Hall v. Staples, Inc.

Filing 37

ORDER TO SHOW CAUSE RE JURISDICTION; AND VACATING MOTION TO DISMISS HEARING. Signed by Judge Jeffrey S. White on 11/14/17. Show Cause Response due by 11/28/2017. (jjoS, COURT STAFF) (Filed on 11/14/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KENDRA HALL, Plaintiff, 8 9 10 United States District Court Northern District of California 11 Case No. 17-cv-02610-JSW ORDER TO SHOW CAUSE RE JURISDICTION AND VACATING MOTION TO DISMISS HEARING v. STAPLES, INC., et al., Defendants. 12 13 On May 5, 2017, Defendants removed this action from the Superior Court of the State of 14 California for the County of Alameda (“Alameda County Superior Court”) on the basis of 15 diversity jurisdiction under 28 U.S.C. § 1332. Defendants bear the burden of establishing the 16 existence of subject matter jurisdiction. See Provincial Gov’t of Marinduque v. Placer Dome, 17 Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). 18 In order for this Court to have jurisdiction under Section 1332, the amount in controversy 19 must be in excess of $75,000. See 28 U.S.C. § 1332(a). Where, as is the case here, a complaint 20 “does not specify a particular amount of damages, the removing defendant bears the burden of 21 establishing, by a preponderance of the evidence,” that the amount in controversy requirement is 22 satisfied. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). On the record 23 as it stands now, Defendants have not met this burden. 24 In the Notice of Removal, Defendants contend that the amount in controversy requirement 25 is satisfied in light of Plaintiff’s request for compensatory damages, emotional and punitive 26 damages, and attorneys’ fees. (Dkt. No. 1, Notice of Removal ¶¶ 17-19.) 27 28 First, regarding Plaintiff’s requested damages, Defendants note that Plaintiff “earned an annual salary of approximately $40,000 per year (based on a rate of $19.00 per hour)” not 1 including the value of benefits. (Dkt. No. 1, Notice of Removal ¶ 17.) However, Defendants’ 2 assumption regarding Plaintiff’s “annual salary” appears based on an assumption that Plaintiff 3 worked 40 hours a week, 52 weeks a year. Defendants, however, have not produced “any 4 evidence that Plaintiff did have such a work schedule” while employed with them. See Brown v. 5 Chipotle Mexican Grill, Inc., No. 16-cv-0174-EMC, 2016 WL 3402619, at *2 (N.D. Cal. June 21, 6 2016). Defendants have similarly failed to provide any factual support which would allow the 7 Court to begin to estimate the potential damages at issue in this case. See Archibold v. Time 8 Warner Cable, Inc., No. 15-cv-1776 FMO, 2015 WL 3407903, at *2 (C.D. Cal. May 27, 2015) 9 (“[T]here is no indication as to the number of hours defendant used to reach its total, the number of hours a week plaintiff worked when she worked for defendant, and whether she worked the 11 United States District Court Northern District of California 10 same hours every week, or which benefits and how were the benefits quantified in the 12 calculation.”). 13 Second, Defendants have failed to provide any estimate for the amount of emotional or 14 punitive damages that may be awarded in this action. Defendants are correct that punitive 15 damages may be included in the amount in controversy. See, e.g., Gibson v. Chrysler Corp., 261 16 F.3d 927, 945 (9th Cir. 2001). However, “merely stating that a complaint seeks punitive damages, 17 which may ultimately be a large sum of money,” (like Defendants do in their Notice of Removal), 18 is insufficient. Sley v. USAA Casualty Ins. Co., No. 5:16-cv-04882-HRL, 2017 WL 2114773, at 19 *3 (N.D. Cal. May 16, 2017). Instead, Defendants may establish the amount of punitive damages 20 potentially awardable in a case by citing to amounts awarded by juries in cases involving 21 analogous facts. See Rodriguez v. Home Depot, U.S.A., Inc., No. 16-cv-01945-JCS, 2016 WL 22 3902838, at *2 (N.D. Cal. July 19, 2016). While Defendants’ Notice of Removal cites three cases, 23 there is no discussion on how much of the respective awards in these cases were attributable to 24 punitive damages. 25 Third, Defendants’ reliance on the potential attorneys’ fee award in this case is premised 26 on the faulty assumption that all such potential fees are properly included in the amount in 27 controversy. Numerous courts in this District have held that only attorneys’ fees incurred at the 28 time of removal are included in the amount in controversy. See, e.g., Carlson v. Gatestone & Co. 2 1 Int’l, Inc., No. 17-cv-01818-BLF, 2017 WL 2615764, at *2 (N.D. Cal. June 16, 2017); Dell v. 2 ServiceMaster Global Holdings, Inc., No. 15-cv-03326-SBA, 2015 WL 6746448, at *2 (N.D. Cal. 3 Nov. 5, 2015); Icard v. Ecolab, Inc., No. 10-cv-0410-PJH, 2010 WL 2528968, at *2 (N.D. Cal. 4 June 18, 2010).1 Defendants have failed to provide any estimate for the amount of attorneys’ fees 5 incurred by Plaintiff’s counsel at the time of removal. Finally, the Court notes that Defendants in their Notice of Removal state “Plaintiff has not 6 7 made a settlement demand for less than $75,000, which raises the inference that the amount in 8 controversy is greater than $75,000.” (Notice of Removal ¶ 26.) This is ambiguously worded. If 9 Plaintiff has simply not submitted a settlement offer, this fact is of little relevance. If, however, Plaintiff has submitted a settlement offer which exceeds $75,000, this is relevant evidence that the 11 United States District Court Northern District of California 10 amount in controversy does, in fact, exceed $75,000. Cohn v. Petsmart, Inc., 281 F.3d 837, 840 12 (9th Cir. 2002) (“A settlement letter is relevant evidence of the amount in controversy if it appears 13 to reflect a reasonable estimate of the plaintiff’s claim.”). Further explanation on this point is 14 required if Defendants seek to rely on Plaintiff’s settlement offer to establish the amount in 15 controversy.2 16 In light of the foregoing, Defendants are ORDERED to show cause why this case should 17 not be remanded to Alameda County Superior Court due to a lack of subject matter jurisdiction. 18 Defendants’ response is due November 28, 2017. Plaintiff may file a response, if she chooses, by 19 December 1, 2017. 20 /// 21 /// 22 /// 23 /// 24 /// 25 1 26 27 The Ninth Circuit has declined to reach this issue, but has recognized that courts around the country have split on this question. See Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 649 n.2 (9th Cir. 2016). 2 28 The Court notes that the Ninth Circuit has held that it does not violate Federal Rule of Civil Procedure 408 to use a settlement offer in this way. See Cohn, 281 F.3d at 840 n.3. 3 1 2 3 4 5 6 In light of this orde the Decem t er mber 8, 2017 hearing on D Defendant’s motion to d s dismiss is VA ACATED. S RED. IT IS SO ORDER Da ated: Novemb 13, 2017 ber 7 ___ __________ ___________ __________ ________ JEF FFREY S. W WHITE Un nited States D District Judg ge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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