Daniel Romero v. Fungyun, Inc. et al

Filing 16

MINUTES (In Chambers) Order Remanding Action by Judge Fernando M. Olguin: IT IS ORDERED that: (1) The above-captioned action shall be remanded to the Superior Court of the State of California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of subject matter jurisdiction pursuant to 28 USC section 1447(c). (2) The Clerk shall send a certified copy of this Order to the state court. (Made JS-6 Case Terminated.) (jp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL
Case No.

CV 16-7640 FMO (JPRx)

Title

Daniel Romero v. Fungyun, Inc.

Present: The Honorable

Date

October 28, 2016

Fernando M. Olguin, United States District Judge

Vanessa Figueroa

None

None

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorney Present for Plaintiff(s):

Attorney Present for Defendant(s):

None Present

None Present

Proceedings:

(In Chambers) Order Remanding Action

On August 29, 2016, Daniel Romero (“plaintiff”) filed a Complaint in the Los Angeles County
Superior Court against Fungyun, Inc. (“defendant”) asserting state-law claims. (See Dkt. 1-1,
Complaint). On October 12, 2016, defendant removed that action on diversity jurisdiction grounds
pursuant to 28 U.S.C. §§ 1332 and 1441. (See Dkt.1, Notice of Removal (“NOR”) at ¶ 6). On
October 13, 2016, defendant filed a corrected version of the NOR after discovering that a page
was inadvertently omitted. (See Dkt. 6, Notice of Errata Re Defendant Fungyun, Inc.’s Notice of
Removal at 1; Dkt. 6-1, “Corrected NOR”). Having reviewed the pleadings, the court hereby
remands this action to state court for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c).
“Federal courts are courts of limited jurisdiction. They possess only that power authorized
by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114
S.Ct. 1673, 1675 (1994). The courts are presumed to lack jurisdiction unless the contrary appears
affirmatively from the record. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n. 3, 126
S.Ct. 1854, 1861 (2006). Federal courts have a duty to examine jurisdiction sua sponte before
proceeding to the merits of a case, see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119
S.Ct. 1563, 1569 (1999), “even in the absence of a challenge from any party.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 514, 126 S.Ct. 1235, 1244 (2006).
“The right of removal is entirely a creature of statute and a suit commenced in a state court
must remain there until cause is shown for its transfer under some act of Congress.” Syngenta
Crop Prot., Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 369 (2002) (internal quotation marks
omitted). Where Congress has acted to create a right of removal, those statutes, unless otherwise
stated, are strictly construed against removal jurisdiction.1 See id. Unless otherwise expressly
provided by Congress, “any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or the defendants, to

1

For example, an “antiremoval presumption” does not exist in cases removed pursuant
to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). See Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7640 FMO (JPRx)

Title

Date

Daniel Romero v. Fungyun, Inc.

October 28, 2016

the district court[.]” 28 U.S.C. § 1441(a); see Dennis v. Hart, 724 F.3d 1249, 1252 (9th Cir. 2013)
(same). A removing defendant bears the burden of establishing that removal is proper. See
Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per curiam) (noting the
“longstanding, near-canonical rule that the burden on removal rests with the removing defendant”);
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam) (“The strong presumption
against removal jurisdiction means that the defendant always has the burden of establishing that
removal is proper.”) (internal quotation marks omitted). Moreover, if there is any doubt regarding
the existence of subject matter jurisdiction, the court must resolve those doubts in favor of
remanding the action to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction must be
rejected if there is any doubt as to the right of removal in the first instance.”).
“Under the plain terms of § 1441(a), in order properly to remove [an] action pursuant to that
provision, [the removing defendant] must demonstrate that original subject-matter jurisdiction lies
in the federal courts.” Syngenta Crop Prot., 537 U.S. at 33, 123 S.Ct. at 370. Failure to do so
requires that the case be remanded, as “[s]ubject matter jurisdiction may not be waived, and. . .
the district court must remand if it lacks jurisdiction.” Kelton Arms Condo. Owners Ass’n, Inc. v.
Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003). Indeed, “[i]f at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the case shall be
remanded.” 28 U.S.C. § 1447(c); see Emrich v. Touche Ross & Co., 846 F.2d 1190, 1194 n. 2
(9th Cir. 1988) (“It is elementary that the subject matter jurisdiction of the district court is not a
waivable matter and may be raised at anytime by one of the parties, by motion or in the
responsive pleadings, or sua sponte by the trial or reviewing court.”); Washington v. United Parcel
Serv., Inc., 2009 WL 1519894, *1 (C.D. Cal. 2009) (a district court may remand an action where
the court finds that it lacks subject matter jurisdiction either by motion or sua sponte).
The court’s review of the Corrected NOR and the attached state court Complaint make
clear that this court does not have subject matter jurisdiction over the instant matter. See 28
U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987)
(“Only state-court actions that originally could have been filed in federal court may be removed to
federal court by the defendant.”) (footnote omitted). In other words, plaintiff could not have
originally brought this action in federal court, as plaintiff does not competently allege facts
supplying diversity jurisdiction.2 See 28 U.S.C. § 1332(a).
There is no basis for subject matter jurisdiction because the amount in controversy does
not appear to exceed the diversity jurisdiction threshold of $75,000. See 28 U.S.C. § 1332(a).3

2

Defendant seeks only to invoke the court’s diversity jurisdiction. (See Dkt. 6-1, Corrected
NOR at ¶¶ 6-23).
3

In relevant part, 28 U.S.C. § 1332(a) provides that “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[.]”
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7640 FMO (JPRx)

Title

Date

Daniel Romero v. Fungyun, Inc.

October 28, 2016

Defendant bears the burden of proving by a preponderance of the evidence that the amount in
controversy meets the jurisdictional threshold of $75,000. See Valdez v. Allstate Ins. Co., 372
F.3d 1115, 1117 (9th Cir. 2004); Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090
(9th Cir. 2003) (per curiam) (“Where it is not facially evident from the complaint that more than
$75,000 is in controversy, the removing party must prove, by a preponderance of the evidence,
that the amount in controversy meets the jurisdictional threshold. Where doubt regarding the right
to removal exists, a case should be remanded to state court.”) (footnotes omitted). Here, the
amount of damages plaintiff seeks cannot be determined from the Complaint, as the Complaint
does not set forth a specific amount. (See, generally, Dkt. 1-1, Complaint at p. 13).
Defendant contends that the amount in controversy threshold is met because at the time
of plaintiff’s termination, plaintiff’s annual salary was approximately $50,000. (See Dkt. 6-1,
Corrected NOR at ¶ 20). Perhaps recognizing that this amount falls below the jurisdictional
threshold, defendant asserts that the court should consider plaintiff’s lost wages through the time
of trial in determining the amount in controversy. (See id.). The court, however, declines to
project lost wages forward to some hypothetical trial date. “[J]urisdiction depends on the state of
affairs when the case begins; what happens later is irrelevant.” Gardynski-Leschuck v. Ford Motor
Co., 142 F.3d 955, 958 (7th Cir. 1998) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303
U.S. 283, 289-90, 58 S.Ct. 586, 590-91 (1938)); see Soto v. Kroger Co., 2013 WL 3071267, *3
(C.D. Cal. 2013) (noting that “the guiding principle is to measure amount in controversy at the time
of removal”). In other words, in measuring lost wages for purposes of the amount in controversy,
the court will not include any amounts beyond the date of removal. See Soto, 2013 WL 3071267,
at *3 (“Jurisdiction based on removal depends on the state of affairs when the case is removed.
Thus, Kroger is not persuasive when it argues that wages up until the present should be included
in the amount in controversy.”) (internal quotation marks and citations omitted); Haase v.
Aerodynamics Inc., 2009 WL 3368519, *4 (E.D. Cal. 2009) (“The amount in controversy must be
determined at the time of removal. At the time of removal, Plaintiff’s lost wage claim, a special
damage, totaled $21,830.”) (internal citation omitted).
Defendant also relies on plaintiff’s claim for attorney’s fees. (See Dkt. 6-1, Corrected NOR
at ¶ 21). “[W]here an underlying statute authorizes an award of attorneys’ fees, either with
mandatory or discretionary language, such fees may be included in the amount in controversy.”
Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 1000 (9th Cir. 2007), overruled on other
grounds as recognized by Rodriguez v. AT & T Mobility Serv. LLC, 728 F.3d 975, 976-77 (9th Cir.
2013). “[C]ourts are split as to whether only attorneys’ fees that have accrued at the time of
removal should be considered in calculating the amount in controversy, or whether the calculation
should take into account fees likely to accrue over the life of the case.” Hernandez v. Towne Park,
Ltd., 2012 WL 2373372, *19 (C.D. Cal. 2012) (collecting cases); see Reames v. AB Car Rental
Servs., Inc., 899 F.Supp.2d 1012, 1018 (D. Or. 2012) (“The Ninth Circuit has not yet expressed
any opinion as to whether expected or projected future attorney fees may properly be considered
‘in controversy’ at the time of removal for purposes of the diversity-jurisdiction statute, and the
decisions of the district courts are split on the issue.”). The court is persuaded that “the better
view is that attorneys’ fees incurred after the date of removal are not properly included because
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7640 FMO (JPRx)

Title

Date

Daniel Romero v. Fungyun, Inc.

October 28, 2016

the amount in controversy is to be determined as of the date of removal.” Dukes v. Twin City Fire
Ins. Co., 2010 WL 94109, *2 (D. Ariz. 2010) (citing Abrego Abrego, 443 F.3d at 690). Indeed,
“[f]uture attorneys’ fees are entirely speculative, may be avoided, and are therefore not ‘in
controversy’ at the time of removal.” Dukes, 2010 WL 94109, at *2; accord Palomino v. Safeway
Ins. Co., 2011 WL 3439130, *2 (D. Ariz. 2011).
Here, defendant provides no evidence of the amount of attorney’s fees that were incurred
at the time of removal. (See, generally, Dkt. 6-1, Corrected NOR at ¶ 21). Thus, defendant has
not shown by a preponderance of the evidence that the inclusion of attorney’s fees in the instant
case would cause the amount in controversy to reach the $75,000 threshold. See Walton v. AT
& T Mobility, 2011 WL 2784290, *2 (C.D. Cal. 2011) (declining to reach the issue of whether future
attorney’s fees could be considered in the amount in controversy because the defendant “did not
provide any factual basis for determining how much attorney’s fees have been incurred thus far
and will be incurred in the future[, and] [b]ald assertions are simply not enough”).
Finally, defendant contends that plaintiff seeks punitive damages that must be considered
in the amount in controversy determination. (See Dkt. 6-1, Corrected NOR at ¶ 22). While
punitive damages may be included in the amount in controversy calculation, see Gibson v.
Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001), cert. denied, 534 U.S. 1104, 122 S.Ct. 903
(2002), plaintiff’s request for such damages does not aid defendant. “[T]he mere possibility of a
punitive damages award is insufficient to prove that the amount in controversy requirement has
been met.” Burk v. Med. Sav. Ins. Co., 348 F.Supp.2d 1063, 1069 (D. Ariz. 2004); accord Geller
v. Hai Ngoc Duong, 2010 WL 5089018, *2 (S.D. Cal. 2010); J. Marymount, Inc. v. Bayer
Healthcare, LLC, 2009 WL 4510126, *4 (N.D. Cal. 2009). Rather, a defendant “must present
evidence that punitive damages will more likely than not exceed the amount needed to increase
the amount in controversy to $75,000.” Burk, 348 F.Supp.2d at 1069. A removing defendant may
establish “probable punitive damages, for example, by introducing evidence of jury verdicts in
analogous cases.” Id.
Here, because defendant has not provided evidence of punitive damages awards in
factually similar cases, (see, generally, Dkt. 6-1, Corrected NOR at ¶ 22), inclusion of punitive
damages in the amount in controversy would be improper. See Burk, 348 F.Supp.2d at 1070
(defendant “failed to compare the facts of Plaintiff’s case with the facts of other cases where
punitive damages have been awarded in excess of the jurisdictional amount”); Killion v. AutoZone
Stores Inc., 2011 WL 590292, *2 (C.D. Cal. 2011) (“Defendants cite two cases . . . in which
punitive damages were awarded, but make no attempt to analogize or explain how these cases
are similar to the instant action. . . . Simply citing these cases merely illustrate[s] that punitive
damages are possible, but in no way shows that it is likely or probable in this case. Therefore,
Defendants’ inclusion of punitive damages in the calculation of the jurisdictional amount is
speculative and unsupported.”) (citation omitted)).
In sum, given that any doubt regarding the existence of subject matter jurisdiction must be
resolved in favor of remanding the action to state court, see Gaus, 980 F.2d at 566, the court is
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7640 FMO (JPRx)

Date

Title

Daniel Romero v. Fungyun, Inc.

October 28, 2016

not persuaded, under the circumstances here, that defendant has met its burden of proving by a
preponderance of the evidence that the amount in controversy meets the jurisdictional threshold.
See Matheson, 319 F.3d at 1090 (“Where it is not facially evident from the complaint that more
than $75,000 is in controversy, the removing party must prove, by a preponderance of the
evidence, that the amount in controversy meets the jurisdictional threshold. Where doubt
regarding the right to removal exists, a case should be remanded to state court.”) (footnote
omitted); Valdez, 372 F.3d at 1118. Therefore, there is no basis for diversity jurisdiction.
This order is not intended for publication. Nor is it intended to be included in or
submitted to any online service such as Westlaw or Lexis.
CONCLUSION
Based on the foregoing, IT IS ORDERED that:
1. The above-captioned action shall be remanded to the Superior Court of the State of
California for the County of Los Angeles, 111 North Hill St., Los Angeles, CA 90012, for lack of
subject matter jurisdiction pursuant to 28 U.S.C. § 1447(c).
2. The Clerk shall send a certified copy of this Order to the state court.
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