Logue v. Northern States Metals Company

Filing 16

ORDER signed by Judge Kimberly J. Mueller on 11/20/2014 REMANDING this action to Sacramento Superior Court. Plaintiff's application for a right to attach order is DENIED as moot. CASE CLOSED. (cc Sacramento Superior). (Donati, J)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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KEVIN W. LOGUE,

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No. 2:14-CV-00996-KJM-EFB

Plaintiff,
v.

ORDER

NORTHERN STATES METALS
COMPANY also known as NORTHERN
STATES METALS CO., INC.,

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Defendant.

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This matter is before the court on the application by plaintiff Kevin Logue for a

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right to attach order. (ECF No. 8.) Defendant Northern States Metals Company opposes the

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application. (ECF No. 11.) Finding the matter suitable for disposition on the papers, the court

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decided it without argument. As explained below, the court REMANDS this action for lack of

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subject matter jurisdiction. Plaintiff’s application for a right to attach order is DENIED AS

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MOOT.

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I. BACKGROUND

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On February 21, 2014, plaintiff commenced this action in Sacramento County

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Superior Court. (Def.’s Notice of Removal, Compl., Ex. B (“Compl.”), ECF No. 1-3.) The

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complaint makes the following claims: (1) failure to pay wages; (2) waiting time penalties under

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California Labor Code section 203; (3) unfair business practices under California Business and

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Professions Code section 17200; and (4) violation of California Labor Code section 226. (Id.)

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Defendant answered on April 22, 2014. (Def.’s Notice of Removal, Answer, Ex. C, ECF No.

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1-4.)

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On April 23, 2014, defendant removed the action to this court, asserting diversity

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jurisdiction. (Def.’s Notice of Removal at 1, ECF No. 1). On July 22, 2014, defendant filed an

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application for right to attach order. (ECF No. 8). Plaintiff opposed the application. (ECF

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No. 11.)

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II. STANDARD

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Under Federal Rule of Civil Procedure 12(h)(3), “[i]f the court determines at any

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time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P.

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12(h)(3). “[A] court may raise the question of subject matter jurisdiction, sua sponte, at any time

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during the pendency of the action . . . .” Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir.

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2002); see also United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 966 (9th

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Cir. 2004) (noting “the district court had a duty to establish subject matter jurisdiction over the

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removed action sua sponte, whether the parties raised the issue or not.”). The Ninth Circuit

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strictly construes the removal statute against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d

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564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt as to the

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right of removal in the first instance.” Id. (citation omitted). Accordingly, “the court resolves all

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ambiguity in favor of remand to state court.” Hunter v. Phillip Morris USA, 582 F.3d 1039, 1042

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(9th Cir. 2009).

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To invoke this court’s diversity jurisdiction, a defendant must establish there is

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complete diversity of citizenship among the parties and that the amount in controversy exceeds

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$75,000. 28 U.S.C. § 1332. To determine whether the amount in controversy has been met on

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removal, the “court may consider whether it is ‘facially apparent’ from the complaint that the

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jurisdictional amount is in controversy.” Singer v. State Farm Mutual Auto. Ins. Co, 116 F.3d

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373, 377 (9th Cir. 1997); Valdez v. Allstate Ins. Co., 372 F.3d 1115 (9th Cir. 2004) (raising

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amount in controversy issue sua sponte).

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/////
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III. ANALYSIS

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Here, the complaint seeks compensatory damages in the amount of $48,544 and

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waiting time penalties in the amount of $7,333.23. (Compl. at 5, ECF No. 1-3.) The complaint

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also seeks attorneys’ fees under California Labor Code sections 218.5 and 226. (Id.) Defendant

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asserts that adding the potential attorneys’ fees to the amounts sought by plaintiff, the damages

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exceed $75,000. (ECF No 1 at ¶ 11(b).)

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To include attorneys’ fees in calculating the amount in controversy, the fees must

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be recoverable by statute or contract whether the fee award is mandatory or discretionary. Galt

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G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998). Here, attorneys’ fees are

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recoverable by statute. Cal. Lab. Code §§ 218.5(a) & 226.

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District courts within the Ninth Circuit are split as to whether attorneys’ fees

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incurred after the date of removal may be included to determine the amount in controversy. See

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Kahlo v. Bank of Am., N.A., No. 12-0083, 2012 WL 1067237, at *3 (W.D. Wash. Mar. 28, 2012)

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(“There is disagreement among the courts of this circuit as to whether attorneys' fees incurred

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after the date of removal, up to and through the end of the case, are properly included in the

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amount in controversy.”); MIC Philberts Invs. v. Am. Cas. Co. of Reading, Pa., No. 12-0131,

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2012 WL 2118239, at *5 (E.D. Cal. June 11, 2012) (“While the Ninth Circuit Court of Appeals

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has not yet spoken on the issue, . . . it appears that a nascent consensus may be emerging among

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the district courts of this Circuit, finding that attorneys’ fees not yet incurred may not be included

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in the amount in controversy calculation.”). In a recent case, this court has refused to include

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future attorneys’ fees in the calculation of the amount in controversy, noting “[a]s a general rule,

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speculative and conclusory allegations as to the amount in controversy are inadequate for

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jurisdictional purposes.” Foltz v. Integon Nat’l Ins. Co., No. 1:14-00907, 2014 WL 4960765, at

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*3 (E.D. Cal. Oct. 2, 2014); see Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089,

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1090–91 (9th Cir. 2003) (“Conclusory allegations as to the amount in controversy are

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insufficient.”).

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Here, defendant merely states “[a]dding the potential damages for attorney’s fees,
it is factually apparent from the body of the [c]omplaint that the damages sought by [p]laintiff are
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well in excess of $75,000.” (ECF No. 1 at ¶ 11(b).) Defendant has not met its “burden of setting

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forth, in the removal petition itself, the underlying facts supporting its assertion that the amount in

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controversy exceeds $[75,000].” Gaus, 980 F.2d at 567. Accordingly, this court lacks subject

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matter jurisdiction.

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IV. CONCLUSION

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For the foregoing reasons, the court REMANDS this action to Sacramento County
Superior Court. Plaintiff’s application for a right to attach order is DENIED AS MOOT.
IT IS SO ORDERED.
DATED: November 20, 2014.

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UNITED STATES DISTRICT JUDGE

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