MARSH, District Judge.
On February 2, 2012, Magistrate Paul Papak issued a Findings and Recommendation (# 22) recommending that plaintiff's Motion to Remand (# 5) be granted. Defendant timely filed objections through his counsel (# 24), and plaintiff has filed his response. (# 25.) The matter is now before me pursuant to 28 U.S.C. § 636(b)(1)(B) and Federal Rule of Civil Procedure 72(b).
When a party objects to any portion of the Magistrate's Findings and Recommendation, the district court must make a de novo determination of that portion of the Magistrate's report. See 28 U.S.C. § 636(b)(1)(B); Dawson v. Marshall, 561 F.3d 930, 932 (9th Cir.2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir.2003) (en banc); accord McDonnell Douglas Corp. v. Commodore Business Machines, Inc., 656 F.2d 1309, 1313 (9th Cir.1981), cert. denied, 455 U.S. 920, 102 S.Ct. 1277, 71 L.Ed.2d 461 (1982). Having conducted a de novo review of this case, and for the reasons set forth below, I adopt the Findings and Recommendation in its entirety.
On November 1, 2011, plaintiff filed an action against his former employers, defendants AB Car Rental Services, Inc. and Avis Budget Car Rental, L.L.C. (defendants) in Multnomah County Circuit Court of the State of Oregon. In his complaint, plaintiff alleges that defendants failed to reinstate him to his former position after suffering an on-the-job injury, violating O.R.S. §§ 659A.043 and 659A.046. On the face of the complaint, plaintiff seeks lost wages and benefits in an amount of $11,627, future lost wages and benefits in an amount of $11, 267, and non-economic damages in an amount of $25,000. Plaintiff also seeks attorney fees and costs in an unspecified amount, pursuant to O.R.S. §§ 659A.885 and 20.107.
On December 1, 2011, defendants removed the action to this court pursuant to 28 U.S.C. § 1332(a), based on diversity jurisdiction, and that the amount in controversy exceeds $75,000. On December 7, 2011, plaintiff filed a motion to remand, contending that his allegations fall below the $75,000 jurisdictional threshold. Defendants submit that the jurisdictional shortfall of $27,106 is more than adequately covered by plaintiff's assertion of attorney fees.
Pursuant to 28 U.S.C. § 1332(a), this court may exercise jurisdiction over any
In the Findings and Recommendation, Judge Papak discusses the two divergent positions that have emerged among the district courts in this Circuit concerning calculation of attorney fees for purposes of establishing the amount in controversy: (1) the court may consider only attorney fees that are incurred as of the date of removal; and (2) the court may consider a reasonable estimate or projection of attorney fees likely to be expended through conclusion of the case. See Giordano v. Park Ave. Life Ins. Co., 2009 WL 1474945 (C.D.Cal. Apr. 7, 2009) (discussing the split of authority); Dukes v. Twin City Fire Ins. Co., 2010 WL 94109 (D.Ariz. Jan. 6, 2010)(same). After thoroughly examining the conflicting case law, Judge Papak urges this court to adopt the former position and consider only those fees incurred at the time of removal.
Defendants object, contending that this court already has embraced the latter position and that when the proper legal standard is applied, they have satisfied the jurisdictional threshold. I disagree.
Defendants argue that I should follow the reasoning in two other Oregon District Court cases, Beaver v. NPC Intern., Inc., 451 F.Supp.2d 1196, 1198 (D.Or.2006), and McDuffy v. Interstate Distributor Co., Case No. 3:04-cv-1335-KI (D.Or. Jan. 4, 2005). In Beaver, Judge Garr King determined that the court may look to other decisions and awards in similar cases as evidence of the amount in controversy. In that case, the parties submitted evidence from other cases, including McDuffy, in which the parties were represented by the same plaintiff's counsel to establish that the amount of fees would exceed the jurisdictional threshold. After examining the other cases, Judge King concluded that "the claim for attorney fees, the potential claim for punitive damages, and the claim for front pay, taken together with the $37,000 in back pay and non-economic damages specifically sought in the complaint, more likely than not total an amount in controversy greater than the $75,000." Beaver, 451 F.Supp.2d at 1200.
In McDuffy, Judge King remanded the case because the defendant failed to present evidence sufficient to meet the jurisdictional threshold. Beaver, 451 F.Supp.2d at 1199. However, as discussed in Beaver, McDuffy went to trial in state court and the plaintiff was awarded $104,283 in attorney fees for 463.4 hours of attorney time. Id.
I find Beaver and McDuffy distinguishable for a variety of reasons. First, I find the Beaver decision readily factually distinguishable. In Beaver, the complaint indicated that Beaver had filed an action with the Bureau of Labor and Industries and alleged he was entitled to fees incurred at the administrative level, in addition to those incurred at trial. Beaver, 451
Additionally, in Beaver, the complaint included unspecified amounts for front pay and punitive damages, which may have met the jurisdictional threshold. Unlike Beaver, plaintiff here asserts a sum certain of $11,267 in front pay, and has not alleged punitive damages.
More importantly, neither Beaver nor McDuffy addressed the split of authority concerning calculation of attorney fees when determining the amount in controversy necessary to establish jurisdiction. Judge Papak has conducted a comprehensive analysis and has fashioned a rule which lends much needed clarity.
As Judge Papak correctly observed, federal jurisdiction depends upon the circumstances that exist at the time of removal. See Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 691-92 (9th Cir.2006)(discussing desire to avoid premature removal). I concur with Judge Papak's reasoning that including anticipated, but unaccrued attorney fees in calculating the amount in controversy is necessarily speculative. Therefore, I agree with Judge Papak that because defendants submitted no evidence as to the amount of plaintiffs attorney fees incurred as of the time of removal, defendants have not met their burden. Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir.1997); see also Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 698 (9th Cir.2005)(removal statutes construed narrowly in favor of remand).
I also adopt Judge Papak's alternative holding that even if attorneys fees incurred after the date of removal are properly included in the amount in controversy, defendants have failed to satisfy their evidentiary burden. I find no error in the reasoning set forth in Findings and Recommendation, and defendants arguments to the contrary are rejected.
Defendants argue that Judge Papak erred when he failed to consider plaintiff's refusal to stipulate a recovery maximum of $75,000. Defendants argument has been rejected repeatedly. See Ramos v. Bimbo Bakeries USA, Inc., 2010 WL 5487535, *4 (D.Or. Dec. 3, 2010), adopted, 2011 WL 11250 (D.Or. Jan. 3, 2011) (rejecting refusal to stipulate to recovery cap of $75,000 as evidence of amount in controversy); Burk v. Medical Savings Ins. Co., 348 F.Supp.2d 1063, 1070 (D.Ariz.2004)(same), abrogated on other grounds by Dukes v. Twin City Fire Ins. Co., 2010 WL 94109 (D.Ariz. Jan. 6, 2010). Furthermore, defendants bear the burden of establishing that the amount in controversy exceeds $75,000, plaintiff's refusal to stipulate is not affirmative evidence of his likely attorney fees. Ramos, 2010 WL 5487535 at *4.
Defendants assert that they should be permitted to have a limited period of discovery in order to seek facts that would establish jurisdiction. Defendants have not shown that dismissal of this action would result in any actual or substantial prejudice, nor is it clear that such discovery would demonstrate facts necessary to establish jurisdiction. Abrego, 443 F.3d at 691. Accordingly, defendants' objection is rejected.
Defendant's remaining objections have been considered and are rejected. The Findings and Recommendation is well-reasoned, without error, and is adopted in its entirety.
The Magistrate Judge's Findings and Recommendation (# 22) in this action is ADOPTED. Accordingly, the Court
IT IS SOR ORDERED.
PAPAK, United States Magistrate Judge:
Plaintiff Robert Reames filed this action against his former employers, defendants AB Car Rental Services, Inc., and Avis Budget Car Rental, LLC, in the Multnomah County Circuit Court of the State of Oregon on November 1, 2011. Reames was employed by defendants, who operated Reames' employer jointly under the name Avis/Budget Rent-A-Car, from June 28, 2007, through October 19, 2009, when Reames suffered an on-the-job injury that temporarily disabled him from full-time work. On or around November 2, 2010, Reames was released by his physician to full duty, and Reames subsequently sought reinstatement in his old job position. Defendants (each a Delaware corporation with its principal place of business in New Jersey) declined to reinstate Reames (a resident of Oregon) or to offer him alternative employment.
By and through his complaint, Reames alleges defendants' liability for failure to reinstate an injured worker to the worker's former position in violation of Or. Rev. Stat. 659A.043 and for failure to re-employ an injured worker in other available and suitable work in violation of Or.Rev.Stat. 659A.046. Reames seeks money damages for past lost wages and benefits in the amount of $11,627 and for future lost wages and benefits in the amount of $11,267, non-economic damages in the amount of $25,000, and his attorney fees and costs in an unspecified amount.
On December 1, 2011, defendants removed Reames' action to this court on the theory that this court has diversity jurisdiction over his claims pursuant to 28 U.S.C. § 1332(a), based on the complete diversity of the parties and the amount in controversy, which defendants assert exceeds $75,000 after Reames' prayer for unspecified attorney fees is taken into account.
Now before the court is Reames' motion (# 5) for remand. I have considered the motion, oral argument on behalf of the parties, and all of the pleadings on file. For the reasons set forth below, Reames' motion should be granted, and this action should be remanded to the Multnomah County Circuit Court for further proceedings in that forum.
"A motion to remand [a] case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after ... notice of removal under section -28 U.S.C. [§ ]1446(a) [is filed]. If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). On a motion for remand, the party opposing remand has the burden to establish that removal was proper. See Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir.2009). The removal statute, 28 U.S.C. § 1441, is strictly construed against the party seeking to establish grounds for removal. See Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir.2009), citing Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32, 123 S.Ct. 366, 154 L.Ed.2d 368 (2002); California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir.2004).
When a defendant removes an action from state court on the grounds that the federal court may properly exercise diversity jurisdiction over the action, the
In analyzing the merits of a motion for remand, the courts first determine whether it is "facially apparent" from the complaint that the jurisdictional threshold has been met. Abrego v. Dow Chem. Co., 443 F.3d 676, 690 (9th Cir.2006), quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir.1997). If it is not apparent on the face of the complaint whether or not the jurisdictional threshold has been met, the court may then consider facts in the removal petition, and may additionally "require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal." Id., quoting Singer, 116 F.3d at 377. Where a plaintiff seeks actual and punitive damages, the federal courts consider both types of damages in determining the amount in controversy. See Bell v. Preferred Life Assurance Soc'y, 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15 (1943). In addition, where a contract or an underlying statute mandates award of attorney fees to a prevailing party, the court may include such fees in its determination of the amount in controversy. See Gait G/S v. JSS Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir.1998).
This court may properly exercise diversity jurisdiction over any civil action "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs," and there exists complete diversity of citizenship among the parties. 28 U.S.C. § 1332(a). Here, it is not disputed that the parties are diverse for purposes of Section 1332. Reames prays for a total of $47,894 in damages, including $22,894 in economic damages and $25,000 in non-economic damages. Thus, this court may properly exercise diversity jurisdiction over Reames' action only in the event the evidence proffered by the defendants in opposition to Reames' motion is sufficient to establish that it is more likely than not that Reames' attorney fees "in controversy" as of the time defendants effected removal of this action exceeded $27,106.
The Ninth Circuit has not yet expressed any opinion as to whether expected or projected future attorney fees may properly be considered "in controversy" at the time of removal for purposes of the diversity-jurisdiction statute, and the decisions of the district courts are split on the issue. See Dukes v. Twin City Fire Ins. Co., Case No. CV-09-2197-PHX-NVW, 2010 WL 94109, *2, 2010 U.S. Dist. LEXIS 3617, *5-6 (D.Ariz. Jan. 5, 2010) (discussing disagreement among the district courts of this circuit "as to whether attorneys' fees incurred after the date of removal are properly included in the amount in controversy"); Giordano v. Park Ave. Life Ins. Co., Case No. CV-09-1405-SJO, 2009 WL 1474945, *2-3, 2009 U.S. Dist. LEXIS 47507, *7-8 (C.D.Cal. Apr. 7, 2009) (same); Burk v. Medical Sav. Ins. Co., 348 F.Supp.2d 1063, 1068-1069 (D.Ariz.2004) (same). Some courts have adopted the position that "[w]hen estimating attorney's fees for the purposes of establishing jurisdiction, the only fees that can be considered are those incurred as of the date of removal," Faulkner v. Astro-Med, Inc., Case No. CV-99-2562-SI, 1999 WL 820198, *4, 1999 U.S. Dist. LEXIS 15801, *9 (N.D.Cal. Oct. 4, 1999), citing Miranti v. Lee, 3 F.3d 925, 928 (5th Cir.1993), see also, e.g., Conrad Assocs. v. Hartford Accident
Although the Ninth Circuit has not yet resolved this issue, at least two other circuits have issued opinions bearing on the question. In a case first filed in federal court, and thus not raising the question of remand, the Seventh Circuit has reasoned that attorney fees can be "in controversy" for purposes of the diversity-jurisdiction statute only if they accrued as of the time the complaint was first filed in the action, based on the proposition that federal jurisdiction necessarily depends on circumstances that pertain at the time an action is filed. See Hart v. Schering-Plough Corp., 253 F.3d 272, 274 (7th Cir.2001), citing Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955, 958-959 (7th Cir.1998). In Gardynski-Leschuck, the Seventh Circuit reasoned as follows:
Gardynski-Leschuck, 142 F.3d at 958-959 (some citations omitted; emphasis supplied).
The Tenth Circuit, by contrast, has, without analysis, ruled that a district court did not err when it considered reasonably anticipated future attorney fees as a part of the "matter in controversy" for purposes of determining whether the jurisdictional threshold had been exceeded. See Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir.1998). Miera, like Gardynski-Leschuck, did not raise the remand issue.
It appears that a nascent consensus may be emerging among the district courts of the Ninth Circuit that the split between the Conrad/Faulkner and the Simmons/Brady lines of cases may best be resolved by adoption of the Conrad/Faulkner reasoning that attorney fees anticipated but unaccrued at the time of removal are not properly in controversy for jurisdictional purposes. See Dukes, 2010 WL 94109 at *2-3, 2010 U.S. Dist. LEXIS 3617 at *7. The Dukes court reasoned that:
Id. (emphasis supplied). Regardless, however, of whether any such consensus has formed or is forming, I agree with the Dukes court that, under Abrego and its predecessor cases (holding that if it is not facially apparent from the removed complaint that the amount in controversy exceeds the jurisdictional threshold, on a motion for remand the courts may consider evidence "relevant to the amount in controversy at the time of removal" in calculating the amount in controversy for jurisdictional purposes, Abrego, 443 F.3d at 690 (emphasis supplied), quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir.1997)), it would be inappropriate to include in calculation of the amount in controversy any fees unaccrued and therefore necessarily speculative — at the time removal was effected. Moreover, I agree with the Gardynski-Leschuck
Assuming arguendo that the court adopts my foregoing recommendation, the court should grant Reames' motion to remand. Defendants have made no showing regarding the attorney fees Reames may have incurred prior to removal (and/or remand) of this action, and thus have not offered evidence in light of which it is more likely than not that Reames' incurred attorney fees exceeded $27,106 as of the time of removal. On the assumption that the court will adopt my recommendation, this court therefore may not properly exercise subject-matter jurisdiction over Reames' action, and it should be remanded to state court.
On the opposite arguendo assumption, that the court will elect to follow the reasoning of the Simmons/Brady lines of cases (that attorney fees that may reasonably be anticipated as of the time of removal may be considered in determining the jurisdictional amount in controversy), remand is likewise the appropriate disposition of Reames' motion, albeit subsequent to a markedly different analysis.
As defendants correctly note, each of Reames' two claims provides for mandatory award of attorney fees to the prevailing plaintiff, so that, in the event Reames were to prevail on one or both of his claims, he would be entitled to mandatory award of his attorney fees reasonably incurred in litigating this action. However, defendants have not made a showing that Reames' fees may reasonably be anticipated to exceed $27,106 sufficient to overcome the presumption against federal subject-matter jurisdiction.
In support of their argument that Reames' total attorney fees may reasonably be expected to exceed $27,106, defendants rely chiefly on the analysis set forth in Beaver v. NPC Int'l, Inc., 451 F.Supp.2d 1196 (D.Or.2006). In Beaver, a former employee alleged his former employer's liability for workers' compensation retaliation in violation of Or.Rev.Stat. 659A.040, for failure to reinstate an injured worker in violation of Or.Rev.Stat. 659A.043, and for failure to re-employ an injured worker in other available and suitable work in violation of Or.Rev.Stat. 659A.046.
In considering the merits of the Beaver motion to remand, noting that "[t]his court and others have sanctioned the introduction of decisions and awards in similar cases as evidence of the amount in controversy," Beaver, 451 F.Supp.2d at 1198 (citations omitted), Judge King held that "[a]ttorneys fee awards in employment discrimination cases arising under Oregon law are probative of the amount in controversy in [Beaver] if the cases are sufficiently similar [to Beaver]," id. Judge King considered two cases he deemed sufficiently similar to Beaver to be considered probative of the fees that might reasonably be anticipated in Beaver: Robins v. Scholastic Book Fairs, 928 F.Supp. 1027 (D.Or. 1996) and McDuffy v. Interstate Distributor Co., Case No. 3:04-CV-1335-KI (D.Or. Jan. 4, 2005). In Robins, after characterizing the case as "`relatively uncomplicated' and `among the most straight-forward employment law cases that compose approximately 25% of this Court's civil docket,'" the court found the attorney fees requested by the prevailing plaintiff to be excessive, and reduced them to an award of $43,505.07 for 455.9 hours of work, including 193.8 hours at the trial court level. Id. at 1199, quoting Robins, 928 F.Supp. at 1033, 1033 n. 10.
In considering McDuffy, Judge King noted that the prevailing McDuffy plaintiff had, like the Beaver plaintiff and like Reames in this action, been represented by Christopher A. Slater. Judge King described the relevant procedural history of McDuffy as follows:
Id.
On the basis of Robins and McDuffy, Judge King reasoned that the plaintiffs'
Id. at 1199-1200. Defendants argue that this court in this action should adopt Judge King's reasoning.
Reames, for his part, offers evidence that, notwithstanding Judge King's prediction, the Beaver parties finally settled their dispute following an expenditure of only 34.0 hours of the plaintiffs counsel's time, or total attorney fees on the order of approximately $10,000. Reames argues that the discrepancy between the awards in McDuffy and Beaver illustrates "the limitations in using other cases as comparitor evidence of the amount in controversy based on the potential attorney fees."
While I do not take issue with Judge King's reasoning (except insofar as it presumes that unaccrued fees that may reasonably be anticipated as of the time of removal may properly be considered in determining the amount in controversy), Beaver cannot be read to stand for the proposition that plaintiffs represented by attorney Christopher A. Slater may always be anticipated to incur at least approximately $45,000 in fees, without regard to the relative complexity of their claims. Judge King's reasoning is persuasive that, in a case likely to be resolved at trial, attorney fees of such magnitude may reasonably be anticipated, but the defendants here have made no showing that Reames' action is among the small minority of cases that cannot be resolved either by settlement or by dispositive motion.
Defendants are correct that Judge King's analysis in Beaver, together with the cases discussed therein, are competent evidence of the amount in controversy here. However, standing alone they are not sufficient to support defendants' position by a preponderance of the evidence. To support the conclusion that the Beaver analysis is applicable here without material modification, defendants were under a burden to establish grounds for concluding that Reames' action could not reasonably be anticipated to be in the majority of cases that reach relatively inexpensive resolution, either through settlement or through early dispositive motion. By relying solely on Beaver and the cases discussed therein, rather than submitting evidence as to the obstacles to efficient resolution, if any, that pertain to this particular action, defendants have failed to meet their burden to establish that jurisdiction is appropriate in this court.
Defendants alternatively argue that Reames is likely to amend his complaint to increase his damages prayer, on the grounds that he has expressly reserved the right to do so in his complaint and that his counsel has done so in the past. The possibility that Reames may at some later date augment his prayer for damages is without consequence to the analysis this court is called upon to perform. As of the present date, Reames has not so augmented his damages prayer. In the event Reames amends his complaint to
Finally, defendants alternatively argue that Reames' motion should be denied because Reames' counsel refused to stipulate to a $74,999 cap on Reames' recovery, including attorney fees, However, Reames was under no obligation to agree to any such stipulation and, indeed, it would arguably have been malpractice for his attorney to agree to any such recovery cap. In the event litigation of Reames' claims proved unexpectedly expensive, or currently unforeseeable circumstances justified a significantly higher damage award than currently anticipated, such a cap could unwarrantedly prevent Reames from being made whole, even in the event he prevailed on one or both of his claims. Reames was justified to reject defendants' proposed stipulation, and his rejection thereof is without jurisdictional effect.
Because defendants have not met their burden to establish that the amount in controversy in this action exceeds the jurisdictional threshold of $75,000, the court should grant Reames' motion for remand. This action should be remanded to state court for further proceedings in that forum (presumably, referral to mandatory arbitration pursuant to Or.Rev.Stat. 36.405).
For the reasons set forth above, Reames' motion (# 5) for remand should be granted, and this action should be remanded to the Multnomah County Circuit Court for further proceedings in that forum.
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due fourteen (14) days from service of the Findings and Recommendation. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.
If objections are filed, then a response is due fourteen (14) days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.
Dated this 2nd day of February, 2012.