from the United States District Court for the District of New
Mexico (D.C. No. 1:15-cv-00605-JCH-SCY)
E. Pierce of Mitchell Silberberg & Knupp, LLP, Los
Angeles, California (Gilbert S. Lee of Mitchell Silberberg
& Knupp, LLP, Los Angeles, California, and Andrew G.
Schultz of Rodey, Dickason, Sloan, Akin & Robb, P.A.,
Albuquerque, New Mexico, with him on the briefs), for
Childress, Sante Fe, New Mexico, for Plaintiff-Appellee.
KELLY, GORSUCH, and McHUGH, Circuit Judges.
GORSUCH, Circuit Judge.
Class Action Fairness Act promises a federal forum for
proposed class actions if (among other things) the amount
"in controversy" exceeds $5 million. 28 U.S.C.
§ 1332(d)(2). But though it has made appearances in many
and even pretty ancient federal jurisdictional statutes, the
term "in controversy" remains a source of dispute
for the parties before us and gives rise to this appeal.
Affording the phrase its traditional meaning, we find federal
jurisdiction here beyond doubt.
case comes to us this way. In exchange for a monthly
subscription fee, Stamps.com lets customers print their own
postage from home, saving them a trip to a post office or the
purchase of a self-metering device. But Ms. Hammond says
Stamps.com's website disclosures didn't clearly
explain its monthly subscription charges. She says she
thought that Stamps.com would charge her only for those
months when she actually used its service, not every single
month. The representations on Stamps.com's website, she
alleges, were misleading and amounted to an unlawful trade
practice. Claiming that "many members of the general
public" were similarly deceived, Ms. Hammond seeks to
pursue a class action in New Mexico state court on behalf of
everyone in the country who, like her, called to cancel their
subscriptions after "discovering" that Stamps.com
"was taking money from them" every month. Ms.
Hammond alleges that this class includes "hundreds or
thousands of persons." And while she doesn't allege
a total damages amount, she contends that she is entitled to
$300 in statutory damages and that other members of the
proposed class should "likely" receive damages of
$31.98, representing two monthly subscription charges ($15.99
x 2), based on her estimate of how long customers could have
reasonably failed to notice the monthly charges before
calling to cancel. Ms. Hammond also seeks punitive damages
for herself and other class members.
Stamps.com sought to remove the case to federal court. The
company presented uncontested declarations showing that in
the last four years (corresponding to a likely statute of
limitations period) at least 312, 680 customers called to
cancel their subscriptions. The company observed that, if
each of these persons were to win the same $300 in damages
Ms. Hammond seeks for herself, the value of this case would
exceed $93 million. And even if other class members could
secure only $31.98 in damages, the company noted, the
case's potential value would still lie at almost $10
million. Well above the $5 million threshold Congress
same, the district court refused jurisdiction. It held that
Stamps.com failed to meet its burden of showing that over $5
million was "in controversy." The reason? The court
faulted Stamps.com for failing to disaggregate from the total
number of customer cancellations those customers who
"felt duped" by Stamps.com's website
disclosures. As the district court noted, customers could
have cancelled their accounts because of "any of a
myriad of . . . reasons." Not everyone was deceived. Put
more pointedly, without proof from Stamps.com establishing
how many of its customers were actually deceived, the
district court thought the company couldn't satisfy the
$5 million "in controversy" requirement.
conclusion rests on a legal error about the meaning of a key
statutory term. In using the phrase "in
controversy" CAFA borrowed a term heavily encrusted with
meaning. A term that's long appeared in our federal
diversity statute and, indeed, traces its lineage all the way
back to the Federal Judiciary Act of 1789, if not beyond.
See An Act to Establish the Judicial Courts of the
United States, ch. 20, 1 Stat. 73, 78 (1789) (codified as
amended at 28 U.S.C. § 1332(a)); Thomas E. Baker,
The History and Tradition of the Amount in Controversy
Requirement: A Proposal to "Up the Ante" in
Diversity Jurisdiction, 102 F.R.D. 299, 302-03 (1984).
When Congress chooses to employ a term of legal art like this
we typically assume it is employing its accepted meaning. As
Justice Frankfurter put it, "if a word is obviously
transplanted from another legal source, whether the common
law or other legislation, it brings the old soil with
it." Felix Frankfurter, Some Reflections on the
Reading of Statutes, 47 Colum. L. Rev. 527, 537 (1947);
see also Antonin Scalia & Bryan A. Garner,
Reading Law 73 (2012).
old soil reveals much here. As historically used, the term
"in controversy" has never required a party seeking
to invoke federal jurisdiction to show that damages
"are greater" or will likely
prove greater "than the requisite amount" specified
by statute. Hartis v. Chi. Title Ins. Co., 694 F.3d
935, 944 (8th Cir. 2012). Instead, the term has required a
party seeking federal jurisdiction to show only and much more
modestly that "a fact finder might legally
conclude" that damages exceed the statutory amount.
Id. As the Supreme Court has explained, to justify
dismissal under this standard "it must appear to a legal
certainty that the claim is really for less than the
jurisdictional amount." St. Paul Mercury Indem. Co.
v. Red Cab Co., 303 U.S. 283, 289 (1938). And this court
has repeatedly "caution[ed] counsel and courts"
against pursuing any other understanding or test.
Frederick v. Hartford Underwriters Ins. Co., 683
F.3d 1242, 1248 n.4 (10th Cir. 2012); see also McPhail v.
Deere & Co., 529 F.3d 947, 955 (10th Cir. 2008);
Gibson v. Jeffers, 478 F.2d 216, 220 (10th Cir.
1973); 14AA Charles Alan Wright et al., Federal Practice and
Procedure § 3702, at 306-08 (4th ed. 2011). Of course,
all these expositions about the meaning of the term "in
controversy" have come in the course of interpreting
earlier federal jurisdictional statutes and it is at least
conceivable Congress could have meant something different in
CAFA. Our presumption of consistent usage is just that, a
presumption. But we cannot think of - and the parties do not
even attempt to give us - any reason to suppose that in using
the term "in controversy" Congress in CAFA meant
anything at odds with our traditional understanding.
that much is to know how our case must come out. Applying the
traditional understanding of the term "in
controversy" to the undisputed facts before us yields no
doubt: federal jurisdiction exists here as a matter of law.
After all and by everyone's admission, actual damages run
at least $31.98 and perhaps $300 per person (before punitive
damages). And, as everyone acknowledges, at least 312, 000
people cancelled their subscriptions during the class period.
All this leads to the possibility that a jury might lawfully
award relief between nearly $10 million and $93 million. A
legal possibility that is more than enough to trigger federal
district court employed a different and mistaken
understanding of the statutory term. It effectively required
Stamps.com to prove that a factfinder would (or
probably would) find damages in excess of the
statutory amount. In reaching its decision to deny
jurisdiction, the district court emphasized that it's
unlikely Ms. Hammond will be able to show all 312,
000 customers cancelled their accounts because of the
company's alleged misrepresentations. For our part, we
don't doubt that probabilistic judgment for a moment. The
problem is that it answers the wrong question. For the
question at this stage in the proceedings isn't what
damages the plaintiff will likely prove but what a
factfinder might conceivably lawfully award. And on
that question - the only legally salient question before us -
no one has identified any legal impediment precluding a jury
from finding all 312, 000 persons entitled to relief. At the
end of the day, "[e]ven if it is highly improbable that
the Plaintiffs will recover the amounts Defendants have put
into controversy, this does not meet the legally impossible
standard." Raskas v. Johnson & Johnson, 719
F.3d 884, 888 (8th Cir. 2013). (And though it's beside
the point, it is perhaps noteworthy that even Ms.
Hammond's own probabilistic estimate about the likely
outcome in this case appears at odds with the district
court's, for she has volunteered her belief that maybe
half of the 312, 000 customers will ultimately prove entitled
to recovery - an estimate that would yield damages of between
$4.98 million and $46 million before punitive damages, and no
one disputes punitive damages could exceed $20, 000.)
history offers its lessons for good reason and our case
supplies no exception. For the law's traditional course
here is not some empty formalism. The jurisdictional test
history suggests serves a useful purpose, helping to keep
cases from bogging down in mini-trials before they've
even begun. At this stage, we're just trying to decide
the forum for the dispute, not liability or damages. And a
more aggressive inquiry into the likelihood of success on the
merits would invite delays and costs more appropriately
reserved for adjudicating the merits than choosing the forum.
Such an inquiry would, as well, force the proponent of
jurisdiction to argue against himself, tasking him with the
job of proving his own likely liability in a sufficient
number of individual cases simply to get a foot in the door
of the federal courthouse. A result awfully unlikely on its
face, one made all the more so when (again) we're unaware
of any other arena in which the term "in
controversy" has been interpreted to exact such a heavy
price for federal jurisdiction. See Raskas, 719 F.3d