Opinion ID: 161121
Heading Depth: 3
Heading Rank: 1

Heading: Aggregation of Punitive Damages

Text: 24 We turn first to defendants' contention, both in their removal notice and on appeal, that the punitive damage claims of the putative class members may be aggregated and attributed to the Martins and to each class member, and that these aggregated damages satisfy the jurisdictional amount with respect to each member of the putative class. In support of this argument, defendants rely on the cases of Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), and Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995), both of which have been disapproved by the circuits that decided them. See Cohen v. Office Depot, Inc., 204 F.3d 1069, 1073-77 (11th Cir. 2000) (explaining Tapscott not valid precedent because it conflicts with earlier ruling on same issue); Ard v. Transcont'l Pipe Line Corp., 138 F.3d 596, 601-02 (5th Cir. 1998) (Allen decision due to peculiarity of Mississippi law and does not represent precedent for any other state). Indeed, all of the circuits considering the issue now hold that punitive damages cannot be aggregated and attributed in total to each member of a putative class for purposes of satisfying the amount-in-controversy requirement of diversity jurisdiction. See, e.g., Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1264-65 (11th Cir. 2000); Ard, 138 F.3d at 600-02; Gilman v. BHC Securities, Inc., 104 F.3d 1418, 1430-31 (2d Cir. 1997); see also Anthony v. Security Pac. Fin. Servs., Inc., 75 F.3d 311, 315 (7th Cir. 1996) (implicitly rejecting aggregation of punitive damages by concluding that [t]he plaintiffs in this case would have to recover on average at least $47,118.36 in punitive damages to satisfy 28 U.S.C. § 1332). 25 Although this court has not ruled directly on the matter, we have pointed out that the Supreme Court has historically interpreted section 1332 to require plaintiffs who have separate and distinct claims, but unite together in a single suit, to each meet the jurisdictional amount in controversy. Leonhardt v. Western Sugar Co., 160 F.3d 631, 637(10th Cir. 1998). We observed that the Court has therefore only permitted aggregation when a single plaintiff seeks to aggregate . . . his own claims, or when two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest. Id. As we discuss below, we now hold, in light of the language in Leonhardt and the analysis of our sister circuits, that punitive damages may not ordinarily be aggregated and attributed in total to each member of a putative class for purposes of satisfying diversity jurisdiction. 26 The court in Gilman explained the reasoning supporting this conclusion. 27 As one court expressed the principle, the paradigm cases allowing aggregation of claims are those which involve a single indivisible res, such as an estate, a piece of property (the classic example), or an insurance policy. These are matters that cannot be adjudicated without implicating the rights of everyone involved with the res. 28 Gilman, 104 F.3d at 1423 (quoting Bishop v. General Motors Corp., 925 F. Supp. 294, 298 (D. N.J. 1996)). The court pointed out that even though a class claim for punitive damages may create a single pool of recovery, a common interest in a pool of funds is not the type of interest that permits aggregation of claims under the `common fund' doctrine. Id. at 1430. Each class member could sue separately for punitive damages and have his right to recovery determined without implicating the rights of every other person claiming such damages. Id. Because a class member's right to punitive damages is separate, distinct, and independent from those of other class members, the class claim for such damages does not seek to enforce a single right in which the class has a common and undivided interest. Punitive damages therefore may not be aggregated in a class action and attributed in total to each member of the class. We agree with Gilman and the other courts, and we reject defendants' argument that the jurisdictional amount with respect to the Martins is satisfied on the basis of the aggregated claims of the class members to punitive damages.