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Stelzer v. Carmax Auto Superstores California, LLC

United States District Court, S.D. California

July 24, 2014

CYNTHIA STELZER, Plaintiff,
v.
CARMAX AUTO SUPERSTORES CALIFORNIA, LLC, Defendant.

ORDER TO SHOW CAUSE RE: AMOUNT IN CONTROVERSY EXCEEDED $75, 000 AT TIME OF REMOVAL

CYNTHIA BASHANT, District Judge.

On August 1, 2013, Defendant Carmax Auto Superstores California, LLC removed this case from state court pursuant to 28 U.S.C. § 1332. On the merits, it is likely that Plaintiff Cynthia Stelzer's Amended Complaint would be dismissed for the same reasons similar complaints have been dismissed in other cases and for failure to comply with the court's order granting Defendant's motion to dismiss. ECF 19; See, e.g., Chulick-Perez v. Carmax Auto Superstores California, LLC, 2:13-CV-02329-TLN, 2014 WL 2154479 (E.D. Cal. May 22, 2014).

However, this Court cannot reach the merits of the claim because the amount in controversy does not reach the statutory minimum of $75, 000, required for diversity jurisdiction under 28 U.S.C. § 1332.

The Court must reevaluate the previous decision (ECF 18) to deny remand in light of newly revealed evidence that Defendant contemplated and subsequently did repurchase the vehicle in question, significantly reducing the potential amount in controversy.

I. LEGAL STANDARD

A defendant can remove any action filed in state court over which federal courts have original jurisdiction. 28 U.S.C. 1441(a). That said, the removal statute is strictly construed against removal, and "[t]he strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. The propriety of removal turns on whether the case could have originally been filed in federal court, Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163 (1997), and the Court's analysis must focus on the pleadings "as of the time the complaint is filed and removal is effected." Strotek Corp. v. Air Transport Ass'n of America, 300 F.3d 1129, 1131 (9th Cir. 2002); see also Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998).

II. DISCUSSION

Stelzer previously contested diversity jurisdiction. ECF 12. At the time, the facts supported federal jurisdiction. ECF 18. However, the facts regarding the amount in controversy have changed, and therefore that legal analysis must be revisited.

CarMax argues that the amount in controversy exceeds $75, 000 for two reasons: the injunctive relief sought, which it values at $350, 000, and the potential attorney's fees, which it values at $77, 400.

a) Amount in Controversy

When a complaint filed in state court affirmatively alleges that the amount in controversy is less than the jurisdictional threshold of $75, 000, the party seeking removal must prove to a "legal certainty" that the threshold is met. Tele Munchen Fernseh GMBH & Co. v. Alliance Atlantis Int'l Distrib, LLC, 2013 WL 6055328 at *2 (C.D. Cal. Nov. 15, 2013) (citing Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007)). But, when it's unclear or ambiguous from the face of a complaint whether the jurisdictional threshold is met, a "preponderance of the evidence" standard applies. Id .; see also Matheson v. Progressive Speciality Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

The court looks to the complaint filed in state court, not to an amended complaint filed after removal. See Heichman v. American Tel. & Tel. Co., 943 F.Supp. 1212, 1216-17 (C.D.Cal. 1995); see also St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938). While "[i]t is true that, when a defendant removes a case to federal court based on the presence of a federal claim, an amendment eliminating the original basis for federal jurisdiction generally does not defeat jurisdiction[, ]" Rockwell Int'l Corp. v. United States, 549 U.S. 457, 474 (2007), [1] later events may clarify a previously uncertain jurisdictional issue. See Asociacion Nacional de Pescadores v. Dow Quimica 988 F.2d 559 (5th Cir.1993) cert. denied, 510 U.S. 1041 (1994); see also St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 293 (1938)).

The claimed amount in controversy cannot be based upon speculation and conjecture. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090-91 (9th Cir. 2003). Rather, the Court can consider "summary-judgment-type evidence relevant to the amount in controversy at the time of removal, " including declarations and affidavits. Id. at 1090. However, the court may also accept a plaintiff's decision to "sue for less than the amount she may be entitled to if she wishes to avoid federal jurisdiction and remain in state court." Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 999 (9th Cir. 2007).[2]

In an action by a single plaintiff against a single defendant, all claims can be aggregated and can include special and general damages, punitive damages, and attorneys' fees. Campbell v. Hartford ...


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