Abramson v. Marriott Ownership Resorts, Inc.

155 F. Supp. 3d 1056, 2016 U.S. Dist. LEXIS 2311, 2016 WL 105889
CourtDistrict Court, C.D. California
DecidedJanuary 4, 2016
DocketCASE NO. SACV 15-0135 AG (JCGx)
StatusPublished
Cited by8 cases

This text of 155 F. Supp. 3d 1056 (Abramson v. Marriott Ownership Resorts, Inc.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Abramson v. Marriott Ownership Resorts, Inc., 155 F. Supp. 3d 1056, 2016 U.S. Dist. LEXIS 2311, 2016 WL 105889 (C.D. Cal. 2016).

Opinion

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ SECOND AMENDED COMPLAINT; GRANTING MOTION TO STRIKE AS MODIFIED; AND GRANTING PLAINTIFFS LEAVE TO AMEND

Andrew J. Guilford, United States District Judge

Plaintiffs Norman Abramson and Car-reen E. Abramson sued Defendant Marriott Ownership Resorts, Inc. and four other corporate entities: Marriott Vacations Worldwide Corporation; Marriott Resorts, Travel Company Inc.; Marriott Resorts Hospitality Corporation; and First American Trust, FSB. The Abramsons assert five claims, all under California state law. Defendants filed a Motion to Dismiss Plaintiffs’ Second Amended Complaint (“SAC”) for failure to state a claim, and also seeking to strike class allegations.

The Court GRANTS the Motion to Dismiss and GRANTS as modified Defendants’ request to strike class allegations, as discussed in this Order. The Court also GRANTS the Abramsons leave to file an amended pleading within 30 days of this Order. Before discussing these holdings, the Court must first discuss its power to rule in this case.

1. SUBJECT MATTER JURISDICTION

The Constitution limits the power of federal courts to rule. See U.S. Const, art. Ill, § 2. The courts police their exercise of power themselves. See Fed.R.Civ.P. 12(h)(3)(“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). This self-enforced check is crucial in a nation governed by the rule of law. So courts take this sacred duty seriously and guard their limited jurisdiction jealously. Ghazaryan v. Wells Fargo Bank, N.A., 42 F.Supp.3d 1341, 1342 (C.D.Cal.2014).

Accordingly, courts assume that cases are outside of their power to rule, and require parties to prove otherwise. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). This requirement starts with a plaintiffs first filing. See Fed.R.Civ.P. 8(a)(1) (“A pleading that states a claim for relief must contain ... a short and plain statement of the grounds for the court’s jurisdiction.... ”). When the Abramsons filed their lawsuit in this Court, they only asserted one basis for this Court’s exercise of jurisdiction: the Class Action Fairness Act of 2005 (“CAFA”). They have not asserted any other basis since. The Court has considerable concern about its exercise of jurisdiction in this case. Before discussing these concerns, some background is necessary.

CAFA is based on diversity jurisdiction, which allows federal courts to rule in civil actions between citizens of different states where the matter in controversy exceeds $75,000. See 28 U.S.C. § 1332(a). Historically, diversity jurisdiction has required that each plaintiff in a case be a citizen of a different state than each defendant — a concept called “complete diversity.”

The Founders enshrined diversity jurisdiction into our Constitution “to provide a federal forum for important disputes where state courts might favor, or be perceived as favoring, home-state litigants.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553-54, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005); see Bank of U.S. v. Deveaux, 9 U.S. (5 Cranch) 61, 87, 3 L.Ed. 38 (1809) (“[T]he constitution itself either entertains apprehensions on this [1061]*1061subject, or views with such indulgence the possible fears and apprehensions of suitors, that it has established national tribunals for the decision of controversies ... between citizens of different states.”); Padilla v. AT & T Corp., 697 F.Supp.2d 1156, 1157 (C.D.Cal.2009) (“The thinking was in part that, for example, in a case involving non-Virginians, a jury of Virginians sitting in federal court would be more likely to follow their oath to be fair than would a jury of Virginians sitting in state court.”); Erwin Chemerinsky, Federal Jurisdiction § 5.3.2 (6th ed. 2012) (“The traditional theory is that diversity jurisdiction was intended to protect out-of-state residents from the bias that they might experience, or at least fear that they might face, in state courts.”); The Federalist No. 80 (Alexander Hamilton) (“[T]he national judiciary ought to preside in all cases in which one State or its citizens are opposed to another State or its citizens. To secure the full effect of so fundamental a,provision against all evasion and subterfuge, it is necessary that its construction should be committed to that tribunal which, having no local attachments, will be likely to be impartial between the different States and their citizens, and which, owing its official existence to the Union, will never be likely to feel any bias inauspicious to the principles on which it is founded.”) Given this purpose, requiring complete diversity makes sense: there’s no need to worry about instate bias if there are in-state parties on both sides.

A decade ago, Congress expanded the diversity jurisdiction statute by passing CAFA. Through CAFA, Congress gave the federal courts power to rule in certain class actions where the matter in controversy exceeds $5,000,000 and at least one plaintiff is a citizen of a different state than one defendant. See 28. U.S.C. § 1332(d)(2). The latter requirement is often called “minimal diversity.” A case with only minimal diversity might have some plaintiffs that are citizens of the same states as some defendants, unlike a case where complete diversity exists.

CAFA’s minimal diversity requirement implicates concerns about the text of the Constitution. The Constitution allows federal courts to rule on “Controversies ... between Citizens of different States.” U.S. Const, art. Ill, § 2 cl. 1. What kind of diversity does “Citizens of different States” require? Complete diversity? Or just minimal diversity? The latter answer seems inconsistent with the expressed purpose of diversity jurisdiction. If diversity jurisdiction exists to protect out-of-state parties from any home-court advantage enjoyed by in-state parties, how is that purpose fulfilled when there are in-state parties on both sides of a case? Yet, despite these issues, courts have consistently (and often summarily) decided that minimal diversity is enough under the Constitution. See State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 531, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967) (“[I]n a variety of contexts this Court and the lower courts have concluded that Article III poses no obstacle to the legislative extension of federal jurisdiction, founded on diversity, so long as any two adverse parties are not co-citizens.”)

CAFA also implicates important federalism concerns. By all accounts, CAFA has increased the number of class actions in federal court, including those based solely on state law claims. See Emery G. Lee III & Thomas E. Willging, Fed. Judicial Center, The Impact of the Class Action Fairness Act of 2005 on the Federal Courts (2008), http://vnvw.fjc.gov/public/ pdf.nsf/lookup/ cafa0408.pdf/$file/cafa0408.pdf.

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Cite This Page — Counsel Stack

Bluebook (online)
155 F. Supp. 3d 1056, 2016 U.S. Dist. LEXIS 2311, 2016 WL 105889, Counsel Stack Legal Research, https://law.counselstack.com/opinion/abramson-v-marriott-ownership-resorts-inc-cacd-2016.