Hodgell v. Andersen Corporation

— 1 — — 2 — — 3 — — 4 — — 5 — — 6 — — 7 — UNITED STATES DISTRICT COURT — 8 — WESTERN DISTRICT OF WASHINGTON AT SEATTLE — 9 — — 10 — JOEL HODGELL, CASE NO. 2:23-cv-00649-LK — 11 — Plaintiff, ORDER REMANDING CASE 12 v. 13 ANDERSEN CORPORATION et al., 14 Defendants. — 15 — 16 This matter comes before the Court following Defendants’ Response to the Court’s July 17 17, 2023 Order to Show Cause. Dkt. No. 20; see Dkt. No. 19. For the reasons discussed below, the 18 Court REMANDS this case to King County Superior Court for lack of subject matter jurisdiction. 19 See 28 U.S.C. § 1447 (c); Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831 , 838 (9th Cir. 2004). 20 I. BACKGROUND 21 Plaintiff Joel Hodgell initiated this action in King County Superior Court in March 2023 22 to recover damages and other relief under Washington’s Consumer Protection Act (“CPA”), Wash. 23 Rev. Code § 19.86 et seq., based on Defendants’ alleged violations of the Commercial Electronic 24 Mail Act (“CEMA”), Wash. Rev. Code § 19.190 et seq. See generally Dkt. No. 1-1. Hodgell asserts 1 that Defendants Andersen Corporation and Renewal by Andersen LLC “initiated or assisted in the 2 transmission of over one-hundred misleading and unsolicited bulk commercial email 3 solicitations.” Id. at 3 . Defendants timely removed the action to federal district court on the basis 4 of diversity jurisdiction pursuant to 28 U.S.C. §§ 1332 , 1441, and 1446. Dkt. No. 1 at 2–3. As 5 discussed in the Court’s prior order, Dkt. No. 19 at 2, Defendants contend that the amount-in6 controversy requirement is met for purposes of diversity jurisdiction due to Hodgell’s $150,000 7 settlement demand. Dkt. No. 1 at 6–7; see Dkt. No. 3 at 9–11 (settlement demand email). However, 8 given the Court’s questions regarding whether such a demand reflects a reasonable estimate of the 9 value of Hodgell’s claims, it ordered Defendants to show cause why this case should not be 10 remanded to King County Superior Court for lack of subject matter jurisdiction. Dkt. No. 19 at 3– 11 5; see Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002) (per curiam). 12 Defendants responded to the Court’s Order by asserting that Hodgell’s attorneys have since 13 “confirmed in writing that [he] continues to seek $150,000 in actual damages.” Dkt. No. 20 at 3 14 (emphasis omitted); see also Dkt. No. 21 at 4 (July 26, 2023 email from Hodgell’s counsel stating: 15 “We are happy to remand to state court but the demand is still $150,000.”). Defendants further 16 aver that Hodgell’s efforts to recover attorney fees and prejudgment interest “should be added to 17 [his] $150,000 claim for actual damages, thus adding even more cushion to the amount in 18 controversy calculation.” Dkt. No. 20 at 4. 19 II. DISCUSSION 20 A. Legal Standard 21 Removal of a civil action to federal district court is proper when the federal court would 22 have original jurisdiction over the state court action. 28 U.S.C. § 1441 (a). Federal jurisdiction 23 exists over all civil actions where the matter in controversy exceeds $75,000 and the action is 24 between citizens of different states. 28 U.S.C. § 1332 (a)(1). Defendants bear the burden of 1 establishing that removal is proper, Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241 , 1244 2 (9th Cir. 2009), and the removal statutes are strictly construed against removal jurisdiction, Hansen 3 v. Grp. Health Coop., 902 F.3d 1051 , 1056–57 (9th Cir. 2018). Furthermore, where, as here, “the 4 complaint does not specify the amount of damages sought, the removing defendant must prove by 5 a preponderance of the evidence that the amount in controversy requirement has been met.” Abrego 6 Abrego v. The Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006). 7 A district court considers the complaint, the allegations in the removal petition, and 8 “summary-judgment-type evidence relevant to the amount in controversy at the time of removal.” 9 Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 793 (9th Cir. 2018) (cleaned up). The 10 notice of removal, however, need not “prove” subject matter jurisdiction: “the fact that the party 11 removing a case to a federal district court has the burden of proving that the district court has 12 jurisdiction does not mean that the notice of removal must in and of itself meet this burden.” Acad. 13 of Country Music v. Cont’l Cas. Co., 991 F.3d 1059 , 1068–69 (9th Cir. 2021). Only when the 14 plaintiff contests—or, as happened here, the district court questions—a defendant’s allegations, 15 must the defendant produce evidence establishing the amount in controversy. Dart Cherokee Basin 16 Operating Co., 574 U.S. 81 , 89 (2017); see 28 U.S.C. § 1446 (c)(2)(B). If at any time a district 17 court determines that “less than a preponderance of the evidence supports the right of removal,” it 18 must remand the action to state court. Hansen, 902 F.3d at 1057 ; see also Matheson v. Progressive 19 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (explaining that doubts as to removability 20 are resolved in favor of remand). 21 B. Defendants Fail to Establish That the Amount in Controversy Exceeds $75,000 22 The amount in controversy is an “estimate of the entire potential amount at stake in the 23 litigation[.]” Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 994 (9th Cir. 2022) 24 (emphasis omitted); see also Greene v. Harley-Davidson, Inc., 965 F.3d 767, 772 (9th Cir. 2020) 1 (“‘Amount at stake’ does not mean likely or probable liability; rather, it refers to possible 2 liability.”). As the Court previously noted, “[a] plaintiff’s damage estimate will not establish the 3 amount in controversy if it appears to be only a bold, optimistic prediction.” Mata v. Home Depot 4 U.S.A., Inc., No. CV-22-1758-FMO (AFMx), 2022 WL 3586206 , at *2 (C.D. Cal. Aug. 22, 2022) 5 (cleaned up); see also Aguilar v. Walmart Inc., No. SACV-23-00685-CJC (DFMx), 2023 WL 6 4118785, at *2 (C.D. Cal. June 21, 2023) (“[E]ven when a plaintiff presents a statement of damages 7 seeking more than $75,000, the statement is not sufficient to carry the defendant’s burden on the 8 amount in controversy requirement if there is not support for the estimate in the complaint or notice 9 of removal.”). And while a settlement letter can be “relevant evidence of the amount in 10 controversy,” it must “appear[] to reflect a reasonable estimate of the plaintiff’s claim.” Cohn, 281 11 F.3d at 840; see also Briggs v. Serv. Corp. Int’l, No. C22-1646-JLR, 2023 WL 576813 , at *2 (W.D. 12 Wash. Jan. 27, 2023). A removing defendant’s conclusory allegations will not suffice to overcome 13 the traditional presumption against removal jurisdiction. Singer v. State Farm Mut. Auto. Ins. Co., — 14 — 116 F.3d 373, 375 (9th Cir. 1997). 15 Here, Defendants assert that “[b]ecause [Hodgell]’s attorneys have confirmed that they 16 seek to recover twice the jurisdictional threshold, Defendants’ Notice of Removal was proper, and 17 this case should not be remanded to state court.” Dkt. No. 20 at 4. They argue that “[Hodgell]’s 18 continuing demand for $150,000 in actual damages—made both before and after the filing [of] his 19 complaint, and now expressly re-affirmed by his legal counsel—is a ‘particularly powerful form 20 of evidence’ that the amount in controversy exceeds $75,000.” Id. at 3 (quoting Flores v. Safeway, 21 Inc., No. C19-0825-JCC, 2019 WL 4849488 , at *3 (W.D. Wash. Oct. 1, 2019)). But the court in 22 Flores concluded that “Plaintiff’s statement [was] strong evidence of the amount in controversy 23 because it provided a reasonable estimate [of] her damages.” 2019 WL 4849488 , at *4 (emphasis — 24 — 1 added); see also Briggs, 2023 WL 576813 , at *3 (“[Plaintiff’s] statement puts his case valuation 2 in line with Cohn’s requirement that a settlement demand be reasonable.”). 3 In this case, by contrast, Defendants fail to explain why Hodgell’s $150,000 settlement 4 demand is a reasonable estimate of his claims. Indeed, that “estimate covers matters beyond those 5 asserted in the Complaint,” and “[t]he Court therefore does not find [the] estimate persuasive or 6 reliable[.]” Licea v. Rugs.com, LLC, No. 2:21-CV-05308-AB-GJS, 2021 WL 4190635 , at *4 (C.D. 7 Cal. Sept. 14, 2021). Thus, for the reasons explained here and in its Order to Show Cause, Dkt. 8 No. 19 at 3–5, the Court finds that Hodgell’s $150,000 settlement demand, “without more 9 evidence, does not reflect a reasonable estimate of [his] claim and does not serve to demonstrate 10 that the amount in controversy has been met.” Keodalah v. Allstate Ins. Co., No. C15-01412-RAJ, — 11 — 2016 WL 4543200 , at *3 (W.D. Wash. Mar. 25, 2016); see also Brown v. Amica Mut. Ins. Co., 12 No. 2:23-CV-00118-JHC, 2023 WL 2043537 , at *1 (W.D. Wash. Feb. 16, 2023) (remanding case 13 where defendants failed to show that plaintiff’s demand constituted a “reasonable estimate of the 14 value of the claim.” (quotation marks omitted)); Leon v. Gordon Trucking, Inc., 76 F. Supp. 3d 15 1055, 1070 (C.D. Cal. 2014) (“It was incumbent on [Defendant] to offer something to substantiate 16 the damages estimate provided by [Plaintiff]’s lawyer, or otherwise to demonstrate that the amount 17 in controversy exceeds [the statutory minimum].” (emphasis original)). 18 Furthermore, though Defendants are correct in observing that statutory attorneys’ fees are 19 considered “at stake” in the litigation and must be included in the amount in controversy, here 20 again, the removing defendant bears the burden of proving the fee amount by a preponderance of 21 the evidence. Fritsch, 899 F.3d at 788, 794 ; see also, e.g., id. at 795 (district courts are “well 22 equipped” to determine “when a fee estimate is too speculative because of the likelihood of a 23 prompt settlement,” and “may reject [a] defendant’s attempts to include future attorneys’ fees in 24 the amount in controversy” if the defendant fails to carry its burden of proof). In their response to 1 the Court’s Order to Show Cause, Defendants make no effort to explain with any specificity how 2 “the approximate value of” Hodgell’s claim for attorneys’ fees will contribute to the amount in 3 controversy. Dkt. No. 20 at 4. 4 Accordingly, because Defendants have failed to establish by a preponderance of evidence 5 that the amount in controversy exceeds $75,000, the Court remands this case for lack of subject 6 matter jurisdiction. See 28 U.S.C. §§ 1446 (c)(2)(B), 1447(c). 7 III. CONCLUSION 8 For the reasons stated herein, the Court ORDERS that: 9 1. Pursuant to 28 U.S.C. § 1447 (c), all further proceedings in this case are 10 REMANDED to the Superior Court for King County in the State of Washington; 11 2. The Clerk of the Court shall mail a certified copy of this Order to the Clerk of the 12 Court for the Superior Court for King County Washington; 13 3. The Clerk of the Court shall also transmit the record herein to the Clerk of the Court 14 for the Superior Court for King County, Washington; and 15 4. The Clerk of the Court shall CLOSE this case. — 16 — 17 Dated this 9th day of August, 2023. 18 A 19 Lauren King United States District Judge — 20 — — 21 — — 22 — — 23 — — 24 —