Wexler v. United Air Lines, Inc.

• Citation: 496 F.Supp.2d 150
• Decision Date: 31 July 2007
• Docket Number: Civil Action No. 06-01917 (GK).
• Parties: Sara WEXLER, on behalf of herself, and all others similarly situated, Plaintiff, v. UNITED AIR LINES, INC., et al., Defendants.
• Court: U.S. District Court — District of Columbia

496 F.Supp.2d 150

Sara WEXLER, on behalf of herself, and all others similarly situated, Plaintiff, v. UNITED AIR LINES, INC., et al., Defendants.

Civil Action No. 06-01917 (GK).

United States District Court, District of Columbia.

July 31, 2007.

Nat Nicola Polito, Law Offices of Nat N. Polito, PC, Washington, DC, Eric B. Fisher, Laura J. Lefkowitz, Morgenstern Jacobs & Blue, LLC, New York, NY, for Plaintiff.

Edward Smith Scheideman, DLA Piper U.S. LLP, Washington, DC, Lawrence A. Wojcik, Raj N. Shah, DLA Piper U.S. LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION

KESSLER, District Judge.

This is a putative class action, brought by Plaintiff Sara Wexler, on behalf of herself and all others similarly situated, against Defendants United Air Lines, Inc. and UAL Corporation (collectively "UAL").¹ Wexler alleges that UAL's conduct violated the District of Columbia Consumer Protection Procedures Act ("DCCPPA"), D.C.Code § 28-3905 (2006), and constituted fraud, negligence, breach of contract, and unjust enrichment.

Plaintiff originally brought this action in the Superior Court for the District of Columbia. UAL removed the action to this Court pursuant to 28 U.S.C. §§ 1441 and 1446, alleging three independent bases of federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331; (2) diversity jurisdiction under 28 U.S.C. § 1332(a); and (3) diversity jurisdiction under the 2005 Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d).

This matter is before the Court on Plaintiffs Motion to Remand [Dkt. No. 12], pursuant to 28 U.S.C. § 1447(c), and UAL's Motion to Dismiss for Failure to State a Claim, pursuant to Fed.R.Civ.P. 12(b)(6) [Dkt. No. 4]. Upon consideration of the Motions, Oppositions, and Replies, and the entire record herein, and for the reasons stated below, Plaintiffs Motion to Remand is granted, and UAL's Motion to Dismiss is denied as moot.

I. BACKGROUND

On June 19, 2006, Wexler² purchased a non-refundable, round trip fare from UAL.³ She was to depart from Washington, D.C. and arrive in Chicago on July 21, and return to Washington on July 23. Wexler found alternate transport to Chicago, so she declined to use the first leg of her itinerary, without informing UAL. UAL then cancelled the remainder of Wexler's itinerary.

On July 23, Wexler attempted to use her ticket for the return leg from Chicago to Washington, D.C. At the airport, the ticketing agent informed Wexler that her reservation had been cancelled under UAL's policy. The only seats remaining on the flight were in first class. One hour prior to scheduled departure and unaware of the availability of seats on other airlines, Wexler paid $917 for a first class ticket and returned to Washington.

II. LEGAL STANDARD

Removal is appropriate only when the case might have originally been brought in federal court. 28 U.S.C. § 1441(a); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The removing party bears the burden of showing that federal subject matter jurisdiction exists. See Your Girl Friday, LLC v. MGF Holdings, Inc., No. 06-0385, 2006 WL 1028959, at *2, 2006 U.S. Dist. LEXIS 20665, at *7 (D.D.C. Apr. 18, 2006). Any ambiguities regarding the existence of removal jurisdiction must be resolved in favor of remand. Id.; Nwachukwu v. Karl, 223 F.Supp.2d 60, 66 (D.D.C.2002).

UAL argues, relying on legislative history, that CAFA shifts the burden away from the removing party and onto the plaintiff. No circuit has accepted the burden-shifting argument. Morgan v. Gay, 471 F.3d 469, 473 (3d Cir.2006). This Court agrees with the five courts of appeals that have held that the burden remains on the removing party to establish CAFA jurisdiction. See id.; DiTolla v. Doral Dental IPA of N.Y., LLC, 469 F.3d 271, 275 (2d Cir.2006); Miedema v. Maytag Corp., 450 F.3d 1322, 1328 (11th Cir. 2006); Abrego v. Dow Chem. Co., 443 F.3d 676, 686 (9th Cir.2006); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005).

III. ANALYSIS

A. There Is No Federal Question Jurisdiction Under 28 U.S.C. § 1331

The well-pleaded complaint rule states that a federal question must appear on the face of the complaint in order to create federal question jurisdiction pursuant to 28 U.S.C. § 1331. See, e.g., Aetna Health Inc. v. Davila, 542 U.S. 200, 207, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). Here, Plaintiffs Complaint is based on a District of Columbia statute and unspecified state common law. Accordingly, there is no basis for federal question jurisdiction.

UAL, however, argues that the Supreme Court's recent decision in Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005), provides an exception to the well-pleaded complaint rule. Grable involved a plaintiffs quiet title action that was premised on the validity of an IRS seizure of real property and required interpretation of a related federal statute. Grable, 545 U.S. at 310-11, 125 S.Ct. 2363. In finding jurisdiction, the Grable Court relied on the Government's "direct interest in the availability of a federal forum to vindicate its own administrative action" and the "microscopic effect on the federal-state division of labor" of allowing this statutory dispute into federal court. Id. at 315, 125 S.Ct. 2363. Given the nature of its subject matter, it is clear that Grable applies to a very narrow category of cases. Empire Healthchoice Assur., Inc. v. McVeigh, ___ U.S. ___, ___, 126 S.Ct. 2121, 2137, 165 L.Ed.2d 131 (2006).

UAL argues that Plaintiffs breach of contract claim is premised on improper notice of the cancellation policy, which necessarily implicates federal regulations promulgated by the Department of Transportation. The fact that Plaintiffs breach of contract claim may implicate federal regulations does not mean it fits into the narrow Grable category. Instead, this case more closely resembles Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). In Merrell Dow, the plaintiff brought several state common law claims, one of which was a negligence claim based on the violation of a federal statute. Id. at 805, 106 S.Ct. 3229. The Court held that it lacked federal question jurisdiction because "the presence of the federal issue as an element of the state tort is not the kind of adjudication for which jurisdiction would serve congressional purposes and the federal system." Id. at 814, 106 S.Ct. 3229. Merrell Dow remains good law, Grable, 545 U.S. at 316, 125 S.Ct. 2363, and controls here.

In this case, Plaintiff, unlike the plaintiff in Merrell Dow, does not even base her claims on a federal statute. Her cause of action arises from her contract with UAL, not from any federal law. While Department of Transportation regulations may have some tangential relevance to the case, they are neither necessarily raised nor actually disputed by Plaintiff. Furthermore, the strong federal interest present in Grable is absent here.

Therefore, the well-pleaded complaint rule applies, and there is no basis for federal question jurisdiction.

B. There Is No Diversity Jurisdiction Under 28 U.S.C. 1332(a) Because UAL Has Not Met Its Burden of Establishing the $75,000 Amount in Controversy Requirement

28 U.S.C. 1332(a) provides that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000." Plaintiffs original reservation was $283 and her additional first class ticket was $917. Because the combined amount of those two tickets is well under $75,000, UAL relies on three bases for reaching the required amount in controversy: injunctive costs, attorney's fees, and punitive damages.

1. Injunctive Costs

The value of injunctive relief for determining the amount in controversy can be calculated as the cost to the defendant. See Comm. For GI Rights v. Callaway, 518 F.2d 466, 472-73 (D.C.Cir.1975); Tropp v. Western-Southern Life Ins. Co., 381 F.3d 591 (7th Cir.2004) (holding diversity jurisdiction established where defendant's affidavits included a calculation of injunctive compliance costs).

UAL claims that complying with an injunction preventing the enforcement of its current cancellation policy would cost more than $75,000. As support, UAL offers a list of obligations that it would be required to undertake in the event an injunction is granted. Notice of Removal at 6-7. UAL provides no evidentiary support for the cost of each obligation, only a claim that the total cost "is certain" to exceed $75,000. Id. at 7. UAL does not submit supporting declarations or affidavits from its employees, who would undoubtedly be in a position to estimate such costs, nor does it provide any evidence to support its claims. This nonexistent evidentiary showing is insufficient to meet UAL's burden to establish the existence of federal subject matter jurisdiction. See Your Girl Friday, 2006 WL 1028959, AT *2, 2006 U.S. Dist. LEXIS 20665, at *8-9 (holding defendant's speculative contention that reasonable attorney's fees would exceed $25,000 was "inadequate to establish the requisite amount in controversy under the diversity statute.").

Given the well-established principle that ambiguities regarding removal jurisdiction are to be construed in favor of remand, UAL has failed to show that injunctive costs would exceed $75,000.

2. Attorney's Fees

Attorney's fees are generally not included in the amount in controversy, unless provided for by statute or contract. See Walker v. Waller, 267 F.Supp.2d 31, 33 (D.D.C.2003); Srour v. Barnes, 670 F.Supp. 18, 22 (D.D.C.1987).

The DCCPPA provides for "reasonable attorney's fees". D.C.Code § 28-3905(k)(1). Plaintiff concedes, however, that her claim under the DCCPPA is preempted by the Airline Deregulation Act of 1978 ("ADA"). 49 U.S.C. § 41713(b)(1) ("[A] State ... may not enact or enforce a law ... related to a price, route, or...