Wang v. Asset Acceptance LLC

Filing 32

ORDER by Judge Samuel Conti denying 11 Motion to Remand (sclc2, COURT STAFF) (Filed on 1/27/2010)

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For the Northern District of California

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

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JOHNNY WANG, an individual, on his ) own behalf and on behalf of those ) similarly situated, ) ) ) Plaintiff, ) ) v. ) ASSET ACCEPTANCE, LLC, a Delaware ) limited liability company, ) and DOES 1-100, inclusive, ) ) ) Defendants. ) I. INTRODUCTION

Case No. 09-4797 SC ORDER DENYING PLAINTIFF'S MOTION TO REMAND

This matter comes before the Court on the Motion to Remand ("Motion") filed by Plaintiff Johnny Wang ("Plaintiff" or "Wang"). Docket No. 11. Remand. Plaintiff filed an Amended Notice of Motion to Defendant Asset Acceptance, LLC,

Docket No. 13.

("Defendant" or "Asset") filed an Opposition and Plaintiff submitted a Reply. Docket Nos. 22, 25. For the following

reasons, Plaintiff's Motion is DENIED.

II.

BACKGROUND On August 20, 2009, Wang sued Asset in California Superior

Court, County of Alameda. Ex. A ("Compl."). practices.

See Notice of Removal, Docket No. 1,

Wang challenges Asset's debt collection Wang faults Asset for reporting debts to

Id. ¶ 1.

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credit reporting agencies ("CRAs"), but failing to report, if applicable, that such debts are disputed, or that the debts are passed their statute of limitations. Id. Wang's action is a

putative class action on behalf of two classes: (1) California residents who have disputed debts that have been reported by Asset to CRAs, and (2) California residents whose reported debts are not within the statute of limitations.1 Id. ¶ 3.

Asset received a copy of the state court complaint on September 8, 2009, and removed the case to this Court on October 8, 2009. Notice of Removal ¶ 2. Plaintiff seeks to remand this

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action contending that Asset has not met its burden of proving federal jurisdiction under the Class Action Fairness Act ("CAFA"), Pub. L. No. 109-2, §4, 119 Stat. 4, 9-12 (2005), codified at 28 U.S.C. § 1332(d). Mot. at 1.

III. LEGAL STANDARD Federal district courts have original jurisdiction of any putative class action filed in state court where the amount in controversy exceeds $5,000,000, where the aggregate number of proposed plaintiffs is 100 or greater, and where there is minimal diversity between the plaintiffs and defendants. 28 U.S.C.

§ 1332(d); Lowdermilk v. U.S. Bank. Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir. 2007). The Court strictly construes the removal statute

against removal jurisdiction, and therefore the defendant always has the burden of establishing that removal is proper.
1

Gaus v.

It is not clear from the Complaint whether the second class is limited to California residents. See Compl. ¶¶ 3, 28. 2

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Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

"[U]nder CAFA,

the burden of establishing federal jurisdiction remains, as before, on the proponent of federal jurisdiction." Abrego Abrego When

v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006).

the plaintiff fails to plead a specific amount of damages, the defendant seeking removal "must prove by a preponderance of the evidence that the amount in controversy requirement has been met." Id. at 683 (citing Gaus, 980 F.2d at 566-67); see also Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (defendant must provide evidence establishing that it is "more likely than not" that the amount in controversy exceeds the federal jurisdictional threshold).

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IV.

DISCUSSION A. Putative Class Size and Amount in Controversy

Wang's Complaint alleges that the population of potential class members is "huge" because the 2008 10-K Report of Asset's parent company indicates that "its portfolio includes 3,598,000 accounts where the purported debtor resides in California." Compl. ¶ 29. Asset contends that:

Assuming, without admitting, that just 1.4 percent of the accounts of California residents allegedly owed by Asset are at issue, the matter in controversy would exceed the sum or value of $5,000,000. . . . Under that scenario, the purported class would have 50,372 members . . . . For each violation as the Court deems proper, the award of punitive damages would be at least $100, resulting in damages of at least $5,037,200 . . . . Notice of Removal ¶ 3. 3

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As Wang correctly points out, Asset's Notice of Removal offers no evidence to show that the purported class size consists of at least 100 members or that the amount in controversy exceeds $5,000,000. Mot. at 3-6. Mere allegations are not sufficient to

overcome the strong presumption against federal jurisdiction. Gaus, 980 F.2d at 566-67; see also Lowdermilk, 479 F.3d at 1002 (court cannot maintain federal jurisdiction based on "speculation and conjecture"). However, in opposing Wang's Motion to Remand, Asset presents evidence indicating that, as of October 2009, Asset was furnishing information to CRAs concerning no less that 177,023 California accounts where the limitations period relating to those accounts has expired. Opp'n at 3; Parker Decl. ¶ 3.2 This evidence shows

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that it is more likely than not that what Wang refers to as the "Out-Of-Statute Debt Class," see Compl. ¶ 28, consists of at least 100 members. Wang seeks actual damages in the form of "declined and reduced credit, forced purchase of credit reports and credit monitoring, postage and private courier costs, mileage, longdistance telephone charges, lost cell phone airtime, increased credit costs, and amounts paid to settle disputed debts not reduced to judgment to improve a credit rating." 57, 63. Compl. ¶¶ 2, 44,

If each potential member of the Out-of-Statute Debt Class

had only $28.26 in actual damages, the amount-in-controversy

Steven Parker, Manager of the Consumer Resolution team in the Compliance Department of Asset, filed a declaration in support of Asset's Opposition. Docket No. 23. 4

2

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requirement would be satisfied. Wang also alleges that class members are entitled to punitive damages, attorneys' fees, and injunctive and equitable relief. Id. ¶¶ 2-3. Plaintiff's lawsuit is based on the Consumer Credit

Reporting Agencies Act ("CCRAA"), Cal. Civ. Code §§ 1785.11785.36. Compl. ¶ 1. For willful violations of this title,

putative class members would be entitled to "[p]unitive damages of not less than one hundred dollars ($100) nor more than five thousand dollars ($5,000) . . . ." Id. § 1785.31(a)(2). Based on

the fact that Asset has 177,023 California accounts where the limitations period has expired, and even just considering the minimum amount of punitive damages that could be recovered by the members of that putative class, the Court finds that it is more likely than not that the amount in controversy exceeds $5,000,000. B. Parker Declaration

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Wang contends that Asset should not be able to introduce evidence with its opposition that could have been included in the Notice of Removal. Mot. at 6-7; Reply at 2-4. The evidence

offered in opposition to a motion to remand can be construed as an amendment to the notice of removal. Cohn v. Petsmart, Inc., 281

F.3d 837, 840 n.1 (9th Cir. 2002); see also Willingham v. Morgan, 395 U.S. 402, 405 n.3 (1969) ("it is proper to treat the removal petition as if it had been amended to include the relevant information contained in the later-filed affidavits"). After

thirty days, the removal petition cannot be amended to add allegations of substance, but it can be amended to clarify defective allegations of jurisdiction previously made. 5 Barrow

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Dev. Co. v. Fulton Ins. Co., 418 F.2d 316, 317 (9th Cir. 1969). Allegations of substance include asserting a new basis for federal jurisdiction. See Hemphill v. Transfresh Corp., No. 98-0899, 1998

WL 320840, at *4 (N.D. Cal. June 11, 1998). Here, Asset does not assert a new basis for jurisdiction for the first time in its opposition to the motion to remand. Asset's

Notice of Removal makes allegations concerning the amount in controversy and the potential class size. ¶ 7. See Notice of Removal

In response to Wang's challenge to those allegations, Asset

has presented evidence showing that the aggregate number of proposed plaintiffs is likely to be 100 or greater, and that it is more likely than not that the amount in controversy exceeds $5,000,000. Parker Decl. ¶¶ 2-3; Opp'n at 6; see also McNutt v.

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General Motors Acceptance Corp., 298 U.S. 178, 189 (1936) ("If his allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof."). Since Asset is merely clarifying its alleged

basis for federal jurisdiction, the Court is not precluded from considering the evidence contained in the Parker Declaration. C. Request for Expedited Discovery

Wang requests leave to take expedited discovery on the jurisdictional issues for rebuttal evidence. Mot. at 7. The

Court is not required to grant a request for jurisdictional discovery. See Abrego Abrego, 443 F.3d at 691. Jurisdictional

discovery may be appropriate where a more satisfactory showing of jurisdictional facts is necessary. 261 F.3d 927, 948 (9th Cir. 2001). 6 See Gibson v. Chrysler Corp., Here, however, Asset has met

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its burden of establishing that removal was proper.

The Court

DENIES Wang's request for leave to take expedited discovery.

V.

CONCLUSION For the reasons stated above, the Court DENIES Plaintiff's

Motion to Remand, and DENIES Plaintiff's request for expedited discovery.

IT IS SO ORDERED.

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Dated: January 27, 2010 UNITED STATES DISTRICT JUDGE

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