Cohen v. Office Depot, Inc. , 184 F.3d 1292 ( 1999 )

Cheryl COHEN, on behalf of herself and others similarly situated, Plaintiff-Appellant,
v.
OFFICE DEPOT, INC., a Florida corporation, Defendant-Appellee.
No. 98-4787.
United States Court of Appeals,
Eleventh Circuit.
Feb. 24, 2000.
Appeal from the United States District Court for the Southern District of Florida.(No. 97-03611-CIV-JAL),
Joan A. Lenard, Judge.
ON PETITION FOR REHEARING AND SUGGESTION OF REHEARING EN BANC
Before BIRCH and CARNES, Circuit Judges, and MILLS*, Senior District Judge.
CARNES, Circuit Judge:
In our prior opinion in this case, we held that Florida Statute § 768.72 conflicts with and must yield
to the "short and plain statement" rule contained in Federal Rule of Civil Procedure 8(a)(3), and as a result
a Florida plaintiff in federal court because of diversity jurisdiction need not obtain leave of court before
pleading a request for punitive damages. Cohen v. Office Depot Inc., 184 F.3d 1292, 1295-99 (11th Cir.1999)
("Cohen I "). We adhere to and leave that part of our earlier opinion intact.1
Relying on Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1358-59 (11th Cir.1996), we also
held that "in a class action lawsuit punitive damages may be aggregated to satisfy the amount-in-controversy
requirement for each class member," at least "where state law provides that an award of punitive damages is
for the 'public benefit' or 'collective good,' and the award would reflect 'the wrongfulness of the defendant's
course of conduct as a whole.' " Cohen I, 184 F.3d at 1295 (quoting Tapscott, 77 F.3d at 1358). Combining
our two holdings, we concluded that the complaint satisfied the amount in controversy requirement because
*
Honorable Richard Mills, Senior U.S. District Judge for the Central District of Illinois, sitting by
designation.
1
For a full recitation of the relevant facts of this case, see Cohen I, 184 F.3d at 1293-94.
it requested $10,000,000 in punitive damages for the entire class of approximately 39,000 Office Depot
catalogue customers. See id. at 1299.
In its petition for rehearing, Office Depot has belatedly pointed out the tension between the Tapscott
decision, on which we relied in our earlier opinion in this case, and the decision in Lindsey v. Alabama
Telephone Co., 576 F.2d 593 (5th Cir.1978). Of course, pre-split or "Old Fifth" decisions such as Lindsey
are binding on us, see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.1981), and where two prior
panel decisions conflict we are bound to follow the oldest one. See United States v. Steele, 147 F.3d 1316,
1318 (11th Cir.1998) (en banc) ("It is the firmly established rule of this circuit that each succeeding panel is
bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled
en banc, or by the Supreme Court.") (internal quotation marks and citation omitted); United States v. Dailey,
24 F.3d 1323, 1327 (11th Cir.1994) (where there is an intracircuit conflict of authority, "the earliest panel
opinion resolving the issue in question binds this circuit until the court resolves the issue en banc") (internal
quotation marks and citation omitted).
For reasons we will soon discuss, we conclude that Tapscott 's holding about aggregation of punitive
damages is inconsistent with the earlier holding on the same legal issue in Lindsey, and accordingly we must
follow Lindsey. Doing so, we conclude that the total of $10,000,000 in punitive damages that was pleaded
for the class of 39,000 members in this case is insufficient to satisfy the $75,000 amount in controversy
requirement. This conclusion requires us to address plaintiff, class-representative Cohen's remaining
arguments involving alternative theories for satisfying the amount in controversy requirement, which are that
it is satisfied because of the value of the requested injunctive relief, and because of the amount of attorney
fees due if the class prevails. We will discuss those issues in a later part of this opinion, but we begin with
a discussion of the inconsistency of Tapscott (and our own prior opinion following it) with Lindsey.
I. THE CONFLICT BETWEEN LINDSEY AND TAPSCOTT REGARDING AGGREGATION OF
PUNITIVE DAMAGES
2
To avoid adding confusion to conflict, we first explain why referring to the "aggregation" of punitive
damages in the context of a class action can be a bit misleading. In this case, as in Lindsey and Tapscott, the
punitive damages claim is a single claim on behalf of the entire class; it is not the sum total of 39,000
individual punitive damages claims. Because each class member could have sought punitive damages in
individual suits, courts sometimes phrase the question as whether a class claim for punitive damages can be
"aggregated" to satisfy the jurisdictional amount in controversy requirement for a class. The question,
however, is not whether distinct punitive damages claims can be added together, but instead it is whether the
single punitive damage claim on behalf of the class can be attributed in toto to each and every class member
so they can individually satisfy the requisite amount in controversy, a requirement mandated by Zahn v.
International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973).2 If the single punitive damages
claim cannot be attributed as a whole to each class member, it must be allocated or divided pro rata among
the class members, and after that is done the total amount of relief sought by each plaintiff must satisfy the
jurisdictional amount. With that clarification of the question, we turn to the conflicting answers of Lindsey
and Tapscott.3
Lindsey involved a state law class action suit against two telephone companies alleged to have
unlawfully extracted excessive cash deposits from the class. See Lindsey, 576 F.2d at 593. The defendants
removed the case to federal court on diversity grounds. See id. at 593-94. The complaint, as construed by
the Court, sought: (1) $2,000 compensatory damages for Lindsey, (2) an unspecified sum of compensatory
2
Cohen argues that Zahn 's holding requiring dismissal from a class suit of any plaintiff whose individual
claim does not satisfy the amount in controversy requirement has been superseded by the 1990 amendments
to 28 U.S.C. § 1367. As will be discussed, we need not decide that issue to resolve the present case. See infra
note 13.
3
Although the term "aggregation" is slightly misleading in the context of punitive damages and attorneys
fees, it is commonly used by courts when addressing the issue of whether the total amount of a class claim
should be attributed to each member of the class. Therefore, to avoid further confusion and for the sake of
consistency, we will continue to refer to the issue as one of "aggregation."
3
damages for the class, which contained an unspecified number of plaintiffs, and (3) $1,000,000 punitive
damages on behalf of the class. See id. at 595.
The Lindsey Court began its analysis by citing Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22
L.Ed.2d 319 (1969), for the broad proposition that multiple plaintiffs suing in a class may not aggregate any
claims for the purpose of satisfying the amount in controversy requirement of diversity jurisdiction. Lindsey,
576 F.2d at 594. The Court then noted that each member of a class must individually satisfy the jurisdictional
amount to avoid being dismissed from the class suit. See id. (citing Zahn, 414 U.S. at 300, 94 S.Ct. at 511).
Because the Lindsey plaintiff had failed to plead a specific number of class members, the Court explained that
it could not determine "what dollar amount represent[ed] the 'amount in controversy' for each member of the
class." Id. at 595 (emphasis added). Noting that the grounds for removal jurisdiction must be found in the
plaintiff's complaint itself, the Court explained that "it was not open for [the] defendants to attempt to show
that the class was small enough that the claims on its behalf exceeded the sum of $10,000 per capita," id.,
which was the amount in controversy requirement at that time, see id. at 593.
Because it could not tell from the complaint the number of class members, the Lindsey Court could
not determine whether each member's claim satisfied the jurisdictional amount, and it therefore held that the
total specified damage claim for the class—$1,002,000—had not been shown to satisfy the amount in
controversy requirement. See id. at 595. A necessary part of Lindsey 's reasoning is the holding that for
amount in controversy purposes a class punitive damages claim must be allocated pro rata to each class
member. Otherwise, the result in that case would have been different. If the Lindsey Court had concluded
that a class claim for punitive damages could be attributed in toto to each class member, i.e., considered in
the aggregate, for amount in controversy purposes, the $1,000,000 punitive damages claim clearly would have
sufficed, regardless of whether the number of class members in Lindsey had been two or two million. The
number of class members would have been irrelevant, instead of the critical factor in the decision. Thus,
Lindsey inescapably stands for the proposition that a federal court cannot exercise diversity jurisdiction over
4
a class action—even with completely diverse parties—solely because the total punitive damages claim on
behalf of the entire class exceeds the jurisdictional amount in controversy. Instead, under Lindsey, the
punitive damages claim for the class must be assigned on a pro rata basis to each class member for amount
in controversy purposes. See id.
Three years after Lindsey, we split from the Fifth Circuit but retained its decisional law as our own,
see Bonner, 661 F.2d at 1207, and fifteen years after the split, this Court decided Tapscott v. MS Dealer Serv.
Corp. In that case, we faced another attempt to base diversity jurisdiction on a class claim for punitive
damages, but we mistakenly considered the matter as one of first impression.4 See Tapscott, 77 F.3d at 1358.
The plaintiffs in Tapscott brought a state law class action, alleging a class of over 10,000 members. See id.at 1355 n. 2. The class sought statutory damages, injunctive relief, and an unspecified amount of
compensatory and punitive damages, based on the defendant's allegedly fraudulent conduct in the sale of
extended service contracts. See id. at 1355. The defendants removed the case to federal court on diversity
jurisdiction grounds. See id. The plaintiffs contested the removal with affidavits attesting that the individual
recovery for each plaintiff would not exceed $50,000, the amount in controversy required for diversity
jurisdiction at the time. See id. The defendants responded that, for jurisdictional purposes, the class claim
for punitive damages should be considered in the aggregate. See id. at 1357-59. We agreed and upheld the
removal of the case to federal court. See id. at 1359.
In Tapscott, this Court pointed to the Supreme Court's discussion in Snyder, which indicated that
multiple plaintiffs may aggregate claims if they have "a single title or right in which they have a common and
undivided interest." Id. at 1357 (quoting Snyder, 394 U.S. at 335, 89 S.Ct. at 1056). We then considered the
nature of punitive damages under Alabama law, finding that Alabama awards punitive damages to plaintiffs
not "as a matter of right," but rather as a means to punish and deter wrongful conduct. See id. at 1358.
4
The Tapscott opinion cites Lindsey for the proposition that each member of a class must individually
satisfy the amount in controversy requirement in order to avoid being dismissed from the suit. See Tapscott,
77 F.3d at 1357 n. 9. But the opinion does not mention the part of Lindsey that requires a pro rata distribution
of the claimed punitive damages for purposes of determining the amount in controversy.
5
Because punitive damages were intended to serve the collective good, we reasoned that the class had a
"common and undivided interest" in the punitive damages claim. See id. at 1358-59. That is why this Court
in Tapscott permitted the punitive damages claim to be used to satisfy the requisite amount in controversy
for the entire class; in effect, we let the whole amount of the punitive damages claim be used by each class
member for that purpose, a result inconsistent with the decision in Lindsey almost twenty years earlier. See
id. at 1359.
Attempting to distinguish Tapscott from Lindsey, Cohen points to the analysis in Tapscott addressing
whether the punitive damages claim constituted a "single collective right in which [the class members had]
a common and undivided interest." Id. She contends that the "common and undivided interest" issue was
never presented to us in Lindsey, and thus, there is no real conflict between our Lindsey and Tapscott
decisions. Cohen's contention misconstrues the operation of our prior panel precedent rule. The issue in
Tapscott was the same as that in Lindsey: whether a class claim for punitive damages can be considered in
the aggregate in order to establish diversity jurisdiction over all potential members of a class, or must instead
be attributed pro rata to each class member.
"Common and undivided interest" is simply the standard used to decide which, if any, claims by
multiple plaintiffs may be considered in the aggregate for jurisdictional purposes, and which must be divided
among the class members. See Snyder, 394 U.S. at 335, 89 S.Ct. at 1056. But we had already decided in
Lindsey that a class claim for punitive damages could not be considered in the aggregate for each class
member, or at least that such a claim arising under Alabama law could not be. Our conclusion to the contrary
in Tapscott, which also involved Alabama punitive damages law, is inconsistent with the result in Lindsey.
Because the same state law governed punitive damages in each case, there can be no difference between the
two cases insofar as the "common and undivided interest" analysis is concerned.5
5
Compare Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir.1995) (allowing aggregated class claim
for punitive damages because, under Mississippi law, plaintiffs had a "common and undivided interest" in
punitive damages claim), with Ard v. Transcontinental Gas Pipe Line Corp., 138 F.3d 596, 602 (5th Cir.1998)
(disallowing aggregated class claim for punitive damages in Louisiana case and stating that "[i]t is unclear
6
The fact that this case involves a Florida law punitive damages claim does not distinguish it from
Lindsey, because as we concluded in our prior panel opinion in this case, the nature of punitive damages is
the same under Florida law as under Alabama law. See Cohen I, 184 F.3d at 1295. We explained that both
states award punitive damages to serve the collective good, noting particularly that "Florida law, like Alabama
law, provides that 'punitive damages are warranted only where the egregious wrongdoing of the defendant
... constitutes a public wrong.' " Id. (citation omitted). Consequently, there can be no difference between this
case and Lindsey stemming from a "common and undivided interest" analysis of state punitive damages law.6
to us what Mississippi law regarding punitive damages drove the Allen panel to depart from Lindsey 's rule,
but we find no principle in Louisiana law ... that permits us to depart from Lindsey ").
6
As we noted in our prior opinion in this case, our decision in Tapscott to consider the class punitive
damages claim in the aggregate was also based on the fact that "the award of punitive damages [would] reflect
not the wrong done to any single individual but the wrongfulness of the conduct as a whole." See Cohen I,
184 F.3d at 1295 (citing Tapscott, 77 F.3d at 1358-59). The class in that case consisted of over 10,000
members, and the allegedly fraudulent transaction underlying each member's claim involved relatively small
amounts of money. See Tapscott, 77 F.3d at 1358-59. Reasoning that "where the wrong to the individual
is small but the course of conduct is large, the potential punitive damages would be to punish and deter the
course of conduct as a whole," we concluded in Tapscott that it was appropriate to view the class claim for
punitive damages in the aggregate. Id. at 1359. We also suggested that if the facts indicated the punitive
damages award "would be determined on an individualized consideration of the egregiousness of the harm
done to individual class members," id. at 1359 n. 13, instead of the "wrongfulness of the defendant's course
of conduct as a whole," id. at 1358, then aggregation might not be proper. See id. at 1359 n. 13. In view of
this analysis in Tapscott, the Lindsey decision arguably could be viewed as holding only this: when a plaintiff
fails to specify the size of the class, thereby preventing the court from determining the extent of the
defendant's wrongful course of conduct, the class claim for punitive damages cannot be viewed in the
"aggregate," i.e., it cannot be attributed in toto to each class member.
Unfortunately, our analysis in Lindsey forecloses that potential distinction between that case
and Tapscott. In Lindsey, we stated that if the plaintiff had alleged a specific number of class
members, that allegation "would have permitted the court to ascertain what dollar amount represents
the 'amount in controversy ' for each member of the class." Lindsey, 576 F.2d at 595 (emphasis
added). Significantly, our analysis in Tapscott suggests that the aggregation of punitive damages is
proper when the defendant's course of conduct affects a large number of individuals. See Tapscott,
77 F.3d at 1359. But according to our prior analysis in Lindsey, a "large" class is exactly what would
have prevented the amount in controversy requirement from being satisfied. Our concern in Lindsey
was that the number of class members, or the divisor, might be so large that the $1,000,000 punitive
damages claim, when divided by the number of class members, would result in an amount less than
$10,000 (the requisite amount in controversy at the time). We indicated in Lindsey that the class
would satisfy the amount in controversy requirement if the complaint alleged a total number of
members that "was small enough that the claims on its behalf exceeded the sum of $10,000 per
capita." Lindsey, 576 F.2d at 595 (emphasis added). Thus, while our opinion in Lindsey does not
7
Cohen's real argument is that the result and holding of Lindsey are wrong because we failed to apply
a "common and undivided interest" analysis—she says it was not even considered. Even if we thought
Lindsey wrong, the prior panel precedent rule is not dependent upon a subsequent panel's appraisal of the
initial decision's correctness. Nor is the operation of the rule dependent upon the skill of the attorneys or
wisdom of the judges involved with the prior decision—upon what was argued or considered. Unless and
until the holding of a prior decision is overruled by the Supreme Court or by the en banc court, that holding
is the law of this Circuit regardless of what might have happened had other arguments been made to the panel
that decided the issue first.
Lindsey held that, for purposes of deciding whether the amount in controversy requirement had been
satisfied, the amount of an Alabama punitive damages claim was to be divided by the number of class
members and the result attributed to each member of the class. Tapscott decided to the contrary. Because
Lindsey predates Tapscott, we must follow Lindsey as the precedent of this Court. See Steele, 147 F.3d at
1318; Dailey, 24 F.3d at 1327.
Accordingly, we rescind that part of our prior opinion in this case that relied upon Tapscott to hold
that the $10,000,000 punitive damages claim on behalf of Cohen's proposed class satisfied the amount in
controversy requirement for diversity jurisdiction over this case. See Cohen I, 184 F.3d at 1294-95. The
punitive damages claim does not satisfy the amount in controversy requirement, because when the
explicitly forbid the aggregation of a class claim for punitive damages, the reasoning and result in
that opinion does.
Under our reasoning in Lindsey, a punitive damages claim must be divided by the total
number of class members with the quotient attributable to each class member for amount in
controversy purposes. See id. Our inability to determine the number of class members, or the
divisor, was critical not because we could not determine the nature of the defendants' course of
conduct, but because without a divisor we could not do the division necessary. We could not divide
the class punitive damages claim by the number of class members without knowing that number. A
Fifth Circuit panel recently acknowledged the necessary implication of our Lindsey decision. See
Ard, 138 F.3d at 601 (construing Lindsey to "appl[y] Snyder 's reasoning that compensatory damage
claims cannot be aggregated for jurisdictional purposes to the context of punitive damage claims");
see supra at note 6.
8
$10,000,000 class claim for punitive damages is divided among the alleged 39,000 class members, as Lindsey
requires for amount in controversy purposes, each member's share of the claim is approximately $256.
We now address Cohen's other two grounds for satisfying the requisite amount-in-controversy: (1)
the value of the requested injunctive relief, and (2) the amount of attorney fees due if the class prevails.
II. COHEN'S OTHER GROUNDS FOR DIVERSITY JURISDICTION
A. INJUNCTIVE RELIEF
In addition to requesting compensatory and punitive damages, this lawsuit seeks to enjoin Office
Depot from engaging in unfair and misleading advertising regarding the catalogue prices of its products.
Cohen claims that Office Depot's advertising indicates that the prices for products purchased from its
catalogues are the lowest prices available anywhere, but that the truth is some products are less expensive if
purchased at Office Depot stores. She argues that enjoining such allegedly misleading advertising would
"result[ ] in changes to Office Depot's advertising and business practices, thereby benefitting the Plaintiff
class, as a whole, by an amount that is clearly in excess of the jurisdictional requirement of Section 1332."
Appellant's Br. 44-45.
When a plaintiff seeks injunctive or declaratory relief, the amount in controversy is the monetary
value of the object of the litigation from the plaintiff's perspective. See Ericsson GE Mobile Communications,
Inc. v. Motorola Communications & Elecs., Inc., 120 F.3d 216, 218-20 (11th Cir.1997). In other words, the
value of the requested injunctive relief is the monetary value of the benefit that would flow to the plaintiff
if the injunction were granted. In this case, Cohen maintains that the class has a "common and undivided
interest" in the injunctive relief, and thus, if considered in the aggregate, the monetary value of it to the
class—alone or combined with the other claims for relief—would satisfy the $75,000 amount in controversy
requirement. However, we need not address whether the monetary value of the requested injunctive relief
should be considered in the aggregate, or instead attributed pro rata among the class members, because we
9
conclude that the monetary value of the injunctive relief to the class plaintiffs in this case is "too speculative
and immeasurable" to establish the requisite amount in controversy in either event. See id. at 221-222.
We have little trouble concluding "to a legal certainty" that the value of the injunctive relief does not
satisfy the jurisdictional amount in this case, see St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
288-89, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938), because we doubt that any monetary value at all would
accrue to the class plaintiffs upon issuance of the prospective injunction. If the requested injunctive relief
were granted, Office Depot would not be required to offer its products at the lowest price available, but
instead could simply raise the price of the products in its stores a sufficient amount that its advertising of
catalogue prices was no longer false. That result would comply with the injunction the class seeks, but it
would be of no monetary benefit to them. Indeed, to the extent class members also buy products in Office
Depot stores, the injunction would cost them money under that scenario.
But let us assume Office Depot's reaction to the requested injunction would be to leave product prices
as they are and clarify its advertising to remove any statement that catalogue prices are the same as store
prices. That result is the most the class could hope for from the requested injunction, but it is one which
would be of little or no monetary value to class members. The benefit of the injunction to the class plaintiffs
would be the knowledge that some office products were less expensive when purchased at Office Depot stores
than when purchased through the catalogue. However, upon class certification and notice, the class plaintiffs
would already have known that, because the allegedly misleading advertising is the very basis of the class
action.
Although Cohen's complaint seeks class certification under subdivisions (b)(1)(A), (b)(1)(B), and
(b)(3) of Fed.R.Civ.P. 23, Cohen's class, if certified, would likely be certified as a(b)(3) class.7 Certification
7
Because Cohen's class seeks compensatory damages, it cannot be certified as a(b)(1)(A) class. See In re
Dennis Greenman Sec. Litig., 829 F.2d 1539, 1545 (11th Cir.1987). As for potential certification under
(b)(1)(B), we fail to see from the complaint's allegations how individual suits against Office Depot brought
by one or more class members "would as a practical matter be dispositive of the interests of the other
members ... or substantially impair or impede their ability to protect their interests." Fed.R.Civ.P.
23(b)(1)(B); see also 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and
10
under Rule 23(b)(3) would require that the class members receive notice of the suit "well before the merits
of [it] are adjudicated." See Schwarzschild v. Tse, 69 F.3d 293, 295 (9th Cir.1995) (citations omitted);
Fed.R.Civ.P. 23(c)(2); see also 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 1788 (2nd ed.1986). As a result, before any injunction were granted, the class
would already know that the catalogue price of some Office Depot products is higher than the store price.
Or, stated differently, if the injunction were not granted, the class plaintiffs would still know that the
advertising is sometimes false and that they can avoid paying the higher catalogue prices simply by shopping
elsewhere or by purchasing the products at Office Depot's stores. The injunctive relief itself would not be
of any monetary value to the class members. Cf. Crawford v. American Bankers Ins. Co. of Fla., 987 F.Supp.
1408, 1415 (M.D.Ala.1997) (explaining that the class members' "financial recovery will come ... from their
tort and [restitution] claims, not from the prospective injunctive relief").
The remote possibility—if there be any—that monetary value might somehow flow to the class
plaintiffs from the requested injunctive relief is "too speculative and immeasurable to satisfy the amount in
controversy requirement." Ericsson, 120 F.3d at 221-222. In Ericsson, the plaintiff company, Ericsson,
claimed that the City of Birmingham improperly handled the bidding process for its purchase of a
communications system, resulting in the company losing the communications system contract to Motorola.
See id. at 217. Ericsson sought to enjoin the city's contract with Motorola and also to have the court declare
Ericsson the lowest responsible bidder, entitling it to the contract with the city worth almost $10,000,000.
See id. However, the district court noted that, under Alabama law, the only remedy available to Ericsson was
to have the district court enjoin the performance of the city's contract with Motorola as void. See id. at 221.
Not only did the court lack authority to declare Ericsson the lowest bidder, it could not even require the city
to rebid the contract. See id.Procedure § 1774 (2nd ed.1986) (explaining that "(b)(1)(B) allows class actions to be brought in cases in
which separate suits might have undesirable effects on the class members"). Moreover, the possibility that
an individual suit "will have either precedential or stare decisis effect on later [suits] is not sufficient" for
(b)(1)(B) class certification. In re Dennis Greenman Sec. Litig., 829 F.2d at 1546.
11
Consequently, the only benefit to Ericsson from its injunctive relief would have been the possibility
that the city might rebid the contract and that, during the rebid, the city might select Ericsson's
communications system and price. See id. at 221-22. We refused to pile possibility onto possibility to
estimate the value of that benefit, but instead held that "[b]ecause [Ericsson could not] reduce the speculative
benefit resulting from a rebid 'to a monetary standard, [ ] there [was] no pecuniary amount in controversy.'
" Id. at 222 (quoting Texas Acorn v. Texas Area 5 Health Sys. Agency, Inc. 559 F.2d 1019, 1023 (5th
Cir.1977)).
Similarly, the injunctive relief in this case involves too many contingencies, such as the manner in
which Office Depot might alter its pricing schemes and the extent to which the class members' purchasing
patterns might change. Because of these contingencies, any benefit to the class from the injunction cannot
be reduced to a reasonable monetary estimate.8 See id. at 222. We therefore conclude that any monetary
value to Cohen's class from the injunction is either non-existent, or at least too tenuous of a foundation for
diversity jurisdiction. In reaching this conclusion, we also note that the policy underlying 28 U.S.C. §
1332(a), which is to reserve federal court diversity jurisdiction for disputes involving relatively substantial
damages, further informs our refusal to speculate about the value of a prospective injunction to the class
plaintiffs in this case. See Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1044-45 (3rd Cir.1993) (noting
that § 1332(a) "must be narrowly construed so as not to frustrate the congressional purpose behind it"). The
8
Like the plaintiff in Ericsson, Cohen has not established a monetary value for the injunctive relief claim.
See id. at 222 n. 18. Cohen argues that her proposed amended complaints provide bases for valuing the
injunctive relief claim, primarily the substantial expense Office Depot would incur by "retooling" its pricing
scheme and advertising. The potential cost of compliance to the defendant, however, is irrelevant in
determining the value of the benefit that would be obtained by the plaintiff from an injunction. See Ericsson,
120 F.3d at 218-20. For that reason, the proposed amended complaint did not establish the requisite amount
in controversy based on the value of the injunctive relief, and accordingly, the district court did not abuse its
discretion in denying leave to amend. See Halliburton & Assocs., Inc. v. Henderson, Few & Co., 774 F.2d
441, 444 (11th Cir.1985) (noting that when "a complaint as amended is still subject to dismissal, leave to
amend need not be given") (citation omitted).
12
total compensatory and punitive damages claim for each class member in this case is about $260,9 well below
the $75,000 threshold for diversity jurisdiction.
Because the class claim for injunctive relief is too speculative to satisfy the amount in controversy
requirement, we turn now to the question of whether the potential recovery of attorney fees, alone or in
combination with the damages claims, can establish the jurisdictional amount in controversy.
B. ATTORNEY FEES
On behalf of the class, Cohen brought claims under Florida statutes that prohibit deceptive business
practices, see Fla. Stat. § 501.201 et seq., and misleading advertising, see Fla. Stat. § 817.41. Both statutory
causes of action authorize a court to award attorney fees to the prevailing party. See Fla. Stat. § 501.2105;
Fla. Stat. § 817.41. Cohen contends that when a statutory cause of action entitles a party to recover reasonable
attorney fees, the amount in controversy includes consideration of the amount of those fees. She is correct.
See Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 202, 54 S.Ct. 133, 134, 78 L.Ed. 267 (1933); Premier
Indus. Corp. v. Texas Indus. Fastener Co., 450 F.2d 444, 447 (5th Cir.1971).
Cohen also contends that the attorney fees in this case will clearly surpass the $75,000 threshold for
the amount in controversy; and she argues that the amount of fees she anticipates will be awarded either
should be (1) attributed to her as the prevailing party, with jurisdiction over the other class plaintiffs
established under 28 U.S.C. § 1367(a) (the supplemental jurisdiction provision), or (2) considered in the
aggregate and attributed in toto to each member based on their "common and undivided interest" in the
attorney fees. Assuming away our doubts that Cohen has established a sufficient basis for her contention that
9
While there are persuasive reasons for viewing the amount in controversy as the total liability faced by
a defendant, instead of as the amount each plaintiff stands to gain, "the Supreme Court has long since closed
that door." Davis v. Carl Cannon Chevrolet-Olds, Inc., 182 F.3d 792, 798 (11th Cir.1999). In this case, the
approximate compensatory damages claim of each member, assuming Cohen's claim is representative of the
other class members, is $3.57. Each member's share of the punitive damages claim is approximately $256.
The total damages claim of each class member, therefore, is less than $260.
13
an award of attorney fees in this case will reach $75,000 or more,10 we address in turn her arguments as to
how that amount of fees should be attributed.
First, we find no basis for attributing the potential award of attorney fees to Cohen, either individually
or as the class representative. The claim for attorney fees in this case is based on two Florida statutes: Fla.
Stat. § 501.2105(1), authorizing an award of attorney fees to "the prevailing party" in an action based on
deceptive business practices; and Fla. Stat. § 817.41(6), mandating an award of attorney fees to "[a]ny person
prevailing" in an action based on misleading advertising. If this class action were successful on the merits,
the entire class of plaintiffs—not just Cohen—would "prevail" in the action, and accordingly, it is the class
and not just Cohen who would recover attorney fees under the statutes.11
In addition, as an individual class member, Cohen stands to recover no more than $260 in damages.
In her first proposed amended complaint, Cohen indicated that over $100,000 in reasonable attorney fees
would be incurred in the litigation. Attributing to one plaintiff an anticipated attorney fees award that is over
384 times greater than that plaintiff's stake in the litigation could raise serious questions about the
10
We doubt that Cohen has sufficiently established that $75,000 in attorneys fees will be recovered in this
case. In her proposed amended complaint, Cohen contends that over $60,000 in reasonable attorneys fees
had been incurred up to that point in the litigation and that ultimately over $100,000 in fees would be
incurred. However, Cohen provided no documentation supporting those contentions or specific explanation
for the substantial amount claimed. Arguably, when the amount in controversy substantially depends on a
claim for attorneys fees, that claim should receive heightened scrutiny. Cf. Packard, 994 F.2d at 1046(explaining that when a "[punitive damages] claim comprises the bulk of the amount in controversy and may
have been colorably asserted solely or primarily [for jurisdictional purposes], that claim should be given
particularly close scrutiny"). However, because of the permissive nature of St. Paul's "legal certainty"
standard for the sufficiency of a plaintiff's amount in controversy allegation, and because our decision would
not be different even if the claimed amount of fees were accurate, we will assume that Cohen has alleged a
sufficient basis for a potential attorneys fee award exceeding $100,000, as estimated in her proposed amended
complaint.
11
Cohen's citation to In re Abbott Labs., 51 F.3d 524 (5th Cir.1995), is inapposite. The Court in that case
attributed a claim for attorney fees to the class representatives, because the relevant Louisiana statute provided
that a "court may allow the representative parties their reasonable expenses of litigation, including attorney[
] fees, when as a result of the class action a fund is made available, or a recovery or compromise is had which
is beneficial, to the class." Id. at 526 (emphasis added). Unlike the statute in Abbott, the Florida statutes at
issue here do not contain language indicating that the award of attorneys fees should go to the class
representatives.
14
reasonableness of the fee award. For these reasons, we conclude the claim for attorney fees in this case is not
attributable solely to Cohen, but instead to the entire class. Because of that conclusion, we must now decide
how the claimed attorney fees should be attributed to each class member for amount in controversy
purposes.12
Cohen maintains that the class members share a "common and undivided interest" in the anticipated
award of attorney fees, and thus, the claim for those fees should be viewed in the aggregate, with the total
amount attributed to each class member. Office Depot responds that, like the class claim for punitive
damages, the amount of the claimed attorney fees should be divided pro rata among each individual class
member. In light of a recent decision by this Circuit and the relevant Florida case law, we conclude that the
claim for attorney fees is not "a single title or right in which [the class members] have a common and
undivided interest." See Snyder, 394 U.S. at 335, 89 S.Ct. at 1056. Therefore, for amount in controversy
purposes, the estimated total attorney fees award should be divided among all of the class members.
In Darden v. Ford Consumer Finance Co., 200 F.3d 753 (11th Cir.2000), the defendant attempted
to remove a class action to federal court on diversity grounds, arguing that the class plaintiffs' claim for
attorney fees under the Georgia RICO statute should be considered in the aggregate for amount in controversy
purposes. We rejected that argument. Following the principles laid down by the Supreme Court in Snyder,
we concluded that the claimed attorney fees did not constitute a "single title or right" in which the class
members had a "common and undivided interest." See id. at 756-59. In reaching that conclusion, we noted
that each class plaintiff could have recovered his attorney fees in individual suits under the RICO statute. See
12
Cohen asks us to join the Fifth and Seventh Circuits in concluding that Congress statutorily overruled
Zahn 's holding that each plaintiff must assert a claim satisfying the requisite amount in controversy to avoid
being dismissed from a class action based on diversity jurisdiction. See Stromberg Metal Works v. Press
Mechanical, Inc., 77 F.3d 928, 930-33 (7th Cir.1996); In re Abbott Lab., 51 F.3d at 527-29. She contends
that the 1990 amendments to 28 U.S.C. § 1367 authorize a court to exercise supplemental jurisdiction over
the claims of the entire class, once the claim of one class member is found to satisfy the amount the
controversy requirement. However, we need not address that argument. Because the claimed attorney fees
in this case are not attributable solely to Cohen, no member of the class has an individual claim that satisfies
the requisite amount in controversy. Therefore, diversity jurisdiction will exist in this case only if the claimed
attorney fees may be considered in the aggregate, attributed as a whole to each class member.
15
id. at 758. It followed that the class members did not share a "single title or right" in the claimed attorney fees,
but instead, each member had a "separate and distinct statutory right or claim to recover those attorney[ ]
fees." Id. Noting further that under Georgia law the statutory award of attorney fees serves to compensate
injured plaintiffs, we reasoned that considering the fees in the aggregate would contravene Snyder 's
prohibition against aggregating compensatory damages.13 See id. Therefore, we refused to aggregate the
claimed attorney fees of the class.14
We construe Darden to hold that a statutory claim for attorney fees may not be considered in the
aggregate for amount in controversy purposes, at least not when both of these factors are present: (1) the
class members have a "separate and distinct" right to recover attorney fees under the relevant statute; and (2)
state law provides that the statutory attorney fees serve to compensate the class members for their injuries.15
Applying that holding to the facts of this case, we conclude that the claimed attorney fees may not be
considered in the aggregate to establish the requisite amount in controversy.
As for the first factor, the class members in this case could recover their individual attorney fees
incurred in separate, individual suits under Florida's consumer protection statutes. See Fla. Stat. §
501.2105(1) (authorizing fee award for "prevailing party"); Fla. Stat. § 817.41(6) (mandating fee award for
"[a]ny person prevailing" under the statute). Like the Georgia RICO statute involved in Darden, the Florida
13
Darden distinguished the "collective good" purposes of the punitive damages in Tapscott from the
compensatory nature of the attorneys fees in that case. See Darden. Therefore, the decision in Darden did
not depend on the continued validity of the Tapscott decision. However, if Darden had somehow reiterated
the part of Tapscott that conflicts with Lindsey, we would still be compelled to follow Lindsey, to the extent
of any conflict. The prior panel precedent rule precludes us from "hold[ing] that two subsequent panel
opinions can implicitly overrule a prior panel opinion." Johnson v. City of Fort Lauderdale, Fla., 126 F.3d
1372, 1380 n. 10 (11th Cir.1997).
14
This Court also rejected the aggregation of an attorney fees award in Davis, 182 F.3d at 796-97.
However, the precedential effect of Davis on this case is minimal, because that case did not involve a
statutory right to attorneys fees. Instead, Davis addressed only the "narrow question ... [of] whether a fee to
be deducted from a [class action] common fund may, if it exceeds $75,000, satisfy the amount-in-controversy
requirement." Id. at 796.
15
Because both factors are present in this case, we need not decide whether either one standing alone would
prevent aggregation of attorney fees to satisfy the amount in controversy.
16
statutes in this case provide "each individual plaintiff in a putative class the right to recover attorney[ ] fees
in the case." Darden, The members of Cohen's class are not joining to "enforce a single title or right" in the
statutory award of attorney fees, see Snyder, 394 U.S. at 335, 89 S.Ct. at 1056, because each member has a
"separate and distinct right" in the claimed fees. See Darden.
The second factor is also present. Like the attorney fees award under the Georgia RICO statute in
Darden, an attorney fees award under Florida consumer protection statutes serves an important compensatory
purpose. In BMW of North Amer., Inc. v. Krathen, 510 So.2d 366, 368 (Fla. 4th Dist.Ct.App.1987), the
District Court of Appeals for the Fourth District noted that "the obvious purpose of the 'Little FTC Act'
[which includes § 501.2105(1) ] is to make consumers whole for losses caused by fraudulent consumer
practices [and that] ... [t]hese aims are not served if the attorney[ ] fees are not included in the protection."
Id. at 368 (citation omitted); cf. Florida Erection Serv. v. McDonald, 395 So.2d 203, 207-08 (Fla. 1st
Dist.Ct.App.1981) (explaining that an award of attorney fees, unlike an award of punitive damages, "does
not provide remuneration to the claimant over and above the amount necessary to compensate him for his
loss"). Even though the primary purpose of such an award is to encourage private enforcement of statutory
policies, thus benefitting the public, see Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828, 833-34
(Fla.1990), that does not mean attorney fees are not also compensatory in nature. The Florida Supreme Court
has recognized that private individuals cannot be expected to pursue statutory causes of action unless their
own losses and costs, including their attorney fees, will be fully compensated. See id. (noting that "[i]f ...
consumers cannot recover in full their attorney fees, they will quickly determine it is too costly ... to file suit,
and individual enforcement of this act will fail") (quoting LaFerney v. Scott Smith Oldsmobile, Inc., 410
So.2d 534, 536 (Fla. 5th Dist.Ct.App.1982)). Because the statutory attorney fees involved in this case serve
a significant compensatory purpose, in this case as in Darden, aggregating the claimed attorneys fees would
be inconsistent with Snyder. Consequently, the nature and purpose of the statutory right to attorney fees in
17
this case strongly resemble those of the statutory right to attorneys fees in Darden; it follows that the result
should be the same.
Because the attorney fees authorized by the Florida statutes in this case serve to compensate plaintiffs
for losses resulting from allegedly unlawful business practices, and because claims for those fees could be
asserted by the class plaintiffs in individual suits, we conclude that the claimed fees do not constitute "a single
title or right in which [the class members] have a common and undivided interest." Snyder, 394 U.S. at 335,
89 S.Ct. at 1056. It follows that the amount of claimed attorney fees may not be considered in the
aggregate—may not be attributed in whole to each class member—but instead, like the class claim for
punitive damages, it must be divided out among the total number of class members for amount in controversy
purposes. Because each class member's damages claim approximates $260, and the claimed attorney fees
must be divided pro rata among 39,000 class members, an astronomical amount of attorney fees would have
to be recovered in order to satisfy the amount in controversy requirement.16 Such a recovery is not possible,
and therefore, neither is diversity jurisdiction.
III. CONCLUSION
Because we conclude that Cohen has failed to allege a sufficient amount in controversy to establish
jurisdiction under 28 U.S.C. § 1332(a), we vacate our prior opinion reversing the district court's dismissal of
this case and remanding for further proceedings. We now affirm the district court's order dismissing the case
for lack of subject matter jurisdiction.
AFFIRMED.
16
Each class member must, in effect, "recover" $74,740 in attorneys fees ($75,000 required for diversity
jurisdiction minus the $260 in damages per class member). That means the class would have to recover a
total of $2.9 billion in attorneys fees ($74,740 multiplied by the alleged 39,000 class members).
18