ATLANTA (Legal Newsline) - A federal appeals court has ruled that because MetroPCS failed to establish the minimum amount in controversy, a class action lawsuit against it should be remanded back to state court.
Chief Judge Edward Earl Carnes and circuit judges Charles R. Wilson and Adalberto Jordan voted in the majority for the U.S. Court of Appeals for the 11th Circuit.
"The defendant can take into account damages and any equitable relief the plaintiff seeks, as long as the estimate is not overly speculative," the Nov. 14 per curiam opinion states.
"Here, in estimating the amount placed in controversy, MetroPCS cited its total Florida revenue during the class period. MetroPCS justifies that method by asserting that the complaint alleges fraudulent inducement and that, under Florida law, rescission of contract is a form of relief available to plaintiffs who, like [Jorge] Porter, allege fraudulent inducement."
Porter filed his class action lawsuit in Miami-Dade Circuit Court on May 1, 2012. It was removed to the U.S. District Court for the Southern District of Florida on Oct. 15, 2013. On July 11, District Judge Joan A. Lenard granted an order remanding the class action lawsuit back to state court.
Porter and the class purchased cell phones from MetroPCS in Florida. He claims MetroPCS overcharged and collected illegal sales tax from the class members.
"The notice of removal then cites the 'substantial' costs of complying with the equitable relief Porter seeks," the opinion states. "We are certain that the costs of compliance would be substantial. Like the fees, costs, and punitive damages, though, MetroPCS fails to put any concrete number on these compliance costs."
Using them to calculate the amount in controversy would again require the panel to engage in unguided speculation, according to the opinion.
"As it stands, the estimates put forth by MetroPCS in its notice of removal to which we can give credit provide us with an approximate amount in controversy of $5,285.00, which comes entirely from the tax class," the opinion states. "Because MetroPCS failed to establish the minimum amount in controversy, the district court was correct to grant Porter’s motion to remand."
Assuming that rescission is available to Porter, MetroPCS has failed to establish the minimum amount in controversy, according to the opinion.
MetroPCS’s revenue includes not just that realized from the service agreements that may be rescinded as a result of this litigation, but also the revenue it receives from the sale of cell phones, other devices and accessories without any corresponding commitment to MetroPCS.
"There is no reason to believe that any of that revenue would have to be returned to customers should the class action succeed on the merits," the opinion states. "Without any breakdown of MetroPCS’s revenue, the district court would have to engage in hopeless speculation in assessing what amount may be subject to rescission; this it cannot do."
Porter is represented by Gonzalo R. Dorta of Gonzalo R. Dorta PA in Coral Gables, Fla.
MetroPCS is represented by Michael J. Stortz of Drinker Biddle & Reath LLP in San Francisco; Michael P. Daly and Meredith C. Slawe of Drinker Biddle & Reath LLP in Philadelphia; Aaron S. Weiss of Carlton Fields PA in Miami, Fla.; and James B. Baldinger of Carlton Fields PA in West Palm Beach, Fla.
U.S. Court of Appeals for the 11th Circuit case number: 14-14239
From Legal Newsline: Kyla Asbury can be reached at firstname.lastname@example.org.