# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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Mat t Grawi tc h; Mi ke W oody
, ind ivi dua lly an d on be ha lf of al l oth er s sim ila rl y sit ua te d

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll an ts

v.

Ch art er Co m

m un ic at io ns , Inc

.
ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of M is so ur i - St . Lou is

__ __ __ __ __ __ Su bm it te d: Jan ua ry

16 , 20 14 Fil ed : M ay

2, 2 01 4

__ __ __ __ __ __ Befo re WOL LMAN, BYE, and MELLOY, Circu it Ju dg es

.

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W OLLMAN, Circ ui t J ud ge

.

Mat t Grawi tc h an d Mi ke W oo dy, th e na m ed pl ai nt iff s in a pu rp or te d cl as s act io n, fil ed su it ag ai n s t C h art er Co m m un ic at io ns , In c. (Ch art er), in Mi ss ou ri st at e

co ur t, cl ai m in g th at Ch art er vi ol at ed th e Mi ss ou ri Mer ch an di si ng Prac t i c e s Act (MM PA), Mo

. Rev . Sta t. § 40 7.0 10 et seq

. , and bre ach ed it s co nt ract wit h t he cla ss

m em be rs

. The co m

pl ai nt al le ge d th at Ch art er had pr ov id ed th e cl as s m em be rs wit hIn te rn et m od em s th at were in cap ab le of op erat in g at th e sp eed t h a t Ch art er ha d

pr om is ed

. Ch art er rem ov ed th e cas e to fed eral di st ric t co u r t a n d t h e n m ov ed to di sm is s t he co m

pl ai nt . The d is tri ct co ur t gra nt ed Ch art er’s m ot io n, and we affi rm

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I. Back gr ou nd

Ch art er is a br oa db an d co m m un ic at io ns co m

pa ny th at pr ov id es cab le
, In te rn et ,
an d te le ph on e se rv ic es

. The pl ai nt iff s su bs cri be d to Ch art er’s “ Pl us ” In te rn et se rv ic e

un de r Ch art er’s In te rn et Res id en ti al Cu st om er Agr eem en t (th e Agr eem en t) in 20 11

. Ch art er pr ov id e d th e pl ai nt iff s wit h DOCSIS 2.0 m od em s at th e ti m e th ei r In te rn et

se rv ic es were i ns ta ll ed

.

In Decem be r 20 11 , Cha rte r up gr ad ed it s “ Pl us ” an d “ Ult ra” s erv ic es in ord er to pr ov id e it s cu st om ers wit h in crea se d do wnl oa d sp eed s of up to 30 m eg ab it s pe r

se co nd (Mb ps ). Alt ho ug h DOCSIS 2.0 m od em s co nt in ue d to fu nc ti on fo ll owi ng th e up gr ad e, th ey co ul d no t op erat e at th e 30 Mb ps sp eed

. In st ead
, DOCSIS 3.0 m od em s

were req ui red to ob ta in th e in crea se d sp eed

. M o nt hs aft er th e up gr ad e, whe n th e pl ai nt iff s di sc ov ered th at th ey were no t rece iv in g th e 30 M b ps do wnl oa d sp eed be cau se th ey di d no t ha ve DOCSIS 3.0 m od em s, th ey co nt act e d C h art er an d
req ue st ed a refu nd . Cha rte r de ni ed th is req ue st

.

The pl ai nt iff

s th en fil ed su it in Mi ss ou ri st at e co ur t on be ha lf of th em se lv es an d

a pr op os ed na ti on wid e cl as s de fin ed as fo ll ows : “ All pe rs on s who
, fro m Sep te m be r 14 , 20 07 , to t h e d a t e of fin al jud gm en t, su bs cri be d to Ch art er In te rn et Res id en ti al Serv ic e un de r th e na m es of ‘Chart er Pl us ,’ ‘Max’ an d ‘U lt ra’ sp eed s an d whi ch were

The Hon or ab le Aud rey G

. F l e i ss ig
, Uni te d St at es Dis tri ct Ju dg e fo r th e 1 East ern Dis tri ct of M is so ur i.

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-pr ov id ed a m od em o f l e s s t h an DOCSIS 3.0 st an da rd .” The pl ai nt iff s al le ge d th at 2
Ch art er vi ol at ed th e M M P A a nd br each ed th e Agr eem en t by rep res en ti ng th at th e pl ai nt iff s wou ld rece iv e th e 30 Mb ps do wnl oa d sp eed
, whi le fai li ng to pr ov id e th em wit h m od em s th at co ul d op erat e at th at sp eed

. The pl ai nt iff s fu rth er al le ge d th at th ey

su ffer ed da m ag es of “ th e di ffer en ce in th e co st an d va lu e of th e se rv ic e th ey pa id fo r,

an d t he us eab le se rv ic e th ey rece iv ed [,]” an d th at th es e d am ag es ex ceed ed $5 0,0 00

co ll ect iv el y , bu t n ot in di vi du al ly.

Ch art er rem ov ed th e cas e to fed eral di st ric t co ur t un d er th e Cl as s Acti on Fai rn es s Act of 20 05 (CAFA), 28 U.S.C. §§ 13 32 (d ), 14 53 , an d th en m ov ed to di sm is s th e co m

pl ai nt un de r Fed eral Ru le of Civ il Pro ced ur e 1 2( b) (6 ) fo r fai lu re to

s t a t e a cl ai m

. The di st ric t co ur t di sm is se d th e co m pl ai nt wit h pr ejud ic e on th r e e in de pe nd en t gr ou nd s, co nc lu di ng (1 ) th at th e pl ai nt iff s h a d n o t pl ead ed fact s

su ffi ci en t to de m on st rat e pe cu ni ary lo ss , (2 ) th at t h e pl ai nt iff s’ Ja nu ary 20 12 bi ll s ga ve th em no ti ce th at th ei r mo d e m s ne ed ed to be up gr ad ed to ob ta in th e in crea se d do wnl oa d sp eed
, an d (3 ) th at th e pl ai nt iff s’ cl ai m s were fo recl os ed by a sp eed di sc la im er i n t he Agre em en t. The pl ai nt iff s m ov ed to alt er o r am en d t he jud gm en t,

an d fo r th e fi rs t t im e arg ue d th at th e cas e sh ou ld ha ve be en rem an de d t o s ta te co ur t be cau se th e di st ric t co ur t la ck ed su bjec t m at te r juri sd ic ti on

. The di st ric t co ur t de ni ed th e m ot io n. On ap pe al
, th e pl ai nt iff s ch al le ng e each of th e gr ou nd s th e di st ric t co ur t rel ie d on in gr an ti ng Ch art er’s m ot io n to di sm is s an d, in th e al te rn at iv e, arg ue th at th e di st ric t co ur t d id no t h av e juri sd ic ti on

.

Ch art er su bm it te d an affi da vi t al on g wit h it s no ti ce of rem ov al es ta bl is h i n g 2 th at it ha s m or e th an 50 ,00 0 cu st om ers na ti on wid e th at “ rece iv e in te rn et se rv ic e un de r th e na m es ‘Chart er’s Pl us ,’ ‘Max’ an d ‘U lt ra Sp eed s’ an d le as e a DOCCSIS 1.0 or a DOCCSIS 2.0 m od em .”

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-II. Dis cu ss io n

A. Rem ov al

W e rev ie w a co ur t’s e x e r c i s e of rem ov al juri sd ic ti on de no vo

. See Harg is v. Acces s Cap it al Fu nd in g, LLC, 67 4 F.3 d 78 3, 78 9 (8 th Ci r. 20 12 ). “ Und er CAFA, fed eral co ur ts ha ve juri sd ic ti on ov er cl as s act io ns in whi ch th e am ou nt in co nt ro ve rs y

ex ceed s $5
, 0 0 0 , 0 0 0 in th e ag gr eg at e; th ere is m in im al (as op po se d to co m pl et e) di ve rs it y am on g th e pa rti es , i.e., an y cl as s m em be r an d an y de fen da nt are ci ti zen s of di ffer en t st at es ; an d th ere are at le as t 10 0 m em be rs in th e cl as s.” W es te rfel d v. In de p. Pro ces si ng , LLC, 62 1 F.3 d 8 19 , 82 2 (8 th Cir . 20 10 ). “ [A] p art y se ek in g to rem ov e

un de r CAFA m

us t es ta bl is h th e am ou n t i n co nt ro ve rs y by a pr ep on de ran ce of th e

ev id en ce[.]” Harg is
, 67 4 F.3 d at 78 9 (fi rs t al t e r a t i on in or ig in al ) (q uo ti ng Bel l v. Hers he y Co ., 55 7 F.3 d 95 3, 95 8 (8 th Ci r. 20 09 )). “ Und er th e pr ep on de ran ce st an da rd
, ‘[t]he juri sd ic ti on al fact

. . . is no t whe th er th e da m ag es ar e gr eat er th an th e req ui si te

am ou nt , bu t whet he r a fact fin de r mig ht le ga ll y co nc lu de th at th ey are[ .] ’” Id

. (fi rs t

an d se co nd al te rat io ns in or ig in al ) (q uo ti ng Bel l, 55 7 F.3 d at 95 9)

. The co u r t ’s juri sd ic ti on is m eas ur ed at t he ti m e o f rem ov al . Id.

The pl ai nt iff

s arg ue th at rem ov al un de r CAFA was im pr op er be cau se Ch art er fai le d to pr ov e by a pr ep on de ran c e o f th e ev id en ce th at th e am ou nt in co nt ro ve rs y

ex ceed ed $5 m il li on

. Acco rd in gl y , th e pl ai nt iff s co nt en d th at th e di st ric t co ur t sh ou ld ha ve rem an de d th e cas e to st at e co ur t be cau se it di d no t ha ve su bjec t m at te r juri sd ic ti on

. In th ei r co m pl ai nt , ho wev er, th e pl ai nt iff s al le ge d a na ti on wid e cl as s

co ns is ti ng of at le as t 50 ,00 0 m em be rs , who ov erp ai d fo r In te rn et se rv ic es each m on th fro m Sep te m

be r 14 , 20 07 , to th e da te of fin al jud gm en t. Fu rth erm or e, th e pl ai nt iff s

so ug ht to reco ve r up to $5 0,0 00 in da m ag es pe r cl as s m emb e r

. B a s ed on th es e al le ga ti on s, a jury m ig h t c on cl ud e th at th e cl as s su ffer ed da m ag es of m or e th an $5

m il li on do ll ars , ev en if th e in di vi du al cl as s m em be rs ’ m on th ly ov erp ay m en t was

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-m in im al

. W e th us co nc lu de th at Ch art er m et it s bu rd en of sh owi ng th at th e am ou nt

in co nt ro ve rs y

ex ceed ed CAFA’s $5 m il li on juri sd ic ti on al th res ho ld

.

B. Mo ti on to Dis m is s

“ W e rev ie w de no vo t he di st ric t co ur t’s gr an t of a m ot io n to di sm is s un de r Fed eral Ru le of Ci vi l Pro ced ur e 12 (b )(6 ), acce pt in g th e pl ai nt iff ’s fact ua l al le ga ti on s

as tru e an d co ns tru in g al l reas on ab le in fere nc es in fav or of th e pl ai nt iff .” Alex an de r

v. Hed ba ck
, 71 8 F.3 d 76 2, 76 5 (8t h Cir. 20 13 ). “ To wit hs ta nd a m ot io n un de r Ru le 12 (b )(6 ), a co m

pl ai nt m us t pl ead su ffi ci en t f

a c t s t o ‘stat e a cl ai m to rel ie f th at is pl au si bl e on it s face .’ ” Id

. (q uo ti ng Ret ro Tele vi si on N e two rk
, In c. v. Luk en Co m m c’ns , LLC, 69 6 F.3 d 76 6, 76 8 (8 th Ci r. 20 12 )). “ A cl ai m ha s faci al pl au si bi li ty whe n th e pl ai nt iff pl ead s fact ua l co nt en t th at al lo ws th e co ur t to dr aw th e reas on ab le in fere nc e th at th e de fen da nt is li ab le fo r th e m is co nd uc t al le ge d.” Ash cro ft v. Iq ba l,
55 6 U.S. 66 2, 67 8 (2 00 9)

. “ Thre ad ba re reci ta ls of th e el em en ts of a cau se of act io n,

su pp or te d b y

m ere c on cl us or y

st at em en ts , do no t s uf

fic e.” Id

.

The pl ai nt iff

s arg ue th at ev en if t h e d i s t ric t co ur t ha d juri sd ic ti on , it erre d in di sm is si ng th ei r co m

pl ai nt fo r fai lu re to p l e a d f a c ts su ffi ci en t to de m on st rat e pe cu ni ary lo ss

. Und er M i s s o u ri la w, th e pl ai nt iff s m us t pr ov e th at th ey su ffer ed
pe cu ni ary lo ss in or de r to pr ev ai l on th ei r MM PA cl ai m , se e W ard v. W

. Cn ty. Mo to r Co ., 40 3 S.W .3d 82 , 84 (Mo

. 20 13 ) (en ba nc ), an d br each of co nt ra c t c l a i m, se e K e ve ne y v. Mo

. Mi li ta ry Acad
., 30 4 S.W .3d 98 , 10 4 (Mo

. 20 10 ) (en ba n c )

. Th e 3 pla in ti ffs co nt en d th at th ey ad eq ua te ly pl ead ed da m ag es by al le gi ng th at th ey su ffer ed

a m on et ary lo ss of “ th e di ffer en ce in th e co st an d va lu e of th e se rv ic es th ey pa id fo r,

an d th e us eab le se rv ic e th ey rece iv ed .” The co m pl ai nt , ho wev er, do es no t al le ge fact s to su pp or t th e pl ai nt iff

s’ al le ga ti on of da mag e s b e c a u s e it do es no t al le ge th at th e p l a i n t iff s pa id ex tra fo r th e 30 Mb ps do wnl oa d sp eed

. Mo reo ve r, acco rd in g t o

The pa rti es ag ree t ha t M is so ur i l aw go ve rn s t he m eri ts of t he ir d is pu te

. 3

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-Ch art er, th e pl ai nt iff s co ul d no t m ak e th at al le ga ti on be cau se Ch a r te r pr ov id ed th e

se rv ic e up gr ad e fo r free

. In th e ab se nc e o f f a ct ua l su pp or t fo r th e pl ai nt iff s’ al le ga ti on of da m ag es , th e pl ai nt iff s’ co m pl ai nt is in su ffi ci en t to wit hs ta nd a m ot io n to di sm is s un de r Ru le 12 (b )(6 ). See Farm Cred it Serv s. of Am ., FLCA v. Hau n, 73 4 F.3 d 8 00 , 80 6 (8 th Cir . 20 13 ).

The pl ai nt iff

s fu rth er co nt en d th at “ [i]f, ba se d on th e pl ead in g, th ere ar e no da m ag es , th en th ere can no t be an am ou nt in co nt ro ve rs y of m or e th an fiv e m il li on do ll ars .” The pl ai nt iff

s th us m ai nt ai n th ei r cl ai m th at rem ov al un de r C A F A w as im pr op er. As se t fo rth ab ov e, we m eas ur e th e di st ric t co ur t’s juri sd ic ti on at th e ti m e of rem ov al

. At th at ti m e, th e di st ric t co ur t co ul d fai rly as su m e th at th e pl ai nt iff s ha d
st at ed a cl ai m an d th at a fact fin de r mi g h t le ga ll y co nc lu de th at th e cl as s da m ag es

w e r e g r e at er th an $5 m il li on

. In de ed
, th e pl ai nt iff s th em se lv es di d no t ch al le ng e

rem ov al u n t i l a f

t er th ei r cl ai m s were di sm is se d. Acco rd in gl y , we fin d no erro r in

rem ov in g th is cas e un de r CAFA, ev en th ou gh th is cas e was la te r di sm is se d fo r fai lu re to p l e a d p ecu ni ary lo ss

. Bec au se we co nc lu de th at th e di st ric t co ur t co rrec tl y di sm is se d th e pl ai nt iff

s’ co m pl ai nt fo r fai lu re to pl ead fact s su ffi ci en t to de m on st rat e pe cu n i a r y l o s s, we ne ed no t ad dr es s th e rem ai ni ng gr ou nd s up on whi ch th e di st ric t

co ur t g ran te d C ha rte r’s m ot io n t o d is m is s.

III. Co nc lu si on

The jud gm en t i s af

fir m ed

.

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