Sims v. AT&T Mobility Services, LLC

Filing 21

ORDER signed by Judge John A. Mendez on 2/26/2013 STAYING CASE, including Defendant's 6 Motion to Dismiss, pending a decision in Standard Fire Ins. Co. v. Knowles; ALLOWING either party to move to lift the stay within 30 days of a disposition in Standard Fire Ins. Co. v. Knowles; DENYING 8 Motion for Attorneys' Fees and Costs. (Michel, G)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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PHILLIP SIMS, individually
and on behalf of all others
similarly situated,

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Plaintiff,

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No.

2:12-cv-02702-JAM-AC

ORDER GRANTING DEFENDANT’S
REQUEST TO STAY

v.
AT&T MOBILITY SERVICES LLC, a
Delaware limited liability
company; and DOES 1 through
10, inclusive,
Defendants.

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Pending before the Court are Plaintiff Phillip Sims’s

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(“Plaintiff”) Motion to Remand and for Attorneys’ Fees and Costs

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(Doc. #8) and Defendant AT&T Mobility Services LLC’s

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(“Defendant”) Motion to Dismiss Plaintiff’s Seventh and Eighth

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Claims (Doc. #6).1

Both motions are fully briefed.

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I.

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BACKGROUND

This lawsuit was originally filed in San Joaquin County

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The motions were determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing for both
motions was originally scheduled for January 23, 2013.
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Superior Court.

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U.S.C. § 1453 claiming federal jurisdiction under the Class

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Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d).

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alleges that CAFA’s jurisdictional requirements are met because

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more than $5,000,000 is in controversy and minimal diversity of

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citizenship exists between the parties.

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action, Defendant moved to dismiss Plaintiff’s seventh and eighth

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claims and strike Plaintiff’s claim for punitive damages.

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Plaintiff then moved to remand this action to state court because

Defendant then removed the action pursuant to 28

Defendant

After removing the

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he contests the Court’s subject matter jurisdiction over this

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action.

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The substantive claims raised by Plaintiff relate to his

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former employment with Defendant.

Plaintiff was a Retail Store

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Manager (“RSM”) for one of Defendant’s retail locations.

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Plaintiff alleges that his position was unlawfully classified as

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exempt from state overtime and break period laws.

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accordingly seeks unpaid wages as well as other penalties

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allegedly due under California law.

Plaintiff

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II.

OPINION

Plaintiff’s Motion to Remand will be addressed first because

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if the Court lacks subject matter jurisdiction, the action must

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be remanded to state court without reaching the merits of

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Defendant’s motion to dismiss.

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A.

Subject Matter Jurisdiction
1.

Legal Standard

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Federal district courts have subject matter jurisdiction

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over class actions in which (1) the amount in controversy exceeds
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$5,000,000, (2) there exists at least minimal diversity of

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citizenship between the parties, and (3) the class consists of at

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least 100 members.

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defendant may remove such an action from state to federal court.

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28 U.S.C. § 1441(a).

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CAFA, 28 U.S.C. §§ 1332(d)(2), 1332(d)(5).

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When a defendant removes a class action from state court

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pursuant to CAFA, it bears the burden of showing jurisdiction.

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Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir.

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2007) (citing Abrego Abrego v. The Dow Chemical Co., 443 F.3d

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676, 685 (9th Cir.2006) (per curiam)).

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specifically pleads an amount in controversy that is less than

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the $5,000,000 jurisdictional threshold, the removing defendant

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must “contradict the plaintiff’s own assessment of damages, [and]

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overcome the presumption against federal jurisdiction” by showing

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with legal certainty that the amount in controversy exceeds the

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statutory threshold.

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amount in controversy greater than the jurisdictional threshold,

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remand is only proper when it is shown to a legal certainty that

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the threshold is not actually met.

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no amount in controversy is pled, a removing defendant need only

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show that the amount is sufficient by a preponderance of the

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evidence.

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Id. at 999-1000.

When a plaintiff

If a plaintiff pleads an

Id. at 998.

Finally, where

Id.

The legal certainty standard requires that the Defendant

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provide enough “concrete evidence . . . to estimate” the actual

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amount in controversy.

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standard sets a high bar for the party seeking removal, but it is

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not insurmountable.”

Id. at 1000.

Id.

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“The ‘legal certainty’

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2.

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Discussion

Plaintiff seeks remand on the grounds that Defendant has not

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shown to a legal certainty that the jurisdictional amount in

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controversy requirement is satisfied.

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legal certainty standard applies because the Complaint

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specifically alleges that the amount in controversy is less than

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$5,000,000.

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the amount in controversy, Plaintiff argues that the class size

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estimated by Defendant is over-inclusive and that Defendant’s

Plaintiff argues that the

In order to rebut Defendant’s evidence concerning

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other damages calculations are supported by insufficient

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evidence.

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$5,000,000 (the “CAFA waiver”), which defeats federal

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jurisdiction.

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ways.

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recovery beyond $5,000,000 in order to avoid federal

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jurisdiction.

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plead an amount in controversy less than $5,000,000, but instead

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pleads a waiver of any recovery beyond that amount.

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Defendant alternately argues that it has shown that the amount in

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controversy exceeds the $5,000,000 threshold.

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first show that the $5,000,000 threshold is met before the

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validity of the CAFA waiver affects jurisdiction, so the Court

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will address the amount in controversy first.

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Plaintiff also argues that he waived recovery beyond

Defendant responds to Plaintiff’s arguments in two

First, Defendant argues that Plaintiff cannot waive

Defendant also argues that the Complaint does not

a.

Second,

Defendant must

Amount in Controversy

Plaintiff argues that Defendant failed to show to a legal

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certainty that the $5,000,000 threshold is met in this case.

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Plaintiff points to the Notice of Removal and claims that it is

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not supported by evidence sufficient to show subject matter
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jurisdiction under the legal certainty standard.

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responds that the legal certainty standard does not apply in this

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case because Plaintiff never pled an amount in controversy in his

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complaint.

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damages over $5,000,000, but not that the amount in controversy

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is less than $5,000,000.

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of damages beyond $5,000,000 was made in bad faith because the

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validity of such waivers is currently pending before the Supreme

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Court.

Defendant

Defendant argues that Plaintiff only pled a waiver of

Defendant adds that Plaintiff’s waiver

Defendant therefore takes the position that it must only

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show that the threshold is met by a preponderance of the

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evidence, not that it is met to a legal certainty.

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The Court disagrees with Defendant’s characterization of the

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complaint.

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“[T]he aggregate amount in controversy is less than five million

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dollars ($5,000,000).

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five million dollars ($5,000,000) regarding the aggregate amount

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in controversy for the class claims alleged herein.”

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¶ 10.

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both that the amount in controversy is less than $5,000,000 and

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that he waives recovery beyond $5,000,000 in the event that he is

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incorrect regarding the amount actually in controversy.

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Plaintiff pleads at paragraph 10 of his complaint,

Plaintiff further waives seeking more than

Complaint

Based on this paragraph, Plaintiff has clearly alleged

The Lowdermilk decision analyzed nearly identical language

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in determining that the legal certainty standard applied.

In

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Lowdermilk, the plaintiff pled entitlement to damages “in total,

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less than five million dollars” and also sought attorneys’ fees.

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Lowdermilk, 479 F.3d at 997.

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language used by the plaintiff triggered the legal certainty

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standard.

The Lowdermilk court held that the

Id. at 998-99.
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With regard to Plaintiff’s complaint in this case, the

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language used to plead entitlement to less than $5,000,000 in

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damages is functionally indistinguishable from that used in the

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Lowdermilk case.

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to invoke the heightened standard is make some affirmative claim

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that he or she is entitled to damages below the jurisdictional

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threshold.

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bears the burden of showing that the jurisdictional threshold is

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met to a legal certainty.

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Based on Lowdermilk, all a plaintiff has to do

That was done in this case, and Defendant therefore

Defendant’s argument that Plaintiff pled entitlement to

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damages below $5,000,000 in bad faith is also unpersuasive.

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Defendant bases this argument on the fact that the validity of

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waivers to damages over $5,000,000 in class actions is currently

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pending before the Supreme Court.

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argument, however, is that the validity of specifically pleading

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entitlement to damages less than $5,000,000 is not being

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reviewed, and Lowdermilk is still valid.

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argument may apply to the CAFA waiver, but Defendant has not

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produced authority to support applying its argument to the

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allegation that the amount in controversy is below $5,000,000.2

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Accordingly, the Court declines to find the mere inclusion of a

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CAFA waiver in a complaint constitutes bad faith with regard to a

The problem with Defendant’s

Defendant’s bad faith

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Defendant’s argument that 28 U.S.C. § 1446(c)(2)(A) requires a
preponderance standard is unpersuasive because that statute
refers only to removals under 28 U.S.C. § 1332(a), not CAFA. See
Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006)
(“Given the care taken in CAFA to reverse certain established
principles but not others, the usual presumption that Congress
legislates against an understanding of pertinent legal principles
has particular force.”).
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separate amount in controversy allegation.

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Based on the foregoing, Defendant must show enough “concrete

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evidence . . . to estimate” the actual amount in controversy, and

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that the amount is over $5,000,000.

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removal, Defendant argues that Plaintiff’s claims place the

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following amounts in controversy:

In Defendant’s notice of

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Overtime Claims

$3,060,408.00

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Waiting Time Penalties

$290,757.60

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Meal and Rest Period Compensation Claims

$4,079,836.80

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Wage Statement Violation Claims

$836,000.00

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Total:

$8,267,001.80

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If Defendant’s amount in controversy is supported by sufficient

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evidence, it exceeds $5,000,000 and this Court has jurisdiction.

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i.

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Class Size

Defendant argues that the class in this litigation contains

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at least 209 individuals.

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Jo Anne Barron to support its contention.

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3).

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generalist for Defendant, and that she has access to the employee

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records of Defendant.

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Defendant’s records, Ms. Barron determined that 209 individuals

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worked in Defendant’s Northern California district during the

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relevant time period, with an average of 102 actively employed at

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any given time.

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those 209 individuals are no longer employed with Defendant.

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¶ 5.

Defendant relies on the declaration of
Barron Decl. (Doc. #1-

Ms. Barron testified that she is a human resources

Id. ¶ 1.

Id. ¶ 3.

Based on her review of

Ms. Barron also testified that 63 of

Finally, Ms. Barron testified that the average salary of

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Id.

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the 209 employees is in excess of $40,000.

Id. ¶ 7.

Plaintiff disputes Defendant’s estimated class size,

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claiming that the class used by Defendant is over-inclusive.

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Plaintiff argues that he only intends to represent RSMs who

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worked for Defendant at retail locations within California’s

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Central Valley.

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Plaintiff accessed Defendant’s website to list store locations

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within 50 miles of Sacramento, CA and Fresno, CA.

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(Doc. #8-3), Exs. D-E.

To show a smaller estimated class size,

Korvilas Decl.

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Plaintiff’s complaint seeks to represent a class defined as:

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All Retail Sales Managers (“RSM”) in AT&T’s district
encompassing the Central Valley of California who
work(ed) for AT&T Mobility Services LLC at any time
within four years prior to the initiation of this
action until the present.

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Complaint ¶ 12.
Importantly, the definition used in the complaint relies on

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Defendant’s definition of the district encompassing the Central

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Valley, but the definition does not limit the class to those RSMs

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who worked in the geographical area known as the Central Valley

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of California.

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expand the geographic region beyond his intent, arguing that his

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use of a lower case “d” in the word district indicates that he

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“intended to refer to the smallest geographic subdivision of AT&T

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including the Central Valley area.”

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Court is not persuaded by Plaintiff’s rebuttal.

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used in the complaint relies on the district established by

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Defendant that encompasses the Central Valley.

Plaintiff argues that Defendant is attempting to

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Reply (Doc. #17) 8.

The

The definition

Ms. Barron

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testified that the corresponding district is Defendant’s Northern

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California district.

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is also under-inclusive because it focuses only on the immediate

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areas around Fresno and Sacramento, not the Central Valley as a

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whole.

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encompasses the entire Central Valley, and by implication, at

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least some areas outside of the Central Valley, focusing only on

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the Fresno and Sacramento regions fails to consider at least some

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RSMs who should be included in the class.

Plaintiff’s reliance on Defendant’s website

Since the district referenced in the complaint

Accordingly, the

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unrebutted evidence before the Court shows to a legal certainty

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that the relevant district is the Northern California district

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defined by Ms. Barron, and the relevant class size is

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approximately 209 RSMs.

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ii.

Evidence Supporting Amount in Controversy

Defendant bases its estimates of the amount in controversy

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on 1) the declaration submitted by Ms. Barron, 2) declarations

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submitted by RSMs in other litigation brought by Plaintiff’s

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counsel, and 3) the allegations in the complaint itself.

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The gist of the legal certainty standard is that the

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proponent of federal jurisdiction in a CAFA case must produce

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some evidence that permits a court to estimate the amount in

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controversy.

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amount in controversy is less than $5,000,000, a removing

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Defendant cannot rely solely on the allegations in the complaint.

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Bonnel v. Best Buy Stores, L.P., No. C–12–2285 EMC, 2012 WL

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3195081, *5, — F. Supp. 2d — (N.D. Cal. Aug. 7, 2012).

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allegations in the Complaint are still relevant because they

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indicate what relief the plaintiff is seeking, and therefore

Thus, when a Plaintiff specifically pleads that the

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The

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provide a basis for estimating the amount in controversy when

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coupled with additional evidence submitted in support of removal.

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Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F.

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Supp. 2d 993, 1001 (C.D. Cal. 2002).

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Plaintiff does not dispute that the RSM declarations are

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accurate, but he does dispute their relevance.

Plaintiff points

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out that two of the three declarants live outside of the Central

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Valley and that their experiences are not germane to this

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lawsuit.

First, for the reasons discussed with regard to class

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size, the declarant who worked for Defendant in Susanville, CA is

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likely a member of the putative class because her city is in

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Northern California.

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worked in Capitola, CA and Monterey, CA is relevant because

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Capitola is in Northern California and the RSM’s experience in

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Monterey is at least probative of Defendant’s overall corporate

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policies, which are at issue here.

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of the third declarant who worked in Fresno, CA and Clovis, CA

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are undisputedly relevant and unrebutted by Plaintiff with regard

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to the number of hours worked by RSMs pursuant to Defendant’s

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alleged policies.

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Second, the declaration from the RSM who

In any event, the experiences

With regard to the Court’s jurisdiction under CAFA in this

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case, the question then becomes whether or not Ms. Barron’s

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declaration combined with the allegations in the complaint and

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the declarations of the RSMs submitted in support of removal

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permit the Court to estimate an amount in controversy that

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exceeds $5,000,000.

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is not intended to comment on the merits of Plaintiff’s claims.

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The Court is required to assume only for jurisdictional purposes

The Court notes that the following analysis

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the truth of Plaintiff’s allegations that Defendant improperly

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misclassified RSMs as exempt from wage and hour regulations, but

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the opposite may be proven by Defendant as the case proceeds.

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iii.

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Overtime Claims

In support of removal, Defendant estimates that each class

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member seeks, at a minimum, one hour of overtime per day for five

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days per week.

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$3,060,408.00 based on an average of 102 RSMs employed at any

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given time multiplied by an hourly overtime rate of $28.85.3

Defendant then calculates a total amount of

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Plaintiff responds to Defendant’s calculation by arguing that it

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is improper under the legal certainty standard to assume one hour

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of uncompensated overtime per day and five workdays per week.

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Plaintiff points to Lopez v. Source Interlink Cos., Inc., No.

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2:12–CV–00003–JAM–CKD, 2012 WL 1131543, at *4, Slip Copy (E.D.

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Cal. Mar. 29, 2012), a case remanded by this Court partially on

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the finding that there was no evidence to support the defendant’s

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assumption that workers worked one hour of uncompensated overtime

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and missed one meal break per week.

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in order to meet the legal certainty standard, Defendant must

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produce a damages analysis with respect to each class member.

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Plaintiff also argues that

The legal certainty standard does not require individualized

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damages analyses with respect to each class member.

All that the

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legal certainty standard requires is the production of concrete

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The calculation is: ($28.85/hour)*(5 hours/week)*(4 years in
the statutory period * 52 weeks/year)*(102 RSMs) = $3,060,408.
Defendant derived a $28.85 hourly wage by dividing the average
$40,000 RSM salary established by Ms. Barron by 52 weeks/year and
by 40 hours/week to arrive at an hourly salary of $19.23.
Overtime is paid at 1.5 times the regular rate, so the overtime
rate is $28.85/hour.
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evidence from which a court can estimate the amount in

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controversy.

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reliance on Lopez is also misplaced.

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declined to include damages based on the removing defendant’s

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assumptions without supporting evidence.

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at *4.

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indicating that they regularly worked far more than five

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uncompensated overtime hours per week.

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with Plaintiff’s allegations that Defendant “required PLAINTIFF

Lowdermilk, 479 F.3d at 1000.

Plaintiff’s

In Lopez, the Court

Lopez, 2012 WL 1131543,

Here, Defendant produced three declarations from RSMs

This evidence accords

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and members of the PLAINTIFF CLASS to work more than eight(8)

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hours per day, twelve (12) hours per day, and/or forty (40) hours

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per week.”

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overtime hours per week when Plaintiff’s allegations and the RSM

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declarations support a much higher sum is reasonable and

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satisfies the legal certainty standard.

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has met its burden on the overtime claims and shown that

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Plaintiff has placed $3,060,408.00 in controversy.

Compl. ¶ 22.

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iv.

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A calculation based on only five

Accordingly, Defendant

Waiting Time Penalties

Defendant calculates that $290,757.60 is placed in

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controversy by Plaintiff’s waiting time penalties claims based on

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Ms. Barron’s testimony that 63 putative class members no longer

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work for Defendant and were thus, according to Plaintiff’s

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allegations, not paid their final wages within the statutorily

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mandated period.4

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the evidence.

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Plaintiff again challenges the sufficiency of

Plaintiff alleges that class members no longer employed by
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The calculation is: $19.23 * 8 hours in a standard work day *
30 days * 63 eligible putative class members = $290,757.60.
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Defendant are entitled to waiting time penalties pursuant to Cal.

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Labor Code §§ 201-203.

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employee is entitled to immediate payment of all wages due upon

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termination.

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within 72 hours.

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wages, he or she is entitled to penalties in the amount of one

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normal day’s salary up to 30 days.

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employees that no longer work for Defendant as of November 2,

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2012 when Ms. Barron’s declaration was filed.

Under those statutes, a terminated

An employee that quits is entitled to all wages due
For each day that the employee waits for final

Defendant has identified 63

Plaintiff’s

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allegation is that each terminated employee is entitled to

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waiting time penalties for unpaid overtime wages, which Plaintiff

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alleges were systematically never paid during the period

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applicable to this lawsuit, including all terminated employees up

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to the present.

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days ago, so based on her testimony and Plaintiff’s allegations,

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it is certain that each of the 63 employees would be entitled to

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the maximum waiting time penalty if Plaintiff’s suit is

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successful.

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that the waiting time penalty claims place $290,757.60 in

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controversy.

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Ms. Barron’s declaration was filed more than 33

Defendant has therefore shown to a legal certainty

v.

Meal and Rest Break Claims

To estimate the amount in controversy for Plaintiff’s meal

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and rest break claims, Defendant assumes that each of the 102

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class members employed at any given time during the relevant

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period missed one meal break and one rest break per shift.

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Defendant bases its assumption on Plaintiff’s allegations, which

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indicate that Defendant failed to provide meal periods during

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shifts greater than five hours and rest breaks for shifts over
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four hours.

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§ 226.7(b), an employee is entitled to an extra hour of pay for

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each shift without sufficient meal breaks and an hour of pay if

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rest breaks are not provided.

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that the aggregate amount in controversy for the meal and rest

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break claims is $4,079,836.80.5

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calculation by arguing that Defendant needs to present a damages

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analysis for each individual employee in order to meet the legal

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certainty standard.

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Compl. ¶¶ 32-33.

According to Cal. Labor Code

Accordingly, Defendant calculated

Plaintiff challenges this

For the same reasons discussed with regard to the overtime

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calculation, the Court finds Defendant’s calculation of the

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amount in controversy with regard to the meal and rest break

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claims to be reasonable.

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allegations in Plaintiff’s complaint, the declarations of RSMs

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produced by Defendant, and Ms. Barron’s declaration.

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declarations indicate that RSMs routinely worked more than five

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shifts exceeding five hours per week, and the complaint alleges

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that they were never provided the proper breaks.

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aggregate of these three sources of information, the Court is

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satisfied that this estimate is based on concrete evidence and

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therefore satisfies the legal certainty standard.

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vi.

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This amount is again based on the

The RSM

Taking the

Wage Statement Violations

Defendant argues that the amount in controversy for the wage

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statement violation claims is $836,000.

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this amount assuming that each of 209 class members are entitled

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5

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Defendant calculates

The calculation is: ($19.23/hour)*(2 extra hours/workday)*(5
workdays/week)*(208 weeks during the four year limitations
period)*(102 putative class members employed at any given time) =
$4,079,836.80.
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to $4,000 in statutory damages, but points out that the amount

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might be much more if actual damages are proven.

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assumption, however, is deficient because there is no evidence in

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the record as to how long RSMs worked with Defendant and thus how

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many allegedly deficient wage statements each received.

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According to Cal. Labor Code § 226(e), each employee is entitled

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to $50 for the first violation and $100 per employee for each

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subsequent violation, not to exceed $4,000.

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improper under the legal certainty standard for the Court to

This

It would be

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speculate as to how many wage statements each class member

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received or how often wage statements were issued.

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Defendant has not shown to a legal certainty an amount in

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controversy for the Wage Statement Violation claims.

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vii.

Accordingly,

Total Amount in Controversy

Based on the foregoing analysis, the Court finds that

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Defendant has satisfied the legal certainty standard with respect

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to the overtime claims and the meal and rest break claims.

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Defendant has shown the amount in controversy to be at least

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$3,060,408.00 plus $4,079,836.80 plus $290,757.60 for a total

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amount of $7,431,002.40.

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prayer for other damages and attorneys’ fees further increases

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the amount in controversy.

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the amount in controversy, however, because the $5,000,000

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threshold is already exceeded.

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b.

Thus,

Defendant also argues that Plaintiff’s

It is unnecessary to further analyze

Validity of Plaintiff’s CAFA Waiver

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Finally, Plaintiff argues that since he waives recovery of

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individual damages in excess of $75,000 and class damages above

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$5,000,000 in aggregate, the Court lacks jurisdiction under CAFA.
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Defendant argues that remand on this basis is improper because

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the validity of such waivers will be considered by the Supreme

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Court during its current term.

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Court’s grant of certiorari in Standard Fire Ins. Co. v. Knowles

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to support its argument.

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involves the validity of a nearly identical CAFA waiver.

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district court in that case held that the waiver was valid, the

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Eighth Circuit declined to hear an interlocutory appeal on the

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issue, and the Supreme Court granted certiorari.

Defendant cites the Supreme

133 S.Ct. 90 (2012).

Standard Fire
The

Knowles v.

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Standard Fire Ins. Co., No. 4:11–CV–04044, 2011 WL 6013024, Slip

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Copy (W.D. Ark. Dec. 2, 2011); Knowles v. Standard Fire Ins. Co.,

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No. 11–8030, 2012 WL 3828891 (8th Cir. Jan. 4, 2012).

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Additionally, the Ninth Circuit recently held in abeyance a

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petition to appeal the remand of a nearly identical case in the

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Central District of California.

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Services LLC; No. 12-80143, Dckt. # 6 (9th Cir. 2012).

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argues in his reply that there is no need to stay the case

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because the case should be remanded based on Defendant’s failure

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to show the requisite amount in controversy.

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Rodriguez v. AT&T Mobility
Plaintiff

As discussed previously, the Court finds that Defendant has

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shown the requisite amount in controversy.

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validity of Plaintiff’s waiver to any damages exceeding that

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amount controls federal subject matter jurisdiction.

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waiver is valid, this case must be remanded because CAFA

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jurisdiction would not exist.

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Defendant has a right to proceed in this forum.

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Accordingly, the

If the

If the waiver is invalid, then

Under the existing law of the Ninth Circuit, CAFA waivers
similar to the one made by Plaintiff are probably valid.
16

See

1

Lowdermilk, 479 F.3d at 999-1000 (indicating that class action

2

plaintiffs have a prerogative to forgo a larger recovery if they

3

wish to remain in state court); see also Rodriguez v. AT&T

4

Mobility Services LLC; No. 2:12-cv-03694-GW-FMO, Dckt. # 30 (C.D.

5

Cal. 2012) (holding that a CAFA waiver in a nearly identical case

6

was valid because, in part, other considerations beyond amount of

7

total recovery may support a representative plaintiff’s desire

8

for a state forum).

9

unequivocally permit such waivers.

The Eighth and Seventh Circuits
Bell v. Hershey Co., 557 F.3d

10

953, 958 (8th Cir. 2009); Back Doctors Ltd. v. Metro. Prop. &

11

Cas. Ins. Co., 637 F.3d 827, 831 (7th Cir. 2011).

12

argues that Plaintiff may lack the authority to waive recovery on

13

behalf of absent putative class members, but the Lowdermilk court

14

considered and dismissed that concern.

15

999 n.5 (noting that a representative plaintiff may sue for less

16

than the amount they are entitled to, but doing so may undermine

17

his or her adequacy as class representative).

18

authority, the Court would order this case remanded because of

19

Plaintiff’s waiver of any recovery over $5,000,000.

20

in Standard Fire is likely to change this analysis by clarifying

21

the validity of the CAFA waiver and consequently the Court’s

22

jurisdiction in this case.

23

permit the Court to correctly decide the present motion to remand

24

on the basis of Plaintiff’s waiver.

25

Defendant

Lowdermilk, 479 F.3d at

Based on this

The decision

Staying this action will therefore

Before imposing a stay, a court must examine “[1] the

26

possible damage which may result from the granting of a stay,

27

[2] the hardship or inequity which a party may suffer in being

28

required to go forward, and [3] the orderly course of justice
17

1

measured in terms of the simplifying or complicating of issues,

2

proof, and questions of law which could be expected to result

3

from a stay.”

4

Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th

5

Cir. 1962)).

6

Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th

In this case, a stay pending an outcome in Standard Fire

7

will serve several purposes.

First, such a stay will avoid

8

possible inconsistent decisions should the Supreme Court

9

invalidate waivers like Plaintiff’s.

Second, staying this case

10

will preserve Defendant’s right to a federal forum should

11

Standard Fire indicate that this Court does have subject matter

12

jurisdiction over Plaintiff’s claims.

13

suffer some hardship if it is forced to proceed in a state forum

14

and it is later determined that federal jurisdiction existed all

15

along.

16

stayed an appeal made pursuant to 28 U.S.C. § 1453(c)(1) in the

17

Rodriguez case, and it makes little sense for this Court to

18

refuse to stay the action only to have the Ninth Circuit do so

19

when Defendant appeals this Court’s order remanding the case to

20

state court.

21

matter pending a decision in Standard Fire will cause little

22

damage to the parties and promote the orderly course of justice.

23

Defendant will also be able to preserve federal jurisdiction in

24

this matter if such jurisdiction exists.

25

stay this case is therefore granted.

Conversely, Defendant will

Finally, the Court notes that the Ninth Circuit recently

Accordingly, the Court finds that staying this

Defendant’s request to

26

B.

27

Plaintiff seeks an award of attorneys’ fees pursuant to 28

28

Plaintiff’s Attorneys’ Fees

U.S.C. § 1447(c) based on Defendant’s removal of this action from
18

1

state court.

2

appropriate because removal was reasonable in light of the amount

3

in controversy and the pending decision in Standard Fire related

4

to CAFA waivers.

5

Defendant responds that attorneys’ fees are not

“Absent unusual circumstances, courts may award attorney's

6

fees under § 1447(c) only where the removing party lacked an

7

objectively reasonable basis for seeking removal.”

8

Franklin Capital Corp., 546 U.S. 132, 141 (2005).

9

finds that Defendant had an objectively reasonable basis for

Martin v.
The Court

10

removing the action based on the potential invalidity of

11

Plaintiff’s CAFA waiver and its ability to show an amount in

12

controversy over $5,000,000.

13

motion is denied.

Accordingly, Plaintiff’s fees

14

C.

Defendant’s Motion to Dismiss

15

Defendant conceded in its opposition to the motion to remand

16

that a stay of this case pending the outcome of Standard Fire

17

also applies to its motion to dismiss.

18

Standard Fire supports the validity of Plaintiff’s CAFA waiver,

19

this Court does not have jurisdiction to pass on Defendant’s

20

motion to dismiss.

21

is stayed pending a decision in Standard Fire.

The Court agrees.

If

Accordingly, decision on Defendant’s motion

22
23

III. ORDER

24

This action, including Defendant’s motion to dismiss, is

25

stayed pending a decision in Standard Fire Ins. Co. v. Knowles,

26

133 S.Ct. 90 (2012).

27

stay within 30 days of a disposition in Standard Fire.

28

time, the Court will only consider the validity of Plaintiff’s

Either party may move the Court to lift the

19

At such

1

CAFA waiver, but not the analysis related to the amount in

2

controversy.

3
4

Plaintiff’s Motion for Attorneys’ Fees is DENIED.

IT IS SO ORDERED.
Dated: February 26, 2013
____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE

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