District Court Abused Its Discretion in Refusing Post-Removal Discovery on Jurisdiction: Eighth Circuit | Practical Law

District Court Abused Its Discretion in Refusing Post-Removal Discovery on Jurisdiction: Eighth Circuit | Practical Law

In Pudlowski v. The St. Louis Rams, LLC, the US Court of Appeals for the Eighth Circuit held that the district court's refusal to consider the defendants' post-removal evidence demonstrating diversity was an abuse of discretion and prejudiced the defendants' efforts to litigate in federal court.

District Court Abused Its Discretion in Refusing Post-Removal Discovery on Jurisdiction: Eighth Circuit

by Practical Law Litigation
Published on 26 Jul 2016 • USA (National/Federal)
In Pudlowski v. The St. Louis Rams, LLC, the US Court of Appeals for the Eighth Circuit held that the district court's refusal to consider the defendants' post-removal evidence demonstrating diversity was an abuse of discretion and prejudiced the defendants' efforts to litigate in federal court.
On July 19, 2016, in Pudlowski v. The St. Louis Rams, LLC, the US Court of Appeals for the Eighth Circuit held that the district court's refusal to consider the defendants' post-removal evidence demonstrating diversity was an abuse of discretion and prejudiced the defendants' efforts to litigate in federal court ( (July 19, 2016)).
The plaintiffs brought a class action suit against the St. Louis Rams, LLC and related entities (Rams), alleging violations of the Missouri Merchandising Practices Act. The alleged violations arose out of the relocation of the Rams football franchise to Los Angeles, California. The Rams filed a notice of removal, claiming federal jurisdiction pursuant to the Class Action Fairness Act (CAFA) (28 U.S.C. § 1332(d)).
In federal court, the plaintiffs moved to remand the case back to state court based on a lack of diversity. In opposition, the Rams submitted two post-removal affidavits to demonstrate diversity. The district court refused to consider the affidavits because they were not included as part of the Rams' original notice of removal, and remanded the case back to Missouri State Court. The Rams appealed.
The Eighth Circuit:
  • Held the district court abused its discretion in refusing to consider the Rams' affidavits simply because they were submitted after removal.
  • Found that the Rams were prejudiced by the court's refusal to consider post-removal evidence, effectively denying the Rams an opportunity to conduct jurisdictional discovery to establish their claim of federal jurisdiction and "limiting their ability to prove their statutory right to a federal forum."
  • Vacated the order remanding the case back to Missouri State Court.
  • Remanded the case to the district court for further proceedings.
The court cited the Supreme Court decision in Dart Cherokee Basin Operating Co., LLC v. Owens to clarify that a defendant does not have to submit evidence establishing federal jurisdiction along with its notice of removal unless the plaintiff or the court questions the jurisdiction claim. The notice only needs to contain a "plausible allegation" that jurisdictional requirements are met. (135 S. Ct. 547, 554 (2014).) If additional information is needed to resolve issues of venue or jurisdiction, then discovery is available.