1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CARMEL STEVENS, et al., Case No. 2:22-cv-06362-FLA (MAAx)

12 Plaintiffs, ORDER REMANDING ACTION FOR 13 v. LACK OF SUBJECT MATTER JURISDICTION 14 STATE FARM MUTUAL, INC., et al., 15 Defendants. 16

17 18 RULING 19 On July 6, 2022, Plaintiffs Carmel Stevens and Ladale Jackson (“Plaintiffs”) 20 initiated this action against Defendants State Farm Mutual Automobile Insurance 21 Company and State Farm General Insurance Company (“Defendants”)1 and DOES 1 22 through 50 in the Los Angeles County Superior Court. Dkt. 6, Ex. A (“Compl.”). 23 The Complaint alleges causes of action for negligence and violations of California’s 24 Unfair Competition law, the Unruh Civil Rights Act (the “Unruh Act”), and California 25 Insurance Code § 10140. Id. Plaintiffs seek actual damages, statutory damages, and 26

27 1 In the Complaint, Defendants were erroneously sued as State Farm Mutual, Inc. and 28 State Farm General Incorporated. 1 attorney’s fees. Id. 2 On September 6, 2022, Defendants removed the action to this court based on 3 alleged diversity jurisdiction. Dkt. 1. In their Notice of Removal, Defendants allege 4 the court has subject matter jurisdiction under

because the amount in 5 controversy exceeds $75,000.

.2 6 On July 28, 2023, the court ordered the parties to show cause why the action 7 should not be remanded for lack of subject matter jurisdiction due to an insufficient 8 amount in controversy. Dkt. 40. Only Defendants filed a response. Dkt. 42 (“Def. 9 Resp.”). 10 Having reviewed the Notice of Removal and Defendants’ response to the 11 court’s Order to Show Cause, and for the following reasons, the court finds 12 Defendants fail to establish subject matter jurisdiction and accordingly REMANDS 13 the action to the Los Angeles County Superior Court. 14 DISCUSSION 15 Federal courts are courts of “limited jurisdiction,” possessing “only that power 16 authorized by the Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of 17 Am.,

(1994); U.S. Const. art. III, § 2, cl. 1. District courts are 18 presumed to lack jurisdiction unless the contrary appears affirmatively from the 19 record. See DaimlerChrysler Corp. v. Cuno,

, 342 n. 3 (2006). 20 Additionally, federal courts have an obligation to examine jurisdiction sua sponte 21 before proceeding to the merits of a case. See Ruhrgas AG v. Marathon Oil Co., 526

(1999). 23 Federal courts have jurisdiction where an action arises under federal law or 24 where each plaintiff’s citizenship is diverse from each defendant’s citizenship and the 25 amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. 26

27 2 The court cites documents by the page numbers added by the CM/ECF system rather 28 than any page numbers listed on the documents natively. 1 §§ 1331, 1332(a). Thus, a notice removing an action from state court to federal court 2 must include “a plausible allegation that the amount in controversy exceeds the 3 jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574

, 89 (2014). Where “the plaintiff contests, or the court questions, the 5 defendant’s allegation” concerning the amount in controversy, “both sides [shall] 6 submit proof,” and the court may then decide whether the defendant has proven the 7 amount in controversy “by a preponderance of the evidence.”

at 88–89. “Federal 8 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 9 instance.” Gaus v. Miles, Inc.,

(9th Cir. 1992). It is Defendants’ 10 burden as the removing party to justify this court’s exercise of jurisdiction.

. 11 A. Chavez v. JPMorgan Chase & Co. 12 Defendants, citing to Chavez v. JPMorgan Chase & Co.,

(9th Cir. 13 2018), argue it is “legally significant” that Plaintiffs agreed in the parties’ Joint Rule 14 26(f) Report that subject matter jurisdiction exists under

. See Def. 15 Resp. at 5 (citing Dkt. 21 at 3). In Chavez, the Ninth Circuit held that a plaintiff’s 16 “concession of diversity jurisdiction... is strong evidence that the amount in 17 controversy exceeds $75,000.”

. 18 Here, Defendants claim Chavez is “directly on point and dispositive.” Def. 19 Resp. at 6. The court disagrees. The Chavez court was clear that “litigants cannot 20 stipulate to subject matter jurisdiction where it does not otherwise exist,” and 21 explicitly required that a plaintiff’s concession of jurisdiction must be “done in good 22 faith.”

(citing Janakes v. U.S. Postal Serv.,

(9th 23 Cir. 1985)). The court, therefore, need not accept the parties’ alleged agreement that it 24 has jurisdiction without any scrutiny. Rather, the court must review the parties’ 25 allegations regarding the amount in controversy to determine if plaintiff’s concession 26 of jurisdiction is made in good faith, when considering the allegations in the record. 27 For the following reasons, the court concludes the parties’ allegations do not 28 demonstrate the amount in controversy requirement is met here. 1 B. Actual and Statutory Damages 2 Defendants allege that actual and statutory damages contribute $32,000 to the 3 amount in controversy in this action. See Def. Resp. at 10. Defendants calculate the 4 actual damages at issue by multiplying the $4,000 in insurance premiums at issue for 5 each Plaintiff by two, which represents the two-year statute of limitations for 6 Plaintiffs’ negligence claim.

This renders an actual damages figure of $8,000 per 7 Plaintiff, for a total of $16,000. 8 With respect to statutory damages, Defendants argue the Unruh Act provides 9 for a $4,000 penalty for each alleged offense.

(citing

(a)). 10 Since Plaintiffs allege Defendants committed an offense at least twice, Defendants 11 argue the court should consider statutory damages of $8,000 per Plaintiff, for a total of 12 $16,000. 13 Plaintiffs have not contested Defendants’ figures and Defendants calculations 14 appear proper. The court, therefore, assumes for purposes of this Order, without 15 making any related legal or factual determinations, that the combined actual and 16 statutory damages Plaintiffs might recover in this action are properly calculated to be 17 $32,000. 18 C. Attorney’s Fees 19 In the Ninth Circuit, attorney’s fees awarded under fee-shifting statutes may be 20 considered in assessing the jurisdictional threshold. Gonzales v. CarMax Auto 21 Superstores, LLC,

(9th Cir. 2016). But, before doing so, a 22 removing defendant must “prove that the amount in controversy (including attorneys’ 23 fees) exceeds the jurisdictional threshold by a preponderance of the evidence,” and 24 must “make this showing with summary-judgment-type evidence.” Fritsch v. Swift 25 Transp. Co. of Ariz., LLC,

(9th Cir. 2018). “A district court may 26 reject the defendant’s attempts to include future attorneys’ fees in the amount in 27 controversy if the defendant fails to satisfy this burden of proof.”

“While a 28 defendant may meet its burden to establish a reasonable estimate of attorneys’ fees by 1 identifying awards in other cases, those cases must be similar enough to the case at 2 hand that the court can conclude that it is more likely than not that the plaintiff may 3 incur a similar fee award.” Kaplan v. BMW of N. Am., LLC, Case No. 3:21-cv-00857- 4 TWR (AGS),

, at *6 (S.D. Cal. Sept. 24, 2021). 5 Defendants argue that “[l]itigating this case through trial would take hundreds 6 of attorney hours.” Def. Resp. at 7. Relying on declarations from their counsel, 7 Defendants estimate a total of 256 hours, which includes drafting the Complaint, 8 responding to a motion to dismiss, deposing six witnesses, responding to a motion for 9 summary judgment, responding to a Daubert motion, trial preparation, and trial itself. 10 See

at 7–8. Defendants’ estimations, however, based solely on the representations 11 of its own counsel, are speculative. 12 Defendants also cite to two out-of-circuit cases in which district courts found 13 time estimations like those which Defendants propose to be proper.

at 8–9. 14 Defendants, however, fail to explain how the facts of those cases are sufficiently 15 similar to the instant case so as to adequately serve as a basis for comparison. 16 With respect to rates, Defendants argue Plaintiffs’ counsel is “likely to be able 17 to recover fees at an hourly rate of at least $750, if not more.”

. To support 18 this assertion, Defendants cite to a case in which a court approved a $750 hourly fee 19 for Plaintiffs’ counsel and another in which Plaintiffs’ counsel sought a rate of $900. 20

Defendants also contend substantial attorney fee awards are “routinely awarded” 21 in cases involving Unruh Act or discrimination claims.

22 As with its computation of the potential attorney hours at issue, Defendants fail 23 to offer any explanation as to how the cases they cite are similar to the instant action, 24 beyond stating that they both involve claims based in discrimination. See

District 25 courts weighing subject matter jurisdiction in discrimination cases need not simply 26 assume the upper extreme of attorney’s fee awards granted in other discrimination 27 cases must be included in the amount in controversy. If this were the law, district 28 courts would be unable to remand discrimination cases for insufficient amounts in 1 | controversy. District courts, however, regularly do so. 2 Here, it is Defendants’ burden to show, with evidence and to the preponderance 3 || standard, that at least $43,001 ($75,001 minus $32,000) in attorney’s fees is in 4 | controversy. Given that the removal statute is construed strictly and all doubts are 5 | resolved in favor of remand, the court finds Defendants have failed to submit evidence 6 | substantiating any specific amount of attorney’s fees in controversy. 7 CONCLUSION 8 Thus, the court determines Defendants have failed to demonstrate the amount in 9 | controversy exceeds $75,000 and finds that diversity jurisdiction does not exist. The 10 | court, therefore, REMANDS the action to the Los Angeles County Superior Court, 11 | Case No. 22STCV21865. All dates and deadlines in this court are VACATED. 12 | Defendants’ Motion to Dismiss (Dkt. 34) is DENIED as MOOT. The clerk of the 13 | court shall close the action administratively. 14 15 IT IS SO ORDERED. 16 17 | Dated: September 27, 2023 18 S FERNANDOY. AENLLE-ROCHA 20 United States District Judge 21 22 23 24 25 26 27 28