Trial lawyers in Florida, Georgia, and Alabama will now have to try much harder to avoid removal to federal court, thanks to a recent panel opinion by the U.S. Court of Appeals for the Eleventh Circuit.  The case, Pretka v. Kolter City Plaza II, Inc., arose in connection with a class action suit brought by buyers of luxury condominiums in Florida.  As the bottom fell out of the south Florida real estate market, many buyers sought to rescind their contracts and obtain a full refund of their deposits.  Although the complaint failed to specify the amount in controversy, it conveniently claimed money damages only in excess of $15,000 (the jurisdictional threshold for state court).

Under the Class Action Fairness Act (CAFA), Kolter timely removed the case to the U.S. District Court for the Southern District of Florida.  But the district judge remanded the case, purporting to rely on Lowery v. Alabama Power Co.’s admonition that a district court may not consider evidence unless it was (1)  “received by the defendant from the plaintiff” or (2) provided to the court at the time of removal.

Based on Lowery, the district court simply refused to consider the evidence submitted by Kolter (both in its removal papers and in response to the plaintiffs’ motion to remand) that established with near certainty the amount in controversy.  That evidence included: (1) a sworn declaration from Kolter’s parent company as to whether the amount in controversy exceeded the jurisdictional threshold; (2) a sworn declaration from Kolter’s contract and closing manager as to the exact amount in controversy; (3) demand letters received from the plaintiffs; and (4) copies of the pertinent pages from each and every contract demonstrating the precise contract price and deposit amounts.

In a 72-page decision thoroughly examining the law of federal removal, the appeals court distinguished Lowery wherever possible and otherwise rejected as mere “dicta” the more problematic aspects of the earlier decision.  Ultimately, the appeals court reversed the district court’s remand, finding that the district court had misapplied and overextended Lowery.  Among other things, the panel recognized that the harsh regime that had quickly developed under Lowery had subjected the defendant’s right to remove to the caprice of the plaintiff’s artful pleading.

Although Pretka involved removal under CAFA, the relaxed standards it announces apply to all cases removed to federal court.  The decision is noteworthy for once again placing plaintiffs and removing defendants on equal footing in seeking a federal courtroom.