Stephen Edlund v. True Classic Tees, LLC
2:25-cv-00450
| C.D. Cal. | Mar 19, 2025Background
- Plaintiff Stephen Edlund filed a putative class action in California state court against True Classic Tees, LLC, alleging deceptive practices related to the company's shipping fee representations.
- Plaintiff claims the company advertises "free shipping" but adds a mandatory "Package Protection & Sustainability Fee" to every online order, allegedly misleading customers.
- Plaintiff seeks a refund of these fees and punitive damages on behalf of himself and similarly situated consumers.
- Defendant removed the case to federal court under the Class Action Fairness Act (CAFA), asserting that the amount in controversy exceeds $5 million.
- Plaintiff moved to remand the case back to state court, arguing that the amount in controversy does not exceed CAFA's threshold.
- Defendant supported its removal with declarations establishing the amount collected in fees, as well as estimates of punitive damages and attorneys' fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the amount in controversy exceed $5 million under CAFA? | Amount in controversy is unsupported; compensatory damages figure is speculative. | Provided declaration showing over $3.1 million in fees collected; calculated punitive damages and attorneys' fees to exceed $5 million. | Defendant adequately demonstrated the amount in controversy exceeds $5 million. |
| Can punitive damages be included at a 1:1 ratio with compensatory damages? | Defendant did not justify using a 1:1 punitive to compensatory ratio. | Cited cases under CLRA with at least 1:1 punitive/compensatory ratios. | Court found the 1:1 ratio for punitive damages is reasonably possible. |
| Does removing punitive damages via amended complaint after removal change federal jurisdiction? | Amended Complaint removing punitive damages eliminates federal jurisdiction. | Post-removal amendments don’t affect jurisdiction if threshold met at removal. | Post-removal changes do not defeat federal jurisdiction. |
| Whether CAFA's numerosity and diversity requirements are disputed | Not disputed | Not disputed | Requirements are satisfied and not at issue. |
Key Cases Cited
- Gaus v. Miles, 980 F.2d 564 (9th Cir. 1992) (Removing party bears burden of establishing federal jurisdiction)
- Serrano v. 180 Connect, Inc., 478 F.3d 1018 (9th Cir. 2007) (CAFA does not alter burden on proponent to establish removal jurisdiction)
- Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81 (2014) (No anti-removal presumption under CAFA; plausible allegation of amount in controversy suffices initially)
- Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785 (9th Cir. 2018) (Court may consider evidence beyond complaint to determine amount in controversy)
- Greene v. Harley-Davidson, Inc., 965 F.3d 767 (9th Cir. 2020) (Defendant may rely on punitive-to-compensatory damages ratios from analogous cases to establish amount in controversy)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (Jurisdictional amount is determined at the time of removal; post-removal amendments do not destroy jurisdiction)