14

‐ 455

‐ cv

Cutrone v. Mortgage Electronic Registration Systems, Inc.



## In the 1 

# United States Court of Appeals 2



## For the Second Circuit 3

4

August Term, 2013 5

No. 14

‐ 455

‐ cv 6

B RIAN C UTRONE AND J ESSICA C ERVONE

, INDIVIDUALLY AND ON 7

BEHALF OF ALL OTHERS SIMILARLY SITUATED

, 8

Plaintiffs

‐ Appellees

, 9

v. 10

M ORTGAGE E LECTRONIC R EGISTRATION S YSTEMS

, I NC

., 11

Defendant

‐ Appellant. 12

13

Appeal from the United States District Court 14

for the Eastern District of New York. 15

No. 13 CV 3075

― Eric N. Vitaliano, Judge

. 16

17

18

A RGUED : A PRIL 1, 2014 19

D ECIDED : A PRIL 17, 2014 20

21

22

Before: W ALKER

, C HIN

, and D RONEY

, Circuit Judges

. 23

24C UTRONE V

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.

‐ 2

‐ Appeal from an order of the United States District Court for 1

the Eastern District of New York (Eric N. Vitaliano, Judge ), holding 2

the defendant

‐ appellant’s notice of removal untimely and 3

remanding this putative class action to state court. We granted 4

MERS’s petition for permission to appeal the remand order and 5

instructed the parties to address: (1) whether this Court’s decision in 6

Moltner v. Starbucks Coffee Co.

, 624 F.3d 34 (2d Cir. 2010) (per 7

curiam), which held that the removal “clocks” of 28 U.S.C. § 1446(b) 8

are not triggered until the plaintiff files a document that explicitly 9

specifies the amount of damages sought, applies to actions removed 10

under the Class Action Fairness Act of 2005 (“CAFA”) and (2) 11

whether a defendant may remove a case under CAFA if neither of 12

the two 30

‐ day periods set forth in 28 U.S.C. §§ 1446(b)(1) and (b)(3) 13

is triggered because the initial pleading and other documents are 14

indeterminate with respect to removability but the defendant later 15

asserts removability on the basis of its own investigation. We 16C UTRONE V

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.

‐ 3

‐ answer both questions in the affirmative. We hold that Moltner 1

applies to cases removed pursuant to CAFA and that the defendant

‐ 2

appellant’s notice of removal was timely. Accordingly, we 3

VACATE the district court’s order and REMAND

. 4

5

6

C HARLES C. M ARTORANA

, Hiscock & Barclay, 7

LLP, Buffalo, NY, for Defendant

‐ Appellant. 8

A NDREW S. L OVE (Samuel H. Rudman, Mark S. 9

Reich, William J. Geddish, Susan K. Alexander, on 10

the brief ), Robbins Geller Rudman & Dowd LLP, 11

San Francisco, CA, and Melville, NY, for Plaintiffs

‐ 12

Appellees. 13

14

D RONEY

, Circuit Judge : 15

Defendant

‐ appellant Mortgage Electronic Registration 16

Systems, Inc. (“MERS”) appeals from an order of the United States 17

District Court for the Eastern District of New York (Eric N. 18

Vitaliano, Judge ) granting the motion of the putative class member 19

plaintiffs

‐ appellees (“plaintiffs”), to remand this case to New York 20C UTRONE V

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.

‐ 4

‐ state court on the ground that MERS’s notice of removal was 1

untimely. The district court concluded that the plaintiffs’ complaint 2

contained sufficient information to put MERS on notice of the size of 3

the putative class and amount in controversy to establish subject 4

matter jurisdiction pursuant to 28 U.S.C. § 1332(d), and it held that 5

MERS’s notice of removal, filed more than 30 days after receipt of 6

the complaint, was therefore untimely under 28 U.S.C. § 1446(b)(1). 7

We reverse and hold that, in Class Action Fairness Act 8

(“CAFA”) cases, the 30

‐ day removal periods of 28 U.S.C. §§ 9

1446(b)(1) and (b)(3) are not triggered until the plaintiff serves the 10

defendant with an initial pleading or other paper that explicitly 11

specifies the amount of monetary damages sought or sets forth facts 12

from which an amount in controversy in excess of $5,000,000 can be 13

ascertained. We also hold that where a plaintiff’s papers fail to 14

trigger the removal clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3), a 15

defendant may remove a case when, upon its own independent 16C UTRONE V

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‐ 5

‐ investigation, it determines that the case is removable; thus, the 30

‐ 1

day removal periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) are not the 2

exclusive authorizations for removal in CAFA cases. 3

Here, neither the plaintiffs’ initial complaint nor their 4

response to MERS’s demand for a bill of particulars in the state court 5

explicitly specified the amount of damages sought or provided 6

MERS with sufficient information to conclude the threshold amount 7

in controversy was satisfied. The named plaintiffs’ identification of 8

their damages ($6,835.20) and their allegation that the potential class 9

“includes hundreds, and likely thousands, of persons and entities,” 10

were not adequate to trigger the 30

‐ day removal periods of 28 U.S.C. 11

§§ 1446(b)(1) and (b)(3). We also hold that MERS properly filed its 12

notice of removal after determining upon its own investigation that 13

the amount in controversy, number of plaintiffs, and diversity 14

between itself and at least one plaintiff class member satisfied the 15

CAFA subject matter jurisdictional requirements set forth in 28 16C UTRONE V

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‐ 6

‐ U.S.C. § 1332(d). We accordingly VACATE the order of the district 1

court and REMAND. 2

BACKGROUND 3

The Parties and the Class Complaint 4

Plaintiffs Brian Cutrone and Jessica Cervone filed the present 5

putative class action against MERS in the Supreme Court of the State 6

of New York, Kings County on February 20, 2013. Their complaint 7

asserts causes of action against MERS under New York state law for 8

common law breach of implied warranty, deceptive business 9

practices in violation of New York General Business Law Section 10

(“NYGBL”) § 349, and false advertising in violation of NYGBL § 350, 11

allegedly committed in connection with MERS’s facilitation of the 12

provision of “Esign” 1 mortgages to consumer

‐ borrowers. 13

According to the plaintiffs’ complaint, MERS is a Delaware 14

corporation with its principal place of business in Virginia. MERS 15

1 MERS contests the plaintiffs’ categorization of the relevant electronic

documents as “Esign” mortgages, but this dispute is not relevant to the present

appeal.C UTRONE V

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‐ 7

‐ created an Internet

‐ based electronic process through which 1

borrowers can obtain paperless Esign mortgages and engage in 2

refinancing of mortgages, and members of the real estate mortgage 3

industry can more easily securitize and bundle mortgages. To 4

facilitate these transactions, MERS acts as the mortgagee of record in 5

local recording offices regardless of the number of times a mortgage 6

is refinanced or the relevant lenders change. 7

When a party executes an Esign mortgage, no physical 8

mortgage document, such as a mortgage note, is created. Instead, 9

the mortgage documents exist as electronic records registered on 10

MERS’s “eRegistry.” When a party later wishes to refinance an 11

Esign mortgage or otherwise assign it to another party, MERS inputs 12

the applicable changes into its eRegistry. Thus, although MERS 13

never physically holds a mortgage note or related instrument, MERS 14

asserts that it facilitates mortgage and note assignments, including 15

refinancing, utilizing its electronic database. 16C UTRONE V

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‐ 8

‐ New York state courts have held that a lender does not have 1

standing to commence a foreclosure action when its assignor, MERS, 2

neither received the right to transfer the mortgage note nor 3

physically possessed the underlying mortgage note. See

, e.g.

, Bank of 4

N.Y. v. Silverberg

, 926 N.Y.S.2d 532, 538

‐ 40 (2d Dep’t 2011). Esign 5

mortgages acquired through MERS’s electronic system may be 6

“non

‐ assignable,” which limits MERS’s customers’ ability to 7

refinance their mortgages electronically and avoid recording fees, as 8

well as MERS’s ability to transfer pools of mortgages as securities. 9

Cutrone and Cervone obtained their first mortgage on their 10

home in Brooklyn through an Esign mortgage that listed MERS as 11

the nominee and mortgagee on March 27, 2008, and paid $7,476.00 in 12

taxes as required by New York’s mortgage recording tax. 2 See N.Y. 13

Tax Law § 253. Four years later, they refinanced their mortgage. 14

They were unable to utilize a New York Consolidation, Extension 15

2 MERS is not itself a lender and did not loan the plaintiffs the funds for the

initial mortgage or refinanced mortgage.C UTRONE V

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.

‐ 9

‐ and Modification Agreement (“CEMA”), which permits a mortgagor 1

to consolidate his original and refinanced mortgages and pay only 2

the difference in mortgage recording tax between the two 3

mortgages. A CEMA could not be used because MERS could not 4

effectuate the assignment between the original and new lenders. 5

The plaintiffs thus paid a second mortgage recording tax of $6,835.20 6

on their refinanced mortgage on January 7, 2013. 7

In their putative class action complaint, which alleges that 8

other borrowers were also required to pay additional recording 9

taxes because of their Esign mortgages, the plaintiffs do not 10

specifically enumerate either the expected number of class members 11

that will join them or the total amount of additional mortgage 12

recording taxes paid by class members. The plaintiffs merely 13

provide the amount of the mortgage recording tax they paid on their 14

refinanced mortgage ($6,835.20) and estimate that the class includes 15

“hundreds, and likely thousands, of persons and entities.” The 16C UTRONE V

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‐ 10

‐ plaintiffs also failed to specify in their response to the defendant’s 1

demand for a bill of particulars in the state court the number of 2

members in the putative class, estimating again that there were more 3

than 100 likely plaintiffs and, as to the damages sought by the class, 4

that they “cannot reasonably state the precise amount in 5

controversy.” 6

Federal District Court Proceedings 7

On May 24, 2013, more than 90 days after the plaintiffs filed 8

their initial complaint in New York state court, MERS filed a notice 9

of removal in the United States District Court for the Eastern District 10

of New York asserting diversity jurisdiction under CAFA, 28 U.S.C. 11

§ 1332(d). The notice alleges that MERS examined its own records 12

and concluded that its eRegistry contained more than 3,000 13

registered promissory notes in electronic form secured by mortgages 14

on real property located in New York. The notice also estimates 15

that, given the large number of relevant promissory notes in MERS’s 16C UTRONE V

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, I NC

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‐ 11

‐ eRegistry, “even using a conservative estimate of damages for each 1

possible class member, there is a reasonable probability that the 2

matter in controversy exceeds the value of $5,000,000 as required by 3

28 U.S.C. § 1332(d).” 3 Finally, the notice states that MERS is a 4

Delaware corporation with its principal place of business located in 5

Virginia and that the named plaintiffs and all members of the 6

purported class are citizens of New York, thus satisfying minimal 7

diversity requirements. 8

On June 24, 2013, the plaintiffs filed a motion to remand, 9

asserting that MERS’s removal was untimely under 28 U.S.C. § 10

1446(b)(1) because the plaintiffs’ complaint provided MERS with 11

sufficient information to determine the likely number of plaintiffs 12

and total amount in controversy. By order dated October 28, 2013, 13

3 A declaration filed by MERS on July 16, 2013, further explains: “Assuming that

even half of the registered eNotes secured by a MERS mortgage in New York are

the basis for claims that Plaintiffs were wrongly forced to pay a mortgage tax,

using a conservatively low number of $3,000.00 in damages for each potential

plaintiff in the putative class, Plaintiffs’ aggregate claims would reach $5.5

million.”C UTRONE V

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‐ 12

‐ the district court granted the plaintiffs’ motion, concluding that, 1

although the complaint filed on February 20, 2013, did not specify 2

either the total amount of damages sought or an exact number of 3

class members, it provided MERS with “all it needed to know in 4

order to enable it to make an intelligent assessment as to CAFA 5

removability.” Cutrone v. Mortg. Elec. Registration Sys.

, Inc.

, No. 13

‐ 6

CV

‐ 3075 (ENV) (VMS), 2013 WL 5960827, at *6 (E.D.N.Y. Nov. 6, 7

2013). Because MERS did not file its notice of removal within 30 8

days of receiving the complaint, the court held, its notice was 9

untimely pursuant to 28 U.S.C. § 1446(b)(1). Id. at *8. 10

The district court rejected MERS’s argument that our holding 11

in Moltner v. Starbucks Coffee Co.

, 624 F.3d 34, 38 (2d Cir. 2010) (per 12

curiam), that “the removal clock does not start to run until the 13

plaintiff serves the defendant with a paper that explicitly specifies 14

the amount of monetary damages sought” should be applied to 15

CAFA cases. Cutrone

, 2013 WL 5960827, at *5

‐ 7. The district court 16C UTRONE V

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‐ 13

‐ also reasoned that tying the removal clocks of 28 U.S.C. § 1446(b) to 1

the serving of an explicit statement of damages would be 2

problematic here because it would mean that the jurisdictional 3

amount in controversy requirement of 28 U.S.C. § 1332(d) was never 4

satisfied. Id. at *6. Thus, the district court ruled that it lacked subject 5

matter jurisdiction and remanded the case to the Supreme Court of 6

the State of New York, Kings County. Id. at *8. 7

Appellate Proceedings 8

On November 15, 2013, MERS petitioned this Court for 9

permission to appeal the district court’s remand order pursuant to 10

28 U.S.C. § 1453(c)(1) and Federal Rule of Appellate Procedure 5(a). 11

It argued that its notice of removal was timely because plaintiffs’ 12

initial complaint failed to trigger the 30

‐ day removal clock of 28 13

U.S.C. § 1446(b)(1) and urged this Court to extend the rule of Moltner 14

to CAFA cases. We granted MERS’s petition for permission to 15

appeal on February 19, 2014. We instructed the parties to brief the 16C UTRONE V

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‐ 14

‐ following two questions: (1) whether this Court’s decision in Moltner 1

applies to cases removed under CAFA and (2) whether a defendant 2

may remove a case under CAFA if neither of the two 30

‐ day periods 3

set forth in 28 U.S.C. §§ 1446(b)(1) and (b)(3) is triggered because the 4

initial pleading and other documents are indeterminate with respect 5

to removability but the defendant later asserts removability on the 6

basis of its own investigation. As explained below, we now answer 7

both questions in the affirmative. 8

DISCUSSION 9

I. Appellate Jurisdiction and Standard of Review 10

We have jurisdiction to hear this appeal pursuant to 28 U.S.C. 11

§ 1453(c)(1), which provides that “a court of appeals may accept an 12

appeal from an order of a district court granting or denying a 13

motion to remand a class action to the State court from which it was 14

removed if application is made to the court of appeals not more than 15

10 days after entry of the order.” See also DiTolla v. Doral Dental IPA 16

of N.Y.

, 469 F.3d 271, 274

‐ 75 (2d Cir. 2006). Here, the district court 17C UTRONE V

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‐ entered its order on November 6, 2013, and MERS filed a petition for 1

leave to appeal on November 15, 2013, thus satisfying the applicable 2

10

‐ day filing requirement. 3

We review de novo a district court’s subject matter jurisdiction 4

determination. See id. at 275. 5

II. Applicability of Moltner to CAFA Cases 6

We begin with a brief explication of the relevant statutory 7

framework for the removal of CAFA cases. In 2005, Congress 8

enacted the Class Action Fairness Act, Pub. L. No. 109

‐ 2, 119 Stat. 4 9

(2005) (codified, in part, at 28 U.S.C. § 1332(d)), which conferred 10

federal jurisdiction over any class action involving: “(1) 100 or more 11

class members, (2) an aggregate amount in controversy of at least 12

$5,000,000, exclusive of interest and costs, and (3) minimal diversity, 13

i.e.

, where at least one plaintiff and one defendant are citizens of 14

different states.” Blockbuster, Inc. v. Galeno

, 472 F.3d 53, 56 (2d Cir. 15

2006) (citing 28 U.S.C. §§ 1332(d)(2), (5)(b), (6)). In CAFA cases, the 16C UTRONE V

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‐ defendant bears the burden of establishing federal subject matter 1

jurisdiction. See id. at 58. To establish the requisite amount in 2

controversy for CAFA jurisdiction pursuant to 28 U.S.C. § 1332(d), a 3

defendant must “show that it appears to a ‘reasonable probability’ 4

that the aggregate claims of the plaintiff class are in excess of $5 5

million.” Id. (internal citation omitted). 6

A defendant’s ability to remove any case satisfying federal 7

jurisdictional predicates, including a CAFA case, is subject to 8

statutorily

‐ imposed time limits. The general removal statute 9

delineates two 30

‐ day periods during which removal may occur. See 10

generally 28 U.S.C. § 1446(b). The first statutory provision requires 11

that a defendant file its notice of removal within 30 days of the 12

service or receipt of the initial pleading. 4 28 U.S.C. § 1446(b)(1). The 13

second section provides that if the case is not immediately 14

removable, the defendant may file a notice of removal within 30 15

4 28 U.S.C. § 1446(b)(1) also provides a removal time period of “within 30 days

after the service of summons upon the defendant if such initial pleading has then

been filed in court and is not required to be served on the defendant....”C UTRONE V

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‐ days of receiving “a copy of an amended pleading, motion, order or 1

other paper from which it may first be ascertained that the case is one 2

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

(emphasis added); see Moltner

, 624 F.3d at 36. 4

Neither provision specifies the information that must be 5

included in a plaintiff’s initial pleading or other paper to trigger the 6

30

‐ day periods of 28 U.S.C. § 1446(b) or how a defendant should 7

“ascertain” removability. See Moltner

, 624 F.3d at 36

‐ 38. The issue 8

therefore arises, as it did in this case, of whether an indeterminate 9

complaint or subsequent document triggers the removal clocks of 28 10

U.S.C. § 1446(b) in CAFA cases. 11

We addressed this issue in Moltner v. Starbucks Coffee Co.

, 624 12

F.3d at 36

‐ 38, a personal injury suit initially filed in New York state 13

court. There, the plaintiff allegedly suffered severe burns while 14

drinking tea purchased from the defendant. Id. at 35

‐ 36. It was only 15

in response to a letter from the defendant three months after the 16C UTRONE V

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‐ plaintiff filed suit that the plaintiff disclosed she sought more than 1

$75,000 in damages, the threshold amount for diversity jurisdiction 2

under 28 U.S.C. § 1332(a). Id. at 36. The defendant filed a notice of 3

removal within 30 days of receiving the plaintiff’s letter. Id. In 4

determining whether removal was timely under 28 U.S.C. § 5

1446(b)(3), we rejected the plaintiff’s argument that the defendant 6

should have concluded from the state court complaint that the 7

amount in controversy would exceed $75,000 by applying “a 8

reasonable amount of intelligence” to the complaint’s general 9

description of the plaintiff’s severe injuries. Id. at 37. Instead, we 10

held that “the removal clock does not start to run until the plaintiff 11

serves the defendant with a paper that explicitly specifies the 12

amount of monetary damages sought.” Id. at 38. We stated that “a 13

bright line rule is preferable to the approach [the plaintiff] 14

advocates. Requiring a defendant to read the complaint and guess 15

the amount of damages that the plaintiff seeks will create 16C UTRONE V

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‐ 19

‐ uncertainty and risks increasing the time and money spent on 1

litigation.” Id. 2

Under the Moltner standard, defendants must still “apply a 3

reasonable amount of intelligence in ascertaining removability.” See 4

Whitaker v. Am. Telecasting, Inc.

, 261 F.3d 196, 206 (2d Cir. 2001); see 5

also Kuxhausen v. BMW Fin. Servs. NA LLC

, 707 F.3d 1136, 1140 (9th 6

Cir. 2013). However, defendants have no independent duty to 7

investigate whether a case is removable. See Whitaker

, 261 F.3d at 8

206 (observing that the “reasonable amount of intelligence” standard 9

“does not require a defendant to look beyond the initial pleading for 10

facts giving rise to removability”). If removability is not apparent 11

from the allegations of an initial pleading or subsequent document, 12

the 30

‐ day clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3) are not 13

triggered. 14

In drawing a bright line rule requiring service of a document 15

explicitly stating the amount in controversy to trigger either 30

‐ day 16C UTRONE V

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‐ period in 28 U.S.C. § 1446(b) in Moltner

, we joined the Eighth Circuit. 1

See 624 F.3d at 38 (citing In re Willis

, 228 F.3d 896, 897 (8th Cir. 2000) 2

(per curiam) (“We find the thirty

‐ day time limit of section 1446(b) 3

begins running upon the receipt of the initial complaint only when 4

the complaint explicitly discloses the plaintiff is seeking damages in 5

excess of the federal jurisdictional amount[;] [t]his rule promotes 6

certainty and judicial efficiency by not requiring courts to inquire 7

into what a particular defendant may or may not subjectively 8

know.” (internal citation and quotation marks omitted))). That 9

bright line rule was also consistent with the approach adopted by 10

the Tenth Circuit. See Akin v. Ashland Chem. Co.

, 156 F.3d 1030, 1036 11

(10th Cir. 1998) (“We disagree with cases from other jurisdictions 12

which impose a duty to investigate and determine removability 13

where the initial pleading indicates that the right to remove may 14

exist. Rather, this court requires clear and unequivocal notice from 15C UTRONE V

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‐ the pleading itself, or a subsequent ‘other paper’ such as an answer 1

to interrogatory.” (emphasis in original) (footnote omitted)). 2

Since we decided Moltner

, at least three of our sister circuits 3

have also adopted a rule requiring that the initial pleading or other 4

subsequent paper contain an “unequivocal statement from the 5

plaintiff regarding the damages sought” to trigger the removal 6

clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3). Walker v. Trailer Transit

, 7

Inc.

, 727 F.3d 819, 824 (7th Cir. 2013); see Mumfrey v. CVS Pharmacy, 8

Inc.

, 719 F.3d 392, 400 (5th Cir. 2013); Kuxhausen

, 707 F.3d at 1139. 9

Two of those decisions involved actions brought pursuant to CAFA. 10

In Walker v. Trailer Transit Inc.

, the Seventh Circuit held that 11

“[t]he 30

‐ day removal clock does not begin to run until the 12

defendant receives a pleading or other paper that affirmatively and 13

unambiguously reveals that the predicates for removal are present.” 14

727 F.3d at 824. With respect to the amount in controversy, the 15

Seventh Circuit explained that “the pleading or other paper must 16C UTRONE V

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‐ 22

‐ specifically disclose the amount of monetary damages sought,” id.

, 1

and held that, with reference to § 1446(b)(3), the removal clock 2

“commences only when the defendant receives a post

‐ complaint 3

pleading or other paper that affirmatively and unambiguously 4

specifies a damages amount sufficient to satisfy the federal 5

jurisdictional minimums,” id. at 825 (emphasis in original). The 6

Seventh Circuit explained that this “bright

‐ line rule promotes clarity 7

and ease of administration for the courts, discourages evasive or 8

ambiguous statements by plaintiffs in their pleadings and other 9

litigation papers, and reduces guesswork and wasteful protective 10

removals by defendants,” id. at 824, and admonished that 11

“[a]ssessing the timeliness of removal should not involve a fact

‐ 12

intensive inquiry about what the defendant subjectively knew or 13

should have discovered through independent investigation,” id. at 14

825. 15C UTRONE V

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‐ In Kuxhausen v. BMW Financial Services NA LLC

, the Ninth 1

Circuit reached a similar decision in a CAFA case in which the 2

named plaintiff claimed damages “exceeding $50,000” for herself 3

and asserted that the class had “hundreds” of members but failed to 4

specify the particular amount of damages the other class members 5

would each claim. 707 F.3d at 1140

‐ 41. On appeal, the plaintiff 6

argued that the defendant should have either utilized the plaintiff’s 7

stated amount of damages or consulted its records to determine a 8

representative amount in controversy and then multiplied either 9

number by “hundreds” of class members to ascertain the likely 10

amount in controversy. Id. at 1141. The Ninth Circuit rejected this 11

reasoning, observing that “[n]owhere in th[e] pleading does [the 12

plaintiff] allege the value, even as an approximation, of other class 13

members’ vehicle financing contracts,” id. at 1140

‐ 41, and holding 14

that “because nothing in [the plaintiff’s] complaint indicated that the 15

amount demanded by each putative class member exceeded [an 16C UTRONE V

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‐ 24

‐ amount that, when aggregated, would satisfy the jurisdictional 1

requirement], it fell short of triggering the removal clock under 2

Section 1446(b),” id. at 1141 (emphasis in original) (internal 3

quotation marks and alterations omitted). The Ninth Circuit 4

explained that it would not charge defendants in CAFA cases “with 5

notice of removability until they’ve received a paper that gives them 6

enough information to remove,” and observed that the defendant 7

was not obligated to supply information that the plaintiff had 8

omitted, even when it had access to such data. Id. (internal 9

quotation marks and citation omitted). The court noted that this 10

bright line rule would avoid a “Catch

‐ 22” for defendants seeking a 11

federal forum but lacking sufficient removal

‐ related information and 12

that it would require “plaintiffs to assume the costs associated with 13

their own indeterminate pleadings.” Id. 14

We agree with these circuits and hold that, in CAFA cases, the 15

removal clocks of 28 U.S.C. § 1446(b) are not triggered until the 16C UTRONE V

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‐ 25

‐ plaintiff serves the defendant with an initial pleading or other 1

document that explicitly specifies the amount of monetary damages 2

sought or sets forth facts from which an amount in controversy in 3

excess of $5,000,000 can be ascertained. While a defendant must still 4

apply a “reasonable amount of intelligence” to its reading of a 5

plaintiff’s complaint, we do not require a defendant to perform an 6

independent investigation into a plaintiff’s indeterminate allegations 7

to determine removability and comply with the 30

‐ day periods of 28 8

U.S.C. §§ 1446(b)(1) and (b)(3). See Whitaker

, 261 F.3d at 206; see also 9

Walker

, 727 F.3d at 823

‐ 25; Mumfrey

, 719 F.3d at 398

‐ 400; Kuxhausen

, 10

707 F.3d at 1140

‐ 41; Moltner

, 624 F.3d at 37

‐ 38. Thus, a defendant is 11

not required to consider material outside of the complaint or other 12

applicable documents for facts giving rise to removability, and the 13

removal periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) are not 14

triggered until the plaintiff provides facts explicitly establishing 15C UTRONE V

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‐ removability or alleges sufficient information for the defendant to 1

ascertain removability. 2

The plaintiffs in this case do not object to the application of 3

Moltner to CAFA cases, but they argue that Moltner should only be 4

applied where “plaintiffs are in possession of information to 5

explicitly specify damages.” They advocate an individual analysis 6

of the timeliness of removal based upon the availability of 7

information to the parties. They also argue that requiring the service 8

of a paper explicitly stating the amount in controversy to trigger the 9

removal clocks encourages gamesmanship and delay by defendants. 10

They point out that, in this case, MERS failed to perform an 11

examination of its records until more than two months after 12

plaintiffs filed their complaint. 13

We rejected this argument in Moltner

, 624 F.3d at 38, and we 14

also reject it here. As we explained in Moltner

, a bright line rule is 15

preferable to the uncertainties faced by defendants in determining 16C UTRONE V

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‐ removability. Id. This approach also avoids courts “expending 1

copious time determining what a defendant should have known or 2

have been able to ascertain at the time of the initial pleading [or 3

other relevant filing].” Mumfrey

, 719 F.3d at 399. Application of the 4

Moltner standard is particularly helpful in CAFA cases removed 5

pursuant to 28 U.S.C. § 1446(b) because the size of the putative class 6

and the $5,000,000 amount in controversy requirements are high 7

enough that it may often initially be unclear whether they will be 8

exceeded. 9

Applying a bright line rule here, neither the plaintiffs’ 10

complaint nor their subsequent response to MERS’s bill of 11

particulars explicitly specifies the aggregate amount in controversy 12

or alleges sufficient information for the defendant to ascertain 13

removability. The only amount provided in the complaint is that 14

which the two named plaintiffs are seeking to recover: the $6,835.20 15

they paid in New York state mortgage recording taxes upon 16C UTRONE V

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‐ refinancing their mortgage. Plaintiffs argue that MERS could have 1

easily ascertained the aggregate amount in controversy for the class 2

from the face of their complaint by multiplying $6,835.20 by the 3

estimated number of putative class members, identified in the 4

complaint as “hundreds, and likely thousands.” However, 5

“[n]owhere in th[e] pleading[s] do[] [the plaintiffs] allege the value, 6

even as an approximation, of other class members’ [second 7

mortgage recording tax payments].” Kuxhausen

, 707 F.3d at 1140

‐ 41. 8

Because neither the plaintiffs’ complaint nor their subsequent 9

response to MERS’s demand for a bill of particulars explicitly 10

specifies the aggregate amount in controversy or provides MERS 11

with sufficient information to conclude the threshold amount in 12

controversy was satisfied, the 30

‐ day removal clocks of 28 U.S.C. § 13

1446(b) were never triggered. Thus, MERS did not run afoul of the 14

statutory timeliness requirements governing removal. 15C UTRONE V

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‐ 29

‐ III. Exclusivity of the 30

‐ Day Removal Periods of 28 U.S.C. §§ 1

1446(b)(1) and (b)(3) in CAFA Cases 2

3

MERS’s removal in this case is thus not precluded by the 30

‐ 4

day clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3). Here, MERS, after 5

its own investigation, determined that the number of class members, 6

amount in controversy, and minimal diversity were satisfied 7

sufficient for CAFA jurisdiction pursuant to 28 U.S.C. § 1332(d). The 8

question remains whether a defendant may, as MERS did here, 9

remove an action outside of the 30

‐ day removal limits delineated in 10

28 U.S.C. §§ 1446(b)(1) and (b)(3) or if they are the exclusive time 11

periods during which a defendant may remove. 12

As an initial matter, we note, as have our sister circuits, that 13

“[t]he moment a case becomes removable and the moment the 30

‐ 14

day removal clock begins to run ‘are not two sides of the same 15

coin.’” Walker

, 727 F.3d at 824 (quoting Kuxhausen

, 707 F.3d at 1141 16

n.3) (citing Mumfrey

, 719 F.3d at 400 n.13). Thus, even if a defendant 17

could remove immediately upon the filing of a complaint because the 18C UTRONE V

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‐ 30

‐ case satisfies the requirements of federal subject matter jurisdiction, 1

a complaint or other document from the plaintiff that does not 2

explicitly convey the removability of a case does not trigger the 3

removal clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3). See Mumfrey

, 4

719 F.3d at 400 n.13. That is, whether a basis for removal exists and 5

whether removal is timely are two separate questions. 6

As the Seventh Circuit explained in Walker : 7

Whether the jurisdictional prerequisites [of 28 U.S.C. § 8

1332(d)] are in fact met is a separate determination [from 9

whether removal is timely] and often involves 10

consideration of materials outside the state

‐ court 11

pleadings. The removing defendant has the burden of 12

proving the jurisdictional predicates for removal. In 13

contrast, the timeliness inquiry [governed by 28 U.S.C. §§ 14

1446(b)(1) and (b)(3)] is limited to [] examining contents of 15

the clock

‐ triggering pleading or other litigation paper; the 16

question is whether that document

, on its face or in 17

combination with earlier

‐ filed pleadings, provides specific 18

and unambiguous notice that the case satisfies federal 19

jurisdictional requirements and therefore is removable. 20

21

727 F.3d at 824

‐ 25 (emphasis in original) (internal citation omitted); 22

see also Mumfrey

, 719 F.3d at 398

‐ 99 (distinguishing between 23C UTRONE V

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‐ “amount disputes” pursuant to 28 U.S.C. § 1332(d) and “timeliness 1

disputes” under 28 U.S.C. §§ 1446(b)(1) and (b)(3) and observing 2

that even though the defendant could have removed the case upon 3

receipt of the plaintiff’s complaint, the removal clock was not 4

triggered by the face of the complaint); Kuxhausen

, 707 F.3d at 1141 5

n.3 (noting that the plaintiff was incorrect in asserting that because 6

the defendant “ could have ventured beyond the pleadings to 7

demonstrate removability initially (as it did later upon receipt of the 8

First Amended Complaint) it was therefore obligated to do so.” 9

(emphases in original)). If a complaint is vague, indeterminate, or 10

otherwise fails to convey these jurisdictional predicates, the removal 11

clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3) are not triggered, but the 12

defendant is not necessarily prohibited from removing. 13

When neither 30

‐ day removal clock of 28 U.S.C. § 1446(b) was 14

triggered, may MERS remove based on its own investigation? 15

Implicit is the question of whether the two 30

‐ day periods listed in 16C UTRONE V

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‐ 28 U.S.C. §§ 1446(b)(1) and (b)(3) are the exclusive authorizations for 1

removal. The Ninth Circuit has resolved this question, and we agree 2

with its approach. In Roth v. CHA Hollywood Medical Center

, L.P.

, 720 3

F.3d 1121, 1123 (9th Cir. 2013), the Ninth Circuit considered a CAFA 4

case in which the plaintiff in a state court action failed to specify an 5

amount of damages in her complaint but the defendants determined 6

removability from their own investigation. On appeal, the issue was 7

whether the defendants could remove under 28 U.S.C. § 1441(a) 8

independently of the 30

‐ day periods set forth in 28 U.S.C. §§ 9

1446(b)(1) and (b)(3). Id. at 1124. 10

The Ninth Circuit held that “§§ 1441 and 1446, read together, 11

permit a defendant to remove outside the two thirty

‐ day periods [of 12

28 U.S.C. § 1446(b)] on the basis of its own information, provided 13

that it has not run afoul of either of the thirty

‐ day deadlines.” Id. at 14

1125. Because the complaint in that case did not reveal on its face 15

that there was a sufficient basis for jurisdiction under CAFA, the 16C UTRONE V

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‐ Ninth Circuit held that it was appropriate for the defendants to 1

remove the case after they completed their own investigation. Id. 2

The court noted, “It would be odd, even perverse, to prevent 3

removal in this case, and we see nothing in the text of §§ 1441 and 4

1446 to require such a result.” Id. We also note that this result is 5

consistent with our sister circuits that have addressed this issue and 6

concluded, at least implicitly, that removal is permissible outside of 7

the 30

‐ day periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) where a 8

defendant’s own investigation yields evidence of removability. See 9

Mumfrey

, 719 F.3d at 398

‐ 99, 400 n.13; Kuxhausen

, 707 F.3d at 1141 10

n.3. 11

We agree with the Ninth Circuit that the text of 28 U.S.C. § 12

1446(b) does not indicate that the two 30

‐ day periods listed therein 13

are the exclusive authorizations of removal. See Roth

, 720 F.3d at 14

1125. Section 1446(b) imposes a time limit only in cases in which the 15

plaintiff’s initial pleading or subsequent document has explicitly 16C UTRONE V

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‐ demonstrated removability. Defendants are permitted to remove 1

outside of these periods when the time limits of 28 U.S.C. § 1446(b) 2

are not triggered. 3

The plaintiffs here suggest this approach could result in 4

“gamesmanship” and intentional delay by defendants. However, 5

the Ninth Circuit addressed this argument in Roth

. The Ninth 6

Circuit noted that, because there is no one

‐ year limitation on 7

removals in CAFA cases pursuant to 28 U.S.C. § 1453(b), it is “at 8

least theoretically possible in a CAFA case for a defendant to wait 9

until the state court has shown itself ill

‐ disposed to defendant, or 10

until the eve of trial in state court, before filing a notice of removal.” 11

Id. at 1126. But, the Ninth Circuit observed: 12

[P]laintiffs are in a position to protect themselves. If 13

plaintiffs think that their action may be removable and 14

think, further, that the defendant might delay filing a 15

notice of removal until a strategically advantageous 16

moment, they need only provide to the defendant a 17

document from which removability may be ascertained. 18

Such a document will trigger the [§ 1446(b)(3)] 30

‐ day 19

removal period[.] 20C UTRONE V

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‐ 1

Id. (internal citation omitted). We also believe that, in most cases, 2

defendants will likely remove as soon as the existence of federal 3

jurisdictional predicates becomes apparent. 4

MERS presented facts adequate to establish a reasonable 5

probability that the number of the putative class is 100 or greater, 6

that the amount in controversy likely exceeds $5,000,000, and that 7

there is minimal diversity between the parties. 5 See Galeno

, 472 F.3d 8

at 57

‐ 59; Lupo v. Human Affairs Int ʹ l, Inc.

, 28 F.3d 269, 273

‐ 74 (2d Cir. 9

1994). MERS thus properly removed this action once it determined 10

removability. Because we already held above that the plaintiffs’ 11

filings failed to trigger the 30

‐ day periods of 28 U.S.C. §§ 1446(b)(1) 12

and (b)(3), we conclude that MERS’s removal based on its own 13

5 The plaintiffs in this case do not argue that MERS failed to allege adequate facts

to establish removability in its notice of removal or subsequent declaration.C UTRONE V

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‐ 36

‐ investigation was permissible. We accordingly hold that MERS’s 1

removal was timely. 6 2

CONCLUSION 3

We hold that, in CAFA cases, the 30

‐ day removal periods of 4

28 U.S.C. §§ 1446(b)(1) and (b)(3) are not triggered until the plaintiff 5

serves the defendant with an initial pleading or other document that 6

explicitly specifies the amount of monetary damages sought or sets 7

forth facts from which an amount in controversy in excess of 8

$5,000,000 could be ascertained. We also hold that where these 9

documents fail to trigger the removal periods of 28 U.S.C. §§ 10

1446(b)(1) and (b)(3), a defendant may remove a case when, upon its 11

own independent investigation, it determines that the case is 12

removable. Thus, we hold that the 30

‐ day removal periods of 28 13

6 Given our holding that MERS timely removed this case, we do not reach the

question, as MERS urges us, of whether the plaintiffs’ cause of action presents a

federal question sufficient for jurisdiction pursuant to 28 U.S.C. § 1331.C UTRONE V

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‐ U.S.C. §§ 1446(b)(1) and (b)(3) are not the exclusive authorizations of 1

removal in CAFA cases. 2

In this case, the plaintiffs never served MERS with a 3

complaint or subsequent document explicitly stating the amount in 4

controversy or providing MERS with sufficient information to 5

conclude the threshold amount in controversy was satisfied. 6

Therefore, the removal clocks of 28 U.S.C. §§ 1446(b)(1) and (b)(3) 7

did not commence. After MERS determined upon its independent 8

investigation that 28 U.S.C. § 1332(d) conveyed CAFA federal 9

jurisdiction because the amount in controversy, number of plaintiffs, 10

and minimal diversity requirements were satisfied, it properly 11

removed the case by alleging facts adequate to establish the amount 12

in controversy in its notice of removal. We therefore VACATE the 13

district court’s order remanding the case to state court and 14

REMAND the case for proceedings consistent with this opinion. 15