(PS) Gaines v. Costco Wholesale Corp.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA ----oo0oo----

TERRY GAINES, No. 2:21-cv-00992 WBS AC

Plaintiff, v. MEMORANDUM AND ORDER RE:

PLAINTIFF’S MOTION TO REMAND COSTCO WHOLESALE CORPORATION, a Washington Corporation; and DOES 1 to 100, inclusive,

Defendant.

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Plaintiff Terry Gaines (“plaintiff”) brought this action against defendant Costco Wholesale Corporation (“Costco”) because of a series of interactions he had with Costco employees while shopping at Costco’s Stockton location on August 28, 2020. (See Def.’s Notice of Removal, Ex. A (“Compl.”) ¶ 12 (Docket No. 1-1).) The thrust of plaintiff’s complaint is that Costco employees treated him disrespectfully and differently than other customers because of his race, causing plaintiff to suffer severe emotional distress and embarrassment. (See id.)

Specifically, plaintiff alleges that, after he had finished shopping and was trying to pay for his items, Costco employees scrutinized his Costco Club membership card, requested to see his identification multiple times, and required him to use multiple credit cards to pay. (See id. at ¶¶ 12-16.) After Costco cashiers told plaintiff that Costco “did not take Mastercard” loud enough for everyone in line to hear, plaintiff alleges that one of the cashiers told him to “have a nice day” in a sarcastic and provoking manner. (See id. at ¶ 16.)

Plaintiff then attempted to complain to Costco management about the cashiers’ behavior. (See id. ¶¶ 17-19.) Plaintiff alleges that he was forced to speak with four different supervisors before being permitted to speak with a manager, despite asking to speak with a manager five times. (Id.) Once plaintiff finally described what happened to a manager, he alleges that the manager told him the cashiers had violated Costco policy and apologized to him. (Id.) Plaintiff filed a formal complaint with the manager. (Id.)

Plaintiff then brought this action against Costco in San Joaquin County Superior Court, claiming that the actions of Costco’s employees violated the Unruh Civil Rights Act, Cal. Civ. Code § 51, et seq., California’s Unfair Competition Law (“UCL”), Cal. Bus. & Profs. Code § 17200, and constituted negligent supervision, hiring, and retention, and intentional infliction of emotional distress. (See generally Compl.) On June 3, 2021, Costco removed the action to this court on the basis of diversity of citizenship. (See Def.’s Notice of Removal at 1 (Docket No. 1).) Plaintiff now moves to remand this action to state court.1 (See Mot. to Remand (Docket No. 5).)

Discussion

A. Amount in Controversy

“[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district . . . where such action is pending.” 28 U.S.C. § 1441(a). However, if “it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

Federal courts have original jurisdiction over cases where complete diversity exists between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). To satisfy the requirements for complete diversity, “each of the plaintiffs must be a citizen of a different state than each of the defendants.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)).

Plaintiff concedes in his motion to remand that § 1332(a)’s complete diversity of citizenship requirement is met because Costco is a Washington citizen for the purposes of diversity. (See Mot. to Remand at 5 n.2.) Accordingly, plaintiff focuses on the amount in controversy requirement, arguing that, even if all doubts are resolved in favor of Costco,

In cases where a plaintiff’s state court complaint does not specify a particular amount of damages, the removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). “Under this burden, the defendant must provide evidence establishing that it is more likely than not that the amount in controversy exceeds that amount." See id.

Costco first points to a number of jury verdicts in cases involving similar facts, all of which exceeded $75,000, as evidence that the amount in controversy in this case exceeds the statutory minimum.2 In particular, Costco cites to Mitchell v.

Costco next argues that the attorneys’ fees in this case could be substantial.3 District courts in California have noted that maintaining a race discrimination claim requires substantial effort on the part of plaintiff’s counsel -- so much so that attorneys’ fees in individual discrimination cases often exceed the damages. See Simmons v. PCR Tech., 209 F. Supp. 2d 21 1029, 1035 (N.D. Cal. 2002). In Mitchell, for instance, the court awarded attorneys’ fees in excess of $185,000 where the jury only awarded $75,000 in statutory damages to each plaintiff 2011). Plaintiff has not objected. Accordingly, the court will grant Costco’s request in its entirety.

Next, the court considers plaintiff’s prayer for punitive damages. See Davenport v. Mutual Ben. Health & Acc. Ass’n, 325 F.2d 785, 787 (9th Cir. 1963) (noting that requests for punitive damages may also be considered when ascertaining the amount in controversy). Although Costco has not provided examples of jury verdicts of punitive damages in similar cases, it contends that because the amount of punitive damages awarded are based on the financial worth of the defendant and are meant to punish the defendant in such a way that it will have a tangible financial consequence, a punitive damages award for a defendant of Costco’s size would exceed $75,000. (See Def.’s Notice of Removal at 6.) Because plaintiff has presented no contrary argument regarding punitive damages for a defendant of Costco’s size, the court agrees with Costco that a punitive damages award would likely exceed $75,000.

Finally, and perhaps most critically, Costco points to a settlement demand letter sent by plaintiff on September 25, 2020 where he asserts that $ 75,000 is a “fair compromise of plaintiff’s claims” and that he expects to “recover no less than $100,000 in this case on the Unruh Civil Rights Act claim alone.” (See Decl. of Michelle DuCharme in Opp’n to Mot. to Remand at Ex. 1 (“DuCharme Decl.”) (Docket No. 6-2).) Plaintiff later sent Costco a demand letter on April 20, 2021, which requested only $20,000 as a fair compromise, but still emphasized that plaintiff expected to recover no less than $100,000 on the Unruh Civil Rights Act claim alone. (See id. at Ex. 2.)4 The Ninth Circuit has held that a settlement letter is relevant evidence of the amount in controversy if it reflects a reasonable estimate of the plaintiff’s claim. See Cohn v. PetSmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). It therefore appears that even by plaintiff’s own calculation, this case is worth substantially more than the jurisdictional amount.5

When viewed in combination, the evidence presented by Costco regarding plaintiff’s claim for general damages, attorney’s fees, and punitive damages satisfies its burden of

B. Plaintiff’s Request for Attorneys’ Fees and Costs

Plaintiff also seeks “attorney’s fees and costs incurred because of the wrongful removal of this action.” (See Mot. to Remand at 7.) “[C]ourts may award attorney’s fees under [28 U.S.C.] § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied.” Martin v. Frankline Capital Corp., 546 U.S. 132, 141 (2005) (citations omitted). Here, for the reasons discussed above, Costco had an objectively reasonable basis for seeking removal. Plaintiff is therefore not entitled to attorney’s fees or costs on this motion.6

IT IS THEREFORE ORDERED that the plaintiff’s motion to 6 Plaintiff also contends that Costco failed to “provide all documents filed in the State Court Action.” (See Mot. to Remand at 7.) However, plaintiff has not identified what specific documents Costco allegedly failed to attach to its notice of removal or how plaintiff was prejudiced thereby. nen nee IE RII EOE IEEE III OI ESE OE remand, (Docket No. 5), be, and the same hereby is, DENIED. Dated: July 21, 2021 aA theow Ah hh. be—

WILLIAMB.SHUBB (asti(i(‘C;*~s~™S UNITED STATES DISTRICT JUDGE