Opinion ID: 6323814
Heading Depth: 2
Heading Rank: 1

Heading: Schutte’s Complaint

Text: First, the allegations in the complaint alone are enough to show plausibly that more than $5 million is in controversy. No. 22-1087 7 Ciox was entitled to take at face value the complaint’s allegation of “several thousand” class members, each with “multiple separate claims.” See Roppo, 869 F.3d at 581 (defendant attempting to satisfy jurisdictional requirements “may rely on the estimate of the class number set forth in the complaint”). Also, it is well-settled that punitive damages, which could be up to $25,000 per claimant here, “factor into the amount-incontroversy calculation.” Id. at 582; see also Back Doctors Ltd. v. Metropolitan Property & Casualty Insurance Co., 637 F.3d 827, 831 (7th Cir. 2011) (relying on potential punitive damages to calculate amount in controversy even where plaintiﬀ “did not expressly ask for a punitive award”). Putting these numbers together, 2,000 class members would need to recover an average of only around $2,501 in exemplary damages—to say nothing of compensatory damages—to surpass the $5 million threshold. Or looking at it another way, if each class member’s exemplary damages averaged $1,000, a class with only 5,001 members would reach the required total. Many other permutations would push the class over the line, but the point is the same: the complaint’s allegations suﬃce to show that “‘a fact-ﬁnder might conceivably lawfully award’ in excess of $5 million dollars.” Roppo, 869 F.3d at 583, quoting Hammond v. Stamps.com, Inc., 844 F.3d 909, 912 (10th Cir. 2016). Schutte’s arguments to the contrary are not persuasive. For one, she suggests that exemplary damages in this case are unlikely to approach the $25,000 maximum. She points out that the compensatory damages are low—her claim is for $61—and the Supreme Court has said that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a signiﬁcant degree, will satisfy due 8 No. 22-1087 process.” State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 425 (2003). These observations fall well short of establishing a “legal certainty” that substantial punitive or exemplary damages could not be awarded here. Even after State Farm, we have recognized that a higher punitive damages ratio may be warranted in cases where compensatory damages are too low to provide meaningful deterrence. See Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672, 674–77 (7th Cir. 2003) (upholding ratio of 37.2 to 1 where compensatory damages were only $5,000 per plaintiﬀ). In addition, “a reviewing court engaged in determining whether an award of punitive damages is excessive should ‘accord “substantial deference” to legislative judgments concerning appropriate sanctions for the conduct at issue.’” BMW of North America, Inc. v. Gore, 517 U.S. 559, 583 (1996), quoting Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 301 (1989) (O’Connor, J., concurring in part and dissenting in part). Any due-process challenge to a high punitive damages award in this case would have to overcome the statute’s express provision that claimants may seek up to $25,000 for “knowing and willful” violations. Wis. Stat. § 146.84(b); see also EEOC v. AutoZone, Inc., 707 F.3d 824, 840 (7th Cir. 2013) (recognizing that statutory cap imposed by Congress “suggests that an award of damages at the capped maximum is not outlandish”). More fundamental, the district court’s task in deciding the remand motion was not to predict Schutte’s prospects on the merits. What matters is the amount “in controversy”—not the amount that plaintiﬀs are most likely to recover. See, e.g., Back Doctors, 637 F.3d at 830 (“[T]he question here is not whether No. 22-1087 9 the class is more likely than not to recover punitive damages, but whether Illinois law disallows such a recovery.”); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005) (“The question is not what damages the plaintiﬀ will recover, but what amount is ‘in controversy’ between the parties.”). Schutte also cites Wisconsin cases holding that punitive damages are available only where compensatory damages are awarded. E.g., Tucker v. Marcus, 418 N.W.2d 818, 824 (Wis. 1988) (“[W]here there exists a ‘cause of action,’ but the action is not one for which the recovery of compensatory damages is justiﬁed, punitive damages cannot be awarded.”). She argues that Ciox has failed “to establish the average or actual overcharges suﬀered by the Class,” so that exemplary damages are “entirely theoretical.” The argument overstates Ciox’s burden. To satisfy CAFA’s requirements, Ciox did not need to “establish” the class’s losses; it needed to provide only a “good faith estimate” that the potential recovery exceeds $5 million. Roppo, 869 F.3d at 579; see also Blomberg, 639 F.3d at 763 (“The party seeking removal does not need to establish what damages the plaintiﬀ will recover, but only how much is in controversy between the parties.”). Nor is Schutte correct to characterize exemplary damages in this case as theoretical. Her complaint alleges that “the defendants intentionally, knowingly, willfully, negligently, and/or otherwise unlawfully imposed fees not allowed by Wis. Stat. § 146.83.” Based on the allegedly “knowing and willful violation,” she seeks “exemplary damages of not more than $25,000.” Schutte put “in controversy” the exemplary damages contemplated by the statute. She cannot avoid federal jurisdiction by trying to retreat from her own allegations. 10 No. 22-1087