Eugene Fridman et al v. Bally Total Fitness Holding Corporation et al

Filing 38

ORDER DISMISSING CASE: Upon sua sponte review of Plaintiffs Complaint, the Court finds that it lacks subject-matter jurisdiction and must dismiss the case without prejudice. The Clerk of Court shall close this case by Judge Otis D Wright, II. (Made JS-6. Case Terminated.) (lc). Modified on 9/25/2012 (lc).

Download PDF
O JS-6 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 10 11 12 EUGENE FRIDMAN, EDWARD RAECEK, BRIAN M. DROMGOOLE, RONNIE KEHATI, and JOSEPH V. ESPOSITO, on behalf of themselves and others similarly situated, 15 16 17 ORDER DISMISSING CASE Plaintiffs, 13 14 Case No. 2:12-cv-707-ODW(MRWx) v. BALLY TOTAL FITNESS HOLDING CORP. and L.A. FITNESS INTERNATIONAL, LLC, Defendants. 18 19 20 Upon sua sponte review of Plaintiffs’ Complaint, the Court finds that it lacks subject-matter jurisdiction and must dismiss the case. Fed. R. Civ. P. 12(h)(3). 21 Federal courts are courts of limited jurisdiction, having subject-matter 22 jurisdiction only over matters authorized by the Constitution and Congress. See, e.g., 23 Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Subject-matter 24 jurisdiction exists in civil cases involving a federal question or diversity of citizenship. 25 28 U.S.C. §§ 1331, 1332. In this case, Plaintiffs solely allege diversity jurisdiction 26 and brings no federal causes of action. 27 Diversity jurisdiction exists for all suits, including class-action suits, where “the 28 matter in controversy exceeds the sum or value of $75,000, exclusive of interest and 1 costs,” and is between parties with diverse citizenship. 28 U.S.C. § 1332(a). But 2 multiple plaintiffs may not aggregate their claims against defendants—to reach the 3 $75,000 threshold—unless they have a single title or right in a common and undivided 4 interest. Gibson v. Chrysler Corp., 261 F.3d 927, 943–44 (9th Cir. 2001). 5 Alternatively, plaintiffs may establish diversity jurisdiction under the Class 6 Action Fairness Act (“CAFA”). Under CAFA, diversity jurisdiction exists in “mass 7 action” suits so long as the following requirements are met: (1) 100 or more plaintiffs; 8 (2) common questions of law or fact between plaintiffs’ claims; (3) minimal diversity, 9 where at least one plaintiff is diverse from one defendant; (4) aggregated claims in 10 excess of $5 million; and (5) at least one plaintiff’s claim exceeding $75,000. 28 11 U.S.C. § 1332(d); Abrego v. Dow Chem. Co., 443 F.3d 676, 689 (9th Cir. 2006). 12 In this class action, Plaintiffs properly allege complete diversity under 13 § 1332(a), but fail to allege that the amount in controversy (per Plaintiff) exceeds 14 $75,000.1 15 million.” (Compl. ¶ 1.) But this does not suffice—individual Plaintiffs still must 16 show that their claims exceed $75,000. Gibson, 261 F.3d at 943–44. In situations like 17 this where plaintiffs do not state specific, individual amounts in damages, the Court 18 determines under the preponderance-of-evidence standard whether the jurisdictional 19 amount is satisfied. Lowdermilk v. U.S. Bank Nat’l Assoc., 479 F.3d 994, 998 (9th 20 Cir. 2007). Plaintiffs state that the aggregate amount in controversy “exceeds $5 21 Examining the Complaint, the Court finds no evidence suggesting that any class 22 member would be entitled to more than $75,000 in damages. Plaintiffs bring this 23 class-action suit for breach of contract and consumer fraud because Defendants no 24 longer honor their “lifetime” and long-term gym memberships. (Compl. ¶¶ 97, 109.) 25 Plaintiffs mention the costs they paid to acquire these memberships.2 But none of 26 1 27 28 Plaintiffs are citizens of Arizona, Florida, New Jersey, New York, and Pennsylvania. Defendants are citizens of California and Illinois. (Compl. ¶¶ 10–16.) 2 Fridman acquired his lifetime membership as a gift, and is required to pay a $17.32 monthly maintenance fee for the membership; Raecek’s lifetime membership cost “approximately $1,000,” 2 1 these costs come close to $75,000. Further, the Complaint fails to state—and rightly 2 so—that Plaintiffs have individually suffered damages in excess of $75,000; the Court 3 sees no reason how they could. Based on Plaintiffs’ allegations, the Court finds that 4 no class member’s claim—not just under a preponderance, but with legal certainty— 5 could possibly exceed $75,000. Accordingly, as a regular class-action suit, there is no 6 diversity jurisdiction here under § 1332(a). 7 But Plaintiffs also allege that this is a CAFA mass action under § 1332(d), 8 because it involves more than 100 plaintiffs and over $5 million in aggregated 9 damages. (Compl. ¶ 1.) Plaintiffs also satisfy the minimal-diversity requirement. 10 (Compl. ¶¶ 10–16.) 11 Yet, under Ninth Circuit law, individual plaintiffs must still meet the $75,000 12 amount-in-controversy requirement in a CAFA mass action: “‘jurisdiction shall exist 13 only over those plaintiffs whose claims in a mass action satisfy the [in excess of 14 $75,000] jurisdictional amount.’” Abrego, 443 F.3d at 687 (alteration in original) 15 (citing 28 U.S.C. § 1332(d)(11)(B)(i)). While it is unclear whether each individual 16 plaintiff in a mass action has to meet the $75,000 amount-in-controversy requirement, 17 it is clear that at least one plaintiff must meet that requirement. Id. at 689 (“We do 18 conclude . . . that the case cannot go forward unless there is at least one plaintiff 19 whose claims can remain in federal court.”). 20 To be clear, the Court is unaware of any binding authority that applies the 21 $75,000 amount-in-controversy requirement to plaintiffs in a mass action originating 22 in federal court, as opposed to on removal. Abrego and its progeny deal only with 23 cases removed from state court—it may be argued that the curious CAFA statute 24 should be construed to mean that the $75,000 amount-in-controversy requirement 25 26 27 28 and he must pay an annual maintenance fee of $25.51; Dromgoole paid “approximately $1,300” for his lifetime membership, and paid a $100 fee to transfer his “home club”; Kehati’s lifetime membership cost “approximately $2,500,” and he must pay $30 per year in maintenance fees; Esposito paid “approximately $559” for his lifetime membership, and must pay a $60 annual maintenance fee. (Compl. ¶¶ 42–43, 52–53, 59–62, 68–69, 76–77.) 3 1 applies only to cases removed from state court, and not to cases originally filed in 2 federal court. 28 U.S.C. § 1332(d)(11)(A) (“For purposes of this subsection . . . a 3 mass action shall be deemed to be a class action removable under paragraphs (2) 4 through (10) if it otherwise meets the provisions of those paragraphs.”). 5 But this Court finds it illogical that the amount-in-controversy requirement for 6 removal would be different (and more strict) than for a case originating in federal 7 court. 8 conclusion, holding that the $75,000 amount-in-controversy requirement equally 9 applies to actions removed from state court and actions originally filed in federal 10 court. Cappuccitti v. DirecTV, Inc., 611 F.3d 1252, 1256–57 (11th Cir. 2010.) But 11 the Eleventh Circuit later vacated this opinion and held that there is no $75,000 12 requirement for CAFA diversity jurisdiction—for cases removed from state court and 13 cases originating in federal court. Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1122 14 (11th Cir. 2010). The Court is aware of one Court of Appeals case that makes the same 15 The Ninth Circuit, however, has maintained its $75,000 amount-in-controversy 16 requirement in Abrego, but has not explicitly held that this requirement also applies to 17 actions originating in federal court. Nevertheless, it is this Court’s position that so 18 long as the Ninth Circuit’s Abrego opinion stands, it is bound to follow the $75,000 19 amount-in-controversy requirement, both for cases removed from state court and cases 20 originating in federal court. 21 22 23 Therefore, this case is hereby DISMISSED WITHOUT PREJUDICE for lack of subject-matter jurisdiction. The Clerk of Court shall close this case. IT IS SO ORDERED. 24 25 26 27 September 25, 2012 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 28 4

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?