AT&T gets "roadside assistance" from the Fourth Circuit

AT&T properly removed a class action lawsuit filed in West Virginia over automoatic "Roadside Assistance" charges under the Class Action Fairness Act of 2005 (CAFA), the Fourth Circuit held yesterday in Strawn v. AT&T Mobility LLC, No. 07-2084 (PDF).

After AT&T removed the suit from the Circuit Court of Kanawha County under CAFA, the district court remanded the case, finding that AT&T failed to show that the matter in controversy exceeded the sum or value of $5 million, exclusive of interest and costs, the jurisdictional threshold established by CAFA.

On the plaintiffs’ motion to remand, the district court read the complaint as defining a narrower class consisting of only those customers who paid the $2.99/mo. "roadside assistance" fee "unwillingly." When AT&T could not provide an estimate of how many customers paid the fee but did so unwillingly, the court held that AT&T had failed to carry its burden of demonstrating the basis for its allegation that the amount in controversy exceeded $5 million and remanded this case to state court.

AT&T appealed, and the Fourth Circuit reversed, concluding that the district court either "misread or construed too broadly the issues raised by the complaint and the definition of the putative class."

Stipulations issue not reached

In an effort to thwart removal, the Plaintiffs attached to their complaint three stipulations, two signed by the named plaintiffs Strawn and Staton and one signed by counsel for the named plaintiffs and purported class members. Each of the named plaintiffs stipulated that he is not seeking damages in excess of$75,000, and counsel stipulated that their law firm does not seek damages, including attorneys fees and costs, exceeding $75,000 for each class member and that the law firm "will not accept an aggregate award for attorneys fees and costs exceeding $5 million inclusive ofany other damages awarded to each named Plaintiff and Class member."

In remanding the case, the district court rejected as ineffective the plaintiffs’ effort to limit the amount in controversy through the stipulations attached to the complaint. Strawn v. AT&T Mobility, Inc., 513 F.Supp. 2d 599, 602 (S.D. W. Va. 2007) ("Although courts have recognized binding stipulations under certain circumstances can amount to an agreement not to seek damages equal to or in excess of the jurisdictional amount, the stipulations in this case do not rise to that level.") . The plaintiffs did not cross-appeal this ruling.