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Gillette v. Peerless Insurance Co.

United States District Court, Ninth Circuit

July 31, 2013

PATRICE GILLETTE, an individual, Plaintiff,
v.
PEERLESS INSURANCE COMPANY, a New Hampshire company qualified to do business in California, Defendant.

ORDER DENYING PLAINTIFF'S MOTION TO REMAND [Dkt. No. 10]

DEAN D. PREGERSON, District Judge.

Presently before the court is Plaintiff's Motion to Remand for Lack of Subject Matter Jurisdiction. Having considered the submissions of the parties, the court denies the motion and adopts the following order.

I. Background

Patrice Gillette ("Plaintiff"), a California resident, is an employee of Peerless Insurance Company ("Defendant"), a New Hampshire company qualified to do business in California. (Complaint at ¶ 4.) In March 2013, Plaintiff filed a complaint in the California Superior Court in Los Angeles County alleging that Defendant failed to pay wages, overtime premiums, and meal and rest break premiums. (Id.) The complaint does not specify the amount in controversy. (Id. at ¶ 2.) Defendant calculated the damages to exceed $75, 000.00. (Notice of Removal at 4.) On May 3, 2013, Defendant timely removed the action to this Court pursuant to 28 U.S.C. §§ 1441(a) and 1446(b) and based on diversity jurisdiction under 28 U.S.C. § 1332(a). (Id.) After removal, Plaintiff offered a declaration limiting her recovery to $74, 999.00, subject to the case being remanded to state court. (Declaration of Patrice Gillette at 3.)[1] Plaintiff seeks to remand under 28 U.S.C. § 1447(c) on the grounds that her offer to cap recovery at $74, 999.00 defeats subject matter jurisdiction and that Defendant miscalculated the amount in controversy (Id.)

II. Legal Standard

Federal courts have removal jurisdiction over suits filed in state court if the federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). There is a strong presumption against removal jurisdiction, and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc. , 980 F.2d 564, 566 (9th Cir. 1992); see Or. Bureau of Labor & Indus. Ex Rel Richardson v. U.S. West Communs., Inc. , 288 F.3d 414, 417 (9th Cir. 2002)(stating that federal courts must "strictly construe a removal statute against removal jurisdiction"). Courts resolve doubts about removability in favor of remand. Goldenberg Family Trust v. Travelers Commercial Ins. Co., CV 11-04312 DDP JEDX, 2011 WL 3648490 (C.D. Cal. Aug. 18, 2011); see also, 28 U.S.C. § 1447(c).

Under 28 U.S.C. § 1441, a court has removal jurisdiction pursuant to 28 U.S.C. § 1332(a) when there is complete diversity of citizenship and the amount in controversy exceeds $75, 000. Where the complaint does not include a particular damages figure, the removing defendant must demonstrate, by a preponderance of the evidence, that the amount in controversy exceeds $75, 000. Sanchez v. Monumental Life Ins. Co. , 102 F.3d 398, 404 (9th Cir.1996); see Gaus , 980 F.2d at 567 (finding that the party seeking removal bears the burden of establishing federal jurisdiction if the complaint leaves the amount in controversy unclear or ambiguous).

A court "cannot base [its] jurisdiction on [a] defendant's speculation and conjecture." Lowdermilk v. U.S. Bank Nat'l Ass'n. , 479 F.3d 994, 1002 (9th Cir.2007) (citing Galt G/S v. JSS Scandinavia , 142 F.3d 1150, 1155-56 (9th Cir.1998)). A removing defendant "may not meet [the] burden by simply reciting some magical incantation' to the effect that the matter in controversy exceeds the sum of $75, 000, ' but instead, must set forth in the removal petition the underlying facts supporting its assertion that the amount in controversy exceeds $75, 000." Id . A court may consider "facts presented in the removal petition as well as any summary-judgment-type evidence relevant to the amount in controversy at the time of removal." Matheson v. Progressive Specialty Ins. Co. , 319 F.3d 1089, 1090 (9th Cir.2003).

III. Analysis

A. Plaintiff's Post-Removal Declaration Does Not Deprive the District Court of Jurisdiction

In St. Paul Mercury Indem. Co. v. Red Cab Co., the Supreme Court interpreted the removal statute to mean that if a "plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, [it will] not deprive the district court of jurisdiction." 303 U.S. 283, 292 (1938). Plaintiff relies on Bailey v. Wal-Mart Stores , 981 F.Supp. 1415, 1416 (N.D. Ala. 1997), to argue that the 1988 Congressional revision of 28 U.S.C. § 1447(c) overturns the longstanding rule articulated in St. Paul Mercury. (Plaintiff's Reply at 4.) Prior to 1988, subsection (c) read:

If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case...

After the 1988 amendment, and currently, subsection (c) reads:

If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, ...

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