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finding that unsubstantiated allegations are insufficient to meet the jurisdictional limit and may warrant remand
Summary of this case from Niknam v. Safeco Ins. Co.Opinion
No C 03-3106 VRW.
July 15, 2003
ORDER
Plaintiff Linda Martinez (Martinez) commenced this action in Alameda County superior court on May 28, 2003. Not of Rem (Doc # 1, Exh # 1). The complaint alleges that defendant Kirk xpedx, a division of the International Paper Company (IPC), unlawfully terminated Martinez's employment on the basis of her disability, race and ethnicity. Id. As relief, Martinez seeks compensatory, special and punitive damages and attorney fees. Id at 4, Prayer.
IPC received service of the complaint on June 5, 2003, and timely removed on July 3, 2003. Not of Rem (Doc # 1) at 2, ¶ 2, Exh # 2. Removal was predicated on IPC's assertion of federal diversity jurisdiction. See id at 2-5, ¶¶ 6-12; 28 U.S.C. § 1332.
The issue of subject matter jurisdiction may be raised by the court sua sponte at any time. See Galt G/S v. Hapag-Lloyd AG, 60 F.3d 1370, 1373 (9th Cir. 1995). Federal diversity jurisdiction may be exercised if the parties are of diverse citizenship and the amount in controversy in the litigation exceeds $75,000. 28 U.S.C. § 1332.
With respect to the latter requirement, if the state complaint fails to allege the amount in controversy with specificity, removing defendants bear the burden of establishing that the amount in controversy exceeds $75,000 by a preponderance of the evidence. See Sanchez v. Monumental Life Ins Co, 102 F.3d 398, 404 (9th Cir. 1996). Defendants must meet that burden by "proving the facts to support jurisdiction, including the jurisdictional amount." Gaus v. Miles, Inc, 980 F.2d 564, 566 (9th Cir. 1992). Such facts must be included in the notice of removal. Id. "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id.
Martinez's complaint alleges violations of California's Fair Employment and Housing Act (FEHA), Cal Govt Code § 12900 et seq. Determination of the amount in controversy may include punitive damages if, as here, such damages are recoverable as a matter of law. See Gibson v. Chrysler Corp, 251 F.3d 927, 945 (9th Cir. 2001). The same is true of attorney fees. See Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir. 1998). A successful plaintiff in a FEHA discrimination action may receive compensatory and punitive damages as well as an award of reasonable attorney fees. See Cal Civ Code § 3294; Cal Govt Code § 12965; Monge v. Superior Court, 222 Cal.Rptr. 64, 66 (Cal App. 1986) (punitive damages); Beaty v. BET Holdings, Inc, 222 F.3d 607, 609 (9th Cir. 2000) (attorney fees). Thus, in determining whether it has diversity jurisdiction over this action, the court must consider the facts set forth by IPC relating to a potential award to plaintiff's of punitive damages and attorney fees as well as compensatory damages. See Simmons v. PCR Technology, 209 F. Supp.2d 1029 (ND Cal 2002).
In its notice of removal, IPC sets forth the following facts regarding the amount in controversy. According to the declaration of Elizabeth A Richman, the human resources manager at the IPC facility that formerly employed Martinez, Martinez earned a yearly salary of $33,800.00 from May 1, 2000, to October 31, 2000, and a yearly salary of $34,800.18 from November 1, 2000 until the date of Martinez's termination. Richman Decl (Doc # 1, Exh # 4) at 2, ¶ 7. The complaint alleges and IPC concurs that Martinez was wrongfully terminated on October 12, 2001. Not of Rem (Doc # 1, Exh # 1) at 2, ¶ 7; Richman Decl (Doc # 1, Exh # 4) at 2, ¶ 6. Martinez's monthly salary at that time was $2900.02. In addition, IPC paid $58 per month for Martinez's dental benefits, $14 per month for her life insurance and $66 per month toward her pension. Id at 2, ¶ 8. Based on the facts presented by IPC to the court, had Martinez not been terminated, IPC would have paid a monthly sum of $3038.02 for Martinez's salary and benefits during the period at issue in this litigation.
From the alleged date of Martinez's termination, October 12, 2001, to the date she commenced suit, May 28, 2003, is a period of under 20 months. Even assuming, as IPC does for purposes of its notice of removal, that the time period at issue was precisely 20 months, the total in wages and benefits lost by Martinez is $60,760.40, an amount below the statutory minimum of $75,000. (The court notes that its calculation differs from that of IPC, which is based on an unsubstantiated assertion that plaintiff's yearly salary during the relevant period was $34,814.14; the Richman declaration belies this assertion. Id at 4, ¶ 9; Exh # 4 at 2, ¶ 2.)
To make up the difference between the estimated compensatory damage amount of $60,760.40 and the statutory minimum, IPC notes that Martinez alleges that she is entitled to punitive damages and attorney fees. In support of this contention, however, IPC simply cites cases from the Ninth Circuit and this district that note the propriety of including potential punitive damages and attorney fee awards in determining the amount in controversy. IPC provides no factual support for the conclusion that an award of punitive damages and attorney fees would more probably than not raise the amount in controversy here beyond the $75,000 threshold.
Such unsubstantiated allegations alone cannot suffice to meet IPC's "burden of actually proving the facts to support jurisdiction, including the jurisdictional amount." Gaus, 980 F.2d at 566. IPC is correct that jury verdicts in analogous cases can furnish evidence of the likelihood of a punitive damage award and so support a finding that the amount in controversy requirement has been met. See Simmons, 209 F. Supp.2d at 1033 (citing Faulkner v. Astro-Med, Inc, 1999 WL 820198 at *4 (ND Cal 1999); Miller v. Michi an Millers Ins Co, 1997 WL 136242 at *4 (ND Cal 1997)). Yet IPC makes no effort to demonstrate that the jury verdicts to which the Simmons defendant cited were awarded in cases in any way analogous to the case at bar. Indeed, IPC simply asks the court to take on faith that cases identified as analogous by the Simmons defendant to the Simmons court are similarly analogous to the instant case. Not of Rem (Doc # 1) at 4, ¶ 9 ("As demonstrated by the jury awards cited by the court in Simmons , employment discrimination lawsuits have the potential for large punitive damage awards.").
The Simmons defendant directed that court's attention to a number of unpublished decisions in which punitive damages were awarded. 209 F. Supp.2d at 1033. The Simmons court had the opportunity to examine those jury awards directly to determine the extent to which they were properly analogous to theSimmons case, an opportunity IPC has not afforded this court with respect to this action. Id. That another district court considered certain the jury verdicts in certain cases to be analogous to a verdict that might result in an employment discrimination case before that court is not, so far as the court can determine from the facts presented to it by IPC,factual evidence of anything to do with the case at bar.
Similarly, the Simmons defendant presented the Simmons court with evidence of regarding demands made by the Simmons plaintiff's counsel for attorney fees at various stages of that litigation. 29 F. Supp.2d at 1034-35. On the basis of those figures, the Simmons court was able to estimate the amount of attorney fees that might likely be awarded in the Simmons litigation and so could include that figure in its determination of the amount in controversy. IPC has not presented similar (or any) evidence of the amount of attorney fees that might be awarded to plaintiff in this litigation if she prevails on her claims.
In sum, IPC's notice of removal does not provide sufficient "facts to support jurisdiction" to meet its burden to prove, by a preponderance of the evidence, that the amount in controversy in this action exceeds $75,000. Absent such proof, the court lacks subject matter jurisdiction. See Singer v. State Farm Mutual Auto Ins Co, 116 F.3d 373, 376 (9th Cir. 1997). Lacking jurisdiction, the court REMANDS this action to Alameda County superior court for all further proceedings.
IT IS SO ORDERED.