1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 Linda Lee Sipple, on behalf of herself and all 4 others similarly situated, Case No.: 2:21-cv-00904-GMN-NJK 5 Plaintiff, vs. ORDER 6

7 Zions Bancorporation, N.A.,

8 Defendant. 9 Pending before the Court is the Motion to Remand, (ECF No. 10), filed by Plaintiff 10 Linda Lee Sipple (“Plaintiff”). Defendant Zions Bancorporation, N.A. (“Defendant”) filed a 11 Response, (ECF No. 18), and Plaintiff filed a Reply, (ECF No. 20). 12 For the reasons discussed below, Plaintiff’s Motion to Remand, is GRANTED. 13 I. BACKGROUND 14 This case arises out of Plaintiff’s claims that Defendant charges Foreign Traction Fees 15 (“FT Fees”) for purchases made online when the purchaser is physically present in the United 16 States. (Compl. ¶ 1, ECF No. 1-1). Defendant is a federally insured bank operating in Texas, 17 California, Oregon, Washington, Arizona, Nevada, New Mexico, Colorado, and Utah, using the 18 following trade names: AmegyBank, California Bank & Trust, The Commerce Bank of 19 Oregon, The Commerce Bank of Washington, National Bank of Arizona, Nevada State Bank, 20 VectraBank Colorado, and Zions Bank. (Compl. ¶ 9); (Pet. Removal ¶ 22, ECF No. 1). 21 Plaintiff has a checking account through Defendant’s Nevada State Bank division. (Compl. ¶ 22 8). 23 Plaintiff alleges that the account documents provided to Defendant’s customers indicate 24 that FT Fees will only be assessed when an account holder uses his or her debit card in a 25 foreign country. (Id. ¶ 2). Defendant allegedly promises that it will only assess FT Fees on card 1 transactions made outside of the United States. (Id. ¶ 3). Nonetheless, Plaintiff claims that 2 Defendant assessed a 2–3% FT Fee on four of her online purchases, even though she was 3 physically present in the United States at the time each purchase was made. (Id. ¶¶ 17–23). 4 On February 17, 2021, Plaintiff filed this prospective class action complaint in Nevada 5 state court on behalf of herself and a class of all similarly situated individuals who have been 6 improperly charged FT Fees by Defendant. (Compl. ¶ 1); (Pet. Removal ¶ 2). The Complaint 7 asserts two claims: (1) breach of contract on behalf of a nationwide class; and (2) violation of 8 the Nevada Deceptive Trade Practices Act, Nev. Rev. State. § 598.0903, et seq., on behalf of a 9 Nevada subclass. (Compl. ¶¶ 53–69). Plaintiff defines the national class as “all holders of a 10 Zions checking account who, within the applicable statute of limitations preceding the filing of 11 this lawsuit, incurred an FT Fee on a transaction made in the United States.” (Id. ¶ 43). 12 Plaintiff defines the Nevada class as “all holders of a Zions checking account in the State of 13 Nevada who, within the applicable statute of limitations preceding the filing of this lawsuit, 14 incurred an FT Fee on a transaction made in the United States.” (Id.). 15 On May 7, 2021, Defendant removed this case to the United States District Court for the 16 District of Nevada pursuant to the Class Action Fairness Act (“CAFA”),

(d). 17 (Pet. Removal ¶ 6). Plaintiff now moves to remand this case for lack of subject matter

18 jurisdiction under CAFA. (See generally Mot. Remand, ECF No. 10). 19 II. LEGAL STANDARD 20 Federal courts are of limited jurisdiction and possess only that jurisdiction which is 21 authorized by either the Constitution or federal statute. Kokkonen v. Guardian Life Ins. Co. of 22 Am.,

,

,

(1994). Pursuant to the Class 23 Action Fairness Act (“CAFA”), a federal district court has jurisdiction over “any civil action in 24 which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest 25 and costs, and is a class action in which any member of a class of plaintiffs is a citizen of a 1 State different from any defendant,” so long as the class has more than 100 members. 28 U.S.C. 2 § 1332(d)(2)(A), (d)(5)(B). Generally, courts “strictly construe the removal statute against 3 removal jurisdiction.” Gaus v. Miles, Inc.,

(9th Cir. 1992). However, “no 4 antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate 5 adjudication of certain class actions in federal court.” Dart Cherokee Basin Operating Co. v. 6 Owens,

,

(2014). “CAFA’s provisions should be read 7 broadly, with a strong preference that interstate class actions should be heard in a federal court 8 if properly removed by any defendant.”

As noted above, to meet the diversity requirement 9 under CAFA, a removing defendant must show “any member of a class of plaintiffs is a citizen 10 of a State different from any defendant.”

(d)(2)(A). “Thus, under CAFA, 11 complete diversity is not required; ‘minimal diversity’ suffices.” Serrano v. 180 Connect, Inc., 12

(9th Cir. 2007). 13 III. DISCUSSION 14 In her Motion to Remand, Plaintiff claims that this case should be remanded for lack of 15 subject matter jurisdiction because Defendant failed to meet its burden to show that the amount 16 in controversy exceeds $5,000,000. (Mot. Remand 1:21–2:2).1 Specifically, Plaintiff argues 17 that Defendant erroneously based its damages calculation using the past six years of FT Fees

18 for remote purchases, even though some of the states involved in this class action have a shorter 19 statute of limitations for breach of contract claims. (Reply 2:21–5:7, ECF No. 20). Further, 20 Plaintiff argues that Defendant’s calculation of attorneys’ fees, which Defendant alleges brings 21 the amount in controversy over the $5,000,000 threshold, is based on too large of a percentage 22 of the prospective damages. (Mot. Remand 8:26–10:12). 23 24

25 1 The parties do not dispute that the diversity and numerosity requirements for CAFA subject matter jurisdiction have been met. 1 Defendant responds that it met its burden to establish the CAFA amount in controversy 2 by demonstrating that the combination of the estimated damages and attorneys’ fees exceed 3 $5,000,000. (Resp. 5:14–21, ECF No. 18). Defendant argues that using six years of data 4 elicited a proper damages estimation because “affirmative defenses [like statute of limitations] 5 should not be considered in evaluating the amount in controversy for removal purposes.” (Id. 6 7:25–26) (citing Green v. Harley-Davidson, Inc.,

(9th Cir. 2020)). Finally, 7 Defendant maintains that its calculation of attorneys’ fees is reasonable based on typical 8 percentages awarded as fees in class action cases. (Id. 8:9–10:12). 9 To satisfy CAFA’s amount in controversy requirement, a removing defendant must 10 plausibly assert that the amount in controversy exceeds $5,000,000. See Ibarra v. Manheim 11 Investments, Inc.,

(9th Cir. 2015). This requires only a “short and plain 12 statement” of the grounds for removal. 28 U.S.C. 1446; Dart,

. But where 13 “the plaintiff contests, or the court questions, the defendant’s allegation” in its notice of 14 removal, further evidence establishing that the amount in controversy meets the jurisdictional 15 minimum is required. Dart,

. Although no presumption against removal exists, 16 the Court must determine, “by a preponderance of the evidence, whether the amount-in- 17 controversy requirement has been satisfied.”

“The parties may submit evidence outside the

18 complaint, including affidavits or declarations, or other summary-judgment-type evidence 19 relevant to the amount in controversy at the time of removal.” Ibarra,

. Where 20 a defendant relies on a chain of reasoning and assumptions to establish the amount in 21 controversy, both must be reasonable. LaCross v. Knight Transp. Inc.,

, 1202 22 (9th Cir. 2015). 23 In the present case, Defendant’s Petition for Removal identifies $4,733,577.36 in 24 assessed FT Fees that would be at issue as damages in this case. (Pet. Removal ¶ 31); (Resp. 25 5:18). Additionally, based on an estimated award of 25%, Defendant claims that potential 1 attorneys’ fees would amount to $1,144,440.74. (Resp. 5:18–20). As such, Defendant alleges 2 that the amount in controversy in this case is approximately $5,878,018.10, which exceeds 3 CAFA’s threshold. Plaintiff’s Motion to Remand challenges the voracity of Defendant’s 4 calculations, and thus, it is now Defendant’s burden to demonstrate by a preponderance of the 5 evidence that the amount in controversy exceeds $5,000,000. Dart,

. 6 A. Damages Calculation 7 To support its claim that the damages at issue in this case are approximately 8 $4,733,577.36, Defendant provides the data it used to create this calculation. Defendant 9 explains that since May 27, 2015, it has maintained records regarding the assessment and 10 collection of FT Fees for credit and debit card purchases at six of its divisions: Amegy Bank of 11 Texas, California Bank & Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank 12 Colorado, and Zions First National Bank (Utah). (Haden Decl. ¶ 3, Ex. A to Resp., ECF No. 13 18-1); (Resp. 7:1–6). The data from these divisions tracks whether the FT Fee was assessed in 14 a remote or in-person transaction. (See FT Fee Chart, Ex. A to Resp.). Defendant explains that 15 a remote purchase is one where the card was not present at the point of sale, indicating an 16 online transaction. (Resp. 6:2–6). In contrast, an in-person transaction is one where the 17 purchaser physically presents the card to the merchant. (Id.). To estimate the damages at stake

18 in this case, Defendant used the data for remote transactions, reasonably assuming that 19 customers charged with FT Fees for online purchases will claim that the transaction was made 20 while the accountholder was physically present in the United States. (Id. 6:6–9, 7:17–8:6). 21 Defendant arrived at its $4,733,577.36 estimate by adding together all remote transactions 22 where FT Fees were assessed in each division for the past six years. (FT Fee Chart, Ex. A to 23 Resp.). 24 However, the Court agrees with Plaintiff that basing the damages calculation using the 25 past six years of data is overbroad. To determine the appropriate time-period, Defendant 1 should have considered the applicable statute of limitations in each state for breach of contract 2 claims because the class is only made up of account holders that incurred FT Fees “within the 3 applicable statute of limitations.” (Compl. ¶ 43). As Defendant points out in its Petition for 4 Removal, “accounts with [Defendant] and its divisions are governed by . . . the laws of the 5 applicable state.” (Pet. Removal ¶ 23). Therefore: 6 [t]he relevant limitations period for each of the National Class members depends upon the state in which their branch of opening is located or the division of Zions 7 holding the account. Breach of contract claims in Nevada, Utah, Arizona, Oregon, New Mexico, and Washington are subject to a limitations period of six 8 (6) years. See

(1)(b); Utah Code Ann. § 78B-2- 309; A.R.S. § 12-548(A)(1); ORS § 12.080; NMSA 1978, § 37-1-3, RCW § 4.16.040. 9 Breach of contract claims in Texas and California are subject to a limitations 10 period of four (4) years. See

(a); Cal. C.C.P. §337. Breach of contract claims in Colorado are subject to a three (3) year 11 limitations period. See C.R.S. § 13-80-101(1)(a).

12 (Pet. Removal ¶ 24). In calculating its damages estimate, Defendant should not have used a 13 blanket period of 6 years, because now the estimate includes two extra years of data for its 14 Texas and California divisions and three extra years of data for its Colorado division, 15 amounting to an overestimate of hundreds of thousands of dollars. Put differently, Defendant’s 16 estimate includes assessed FT Fees that members of the class would not be able to claim as 17 damages, and thus, those fees should not be included in the damages estimate. A more 18 appropriate estimate uses six years of data for the Nevada, Arizona, and Utah divisions, four 19 years of data for the Texas and California divisions, and three years of data for the Colorado 20 division, which results in approximately $4,336,935.93.2 (See FT Fee Chart, Ex. A. to Resp.); 21 (Reply 3:5–19). 22

23 2 A four-year statute of limitations would cover the period between February 17, 2017, and February 17, 2021. 24 The Texas division reported $163,241.26 in remote debit and credit card transactions where FT Fees were assessed in 2017, $199,914.90 in 2018, $198.452.65 in 2019, $202,866.66 in 2020, and $31,252.99 through 25 February 17, 2021, for a total of $795,728.46. The California division reported $85,515.05 in 2017, $94,002.01 in 2018, $95,593.90 in 2019, $101,724.02 in 2020 and $15,075.51 through February 17, 2021, for a total of $391,910.69. (See FT Fee Chart, Ex. A to Resp.). 1 While Green v. Harley-Davidson, Inc., does hold that it is improper to consider a statute 2 of limitations affirmative defense when calculating the amount in controversy, in the present 3 case, the statute of limitations is not being used as an affirmative defense.

. 4 Instead, the state statutes of limitations are merely a tool to determine the period of time over 5 which to assess damages. Without identifying the upper and lower bounds of the class, there is 6 no way to determine “the amount at stake in the underlying litigation.”

(citing Gonzales v. 7 CarMax Auto Superstores, LLC,

((9th Cir 2016)) (“The amount in 8 controversy represents only the ‘amount at stake in the underlying litigation,’ not the likely 9 liability.”). Therefore, a better estimate of the damages in this case is $4,336,935.93. Cf 10 Cantaro Castillo v. Western Range Association, 777 Fed. App’x 866, 867–68 (9th Cir. 2019) 11 (calculating the damages in a breach of contract case using the appropriate state statute of 12 limitations to determine the amount in controversy under CAFA). 13 B. Attorneys’ Fees Calculation 14 With an estimated damages claim of $4,336,935.93, the attorneys’ fees award needs to 15 amount to at least 16% of the total award in order to meet the CAFA threshold.3 Defendant 16 claims that a 25% percent award is appropriate here, which would place the amount in 17

18

19

20 A three-year statute of limitations would cover the period between February 17, 2018, and February 17, 2021. The Colorado division reported $30,337.36 in remote debit and credit card transactions where FT Fees were 21 assessed in 2018, $30,402.16 in 2019, $28,690.51 in 2020, and $4,429.15 through February 17, 2021, for a total of $93,859.18. (Id.). 22 Therefore, the total estimate would include $795,728.46 from Texas, $391,910.69 from California, $93,859.16 23 from Colorado, $508,954.19 from Arizona, $1,954,850.39 from Utah, and $591,633.02 from Nevada, for a total of $4,336,935.93. (Id.). 24 3 As explained infra fn.4, the attorney fees calculation is only based on $4,243,076.75. 16% of $4,243,076.75 is 25 $678,892.28. Adding together the estimated damages award of $4,336,935.93 and the estimated 16% attorney fees award of $678,892.28 equals an amount in controversy of $5,015,828.21. 1 controversy well over $5,000,000.4 Plaintiff does not dispute that attorneys’ fees should be 2 included in the amount in controversy, but rather argues that the 25% benchmark is too high. 3 (Reply 5:8–7:15). 4 “Where an underlying statute authorizes an award of attorneys’ fees, either with 5 mandatory or discretionary language, such fees may be included in the amount in controversy.” 6 Lowdermilk v. United States Bank National Assoc.,

(9th Cir. 2007) (internal 7 citations omitted). See also Fritsch v. Swift Trans. Co. of Arizona, LLC,

(9th 8 Cir. 2018) (“a court must include future attorneys’ fees recoverable by statute or contract when 9 assessing whether the amount-in-controversy requirement is met.”). Here, the parties do not 10 dispute that attorneys’ fees in breach of contract cases are authorized by statute in Texas, 11 Arizona, California, Nevada, and Utah. See ARS § 12-341.01; Texas, § 38.001; Cal. Civ. Code 12 § 1717; Utah Code §78b-5-826; NRS § 41.600. Therefore, a 25% fee award would amount to 13 $1,060,769.19.5 14 Plaintiff argues that 25% is an inappropriate estimate for attorneys’ fees because in 15 Fritsch v. Swift Transportation Co., the Ninth Circuit refused to adopt a per se equitable rule 16 that the amount of attorneys’ fees in controversy in class actions is 25% of all other alleged 17 recovery because “the defendant must prove the amount of attorneys’ fees at stake by a

18 preponderance of the evidence.” Fritsch further requires that a defendant make this showing by 19 producing “summary-judgment-type evidence.” Id. at 794. 20 The Court finds that Defendant has not met its burden to show by a preponderance of the 21 evidence that a 25% rate for calculating attorneys’ fees is appropriate in this case. The only 22

23 4 See infra fn.5. 24 5 Since Colorado does not have a statute authorizing attorney fees for breach of contract claims, the attorney fees 25 calculation cannot include the Colorado damages, so $93,859.18 must be subtracted from $4,336,935.93. Therefore, the attorney fees calculation is based on $4,243,076.75. 25% of 4,243,076.75 would be an attorney fee award of $1,060,769.19, leading to an amount in controversy of $5,397,705.12. 1 evidence that Defendant produces to support its position is that other cases have approved a 2 25% rate for attorneys’ fees. (See Resp. 9:17–10:13). The Court does not question that a 25% 3 rate can be an appropriate rate to calculate attorneys’ fees, but it is Defendant’s burden to prove 4 its appropriateness in this case. While Defendant claims that the “reasonableness of a 25% 5 estimate is demonstrated by these [other] cases,” Fritsch explicitly states that the burden of 6 proof on Defendant is not merely the reasonableness of the fee requested, but must be 7 supported by evidence. Id. at 795 (“Unlike the Seventh Circuit, where the defendant need show 8 only “a reasonable probability” that the amount in controversy exceeds the minimum, we 9 require a removing defendant to prove that the amount in controversy (including attorneys’ 10 fees) exceeds the jurisdictional threshold by a preponderance of the evidence.”); (Resp. 10:8). 11 Other than citing to previous cases where courts approved a 25% attorneys’ fee rate, Defendant 12 provides no evidence to support its own request for 25%, and thus, the Court has no ability to 13 evaluate whether a 25% rate in this case is reasonable. See, e.g., Anderson v. Cindys Cleaning 14 Service, LLC, No. CV20-4569 PSG,

, at *5 (C.D. Cal. Aug. 27, 2020) 15 (rejecting an attorneys’ fees estimate for the purposes of determining amount in controversy 16 because defendant provided “zero evidence to support its 25% estimate”); Zhao v. RelayRides, 17 Inc., No. 17-cv-04099-JCS,

, at *17 (C.D. Cal. Dec. 12, 2017) (“assuming

18 that future attorneys’ fees are properly considered when determining whether the amount in 19 controversy is met, the amount of such fees must be supported by sufficient evidence to show 20 that it is not speculative”). But see, Vasquez v. RSI Home Products, No. 8:20-cv-01494-JWH- 21 JDE,

, at *12 (C.D. Cal. Nov. 12, 2020) (approving a 25% attorneys’ fees 22 estimate for purposes of amount in controversy when plaintiff’s counsel cited cases where he 23 personally received a fee award exceeding 25% of the total award). 24 Accordingly, the Court will not consider attorneys’ fees in the amount in controversy 25 calculation. Since all damage estimations in this case are well below $5,000,000, the Court 1 finds that the CAFA amount in controversy is not met, and thus, Plaintiff’s Motion to Remand 2 is granted because this Court lacks subject matter jurisdiction. 3 IV. CONCLUSION 4 IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand, (ECF No. 10), is 5 GRANTED. 6 IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss, (ECF No. 31), is 7 DENIED as moot. 8 The Clerk of Court shall close this case. 9 DATED this __2_8__ day of March, 2022. 10 11 ___________________________________ Gloria M. Navarro, District Judge 12 UNITED STATES DISTRICT COURT 13 14 15 16 17 18 19 20 21 22 23 24 25