On Thursday, the U.S. Circuit Court of Appeals for the Seventh Circuit affirmed removal under the Class Action Fairness Act, of class action claims against Countrywide Home Loans, Inc. involving alleged violations of the federal Telephone Consumer Protection Act (TCPA), 47 USC 227. Writing for the panel (which also included Judges Posner and Rovner), Judge Easterbrook held that removal was proper under CAFA because Countrywide’s concession that it had sent at least 3,800 unsolicited advertising faxes meant that the amount in controversy exceeded CAFA’s $5 million amount in controversy requirement (the TCPA allows for awards of $500 per fax, which can be trebled to $1500/fax for willful behavior). The court held that Countrywide was not required to show that a judgment against it would result in an award in excess of $5 million, but merely that it was possible for such an award to be made on the face of the pleadings.
The Seventh Circuit decision contains two key holdings:
- A defendant invoking federal jurisdiction has the burden of proving it exists. This is contrary to CAFA's legislative history and several district court opinions holding the burden of proof is on the plaintiff resisting removal.
- TCPA cases can be removed under CAFA even though the federal statute appears to restrict jurisdiction to state courts.
