Gutierrez v. Asset Management Specialist Inc.

Filing 14

ORDER to SHOW CAUSE signed by Magistrate Judge Gary S. Austin on 7/22/2013. Within fifteen days (15) of the date of this order, Defendant shall file a written response to this Order to Show Cause outlining why jurisdiction is proper.(Martinez, A)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JESUS GUTIERREZ, on behalf of himself
and all others similarly situated, an on
behalf of the general public,

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13-cv-149 LJO GSA

Plaintiffs,
v.

ORDER TO SHOW CAUSE

ASSET MANAGEMENT SPECIALISTS,
INC., a Nevada Corporation, and DOES 1
through 10, inclusive,
Defendants.

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INTRODUCTION
On January 30, 2013, Defendant, Asset Management Specialists, Inc. (“Defendant”)

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removed this class action from the Fresno County Superior Court to this Court. (Doc. 1). The

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parties have reached a settlement agreement in this case and on June 12, 2013, they filed inter

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alia, a Motion for Preliminary Approval of the Class Action Settlement. (Doc. 11). The hearing

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on the motion was scheduled for July 19, 2013 at 9:30. The Court vacated the hearing and took

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the matter under submission. (Doc. 13). Upon a review of the case and the proposed settlement, it
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appears that federal court jurisdiction is not proper
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DISCUSSION

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Pursuant to Title 28 of the United States Code section 1441(a), a defendant may remove

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an action to federal court if the district court has original jurisdiction. 28 U.S.C. § 1441(a);

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Hunter v. Phillip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (quoting Ansley v.

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Ameriquest Mortg. Co., 340 F.3d 858, 861 (9th Cir. 2003)). If at any time before final judgment

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it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. 28

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U.S.C. § 1447(c). Here, Defendant removed this action based on diversity under 28 U.S.C. §§

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1332(a), 1441, 1446.

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District courts have original jurisdiction of all civil actions between citizens of different

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States in which Athe matter in controversy exceeds the sum or value of $75,000, exclusive of

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interest and costs.@ 28 U.S.C. ' 1332(a). In 2005, the Class Action Fairness Act ("CAFA") was

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enacted and section 1332 was amended to expand diversity jurisdiction over class actions.

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Yeroushalmi v. Blockbuster, Inc., No. CV 05-225-AHM (RCX), 2005 WL 2083008, at *1 (C.D.

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Cal. July 11, 2005). Under Section 1332, diversity jurisdiction exists for traditional class actions

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where there is complete diversity of citizenship and the amount in controversy for an individual

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plaintiff is at least $75,000, and in mass class actions where the aggregated monetary relief claims

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of 100 or more persons exceeds $5,000,000 and the parties satisfy minimal diversity. Abrego

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Abrego v. The Dow Chemical Co., 443 F.3d 676, 680-81 (9th Cir. 2006) (citations omitted).

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In determining whether diversity of citizenship exists and removal is proper, the court

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considers the pleadings filed at the time of removal. Provincial Gov=t of Marinduque v. Placer

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Dome, Inc., 582 F.3d 1083, 1085 n.5 (9th Cir. 2009). The operative complaint in this case is

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Plaintiff’s First Amended Complaint (“FAC”) which alleges the following state law claims : (1)

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failure to pay wages under Labor Code §§ 510 and 1194; (2) failure to provide accurate itemized

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wage statements under Labor Code § 226; (3) failure to timely pay wages under Labor Code §§

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201-203; (4) failure to timely pay wages during the course of employment under Labor Code §

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204; (5) failure to reimburse expenses under Labor Code § 2802; (6) unfair competition pursuant

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to Business & Professions Code § 17200; and (7) Civil Penalties under the Private Attorneys

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General Act (“PAGA”). The FAC does not allege an amount of damages.
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In this circuit, where the amount of damages are not specified in the complaint, it is the

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removing party=s burden to show by a preponderance of the evidence that the amount in

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controversy exceeds the jurisdictional amount. Lewis v. Verizon Communications, Inc., 627 F.3d

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395, 397 (9th Cir. 2010); Abrego Abrego, 443 F.3d at 679; Guglielmino v. McKee Foods Corp.,

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506 F.3d 696, 699 (9th Cir. 2007). The amount in controversy is merely an estimate of the total

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amount in dispute; and the Ninth Circuit expressly contemplates that the district court will

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consider some evidentiary record in determining the amount in controversy. Lewis, 627 F.3d at

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400.

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In this case, it is clear that that the case does not meet the jurisdictional requirements of

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CAFA as the amount of the claims do not exceed $5,000,000.1 It also does not appear that

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jurisdiction is proper under diversity for traditional class actions pursuant to 28 U.S.C. § 1332(a)

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because the amount in controversy for any one plaintiff does not exceed the minimal

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jurisdictional amount of $75,000. The Motion for Preliminary Approval of the Class Action

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Settlement indicates that the maximum settlement amount is $235,000 and that there are

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approximately 150 members in the class. Thus, no individual plaintiff meets the $75,000 amount.

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Even if this Court were to consider the potential amount of damages, a review of the causes of

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action and the maximum amount of Plaintiff’s projected damages suggest this criteria cannot be

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met given the class size. (Doc. 11, at pg. 13 lines 11-27).

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AThe removal statute is strictly construed against removal jurisdiction.@ Provincial Gov=t

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of Marinduque, 582 F.3d at 1087. If the district court determines that it lacks jurisdiction, the

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action should be remanded back to the state court. Martin v. Franklin Capital Corp., 546 U.S.

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132, 134 (2005).

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The Court notes that Defendant has not alleged this section as a basis for this Court’s jurisdiction in its Notice of
Removal . (Doc. 1).

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CONCLUSION AND ORDER

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Accordingly, within fifteen days (15) of the date of this order, Defendant shall file a

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written response to this Order to Show Cause outlining why jurisdiction is proper. In the

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alternative, the parties may file a stipulation to remand this action to the Fresno County Superior
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Court.

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IT IS SO ORDERED.
Dated:

July 22, 2013

/s/ Gary S. Austin
UNITED STATES MAGISTRATE JUDGE

DEAC_Signature-END:

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