Opinion ID: 767813
Heading Depth: 1
Heading Rank: 2

Heading: cohen's other grounds for diversity jurisdiction

Text: 20 In addition to requesting compensatory and punitive damages, this lawsuit seeks to enjoin Office Depot from engaging in unfair and misleading advertising regarding the catalogue prices of its products. Cohen claims that Office Depot's advertising indicates that the prices for products purchased from its catalogues are the lowest prices available anywhere, but that the truth is some products are less expensive if purchased at Office Depot stores. She argues that enjoining such allegedly misleading advertising would result[] in changes to Office Depot's advertising and business practices, thereby benefitting the Plaintiff class, as a whole, by an amount that is clearly in excess of the jurisdictional requirement of Section 1332. Appellant's Br. 44-45. 21 When a plaintiff seeks injunctive or declaratory relief, the amount in controversy is the monetary value of the object of the litigation from the plaintiff's perspective. See Ericsson GE Mobile Communications, Inc. v. Motorola Communications & Elecs., Inc., 120 F.3d 216, 218-20 (11th Cir. 1997). In other words, the value of the requested injunctive relief is the monetary value of the benefit that would flow to the plaintiff if the injunction were granted. In this case, Cohen maintains that the class has a common and undivided interest in the injunctive relief, and thus, if considered in the aggregate, the monetary value of it to the class - alone or combined with the other claims for relief - would satisfy the $75,000 amount in controversy requirement. However, we need not address whether the monetary value of the requested injunctive relief should be considered in the aggregate, or instead attributed pro rata among the class members, because we conclude that the monetary value of the injunctive relief to the class plaintiffs in this case is too speculative and immeasurable to establish the requisite amount in controversy in either event. See id. at 221-222. 22 We have little trouble concluding to a legal certainty that the value of the injunctive relief does not satisfy the jurisdictional amount in this case, see St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S. Ct. 586, 590 (1938), because we doubt that any monetary value at all would accrue to the class plaintiffs upon issuance of the prospective injunction. If the requested injunctive relief were granted, Office Depot would not be required to offer its products at the lowest price available, but instead could simply raise the price of the products in its stores a sufficient amount that its advertising of catalogue prices was no longer false. That result would comply with the injunction the class seeks, but it would be of no monetary benefit to them. Indeed, to the extent class members also buy products in Office Depot stores, the injunction would cost them money under that scenario. 23 But let us assume Office Depot's reaction to the requested injunction would be to leave product prices as they are and clarify its advertising to remove any statement that catalogue prices are the same as store prices. That result is the most the class could hope for from the requestedinjunction, but it is one which would be of little or no monetary value to class members. The benefit of the injunction to the class plaintiffs would be the knowledge that some office products were less expensive when purchased at Office Depot stores than when purchased through the catalogue. However, upon class certification and notice, the class plaintiffs would already have known that, because the allegedly misleading advertising is the very basis of the class action. 24 Although Cohen's complaint seeks class certification under subdivisions (b)(1)(A), (b)(1)(B), and (b)(3) of Fed. R. Civ. P. 23, Cohen's class, if certified, would likely be certified as a (b)(3) class. 7 Certification under Rule 23(b)(3) would require that the class members receive notice of the suit well before the merits of [it] are adjudicated. See Schwarzschild v. Tse, 69 F.3d 293, 295 (9th Cir. 1995) (citations omitted); Fed. R. Civ. P. 23(c)(2); see also 7B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure 1788 (2nd ed. 1986). As a result, before any injunction were granted, the class would already know that the catalogue price of some Office Depot products is higher than the store price. Or, stated differently, if the injunction were not granted, the class plaintiffs would still know that the advertising is sometimes false and that they can avoid paying the higher catalogue prices simply by shopping elsewhere or by purchasing the products at Office Depot's stores. The injunctive relief itself would not be of any monetary value to the class members. Cf. Crawford v. American Bankers Ins. Co. of Fla., 987 F. Supp. 1408, 1415 (M.D. Ala. 1997) (explaining that the class members' financial recovery will come ... from their tort and [restitution] claims, not from the prospective injunctive relief). 25 The remote possibility - if there be any - that monetary value might somehow flow to the class plaintiffs from the requested injunctive relief is too speculative and immeasurable to satisfy the amount in controversy requirement. Ericsson, 120 F.3d at 221-222. In Ericsson, the plaintiff company, Ericsson, claimed that the City of Birmingham improperly handled the bidding process for its purchase of a communications system, resulting in the company losing the communications system contract to Motorola. See id. at 217. Ericsson sought to enjoin the city's contract with Motorola and also to have the court declare Ericsson the lowest responsible bidder, entitling it to the contract with the city worth almost $10,000,000. See id. However, the district court noted that, under Alabama law, the only remedy available to Ericsson was to have the district court enjoin the performance of the city's contract with Motorola as void. See id. at 221. Not only did the court lack authority to declare Ericsson the lowest bidder, it could not even require the city to rebid the contract. See id. 26 Consequently, the only benefit to Ericsson from its injunctive relief would have been the possibility that the city might rebid the contract and that, during the rebid, the city might select Ericsson's communications system and price. See id. at 221-22. We refused to pile possibility onto possibility to estimate the value of thatbenefit, but instead held that [b]ecause [Ericsson could not] reduce the speculative benefit resulting from a rebid 'to a monetary standard, [] there [was] no pecuniary amount in controversy.' Id. at 222 (quoting Texas Acorn v. Texas Area 5 Health Sys. Agency, Inc. 559 F.2d 1019, 1023 (5th Cir. 1977)). 27 Similarly, the injunctive relief in this case involves too many contingencies, such as the manner in which Office Depot might alter its pricing schemes and the extent to which the class members' purchasing patterns might change. Because of these contingencies, any benefit to the class from the injunction cannot be reduced to a reasonable monetary estimate. 8 See id. at 222. We therefore conclude that any monetary value to Cohen's class from the injunction is either non-existent, or at least too tenuous of a foundation for diversity jurisdiction. In reaching this conclusion, we also note that the policy underlying 28 U.S.C. 1332(a), which is to reserve federal court diversity jurisdiction for disputes involving relatively substantial damages, further informs our refusal to speculate about the value of a prospective injunction to the class plaintiffs in this case. See Packard v. Provident Nat'l Bank,994 F.2d 1039, 1044-45 (3rd. Cir. 1993) (noting that 1332(a) must be narrowly construed so as not to frustrate the congressional purpose behind it). The total compensatory and punitive damages claim for each class member in this case is about $260, 9 well below the $75,000 threshold for diversity jurisdiction. 28 Because the class claim for injunctive relief is too speculative to satisfy the amount in controversy requirement, we turn now to the question of whether the potential recovery of attorney fees, alone or in combination with the damages claims, can establish the jurisdictional amount in controversy.
29 On behalf of the class, Cohen brought claims under Florida statutes that prohibit deceptive business practices, see Fla. Stat. 501.201 et seq., and misleading advertising, see Fla. Stat. 817.41. Both statutory causes of action authorize a court to award attorney fees to the prevailing party. See Fla. Stat. 501.2105; Fla. Stat. 817.41. Cohen contends that when a statutory cause of action entitles a party to recover reasonable attorney fees, the amount in controversy includes consideration of the amount of those fees. She is correct. See Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 202, 54 S. Ct. 133, 134 (1933); Premier Indus. Corp. v. Texas Indus. Fastener Co., 450 F.2d 444, 447 (5th Cir. 1971). 30 Cohen also contends that the attorney fees in this case will clearly surpass the $75,000 threshold for the amount in controversy; and she argues that the amount of fees she anticipates will be awarded either should be (1) attributed to her as the prevailing party, with jurisdiction over the other class plaintiffs established under 28 U.S.C. 1367(a) (the supplemental jurisdiction provision), or (2) considered in the aggregate and attributed in toto to each member based on their common and undivided interest in the attorney fees. Assuming away our doubts that Cohen has established a sufficient basis for her contention that an award of attorney fees in this case will reach $75,000 or more, 10 we address in turn her arguments as to how that amount of fees should be attributed. 31 First, we find no basis for attributing the potential award of attorney fees to Cohen, either individually or as the class representative. The claim for attorney fees in this case is based on two Florida statutes: Fla. Stat. 501.2105(1), authorizing an award of attorney fees to the prevailing party in an action based on deceptive business practices; and Fla. Stat. 817.41(6), mandating an award of attorney fees to [a]ny person prevailing in an action based on misleading advertising. If this class action were successful on the merits, the entire class of plaintiffs - not just Cohen - would prevail in the action, and accordingly, it is the class and not just Cohen who would recover attorney fees under the statutes. 11 32 In addition, as an individual class member, Cohen stands to recover no more than $260 in damages. In her first proposed amended complaint, Cohen indicated that over $100,000 in reasonable attorney fees would be incurred in the litigation. Attributing to one plaintiff an anticipated attorney fees award that is over 384 times greater than that plaintiff's stake in the litigation could raise serious questions about the reasonableness of the fee award. For these reasons, we conclude the claim for attorney fees in this case is not attributable solely to Cohen, but instead to the entire class. Because of that conclusion, we must now decide how the claimed attorney fees should be attributed to each class member for amount in controversy purposes. 12 33 Cohen maintains that the class members share a common and undivided interest in the anticipated award of attorney fees, and thus, the claim for those fees should be viewed in the aggregate, with the total amount attributed to each class member. Office Depot responds that, like the class claim for punitive damages, the amount of the claimed attorney fees should be divided pro rata among each individual class member. In light of a recent decision by this Circuit and the relevant Florida case law, we conclude that the claim for attorney fees is not a single title or right in which [the class members] have a common and undivided interest in the claimed attorney fees. See Snyder, 394 U.S. at 335, 89 S. Ct. at 1056. Therefore, for amount in controversy purposes, the estimated total attorney fees award should be divided among all of the class members. 34 In Darden v. Ford Consumer Finance Co., 200 F.3d 753 (11th Cir. 2000), the defendant attempted to remove a class action to federal court on diversity grounds, arguing that the class plaintiffs' claim for attorney fees under the Georgia RICO statute should be considered in the aggregate for amount in controversy purposes. We rejected that argument. Following the principles laid down by the Supreme Court in Snyder, we concluded that the claimed attorney fees did not constitute a single title or right in which the class members had a common and undivided interest. See id. at 756-59. In reaching that conclusion, we noted that each class plaintiff could have recovered his attorney fees in individual suits under the RICO statute. See id. at 758. It followed that the class members did not share a single title or right in the claimed attorney fees, but instead, each member had a separate and distinct statutory right or claim to recover those attorney[] fees. Id. Noting further that under Georgia law the statutory award of attorney fees serves to compensate injured plaintiffs, we reasoned that considering the fees in the aggregate would contravene Snyder's prohibition against aggregating compensatory damages. 13 See id. Therefore, we refused to aggregate the claimed attorney fees of the class. 14 35 We construe Darden to hold that a statutory claim for attorney fees may not be considered in the aggregate for amount in controversy purposes, at least not when both of these factors are present: (1) the class members have a separate and distinct right to recover attorney fees under the relevant statute; and (2) state law provides that the statutory attorney fees serve to compensate the class members fortheir injuries. 15 Applying that holding to the facts of this case, we conclude that the claimed attorney fees may not be considered in the aggregate to establish the requisite amount in controversy. 36 As for the first factor, the class members in this case could recover their individual attorney fees incurred in separate, individual suits under Florida's consumer protection statutes. See Fla. Stat. 501.2105(1) (authorizing fee award for prevailing party); Fla. Stat. 817.41(6) (mandating fee award for [a]ny person prevailing under the statute). Like the Georgia RICO statute involved in Darden, the Florida statutes in this case provide each individual plaintiff in a putative class the right to recover attorney[] fees in the case. Darden, The members of Cohen's class are not joining to enforce a single title or right in the statutory award of attorney fees, see Syder, 394 U.S. at 335, 89 S. Ct. at 1056, because each member has a separate and distinct right in the claimed fees. See Darden. 37 The second factor is also present. Like the attorney fees award under the Georgia RICO statute in Darden, an attorney fees award under Florida consumer protection statutes serves an important compensatory purpose. In BMW of North Amer., Inc. v. Krathen, 510 So.2d 366, 368 (Fla. 4th Dist. Ct. App. 1987), the District Court of Appeals for the Fourth District noted that the obvious purpose of the 'Little FTC Act' [which includes 501.2105(1)] is to make consumers whole for losses caused by fraudulent consumer practices [and that] ... [t]hese aims are not served if the attorney[] fees are not included in the protection. Id. at 368 (citation omitted); cf. Florida Erection Serv. v. McDonald, 395 So.2d 203, 207-08 (Fla. 1st Dist. Ct. App. 1981) (explaining that an award of attorney fees, unlike an award of punitive damages, does not provide remuneration to the claimant over and above the amount necessary to compensate him for his loss). Even though the primary purpose of such an award is to encourage private enforcement of statutory policies, thus benefitting the public, see Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828, 833-34 (Fla. 1990), that does not mean attorney fees are not also compensatory in nature. The Florida Supreme Court has recognized that private individuals cannot be expected to pursue statutory causes of action unless their own losses and costs, including their attorney fees, will be fully compensated. See id. (noting that [i]f ... consumers cannot recover in full their attorney fees, they will quickly determine it is too costly ... to file suit, and individual enforcement of this act will fail) (quoting LaFerney v. Scott Smith Oldsmobile, Inc., 410 So.2d 534, 536 (Fla. 1st Dist. Ct. App. 1978)). Because the statutory attorney fees involved in this case serve a significant compensatory purpose, in this case as in Darden, aggregating the claimed attorneys fees would be inconsistent with Snyder. Consequently, the nature and purpose of the statutory right to attorney fees in this case strongly resemble those of the statutory right to attorneys fees in Darden; it follows that the result should be the same. 38 Because the attorney fees authorized by the Florida statutes in this case serve to compensate plaintiffs for losses resulting from allegedly unlawful business practices, and because claims for those fees could be asserted by the class plaintiffs in individual suits, we conclude that the claimed fees do not constitute a single title or right in which [the class members] have a common and undivided interest. Snyder, 394 U.S. at 335, 89 S. Ct. at 1056. It follows that the amount of claimed attorney fees may not be considered in the aggregate - may not be attributed in whole to each class member - but instead, likethe class claim for punitive damages, it must be divided out among the total number of class members for amount in controversy purposes. Because each class member's damages claim approximates $260, and the claimed attorney fees must be divided pro rata among 39,000 class members, an astronomical amount of attorney fees would have to be recovered in order to satisfy the amount in controversy requirement. 16 Such a recovery is not possible, and therefore, neither is diversity jurisdiction.