Amount in question may be below $5 million required for class action case.
U.S. District Judge Margaret M. Morrow is asking the plaintiffs bringing a class action against SnapNames over the insider bidding scandal to show that the controversy exceeds $5 million.
Under the Class Action Fairness Act, the amount at issue in a lawsuit must exceed $5 million (not including interest and costs) to qualify for class action status.
In the case of Stewart Resmer vs. Oversee.net (SnapNames’ parent company), the judge says that the plaintiff hasn’t given enough facts to show that the SnapNames case is a dispute that exceeds $5 million:
Plaintiff has alleged that the amount in controversy, exclusive of interest and costs, exceeds
$5,000,000. This allegation, unsupported by facts, is not sufficient to satisfy the $5,000,000 amount
in controversy requirement. To satisfy his burden of pleading jurisdiction, plaintiff cannot rely only
on conclusory allegations.
In fact, the lead plaintiff allegedly lost $20 in one auction thanks to bidding against ‘halvarez’. If that’s the typical amount lost, the total amount would be far less than $5 million:
Although plaintiff alleges that the defendants have engaged in shill bidding in approximately 50,000 auctions, the plaintiff himself suffered a monetary loss of only $20 due to one inflated bid. If $20 is typical of the loss suffered by the winners in the 50,000 auctions, then the total losses at issue would be approximately $1,000,000â€”far less than the requisite amount. While it is possible that the losses suffered in the 50,000 auctions exceed $1,000,000, plaintiff’s complaint does not explain why this is so.
Judge Morrow has given the plaintiff until February 8th to show otherwise, or the action may be dismissed for lack of subject matter jurisdiction.