District Court Examines Validity of Underlying Claims in Determining Amount in Controversy
In McDaniel v. Fifth Third Bank, 2014 WL 805508 (M.D. Fla., Feb. 28, 2014) (McDaniel v Fifth Third), the United States District Court for the Middle District of Florida remanded a class action back to Florida state court because it found that some of plaintiff’s claims were not viable as a matter of law and, therefore, could not be considered in determining the amount in controversy.
Specifically, in McDaniel the plaintiff filed a class action against Fifth Third Bank in state court seeking compensatory and statutory damages not to exceed $2,989,335. Plaintiff, however, also sought punitive damages based on his fraud and Florida Consumer Collection Protection Act (“FCCPA”) claims. The bank removed the case to federal court pursuant to the Class Action Fairness Act alleging that the amount in controversy exceeded $5,000,000 when the claims for punitive damages were taken into consideration.
The Court found that the amount in controversy requirement was not met and remanded the case to state court. Notably, the Court found that the amount in controversy requirement was not met because the plaintiff’s fraud claims were destined to fail as a matter of law. Specifically, the Court found that “a removing defendant cannot establish that the amount in controversy exceeds the jurisdictional threshold if it must rely on a facially deficient claim.” Id. at *2. Moreover, the Court reasoned, the defendant “cannot establish that punitive damages are at issue because an award of punitive damages relies on [Plaintiff’s] facially deficient fraud claims.” Id.
Although the plaintiff also sought punitive damages pursuant to his FCCPA claim, the Act caps punitive damages at $1,500,000. Thus, even if awarded, those damages would not push the amount in controversy past the jurisdictional threshold. Here, it appears as though the plaintiff’s pleading deficiencies saved him from federal court.