In the

United States Court of Appeals

For the Seventh Circuit

No. 11-8001

ABM SECURITY SERVICES, INC.,

Petitioner,

v.

TYRONE DAVIS, et al.,

Respondents.

Petition for Permission to Appeal from

the United States District Court for the 

Northern District of Illinois, Eastern Division.

No. 10 C 5958—Milton I. Shadur, Judge.

SUBMITTED FEBRUARY 28, 2011—DECIDED JUNE 16, 2011

Before BAUER, KANNE, and SYKES, Circuit Judges.

SYKES, Circuit Judge. ABM Security Services, Inc., petitions to appeal the district court’s remand of this case

to state court pursuant to the Class Action Fairness Act,

28 U.S.C. § 1453(c)(1) (“CAFA”). The plaintiffs, employees of ABM, filed their proposed class action in

Illinois state court, alleging that ABM violated the

Illinois Minimum Wage Law (“IMWL”) when it failed to
2 No. 11-8001

compensate employees for time spent working before

and after their shifts. ABM removed the case to federal

court asserting that the court had jurisdiction under

CAFA. The district court concluded that ABM failed to

show that the amount in controversy exceeds $5,000,000,

as required to establish CAFA jurisdiction. 28 U.S.C.

§ 1332(d)(2). The parties do not dispute that CAFA’s

other jurisdictional requirements are met. We grant

ABM’s petition for permission to appeal and reverse the

district court’s order remanding the case to state court.

ABM twice amended its notice of removal, each time

responding to instructions from the district court and

further refining its calculation of the amount in controversy. Included in the amount in controversy are compensatory damages for the three-year period immediately preceding the filing of the original complaint,

interest on all regular and overtime compensation due,

and costs and attorneys’ fees. The IMWL also provides

for a punitive-damages award. See 820 ILL. COMP.

STAT. 105/12(a) (providing for “damages of 2% of the

amount of any such underpayments for each month following the date of payment during which such underpayments remain unpaid”).

In its initial notice of removal, ABM calculated

that the amount in controversy could be as high as

$10.7 million, exclusive of attorneys’ fees. ABM estimated that hourly security guards spent approximately

thirty minutes per day performing the duties that are

the subject of plaintiffs’ allegations; this would result in

two-and-a-half hours of unpaid work per week for full-
No. 11-8001 3

time employees and thirty minutes for part-time employees. ABM multiplied the number of employees by

their average wage rate and the number of unpaid

hours for the relevant time period. This resulted in

$6.2 million in compensatory damages. Adding the 2%

penalty raised the amount in controversy to $10.7 million. ABM noted that this figure did not include

any adjustment for overtime rates for any of the hours,

which could raise the amount by another $1.5 million.

At a hearing the district court instructed ABM to

exclude a subset of putative class members who had

opted into a related class action pending in California.

The court also requested additional information relating to the number of weeks worked by members of

the putative class. ABM then filed an amended notice

of removal with revised calculations. If the unpaid wages

were straight time, ABM calculated, they would total

$3,014,812; if they were overtime, they would total

$4,552,218. Adding the 2% statutory penalty, ABM calculated the amount in controversy using straight wages as

$5,185,476.64, and using overtime wages as $7,778,214.96.

The district court again directed ABM to provide additional data regarding the precise number of days worked

by the putative class members and to exclude vacation

or sick days from the amount-in-controversy calculation. After review of its production records, ABM filed

another amended notice of removal and included a summary of the production records as an exhibit. ABM calculated the number of holiday and nonholiday days

employees worked for each calendar year and deter-
4 No. 11-8001

mined the average holiday and nonholiday wage rate

for each year. ABM again estimated that plaintiffs were

alleging they were required to perform thirty minutes

of unpaid work each day. Using these figures, ABM

calculated that the potential back-pay damages

were $3,801,204.07. Adding a 2% statutory penalty of

$1,442,878.07, ABM calculated the total amount in controversy as $5,244,082.14.

The district court disagreed and held that the amount

in controversy was approximately $5,500 short of the

$5 million jurisdictional requirement. It accepted the

calculation of relevant back-pay damages, but took

issue with the calculation of the 2% statutory penalty.

The district court thought ABM mistakenly doubled

the multiplier for each year’s damages and also failed

to properly apply the date when the statutory penalty

begins to accumulate. The court made an independent

calculation of the statutory penalty and held that it

was $1,193,244, making the total amount in controversy

$4,994,448.07. With regard to attorneys’ fees, the court

said that as of the date of removal, counsel for the putative class had “simply filed the Complaint, legal work

that did not push the total past the $5 million-plus

floor prescribed by CAFA.”

ABM argues that the district court erred when it calculated the statutory penalty and when it held that plaintiffs’ request for reasonable attorneys’ fees would not

push the amount in controversy over $5 million. In its

petition ABM attempts to recreate the district court’s

calculations and also shows its own calculations in the
No. 11-8001 5

form of several charts. ABM argues that the district court

erred when it calculated that no penalty accrued until

October 2007. The IMWL provides for “damages of 2% of

the amount of any such underpayments for each month

following the date of payment during which such underpayments remain underpaid.” 820 ILL. COMP. STAT.

105/12(a). Plaintiffs filed their lawsuit on August 13, 2007.

ABM says that in accordance with the Illinois Wage

Payment and Collection Act, 820 ILL. COMP. STAT. 115/3,

it pays wages biweekly with one week in arrears; wages

that were due between August 13 and 17 were paid

on August 24, 2007. They argue that the “month

following the date of payment,” August 24, is September, so the penalty would start to accrue in September,

instead of October as the district court calculated. This

results in a penalty of $1,323,971.92, for a total amount

in controversy of $5,125,235.97. Alternatively ABM

argues that even if the penalty does not begin accruing

until September 24, one full month after the date of payment, it would still result in a penalty of $1,248,485.11

and an amount in controversy of $5,049,749.18.

In our recent decision in Back Doctors Ltd. v. Metropolitan

Property & Casualty Insurance Co., 637 F.3d 827, 830 (7th

Cir. 2011), we reiterated the legal standard to be used

when determining if the amount in controversy is met.

When removing a suit, the defendant as proponent of

federal jurisdiction is entitled to present its own

estimate of the stakes; it is not bound by the plaintiff’s estimate. . . . Once this has been done, and supported by proof of any contested jurisdictional facts,
6 No. 11-8001

the presumption is the one stated in St. Paul Mercury:

the estimate of the dispute’s stakes advanced by

the proponent of federal jurisdiction controls unless

a recovery that large is legally impossible. 

Id. (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303

U.S. 283, 293 (1938)). And even more recently we emphasized that “[o]nce the proponent of federal jurisdiction has explained plausibly how the stakes exceed

$5,000,000, the case belongs in federal court unless it

is legally impossible for the plaintiff to recover that

much.” Blomberg v. Serv. Corp. Int’l, 639 F.3d 761, 764

(7th Cir. 2011) (internal citation omitted).

ABM’s calculations regarding the accrual of the statutory penalty are a reasonable interpretation of the

IMWL’s statutory language. In its remand order, the

district court gave two theories for why it thought

ABM’s calculations were wrong, though it acknowledged that counsel had disputed any mistake at a recent

status hearing. The district court then asserted that

its independent calculations avoided the errors the

court attributed to ABM. But the court did not

show its own calculations in the order or explain how it

calculated the statutory penalty. Had ABM provided

the district court with the charts and comprehensive explanation included in its petition, this appeal may

have been avoided. Even so, once ABM laid out its calculations showing that the amount in controversy exceeded $5 million, the district court needed to find that

it was legally impossible for plaintiffs to recover that

much. See Back Doctors, 637 F.3d at 830. The district
No. 11-8001 7

court’s order does not establish that ABM’s calculations

regarding the plaintiffs’ potential recovery were legally

impossible.

The district court also failed to satisfactorily explain

why it was legally impossible for there to be at least

$5,552 in attorneys’ fees in controversy at the time of

removal. The district court correctly held that only attorneys’ fees incurred up to the time of removal could be

included in the amount in controversy. See Oshana v.

Coca-Cola Co., 472 F.3d 506, 512 (7th Cir. 2006). But the

court said that because plaintiffs’ counsel had “simply

filed the Complaint,” it did not push the amount in

controversy past the jurisdictional requirement. Attorneys’ fees are available for work performed prior to

filing a complaint, and it is quite plausible that the value

of preliminary legal work in a class-action lawsuit

exceeds $5,552.

For these reasons, we GRANT the petition for permission to appeal, REVERSE the district court’s decision, and

REMAND the case for further proceedings.

6-16-11