Probationers Are Now Supervised By The District Court

McGee v. Sentinel Offender Services, LLC, No. CV 110-054, 2010 WL 4929951 (S.D. Ga. Nov. 30, 2010).

A District Court in Georgia refused to remand the case to the state court finding that based on the damages claimed in the complaint,the defendant showed with a requisite degree of certainty that the amount in controversy exceeded $5 million.

The plaintiff originally filed this lawsuit against Sentinel Offender Services, LLC (“Sentinel”) in the Superior Court of Richmond County, Georgia asserting various claims arising from the defendant’s role as a private probation company in the State of Georgia.

The plaintiff sought a temporary restraining order enjoining Sentinel from taking any action against the plaintiff on void convictions and requested the court to find Sentinel in contempt of court. The plaintiff also purported to bring a class action on behalf of all individuals previously convicted of misdemeanor or ordinance violations in the State of Georgia, who were under probation supervised by Sentinel, and who had paid a fee to Sentinel. Additionally, the plaintiff also sought to recover three times the amount that fees paid to Sentinel for the supervision of class members’ private probation, including all monthly operating fees, electronic monitoring fees, or other fees, and punitive damages. The plaintiff alleged that the Georgia statute under which Sentinel operated as a private probation company was unconstitutional and that the defendant’s business practices constituted pattern of racketeering activity as defined in the Georgia Racketeer Influence and Corrupt Organization Act.

Sentinel timely removed this case to the federal court under CAFA contending that the amount in controversy exceeded $5 million in the aggregate, that it was not a Georgia citizen, and the plaintiff class included over 100 or more members. In support of the removal, Sentinel filed a declaration by its Chief Operating Officer and the Vice President of Eastern Operations, Mark Contestabile, in which he stated that 35,753 individuals convicted of misdemeanors or ordinance violations in the State of Georgia were under probation supervised by Sentinel, and that Sentinel had collected $5,675,639.20 in supervision fee from these individuals. His declaration was uncontestable. Get it? In his declaration, Mr. Contestabile stated that this fee did not include $2,086,811.08 in fees for electronic monitoring and $183,049 in fees for drug scenes.

In his motion to remand, the plaintiff admitted that minimal diversity existed and that the class would include over 100 individuals. The plaintiff, however, challenged Sentinel’s contention that the amount in controversy exceeded $5 million.

The plaintiff argued that Mr. Contestabile’s declaration was insufficient to show that the amount in controversy because it failed to show with requisite degree of certainty, that the amount in controversy exceeded $5 million. The plaintiff relied on Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006), in which Maytag supplied the court with a declaration written by one of its analysts that stated that the amount in controversy exceeded $5 million. In remanding the case, the district court in Miedema held that the defendant had failed to carry its burden on removal, in part because the defendant’s analyst had not explained how she arrived at the total value, which was eventually affirmed by the Eleventh Circuit. (Editors’ Note: See the CAFA Law Blog analysis of Miedema posted on August 22, 2006 and the CAFA Law Blog critique of the Miedema decision posted on August 22, 2006).

The Court found that this case was distinguishable from Miedema–a product liability action–where a great uncertainty existed as to the amount in controversy, unlike this case. Here, the plaintiff asked the Court to require the defendant to divest itself of any interest in the enterprise or personal property, including all fees collected by it acting as a private company. The plaintiff also sought to recover three times the amount that Sentinel had collected including all monthly operating fees, electronic monitoring fees, or other fees. The Court found that, based on these representations, the defendant submitted a declaration that set forth fees collected by Sentinel in Mr. Contestabile’s declaration. Therefore, the Court ruled that Sentinel established that the Court had jurisdiction over this case under 28 U.S.C. §1332(d)(2).

The Court also found that the sole defendant in this case was Sentinel, which was a limited liability corporation organized under the laws of Delaware with its principal place of business in Irvine, California, and definitely not a citizen of Georgia. Therefore, jurisdiction existed under 28 U.S.C. §1332(d)(3). The Court finally, ruled that Sentinel was not a state official of other government entity, as it was a private limited corporation.

Accordingly, the Court denied the plaintiff’s motion to remand.