United States District Court, E.D. California
September 27, 2019, the court issued an order requiring the
parties to meet and confer regarding the amount in
controversy and file a joint status report either stipulating
to remand the case or explaining why the case should not be
remanded for lack of jurisdiction. The parties filed separate
status reports. The court now REMANDS the case to Solano
County Superior Court on its own motion.
case arises from a dispute over the return of two pairs of
shoes to a Reebok store, in which Reebok employees refused to
allow plaintiff Shainaz Awadan to return two pairs of shoes,
and ultimately kept the shoes without refunding her the
purchase price. See generally, Compl., ECF No. 1-2,
at 6-7. Plaintiff, proceeding pro se, filed a complaint in
Solano County Superior Court on April 18, 2017, alleging,
inter alia, discrimination, civil rights violations,
unethical and unfair business practices, and claiming damages
of over $70 million. Defendant removed the case on May 31,
2017 based on diversity jurisdiction. See Not. of
Removal, ECF No. 1. The magistrate judge issued findings and
recommendations recommending a grant of defendant's
motion requesting that all claims excepting state law claims
for conversion be dismissed, ECF No. 21; that recommendation
was adopted by the court, ECF No. 26. Plaintiffs declined to
file an amended complaint. Pls.' Response to Order to
Show Cause, ECF No. 29.
only remaining claims are plaintiff Shainaz Awadan's
claims for conversion, one for each of the two pairs of
shoes. See Pls.' Pretrial St., ECF No. 47,
¶¶ 3-4. Plaintiff claims $5 million for each pair
of shoes. Id. Attached as Exhibit A to
plaintiffs' complaint is the receipt showing values of
$19.99 and $39.99 for the shoes at issue. Compl. at 14.
Responding to the order to show cause, plaintiffs'
separate status report does not dispute the value of the
shoes. Plaintiff Ms. Awadan reiterates her request for
punitive damages “to seek justice and punish Reebok for
there [sic] wrong doing so this may not happen to anyone else
again[.]” Pls.' Status Report, ECF No. 56 at 2.
courts only have diversity-of-citizenship jurisdiction where
the amount in controversy exceeds $75, 000 and the parties
have complete diversity of citizenship. 28 U.S.C. §
1332. “The sum claimed by the plaintiff” is
generally accepted as the amount in controversy, as long as
it is “apparently made in good faith.” However,
if it appears “to a legal certainty that the claim is
really for less than the jurisdictional amount, ”
remand is justified for lack of jurisdiction. Pachinger
v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 364
(9th Cir. 1986). “[T]he court ‘may go beyond the
pleadings for the limited purpose of determining the
applicability' of a rule of law that limits
damages.” In re Brown, No BAP
NV-16-1099-KULJU, 2017 WL 1149074, at *5 (B.A.P. 9th Cir.
Mar. 27, 2017), appeal dismissed, No. 16-1099, 2018
WL 1989647 (9th Cir. Apr. 23, 2018) (citation omitted).
measure of damages in a conversion action, such as this one,
is based on the value of the converted property. Tyrone
Pac. Int'l, Inc. v. MV Eurychili, 658 F.2d 664, 666
(9th Cir. 1981). In California, plaintiffs must show that the
defendant acted with malice, fraud or oppression in
committing a tort to get punitive damages. Cal. Civ. Code
§ 3294. Although there is no fixed ratio between
compensatory and punitive damages, “punitive damages
must bear a reasonable relationship and be proportionate to
the actual harm suffered by the plaintiff (i.e. compensatory
damages).” Bardis v. Oates, 119 Cal.App.4th 1,
17 (2004) (quoting Marron v. Superior Court, 108
Cal.App.4th 1049, 1059-60 (2003)). Punitive damages awards
far in excess of compensatory damages may violate the Due
Process Clause of the Fourteenth Amendment. State Farm
Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 417
(2003). The Supreme Court has held that a ratio of punitive
damages to compensatory damages exceeding single digits may
comport with Due Process, but only when “a particularly
egregious act has resulted in only a small amount of economic
damages.” Campbell, 538 U.S. at 425.
plaintiff disclosed in her complaint and defendant does not
dispute that the total value of the shoes at issue is $59.98.
Compl. at 14. In the remaining action for conversion, that
amount would be the measure of her compensatory damages.
Ms. Awadan also asks for punitive damages. Even assuming,
arguendo, she could prove that the Reebok
store's acts were malicious, fraudulent or oppressive,
the punitive damages award would not reach the jurisdictional
limit of $75, 000.01. Although there is no fixed formula for
punitive damages, ratios of punitive damages to compensatory
damages exceeding single digits are viewed with skepticism,
as signaled by the Court's observation in the
Campbell case quoted above. For plaintiff's
final award to reach the jurisdictional limit here, she would
need to achieve a punitive damages ratio of 1, 250:1, i.e.,
$1, 250.00 in punitive damages for every $1 in compensatory
damages. Such an award would violate due process by any
formulation of the legal standard. Thus, it is legally
impossible for plaintiffs to recover the jurisdictional limit
on the remaining claims.
foregoing reasons, this case is hereby REMANDED to ...