David William Blood, et al v. Equifax, Inc, et al

Filing 20

MINUTES (IN CHAMBERS) ORDER (1) GRANTING PLAINTIFFS MOTION TO REMAND (Doc. 13); AND (2) DENYING AS MOOT DEFENDANTS MOTION TO STAY (Doc. 12) by Judge Josephine L. Staton: Before the Court are two motions: (1) a Motion to Remand and Request for Sa nctions filed by Plaintiffs; and (2) a Motion to Stay Case filed by Defendant Equifax. (MTR, Doc. 13; MTS, Doc. 12.) Having considered the parties papers and for the reasons discussed below, the Court GRANTS Plaintiffs Motion to Remand and DENIES AS MOOT Defendants Motion to Stay. Accordingly, the hearing set for August 3, 2018, at 2:30 p.m., is VACATED. (es)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

Date: July 30, 2018

Present: HONORABLE JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE

Terry Guerrero
Deputy Clerk

N/A
Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFF:

ATTORNEYS PRESENT FOR DEFENDANT:

Not Present

Not Present

PROCEEDINGS: (IN CHAMBERS) ORDER (1) GRANTING PLAINTIFFS’
MOTION TO REMAND (Doc. 13); AND (2) DENYING AS
MOOT DEFENDANT’S MOTION TO STAY (Doc. 12)
Before the Court are two motions: (1) a Motion to Remand and Request for
Sanctions filed by Plaintiffs; and (2) a Motion to Stay Case filed by Defendant Equifax.
(MTR, Doc. 13; MTS, Doc. 12.) The parties opposed each other’s Motions and each
filed a Reply. (MTR Opp., Doc. 17; MTS Opp., Doc. 14; MTR Reply, Doc. 18; MTS
Reply, Doc. 19.) The Court finds this matter appropriate for decision without oral
argument. Fed. R. Civ. P. 78(b); C.D. Cal. R. 7-15. Accordingly, the hearing set for
August 3, 2018, at 2:30 p.m., is VACATED. Having considered the parties’ papers and
for the reasons discussed below, the Court GRANTS Plaintiffs’ Motion to Remand and
DENIES AS MOOT Defendant’s Motion to Stay.
I.

BACKGROUND

This case arises out of a data security incident that Defendant announced on
September 7, 2017, which is now the subject of a Multidistrict Litigation (“MDL”)
proceeding in the Northern District of Georgia.

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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

Date: July 30, 2018

Plaintiffs filed the First Amended Complaint 1 in Orange County Superior Court on
April 19, 2018, alleging claims for (1) negligence; (2) violation of Consumer Credit
Reporting Act, Cal. Civ. Code §§ 1785, et seq.; (3) violation of Consumer Records Act,
Cal. Civ. Code § 1798.81.5; and (4) conversion. (FAC ¶¶ 5–45, Doc. 1-2.) Plaintiffs
seek compensatory damages, punitive damages, and attorney’s fees “to the maximum
limit of $74,000 per plaintiff.” (Id. at 10.) Plaintiffs also seek “other and further relief as
the court may deem proper, except that Plaintiffs do not seek declaratory relief, injunctive
relief, or any other type of equitable relief.” (Id. at 11.) Moreover, Plaintiffs attached to
the FAC signed stipulations in which each Plaintiff agreed that he or she “would not seek
or ask for, and hereby waives his or her right to recover or accept, an amount in excess of
$74,000 in this lawsuit.” (Stipulations, Doc. 1-2.)
On May 31, 2018, Defendant removed the case to this Court on the basis of
diversity jurisdiction. (See Notice of Removal, Doc. 1.) Then, on June 6, 2018,
Defendant filed a “Notice of Potential Tag Along Action,” requesting that the Judicial
Panel on Multidistrict Litigation (“JPML”) transfer this case for consolidation with the In
re Equifax MDL. (See Notice of Tag Along, Ex. A to Mot., Doc. 12-2.) The JPML then
issued a Conditional Transfer Order on June 8, 2018, which Plaintiffs opposed and is
currently being briefed before the JPML. (See CTO, Ex. B. to Mot., Doc. 12-2.)
Plaintiffs seek to remand this matter, and Defendant seeks a stay pending the
JPML’s final decision on transfer.
II.

ORDER OF PENDING MOTIONS

The Court must first determine in which order to consider the parties’ motions.
Plaintiffs argue that the Motion to Remand addresses jurisdictional defects, which must
be considered first. (MTS Opp. at 2.) Defendant argues that the Court should address its
Motion to Stay first and wait to see if the case is transferred to the MDL court before
considering the Motion to Remand. (MTR Opp. at 1–2.)
1

Although titled “First Amended Complaint,” this document is the original pleading that
initiated the case.
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

Date: July 30, 2018

“This Court applies the Conroy methodology when considering simultaneous
motions to remand and to stay in the MDL context.” Acosta-Smith v. Equifax Inc., No.
8:18-CV-00005-JLS (PJW), 2018 WL 1155981, at *2 (C.D. Cal. Mar. 5, 2018). The
Conroy approach proceeds as follows:
First, the Court gives preliminary scrutiny to the merits of the motion to
remand. If this preliminary assessment suggests that removal was
improper, the Court completes its consideration and remands the case to
state court. Second, if the jurisdictional issue appears factually or legally
difficult, the Court determines whether identical or similar jurisdictional
issues have been raised in other cases that have been or may be transferred
to the MDL proceeding. Third, if the jurisdictional issue is both difficult
and similar or identical to those in cases transferred or likely to be
transferred, then the Court will rule first on the defendant’s motion to stay.
Id.
In Acosta-Smith v. Equifax, another case arising out of Defendant’s security
breach, the Court found it appropriate to consider Defendant’s motion to stay before the
plaintiffs’ motion to remand. Id. at *3. In that case, the complaint alleged a $74,000 per
plaintiff damages cap, but the plaintiffs did not file stipulations binding themselves to the
cap. Id. at *3. Noting the absence of Ninth Circuit authority on the issue, the Court
found that it was not clear whether the damages cap alone was sufficient to establish the
amount in controversy with “legal certainty” and thus it was “not an obvious case for
remand.” Id.
As in Acosta-Smith, the primary issue raised by the instant Motion to Remand is
whether the amount in controversy satisfies the jurisdictional minimum. 2 (See MTR at

2

Plaintiffs separately argue that Defendant did not provide adequate evidence of the
parties’ diversity in its Notice of Removal, though Defendant responds that it need only allege
complete diversity at this juncture. (See MTR at 7; MTR Opp. at 7–9.) However, the Court need
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

Date: July 30, 2018

8–15.) However, there is one critical difference here: Plaintiffs have submitted signed
stipulations stating that they will not seek, ask for, recover, or accept an amount in excess
of $74,000. (See Stipulations.) There can be no dispute that a plaintiff may obtain
remand “by stipulating to [an] amount[] at issue that fall[s] below the federal
jurisdictional requirement.” Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 595
(2013). Thus, engaging the first step of Conroy, a preliminary assessment of the merits
of the Motion to Remand suggests that removal was improper, “and thus, the Court must
promptly complete its consideration of Plaintiffs[’] [Motion to Remand] and remand if
necessary.” Goodwin v. Kojian, No. SACV 13-325-JLS (JPRx), 2013 WL 1528966, at
*2 (C.D. Cal. Apr. 12, 2013). For the same reason, even if the Court were to proceed to
the second step of Conroy, the jurisdictional issue is not “sufficiently difficult” to warrant
deciding Defendant’s Motion to Stay before Plaintiffs’ Motion to Remand. Id.
Accordingly, the Court will decide the Motion to Remand first before reaching
the merits of Defendant’s Motion to Stay.
III.

MOTION TO REMAND

When reviewing a notice of removal, “it is to be presumed that a cause lies outside
the limited jurisdiction of the federal courts and the burden of establishing the contrary
rests upon the party asserting jurisdiction.” Hunter v. Philip Morris USA, 582 F.3d 1039,
1042 (9th Cir. 2009) (quoting Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 684 (9th
Cir. 2006) (internal quotation marks omitted)). Courts “strictly construe the removal
statute against removal jurisdiction,” and thus “the defendant always has the burden of
establishing that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992).
“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.” U.S. Bank Nat’l Ass’n v. Azam, No.
not reach this dispute because it finds that Defendant cannot satisfy the amount in controversy
requirement.
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

Date: July 30, 2018

SACV-13:633-JLS (JPRx), 2013 WL 12130577, at *2 (C.D. Cal. Apr. 30, 2013), aff’d
sub nom. U.S. Bank Nat. Ass’n v. Azam, 582 F. App’x 710 (9th Cir. 2014). As Defendant
concedes, removal is precluded where a plaintiff has entered a binding stipulation
“stating that he does not seek, will not ask for, and waives his right to accept an amount
… in excess of $75,000.” (MTR Opp. at 13.) See, e.g., Patel v. Nike Retail Servs., Inc.,
58 F. Supp. 3d 1032, 1038 (N.D. Cal. 2014); Ford v. United Parcel Serv., Inc., No. 3:14CV-1872-D, 2014 WL 6491446, at *2 (N.D. Tex. Nov. 20, 2014); Gomez v. RSC Equip.
Rental Inc., No. CV-08-009-JLQ, 2008 WL 725022, at *1 (E.D. Wash. Mar. 17, 2008).
Here, Plaintiffs have each filed binding stipulations averring that the amount in
controversy will not exceed the jurisdictional minimum. (See Stipulations.) Although
some of the signatures are electronic, as Defendant points out, (MTR Opp. at 12, 14),
Plaintiffs’ Counsel has satisfied the relatively “low burden” of authenticating these
signatures by explaining how they were obtained through Counsel’s online portal system.
(See Wilens Decl., Doc. 18.) Nanavati v. Adecco USA, Inc., 99 F. Supp. 3d 1072, 1076
(N.D. Cal. 2015); Prasad v. Pinnacle Mgmt. Servs. Co., LLC, No. 5:17-CV-02794-HRL,
2018 WL 401231, at *5 (N.D. Cal. Jan. 12, 2018). Thus, the stipulations are effective to
legally bind all Plaintiffs to the damages cap, and therefore Defendant cannot show with
legal certainty that the amount in controversy is satisfied. 3 Cf. Acosta-Smith, 2018 WL
1155981, at *2–*3.
Accordingly, the Court GRANTS Plaintiffs’ Motion to Remand. However, the
Court does not find that sanctions are warranted, and so DENIES Plaintiff’s request for
sanctions.

3

Defendant also devotes a significant portion of its Opposition to arguing that the
damages cap as alleged in the FAC is not binding because California law does not allow a
plaintiff to plead a punitive damages amount in the complaint. (See MTR Opp. at 9–12.) The
Court need not address this argument because it has no relevance to the effectiveness of
Plaintiffs’ stipulations. See Ford, 2014 WL 6491446, at *7 (noting that a plaintiff may avoid
removal by alleging that she seeks monetary relief of a certain sum “or less … and includes with
her petition the necessary stipulation or affidavit”).
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____________________________________________________________________________
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.: 8:18-cv-00958-JLS-PJW
Title: David William Blood, et al. v. Equifax, Inc., et al.

V.

Date: July 30, 2018

CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion to Remand is GRANTED.
Defendant’s Motion to Stay is DENIED AS MOOT. This matter is remanded to the
Orange County Superior Court, case no. 30-2018-00975969-CU-BT-CJC.

Initials of Preparer: tg

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