Rosas v. USFastCash et al
Filing
54
ORDER GRANTING PLAINTIFFS ( 45 in 12-5066 and 40 in 12-5067) MOTIONS TO REMAND AND DENYING ( 13 and 14 in 12-5066 and 16 and 27 in 12-5067)DEFENDANTS MOTIONS. Signed by Judge Claudia Wilken on 12/5/2012. (ndr, COURT STAFF) (Filed on 12/5/2012)
1
IN THE UNITED STATES DISTRICT COURT
2
FOR THE NORTHERN DISTRICT OF CALIFORNIA
3
4
5
6
KATHRINE ROSAS, on behalf of
herself and all others similarly
situated, and as Private Attorney
General,
Plaintiff,
7
8
9
United States District Court
For the Northern District of California
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
v.
USFASTCASH; AMERILOAN; UNITED
CASH LOANS; PREFERRED CASH LOANS;
ONE CLICK CASH; MIAMI TRIBE OF
OKLAHOMA, also known as MIAMI
NATION OF OKLAHOMA; MIAMI NATION
ENTERPRISES, also known as MNE;
SANTEE SIOUX NATION; SFS, INC.;
AMG SERVICES, INC.; AMG CAPITAL
MANAGEMENT, LLC; BLACK CREEK
CORPORATION; BLACK CREEK CAPITAL,
LLC; BROADMOOR CAPITAL PARTNERS;
HALLINAN CAPITAL CORPORATION;
LEADFLASH CONSULTING, LLC; LEVEL
5 MOTORSPORTS, LLC; N.M. SERVICE
CORP., formerly known as NATIONAL
MONEY SERVICE; PARTNER WEEKLY
LLC; PARK 269, LLC; ST. CAPITAL,
LLC; THE MUIR LAW FIRM, LLC;
TRIBAL FINANCIAL SERVICES; WEST
FUND, LLC; SCOTT’S TRIBAL
ENTITIES; SCOTT A. TUCKER; BLAINE
A. TUCKER; CHARLES M. HALLINAN;
CAROLYN HALLINAN; DON E. BRADY;
ROBERT D. CAMPBELL; and TIMOTHY
J. MUIR,
Defendants.
________________________________/
No. C 12-5066 CW
ORDER GRANTING
PLAINTIFFS’
MOTIONS TO REMAND
(Docket Nos. 45 in
12-5066 and 40 in
12-5067) AND
DENYING
DEFENDANTS’
MOTIONS (Docket
Nos. 13 and 14 in
12-5066 and 16 and
27 in 12-5067)
1
2
3
AMY LYNNE BAILLIE, and KATHRINE
ROSAS, on behalf of themselves
and all others similarly
situated, and as Private Attorney
General,
4
5
6
7
8
9
United States District Court
For the Northern District of California
10
11
12
13
14
15
16
17
No. C 12-5067 CW
Plaintiffs,
v.
ACCOUNT RECEIVABLE MANAGEMENT OF
FLORIDA, INC., formerly known as
UNITED LEGAL CORPORATION; MTE
FINANCIAL SERVICES, INC.;
INSTANTCASHLOANTILLPAYDAY.COM;
PROCESSING SOLUTIONS, LLC;
INSTANT CASH USA, INC.; FIRST
EAST, INC.; RIO RESOURCES; THOMAS
ASSENZIO; JOLENE HART ASSENZIO;
CHARLES HALLINAN; CAROLYN
HALLINAN; CLK MANAGEMENT, LLC;
WEB CASH NETWORK, LLC, doing
business as RIO RESOURCES; DEXTER
EMERALD GROUP, LLC; AMG SERVICES,
INC.; SCOTT TUCKER; BLAINE
TUCKER; PROFESSIONAL RECOVERY
SYSTEMS; CHECK STOP UTAH, LLC;
and EAST FINCHEY, LLC,
Defendants.
________________________________/
Plaintiffs Kathrine Rosas and Amy Lynne Baillie move to
18
remand these related cases to state court.
Defendant Charles M.
19
Hallinan opposes the motion to remand in Rosas v. US FastCash,
20
Case No. C12-5066 (Rosas), and Defendant Processing Solutions, LLC
21
(PSL), who shares counsel with Hallinan, opposes the motion to
22
remand in Baillie v. Account Receivable Management of Florida,
23
Inc., Case No. C12-5067 (Baillie).
24
Hallinan and Defendant Hallinan Capital Corporation also move
25
to dismiss the first amended complaint in Rosas (Rosas 1AC).
26
Defendant Thomas Assenzio moves to dismiss the third amended
27
complaint in Baillie (Baillie 3AC).
28
2
PSL and Defendants First
1
East, Inc. and Instant Cash USA, Inc. move to compel arbitration
2
in Baillie.
3
Plaintiffs oppose each of these motions.
The Court took the motions under submission on the papers.
4
Having considered the papers filed by the parties, the Court
5
GRANTS Plaintiffs’ motions to remand and DENIES Defendants’
6
motions.1
7
8
BACKGROUND2
I.
9
Relevant procedural history
On May 22, 2007, Plaintiff Amy Lynne Baillie initiated the
United States District Court
For the Northern District of California
10
Baillie action in the Alameda County Superior Court.
11
2009, PSL, First East and Instant Cash filed a motion to stay the
12
case pending arbitration.
The trial court denied the motion, and
13
these Defendants appealed.
On May 27, 2010, the state court of
14
appeal affirmed the trial court’s decision on the motion to stay.
15
On June 11, 2010, these Defendants filed a petition for re-hearing
16
before the state court of appeal, which was denied.
17
2010, these Defendants filed a petition for review in the
18
California Supreme Court, which was denied on August 11, 2010.
19
January 18, 2011, the United States Supreme Court denied PSL’s
20
petition for certiorari.
On March 9,
On July 6,
On
21
22
1
23
24
25
26
The Court’s denial of these motions is without prejudice to
Defendants refiling them in state court to the extent otherwise
permissible. The Court notes that the state court has already
considered and denied the motion to compel arbitration and Thomas
Assenzio’s motion to dismiss, Docket Nos. 16 and 27 in Case No.
C12-5067, and that Defendants may be precluded from refiling these
motions in state court.
2
27
28
Defendants have objected to certain evidence offered by
Plaintiffs. The Court decides the motion without considering
evidence to which Defendants have objected. Accordingly,
Defendants’ objections are OVERRULED as moot.
3
1
2
3
4
5
On July 1, 2009, Rosas initiated the Rosas action in the San
Francisco Superior Court.
On November 3, 2010, the Baillie 3AC was filed, adding
Kathrine Rosas as a Plaintiff and the Assenzios as Defendants.
On January 4, 2011, Thomas Assenzio removed Baillie from
6
state court to this Court for the first time.
7
Account Receivable Management of Florida, Inc., Case No. C11-21.
8
On February 14, 2011, this Court granted Plaintiffs’ motion
9
to remand Baillie to state court.
See Baillie v.
See Docket No. 30 in Case No.
United States District Court
For the Northern District of California
10
C11-21.
11
the amount in controversy, and Mr. Assenzio fails to establish
12
that it is more likely than not that the amount in controversy in
13
this action exceeds $5 million.”
14
The Court held, “Plaintiffs’ complaint does not specify
Id. at 10.
On October 27, 2011, the state court entered an order
15
coordinating Baillie with Rosas and recommending that the
16
coordinated proceedings take place in the Alameda County Superior
17
Court.
18
Lending Cases, Alameda Co. Case No. JCCP004688.
19
Docket No. 1-1 in Case No. C12-5066.
See also Internet
On December 5, 2011, Judge Wynne S. Carvill of the Alameda
20
County Superior Court was appointed as the coordination trial
21
judge.
22
Docket No. 30-2 in Case No. C12-5067.
On July 31, 2012, the Rosas 1AC was filed, naming Hallinan as
23
a Defendant for the first time in that action.
24
completed upon Hallinan on September 3, 2012.
25
Service was
On September 19, 2012, Plaintiffs filed a motion for leave to
26
file a fourth amended complaint (4AC) in Baillie.
27
Removal, Ex. C, Docket No. 1 in Case No. C12-5067.
28
4
Notice of
1
On September 28, 2012, PSL removed Baillie to this Court.
2
Docket No. 1 in Case No. C12-5067.
3
removed Rosas to this Court.
4
actions, PSL and Hallinan assert that this Court has jurisdiction
5
under the Class Action Fairness Act (CAFA).
6
On the same day, Hallinan
Docket No. 1 in C 12-5066.
At the time of removal, the state court had not yet acted on
7
Plaintiffs’ motion for leave to file a 4AC in Baillie.
8
II.
9
10
United States District Court
For the Northern District of California
In both
Factual allegations in Rosas
The following factual allegations are set forth in the Rosas
1AC.
11
Rosas collectively refers to Defendants US FastCash;
12
Ameriloan; United Cash Loans; Preferred Cash Loans; One Click
13
Cash; Miami Nation Enterprises; SFS, Inc.; AMG Services, Inc.;
14
Miami Tribe of Oklahoma, also known as Miami Nation of Oklahoma;
15
Santee Sioux Nation; Scott A. Tucker; and Blaine A. Tucker as
16
Defendant Lenders.
17
Timothy J. Muir, through Defendant The Muir Law Firm, LLC, pays
18
for the domain name registrations and other fees of multiple
19
websites used by Defendants to market high-fee, short-term
20
“payday” loans.
21
www.usfastcash.com, www.ameriloan.com, www.unitedcashloan.com and
22
www.oneclickcash.com.
23
Firm advertised, marketed, distributed or sold the payday loans
24
“to consumers throughout the United States and participated in the
25
collection of those loans.”
26
Rosas 1AC 2-3.
Id. at ¶¶ 24, 36.
Id.
Rosas alleges that Defendant
The domain names include
She further contends that the Muir
Id. at ¶ 24.
Rosas alleges that she obtained five payday loans from
27
Defendant Lenders, on September 2, 2005, October 24, 2005,
28
February 19, 2006 and October 24, 2006.
5
Id. at ¶ 56.
The
1
interest rate on each loan was 782.14% per annum.
2
alleges that this rate is unconscionable under California law.
3
Id. at ¶ 49.
4
paid interest to Defendant Lenders on each of these loans and
5
repaid all of the loans in full.
6
Id.
She
Over the following months, Rosas was charged and
Id. at ¶ 57.
Rosas alleges that Defendant Lenders utilized a standard form
7
agreement to execute loans to members of the putative class.
8
at ¶¶ 47-49.
9
and alleges Defendant Lenders used “various iterations” of this
Id.
She refers to the form as the Instant Cash Agreement
United States District Court
For the Northern District of California
10
agreement.
11
putative class members unconscionable and usurious rates.
12
alleges that Defendant Lenders advertised these loans to
13
individuals in California, that the class members entered into the
14
agreements while in California and that Defendant Lenders debited
15
their bank accounts located in California to collect on the loans.
16
Id. at ¶ 64.
17
Id.
Rosas accuses Defendant Lenders of charging all
She
Rosas further alleges that various individuals and entities
18
received funds that can be traced to the usurious loans made by
19
Defendant Lenders.
20
2011, Hallinan Capital purportedly received from AMG at least
21
twenty-two million dollars, “money which was obtained from the
22
payday lending described below” in the 1AC.
23
Hallinan Capital is allegedly owned and controlled by Carolyn and
24
Charles Hallinan, who knew of the payday lending scheme, and who
25
personally received the twenty-two million dollars.
26
¶¶ 32-33.
27
28
See, e.g., id. at ¶¶ 22, 31-33.
In 2010 and
Id. at ¶ 32.
Id. at
Rosas seeks to bring various claims on behalf of a class of
people “whose bank accounts . . . located in the State of
6
1
California [were] debited to pay on a payday loan whose annual
2
interest rate was in excess of ten percent (10%) per annum,” and
3
who “entered into Instant Cash Agreements with Defendant Lenders
4
and paid money to discharge the debt.”
5
Id. at ¶ 89.
On behalf of the putative class, Rosas asserts three claims
6
against Defendant Lenders: (1) usury and/or unconscionable
7
lending; (2) violation of California’s Unfair Competition Law,
8
Cal. Bus. & Prof. Code §§ 17200, et seq.; and (3) money had and
9
received.
Rosas seeks monetary relief, including recovery of all
United States District Court
For the Northern District of California
10
interest payments made by class members during the four years
11
prior to filing of the complaint, imposition of statutory
12
penalties, restitution and injunctive relief.
13
In her fourth cause of action, Rosas seeks imposition of a
14
constructive trust upon the Defendants, including the Hallinans
15
and Hallinan Capital, who she alleges received “proceeds from
16
unlawful, unconscionable and despicable usurious loans made to the
17
Plaintiff class by the Defendant Lenders.”
18
portion of the prayer for relief related to the fourth cause of
19
action seeks an order declaring among other things that these
20
Defendants “hold all monies received from Defendant Lenders” as
21
constructive trustees, and for “an accounting of all monies
22
received by” these Defendants since July 1, 2005.
23
III. Factual allegations in Baillie
Id. at ¶ 113.
The
Id. at 30.
24
A. Allegations made in the Baillie 3AC
25
Thomas Assenzio “owned, controlled, managed and/or directed”
26
Defendants MTE Financial Services, Inc.; Instant Cash USA; Rio
27
Resources; PSL; First East Inc.; and
28
Instantcashloantillpayday.com.
3AC ¶ 4.
7
All of these entity
1
Defendants conducted business as consumer lenders in California.
2
Id. at ¶¶ 10-16.
3
Assenzio’s wife, held an ownership interest in PSL and First East.
4
Plaintiffs refer to the Assenzios and all of these entity
5
Defendants as “Defendant Lenders.”
Defendant Jolene Hart Assenzio, who is Mr.
Id. at ¶ 18.
6
Baillie alleges that she obtained a “payday loan” for $300
7
from MTE Financial, doing business as Instant Cash USA, with an
8
Annual Percentage Rate of 1,216.667%.
9
“Loan Note and Disclosure” provided the following payment terms:
United States District Court
For the Northern District of California
10
11
12
13
14
15
3AC ¶ 2 and Ex. A, at 1.
A
You must make one payment of $390 due on 7/14/2006, if
you decline the option of renewing your loan. If
renewing is accepted, you will pay the finance charge of
$90 only, on 7/14/2006. You will accrue new finance
charges with every renewal of your loan. On your fifth
renewal and every renewal thereafter, your loan will be
paid down by $50 ($100 on balances over $500). This
means your account will be debited the finance charge
plus $50 ($100 on balances over $500) on the due date.
This will continue until your loan is paid in full.
3AC, Ex. A, at 1.
Between July 14, 2006 and December 1, 2006,
16
Baillie’s checking account was debited eleven times on nine
17
different dates, for an amount totaling $977.00.
3AC ¶ 36.
On or
18
about October 15, 2006, Baillie’s loan was assigned to Defendant
19
United Legal Corporation, predecessor in interest to Defendant
20
Account Receivable Management of Florida (ARM).
Id. at ¶ 37.
On
21
February 8, 2007, United Legal, notified Baillie that,
22
notwithstanding her payments, $430 remained due on her loan.
Id.
23
at ¶ 38.
24
On or about June 19, 2006, Rosas obtained a $300 loan from
25
Rio Resources.
Id. at ¶ 3.
Between June 30, 2006 and September
26
22, 2006, Rio Resources debited Rosas’s checking account on seven
27
different dates, for an amount totaling $825.
28
8
Id. at ¶¶ 3, 40.
1
On or about November 3, 2006, Rosas obtained a $300 loan from
2
Instant Cash USA; thereafter, Instant Cash USA debited her
3
checking account for principal and interest payments for an
4
undisclosed amount.
5
associated with her loans were usurious and unconscionable under
6
California law.
7
November 2006 loan, Rosas was charged interest at a rate in excess
8
of 700 percent per annum; Rosas does not specify how much she paid
9
on this loan.
United States District Court
For the Northern District of California
10
Id. at ¶¶ 3, 41.
Id. at ¶¶ 3, 40, 41.
The interest rates
With respect to her
Id. at ¶ 41.
Plaintiffs seek to bring claims on behalf of themselves and a
11
class, defined as, “All persons . . . who are residents of the
12
State of California and entered into Instant Cash Agreements with
13
Defendant Lenders . . . and may have been a recipient of a
14
collection Notice from Defendant Account Receivable Management of
15
Florida, Inc., formerly known as United Legal Corporation . . .”
16
Plaintiffs allege that “thousands of people in California entered
17
into Instant Cash Agreements with Defendant Lenders” and that
18
“thousands of California consumers have been subjected to the
19
wrongful collection actions of the Defendants ARM.”
20
Id. at ¶ 67.
In the 3AC, Plaintiffs assert claims for: (1) “usury and/or
21
unconscionable lending,” against Defendant Lenders; (2) violation
22
of California’s Unfair Competition Law (UCL), Cal. Bus. & Prof.
23
Code §§ 17200, et seq., against Defendant Lenders; (3) violation
24
of the UCL, against Defendant ARM; (4) unjust enrichment, against
25
Defendant Lenders and Defendant ARM; and (5) an accounting,
26
against Defendant Lenders and Defendant ARM.
27
On their first claim, Plaintiffs seek “a penalty equal to
28
three times the interest paid during the year immediately prior to
9
1
the filing” of their complaint and “to cancel all future interest
2
that Defendants claim is due.”
3
“to recover all interest paid to Defendants during the two years
4
immediately preceding the filing of” their action and to recover
5
all interest they or putative class members paid “that is not
6
otherwise allowed by law commencing with the date four years
7
immediately preceding the filing” of their action.
8
27:20-25.
9
members sixty-five years or older.
Id. at 27:18-20.
They also seek
Id. at
Plaintiffs seek trebling of damages suffered by class
Id. at 27:26-27.
United States District Court
For the Northern District of California
10
On their second and third claims, Plaintiffs seek to enjoin
11
Defendants from charging an interest rate in excess of the legal
12
maximum.
13
unlawful, unfair or fraudulent act committed by Defendants.
14
at 28:6-10.
15
Id. at 28:2-5.
They also seek restitution for any
Id.
Finally, on their fourth and fifth claims, Plaintiffs seek
16
recovery for “all interest payments and other monies” Defendants
17
received from them and the putative class, “commencing with the
18
date four years immediately preceding the filing” of their action.
19
Id. at 28:15-21.
20
demurrer, filed by PSL, First East and Instant Cash, to the fourth
21
and fifth causes of action, without leave to amend.
22
37-3 in Case No. C12-5067.
23
On March 11, 2011, the state court sustained a
Docket No.
Plaintiffs also seek attorneys’ fees and costs, pursuant to
24
California Code of Civil Procedure § 1021.5.
25
B. Plaintiffs’ motion for leave to amend
26
In the motion for leave to file a 4AC, Plaintiffs seek to
27
Id. at 28:23-25.
make a number of changes to the 3AC, which include the following.
28
10
1
Plaintiffs seek to add new Defendants, including Dexter
2
Emerald Group, alleged to be solely owned and controlled by Thomas
3
Assenzio, and additional Defendant Lenders, among them Web Cash
4
Network, LLC, alleged to be controlled by Thomas Assenzio and
5
newly added Defendant Charles Hallinan.
6
allegation “that Dexter Emerald received from Web Cash more than
7
$6,500,000 without consideration, all of which were proceeds from
8
the payday lending at issue in this case during the Class Period.”
9
Proposed 4AC ¶ 18.
United States District Court
For the Northern District of California
10
Plaintiffs seek to add an
Plaintiffs also seek to add three new causes of action to
11
their complaint.
12
or annul fraudulent transfers,” Plaintiffs seek to set aside
13
transfers of proceeds from the payday lending in this case,
14
including, but not limited to, “the payment by Web Cash to Dexter
15
Emerald of more than $6,500,000.00 all of which were proceeds from
16
the payday lending in this case.”
17
prayer for relief related to this claim, Plaintiffs request to set
18
aside the transfer or conveyances between Defendants “to the
19
extent necessary to satisfy plaintiffs’ judgment, plus interest.”
20
Id. at 26-27.
21
In the new sixth cause of action to “set aside
Id. at ¶¶ 99-100.
In their
In the new fifth cause of action, “Plaintiffs seek imposition
22
of a Constructive Trust as to all . . . defendants who each
23
received proceeds from unlawful, unconscionable and despicable
24
usurious loans made to the Plaintiff class by the Defendant
25
Lenders.”
26
this claim, Plaintiffs request an order declaring that these
27
Defendants hold “all monies received from Defendant Lenders” and
28
others as constructive trustees and “an accounting of all monies
Id. at ¶ 95.
In their prayer for relief related to
11
1
received by defendants named . . . for imposition of a
2
Constructive Trust since July 1, 2005.”
3
Id. at 26.
LEGAL STANDARD
4
A defendant may remove a civil action filed in state court to
5
federal district court so long as the district court could have
6
exercised original jurisdiction over the matter.
7
§ 1441(a).
8
time before judgment, it appears that the district court lacks
9
subject matter jurisdiction over a case previously removed from
28 U.S.C.
Title 28 U.S.C. § 1447(c) provides that if, at any
United States District Court
For the Northern District of California
10
state court, the case must be remanded.
11
the scope of the removal statute must be strictly construed.
12
v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
13
presumption’ against removal jurisdiction means that the defendant
14
always has the burden of establishing that removal is proper.”
15
Id.; see also Wash. State v. Chimei Innolux Corp., 659 F.3d 842,
16
847 (9th Cir. 2011) (“The burden of establishing removal
17
jurisdiction, even in CAFA cases, lies with the defendant seeking
18
removal.”)).
19
favor of remanding the case to state court.
20
566.
23
Gaus
“The ‘strong
Courts should resolve doubts as to removability in
21
22
On a motion to remand,
Gaus, 980 F.2d at
DISCUSSION
I.
Motion to Remand in Rosas
CAFA provides that district courts have jurisdiction over
24
certain class actions in which the amount in controversy exceeds
25
five million dollars.
26
dispute whether it is facially apparent from the Rosas 1AC that
27
this amount in controversy requirement has been met.
28 U.S.C. § 1332(d)(2).
28
12
The parties
1
Hallinan contends that it is facially apparent that the Rosas
2
1AC puts in controversy at least twenty-two million dollars
3
through the fourth cause of action.
4
specify an amount in controversy in her prayer for relief, that
5
she has not plead that the twenty-two million dollars relates to
6
loans made to class members, which is limited to individuals
7
located in California, and that Hallinan has not introduced
8
evidence sufficient to establish by a preponderance of the
9
evidence that the jurisdictional amount is met.
United States District Court
For the Northern District of California
10
Rosas argues that she did not
When assessing whether a removing defendant has met the
11
amount in controversy requirement, “‘[t]he ultimate inquiry is
12
what amount is put ‘in controversy’ by the plaintiff’s complaint,
13
not what a defendant will actually owe.’”
14
Express, Inc., 2012 U.S. Dist. LEXIS 27215, at *6 (N.D. Cal.)
15
(quoting Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199,
16
1205 (E.D. Cal. 2008)).
17
court may consider whether it is ‘facially apparent’ from the
18
complaint that the jurisdictional amount is in controversy.”
19
Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th
20
Cir. 1997) (quoting Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
21
1335-36 (5th Cir. 1995)).
22
“court may consider facts in the removal petition, and may require
23
parties to submit summary-judgment-type evidence relevant to the
24
amount in controversy at the time of removal.”
25
Allen, 63 F.3d at 1335-36).
26
Jasso v. Money Mart
In making this assessment, the “district
When this is not facially apparent, a
Id. (quoting
The Ninth Circuit has “identified at least three different
27
burdens of proof which might be placed on a removing defendant in
28
varying circumstances.”
Guglielmino v. McKee Foods Corp., 506
13
F.3d 696, 699 (9th Cir. 2007).
2
state court alleges on its face an amount in controversy
3
sufficient to meet the federal jurisdictional threshold, such
4
requirement is presumptively satisfied unless it appears to a
5
‘legal certainty’ that the plaintiff cannot actually recover that
6
amount.”
7
F.3d 398 (9th Cir. 1996)).
8
from the face of a state-court complaint whether the requisite
9
amount in controversy is pled,” the removing party must establish
10
United States District Court
For the Northern District of California
1
by a preponderance of the evidence that the amount in controversy
11
exceeds the jurisdictional amount.
12
at 404).
13
alleges that the amount in controversy is less than the
14
jurisdictional threshold, the ‘party seeking removal must prove
15
with legal certainty that CAFA’s jurisdictional amount is met.’”
16
Id. (quoting Lowdermilk v. United States Bank Nat’l Assoc., 479
17
F.3d 994, 1000 (9th Cir. 2007).
18
First, “when a complaint filed in
Id. (citing Sanchez v. Monumental Life Ins. Co., 102
Second, if “it is unclear or ambiguous
Id. (citing Sanchez, 102 F.3d
Finally, “when a state-court complaint affirmatively
Because of the “varying burdens of proof depending on the
19
situation and nature of the plaintiff’s complaint,” the Court
20
“must as a threshold matter determine precisely what” the Rosas
21
1AC alleged and in which of these three categories this case
22
falls.
23
Guglielmino, 506 F.3d at 699.
Resolving doubts in favor of remand, the Court concludes that
24
it is not clear, and it is ambiguous from its face, whether the
25
twenty-two million dollars to which the complaint refers is in
26
controversy in the action.
27
to persons “whose bank accounts are located in the State of
28
California.”
The pleading clearly limits the class
Rosas 1AC ¶ 89.
In the fourth cause of action,
14
1
Rosas seeks imposition of a constructive trust upon Defendants who
2
received “proceeds from unlawful, unconscionable and despicable
3
usurious loans made to the Plaintiff class by the Defendant
4
Lenders.”
5
limited this cause of action to proceeds from loans made to
6
persons with bank accounts in California.
7
apparent whether the twenty-two million dollars allegedly given by
8
AMG to Hallinan Capital was limited to proceeds from such loans.
9
The Rosas 1AC describes this amount as being obtained from the
Id. at ¶ 113 (emphasis added).
She has thus explicitly
It is not facially
United States District Court
For the Northern District of California
10
payday lending scheme as a whole; it does not limit this scheme to
11
California.
12
consumers throughout the United States, not just in California.
13
See, e.g., id. at ¶ 24.
14
relief that is related to the fourth cause of action seeks an
15
order declaring, among other things, that Defendants “hold all
16
monies received from Defendant Lenders” as constructive trustees,
17
id. at 30, without explicitly limiting the constructive trust to
18
proceeds from loans made to class members, such a limitation is
19
logically inferred from the limitation in the cause of action
20
itself.
21
constructive trust on proceeds beyond those actually at issue in
22
the cause of action based on loans made to the putative class,
23
such a request would not be legally plausible.
There are indications that it may have involved
Although the portion of her prayer for
Further, if the prayer for relief sought to impose a
24
Having concluded that it is “unclear or ambiguous from the
25
face of a state-court complaint whether the requisite amount in
26
controversy is pled,” Guglielmino, 506 F.3d at 699, the Court
27
applies the second burden of proof described above.
28
Hallinan must establish by a preponderance of the evidence that
15
Accordingly,
1
the amount in controversy exceeds the jurisdictional amount.
2
Because the first standard does not apply, Rosas need not
3
establish to a “legal certainty” that she cannot actually recover
4
the jurisdictional amount.
5
that she has not done so are unavailing.
6
Thus, Hallinan’s repeated arguments
Hallinan has not submitted any summary-judgment-type evidence
7
as to the amount in controversy.
8
evidence that the amount transferred from AMG to Hallinan Capital
9
represented proceeds from loans made to individuals with
For example, he has not offered
United States District Court
For the Northern District of California
10
California bank accounts.
11
in the Rosas 1AC constitute an admission by Rosas that the amount
12
in controversy requirement is satisfied, and that this constitutes
13
sufficient evidence to meet his evidentiary burden.
14
formal judicial admission by a plaintiff of such a fact may
15
constitute sufficient evidence, Hallinan bases his argument that
16
such an admission was actually made on his assertion that the 1AC
17
facially discloses that twenty-two million dollars is in
18
controversy.
19
clearly disclose this on its face, the Court concludes that it
20
also does not constitute such an admission.
21
Instead, he argues that the allegations
Although a
Having already found that the Rosas 1AC does not
Accordingly, Hallinan has not met his burden to establish
22
that federal jurisdiction exists under CAFA, and the Court GRANTS
23
Rosas’s motion to remand.
24
II.
25
Motion to Remand in Baillie
In Baillie, the parties dispute both whether PSL could remove
26
the action to federal court based on the proposed 4AC before the
27
state court had decided whether to allow it to be filed, and
28
whether the proposed 4AC reveals that the jurisdictional amount is
16
1
in controversy through the fifth and sixth causes of action and
2
the allegation related to the transfer between Web Cash and Dexter
3
Emerald.
4
The Ninth Circuit has not squarely answered the question of
5
whether the thirty day time period for removal under 28 U.S.C.
6
§ 1446(b)(3) commences when a motion for leave to amend a pleading
7
is filed in the state court or at some other time, such when the
8
court rules on the motion or when the amended pleading is
9
ultimately filed.
Courts considering the issue have articulated a
United States District Court
For the Northern District of California
10
number of different views.
11
§ 107.30[3][a][iv][B] (summarizing approaches).
12
concludes that remand is warranted, even if the proposed 4AC could
13
serve properly as the basis for removal before the state court
14
ruled on the motion for leave to amend, the Court does not reach
15
this issue.
16
See 16 Moore’s Federal Practice
Because the Court
The Court has previously held that the Baillie 3AC does not
17
specify the amount in controversy on its face.
18
1AC, it is not clear from the face of the proposed 4AC in Baillie
19
whether the six and a half million dollars to which it refers is
20
in controversy under either the Baillie 3AC or the proposed 4AC,
21
so as to constitute “other paper” under 28 U.S.C. § 1446(b)(3), as
22
PSL argues.
23
in the Baillie 3AC.
24
limited to individuals who reside in California or whose bank
25
accounts are located within the state.
26
Proposed 4AC ¶ 65.
27
claims on behalf of a California class, neither pleading states
28
that the payday loan scheme described only resulted in loans made
As with the Rosas
Neither Defendant involved in that transfer was named
In addition, as in Rosas, the class is
See Baillie 3AC ¶ 65;
Although Plaintiffs seek to prosecute only
17
1
to putative class members or within California.
2
Plaintiffs allege that the six and a half million dollars were
3
“proceeds from the payday lending at issue in this case,” Proposed
4
4AC ¶ 100, this does not make clear whether this sum was proceeds
5
of the payday lending scheme as a whole, which may or may not
6
encompass loans made to non-class members, or proceeds only of
7
loans made to class members and in controversy.
8
trust claim in the proposed 4AC is similar to the corresponding
9
claim in Rosas and clearly limits the claim to proceeds upon
Thus, although
The constructive
United States District Court
For the Northern District of California
10
“loans made to the Plaintiff class.”
11
claim to set aside or annul fraudulent transfers may have been
12
phrased more precisely, in this cause of action, Plaintiffs could
13
seek only to set aside the transfers to the extent necessary to
14
satisfy the claims of the named Plaintiffs and the class members.
15
Id. at ¶ 95.
Although the
Like Hallinan, PSL has not introduced any evidence, aside
16
from the proposed 4AC itself, to show by a preponderance of the
17
evidence that the amount in controversy exceeds the jurisdictional
18
amount.
19
on its face, it does not constitute an admission against
20
Plaintiffs’ interest in the choice of forum, as PSL contends.
21
Because the proposed 4AC does not clearly disclose this
Accordingly, PSL has not met its burden to establish that
22
federal jurisdiction exists under CAFA, and the Court GRANTS
23
Plaintiffs’ motion to remand in Baillie.
24
CONCLUSION
25
For the reasons set forth above, the Court GRANTS the motions
26
to remand (Docket Nos. 45 in 12-5066 and 40 in 12-5067) and DENIES
27
Defendants’ motions to dismiss and compel arbitration (Docket Nos.
28
13 and 14 in 12-5066 and 16 and 27 in 12-5067), without prejudice
18
1
to refiling them in state court to the extent otherwise
2
permissible.
3
4
5
The Clerk shall remand these cases to the Alameda County
Superior Court and close the file.
IT IS SO ORDERED.
6
7
8
Dated: 12/5/2012
CLAUDIA WILKEN
United States District Judge
9
United States District Court
For the Northern District of California
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
19
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?