Coleman v. Hat World, Inc.

— 1 — — 2 — — 3 — 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA — 6 — 7 TAKORI JULIANA COLEMAN, on behalf Case No. 3:23-cv-03437-JD of herself and others similarly situated, — 8 — Plaintiff, ORDER RE REMAND — 9 — v. — 10 — HAT WORLD, INC.; and DOES 1 to 100, 11 inclusive Defendants. — 12 — 13 Plaintiff Takori Juliana Coleman, on behalf of herself and a putative class of California 14 employees, sued defendant Hat World, Inc. (Hat World) and unnamed Doe defendants for wage 15 and hour violations under the California Labor Code and the Business and Professions Code 16 Section 17200. Dkt. No. 1-2. Coleman originally sued in the Superior Court for Alameda County, 17 and Hat World removed the action to this Court on traditional diversity grounds. Dkt. No. 1 at 318 10 (citing 28 U.S.C. §§ 1332 (a)(1), 1441(a)). To be clear, removal was not made under the Class 19 Action Fairness Act. Coleman asks for a remand to the Superior Court. Dkt. No. 11. The case is 20 remanded for lack of subject matter jurisdiction. 28 U.S.C. § 1447 (c). 21 The only dispute with respect to diversity jurisdiction is whether the amount in controversy 22 exceeds the statutory threshold of $75,000. See 28 U.S.C. § 1332 (a). The parties debated how to 23 allocate the amount in controversy in a putative class action, but there is a much more direct 24 answer to the question of removal here. The complaint is silent on its face about the value of the 25 damages and penalties Coleman seeks. The only hard numbers that Hat World offers is to 26 estimate that Coleman might get $5,550 in wage statement penalties, and $3,720 in waiting time 27 penalties, for a grand total of $9,270. Dkt. No. 1 at 7-8. Coleman quibbles a bit with these figures 1 way, Hat World is short of the statutory threshold amount of $75,000 by $65,730 to 69,450. 2 Hat World proposes to make up this difference with Coleman’s future attorney’s fees. 3 There is no question under governing law that “future attorneys’ fees recoverable by statute or 4 contract” should be included in the amount in controversy. Fritsch v. Swift Transportation 5 Company of Arizona, LLC, 899 F.3d 785, 794 (9th Cir. 2018); see also Arias v. Residence Inn by 6 Marriott, 936 F.3d 920, 922 (9th Cir. 2019). Coleman has asked for such fees under California 7 Labor Code Sections 226 and 1194. See Dkt. No. 1-2 at 29-31 (complaint prayers for relief). 8 There is also no question that the estimate of attorney’s fees must be something more than mere 9 conjecture. The party invoking federal jurisdiction must prove the amount in controversy by a 10 preponderance of the evidence. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 11 2007); Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (“summary12 judgment-type evidence” used to determine the amount in controversy) (internal quotation 13 omitted). 14 This is where Hat World stumbles. It estimates that Coleman’s lawyers will need to spend 15 150 hours on the litigation through trial, and posits a billing rate of $650 per hour, for a total of 16 $97,500 in legal fees. Dkt. No. 1 at 9. Even accepting for present purposes that the billing rate is 17 based on what Coleman’s lawyers actually charge, this fee estimate is a pure guess. Why assume 18 150 hours as opposed to 100 or less? Why assume the case will necessarily go to trial and a 19 verdict rather than settle? See Fritsch, 899 F.3d at 795 (noting fee estimate may be speculative in 20 light of early settlement possibility). These and other salient questions were not answered with 21 anything approaching summary-judgement-type evidence, and in the absence of such evidence, it 22 is equally plausible that Hat World’s assumptions are wrong and that Coleman’s legal fees will 23 come in below an amount necessary to establish diversity jurisdiction. In the Court’s long 24 experience with California state wage and hour cases, early settlement is common and it is quite 25 realistic to project that Coleman’s attorney’s fees will be far less than Hat World’s guess. See 26 Fritsch, 899 F.3d at 795-96 (noting district court expertise in estimating future fees awards). 27 Hat World’s main response is that other cases have involved similar assumptions. That is 1 was warranted by the facts. It also bears mention that “[t]here is a strong presumption against 2 || removal, and the removal statute is strictly construed against finding federal jurisdiction.” 3 Wondeh v. Change Healthcare Prac. Mgmt. Sols., Inc., No. 19-CV-07824-JD, 2020 WL 5630268 , 4 |} at*1 (N_D. Cal. Sept. 21, 2020) (citing California v. AbbVie Inc, 390 F. Supp. 3d 1176 , 1180 5 || (N.D. Cal. 2019); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Any doubt about 6 || removal weighs in favor of remand. See Hawaii ex rel. Louie v. HSBC Bank Nev., N.A., 761 F.3d 7 1027, 1034 (9th Cir. 2014). 8 Consequently, the case was removed without subject matter jurisdiction. It is remanded to 9 the Superior Court. 28 U.S.C. § 1447 (c). 10 IT IS SO ORDERED. 11 Dated: February 5, 2024 a 12 JAMEYpPONATO 14 Unitedfftates District Judge — 15 — — 16 — = 17 Z 18 — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 —