Stokes v. Skyfineusa, LLC ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 ADAM STOKES, on behalf of No. 2:23-cv-00065 WBS DB himself and others similarly 13 situated, 14 Plaintiff, MEMORANDUM AND ORDER RE: PLAINTIFF’S MOTION TO REMAND 15 v. 16 SKYFINEUSA, LLC, a Utah Limited Liability Company, and DOES 1- 17 100, inclusive, 18 Defendants. 19 20 ----oo0oo---- 21 Plaintiff Adam Stokes initiated this putative consumer 22 class action against defendant SkyFineUSA, LLC, for violation of 23 the Consumer Contract Awareness Act of 1990, fraud and deceit, 24 negligent misrepresentation, and unfair business practices. (See 25 Compl. (Docket No. 1-2).) Defendant removed the action to this 26 court from the Sacramento County Superior Court based on 27 diversity. (Docket No. 1.) 28 A scheduling conference in this matter was set for 1 April 10, 2023. Prior to the hearing, the court ordered the 2 parties to submit briefing addressing the amount in controversy 3 jurisdictional requirement. (Docket No. 14.) Upon review of the 4 briefing and following oral argument, the court now remands the 5 case on its own motion. 6 “Under 28 U.S.C. § 1441, a defendant may remove an 7 action filed in state court to federal court if the federal court 8 would have original subject matter jurisdiction over the action.” 9 Moore-Thomas v. Ala. Airlines, Inc., 553 F.3d 1241, 1243 (9th 10 Cir. 2009). 11 Federal courts have original jurisdiction over cases 12 where complete diversity exists between the parties and the 13 amount in controversy exceeds $75,000, exclusive of interest and 14 costs. 28 U.S.C. § 1332(a). “If at any time before final 15 judgment it appears that the district court lacks subject matter 16 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447; see 17 also Smith v. Mylan Inc., 761 F.3d 1042, 1044 (9th Cir. 2014) 18 (sua sponte remand is permissible where district court lacks 19 subject matter jurisdiction). 20 There is a “strong presumption” against exercising 21 removal jurisdiction when the amount in controversy is in 22 question, and “[f]ederal jurisdiction must be rejected if there 23 is any doubt as to the right of removal in the first instance.” 24 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal 25 citations omitted). The amount in controversy includes “all 26 relief claimed at the time of removal to which the plaintiff 27 would be entitled if [he] prevails,” Chavez. v. JPMorgan Chase & 28 Co., 888 F.3d 413, 418 (9th Cir. 2018), which may include 1 “damages (compensatory, punitive, or otherwise) . . . as well as 2 attorneys’ fees under fee shifting statutes,” Gonzalez v. CarMax 3 Auto Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016). 4 “In assessing the amount in controversy, [courts] may 5 consider allegations in the complaint and in the notice of 6 removal, as well as summary-judgment-type evidence relevant to 7 the amount in controversy.” Chavez, 888 F.3d at 416. When a 8 plaintiff’s state court complaint does not specify an amount of 9 damages, the removing defendant bears the burden of establishing, 10 by a preponderance of the evidence, that the amount in 11 controversy exceeds $75,000. Sanchez v. Monumental Life Ins. 12 Co., 102 F.3d 398, 404 (9th Cir. 1996). “Under this burden, the 13 defendant must provide evidence establishing that it is more 14 likely than not that the amount in controversy exceeds that 15 amount.” Id. (internal quotation marks omitted). A defendant 16 “need include only a plausible allegation that the amount in 17 controversy exceeds the jurisdictional threshold.” Dart Cherokee 18 Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). However, 19 conclusory allegations as to the amount in controversy are 20 insufficient. See Corral v. Select Portfolio Servicing, Inc., 21 878 F.3d 770, 774 (9th Cir. 2017). 22 Plaintiff disputes that the requisite amount in 23 controversy has been met. (Pl.’s Brief (Docket No. 15).) 24 Defendant argues that the amount in controversy is satisfied 25 based on the value of plaintiff’s claims and plaintiff’s 26 anticipated attorneys’ fees. (Def.’s Brief (Docket No. 16).) 27 The court will address each in turn. 28 1 I. Value of Plaintiff’s Claims 2 “[C]laims of class members can be aggregated to meet 3 the jurisdictional amount requirement only when they ‘unite to 4 enforce a single title or right in which they have a common and 5 undivided interest.’” Urbino v. Orkin Servs. of Cal., Inc., 726 6 F.3d 1118, 1122 (9th Cir. 2013) (quoting Snyder v. Harris, 394 7 U.S. 332, 335 (1969)). “Only where . . . the defendant owes an 8 obligation to the group of plaintiffs as a group and not to the 9 individuals severally, will a common and undivided interest 10 exist.” Id. (internal quotation marks omitted). Representative 11 actions alleging violations of California labor law do not 12 involve a common and undivided interest. See id. at 1122. 13 Accordingly, the court will consider only the claims of the named 14 plaintiff here when determining the amount in controversy for 15 purposes of diversity jurisdiction. See id. 16 Plaintiff alleges that defendant improperly charged him 17 approximately $5,400 in fees. (Compl. ¶ 19.) Although plaintiff 18 also seeks punitive damages, defendant neither proposes an 19 estimate of punitive damages nor cites any pertinent authority. 20 Accordingly, the court will assume for purposes of this inquiry 21 that the value of plaintiff’s claims is $5,400. See Greene v. 22 Harley-Davidson, Inc., 965 F.3d 767, 772 (9th Cir. 2020) (a 23 defendant relying on punitive damages to satisfy the amount in 24 controversy requirement must show that it is “reasonably possible 25 that it may be liable for the proffered punitive damages amount,” 26 for example by “cit[ing] a case based on the same or a similar 27 statute in which the jury or court awarded punitive damages based 28 on the punitive-compensatory damages ratio relied upon by the 1 defendant”). To satisfy the $75,000 amount in controversy 2 requirement, defendant must therefore establish that plaintiff’s 3 attorneys’ fees are likely to exceed $69,600. 4 II. Attorneys’ Fees 5 “[W]here an underlying statute authorizes an award of 6 attorneys’ fees, either with mandatory or discretionary language, 7 such fees may be included in the amount in controversy,” Shoner 8 v. Carrier Corp., 30 F.4th 1144, 1148 (9th Cir. 2022) (citing 9 Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 10 1998)), including attorneys’ fees incurred after the time of 11 removal, Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 12 785, 794 (9th Cir. 2018). If plaintiff prevails on his class 13 claims, he will be entitled to attorneys’ fees as a matter of 14 right. See Cal. Civ. Proc. Code § 1021.5. Accordingly, the 15 court may consider attorneys’ fees when assessing the amount in 16 controversy here. 17 In Gibson v. Chrysler Corporation, the Ninth Circuit 18 held that an entire class’s anticipated attorneys’ fees could not 19 be allocated to the named plaintiff for purposes of satisfying 20 the amount in controversy. See 261 F.3d 927, 941 (9th Cir. 21 2001), holding modified on other grounds by Exxon Mobil Corp. v. 22 Allapattah Servs., Inc., 545 U.S. 546 (2005). It based this 23 conclusion on the language of the applicable fee-shifting 24 statute, which provides that a court may award attorneys’ fees 25 “to a successful party” rather than to a named or representative 26 party. See id. at 942-43 (quoting Cal. Civ. Proc. Code § 1021.5) 27 (emphasis in original). 28 Here, plaintiffs seek attorneys’ fees under the same 1 fee-shifting statute at issue in Gibson. (See Compl. at 11.) 2 The court will therefore consider only plaintiff’s pro rata share 3 of anticipated attorneys’ fees. See Canela v. Costco Wholesale 4 Corporation, 971 F.3d 845, 850 (9th Cir. 2020) (explaining that 5 the Ninth Circuit “consider[s] a successful party’s pro rata 6 share of attorneys’ fees in assessing whether her claim meets the 7 jurisdictional threshold”) (citing Gibson, 261 F.3d at 942). To 8 satisfy the amount in controversy requirement, defendant must 9 establish that plaintiff’s pro rata share of the attorneys’ fees 10 is likely to exceed $69,600. 11 In cases involving a “common fund” that is distributed 12 to class members, district courts can award attorneys’ fees based 13 on either a percentage of the total fund or a lodestar 14 calculation that incorporates reasonable valuations of the hours 15 expended and the hourly rate. Hanlon v. Chrysler Corp., 150 F.3d 16 1011, 1029 (9th Cir. 1998). “The reasonableness of attorneys’ 17 fees, when such fees are unascertainable on the face of the 18 complaint, can be calculated by looking to other attorneys’ fees 19 awards in similar cases.” Garnett v. ADT LLC, 74 F. Supp. 3d 20 1332, 1337 (E.D. Cal. 2015) (Shubb, J.) (citing Garcia, 2014 WL 21 2468344, at *5; Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th 22 Cir. 2005)). In determining what constitutes a reasonable 23 attorneys’ fee, district courts may rely on “their own knowledge 24 of customary rates and their experience concerning reasonable and 25 proper fees.” Oth Ingram v. Oroudjian, 647 F.3d 925, 928 (9th 26 Cir. 2011). 27 The complaint states that there are putative class 28 members “in excess of thousands of individuals.” (Compl. ¶ 6.) 1 For purposes of this inquiry, the court conservatively assumes 2 that there are 1,000 putative class members and allocates the 3 attorneys’ fees equally between them. Based on these 4 assumptions, plaintiff’s counsel would need to be awarded more 5 than $69,600,000 as a “reasonable” attorneys’ fee award.1 See 6 Buchanan v. Aramark Campus, LLC, No. 19-cv-00384 VKD, 2019 WL 7 3302164, at *7 (N.D. Cal. July 23, 2019) (applying similar 8 calculation in determining total requisite attorneys’ fees based 9 on plaintiff’s pro rata share). Defendant has provided no reason 10 to believe that attorneys’ fees in this action would reach such 11 an absurdly high amount.2 12 Accordingly, the court finds that defendant has not 13 proven by a preponderance of the evidence that the $75,000 amount 14 in controversy threshold is satisfied and has therefore failed to 15 overcome the presumption in favor of remand. 16 IT IS THEREFORE ORDERED that this case be, and the same 17 hereby is, REMANDED to the Superior Court of the State of 18 /// 19 /// 20 1 This $69,600,000 figure results from $69,600 in attorneys’ fees multiplied by 1,000 putative class members. 21 22 2 Even if the court were to consider attorneys’ fees as if the action were to proceed with a single plaintiff, defendant 23 has not provided any evidence to establish that attorneys’ fees would reach $69,600 for a case involving damages stemming from 24 $5,400 in allegedly overcharged fees. Further, plaintiff seeks attorneys’ fees under 25 California Code of Civil Procedure § 1021.5, which deals with actions enforcing a right that affects the public interest. If 26 this case does not receive class treatment, plaintiff will likely 27 not be entitled to attorneys’ fees under that statute. See Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 565 (2004), as 28 modified (Jan. 12, 2005). ee EI II IG) OE IE ID OE IIE OIE IIE I OS IID III US ISELIN IOS EE 1 California, in and for the County of Sacramento. 2 bitten th. (bh. 4 Dated: April 11, 2023 WILLIAMB.SHUBB .}.}©}©§=©—©)—.—” 5 UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28