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Sloan v. 1st American Automotive Sales Training

United States District Court, C.D. California

April 17, 2017

ALEX SLOAN, individually, and on behalf of other members of the general public similarly situated, Plaintiff,
v.
1st AMERICAN AUTOMOTIVE SALES TRAINING; TOM ROSS; KIRBY KOOPMAN; and DOES 1-50, inclusive, Defendants.

          ORDER DENYING MOTION TO DISMISS [44]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         This is a putative consumer class action. Before the Court is Defendants 1st American Automotive Sales Training (“1st Auto”), Tom Ross, and Kirby Koopman's motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (ECF No. 44.) For the following reasons, the Court DENIES Defendants' motion.

         II. FACTUAL BACKGROUND

         Defendants advertised a three-day automotive sales training course online. (First Am. Compl. (“FAC”) ¶ 6, ECF No. 42.) An advertisement on 1st Auto's website described the sales training course as a combination “of fundamentals, role playing, tests, and homework” and suggested that the trainer “will place” trainees with dealerships and that trainees will be “working within the first few days.” (Id. ¶¶ 6-7.) A separate advertisement on Craigslist.com indicated that 1st Auto offers “[c]omprehensive training with national certification[, ] $2000/month or very liberal commissions[, ] general incentives and bonuses[, ] ¶ 5 day work week[, ] employee medical and dental benefits[, and a] friendly work environment.” (Id. ¶ 5.)

         Plaintiff alleges that the reality for those who responded to the advertisements was quite different. Respondents were charged $695 for the course, did not receive national certification, and were not offered employment at the course's conclusion despite further promises during the training of “guaranteed” positions. (Id. ¶¶ 9-11.)

         Plaintiff alleges that he went to a Volvo dealership in Culver City, California, on Wednesday, May 27, 2015, to “begin his training after responding to the Craigslist advertisement describing the job opening.” (Id. ¶ 28.) After arriving at the dealership, Plaintiff paid $695 for the course and was told that he would be reimbursed within ninety days. (Id. ¶¶ 29, 37.) Plaintiff was promised national certification and a position “multiple times” during the training. (Id. ¶ 30.) At some point, Plaintiff signed paperwork and was told that he would need to complete a background check before beginning work on “Monday of the following week.” (Id. ¶ 31.) Ultimately, Plaintiff did not receive national certification, a position, or reimbursement for the course-in short, he was provided with “nothing of benefit.” (Id. ¶ 37.) Plaintiff complained to the General Sales Manager of the Volvo dealership but the Sales Manager told Plaintiff “there was nothing he could do because Defendant Tom Ross was in charge of hiring.” (Id. ¶ 32.)

         Plaintiff filed this putative class action in federal court on July 19, 2016, pursuant to the Class Action Fairness Act (“CAFA”).[1] (ECF No. 1.) In his Class Action Complaint, Plaintiff alleged two causes of action against Defendants: (1) violation of the False Advertising Law (“FAL”) pursuant to California Business and Professions Code section 17500; and (2) violation of the Unfair Competition Law (“UCL”) pursuant to California Business and Professions Code section 17200. (Id.) On February 27, 2017, Plaintiff filed a First Amended Complaint adding a cause of action for violation of the Consumer Legal Remedies Act (“CRLA”) pursuant to California Civil Code section 1750. (FAC ¶¶ 81-83.) On March 17, 2017, Defendants filed the pending motion to dismiss pursuant to Rules of Civil Procedure 12(b)(1) and 12(b)(6). (ECF No. 44.) The motion is now fully briefed and ready for decision. (ECF Nos. 45-46.)[2]

         III. ANALYSIS

         A. Dismissal Pursuant to Rule 12(b)(1)

         Defendants contend that Plaintiff has not established the requisite amount in controversy for CAFA jurisdiction. (Mot. 1-2, ECF No. 44.) “Under CAFA, federal courts have original jurisdiction over a class action if (1) the parties are minimally diverse, (2) the proposed class has more than 100 members, and (3) the aggregate amount in controversy exceeds $5 million.” See Lockhart v. Columbia Sportswear Co., No. 515CV02634ODWPLAX, 2016 WL 2743481, at *2 (C.D. Cal. May 11, 2016) (citing 28 U.S.C. § 1332(d)(2), (d)(5)(B)). “[T]he claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(d)(6).

         Courts have applied the facial attack/factual attack framework in Rule 12(b)(1) challenges to CAFA's $5 million amount in controversy requirement. See, e.g., Zapata Fonseca v. Vigo Importing Co., No. 5:16-CV-02055-EJD, 2016 WL 6249006, at *1 (N.D. Cal. Oct. 26, 2016). A facial attack examines whether allegations contained in the complaint are sufficient to establish the amount in controversy. See Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004) (“In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.”).

         The proponent of federal jurisdiction, in this case, Plaintiff, bears the initial burden of establishing federal jurisdiction including that the amount in controversy exceeds $5 million. In re Wilshire Courtyard, 729 F.3d 1279, 1284 (9th Cir. 2013). However, the plaintiff may satisfy this burden by merely alleging in good faith that its damages exceed the relevant jurisdictional threshold. See Naffe v. Frey, 789 F.3d 1030, 1040 (9th Cir. 2015).

         Once the plaintiff satisfies its burden, the defendant must show to a legal certainty that the claims do not satisfy the amount in controversy requirement. See Richardson v. Servicemaster Global Holdings, Inc., No. 09-CV-4044 SI, 2009 WL 4981149, at *3 (N.D. Cal. Dec. 15, 2009) (“In other words, when a plaintiff brings suit in federal court alleging that the amount in controversy exceeds the jurisdictional minimum, a defendant challenging the federal court's jurisdiction must establish to a legal certainty that plaintiff's claim does not satisfy the requisite jurisdictional amount.”); Taylor v. Enter. Rent-A-Car Co., No. CV 10-1849-JST SHX, 2011 WL 1195898, at *3 (C.D. Cal. Mar. 30, 2011) (‚ÄúDefendants must show that from . . . the face of the ...


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