JOHN A. HOUSTON, District Judge.
Pending before the Court is Plaintiff Tracy R. Horn's ("Horn" or "Plaintiff") motion to remand, pursuant to 28 U.S. Code § 1447 (Doc. No. 5) and Defendant AccessLex Institute's ("Access" or "Defendant") motion to dismiss the initial complaint pursuant to Rule 12(b)(6) (Doc. No. 2). The motion to remand and the motion to dismiss have been fully briefed. After a careful review of the pleadings and for the reasons set forth below, Plaintiff's motion to remand is
On June 27, 2017, Plaintiff filed a limited civil case for unlawful debt collection practices in violation of the California Rosenthal Fair Debt Collection Practices Act (RFDCPA), California Civil Code §§ 1788-1788.33 in the San Diego County Superior Court. Plaintiff's single cause of action describes seven (7) attempts by Defendant to communicate directly with plaintiff after notification of attorney representation and alleges this conduct constitutes the knowing and willful violation of eight (8) provisions of the Fair Debt Collection Practices Act (FDCPA), as incorporated by Cal. Civ. Code § 1788.17. Plaintiff prays for relief in the form of statutory damages, attorney's fees, litigation expenses, and actual damages for "harm resulting from Defendant's actions, including worry, emotional distress, anxiety, humiliation, [and] telephone charges."
On September 29, 2017, Defendant filed a notice of removal based solely on diversity of citizenship in accordance with 28 U.S.C. § 1446(b) [Doc No. 1] followed by a Motion to Dismiss Plaintiff's Complaint or in the alternative, to transfer venue [Doc. No. 2]. Plaintiff moved for remand pursuant to 28 U.S.C. § 1447(c) and L.R. 7-1 on the grounds that "this Court lacks subject matter jurisdiction to hear this case and Defendant improperly removed this action to federal court." [Doc. No. 5.] Although Plaintiff does not dispute complete diversity exists between the parties, she challenges Defendant's proffer that the amount in controversy exceeds $75,000. In addition, Plaintiff requests attorney's fees and costs pursuant to 28 U.S.C. 1447(c). Both motions, having been briefed and taken under submission, are now before the Court.
The federal court is one of limited jurisdiction.
The removal statute, 28 U.S.C. §1441 allows defendants to remove an action when a case originally filed in state court is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1441(a) and (b); 28 U.S.C. §§ 1331, 1332(a). The amount in controversy is determined as of the date of removal.
In circumstances where defendant's removal of the action is objectively unreasonable, the Court may award attorney's fees under § 1447(c).
Plaintiff moves to remand this action to state court based on lack of diversity jurisdiction. Specifically, Plaintiff contends that removal is improper because the amount in controversy falls well below the $75,000 threshold. In looking first to the complaint, the prayer for relief generally requests statutory damages and actual damages for mental anguish. The specific amount of damages are unclaimed. However, Plaintiff points to: (1) the civil case cover sheet, which accompanied the filing of Plaintiff's lawsuit and invokes limited jurisdiction — designating the amount demanded as $25,000 or less, (2) the statutory limit on damages of $1,000 per person, per action regardless of the number of violations (
In response, and in light of Plaintiff's declaration, Defendant does not oppose the motion to remand, but objects to Plaintiff's request for an award of fees § 1447(c).
An award of fees under § 1447(c) is discretionary, although guided by the underlying objective to deter removals intended to "prolong[] litigation and impose[] costs on the opposing party."
Defendant contends removal was objectively reasonable on three grounds: (1) Plaintiff did not expressly limit the amount of her claims within the complaint, (2) Plaintiff's counsel did not implement reasonable methods of resolving the jurisdictional dispute after receiving the notice of removal and (3) removal was a procedural precaution to avoid waiver of the right to a federal forum in the instance Plaintiff's action was reclassified as an unlimited action after amendment to the initial pleading. The Court is unpersuaded.
It is uncontested that neither the body of Plaintiff's Complaint, nor the prayer for relief alleges a specific amount of damages. However, it is in these circumstances, when "a plaintiff's state court complaint does not specify a particular amount of damages, [that] the removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds [the jurisdictional amount.]"
While Defendant does not oppose the motion to remand, the Court considers the reasonableness of removal in light of Defendant's initial assertion that Plaintiff's claims included "`statutory damages...in the amount of up to $1,000.00' for each allegedly willful violation." As clarified in Plaintiff's motion to remand, statutory damages under the RFDCPA are awarded per proceeding, not per violation.
Plaintiff's action was filed in state court as a limited jurisdiction civil case. In such cases, "the amount in controversy does not exceed twenty-five thousand dollars ($25,000)," exclusive of attorneys' fees, interest, and costs. CCP § 85a. Defendant, citing
In bringing the motion to remand, Plaintiff's counsel billed $3,100. The total, includes "$2,300 in attorney's fees, costs and expenses for researching, preparing and filing this Motion for Remand ... [and] $800 in attorney fees to reply to Defendant's opposition." [Doc. No. 5-1, pg 8]. Defendant does not contest the amount billed as unreasonable, but proposes that the fees billed in relation to the motion to remand are a "strong indication that the total amount of her claim, together with fees....will exceed $75,000." This assumption would require Plaintiff's counsel to expend over 124 billable hours throughout the pendency of the case and bill an amount more than double that which the plaintiff is able to recover in damages. Whereas here, Plaintiff's damages are capped at $25,000, it is inconceivable that Plaintiff's counsel would be entitled to $50,001 in "reasonable attorney's fees." See Cal. Civ. Code §1788.30(c) (entitling the prevailing party to reasonable attorney's fees based on time necessarily expended to enforce liability).
Lastly, Defendant asserts that removal was reasonable to safeguard its right to a federal forum if Plaintiff was to amend the Complaint increasing the recovery sought. Defendant's concern is misplaced in light of the statutory procedural protection outlined in §1446(b)(3). Section 1446(b)(3) allows a defendant to remove to federal court within thirty days of receiving information in an "amended pleading, motion, order or other paper" which allows the defendant to "ascertain ... that the case is one which is or has become removable ...." See
With no claim for pecuniary loss by Plaintiff, a thousand dollar limit on statutory damages, and a total maximum recovery amount of $25,000, excluding costs and fees, the Court is strained to find sufficient justification for the removal of this action. Finding removal was not objectively reasonable, the Court
The Court declines to rule on Defendant's motion to dismiss. "Article III generally requires a federal court to satisfy itself of its jurisdiction over the subject matter before it considers the merits of a case."
For the foregoing reasons,