Liou v. Organifi, LLC ( 2020 )

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 GLENN LIOU, Case No.: 20-cv-1077-CAB-DEB 9 Plaintiff, ORDER DENYING MOTION TO 10 v. REMAND 11 ORGANIFI, LLC et al., [Doc. No. 4] 12 Defendants. 13 14 15 This matter is before the Court on Plaintiff’s Motion to Remand this action to San 16 Diego County Superior Court. Based upon the record, including the notice of removal 17 and the briefs and declarations supporting and opposing the motion, the motion is denied. 18 I. Background 19 On August 30, 2019, Plaintiff Glenn Liou filed this putative class action in San 20 Diego County Superior Court on behalf of himself and “[a]ll persons who have purchased” 21 Organifi’s Green Juice product (“the Product”). [Doc. No. 4-1, p. 7 at 16.]1 The complaint 22 purported to assert only state law claims against Defendants. Defendants filed a demurrer 23 in state court, and instead of opposing the demurrer, Plaintiff filed the operative first 24 amended complaint (“FAC”). Defendants filed a demurrer to the FAC in Superior Court 25 on February 14, 2020. [Id.] 26 27 28 1 Because of delays related to the COVID-19 pandemic, the demurrer to the FAC was 2 not heard in Superior Court before Defendant filed a notice of removal on June 12, 2020. 3 [Id., p.6 at 1.] Plaintiff now moves for remand pursuant to 28 U.S.C. § 1447(c) on the 4 ground that removal was untimely because the notice of removal was filed more than thirty 5 days after the FAC was filed on January 6, 2020. [Id., p. 12 at 8-10.] 6 II. Discussion 7 Defendants removed this case under 28 U.S.C. § 1446 asserting jurisdiction 8 pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). “Federal 9 jurisdiction under CAFA has three elements: (1) there must be minimal diversity of 10 citizenship between the parties, (2) the proposed class must have at least 100 members, 11 and (3) the amount in controversy must ‘exceed[] the sum or value of $5,000,000.’” 12 Kuxhausen v. BMW Fin. Servs., NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013) (citing 28 13 U.S.C. § 1332(d)). As for the timing of a notice of removal, section 1446: 14 identifies two thirty-day periods for removing a case. The first thirty-day 15 removal period is triggered if the case stated by the initial pleading is removeable on its face. The second thirty-day removal period is triggered if 16 the initial pleading does not indicate that the case is removable, and the 17 defendant receives a copy of an amended pleading, motion, order or other papers from which removability may first be ascertained. 18 19 Id. (internal quotations and ellipses omitted). “[U]ntimely removal is a procedural defect 20 and not jurisdictional . . ..” Maniar v. F.D.I.C., 979 F.2d 782, 784 (9th Cir. 1992). Plaintiff 21 does not dispute the existence of subject matter jurisdiction under CAFA. Plaintiff’s sole 22 argument for remand is that the existence of CAFA jurisdiction could be ascertained from 23 the face of the FAC, making Defendants’ removal untimely. 24 Neither party disputes that the existence of a putative class in excess of 100 25 members was ascertainable from the FAC. Furthermore, diversity was sufficiently 26 established by the FAC because Plaintiff defined the class as “[all] persons who have 27 purchased the Products in the past four years other than for purposes of resale or 28 distribution.” [Doc. No. 4-1, p. 7 at 16.] The Ninth Circuit has permitted broad class 1 definitions to establish diversity. See Broadway Grill, Inc. v. Visa Inc., 856 F.3d 1274, 2 1276 (9th Cir. 2017) (“The complaint described the class as ‘all California individuals, 3 businesses and other entities who accepted Visa-branded cards in California since January 4 1, 2004’…The district court correctly denied the motion to remand because the class, on 5 its face, included many non-citizens of California.”). Based on the Plaintiff’s broad class 6 definition and CAFA’s minimal diversity requirement, which is met when “any member 7 of a class of plaintiffs is a citizen of a state different from any defendant,” diversity was 8 ascertainable on the face of the FAC. Id. at 1277 (internal quotations omitted). 9 Having determined that two of the three requirements for CAFA jurisdiction were 10 ascertainable from the FAC, the only remaining issue is whether the amount in controversy 11 was ascertainable as well. As discussed below, because it was not ascertainable from 12 either the FAC or any other document produced in this litigation, neither of the thirty-day 13 periods set forth in § 1446 were triggered. Therefore, removal was timely. 14 Removability “under § 1446(b) is determined through examination of the four 15 corners of the applicable pleadings, not through subjective knowledge or a duty to make 16 further inquiry.” Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). 17 Defendants “need not make extrapolations or engage in guesswork; yet the statute ‘requires 18 a defendant to apply a reasonable amount of intelligence in ascertaining removability.’” 19 Kuxhausen, 707 F.3d at 1140 (quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 20 206 (2d Cir. 2001)). Thus, for example, if a complaint provides dollar values sufficient for 21 the amount in controversy to be calculated using simple arithmetic, and that calculation 22 results in an amount in excess of the jurisdictional minimum, the requisite amount in 23 controversy is ascertainable from the face of the complaint. Id. However, a defendant is 24 “not obligated to supply information which [the plaintiff] had omitted.” Id. at 1141. 25 “[E]ven if a defendant could have discovered grounds for removability through 26 investigation, it does not lose the right to remove because it did not conduct such an 27 investigation and then file a notice of removal within thirty days of receiving the 28 1 indeterminate document.” Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 2 (9th Cir. 2013). 3 Plaintiff argues that Organifi did not use a “reasonable amount of intelligence” to 4 ascertain that more than $5,000,000 was in controversy based on the FAC. However, none 5 of the allegations in the FAC indicate that this jurisdictional minimum was satisfied. 6 Plaintiff claims that his allegation that Organifi’s annual revenues have been between $18– 7 50 million put Defendants on notice that the amount in controversy exceeded $5 million. 8 But considering that Organifi sells an array of products, its total revenues do not reveal 9 sufficient information about its sales of the Product at issue in this lawsuit to ascertain the 10 class’ potential damages. 11 Indeed, even Plaintiff’s efforts to calculate the amount in controversy from 12 allegations in the FAC (1) that the alleged the “number of class members is likely in the 13 tens of thousands,” and (2) that a one-month supply of the Product costs $70, yields a total 14 of only $1.4 million.2 [Doc. No. 4-1, p.7 at 18.] Plaintiff then contends that Defendants 15 could have applied a 2:1 punitive damages multiplier and added 25% for attorneys fees to 16 raise the total matter in controversy over $5,000,000. Yet, Plaintiff’s arguments for the 17 amount of punitive damages and attorney’s fees are based not on allegations in the FAC 18 but on caselaw indicating that plaintiffs in similar cases had used similar ratios. [Doc. No. 19 4-1, p. 15 at 6-9.] Had the FAC expressly alleged that Plaintiff sought punitive damages 20 of at least twice the amount of compensatory damages along with attorney’s fees of 25% 21 of the total of compensatory and punitive damages, Plaintiff’s position would be stronger. 22 The FAC does not include such allegations, however, and Defendants are “not obligated to 23 supply information which [the plaintiff] omitted.” Kuxhausen, 707 F.3d at 1141. 24 Accordingly, even accepting Plaintiff’s argument that Defendants could have ascertained 25 26 27 2 Using the Kuxhausen court’s reasoning that “‘hundreds’ by definition, means at least 200,” Plaintiff argues that “tens of thousands” sufficiently establishes a minimum of 20,000 class members. $70 x 20,000 28 1 |} that $1.4 million in compensatory damages was in controversy from the four corners of the 2 || FAC, that amount is well below that jurisdictional threshold. 3 Finally, Plaintiff's argument that Defendants must show by a preponderance of the 4 || evidence that they first ascertained removability based on their investigation within thirty 5 || days of the date of removal is misguided. When Defendants discovered through their own 6 investigation that the requirements for jurisdiction under CAFA were satisfied is irrelevant 7 ||to whether their removal was timely because timeliness of removal “under § 1446(b) is 8 ||determined through examination of the four corners of the applicable pleadings, not 9 ||through subjective knowledge.” Harris, 425 F.3d at 694. As such, “[i]f plaintiffs think 10 || that their action may be removable and...that the defendant might delay filing a notice of 11 ||removal until a strategically advantageous moment” plaintiffs have an incentive to make 12 ||removability clearly ascertainable. Roth, 720 F.3d at 1126. Because no pleading or other 13 || paper from this lawsuit indicated that this case was removable at the time the notice of 14 ||removal was filed, neither thirty-day removal period from § 1446 was triggered. As a 15 ||result, Defendants’ removal was timely regardless of when they discovered the facts 16 || sufficient to determine that the jurisdictional requirements of CAFA are satisfied in this 17 || case. 18 II. Conclusion 19 Because the existence of federal jurisdiction over this lawsuit was not apparent on 20 ||the face of any pleading or other paper provided by Plaintiff in connection with this 21 litigation, neither thirty-day deadline for Defendants to file a notice of removal was 22 ||triggered. Accordingly, Defendants’ removal was not untimely under 28 U.S.C. § 1446. 23 || Plaintiffs motion to remand is therefore DENIED. 24 It is SO ORDERED. 25 ||Dated: August 6, 2020 € 26 Hon. Cathy Ann Bencivengo 27 United States District Judge 28