Dominique Zavala v. FedEx Ground Package System, Inc. et al

Filing 16

MINUTE ORDER (IN CHAMBERS) ORDER REMANDING CASE TO STATE COURT SUA SPONTE by Judge David O. Carter. For the reasons set forth above, the Court hereby REMANDS this case to the Superior Court of Orange, California. The Status Conference set for June 10, 2024 is hereby VACATED and removed from the Courts calendar. The Clerk shall serve this minute order on the parties. Case number 30-2023-01365892-CU-WT-WJC. Case Terminated. Made JS-6. (twdb)

JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. 8:24-cv-00553-DOC-DFM

Date: June 4, 2024

Title: DOMINIQUE ZAVALA V. FEDEX GROUND PACKAGE SYSTEM, INC., ET AL.
PRESENT:
THE HONORABLE DAVID O. CARTER, JUDGE
Karlen Dubon
Courtroom Clerk

Not Present
Court Reporter

ATTORNEYS PRESENT FOR
PLAINTIFF:
None Present

ATTORNEYS PRESENT FOR
DEFENDANT:
None Present

PROCEEDINGS (IN CHAMBERS): ORDER REMANDING CASE TO
STATE COURT SUA SPONTE
For the reasons explained below, the Court REMANDS this case Orange County
Superior Court.
I.

Background

Plaintiff alleges that Defendant FedEx Ground Package System, Inc.
(“Defendant”) terminated her in August 2022 in retaliation for her request for
accommodation, for filling workers’ compensation, and in discrimination against her
disability. Notice of Removal Ex. 1 (“Compl.”) (Dkt. 1-2) ¶ 23. Plaintiff then filed this
lawsuit, alleging discrimination, failure to accommodate, failure to engage in interactive
process, age discrimination, failure to prevent discriminmation, retaliation, wrongful
termination, meal and rest break violations, failure to pay overtime and wages, failure to
pay all compensation at termination, waiting time penalties, and unfair competition. See
id. ¶¶ 20-37.
Plaintiff originally filed suit in the Superior Court of California, County of Orange
on December 7, 2023. See id. at ¶ 39. On March 14, 2024, Defendant removed the action
to this Court, asserting diversity jurisdiction. Notice of Removal (“Not.”) (Dkt. 1).

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. 8:24-cv-00553-DOC-DFM

II.

Date: June 4, 2024
Page 2

Legal Standard

“If 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). Removal of a case
from state court to federal court is governed by 28 U.S.C. § 1441, which provides in
relevant part that “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.” 28 U.S.C. § 1441. This statute “is strictly construed against removal
jurisdiction,” and the party seeking removal “bears the burden of establishing federal
jurisdiction.” Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988)
(emphasis added) (citations omitted).
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(a). For diversity
jurisdiction purposes, a corporation is “deemed to be a citizen of every State and foreign
state by which it has been incorporated and of the State or foreign state where it has its
principal place of business.” 28 U.S.C. § 1332(c)(1). The presence of any single plaintiff
from the same state as any single defendant destroys “complete diversity” and strips the
federal courts of original jurisdiction over the matter. Exxon Mobil Corp. v. Allapattah
Servs., Inc., 545 U.S. 546, 553 (2005).
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 satisfied.” Id. In that situation, 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
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).
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

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. 8:24-cv-00553-DOC-DFM

Date: June 4, 2024
Page 3

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, 980 F.2d at
567). 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, the burden lies
with the defendant to show by a preponderance of the evidence that the jurisdictional
minimum is satisfied. 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 so 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.
If the court lacks subject matter jurisdiction, any action it takes is ultra vires and
void. See Gonzalez v. Crosby, 545 U.S. 524, 534 (2005); Steel Co. v. Citizens for a Better
Env’t, 523 U.S. 83, 94, 101–02 (1998). The lack of subject matter jurisdiction may be
raised at any time by either the parties or the court. Fed. R. Civ. P. 12(h)(3). If subject
matter jurisdiction is found to be lacking, the court must dismiss the action, id., or
remand pursuant to 28 U.S.C. § 1447(c). A court may raise the question of subject matter
jurisdiction sua sponte. See Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002).
III.

Discussion

Defendant has not met its burden to show that the amount in controversy
requirement is satisfied. The Court considers lost wages in the period from termination
until removal. Here, it appears that Plaintiff was terminated in August 2022, and the case
was removed on March 14, 2024. See Compl. ¶ 23; Not. In her Complaint, Plaintiff does
not specify her daily or weekly rate of pay; however, Plaintiff “earned an hourly wage of
$18,” and “consistently worked over five (5) hours per shift,” Compl. ¶¶ 18, 34.
Accordingly, an hourly rate of $18, assuming an average of 40 hours of work per week, is

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. 8:24-cv-00553-DOC-DFM

Date: June 4, 2024
Page 4

$720 per week. A weekly rate of $720 over 80 weeks results in $57,600 in lost wages,
well below the amount in controversy threshold.
Plaintiff seeks judgment against Defendants an amount “[f]or all actual,
consequential, and incidental damages, including but not limited to loss of earnings and
employee benefits, according to proof, but no less than three-hundred thousand dollars
($300,000), and no greater than three million dollars ($3,000,000).” Id. ¶ 38.This amount
reflects restitution for unfair competition, pre-judgment and post-judgment interest,
punitive and exemplary damages, attorneys’ fees, costs of suit incurred, and for other
relief the Court may deem just and proper. Id. To reach the jurisidictional threshold,
Defendant asks the Court to include these fees. Not. at 6.
This Court, however, does not include these types of speculative damages or civil
penalties when calculating the amount in controversy. See Traxler v. Multnomah Cnty.,
596 F.3d 1007, 1011 (9th Cir. 2010) (recognizing that front pay is speculative); Galt G/S
v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998) (“We hold that where 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.”).
Because Defendant has not satisfied their burden to show that more than $75,000 is at
issue in this case, the Court lacks diversity jurisdiction.
The Court’s decision not to include speculative awards in the amount in
controversy is reinforced by the fact that Congress has not raised the amount in
controversy since 1996—nearly three decades ago. 1 See The Federal Courts Improvement
Act of 1996, 110 Stat. 3850. Since then, the inflation rate is nearly 100% (i.e., prices have
almost doubled). Thus, adjusted for inflation, the amount in controversy should be around
$150,000. Stated conversely, a case worth $75,000 in 1996 is worth only $37,500 in
today’s dollars. Because inflation has plainly decreased the “real” value of the amount in
controversy, more and more cases are able to meet the jurisdictional threshold and can be
brought in federal court. As federal diversity jurisdiction expands, state court jurisdiction
to decide purely state law issues and develop state law correspondingly decreases. Thus,
the federal jurisdictional creep is incompatible with the most basic principles of
federalism.
Federalism is not the only loser in Congress’s failure to increase the amount in
controversy. When a case is improperly removed, as happened here, ultimate resolution is
For reference, in 1996, the minimum wage was $4.75 per hour, and only 16% of Americans had cell phones.
Indeed, the current amount-in-controversy is older than both of my law clerks.

1

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No. 8:24-cv-00553-DOC-DFM

Date: June 4, 2024
Page 5

delayed. Moreover, if a court does not immediately remand a case sua sponte, a plaintiff
may move to remand. Because cases subject to motion to remand are typically small
dollar cases, this increased motion work can quickly cause attorneys’ fees to outrun any
potential recovery and places an immense burden on a plaintiff’s lawyer working on
contingency. In this respect, the current low jurisdictional threshold reduces access to
justice. Therefore, the Court respectfully encourages Congress to reconsider the amount
in controversy minimum.
IV.

Disposition

For the reasons set forth above, the Court hereby REMANDS this case to the
Superior Court of Orange, California. The Status Conference set for June 10, 2024 is
hereby VACATED and removed from the Court’s calendar.
The Clerk shall serve this minute order on the parties.
MINUTES FORM 11
CIVIL-GEN

Initials of Deputy Clerk: kdu