Pinales v. American Family Mutual Insurance Company SI, 2:18-cv-04464

Plaintiffs sued their insurer in Arizona state court for claims arising from an insurance loss and filed a complaint before November 3, 2018.
On November 3, 2018—after Plaintiffs filed the complaint but before removal—Defendant paid Plaintiffs over $300,000 on the underlying insurance claim.
Defendant subsequently removed the case to federal court based on diversity jurisdiction under 28 U.S.C. § 1332, asserting the amount in controversy exceeded $75,000.
Plaintiffs moved to remand, arguing the post‑complaint payment reduced the amount in controversy below the jurisdictional threshold at the time of removal.
Defendant did not dispute making the payment and did not present evidence that the amount in controversy remained above $75,000 on the date of removal; instead, Defendant argued Plaintiffs should have amended their complaint prior to removal.
The court concluded that, because the payment occurred before removal and Defendant offered no evidence to the contrary, Defendant failed to show the amount in controversy exceeded $75,000 on the removal date and granted remand.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal diversity jurisdiction existed at removal	Payment after filing reduced Plaintiffs’ damages below $75,000, so no diversity jurisdiction at removal	Amount in controversy as pleaded in state court exceeded $75,000 and Plaintiffs failed to amend before removal	No diversity jurisdiction; remand granted because defendant did not prove amount exceeded $75,000 at removal
Whether post‑complaint payment by defendant defeats removal	Yes — the payment occurred before removal and lowers the controversy amount	No — plaintiff should have amended complaint; defendant relies on original pleadings	Payment controls; defendant cannot rely on stale pleadings without evidence to the contrary

Valdez v. Allstate Ins. Co., 372 F.3d 1115 (9th Cir. 2004) (removal burden and procedures in diversity cases)
Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014) (notice of removal need only allege a plausible amount in controversy; evidentiary showing required if contested)
Ibarra v. Manheim Inv., 775 F.3d 1193 (9th Cir. 2015) (district courts may set procedures for evidentiary submissions when amount in controversy is contested)