Quintana v. Claire's Stores, Inc.
| Decision Date | 22 April 2013 |
| Docket Number | Case No.: 13-0368-PSG |
| Court | U.S. District Court — Northern District of California |
| Parties | MAYRA QUINTANA, et al, Plaintiffs, v. CLAIRE'S STORES, INC., et al, Defendants. |
(Re: Docket No. 15)
Plaintiffs Mayra Quintana, et al ("Plaintiffs") move to remand this action back to Santa Clara County Superior Court. Defendants Claire's Stores, Inc., et al ("Defendants") oppose. The parties appeared for oral argument on April 9, 2013. Having considered the parties' papers and arguments, the court DENIES Plaintiffs' motion.
Plaintiffs originally filed this action in Santa Clara County Superior Court and allege that Defendants violated various California Labor Code provisions by, among other things, failing to record and pay hourly wages, failing to provide required meal and rest breaks, and failing to pay wages upon termination.1 Plaintiffs' claims include claims for penalties under the Private Attorney General Act ("PAGA"). Defendants removed the case to this court pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), and alternatively, on the grounds that diversityjurisdiction exists pursuant to 28 U.S.C. § 1332(a).2 In support of CAFA jurisdiction, Defendants assert that Plaintiffs' claims when aggregated exceed the $5 million damages threshold, that more than 100 potential class members exist, and that there is minimal diversity between the parties.3 Defendants further contend that complete diversity exists because the sole California citizen defendant, Shelley Muzsek, was joined fraudulently for the sole purpose of defeating diversity jurisdiction.4
Plaintiffs move to remand the action back to state court because, they argue, Defendants have not shown with legal certainty that the amount in controversy exceeds $5 million. In their complaint, Plaintiffs seek "damages, restitution penalties, injunctive relief, and attorneys' fees in excess of twenty-five thousand dollars . . . but not to exceed five million dollars."5 They also "reserve the right to amend [their] prayer for relief to seek a different amount."6 As to Muzsek's inclusion as a defendant, Plaintiffs assert that they may raise a cause of action against her under California Labor Code Section 558 for civil penalties arising from unpaid wages, and so she is a proper defendant and an obstacle to complete diversity.7
The removal statute, 28 U.S.C. § 1441, provides in part, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district and divisionembracing the place where such action is pending."8 Section 1332(d) "vests district courts with original jurisdiction of any civil action in which, inter alia, the amount in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and in which the aggregate number of proposed plaintiffs is 100 or greater, and any member of the plaintiff class is a citizen of a state different from any defendant."9 District courts have diversity jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds $75,000, exclusive of interest and costs.10 If at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case that has been removed to federal court, the case must be remanded.11
Upon a motion to remand to state court, the party asserting federal jurisdiction has the burden of proof. "The burden of establishing federal jurisdiction is upon the party seeking removal, and the removal statute is strictly construed against removal jurisdiction."12 "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper."13
Regarding this court's jurisdiction under CAFA, the parties do not dispute the numerosity or minimum diversity elements; only the amount in controversy element is at issue. The partiesfurther dispute Defendants' burden to show that the amount-in-controversy threshold has been met, and so the court begins with a determination of the proper burden of proof.
The complaint determines the burden on the party asserting federal subject matter jurisdiction to show satisfaction of the amount-in-controversy.14 If the complaint alleges damages exceeding the jurisdictional minimum, a presumption arises that the amount in controversy has been satisfied and a party challenging jurisdiction must show with "legal certainty that the claims is actually for less than the jurisdictional minimum."15 If plaintiffs fail to plead a specific amount, proponents of federal jurisdiction "must prove by a preponderance of the evidence that the amount in controversy requirement has been met."16 If plaintiffs seek an amount in damages less than the jurisdictional threshold, "the party seeking removal must prove with legal certainty that CAFA's jurisdictional amount is met."17
Defendants argue that because Plaintiffs did not account for their PAGA claims in the jurisdictional section of the complaint and because they include a reservation of their rights to pursue greater damages, the amount in controversy is ambiguous and therefore the preponderance of evidence standard applies.18 The jurisdiction and venue section of the complaint states:
Plaintiffs allege that the amount in controversy for each class representative, including claims for monetary damages, restitution, penalties, injunctive relief, and attorneys' fees, is less than [$75,000] and that the aggregate amount in controversy for the proposed class action, including monetary damages, restitution, penalties, injunctive relief, and attorneys' fees, is less than [$5,000,000], exclusive of interests and costs. Plaintiffs reserve the rightto seek a larger amount based upon new and different information resulting from investigation and discovery.19
Plaintiffs concede that they did not include any PAGA recovery in their jurisdiction disclaimer, but they assert that when brought as representative actions rather than class actions, PAGA claims are not removable under CAFA.20 Plaintiffs assert that because a representative PAGA claim is not removable under CAFA, they need not include PAGA penalties in their assessment of the amount-in-controversy for jurisdiction. They argue that because they included the necessary class action damages, their statement regarding the amount-in-controversy is sufficiently certain to require review under the stricter "legal certainty" standard articulated in Lowdermilk v. United States Bank National Association.21
In Lowdermilk, the Ninth Circuit considered the removing party's burden when a complaint states a specific amount in damages that is below the jurisdictional threshold.22 The plaintiff in that case alleged that "[t]he aggregate total of the claims pled herein do [sic] exceed five million dollars."23 The Ninth Circuit held that the plaintiff had pleaded a "specific amount in damages" and observed that the removing party had to "not only contradict the plaintiffs own assessment of damages," but also "overcome the presumption against federal jurisdiction."24 The Ninth Circuit ultimately held that "where the plaintiff has pled an amount in controversy less than $5,000,000,the party seeking removal must prove with legal certainty that CAFA's jurisdictional amount is met."25
In Guglielmino v. McKee Foods Corp.,26 which was issued shortly after Lowdermilk, the Ninth Circuit advised that if the amount in damages is ambiguous when considering the entire complaint, a claim that the amount-in-controversy falls below the jurisdictional amount does not require application of the legal certainty standard.27 In Guglielmino, the plaintiffs alleged in their jurisdiction statement that "the sum of such damages and the value of injunctive relief sought by plaintiff in this action is less than $75,000" but claimed in the prayer for relief several remedies, including statutory damages, punitive and exemplary damages, attorneys' fees and costs, payment of back taxes and benefits, and a "notice of the right to rescission and restitution to similarly situated" parties.28 The Ninth Circuit held that because the plaintiffs sought attorneys' fees and back payment that did "not fall comfortably within the realm of damages" and therefore were not included in the plaintiff's damages jurisdiction statement, the complaint was ambiguous as to the amount in controversy.29
Plaintiffs' complaint here more closely aligns with the complaint in Guglielmino because they have failed to include in their assessment of their damages or the amount-in-controversy all of the potential remedies they seek in their complaint. Plaintiffs make no assertion that the language in either their jurisdiction statement or their prayer for relief includes their PAGA claims. They in fact state that not only did they not include their PAGA claims in the requests for relief but that "[b]ecause PAGA is not a class action and cannot be removed under CAFA, Plaintiffs correctlyleave the representative action out of the amount in controversy averment for [their] class action."30 To support this argument, Plaintiffs rely on Ninth Circuit case law holding the representative actions cannot be removed under CAFA.31 But Plaintiffs cite no case law, and the court has not found any, suggesting that representative PAGA claims accompanying class action claims are exempt from the amount-in-controversy calculation. Several district courts in fact have considered PAGA claims in their assessment of the amount in controversy in similar remand motions.32
Guglielmino supports inclusion of the PAGA claims in the amount-in-controversy evaluation. In that case, the Ninth Circuit noted that "because recovery of [back payment of health...
To continue reading
Request your trial