Goodard v. Google, Inc.

Filing 11

MOTION to Remand filed by Jenna Goodard. Motion Hearing set for 9/5/2008 09:00 AM in Courtroom 3, 5th Floor, San Jose. (Himmelfarb, Alan) (Filed on 6/30/2008)

D

ockets.Justia.com

EXHIBIT A

Case 1:08-cv-00405

Document 31

Filed 04/29/2008

Page 1 of 4

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION SUSAN PALUZZI, individually and on behalf of a class of similarly situated individuals, ) ) ) Plaintiff, ) v. ) ) CELLCO PARTNERSHIP, a Delaware General ) Partnership d/b/a Verizon Wireless, and MBLOX, ) INC., a Delaware corporation, ) ) Defendants. ) ORDER Plaintiff Susan Paluzzi brought a five count putative class action complaint in the Circuit Court of Cook County, Illinois, against defendants Cellco Partnership d/b/a Verizon Wireless ("Verizon") and mBlox, Inc., claiming that defendants have a practice of unlawfully charging cellular telephone customers for unauthorized products and services. Verizon removed the case to this court based on the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d), which gives federal district courts original jurisdiction over class actions in which the amount in controversy exceeds $5 million and any member of a class of over 100 plaintiffs is a citizen of a state different from the state of any defendant. Plaintiff has moved to remand, arguing that the court lacks subject matter jurisdiction and that Verizon has failed to show by a preponderance of the evidence that the amount in controversy exceeds $5 million. The motion is granted. Plaintiff's complaint, brought on behalf of herself and two classes, seeks to stop Verizon's practice of billing cellular telephone customers for unauthorized mobile content services. Such services, also known as premium text message services, include ringtones, sports score reports, weather alerts, horoscopes, and interactive radio, delivered to customers' mobile

No. 08 C 0405 Judge Robert W. Gettleman

Case 1:08-cv-00405

Document 31

Filed 04/29/2008

Page 2 of 4

devices. Mobile content service providers charge and collect from their customers by "piggybacking" on cellphone bills sent out by wireless carriers such as Verizon. To accomplish this, mobile content service providers partner with third-party aggregators such as defendant mBlox, who act as middlemen between the numerous mobile content service providers and the carriers. When a mobile content service provider provides its services to a particular carrier's customer, the aggregator with whom the service provider has contracted and the carrier each retain a portion of the mobile content service charge collected from the customer. Plaintiff claims that Verizon has set up and maintained its billing system in a manner that results in unauthorized and erroneous charges for mobile content services. She seeks to represent two classes: (1) a carrier class; and (2) an aggregator class. Plaintiff asserts claims for breach of contract, restitution, tortious interference with contract, computer tampering in violation of 720 ILCS 5/16D-3 and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. Defendant, as proponent of federal jurisdiction, bears the burden of establishing removal jurisdiction. Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 447-48 (7th Cir. 2005). A removing party must prove by the preponderance of the evidence that the amount in controversy exceeds the threshold in order to meet this burden. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 541, 42 (7th Cir. 2006). To meet its burden, Verizon has provided evidence that it has 400,000 wireless customers in Illinois who subscribed to premium text messaging services, and that since inception those subscribers have been billed a total of $13 million for mobile services Verizon argues that

2

Case 1:08-cv-00405

Document 31

Filed 04/29/2008

Page 3 of 4

because plaintiff's complaint places at issue Verizon's entire system for billing mobile content, all charges that Verizon has collected from mobile customers are in controversy. Verizon characterizes plaintiff's complaint too broadly. Plaintiff's claim includes charges for unauthorized services, not all amounts Verizon has billed and collected for mobile content services. It is impossible to tell from Verizon's submissions how many of its customers were overbilled, and by how much. To conclude that more than $5 million is in controversy the court would have to speculate as to the size of the classes and the average amount of recovery for each class member, or simply assume that the amount overcharged is approximately 38% of the total amount billed by Verizon for mobile content services. Such speculation is an insufficient basis for the assertion of subject matter jurisdiction. See Reason v. General Motors Co., 896 F. Supp. 829, 835 (S.D. Ind. 1995) (citing N.L.F.C., Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1993)). Finally, while defendant's argument that potential punitive damages and attorney's fees should be included in establishing the amount in controversy is legally correct, it is insufficient to carry Verizon's burden. Any award of punitive damages must be based on the amount of compensatory damages awarded, and as already noted that amount is too speculative to be determined. Rather than supplying a good faith estimate of the actual amount in controversy as is Verizon's burden, adding putative damages just adds more speculation into the mix. With respect to attorney's fees, plaintiff is correct that the amount of attorney's fees to be considered as part of the amount in controversy is the amount of fees incurred at the time jurisdiction is invoked. Atteberry v. Esurance Ins. Services, Inc., 473 F. Supp.2d 876, 877 (N.D. Ill. 2007). Although Verizon has failed to provide any evidence of what those fees might be, it is highly

3

Case 1:08-cv-00405

Document 31

Filed 04/29/2008

Page 4 of 4

unlikely that at this state of the litigation they would amount to a substantial portion of the $5 million required to confer federal jurisdiction under CAFA. Accordingly, the court concludes that Verizon has failed to provide sufficient evidence that the amount in controversy exceeds $5 million, and consequently removal was improper. Plaintiff's motion for remand to the Circuit Court of Cook County, Illinois is granted. Plaintiff's requests for attorney's fees and costs is denied.1 ENTER: April 29, 2008

__________________________________________ Robert W. Gettleman United States District Judge

Nothing in this order is intended to suggest that the case may not become removable in the future based on a new development. See 28 U.S.C. § 1446(b)2. 4

1

EXHIBIT B

Case 0:08-cv-60146-CMA

Document 25

Entered on FLSD Docket 03/26/2008

Page 1 of 5

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION CASE NO. 08-60146-CIV-ALTONAGA/Turnoff LISA GRAY, individually and on behalf of a class of similarly situated individuals, Plaintiff, vs. CELLCO PARTNERSHIP, a Delaware General Partnership d/b/a Verizon Wireless; and MOBILE MESSENGER AMERICAS, INC., a Delaware corporation, Defendants. ___________________________________ / ORDER ON MOTION TO REMAND THIS CAUSE is before the Court on Plaintiff, Lisa Gray's ("Gray['s]") Motion to Remand [D.E. 9], filed February 25, 2008. The Court has carefully reviewed the parties' written submissions and applicable law. Gray has brought this putative class action against Defendants, Cellco Partnership d/b/a Verizon Wireless ("Verizon") and Mobile Messenger Americas, Inc. ("Mobile Messenger"), seeking to stop a practice Gray alleges Defendants engage in of causing cellular telephone customers to be billed for unauthorized and unwanted mobile content services and to obtain redress for persons who have been injured by that practice. Verizon1 timely removed this action based on the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d), which gives federal district courts original jurisdiction over class actions in which the amount in controversy exceeds $5,000,000 and any member of a class of over 100 plaintiffs is a citizen of a state different from the state of any defendant.

Under the Class Action Fairness Act of 2005 no other defendants are required to consent or join in the removal. See 28 U.S.C. § 1453(b).

1

Case 0:08-cv-60146-CMA

Document 25

Entered on FLSD Docket 03/26/2008

Page 2 of 5

Case No. 08-60146-CIV-ALTONGA/Turnoff

Gray seeks a remand on the ground that Verizon has failed to show by a preponderance of the evidence that the action places at least $5 million in controversy. Gray's Complaint contains a count for breach of contract (Count I), restitution/unjust enrichment (Count II), and tortious interference with contract (Count III) on behalf of two proposed classes: as to Count I, a Carrier Class, and as to Counts II and III, a Mobile Content Provider Class. The "Carrier Class" is defined as a class consisting of all Verizon wireless telephone subscribers in Florida who suffered losses or damages as a result of Verizon billing for mobile content products and services not authorized by the subscriber. The Mobile Content Provider Class consists of all wireless telephone subscribers in Florida who suffered losses or damages as a result of incurring charges on their cellular telephone bills from, or on behalf of, Mobile Messenger which were not authorized by the subscriber. Gray alleges that Verizon, systematically and repeatedly, and without authorization, has been billing its customers for the purchase of products and services not agreed to by the customers and along with third-party services providers, has been profiting significantly through this practice. The disputed services include access to and billing for third-party mobile content services such as ring tones, chat services, horoscopes, stock tips, weather alerts, participatory television, payment services and other forms of software provided by hundreds of third-party vendors with names such as Mobile Messenger. Verizon asserts that while the Complaint does not allege an amount in controversy, the $5 million threshold is satisfied for several reasons. First, reading the Complaint as a whole reveals that Plaintiff is challenging Verizon's entire billing system for mobile content charges to Florida wireless subscribers and Plaintiff cannot insist the class she seeks to represent includes only those who may ultimately prove their charges were unauthorized. Verizon relies on the declaration of Bill Medrano, 2

Case 0:08-cv-60146-CMA

Document 25

Entered on FLSD Docket 03/26/2008

Page 3 of 5

Case No. 08-60146-CIV-ALTONGA/Turnoff

attached to its Notice of Removal, which states Verizon's total charges for mobile content to wireless subscribers in Florida exceeds the sum of $24 million, an amount far greater than the $5 million threshold required for federal jurisdiction under CAFA. Second, even if Plaintiff is not challenging the entire billing system, because Plaintiff is seeking punitive damages, capped at three times the amount of compensatory damages (unless a defendant is shown to have acted with the specific intent to harm the claimant), if Plaintiff merely recovers $1.25 million in compensatory damages (less than 5% of Verizon's total mobile content charges), then the CAFA jurisdictional threshold is satisfied. Under 28 U.S.C. § 1447(c), a case removed from state court should be remanded if it appears that it was removed improvidently. The burden of establishing federal jurisdiction, as Verizon recognizes, falls on the party who is attempting to invoke the jurisdiction of the federal court. See McNutt v. Gen. Motors Acceptance Corp. of Indiana, Inc., 298 U.S. 178, 189 (1936); see also Miedema v. Maytag Corp., 450 F.3d 1322, 1329-30 & n.8 (11th Cir. 2006) (removing party bears burden of establishing federal jurisdiction under CAFA). Moreover, courts should strictly construe the requirements of removal jurisdiction and remand all cases in which such jurisdiction is doubtful. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). When the plaintiff and defendant clash on the issue of jurisdiction, uncertainties are resolved in favor of remand. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Where a "`plaintiff has not pled a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional requirement.'" Miedema, 450 F.3d at 1330 (quoting Williams v. Best Buy Co., Inc., 269 F.3d 1316, 1319 (11th Cir. 2001) (emphasis added)). Because the amount in controversy is not apparent on the face of Gray's Complaint, the undersigned must necessarily "look to the notice of removal and may 3

Case 0:08-cv-60146-CMA

Document 25

Entered on FLSD Docket 03/26/2008

Page 4 of 5

Case No. 08-60146-CIV-ALTONGA/Turnoff

require evidence relevant to the amount in controversy at the time the case was removed." Id. Notwithstanding Verizon's characterization of Plaintiff's claims, Gray does not claim that all amounts Defendants billed and collected for mobile content services were improper, rather, she claims that some of those charges were unauthorized and thus improper. To find that more than $5 million is in controversy the undersigned would necessarily have to speculate as to the size of the classes and the likely average amount of recovery for each class member, or assume that approximately 20% of the mobile content service charges were improper.2 A district court, however, is not permitted to engage in this type of guesswork. See Lowrey v. Alabama Power Co., 483 F.3d 1184, 1210 (11th Cir. 2007). The undersigned agrees with Plaintiff, therefore, that Verizon has failed to adequately demonstrate a relationship between the amount in controversy and the $24 million figure Verizon claims it charged all Florida consumers for mobile content services. See, e.g., Pearson's Pharmacy, Inc. v. Blue Cross & Blue Shield of Alabama, 2007 WL 3496031, at *1 (M.D. Ala., Nov. 14, 2007). As to Verizon's argument that the prayer for punitive damages brings this case within the jurisdictional amount, the Complaint requests exemplary damages if the challenged conduct is proved to be willful. And while the Court must consider punitive damages when determining if the jurisdictional amount in controversy has been satisfied, unless it is apparent that such cannot be recovered, see, e.g., Holley Equip. Co. v. Credit Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987) (citations omitted), the Court returns to what sum, if any, is shown by a preponderance of the evidence to be the amount in controversy from which one can extrapolate a punitive damage recovery. See, e.g., Sharritt v. Liberty Mut. Ins. Co., 2005 WL 1505994, at *1 (S.D. Ala. June 24,

For example, Gray alleges she was improperly charged $19.99 and further alleges Defendants improperly ch arged consumers "as little as a few dollars to at most several hundreds of dollars per person."

2

4

Case 0:08-cv-60146-CMA

Document 25

Entered on FLSD Docket 03/26/2008

Page 5 of 5

Case No. 08-60146-CIV-ALTONGA/Turnoff

2005) (finding defendant had not satisfied its burden where it had only shown amount in controversy to be $6,700, thus, punitive damage would have to be more than ten times the compensatory damages). Verizon posits that as little as $1.25 million is necessary for punitive damages in three times that amount to bring this case over the requisite jurisdictional sum. Even assuming that Verizon's estimate is not unreasonably high, the Court must nevertheless reject it because it is not based on any analysis of the evidence at the time of removal. See Lowrey, 483 F.3d at 1210 (rejecting defendants' argument that, to reach the jurisdictional threshold, each of the roughly 400 plaintiffs need only recover on average $12,500 ­ "a relatively low hurdle" ­ because it would require the court to engage in "impermissible speculation"). The punitive damages discussion, therefore, simply adds more speculation to a record insufficient to satisfy Verizon's burden as the removing party. Resolving all doubts in favor of remand, as the Court must, see, e.g., Miedema, 450 F.3d at 1328-29, it is ORDERED AND ADJUDGED that the Motion to Remand [D.E. 9] is GRANTED and this cause remanded to the Seventeenth Judicial Circuit, in and for Broward County, Florida. The Clerk of Court is directed to mark this case as CLOSED. DONE AND ORDERED in Chambers at Miami, Florida this 25th day of March, 2008.

_________________________________ CECILIA M. ALTONAGA UNITED STATES DISTRICT JUDGE
cc: Hon. William C. Turnoff counsel of record

5