Sahand Zarrabian v. Tech Rabbit, LLC, 2:18-cv-10648

Plaintiff Sahand Zarrabian filed a putative class action in California state court alleging a data breach on Tech Rabbit, LLC’s website and seeking equitable relief (including orders to adopt data-security policies).
Defendant Tech Rabbit removed the action to federal court asserting diversity jurisdiction, alleging the amount in controversy exceeds $75,000.
The state complaint only pleads that damages exceed $25,000 to meet California superior court jurisdiction; it does not allege amounts approaching $75,000.
In its notice of removal, Tech Rabbit asserted it would cost $300,000–$500,000 to implement “banking-grade” security, but provided no vendor estimates or supporting documentation.
Tech Rabbit submitted a declaration from its COO estimating implementation costs, but the declaration lacked supporting exhibits, demonstrated speculative assumptions (e.g., equating requested relief with banking-grade systems), and did not establish the declarant’s relevant expertise.
The district court found removal doubtful because the defendant failed to prove by a preponderance of the evidence that the amount in controversy exceeded $75,000, and remanded the case to state court; the pending federal motion to dismiss was denied as moot.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal diversity jurisdiction exists based on amount in controversy	Zarrabian: Defendant failed to prove amount in controversy > $75,000	Tech Rabbit: Equitable relief sought could require adoption of banking-grade security costing $300,000–$500,000, exceeding jurisdictional minimum	Remand: Defendant did not meet burden; removal improper because evidence was speculative and unsupported
Whether plaintiff should receive fees for improper removal	Zarrabian: Requested fees and costs for removal	Tech Rabbit: Removal had a reasonable basis	Denied: Court declined fees because defendant had an objectively reasonable basis to attempt removal despite failing to prove amount in controversy

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (recognizes federal courts’ limited subject-matter jurisdiction)
Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014) (notice of removal need include only a plausible allegation of amount in controversy)
Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal statute strictly construed; removing party bears burden and bald allegations warrant remand)
Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089 (9th Cir. 2003) (when complaint doesn’t make it facially evident that amount exceeds threshold, removing party must prove amount in controversy)
Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993 (C.D. Cal. 2002) (amount-in-controversy proof may require summary-judgment-type evidence)
Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (attorney’s fees for improper removal available only where defendant lacked an objectively reasonable basis for removal)