Reina Erazo v. Millard Mall Services, Inc. et al

Filing 21

ORDER DENYING PLAINTIFF MOTION TO REMAND 16 . Erazo's request for sanctions for improper removal is thus also denied by Judge Otis D. Wright, II. (lc). Modified on 6/5/2014 (lc).

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United States District Court
Central District of California

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REINA ERAZO,

Case No. 2:14-cv-02612-ODW(SSx)
Plaintiff,

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v.

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ORDER DENYING MOTION TO

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MILLARD MALL SERVICES, INC; THE REMAND [16]

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MILLARD GROUP; and DOES 1– 50,

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inclusive,
Defendants.

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I.

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INTRODUCTION

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Plaintiff Reina Erazo moves to remand this action to Los Angeles County

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Superior Court for lack of subject-matter jurisdiction. (ECF No. 16.) Erazo contends

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that Defendant Millard Mall Services, Inc. filed a Notice of Removal that was

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insufficient to establish diversity jurisdiction under 28 U.S.C. § 1332. Erazo’s main

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argument is that a settlement demand is unreasonable and does not assert that the

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amount in controversy exceeds the jurisdictional minimum of $75,000.

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reasons discussed below, the Court DENIES Erazo’s Motion to Remand.

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For the

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II.

FACTUAL BACKGROUND

Erazo’s claims arise from the termination of her employment.

(Compl.

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¶¶ 4, 10.) Erazo filed suit against Millard Mall alleging state-law claims of disability

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discrimination, failure to accommodate disability, failure to engage in interactive

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process, failure to prevent discrimination, retaliation for taking leave, and wrongful

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discharge. (See Not. Removal Ex. B.)

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Erazo began working for Millard Mall in 1999.

(Compl. ¶¶ 3, 17.)

On

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November 4, 2010, Plaintiff suffered a hernia while working. (Id. ¶¶ 3, 21–22.) In

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February 2011, Erazo went on medical leave. (Id. ¶¶ 3, 24–25.) Plaintiff eventually

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underwent surgery for her hernia in July 2011. (Id. ¶¶ 4, 1.) Erazo returned to work

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December 22, 2011 with many significant working restrictions. (Id. ¶¶ 4, 3–5.) On

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January 8, 2012, Erazo was terminated allegedly due to Millard Mall’s inability to

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accommodate her working restrictions. (Id. ¶¶ 4, 10–15.)

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On December 24, 2013, Erazo commenced this action in Los Angeles County

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Superior Court. (ECF No. 1.) On March 14, 2014, Erazo’s counsel sent an email

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informing Millard Mall that Erazo had taken a new job on December 15, 2012,

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earning $8.50 an hour for 36 hours a week, and made an initial settlement demand of

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$275,000. (Opp’n 5:2–9.) Millard Mall removed the action to federal court on April

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7, 2014 on the basis of diversity jurisdiction under 28 U.S.C. § 1332. (ECF No. 1.)

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Erazo then filed the instant Motion to Remand on May 7, 2014. (ECF. No. 16.)

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III.

LEGAL STANDARD

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Federal courts are courts of limited jurisdiction, having subject-matter

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jurisdiction only over matters authorized by the Constitution and Congress. U.S.

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Const. art. III, § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.

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375, 377 (1994). A suit filed in state court may be removed to federal court if the

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federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a).

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But courts strictly construe the removal statute against removal jurisdiction, and

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“[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal

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in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The

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party seeking removal bears the burden of establishing federal jurisdiction. Durham v.

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Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006) (citing Gaus, 980 F.2d

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at 566).

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Federal courts have original jurisdiction where an action presents a federal

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question under 28 U.S.C. § 1331, or diversity of citizenship under 28 U.S.C. § 1332.

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A defendant may remove a case from a state court to a federal court pursuant to the

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federal removal statute, 28 U.S.C. § 1441, on the basis of federal question or diversity

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jurisdiction. To exercise diversity jurisdiction, a federal court must find complete

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diversity of citizenship among the adverse parties, and the amount in controversy must

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exceed $75,000, usually exclusive of interest and costs. 28 U.S.C. § 1332(a).
IV.

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DISCUSSION

In this Motion, Erazo contends that the amount in controversy does not exceed
$75,000. Neither party alleges federal-question jurisdiction under 28 U.S.C. § 1331.

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Erazo argues that the amount in controversy requirement is not met because a

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$275,000 settlement offer from Erazo is not a reasonable calculation of the amount in

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controversy.

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settlement demand coupled with compensatory, emotional distress, and punitive

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damages along with attorneys’ fees sought in the Complaint show that the amount in

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controversy exceeds the jurisdictional minimum. (Opp’n 1:10–12.)

(Mot. 6:16–17.)

On the other hand, Millard Mall asserts that the

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In a federal diversity action, a settlement demand may be relevant evidence as

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to the amount in controversy if it reflects a reasonable estimate of the plaintiff’s claim.

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Cohn v. PetSmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). Even if a settlement

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demand is imprecise, it may still indicate that the amount in controversy exceeds the

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jurisdictional minimum if it is sufficiently supported by a fair reading of the

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complaint.

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Attorneys' fees, emotional distress, and punitive damages may also be considered.

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Kroske v. U.S. Bank Corp., 432 F.3d 976 at 980 (9th Cir. 2005.); Galt G/S v. JSS

Babasa v. LensCrafters, Inc. 498 F.3d 972, 975 (9th Cir. 2007).

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Scandinavia, 142 F.3d 1150 at 1155 (9th Cir. 1998); Davenport v. Mutual Ben. Health

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& Acc. Ass’n 325 F.2d 785, 787 (9th Cir. 1963).

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Here, Erazo sent a settlement demand for $275,000. Erazo contends that it was

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an arbitrary demand that did not reflect a reasonable estimate. However, Erazo also

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refuses to admit that the amount in controversy is less than $75,000.

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Furthermore, Erazo relies on a misreading of Cohn to support this Motion.

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Erazo contends that the Ninth Circuit held that “[b]ecause the . . . demand was the

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only evidence offered by the Notice of Removal to show the amount in controversy

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exceeds the jurisdictional minimum, the Notice of Removal itself does not satisfy

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defendants’ burden of proving subject matter jurisdiction.” (Mot. 6:2–5.) However,

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the Ninth Circuit in Cohn actually held that a $100,000 settlement demand did satisfy

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the jurisdictional minimum because it was reasonable. Cohn, 281 F.3d at 837. In

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fact, the quote upon which plaintiff relies is not even within the Ninth Circuit’s

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decision in Cohn.

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The Court finds that the $275,000 settlement demand from Erazo is reasonable

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as an aggregate total of damages resulting from backpay, emotional distress, punitive

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damages, and attorneys’ fees. Based on the allegations in the Complaint that Erazo

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worked 37 hours a week at $11.31 an hour, backpay would start as of January 2012

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and total at least $47,049.60 prior to any mitigation. (Reply 6:2–4.) Emotional

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distress damages in similar cases have ranged around $25,000. Kroske, 432 F.3d

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at 980.

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(Yeremian Decl. ¶¶ 2, 21–22.) Additionally, these figures do not include punitive

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damages which could potentially total over $75,000 alone.

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allegations in the Complaint, the settlement demand is a reasonable assessment of the

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amount in controversy.

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Attorneys’ fees for this Motion alone have already reached $4,500.

V.

Coupled with the

CONCLUSION

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For the reasons discussed above, the Court finds that there is subject-matter

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jurisdiction over this action pursuant to 28 U.S.C. § 1332. Accordingly, the Court

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DENIES Erazo’s Motion to Remand. (ECF No. 16.) Erazo’s request for sanctions

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for improper removal is thus also denied.

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IT IS SO ORDERED.

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June 5, 2014

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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