Mark Pirozzi; Keila Green, individually and on behalf of others similarly situated Respondents
Massage Envy Franchising, LLC Petitioner
Submitted: August 6, 2019
Petition for Permission to Appeal from United States District
Court for the Eastern District of Missouri - St. Louis
Loken, Shepherd, and Grasz, Circuit Judges.
Pirozzi and Keila Green as named plaintiffs filed a class
action lawsuit in Missouri state court against Massage Envy
Franchising, LLC ("Massage Envy"). The petition
alleged that Massage Envy violated the Missouri Merchandising
Practices Act ("MMPA") when advertisements for its
one hour massage session failed to disclose that the session
included ten minutes to undress, dress, and consult with the
therapist. A second amended petition filed in March 2019
expanded the class claims to include Massage Envy's one
and one-half and two hour sessions. The petitions sought
compensatory, statutory, and punitive damages and an award of
attorneys' fees in unspecified amounts. Massage Envy
filed a notice of removal on April 1, 2019, invoking federal
diversity jurisdiction under the Class Action Fairness Act
("CAFA"), 28 U.S.C. §§ 1332(d), 1453.
Massage Envy alleged that, if liable to the class, it would
potentially owe an aggregate of $2.885 million in
compensatory damages, based on the value of ten minutes of
massage, $720, 000 in attorneys' fees, assuming a 25% fee
award, and $3.6 million in punitive fees, assuming an award
of punitive damages equal to the compensatory damages and
moved to remand the class action to state court, arguing the
notice of removal was untimely. See 28 U.S.C. §
1446(b). Without addressing that question, the district court
remanded the case to state court, concluding it lacked
subject matter jurisdiction because "Massage Envy offers
nothing but speculation that potential awards of
attorneys' fees and punitive damages push the amount in
controversy over $5 million," the minimum aggregate
amount in controversy required to remove a class action under
CAFA. See § 1332(d)(2). Massage Envy petitions
for permission to appeal the remand order. See
§ 1453(c)(1). Reviewing de novo, we conclude the
district court misapplied controlling Supreme Court and
Eighth Circuit CAFA precedents. Accordingly, we grant
permission to appeal, reverse the district court's remand
order, deny plaintiffs' motion to remand, and remand for
primary purpose in enacting CAFA was to open the federal
courts to corporate defendants out of concern that the
national economy risked damage from a proliferation of
meritless class action suits." Bell v. Hershey
Co., 557 F.3d 953, 957 (8th Cir. 2009). CAFA expands
federal diversity jurisdiction to include class actions in
which more than $5 million is in controversy if "any
member of a class of plaintiffs is a citizen of a State
different from any defendant." § 1332(d)(2)(A). If
the class action complaint does not allege that more than $5
million is in controversy, "a defendant's notice of
removal need include only a plausible allegation that the
amount in controversy exceeds the jurisdictional
threshold." Dart Cherokee Basin Operating Co. v.
Owens, 135 S.Ct. 547, 554 (2014). If the class action
plaintiffs challenge the notice of removal allegation,
"removal is proper on the basis of an amount in
controversy asserted by the defendant if the district court
finds, by the preponderance of the evidence, that the amount
in controversy exceeds the jurisdictional threshold."
Id. at 553-54, quoting § 1446(c)(2)(B).
plaintiffs did not challenge Massage Envy's allegation
that more than $5 million is in controversy; indeed,
plaintiffs' motion to remand affirmatively alleged
aggregate claims that "conservatively" put more
than $12 million in controversy. The district court,
exercising its "independent obligation to determine
whether federal subject-matter jurisdiction exists,"
nonetheless reviewed the class action petition and the notice
of removal. In remanding, the court stated that "Massage
Envy overstates the actual damages that plaintiffs could
recover" and "offers nothing but speculation"
as to the potential awards of attorneys fees and punitive
damages. "Given the nature of [plaintiffs']
allegations," the court concluded, "it is more
likely that a reasonable fact finder would not award several
million dollars in punitive damages."
Dart, the Supreme Court noted that a removing
defendant's uncontested amount-in-controversy allegation
may be "questioned by the court." 135 S.Ct. at 553.
However, the district court erred by applying the wrong legal
standard. As the removing party, Massage Envy has the burden
to establish "not whether the damages [sought]
are greater than the requisite amount, but whether a
fact finder might legally conclude that they
are." Hartis v. Chicago Title Ins. Co., 694
F.3d 935, 944 (8th Cir. 2012) (quotation omitted; emphasis in
original). When the notice of removal plausibly alleges that
the class might recover actual damages, punitive
damages, and attorneys' fees aggregating more than $5
million, "then the case belongs in federal court unless
it is legally impossible for the plaintiff to
recover that much." Raskas v. Johnson &
Johnson, 719 F.3d 884, 888 (8th Cir. 2013) (emphasis
added), quoting Spivey v. Vertrue, Inc., 528 F.3d
982, 986 (7th Cir. 2008). "Even if it is highly
improbable that the Plaintiffs will recover the amounts
Defendants have put into controversy, this does not meet the
legally impossible standard." Id.
this standard, the district court erred when it evaluated the
MMPA violations alleged in plaintiffs' second amended
petition and remanded the class action to state court because
"it is more likely that a reasonable fact finder would
not award several million dollars in punitive damages."
Even if that assessment of plaintiffs' class action
claims was sound (an issue we do not consider),
considerations such as this go to the merits of
plaintiffs' claims; they "should not be smuggled
into the jurisdictional inquiry." Keeling v.
Esurance Ins. Co., 660 F.3d 273, 275 (7th Cir. 2011).
When plaintiffs have not challenged the removing
defendant's amount-in-controversy allegations,
"[t]his is a pleading requirement, not a demand for
proof." Spivey, 528 F.3d at 986. So long as
Massage Envy has plausibly alleged that more than $5 million
is in controversy, the case belongs in federal court unless
it is legally impossible for the plaintiff to recover that
class action petition explicitly sought to recover punitive
damages, unlike the class action complaint in Hurst v.
Nissan North America, Inc., 511 Fed.Appx. 584 (8th Cir.
2013). Massage Envy's notice of removal
alleged that plaintiffs' second amended petition put $3.6
million in aggregated compensatory damages and attorneys'
fees in controversy. The petition also alleged the class is
entitled to punitive damages in an unstated aggregate amount.
It is undisputed that punitive damages may be awarded for
egregious violations of the MMPA. See Mo. Rev. Stat.
§ 407.025.1; Lewellen v. Franklin, 441 S.W.3d
136, 146-48 (Mo. 2014). In Grabinski v. Blue Springs Ford
Sales, Inc., we affirmed multiple punitive damage awards
for egregious MMPA violations where "the ratio of the
collective punitive damages to the collective actual damages
[was] approximately 27:1." 203 F.3d 1024, 1026 (8th
Cir.), cert. denied, 531 U.S. 825 (2000). Given the
awards of punitive damages upheld in prior MMPA cases such as
Grabinski, plaintiffs' allegation that they are
entitled to punitive damages in an unstated amount raised the
amount in controversy to more than $5 million, whether or not
they ultimately prove they are entitled to the punitive
damages they claim. In determining the amount in controversy
for CAFA removal purposes, "we must accept the
class's characterization." Keeling, 660
F.3d at 275.
remaining issue is plaintiffs' motion to remand, which
the district court denied as moot. Plaintiffs argue that
Massage Envy's notice of removal was untimely because the
class action allegations in their original petition, as well
as in their second amended petition, put more than $5 million
in controversy. We conclude this contention is without merit.
The thirty-day removal period in § 1446(b)(3)
"begins running upon receipt of the initial complaint
only when the complaint explicitly discloses the plaintiff is
seeking damages in excess of the federal jurisdictional
amount." In re Willis, 228 F.3d 896, 897 (8th
Cir. 2000). If the complaint contains no such disclosure, the
time limit begins to run when the removing defendant
"receives from the plaintiff an amended pleading,
motion, order, or other paper from which the defendant can
unambiguously ascertain that the CAFA jurisdictional
requirements have been satisfied." Gibson v. Clean
Harbors Envtl. Servs., Inc., 840 F.3d 515, 519 (8th Cir.
2016) (quotation omitted). Here, neither the initial nor the
second amended petition disclosed an aggregate amount in
controversy or permitted Massage Envy to "unambiguously
ascertain" that more than $5 million was in controversy.
When Massage Envy investigated and filed a notice of removal
based on the results of its own amount-in-controversy
investigation, the notice was not untimely.
foregoing reasons, we grant the Petition for Permission To
Appeal, reverse the Order of Remand dated July 15, 2019, deny
plaintiffs' Motion for Remand, and remand to the district