Brenda Ruffins v. Richman Property Services, Inc. ( 2024 )

O 1 JS-6 2 3 4 5 6 7 8 United States District Court 9 Central District of California 10 11 BRENDA RUFFINS et al., Case № 2:24-cv-08288-ODW (SSCx) 12 Plaintiffs, ORDER REMANDING CASE AND 13 v. DENYING DEFENDANT’S MOTION TO DISMISS [9] 14 RICHMAN PROPERTY SERVICES, INC. et al., 15 Defendants. 16 17 18 I. INTRODUCTION 19 On July 31, 2024, Plaintiffs Brenda Ruffins and Danielle Gromme initiated this 20 action against Defendants Richman Property Services, Inc. (“Richman”) and DOES 1 21 through 10 for violation of California’s Investigative Consumer Reporting Agencies 22 Act (“ICRAA”) in the Superior Court of California. (Notice Removal (“NOR”) Ex. A 23 (“Complaint” or “Compl.”), ECF Nos. 1, 1-1.) On September 26, 2024, Richman 24 removed this action to federal court based on alleged diversity jurisdiction pursuant to 25 28 U.S.C. § 1332(a). (NOR ¶ 11.) On October 15, 2024, the Court ordered the parties 26 to show cause why this action should not be remanded for lack of subject-matter 27 jurisdiction. (Order Show Cause (“OSC”), ECF No 17.) On October 22, 2024, the 28 parties responded. (Def.’s Resp. OSC, ECF No. 18; Pls.’ Resp. OSC, ECF No. 19.) 1 For the reasons below, the Court REMANDS this action to Ventura County Superior 2 Court. 3 II. BACKGROUND 4 In 2023 and 2024, Plaintiffs completed and submitted rental applications 5 (“Application”) to apply for apartment units in a building operated by Richman. 6 (Compl. ¶¶ 7, 14.) The Application notified applicants that Richman may screen for 7 criminal background and previous evictions. (Id. ¶ 15.) Richman did not provide a 8 process for Plaintiffs to indicate that they wished to receive a copy of any report 9 prepared in connection with the Applications, and it did not provide Plaintiffs with “a 10 consent form or disclosure with a box to check” in connection with such reports. (Id. 11 ¶ 20.) Richman later processed Plaintiffs’ Applications and requested investigative 12 consumer reports about each Plaintiff, obtaining at least one such report about each 13 Plaintiff. (Id. ¶¶ 18–19.) Richman did not provide Plaintiffs a copy of any such 14 reports. (Id. ¶ 21.) Plaintiffs became residents of an apartment building Richman 15 operates. (See Decl. Theresa Eastwood Davis ISO Def.’s Resp. OSC (“Davis Decl.”) 16 ¶¶ 4–5, ECF No. 18-2.) 17 On August 23, 2024, Plaintiffs filed this lawsuit in the Superior Court of the 18 State of California, County of Ventura. (Compl.) In their Complaint, Plaintiffs assert 19 two causes of action for violation of the ICRAA, and one cause of action seeking a 20 judicial declaration that Plaintiffs’ Applications and annual re-certifications violate the 21 ICRAA and are “therefore illegal and wholly void.” (Id. ¶¶ 24–44.) As relief, 22 Plaintiffs request (1) general, compensatory, and punitive damages; (2) statutory 23 damages; (3) interest; (4) attorneys’ fees; (5) equitable relief and restitution; 24 (6) declaratory judgment that Plaintiffs’ Application and annual re-certification 25 violates the ICRAA; (6) an injunction enjoining Richman from violating the ICRAA 26 or refusing to rent to Plaintiffs; and (7) a writ of mandate and injunction requiring 27 Richman to, among other things, comply with the ICRAA by including in its rental 28 1 application an option for prospective applicants to receive a copy of any investigative 2 consumer report and, if requested, providing the reports themselves. (Id., Prayer.)1 3 Richman removed this action to federal court, alleging diversity jurisdiction 4 under 28 U.S.C. § 1332(a). (NOR ¶ 11.) On October 22, 2024, the Court sua sponte 5 ordered the parties to show cause why this action should not be remanded for lack of 6 subject-matter jurisdiction, specifically with respect to the amount in controversy. 7 (OSC 2.) Richman opposes remand, while Plaintiffs support it. (Def.’s Resp. OSC; 8 Pls.’ Resp. OSC.) Richman also moves to dismiss this case. (Mot. Dismiss, ECF 9 No. 9.)2 10 III. LEGAL STANDARD 11 Federal courts are courts of limited jurisdiction and possess only that 12 jurisdiction as authorized by the Constitution and federal statute. Kokkonen v. 13 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under 28 U.S.C. § 1441(a), 14 a party may remove a civil action brought in a state court to a district court only if the 15 plaintiff could have originally filed the action in federal court. Federal district courts 16 have original jurisdiction where an action arises under federal law, or where each 17 plaintiff’s citizenship is diverse from each defendant’s citizenship (i.e., diversity is 18 “complete”), and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331, 19 1332(a). 20 There is a strong presumption that a court is without jurisdiction until 21 affirmatively proven otherwise. Fifty Assocs. v. Prudential Ins. Co. of Am., 446 F.2d 22 1187, 1190 (9th Cir. 1970); see Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) 23 1 Richman “notes the presence on the Superior Court docket of an amended filing by Plaintiffs, but 24 this purported amended complaint was never served and is therefore not effective.” (Def.’s OSC 25 Resp. 8.) Richman explains that the amended complaint it characterizes as “inoperative” “limit[s] the total amount of recovery, including statutory damages, attorneys’ fees and costs, and [the] cost of 26 injunctive relief not to exceed $74,999.” (Id. at 9 n.4.) Neither party has filed this purported amended complaint on the Court’s docket, nor has either party argued that the Complaint, which 27 Defendant attached to the NOR, is inoperative. Therefore, for purposes of this Order, the Court 28 considers whether the Complaint filed on the docket provides a basis for this Court’s jurisdiction. 2 As of the date of this Order, the briefing on Richman’s motion to dismiss remains ongoing. 1 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal 2 in the first instance.”). When an action is removed from state court, the removing 3 party bears the burden of demonstrating that removal is proper. Corral v. Select 4 Portfolio Servicing, Inc., 878 F.3d 770, 773 (9th Cir. 2017). Removal is strictly 5 construed, and any doubt as to removal is to be resolved in favor of remand. Id. 6 IV. DISCUSSION 7 The Court addresses each of the five categories of damages that Richman 8 asserts contributes to an amount in controversy exceeding $75,000: (1) statutory 9 damages; (2) attorneys’ fees; (3) declaratory relief; (4) injunctive relief; and (5) other 10 damages. (See Def.’s Resp. OSC.) 11 A. Statutory Damages 12 The ICRAA, requires, among other things, any person requesting an 13 “investigative consumer report” to “[p]rovide the consumer a means by which the 14 consumer may indicate on a written form, by means of a box to check, that the 15 consumer wishes to receive a copy” of such report. Cal. Civ. Code § 1786.16(b). The 16 ICRAA provides for a minimum of $10,000 in damages for violations of the statute. 17 Id. § 1786.50(a)(1). In their Complaint, Plaintiffs claim they “are each entitled to 18 statutory damages in the amount of $10,000 per investigative report” and that 19 Richman obtained “at least one” such report about each Plaintiff. (Compl. ¶ 31.) For 20 purposes of the jurisdictional analysis, Plaintiffs’ claims are not aggregated. See, e.g., 21 Completo v. Richman Prop. Servs., Inc., No. 2:24-cv-04233-ODW (SSCx), 2024 WL 22 4492044, at *2–4 (C.D. Cal. Oct. 15, 2024); Calloway v. Richman Prop. Servs., Inc., 23 No. 2:24-cv-04232-ODW (SSCx), 2024 WL 4492045, at *2–4 (C.D. Cal. Oct. 15, 24 2024). Because each Plaintiff seeks $10,000 of statutory damages per investigative 25 consumer report, and each Plaintiff alleges that Defendant “obtained at least one” such 26 reports per Plaintiff, (Compl. ¶ 33), Plaintiffs’ claim for statutory damages supports 27 only $10,000 amount in controversy. 28 1 B. Attorneys’ Fees 2 Under the ICRAA, a plaintiff may recover “the costs of the action together 3 with reasonable attorney’s fees as determined by the court.” Cal. Civ. Code 4 § 1786.50(a)(2). The Ninth Circuit has held that attorneys’ fees awarded under fee- 5 shifting statutes can be considered in assessing the jurisdictional threshold. Gonzales 6 v. CarMax Auto Superstores, LLC, 840 F.3d 644, 649 (9th Cir. 2016). However, “a 7 removing defendant” must “prove that the amount in controversy (including attorneys’ 8 fees) exceeds the jurisdictional threshold by a preponderance of the evidence,” and 9 must “make this showing with summary-judgment-type evidence.” Fritsch v. Swift 10 Transp. Co. of Ariz., LLC, 899 F.3d 785, 795 (9th Cir. 2018). As such, a “district court 11 may reject the defendant’s attempts to include future attorneys’ fees in the amount in 12 controversy if the defendant fails to satisfy this burden of proof.” Id. Although a 13 defendant can “meet its burden to establish a reasonable estimate of attorneys’ fees by 14 identifying awards in other cases, those cases must be similar enough to the case at 15 hand that the court can conclude that it is more likely than not that the plaintiff may 16 incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, No. 21-cv-857 TWR 17 (AGS), 2021 WL 4352340, at *6 (S.D. Cal. Sept. 24, 2021). 18 Here, Richman fails to meet its burden with respect to attorneys’ fees. Richman 19 cites a handful of cases to support its contention that attorneys’ fees should be 20 included in the amount in controversy calculation. (See Def.’s Resp. OSC 6–8.) First, 21 Richman cites Elmi v. Related Mgmt. Co., L.P., No. G061379, 2023 WL 6210756 22 (Cal. Ct. App. Sept. 25, 2023), as an example of an ICRAA case where a plaintiff 23 sought more than $300,000 in attorneys’ fees. (See Def.’s Resp. OSC 6–7.) However, 24 there, the appellate court did not award $300,000 in attorneys’ fees, but instead 25 affirmed the trial court’s $19,440 award. Elmi, 2023 WL 6210756, at 1, 4. 26 Second, Richman cites Smith v. Abode Cmtys., LLC, No. 20STCV11372, 27 2022 WL 17752962 (Cal. Super. Ct. Oct. 11, 2022), in which a court awarded 28 Plaintiffs’ counsel $147,690 in an ICRAA case it won after a jury trial. (See Def.’s 1 Resp. OSC 7.) Despite that case concerning an ICRAA claim litigated by Plaintiffs’ 2 counsel, Richman makes no effort to explain how that case is comparable to this one 3 such that the Court “can conclude that it is more likely than not that the plaintiff may 4 incur a similar fee award.” Kaplan, 2021 WL 4352340, at *6. Moreover, attorneys’ 5 fees may be less here than the typical case—including Smith—because Plaintiffs’ 6 counsel is representing numerous Plaintiffs in nearly identical cases against Richman 7 where the parties have filed nearly identical motions.3 This duplication of work would 8 more likely than not lead to a reduced attorneys’ fees award on a per-Plaintiff basis.4 9 In an apparent effort to show duplication of work would not lead to a reduced 10 attorneys’ fees award, Richman cites two “duplicative ICRAA cases” Plaintiffs’ 11 counsel recently litigated. (See Req. Judicial Notice ISO Def.’s Resp. OSC (“RJN”) 12 Ex. 1 (“Lopez”), Ex. 2 (“Woods”) ECF Nos. 18-6 to 18-8.)5 Neither case supports 13 Richman. In Woods, a California court awarded $34,133 in attorneys’ fees, but the 14 court did not address any arguments about reduced fees related to duplication of work. 15 (See Woods.) And in Lopez, a California court awarded Plaintiffs’ $54,158.50 in an 16 ICRAA case won after summary adjudication. (See Lopez.) But, notably, the court 17 “disagree[d] that the time-entries identified by [defendant] are based on duplicative 18 work.” (Lopez 4.) Equally important, even if the Court were to credit these fee 19 amounts, neither number would raise the amount in controversy to exceed $75,000. 20 21 3 See, e.g., Mot. J. Pleadings, Completo v. Richman Prop. Servs., No. 2:24-cv-04233-ODW (SSCx), 22 ECF No. 18; Mot. J. Pleadings, Calloway v. Richman Prop. Servs., Inc., No. 2:24-cv-04232-ODW (SSCx), ECF No. 22; Mot. Dismiss, Harville v. Richman Prop. Servs., Inc., No. 2:24-cv-07832- 23 ODW (SSCx), ECF No. 11; Mot. Dismiss, Alvarado v. Richman Prop. Servs., Inc., No. 8:24-cv- 02008-ODW (SSCx), ECF No. 10; Mot. Dismiss, Lee v. Richman Prop. Servs., Inc., No. 2:24-cv- 24 08286-ODW (SSCx), ECF No. 11; Mot. Dismiss, Murph v. Richman Prop. Servs., Inc., No. 2:24-cv- 25 08545-ODW (SSCx), ECF No. 10; Mot. Dismiss, Hernandez v. Richman Prop. Servs., Inc., No. 2:24-cv-08242-ODW (SSCx), ECF No. 9. 26 4 For the same reason, a declaration from one of Richman’s attorneys stating that “[s]ignificant fees have been incurred so far” and “based on [his] experience, it is unlikely this case will settle quickly, 27 (Decl. Benjamin E. Strauss ¶ 2, ECF No. 18-1), does not assist Richman in meeting its burden. 28 5 The Court GRANTS Richman’s request for judicial notice of courts’ rulings on fee motions in other ICRAA cases over Plaintiffs’ objection. (See RJN; Pls. Obj. RJN, ECF No. 19-1.) 1 Because the removal statute is strictly construed, and all doubts are resolved in 2 favor of remand, the Court finds that Richman fails to submit adequate evidence 3 substantiating any attorneys’ fees. Accordingly, the Court does not consider attorneys’ 4 fees in its amount in controversy calculation. 5 C. Other Damages 6 Richman references the alleged punitive damages. (Def.’s Resp. OSC 5–6, 7 10.) Richman’s bare assertion that the Court should consider these damages “provides 8 the Court with no factual or legal basis by which to determine the likelihood” of such 9 an award in this case. Banuelos v. Colonial Life & Acc. Ins. Co., No. 2:11-cv-08955- 10 JHN (AGRx), 2011 WL 6106518, at *2 (C.D. Cal. Dec. 8, 2011); Dressler v. Hartford 11 Fin. Servs. Grp., Inc., No. 2:14-cv-02134-MMM (MANx), 2014 WL 12560796, at *7 12 (C.D. Cal. June 19, 2014) (“The mere fact that a plaintiff seeks punitive damages, 13 however, is not sufficient, standing alone, to establish that the amount in controversy 14 exceeds the jurisdictional threshold.”). Therefore, inclusion of these damages “in the 15 amount in controversy would be improper.” Hulse v. Bethesda Lutheran Cmtys., Inc., 16 No. 5:18-cv-00262-FMO (KKx), 2018 WL 1033223, at *3 (C.D. Cal. Feb. 23, 2018). 17 For the same reasons, the Court cannot consider the other purported monetary 18 damages, including compensatory, general, emotional distress damages, and invasion 19 of privacy damages. (See Def.’s Resp. OSC 4, 10.) 20 D. Injunctive Relief 21 Because Richman only references injunctive relief in passing, (id. at 10), the 22 Court cannot ascribe any value to this relief for purposes of the jurisdictional analysis. 23 E. Declaratory Relief 24 Richman contends that the cost of complying with Plaintiffs’ requested 25 declaratory relief satisfies the amount in controversy. (See id. at 9–10.) “In actions 26 seeking declaratory or injunctive relief, it is well established that the amount in 27 controversy is measured by the value of the object of the litigation.” Corral, 878 F.3d 28 at 775; accord Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 347 (1977). 1 The “object of the litigation” in this case is a declaration that rental applications and 2 annual re-certifications are void. (See Compl. ¶ 39, Prayer ¶¶ 7–8). Richman asserts 3 that declaratory relief, in conjunction with equitable relief and restitution, could cost it 4 between $17,184 and $31,956 for Plaintiffs (the rent due throughout Plaintiffs’ 5 respective leases). (Def.’s Resp. OSC 10; see Davis Decl. ¶¶ 4–5.) The Court cannot 6 credit this amount because the rental agreement is not the “object of the litigation.” 7 Plaintiffs seek a declaration that their “Rental Application and the annual 8 re-certification . . . violate the ICRAA.” (Compl., Prayer ¶ 8.) Separately in the 9 Complaint—but not the Prayer for Relief—Plaintiffs seek a declaration that these 10 applications “are illegal and wholly void.” (Compl. ¶ 43.) Even crediting this 11 requested relief, nowhere in the Complaint do Plaintiffs request a declaration that their 12 rental agreements are void. (See generally Compl.) Richman has not shown how 13 voiding the rental application, but not the rental agreement, would cost it any money 14 or lead to voidance of the rental agreements themselves. Richman’s unsworn 15 assertion that “[t]hese applications are a condition precedent to the leases,” (Def.’s 16 Resp. OSC 10), does not alter this finding. 17 Therefore, for purposes of the jurisdictional analysis, Richman has proven 18 $10,000 in controversy. Even assuming some amount in controversy for attorneys’ 19 fees, injunctive and declaratory relief, and other damages, the amount in controversy 20 is well below the $75,000 threshold required for diversity jurisdiction. See 28 U.S.C. 21 § 1332(a). 22 23 24 25 26 27 28 1 Vv. CONCLUSION 2 For the foregoing reasons, the Court REMANDS this case to the Superior 3 || Court of California, County of Ventura, 800 South Victoria Avenue, Ventura, California, 93009, Case No. 2024CUNP028017. Consequently, the Court DENIES 5 || Richman’s Motion to Dismiss, (ECF No. 9), as moot. 6 7 IT IS SO ORDERED. 8 9 October 29, 2024 Se 10 Ae i Of a ai 2 OTIS D. IGHT, I 3 UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28