15 December 2014

Law in Plain English: Dart Cherokee Basin Operating Company, LLC v. Owens

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblogDart Cherokee Basin Operating Company, LLC v. Owens

Argument: Oct 7 2014 (Aud.)

Background: Brandon Owens filed a class action lawsuit in Kansas state court alleging that he and others were underpaid royalties from Dart Cherokee Basin Operating Company or Cherokee Basin Pipeline on oil and gas wells. The defendants sought to remove the case to federal court, pursuant to the Class Action Fairness Act (CAFA). Federal law requires only that defendants must file "a short and plain statement of the grounds for removal." Although Owens sought royalties of at least $8.2 million (in excess of CAFA's requirement of $5 million, the district court denied the motion to remove because the defendant's notice of removal failed to provide evidentiary support, "such as an economic analysis . . . or settlement estimates" for the $8 million figure. The defendants requested permission to appeal to the Tenth Circuit, but a divided panel denied permission. Petitioners then sought en banc review of the panel's decision, but the panel voted 4-4 (an evenly divided vote denies the petition).

Issue: The question before the Court is whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or whether it is enough to allege the required “short and plain statement of the grounds for removal.”

Holding: In a 5-4 decision, the Supreme Court ruled that as specified in §1446(a), a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold; the notice need not contain evidentiary submissions. The District Court erred in remanding this case for want of an evidentiary submission in the notice of removal, and the Tenth Circuit abused its discretion in denying review of that decision.
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