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)

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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

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