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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS
LAVERNE RIPPY individually and on behalf of all other similarly situated Illinois citizens and residents, Plaintiff, vs. SCHNUCK MARKETS, INC., Defendant.
No. 3:13-cv-00471-MJR-DGW Removed from St. Clair County Circuit Court, State of Illinois, Case No. 13-L-218
DEFENDANT’S NOTICE OF REMOVAL Defendant, Schnuck Markets, Inc. (“Schnucks”), through counsel and pursuant to 28 U.S.C. §§ 1332(d), 1441, 1446, and 1453, hereby removes this action from the Circuit Court for the Twentieth Judicial District, St. Clair County, to the United States District Court for the Southern District of Illinois. The grounds for removal are as follows: I. BACKGROUND 1. On April 25, 2013, Plaintiff Laverne Rippy filed a civil class action complaint
against Schnucks in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois, styled Rippy v. Schnuck Markets, Inc., Case No. 2013-L-218. The Complaint is attached to this Notice as Exhibit A. 2. At the same time Plaintiff filed her Complaint, Plaintiff filed a motion to certify a
class composed of “[a]ll Illinois citizens and residents with individual monetary claims not in excess of $75,000 exclusive of interest and costs, who shopped at Defendant’s Illinois locations, who from five years preceding the data breach of Defendant’s security that compromised credit
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card and debit card information, was not provided notice in compliance with 815 ILCS 530/10.” (Ex. B, Mot. for Class Certification, at 1–2.) Plaintiff’s Motion for Class Certification is attached to this Notice as Exhibit B. 3. Plaintiff alleges that criminals hacked into Schnucks’ electronic payment systems
that transmit customer information (including credit and debit card information), thereby causing a data breach of these systems in March 2013. (Ex. A, Compl. ¶¶ 1, 7.) This alleged data breach, according to Plaintiff, “compromised” her and the other members of the putative class’s customer information. (Id. ¶ 1, 7, 32, 41, 64.) Plaintiff also claims that Schnucks did not notify her and the other putative class members of the alleged data breach in compliance with 815 Ill. Comp. Stat. § 530/10. (Id. ¶ 8.) 4. Plaintiff brings claims under the Illinois Consumer Fraud and Deceptive Business
Practices Act, 815 Ill. Comp. Stat. § 505/1 et seq. (Counts I and II), the Illinois Personal Information Act, 815 Ill. Comp. Stat. § 530/1 et seq. (Count III), and common-law negligence (Count IV). 5. Plaintiff claims that Schnucks’ alleged misconduct caused her and the putative
class to “incur numerous hours cancelling their compromised cards, activating replacement cards and re-establishing automatic withdrawal payment authorizations from their old cards to their new cards.” (Ex. A, Compl. ¶¶ 32, 41, 64.) Plaintiff also alleges “other economic and noneconomic harm.” (Id.) Accordingly, Plaintiff requests for herself and the putative class “actual individual damages, costs and attorneys’ fees, including interest thereon” and “such further relief as the Court deems just.” (Ex. A, Compl., Prayer for Relief.)
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GROUNDS FOR REMOVAL 6. A. 7. This case is removable pursuant to 28 U.S.C. §§ 1332(d), 1441, 1446 and 1453. Removal is Timely Plaintiff’s Complaint was filed on April 25, 2013. While Plaintiff has not yet
served Schnucks with a copy of the Complaint and summons, Schnucks may still remove this case under 28 U.S.C. § 1441. See, e.g., Sheffer v. Cottrell, Inc., No. 08–0791–DRH, 2009 WL 1231037, at *2 (S.D. Ill. Apr. 30, 2009) (“nothing in 28 U.S.C. § 1441 or any other statute requires defendants to have been served themselves prior to removing a case to federal court”) (quotation omitted). B. 8. This Court has Original Jurisdiction This Court has original jurisdiction under the Class Action Fairness Act
(“CAFA”), codified at 28 U.S.C. § 1332(d), because this case: (i) is a class action where a member of the putative class is a citizen of a state different from a defendant; (ii) the amount in controversy exceeds $5 million exclusive of interest and costs; and (iii) the size of the putative class is more than 100 people. See 28 U.S.C. § 1332(d). 1. 9. Diversity of Citizenship Exists.
Plaintiff alleges that she is a citizen of Illinois. (Ex. A, Compl. ¶ 4.) Plaintiff
seeks to represent a putative class of similarly situated Illinois residents. (Id. ¶ 10.) 10. Schnucks is a citizen of Missouri because it is a Missouri corporation with its
principal place of business in Missouri. (Id. ¶ 5; see also 28 U.S.C. § 1332(c).) 11. Because Plaintiff and her putative class members and Schnucks are citizens of
different states, complete diversity exists, which is more than is required by CAFA. See 28 U.S.C. § 1332(d)(2) (requiring only minimal diversity).
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The CAFA Amount in Controversy Threshold is Satisfied.
Removal is also appropriate because Plaintiff’s Complaint places more than $5
million at issue in this case. See 28 U.S.C. § 1332(d)(2); see also Back Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir. 2011) (“[U]nless recovery of an amount exceeding the jurisdictional minimum is legally impossible, the case belongs in federal court.”) (citation omitted). 13. As set forth above, Plaintiff claims that Schnucks’ alleged misconduct caused her
and the other putative class members to suffer “actual damages,” including “numerous hours cancelling their compromised cards, activating replacement cards and re-establishing automatic withdrawal payment authorizations from their old cards to their new cards, and other economic and non-economic harm.” (Ex. A, Compl. ¶¶ 32, 41, 64.) 14. Plaintiff and the putative class member’s potential “time and effort” damages
alone satisfy the $5 million amount in controversy requirement.1 Schnucks has determined that criminals hacked into its electronic payment systems at 23 stores located in Illinois. Schnucks has further determined that approximately 1,600,000 credit or debit card transactions took place at these Illinois stores during the relevant period. Finally, Schnucks has “de-duplicated” these transactions, using the first six and the last four digits of the cards at issue, and this deduplication analysis has established that approximately 500,000 unique credit or debit cards were
In filing this Notice of Removal, Schnucks does not concede liability on any of the claims asserted in Plaintiff’s Complaint, or that she and the absent class members are entitled to recover any damages. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005) (“[S]uits are removed on the pleadings, long before ‘evidence’ or ‘proof’ have been adduced. The question is not what damages the plaintiff will recover, but what amount is ‘in controversy’ between the parties. That the plaintiff may fail in its proof, and the judgment be less than the threshold (indeed, a good chance the plaintiff will fail and the judgment will be zero) does not prevent removal.”).
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used in Schnucks’ Illinois stores during the relevant time period. Thus, based on Plaintiff’s allegations, the proposed putative class has at least 500,000 members.2 (Ex. A, Compl. ¶ 10.) 15. Because of the putative class’s size and the nature of the monetary relief
requested, the amount in controversy in this case exceeds $5 million. For example, even valuing Plaintiff’s and the putative class members’ alleged “time and effort” damages at the federal minimum wage ($7.25 per hour), and interpreting “numerous hours” to equal only two (2) hours, the potential amount in controversy is equal to approximately $7.25 million (2 * 7.25 * 500,000 = 7,250,000). See 28 U.S.C. § 1332(d)(6) (“[T]he claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5,000,000.”). 16. Moreover, while Plaintiff’s Complaint does not affirmatively seek punitive
damages, Plaintiff brings consumer fraud claims for which punitive damages are available. (Ex. A, Compl. ¶ 30 (alleging “willful and wanton” violations of the Illinois Consumer Fraud Act); see also Back Doctors Ltd., 637 F.3d at 831 (district court erred in not considering potential punitive damages award when assessing amount in controversy where punitive damages were available under the same statute, even though complaint did not specifically pray for them).) 17. Interpreting United States Supreme Court precedent, the Illinois Supreme Court
has approved a punitive damage award with a ratio of punitive to compensatory damages of approximately 11 to 1. Int’l Union of Operating Eng’rs, Local 150 v. Lowe Excavating Co., 870 N.E.2d 303, 324 (Ill. 2006). Thus, including punitive damages, the total amount of potential damages at issue in this case is far in excess of the $5 million statutory minimum.
In fact, the 500,000 number is based only on the time period from December 9, 2012 to March 29, 2013. Plaintiff, however, alleges that her class should include any Illinois resident who shopped at Schnucks’ Illinois stores at any time during the past five (5) years. Schnucks has more than thirty stores in Illinois, so, based on Plaintiff’s expansive class definition, the putative class could be significantly larger than 500,000.
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Finally, Plaintiff also seeks an award of attorneys’ fees. (See Ex. A, Compl.,
Prayer for Relief.) Any attorneys’ fees that Plaintiff incurred prior to the filing of this Notice of Removal may be included in calculating the amount in controversy. ABM Sec. Servs., Inc. v. Davis, 646 F.3d 475, 479 (7th Cir. 2011). Given the early stage at which Schnucks removed this case, the amount of attorneys’ fees at issue might be small. But these fees would nonetheless further support that the amount in controversy in this case exceeds $5 million. 19. For these reasons, the $5 million amount-in-controversy requirement of 28 U.S.C.
§ 1332(d)(2) is satisfied. 3. 20. The Proposed Class Exceeds 100 Members.
As alleged above, Schnucks has determined that approximately 500,000 people
fall within Plaintiff’s proposed class definition. Accordingly, the number of proposed class members substantially exceeds 100, satisfying the jurisdictional requirements of 28 U.S.C. § 1332(d)(5)(B).3 21. For all of these reasons, this Court has original jurisdiction pursuant to 28 U.S.C.
§ 1332(d) and this case is removable pursuant to 28 U.S.C. § 1441(b)(1). Removal to this Court is appropriate because this judicial district embraces the district and division in which this case was pending in state court, 28 U.S.C. § 1446(a). III. STATE COURT PLEADINGS AND NOTICE 22. Pursuant to 28 U.S.C. § 1446(a), copies of the current State Case docket sheet,
each pending motion, petition, and related response, reply, and brief (none are pending), and all process, pleadings, and orders served upon Schnucks in the State Case are attached hereto.
Because the records reviewed by Schnucks do not match cards to addresses, Schnucks cannot verify the number of unique cards used in Illinois that were also used by Illinois residents. Nonetheless, it is more than plausible that most of these people are Illinois residents. See De Falco v. Vibram USA, Inc., No 12 C 7238, 2013 WL 1122825, at *5 (N.D. Ill. Mar. 18, 2013) (“While it is likely that not every shoe sold by Vibram to Illinois retailers was eventually sold to an Illinois customer, it is plausible that the vast majority of them were.”).
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Pursuant to 28 U.S.C. § 1446(d), Schnucks will provide written notice of the
filing of this Notice to all parties and a copy of this Notice will be filed with the Clerk of the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois. WHEREFORE, Defendant Schnucks respectfully requests that the State Case be removed to the United States District Court for the Southern District of Illinois. Dated this 17th day of May, 2013 /s/ Russell K. Scott Russell K. Scott, Esq. Greensfelder, Hemker & Gale, P.C. 12 Wolf Creek Drive, Ste. 100 Belleville, IL 62226 Telephone: 618-257-7308 Fax: 618-257-7353 Email: email@example.com m z
Attorney for Defendant Schnuck Markets, Inc.
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CERTIFICATE OF SERVICE I certify that on the 17th of May, 2013, the foregoing Notice of Removal was filed electronically. Notice of this filing will be sent to all parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system.
/s/ Russell K. Scott m An Attorney for Schnuck Markets, Inc.
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