### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 14

‐ 8006

M ICHAEL B. J OHNSON

, individually and on behalf of all

others similarly situated,

Plaintiff

‐ Respondent

,

v.

P USHPIN H OLDINGS

, LLC, et al

., Defendants

‐ Petitioners

.

____________________

Petition for Leave to Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 13 C 7468

— Charles P. Kocoras

, Judge

.

____________________

S UBMITTED M ARCH 19, 2014

— D ECIDED A PRIL 9, 2014

____________________

Before P OSNER

, R OVNER

, and T INDER

, Circuit Judges

.

P OSNER

, Circuit Judge

. This class

‐ action suit, which had

been filed in an Illinois state court, accuses Pushpin Hold

‐ ings (we can ignore the other defendants—owners and affil

‐

iates of Pushpin and entities alleged to have been acting in

concert with it) of having violated the Illinois Consumer

Fraud Act, 815 ILCS 505/2, by operating as a debt collector in

Illinois without an Illinois license, as required by 225 ILCS2 No. 14

‐ 8006

425/4, and also of having committed common law torts of

abuse of process and malicious prosecution in attempting to

collect debts. Pushpin removed the case to federal district

court under the removal provision of the Class Action Fair

‐

ness Act of 2005, 28 U.S.C. § 1453(b). To be allowed to re

‐

main and litigate in federal court, Pushpin was required by

other provisions of the Act to show that the amount in con

‐

troversy in the litigation exceeded $5 million. §§ 1332(d)(2),

(6). The district court ruled that Pushpin had failed to show

this, and ordered the case remanded to the state court from

which it had been removed. Pushpin asks us for leave to file

an interlocutory appeal from the remand ruling, and we

have decided to grant that leave, as we are authorized to do

by § 1453(c)(1). The petition and response, together with the

record in the district court, adequately illuminate the dis

‐

pute, so we dispense with further briefing and proceed to

the merits.

The class action complaint alleges that Pushpin filed in Il

‐

linois courts some 1100 small

‐ claims suits, all fraudulent, but

that the class (which consists of the defendants in those

suits) seeks “no more than $1,100,000.00 in compensatory

damages and $2,000,000.00 in punitive damages,” and “will

incur attorneys’ fees of no more than $400,000.00 in prose

‐ cuting the class action counts,” and therefore “the total

amount of compensatory damages plus punitive damages

plus attorney’s fees requested on behalf of all class members

is no more than $3,500,000.00.” Of course $3.5 million is well

below the $5 million threshold for removal of a state

‐ court

class action to a federal district court under the Class Action

Fairness Act. Class counsel wants the stakes to remain below

that threshold so that the suit will have to be litigated in

state court, class counsel’s preferred forum. Pushpin arguesNo. 14

‐ 8006 3

that the potential damages that class counsel could establish

if the substantive allegations of the complaint are proved ex

‐

ceed $5 million, and therefore the case should remain in fed

‐

eral court.

One might suppose that whatever potential damages the

class might have sought, remand is required because the

complaint forswears any claim for more than $3.5 million.

The district judge said, however, that “once the proponent

[of removal, and hence opponent of remand—Pushpin] has

plausibly suggested that the relief exceeds $5 million, then

the case remains in federal court unless the plaintiff can

show it is legally impossible to recover that much.” The term

we’ve italicized appears in many cases, e.g., ABM Security

Services, Inc. v. Davis

, 646 F.3d 475, 478 (7th Cir. 2011);

Blomberg v. Service Corp. Int’l

, 639 F.3d 761, 764 (7th Cir.

2011), as does the older formula that to prevent removal the

plaintiff must demonstrate to a “legal certainty” that his

claim is for less than the jurisdictional amount. E.g., St. Paul

Mercury Indemnity Co. v. Red Cab Co.

, 303 U.S. 283, 289 (1938);

Meridian Security Ins. Co. v. Sadowski

, 441 F.3d 536, 541 (7th

Cir. 2006). Neither “legal impossibility” nor “legal certainty”

seems descriptive of what is after all just a party’s commit

‐

ment not to seek damages above an amount specified by

him, whether to avoid removal or for some other reason.

See, e.g., BEM I, L.L.C. v. Anthropologie, Inc.

, 301 F.3d 548, 552

(7th Cir. 2002); Workman v. United Parcel Service, Inc.

, 234 F.3d

998, 1000 (7th Cir. 2000); Bell v. Hershey Co.

, 557 F.3d 953, 958

(8th Cir. 2009). A court can’t force a plaintiff to accept greater

damages than he wants; and it might seem that class counsel

in this case had made a commitment, in the passages that we

quoted from the complaint, not to seek a judgment for more

than $3.5 million.4 No. 14

‐ 8006

But we have held that Illinois law, which governed the

litigation before removal, requires, for such a commitment to

be effective, that the plaintiff “fil[e] a binding stipulation or

affidavit with the complaint.” Back Doctors Ltd. v. Metropoli

‐

tan Property & Casualty Ins. Co.

, 637 F.3d 827, 831 (7th Cir.

2011); Oshana v. Coca

‐ Cola Co.

, 472 F.3d 506, 511–12 (7th Cir.

2006). Actually all we can find in Illinois statutory and case

law are statements that a plaintiff’s damages are not limited

to the amount sought in the complaint, see 735 ILCS 5/2

‐ 604;

In re Estate of Hoellen

, 854 N.E.2d 774, 785 (Ill. App. 2006),

which is not the same as saying that the amount can be lim

‐

ited only by binding stipulation or affidavit. But what at

least is clear is that an unattested statement in a complaint

won’t do—and the plaintiff in this case failed to attach a

binding stipulation or affidavit (it’s unclear what the differ

‐

ence between “binding stipulation” and “affidavit” is, but

it’s irrelevant in this case), while Pushpin has alleged that

there aren’t 1100 suits against members of the class but 1300

and that the aggregate compensatory damages to which the

class may be entitled are not $1.1 million but $3.3 million.

These allegations, which if accepted push the total potential

damages above the $5 million threshold, are as plausible as

the plaintiff’s.

Even if there were a binding stipulation, there would re

‐

main a question whether a named plaintiff (class representa

‐

tive) should be allowed to discard, without explanation or

notice to the other members of the class, “what could be a

major component of the class’s recovery,” merely to “ensure

that the stakes fall under $5 million.” Back Doctors Ltd. v.

Metropolitan Property & Casualty Ins. Co.

, supra

, 637 F.3d at

830–31. Class counsel doubtless consider it a sensible trade

in this case: give up some damages in exchange for beingNo. 14

‐ 8006 5

able to litigate the case in what class counsel must believe is

a more favorable forum—otherwise why insist that their

damages would not reach $5 million? Some members of the

class, however, might think it better to gamble on the out

‐

come of the suit if it is litigated in federal court than to give

up what might be millions of dollars in damages. Or maybe

not; spread over more than 1000 class members, an addi

‐

tional $1.5 million in damages (though it might be of course

be more) would yield an average of less than $1500 in addi

‐

tional damages per class member— much less, since class

counsel would take a big bite of the damages as an addition

‐

al attorneys’ fee.

But tugging against this type of objection to obtaining a

remand in exchange for surrendering part of the class dam

‐

ages claim is the lack of realism in thinking that the class

members can make an informed decision on whether the

case should be litigated in federal or state court. What is re

‐ quired for such a decision is an expert legal judgment, and

that is something that class counsel can provide but not class

members—at least in a case like this; for remember that the

members of the class are just small debtors who happen to

have been sued by Pushpin and many of whom, for lack of

legal sophistication or lack of resources or because the

amount of the alleged debt was too small to justify the ex

‐

pense of a lawyer, simply defaulted.

But however this issue should be resolved as an original

matter, the Supreme Court has now resolved it for us in its

year

‐ old decision in Standard Fire Ins. Co. v. Knowles

, 133 S.

Ct. 1345 (2013), seemingly unbeknownst to the parties in our

case, as they have not cited it. The Court held that a stipula

‐

tion by the named plaintiff in his complaint—even though6 No. 14

‐ 8006

accompanied by an affidavit signed by him—if made before

the class is certified doesn’t limit the amount of potential

damages that the class would be able to recover and so does

not affect removability under the Class Action Fairness Act.

Id

. at 1349. What is surprising about the decision is that the

Court’s opinion makes no reference to Arkansas law, the law

under which the suit had been filed. If Arkansas limits dam

‐

ages by a procedural rule, the limitation would not affect

removability under the Class Action Fairness Act; but if the

limitation is substantive, it might. See the opinions (none a

majority opinion) in Shady Grove Orthopedic Associates v. All

‐

state Ins. Co.

, 130 S. Ct. 1431 (2010).

The Court in Knowles also did not discuss the tradeoff be

‐

tween class counsel’s giving up a part of the class damages

claim and, by doing so, being able to litigate in a forum be

‐

lieved to be more favorable to the class. No matter; the Court

has spoken and we are bound.

But this does not end the appeal, because class counsel

advance another ground for a remand—the Rooker

‐ Feldman

rule: that the Supreme Court is the only federal court that

can entertain an appeal from a decision by a state court. This

may seem rather a desperate argument, since if the default

judgments stand, the amount of damages that the class seeks

will be greatly diminished. But remember that the aim of

class counsel is to get this case back into state court, and

maybe there they’ll be able to get the default judgments set

aside. No matter; for they’re wrong about the Rooker

‐ Feldman

rule. (This is apart from the fact that it is disputed how many

of the judgments were entered before removal—for what may

have happened later would not affect federal jurisdiction,

Exxon Mobil Corp. v. Saudi Basic Industries Corp.

, 544 U.S. 280,No. 14

‐ 8006 7

284 (2005); Back Doctors Ltd. v. Metropolitan Property & Casual

‐

ty Ins. Co.

, supra

, 637 F.3d at 830; Bergquist v. Mann Bracken,

LLP

, 592 F.3d 816, 818 (7th Cir. 2010), since federal jurisdic

‐

tion would have attached at the time of removal.) The rule

does not bar a federal suit that seeks damages for a fraud

that resulted in a judgment adverse to the plaintiff. E.g.,

Nesses v. Shepard

, 68 F.3d 1003, 1004 (7th Cir. 1995), and other

cases cited in Truong v. Bank of America, N.A

., 717 F.3d 377,

383–84 (5th Cir. 2013). Such a suit does not seek to disturb

the judgment of the state court, but to obtain damages for

the unlawful conduct that misled the court into issuing the

judgment. It’s true that the plaintiff is also asking that the

default judgments be vacated, and that is relief that would

violate the Rooker

‐ Feldman rule; but that claim can be rejected

without affecting the damages claim.

What we are left with to guide our decision is that the

plaintiff did not irrevocably commit to obtaining less than $5

million for the class, and Pushpin’s estimate that the damag

‐

es recoverable by the class if it prevails on the merits may

well equal or exceed that amount may be reliable enough to

preclude remanding the case to the state court. The only

ground on which the district judge rejected Pushpin’s esti

‐

mate and so decided to remand the case was that most of the

claims on behalf of the class are barred by the Rooker

‐ Feldman

rule. That was a mistake; and the judge was also mistaken in

saying that “there is a strong presumption in favor of re

‐

mand” when a case has been removed under the Class Ac

‐

tion Fairness Act. There is not. Back Doctors Ltd. v. Metropoli

‐

tan Property & Casualty Ins. Co.

, supra

, 637 F.3d at 830. The

judge will have to determine anew whether the amount in

controversy reaches the statutory minimum, thus barring

remand, or does not, thus requiring remand. We don’t have8 No. 14

‐ 8006

enough information to be able to make that determination

ourselves.

R EVERSED AND R EMANDED

.