Opinion
2:20-cv-10511-CAS-Ex
02-01-2021
DONELL COREY KENDALL v. NESTLE WATERS NORTH AMERICA. INC. ET AL
Attorneys Present for Plaintiffs: Alexis Djivre Bryan Merryman Attorneys Present for Defendants: Azar Mouzari Thomas Mayhew
Attorneys Present for Plaintiffs:
Alexis Djivre
Bryan Merryman
Attorneys Present for Defendants:
Azar Mouzari
Thomas Mayhew
CIVIL MINUTES - GENERAL
CHRISTINA A. SNYDER
Proceedings:TELEPHONE HEARING RE: PLAINTIFF'S MOTION TO REMAND (Dkt. 9, filed December 17, 2020)
I. INTRODUCTION
On September 23, 2020, plaintiff Donell Corey Kendall filed this class action in Los Angeles Superior Court against defendants Nestle Waters North America, Inc., dba Ready Refresh ("Nestle Waters") and Does 1-20, inclusive. Dkt. 1-1 ("Compl."). The complaint alleges seven claims: 1) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq.; (2) violation of the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750, et seq.; (3) breach of the implied covenant of good faith and fair dealing; (4) money had and received; (5) unjust enrichment; (6) imposition of unlawful civil penalties in violation of Cal. Civ. Code § 1671; and (7) negligence. Id. On November 17, 2020, defendants removed this action to federal court asserting jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d)(2). Dkt. 1 ("NTC of Removal").
On December 17, 2020, plaintiff filed a motion to remand this action to California state court. Dkt. 9 ("Mot."). On January 7, 2021, defendants filed an opposition. Dkt. 10 ("Opp'n"). Plaintiff filed a reply on January 15, 2021. Dkt. 11 ("Reply"). On January 29, 2021, defendants filed a supplemental declaration in support of their opposition. Dkt. 14.
The Court held a hearing on February 1, 2021. Having carefully considered the parties' arguments, the Court finds and concludes as follows.
II. BACKGROUND
Defendant Nestle Waters operates a retail beverage delivery service company that delivers bottled water and other beverages to the homes and offices of its monthly subscribers. Compl. at 2. Plaintiff Donell Corey Kendall alleges that he contracted with defendants to purchase water from approximately August 2014 through late 2018. Id. at 2, ¶ 1.
In his complaint, plaintiff alleges that throughout the period during which he purchased water from defendants pursuant to a monthly contract, defendants charged him "late fees in the amount of $20 for each month he was late in paying his beverage delivery service." Id. ¶ 1. In addition, plaintiff alleges that each member of the proposed class was charged a $20 late fee for every month when they were late in paying for the beverage delivery service. Id. ¶ 2. Plaintiff alleges that the $20 late fees assessed by defendants were "exorbitant and disproportionately high' and, despite language in his contract stating that "if the late fee exceeds the maximum rate allowed by applicable law, the late charge will be equal to such maximum rate," were "in excess of the maximum amount allowable under California law." Id.¶¶ 1113. According to plaintiffs allegations, the maximum late fee rate that is allowable as a matter of California law is approximately 18% per year or 1.5% per month, whereas "[i]n most cases, a monthly fee of $20 was in excess of 70% of the beverage charge." Id. ¶ 36. Plaintiff further alleges that defendants failed to disclose that they would charge late fees in excess of the lawful amount when plaintiff subscribed to the delivery service. Id. ¶ 13.
The complaint defines the proposed class as follows:
[A]ll those subscribers of Defendants' water delivery service who were charged late fees by Defendants over the past four years. No. claim is made for any corporate entity under the causes of action for violation of the CLRA and the UCL. A subclass of non-corporate users' claims is asserted for consumers/individuals.Id. ¶18.
In the instant motion to remand, plaintiff contends that defendants have not met each of the statutory requirements for federal jurisdiction pursuant to CAFA. In particular, plaintiff contends that defendants have failed to sufficiently demonstrate that the amount in controversy in this action exceeds $5,000,000. Mot. at 2.
III. LEGAL STANDARD
Remand may be ordered either for lack of subject matter jurisdiction or for any defect in removal procedure. See 28 U.S.C. § 1447(c). The Court strictly construes the removal statutes against removal jurisdiction, and jurisdiction must be rejected if there is any doubt as to the right of removal. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
CAFA gives federal courts jurisdiction over certain class actions if (1) "the class has more than 100 members"; (2) "the parties are minimally diverse"; and (3) "the amount in controversy exceeds $5 million." Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 84-85, 135 S.Ct. 547, 552 (2014). There is no presumption against removal jurisdiction in CAFA cases; however, the defendant still bears the burden of establishing removal jurisdiction. Id. at 554. CAFA's "minimal diversity" requirement means that "a federal court may exercise jurisdiction over a class action if 'any member of a class of plaintiffs is a citizen of a State different from any defendant.'' Mississippi ex rel. Hood v. AU Optronics Corp.. 571 U.S. 161, 165, 134 S.Ct. 736, 740, (2014) (quoting 28 U.S.C. § 1332(d)(2)(A)). Where, as here, the amount in controversy is contested, and the plaintiff does not plead a specific amount in controversy, the defendant's evidentiary burden in opposing a motion to remand depends on whether plaintiff has mounted a facial or factual attack on defendants jurisdictional allegations. Salter v. Quality Carriers, Inc., 974 F.3d 959, 964 (9th Cir. 2020). A facial attack "accepts the truth of the plaintiffs allegations but asserts that they are insufficient on their face to invoke federal jurisdiction," thus calling for the Court to "determine[]whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction." Id. (quoting Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). In contrast, a factual attack "contests the truth of plaintiff s factual allegations, usually by introducing evidence outside the pleadings." Id. "When a plaintiff mounts a factual attack, the burden is on the defendant to show, by a preponderance of the evidence, that the amount in controversy exceeds the $5 million jurisdictional threshold." Harris v. KM Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020). Although a plaintiff may present evidence in support of a factual attack, they "need only challenge the truth of defendant's jurisdictional allegations by making a reasoned argument as to why any assumptions on which they are based are not supported by the evidence." Id. at 700.
Under the preponderance of the evidence standard, the removing party must "provide evidence establishing that it is more likely than not that the amount in controversy exceeds [the jurisdictional amount]." Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (internal quotation omitted). In determining whether the removing party has satisfied this burden, the district court may consider facts in the removal petition and '"summary-judgment-type evidence relevant to the amount in controversy at the time of removal.'" Singer v. State Farm Mut. Auto. Ins. Co..116 F.3d 373, 377 (9th Cir. 1997) (quoting Allen v. R & H Oil & Gas Co.. 63 F.3d 1326, 1335-36 (5th Cir. 1995)).
IV. DISCUSSION
Defendant removed this action pursuant to CAFA. As stated above, CAFA gives federal courts jurisdiction over certain class actions if (1) "the class has more than 100 members"; (2) "the parties are minimally diverse"; and (3) "the amount in controversy exceeds $5 million." Dart Cherokee. 135 S.Ct. at 552. Here, plaintiffs appear to concede that the parties are minimally diverse and that the proposed class contains more than 100 members. See generally Mot. Accordingly, the Court addresses only whether defendant has adequately established that the "amount in controversy exceeds $5 million."
Plaintiff argues that defendant has failed to establish that the amount in controversy exceeds $5 million. "In measuring the amount in controversy, a court must 'assum[e] that the allegations of the complaint are true and assum[e that] a jury [will] return[ ] a verdict for the plaintiff on all claims made in the complaint.' Kenneth Rothschild Trust v. Morgan Stanley Dean Witter. 199 F.Supp.2d 993, 1001 (CD. Cal. 2002) (quoting Jackson v. American Bankers Ins. Co. of Florida. 976 F.Supp. 1450, 1454(S.D. Ala. 1997)); see also Coleman v. Estes Express Lines. Inc., 730 F.Supp.2d 1141, 1148 (CD. Cal. Jul. 19, 2010) ("In deciding the amount in controversy, the Court looks to what the plaintiff has alleged, not what the defendants will owe"). '[W]hen the defendant's assertion of the amount in controversy is challenged by plaintiffs in a motion to remand, the Supreme Court has said that both sides submit proof and the court then decides where the preponderance lies." Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1198 (9th Cir. 2015). Under this system, the removing party bears the burden of demonstrating that the CAFA amount in controversy requirement is met, but may "rely on reasonable assumptions to prove that it has met the statutory threshold." Harris, 980 F.3d at 701 (citing Ibarra, 775 F.3d at 1197; Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019)).
Here, plaintiffs complaint indicates that he is seeking relief in the form of damages and restitution in the "amount by which [defendants were unjustly enriched" by allegedly unlawful fees charged "in excess of 1.5% per month." Compl. at 3. In other words, plaintiff seeks an award of the difference between the $20 late fee that class members were allegedly charged and the 1.5% late fee that he alleges is lawful. Plaintiff further seeks injunctive relief prohibiting defendants from charging unlawful late fees in the future. See Compl. at Prayer for Relief.
Defendants asserted in their notice of removal that the amount placed in controversy by plaintiffs claims "exceeds $5 million" and submitted two declarations from Nestle Waters Senior Director of Technology Integration Eric Lord stating, based on analysis of defendants' business records, that more than $5 million is at issue. NTC of Removal at 4; Dkts. 10-2 ("Dec. Lord Decl."), 10-3 ("Jan. Lord Decl."). In response, plaintiffs argued that defendants' declaration evidence was "speculative and facially deficient" because the declarations calculate the amount of late fees but did not provide "any further explanation or proof explaining how the total amount of late fees were calculated or why they exceeded $5 million. Reply at 2.