Romulus v. CVS Pharmacy, Inc. , 770 F.3d 67 ( 2014 )

United States Court of Appeals
For the First Circuit
No. 14-1937
DAVID ROMULUS, CASSANDRA BEALE, NICHOLAS HARRIS,
ASHLEY HILARIO, AND ROBERT BOURASSA, on behalf of themselves
and all other persons similarly situated,
Plaintiffs, Appellees,
v.
CVS PHARMACY, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Lynch, Chief Judge,
Torruella and Howard, Circuit Judges.
James Norman Boudreau, with whom John F. Farraher, Jr., and
Greenberg Traurig, LLP were on brief for appellant.
Thomas V. Urmy, Jr., with whom Rachel M. Brown, Patrick J.
Vallely, and Shapiro Haber & Urmy LLP were on brief for appellees.
October 24, 2014
LYNCH, Chief Judge. CVS Pharmacy, Inc. takes this
interlocutory appeal from an order granting the plaintiffs' motion
to remand a putative class action for wage and hour violations. In
this case of first impression in this circuit, we clarify the
removal time periods and mechanisms under the Class Action Fairness
Act of 2005 ("CAFA").
Under CAFA, federal courts have jurisdiction over a class
action if, among other requirements, the amount in controversy
exceeds $5 million. Standard Fire Ins. Co. v. Knowles, 133 S. Ct.
1345, 1347 (2013) (citing 28 U.S.C. § 1332(d)(2), (d)(5)). Section
1446(b) specifies two time periods within which a defendant must
remove a class action that satisfies CAFA's jurisdictional
requirements from state court to federal court. See 28 U.S.C.
§ 1453(b) (applying Section 1446(b)(1) and (b)(3) to class
actions). If the case as stated by the initial pleading is
removable, Section 1446(b)(1) requires the defendant to remove
within thirty days of its receipt. See id. § 1446(b)(1). Section
1446(b)(3) requires the defendant to remove within thirty days of
receiving a subsequent paper from which it may first be ascertained
that the class action is or has become removable. See id.
§ 1446(b)(3).
The district court granted the plaintiffs' motion to
remand for several reasons. Romulus v. CVS Pharmacy, Inc., No. 13-
10305-RWZ, 2014 WL 1271767 (D. Mass. Mar. 27, 2014) [hereinafter
-2-
Romulus II]. It held that CVS's notice of removal came too late to
meet the thirty-day deadline in Section 1446(b)(1), and that the
second thirty-day deadline in Section 1446(b)(3) did not apply.
Id. at *2-3. It then held that CVS had not met its burden to
establish the substantive amount in controversy requirement. Id.at *3 n.3. We reverse. We hold that CVS's second notice of
removal was timely under Section 1446(b)(3), and that CVS
sufficiently demonstrated that the amount in controversy exceeds $5
million. Removal was appropriate; remand was not.1
We resolve the previously unanswered question in this
circuit as to when the two time limits in Section 1446(b) mandate
removal within thirty days. In line with the other circuits that
have adopted a bright-line approach, we hold that the time limits
in Section 1446(b) apply when the plaintiffs' pleadings or the
plaintiffs' other papers provide the defendant with a clear
statement of the damages sought or with sufficient facts from which
damages can be readily calculated. We also clarify the meaning of
the statutory term "other paper." 28 U.S.C. § 1446(b)(3). On the
merits, we hold that CVS has adequately met its burden to show
removal.
1
The plaintiffs chose a state forum and prefer to remain
there. So, for removal purposes, their incentives are to minimize
damages. Defendant CVS prefers the case to be in federal court.
So, its incentives are to maximize damages at present for CAFA
removal. Of course, at trial, those incentives are reversed.
-3-
I. Procedural History
Named plaintiffs David Romulus, Cassandra Beale, Nicholas
Harris, Ashley Hilario, and Robert Bourassa, all "Shift
Supervisors" at CVS stores in Massachusetts, filed a First Amended
Class Action Complaint against CVS in Massachusetts Superior Court
on August 31, 2011.2 The plaintiffs allege that CVS has a policy
under which Shift Supervisors must remain on store premises when
taking rest or meal breaks when there are no other managerial
employees on duty or when there is only one other employee on duty.
Despite requiring Shift Supervisors to stay on store premises, the
plaintiffs allege that CVS does not pay them for these "breaks" in
violation of the Massachusetts Wage Act, Mass. Gen. Laws ch. 149,
§ 148, and the Massachusetts Overtime Statute, Mass. Gen. Laws ch.
151, §§ 1A, 1B.
The plaintiffs allege that "CVS has employed many
hundreds, if not thousands, of Shift Supervisors in Massachusetts"
since July 25, 2008. They seek unpaid wages (including overtime
wages), treble damages, interest, attorneys' fees, and costs for
those breaks in the class period during which they were required to
stay on store premises. The plaintiffs did not provide information
on the number of breaks at issue, or the total amount of damages
sought in the First Amended Complaint.
2
The original complaint was filed on July 26, 2011, but was
never served.
-4-
CVS, perhaps in an abundance of caution, nevertheless
sought to remove within thirty days of service, on September 30,
2011. To calculate the plaintiffs' damages, CVS relied on a series
of estimates. Assuming that the class members lost each meal break
during the class period, CVS calculated total damages of
$10,396,944.3
The district court rejected CVS's calculation and granted
the plaintiffs' motion to remand the case to Massachusetts state
court. Romulus v. CVS Pharmacy, Inc., No. 11-11734-RWZ, 2012 WL
899577 (D. Mass. Mar. 16, 2012) [hereinafter Romulus I]. The court
noted that "[t]he difficulty with defendant's calculation is that
it assumes all shift supervisors lost their break each day of their
employment during the class period while the complaint clearly
states that the circumstances leading to such loss occurred
'sometimes.'" Id. at *1. "Because defendant's assumptions are in
no way rooted in the allegations of the complaint, defendant fails
to meet its burden of proving the requisite jurisdictional amount."
3
In its opposition to the plaintiffs' motion to remand, CVS
estimated that all Shift Supervisors, approximately 2583, worked
516,105 shifts of six or more hours during the relevant time
period. Assuming that the class members lost each thirty-minute
meal break on all of those shifts, CVS multiplied the number of
shifts by one half of the average hourly rate, $13.43, and
calculated damages of $3,465,648. CVS trebled that amount to reach
a total damages estimate of $10,396,944. Even if wage violations
occurred in only 50 percent of these meal breaks, the damages total
would exceed $5 million. See Romulus v. CVS Pharmacy, Inc., No.
11-11734-RWZ, 2012 WL 899577, at *1 (D. Mass. Mar. 16, 2012).
-5-
Id. The propriety of the district court's first remand order is
not before us.
The parties conducted preliminary discovery upon their
return to state court. CVS provided the plaintiffs with electronic
time and attendance data relating to Massachusetts Shift
Supervisors from August 2010 through June 2012. Analyzing this
data, the plaintiffs found 116,499 meal breaks during this period
when no other Shift Supervisor was working. They informed CVS of
this number, a very important component of this damages
calculation, by email on January 18, 2013.
Within thirty days of receipt of this email, CVS filed
its second notice of removal on February 15, 2013. CVS
extrapolated the plaintiffs' number of violations over the entire
class period, and argued that there was "a reasonable probability
that the amount in controversy exceeds $5,000,000." CVS argued
that this second notice of removal was "timely under 28 U.S.C.
§ 1446(b)(3) because it was filed within 30 days of the date that
CVS ascertained that this case became removable" based on the email
provided by the plaintiffs.
On March 27, 2014, the district court again granted the
plaintiffs' motion to remand, finding that CVS's notice of removal
was untimely and concluding on the merits that CVS had "failed to
'show a reasonable probability that more than $5 million is at
stake in this case.'" Romulus II, 2014 WL 1271767, at *3 & n.3
-6-
(citing Amoche v. Guar. Trust Life Ins. Co., 556 F.3d 41, 50-51
(1st Cir. 2009)).
On the question of timeliness, the district court
concluded that CVS must rely on Section 1446(b)(3) since "[f]ar
more than thirty days have elapsed since service of plaintiffs'
amended complaint." Id. at *2. Without the guidance of circuit
precedent, the district court held that the defendant had failed to
identify any paper "providing information from which it later
ascertained removability for the first time." Id. Even if the
January 18, 2013, email qualified as an "other paper" for the
purposes of Section 1446(b)(3), it "provide[d] no 'new' information
regarding removability that could not have been previously
ascertained by defendant in light of the allegations in the amended
complaint and its own knowledge and information." Id. at *2-3.
The district court highlighted that the estimate contained in the
January 18, 2013, email came from data that CVS had possessed from
the beginning of litigation and had provided to the plaintiffs.
Id. at *2. The district court found that CVS had violated a duty
to make a reasonable inquiry into its own records at the time of
the complaint. Id. (citing Sok v. U.S. Fid. & Guar. Co., No. 91-
12028, 1992 WL 97193, at *1 (D. Mass. Apr. 27, 1992)).
On the substantive question of the amount in controversy,
the district court noted the plaintiffs' objections to defendant's
calculations of the amount in controversy. Id. at *3 n.3. The
-7-
district court, without further explanation, then stated that the
"Plaintiffs' arguments on these points are persuasive, and I find
that defendant, despite having 'better access to the relevant
information,' has failed to 'show a reasonable probability that
more than $5 million is at stake in this case.'" Id. (quoting
Amoche, 556 F.3d at 50-51).
CVS sought leave to appeal the district court's order on
an interlocutory basis under 28 U.S.C. § 1453(c)(1). This court
asked the district court to clarify "whether, in its view, the
removal was untimely with respect to a particular 30-day period in
§ 1446(b); and if so, whether the 30 days ran from a particular
date." The district court explained in response:
The only possibly qualifying document [under
§ 1446(b)(3)] [defendant] received was the
January 18, 2013, e-mail. I deemed it
inadequate to serve as an "other paper" because
it was based entirely on information provided
by defendant. Because the information was
readily available to defendant from the start,
it provided no "new" information regarding
removability that would allow use of the date
of the e-mail as the starting date for
determining timeliness. Accordingly, I deemed
the proper date for calculating timeliness to
be the date of the return of service, September
8, 2011, which necessarily followed receipt by
defendant of the First Amended Complaint.
Romulus v. CVS Pharmacy, Inc., No. 13-10305-RWZ, 2014 WL 2435089,
at *1 (D. Mass. May 30, 2014) [hereinafter Romulus III].
-8-
This Court granted the petition for review on September
8, 2014, and asked the parties to address a series of questions.4
The parties submitted supplemental briefing on these issues.
We now hold that Section 1446(b)'s thirty-day clocks are
triggered only when the plaintiffs' complaint or plaintiffs'
subsequent paper provides the defendant with sufficient information
to easily determine that the matter is removable. The district
court erred in imposing too great a duty of inquiry on the
defendant. In this case, the plaintiffs' January 18, 2013, email
triggered Section 1446(b)(3)'s thirty-day deadline by providing
sufficient information from which to easily ascertain the amount in
4
The Court posed the following questions:
-- According to the Seventh Circuit, "[e]very circuit that has
addressed the question of removal timing has applied [28 U.S.C.]
§ 1446(b) literally and adopted some form of a bright-line rule
that limits the court's inquiry to the clock-triggering pleading or
other paper and, with respect to the jurisdictional amount in
particular, requires a specific, unequivocal statement from the
plaintiff regarding the damages sought." Walker v. Trailer
Transit, Inc., 727 F.3d 819, 824 (7th Cir. 2013). Is this, or
should this be, the rule in this circuit?
-- Under the removal statute, what time-sensitive duty, if any,
does the defendant have to investigate the facts in response to
plaintiff's allegations?
-- Assuming that neither 30-day period in § 1446(b) is advancing,
does the defendant have a deadline for coming forward with its own
information supporting removal?
-- Again assuming that neither 30-day period in § 1446(b) is
advancing, does any mechanism in the removal statute regulate a
second or successive removal that is based on information available
to the defendant at the time of the previous removal?
-9-
controversy for the first time. The plaintiffs' email was not
disqualified from being an "other paper" by the fact that it was
based on information provided by the defendant. CVS's second
notice of removal on February 15, 2013, was therefore timely.
In addition, we hold that CVS carried its substantive
burden of demonstrating a reasonable probability that the amount in
controversy exceeds $5 million, as required for federal
jurisdiction under CAFA. We do not, as a consequence, reach the
difficult questions related to the availability and mechanics of
removal outside of the two thirty-day windows in Section 1446(b).
II. Appellate Justiciability
The plaintiffs mistakenly argue that this interlocutory
appeal is untimely, and that this court lacks jurisdiction over the
appeal. Under CAFA, "[i]f the court of appeals accepts an appeal
under paragraph (1), the court shall complete all action on such
appeal, including rendering judgment, not later than 60 days after
the date on which such appeal was filed, unless an extension is
granted under paragraph (3)." 28 U.S.C. § 1453(c)(2). The
plaintiffs claim that CVS filed its appeal on April 7, 2014, and
that an appellate decision was due by May 30, 2014.
The April 7, 2014, filing was not an appeal, but a
petition for permission to appeal. Under CAFA, the appellate court
had discretion to grant CVS permission to appeal, and no appeal
-10-
existed until we did so. See id. As the Fifth Circuit has
persuasively reasoned:
When a party files a notice of appeal, there
is, at that very point in time, an appeal,
albeit one that may later be subject to
dismissal for jurisdictional or procedural
insufficiency. Where, however, a party
"applies" for leave to appeal, or "seeks
permission" to do so, there is logically no
appeal until the court vested with the
authority to grant or deny leave has done so.
Patterson v. Dean Morris, L.L.P., 444 F.3d 365, 369 (5th Cir.
2006).
The sixty-day deadline for appellate consideration begins
to accrue from the date on which the court of appeals grants
permission to appeal. Coll. of Dental Surgeons of P.R. v. Conn.
Gen. Life Ins. Co., 585 F.3d 33, 37 (1st Cir. 2009). We granted
CVS permission to appeal on September 8, 2014, and have 60 days
from that date to render judgment, unless an extension is granted.
See 28 U.S.C. § 1453(c)(2).
III. Analysis
The district court's jurisdictional determination on
removal is subject to de novo review. Amoche, 556 F.3d at 48.
Issues of statutory interpretation are also subject to de novo
review. Hannon v. City of Newton, 744 F.3d 759, 765 (1st Cir.
2014). "However, where the district court's assessment of a
jurisdictional issue turns on findings of fact, we accept those
findings unless they are clearly erroneous." Cooper v. Charter
-11-
Commc'ns Entm'ts I, LLC, 760 F.3d 103, 106 (1st Cir. 2014).
Findings of fact were not made here.
A. Timeliness of Removal Under Section 1446(b)
1. Statutory Time Limits
Section 1446(b) sets forth two thirty-day windows for
removal based on pleadings, or other papers, provided by the
plaintiff. First, Section 1446(b)(1) states:
(1) The notice of removal of a civil action
or proceeding shall be filed within 30 days
after the receipt by the defendant, through
service or otherwise, of a copy of the initial
pleading setting forth the claim for relief
upon which such action or proceeding is based
. . . .
28 U.S.C. § 1446(b)(1). Second, Section 1446(b)(3) states:
(3) Except as provided in subsection (c), if
the case stated by the initial pleading is not
removable, a notice of removal may be filed
within 30 days after receipt by the defendant,
through service or otherwise, of a copy of an
amended pleading, motion, order or other paper
from which it may first be ascertained that
the case is one which is or has become
removable.
Id. § 1446(b)(3). The district court's first remand order, issued
after CVS removed the case within thirty days of the initial
pleading, is not before us. The question is whether CVS's second
notice of removal was timely under Section 1446(b)(3).
The district court implicitly held that the Section
1446(b)(1) clock runs in every case from the date of service,
regardless of the contents of the complaint. See Romulus III, 2014
-12-
WL 2435089, at *1. Having missed the first thirty-day period, the
district court held that CVS "must rely on section 1446(b)(3) to
sustain its second attempt to remove." Romulus II, 2014 WL
1271767, at *2. The district court concluded that Section
1446(b)(3) did not apply in this case since CVS had identified no
"other paper" that set forth "new information supporting federal
jurisdiction over this case." Id. The district court reasoned
that information on damages is not "new" if the defendant could
have discovered it earlier through its own investigation. See id.This is not how the statute reads and would produce a difficult-to-
manage test.
The plaintiffs do argue that the text of the statute
supports the district court's reading of Section 1446(b). First,
Section 1446(b)(1) includes the mandatory language that "[t]he
notice of removal of a civil action or proceeding shall be filed
within 30 days after the receipt by the defendant, through service
or otherwise, of a copy of the initial pleading." 28 U.S.C.
§ 1446(b)(1) (emphasis added). The plaintiffs argue that Section
1446(b)(1), by its terms, requires removal within thirty days of
service in every case, regardless of whether the complaint
evidences removability or not. Section 1446(b)(3) then operates as
an exception to allow a defendant to remove outside of this initial
thirty-day window if the defendant "first . . . ascertain[s]" that
the case is removable from a subsequent paper. Id. § 1446(b)(3).
-13-
According to the plaintiffs, Section 1446(b)(3) cannot be invoked
if the defendant could have "ascertained," -- through "some sort of
investigative action" by the defendant -- that the case was
removable at some point prior to the receipt of the plaintiffs'
paper.
To the contrary, the text of the statute focuses solely
on when the plaintiffs' papers reveal removability.5 Section
1446(b)(1) must be understood in conjunction with Section
1446(b)(3), which applies instead of Section 1446(b)(1) "if the
case stated by the initial pleading is not removable." 28 U.S.C.
§ 1446(b)(3) (emphasis added). The language of Section 1446(b)(3)
makes clear that removability in Section 1446(b)(1) is to be judged
by the case as stated on the face of the complaint.
When removability is not clear from the initial pleading,
Section 1446(b)(3) then looks to the plaintiffs' subsequent papers.
Specifically, Section 1446(b)(3) applies when the defendant
receives "a copy of an amended pleading, motion, order or other
paper from which it may first be ascertained that the case is one
which is or has become removable." Id. (emphases added). Even if
the case was previously removable, Section 1446(b)(3) does not
5
This case does not concern, nor do we address, a situation
where the time limit is triggered by an "order" as contemplated in
Section 1446(b)(3). It is instead limited to those cases in which
a plaintiff's pleading or some "other paper" from the plaintiff is
provided to the defendant.
-14-
apply until removability can first be ascertained from the
plaintiffs' own papers.
Based on the text of the statute, we hold that the
defendant looks to the papers provided by the plaintiffs to
determine whether Section 1446(b)'s removal clocks have been
triggered. Every circuit to have addressed this issue has likewise
"adopted some form of a bright-line rule that limits the court's
inquiry to the clock-triggering pleading or other paper" in order
to determine removability. Walker v. Trailer Transit, Inc., 727
F.3d 819, 824 (7th Cir. 2013) (collecting cases); see also Cutrone
v. Mortg. Elec. Registration Sys., Inc., 749 F.3d 137, 143-45 (2d
Cir. 2014).
The bright-line test varies in severity among the
circuits. The Seventh Circuit, for example, has explained that
"the question is whether [the clock-triggering pleading or other
paper], on its face or in combination with earlier-filed pleadings,
provides specific and unambiguous notice that the case satisfies
federal jurisdictional requirements and therefore is removable."
Walker, 727 F.3d at 825. The Seventh Circuit highlighted that this
rule requires the plaintiff to "specifically disclose the amount of
monetary damages sought" in order to trigger Section 1446(b)'s
deadlines. Id. at 824. The Seventh Circuit, though, has not
addressed whether Section 1446(b) can be triggered by a simple
calculation on the part of the defendant from data revealed by the
-15-
plaintiff's papers in the absence of a specific damages estimate
from the plaintiff.
The Second Circuit has also limited the inquiry to the
contents of the complaint or later paper, but has allowed the
plaintiff to trigger the removal deadlines either by "explicitly
specif[ying] the amount of monetary damages sought or [by]
set[ting] forth facts from which an amount in controversy in excess
of $5,000,000 can be ascertained." Cutrone, 749 F.3d at 145
(emphasis added). The Second Circuit explained that, even under a
bright-line rule, "defendants must still 'apply a reasonable amount
of intelligence in ascertaining removability.'" Id. at 143
(quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 206 (2d
Cir. 2001)). Although defendants must apply a reasonable amount of
intelligence, they "have no independent duty to investigate whether
a case is removable." Id.Citing the same language, the Ninth Circuit has stated
that the defendant must "'apply a reasonable amount of intelligence
in ascertaining removability.'" Kuxhausen v. BMW Fin. Servs. NA
LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (quoting Whitaker, 261
F.3d at 206). For example, "[m]ultiplying figures clearly stated
in a complaint is an aspect of that duty." Id.We agree with the Second Circuit that a plaintiff's
pleading or later paper will trigger the deadlines in Section
1446(b) if the plaintiff's paper includes a clear statement of the
-16-
damages sought or if the plaintiff's paper sets forth sufficient
facts from which the amount in controversy can easily be
ascertained by the defendant by simple calculation. The defendant
has no duty, however, to investigate or to supply facts outside of
those provided by the plaintiff.
As a policy matter, the plaintiffs argue that a defendant
should have a duty to investigate removal early in litigation in
order to avoid gamesmanship and to resolve removal as efficiently
as possible. The plaintiffs explain:
If there were no deadline by which a defendant
must disclose information in its possession
that supports removal, a defendant could
strategically litigate a case in state court
until it could assess how it was faring there,
or decide whether to remove based on its
assessment of how much disruption a change of
forum would cause the plaintiff. It would
also enable a defendant to use delay (as CVS
seems to have tried to do here) as a weapon
with the hope of exhausting the plaintiff's
patience or resources.
The plaintiffs note that CVS's second attempt at removal was based
on data calculated from information CVS possessed from the
beginning of this litigation, but the second notice of removal was
not filed until seventeen months after the case was initially
brought. Imposing an obligation on a defendant to investigate and
remove early and quickly, they say, would ensure the efficient
resolution of removal questions. They argue, moreover, that this
burden would not weigh too heavily on a defendant since the
-17-
defendant need only establish the amount in controversy by a
reasonable probability.
There are contrary policy arguments that Congress could
have considered. In the absence of something like a bright-line
approach, plaintiffs would have no incentive to specify estimated
damages early in litigation. Defendants would protectively remove
when faced with an indeterminate complaint in order to avoid
missing the mandatory window for removal under Section 1446(b)(1).
This would be particularly problematic in CAFA cases, since the
large number of class members and the high requirement for the
amount in controversy often will be difficult to ascertain
immediately. See Cutrone, 749 F.3d at 145. If a defendant sought
to later remove under Section 1446(b)(3), the district court would
face the unenviable task of determining whether the defendant
should have previously discovered that the case was removable.
Determining what the defendant should have investigated, or what
the defendant should have discovered through that investigation,
rather than analyzing what was apparent on (or easily ascertainable
from) the face of the plaintiff's pleadings, will not be efficient,
but will result in fact-intensive mini-trials.
The plaintiffs are also "in a position to protect
themselves" from the gamesmanship of which they warn. Roth v. CHA
Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1126 (9th Cir. 2013).
The Ninth Circuit explained, "[i]f plaintiffs think that their
-18-
action may be removable and think, further, that the defendant
might delay filing a notice of removal until a strategically
advantageous moment, they need only provide to the defendant a
document from which removability may be ascertained." Id. By
filing a complaint or subsequent paper that meets the bright-line
rule, the plaintiffs will trigger one of the thirty-day clocks in
Section 1446(b), and will force the defendant to remove immediately
or lose the opportunity to do so later. Id.We follow, as we must, the Congressional policy choice
inherent in the statutory text. As we have previously explained,
"the obvious purpose of starting the 30-day clock only after the
defendant's receipt of a 'paper' revealing the case's removability
is to ensure that the party seeking removal has notice that the
case is removable before the limitations period begins to run
against it." Woburn Five Cents Sav. Bank v. Robert M. Hicks, Inc.,
930 F.2d 965, 970 (1st Cir. 1991). To determine whether the
Section 1446(b) clocks have begun to run, therefore, we focus
exclusively on the pleadings and other papers provided by the
plaintiffs. The defendant must remove within thirty days of a
paper, filed by the plaintiffs, that explicitly specifies the
amount of monetary damages sought or sets forth facts from which an
amount in controversy in excess of $5 million can be readily
ascertained. See Cutrone, 749 F.3d at 145.
-19-
2. Plaintiffs' Complaint
The plaintiffs argue that CVS's second notice of removal
is late because the amended complaint should have satisfied even a
bright-line approach "since it set forth a clear damages theory
which CVS clearly understood." "To establish the amount in
controversy," according to the plaintiffs, "all CVS had to do was
determine how many times Shift Supervisors took meal breaks when no
other Shift Supervisor, Assistant Manager or Manager was present,
and multiply the total time of such breaks by the Shift
Supervisors' average hourly wage to obtain a reliable estimate of
the amount of unpaid wages owed to the Class."
Essential facts are missing from the complaint. As the
plaintiffs concede, CVS would have needed to investigate and supply
the number of meal breaks at issue and the average hourly wage to
have determined the amount in controversy. The complaint neither
states the aggregate amount in controversy nor alleges sufficient
information from which CVS could have easily ascertained
removability.
3. "Other Paper": Plaintiffs' Email
"[I]f the case stated by the initial pleading is not
removable, a notice of removal may be filed within 30 days after
receipt by the defendant . . . of a copy of an amended pleading,
motion, order or other paper from which it may first be ascertained
that the case is one which is or has become removable." 28 U.S.C.
-20-
§ 1446(b)(3).6 The district court determined that "[t]he only
possibly qualifying document" was an email sent to CVS by
plaintiffs' counsel on January 18, 2013, which estimated the number
of meal breaks without Shift Supervisor coverage over an almost
two-year period. Romulus III, 2014 WL 2435089, at *1. The
district court held that this email was "inadequate to serve as an
'other paper' because it was based entirely on information provided
by defendant." Id.The interpretation of the phrase "other paper" in Section
1446(b)(3) is another issue of first impression for this circuit.7
There are cogent arguments for both an expansive and limited
construction of this phrase. Given the ambiguity present in the
text, we rely on the clear congressional intent to interpret "other
paper" broadly.
Section 1446(b)(3) lists the documents that can trigger
the second removal window: "a copy of an amended pleading, motion,
6
In a non-CAFA case, the availability of this avenue for
removal is limited to one year, "unless the district court finds
that the plaintiff has acted in bad faith in order to prevent a
defendant from removing the action." 28 U.S.C. § 1446(c)(1). This
one-year cap is irrelevant to the present case since it does not
apply to the removal of class actions under CAFA. Id. § 1453(b).
7
District courts in this circuit that have addressed this
issue have come to opposite conclusions as to how narrowly to
construe the phrase. Compare Mill-Bern Assocs., Inc. v. Dall.
Semiconductor Corp., 69 F. Supp. 2d 240 (D. Mass. 1999)
(interpreting narrowly), and Borgese v. Am. Lung Ass'n of Me., No.
05-88, 2005 WL 2647916 (D. Me. Oct. 17, 2005) (same), with Parker
v. Cnty. of Oxford, 224 F. Supp. 2d 292 (D. Me. 2002) (interpreting
broadly).
-21-
order or other paper." 28 U.S.C. § 1446(b)(3). The doctrine of
ejusdem generis would suggest that the term "other paper" should be
limited to documents similar to a pleading, motion, or order. See
Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 114-15 (2001)
("[T]he general words are construed to embrace only objects similar
in nature to those objects enumerated by the preceding specific
words." (citation omitted) (internal quotation marks omitted)).
Relying on this canon of statutory interpretation, the district
court in Mill-Bern Associates, Inc., concluded that "other paper"
must be limited to documents that are "formally filed and/or served
on the parties," like a filed affidavit. 69 F. Supp. 2d at 243.
Another part of the statute could support a broader
textual interpretation. Specifically, Section 1446(c)(3)(A)
states:
If the case stated by the initial pleading is
not removable solely because the amount in
controversy does not exceed the amount
specified in section 1332(a), information
relating to the amount in controversy in the
record of the State proceeding, or in
responses to discovery, shall be treated as an
"other paper" under subsection (b)(3).
28 U.S.C. § 1446(c)(3)(A) (emphasis added). It is nevertheless
unclear, from the text alone, whether this provision applies to
CAFA cases. On the one hand, Congress chose to specifically
mention only non-CAFA cases, removed under diversity jurisdiction
pursuant to 28 U.S.C. § 1332(a), when statutorily broadening the
scope of the term "other paper." On the other hand, Congress
-22-
drafted CAFA to incorporate all of Section 1446, except for the
one-year limitation on removal under Section 1446(c)(1). See id.§ 1453(b). Moreover, there is a general presumption that "the same
term has the same meaning when it occurs here and there in a single
statute." Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 574
(2007).
In general, "[t]he federal courts have given the
reference to 'other paper' an expansive construction and have
included a wide array of documents within its scope." 14C Wright
& Miller, Federal Practice and Procedure § 3731 (4th ed.). As
such,
[V]arious discovery documents such as
deposition transcripts, answers to
interrogatories and requests for admissions,
as well as amendments to ad damnum clauses of
complaints, and correspondence between the
parties and their attorneys or between the
attorneys usually are accepted as "other
papers," receipt of which can initiate a 30-
day period of removability.
Id. (citations omitted).
Two courts of appeals have held that informal
correspondence from the plaintiff to the defendant constituted an
"other paper" under Section 1446(b). In Addo v. Globe Life &
Accident Insurance Co., the Fifth Circuit held that a post-
complaint demand letter, which offered to settle for above the
amount in controversy, triggered Section 1446(b) as an "other
paper." 230 F.3d 759, 761-62 (5th Cir. 2000). Likewise, the Ninth
-23-
Circuit held that a letter from the plaintiffs, sent in preparation
for mediation, which estimated damages to exceed $5 million "put
[the defendant] on notice as to the amount in controversy." Babasa
v. LensCrafters, Inc., 498 F.3d 972, 975 (9th Cir. 2007). The
letter qualified as an "other paper," and necessitated removal
within thirty days. See id.The Senate Report accompanying the passage of CAFA
supports the broad interpretation of the phrase "other paper" and
resolves for us any uncertainty arising from the text of the
statute. The Committee on the Judiciary explicitly stated that it
"favor[ed] the broad interpretation of 'other paper' adopted by
some courts to include deposition transcripts, discovery responses,
settlement offers and other documents or occurrences that reveal
the removability of a case." S. Rep. No. 109-14, at 9 (2005),
reprinted in 2005 U.S.C.C.A.N. 3, 10. On balance, this clear
congressional intent outweighs the usual application of ejusdem
generis and resolves the lack of clarity in Section 1446(c)(3)(A).
We hold that correspondence from the plaintiff to the
defendant concerning damages can constitute an "other paper" for
purposes of Section 1446(b)(3). Under Section 1446(b)(3), the
correspondence triggers the thirty-day clock if it is the first
document in which the plaintiff puts the defendant on notice that
the criteria for removal are met.
-24-
In this case, CVS had provided the plaintiffs with time
punch data for Shift Supervisors in the course of settlement
negotiations. By analyzing the data, experts from both sides were
able to estimate the number of meal breaks during which a Shift
Supervisor was working without another Shift Supervisor. In a
telephone conversation, both parties orally exchanged their
calculations. CVS asked the plaintiffs to provide their estimate
in written form, which the plaintiffs did by email on the same day.
The email estimated 116,499 meal breaks without Shift Supervisor
coverage from August 2010 through June 2012.
In theory, one more bit of information would be helpful
for precision. Two other types of managerial employees, Store
Managers and Assistant Store Managers, could be working during some
portion of these meal breaks without Shift Supervisor coverage.
The plaintiffs argue that their estimate in the January 18, 2013,
email "could not by itself establish class damages because it did
not account for whether Managers or Assistant Managers were present
during those breaks, which would have allowed the Shift Supervisors
to leave the premises and thus not result in a wage law violation."
The plaintiffs state that they had not "communicated to CVS 'the
precise number of potential wage and hour violations for which they
seek redress' because they still lacked the information regarding
Managers and Assistant Managers needed to make such a calculation."
-25-
Whether data even exists on the presence of Store
Managers and Assistant Store Managers, to reduce any damages
estimate, has been of constant dispute in this litigation. Going
back to at least the first remand proceeding, the plaintiffs have
asserted in their district court filings that CVS has a statutory
obligation to maintain records of the time actually worked by all
its employees, including Managers and Assistant Managers, and that
CVS "cannot hide behind the fact that it failed to do so." The
fair implication of the plaintiffs' position is that CVS will
ultimately be liable for breaks for which such managerial coverage
cannot be reliably established. To us, that aspect of plaintiffs'
own theory is substantial enough to place all breaks without Shift
Supervisor coverage in controversy.8 The plaintiffs provided CVS
with this number in the email on January 18, 2013.
With the estimate in the plaintiffs' email, CVS had all
of the information necessary to readily ascertain the matter's
8
We note in addition that CVS has admitted that this
putative "evidence" of managerial coverage, which assists it in
reducing the scope of potential damages, is either non-existent or
unreliable. At oral argument, CVS stated, "we don't have the data
that [] would prove or disprove the plaintiffs' claim" on this
point. According to CVS, no daily time records exist for these
exempt employees. CVS admitted that the evidence that does exist
-- anecdotal evidence and written schedules subject to change -- is
not reliable. CVS acknowledged that if the plaintiffs are correct
that CVS should have maintained daily time records for exempt
managers, "no reduction [in the number of breaks] was or is
warranted." CVS may not switch its position on this issue later.
It is bound by its judicial admission. Cf. Lima v. Holder, 758
F.3d 72, 79 (1st Cir. 2014).
-26-
removability from the plaintiffs' own papers. As the plaintiffs
had themselves said, all CVS had to do to determine an estimate of
damages was multiply the estimate of the number of meal breaks at
issue by the average hourly wage. The record from the first
removal proceeding included the uncontested average hourly wage,
$13.43.9 With the email, the plaintiffs then provided the number
of breaks at issue. CVS was able easily to calculate a total of
$5,611,893 damages at issue.10
9
Although the average hourly wage was originally provided by
CVS based on an investigation of its own data, that uncontested
fact became part of the record in the first removal attempt. CVS
was under no duty to provide this figure originally, but could not
subsequently ignore it. Utilizing the uncontested average hourly
wage in the record was part of CVS's duty to apply reasonable
intelligence when ascertaining removability.
10
According to CVS,
Plaintiffs' review of the Time & Attendance
Data revealed a total of 116,499 potential
instances in which a violation occurred during
the period August 2010 through June 2012.
This equates to 5,065 alleged violations per
month. Extrapolating this average over the
class period of fifty-five (55) months (three
years prior to the date the Complaint was
filed through March 31, 2013) yields 278,575
alleged violations. Thus, using plaintiffs'
estimate of the number of alleged violations
and an average hourly wage for Shift
Supervisors in Massachusetts, the potential
damages exceed $5,000,000 as follows:
278,575 unpaid meal periods x $13.43/hr
(average hourly rate) x 0.5 hours (30 minute
meal period) = $1,870,631.
Taking into account treble damages mandated by
the Wage Act, plaintiffs' alleged damages are
-27-
The district court observed that the information
contained in the plaintiffs' email was based on CVS's own data and
that CVS could have performed its own analysis to reach the same
estimate earlier in litigation.11 See Romulus II, 2014 WL 1271767,
at *2. But it erred in concluding that this fact made CVS's second
notice of removal untimely. The timeliness inquiry is limited to
the information in the plaintiffs' papers, regardless of whether
its original source is the defendant. The defendant has no duty to
perform significant investigation of its own data to ascertain
removability. The test is not whether the information is "new,"
but when the plaintiffs' papers "first" enable the defendant to
make the requisite merits showing to the district court. See 28
U.S.C. § 1446(b)(3).
The email qualifies as an "other paper from which it may
first be ascertained that the case is one which
is . . . removable," and required the defendant to remove within
at least $5,611,893 ($1,870,631 x 3 =
$5,611,893).
11
The district court stated that CVS "'had a duty to make a
reasonable inquiry regarding the amount in controversy at the time
the suit was filed,' . . . particularly where it, not plaintiffs,
possessed the records and data necessary to make the relevant
calculations." Romulus II, 2014 WL 1271767, at *2 (citation
omitted). It is true, but irrelevant for present purposes, that
plaintiffs often do not possess the information from which to make
a damages estimate at the beginning of litigation. Nevertheless,
Congress chose to impose the strict time limits of Section 1446(b)
only once the plaintiff put the defendant on notice of the matter's
removability.
-28-
thirty days. Id. CVS's second notice of removal, filed within
thirty days of the email, was timely.12
B. The Substantive Removal Question: Amount-in-Controversy
Under Section 1332
Although CVS's notice of removal was timely, it still
must show that the CAFA jurisdictional prerequisites for federal
jurisdiction are met. The only element at issue in this removal is
whether "the matter in controversy exceeds the sum or value of
$5,000,000, exclusive of interest and costs." 28 U.S.C.
§ 1332(d)(2). As we have stressed, "the pertinent question is what
is in controversy in the case, not how much the plaintiffs are
ultimately likely to recover." Amoche, 556 F.3d at 51.
The removing defendant bears the burden of establishing
federal jurisdiction under CAFA. Id. at 48. We have previously
12
Although CVS originally argued for removal based on Section
1446(b)(3), it now urges us to hold that it could remove at any
time based on its own investigation if neither time limit in
Section 1446(b) applied. Three circuits have agreed that a
defendant can remove on the basis of its own investigation if
neither of the statutory grants for removal in Section 1446(b) have
been triggered and transgressed. See, e.g., Cutrone, 749 F.3d at
146-48; Walker, 727 F.3d at 825-26; Roth, 720 F.3d at 1125-26. We
do not address the complicated questions concerning the possibility
of removal outside of the specified CAFA statutory procedures.
Whether CVS could have independently removed, pursuant to 28 U.S.C.
§ 1441, based on an investigation of its own data is irrelevant
since it was required to remove within thirty days of the
plaintiffs' email on January 18, 2013.
-29-
held that a defendant "must show a reasonable probability that more
than $5 million is at stake in this case." Id. at 50.13
CVS's second notice of removal calculated the amount in
controversy to be at least $5,611,893.14 In doing so, CVS was
merely meeting its obligation to apply a "reasonable amount of
intelligence" to the plaintiffs' papers. See Cutrone, 749 F.3d at
145.
CVS updated its damages estimate in its opposition to the
plaintiffs' motion to remand. In the plaintiffs' favor, CVS
discounted the number of meal breaks when there was no other Shift
Supervisor working by 15 percent in an attempt to estimate the
number of meal breaks at which no managerial employees were
13
We easily dispose of CVS's ill-founded argument that the
district court's conclusion, using the reasonable probability
language from Amoche, "articulated the wrong standard." CVS
asserts that the court must apply a preponderance standard based on
28 U.S.C. § 1446(c)(2)(B), enacted as part of the Federal Courts
Jurisdiction and Venue Clarification Act of 2011 ("JVCA"). CVS
lost that battle before it filed its brief. In Amoche, we
expressly noted that "the reasonable probability standard is, to
our minds, for all practical purposes identical to the
preponderance standard adopted by several circuits." 556 F.3d at50 (citing Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543
(7th Cir. 2006)). We express no view on the applicability of
Section 1446(c)(2) to CAFA cases since the standards,
notwithstanding nomenclature, are identical.
14
CVS extrapolated the number of breaks without Shift
Supervisor coverage over a class period of fifty-five months,
measured from "three years prior to the date the Complaint was
filed through March 31, 2013." Multiplying this number of unpaid
meal breaks (278,575) by one-half of the average hourly rate
($13.43) totaled $1,870,631. With treble damages as mandated by
the Wage Act, "plaintiffs' alleged damages are at least
$5,611,893."
-30-
present. Then, CVS extended the class period, updated the average
hourly wage, included Overtime/Premium rates, and added a
reasonable estimate of attorneys' fees.15 CVS provided the
information for its calculations, as set forth in Appendix A,
showing damages of $6,291,285.
The plaintiffs raised objections to CVS's revised
calculation. First, the plaintiffs take issue with CVS's "cherry-
picked 15% assumption."16 Second, the plaintiffs argue that CVS
should have calculated the amount in controversy through the time
of removal. Third, the plaintiffs argue that "CVS's entire
calculation is premised on the assumption that the unlawful
policies identified in the Complaint continue to this day."
Fourth, the plaintiffs object that the estimate for attorneys' fees
is "entirely speculative."
The district court concluded that the "Plaintiffs'
arguments on these points are persuasive, and I find that
15
We have held that attorneys' fees are generally not
considered when calculating the amount in controversy except where
provided by contract or explicitly allowed by statute. See
Spielman v. Genzyme Corp., 251 F.3d 1, 7 (1st Cir. 2001). Here,
the amount is properly included because Mass. Gen. Laws ch. 151,
§ 1B explicitly permits the recovery of attorneys' fees, and the
parties do not dispute the point.
16
For this figure, CVS relies on plaintiff Robert Bourassa's
testimony that the store manager was present during only 12 to 15%
of his breaks. The plaintiffs note that plaintiff Cassandra Beale
provided a contrary estimate. Specifically, Ms. Beale estimated
that she was required to be in the store for 60 to 70% of her
breaks, meaning that the store manager must have been present
during the remaining 30 to 40% of her breaks.
-31-
defendant, despite having 'better access to the relevant
information,' has failed to 'show a reasonable probability that
more than $5 million is at stake in this case.'" Romulus II, 2014
WL 1271767, at *3 n.3 (quoting Amoche, 556 F.3d at 50-51). But, it
made no factual findings and provided no other explanation.
We do not believe that remand for a further explanation
of the district court's succinct reasons for rejecting CVS's figure
is appropriate. The district court made no factual findings and so
no deference is owed. As we said in Amoche, "[m]erely labeling the
defendant's showing as 'speculative' without discrediting the facts
upon which it rests is insufficient." 556 F.3d at 51.
Whether our review is de novo or for clear error, we hold
that the evidence demonstrates a reasonable probability that the
amount in controversy exceeds $5 million even when accounting for
the plaintiffs' objections. As we have held, all breaks without
Shift Supervisor coverage are at issue in light of the ongoing
dispute over the presence of Managers or Assistant Managers.
Without the discount, the plaintiffs' arguments fail to reduce the
amount at issue to less than $5 million even if the time frame is
limited and if the attorneys' fees are omitted. Multiplying the
number of breaks without Shift Supervisor coverage per month (5065)
by the number of months between July 25, 2008 and the second notice
of removal (approximately fifty-four) by half of the updated
average hourly wage ($13.53/2) by three for treble damages results
-32-
in a damages estimate of $5,550,885.45. That is enough to show a
reasonable probability that more than $5 million is at issue in
this case.
IV. Conclusion
In Amoche, we stressed that we wished to avoid "extensive
and time consuming litigation over the question of the amount in
controversy in CAFA removal cases," and that consideration of
preliminary issues of removal "should not devolve into a mini-trial
regarding the amount in controversy." Amoche, 556 F.3d at 50. Our
holdings further having clear and efficient rules to govern the
process of CAFA removals, and, above all, are in keeping with the
Congressional intent in CAFA that the federal courts be available
forums to hear significant class actions. See id. at 47-48. This
case is now in federal court to stay, and the remand order is
reversed.
So ordered.
-33-
Appendix A:
CVS's Damage Calculations Through July 23, 2013
Total Number of Violations 116,499
without Shift Supervisor
Coverage from Email
15% Reduction to Account for 99,024
Meal Breaks Where a Store
Manager or Assistant Store
Manager was Present
Number of Months in Sample 23
(August 2010 - June 2012)
Number of Violations Per Month 4305.4
in Sample (99,024
violations/23 months)
Number of Months in Class 59
Period (July 25, 2008 - July
23, 2013)
Number of Violations in Class 254,018
Period (4305.4 violations per
month x 59 months)
Updated Average Hourly Wage $13.53
Potential Exposure at Straight $1,718,432
Time (0.5 x Avg. Wage x
Violations)
Potential Exposure $1,906,428
Incorporating OT/Premium Rates
Treble Damages $5,719,285
Estimated Attorneys Fees (10% $572,000
of Potential Recovery)
Total Amount in Controversy $6,291,285
-34-