Patrice Gillette et al v. Peerless Insurance Company et al, No. 2:2013cv03161 - Document 20 (C.D. Cal. 2013)
Court Description: ORDER DENYING PLAINTIFFS MOTION TO REMAND 10 by Judge Dean D. Pregerson. (lc). Modified on 8/1/2013 .(lc).
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Patrice Gillette et al v. Peerless Insurance Company et al Doc. 20 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 PATRICE GILLETTE, an individual, 12 Plaintiff, 13 v. 14 15 16 17 PEERLESS INSURANCE COMPANY, a New Hampshire company qualified to do business in California. Defendant. ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-03161 DDP (RZx) ORDER DENYING PLAINTIFF’S MOTION TO REMAND [Dkt. No. 10] 18 19 Presently before the court is Plaintiff’s Motion to Remand for 20 Lack of Subject Matter Jurisdiction. 21 submissions of the parties, the court denies the motion and adopts 22 the following order. 23 I. 24 Having considered the Background Patrice Gillette ("Plaintiff"), a California resident, is an 25 employee of Peerless Insurance Company ("Defendant"), a New 26 Hampshire company qualified to do business in California. 27 (Complaint at ¶ 4.) In March 2013, Plaintiff filed a complaint in 28 the California Superior Court in Los Angeles County alleging that Dockets.Justia.com 1 Defendant failed to pay wages, overtime premiums, and meal and rest 2 break premiums. (Id.) The complaint does not specify the amount in 3 controversy. (Id. at ¶ 2.) Defendant calculated the damages to 4 exceed $75,000.00. (Notice of Removal at 4.) On May 3, 2013, 5 Defendant timely removed the action to this Court pursuant to 28 6 U.S.C. §§ 1441(a) and 1446(b) and based on diversity jurisdiction 7 under 28 U.S.C. § 1332(a). (Id.) After removal, Plaintiff offered a 8 declaration limiting her recovery to $74,999.00, subject to the 9 case being remanded to state court. (Declaration of Patrice 10 Gillette at 3.)1 Plaintiff seeks to remand under 28 U.S.C. § 11 1447(c) on the grounds that her offer to cap recovery at $74,999.00 12 defeats subject matter jurisdiction and that Defendant 13 miscalculated the amount in controversy (Id.) 14 II. 15 Legal Standard Federal courts have removal jurisdiction over suits filed in 16 state court if the federal court would have had original 17 jurisdiction over the suit. 28 U.S.C. § 1441(a). There is a strong 18 presumption against removal jurisdiction, and "[f]ederal 19 jurisdiction must be rejected if there is any doubt as to the right 20 of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 21 564, 566 (9th Cir. 1992); see Or. Bureau of Labor & Indus. Ex Rel 22 Richardson v. U.S. West Communs., Inc., 288 F.3d 414, 417 (9th Cir. 23 2002)(stating that federal courts must "strictly construe a removal 24 statute against removal jurisdiction"). Courts resolve doubts about 25 removability in favor of remand. Goldenberg Family Trust v. 26 27 28 1 Though the relevant page of Plaintiff’s declaration is numbered as page 3, it is the second page of the filed document and the only page containing any substantive information. 2 1 Travelers Commercial Ins. Co., CV 11-04312 DDP JEDX, 2011 WL 2 3648490 (C.D. Cal. Aug. 18, 2011); see also, 28 U.S.C. § 1447(c). 3 Under 28 U.S.C. § 1441, a court has removal jurisdiction 4 pursuant to 28 U.S.C. § 1332(a) when there is complete diversity of 5 citizenship and the amount in controversy exceeds $75,000. 6 the complaint does not include a particular damages figure, the 7 removing defendant must demonstrate, by a preponderance of the 8 evidence, that the amount in controversy exceeds $75,000. Sanchez 9 v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996); see Where 10 Gaus, 980 F.2d at 567 (finding that the party seeking removal bears 11 the burden of establishing federal jurisdiction if the complaint 12 leaves the amount in controversy unclear or ambiguous). 13 A court "cannot base [its] jurisdiction on [a] defendant's 14 speculation and conjecture." Lowdermilk v. U.S. Bank Nat'l Ass'n., 15 479 F.3d 994, 1002 (9th Cir.2007) (citing Galt G/S v. JSS 16 Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir.1998)). A removing 17 defendant "may not meet [the] burden by simply reciting some 18 'magical incantation' to the effect that 'the matter in controversy 19 exceeds the sum of $75,000,' but instead, must set forth in the 20 removal petition the underlying facts supporting its assertion that 21 the amount in controversy exceeds $75,000." Id. A court may 22 consider "facts presented in the removal petition as well as any 23 summary-judgment-type evidence relevant to the amount in 24 controversy at the time of removal." Matheson v. Progressive 25 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir.2003). 26 III. Analysis 27 A. Plaintiff's Post-Removal Declaration Does Not Deprive the District Court of Jurisdiction 28 3 1 In St. Paul Mercury Indem. Co. v. Red Cab Co., the Supreme 2 Court interpreted the removal statute to mean that if a "plaintiff 3 after removal, by stipulation, by affidavit, or by amendment of his 4 pleadings, reduces the claim below the requisite amount, [it will] 5 not deprive the district court of jurisdiction." 303 U.S. 283, 292 6 (1938). Plaintiff relies on Bailey v. Wal-Mart Stores, 981 F. Supp. 7 1415, 1416 (N.D. Ala. 1997), to argue that the 1988 Congressional 8 revision of 28 U.S.C. § 1447(c) overturns the longstanding rule 9 articulated in St. Paul Mercury. (Plaintiff’s Reply at 4.) 10 11 12 Prior to 1988, subsection (c) read: If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case . . . 13 After the 1988 amendment, and currently, subsection (c) reads: 14 15 If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. 16 17 28 U.S.C. §1447(c). 18 Bailey held that the 1988 amendment of section 1447(c) 19 overturned the previous rule "that events occurring subsequent to 20 removal do not oust the district court's jurisdiction." Id. at 1416 21 (citing St. Paul Mercury, 303 U.S. at 592). Now, according to the 22 Bailey court, a plaintiff can, at any time before the receipt of a 23 jury verdict, amend its allegations in order to eliminate subject 24 matter jurisdiction, necessitating automatic remand. 25 1416-17. 26 since the 1988 amendment, the Ninth Circuit has consistently held 27 that "post-removal amendments to a complaint cannot divest a court 28 of federal jurisdiction." Hamdy v. Guardsmark, LLC, CV 08-06807 R Id. at Bailey, however, is not the law of this circuit. 4 Even 1 PLAX, 2009 WL 961375 (C.D. Cal. Apr. 8, 2009; see also Guglielmino 2 v. Mckee Foods Corp., 506 F.3d 696, 705 (9th Cir. 2007)(stating 3 that a "party might file a binding stipulation, prior to removal, 4 that it will not seek more in recovery than the jurisdictional 5 threshold" (emphasis added)); Sparta Surgical Corp. v. Nat'l Ass'n 6 of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (finding 7 that jurisdiction must be analyzed on the basis of pleadings filed 8 at the time of removal); Williams v. Costco Wholesale Corp, 471 9 F.3d 975, 976 (9th Cir. 2006) (holding that "post-removal 10 amendments to the pleadings cannot affect whether a case is 11 removable, because the propriety of removal is determined solely on 12 the basis of the pleadings filed in state court"). 13 Other circuits that have addressed this issue have also held 14 that "events occurring after removal which may reduce the damages 15 recoverable below the amount in controversy requirement do not oust 16 the district court's jurisdiction." Poore v. American-Amicable Life 17 Ins. Co. of Texas, 218 F.3d 1287, 1290-91 (11th Cir. 2000); see 18 also, Yong Qin Luo v. Mikel, 625 F.3d 772, 776 (2d Cir. 2010) (per 19 curiam)(holding that it is a "well-established rule that a district 20 court's subject matter jurisdiction, once established, is 21 unaffected by post-removal reductions in the amount in controversy" 22 (internal citations omitted)); Rogers v. Wal-Mart Stores, Inc., 230 23 F.3d 868, 870 (6th Cir. 2000); Hargis v. Access Capital Funding, 24 LLC, 647 F.3d 783, 789 (8th Cir. 2012). 25 Plaintiff further argues that the fact a federal court can, as 26 condition for remand, insist on a "binding affidavit or 27 stipulation," means that a stipulation limiting damages need not 28 necessarily "exist before removal." (Reply at 5(citing 14AAC. 5 1 Wright, A. Miller, & E. Cooper, Federal Practice and Procedure.)) 2 Plaintiff claims that the Supreme Court adopted this reasoning in 3 Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013). The 4 Court in Standard Fire adopted the reasoning by Wright and Miller, 5 stating that "a federal court, as a condition for remand, can 6 insist on a binding affidavit or stipulation that the plaintiff 7 will continue to claim less that the jurisdictional amount." 8 Standard Fire Ins. Co., 133 S.Ct at 1345 (citing 14AAC. Wright, A. 9 Miller, & E. Cooper, Federal Practice and Procedure). However, in 10 the same paragraph, Wright and Miller further explain that "courts 11 have required that these affidavits or stipulations be executed 12 prior to the notice of removal as a sign of their bona fides and 13 cannot await the motion to remand." § 3702.1 Determination of the 14 Amount in Controversy-Cases Removed from State Court, 14AA Fed. 15 Prac. & Proc. Juris. § 3702.1 (4th ed.)(emphasis added). Moreover, 16 Standard Fire Ins. Co. involved an allegation limiting class action 17 damages in the complaint itself, prior to removal. The Court in 18 Standard Fire did not have before it a post-removal stipulation, 19 nor did it purport to overrule its holding in St. Paul Mercury. 20 Neither the 1988 amendment of section 1447(c) nor Standard 21 Fire overturns the Supreme Court's interpretation of the removal 22 statute in St. Paul Mercury. A plaintiff may not wait until her 23 case has been removed to federal court to amend her complaint in 24 order to manipulate the basis upon which removal was granted. This 25 longstanding rule is based on the policy that judicial economy, 26 convenience, and fairness are sometimes best served when the 27 federal courts retain jurisdiction. 28 Century Ins. Co., 934 F.2d 203, 205-06 (9th Cir. 1991). Any other 6 See, e.g., Harrell v. 20th 1 ruling would enable plaintiffs to, upon the realization that their 2 litigation has taken a sour turn in federal court, use a 3 post-removal damage stipulation to remand their case after the 4 parties and the court have invested extensive time and resources. 5 Thus, Plaintiff’s post-removal stipulation to cap her recovery at 6 $74,999.00 does not operate to divest the court of jurisdiction. 7 2. Plaintiff’s Declaration Does Not Clarify the Amount in Controversy at the Time of Removal 8 Plaintiff also argues that her willingness to stipulate to cap 9 her recovery at $74,999.00 operates to clarify the amount of 10 controversy, rather than to reduce or change her initial demand for 11 damages. (Reply at 6.) While under St. Paul Mercury, a plaintiff 12 may not reduce or change her demand for damages by way of 13 stipulation to defeat diversity jurisdiction, the Court did not 14 prohibit post-removal stipulations in their entirety. St. Paul 15 Mercury only prohibits post-removal attempts to defeat federal 16 jurisdiction by stipulation where federal jurisdiction existed at 17 the time of removal. Thus, where a complaint is ambiguous as to the 18 amount in controversy, a plaintiff's post-removal declaration that 19 the amount in controversy was less than $75,000 prior to removal 20 may be sufficient to show lack of jurisdiction. Baldori v. Delta 21 Air Lines, Inc., 1:11-CV-102, 2011 WL 1212069 (W.D. Mich. Mar. 29, 22 2011). 23 Courts consider stipulations that clarify the amount in 24 controversy in situations where (1) state pleading rules leave 25 plaintiffs with no other option but to specify an ambiguous amount 26 in controversy in the complaint, or (2) where the stipulation 27 indicates that the amount in controversy at the time of removal 28 7 1 fell below the jurisdiction limit. See, Allen v. R & H Oil & Gas 2 Co., 63 F.3d 1326, 1329-30 (5th Cir. 1995) (denying plaintiffs' 3 motion to "clarify" their complaint by amendment to seek less than 4 the requisite amount on the ground that the pre-removal damages met 5 the requisite amount); Brooks v. Pre-Paid Legal Services, Inc., 153 6 F. Supp. 2d 1299, 11301 7 plaintiffs "submitted affidavits. . . showing that federal 8 jurisdiction has never properly attached."); Ryan v. Cerullo, 343 9 F. Supp. 2d 157, 160 (D. Conn. 2004) (finding that a plaintiff's 10 stipulation, "along with [plaintiff’s] plausible explanation for 11 how he arrives at an amount in controversy of less than $75,000," 12 clarified his ambiguous statement of damages in accordance to state 13 pleading laws). (M.D. Ala. 2001)(remanding where 14 Here, Plaintiff's declaration does not arise under either of 15 these situations. Plaintiff was not bound by a state pleading law 16 that would prohibit a specific claim for damages in the complaint. 17 There are no pleading rules for a cause of action under California 18 Labor Code §§226.7, 510, 512, 1194, and 1198 or under California 19 Business and Professional Code §17200 et. seq. that would have 20 limited Plaintiff’s ability to place a value on her damages in the 21 complaint. 22 clarifies the value of her claims at the time of removal. Plaintiff 23 only claims that the declaration is a clarification “because there 24 was no value assigned to her claims in the complaint.” (Reply at 25 3.) 26 controversy to be less than $75,000.00, nor does she allege any 27 facts that show federal jurisdiction never attached to this case. 28 Nor does Plaintiff assert that her declaration Plaintiff does not explain how she determined the amount in To the contrary, Plaintiff's willingness to enter into a 8 1 binding stipulation 'in exchange for remand' clearly reserves the 2 right to pursue more than $74,999.00 if her case is not remanded to 3 state court. (Reply at 8; Gillette Decl. ¶ 2.) 4 declaration actually serves to clarify that the amount in 5 controversy exceeds the jurisdictional threshold. 6 not claim, nor does she submit any evidence, to show that her 7 damages were actually less than $75,000.00 at the time of removal. 8 Thus, her declaration does not clarify that the amount in 9 controversy was below the jurisdictional limit prior to removal. 10 B. Therefore, her Plaintiff does Defendant Meets its Burden to Establish that the Amount in Controversy Exceeds the Jurisdictional Minimum 11 Where a complaint is silent on the amount in controversy, the 12 defendant bears the burden of proof to establish, by a 13 preponderance of the evidence, that the amount in controversy 14 exceeds $75,000.00. Sanchez v. Monumental Life Ins. Co., 102 F.3d 15 398, 404 (9th 1996.) Courts "consider facts presented in the 16 removal petition as well as any 'summary-judgment-type evidence 17 relevant to the amount in controversy at the time of removal.'" 18 Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 19 (9th Cir. 2003) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 20 116 F.3d 373, 377 (9th Cir. 1997)(emphasis added)). 21 Based on the allegations in the Complaint, Defendant found 22 that Plaintiff worked for more than eight hours a workday or more 23 than 40 hours a week. (Notice of Removal at 3.) Based on 24 Plaintiff’s salary, Defendant estimated her approximate average 25 hourly rate to be $43.31 per hour. (Id.) Defendant also estimated 26 that Plaintiff would recover approximately 15 hours of overtime per 27 week based on her previous workers compensation claim. (Id. at 4.) 28 9 1 Defendant concluded that Plaintiff’s estimated damages total 2 $121,274.40 for unpaid overtime and missed meal and rest 3 periods(not including costs or other penalties). (Id. at 4.) 4 Plaintiff never refutes the method of Defendant's calculations, but 5 argues that Defendant ceased to employ her as of December 2012, and 6 that any damages arising from her employment after that date are 7 not encompassed in this lawsuit against this Defendant. (Reply at 8 pg. 6.) This issue, however, is inconsequential. Even accounting 9 for Plaintiffs objections to the inclusion of the 2013 workweeks in 10 the damage calculations, Defendant still found that Plaintiff 11 worked 64 workweeks during the period of June 2011 through December 12 2012. (Id. at pg. 5.) Based on a $43.31 per hour pay rate and her 13 asserted average work weeks per hour (neither of which plaintiff 14 disputes), Defendant estimated the damages to be worth $97,026.12. 15 (Id.) Thus, Defendant’s calculations show an amount in controversy 16 sufficient to invoke federal jurisdiction. 17 Plaintiff submits her post-removal declaration to cap her 18 damages bellow $74,999.00 as "summary judgment type" evidence of 19 the amount in controversy. Plaintiff argues that this is the first 20 and only evidence of the amount in controversy. (Reply at 6.) As 21 discussed above, Plaintiff’s declaration limiting her damages does 22 not suffice as evidence of the value of the damages at the time of 23 removal. The declaration only shows what Plaintiff will claim as 24 damages on the condition that the case is remanded. Plaintiff 25 alleges no further facts and fails to submit any evidence as to 26 value of her damages prior to removal. 27 28 Considering Defendant’s calculations of the estimated value of Plaintiff’s damages, and the evidence that Plaintiff submitted in 10 1 her post-remand papers, including her damages declaration, as 2 "summary judgment type evidence" of the amount in controversy, the 3 court finds, by a preponderance of the evidence, the amount in 4 controversy exceeded the jurisdictional limit at the time of 5 removal. 6 IV. Conclusion 7 For the foregoing reasons, Plaintiff’s post-removal offer to 8 stipulate to limit the amount in controversy does not deprive this 9 court of subject matter jurisdiction. Accordingly, Plaintiff’s 10 motion for remand is DENIED. 11 12 IT IS SO ORDERED. 13 14 15 Dated: July 31, 2013 16 DEAN D. PREGERSON 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28 11
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