Amount-in-Controversy: Not Too Late to Aggregate

Writing in the May issue of the newsletter of the Class Actions and Multiparty Litigation Committee, Thomas J. Foley and Ellen C. Padesky of Detroit's Kitch Drutchas Wagner DeNardis & Valitutti discuss aggregation: Recent federal decisions have addressed issues relating when plaintiffs' claims can be aggregated, or if claims need be aggregated, satisfy the amount-in-controversy requirement for federal diversity jurisdiction under 28 U.S.C. 1332(a), which now is $75,000. In Zahn v. International Paper Co., 414 U.S. 291 (1973), the U.S. Supreme Court established the general rule that a defendant must show that the jurisdictional amount is satisfied by each class member allow removal under the diversity jurisdiction statute. While separate claims generally may not be aggregated, aggregation is permissible when two or more plaintiffs unite enforce a single title or right in which they have a common and undivided interest. Snyder v. Harris, 392 U.S. 332 (1969). With the explosion of class actions and mass tort litigation, defense counsel should be aware of successful aggregation strategies being advanced, enabling defendants remove cases and remain in federal court. Various aggregation arguments In In re Cardizem CD Antitrust Litigation, 90 F.Supp.2d 819 (E.D. Mich. 1999), the plaintiffs in consolidated cases brought class action suits in state court against numerous defendants alleging violations of state antitrust and related laws. Specifically, the plaintiffs argued that the manufacturer defendants conspired prevent a cheaper generic version of the prescription heart medication Cardizem CD from entering the U.S. marketplace. (See also 105 F.Supp.2d 618, 682 (E.D. Mich. 2000.) The defendants removed the actions federal court, and the plaintiffs subsequently filed motions for remand. Cardizem discusses nine separate cases involving amount-in-controversy disputes and the different aggregation arguments advanced by defendants. 1. Cases where plaintiffs specifically allege unjust enrichment and/or admit seeking disgorgement or restitution. In Cardizem, several plaintiffs plainly asserted claims for unjust enrichment and demanded that the defendants disgorge millions of dollars the class. The Cardizem court reviewed the state law of Illinois, New York, Wisconsin and North Carolina and determined that those states recognized an independent cause of action based on unjust enrichment theories. The court concluded that pursuant the complaint, the plaintiff class had a collective right to a disgorgement in the amount of the unjust enrichment, and that amount does not depend on the number of the plaintiffs. Because the possible recovery on the disgorgement claim was either all or nothing, the court opined that it was an integrated claim that easily satisfied the jurisdictional requirement for diversity jurisdiction. In one complaint, North Carolina class plaintiffs attempted limit recovery under the unjust enrichment claim the amount each member of the class overpaid for their prescription. However, a review of the state law on recovery for claims of unjust enrichment revealed it was clear that defendants would be disgorged of the entire amount, and if any one class member did not collect his or her share, then the remaining plaintiffs' shares would be increased. Therefore, the court found that the plaintiff could not change the integrated nature of her unjust enrichment claim by merely limiting the share she sought take from the disgorged amount. 2. Cases where the plaintiffs expressly disclaim damages in excess of $75,000. Often in class actions, it is not unusual see plaintiffs specifically plead and expressly disclaim damages in excess of $75,000. In Cardizem, one plaintiff class expressly disclaimed recovery for any class member greater than $74,999, including interest, attorneys' fees, restitution, disgorgement and treble damages. …