Juan Lemus v. SOS International, LLC

Filing 8

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 puruant to 28 USC section 1447(c). 2) The Clerk shall send a certified copy of this Order to the state court. (Case Terminated. Made JS-6.) (jp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7941 FMO (AFMx)

Title

Juan Lemus v. SOS International, LLC

Present: The Honorable

Date

November 14, 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 19, 2016, Juan Lemus (“plaintiff”) filed a Complaint in the Los Angeles County
Superior Court against SOS International, LLC (“defendant”) asserting state-law claims. (See Dkt.
1, Notice of Removal (“NOR”) at Exhibit (“Exh.”) A (“Complaint”)). On October 25, 2016,
defendant removed that action on diversity jurisdiction grounds pursuant to 28 U.S.C. §§ 1332 and
1441. (See Dkt.1, NOR at ¶ 7). 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
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

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 16-7941 FMO (AFMx)

Title

Date

Juan Lemus v. SOS International, LLC

November 14, 2016

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 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
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

2

Defendant seeks only to invoke the court’s diversity jurisdiction. (See Dkt. 1, NOR at ¶¶

7-28).
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 16-7941 FMO (AFMx)

Title

Date

Juan Lemus v. SOS International, LLC

November 14, 2016

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, Exh. A, Complaint at pp. 19-20).
Defendant contends that the amount in controversy threshold is met because based on
plaintiff’s annual salary, plaintiff seeks at least $36,883.80 in unpaid overtime, (see Dkt. 1, NOR
at ¶¶ 18-19), $6,345.60 in California Labor Code § 203 penalties, (see id. at ¶ 20), and $4,000 in
Labor Code § 226 penalties. (See id. at ¶ 21). Perhaps recognizing that this amount falls below
the jurisdictional threshold, defendant asserts that the court should consider plaintiff’s lost wages
and future wages through the time of trial in determining the amount in controversy. (See id. at
¶ 22). 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’s reliance on plaintiff’s prayer for emotional distress damages, (see Dkt. 1, NOR
at ¶ 23), is similarly unpersuasive. Even if emotional distress damages are recoverable, plaintiff’s
Complaint does not allege any specific amount for his emotional distress claims (or as general
damages), (see, generally, Dkt. 1, Exh. A, Complaint), and therefore it would be speculative to
include these damages in the total amount in controversy. See Cable v. Merit Life Ins. Co., 2006
WL 1991664, *3 (E.D. Cal. 2006) (Defendant’s argument that emotional distress damages
exceeded the jurisdictional threshold was insufficient when “[d]efendant provide[d] no reliable
basis for determining the amount of emotional distress damages likely to be recovered in this
case.”). Further, defendant fails to provide any analogous cases with substantially similar factual
scenarios to guide the court as to the amount of emotional distress damages that might be
recovered in this case. (See, generally, Dkt. 1, NOR at ¶ 23); see also Mireles v. Wells Fargo
Bank, N.A., 845 F.Supp.2d 1034, 1055 (C.D. Cal. 2012) (remanding where defendants “proffer[ed]
no evidence that the lawsuits and settlements alleged in the complaint are factually or legally
similar to plaintiffs’ claims”); Dawson v. Richmond Am. Homes of Nevada, Inc., 2013 WL 1405338,
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7941 FMO (AFMx)

Title

Date

Juan Lemus v. SOS International, LLC

November 14, 2016

*3 (D. Nev. 2013) (remanding where defendant “offered no facts to demonstrate that the [proffered
analogous] suit is factually identical [to plaintiffs’ suit]”).
Next, defendant contends that plaintiff seeks punitive damages that should be considered
in the amount in controversy determination. (See Dkt. 1, NOR at ¶ 24). 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. 1, NOR at ¶ 24), 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.”)
(citations omitted)).
Finally, defendant relies on plaintiff’s claim for attorney’s fees. (See Dkt.1, NOR at ¶ 25).
“[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
the amount in controversy is to be determined as of the date of removal.” Dukes v. Twin City Fire
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-7941 FMO (AFMx)

Date

Title

Juan Lemus v. SOS International, LLC

November 14, 2016

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. 1, NOR at ¶ 25). 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”).
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
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.
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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