Class Action Defendants Seeking to Eliminate Removal Uncertainty Get Assistance from Seventh Circuit Decision

In an opinion beneficial to class action defendants, the Seventh Circuit has taken some of the guesswork out of removal by holding that the 30-day period for removing a case to federal court only begins once the defendant has received a pleading or other litigation paper that includes a specific, unequivocal statement that the damages sought meet the jurisdictional amount.

In Walker v. Trailer Transit, Inc., plaintiff’s class action complaint invoked a measure of damages that, according to defendant’s calculations, could not exceed the Class Action Fairness Act’s (“CAFA”) $5 million amount-in-controversy threshold. But, in its opposition to defendant’s summary judgment motion and in a follow-up e-mail, plaintiff intimated that damages could be measured either under plaintiff’s original theory or under a new theory. It was not until defendant served requests for admission that plaintiff admitted it was pursuing the new theory, under which its damages, according to defendant’s calculations, would exceed the CAFA threshold.

Within 30 days of receiving plaintiff’s response to the requests for admission, defendant filed a notice of removal. Plaintiff argued that the notice was untimely because it identified its new damages theory in both its summary judgment response and in response to defendant’s e-mail query, but both the District Court and the Seventh Circuit disagreed.

The Seventh Circuit held that only a pleading or other litigation paper facially revealing a specific, unequivocal statement as to damages will suffice to trigger the 30-day removal clock. In so holding, the Court joined six other circuit courts that have reached the same conclusion. The Court stated that its determination satisfies three policy goals: (1) it “promotes clarity and ease of administration for courts”; (2) it “discourages evasive or ambiguous statements by plaintiffs in their pleadings and other litigation papers”; and (3) it “reduces guesswork and wasteful protective removals by defendants.”

The Court noted that the moment a case becomes removable and the moment the removal clock begins to run are not the same. While the jurisdictional requirements may in fact be met, the clock does not start until the defendant receives a document that “provides specific and unambiguous notice that the case satisfies federal jurisdictional requirements and therefore is removable.” That was the case in Walker because plaintiff’s summary judgment response and follow-up e-mail were ambiguous.