Barbara McLaren v. The UPS Store Inc ( 2022 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
Nos. 22-1379 and 22-1380
______________
BARBARA MCLAREN
v.
THE UPS STORE INC; RK & SP SERVICES INC, DBA
UPS Store #4122; HAMILTON PACK N SHIP LLC, DBA
UPS Store #4122; TURQUOISE TERRAPIN LLC, DBA
UPS Store #4122,
Appellants
************
VINCENT TRIPICCHIO, on behalf of himself and all others
similarly situated
v.
THE UPS STORE INC; JB & A ENTERPRISES INC,
Appellants
____________
Appeal from the United States District Court
for the District of New Jersey
(D.N.J. Nos. 3-21-cv-14424 & 3-21-cv-14512)
U.S. District Judge: Honorable Freda L. Wolfson, Chief
District Judge
______________
Argued March 30, 2022
______________
Before: McKEE, SHWARTZ, and BIBAS, Circuit Judges.
(Filed: April 25, 2022)
______________
Kent A. Bronson [ARGUED]
Milberg Coleman Bryson Phillips & Grossman
19th Floor
100 Garden City Plaza, Suite 500
Garden City, NY 11530
Jared M. Placitella
Cohen Placitella & Roth
2001 Market Street
Two Commerce Square, Suite 2900
Philadelphia, PA 19103
Counsel for Appellee McLaren
Joseph A. Osefchen [ARGUED]
Stephen P. DeNittis
DeNittis Osefchen Prince
525 Route 73 North
5 Greentree Centre, Suite 410
Marlton, NJ 08053
2
Counsel for Appellee Tripicchio
Adam J. Hunt
Morrison & Foerster
250 West 55th Street, Suite 900
New York, NY 10019
Joseph R. Palmore [ARGUED]
Morrison & Foerster
2100 L Street, N.W., Suite 900
Washington, DC 20037
Counsel for Appellants
Andrew M. Schwartz
Gordon & Rees
Three Logan Square
1717 Arch Street, Suite 610
Philadelphia, PA 19103
Counsel for Appellant JB & A Enterprises, Inc.
______________
OPINION
______________
SHWARTZ, Circuit Judge.
The removal statute sets deadlines by which a defendant
may remove a case from state to federal court. One provision
requires removal within thirty days of service of a pleading that
demonstrates the existence of federal jurisdiction. If the initial
3
pleading does not disclose the existence of federal jurisdiction,
a separate provision permits removal within thirty days of the
date on which a defendant receives an amended pleading,
motion, order, or other paper that discloses federal jurisdiction.
In this case, the initial pleadings did not demonstrate the
existence of federal jurisdiction, and the defendants never
received any paper that disclosed jurisdiction. Thus, no thirty-
day clock began to run, and so removal here was timely. As a
result, the District Court incorrectly held that removal was
untimely, and we will vacate the order remanding these cases
to state court.
District courts must, however, decline from exercising
jurisdiction under certain circumstances. We will therefore
remand to the District Court for it to consider whether the local
controversy exception under the Class Action Fairness Act
(“CAFA”) requires it to decline to decide these timely removed
cases.
I
Plaintiffs purchased notary services at UPS stores in
New Jersey. They assert, in two separate putative class action
complaints brought against The UPS Store, Inc. (“TUPSS”)
and several of its New Jersey franchisees (collectively with
TUPSS, “Defendants”), that the local UPS Stores charged
them an amount for notary services that exceeded the $2.50 fee
permitted by New Jersey state law. In one case, McLaren v.
The UPS Store, Inc., Plaintiff asserts that she paid $5.00 for a
notary service. In the other case, Tripicchio v. The UPS Store,
Inc., Plaintiff alleges that he was charged $2.50 for a notary
service plus a $12.50 “notary convenience fee.” Each Plaintiff
4
brings New Jersey state law claims that permit compensatory
damages, treble damages, and attorneys’ fees. Tripicchio also
asserts a claim that carries a $100 statutory penalty per class
member.
Plaintiffs filed their complaints in New Jersey Superior
Court. Plaintiff McLaren filed her complaint in May 2020, and
Plaintiff Tripicchio filed his complaint in November 2020.
Each complaint describes the class members as those who paid
fees for notary services, or who were charged more than $2.50
for notary services. McLaren’s complaint alleges that
Defendants’ records would identify the “hundreds if not
thousands” of class members. App. 130-31 ¶ 75. Tripicchio’s
complaint alleges that his putative class includes “less than
5,000 persons,” and that Defendants’ records would identify
them. App. 200-01 ¶ 8. Neither complaint’s class definition is
explicitly limited to New Jersey citizens, but each named
Plaintiff is alleged to be a New Jersey citizen, and each
complaint alleges that TUPSS is not a citizen of New Jersey.
Neither complaint alleges that the amount in controversy
exceeds $5 million. In fact, Tripicchio’s complaint states that
the amount in controversy is less than $1 million.
Defendants moved to dismiss McLaren’s complaint.
The state court denied the motion on November 13, 2020.
Defendants thereafter filed an interlocutory appeal with the
New Jersey Superior Court, Appellate Division. In July 2021,
the Appellate Division affirmed the trial court’s order in part,
allowing McLaren to proceed on some of her New Jersey state
law claims. McLaren v. UPS Store, Inc., No. A-1612-20, 2021
WL 308515 (N.J. Super. Ct. App. Div. July 22, 2021).
While the appeal was pending, TUPSS responded to
McLaren’s discovery demands. In December 2020, TUPSS
5
produced a spreadsheet showing that the New Jersey UPS
stores had more than one million notary transactions during the
six-year class period. Because it disclosed the number of
transactions at issue, the spreadsheet, together with the
complaints, revealed that each case had an amount in
controversy that satisfied federal jurisdiction under CAFA. 1
Defendants removed both complaints to federal court,
asserting that CAFA’s jurisdictional requirements were met.
In their removal petitions, which were filed just days after they
received the Appellate Division’s 2021 adverse ruling,
Defendants asserted that the District Court has jurisdiction
because each case involves minimally diverse parties, each
case involves a plaintiff class of at least 100 members, and
TUPSS’s internal corporate documents demonstrate that the
number of notary transactions allegedly exceeding $2.50 could
lead to damages exceeding $5 million in each case.
Plaintiffs moved to remand. The District Court granted
the motion, finding that the complaints’ allegations allowed
Defendants to “reasonably and intelligently” conclude that the
cases were removable under CAFA because the complaints
1
CAFA’s required amount in controversy is $5 million
in the aggregate. 28 U.S.C. § 1332(d)(2). Using the
information in the spreadsheet, McLaren’s suit involves
1,068,852 transactions in which customers were overcharged
$2.50, which yields treble damages of at least $8,016,390.
Tripicchio’s suit involves the same number of transactions but
if each transaction involved an overcharged amount of $12.50,
and if that amount were trebled, and each transaction triggered
the $100 statutory per-class-member penalty, the amount in
controversy would be at least $40,081,950.
6
disclosed sufficient information for TUPSS to calculate the
amount in controversy when considered alongside TUPSS’s
transaction records. App. 71, see also id. 72-73 (citing 28
U.S.C. § 1446(b)(1)). The District Court reasoned that
Defendants could have performed this calculation upon receipt
of the complaints or, at latest, when the spreadsheet was
produced in December 2020, and thus the removal petitions
filed months later were untimely. Because it found that
removal was untimely, the Court did not consider whether
CAFA’s local controversy exception also required remand.
We granted Defendants’ petition for permission to
appeal the remand orders.
II 2
A
2
The District Court had removal jurisdiction pursuant
to 28 U.S.C. §§ 1332(d)(2), 1453(b), 1441(a), and 1446(a).
We have jurisdiction pursuant to 28 U.S.C. § 1453(c)
7
Defendants may remove civil actions from state court to
federal court so long as the district court would have had
subject-matter jurisdiction had the case been originally filed
before it. 28 U.S.C. § 1441. CAFA confers “original [subject-
matter] jurisdiction of any civil action” where the amount in
controversy exceeds $5,000,000, the parties are minimally
diverse, and the class consists of 100 or more members. Id.§ 1332(d)(2), (5)(B), (6); Judon v. Travelers Prop. Cas. Co. of
Am., 773 F.3d 495, 500 (3d Cir. 2014).
Defendants removing under CAFA must comply with
the time limits of the removal statute, 28 U.S.C. § 1446, except
that the one-year outer deadline for removing cases based on
diversity jurisdiction does not apply. See id. § 1453(b).
Two thirty-day clocks limit the time within which a
defendant may remove a case. Id. § 1446. First, under
§ 1446(b)(1), a defendant has thirty days to file a notice of
removal “after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading setting forth the
claim for relief.” Second, “if the case stated by the initial
pleading is not removable,” then, under § 1446(b)(3), a case
may be removed within thirty days “after receipt by the
(“[N]otwithstanding section 1447(d) [—which makes orders
remanding a case to State court unreviewable, see 28 U.S.C.
§ 1447(d)—] a court of appeals may accept an appeal from an
order of a district court granting or denying a motion to remand
a class action . . . if application is made to the court of appeals
not more than 10 days after entry of the order.”). We “review
issues of subject matter jurisdiction and statutory interpretation
de novo.” Walsh v. Defs., Inc., 894 F.3d 583, 586 (3d Cir.
2018).
8
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.” Subsection (b)(3) “is an exception to”
(b)(1), in that it only applies if the initial pleading did not give
defendant notice of removability. A.S. ex rel. Miller v.
SmithKline Beecham Corp., 769 F.3d 204, 208-09 (3d Cir.
2014). Each provision, however, is triggered only when the
defendant receives a particular document: in (b)(1) the initial
pleading, and in (b)(3) an amended pleading, motion, order, or
other paper. If either provision is triggered, removal after thirty
days is prohibited. See Roth v. CHA Hollywood Med. Ctr.
L.P., 720 F.3d 1121, 1125 (9th Cir. 2013) (holding that 28
U.S.C. §§ 1441 and 1446 “permit a defendant to remove
outside the two thirty-day periods on the basis of its own
information, provided that it has not run afoul of either of the
thirty-day deadlines [in § 1446(b)]”).
We next examine whether removal here was timely
under either (b)(1) or (b)(3).
B
1
We first consider whether either McLaren’s or
Tripicchio’s complaint triggered (b)(1)’s thirty-day clock. The
clock is triggered where “the document informs the reader, to
a substantial degree of specificity, [that] all the elements of
9
federal jurisdiction are present.” Foster v. Mut. Fire, Marine
& Inland Ins. Co., 986 F.2d 48, 53 (3d Cir. 1993) (quoting
Rowe v. Marder, 750 F. Supp. 718, 721 (W.D. Pa. 1990), aff’d,
935 F.2d 1282 (3d Cir. 1991)). Thus, when a district court
evaluates whether a case is removable under (b)(1), the
“inquiry begins and ends within the four corners of the
pleading.” Id.McLaren’s complaint sets forth allegations that satisfy
CAFA’s numerosity and diversity requirements, but it does not
identify the amount in controversy “to a substantial degree of
specificity.” Id. As to numerosity, McLaren alleges that
members of her putative class number “hundreds if not
thousands of individuals.” App. 130-31 ¶ 75. The complaint
thus put Defendants on notice of at least 2,000 class members.
See Kuxhausen v. BMW Fin. Servs., NA, LLC, 707 F.3d 1136,
1140 (9th Cir. 2013) (“a class of ‘thousands of persons’ implies
a logical minimum of 2,000 class members”). As to diversity,
McLaren alleges that she is a citizen of New Jersey, and that
TUPSS is incorporated in Delaware and headquartered outside
of New Jersey.
As to the amount in controversy, however, McLaren’s
complaint does not provide “a clear statement of the damages
sought or . . . sufficient facts from which damages can be
readily calculated,” Romulus v. CVS Pharmacy, Inc., 770 F.3d
67, 69 (1st Cir. 2014), nor does it “affirmatively reveal[] on its
face that [she] is seeking damages in excess of the minimum
jurisdictional amount,” Mumfrey v. CVS Pharmacy, Inc., 719
F.3d 392, 399 (5th Cir. 2013) (quoting Chapman v.
Powermatic, Inc., 969 F.2d 160, 163 (5th Cir. 1992)).
McLaren’s complaint alleges that each store charged “notary
fees of $5 instead of $2.50 for each notarial act performed,”
10
App. 125 ¶ 49, and that “[t]housands of similarly-situated New
Jersey customers were similarly overcharged at UPS Stores
throughout New Jersey,” App. 135 ¶ 89. If the amount of
overcharge ($2.50) were multiplied by the number of class
members specified (no less than 2000), damages would total
$5,000, and, even if trebled, the amount in controversy would
be far below CAFA’s $5 million requirement. Because the
complaint does not reveal the number of notary services
provided at the allegedly prohibited rate, it does not inform
Defendants “to a substantial degree of specificity” that the
amount in controversy exceeded $5 million. Foster, 986 F.2d
at 53 (quoting Rowe, 750 F. Supp. at 721). Thus, McLaren’s
initial pleading did not trigger (b)(1)’s removal clock.
Tripicchio’s complaint also reveals facts satisfying
CAFA’s numerosity and diversity requirements, but it does not
set forth “sufficient facts from which damages can be readily
calculated.” Romulus, 770 F.3d at 69. As to numerosity,
Tripicchio asserts a class of “at least 100 persons.” App. 205
¶ 37. As to diversity, Tripicchio states that he is a citizen of
New Jersey and TUPSS is a citizen of Delaware and California.
As to the amount in controversy, the complaint specifically
alleges that “the total amount in controversy is far less than $5
million.” App. 200 ¶ 8. In addition to this disclaimer, the
amount calculable from the pleadings does not meet the CAFA
minimum. Tripicchio’s proposed class includes “[a]ll persons
who were charged a fee of more than $2.50,” and a subclass of
“[a]ll persons who were charged a $12.50 ‘Notary
Convenience’ fee.” App. 204-05 ¶¶ 34-35. If each member of
the subclass (no less than 100) was overcharged by $12.50, and
those damages were trebled, Tripicchio would be seeking
compensatory damages of $3,750. Adding this to the $100-
per-class-member statutory penalty he seeks, Tripicchio’s class
11
damages would be around $13,750, far below the CAFA
minimum. In sum, the four corners of Tripicchio’s complaint
did not trigger (b)(1)’s thirty-day removal clock either.
2
Plaintiffs assert that Defendants possessed information
concerning the number of notary services they provided, and
that such information would have informed them that the
amount in controversy for CAFA jurisdiction was satisfied.
Because Defendants had such information when they were
served with the complaints, Plaintiffs argue that Defendants
were required to remove these cases within thirty days of the
date they received the initial pleading. Plaintiffs are incorrect.
As we will later explain, the text of § 1446(b) requires
that courts focus on what a defendant receives, and not on what
knowledge it possesses. Thus, whether removal is timely
under § 1446(b) depends on “whether [a] document [the
defendant receives] informs the reader, to a substantial degree
of specificity, [that] all the elements of federal jurisdiction are
present.” Foster, 986 F.2d at 53 (quoting Rowe, 750 F. Supp.
at 721); see also Papp v. Fore-Kast Sales Co., Inc., 842 F.3d
805, 816 n.10 (3d Cir. 2016) (observing in dicta that the
§ 1446(b) clocks do not require defendants to make
“deduction[s]” from plaintiffs’ submissions to discern
removability). This approach saves courts from “arduous
inquiries into defendants’ state of mind.” Foster, 986 F.2d at
53. Here, because the four corners of each complaint
Defendants received did not provide facts from which they
could ascertain federal subject matter jurisdiction, the (b)(1)
clock never began to run.
C
12
1
We next examine whether the thirty-day clock under
(b)(3) was triggered. As stated previously, if the initial
pleading does not show that the case is removable, then, under
(b)(3), a case may be removed “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.
§ 1446(b)(3). Plaintiffs assert that Defendants could have
ascertained that the cases were removable based on their own
records and, at the latest, should have removed the cases within
thirty days of producing the spreadsheet that set forth the
number of notary transactions during the class period, because
that number enabled Defendants to determine that the amount
in controversy exceeded $5 million. Although Plaintiffs’
position has common-sense appeal, the text of the statute does
not permit adopting it.
The text of § 1446(b) shows that the only documents
that trigger either thirty-day clock are those documents
“recei[ved] by the defendant.” 28 U.S.C. § 1446(b)(1), (3).
Subsection (b)(1) requires removal “within thirty days after the
receipt by the defendant . . . of a copy of the initial pleading,”
and (b)(3) permits removal “within thirty days after receipt by
the defendant . . . of a copy of an amended pleading, motion,
order or other paper” from which federal jurisdiction can be
ascertained. 28 U.S.C. § 1446(b)(1), (3). The plain language
of the statute focuses only on what a defendant receives. Thus,
the statute does not contemplate that the thirty-day clock would
13
be triggered by information that the defendant already
possesses or knows from its own records. 3
Our observations in Foster are consistent with this
interpretation. As we stated in Foster, the time clocks in
§ 1446(b) depend not on “what the defendants purportedly
knew.” 986 F.2d at 54. Many of our sister circuits agree.
Those courts have held that the § 1446(b) clocks are triggered
based only on what a defendant can ascertain from the four
corners of the plaintiff’s complaint or other paper the defendant
receives. 4
3
Although many of the documents listed in § 1446(b)
are of the type that generally only come from a plaintiff, such
as pleadings, others in the list can come from other sources.
For instance, motions could be filed by other parties, and
orders can come from courts. Thus, the § 1446(b) clocks are
triggered only by documents a defendant receives, but the
triggering document in (b)(3) need not come from the plaintiff.
4
See Gibson v. Clean Harbors Env’t Servs., Inc., 840
F.3d 515, 519 (8th Cir. 2016) (holding clock does not run “until
the defendant receives from the plaintiff [a document] from
which the defendant can unambiguously ascertain that the
CAFA jurisdictional requirements have been satisfied”)
(quotation marks and citation omitted); Paros Props. LLC v.
Colo. Cas. Ins. Co., 835 F.3d 1264, 1269 (10th Cir. 2016)
(describing, in a non-CAFA case, court’s “very strict”
approach in assessing whether “grounds for removal are
ascertainable” because plaintiff’s statement must provide clear
and unequivocal notice); Graiser v. Visionworks Am., 819
F.3d 277, 285 (6th Cir. 2016) (holding document from the
plaintiff must allow defendant to “unambiguously ascertain”
CAFA jurisdiction); Romulus, 770 F.3d at 69 (holding in a
14
This “bright-line rule,” Walker v. Trailer Transit, Inc.,
727 F.3d 819, 824 (7th Cir. 2013), advances judicial economy,
prevents premature (protective) removals, and discourages
evasive or ambiguous pleading. First, inquiring into what the
defendant knew, rather than what a document states, could
“degenerate into a mini-trial,” Lovern v. Gen. Motors Corp.,
121 F.3d 160, 162 (4th Cir. 1997). Thus, a bright-line rule
“promotes clarity and ease of administration for the courts.”
Walker, 727 F.3d at 824; see also Cutrone v. Mortg. Elec.
Registration Sys., Inc., 749 F.3d 137, 145 (2d Cir. 2014)
(rejecting plaintiff’s argument that defendant failed to examine
its records when it received the complaint because the bright-
line rule “also avoids courts ‘expending copious time
determining what a defendant should have known or have been
able to ascertain at the time of the initial pleading [or other
relevant filing]’” (quoting Mumfrey, 719 F.3d at 399
(alteration in original))); Foster, 986 F.2d at 53 (observing that,
CAFA case that time limits only apply “when the plaintiffs’
pleadings or . . . other papers provide the defendant with a clear
statement of the damages sought or with sufficient facts from
which damages can be readily calculated”); Cutrone v. Mortg.
Elec. Registration Sys., Inc., 749 F.3d 137, 139 (2d Cir. 2014)
(holding, in a CAFA case, thirty-day clocks are not triggered
until “the plaintiff serves the defendant with an initial pleading
or other paper that explicitly specifies the amount of monetary
damages sought or sets forth facts from which an amount in
controversy in excess of $5,000,000 can be ascertained”);
Walker v. Trailer Transit, Inc., 727 F.3d 819, 821, 825 (7th Cir.
2013) (holding, in a CAFA case, thirty-day clocks are triggered
only by plaintiff’s paper that, “on its face or in combination
with earlier-filed pleadings,” “affirmatively and
unambiguously reveals” removability).
15
by evaluating removability based only on the “the four corners
of the pleading,” courts are saved from “arduous inquiries into
defendants’ state of mind”).
Second, ensuring that the § 1446(b) clocks are not
triggered by unclear or incomplete information about
removability discourages defendants from “remov[ing] cases
prematurely for fear of accidentally letting the thirty-day
window to federal court close.” Mumfrey, 719 F.3d at 399.
Third, the rule discourages plaintiffs from attempting to
“prevent or delay removal by failing to reveal information
showing removability and then objecting to removal when the
defendant has discovered that information on its own.” Roth,
720 F.3d at 1125; see also Romulus, 770 F.3d at 75 (“In the
absence of something like a bright-line approach, plaintiffs
would have no incentive to specify estimated damages early in
litigation.”).
Section 1446(b)’s use of the phrase “receipt by the
defendant” also prohibits courts from imposing a duty on
defendants to investigate the records they possess. Although a
defendant has a duty to “apply a reasonable amount of
intelligence to its reading” of the documents it receives, it has
no duty “to search its own business records or ‘perform an
independent investigation into a plaintiff’s indeterminate
allegations to determine removability.’” Gibson v. Clean
Harbors Env’t Servs., Inc., 840 F.3d 515, 519 (8th Cir. 2016)
(quoting Graiser v. Visionworks of Am., 819 F.3d 277, 285
(6th Cir. 2016)); Romulus, 770 F.3d at 75 (“The defendant has
no duty . . . to investigate or to supply facts outside of those
provided by the plaintiff.”); Mumfrey, 719 F.3d at 399
(declining to adopt a rule that would “expect defendants to
16
‘ascertain[] from the circumstance[s] and the initial pleading’”
that damages exceeded the amount-in-controversy
requirement) (quoting Chapman, 969 F.2d at 163 (alterations
in original)); cf. Kuxhausen, 707 F.3d at 1140 (“Multiplying
figures clearly stated in a complaint is an aspect of [reasonable
intelligence].”). Thus, the text and the weight of authority
demonstrate that a defendant must apply ordinary intelligence
in reading the documents it receives, but it need not search its
own records to determine whether federal jurisdiction exists.
This approach, of course, increases the possibility that,
in CAFA cases, a defendant may delay removing a state case
to federal court until it finds the state court disadvantageous,
such as after an unfavorable ruling. See, e.g., Roth, 720 F.3d
at 1125 (“A defendant should not be able to ignore pleadings
or other documents from which removability may be
ascertained and seek removal only when it becomes
strategically advantageous for it to do so.”); Graiser, 819 F.3d
at 286 (“We are mindful of the concern that, under this rule, a
defendant could ignore information in its possession that
supports removability, and—with no removal clock ticking—
delay litigation in state court unless and until the federal forum
proves more desirable.”). This reasonable concern exists
because the statute does not impose any outer time limit on
removal in class action cases, and thus defendants could
17
theoretically remove during a state court trial. 5 Defendants
even conceded this possibility at oral argument. The concern
is also logically based on the reality that, in many cases, the
defendant may be the only party who has access to information
that reveals a case’s removability. These legitimate concerns,
however, do not allow us to ignore the plain text of the statute.
Moreover, as other courts have explained, plaintiffs “are also
‘in a position to protect themselves’ from the gamesmanship of
which they warn” because they can file a complaint or conduct
discovery and thereafter provide the defendant with a paper
from which federal jurisdiction can be ascertained and thereby
start the removal clock. Romulus, 770 F.3d at 76 (quoting
Roth, 720 F.3d at 1126); see also Graiser, 819 F.3d at 286
(noting four corners approach “provides both sides with tools
to prevent gamesmanship” (quotation marks and citation
omitted)).
5
In Lovern, a non-CAFA case, the Court of Appeals for
the Fourth Circuit noted that “strategic delay interposed by a
defendant in an effort to determine the state court’s receptivity
to his litigating position” is prevented by the one-year limit on
removal. See Lovern, 121 F.3d at 163 (observing that, in
diversity cases, the removal statute “explicitly safeguards
against such a strategic delay by erecting an absolute bar to
removal of [diversity] cases . . . ‘more than 1 year after
commencement of the action’” and explaining that the bar
creates “a sufficient incentive for defendants promptly to
investigate the factual requisites for diversity jurisdiction,
including the citizenship of the plaintiff and the amount in
controversy”) (quoting 28 U.S.C. § 1446(b)). As previously
stated, this one-year time limit does not apply to class action
cases, so the safeguard on which the Lovern court relied is
absent here. 28 U.S.C. § 1453(b).
18
Thus, despite these legitimate concerns, § 1446(b)’s
text dictates that the thirty-day clocks are triggered by either
the four corners of the initial complaint or documents a
defendant receives, and not by what the defendant subjectively
knew or the documents in its possession.
2
Mindful of the text of the statute as well as our sister
circuits’ interpretations and observations, we next examine
whether (b)(3)’s thirty-day clock was triggered here.
The District Court did not explicitly hold that
§ 1446(b)(3)’s clock began to run. Rather, it held the removal
notices should have been filed “at the latest, on December 11,
2020, when [Defendants] provided” the spreadsheet showing
the number of transactions at issue. App. 72. This information,
according to the District Court, provided “sufficient facts from
which damages can be readily calculated” in each case, App.
71, and hence Defendants had a document from which
removability could be ascertained. The spreadsheet here,
however, was not the type of document that started the (b)(3)
clock because it was not “recei[ved] by [a] defendant.” 28
U.S.C. § 1446(b)(3). Instead, the spreadsheet was a document
that the defendant produced. 6 Thus, the spreadsheet did not
6
During oral argument, McLaren asserted that she
referenced the spreadsheet in a discovery dispute motion that
she served on TUPSS. See also McLaren v. The UPS Store,
No. 3:21-cv-14424, ECF No. 1-3 at 482. She argues that once
she provided TUPSS with her motion, which appended
TUPSS’ discovery responses that referenced a spreadsheet
19
trigger the thirty-day clock, and Defendants were therefore not
required to remove within thirty days of its production on
December 11, 2020.
Because the complaints did not reveal facts from which
Defendants could ascertain removability under CAFA, and
because the spreadsheet TUPSS produced was not “recei[ved]
by [D]efendant[s],” no thirty-day removal clock started. As a
result, Defendants’ removals were timely. 28 U.S.C.
§ 1446(b)(1), (3).
D
Even if a federal court has jurisdiction under CAFA, it
must decline to exercise that jurisdiction if the class action
involves a local controversy. 28 U.S.C. § 1332; Kaufman v.
Allstate N.J. Ins. Co., 561 F.3d 144, 148 (3d Cir. 2009). In
evaluating whether removal is proper, “we generally focus on
the allegations in the [c]omplaint and the notice of removal,”
but we may also consider “evidence that the parties submit to
determine whether subject matter jurisdiction exists or an
exception thereto applies.” Vodenichar v. Halcon Energy
TUPSS possessed, Defendants received information about a
document that contained information from which removability
could be ascertained. Because this argument was not raised in
the briefs to the District Court or us, it is waived. Nelson v.
Adams USA, Inc., 529 U.S. 460, 469 (2000) (“It is . . . the
general rule that issues must be raised in lower courts in order
to be preserved as potential grounds of decision in higher
courts.”); United States v. Pellulo, 399 F.3d 197, 222 (3d Cir.
2005) (waiver on appeal where party fails to “identify or argue
an issue in [her] opening [appellate] brief”).
20
Props., Inc., 733 F.3d 497, 503 & n.1 (3d Cir. 2013) (quotation
marks and citations omitted).
McLaren asserts that the local controversy exception
under 28 U.S.C. § 1332(d)(4)(A) applies and that remand is
required. 7 Because the District Court did not decide whether
the local controversy exception applies, and because fact
gathering may be needed to determine if each element of the
7
Only McLaren invoked the exception; Tripicchio did
not. Defendants, however, do not argue that Tripicchio waived
or forfeited his right to invoke the exception. So, we leave it
to the District Court to determine whether the exception applies
in Tripicchio as well.
21
cal controversy exception is met, 8 we will remand to allow the
Court to consider whether it must decline to decide these
timely removed cases. 9 See, e.g., Mondragon v. Capital One
Auto Fin., 736 F.3d 880, 884-85 (9th Cir. 2013) (noting the
need to consider factual record when there is a dispute about
class member citizenship and remanding to district court to
permit plaintiff to gather and submit evidence regarding local
8
Under the exception, a district court must decline
jurisdiction where six requirements are met:
(1) greater than two-thirds of the putative class
are citizens of the state in which the action was
originally filed; (2) at least one defendant is a
citizen of the state in which the action was
originally filed (the “local defendant”); (3) the
local defendant’s conduct forms a significant
basis for the claims asserted; (4) plaintiffs are
seeking significant relief from the local
defendant; (5) the principal injuries occurred in
the state in which the action was originally filed;
and (6) no other class action asserting the same
or similar allegations against any of the
defendants had been filed in the preceding three
years.
Vodenichar, 733 F.3d at 506-07. The party invoking the
exception bears the burden of proving these conditions by a
preponderance of the evidence. Id. at 503.
9
Contrary to Defendants’ argument, McLaren did not
waive her request to conduct discovery concerning the
applicability of the local controversy exception. McLaren v.
The UPS Store, No. 3:21-cv-14424, ECF No. 15 at 6 n.6.
22
controversy exception); In re Sprint Nextel Corp., 593 F.3d
669, 676 (7th Cir. 2010) (vacating remand order and
remanding to the district court to “give the plaintiffs another
opportunity to prove that the proposed class satisfies the
requirements of the home-state exception”); see also Walsh v.
Defs., Inc., 894 F.3d 583, 588 (3d Cir. 2018) (permitting
remand, following a motion for reconsideration of an order
previously denying remand, based upon evidence disclosed
during class discovery that showed the local controversy
exception was satisfied).
III
For the foregoing reasons, we will vacate the order
remanding the cases to state court and remand to the District
Court for further proceedings.
23