Awadan et al v. Reebok Corporate Headquarter

Filing 59

ORDER signed by District Judge Kimberly J. Mueller on 11/5/19 REMANDING CASE to Solano County Superior Court. Certified copy of remand order sent to other court. CASE CLOSED (Kastilahn, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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FAIZAL AWADAN, SHAINAZ
AWADAN,
Plaintiffs,

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ORDER
v.

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No. 2: 17-cv-01148-KJM-AC

REEBOK CORPORATE
HEADQUARTER,

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Defendant.

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On September 27, 2019, the court issued an order requiring the parties to meet and

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confer regarding the amount in controversy and file a joint status report either stipulating to

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remand the case or explaining why the case should not be remanded for lack of jurisdiction. The

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parties filed separate status reports. The court now REMANDS the case to Solano County

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Superior Court on its own motion.

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I.

Factual Background
This case arises from a dispute over the return of two pairs of shoes to a Reebok

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store, in which Reebok employees refused to allow plaintiff Shainaz Awadan to return two pairs

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of shoes, and ultimately kept the shoes without refunding her the purchase price. See generally,

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Compl., ECF No. 1-2, at 6–7. Plaintiff, proceeding pro se, filed a complaint in Solano County

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Superior Court on April 18, 2017, alleging, inter alia, discrimination, civil rights violations,
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unethical and unfair business practices, and claiming damages of over $70 million. Defendant

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removed the case on May 31, 2017 based on diversity jurisdiction. See Not. of Removal, ECF

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No. 1. The magistrate judge issued findings and recommendations recommending a grant of

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defendant’s motion requesting that all claims excepting state law claims for conversion be

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dismissed, ECF No. 21; that recommendation was adopted by the court, ECF No. 26. Plaintiffs

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declined to file an amended complaint. Pls.’ Response to Order to Show Cause, ECF No. 29.

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The only remaining claims are plaintiff Shainaz Awadan’s claims for conversion,

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one for each of the two pairs of shoes. See Pls.’ Pretrial St., ECF No. 47, ¶¶ 3-4. Plaintiff claims

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$5 million for each pair of shoes. Id. Attached as Exhibit A to plaintiffs’ complaint is the receipt

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showing values of $19.99 and $39.99 for the shoes at issue. Compl. at 14. Responding to the

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order to show cause, plaintiffs’ separate status report does not dispute the value of the shoes.

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Plaintiff Ms. Awadan reiterates her request for punitive damages “to seek justice and punish

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Reebok for there [sic] wrong doing so this may not happen to anyone else again[.]” Pls.’ Status

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Report, ECF No. 56 at 2.

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II.

Legal Standard
District courts only have diversity-of-citizenship jurisdiction where the amount in

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controversy exceeds $75,000 and the parties have complete diversity of citizenship. 28 U.S.C.

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§ 1332. “The sum claimed by the plaintiff” is generally accepted as the amount in controversy, as

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long as it is “apparently made in good faith.” However, if it appears “to a legal certainty that the

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claim is really for less than the jurisdictional amount,” remand is justified for lack of jurisdiction.

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Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 364 (9th Cir. 1986). “[T]he court

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‘may go beyond the pleadings for the limited purpose of determining the applicability’ of a rule

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of law that limits damages.” In re Brown, No BAP NV-16-1099-KULJU, 2017 WL 1149074, at

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*5 (B.A.P. 9th Cir. Mar. 27, 2017), appeal dismissed, No. 16-1099, 2018 WL 1989647 (9th Cir.

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Apr. 23, 2018) (citation omitted).

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The measure of damages in a conversion action, such as this one, is based on the

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value of the converted property. Tyrone Pac. Int’l, Inc. v. MV Eurychili, 658 F.2d 664, 666 (9th

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Cir. 1981). In California, plaintiffs must show that the defendant acted with malice, fraud or
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oppression in committing a tort to get punitive damages. Cal. Civ. Code § 3294. Although there

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is no fixed ratio between compensatory and punitive damages, “punitive damages must bear a

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reasonable relationship and be proportionate to the actual harm suffered by the plaintiff (i.e.

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compensatory damages).” Bardis v. Oates, 119 Cal. App. 4th 1, 17 (2004) (quoting Marron v.

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Superior Court, 108 Cal. App. 4th 1049, 1059–60 (2003)). Punitive damages awards far in

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excess of compensatory damages may violate the Due Process Clause of the Fourteenth

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Amendment. State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003). The

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Supreme Court has held that a ratio of punitive damages to compensatory damages exceeding

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single digits may comport with Due Process, but only when “a particularly egregious act has

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resulted in only a small amount of economic damages.” Campbell, 538 U.S. at 425.

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III.

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Discussion
Here, plaintiff disclosed in her complaint and defendant does not dispute that the

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total value of the shoes at issue is $59.98. Compl. at 14. In the remaining action for conversion,

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that amount would be the measure of her compensatory damages.

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Plaintiff Ms. Awadan also asks for punitive damages. Even assuming, arguendo,

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she could prove that the Reebok store’s acts were malicious, fraudulent or oppressive, the

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punitive damages award would not reach the jurisdictional limit of $75,000.01. Although there is

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no fixed formula for punitive damages, ratios of punitive damages to compensatory damages

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exceeding single digits are viewed with skepticism, as signaled by the Court’s observation in the

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Campbell case quoted above. For plaintiff’s final award to reach the jurisdictional limit here, she

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would need to achieve a punitive damages ratio of 1,250:1, i.e., $1,250.00 in punitive damages

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for every $1 in compensatory damages. Such an award would violate due process by any

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formulation of the legal standard. Thus, it is legally impossible for plaintiffs to recover the

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jurisdictional limit on the remaining claims.

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IV.

Conclusion
For the foregoing reasons, this case is hereby REMANDED to Solano County

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Superior Court.

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DATED: November 5, 2019.

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UNITED STATES DISTRICT JUDGE

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