Brad Ponsford v. Skypatrol, LLC
5:17-cv-00977
C.D. Cal.Aug 21, 2017Background
- Plaintiff Brad Ponsford filed a Riverside County PAGA action against Skypatrol LLC and Topp Group, Inc.; defendants removed to federal court on diversity grounds.
- The parties are completely diverse (Plaintiff: California; Defendants: Delaware, Florida, New York); jurisdictional facts not disputed.
- Plaintiff previously filed a separate, apparently identical action asserting state-law wrongful termination, retaliation, and UCL claims; the court had previously denied remand in that earlier suit because defendants showed amount in controversy exceeded $75,000.
- The second complaint here asserts only a PAGA claim seeking statutory civil penalties, interest, and attorneys’ fees (no compensatory or punitive damages).
- Defendants contend diversity jurisdiction exists because the amount in controversy exceeds $75,000, relying primarily on estimated attorneys’ fees; Plaintiff argues defendants have not met their burden to prove the required amount.
- The Court concluded defendants failed to prove by a preponderance of the evidence that the amount in controversy exceeds $75,000 and granted remand; the Court also ordered the parties to be prepared to address possible forum manipulation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists based on amount in controversy | Amount in controversy does not exceed $75,000 because only PAGA statutory penalties (small per-violation amounts) and fees are recoverable | Amount in controversy exceeds $75,000 by including attorneys’ fees (estimated through trial) plus PAGA penalties | Held: No — defendants did not prove by a preponderance that amount in controversy exceeds $75,000; remand granted |
| Whether attorneys’ fees may be used to satisfy amount-in-controversy | Agrees fees may be considered only if proven and not speculative | Fees are part of amount in controversy because PAGA authorizes fee awards; estimate fees through trial to reach threshold | Held: Fees can count in principle, but defendants failed to present sufficient, non-speculative evidence of fees to meet burden |
| Whether court should consider forum manipulation/forum shopping | Plaintiff’s refiling suggests manipulation to defeat federal jurisdiction; argues for remand | Defendants urge the court to consider forum manipulation and preserve judicial economy by retaining the case | Held: Court expressed concern and ordered parties to be prepared to address manipulation, but jurisdictional requirement controls; remand based on lack of amount in controversy despite policy concerns |
| Who bears burden to establish amount in controversy on contested removal | Plaintiff challenges defendants’ allegation, disputing amount | Defendant bears burden to prove amount in controversy by preponderance when contested | Held: Confirmed — when contested, defendant must prove amount in controversy by preponderance; defendants failed to meet that burden |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction; party asserting jurisdiction bears burden)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) (removal jurisdiction is narrowly confined to statutory limits)
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014) (when plaintiff contests, removal is proper only if defendant proves amount in controversy by preponderance)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) (subject-matter jurisdiction cannot be waived or forfeited)
- Galt G/S v. JSS Scandinavia, 142 F.3d 1150 (9th Cir. 1998) (attorney fees may be included in amount in controversy if underlying statute authorizes fees)
- United States v. Ceja-Prado, 333 F.3d 1046 (9th Cir. 2003) (courts must jealously guard their jurisdiction)
- Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) (federal courts must satisfy themselves of subject-matter jurisdiction)
- Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988) (factors for remand or decline of supplemental jurisdiction include considerations of judicial economy and forum manipulation)