Soriano et al v. LendingTree, LLC

Filing 21


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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 CARMEN SORIANO, et al., Plaintiffs, 8 9 10 United States District Court Northern District of California 11 v. LENDINGTREE, LLC, Case No. 17-cv-07078-MMC ORDER DISCHARGING ORDER DIRECTING DEFENDANT TO SHOW CAUSE WHY ACTION SHOULD NOT BE REMANDED Defendant. 12 13 By order filed December 22, 2017, the Court directed defendant LendingTree, LLC 14 to show cause why the above-titled action should not be remanded for lack of subject 15 matter jurisdiction. Before the Court is defendant's response, as well as plaintiffs' reply 16 thereto. Having read and considered the parties' respective submissions, the Court 17 hereby rules as follows. 18 On September 7, 2017, plaintiffs filed the above-titled action in state court, and 19 allege in their complaint a single, state law cause of action, specifically, a claim under 20 § 17529.5 of the California Business and Professions Code, which statute prohibits, 21 under circumstances identified therein, advertising in commercial emails. See Cal. Bus. 22 & Prof. Code § 17529.5(a) (listing three "circumstances" under which it is "illegal for any 23 person or entity to advertise in a commercial e-mail"). On December 12, 2017, 24 defendant, relying on diversity jurisdiction, removed the action. 25 A district court has diversity jurisdiction where "the matter in controversy exceeds 26 the sum or value of $75,000, exclusive of interest and costs" and the matter is "between 27 . . . citizens of different States." See 28 U.S.C. § 1332(a). 28 With respect to the second element, diversity of citizenship, the Court, in its order 1 to show cause, found defendant's showing deficient, as defendant asserted plaintiffs are 2 citizens of California but did not identify the state or states in which defendant's owners or 3 members are citizens. See Johnson v. Columbia Properties Anchorage, LP, 437 F. 3d 4 894, 899 (9th Cir. 2006) (holding “limited liability corporation” is a “citizen of every state in 5 which its owners/members are citizens”). In its response, defendant states it has one 6 member, specifically, Lending Tree, Inc., and has established that its member is 7 incorporated in Delaware and has its principal place of business in North Carolina. (See 8 DeCristo Decl. ¶ 3.) 9 10 Accordingly, the Court is satisfied the parties are diverse in citizenship. The Court turns to the issue of whether the requisite amount in controversy is United States District Court Northern District of California 11 established. Although, in its order to show cause, the Court did not question the 12 sufficiency of defendant's showing regarding the amount in controversy, and, indeed, 13 found defendant's showing was sufficient, defendant, in its response to the order to show, 14 has addressed the issue, and plaintiffs, in their reply, now argue defendant's showing as 15 to the amount in controversy is deficient and that, as a result, the instant action should be 16 remanded for lack of subject matter jurisdiction. As set forth below, the Court continues 17 to find defendant has made a sufficient showing as to the amount in controversy. 18 As noted, the complaint consists of a single cause of action asserted jointly by the 19 three plaintiffs. Each plaintiff's claim is based on her receipt from defendant of 20 commercial emails that include, according to plaintiffs, "the same" subject line, which line, 21 plaintiffs allege, is "absolutely false" or, in the alternative, is "misleading relative to the 22 contents of the subject matter of the emails." (See Compl. ¶¶ 24-28.) As each plaintiff's 23 claim arises out of the same controversy, specifically, whether defendant's commercial 24 emails were in violation of § 17529.5, the Court has jurisdiction over each such claim, 25 provided the amount in controversy as to one such plaintiff's claim exceeds the sum of 26 $75,000. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 549, 566-67 27 (2005) (holding where at least one plaintiff in "diversity action allege[s] a sufficient amount 28 in controversy," court may exercise "supplemental jurisdiction over all claims by [other] 2 1 diverse [plaintiffs] arising out of the same Article III case or controversy"). 2 Here, on behalf of plaintiff Molly Vongchan ("Vongchan"), plaintiffs seek damages 3 in the amount of $59,000, as well as an award of attorneys' fees (see Compl., prayer for 4 relief, ¶¶ B, E),1 and defendant, in its notice of removal, has sufficiently shown it is 5 reasonable to anticipate Vongchan will receive an award of attorneys' fees in excess of 6 $16,000 if she were to prevail on the merits (see Notice of Removal ¶¶ 21-23, 25-28). 7 Plaintiffs argue that, in determining the amount in controversy in a removed action, 8 a court should only consider the amount of attorneys' fees that had accrued as of the 9 time of removal, which amount plaintiffs assert was $5733. (See Harker Decl. ¶ 2.) Although, as plaintiffs correctly observe, some courts have so ruled, see, e.g., 11 United States District Court Northern District of California 10 Rachner v. Network Funding, L.P., 2017 WL 5508518, at *4 (C.D. Cal. November 16, 12 2017) (noting, without resolving issue, "courts are split as to whether only attorneys' fees 13 that have accrued at the time of removal should be considered in calculating the amount 14 in controversy, or whether the calculation should take into account fees likely to accrue 15 over the life of the case") (collecting citing cases) (internal quotation, citation and 16 alteration omitted), the Court finds more persuasive those courts that have found "the 17 measure of fees should be the amount that can reasonably be anticipated at the time of 18 removal, not merely those already incurred," see Simmons v. PCR Technology, 209 F. 19 Supp. 2d 1029, 1034-35 (N.D. Cal. 2002) (holding, because "[t]he court determines the 20 amount in controversy based on damages that can reasonably be anticipated at the time 21 of removal," and because attorneys' fees are considered part of that amount, "the 22 measure of fees [similarly] should be the amount that can reasonably be anticipated at 23 the time of removal"); see also Brady v. Mercedes-Benz USA, Inc., 243 F. Supp. 2d 24 1004, 1010-11 (N.D. Cal. 2002) (holding "a reasonable estimate of fees likely to be 25 recovered may be used in calculating the amount in controversy," finding "[w]here the law 26 27 28 1 A "prevailing plaintiff" under § 17529.5 is entitled to "reasonable attorney's fees." See Cal. Bus. & Prof. Code § 17529.5(b)(1)(C). 3 1 entitles the prevailing party to recover reasonable attorney fees, a reasonable estimate of 2 fees likely to be incurred to resolution is part of the benefit permissibly sought by the 3 plaintiff and thus contributes to the amount in controversy"). 4 Further, although neither the Supreme Court nor the Ninth Circuit has expressly held that the amount of attorney's fees properly considered for purposes of determining 6 the amount in controversy is the amount the plaintiff is reasonably anticipated to recover 7 in the event the plaintiff prevails, such understanding appears implicit in several cases. 8 See Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 133 (1933) (holding removal 9 proper where amount in controversy included attorneys' fees plaintiff alleged he "would" 10 receive if he prevailed); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 698, 701 (9th 11 United States District Court Northern District of California 5 Cir. 2007) (affirming district court's order denying remand; finding requisite amount in 12 controversy shown where calculation included "estimate" of attorneys' fees likely to be 13 recovered if plaintiff prevailed); Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1152, 1155- 14 56 (9th Cir. 1998) (affirming district court's retention of jurisdiction and its finding as to 15 amount in controversy, where district court added "projected attorneys' fees" to "principal 16 claim amount"). 17 18 19 Accordingly, as the Court finds defendant has shown the requisite amount in controversy has been established, the order to show cause is hereby DISCHARGED. IT IS SO ORDERED. 20 21 Dated: April 16, 2018 MAXINE M. CHESNEY United States District Judge 22 23 24 25 26 27 28 4

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