LLC (“CMT”), and Verifone, Inc. (“Verifone”) in the Circuit Court of Cook County. He alleges violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/1 et seq., or alternatively, unjust enrichment, arising out of Defendants' collection of an extra fee when Redman and the putative class members paid for their taxi fares by non-cash, electronic means. Redman seeks actual and punitive damages, in addition to attorneys' fees, costs, and prejudgment interest. CMT removed the case pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Redman now moves to remand this case to the Circuit Court of Cook County. Because CMT has failed to provide a good-faith estimate that the amount in controversy meets CAFA's $5 million jurisdictional minimum, the Court remands this case to the Circuit Court of Cook County.


         Redman, an Illinois resident and frequent taxicab rider, noticed an extra fifty cent charge on his taxicab receipt any time he paid his fare by credit or debit card. These fifty cent charges were often labeled “Fee” or “Tech.” See Doc. 1-1 at 13 (sample copies of Redman's taxicab receipts). Redman incurred these charges while riding in taxicabs either licensed to or affiliated with 5 Star, E&E, Boulevard, Mikhalia, Blue Ribbon, and SBJ. He paid the fee on at least one occasion by swiping his credit or debit card through a device provided by CMT, the main provider of rear seat taxicab payment terminals in Chicago. Redman also paid the extra fee on at least one occasion by swiping his card through a device provided by Verifone.

         The City of Chicago Municipal Code sets out the fares that taxicabs can charge. The City of Chicago's commissioner of business affairs and consumer protection has also adopted “Taxicab Medallion License Holder Rules” (“Taxi Rules”). Taxi Rule TX 5.07(f) requires taxicabs to process electronic forms of payment, and Taxi Rule 5.07(c) states that taxicabs “[m]ay not impose an extra fee or a surcharge for non-cash electronic forms of payment.” Doc. 1-1 ¶ 25.


         A case filed in state court that could have been filed originally in federal court may be properly removed to federal court. 28 U.S.C. § 1441; Tylka v. Gerber Prods. Co., 211 F.3d 445, 448 (7th Cir. 2000). The removing party bears the burden of demonstrating that removal is proper. Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th Cir. 2009). A case may be remanded for lack of subject matter jurisdiction or, if timely raised, for failure to comply with the removal statutes. 28 U.S.C. §§ 1446, 1447(c); GE Betz, Inc. v. Zee Co., 718 F.3d 615, 625-26 (7th Cir. 2013).


         I. CAFA Jurisdiction

         CAFA extends federal jurisdiction over purported class actions where (1) the proposed class consists of 100 or more members; (2) any member of the class is a citizen of a state different from any defendant (i.e., minimal diversity exists); and (3) the aggregate amount in controversy for all class members exceeds $5, 000, 000, exclusive of interest and costs. 28 U.S.C. §§ 1332(d)(2), (d)(5)(B). A “local controversy” exception exists, under which the Court should decline to exercise jurisdiction over a case where (1) more than two-thirds of the members of the proposed plaintiff class are citizens of the state in which the action was filed; (2) at least one defendant against whom significant relief is sought and whose actions form a significant basis for the class' claims is a citizen of that state; and (3) the principal injuries resulting from the alleged conduct of each defendant were incurred in that state. 28 U.S.C. § 1332(d)(4)(A). Redman argues that the Court should remand the case to state court because CMT, as the removing party, has not carried its burden to establish the amount in controversy or that the local controversy exception does not apply.[2]

         Redman's complaint did not demand a specific amount in damages or limit the amount he sought to recover on behalf of the putative class. As a result, CMT needed to include “a plausible allegation that the amount in controversy exceeds the jurisdictional threshold” in its notice of removal. Dart Cherokee Basin Operating Co., LLC v. Owens, --- U.S. ----, 135 S.Ct. 547, 554, 190 L.Ed.2d 495 (2014). In its notice of removal, CMT simply stated:

Plaintiff did not set a cap on recovery in the Class Action Complaint or otherwise indicate that the class would not seek more than $5 million in aggregate. Therefore, Plaintiff has held open the possibility that the damages award could exceed $5 million. In other words, it is plausible for the class as a whole to recover in excess of $5 million. Because CMT's exposure could exceed $5 million, the amount in controversy has been met.

Doc. 1 ¶ 9 (citation omitted). Although the Court is to accept plausible jurisdictional allegations if not challenged, when challenged, the removing defendant must provide evidence to support the amount in controversy. Owens, 135 S.Ct. at 554. The Court then determines whether the jurisdictional facts have been proven by a preponderance of the evidence. Id. If so, then the plaintiff can defeat jurisdiction only if it “appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Oshana v. Coca-Cola Co., 472 F.3d 506, 511 (7th Cir. 2006).

         Redman argues that CMT's amount in controversy allegations do not even meet the plausibility standard because CMT merely sets forth that the amount theoretically could exceed $5 million without making any effort to calculate the amount, leaving that task to the Court or Redman. To the extent necessary, Redman also challenges whether CAFA's jurisdictional minimum is met, which would require the parties to produce evidentiary proof on the issue and the ...

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