Timlick v. National Enterprise Systems, Inc.

Filing 22

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING 12 PLAINTIFFS MOTION TO REMAND.(ndrS, COURT STAFF) (Filed on 8/16/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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LISA ARLENE TIMLICK,

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Plaintiff,

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ORDER GRANTING PLAINTIFF’S
MOTION TO REMAND

v.

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NATIONAL ENTERPRISE SYSTEMS,
INC.,

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United States District Court
Northern District of California

Case No.17-cv-00559-HSG

Re: Dkt. No. 12

Defendant.

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On December 27, 2016, Plaintiff Lisa Arlene Timlick (“Timlick”) filed a class action

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complaint against Defendant National Enterprise Systems, Inc. (“NESI”) and unknown defendants

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in the Superior Court of California, County of Lake. Dkt. No. 1, Ex. A (“Compl.”).1 On February

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3, 2017, NESI filed its notice of removal, asserting that removal was proper under 28 U.S.C. §

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1441(b) because the Court allegedly had original jurisdiction pursuant to the diversity statute, id. §

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1332(a), and the Class Action Fairness Act of 2005 (“CAFA”), id. § 1332(d). Dkt. No. 1

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(“Notice”) ¶¶ 3–4. On February 15, 2017, Timlick filed her motion to remand, Dkt. No. 12, which

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is fully briefed and pending before the Court.2
The complaint’s single cause of action alleges that Defendants violated section

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1812.701(b) of the California Civil Code by “fail[ing] to include the notice required by California

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Civil Code § 1812.700(a) in their first written notice to Plaintiff in a type-size that was at least the

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same type-size as that used to inform Plaintiff of her specific debt or in at least 12-point type.”

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Compl. ¶ 47. Consequently, the complaint asserts that “Plaintiff is entitled to an award of

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The complaint refers to the unknown defendants by the fictitious names “DOES 1 through 10.”
Compl. ¶ 12.
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The Court finds this matter appropriate for disposition without oral argument and the matter is
deemed submitted. See Civil L.R. 7-1(b).

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statutory damages in the amount not to exceed $1,000 against each Defendant” and “the Class is

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entitled to an award of statutory damages in an amount not to exceed the lesser of five hundred

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thousand dollars ($500,000) or 1 percent of the net worth of each Defendant.” Id. ¶¶ 48–49. The

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complaint does not assert that Timlick or the putative class members suffered any actual damages.

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See generally id.

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Statutory damages are recoverable for a violation of section 1812.701(b) of the California
Civil Code. See Cal. Civ. Code 1812.702 (“Any violation of this act shall be considered a

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violation of the Rosenthal Fair Debt Collection Practices Act (Title 1.6C (commencing with

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Section 1788)).”); id. § 1788.17 (“[E]very debt collector collecting or attempting to collect a

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consumer debt . . . shall be subject to the remedies in Section 1692k of, Title 15 of the United

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United States District Court
Northern District of California

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States Code.”). For an individual plaintiff, these statutory damages may not exceed $1,000, 15

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U.S.C. § 1692k(a)(2)(A), whereas for a class they may not exceed:

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(i) such amount for each named plaintiff as could be recovered
under subparagraph (A), and (ii) such amount as the court may
allow for all other class members, without regard to a minimum
individual recovery, not to exceed the lesser of $500,000 or 1 per
centum of the net worth of the debt collector.

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15 U.S.C. § 1692k(a)(2)(B); see also Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark,

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L.L.C., 198 F.R.D. 503, 507 (N.D. Ill. 2001) (“I award the maximum allowable statutory damages

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[under § 1692k]: $1,000 for [the plaintiff], and either a half million dollars or 1% of the

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[defendant’s] net worth, whichever is less, for the absent class members.”). In short, statutory

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damages recoverable for the alleged violation of section 1812.701(b) of the California Civil Code

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are at most $1,000 for Plaintiff and $500,000 for the putative class members.

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The Court finds that removal of this case was inappropriate because it could not have been

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filed originally in federal court. See 28 U.S.C. § 1441(a); Matheson v. Progressive Specialty Ins.

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Co., 319 F.3d 1089, 1090 (9th Cir. 2003). Plaintiff’s individual claim does not provide a basis for

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removal under the diversity jurisdiction statute because the amount in controversy, exclusive of

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interest and costs, cannot exceed $75,000. See 28 U.S.C. 1332(a). The class claim does not

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provide a basis for removal under CAFA because the aggregate amount in controversy, exclusive

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of interest and costs, cannot exceed $5 million. See 28 U.S.C. § 1332(d)(2); Ibarra v. Manheim
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Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015). Thus, as to both the individual and class

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claims, NESI has failed to meet its burden of proof for establishing jurisdiction. See Matheson,

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319 F.3d at 1090 (“Where it is not facially evident from the complaint that more than $75,000 is in

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controversy, the removing party must prove, by a preponderance of the evidence, that the amount

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in controversy meets the jurisdictional threshold [of § 1332(a)].”); Ibarra, 775 F.3d at 1197

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(“Whether damages are unstated in a complaint, or, in the defendant’s view are understated, the

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defendant seeking removal bears the burden to show by a preponderance of the evidence that the

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aggregate amount in controversy exceeds $5 million when federal jurisdiction [based upon CAFA]

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is challenged.”).

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Since the Court lacks subject matter jurisdiction over this action, remand is required. See

United States District Court
Northern District of California

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28 U.S.C. § 1447(c). However, the Court declines Timlick’s request for attorney fees under §

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1447(c) because Defendant’s arguments in support of CAFA jurisdiction, while unpersuasive, are

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not objectively unreasonable. See Notice ¶ 4; Dkt. No. 14 at 4–7; Martin v. Franklin Capital

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Corp., 546 U.S. 132, 141 (2005) (“Absent unusual circumstances, courts may award attorney’s

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fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for

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seeking removal. Conversely, when an objectively reasonable basis exists, fees should be

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denied.”).

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For the foregoing reasons, the Court hereby GRANTS Timlick’s motion to remand the

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case to the Superior Court of California, County of Lake. The clerk shall remand the case

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forthwith and close the case.

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IT IS SO ORDERED.
Dated: 8/16/2017

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HAYWOOD S. GILLIAM, JR.
United States District Judge

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