Timlick v. National Enterprise Systems, Inc.
4:17-cv-00559
N.D. Cal.Aug 16, 2017Background
- Plaintiff Lisa Arlene Timlick filed a putative class action in California state court alleging NESI violated Cal. Civ. Code § 1812.701(b) by failing to include a statutorily required notice in the required type size.
- Complaint seeks statutory damages only: up to $1,000 for the named plaintiff and up to $500,000 (or 1% of defendant’s net worth) for the class; no actual damages alleged.
- NESI removed to federal court asserting diversity jurisdiction under 28 U.S.C. § 1332(a) and CAFA jurisdiction under 28 U.S.C. § 1332(d).
- Timlick moved to remand, arguing the amount in controversy does not meet federal thresholds for either individual diversity ($75,000) or CAFA aggregate ($5,000,000).
- The court evaluated whether NESI met its burden to prove, by a preponderance of the evidence, that the amount in controversy satisfied the jurisdictional minima.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists under § 1332(a) | Amount in controversy for Timlick’s individual claim does not exceed $75,000 | The statutory damages potentially available establish more than $75,000 in controversy | Held: No. Individual claim cannot meet $75,000 threshold; defendant failed to prove otherwise |
| Whether CAFA provides federal jurisdiction under § 1332(d) | Aggregate class statutory damages capped at $500,000, below $5,000,000 CAFA floor | CAFA applies because aggregate potential statutory recovery could meet $5,000,000 | Held: No. Aggregate amount in controversy is not plausibly over $5,000,000; defendant failed its burden |
| Burden of proof for removal when amount is not facially evident | Remand appropriate unless defendant proves amount in controversy by preponderance | Defendant must show by preponderance that CAFA/diversity thresholds are met | Held: The court applied the preponderance standard and found defendant did not meet it |
| Entitlement to attorney’s fees under 28 U.S.C. § 1447(c) | Award fees because removal was improper | Deny fees because removal arguments were not objectively unreasonable | Held: Fees denied; defendant’s CAFA arguments were not objectively unreasonable |
Key Cases Cited
- Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089 (9th Cir.) (removing party bears burden to prove jurisdictional amount when not facially evident)
- Ibarra v. Manheim Investments, Inc., 775 F.3d 1193 (9th Cir.) (defendant seeking CAFA removal must prove aggregate amount in controversy by a preponderance)
- Martin v. Franklin Capital Corp., 546 U.S. 132 (U.S.) (attorney’s fees under § 1447(c) are appropriate only when removal lacked an objectively reasonable basis)
- Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark, L.L.C., 198 F.R.D. 503 (N.D. Ill.) (illustrative award of maximum statutory damages under § 1692k for class and individual claims)