# Respondents Brief — Ford Motor Co. v. McCauley

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Respondents Brief
- **Published:** January 1, 2002
- **Citation:** 536 U.S. 987

## Text

! ” Sabecme t Coan, Ue.
‘ rijLege

JUN 6 Oe
No. 01-896

WeHCE OF THE CLERR

IN THE

Supreme Court of the United States

FORD MOTOR COMPANY and
CITIBANK (SOUTH DAKOTA), N.A.,
Petitioners,
Vv.
JOHN B. McCAULEY, et al.,
Respondents.

On Wait oF CERTIORARI TO THE
UnNitep STATES CourRT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF FOR RESPONDENTS

Steve W. BERMAN
Counsel of Record

ANDREW M. VOoLk

R. BRENT WALTON

HAGENS BERMAN
1301 Fifth Avenue
Suite 2900
Seattle, WA 98101
(206) 623-7292

Counsel for Respondents

(Additional Counsel for Respondents Listed on Signature Page)

174347 ce

COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

BEST AVAILABLE COPY

i
QUESTION PRESENTED

Whether a class action lawsuit seeking damages and
injunctive relief may be heard in federal court where, from
the face of the complaint, the potential award of damages
for “separate and distinct” claims could not possibly exceed
the per plaintiff $75,000 amount-in-controversy requirement
imposed under 28 U.S.C. § 1332, but where the injunctive
relief requested, if granted, would impose administrative
costs on one of the defendants in excess of $75,000.

il iii

STATEMENT PURSUANT TO RULE 29.6 TABLE OF CONTENTS
Respondents are individuals and thus have no corporate Page
parents and do not issue stock. EE, Kcccscencteserececceasces i
Statement Pursuant to Rule 29.6 .......... 6006. il
Aad nsccenccccecccscccasccess ill
Table of Cited Authorities ..... 0.0.0... .6 0000s Vv
: EET cccocccccccnccecescesces l
| Summary OF ATMUMOME 2... cc ccc ccs ccccscees 9
| PEE Su webSUSEGbGCOCesereocenesceceeees 17

I. The Amount-In-Controversy Requirement
Under 28 U.S.C. § 1332 Is Strictly Construed
Against Expanding Federal Jurisdiction ... 17

Il. The Rule For Valuing Injunctive Relief
To Determine Whether The Amount-In-
Controversy Requirement Under The
Diversity Statute Is Well-Settled And
Prohibits Federal Jurisdiction In This Case
Because The Value Of The “Object Of The
Litigaticn ’ Does Not Exceed The Requisite
Amount-In-Controversy ..............5. 20

A. When An Injunction Is Prayed for,
the Amount-In-Controversy Is Measured
by the Value of the “Object of the
DET S6GeceGebeeereccecccces 20

iv

Contents
Page

B. Historically, the Plaintiff’s Viewpoint or
Objective Has Been Determinative in
Valuing the “Object of the Litigation”
and the Amount-In-Controversy ...... 24

1. Plaintiff's viewpoint determines the
value assigned to the “object of the
BEES ovcvdccucccececeesss 25

2. The “paramount policy” of this
Court is that plaintiff's complaint
controls jurisdiction ............ 31

C. The Doctrine of Stare Decisis Militates
Against Adopting the “Either Viewpoint”
ED Saveséecncecduncaecsdecenens 33

Ill. The “Object Of The Litigation” Here
Cannot Exceed The Requisite Amount-In-
Controversy Without Violating The Non-
Aggregation Principle Applicable To Class
REED co ccccvecccucsceecacedsescuases 38

A. The Non-Aggregation Principle and Its
Serict AMWUCRMIOR . ww wee cccccceces 38

B. Plaintiffs’ Claims Are Separate and
Distinct; the Claims Cannot Be

TTT eT Tee 39

C. The “Either Viewpoint” Rule Does Not
Provide an Exception to the Non-

Aggregation Principle .............. 43

PD . 2c de aeneueneubedensebesasaune 47

Vv

TABLE OF CITED AUTHORITIES

Page

Cases:
Alfonso v. Hillsborough County Aviation Authority,

308 F.2d 724 (Sth Cir. 1962) ............005. 21
Alvarez v. Pan American Life Insurance Co.,

375 F.2d 992 (Sth Cir. 1967) ............20.. 41
Berryman v. Board of Trustees,

PEED Gnbed eb eecccanssccndces 27
Bitterman v. Louisville & Nashville R.R. Co.,

ee SEE wveccesecedcscccseccoss 12, 27
In re Brand Name Prescription Drugs

Antitrust Litigation,

123 F.3d 599 (7th Cir. 1997) ...........005. passim
Caterpillar, Inc. v. Williams,

Te 13, 31, 32, 44
Clark v. Paul Gray, Inc.,

Tee 27, 39, 40
Clay v. Field,

eee 39
Conroy v. Aniskoff,

Be GE ER GUEEED wcvecccccecccecsccccess 35
Del Vecchio v. Conseco, Inc.,

230 F.3d 974 (7th Cir. 2000) ...........0045. 40

vi

Cited Authorities
Page

Elgin v. Marshall,

106 U.S. (16 Otto.) 578 (1882) .............. 39
Elliott v. Empire Natural Gas Co.,

Se Ge GEE occecesccccssscess 20, 23
Ericsson GE Mobile Communs. v. Motorola

Communs. & Electrics,

120 F.3d 216 (11th Cir. 1997) ............... 21
Freeman v. Dawson,

ED 6 cdicuneedecenésnesedes 29
Gibson v. Shufeldt,

dd coe ceececdegeweet 28, 29, 40
Gilman v. BHC Security,

104 F.3d 1418 (2d Cir.1997) ................ 40
Glenwood Light & Water Co. v.

Mutual Light, Heat & P. Co.,

ll Ee 12, 21, 24, 25, 26
Great Northern Railway Co. v. Alexander,

DPE acotavdasedesstaceeéose 13, 32
Healy v. Ratta,

DAD cc.cnceceesdeuses 10, 18, 34, 36
Healy v. Sea Gull Specialty Co.,

gE EE ee 31, 32

Hunt v. New York Cotton Exchange,
Dt <vccecuscedddeekeded 12, 21, 26

vii
Cited Authorities
Page
Hunt v. Washington State Apple Adver. Comm'n,
Se Se SO EIOTED covccccccccseses 1-2, 10, 20, 21
Justice v. Atchison, T. & S.F-R. Co.,
927 F.2d 503 (10th Cir. 1991) ............... 21
Lonnquist v. J.C. Penney Co.,
421 F.2d 597 (10th Cir. 1970) ............... 7,21
Lorillard v. Pons,
Ps SPEED bccdstecccocedenscesess 14, 34
Market Co. v. Hoffman,
101 U.S. (11 Otto) 112 (1879) ............... 29, 30
Massachusetts State Pharm. Association v.
Federal Prescription Serv., Inc.,
431 F.2d 130 (8th Cir. 1970) ................ 21
McNeil v. Southern R. Co.,

BE Wee DE GEOSED ccccccccecccccccesccees 28

McNutt v. General Motors Acceptance Corp.,
Be eh CHOSE cccccccccesccccoeccoces 21

Merrell Dow Pharm., Inc. v. Thompson,
Se SEED cc ccccccoseececcocevces 31, 32

In re Microsoft Corp. Antitrust Litigation,
127 F. Supp. 2d 702 (D. Md. 2001) ........... 45

Mississippi & Missouri Railroad Co. v. Ward,
67 U.S. (2 Black) 485 (1863) ................ 29, 30

vill

Cited Authorities
Page

Morrison vy. Allstate Indem. Co.,

228 F.3d 1255 (11th Cir. 2000) .............. 40
North Pacific S.S. Co. v. Soley,

Sy ED onuceedencesecnsceendas 19
Oliver v. Alexander,

31 U.S. (6 Pet.) 143 (1832) ............0e0es 39, 40
Packard v. Provident Nat'l Bank,

994 F.2d 1039 (3d Cir. 1993) ................ 21
Patterson v. McLean Credit Union,

Se EEE occredcnccsdecccsenesne 13, 33
Payne v. Tennessee, .

Pe CED. eoccesececescecevcesees 33
Ridder Bros. v. Blethen,

142 F.2d 395 (9th Cir. 1944) ............2... 7
Rivet v. Regions Bank,

DE scecurscodeasseseeséens 31
Ross v. Prentiss,

44 U.S. (3 How.) 771 (1845) ............... passim
Russell v. Stansell,

DPD cceésessenceseseesecess 22, 39
Saint Paul Mercury Indem. Co. v. Red Cab Co.,

DPD cocsnesseseseonecseeces passim

ix
Cited Authorities
Page

Sanchez v. Monumental Life Ins. Co.,

102 F.3d 398 (9th Cir. 1996) ................ 7
Scott v. Frazier;

PAD cousececeeceeses 12, 27, 28, 34
Shamrock Oil & Gas Corp. v. Sheets,

ED cccvancoguuessoessse 10, 18, 36
Shields v. Thomas,

$8 U.S. (17 How.) 3 (1855S) ....cccccccewses 29
Smith v. Adams,

PD cndcnneceeesesess 11, 12, 20, 23
Snow v. Ford Motor Co.,

561 F.2d 787 (9th Cir. 1977) ............... passim
Snyder v. Harris,

SP SPEED ccccvecccseseccecosves passim
Thomson v. Gaskill,

315 U.S. 442 (1942) 2... cc cccccccees 19, 27, 39, 42
Walter v. Northeastern R. Co.,

PE vecccccecedeossncénsees 39
Wheless v. St. Louis,

DD bcoccsscoseessececooees 28, 39

Zahn v. International Paper Co.,
EEE odecesccodeosseecesees passim

x

Cited Authorities
Page

Statutes:
28 U.S.C. § 1291 2... cece ccc eee eee eens 4
28 U.S.C. § 1331 0... cece eee e cece ence cree 17
28 U.S.C. $ 1332 .... cece ccrccccevcccceeres passim
28 U.S.C. § 1407 .... cc cece cece nee eeeeeeee 2
28 U.S.C. § 1441(b) 6.6 ee eee eee ee eee eee 31
S. 1712 and H.R. 2341 «1... cee ee ee ee eee eee 14, 36
Miscellaneous:
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 (1985) .....- eee eee ee eee 10, 19, 34
Armistead M. Dobie, Jurisdictional Amount in the

United States District Court,

38 Harv. L. Rev. 733 (1925) .....-.. secre eeee 21, 30
C. T. Drechsler, Criterion of Jurisdictional Amount

to Vest Jurisdiction of Federal Court Where

Injunction Is Sought,

30 A.L.R. 2d 602 (1954 & Supp. 2002) ....... 28
Note, 34 Columbia L. Rev. 311 (1934) ...-.----- 20

|

STATEMENT OF THE CASE

This case concerns a class action involving parties of
different states' and “separate and distinct” claims of
individuals brought exclusively under state law. In Snyder v.
Harris, 394 U.S. 332 (1969), and Zahn v. International Paper
Co., 414 U.S. 291 (1973), this Court held that Rule 23 did
not alter the long-standing traditional rule that “separate and
distinct claims of two or more plaintiffs cannot be aggregated
in order to satisfy the jurisdictional amount requirement”
of the diversity statute. 394 U.S. at 334; 414 U.S. at 294.
In contrast, where “several plaintiffs unite to enforce a single
title or right, in which they have a common and undivided
interest,” their claims may be aggregated to reach the
jurisdictional threshold. Zahn, 414 U.S. at 294.

In this case, there is no dispute that Respondents’
(“Plaintiffs”) underlying claims are “separate and distinct,”
J.A. 113, nor is there any dispute that this case was brought
as a class action and thus is governed by the non-aggregation
principle confirmed by this Court in Snyder and Zahn.
In addition to compensatory damages, however, Plaintiffs
prayed for injunctive relief. Petitioners contend that the
plaintiffs have a “common and undivided” interest in the
prayed for relief. Pet. Br. at 26-31. Admittedly, this Court
has not spoken conclusively about how to value the amount-
in-controversy in the class action context where, like here,
injunctive relief is requested as the surrogate through which
the “separate and distinct” damage claims can be realized.
Yet, there is no doubt that “[iJn actions seeking declaratory
or injunctive relief, it is well established that the amount in
controversy is measured by the value of the object of the
litigation.” Hunt v. Washington State Apple Adver. Comm'n,

1. It is undisputed that the parties are completely diverse.
J.A. 112. References to the Joint Appendix in this brief are
abbreviated to “J.A.”.

2

432 U.S. 333, 347 (1977). Here, the value of the “object of
the litigation” is less than $75,000 per plaintiff. J.A. 95,
97, 118.

The genesis of this action arises from Ford Motor
Company’s (“Ford”) and Citibank (South Dakota), N.A.’s
(“Citibank”) termination of a credit card rebate program
(“Rebate Program”). In each of the six original actions,
Plaintiffs filed their cases under state law asserting state law
claims in the state courts of Washington, Oregon, California,
Illinois, Alabama and New York. J.A. 109. Generally,
Plaintiffs alleged that Ford and Citibank breached their
contractual obligation to allow plaintiffs to obtain monetary
rebates payable towards the purchase or lease of certain Ford
vehicles from their use of the co-branded Ford/Citibank credit
card. J.A. 57-58. Plaintiffs further alleged that the ability to
obtain rebates was part of the promised consideration owed
to plaintiffs for choosing the Ford/Citibank credit card as
opposed to the many other cards available on the market.
J.A. 51-53. Plaintiffs also alleged that Petitioners’ conduct,
in terminating the program after duping Plaintiffs and the
class into obtaining and using the card, constituted an unfair
and deceptive trade practice for which Petitioners are liable
for damages under the consumer laws of the various states.
J.A. 59-61.

Petitioners removed each case to federal court and
petitioned the Judicial Panel on Multidistrict Litigation
(“MDL Panel”) to consolidate the cases for pretrial
proceedings under 28 U.S.C. § 1407. J.A. 109. The MDL
Panel granted the petition, plaintiffs consented to the transfer,
and all cases were transferred to the Western District of
Washington. J.A. 31-32. The district court received the cases
for limited, pretrial purposes. /d.

3

In the Case Management Order proposed by the parties,
the district court noted that the cases were “consolidated for
pretrial purposes,” and ordered that “a consolidated
complaint” — if one was to be filed — must “be filed
within fifteen (15) days after this Order becomes effective.”
J.A. 41, 44. Although Plaintiffs recognized that they could
have, in good faith, challenged the district court’s jurisdiction,
they made a strategic decision not to engage in a protracted
jurisdictional battle that would drain plaintiffs’ resources and
delay pursuit of the merits of plaintiffs’ claims. J.A. 70.
Moreover, to further streamline the pretrial proceedings, the
plaintiffs filed a single, consolidated complaint. J.A. 70.
Among other things, the consolidated complaint sought
compensatory and punitive damages, and an injunction
reinstating the wrongfully terminated Rebate Program.
J.A. 110.

After some initial discovery, Plaintiffs filed a motion
for class certification. J.A. 92. The briefing became protracted
when Citibank claimed — due to its own faulty record
keeping — determination of class membership might be
difficult. The district court thereupon allowed the Plaintiffs
to conduct discovery to explore the newly-raised “faulty
record-keeping” defense, and allowed each party to submit
supplemental briefing. At that point — and in contradiction
to the position they now take — Petitioners’ argued:
“This case, after all, does not involve a common fund or a
joint interest among cardholders. Instead, it involves a
collection of individual claims based on individual patterns
of consumer purchasing decisions. The Ninth Circuit has
made clear that aggregated damages may not be awarded in
this type of case... .” J.A. 92.

Accordingly, after class certification discovery, and
following an initial hearing on class certification, sua sponte
the district court issued an order to show cause why the action

4

should not be dismissed for lack of jurisdiction and why the
six original cases “should not be. . . remanded to state court.”
J.A. 66. in response, Petitioners argued only that the district
court had diversity jurisdiction; Petitioners did not question
that the six original actions (originally filed in state court)
must be remanded to their state courts of origin upon a finding
of no subject matter jurisdiction in federal court. J.A. 73-86.
On October 29, 1999, the district court found that it lacked
subject matter jurisdiction over the claims in the consolidated
complaint, which it therefore dismissed, J.A. 91-101, and
remanded to state court each of the six actions originally
filed in state court and removed to federal court by
Petitioners. J.A. 100-101.’

1. The district court dismissed the consolidated
complaint for lack of jurisdiction. In response to the district
court’s show cause order, Petitioners argued for diversity
jurisdiction, while Respondents suggested that jurisdiction
was “questionable.” J.A. 92-93. Even though no plaintiff or
putative class member could possibly have a claim for
compensatory damages greater than $75,000, Petitioners
contended that the jurisdictional amount-in-controversy was
met for three reasons: (i) plaintiffs requested an aggregate
award of damages “without reference to the damages incurred
by any individual cardholder”, J.A. 95; (ii) the cost of
compliance with the injunctive relief requested would

2. Petitioners have consistently and erroneously contended
that the consolidated complaint “superceded” the original state
law complaints thus rendering the state actions “non-existent.”
See, e.g., J.A. 126. The district court dismissed the consolidated
complaint and indicated an intention to dispose of the federal action
while remanding the cases back to their original state courts.
J.A. 100-101, 124-126. Thus, the court of appeals concluded that
the district court’s decision was reviewable under 28 U.S.C. § 1291.
J.A. 111-112. The district court’s order remanding the state actions
is not before the Court, and the panel below concluded that it was
not reviewable. J.A. 126.

5

be “significantly in excess of $75,000”, J.A. 96; and
(iii) punitive damages were prayed for and should be
aggregated to determine whether the requisite amount-in-
controversy was met, J.A. 97.’ The district court rejected each
one of Petitioners’ arguments and dismissed the consolidated
complaint for lack of jurisdiction.‘

The district court rejected Petitioners’ “aggregate award”
argument because the district court found that the action
involved “separate and distinct” claims, and thus under this
Court’s holdings of Snyder and Zahn, such claims could
not be aggregated to meet the amount-in-controversy
requirement. J.A. 94-96.

The district court also rejected Petitioners’ argument that
the jurisdictional minimum was met by the cost of complying
with the injunctive relief requested. The district court did so
for two reasons: (i) the cost to comply with an injunction
could not serve to satisfy the amount-in-controversy
requirement “[wJhere, as here, the nature and value of the
injunctive relief sought is identical to the nature and value
of the monetary relief sought,” as to do so would run contrary
to the “principles of Snyder and Zahn,” J.A. 96-97;° and

3. Petitioners did not argue to the district court that “any
plaintiff’s recovery of punitive plus compensatory damages could
reach $75,000 (at that level, a recovery for six million class members
would be the absurd total of $450 billion).” J.A. 97.

4. The Question Presented to the Court concerns (i) and (ii),
thus further discussions of punitive damages and the underlying
findings and rulings relevant to the punitive damages issue are
omitted.

5. In particular, the district found:

The injunctive relief sought ... is simply a means to
vindicate each plaintiff’s separate and individual claim

(Cont’d)

6

(ii) even under the “either viewpoint” rule, the district court
found that Petitioners “failed to show that the value of the
injunction enforced as to any one cardholder would exceed
$75,000,” J.A. 97 (emphasis added).° Accordingly, the district
court found that Petitioners failed to carry their burden of
proving by a preponderance of the evidence that it would
cost more than $75,000 to reinstate the Rebate Program even
for one plaintiff.

2. The Ninth Circuit affirmed the dismissal of the
consolidated complaint for lack of jurisdiction.’ The panel

(Cont'd)

for accrual of rebates for five years. Plaintiffs’ having
made class action allegations does not alter the nature
of the rights asserted. Where, as here, the nature and
value of the injunctive relief sought is identical to the
nature and value of the monetary relief sought, to permit
aggregation of the former but not the latter would
undermine the principles of Snyder and Zahn.

J.A. 96-97.

6. Contrary to Petitioners’ contention that they “demonstrated
that the plaintiffs have a common and undivided interest in the their
claim for an injunction,” the district court found otherwise. J.A. 96-
97. Additionally, the only evidence in the record about the monetary
cost of compliance with any injunction is the cost to Citibank,
J.A. 87-89; there is no evidence in the record that an injunction would
impose any similar costs on Ford. In fact, according to the declaration
of Sheryl Behar, Citibank provided the “administrative services”
under the Rebate Program which, if reinstated, would cost Citibank
in excess of $75,000, while “Ford provided cardholders with rebate
credits... .” J.A. 87-88. As the district court found, these rebate
credits could total no more than $3,500 to each plaintiff. J.A. 95.

7. On appeal, Petitioners did not contend that plaintiffs’ damages
claims could be aggregated to meet the amount-in-controversy
requirement, or that plaintiffs’ claims were “common and undivided”
as opposed to “separate and distinct.” J.A. 113.

7

first confirmed that it had jurisdiction to review the district
court’s order, J.A. 111-112, and then addressed Petitioners’
contention that the cost of compliance with the requested
injunctive relief carries them over the jurisdictional threshold.
The court began its analysis by reviewing the history of
applying the “either viewpoint” rule to multi-plaintiff
actions.* Under the “either viewpoint” rule, the Ninth Circuit
has held that the amount-in-controversy requirement can be
satisfied if “the pecuniary result to either party which the
judgment would directly produce” exceeds the jurisdictional
amount. J.A. 113 (citing Ridder Bros. v. Blethen, 142 F.2d
395, 399 (9th Cir. 1944). However, the panel also noted that
Snow v. Ford Motor Co., 561 F.2d 787, 790 (9th Cir. 1977),
specifically foreclosed application of the “either viewpoint”
rule to class actions. J.A. 114.

According to the panel, Snow declined to extend Ridder
to class actions because of the long-standing non-aggregation
principle and the Court’s decisions in Snyder and Zahn.
It stated, “the threshold question is aggregation, and it must
be resolved affirmatively before total detriment [to the
defendant] can be considered. Otherwise, the principle of
Snyder and Zahn would be subverted, i.e., plaintiffs with
minimal damages could dodge the non-aggregation rule
by praying for an injunction.” J.A. 115 (citation & internal
quotation omitted). Accordingly, “where the equitable relief
sought is but a means through which the individual claims

8. The Ninth Circuit has rejected the “plaintiff viewpoint” rule
when determining the value of non-class claims for purposes of
determining whether the amount-in-controversy requirement is
satisfied. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 405
n.6 (9th Cir. 1996) (en banc); Ridder Bros. v. Blethen, 142 F.2d 395,
399 (9th Cir. 1944).

9. Courts equate “total detriment” to aggregation. See Snow,
561 F.2d at 790; Lonnquist v. J.C. Penney Co., 421 F.2d 597, 599
(10th Cir. 1970).

8

may be satisfied, the ban on aggregation applies with equal
force to the equitable as well as monetary relief.” /d.

Thus, the panel correctly noted that in multi-plaintiff
cases seeking declaratory or injunctive relief, the amount-
in-controversy is measured by the “nature and value of the
right asserted.” J.A. 115 (citing Snow, 561 F.2d at 790).
Furthermore, the panel emphasized that if plaintiffs were
asserting a “common and undivided” right, it could look to
“either viewpoint” to determine jurisdiction. But if the right
asserted was “separate and distinct,” the jurisdictional test
“is the cost to the defendants of an injunction running in
favor of one plaintiff.” J.A. 115-116 (citing Jn re Brand Name
Prescription Drugs Antitrust Litig., 123 F.3d 599, 610 (7th
Cir. 1997)).

Applying those standards, just like the district court, the
panel first held that plaintiffs do not possess a “common and
undivided interest in accruing rebates under the program,”
which is the injunctive relief requested. J.A. 116-117.
The court even noted that Petitioners originally argued this
position in opposition to the motion for class certification
when they concluded “[b]ecause the [putative] class members
in this case do not in any sense possess joint ownership of,
or an undivided interest in a common res, their claims...
are separate and distinct.” J.A. 117 (quoting Petitioners).
In line with Petitioners’ earlier position, which is contrary
to the position Petitioners take before this Court, the panel
concluded that the “right [to injunctive relief] is distinct to
each plaintiff, is based on his or her individual contractual
relationship with Ford and Citibank, and is worth no more
than $3,500.” J.A. 117. In other words, the court found that
the equitable relief sought in this case and under these facts
was merely a “means through which the individual claims
may be satisfied” and “no plaintiff has an individual claim
worth more than $75,000.” J.A. 118.

9

Following the finding that the injunctive relief claims
are “separate and distinct” and valued at no more than $3,500
per plaintiff, the panel proceeded to test whether the cost of
an injunction running in favor of one plaintiff would exceed
$75,000. Departing some from the disjunctive rationale of
the district court,’ the panel concluded, as a matter of law,
that fixed administrative compliance costs that would be
imposed if the injunction were granted could not satisfy the
amount-in-controversy requirement. The court reasoned that,
if permitted, “‘every case, however trivial, [brought] against
a large company would cross the [jurisdictional] threshold.’”
J.A. 118-119 (quoting and citing Brand Name, 123 F.3d
at 610).

SUMMARY OF ARGUMENT

By its plain terms, the unambiguous diversity statute
grants the federal district courts original jurisdiction
over “all civil actions” involving completely diverse parties
where “the matter in controversy exceeds the sum or value
of $75,000.” 28 U.S.C. § 1332(a)(1). Thus, one essential
element of federal jurisdiction under the diversity statute is
the amount or value of the litigation. Here, Plaintiffs seek
damages and an injunction as a means to provide value to
their individual contract rights. There is no dispute that
Plaintiffs’ contract claims are “separate and distinct” and thus
under this Court’s long-settled interpretation of the amount-
in-controversy requirement, the value of the claims cannot
be aggregated to meet the jurisdictional threshold of $75,000.
Snyder v. Harris, 394 U.S. 332 (1969). Moreover, according
to the parties and the courts below, no plaintiff has an

10. In addition to concluding that the injunctive relief was the
means through which plaintiffs sought to satisfy their individual
claims, the district court also found that Petitioners had failed to
meet its burden of proving that the amount-in-controversy was
satisfied even for one plaintiff under the “either viewpoint” rule.
J.A. 97. The panel did not distr’) this finding.

10

individual claim exceeding $75,000. However, Plaintiffs
prayed for an injunction as well. “In actions seeking
declaratory or injunctive relief, it is well established that the
amount in controversy is measured by the value of the object
of the litigation.” Hunt v. Washington State Apple Adver.
Comm'n, 432 U.S. 333, 347 (1977). Thus, the question in
this case is how to value the “object of the litigation” and
whether that value exceeds the jurisdictional threshold for
each plaintiff.

Petitioners ask this Court to value the “object of the
litigation” from the defendant’s viewpoint or, alternatively
to conclude that plaintiffs’ request for injunctive relief is a
“common and undivided” interest that may be aggregated to
determine the amount-in-controversy. For all of the following
reasons, Petitioners’ request should be denied and the
judgment should be affirmed.

I. The policy of this Court is to construe the amount-in-
controversy requirement strictly and against expanding
federal jurisdiction. Healy v. Ratta, 292 U.S. 263, 270 (1934);
Snyder, 394 U.S. at 339-40. This is done to respect the proper
role of state courts in actuating the federal judicial system
and to ensure that the federal courts are not burdened without
Congress’s explicit authorization. Healy, 292 U.S. at 270;
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09
(1941); Snyder, 394 U.S. at 339-40; 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, 302-18 (1985).

I1.A. The rule for valuing injunctive relief for purposes
of determining the amount-in-controversy is settled and has
been for some time: “the amount in controversy is measured
by the value of the object of the litigation.” Hunt, 432 U.S.
at 347 (citing cases back to 1907). It is generally understood

11

that the “object of the litigation” is the right or rights that
plaintiffs seek to protect. In other words, the “matter in
dispute” is “the subject of litigation, the matter upon which
the action is brought and issue is joined, and in relation
to which, if the issue be one of fact, testimony is taken.”
Smith v. Adams, 130 U.S. 167, 175 (1889).

Here, the relevant rights that Plaintiffs seek to protect
are their separate contractual rights. In particular, plaintiffs
seek to hold Ford and Citibank to their bargain and permit
each class member to “earn up to $700 in rebates over any
consecutive 12-months for a maximum rebate of $3,500 over
a 5-year period” toward the purchase or lease of certain Ford
vehicles. J.A. 49, 109. The relevant controversy is whether
Ford and/or Citibank owe Plaintiffs this right and these
rebates.'' Thus, in this case, the “object of the litigation” is
the value of the right to be protected and gained by Plaintiffs,
which the courts below have valued at less than $75,000 per
plaintiff.

Nevertheless, Petitioners contend that the administrative
costs imposed by the injunctive relief requested can and
should be used to determine the value of the “object of the
litigation” in all cases where injunctive relief is requested.
Petitioners are mistaken. Such administrative costs are
collateral to the rights that plaintiffs seek to protect and thus
are not included in the jurisdictional calculus. Ross v.
Prentiss, 44 U.S. (3 How.) 771, 772 (1845). Indeed, one can
see that they are collateral to the “object of the litigation” by
virtue of the fact that Plaintiffs are not required to present

11. There are additional objectives of the litigation under
consumer protection statutes and the common law unjust enrichment
claim (e.g., disgorgement), but these objectives do not appear relevant
to the Question Presented and Petitioners have not emphasized these
aspects of the litigation in their briefs at any stage of the litigation.
Thus, Respondents similarly omit discussion of these issues.

12

testimony about these administrative costs to establish their
rights, and such administrative costs are no defense to a
breach of contract claim. Consequently, Petitioners would
not introduce such testimony either. Cf Smith v. Adams,
supra.

B.1. Furthermore, this Court has historically valued the
“object of the litigation” solely from the plaintiff’s viewpoint.
Indeed, on several occasions, this Court has expressly stated
that this is the rule. See, e.g., Scott v. Frazier, 253 U.S. 243,
244 (1920) (“It is well settled the . . . amount in controversy
must equal the jurisdictional sum as to each complainant.”);
Glenwood Light & Water Co. v. Mutual Light, Heat & P.
Co., 239 U.S. 121 (1915) (holding jurisdictional amount
is tested “by the value of the object to be gained by
complainant”); Bitterman v. Louisville & Nashville R.R. Co.,
207 U.S. 205, 225 (1907) (“[T]he substantial character of
the jurisdictional averment in the bill is to be tested, not by
the mere immediate pecuniary damage resulting from the acts
complained of, but by the value of the . . . rights of property
which the complainant sought to have recognized and
enforced.”); Hunt v. New York Cotton Exchange, 205 U.S.
322, 336 (1907) (“The object of this suit is to protect that
right. The right, therefore, is the matter in dispute, and its
value to the Exchange [the plaintiff] determines the
jurisdiction”).

B.2. Given the paramount policy that the plaintiff is the
master of the complaint and that the complaint controls
jurisdiction, it is easy to understand why the plaintiff’s
viewpoint is used to test the value of the “object of the
litigation.” First, such a rule is consistent with the general
rule that “the sum claimed by the plaintiff controls” if the
claim is made in good faith. Saint Paul Mercury Indem. Co.
v. Red Cab Co., 303 U.S. 283, 288 (1938). Second, such an
approach is also consistent with the well-pleaded complaint
rule and removal statute. Jd. at 291. Third, the plaintiff’s

13

viewpoint rule is the one bright line rule that is consistent
with the long-established right of plaintiffs to decide which
jurisdiction to bring his or her case in, and which law to rely
upon. If a defendant, by merely recasting the complaint or
adding allegations about the cost of the injunctive relief
requested, could defeat a plaintiff’s choice of law or forum,
then, in the words of this Court, “the plaintiff would be master
of nothing.” Caterpillar Inc. v. Williams, 482 U.S. 386, 399
(1987); see also Great Northern Ry. Co. v. Alexander, 246
U.S. 276, 281 (1918) (jurisdiction is “to be determined by
the allegations of the complaint ... it cannot be made
removable by any statement in the petition for removal or in
subsequent pleadings by the defendant”). This is especially
true in cases brought against large multinational corporations
that would likely incur in excess of $75,000 in administrative
costs for any injunction issued against them. See Brand Name,
123 F.3d at 610.

C. Additionally, considerations of stare decisis militate
against opening the federal courts to every completely diverse
action that seeks injunctive relief, which would be the effect
if this Court were to adopt the “either viewpoint” rule as
Petitioners propose. Considerations of stare decisis are
especially important where, as here, the Court is interpreting
a statute because Congress is “free to alter what we have
done.” Patterson v. McLean Credit Union, 491 U.S. 164, 172-
173 (1989).

As noted above, the relevant decisions of this Court have
stood for decades and, more importantly, are the products of
over 100 years of this Court’s jurisprudence. Other than
increasing the amount-in-controversy threshold to
establishing federal jurisdiction, the relevant text of the
diversity statute has remained essentially unchanged by
Congress since the statute was originally enacted. Moreover,

14

Congress has presumably read and understood these holdings
when setting the requisite amount-in-controversy. Indeed,
Congress has ratified the Court’s interpretation. Lorillard v.
Pons, 434 U.S. 575, 580-81 (1978). Thus, it would be
inappropriate for this Court to expand federal jurisdiction
where Congress has chosen not to. Zahn, 414 U.S. at 300-
01.

Congress’s current consideration of S. 1712 and H.R.
2341 (the “Class Action Fairness Act of 2001”) implicitly
acknowledges that this case cannot presently be brought in
federal court. These bills seek to amend 28 U.S.C. § 1332
to federalize class actions and modify the amount-in-
controversy requirements to undo the effect of this Court’s
holdings interpreting section 1332’s amount-in-controversy
requirement. If enacted, the Class Action Fairness Act would
establish the new rules of federal jurisdiction in class actions
that Petitioners ask this Court to write but at a different and
higher threshold, well above the present $75,000.

If Congress chooses to, it can and should amend section
1332 to adopt and incorporate Petitioners’ position and fix
any perceived error. However, this Court should not
pronounce a new rule that would open the federal courts to
the hundreds, if not thousands, of state court actions filed
across the country annually that pray for injunctive relief,
especially at time when this Court has expressed its concern
over the caseloads in federal court. See 1999 Year-End Report
on the Federal Judiciary. Instead, this Court should reaffirm
its prior holdings and state clearly that the plaintiff’s
viewpoint controls the “object of the litigation,” and defer
to Congress the determination of whether diversity
jurisdiction should be expanded to include all diverse cases
and/or class actions where plaintiffs seek injunctive relief.

ee eee

iii, see

15

Assuming that the Court rejects the “either viewpoint”

approach Petitioners propose and reaffirms its holdings that

“plaintiff’s viewpoint” determines the amount-in controversy,
diversity jurisdiction is lacking here because the value of
the “object of the litigation” from the plaintiff’s perspective
does not exceed $75,000 per plaintiff. Thus, the judgment
should be affirmed on this basis alone.

IlIl.A. The non-aggregation principle also precludes
federal jurisdiction over this case. According to the traditional
interpretation of the diversity statute, the non-aggregation
principle holds that the “separate and distinct claims of two
or more plaintiffs cannot be aggregated in order to satisfy
the jurisdictional amount requirement.” Snyder, 394 U.S. at
335. The only time aggregation is permitted in multi-plaintiff
cases is where “two or more plaintiffs unite to enforce a single
title or right in which they have a common and undivided
interest.” Id. (emphasis added).

B. Here, Plaintiffs’ claims are separate and distinct. In
fact, Petitioners concede this point. J.A. 113, 117. Thus, the
non-aggregation principle applies. Furthermore, contrary to
Petitioners’ position, it does not matter whether Plaintiffs
share a “common and undivided” interest in the injunctive
relief because the non-aggregation principle applies whenever
plaintiffs unite to enforce (i) “a single title or right,” that is
(ii) “common and undivided,” and here. Petitioners concede
that Plaintiff do not share a united title or right, even to the
relief requested. Accordingly, Plaintiffs’ claims cannot be
aggregated to meet the jurisdictional threshold.

Additionally, even if Plaintiffs’ claims could be
aggregated, defendants’ costs cannot. Here, the record reveals
that although Citibank would incur over $75,000 in
administrative costs if an injunction reinstating the Rebate
Program were to issue, there is no evidence that an injunction

16

would impose similar costs on Ford. In fact, according to
the declaration of Sheryl Behar, Citibank provided the
“administrative services” under the Rebate Program which,
if reinstated, would cost Citibank in excess of $75,000, while
“Ford provided cardholders with rebate credits. . . .” J.A. 87-
88. As the district court found, these rebate credits
could total no more than $3,500 to each plaintiff. J.A. 95.
Thus, even if the defendant’s viewpoint is considered and
jurisdiction is tested by “the cost to each defendant of an
injunction running in favor of one plaintiff,”’? finding
jurisdiction here violates the non-aggregation principle
because the cost to Ford is at most $3,500 per plaintiff.
Therefore, the district court’s finding that Petitioners failed
to meet their burden under the “either viewpoint” rule should
be upheld. J.A. 97.

C. Finally, the “either viewpoint” rule, if adopted in the
form that Petitioners’ request (i.e., to include defendant’s
administrative compliance costs in the jurisdictional
calculus), would create such a porous exception to the non-
aggregation principle that the principle would be rendered
non-existent. Indeed, as Judge Posner has noted, “every case,
however trivial, against a large company would cross the
[jurisdictional] threshold,” if such administrative costs were
included. Brand Name, 123 F.3d at 610.

The Court need not take this bait. Not only are such costs
collateral to the “object of the litigation” and thus excluded
from the definition of amount-in-controversy, see Ross, 44
U.S. at 772, but also the Ninth Circuit held that these costs
cannot be considered as a matter of law if the non-aggregation
principle is to be respected. The Court should affirm the Ninth
Circuit’s ruling because failing to place such a limitation on
the “either viewpoint” rule would mean that the federal
courthouse doors would be open to every large corporation

12. Brand Name, 123 F.3d at 610.

17

whenever completely diverse parties sue them and seek
injunctive relief — including individual actions — and to
every diverse plaintiff who wished access to the federal courts
simply by including a prayer for injunctive relief. Not only
would such an expansion of federal jurisdiction render the
non-aggregation principle effectively meaningless, but it
would also be contrary to this Court’s interpretations and
policies pertaining to the diversity statute. If federal
jurisdiction is to be expanded this way, the Court should defer
to Congress.

ARGUMENT

I. The Amount-In-Controversy Requirement Under
28 U.S.C. § 1332 Is Strictly Construed Against
Expanding Federal Jurisdiction

One of the essential elements of federal jurisdiction under
the diversity statute is the amount or value of the subject
matter in litigation. By its plain terms, the unambiguous
diversity statute grants the federal district courts original
jurisdiction over “all civil actions” involving completely
diverse parties where “the matter in controversy exceeds
the sum or value of $75,000.” 28 U.S.C. § 1332(a)(1)."
Thus, the question presented here is whether this case, in
which Plaintiffs seek damages perhaps totaling in the millions
and an injunction as a means to provide value to their
individual contract rights which admittedly would cost
Citibank more than $75,000 to implement, but would not
cost Ford more than $75,000 per plaintiff, establishes the
requisite amount-in-controversy even though no plaintiff
would obtain more than $75,000 in pursuit of his or her
separate and distinct contractual claim.

13. For years the federal question jurisdiction statute, 28 U.S.C.
§ 1331, contained a similar amount-in-controversy requirement. Some
of the cases cited in Respondents’ brief involve that requirement.

18

Since the creation of the federal courts with the Judiciary
Act of 1789, which has remained essentially unchanged since
its inception, suits between citizens of different states, and
at times those based on a federal question, and involving
less than a certain prescribed amount could neither be brought
in a federal court ~iginally nor removed to federal court
from a state court. Indeed, the only material changes to the
statute have been for Congress to limit the number of federal
cases by increasing the amount-in-controversy threshold.'*
In Healy v. Ratta, 292 U.S. 263 (1934), this Court held, with
regard to the policy of Congress in fixing a minimum
jurisdictional amount for the federal courts:

Pursuant to this policy the jurisdiction of federal
courts of first instance has been narrowed
by successive acts of Congress, which have
progressively increased the jurisdictional amount.
The policy of the [diversity] statute calls for its
strict construction. . . . Due regard for the rightful
independence of state governments, which should
actuate federal courts, requires that they
scrupulously confine their own jurisdiction to the
precise limits which the statute has defined.

Id. at 270; see also Shamrock Oil & Gas Corp. v. Sheets, 313
U.S. 100, 108-09 (1941)

The power reserved to the states under the
Constitution to provide for the determination of
controversies in their courts, may be restricted
only by the action of Congress in conformity to
the Judiciary Articles of the Constitution. Due
regard for the rightful independence of state
governments, which should actuate federal courts,

14. See Pet. Br. at 10 n.3 citing the requisite amounts and the
amendments to the diversity statute.

19

requires that they scrupulously confine their own
jurisdiction to the precise limits which the statute
has defined.

(Internal quotation omitted). Saint Paul Mercury Indem. Co.
v. Red Cab Co., 303 U.S. 283, 288 (1938) (“The intent of
Congress drastically to restrict federal jurisdiction in
controversies between citizens of different states has always
been rigorously enforced by the courts.”); Snyder, 394 U.S.
at 339-40 (refusing to overrule the “aggregation doctrine” in
part because it would rewrite the “settled interpretation” of
the diversity statute incorporating that doctrine, and because
it would expand the federal caseload which would “undercut
the purpose” of the amount-in-controversy threshold
requirement). Thus, it is one governing principle and purpose
of the diversity statute — and perhaps the principal purpose
— to narrow federal jurisdiction in favor of jurisdiction
in state courts, and correspondingly limit those cases that
can be brought in federal court.'° See 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, 302-18 (1985).

The strict reading of the scope of diversity jurisdiction
applies here and to Petitioners’ request that this Court expand
federal jurisdiction by revisiting how to value the “object of
the litigation” to include the costs to the defendant of the
requested injunctive relief. Because such a reading of the
diversity statute would be inconsistent with, if not contrary
to, the Court’s settled jurisprudence, Petitioners’ request
should be rejected.

15. Federal courts, of course, are courts of limited jurisdiction.
Indeed, federal courts must, at all times, be ever vigilant in ensuring
that the requisite amount-in-controversy is satisfied, else jurisdiction
is lacking and the case must be dismissed. See, e.g., Thomson v.
Gaskill, 315 U.S. 442, 446 (1942); Saint Paul, 303 U.S. at 290-91;
North Pacific S.S. Co. v. Soley, 257 U.S. 216, 221 (1921).

20

II. The Rule For Valuing Injunctive Relief To Determine
Whether The Amount-In-Controversy Requirement
Under The Diversity Statute Is Well-Settled And
Prohibits Federal Jurisdiction In This Case Because
The Value Of The “Object Of The Litigation” Does
Not Exceed The Requisite Amount-in-controversy

A. When An Injunction Is Prayed for, the Amount-
In-Controversy Is Measured by the Value of the
“Object of the Litigation.”

This Court has interpreted and settled what is a “matter
in controversy” for purposes of the diversity statute in suits,
such as this one, seeking in an injunction: “it is well
established that the amount in controversy is measured by
the value of the object of the litigation.” Hunt, 432 U.S. at
347. As has been noted by commentators and courts over
the years, it is difficult to establish a rule more concrete
than this, because the “object of the litigation” can and will
differ depending on the facts and circumstances of each case.
See, e.g., Elliott v. Empire Natural Gas Co., 4 F.2d 493, 496
(8th Cir. 1925) (“No rules as to how jurisdictional amount
shall be arrived at can be laid down governing every case,
for there are different shades of fact differentiating the various
cases, and each one is dependent upon its own particular facts
and circumstances.”’) It is generally understood that the
subject or object of the litigation or matter in dispute is
“the matter upon which the action is brought and issue is
joined, and in relation to which, if the issue be one of fact,
testimony is taken.” Smith v. Adams, 130 U.S. 167, 175
(1889); see Note, 34 CoLumsia L. Rev. 311, 311 (1934). Stated
otherwise, the “matter in controversy” or “the object of the
litigation” is properly understood as the right(s) sought to be
protected by the complaint. Thus, under Hunt, it is the value
of these rights that determines whether the amount-in-
controversy requirement is satisfied when injunctive relief
is requested. |

“eae

21

Here, the object of Plaintiffs’ complaint is to hold Ford and
Citibank to their bargain and permit each class member to “earn
up to $700 in rebates over any consecutive 12-months for a
maximum rebate of $3,500 over a 5-year period” toward
the purchase or lease of certain Ford vehicles. J.A. 49, 109.
The relevant controversy is whether Ford and/or Citibank owe
Plaintiffs this right and these rebates. Thus, in this case, the
“object of the litigation” is the value of the right to be protected
and gained by Plaintiffs; it is not how much it would cost the
Petitioners to administer the relief to give value to Plaintiffs’
right, assuming their contractual rights were vindicated. Hunt,
432 US. at 347 (citing McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 181 (1936); Glenwood Light & Water Co.
v. Mutual Light, Heat & Power Co., 239 U.S. 121, 126 (1915);
Hunt v. New York Cotton Exchange, 205 U.S. 322, 336 (1907));
Armistead M. Dobie, Jurisdictional Amount in the United States
District Court, 38 Harv. L. Rev. 733, 734 (1925) (suggesting
that the amount-in-controversy is “always” determined by the
“value to the plaintiff of the right” that plaintiff seeks to
protect).'® To the extent that the Ninth Circuit’s opinion takes a
different approach from the above well-established precedent
of this Court, Respondents respectfully disagree with the panel’s
rationale.

If the object of this litigation were not clear from the
face of the complaint, it becomes abundantly clear from the
realization that were Petitioners to give each putative class

16. Several courts of appeal agree with Judge Dobie, at least in
the context of multi-plaintiff cases or class actions. See, e.g., Packard v.
Provident Nat'l Bank, 994 F.2d 1039, 1050 (3d Cir. 1993); Alfonso v.
Hillsborough County Aviation Auth., 308 F.2d 724, 726-27 (Sth Cir.
1962); Massachusetts State Pharm. Asso. v. Federal Prescription Serv.,
Inc., 431 F.2d 130, 132 n.1 (8th Cir. 1970); Snow, 561 F.2d at 790 (9th
Cir. 1977); Lonnquist, 421 F.2d at 599 (10th Cir. 1970); Ericsson GE
Mobile Communs. v. Motorola Communs. & Elecs., 120 F.3d 216, 219-
20 (11th Cir. 1997); but see Brand Name, 123 F.3d at 609-10 (7th Cir.);
Justice v. Atchison, T. & S.F-R. Co., 927 F.2d 503, 505 (10th Cir. 1991).

22

member $3,500 toward the purchase or lease of their next
qualifying Ford vehicle, the “controversy” relevant to the
injunction sought would disappear. In Russell v. Stansell, 105
U.S. 303 (1882), appellants petitioned the district court to enjoin
Stansell from collecting on an assessment worth more than
$70,000 decreed against the Levee Board of Mississippi.
The plaintiffs in the case became involved because the Levee
Board did not satisfy the decree, and under the provisions of
the statute creating the Levee Board, Stansell could obtain an
assessment and collection of the charge from the owner of the
lands in the district, which Stansell had done. Despite the fact
that the plaintiffs sought to enjoin Stansell from collecting an
amount more than the requisite amount-in-controversy, this
Court held that jurisdiction was lacking. /d. at 304. In doing so,
this Court stated that the “object was to relieve each separate
owner from the amount for which he personally, or his property,
was found to be accountable. An injunction, if granted, would
necessarily be to prevent { Stansell] from collecting from each
owner the amount for which he was separately liable.” /d.
(emphasis added). This Court then held that the plaintiffs’
interests were “distinct and separate” and thus could not be
“united” or aggregated “for the purpose of making up the amount
necessary to give us jurisdiction on appeal” even though the
injunction sought, if granted, would cost Stansell more than the
requisite amount-in-controversy. /d.

This case presents the converse to Russell. Instead of
seeking an injunction to prevent someone from collecting
what they separately owe, the object of the injunction sought
is to force the Petitioners to pay each plaintiff what they
are separately owed under their individual contracts.
And, Petitioners can relieve themselves of further liability by
paying to each what they owe. In other words, the nature of the
right Plaintiffs seek to protect through the equitable relief
requested is merely the “means through which the individual
claims may be satisfied.” J.A. 117. This is the object of the
litigation.

23

Moreover, for Plaintiffs to establish their right to
their individual rebate amounts, it does not matter that
Citibank would incur administrative costs in excess of
$75,000; those costs are simply a collateral effect of the
litigation. Ross v. Prentiss, 44 U.S. (3 How.) 771, 772 (1844)
(holding jurisdiction does not depend upon the amount of
any contingent loss or damage which one of the parties may
sustain, but upon the amount in dispute between them);
Elliott, 4 F.2d at 501 (same). Indeed, no testimony about the
administrative costs would be taken to establish and protect
the rights at issue. Cf Smith v. Adams, supra. In Ross v.
Prentiss, land worth more, and mortgaged for more than
$2,000, was about to be sold on execution for a debt of a
lesser sum, and a complaint by the mortgagee to stay the
sale was dismissed. The mortgagee appealed, and insisted
that jurisdiction depended on the value of the property, and
that he might lose the whole right of his mortgage by a forced
sale. In rejecting these arguments and dismissing the appeal,
this Court stated:

The only matter in controversy between the
parties is the amount claimed on the execution.
The dispute is whether the property in question is
liable to be charged with it or not. The jurisdiction
does not depend upon the amo: ‘nt of any contingent
loss or damage which one of the parties may sustain
by a decision against him, but upon the amount in
dispute between them; and as that amount is in this
case below two thousand dollars, the appeal must
be dismissed.

Ross, 44 U.S. at 772 (emphasis added).
Similarly, here, the relevant controversy is whether the

Petitioners breached the individual’s contract when they
unilaterally terminated the Rebate Program. The amount-in-

24

controversy is the damage, if any, each plaintiff suffered as a
result of the contractual breach, not the administrative costs
of the Rebate Program, which is collateral to the value of the
contractual right.'’ And, the value of the contractual right
undisputedly is less than $75,000 each.

B. Historically, the Plaintiff’s Viewpoint or Objective
Has Been Determinative in Valuing the “Object of
the Litigation” and the Amount-In-Controversy.

If the Court were to agree with Petitioners that their costs
are the “object of the litigation” and specifically endorse
equating the defendant’s costs with the test for determining
jurisdiction, the Court would be uprooting over a 100 years
of settled jurisprudence and fundamental principles
that Congress has relied upon in setting the amount-in-
controversy threshold only to expand federal jurisdiction
needlessly. Snyder, 394 U.S. at 338-42. To be sure, valuing
the “object of the litigation” has caused courts problems over
the years. This confusion has lead lower courts to create the
so-called “either viewpoint” rule. However, this Court has
consistently valued the “object of the litigation” from the
plaintiff’s viewpoint, in large measure because jurisdiction
is tested on the face of the complaint. Indeed, this Court has
expressly stated on several occasions that the jurisdictional
amount is to be tested “by the value of the object to be gained
by complainant.” See, e.g., Glenwood Light & Water Co.,
239 U.S. at 125. The Court should reaffirm this principle
and provide the lower courts with clear guidance explaining

17. To see just how collateral these administrative costs are,
consider the fact that although Citibank will incur administrative costs
in excess of $75,000, according to the allegations in the complaint,
Citibank will actually profit financially if the Rebate Program were
reinstated. J.A. 54. The Rebate Program was discontinued because
of Ford’s contingent liability for the outstanding rebates. J.A. 54-55.
It is the money that Ford will pay to Plaintiffs in redeeming the rebates
that are in controversy.

25

that plaintiffs are the master of the complaint and jurisdiction,
and thus it is their perspective that is paramount.

1. Plaintiff’s viewpoint determines the value
assigned to the “object of the litigation.”

Because jurisdiction is determined from and contingent
upon the allegations in the complaint, it is natural to assess
the value of the “object of the litigation” or right sought to
be enforced from the plaintiff’s perspective as well. Indeed,
this Court has declared this the rule.

In Glenwood Light & Water Co., forexample, this Court
stated “the jurisdictional amount is to be tested by the value
of the object to be gained by complainant.” Id. at 125
(emphasis added). What is of additional significance though
is that this Court specifically rejected the notion that
jurisdiction could be established by the cost to the defendant.
In Glenwood Light the plaintiff sought to enjoin the defendant
from erecting telephone poles and wires that were causing
injury to the plaintiff’s poles, wires, and business. The district
court had held “that the jurisdictional amount was fixed by
the cost to defendant of removing its poles and wires in the
streets and alleys where they conflicted or interfered with
the poles and wires of complainant, and replacing defendant’s
poles and wires in such position as to avoid conflict and
interference.” Jd. (emphasis added). That amount, as fixed
by the cost to the defendant, was less than the requisite
amount-in-controversy and the case was dismissed.
On appeal, this Court expressly held that it was erroneous to
test the jurisdictional amount by the cost to the defendant.
Instead, “the rule applicable generally to suits for injunction
to restrain a nuisance, a continuing trespass, or the like, viz.,
that the jurisdictional amount is to be tested by the value of
the object to be gained by complainant.” Id. (emphasis
added). And, because the plaintiff sued to “maintain and

26

operate its plant and conduct its business free from wrongful
interference by defendant,” it was the value that the remedy
would bring to the plaintiff that was “determinative of the
jurisdiction.” Jd. at 126.

Similarly, in Hunt v. New York Cotton Exchange,
205 U.S. 322 (1907), plaintiff Exchange brought suit to enjoin
the defendant from receiving, using, or selling quotations of
the Exchange without its consent or approval. The defendant
contended that the amount-in-controversy requirement was
not met because what plaintiff sought to enjoin was his
contract with a telegraph company from whom he received
quotations, and that contract was less than jurisdictional
prerequisite. In response, this Court first noted that plaintiff’s
injury, and the reason or “object” of the lawsuit, was not the
fee paid by Hunt under contract to the telegraph company,
but instead was

to enjoin the appellant from receiving, using or
selling, directly or indirectly, the Exchange’s
quotations or permitting or maintaining any wire
to his office over which the quotations are passing,
or distributing the quotations, until he shall have
acquired the right to receive them either by
contract of purchase from the Exchange, or
with its consent and approval, from one of the
Telegraph Companies authorized to distribute
them.

Id. at 336. This Court continued, stating:

And the right to the quotations was declared, as
we said in Board of Trade v. Christie Grain &
Stock Company, to be property, and the Exchange
may keep them to itself or communicate them to
others. The object of this suit is to protect that

27

right. The right, therefore, is the matter in dispute,
and its value to the Exchange determines the
jurisdiction, not the rate paid by appellant to the
Telegraph Company.

Id. (emphasis added).

Bitterman v. Louisville & Nashville R.R. Co., 207 U.S.
205 (1907), is yet another case where this Court expressly
held that the jurisdictional amount is determined from the
plaintiff’s perspective. In Bitterman, the railroad sought to
enjoin ticket brokers from dealing non-transferable tickets
at reduced rates. In response to a jurisdictional challenge,
this Court stated:

[T]he substantial character of the jurisdictional
averment in the bill is to be tested, not by the mere
immediate pecuniary damage resulting from the
acts complained of, but by the value of the
business to be protected and the rights of property
which the complainant sought to have recognized
and enforced.

Id. at 225 (emphasis added); see also Thomson v. Gaskill,
315 U.S. at 446-47 (valuing the amount-in-controversy in
suit seeking and injunction and damages from the face of
the complaint and solely from the “pecuniary consequence”
to plaintiffs); Clark v. Paul Gray, Inc., 306 U.S. 583, 587-89
(1939) (refusing to value the amount-in-controversy from
the defendants’ perspective in a case seeking injunctive relief
of a tax statute despite, if enjoined, the direct pecuniary
deprivation to defendant California would have exceeded the
jurisdictional threshold); Scott v. Frazier, 253 U.S. 243, 244
(1920) (“It is well settled that . . . amount in controversy must
equal the jurisdictional sum as to each complainant.”);
Berryman v. Board of Trustees, 222 U.S. 334, 345-46 (1912)

28

(valuing the amount in controversy, in a suit to enjoin the
collection of a tax against plaintiff on the ground that it was
perpetually exempt from taxation by contract, in accordance
with the value of the right plaintiff sought to protect); McNeil
vy. Southern R. Co., 202 U.S. 543, 558 (1906) (valuing rights
sought to be enforced in the action from the plaintiff's
perspective); Wheless v. St. Louis, 180 U.S. 379, 382 (1901)
(valuing an injunction and stating:

The ‘matter in dispute’ within the meaning of the
statute is not the principle involved, but the
pecuniary consequence to the individual party,
dependent on the litigation, as, for instance, in
this suit the amount of the assessment levied,
or which may be levied, as against each of the
complainants separately. The rules of law which
might subject complainants to or relieve them
from assessment would be applicable alike to all,
but each would be so subjected, or relieved, in a
certain sum, and not in the whole amount of the
assessment.

Gibson v. Shufeldt, 122 U.S. 27, 39 (1887) (“The sole matter in
dispute .. . is between the defendants and each plaintiff as
to the amount which the latter shall recover”); see generally
C. T. Drechsler, Criterion of Jurisdictional Amount to Vest
Jurisdiction of Federal Court Where Injunction Is Sought, 30
A.L.R.2d 602 (1954 & Supp. 2002). |

Despite this Court’s pronouncement of such a clear rule
that the “amount in controversy must equal the jurisdictional
sum as to each complainant,” Scott v. Frazier, supra,
Plaintiffs acknowledge that this Court has not always
seemingly determined the value of the “object of the
litigation” from the “plaintiff's viewpoint”, though it has
always valued the objective from the rights plaintiffs put

29

at issue and the allegations contained in the complaint.
See, e.g., Mississippi & Missouri Railroad Co. v. Ward, 67
U.S. (2 Black) 485, 492 (1863); Market Co. v. Hoffman, 101
U.S. (11 Otto) 112, 113 (1879). Petitioners latch onto these
two cases to support their contention that “either viewpoint”
rule controls federal jurisdiction under the diversity statute
whenever plaintiffs’ seek an injunction. However, these cases
are not contrary to the well-settled rule that it is the plaintiff's
complaint and the plaintiff’s “object of the litigation” that is
controlling.

First, Market Co. v. Hoffman, is inapposite. As this Court
has noted, it is a case involving several plaintiffs with a
common and undivided interest and thus the value of the
litigation was the aggregate amount at stake by the sale of
the market stalls. See Gibson, 122 U.S. at 34 (grouping
Market Co. with Shields v. Thomas, 58 U.S. (17 How.) 3
(1855), and Freeman v. Dawson, 110 U.S. 264 (1884)).
In Market Co., 206 complainants, all occupiers of the stalls
in the market, sued jointly to enjoin (and did enjoin) the
market company from selling the stalls for more than
$60,000. On appeal, this Court stated, “the decree is a single
one in favor of them all, and in denial of the right claimed
by the company, which is of far greater value than the sum
which, by the act of Congress, is the limit below which
an appeal is not allowable.” Market Co., 101 U.S. at 113.
Furthermore, the purpose of the lawsuit was to enjoin the
sale. Thus, the “object of the litigation,” from the plaintiff’s
perspective also happened to be the cost to the defendant.

Mississippi & Missouri Railroad Co. v. Ward, however,
is a little more problematic, though it too is reconcilable
with the “plaintiff’s viewpoint” rule. Suing as a “public
prosecutor,” the plaintiff in Ward sought to abate a public
nuisance. In particular, the plaintiff sought removal of the

30

Rock Island Bridge, which spanned the Mississippi river, on
the theory that the bridge was an obstruction to navigation
and amounted to a public nuisance. No damages were asked.
This Court noted, in sustaining jurisdiction, “[b]ut the want
of a sufficient amount of damage having been sustained to
give the Federal Courts jurisdiction will not defeat the
remedy, as the removal of the obstruction is the matter of
controversy, and the value of the object must govern.” 67
U.S. at 492. Courts and commentators have interpreted this
statement as proof that the “defendant’s viewpoint” can be
considered in valuing the amount-in-controversy. See, e.g.,
Dobie, supra, at 740. However, this Court’s decision in Ward
is consistent with the “plaintiff’s viewpoint” rule even though
the amount-in-controversy was measured by the cost to
remove the bridge. Indeed, properly understood, Ward is yet
another case where the “object of the litigation” is determined
by the complaint and plaintiff’s viewpoint, and valued in
accordance with what the plaintiff sought to accomplish or
obtain through the litigation (i.e., the removal of the bridge).
Thus, in Ward and Market Co., and like many other cases,
the value of the litigation to the plaintiff was identical to the
cost to the defendant. See Pet. Br. at 10 (“the recovery sought
by the plaintiff usually equals the liability faced by the
defendant” and citing authorities).

Accordingly, because this Court has historically valued
the “object of the litigation” solely from the plaintiff’s
viewpoint, and because Congress has relied on this Court’s
precedent in establishing the requisite amount-in-controversy,
the Court should reject Petitioners’ invitation to adopt the
“either viewpoint” rule when determining how to value the
“object of the litigation” and explicitly reaffirm that the
plaintiff’s viewpoint is the only viewpoint relevant to the
calculus.

31

2. The “paramount policy” of this Court is that
plaintiff’s complaint controls jurisdiction.

Expressly adopting a plaintiff viewpoint rule is consistent with
the “paramount policy” of this Court that “the plaintiff is the master
of the complaint,”'* and the general rule governing dismissal
for want of jurisdiction in cases brought in federal court is that
“the sum claimed by the plaintiff controls if the claim is apparently
made in good faith.” Saint Paul, 303 U.S. at 288. Furthermore,
taking the plaintiff's viewpoint and objective is consistent with
the well-pleaded complaint rule’? and the removal statute as
“the status of the case as disclosed by the plaintiff's complaint
is controlling in the case of a removal, since the defendant
must file his petition before the time for answer or forever lose
his right to remove.” Jd. at 291.”° In fact, if on the face of the
complaint, it is obvious to a court that a suit cannot involve
the necessary amount, dismissal of the federal action is required.
Id." Accordingly, the Court should reaffirm the bright line test
that the plaintiff's viewpoint determines jurisdiction.

18. Caterpillar, Inc. v. Williams, 482 U.S. 386, 398-99 (1987);
Healy v. Sea Gull Specialty Co., 237 U.S. 479, 480 (1915) (Holmes, J.).

19. This Court has long held that “the presence or absence of
federal-question jurisdiction is governed by the ‘well-pleaded complaint
rule,’ which provides that federal jurisdiction exists only when a federal
question is presented on the face of the plaintiff’s properly pleaded
complaint.” Rivet v. Regions Bank, 522 U.S. 470, 475 (1998) (quoting
Caterpillar, Inc. v. Williams, 482 U.S. at 392).

20. A defendant may remove a case only if the claim could have
been brought in federal court. 28 U.S.C. § 1441(b). “Jurisdiction may
not be sustained on a theory that the plaintiffhas not advanced.” Merrell
Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 810 n.6 (1986) (emphasis
added).

21. Certain amici suggest that so much emphasis on the
plaintiff’s perspective might unfairly prejudice defendants. Abiding
(Cont'd)

32

Such “bright line” principles are basic to plaintiffs’ long-
established rights to decide “what jurisdiction [they] will
appeal to,” Sea Gull, 237 U.S. at 480, and “what law
[they] will rely upon.” Merrell Dow, 478 U.S. at 810 n.6.
If a defendant, by merely recasting the complaint or adding
allegations about the cost of the injunctive relief requested
could defeat a plaintiff’s choice of law or forum, then, in the
words of this Court, “the plaintiff would be master of
nothing.” Caterpillar, 482 U.S. at 399; see also Great
Northern R. Co. v. Alexander, 246 U.S. 276, 281 (1918)
(jurisdiction is “to be determined by the allegations of the
complaint . . . it cannot be made removable by any statement
in the petition for removal or in subsequent pleadings by the
defendant”). This is especially true in a case such as this one
against two behemoth corporations that do business in all 50
states and across the globe, where any injunctive relief
requested would realistically cost them in excess of $75,000
in administrative compliance costs regardless of the number
of plaintiffs. Brand Name, 123 F.3d at 610 (noting “every
case, however trivial, against a large company would cross
the threshold, whether the threshold was $50,000 or as it
now is $75,000, even if the plaintiff were asking for an
injunction against disclosing his unlisted telephone number”).

(Cont'd)

by strict adherence to the complaint and the plaintiffs’ objective in
the litigation does not unfairly prejudice defendants. In most litigation
a defendant can choose to become the plaintiff in the same
controversy by invoking the Declaratory Judgment Act or a state’s
analog, choose the jurisdiction that they wish to be in, and the law
that they wish to apply. In this case, had defendants attempted to
take such an approach, they would have sought an order validating
their alleged right to terminate the individual agreements between
them and the putative class members and avoid payment of the rebates
Plaintiffs allege they are owed. The “controversy” would remain the
same, and the same amount of money would be at issue.

_ =

C. The Doctrine of Stare Decisis Militates Against
Adopting the “Either Viewpoint” Rule.

As this Court has stated, stare decisis is “the preferred
course because it promotes the evenhanded, predictable, and
consistent development of legal principles, fosters reliance
on judicial decisions, and contributes to the actual and
perceived integrity of the judicial process.” Payne v.
Tennessee, 501 U.S. 808, 827 (1991). “Considerations of
stare decisis have special force in the area of statutory
interpretation, for here, unlike in the context of constitutional
interpretation, the legislative power is implicated, and
Congress remains free to alter what we have done.” Patterson
v. McLean Credit Union, 491 U.S. 164, 172-173 (1989).

Petitioners’ request that the Court adopt the “either
viewpoint” rule threatens to undermine, if not overrule, this
Court’s precedent interpreting the unambiguous provisions
of the diversity statute. In short, Petitioners request that the
Court value the “object of the litigation” differently than this
Court has ever done. As discussed above, the relevant
decisions of this Court have stood for decades and, more
importantly, are the products of over 100 years of this Court’s
jurisprudence. These decisions also include the non-
aggregation principle discussed below, which is equally
impacted by Petitioners’ request.

Other than increasing the amount-in-controversy
threshold to establishing federal jurisdiction, the relevant text
of the diversity statute and the scope of federal diversity
jurisdiction have remained essentially unchanged by
Congress since the statute was originally enacted. It is settled
that “[t]he policy of the [diversity] statute calls for its strict
construction. ... Due regard for the rightful independence
of state governments, which should actuate federal courts,
requires that they scrupulously confine their own jurisdiction

34

to the precise limits which the statute has defined.” Healy,
292 U.S. at 270; Snyder, 394 U.S. at 339-40. Indeed,
Congress has understood the purpose of amount-in-
controversy requirement as to preserve the proper role of
state courts and to avoid the overburdening of federal courts.
See Baker, supra, 102 F.R.D. at 302-18. Thus, without
Congress acting to amend the diversity statute to adopt the
“either viewpoint” rule or amend the non-aggregation
principle, it would be inappropriate for this Court to revisit
the holdings to expand federal jurisdiction where “Congress,
with complete understanding of how the courts had construed
the statute,” has chosen not to. Zahn, 414 U.S. at 300-01;
Snyder, 394 U.S. at 339-42.”

Admittedly, there may be valid policy reasons to consider
the defendant’s viewpoint in valuing the “object of the
litigation” and Petitioners and amici more than adequately
provide the Court with this discussion (e.g., ensuring that
the case is substantial, and help protect from bias, though it
is fair to wonder just how biased Petitioners would be in any
state as they do business in every state). However, this Court
should not pronounce a new rule reinterpreting how to value
the “object of the litigation” when that procedure has been
long settled. E.g., Scott v. Frazier, 253 U.S. at 244 (“It is
well settled ... amount in controversy must equal the
jurisdictional sum as to each complainant.”).

22. In fact, any change purporting to alter the definition of the
“amount in controversy” would conflict with the command of Rule
82. Snyder, 394 U.S. at 337-38. The cases discussed in this brief for
the most part predate the 1958 amendment to the diversity statute.
Thus, Petitioners’ discussion in note 4 of their brief is simply
irrelevant as Congress is presumed to know the Court’s interpretation
of the statute, and when essentially left unchanged for over one
hundred years, Congress is deemed to have ratified the Court’s
interpretation. Lorillard v. Pons, 434 U.S. 575, 580-81 (1978).

35

Furthermore, the Court should be leery of adopting
Petitioners’ request because that would open the federal courts
to the hundreds, if not thousands, of state court actions filed
across the country annually that pray for injunctive relief,
especially when this Court has expressed its concern over the
caseloads in federal court. See 1999 Year-End Report on the
Federal Judiciary.” Indeed, the U.S. Department of Justice
expressed its concern to Congress about the impact that the Class
Action Fairness Act of 2000 would have had on the federal
courts, stating: it “would flood the Federal courts with class
action suits at a time when the Chief Justice, among others, has
reportedly expressed serious concerns about the increasingly
burdensome workload of the Federal court.” Letter from
Robert Raben, Asst. Attorney General, to Sen. Leahy, dated June
9, 2000, at 3, available at www.citizen.org/documents/
ACF219.PDF. If the provisions of the Class Action Fairness
Act caused the U.S. Department of Justice to note the “flood”
of additional lawsuits the federal courts would be asked to hear,
Petitioners’ request to adopt the untethered “either viewpoint”
rule would result in an absolute deluge of additional cases.
If Congress chooses to, it can and should amend section 1332
to incorporate defendant’s viewpoint. See, e.g., Conroy v.
Aniskoff, 507 U.S. 511, 528 (1993) (Scalia, J., concurring) (“The
language of the statute is entirely clear, and if that is not what
Congress meant then Congress has made a mistake and Congress
will have to correct it.””) However, this Court’s precedent simply
forecloses an interpretation of the “object of the litigation” that
incorporates the defendant’s viewpoint in valuing the amount-
in-controversy. See supra.

Another reason that this Court should await Congressional
action is that Congress is best suited to making the policy
decisions implicated. For example, Congress should determine
where to draw the line as to the “due regard” to be given to state

23. In 2001, the filings in the federal courts of appeal reached

an all-time high at 57,464. Civil filings in 2001 were also substantial,
totaling 258,517. 2001 Year-End Report on the Federal Judiciary.

36

governments and their courts. See Shamrock Oil, Healy, supra.
Indeed, the Court should decline to adopt Petitioners’ expansive
interpretation of the diversity statute because it would invariably
result in the “unnecessary federalization of traditional state court
matters” at a time when the federal courts are burdened heavily
already. 1999 Year-End Report on the Federal Judiciary (quoting
Chief Justice Rehnquist).

Petitioners should take some solace from the fact that
Congress may give them what they ask of this Court. Pending
before Congress are S. 1712 and H.R. 2341 (the “Class Action
Fairness Act of 2001”).** These bills seek to amend 28 U.S.C.
§ 1332 to federalize class actions and modify the amount-in-
controversy requirements. In fact, since at least 1998, Congress
has been attempting to amend the diversity statute as applied to
class actions because several legislators perceive, just as
Petitioners do, the need to amend the diversity statute to undo
the effect of this Court’s holdings interpreting the amount-in-
controversy provision and the non-aggregation principle so
recently reaffirmed in Snyder and Zahn.” If enacted, the Class
Action Fairness Act would establish the new rules of federal
jurisdiction in class actions that Petitioners ask this Court to
write but at a different and higher threshold, well above the
present $75,000.”°

24. The fact that the Class Action Fairness Act is pending before
Congress implicitly acknowledges that a case such as this one, where
plaintiffs’ state law claims are separate and distinct, cannot be aggregated
or otherwise brought in federal court on the basis of diversity jurisdiction
or through removal.

25. Asimilar bill, each one entitled “Class Action Fairness Act of
[Year]”, has been introduced in the House and Senate every year since
1998.

26. In relevant part, the Act would modify section 1332 to read:

(d)(2) The district courts shall have original jurisdiction
of any civil action in which the matter in controversy
(Cont'd)

37

In sum, because this Court has historically valued the
“object of the litigation” from the plaintiff’s viewpoint and
has historically declared that to be the rule, this Court should
not uproot its long-settled interpretation of the amount-in-
controversy requirement to view the “object of the litigation”
from the defendant’s viewpoint. Instead, this Court should
reaffirm its prior holdings and state clearly that the plaintiff’s
viewpoint controls the “object of the litigation,” and defer
to Congress the determination of whether diversity
jurisdiction should be expanded.”’

(Cont'd)

exceeds the sum or value of $2,000,000, exclusive of
interest and costs, and is a class action in which —

(A) any member of a class of plaintiffs is a citizen
of a State different from any defendant;

(d)(4) In any class action, the claims of the individual
class members shall be aggregated to determine whether
the matter in controversy exceeds the sum or value of
$2,000,000, exclusive of interests and costs.

Resp. App. at 16a-17a; 38a-39a.

The Act would also amend the removal statute to include a
provision to make most orders remanding a class action to state court

immediately appealable.

27. If the Court concludes that the “object of the litigation”
here, viewed solely from the plaintiff's perspective, is merely the
reinstitution of the Rebate Program in the abstract, including all of
the attendant costs, and not Plaintiffs’ subsequent use and monetary
entitlements under the program which alone bring value to Plaintiffs’
contractual rights, Plaintiffs concede that the amount-in-controversy

(Cont'd)

38

Ill. The “Object Of The Litigation” Here Cannot Exceed
The Requisite Amount-In-Controversy Without
Violating The Non-Aggregation Principle Applicable
To Class Actions

The primary object of this litigation, as is uncontested,
is for Plaintiffs to receive the benefit of the bargain of the
Rebate Program that Ford and Citibank unlawfully
terminated. That is, Plaintiffs seek the opportunity to accrue
rebates and spend them on the purchase or lease of qualifying
Ford vehicles, viz., it is to collect and use their rebates.
That right was valued at $3,500 — at most — for any one
plaintiff. J.A. 95, 113. Thus, because the “object of the
litigation” was valued at no more than $3,500 per plaintiff,
in accordance with non-aggregation principle applicable to
class actions, this case does not meet the jurisdictional
threshold on the facts. To find jurisdiction under the diversity
statute under these facts would require this Court to overrule
Snyder and Zahn and over 100 years of precedent.

A. The Non-Aggregation Principle and Its Strict
Application.

According to the traditional interpretation of the diversity
statute, the non-aggregation principle holds that the “separate
and distinct claims of two or more plaintiffs cannot be
aggregated in order to satisfy the jurisdictional amount
requirement.” The only time aggregation is permitted in
multi-plaintiff cases is where “two or more plaintiffs unite
to enforce a single title or right in which they have a common
and undivided interest.” Snyder, 394 U.S. at 335 (emphasis

(Cont’d)

requirement is satisfied. However, Plaintiffs’ allege that the “object
of the litigation” is more than the reinstatement of the program in
the abstract, as it is only the use of the program and redemption of
the rebates that brings value to Plaintiffs’ rights.

39

added); see also Zahn, 414 U.S. at 295-96 (same); Clark v.
Paul Gray, Inc., 306 U.S. 583, 588-89 (1939) (same);
Wheless, 180 U.S. at 382 (same); Clay v. Field, 138 U.S.
464, 479 (1891) (same); Russell v. Stansell, 105 U.S. at 304
(same); Oliver v. Alexander, 31 U.S. (6 Pet.) 143, 145-47
(1832) (same). The non-aggregation principle equally applies
in multi-defendant cases. Walter v. Northeastern R. Co., 147
U.S. 370, 373-74 (1893). Thus, no plaintiff or defendant may
enter federal court by “rid[ing] on another’s coattails.” Zahn,
414 US. at 301.

The non-aggregation principle is applied strictly.

Indeed, so strictly has it been applied, that, in cases
where, although the entire matter in dispute in the
suit exceeds in value the jurisdictional limit,
nevertheless, if there are several and separate
interests in that sum, belonging to distinct parties,
and constituting distinct causes of action, although
actually united in one suit and growing out of the
same transaction, the jurisdiction of the court has
been constantly denied.

Elgin v. Marshall, 106 U.S. (16 Otto.) 578, 582 (1882).
The strict construction is demanded even where plaintiffs allege
a “common and undivided” interest. See, e.g., Thomson, 315
U.S. at 446 (dismissing for want of jurisdiction where the record
failed to contain the contracts upon which plaintiffs’ allegedly
“common and undivided” claims were brought).

B. Plaintiffs’ Claims Are Separate and Distinct; the
Claims Cannot Be Aggregated.

Petitioners concede that plaintiffs’ claims are separate
and distinct. J.A. 113, 117. Thus, plaintiffs have no single
title or right in which they share a common and undivided

40

interest. However, Petitioners contends that the relief sought,
in particular reinstitution of the Rebate Program, is common
and undivided and thus its value to Plaintiffs may be
aggregated to meet the jurisdictional threshold even while
conceding that plaintiffs do not have a united title or right
to the relief requested. Pet. Br. at 26-31. Petitioners
misapprehend the non-aggregation principle.

By its very terms, the non-aggregation principle only
applies to claims, i.e., the “single titles or rights” in which
the parties share a common and undivided interest that one
or more plaintiffs seek to protect. It does not apply to the
relief requested, no matter how “common and undivided”
that interest may be. Snyder, 394 U.S. at 336-37; Clark, 306
U.S. at 588; Saint Paul, 303 U.S. at 294 (“[t}he claim,
whether well or ill founded in fact, fixes the right of the
defendant to remove”); Gibson, 122 U.S. at 30 (“the test is
whether they claim it under one common right .. . or claim
it under separate and distinct rights”) (emphasis added);
Oliver, 31 U.S. at 146 (“If the cause of action is several, the
suit must be several also.””); Morrison v. Allstate Indem. Co.,
228 F.3d 1255, 1264 (11th Cir. 2000) (“For amount in
controversy purposes, however, it is the nature of the right
asserted, not that of the relief requested, that determines
whether the claims of multiple plaintiffs may be aggregated”);
Del Vecchio v. Conseco, Inc., 230 F.3d 974, 977-78 (7th Cir.
2000) (noting that remedy sought, seeking imposition of
constructive trust, does not convert claims of putative class
members entitled to their own separate recovery into common
and undivided interest); Gilman v. BHC Sec., 104 F.3d 1418,
1422-24 (2d Cir. 1997) (discussing the non-aggregation
principle and focusing on the rights to be protected); Snow,
561 F.2d at 790 (9th Cir.) (“the proper focus ... is not
influenced by the type of relief requested, but rather continues
to depend upon the nature and value of the right asserted,”

41

(i.e., the object of the litigation)); Alvarez v. Pan American
Life Ins. Co., 375 F.2d 992, 993-94 (Sth Cir. 1967) (holding
class conversion and contract claims are separate and distinct
even though relief sought was class-wide and not individual).

Here, it is uncontested that Plaintiffs’ claims and causes
of action are separate and distinct. J.A. 113, 117. Indeed, the
contracts at issue do not grant any plaintiff any interest,
title, or right in any other plaintiff’s contract. Moreover,
because Plaintiffs’ claims are separate and distinct, each class
member will be owed a separate rebate amount and damages,
assuming that the lawsuit is successful.”* Accordingly,
aggregating Plaintiffs’ claims would violate the non-
aggregation principle.

Additionally, the district found that “(t]he injunctive
relief sought ... is simply a means to vindicate each
plaintiff’s separate and individual claim for accrual of rebates
for five years.” J.A. 96. Consequently, if the Court were to
accept Petitioners’ argument that simply by virtue of
including a request for injunctive relief, separate and distinct
claims, which cannot be aggregated to obtain federal
jurisdiction, could suddenly be bootstrapped into federal
court. This result would “undermine the principles of Snyder
and Zahn.” J.A. 96-97. Thus, because the separate value of
the lawsuit to each plaintiff is less than $75,000, this case

28. Petitioners suggest that they have no interest in how the
damages of this suit are apportioned or what rebates are owed to
each plaintiff and class member. Pet. Br. at 27-28. This contention
seems incongruous with the purpose of the lawsuit, which is to
enforce the contractual right to the rebate and give each class member
his or her separate opportunity to cash this right in on the purchase
or lease of a qualifying Ford vehicle. See supra. And, as Petitioners
acknowledge, the value of this right is dependant on cardholder usage.
Pet. Br. at 28; see also J.A. 53-54, 87-88.

42

cannot meet the requirements for jurisdiction without running
afoul of the non-aggregation principle.

Even under the “either viewpoint” rule, obtaining federal
jurisdiction in this case requires aggregation. Although
Petitioners contend that the business cost of reinstating the
Rebate Program, even for one plaintiff, exceeds the $75,000
threshold, the district court found that Petitioners failed to
prove this jurisdictional fact. J.A. 97. The district court did
so for a good, but albeit, unstated reason: the evidence in the
record simply fails to support Petitioners. Because there are
multiple defendants, neither defendant can ride the coattails
of the other to assert federal jurisdiction. Here, even if the
Court were to conclude that the “object of the litigation” is
more than $75,000 per plaintiff, the evidence in the record”
about the costs of administering the Rebate Program fails to
prove that Ford would incur costs or liabilities more than
$75,000 per plaintiff. In fact, not only have Petitioners failed
to include a copy of the Ford-Citibank contract which might
permit a court to determine if they have a “common and
undivided” interest in the Rebate Program, see Thomson, 315
U.S. at 446, but they have also submitted evidence that the
costs of the program are not shared equally. Indeed, according
to the record, Citibank shoulders the administrative costs of
the program while Ford provides the rebate credits, J.A. 87-
88, which can be no more than $3,500 per plaintiff. J.A. 95,
113. Thus, even accepting Petitioners’ argument that the costs
of implementing Rebate Program count toward valuing the
amount-in-controversy, this case would run afoul of the non-
aggregation principle because the costs to Ford must be
aggregated to exceed the jurisdictional threshold. Stated
otherwise, even if the defendant’s viewpoint is considered
and jurisdiction is tested by “the cost to each defendant of

29. The Court is limited to the record in assessing whether the
jurisdictional amount is sufficient. Thomson, 315 U.S. at 446.

43

an injunction running in favor of one plaintiff,”*° finding
jurisdiction here violates the non-aggregation principle
because the cost to Ford is at most $3,500 per plaintiff.
Accordingly, the district court’s finding that Petitioners failed
to meet their burden under the “either viewpoint” rule should
be upheld. J.A. 97.

C. The “Either Viewpoint” Rule Does Not Provide
an Exception to the Non-Aggregation Principle.

Every court expressly adopting the “either viewpoint”
rule has held that it is limited by the non-aggregation principle
articulated in Snyder and Zahn. See, e.g., Brand Name, 123
F.3d at 609-10. Thus, every court must value the “object of
the litigation” without aggregating “separate and distinct”
claims. Petitioners’ request that this Court recognize
administrative compliance costs as part of the value of the
“object of the litigation” is tantamount to rewriting the non-
aggregation principle to include an exception that would
swallow the rule. Respectfully, such costs should simply be
deemed collateral to the “object of the litigation” and thus
irrelevant to the jurisdictional calculation. See Ross, supra.
Alternatively, this Court should uphold the Ninth Circuit’s
ruling that such costs are, as a matter of law, excluded from
the amount-in-controversy as this will adhere to the purpose
of the non-aggregation principle and limit federal jurisdiction.

No court under any approach has accepted the argument
that ministerial or administrative business costs of compliance
with an injunction satisfy the amount-in-controversy
requirement. Just like the panel below, in Brand Name, Judge
Posner specifically emphasized that if such an argument
were accepted, “then every case, however trivial, against a
large company would cross the threshold.” 123 F.3d at
610. For example, although Petitioners contend otherwise,

30. Brand Name, 123 F.3d at 610.

ae

see Pet. Br. at 23, Snow v. Ford would be removable under the
rule Petitioners ask this Court to adopt. Snow v. Ford Motor
Co., 561 F.2d 787 (9th Cir. 1977).

In Snow, the plaintiff filed suit in state court seeking
damages and an injunction against Ford from continuing to sell
trailering special packages without a wiring connector kit.
Like the present case, Ford removed and argued that the requisite
amount-in-controversy was met because of the business right
Snow sought to enjoin, as it would affect all of Ford’s future
sales and impose substantial costs on Ford. Jd. at 790. The court
disagreed, as the injury Ford allegedly caused each plaintiff and
putative class member was $11. According to the court, this
was the nature and value of the right asserted, it was not the
administrative business expenses Ford would incur. Jd. However,
including the administrative costs that a business would incur
in complying with an injunction when making the amount-in-
controversy determination, including those in Snow, would
easily bring such cases into federal court. Indeed, simply the
cost of duplicating and disseminating such an order within a
large corporation alone might exceed the jurisdictional threshold.
See Brand Name, 123 F.3d at 610.

If Petitioners’ request to include these administrative costs
in valuing the “object of the litigation” were adopted in full, the
kinds of cases suddenly capable of being brought in federal court
would not simply be limited to multi-party cases either. Indeed,
if such administrative compliance costs were considered, there
would be nothing to stop large corporate defendants from
removing every diversity case seeking an injunction to federal
court, and thereby render plaintiffs “master of nothing.”
Cai. -pillar, 482 U.S. at 399. Nor would there be anything to
stop plaintiffs from accessing the federal courts if all any diverse
plaintiff had to do was pray for injunctive relief. Snow, 561
F.2d at 791. In short, adoption of the “either viewpoint” rule
would blow the federal courthouse doors wide open. Thus, even

i CY

45

if the Court accepts Petitioners’ argument that defendants’
viewpoint matters in valuing the amount-in-controversy, this
Court should uphold the panel’s ruling that administrative
compliance costs of the nature involved here, as a matter of
law, cannot be included in the jurisdictional calculus.

Fundamentally, there is little reason to include these
kinds of compliance costs in any event. These business costs
are simply not the kind of business costs that courts would
consider even under the “either viewpoint” approach.
Pre-litigation, the Petitioners had the Rebate Program in
place, the business apparatus had been designed, employees
had been hired, and the Rebate Program was operational.
The injunction requested, at the time the suit was filed, was
simply to keep the business practice going as a means to
compensate Plaintiffs for the damages suffered. J.A. 95-96.
It was not as though the injunction requested Ford or Citibank
to design a new program or create a new product and thus
substantially alter their business practices. See, e.g., Jn re
Microsoft Corp. Antitrust Litig., 127 F. Supp. 2d 702, 718-
19 (D. Md. 2001) (noting the value of the litigation (i.e.,
creating a Windows operating system untied from the Internet
Explorer) would cost more than $58 million to create).
Instead, the injunction requested would simply have
maintained the business practice that Petitioners established
uniil each plaintiff had been paid up to $3,500 in value, which
is exactly what Plaintiffs bargained for in signing up for the
co-branded credit card.

In sum, adoption of the “either viewpoint” rule would
open the courthouse doors to every large corporation
whenever any diverse plaintiff (or plaintiffs) sues them and
seeks injunctive relief. Moreover, it would permit any diverse
plaintiff to assert federal against a large corporation
jurisdiction simply by including a prayer for injunctive relief.
The “either viewpoint” rule thus subverts the non-aggregation

46

principle entirely. Moreover, as emphasized already,
expansions of federal jurisdiction are not the province of this
Court; they are Congress’s responsibility. And, adoption
of the “either viewpoint” rule would expand diversity
jurisdiction in a manner inconsistent with the settled
interpretations and policies of the diversity statute and Snyder
and Zahn. Accordingly, the Court should reject Petitioners’
invitation.*!

31. Plaintiffs would be remiss if they ignored several of the
amici’s contention that state courts are somehow beholden to
plaintiff’s lawyers or incapable of handling class actions. The state
court judges who are elected are beholden to the electorate, as is any
elected official. Over the years they have proven exceptionally
capable jurists. And, though some state courts may have fewer
resources at their disposal than the federal courts, this fact does not
equate with a lesser form of justice. State courts seek to do justice
and work diligently at it. Moreover, both state and federal judges are
capable of committing errors with the resources they have.

47

CONCLUSION

For the reasons explained above, the judgment should

be affirmed.

MICHAEL J. ROSENFELD
KALB, ROSENFELD & EssiG
283 Commack Road
Commack, NY 11725
(516) 499-3800

James G. Lewis

9911 W. Pico Blvd, Suite 503
Los Angeles, CA 90035
(310) 553-1661

Russe_i J. DRAKE

WuatLey Drake LLC

2323 2nd Ave., North

P.O. Box 10647
Birmingham, AL 35202-0647
(205) 328-9576

Respectfully submitted,

Steve W. BERMAN
Counsel of Record
ANDREW M. VOLK
R. BRENT WALTON
HAGENS BERMAN
1301 Fifth Avenue
Suite 2900
Seattle, WA 98101
(206) 623-7292

RoGeR W. KIRBY

ANDREA BIERSTEIN

Kirsy McINERNEY & SQUIRE
830 Third Ave., 10" Floor
New York, NY 10022
(212) 317-2300

JoHn H. ALEXANDER
ALEXANDER & ASSOCIATES
100 W. Monroe Street
21* Floor

Chicago, IL 60603

(312) 263-7731

Counsel for Respondents

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0531%3A07. Public record. Not legal advice.