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Dart Cherokee Basin Operating Co. v. Owens

ELR Citation: 44 ELR 20268
Nos. 13-719, (U.S., 12/15/2014)

The U.S. Supreme Court held that a district court erred in remanding to state court landowners' class action lawsuit seeking compensation for damages they sustained when an energy company allegedly underpaid royalties due under certain oil and gas leases. The lawsuit was originally filed in state court, and the company removed it to federal court, invoking the Class Action Fairness Act of 2005 (CAFA), which gives federal courts jurisdiction over class actions if the amount in controversy exceeds $5 million. The company's notice of removal alleged that the purported underpayments totaled over $8.2 million. The landowners moved to remand the case to state court, asserting that the removal notice was "deficient as a matter of law" because it included "no evidence" proving that the amount in controversy exceeded $5 million, and the district court agreed, reading Tenth Circuit precedent to require proof of the amount in controversy in the notice of removal itself. The company appealed, but the Tenth Circuit denied review. The Supreme Court reversed. As specified in 28 U.S.C. §1446(a), a defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold; the notice need not contain evidentiary submissions. The district court therefore erred in ruling that the company's amount-in-controversy allegation failed for want of proof. In addition, it was an abuse of discretion for the Tenth Circuit to deny the company's request for review. The case was therefore vacated and remanded. Ginsburg, J., delivered the opinion of the Court, in which Roberts, C.J., and Breyer, Alito, and Sotomayor, JJ., joined. Scalia, J., filed a dissenting opinion, in which Kennedy and Kagan, JJ., joined, and in which Thomas, J., joined as to all but the final sentence. Thomas, J., filed a dissenting opinion.