Walker v. Motricity Inc.

• Decision Date: 19 June 2009
• Docket Number: No. C 09-01316 MHP.,C 09-01316 MHP.
• Citation: Walker v. Motricity Inc., 627 F.Supp.2d 1137 (N.D. Cal. 2009)
• Parties: Camellia WALKER, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. MOTRICITY INC., a Delaware corporation, Defendant.
• Court: U.S. District Court — Northern District of California

627 F.Supp.2d 1137

Camellia WALKER, individually and on behalf of a class of similarly situated individuals, Plaintiff, v. MOTRICITY INC., a Delaware corporation, Defendant.

No. C 09-01316 MHP.

United States District Court, N.D. California.

June 19, 2009.

Alan Himmelfarb, Kamberedelson, LLC, Vernon, CA, Michael J. Aschenbrener, Michael James Aschenbrener, Kamberedelson, LLC, Chicago, IL, for Plaintiff.

David F. Gross, Stephen Andrew Chiari, DLA Piper LLP, San Francisco, CA, Russell

Brent Morgan, Scott Kendall Haynes, Bradley Arant Boult Cummings, LLP, Nashville, TN, for Defendant.

MEMORANDUM & ORDER

Re: Plaintiff's Motion to Remand

MARILYN HALL PATEL, District Judge.

Plaintiff Camellia Walker, individually and on behalf of others similarly situated, brought suit against defendant Motricity, Inc. ("Motricity") in the Superior Court of California for the County of Alameda. Motricity removed the action to the Northern District of California. This court granted Walker's motion to remand the action back to state court on the basis that Motricity failed to show a sufficient amount in controversy to establish federal jurisdiction. Fifteen days later, Motricity again removed the action to federal court, standing by its assertion that it had satisfied the requirements for removal and subject matter jurisdiction. Now before the court is Walker's second motion to remand the action, again on grounds that Motricity has failed to establish a sufficient amount in controversy. The court has considered the parties' arguments fully, and for the reasons set forth below, rules as follows.

BACKGROUND

Because the facts of this case have been summarized in the court's prior memorandum and order granting plaintiff's motion to remand, see Docket No. 37, only a brief summary is necessary here. Unless otherwise indicated, the facts are taken from plaintiffs complaint. See Docket No. 1, Exh. A ("Compl.").

Walker is a resident of Alameda County, California. Motricity is a Delaware corporation with its headquarters and principal place of business in the State of Washington. Motricity does business throughout the State of California, where it allegedly operates mobile transaction networks to help companies develop, deliver and bill for "mobile content" services to compatible mobile devices in California and the nation. Mobile content services for cellular phones include such services such as customized ring tones, premium text messages, and sports score reports. Walker alleges that Motricity is able to reach and bill millions of wireless subscribers nationwide and has registered thousands of transactions and processed thousands of dollars in California over recent years.

Walker alleges that in or about 2007, she was charged by Motricity for unwanted mobile content services on her cellular telephone bill in the form of premium text messages. Walker alleges that at no time did she authorize the transactions and at no time did Motricity verify her purported authorization of the charges. Walker alleges that the protections normally present in consumer transactions, such as signatures and private credit card numbers, are not present in transmissions concerning mobile content services because all that is needed to charge a consumer for such products is the consumer's cellular telephone number. Walker alleges that Motricity has therefore engaged in an unlawful practice of charging cellular telephone customers for products and services the customers have not authorized. Walker alleges that Motricity has not provided a full refund of the unauthorized charges, nor implemented any adequate procedure to ensure that such unauthorized charges would not appear in future billing periods. Walker alleges that Motricity knowingly maintains a system that allows for erroneous charges to retain its respective shares of the improper collections.

On July 3, 2008, Walker brought this action on behalf of herself and a class of similarly situated wireless subscribers in California who have suffered losses as a result of incurring unauthorized charges on their cellular telephone bills from or on behalf of Motricity. She asserts the proposed class consists of thousands of individuals and other entities. Walker brings claims for restitution/unjust enrichment, tortious interference with a contract, violation of the California Legal Remedies Act under California Civil Code, section 1770, violation of California's Unfair Competition Law under California Business and Professional Code section 17200, violation of California's Computer Crime Law under California Penal Code, section 502, an accounting, and trespass to chattels, on behalf of herself and the class. Walker seeks an injunction to protect her interests and those of, the purported class from Motricity's allegedly unfair and deceptive billing practices. She also seeks economic, monetary, actual, consequential and compensatory damages, exemplary damages if Motricity's conduct is proven willful, attorneys' fees and costs and pre- and postjudgment interest on behalf of herself and the class.

On July 31, 2008, Motricity removed this action pursuant to the Class Action Fairness Act of 2005 ("CAFA"). As a basis for federal court jurisdiction, Motricity claimed that jurisdiction was appropriate pursuant to CAFA because the class action consisted of more than 100 members, Walker is a citizen of California, and Motricity is a corporation incorporated in Delaware and has its principal place of business in Washington. It further claims that the amount in controversy exceeds $5 million. See Notice of Removal, Docket No. 1, at 2-4; see also 28 U.S.C. §§ 1332, 1453.

On August 27, 2008, Walker moved to remand the action back to state court. After full briefing and a hearing, on March 11, 2009, this court granted the motion based on Motricity's failure to show, by a preponderance of the evidence, that the amount in controversy exceeded $5 million pursuant to CAFA. Motricity again removed the action to federal court just fifteen days later, relying on a declaration by Walker's counsel Jay Edelson in another, unrelated action in which he stated that 20 per cent of that aggregator's revenue came from unauthorized charges. Motricity is now asserting that, by using the same ratio in conjunction with the $15 million in revenue it generated from mobile content service transactions in California, along with any potential punitive damages arising therefrom and reasonable attorneys' fees, it meets the amount in controversy requirement, and this court accordingly has original jurisdiction over the action.

LEGAL STANDARD

Removal of a civil action from state court to federal court is permitted if the federal court has "original jurisdiction" over the matter. See 28 U.S.C. § 1441(a). CAFA vests district courts with "original jurisdiction of any civil action in which ... the amount in controversy exceeds the sum or value of $5,000,000" and in which the aggregate number of proposed plaintiffs is 100 or greater, any member of the plaintiff class is a citizen of a state different from the defendant, and the primary defendants are not States, State officials or other governmental entities. Lowdermilk v. United States Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir.2007) (quoting 28 U.S.C. § 1332(d)). In any class action, the claims of the individual class members shall be aggregated to determine whether the matter in controversy is satisfied. 28 U.S.C. § 1332(d)(6).

The removing party bears the burden of establishing that removal is proper. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir.1988); see also Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 685 (9th Cir.2006) (per curiam) ("under CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction."). The Ninth Circuit has identified different burdens of proof for establishing removal jurisdiction in the CAFA context, depending on what has been pled in the complaint. If it is facially apparent from the complaint that the jurisdictional amount is in controversy, then the court need not look beyond the "four corners of the complaint" to determine whether the jurisdictional amount is satisfied. Lowdermilk, 479 F.3d at 998. In such cases, the court applies the "legal certainty" standard. Id. If the complaint alleges specific damages in excess of the jurisdictional minimum, then the amount in controversy is presumptively satisfied unless it appears to a `legal certainty' that the claim is actually for less than the jurisdictional minimum, whereas if the specific damages are less than the statutory minimum, it must be shown to a legal certainty that the amount in controversy exceeds that minimum for removal. Id.

If the jurisdictional amount in controversy is not facially apparent from the complaint, i.e., if the plaintiff has not sought a specific amount in damages or if the amount sought is unclear, then the court must look beyond the facts of the complaint and apply the preponderance of the evidence standard. See id.; Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007). Accordingly, in order to defeat a motion to remand, the removing defendant must prove by a "preponderance of the evidence" that the amount in controversy requirement has been met. Sanchez, 102 F.3d at 404 ("the defendant must provide evidence establishing that it is `more likely than not' that the amount in controversy exceeds that amount."); Abrego Abrego, 443 F.3d at 683 (applying the preponderance standard to complaints filed under CAFA that do not specify a particular amount in controversy).

In determining whether the jurisdictional requirement has been met in such cases, the court may consider evidence submitted subsequent to the notice of removal, including evidence submitted in conjunction with an opposition to a motion to remand. Cohn v. Petsmart, Inc., 281...