Richard Valenzuela v. Hopdoddy Burger Bar, Inc. ( 2020 )

CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 20-9037 FMO (KSx) Date December 18, 2020 Title Richard Valenzuela v. Hopdoddy Burger Bar, Inc., et al. Present: The Honorable Fernando M. Olguin, United States District Judge Vanessa Figueroa None None Deputy Clerk Court Reporter / Recorder Tape No. Attorney Present for Plaintiff(s): Attorney Present for Defendant(s): None Present None Present Proceedings: (In Chambers) Order Remanding Action On August 31, 2020, plaintiff Richard Valenzuela (“plaintiff”) filed a Complaint in the Los Angeles County Superior Court against Hopdoddy Burger Bar, Inc. (“Hopdoddy”) and Margarita Pleasant (“Pleasant”) (collectively, “defendants”), asserting claims related to his employment. (See Dkt. 1, Notice of Removal (“NOR”) at ¶ 1; Dkt. 1-1, Complaint). On October 1, 2020, Hopdoddy removed the action on diversity jurisdiction grounds pursuant to 28 U.S.C. §§ 1332 and 1441. (See Dkt. 1, NOR at ¶ 5). Having reviewed the pleadings, the court hereby remands this action to state court for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c). In general, “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 or the defendants, to the district court[.]” 28 U.S.C. § 1441(a). A removing defendant bears the burden of establishing that removal is proper. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam) (“The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.”) (internal quotation marks omitted); Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per curiam) (noting the “longstanding, near- canonical rule that the burden on removal rests with the removing defendant”). If there is any doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts in favor of remanding the action to state court.1 See Gaus, 980 F.2d at 566 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.”). Indeed, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c); see Kelton Arms Condo. Owners Ass’n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003) (“Subject matter jurisdiction may not be waived, and, indeed, we have held that the district court must remand if it lacks jurisdiction.”); 1 An “antiremoval presumption” does not exist in cases removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). See Dart Cherokee Basin Operating Co., LLC CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 20-9037 FMO (KSx) Date December 18, 2020 Title Richard Valenzuela v. Hopdoddy Burger Bar, Inc., et al. Washington v. United Parcel Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district court may remand an action where the court finds that it lacks subject matter jurisdiction “either by motion or sua sponte”). The court’s review of the NOR and the attached state court Complaint makes clear that this court does not have subject matter jurisdiction over the instant matter. In other words, plaintiff could not have originally brought this action in federal court, as plaintiff does not competently allege facts supplying diversity jurisdiction.2 Therefore, removal was improper. See 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987) (“Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.”). When federal subject matter jurisdiction is predicated on diversity of citizenship, see 28 U.S.C. § 1332(a), complete diversity must exist between the opposing parties, see Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 472 (1996) (stating that the diversity jurisdiction statute “applies only to cases in which the citizenship of each plaintiff is diverse from the citizenship of each defendant”), and the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332(a).3 With respect to the amount in controversy, defendant bears the burden of proving by a preponderance of the evidence that the amount in controversy meets the jurisdictional threshold. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam) (“Where it is not facially evident from the complaint that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold. Where doubt regarding the right to removal exists, a case should be remanded to state court.”) (footnote omitted). Here, there is no basis for diversity jurisdiction because the amount in controversy does not appear to exceed the diversity jurisdiction threshold of $75,000. See 28 U.S.C. § 1332. As an initial matter, the amount of damages plaintiffs seek cannot be determined from the Complaint, as the Complaint does not set forth a specific amount. (See, generally, Dkt. 1-1, Complaint). Hopdoddy contends that the amount in controversy exceeds $75,000 based “on the nature of Plaintiff’s allegations, the extent and number of claims asserted, and the relief sought[.]” (Dkt. 1, NOR at ¶ 15). However, Hopdoddy proffers no evidence that might help the court determine whether plaintiff’s claims would fulfill the amount in controversy requirement. (See, 2 Hopdoddy seeks only to invoke the court’s diversity jurisdiction. (See, generally, Dkt. 1, NOR). 3 In relevant part, 28 U.S.C. § 1332(a) provides that a district court has diversity jurisdiction CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 20-9037 FMO (KSx) Date December 18, 2020 Title Richard Valenzuela v. Hopdoddy Burger Bar, Inc., et al. generally, id.). Hopdoddy merely cites to plaintiff’s requested forms of relief as proof, ipso facto, that the amount plaintiff seeks would meet the amount in controversy requirement. (See id.). Such an unsubstantiated assertion, untethered to any facts or evidence, cannot satisfy the amount in controversy requirement of § 1332(a). See Gaus, 980 F.2d at 567 (remanding for lack of diversity jurisdiction where defendant “offered no facts whatsoever . . . [to] overcome[ ] the strong presumption against removal jurisdiction, [and did not] satisf[y] [defendant’s] burden of setting forth . . . the underlying facts supporting its assertion that the amount in controversy exceeds [$75,000].”) (internal quotation marks omitted) (emphasis in original). Thus, Hopdoddy has failed to show that the amount in controversy exceeds $75,000. With respect to diversity of the parties, plaintiff appears to be a citizen of California, (see Dkt. 1, NOR at ¶ 9), and Hopdoddy is a citizen of Texas and Delaware. (See id. at ¶ 10). However, defendant Pleasant also appears to be a citizen of California. (See id. at ¶ 7). Hopdoddy asserts that Pleasant is a sham defendant, and therefore her citizenship should be disregarded for purposes of diversity jurisdiction. (See id. at ¶¶ 6-8). “If a plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the well-settled rules of the state, the joinder is fraudulent and the defendant’s presence in the lawsuit is ignored for purposes of determining diversity.” United Comput. Sys., Inc. v. AT & T Corp., 298 F.3d 756, 761 (9th Cir. 2002) (internal quotation marks omitted); see Allen v. Boeing Co., 784 F.3d 625, 634 (9th Cir. 2015) (“[J]oinder is fraudulent when a plaintiff’s failure to state a cause of action against the resident defendant is obvious according to the applicable state law.”). Defendant must show by “clear and convincing evidence” that the plaintiff does not have a colorable claim against the alleged sham defendant. See Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007) (“Fraudulent joinder must be proven by clear and convincing evidence.”); Mireles v. Wells Fargo Bank, N.A., 845 F.Supp.2d 1034, 1063 (C.D. Cal. 2012) (“Demonstrating fraudulent joinder” requires showing that “after all disputed questions of fact and all ambiguities . . . are resolved in the plaintiff’s favor, the plaintiff could not possibly recover against the party whose joinder is questioned.”) (emphasis in original). Indeed, “[a] defendant invoking federal court diversity jurisdiction on the basis of fraudulent joinder bears a heavy burden since there is a general presumption against [finding] fraudulent joinder.” Grancare, LLC v. Thrower ex rel. Mills, 889 F.3d 543, 548 (9th Cir. 2018) (internal quotation marks omitted). The court finds that Hopdoddy has failed to meet its “heavy burden” of showing by clear and convincing evidence that plaintiff does not have colorable claims against Pleasant. It is not enough to claim that plaintiff has failed to state a claim against the alleged sham defendant. In other words, even assuming all of plaintiff’s claims against Pleasant were deficiently pled, there exists the possibility that plaintiff could salvage one or more of his claims through amendment of the operative complaint. In short, the court is unable to conclude that Pleasant is a sham defendant. See, e.g., Chau-Barlow v. Provident Life & Accident Ins. Co., 2016 WL 5921061, *2 CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 20-9037 FMO (KSx) Date December 18, 2020 Title Richard Valenzuela v. Hopdoddy Burger Bar, Inc., et al. demurrer as to all causes of action without leave to amend.”); Vasquez v. Bank of Am., N.A., 2015 WL 794545, *4 (C.D. Cal. 2015) (finding defendants had not met the “heavy burden of persuasion to show to a near certainty that joinder was fraudulent” because plaintiff could amend complaint to state at least one valid claim) (internal quotation marks omitted); Padilla v. AT & T Corp., 697 F.Supp.2d 1156, 1159 (C.D. Cal. 2009) (“Even if Plaintiff did not plead facts sufficient to state a claim against [an alleged sham defendant], Defendants have not established that Plaintiff could not amend her pleadings and ultimately recover against [that sham defendant.]”). In sum, given that any doubt regarding the existence of subject matter jurisdiction must be resolved in favor of remanding the action, see Gaus, 980 F.2d at 566 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.”), the court is not persuaded, under the circumstances here, that Hopdoddy has met its burden of proving by a preponderance of the evidence that the amount in controversy meets the jurisdictional threshold, see Matheson, 319 F.3d at 1090 (“Where it is not facially evident from the complaint that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold. Where doubt regarding the right to removal exists, a case should be remanded to state court.”) (footnote omitted); Valdez, 372 F.3d at 1117 (same), or that complete diversity of the parties exists. Accordingly, there is no basis for diversity jurisdiction, and the court lacks subject matter jurisdiction over this matter. This order is not intended for publication. Nor is it intended to be included in or submitted to any online service such as Westlaw or Lexis. CONCLUSION Based on the foregoing, IT IS ORDERED that: 1. The above-captioned action shall be remanded to the Superior Court of the State of California for the County of Los Angeles, 111 N. Hill Street, Los Angeles, CA 90012, for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c). 2. The Clerk shall send a certified copy of this Order to the state court. 3. Any pending motion is denied as moot. 00 : 00