Suemur Bezabeh et al v. Envirobusiness, Inc.

Filing 16

MINUTES (IN CHAMBERS) ORDER by Judge David O. Carter granting 9 MOTION to Remand Case to State Court. Case Remanded to the Superior Court of California, Orange County, case number 30-02017-00927267. (see document for details). MD JS-6. Case Terminated. (dro)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES – GENERAL

Case No. SA CV 17-1262-DOC (DFMx)

Date: September 25, 2017

Title: SUEMUR BEZABEH V. ENVIROBUSINESS, INC., ET AL.

PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Deborah Goltz
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR
PLAINTIFFS:
None Present

ATTORNEYS PRESENT FOR
DEFENDANTS:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER GRANTING PLAINTIFF’S
MOTION TO REMAND [9]
Before the Court is Plaintiff Suemur Bezabeh’s (“Plaintiff”) Motion to Remand to
State Court (“Motion”) (Dkt. 9). The Court finds this matter appropriate for resolution
without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. Having reviewed the moving
papers and considered the parties’ arguments, the Court GRANTS Plaintiff’s Motion.
I. Background
The Court adopts the facts as set out in Plaintiffs’ Complaint (“Compl.”) (Dkt. 12) and Defendant Envirobusiness, Inc.’s (“Defendant”) Notice of Removal (Dkt. 1).
Plaintiff is a resident of Westminster, County of Orange, and was hired by
Defendant in February 2015. Compl. ¶¶ 1, 7. On multiple occasions, the Defendant’s
President made racially discriminatory and offensive remarks to Plaintiff and other
employees. Id. ¶¶ 9, 12–13. After Plaintiff complained about these remarks to
management on September 26, 2016, he faced “a blatant campaign of retaliation,” which
eventually created such a hostile work environment that Plaintiff quit his job in
November 2016. Id. ¶¶ 15, 26, 31.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

Date: September 25, 2017
Page 2

On June 20, 2017, Plaintiff brought this action in the Superior Court of California,
County of Orange. Not. Rem. ¶ 1. Plaintiff alleges a claim for wrongful termination as
well as three claims under the Fair Employment and Housing Act (“FEHA”): racial
discrimination, retaliation, and failure to prevent discrimination. Compl. ¶¶ 32–65.
On July 21, 2017, Defendant removed the case to this Court based on diversity
jurisdiction. See Not. Rem. ¶ 3.
On August 18, 2017, Plaintiff filed the instant Motion. Mot. at 1. On August 28,
2017, Defendant opposed (Dkt. 10), and on September 1, 2017, Plaintiff replied (Dkt.
14).
II. Legal Standard
Removal of a case from state to federal court is governed by 28 U.S.C. § 1441,
which provides in pertinent part that “[e]xcept as otherwise expressly provided by an act
of Congress, any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed . . . to the district court of the
United States for the district and division embracing the place where such action is
pending.” The removing defendant must file a notice of removal in the appropriate
United States District Court, together with all process, pleadings, and orders served upon
the defendant. 28 U.S.C. § 1446(a). Notice of removal must be filed within thirty days of
receiving a copy of the original complaint, or “within 30 days after the service of
summons upon the defendant, if such initial pleading has then been filed in court and is
not required to be served on the defendant, whichever period is shorter.” 28 U.S.C. §
1446(b). Remand may be ordered for lack of subject matter jurisdiction or any defect in
the removal procedure. 28 U.S.C. § 1447(c).
To protect the jurisdiction of state courts, removal jurisdiction should be strictly
construed in favor of remand. Harris v. Bankers Life and Cas. Co., 425 F.3d 689, 698
(9th Cir. 2005) (citing Shamrock Oil & Gas Corp. v. Sheet, 313 U.S. 100, 108–09
(1941)). If there is any doubt as to the right of removal in the first instance, remand must
be ordered. See Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).
Federal diversity jurisdiction requires that the parties be “citizens of different
states” and that the amount in controversy exceed $75,000. 28 U.S.C. § 1332. Generally,
a removing defendant must prove by a preponderance of the evidence that the amount in
controversy satisfies the jurisdictional threshold. Guglielmino v. McKee Foods Corp., 506
F.3d 696, 699 (9th Cir. 2008). If the Complaint affirmatively alleges an amount in
controversy greater than $75,000, the jurisdictional requirement is “presumptively

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

Date: September 25, 2017
Page 3

satisfied.” Id. A plaintiff who then tries to defeat removal must prove to a “legal
certainty” that a recovery of more than $75,000 is impossible. St. Paul Mercury Indem.
Co. v. Red Cab Co., 303 U.S. 283, 288–89 (1938); Crum v. Circus Circus Enters., 231
F.3d 1129, 1131 (9th Cir. 2000). This framework applies equally to situations where the
complaint leaves the amount in controversy unclear or ambiguous. See Gaus v. Miles,
Inc., 980 F.2d 564, 567 (9th Cir. 1992); Sanchez v. Monumental Life Ins. Co., 102 F.3d
398, 403–04 (9th Cir. 1996).
However, a removing defendant “may not meet [its] burden by simply reciting
some ‘magical incantation’ to the effect that ‘the matter in controversy exceeds the sum
of [$75,000],’ but instead, must set forth in the removal petition the underlying facts
supporting its assertion that the amount in controversy exceeds [$75,000].” Richmond v.
Allstate Ins. Co., 897 F. Supp. 447, 450 (S.D. Cal. 1995) (quoting Gaus v. Miles, Inc.,
980 F.2d 564, 567 (9th Cir. 1992)). Under recent Supreme Court precedent, the
allegations in a defendant’s notice of removal that the amount in controversy exceeds the
jurisdictional threshold need only be “plausible.” Dart Cherokee Basin Operating Co.,
LLC v. Owens, 135 S. Ct. 547, 554 (2014). If the plaintiff has not clearly or
unambiguously alleged $75,000 in its complaint or has affirmatively alleged an amount
less than $75,000 in its complaint, once the plaintiff challenges removal the burden lies
with the defendant to show by a preponderance of the evidence that the jurisdictional
minimum is satisfied. Id.; see also Geographic Expeditions, Inc. v. Estate of Lhotka ex
rel. Lhotka, 599 F.3d 1102, 1106–07 (9th Cir. 2010); Guglielmino, 506 F.3d at 699.
While the defendant must “set forth the underlying facts supporting its
assertion that the amount in controversy exceeds the statutory minimum,” the standard is
not so taxing as to require the defendant to “research, state, and prove the plaintiff’s
claims for damages.” Coleman v. Estes Express Lines, Inc., 730 F. Supp. 2d 1141, 1148
(C.D. Cal. 2010) (emphases added). In short, the defendant must show that it is “more
likely than not” that the amount in controversy exceeds the statutory minimum. Id.
Summary judgment-type evidence may be used to substantiate this showing. Matheson v.
Progressive Specialty Ins. Co., 319 F.3d 1089, 1090–91 (9th Cir. 2003); Singer v. State
Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997). For example, defendants
may make mathematical calculations using reasonable averages of hourly, monthly, and
annual incomes of comparable employees when assessing the amount in controversy in a
wrongful termination suit. Coleman, 730 F. Supp. 2d. at 1148–49.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

III.

Date: September 25, 2017
Page 4

Discussion

In seeking remand to state court, Plaintiff argues that Defendant improperly
removed the case on the alleged basis of diversity jurisdiction, because Defendant “failed
to establish that the amount in controversy exceeds $75,000 by a preponderance of the
evidence, as required.” Mot. at 3, 7. Defendant responds that removal was proper,
because Defendant’s Notice of Removal “satisfied the Supreme Court’s requirement of
including a ‘plausible allegation’ that the amount in controversy exceeds the
jurisdictional threshold of $75,000.00.” Mot. at 1.
In determining the amount in controversy, courts first look to the complaint,
because “the sum claimed by the plaintiff controls if the claim is apparently made in good
faith.” Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015)
(quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). Here,
however, Plaintiff’s Complaint does not state an amount in controversy or provide a
dollar amount estimate of damages sought. See Compl. at 16–17. For each of his four
causes of action, Plaintiff broadly requests relief in the form of compensatory damages,
“economic and/or non-economic damages,” “general and/or non-economic damages,”
damages for emotional distress, punitive damages, and reasonable attorney’s fees. Id.
“When the plaintiff’s complaint does not state the amount in controversy, the defendant’s
notice of removal may do so.” Dart, 135 S. Ct. at 551 (citing 28 U.S.C. § 1446(c)(2)(A)).
On the basis of Plaintiff’s underlying claims and broad prayer for relief, Defendant
claimed in its Notice of Removal that the amount in controversy exceeds 75,000 dollars.
Not. Rem. ¶ 7. To support this claim, Defendant explained that
[a] review of Plaintiff’s employment documents indicates that in
2016, Plaintiff earned an annual base salary of $80,000.00 with a
bonus of $10,199.00. Plaintiff’s employment with [Defendant]
ended on November 18, 2016. Accordingly, his claim for lost wages
alone, as of the date of removal, exclusive of any interest, amounts
to approximately $53,333.33. Assuming a trial date of one year from
the date of removal, an estimate of Plaintiff’s claim for lost wages
alone, from the date of his alleged termination through the time of
trial, exclusive of any interest, amounts to approximately
$133,333.33.
Not. Rem. ¶ 7a (internal citations omitted). Defendant points out that Plaintiff also seeks
emotional distress damages, punitive damages, and attorney’s fees, and that it is thus
“reasonable to estimate that the amount in controversy far exceeds $75,000.” Id. ¶¶ 7b–e.

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

Date: September 25, 2017
Page 5

Because “‘a defendant’s notice of removal need include only a plausible allegation that
the amount in controversy exceeds the jurisdictional threshold,’ and need not contain
evidentiary submissions,” Defendant’s Notice of Removal sufficiently pled that the
amount in controversy exceeded $75,000. Ibarra, 775 F.3d at 1197 (quoting Dart, 135 S.
Ct. at 554).
Nonetheless, once a plaintiff contests a removing defendant’s assertion of the
amount in controversy, “evidence establishing the amount is required.” Id. In such cases,
both parties may submit proof of the amount in controversy through “summaryjudgment-type evidence” including “affidavits and declarations,” and the defendant
seeking removal bears the burden of showing by a preponderance of the evidence that the
amount-in-controversy requirement has been satisfied. Id. Here, Defendant has filed as
exhibits to its Opposition company documents showing that Plaintiff’s salary was in fact
$80,000 per year and that he received a bonus of $10,199 in 2016. Leibowitz Declaration
Exs. A (Dkt. 10-5) at 1, B (Dkt. 10-6) at 1.
Plaintiff does not submit any evidence of his own regarding the amount in
controversy, but instead argues that Defendant has failed to show that the amount exceeds
$75,000. Plaintiff claims that, “[a]t best, Defendant established that Plaintiff’s lost wages
were $53,333.33 at the time of removal, with a chance of recovering 12.5% of that
amount in attorneys’ fees.” Reply at 2. Thus, the parties do not dispute that lost wages at
the time of removal were $53,333.33 and that Plaintiff may be able to recover attorney’s
fees of 12.5%. If those lost wages are the only damages, attorney’s fees would be
$6,666.67 (calculated by multiplying $53,333.33 by 0.125), which would make the total
amount in controversy $60,000. See Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th
Cir. 2005), as amended on denial of reh’g and reh’g en banc (Feb. 13, 2006) (citing Galt
G/S v. JSS Scandinavia, 142 F.3d 1150, 1155–56 (9th Cir.1998)) (“The amount in
controversy includes the amount of damages in dispute, as well as attorney’s fees, if
authorized by statute or contract.”); see also Guglielmino, 506 F.3d at 701 (holding that
applying 12.5% of the total amount in controversy is a conservative estimate for
attorneys’ fees). The Court finds that Defendant has shown by a preponderance of the
evidence that the amount in controversy is at least $60,000.
However, the parties dispute whether the amount in controversy encompasses any
additional damages. Plaintiff argues that lost wages should be calculated only through the
date of removal rather than through the completion of trial, as Defendant claims, and that
Defendant has not established any emotional distress or punitive damages. Reply at 2–6.
First, as to the parties’ dispute about the relevant time period for calculating
Plaintiff’s lost wages, the Court agrees with Plaintiff that the weight of authority requires

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

Date: September 25, 2017
Page 6

the Court to ascertain jurisdiction at the time of removal rather than the time of
trial. Fortescue v. Ecolab Inc., No. CV 14-0253 FMO RZX, 2014 WL 296755, at *2
(C.D. Cal. Jan.28, 2014) (“in determining the amount in controversy, the court declines to
project lost wages forward to some hypothetical trial date.”); Soto v. Kroger Co., No.
SACV 12-0780-DOC, 2013 WL 3071267, *3 (C.D. Cal. 2013) (“the guiding principle is
to measure amount in controversy at the time of removal”); Haase v. Aerodynamics
Inc., No. 2:09–CV–01751–MCE–GG, 2009 WL 3368519, *4 (E.D. Cal. 2009) (“The
amount in controversy must be determined at the time of removal.”); see 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 (1938)) (“jurisdiction depends on the
state of affairs when the case begins; what happens later is irrelevant.”); see
also Simmons v. PCR Tech., 209 F. Supp. 2d 1029, 1032 (N.D. Cal. 2002) (limiting
amount of lost wages considered in amount in controversy to those accrued at time of
removal).
Second, the amount in controversy may include damages for emotional
distress, Kroske, 432 F.3d at 980, as well as punitive damages when they are recoverable
as a matter of law. Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001); see Bell
v. Preferred Life Assur. Soc. of Montgomery, Ala., 320 U.S. 238, 240 (1943). To establish
probable emotional distress and punitive damages, a defendant may introduce evidence of
jury verdicts from cases with analogous facts. Simmons v. PCR Tech., 209 F.Supp.2d
1029, 1033 (N.D. Cal.2002); Surber v. Reliance Nat. Indem. Co., 110 F.Supp.2d 1227,
1232 (N.D. Cal.2000); see Kroske, 432 F.3d at 980 (“[T]he district court properly
considered . . . emotional distress damage awards in similar age discrimination cases in
Washington.”). Defendant in this case, however, has produced no evidence showing
emotional distress or punitive damage awards in cases with analogous facts. Instead,
Defendants claim that, “based on Plaintiff’s allegations and in particular the allegedly
severe and continuing nature of his emotional distress,” Plaintiff’s emotional distress
damages “are far more than nominal in character.” Not. Rem. ¶ 7b; Opp’n at 4. As to
punitive damages, Defendant simply states that “California courts have indicated punitive
damages may, conservatively, be two to three times the amount of compensatory
damages,” citing two cases that are not analogous to this case because they involve
entirely different claims. Not. Rem. ¶ 7c; Opp’n at 4–5.
Defendant fails to provide any evidence of the amount of emotional distress or
punitive damages that juries award in wrongful termination cases analogous to this one.
For both types of damages, Defendant has made the basic point that these damages are
available and could, in theory, be substantial. This is not enough, however, because
“conclusory allegations as to the amount in controversy are insufficient.” Matheson, 319

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. SACV 17-1262 DOC (DFM)

Date: September 25, 2017
Page 7

F.3d at 1090–91 (citing Gaus, 980 F.2d at 567). Moreover, allowing defendants to claim
that the amount in controversy includes punitive damages two to three times the amount
of compensatory damages, simply because such punitive damages might be available by
law, would significantly erode the jurisdiction of state courts. As a result, the Court
rejects this argument.
Thus, Defendant has failed to make the required showing by a preponderance of
the evidence—in fact, Defendant has provided no evidence of past jury verdicts
whatsoever—that emotional distress and punitive damages in the range of $15,000 are
awarded in cases analogous to this case. Based on the record before it, the Court cannot
say that it is “more likely than not” that emotional distress and punitive damages would
push the amount in controversy up from $60,000 to above $75,000. Sanchez, 102 F.3d at
404. Because Defendant has not established that the amount-in-controversy requirement
has been met, the Court lacks jurisdiction to hear this case.
IV.

Disposition

For the foregoing reasons, the Court GRANTS Plaintiff’s Motion. The Court
REMANDS this case the Superior Court of California, Orange County.
The Clerk shall serve this minute order on the parties.
MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk: djg