Geoffrey Romsa v. Ikea US West, Inc. et al

Filing 10

ORDER Remanding Case to Los Angeles Superior Court for Lack ofSubject Matter Jurisdiction by Judge Margaret M. Morrow remanding case to Los Angeles Superior Court, Case number BC538037. Ikea has failed to carry its burden of showing that the court has subject matter jurisdiction to hear this action. As a consequence, the clerk is directed to remand the case to Los Angeles Superior Court forthwith. Made JS-6, (Made JS-6. Case Terminated.) (Attachments: # 1 Letter) (ah)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

Case No.
Title

Date

CV 14-05552 MMM (JEMx)

August 28, 2014

Geoffrey Romsa, Guardian ad litem of N.R. v. Ikea US West, Inc.

Present: The Honorable

MARGARET M. MORROW

ANEL HUERTA

N/A

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

Order Remanding Case to Los Angeles Superior Court for Lack of
Subject Matter Jurisdiction
I. BACKGROUND

Geoffrey Romsa filed this action on February 28, 2014, as guardian ad litem of N.R., a minor,
who allegedly suffered second degree burns when he touched hot mashed potatoes prepared and sold
by defendant Ikea US West, Inc. (“Ikea”).1 On July 17, 2014, Ikea removed the action to this court,
invoking the court’s diversity jurisdiction under 28 U.S.C. § 1332.2 On July 24, 2014, the court
issued an order to show cause why the case should not be remanded for lack of subject matter
jurisdiction.3 On July 31, 2014, Ikea US West, Inc. (“Ikea”) filed a response to the order to show
cause,4 and on August 7, 2014, Romsa filed a reply.5 For the reasons stated, the court lacks subject

1

Notice of Removal, Exh. A (“Complaint”), ¶¶ 1, 13, Docket No. 1 (July 17, 2014).

2

Id. at 1.

3

Order to Show Cause (“OSC”), Docket No. 7 (July 24, 2014).

4

Response to Order to Show Cause (“Response”), Docket No. 8 (July 31, 2014).

5

Plaintiff's Reply in Opposition to Defendant’s Response (“Reply”), Docket No. 9 (Aug. 7,

2014)

matter jurisdiction to hear the action and remands it to Los Angeles Superior Court.
II. DISCUSSION
A.

Standard Governing Ikea’s Pleading of Jurisdiction

As the party invoking federal jurisdiction, Ikea bears the burden of establishing the existence
of subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994);
In re Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001); Thompson v. McCombe, 99 F.3d 352, 353
(9th Cir. 1996). At the pleading stage, this burden is satisfied by alleging facts that show a proper
basis for jurisdiction. FED.R.CIV.PROC. 8(a)(1) (a complaint “shall contain a short and plain
statement of the grounds upon which the court’s jurisdiction depends”); see McNutt v. Gen. Motors
Acceptance Corp., 298 U.S. 178, 189 (1936) (“The prerequisites to the exercise of jurisdiction are
specifically defined and the plain import of the statute is that the District Court is vested with authority
to inquire at any time whether these conditions have been met. They are conditions which must be
met by the party who seeks the exercise of jurisdiction in his favor. He must allege in his pleading
the facts essential to show jurisdiction”).
The complaint must show “affirmatively and distinctly the existence of whatever is essential
to federal jurisdiction, and if [it] does not do so, the court, on having the defect called to its attention
or on discovering the same, must dismiss the case, unless the defect be corrected by amendment.”
Tosco Corp. v. Communities For A Better Environment, 236 F.3d 495, 499 (9th Cir. 2001). Since
subject matter jurisdiction must be affirmatively alleged, courts will not infer allegations supporting
the exercise of jurisdiction. See Watson v. Chessman, 362 F.Supp.2d 1190, 1194 (S.D. Cal. 2005);
see also Tosco Corp., 236 F.3d at 499; Century Sw. Cable Television, Inc. v. CIIF Assocs., 33 F.3d
1068, 1071 (9th Cir. 1994).
B.

Whether Ikea Has Established the Existence of Diversity Jurisdiction

“The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . .
citizens of different States. . . .” 28 U.S.C. § 1332(a)(1). “[W]hen a complaint filed in state court
alleges on its face an amount in controversy sufficient to meet the federal jurisdictional threshold, [the
amount in controversy] requirement is presumptively satisfied unless it appears to a ‘legal certainty’
that the plaintiff cannot actually recover that amount.” Guglielmino v. McKee Foods Corp., 506 F.3d
696, 699 (9th Cir. 2007). See also St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 28889 (1938) (stating that “the sum claimed by the plaintiff controls if the claim is apparently made in
good faith,” and that “[i]t must appear to a legal certainty that the claim is really for less than the
jurisdictional amount to justify dismissal”). Where, by contrast, “it is unclear or ambiguous from the
face of a state-court complaint whether the requisite amount in controversy is pled[,] . . . [courts]
apply a preponderance of the evidence standard.” Guglielmino, 506 F.3d at 699. Finally, “when a
state-court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional
threshold, the ‘party seeking removal must prove with legal certainty that [the] jurisdictional amount

is met.’” Id. (quoting Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 1000 (9th Cir. 2007)).6

6

In Lowdermilk, 479 F.3d at 999, the Ninth Circuit held that when a plaintiff pleads a specific
amount in controversy that is less than the jurisdictional minimum, a defendant seeking to remove the
case under the Class Action Fairness Act (“CAFA”) must show to a “legal certainty” that the
jurisdictional amount is at issue. The court identified two principles informing this conclusion: “First,
as federal courts, we are courts of limited jurisdiction and we will strictly construe our jurisdiction.
Second, it is well established that the plaintiff is ‘master of her complaint’ and can plead to avoid
federal jurisdiction.” Id. at 998-99 (citations omitted). Several district courts subsequently applied
the legal certainty rule in § 1332(a) diversity jurisdiction cases. See, e.g., Site Mgmt. Solutions, Inc.
v. TMO CA/NV, LLC, No. CV 10–08679 MMM (JEMx), 2011 WL 1743285, *3 (C.D. Cal. May 4,
2011) (applying the legal certainty standard in a § 1332(a) diversity jurisdiction case); Lara v. Trimac
Transp. Servs. Inc., No. CV 10–4280–GHK (JCx), 2010 WL 3119366, *1 n. 1 (C.D. Cal. Aug. 6,
2010) (same); but see Lyon v. W.W. Grainger, Inc., No. C 10–00884 WHA, 2010 WL 1753194, *1
(N.D. Cal. Apr.29, 2010) (“It would be an unprecedented extension of Ninth Circuit caselaw to apply
the burden of proof that plaintiff suggests to a non-CAFA case such as this”).
In Standard Fire Insurance Company v. Knowles, 133 S. Ct. 1345, 1347 (2013), plaintiff filed
a class action, alleging that he and the “[c]lass stipulate[d] they [would] seek to recover total aggregate
damages of less than [the CAFA jurisdictional threshold of] five million dollars.” Defendant
removed, invoking CAFA. Id. at 1348. The district court remanded. It found that although the
amount in controversy would have exceeded $5,000,000 in the absence of the stipulation, it could not
be met given the stipulation. Id. The Supreme Court held that the district court erred in relying on
the stipulation because “a plaintiff who files a proposed class action cannot legally bind members of
the proposed class before the class is certified.” Id. at 1349.
In Rodriguez v. AT&T Mobility Services LLC, 728 F.3d 975 (9th Cir. 2013), the Ninth Circuit
recognized that Standard Fire overruled Lowdermilk’s “legal certainty” standard in CAFA cases. See
id. at 977 (“Our reasoning there for imposing on defendants the burden to prove the amount in
controversy to a legal certainty, rather than the ordinary preponderance of the evidence standard, is
clearly irreconcilable with the Supreme Court’s reasoning in Standard Fire”). The court held that the
second principle informing the Lowdermilk rule – to “preserve the plaintiff’s prerogative . . . to forgo
a potentially larger recovery to remain in state court”– was “directly contradicted by Standard Fire[’s
holding that] a plaintiff seeking to represent a putative class could not evade federal jurisdiction by
stipulating that the amount in controversy fell below the jurisdictional minimum.” Id. at 980, 981.
The court also concluded that Standard Fire had overruled Lowdermilk’s directive that district courts
“need not look beyond the four corners of the complaint to determine whether the CAFA
jurisdictional amount is met,” and that § 1332(d) required district courts to evaluate the potential
claims of absent class members rather than plaintiff’s complaint. Id. at 981.
Since Rodriguez was decided, district courts in the Ninth Circuit have disagreed as to whether
the legal certainty standard continues to apply in non-CAFA cases. Compare Stelzer v. CarMax Auto
Superstores Cal., LLC, 13–CV–1788–LAB–JMA, 2013 WL 6795615, *5 & n. 2 (S.D. Cal. Dec. 20,
2013) (applying the legal certainty standard) with Cagle v. C&S Wholesale Grocers, Inc., No.
2:13–cv–02134–MCE–KJN, 2014 WL 651923, *7 (E.D. Cal. Feb. 19, 2014) (holding that the

A damages estimate “is relevant evidence of the amount in controversy if it appears to reflect
a reasonable estimate of the plaintiff’s claim.” Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir.
2002). A plaintiff’s damage estimate will not establish the amount in controversy, however, if it
appears to be only a “bold optimistic prediction.” Molina v. Lexmark Intern., Inc., No. CV 08-04796
MMM (FFMx), 2008 WL 4447678, *4 (C.D. Cal. Sept. 30, 2008) (quoting Surber v. Reliance Nat’l
Indem. Co., 110 F.Supp.2d 1227, 1232 (N.D. Cal. 2000)). On June 18, 2014, Romsa provided a
statement of damages, estimating $500,000 in pain and suffering damages, $500,000 in emotional
distress damages, and $4,577.97 in past medical expenses. The statement reserved the right to seek
future medical expenses as well.7 The statement of damages does not explain how Romsa arrived at
these estimates. In its response, Ikea argues that, although Romsa’s estimate of pain and suffering
and emotional distress damages is unreasonably high, there is nonetheless evidence that the amount
in controversy exceeds $75,000. Ikea cites the deposition testimony of Romsa and his wife, who
contend that their son now “cries a lot” and wakes up “5-6 times a night.”8 Romsa’s reply disputes
that the amount in controversy exceeds $75,000, and argues that Ikea’s failure to accept a settlement
offer of $75,000 is evidence that it believes the amount in controversy is less than $75,000.9 He
asserts that Ikea was “relentless” in requesting a statement of damages, and filed a motion to compel
seeking monetary sanctions after he responded that it was premature to provide any damages
estimate.10
The leap from $4,597.77 in medical expenses incurred to Ikea’s assertion that N.R. has
suffered damages in excess of $75,000 because he cries a lot and wakes up several times a night is
difficult to credit. Ikea cites no facts that indicate a damages award anywhere near $75,000 – let

preponderance of the evidence standard applies).
The court believes that Standard Fire and Rodriguez leave the legal certainty rule intact in nonCAFA cases. The rationale underlying those decisions – i.e., that a plaintiff cannot bind absent class
members before a class is certified – has no application outside the class action context. In contrast,
the reasoning that underlies the Lowdermilk rule – i.e., that federal courts are courts of limited
jurisdiction, and that a plaintiff is “master of her complaint” – applies with full force in non-CAFA
cases. Moreover, the “legal certainty” test for cases such as this does not derive from Lowdermilk
and rests on a distinct line of reasoning. The Ninth Circuit announced the rule in Sanchez v.
Monumental Life Insurance Company, 102 F.3d 398, 402 (9th Cir. 1996). Accordingly, the court
concludes that neither Knowles nor Rodriguez disturbs the “legal certainty” rule used to determine
the amount in controversy in removal cases that are not class actions.
7

Reply, Exh. D.

8

Response, Exh. A at 148, 217.

9

Reply at 4.

10

Id. at 1-2.

alone $1,000,000 – is likely. “While a federal court must of course give due credit to the good faith
claims of the plaintiff, a court would be remiss in its obligations if it accepted every claim of damages
at face value, no matter how trivial the underlying injury.” Surber, 110 F. Supp. 2d at 1232 (citation
omitted); see also Christensen v. Northwest Airlines, Inc., 633 F.2d 529, 530-31 (9th Cir. 1980)
(affirming dismissal on the ground that plaintiff’s injury was too small to satisfy the amount in
controversy requirement because plaintiff alleged only that she suffered anger and embarrassment
following an argument as to who was at fault for her missed flight to Seattle). The court cannot
accept Romsa’s statement of damages or Ikea’s response to the order to show cause as a conclusive
indication that subject matter jurisdiction does or does not exist. Because Ikea bears the burden of
persuasion, and because it has failed to meet that burden, the court concludes that it has not
established that the amount in controversy requirement has been satisfied.
III. CONCLUSION
“The ‘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). For the reasons stated, Ikea has failed to carry its burden of showing that the court has
subject matter jurisdiction to hear this action. As a consequence, the clerk is directed to remand the
case to Los Angeles Superior Court forthwith.

CV-90 (12/02)

CIVIL MINUTES - GENERAL

Initials of Deputy Clerk AH