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Sandy Bell and Martin Gama, ) Individually and On Behalf of v. Home Depot U.S.A.

April 25, 2013

SANDY BELL AND MARTIN GAMA, ) INDIVIDUALLY AND ON BEHALF OF OTHER MEMBERS OF THE GENERAL PUBLIC SIMILARLY SITUATED AND AS AGGRIEVED EMPLOYEES PURSUANT TO THE PRIVATE ATTORNEYS GENERAL ACT ("PAGA"),
PLAINTIFFS,
v.
HOME DEPOT U.S.A., INC., A DELAWARE CORPORATION; JOHN BROOKS, AN INDIVIDUAL; AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. Senior United States District Judge

REMAND ORDER

Plaintiffs seek an order remanding this putative class action to the Superior Court of the State of California from which it was removed, arguing that removal jurisdiction, which is based on the Class Action Fairness Act of 2005 ("CAFA"), is lacking since the removing party, Defendant Home Depot U.S.A., Inc. ("Home Depot"), has not shown CAFA's $5 million amount-in-controversy requirement is met. Defendants oppose the motion, arguing, "[g]iven the various [state law] wage and hour claims in the [C]omplaint, [P]laintiffs' allegations that such violations were systemic, and the data provided by Home Depot here and in its removal papers, it is clear that plaintiffs' claims place more than $5 million in controversy." (Defs.' Opp'n 1:18-21, ECF No. 15.)

I. JURISDICTION UNDER CAFA

"As amended by CAFA, 28 U.S.C. § 1332(d) vests district courts with 'original jurisdiction of any civil action in which [the amount] in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs,' and in which 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." Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir. 2007) (quoting 28 U.S.C. § 1332(d)). "[U]nder CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction." Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006) (per curiam).

A. Legal Standard

The parties dispute the legal standard that governs the amount in controversy determination. Plaintiffs argue Home Depot must establish the amount in controversy exceeds $5 million to a legal certainty; Defendants counter the preponderance-of-the-evidence standard applies. Under CAFA, "where the plaintiff has pled an amount in controversy less than $5,000,000, the party seeking removal must prove with legal certainty that CAFA's jurisdictional amount is met." Lowdermilk, 479 F.3d at 1000. However, if a plaintiff's "complaint is unclear [regarding] 'a total amount in controversy,' the proper burden of proof . . . is proof by a preponderance of the evidence." Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007).

Plaintiffs' complaint includes the following allegations: The monetary damages and restitution sought by Plaintiffs exceed the minimal jurisdiction limits of the Superior Court and will be established according to proof at trial. Plaintiffs allege that the amount in controversy for each class representative, including claims for monetary damages, restitution, penalties, injunctive relief, and a pro rata share of attorneys fees, is less than seventy-five thousand dollars ($75,000) and that the aggregate amount in controversy for the proposed class action, including monetary damages, restitution, penalties, injunctive relief, and attorneys' fees, is less than five million dollars ($5,000,000), exclusive of interest and costs. Plaintiffs reserve the right to seek a larger amount based upon new and different information resulting from investigation and discovery. (Compl. ¶ 1, ECF No. 2-3 (emphasis added).)

Defendants argue:

Notwithstanding [that Plaintiffs allege] that damages are less than $5 million, [P]laintiffs expressly reserve the right to seek more than $5 million in damages and refuse to stipulate that they will not seek greater damages. Accordingly, the amount of damages sought in the [C]omplaint is ambiguous, and as a result, the preponderance of the evidence standard applies.

(Opp'n 1:6-13.)

Plaintiffs counter that they "'may plead conservatively to secure a state forum,'" and "'absent evidence of bad faith, the Court is obligated to honor that representation.'" (Mot. to Remand 3:10--13, ECF No. 9 (alteration omitted) (quoting Lowdermilk, 473 F.3d at 1003).) Further, Plaintiffs argue "the 'reservation of rights' language does not affect [Home Depot's] burden." (Id. at 3:13--14 (citing Jones v. ADT Sec. Servs., Inc., No. CV 11-7750 PSG (JCGx), 2012 WL 12744, at *2 (C.D. Cal. Jan. 3, 2012)).)

Plaintiff[s'] reservation of right[s] does not create an uncertainty about the amount in controversy; it does no more than state a right that Plaintiff[s] already possess[]. Because Plaintiff[s] ha[ve] specifically alleged that [their] case does not meet the diversity jurisdiction threshold required for CAFA jurisdiction, [Home Depot] must establish with legal certainty that the amount in controversy exceeds the statutory minimum of $5,000,000.

Velasquez v. HMS Host USA, Inc., No. 2:12-CV-02312-MCE-CKD, 2012 WL 6049608, at *7 (E.D. Cal. Dec. 5, 2012); see also Jones v. ADT Sec. Servs., Inc., No. CV 11-7750 PSG (JCGx), 2012 WL 12744, at *2 (C.D. Cal. Jan. 3, 2012) ("On its face, the Complaint alleges the amounts in controversy are less than the statutory minimums for [CAFA] jurisdiction. . . . Defendant argues that Plaintiffs' reservation of rights . . . creates an ambiguity. The Court disagrees.")

"The 'legal certainty' standard sets a high bar for the party seeking removal, but it is not insurmountable." Lowdermilk, 479 F.3d at 1000. "The standard 'legal certainty' . . . . does not mean the [removing party] must prove [plaintiffs'] case; rather, [that party] must produce enough evidence to allow a court 'to estimate with certainty the actual amount in controversy.'" Campbell, 471 F. App'x at 647 (second alteration in original) (quoting Lowdermilk, 479 F.3d at 1001). Assertions and assumptions in the removing party's calculation of the amount in controversy must be supported by evidence. See Lowdermilk, 479 F.3d at 1001 ("Defendant assumes that all class members would be entitled to the maximum damages . . . , ...


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