United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 11-3445

___________

John M. Rolwing, *

*

Appellee, *

* Appeal from the United States

v. * District Court for the

* Eastern District of Missouri.

Nestle Holdings, Inc., *

*

Appellant. *

___________

Submitted: December 14, 2011

Filed: February 2, 2012

___________

Before MURPHY, BOWMAN, and GRUENDER Circuit Judges.

___________

GRUENDER, Circuit Judge.

Nestle Holdings, Inc. (“Nestle”) appeals the district court’s order remanding 1

this putative class action to the jurisdiction of the state courts of Missouri. Because

at the time the case was removed it did not meet the requirements for federal subject

matter jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C.

§§ 1332(d), 1453, 1711-15, we affirm the order of the district court.

The Honorable Thomas C. Mummert, United States Magistrate Judge for the

1

Eastern District of Missouri, to whom the case was referred by consent of the parties

pursuant to 28 U.S.C. § 636(c).
I. BACKGROUND

On January 15, 2001, Nestle agreed to a merger with Ralston Purina Company

that provided for the cash purchase of Ralston Purina’s common stock by Nestle. The

merger agreement contained a choice-of-law provision selecting Missouri law as

controlling its terms. The merger was completed on December 12, 2001. On

December 18, 2001, Nestle paid Ralston Purina book-entry shareholders a total of

$8,880,809,766.50 for their 265,098,799 outstanding common shares of Ralston

Purina. 

Ralston Purina book-entry shareholder John M. Rolwing filed this putative

class action in Missouri state court on March 30, 2011, on behalf of himself and all

other Ralston Purina book-entry shareholders at the time of the execution of the

merger agreement (“the class”). Rolwing claims that Nestle was required to pay the

class on December 12, that Nestle’s December 18 payment was delinquent, and that

the class is entitled to interest on the delinquent payment. Nestle removed the case

to federal court on May 17, 2011, invoking CAFA-provided jurisdiction under 28

U.S.C. § 1332(d). It then filed a motion to dismiss on the basis of a prior resolution

by the state courts of Ohio of a putative class action, brought by the same attorney on

behalf of a different named plaintiff in that state, that claimed damages under the

same theory for the same class. 

Before the district court could rule on Nestle’s motion to dismiss, Rolwing

moved to remand the case to Missouri state court, arguing that the amount in

controversy was not in excess of $5 million, as required by § 1332(d). Nestle

responded by asserting that Rolwing’s theory of the case clearly comprehended the

possibility of damagesin excess of $5 million. The interest due on Nestle’s payment

to the class, calculated at an annualized rate of nine percent as required by Missouri

law, see Mo. Rev. Stat. § 408.020, would exceed $2 million for each day that the

payment was late. If payment had been due on December 12 as Rolwing alleges,

-2-
Nestle claims it would be exposed to damages well in excess of the $5 million

threshold.

To counter any attempt at removal, however, Rolwing’s complaint included a

prayer for relief requesting “judgment against defendant in an amount that is fair and

reasonable in excess of $25,000, but not to exceed $4,999,999.” The prayer stated

further: “Plaintiff and the class do not seek—and will not accept—any recovery of

damages (in the form of statutory interest) and any other relief, in total, in excess of

$4,999,999.” Rolwing did this, according to his complaint, expressly so as “not to

provide anyUnited States DistrictCourt with jurisdiction under the terms ofthe Class

Action Fairness Act of 2005 . . . or any other provision(s) of law.” Rolwing also

included two stipulations with his complaint: one stating that as named plaintiff and

putative class representative he would not seek or accept any recovery in excess of

$4,999,999 on his own behalf or on the behalf of the class, and a second signed by

his counsel stating that no attorneys’ fees would be sought or accepted other than on

a contingency basis out of the maximum recovery of $4,999,999 provided for by the

other stipulation. As with the complaint’s prayer for relief, both stipulations stated

that the limitation on damages sought was for the purpose of defeating federal

jurisdiction.

The district court granted Rolwing’s motion to remand on the basis of this

disclaimer of damages and denied as moot a second motion to remand filed by

Rolwing on the basis of the securities exception in 28 U.S.C. § 1332(d)(9)(C). Nestle

filed a petition pursuant to 28 U.S.C. § 1453(c) requesting permission to appeal the

district court’s remand order, which we granted.

II. DISCUSSION

CAFA provides for federal subject matter jurisdiction over qualifying class

actions where the aggregate amount in controversy exceeds $5 million. 28 U.S.C.

-3-
§ 1332(d). Such class actions generally are removable, and the usual one-year time

limit on diversity-premised removal is inapplicable. 28 U.S.C. § 1453. Certain class

actions dealing either with securities or claims relating to business governance arising

out of state law are excepted from this general rule and are not removable. 28 U.S.C.

§ 1453(d). The courts of appeals are authorized to accept an appeal from an order

granting or denying a motion to remand a class action. 28 U.S.C. § 1453(c).

“We review de novo a district court’s order to remand a removed case for lack

of subject matter jurisdiction.” Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir.

2009). In the CAFA context, the party seeking removal bears the burden of proving

by a preponderance of the evidence that the jurisdictional requirements for removal

are met. Id. at 956-59. If the removing party meets this burden, the party seeking

remand must establish to a legal certainty that the requirements for federal

jurisdiction are not met. Id. at 959. Thus, for a remand to be justified, Rolwing must

show that it is legally certain that recovery in this case cannot exceed $5 million. See

id. 

Rolwing has maintained throughout these proceedings that the disclaimer of

damages greater than $4,999,999 in his prayer for relief and the accompanying

stipulations makes it legally certain that the amount in controversy cannot exceed $5

million. Nestle countersthat(1) Missouri law (which governed the merger agreement

and therefore would control the suit) would not give effect to the disclaimer, and (2)

Rolwing’s purported disclaimer of part of the class’s potential recovery is

unenforceable because it “was inconsistent with the interests of and in breach of his

fiduciary duties to the putative class.” Nestle contends that, absent certainty that the

disclaimer will be enforced, it is not a legal certainty that the amount in controversy

is not in excess of $5 million, rendering remand inappropriate.

We have previously stated that a binding stipulation limiting damages sought

to an amount not exceeding $5 million can be used to defeat CAFA jurisdiction. Bell,

-4-
557 F.3d at 958 (“In order to ensure that any attempt to remove would have been

unsuccessful, Bell could have included a binding stipulation with his petition stating

that he would not seek damages greater than the jurisdictional minimum on

remand.”). Stipulations of this sort, when filed contemporaneously with a plaintiff’s

complaint and not after removal, have long been recognized as a method of defeating

federal jurisdiction in the non-CAFA context. See, e.g., De Aguilar v. Boeing Co.,

47 F.3d 1404, 1412 (5th Cir. 1995); In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir.

1992) (per curiam) (“Litigants who want to prevent removal must file a binding

stipulation or affidavit with their complaints.”).

Nestle first argues that Rolwing’s prayer for relief and the stipulations are not

enforceable under Missouri law and, therefore, not binding on the class. While it is

unclear what effect, if any, Missouri law would give to the prayer for relief in

Rolwing’s complaint, see Mo. Rev. Stat. § 509.050.1(2) (prohibiting the specific

pleading of damages “except to determine . . . jurisdictional authority,” and providing

that specific damage pleadings under that exception “shall not affect the conduct of

trial with regard to stating, proving, or arguing damages”), it is not necessary for us

to resolve this question. Instead, we conclude that the stipulations are independently

enforceable under the doctrine of judicial estoppel and, therefore, binding within the

meaning of Bell. 

Under Missouri law, “[t]he doctrine ofjudicial estoppel providesthat‘[w]here

a party assumes a certain position in a legal proceeding, and succeeds in maintaining

that position, he may not thereafter, simply because his interests have changed,

assume a contrary position, especially if it be to the prejudice of the party who has

acquiesced in the position formerly taken by him.’” Taylor v. State, 254 S.W.3d 856,

858 (Mo. 2008) (second alteration in original) (quoting Zedner v. United States, 547

U.S. 489, 504 (2006)). According to thisrule, by defeating removal through asserting

the position that he will not accept more than $4,999,999 in damages on behalf of the

class he is seeking to represent, Rolwing is estopped from later accepting damages

-5-
that exceed that amount. Similarly, by taking the position that he would only accept

fees on a contingency basis out of damages not exceeding $4,999,999, Rolwing’s

counsel is estopped from accepting any other fee award. “Stipulations are

‘controlling and conclusive, and courts are bound to enforce them.’” Zipper v. Health

Midwest, 978 S.W.2d 398, 410 (Mo. Ct. App. 1998) (quoting Pierson v. Allen, 409

S.W.2d 127, 130 (Mo. 1966)). Therefore, we are confident that Missouri courts will

apply judicial estoppel to enforce the terms of the stipulations.

Nestle’s second argument is that the stipulations are not enforceable because,

in disclaiming a significant portion ofthe putative class’s potential recovery, Rolwing

has violated his fiduciary duty to the putative class. Nestle points, in particular, to

Back Doctors Ltd. v. Metropolitan Property &Casualty Insurance Co., 637 F.3d 827

(7th Cir. 2011), in which the Seventh Circuit stated that, in a putative class action, a

plaintiff “has a fiduciary duty to its fellow class members. A representative can’t

throw away what could be a major component of the class’s recovery. Either a state

or a federal judge might insist that some other person, more willing to seek [damages

in excess of the jurisdictional minimum], take over as representative.” Id. at 830-31. 

Nestle contends that, because the damage disclaimer was a bad-faith renunciation of

“a major component of the class’s recovery,” a court might not certify Rolwing as

class representative, might not certify Rolwing’s counsel as class counsel, or might

refuse to enforce Rolwing’s damage disclaimer against the class. Nestle argues that,

because of these possibilities, Rolwing has not met his legal certainty burden.

As an initial matter, we are bound to consider only jurisdictional facts present

at the time of removal and not those occurring subsequently, see St. Paul Mercury

Indem. Co. v. Red Cab Co., 303 U.S. 283, 293 (1938), such as a hypothetical future

substitution of class representative, substitution of class counsel, or other non-

-6-
enforcement of the damage disclaimer because of bad faith. At any rate,

2

notwithstanding the language cited by Nestle, Back Doctors actually supports remand

in this case. In Back Doctors, the actual damages at issue were approximately $2.9

million. The initial complaint filed in Illinois state court neither requested punitive

damages nor disclaimed them. The defendantremoved under CAFA, arguing that the

amount in controversy was in excess of $5 million because of the potential for an

award of punitive damages. The plaintiff then argued that remand was warranted

because it had not requested punitive damages. Applying the same legal certainty

standard we applied above, Back Doctors, 637 F.3d at 829-30, the Seventh Circuit

found that the plaintiff had failed to establish to a legal certainty that he could not

recover in excess of the jurisdictional minimum under CAFA because his failure to

request punitive damages did not conclusively establish that they could not be

awarded, id. at 831.

However, the court went on to explain that “[i]f the Supreme Court of Illinois

had established . . . that omission of a request [for punitive damages] from the initial

pleading forbids a punitive award, then remand would be appropriate” and that a

“plaintiff in Illinois can limit the relief to an amount less than the jurisdictional

minimum, and thus prevent removal, by filing a binding stipulation or affidavit with

the complaint.” Id. In other words, contrary to Nestle’s view of the case, the Seventh

Circuit, in spite of its concern about the potential conflict of interest inherent in

damage disclaimers in pre-certification class actions, explicitly endorsed the method

used by Rolwing in this case to defeat CAFA jurisdiction.

We note that, should circumstances change in the manner suggested by Nestle, 2

removals under CAFA are not subject to the one-year limitation period in 28 U.S.C.

§ 1446(c)(1). Under CAFA, a party can remove the case any time “within 30 days

after [its receipt], through service or otherwise, of a copy of an amended pleading,

motion, order or other paper from which it may first be ascertained that the case is

one which is or has become removable.” 28 U.S.C. § 1446(b)(3).

-7-
Because we conclude that Missouri’s well-established judicial estoppel

doctrine makes these stipulations binding, Rolwing has shown that it is legally

impossible for the amount in controversy in this case to meet CAFA’s threshold, and

remand based on CAFA’s amount-in-controversy requirement was appropriate.

3

III. CONCLUSION

For the foregoing reasons, we affirm the judgment of the district court.

______________________________

Because we decide the case on this basis, we need not address Rolwing’s 3

arguments for remand on the basis of class numerosity (first raised on appeal) or

CAFA’s securities exception.

-8-