Opinion ID: 2745480
Heading Depth: 3
Heading Rank: 3

Heading: Other Paper: Plaintiffs' Email

Text: [I]f the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. 28 U.S.C. -20- § 1446(b)(3).6 The district court determined that [t]he only possibly qualifying document was an email sent to CVS by plaintiffs' counsel on January 18, 2013, which estimated the number of meal breaks without Shift Supervisor coverage over an almost two-year period. Romulus III, 2014 WL 2435089, at . The district court held that this email was inadequate to serve as an 'other paper' because it was based entirely on information provided by defendant. Id. The interpretation of the phrase other paper in Section 1446(b)(3) is another issue of first impression for this circuit.7 There are cogent arguments for both an expansive and limited construction of this phrase. Given the ambiguity present in the text, we rely on the clear congressional intent to interpret other paper broadly. Section 1446(b)(3) lists the documents that can trigger the second removal window: a copy of an amended pleading, motion, 6 In a non-CAFA case, the availability of this avenue for removal is limited to one year, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action. 28 U.S.C. § 1446(c)(1). This one-year cap is irrelevant to the present case since it does not apply to the removal of class actions under CAFA. Id. § 1453(b). 7 District courts in this circuit that have addressed this issue have come to opposite conclusions as to how narrowly to construe the phrase. Compare Mill-Bern Assocs., Inc. v. Dall. Semiconductor Corp., 69 F. Supp. 2d 240 (D. Mass. 1999) (interpreting narrowly), and Borgese v. Am. Lung Ass'n of Me., No. 05-88, 2005 WL 2647916 (D. Me. Oct. 17, 2005) (same), with Parker v. Cnty. of Oxford, 224 F. Supp. 2d 292 (D. Me. 2002) (interpreting broadly). -21- order or other paper. 28 U.S.C. § 1446(b)(3). The doctrine of ejusdem generis would suggest that the term other paper should be limited to documents similar to a pleading, motion, or order. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 114-15 (2001) ([T]he general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words. (citation omitted) (internal quotation marks omitted)). Relying on this canon of statutory interpretation, the district court in Mill-Bern Associates, Inc., concluded that other paper must be limited to documents that are formally filed and/or served on the parties, like a filed affidavit. 69 F. Supp. 2d at 243. Another part of the statute could support a broader textual interpretation. Specifically, Section 1446(c)(3)(A) states: If the case stated by the initial pleading is not removable solely because the amount in controversy does not exceed the amount specified in section 1332(a), information relating to the amount in controversy in the record of the State proceeding, or in responses to discovery, shall be treated as an other paper under subsection (b)(3). 28 U.S.C. § 1446(c)(3)(A) (emphasis added). It is nevertheless unclear, from the text alone, whether this provision applies to CAFA cases. On the one hand, Congress chose to specifically mention only non-CAFA cases, removed under diversity jurisdiction pursuant to 28 U.S.C. § 1332(a), when statutorily broadening the scope of the term other paper. On the other hand, Congress -22- drafted CAFA to incorporate all of Section 1446, except for the one-year limitation on removal under Section 1446(c)(1). See id. § 1453(b). Moreover, there is a general presumption that the same term has the same meaning when it occurs here and there in a single statute. Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 574 (2007). In general, [t]he federal courts have given the reference to 'other paper' an expansive construction and have included a wide array of documents within its scope. 14C Wright & Miller, Federal Practice and Procedure § 3731 (4th ed.). As such, [V]arious discovery documents such as deposition transcripts, answers to interrogatories and requests for admissions, as well as amendments to ad damnum clauses of complaints, and correspondence between the parties and their attorneys or between the attorneys usually are accepted as other papers, receipt of which can initiate a 30- day period of removability. Id. (citations omitted). Two courts of appeals have held that informal correspondence from the plaintiff to the defendant constituted an other paper under Section 1446(b). In Addo v. Globe Life & Accident Insurance Co., the Fifth Circuit held that a postcomplaint demand letter, which offered to settle for above the amount in controversy, triggered Section 1446(b) as an other paper. 230 F.3d 759, 761-62 (5th Cir. 2000). Likewise, the Ninth -23- Circuit held that a letter from the plaintiffs, sent in preparation for mediation, which estimated damages to exceed $5 million put [the defendant] on notice as to the amount in controversy. Babasa v. LensCrafters, Inc., 498 F.3d 972, 975 (9th Cir. 2007). The letter qualified as an other paper, and necessitated removal within thirty days. See id. The Senate Report accompanying the passage of CAFA supports the broad interpretation of the phrase other paper and resolves for us any uncertainty arising from the text of the statute. The Committee on the Judiciary explicitly stated that it favor[ed] the broad interpretation of 'other paper' adopted by some courts to include deposition transcripts, discovery responses, settlement offers and other documents or occurrences that reveal the removability of a case. S. Rep. No. 109-14, at 9 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 10. On balance, this clear congressional intent outweighs the usual application of ejusdem generis and resolves the lack of clarity in Section 1446(c)(3)(A). We hold that correspondence from the plaintiff to the defendant concerning damages can constitute an other paper for purposes of Section 1446(b)(3). Under Section 1446(b)(3), the correspondence triggers the thirty-day clock if it is the first document in which the plaintiff puts the defendant on notice that the criteria for removal are met. -24- In this case, CVS had provided the plaintiffs with time punch data for Shift Supervisors in the course of settlement negotiations. By analyzing the data, experts from both sides were able to estimate the number of meal breaks during which a Shift Supervisor was working without another Shift Supervisor. In a telephone conversation, both parties orally exchanged their calculations. CVS asked the plaintiffs to provide their estimate in written form, which the plaintiffs did by email on the same day. The email estimated 116,499 meal breaks without Shift Supervisor coverage from August 2010 through June 2012. In theory, one more bit of information would be helpful for precision. Two other types of managerial employees, Store Managers and Assistant Store Managers, could be working during some portion of these meal breaks without Shift Supervisor coverage. The plaintiffs argue that their estimate in the January 18, 2013, email could not by itself establish class damages because it did not account for whether Managers or Assistant Managers were present during those breaks, which would have allowed the Shift Supervisors to leave the premises and thus not result in a wage law violation. The plaintiffs state that they had not communicated to CVS 'the precise number of potential wage and hour violations for which they seek redress' because they still lacked the information regarding Managers and Assistant Managers needed to make such a calculation. -25- Whether data even exists on the presence of Store Managers and Assistant Store Managers, to reduce any damages estimate, has been of constant dispute in this litigation. Going back to at least the first remand proceeding, the plaintiffs have asserted in their district court filings that CVS has a statutory obligation to maintain records of the time actually worked by all its employees, including Managers and Assistant Managers, and that CVS cannot hide behind the fact that it failed to do so. The fair implication of the plaintiffs' position is that CVS will ultimately be liable for breaks for which such managerial coverage cannot be reliably established. To us, that aspect of plaintiffs' own theory is substantial enough to place all breaks without Shift Supervisor coverage in controversy.8 The plaintiffs provided CVS with this number in the email on January 18, 2013. With the estimate in the plaintiffs' email, CVS had all of the information necessary to readily ascertain the matter's 8 We note in addition that CVS has admitted that this putative evidence of managerial coverage, which assists it in reducing the scope of potential damages, is either non-existent or unreliable. At oral argument, CVS stated, we don't have the data that [] would prove or disprove the plaintiffs' claim on this point. According to CVS, no daily time records exist for these exempt employees. CVS admitted that the evidence that does exist -- anecdotal evidence and written schedules subject to change -- is not reliable. CVS acknowledged that if the plaintiffs are correct that CVS should have maintained daily time records for exempt managers, no reduction [in the number of breaks] was or is warranted. CVS may not switch its position on this issue later. It is bound by its judicial admission. Cf. Lima v. Holder, 758 F.3d 72, 79 (1st Cir. 2014). -26- removability from the plaintiffs' own papers. As the plaintiffs had themselves said, all CVS had to do to determine an estimate of damages was multiply the estimate of the number of meal breaks at issue by the average hourly wage. The record from the first removal proceeding included the uncontested average hourly wage, $13.43.9 With the email, the plaintiffs then provided the number of breaks at issue. CVS was able easily to calculate a total of $5,611,893 damages at issue.10 9 Although the average hourly wage was originally provided by CVS based on an investigation of its own data, that uncontested fact became part of the record in the first removal attempt. CVS was under no duty to provide this figure originally, but could not subsequently ignore it. Utilizing the uncontested average hourly wage in the record was part of CVS's duty to apply reasonable intelligence when ascertaining removability. 10 According to CVS, Plaintiffs' review of the Time & Attendance Data revealed a total of 116,499 potential instances in which a violation occurred during the period August 2010 through June 2012. This equates to 5,065 alleged violations per month. Extrapolating this average over the class period of fifty-five (55) months (three years prior to the date the Complaint was filed through March 31, 2013) yields 278,575 alleged violations. Thus, using plaintiffs' estimate of the number of alleged violations and an average hourly wage for Shift Supervisors in Massachusetts, the potential damages exceed $5,000,000 as follows: 278,575 unpaid meal periods x $13.43/hr (average hourly rate) x 0.5 hours (30 minute meal period) = $1,870,631. Taking into account treble damages mandated by the Wage Act, plaintiffs' alleged damages are -27- The district court observed that the information contained in the plaintiffs' email was based on CVS's own data and that CVS could have performed its own analysis to reach the same estimate earlier in litigation.11 See Romulus II, 2014 WL 1271767, at . But it erred in concluding that this fact made CVS's second notice of removal untimely. The timeliness inquiry is limited to the information in the plaintiffs' papers, regardless of whether its original source is the defendant. The defendant has no duty to perform significant investigation of its own data to ascertain removability. The test is not whether the information is new, but when the plaintiffs' papers first enable the defendant to make the requisite merits showing to the district court. See 28 U.S.C. § 1446(b)(3). The email qualifies as an other paper from which it may first be ascertained that the case is one which is . . . removable, and required the defendant to remove within at least $5,611,893 ($1,870,631 x 3 = $5,611,893). 11 The district court stated that CVS 'had a duty to make a reasonable inquiry regarding the amount in controversy at the time the suit was filed,' . . . particularly where it, not plaintiffs, possessed the records and data necessary to make the relevant calculations. Romulus II, 2014 WL 1271767, at  (citation omitted). It is true, but irrelevant for present purposes, that plaintiffs often do not possess the information from which to make a damages estimate at the beginning of litigation. Nevertheless, Congress chose to impose the strict time limits of Section 1446(b) only once the plaintiff put the defendant on notice of the matter's removability. -28- thirty days. Id. CVS's second notice of removal, filed within thirty days of the email, was timely.12 B. The Substantive Removal Question: Amount-in-Controversy Under Section 1332 Although CVS's notice of removal was timely, it still must show that the CAFA jurisdictional prerequisites for federal jurisdiction are met. The only element at issue in this removal is whether the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs. 28 U.S.C. § 1332(d)(2). As we have stressed, the pertinent question is what is in controversy in the case, not how much the plaintiffs are ultimately likely to recover. Amoche, 556 F.3d at 51. The removing defendant bears the burden of establishing federal jurisdiction under CAFA. Id. at 48. We have previously 12 Although CVS originally argued for removal based on Section 1446(b)(3), it now urges us to hold that it could remove at any time based on its own investigation if neither time limit in Section 1446(b) applied. Three circuits have agreed that a defendant can remove on the basis of its own investigation if neither of the statutory grants for removal in Section 1446(b) have been triggered and transgressed. See, e.g., Cutrone, 749 F.3d at 146-48; Walker, 727 F.3d at 825-26; Roth, 720 F.3d at 1125-26. We do not address the complicated questions concerning the possibility of removal outside of the specified CAFA statutory procedures. Whether CVS could have independently removed, pursuant to 28 U.S.C. § 1441, based on an investigation of its own data is irrelevant since it was required to remove within thirty days of the plaintiffs' email on January 18, 2013. -29- held that a defendant must show a reasonable probability that more than $5 million is at stake in this case. Id. at 50.13 CVS's second notice of removal calculated the amount in controversy to be at least $5,611,893.14 In doing so, CVS was merely meeting its obligation to apply a reasonable amount of intelligence to the plaintiffs' papers. See Cutrone, 749 F.3d at 145. CVS updated its damages estimate in its opposition to the plaintiffs' motion to remand. In the plaintiffs' favor, CVS discounted the number of meal breaks when there was no other Shift Supervisor working by 15 percent in an attempt to estimate the number of meal breaks at which no managerial employees were 13 We easily dispose of CVS's ill-founded argument that the district court's conclusion, using the reasonable probability language from Amoche, articulated the wrong standard. CVS asserts that the court must apply a preponderance standard based on 28 U.S.C. § 1446(c)(2)(B), enacted as part of the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (JVCA). CVS lost that battle before it filed its brief. In Amoche, we expressly noted that the reasonable probability standard is, to our minds, for all practical purposes identical to the preponderance standard adopted by several circuits. 556 F.3d at 50 (citing Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006)). We express no view on the applicability of Section 1446(c)(2) to CAFA cases since the standards, notwithstanding nomenclature, are identical. 14 CVS extrapolated the number of breaks without Shift Supervisor coverage over a class period of fifty-five months, measured from three years prior to the date the Complaint was filed through March 31, 2013. Multiplying this number of unpaid meal breaks (278,575) by one-half of the average hourly rate ($13.43) totaled $1,870,631. With treble damages as mandated by the Wage Act, plaintiffs' alleged damages are at least $5,611,893. -30- present. Then, CVS extended the class period, updated the average hourly wage, included Overtime/Premium rates, and added a reasonable estimate of attorneys' fees.15 CVS provided the information for its calculations, as set forth in Appendix A, showing damages of $6,291,285. The plaintiffs raised objections to CVS's revised calculation. First, the plaintiffs take issue with CVS's cherrypicked 15% assumption.16 Second, the plaintiffs argue that CVS should have calculated the amount in controversy through the time of removal. Third, the plaintiffs argue that CVS's entire calculation is premised on the assumption that the unlawful policies identified in the Complaint continue to this day. Fourth, the plaintiffs object that the estimate for attorneys' fees is entirely speculative. The district court concluded that the Plaintiffs' arguments on these points are persuasive, and I find that 15 We have held that attorneys' fees are generally not considered when calculating the amount in controversy except where provided by contract or explicitly allowed by statute. See Spielman v. Genzyme Corp., 251 F.3d 1, 7 (1st Cir. 2001). Here, the amount is properly included because Mass. Gen. Laws ch. 151, § 1B explicitly permits the recovery of attorneys' fees, and the parties do not dispute the point. 16 For this figure, CVS relies on plaintiff Robert Bourassa's testimony that the store manager was present during only 12 to 15% of his breaks. The plaintiffs note that plaintiff Cassandra Beale provided a contrary estimate. Specifically, Ms. Beale estimated that she was required to be in the store for 60 to 70% of her breaks, meaning that the store manager must have been present during the remaining 30 to 40% of her breaks. -31- defendant, despite having 'better access to the relevant information,' has failed to 'show a reasonable probability that more than $5 million is at stake in this case.' Romulus II, 2014 WL 1271767, at  n.3 (quoting Amoche, 556 F.3d at 50-51). But, it made no factual findings and provided no other explanation. We do not believe that remand for a further explanation of the district court's succinct reasons for rejecting CVS's figure is appropriate. The district court made no factual findings and so no deference is owed. As we said in Amoche, [m]erely labeling the defendant's showing as 'speculative' without discrediting the facts upon which it rests is insufficient. 556 F.3d at 51. Whether our review is de novo or for clear error, we hold that the evidence demonstrates a reasonable probability that the amount in controversy exceeds $5 million even when accounting for the plaintiffs' objections. As we have held, all breaks without Shift Supervisor coverage are at issue in light of the ongoing dispute over the presence of Managers or Assistant Managers. Without the discount, the plaintiffs' arguments fail to reduce the amount at issue to less than $5 million even if the time frame is limited and if the attorneys' fees are omitted. Multiplying the number of breaks without Shift Supervisor coverage per month (5065) by the number of months between July 25, 2008 and the second notice of removal (approximately fifty-four) by half of the updated average hourly wage ($13.53/2) by three for treble damages results -32- in a damages estimate of $5,550,885.45. That is enough to show a reasonable probability that more than $5 million is at issue in this case.