Opinion
3:21-cv-01308-JR
12-02-2021
JAYANA RUSHING, Plaintiff, v. ROSS DRESS FOR LESS, INC., Defendant.
FINDINGS & RECOMMENDATION
JOLIE A. RUSSO, UNITED STATES MAGISTRATE JUDGE
Plaintiff Jayana Rushing sued defendant Ross Dress for Less, Inc., and its unidentified employee Kim Doe in the Multnomah County Circuit Court of the State of Oregon. Case No. 21CV15451. Plaintiff brings a claim for discrimination on the basis of race in violation of Or. Rev. Stat. § 659A.403. Defendant removed the case to federal court based on diversity jurisdiction (ECF No. 1). Before this Court is plaintiff's motion to remand the case to the Multnomah County Circuit Court (ECF No. 6). The motion should be denied.
BACKGROUND
Plaintiff is an individual domiciled in Clark County, Washington. Notice of Removal ¶ 10, ECF No. 1. Defendant Ross Dress for Less, Inc., (“Ross”) is a Virginia corporation with its principal place of business in Dublin, California. Id. ¶ 11. Plaintiff alleges that on or about October 9, 2020, she was a customer at the Ross store at 10041 NE Cascades Parkway, Portland, Oregon. Id. Ex. 1, at ¶¶ 1, 3. This dispute arose from an interaction between plaintiff and one of defendant's employees, referred to by the fictitious name “Kim Doe.” Id. Ex. 1, at ¶¶ 2-4.
Plaintiff alleges she was shopping at the Ross store above when Kim Doe stopped plaintiff, told plaintiff she was not welcome in the store, and demanded that plaintiff leave. Id. Ex. 1, at ¶ 3. Plaintiff allegedly asked for an explanation regarding the refusal of service and Kim Doe replied that plaintiff's business was not welcome. Id.
Plaintiff is African American and was allegedly the only African American customer in the store at the time. Id. Ex. 1, at ¶ 4. Plaintiff allegedly observed numerous Caucasian customers in the store who were not stopped, nor were they told that their business was unwelcome and asked to leave the store. Id. Plaintiff alleges that a result of this incident she suffered, continues to suffer, and will in the future suffer from feelings of racial stigmatization. Id. Ex. 1, at ¶ 8.
On April 20, 2021, plaintiff brought a claim against Ross and Kim Doe in Multnomah County Circuit Court. Id. Plaintiff seeks up to $55,000 of “noneconomic damages, and for costs and disbursements necessarily incurred herein.” Id. Plaintiff pled this amount “for jurisdictional purposes only.” Id.
On August 4, 2021, plaintiff served Ross with her complaint. Id. Ex. 3. On August 25, 2021, the presiding judge issued a limited judgment dismissing fictitious defendant Kim Doe. Id. Ex. 4. On September 3, 2021, Ross removed the case to federal court. Id. On October 4, 2021, plaintiff filed a motion in this Court to remand the case back to Multnomah County Circuit Court pursuant to 28 U.S.C. § 1447 (ECF No. 6).
LEGAL STANDARD
A civil action generally may be removed from state court to federal court if the federal district court would have had original, subject matter jurisdiction over the case. 28 U.S.C. § 1441(a). Subject matter jurisdiction may be based on either diversity jurisdiction or federal question jurisdiction. 28 U.S.C. §§ 1331, 1332.
Diversity jurisdiction exists over civil actions when the amount in controversy exceeds $75,000 and there is complete diversity among all plaintiffs and defendants. 28 U.S.C. § 1332(a). The amount in controversy is the “amount at stake in the underlying litigation, ” Theis Research, Inc. v. Brown & Bain, 400 F.3d 659, 662 (9th Cir. 2005); this includes any result of the litigation, excluding interests and costs, that “entail[s] a payment” by the defendant. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007). The among in controversy “includes, inter alia, damages (compensatory, punitive, or otherwise) and the cost of complying with an injunction, as well as attorneys' fees awarded under fee shifting statutes.” Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648-49 (9th Cir. 2016) (citing Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1046 n.3 (9th Cir. 2000)).
Where “it is unclear or ambiguous from the face of a state-court complaint whether the requisite amount in controversy is pled, ” Guglielmino, 506 F.3d at 699, the “‘removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds' the jurisdictional threshold.” Urbino v. Orkin Servs. of California, Inc., 726 F.3d 1118, 1121-22 (9th Cir. 2013) (quoting Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). “Federal courts are courts of limited jurisdiction…. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted).
A motion to remand is the proper procedure to challenge removal. 28 U.S.C. § 1447. The party seeking removal bears the burden of establishing that removal is proper. See Moore-Thomas v. Ala. Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). “This burden is particularly stringent for removing defendants because ‘[t]he removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand.'” Corral v. Select Portfolio Servicing, Inc., 878 F.3d 770, 773-74 (9th Cir. 2017) (quoting Moore-Thomas, 553 F.3d at 1244); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (noting the “strong presumption” against removal jurisdiction).
DISCUSSION
The key issue here is whether the amount in controversy exceeds $75,000. Plaintiff argues this Court should look no further than her noneconomic damages claim of $55,000, which she pled “for jurisdictional purposes only, ” and conclude this case does not meet the dollar threshold required by 28 U.S.C. § 1332(a). Notice of Removal Ex. 1, at ¶ 8, ECF No. 1. Plaintiff acknowledges she may later amend her complaint to request punitive damages and attorney fees, which may increase the amount in controversy to above $75,000. Pl.'s Mot. to Remand 2, ECF No. 6. However, plaintiff asserts that defendant may remove the case only after any such amendment. Id.
In removing this case to federal court, the defendant stated that plaintiff's claim exceeds $75,000 including potential attorney fees and punitive damages. Notice of Removal ¶ 5-9. Further, defendant argues plaintiff is engaging in “gamesmanship” by pleading only $55,000 in compensatory damages and remaining non-committal on attorney fees and punitive damages. Def.'s Resp. 1, ECF No. 9. Defendant contends plaintiff is using this ambiguity to keep the case in state court. Id. Defendant notes the amount of plaintiff's expressly pled damages is higher than the threshold for mandatory arbitration in state court and lower than the threshold for federal diversity jurisdiction. Or. Rev. Stat. § 36.400(3); 28 U.S.C. § 1332(a). However, as explained below, defendant nonetheless bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds $75,000.
A. The Amount in Controversy Includes Potential Attorney Fees and Punitive Damages
Plaintiff alleges racial discrimination in a place of public accommodation under Or. Rev. Stat. § 659A.403. A successful litigant under that statute is entitled to recover attorney fees and potentially punitive damages pursuant to Or. Rev. Stat. § 659A.885(8). Oregon courts have construed the language found in Or. Rev. Stat. § 659A.885 “as mandatory and highly favorable to plaintiffs, holding that prevailing plaintiffs are entitled to recover their attorney fees.” Hamlin v. Hampton Lumber Mills, Inc., 227 Or. App 165, 167 (2009); see Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 827 (9th Cir. 2009) (“State law establishes the required showing for attorney's fees in an action in diversity.”)
The fact that plaintiff has not requested attorney fees or punitive damages does not affect her statutory right to pursue such damages, nor does it preclude such damages from the amount-in-controversy calculation. See Fritsch v. Swift Transportation Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018). Rather, “a court must include future attorneys' fees recoverable by statute or contract when assessing whether the amount-in-controversy requirement is met.” Id. (emphasis added). In addition, the court may include potential punitive damages in this assessment. Gibson v. Chrysler Corp., 261 F.3d 927, 946 (9th Cir. 2001), holding modified by Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005) (“Plaintiff did not explicitly request punitive damages, but the potential for such damages may still be considered for purposes of amount in controversy.” (citing Bell v. Preferred Life Assur. Soc. of Montgomery, Ala., 320 U.S. 238, 240-43 (1943))). Therefore, in determining the amount in controversy in this case, this Court must include potential attorney fees and may include potential punitive damages.
Plaintiff could waive her right to recover any attorney fees or even agree to limit them to avoid the federal jurisdictional amount. See, e.g., Logan v. Walmart, Inc., 2020 WL 6940230, at *3 (D. Or. Nov. 25, 2020). But plaintiff has not done so here. Plaintiff has preserved her right to pursue such damages at a later time. “It would be inappropriate gamesmanship if a plaintiff otherwise entitled to recover attorney's fees could avoid removal simply by not requesting attorney's fees in an original complaint.” Id.
Notice of Removal Ex. 1, at ¶ 3 (quantifying plaintiff's compensatory damages “for jurisdictional purposes only”); Pl.'s Mot. to Remand 2 (reserving plaintiff's right to “increase the amount of damages to a number above $75,000” in “the future”). This Court has received no indication that plaintiff's counsel responded to defense counsel's inquiry as to whether plaintiff would be “willing to waive (via stipulation) any right she may have to an award of attorney's fees and punitive damages” to resolve the motion to remand. Ridgeway Decl. Ex. A, ECF No. 10.
B. The Conservatively Estimated Amount in Controversy Exceeds $75,000
Regardless, defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. Sanchez, 102 F.3d at 404. To meet this burden, defendant must “make this showing with summary-judgment-type evidence.” Fritsch, 899 F.3d at 795 (citing Chavez, 888 F.3d at 416; Corral, 878 F.3d at 774). “The type of evidence that courts have considered to estimate reasonable future attorney's fees include a percentage of economic damages alleged, fee awards in similar cases, and estimates of the number of hours that will likely be required to litigate the pending case multiplied by the opposing counsel's hourly rate.” Peck v. First Student, Inc., 2017 WL 3288116, at *3 (D. Or. Aug. 2. 2017).
Other cases in the District of Oregon have discussed what it takes to prove the amount in controversy to support federal diversity jurisdiction. In Logan, the Court granted the plaintiffs' motion to remand because the defendant there did not present sufficient evidence regarding the amount in controversy. 2020 WL 6940230, at *3. Similarly, in Edwards v. Walmart, Inc., the Court granted plaintiff's motion to remand because the defendant failed to carry its burden to establish the amount in controversy satisfied 28 U.S.C. § 1332(a). 2021 WL 1343110, at *4 (D. Or. Feb. 19, 2021), findings and recommendation adopted, 2021 WL 1341856 (D. Or. Apr. 9, 2021). There, the Court noted that “[r]ather than evidence of ‘a percentage of economic damages alleged, fee awards in similar cases, and estimates of the number of hours that will likely be required to litigate the pending case multiplied by the opposing counsel's hourly rate,' [defendant] offers the bare assumption' that a senior partner … will perform all of the work in this apparently straight-forward case.” Id. at *3.
Regarding attorney fees, the Ninth Circuit has upheld the “conservative” method of estimating attorney fees by multiplying pled economic damages by 12.5%. Guglielmino, 506 F.3d at 698. Here, the defendant relies on the other types of evidence mentioned in Edwards. Defendant first highlights the fact that plaintiff has retained four experienced trial attorneys in this case, each billing at least $250 per hour. At that rate, approximately eighty billed hours plus the $55,000 pled in compensatory damages would meet the amount in controversy requirement under 28 U.S.C. § 1332(a). Defendant contends litigation in this case will be costly given the broad scope of discovery. It also notes that plaintiff's counsel will need to prepare for, attend, and defend defendant's deposition of plaintiff and any supporting witness she may identify, including the healthcare professionals supporting plaintiff's claim for emotional distress damages. Def.'s Resp. 6. In addition, defendant indicates plaintiff will need to defend a motion for summary judgment. Id. Defendant also offers examples of arguably similar discrimination cases within the Ninth Circuit which awarded greater than $100,000 in attorney fees. Ultimately, defendant argues this evidence proves plaintiff will incur more than $20,000.01 in attorney fees, and thus exceed the $75,000 amount-in-controversy requirement.
See, e.g., Cleavenger v. Univ. of Or., 2016 WL 1065821 (D. Or. Mar. 16, 2016) (reflecting plaintiff's counsel's rates, five years ago, as: (1) Gregory Kafoury at $500/hour; (2) Mark McDougal at $450/hour; (3) Jason Kafoury $350/hour; and (4) Adam Kiel at $250/hour); Franklin v. Clarke, 2012 WL 1309191 (D. Or. Apr. 16, 2012) (reflecting Mark McDougal's rate as $350/hour nine years ago); Settlegoode v. Portland Pub. Sch., 2005 WL 1899376 (D. Or. Aug. 9, 2005) (reflecting Gregory Kafoury's rate as $400/hour and Mark McDougal's rate as $350/hour sixteen years ago).
See Notice of Removal Ex. B, at 3-6 (doc. 1) (seeking, e.g., “[a]ny letters, emails, complaints memorialized in any form, or demands memorialized in any form relating to any incidents at any of defendant's stores in Oregon in the last five years which deal with, touch upon, or concern discrimination.”)
See Polee v. Cent. Contra Costa Transit Auth., 2021 WL 308608 (N.D. Cal. Jan. 29, 2021) (awarding $440,056.00 in attorney's fees in race discrimination claim); Granville v. City of Portland, 2006 WL 8459251, at *1 (D. Or. Oct. 16, 2006) (awarding $137,902.20 in attorneys' fees in race discrimination claim); Miller v. Vicorp Restaurants, Inc., 2006 WL 212021, at *1 (N.D. Cal. Jan. 11, 2006), order clarified, 2006 WL 463544 (N.D. Cal. Feb. 24, 2006), amended, 2006 WL 8443027 (N.D. Cal. Apr. 14, 2006) (awarding $410,728.95 in attorneys' fees on age and race discrimination claims).
Regarding punitive damages, defendant notes that multiple courts have used a “conservatively estimated” 1:1 ratio of punitive damages to compensatory damages when assessing the amount in controversy. The Ninth Circuit has upheld this approach. Guglielmino, 506 F.3d at 698. “[I]n general, intentional discrimination is enough to establish punitive damages liability.” Passantino v. Johnson & Johnson Consumer Prod., Inc., 212 F.3d 493, 515 (9th Cir. 2000). Here, defendant emphasizes that plaintiff alleges intentional discrimination, not an accidental violation of the law. Plaintiff allegedly suffers from “feelings of racial stigmatization” due to assertive conduct excluding her from defendant's store on the basis of her race. Notice of Removal Ex. 1, at ¶ 8. Thus, it is likely that punitive damages would comprise a significant portion of plaintiff's potential recovery.
See, e.g., Funk v. Bank of Hawai'i, 2020 WL 2494530, at *6 (N.D. Cal. May 14, 2020) (“[T]his Court has found the 1:1 ratio upheld in Guglielmino to be an appropriate estimate of punitive damages in foreclosure cases.”); Tompkins v. Basic Rsch. LLC, 2008 WL 1808316, at *4 (E.D. Cal. Apr. 22, 2008) (citing Guglielmino to apply “the ‘conservative' estimate of a 1:1 ratio between compensatory and punitive damages”).
See, e.g., Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020 (9th Cir. 2003) (upholding jury verdict with a 7:1 ratio between punitive and compensatory damages on claims of ethnicity and nationality discrimination); Swinton v. Potomac Corp., 270 F.3d 794 (9th Cir. 2001) (affirming jury verdict with a 28:1 ratio in race discrimination case); Pavod v. Swift Transp. Co., Inc., 192 F.3d 902 (9th Cir. 1999) (upholding jury verdict with a 6:5 ratio in race discrimination case).
Applying the 1:1 compensatory to punitive damages ratio in this case yields $55,000 in punitive damages, for a total of $110,000 in controversy. Even excluding attorney fees, that amount satisfies the jurisdictional threshold under 28 U.S.C. § 1332(a). In addition, although defendant did not actually calculate estimated attorney fees, its evidence regarding plaintiff's attorney's billing rates and likely efforts, as well as its evidence of fee awards in similar cases, further support the conclusion that the amount in controversy exceeds $75,000. Because the defendant has met its burden of establishing, by a preponderance of the evidence, that the amount in controversy meets the requirement for federal jurisdiction, this Court should deny plaintiff's motion to remand (ECF No. 6).
CONCLUSION
Because the parties are in complete diversity and the amount in controversy exceeds $75,000, plaintiff's motion to remand this case back to state court (ECF No. 6) should be denied.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.