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Wade Grant, On Behalf of Himself, All v. Capitol Management Services

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


April 11, 2011

WADE GRANT, ON BEHALF OF HIMSELF, ALL
OTHER PERSONS SIMILARLY SITUATED AND THE GENERAL PUBLIC, PLAINTIFF,
v.
CAPITOL MANAGEMENT SERVICES, L.P., DEFENDANT.

The opinion of the court was delivered by: Hayes, Judge:

ORDER OF REMAND

The matter before the Court is the Motion to Remand the Case to State Court filed by Plaintiff. (ECF No. 11).

I. Background

On September 17, 2010, Plaintiff initiated this action by filing a Complaint in California Superior Court for the County of San Diego. (ECF No. 1 at 1). On December 1, 2010, Defendant Capitol Management Services, L.P., filed a Notice of Removal of Action Under Class Action Fairness Act. Id.

A. Allegations of the Complaint

The Complaint asserts three claims: (1) Negligent Violations of the Telephone Consumer Protection Act 47 U.S.C. § 227 et seq.; (2) Knowing and/or Willful Violations of the Telephone Consumer Protection Act 47 U.S.C. § 227 et seq.; and (3) Unlawful, Fraudulent and Unfair Business Acts and Practices in Violation of California Business & Professions Code § 17200 et seq.

Plaintiff Wade Grant is a California citizen. Defendant Capitol Management Services, L.P. is a citizen of New York.

Plaintiff brings the Complaint on behalf of himself and "all other similarly situated [individuals] defined as all persons within California who received any telephone call from Defendant to said person's cellular telephone through the use of any automated telephone dialing system or an artificial or prerecorded voice, within the four years prior to filing of this Complaint." Id. at 8.

The Complaint seeks damages in the amount of $500 for each negligent violation of the Telephone Consumer Protection Act and $1,500 for each knowing or willful violation of the Telephone Consumer Protection Act. Id. at 13-14. The Complaint alleges that "[n]o federal diversity jurisdiction exists between Plaintiff and Defendant because Plaintiff's claim is less than $75,000 exclusive of attorney's' [fees] and interest." Id. at 7.

Plaintiff states that he "does not, as yet, know the exact size of the Class." Id. at 8. Plaintiff alleges that based on the nature of Defendant business, "Plaintiff believes that there are numerous Class members ...." Id. at 8-9.

B. Removal

Defendant states in his Notice of Removal that the removal is pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. §§ 1332(d)(2), 1332(d)(5) and 1453(a). Id. at 1. Defendant alleges that "(1) Plaintiff's counsel has advised Defendant's counsel that the combined claims exceed $5,000,000.00; (2) there are at least 100 class members; and (3) class members are a citizen of a different state than Defendant." Id. at 2.

C. Motion to Remand

Plaintiff contends that this case should be remanded because there is a presumption against removal jurisdiction and Defendant has not satisfied its burden. Plaintiff contends that Defendant has not submitted sufficient evidence to establish the requisite amount in controversy and the requisite number of members in the class.

Defendant contends that the amount in controversy exceeds $5,000,000 because Plaintiff seeks statutory damages for each phone call in the amount of at least $500 and Capitol Management Services, L.P. has made over 10,000 calls to cell phones during the relevant time period. Defendant also contends that the proposed class exceeds 100 individuals because Capitol Management Services, L.P. has attempted to collect from over 1,000 individuals in California during the relevant time period.

Defendant submits the Declaration of Stephen Florczak, executive vice president of information technology at Capitol Management Services, L.P., who states that Defendant "employs computerized debt collection assistance and tracking software to manage its collections." (ECF No. 12-2 at 2). Florczak states in his Declaration that Defendant "trains its collectors to input information into the computer database each time an action is taken on an account, or a communication is attempted or occurs." Id. Florczak states in his Declaration that he performed searches of the systems and databases to determine the answers to the following questions: "First, how many timed did [Capitol Management Services, L.P.] dial numbers ostensibly assigned to cell phones in California between the dates of September 17, 2006 and September 17, 2010? [and] Second, how many California Debtors did [Capitol Management Services, L.P.] attempt to collect from over the past four years?" (ECF No. 12-2 at 1-2). Florczak states in his Declaration that "[b]etween September 17, 2006 and September 17, 2010, [Capitol Management Services, L.P.] dialed numbers believed to have been associated with cell phones in California more than 10,000 times." Id. at 3. Florczak states in his Declaration that "[b]etween September 17, 2006 and September 17, 2010, [Capitol Management Services, L.P.] dialed over 1,000 phone numbers identified with a unique debtor residing in California." Id.; (ECF No. 14 at 2).

D. Discussion

"A civil action in state court may be removed to federal district court if the district court had 'original jurisdiction' over the matter." Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir. 2007) (quoting 28 U.S.C. § 1441(a)). The Class Action Fairness Act ("CAFA") vests district courts with "original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000.00, exclusive of interest and costs," and the aggregate number of proposed plaintiffs is 100 or greater, and any member of the plaintiff class is a citizen of a state different from any defendant. 28 U.S.C. § 1332(d). "'[U]nder CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction.'" Lowdermilk, 479 F.3d at 997 (quoting Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006) (per curiam)); Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 (9th Cir. 2007).

In determining whether the amount-in-controversy requirement is satisfied, the appropriate procedure is as follows:

The district court may consider whether it is 'facially apparent' from the complaint that the jurisdictional amount is in controversy. If not, the court may consider facts in the removal petition, and may require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal.

Abrego Abrego, 443 F.3d at 690 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997); (citing Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005)). When the plaintiff fails to plead a specific amount in damages and it is not otherwise facially apparent that the jurisdictional amount is in controversy, "the defendant seeking removal 'must prove by a preponderance of the evidence that the amount in controversy requirement has been met.'" Lowdermilk, 479 F.3d at 998 (quoting Abrego Abrego, 443 F.3d at 683). "[W]hen a state-court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional threshold, the 'party seeking removal must prove with legal certainty that [Class Action Fairness Act's] jurisdictional amount is met.'" Guglielmino, 506 F.3d at 699 (quoting Lowdermilk, 479 F.3d at1000).

In this case, the amount in controversy is not facially apparent from the Complaint. However, the Complaint does not affirmatively allege that the amount in controversy for the proposed class is less than the Class Action Fairness Act jurisdictional threshold of $5,000,000.00. Thus, the issues before the Court is whether Defendant has satisfied its burden of proving by a preponderance of the evidence that the amount in controversy exceeds $5,000,000.00 and whether Defendant has satisfied its burden of proving by a preponderance of the evidence that the putative class includes 100 or more persons.

The proposed class is comprised of individuals who received any call from Defendant to their "cellular telephone through the use of any automated telephone dialing system or an artificial or prerecorded voice...." (ECF No. 1 at 8). With regard to the amount in controversy, Defendant has submitted evidence that Capitol Management Services, L.P. trains "its collectors" to input information into the "computerized debt collection assistance and tracking software" whenever "a communication is attempted or occurs." (ECF No. 12-2 at 2). While Defendant has submitted evidence that Capitol Management Services, L.P. has dialed over 10,000 phone numbers assigned to cell phones, Defendant has not shown that those calls were made using an automated telephone dialing system or an artificial or prerecorded voice. (ECF No. 1 at 8). With regard to the size of the class, Defendant has submitted evidence that Capitol Management Services, L.P. has dialed over 1,000 phone numbers identified with unique debtors in California. However, Defendant has not shown that 100 or more of those unique debtors were contacted on their cell phone using an automated telephone dialing system or an artificial or prerecorded voice. After considering the allegations of the Complaint and the evidence submitted by Defendant, the Court concludes that Defendant has failed to establish by a preponderance of the evidence that plaintiff class members seek greater than $5,000,000.00 in this case and that the total number of plaintiff class members equals 100 or more individuals.

E. Request for Attorney's Fees and Costs

Plaintiff seeks an award of attorney's fees and costs in the amount of $12,235.00. (ECF No. 11-1 at 11). Plaintiff contends that the actual fees and costs incurred in preparing the motion to remand is $20,860.00. (ECF No. 11-2 at 2). Defendant contends that there is an objectively reasonable basis for removal; thus, attorney's fees and costs should not be awarded. 28 U.S.C. § 1447 (c) provides: "An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." "[T]he standard for awarding fees should turn on the reasonableness of the removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005) ("Absent unusual circumstances, courts may award attorney's fees under §1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal."). The Court does not find that Defendant Capitol Management Services, L.P. lacked an objectively reasonable basis for seeking removal.

F. Conclusion

IT IS HEREBY ORDERED that the Motion to Remand the Case to State Court filed by Plaintiff (ECF No. 11) is GRANTED. Pursuant to 28 U.S.C. § 1447(c), this action is REMANDED to the California Superior Court for the County of San Diego, where it was originally filed and assigned Case No.3702010-00100521-CU-NP-CTL. Plaintiff's request for attorney's fees and costs is DENIED.

United States District Judge WILLIAM Q. HAYES

20110411

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