1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 FERNANDO GASTELUM, Case No. 1:22-cv-00178-KES-CDB 12 Plaintiff, ORDER VACATING OCTOBER 30, 2024, FINDINGS AND RECOMMENDATIONS 13 v. (Doc. 36) 14 TILLY’S, INC., FINDINGS AND RECOMMENDATIONS TO 15 Defendant. (1) GRANT DEFENDANT’S MOTION TO DISMISS AND DECLINE SUPPLEMENTAL 16 JURISDICTION OVER PLAINTIFF’S STATE LAW CLAIM, (2) DENY PLAINTIFF’S 17 MOTION FOR LEAVE TO AMEND, and (3) DISMISS PLAINTIFF’S UNRUH ACT CLAIM 18 WITHOUT PREJUDICE
19 (Docs. 6, 38)
20 14-DAY OBJECTION PERIOD 21 22 On February 11, 2022, Plaintiff Fernando Gastelum (“Plaintiff”) initiated this action with 23 the filing of a complaint against Defendant Tilly’s, Inc.1 (“Defendant”) alleging violations of the 24 American with Disabilities Act (ADA) and California’s Unruh Civil Rights Act. (Doc. 1). These 25 claims stem from alleged barriers Plaintiff encountered while visiting two facilities owned by 26 Defendant. (Id. ¶¶ 3, 8-13). 27 1 Defendant World of Jeans & Tops dba Tillys (“Defendant”) notes it is erroneously sued 28 as Tilly’s, Inc. (Doc. 6 at 1). 1 I. Order Vacating October 30, 2024, Findings and Recommendations 2 On March 25, 2022, Defendant filed its motion to dismiss for lack of supplemental 3 jurisdiction a claim asserted by Plaintiff pursuant to California’s Unruh Civil Rights Act (the second 4 cause of action in Plaintiff’s operative complaint). (Doc. 6). Plaintiff timely filed an opposition 5 on March 30, 2022, and Defendant replied on April 26, 2022. (Docs. 9, 11). Plaintiff thereafter 6 filed two notices of supplemental authority; Defendant filed a response to the first. (Docs. 12-14). 7 On August 1, 2024, the assigned district judge referred Defendant’s motion to the undersigned for 8 preparations of findings and recommendations. (Doc. 34). 9 On October 30, 2024, the undersigned issued findings and recommendations to decline 10 supplemental jurisdiction over Plaintiff’s state law claim, and grant Defendant’s motion to dismiss 11 that claim without prejudice to Plaintiff’s filing of the claim in state court. (Doc. 36). Plaintiff was 12 afforded 14 days after service of the order to file any objections. (Id. at 9). No objections were 13 filed, however, on November 15, 2024, Plaintiff lodged the first amended complaint (“FAC”) and 14 filed the pending motion for leave to amend. (Docs. 37, 38). 15 II. Defendant’s Motion to Dismiss Plaintiff’s Unruh Act Claim (Doc. 6) 16 A. Governing Legal Standards 17 Under 28 U.S.C. § 1367(a), a court that has original jurisdiction over a civil action “shall 18 have supplemental jurisdiction over all other claims that are so related to claims in the action within 19 such original jurisdiction that they form part of the same case or controversy under Article III of 20 the United States Constitution.” The Ninth Circuit has concluded that ADA and Unruh Act claims 21 that derive from a common nucleus of operative fact “form part of the ‘same case or controversy’ 22 for purposes of § 1367(a).” Arroyo v. Rosas, 19 F.4th 1202, 1209 (9th Cir. 2021). 23 However, even where supplemental jurisdiction over a claim exists under § 1367(a), the 24 Court may decline jurisdiction over the claim if: 25 (1) the claim raises a novel or complex issue of State law, 26 (2) the claim substantially predominates over the claim or claims over which the 27 district court has original jurisdiction, 28 (3) the district court has dismissed all claims over which it has original jurisdiction, 1 or 2 (4) in exceptional circumstances, there are other compelling reasons for declining 3 jurisdiction. 4 § 1367(c)(1)-(4). 5 Pertinent here, a court deciding whether to apply § 1367(c)(4) must undertake “a two-part 6 inquiry.” Arroyo, 19 F.4th at 1210. “First, the district court must articulate why the circumstances 7 of the case are exceptional within the meaning of § 1367(c)(4).” (Id.) (citations and internal 8 quotation marks omitted). “Second, in determining whether there are compelling reasons for 9 declining jurisdiction in a given case, the court should consider what best serves the principles of 10 economy, convenience, fairness, and comity which underlie the pendent jurisdiction doctrine 11 articulated in [United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966)].” (Id.) (citations and 12 internal quotation omitted). 13 After considering § 1367(c)(4) and California’s requirements for bringing Unruh Act 14 claims, “numerous district courts in California ‘have declined to exercise supplemental jurisdiction 15 over Unruh Act . . . claims brought alongside ADA claims.’” Block v. Cal.-Fresno Invest. Co., No. 16 1:22-cv-1419 JLT SAB, 2023 WL 8675398, at *4 (E.D. Cal. Dec. 15, 2023) (quoting Rutherford 17 v. Nuway Ins. Agency Inc., No. SACV 21-00576-CJC-JDE, 2021 WL 4572008, at *1 (C.D. Cal. 18 Apr. 1, 2021)). Underlying these decisions is “the recent confluence of several California-law rules 19 [that] have combined to create a highly unusual systemic impact on ADA-based Unruh Act cases 20 that clearly threatens to have a significant adverse impact on federal-state comity.” Arroyo, 19 21 F.4th at 1211. 22 Notably, Congress adopted the ADA to address the discrimination encountered by persons 23 with disabilities, providing a private cause of action to seek injunctive, but not monetary, relief. 24 (See id. at 1205) (discussing background and relief available under the ADA). And the Unruh Act 25 likewise prohibits disability discrimination, containing a provision, Cal. Civ. Code § 51(f), stating 26 that a violation of the ADA also violates the Unruh Act. However, unlike the ADA, the Unruh Act 27 allows a plaintiff to recover “up to a maximum of three times the amount of actual damage but in 28 no case less than four thousand dollars.” Cal. Civ. Code § 52(a). 1 In response to perceived abuses of the Unruh Act, California has enacted requirements for 2 bringing such claims, which requirements the Ninth Circuit has assumed, without deciding, “apply 3 only in California state court.” Vo, 49 F.4th at 1170. For example, provisions were added (1) 4 regarding the contents of demand letters, Cal. Civ. Code § 55.31; (2) imposing heightened pleading 5 requirements, Cal. Civ. Code § 425.50(a); and (3) requiring an additional filing fee of $1,000 for 6 so called “high-frequency litigants,” Cal. Gov’t Code § 70616.5(b), see Cal. Civ. Code § 425.55(b) 7 (defining a high-frequency litigant to include “[a] plaintiff who has filed 10 or more complaints 8 alleging a construction-related accessibility violation within the 12-month period immediately 9 preceding the filing of the current complaint alleging a construction-related accessibility 10 violation”). 11 All of these requirements2 apply to claims alleging a construction-related accessibility 12 violation, defined as involving “a provision, standard, or regulation under state or federal law 13 requiring compliance with standards for making new construction and existing facilities accessible 14 to persons with disabilities,” including those related to the ADA. Cal. Civ. Code § 55.52(a)(1), (6); 15 see Cal. Civ. Code § 55.3(a)(2). By enacting such restrictions, California has expressed a “desire 16 to limit the financial burdens California’s businesses may face from claims for statutory damages 17 under the Unruh Act.” Arroyo, 19 F.4th at 1209 (internal quotations omitted). However, “Unruh 18 Act plaintiffs have evaded these limits by filing in a federal forum in which [they] can claim these 19 state law damages in a manner inconsistent with the state law’s requirements.” (Id. at 1213) 20 (internal quotation omitted). Consequently, “the procedural strictures that California put in place 21 have been rendered largely toothless, because they can now be readily evaded.” (Id.). 22 Recently, the Ninth Circuit provided substantial guidance on this issue in Vo v. Choi in 23 affirming a district court’s order denying supplemental jurisdiction over an Unruh Act claim under 24 § 1367(c)(4). Vo, 49 F.4th at 1168. In that case, the district court declined supplemental jurisdiction 25 over the Unruh Act claim after giving the plaintiff the opportunity to respond and before addressing 26 the merits of the case. (Id. at 1168-69). In reviewing the district court’s decision, the Ninth Circuit 27
28 2 Cal. Civ. Code § 55.31(a); Cal. Civ. Code § 425.50(a); Cal. Gov’t Code § 70616.5(a). 1 held that the district court sufficiently explained why the circumstances of the case were exceptional 2 under § 1367(c)(4), agreeing with the district court that “it would not be ‘fair’ to defendants and 3 ‘an affront to the comity between federal and state courts’ to allow plaintiffs to evade California’s 4 procedural requirements by bringing their claims in federal court.” (Id. at 1171). The Court also 5 affirmed the district court’s finding that the balance of the Gibbs values—economy, convenience, 6 fairness, and comity—provided compelling reasons to decline supplemental jurisdiction, stating 7 that “the district court [properly] analyzed Vo’s situation under the Gibbs values and determined 8 that the values of fairness and comity favored not retaining jurisdiction over the claim.” (Id. at 9 1172). Accordingly, “[g]iven these very real concerns, in addition to the deferential standard of 10 review, [the Ninth Circuit saw] no reason to hold that the district court abused its discretion in 11 determining there were compelling reasons to decline jurisdiction over the Unruh Act claim.” (Id.). 12 With these legal standards in mind, the Court addresses whether the relevant considerations 13 of § 1367(c)(4) warrant declining the exercise of supplemental jurisdiction over Plaintiff’s Unruh 14 Act claim. 15 B. Discussion 16 In support of its motion to dismiss Plaintiff’s Unruh Act claim, Defendant argues the Court 17 should decline to exercise supplemental jurisdiction on the grounds that extraordinary 18 circumstances exist given Plaintiff’s status at the time he commenced this action as a high- 19 frequency litigant and the need as a matter of comity to respect California’s interest in discouraging 20 unverified disability discrimination suits. (Doc. 6). In opposition, Plaintiff argues that the Unruh 21 Act’s heightened procedural requirements are preempted by 28 C.F.R. § 36.103(c) and, thus, 22 “void.” (Doc. 9 at 2). Plaintiff further argues that the Unruh Act is directed towards attorneys, not 23 litigants, and that comity should be disregarded in light of the ADA. (Id.). 24 The Court begins with the first part of the two-step inquiry under § 1367(c)(4)—whether 25 the circumstances here are exceptional. Vo, 49 F.4th at 1171. 26 As discussed above, California has enacted various requirements that apply to claims 27 alleging a construction-related accessibility violation. And if the Court were to exercise jurisdiction 28 over Plaintiff’s Unruh Act claim, Plaintiff would be permitted to avoid these requirements. See 1 Arroyo, 19 F.4th at 1213 (noting that potential evasion of California’s requirements met 2 exceptional-circumstances prong of § 1367(c)(4)). Further, such evasion would undermine 3 California’s policy interests in enforcing its requirements—providing monetary relief but limiting 4 burdens on small businesses and disincentivizing plaintiffs’ attorneys from obtaining “monetary 5 settlements at the expense of forward-looking relief that might benefit the general public.” (Id.). 6 In his opposition, Plaintiff appears to argue that these circumstances should not be considered 7 exceptional because they are preempted by 28 C.F.R. § 36.103(c). However, Plaintiff does not 8 support this perfunctory argument with any authority. In any event, it misconstrues the operation 9 of federal preemption— as other courts and judges within this Court previously have held. See, 10 e.g., Gastelum v. Five Below, Inc., No. 1:22-cv-00825-AWI-SAB, 2022 WL 6224274, at *9–10 11 (E.D. Cal. Oct. 7, 2022) (finding Plaintiff’s preemption arguments as to Unruh Act’s pleading 12 requirements, but not monetary damages, to be “at best, paradoxical.”), report and recommendation 13 adopted, 2023 WL 159577 (E.D. Cal. Jan. 11, 2023); Gastelum v. TJX Cos., Inc., No. 21-cv-06714- 14 VKD, 2023 WL 2224432, at *3 (N.D. Cal. Feb. 24, 2023) (finding Plaintiff’s preemption argument 15 to be “neither well-developed nor supported by any authority that actually so holds.”). As such, 16 and there is “little doubt that the first prong [under § 1367(c)(4)] is satisfied here.” Vo, 49 F.4th at 17 1171. 18 Turning to the second part of the inquiry—whether there are other compelling reasons for 19 declining jurisdiction—the Court considers the Gibbs values of economy, convenience, fairness, 20 and comity. Vo, 49 F.4th at 1171. Importantly, this case is an early stage of the litigation— 21 although, regrettably, the case has experienced significant delay given the extraordinary judicial 22 resource emergency confronted by this district—the case has not been scheduled and Plaintiff’s 23 claims have not been addressed. See Arroyo, 19 F.4th at 1214 (noting that the Gibb’s values did 24 not support declining supplemental jurisdiction where the case was at a “very late stage”). Thus, 25 this is not a case “where it makes no sense to decline jurisdiction . . . over a pendent state law claim 26 that that court has effectively already decided.” (Id.). Notably, Plaintiff makes no argument that 27 the stage of this case warrants exercising jurisdiction. 28 Moreover, in light of the above discussion of California’s requirements for Unruh Act 1 claims, it would not be fair, nor would comity be served, by allowing Plaintiff’s Unruh Act claim 2 to proceed without the state court being able to enforce its policy interests as reflected in its various 3 procedural requirements. (Id. at 1213) (noting “comity-based concerns that California’s policy 4 objectives in this area were being wholly thwarted” by plaintiffs being able to bring Unruh Act 5 claims in Federal court). 6 On this issue, Plaintiff does not challenge Defendant’s assertion that, at the time he 7 commenced this action, Plaintiff was a high-frequency litigant. While a review of public filings 8 confirms that Plaintiff’s status as a high-frequency litigant is not a close call, the Court notes it need 9 only determine whether California’s requirements are implicated, not whether they are in fact met. 10 As the Ninth Circuit noted in Vo, whether a Plaintiff “has satisfied the heightened pleading 11 requirements” imposed in California is a question for the state court because “[f]orcing the district 12 court to determine if [this is] in fact true would itself run afoul of the Gibbs values—especially 13 comity,” and would deprive California of playing its “critical role in effectuating the policies 14 underlying [its] reforms.” Vo, 49 F.4th at 1173-74 (internal citation omitted). 15 Separately, Plaintiff argues that requiring him to bring a second action in state court would 16 be duplicative and that the Court’s limited resources would be better served by requiring the parties 17 to participate in a settlement conference. (Doc. 9 at 9). As an initial matter, this argument 18 improperly assumes that Plaintiff will be successful in this action. However, even accepting such 19 an assumption, the fact that the litigation could prove duplicative or increase costs does not, in light 20 of the other considerations, warrant retaining jurisdiction. As one court has concluded, “if plaintiff 21 legitimately seeks to litigate this action in a single forum, plaintiff may dismiss this action and refile 22 it in a state court in accordance with the requirements California has imposed on such actions.” 23 Garibay v. Rodriguez, No. CV 18-9187 PA (AFMX), 2019 WL 5204294, at *6 (C.D. Cal. Aug. 27, 24 2019). Moreover, it is California’s prerogative to impose a heightened filing fee for high-frequency 25 litigants in an effort to curb abuses of the Unruh Act at the risk of the fee being ultimately paid by 26 defendants. It would undermine comity and fairness were Plaintiff permitted to proceed with his 27 Unruh Act claim in light of California’s policy concerns. 28 While Plaintiff acknowledges the Ninth Circuit’s holding in Arroyo (Doc. 9 at 5-6), he 1 suggests the holding should be disregarded because of federal preemption (see supra) and 2 separately argues the Gibbs factors warrant the Court’s exercise of supplemental jurisdiction here. 3 (Id.). But in Vo, the Ninth Circuit rejected the type of argument advanced by Plaintiff in affirming 4 the district court’s finding that the balance of the Gibbs values—economy, convenience, fairness, 5 and comity—provided compelling reasons to decline supplemental jurisdiction. Vo, 49 F.4th at 6 1172 (“the district court [properly] analyzed Vo’s situation under the Gibbs values and determined 7 that the values of fairness and comity favored not retaining jurisdiction over the claim.”). 8 Accordingly, in light of the two-step inquiry under § 1367(c)(4), the undersigned concludes 9 that the circumstances of this case are exceptional and there are other compelling reasons to decline 10 supplemental jurisdiction over Plaintiff’s Unruh Act claim. See, e.g., Orosco v. Monrroy Enters. 11 LLC, No. 2:23-cv-07818-MEMF (KSx), 2023 WL 10407115, at *5 (C.D. Cal. Nov. 30, 2023) 12 (declining to exercise supplemental jurisdiction over and dismissing Plaintiff’s California Unruh 13 Act, Disabled Persons Act, Health & Safety Code and negligence claims following Vo/Arroyo 14 analysis); Kim v. Vegara, No. EDCV 22-281 JGB (SHKx), 2022 WL 17080182, at *5 (C.D. Cal. 15 Oct. 5, 2022) (same); Benford v. Hall, No. CV 22-03337-RSWL-ASx, 2022 WL 20273588, at *3 16 & n.3 (C.D. Cal. July 18, 2022) (same). The undersigned will therefore recommend that the Court 17 decline to exercise supplemental jurisdiction over Plaintiff’s Unruh Act claim pursuant to 28 U.S.C. 18 § 1367(c)(4). 19 III. Plaintiff’s Motion for Leave to Amend (Doc. 38) 20 A. Governing Legal Standards 21 Rule 15 provides that a plaintiff may amend the complaint only by leave of the court or by 22 written consent of the adverse party if the amendment is sought more than 21 days after the filing 23 of a responsive pleading or a motion to dismiss. Fed. R. Civ. P. 15(a). “Rule 15(a) is very liberal” 24 and a court should freely give leave to amend when “justice so requires.” AmerisourceBergen 25 Corp. v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006); see Chodos v. W. Publ. Co., 292 26 F.3d 992, 1003 (9th Cir. 2002) (“it is generally our policy to permit amendment with ‘extreme 27 liberality’”) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th 28 Cir.1990)). 1 Granting or denying leave to amend a complaint under Rule 15 is within the discretion of 2 the court. Swanson v. United States Forest Service, 87 F.3d 339, 343 (9th Cir. 1996). “In exercising 3 this discretion, a court must be guided by the underlying purpose of Rule 15 to facilitate decision 4 on the merits, rather than on the pleadings or technicalities.” United States v. Webb, 655 F.2d 977, 5 979 (9th Cir, 1981); Chudacoff v. Univ. Med. Ctr., 649 F.3d 1143, 1152 (9th Cir. 2011) (“refusing 6 Chudacoff leave to amend a technical pleading error, albeit one he should have noticed earlier, 7 would run contrary to Rule 15(a)’s intent.”). 8 A court ordinarily considers five factors to assess whether to grant leave to amend: “(1) bad 9 faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of amendment; and (5) 10 whether the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 F.3d 805, 808 11 (9th Cir. 2004). The factors are not weighed equally. Bonin v. Calderon, 59 F.3d 815, 845 (9th 12 Cir. 1995); see Atkins v. Astrue, 2011 WL 1335607, at *3 (N.D. Cal. April 7, 2011) (the five factors 13 “need not all be considered in each case”). Undue delay, “by itself…is insufficient to justify 14 denying a motion to amend.” Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). On the other 15 hand, futility of amendment and prejudice to the opposing party can, by themselves, justify the 16 denial of a motion for leave to amend. Bonin, 59 F.3d at 845; see Eminence Capital, LLC v. Aspeon, 17 Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (the consideration of prejudice to the opposing party 18 carries the greatest weight). 19 In conducting this five-factor analysis, the court generally grants all inferences in favor of 20 permitting amendment. Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). 21 Moreover, the court must be mindful that, for each of these factors, the party opposing amendment 22 has the burden of showing that amendment is not warranted. DCD Programs, Ltd. v. Leighton, 833 23 F.2d 183, 187 (9th Cir. 1987). 24 B. Discussion 25 In the October 30, 2024, findings and recommendations, the undersigned recommended the 26 Court decline to exercise supplemental jurisdiction over Plaintiff’s Unruh Act claim pursuant to 28 27 U.S.C. § 1367(c)(4) and therefore dismiss that claim without prejudice to Plaintiff’s filing of the 28 claim in state court. (Doc. 36 at 9). As noted above, Plaintiff did not file objections to those 1 findings and recommendations. Instead, Plaintiff filed the pending motion for leave to amend and 2 therewith a contemporaneously lodged FAC “for the primary purpose of establishing [diversity] 3 jurisdiction over” his Unruh Act claims to save those claims from dismissal. (Docs. 37, 38). 4 Plaintiff argues there is a complete diversity of citizenship and the amount in controversy exceeds 5 $75,000. (Id.). Thus, Plaintiff requests the Court grant Plaintiff’s motion and accept the lodged 6 FAC filed therewith. (Id.). Defendant does not oppose the pending motion. The Court addresses 7 the relevant Nunes factors below: 8 1. Bad Faith 9 A motion to amend is made in bad faith where there is “evidence in the record which would 10 indicate a wrongful motive” on the part of the litigant requesting leave to amend. DCD Programs, 11 833 F.2d at 187; Wizards of the Coast LLC v. Cryptozoic Entm’t LLC, 309 F.R.D. 645, 651 (W.D. 12 Wash. 2015) (“In the context of a motion for leave to amend, ‘bad faith’ means acting with intent 13 to deceive, harass, mislead, delay, or disrupt.”) (citing Leon v. IDX Sys. Corp., 464 F.3d 951, 961 14 (9th Cir. 2006)). Here, there is insufficient information before the Court to conclude that Plaintiff 15 harbors a wrongful motive in requesting leave to amend. Although Plaintiff did not file objections 16 to the previous findings and recommendations (Doc. 36), it appears Plaintiff attempts to move this 17 litigation forward in this Court by amending the complaint to allege diversity jurisdiction over his 18 Unruh Act claims. (Doc. 38). Accordingly, this factor weighs in favor of amendment. 19 2. Undue Delay 20 By itself, a showing of undue delay is insufficient to deny leave to amend pleadings. Howey 21 v. United States, 481 F.2d 1187, 1191 (9th Cir. 1973); DCD Programs, 833 F.2d at 186. However, 22 in combination with other factors, delay may be sufficient to deny amendment. Webb, 655 F.2d at 23 979-80; see Lockheed Martin Corp. v. Network Solutions Inc., 194 F.3d 980, 986 (9th Cir. 1999). 24 (substantial delay, while not dispositive, is relevant to whether to permit amendment). In assessing 25 whether there exists undue delay, a court shall consider if “the moving party knew or should have 26 known the facts and theories raised by the amendment in the original pleading.” Jackson v. Bank 27 of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990) (citations omitted). The mere fact that a party fails 28 to offer a reason for not moving to amend earlier does not in itself constitute an adequate basis for 1 denying leave to amend. Howey, 481 F.2d at 1190-91. Whether there has been “undue delay” 2 should be considered in the context of (1) the length of the delay measured from the time the moving 3 party obtained relevant facts; (2) whether discovery has closed; and (3) proximity to the trial date. 4 Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 798-99 (9th Cir. 1991). 5 Plaintiff undoubtedly knew or should have known at the time he filed the operative 6 complaint — approximately two-and-one-half years before filing his pending motion for leave to 7 amend — the facts and theories permitting him to allege diversity jurisdiction. Jackson, 902 F.2d 8 at 1388. Indeed, given that this case has not yet been scheduled or discovery opened, Plaintiff can 9 hardly claim that he discovered facts supporting the existence of diversity jurisdiction at some point 10 after his commencement of this action. This factor weighs against permitting amendment. 11 3. Prejudice to the Opposing Party 12 The most critical factor in determining whether to grant leave to amend is prejudice to the 13 opposing party. Eminence Capital, 316 F.3d at 1052. The burden of showing prejudice is on the 14 party opposing an amendment to the complaint. DCD Programs, Ltd., 833 F.2d at 187. There is a 15 presumption in favor of granting leave to amend where prejudice is not shown under Rule 15(a). 16 Eminence Capital, 316 F.3d at 1052. 17 Here, Defendant did not oppose the motion for leave to amend nor has Defendant shown 18 any prejudice from granting amendment to the complaint. Thus, this factor weighs in favor of 19 granting leave to amend. 20 4. Prior Amendments 21 The Court’s discretion to deny leave to amend is “particularly broad” where a party has 22 previously amended the pleading. Allen v. Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). Here, 23 Plaintiff’s proposed amendments would constitute the first amendment to the pleadings. (Doc. 37). 24 Thus, this factor weighs in favor of granting leave to amend. 25 5. Futility of Amendment 26 A court may deny leave to amend if the proposed amendment is futile or would be subject 27 to dismissal. Carrico v. City & Cnty. of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011). An 28 amendment is futile if the complaint clearly could not be saved by amendment. United States v. 1 Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011). However, denial of leave to amend on 2 futility grounds is “rare.” Zurich Am. Ins. Co. of Illinois v. VForce Inc., No. 2:18-cv-02066-TLN- 3 CKD, 2020 WL 2732046, at *3 (E.D. Cal. May 26, 2020) (citing Netbula, LLC v. Distinct Corp., 4 212 F.R.D. 534, 539 (N.D. Cal. 2003)). “Ordinarily, ‘courts will defer consideration of challenges 5 to the merits of a proposed amended pleading until after leave to amend is granted and the amended 6 pleading is filed.”’ (Id.). 7 The undersigned reviews Plaintiff’s proposed amendments in the lodged FAC (Doc. 37) to 8 determine if the proposed amendments are futile or would be subject to dismissal. Plaintiff seeks 9 leave to amend to allege diversity jurisdiction over his Unruh Act claims. (Doc. 38). The lodged 10 FAC alleges federal question jurisdiction pursuant to 28 U.S.C. § 1331 and § 1343(a)(3)&(4) for 11 violations of the ADA, as well as diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Doc. 37 ¶¶ 12 5, 6). 13 For a federal court to exercise diversity jurisdiction, the citizens must be of different states 14 and the amount in controversy must exceed $75,000. 28 U.S.C. § 1332(a). The amount in 15 controversy is generally determined from the face of the pleadings. See Crum v. Circus Circus 16 Enterprises, 231 F.3d 1129, 1131 (9th Cir. 2000). The party asserting diversity jurisdiction must 17 prove that the amount in controversy exceeds $75,000, bearing in mind that “[c]onclusory 18 allegations as to the amount in controversy are insufficient.” Matheson v. Progressive Specialty 19 Ins. Co., 319 F.3d 1089, 1090–91 (9th Cir. 2003) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566– 20 67 (9th Cir. 1992)). 21 Plaintiff alleges that the Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332, as 22 Plaintiff is a citizen of Arizona, Defendant is a citizen of California, and the amount in controversy 23 “to the best of Plaintiff's estimate, greatly exceed[s] the statutory threshold of $75,000.00.” (Doc. 24 37 ¶ 6). Plaintiff’s lodged FAC states that he seeks: (1) cost of compliance with injunctive relief, 25 (2) damages under the Unruh Act, which provides for “damages in an amount no less than 26 $4,000.00 per Unruh violation per encounter” and for “treble damages pursuant to Cal. Civ. Code 27 § 3345(b), (3) attorney’s fees “should Plaintiff hire a lawyer[,]” and (4) punitive damages. (Id. at 28 1, 7). The undersigned will address each form of requested relief in turn in determining whether 1 the lodged FAC exceeds the statutory threshold. 2 First, Plaintiff seeks injunctive relief in requesting an order that: “Defendant implement 3 enforceable policies, practices, or procedures to afford goods, services, facilities, privileges, 4 advantages, or accommodations to Plaintiff and others similarly situated”; Defendant removes all 5 barriers to accessibility in all its stores”; and “that Defendant remediate each and every inaccessible 6 element in the stores that are subject of this [FAC.]” (Id. ¶ 37(c)-(e)). In actions seeking declaratory 7 or injunctive relief, the amount in controversy is measured by the value of the object of the 8 litigation. Corral v. Select Portfolio Serv'g, Inc., 878 F.3d 770, 775 (9th Cir. 2017). Generally, the 9 amount in controversy is assessed through the “either viewpoint rule,” meaning that the amount in 10 controversy in the case is the pecuniary result to either party which the judgment would directly 11 produce. Corral, 878 F.3d at 775; In re Ford Motor. Co./Citibank (S. Dakota), N.A., 264 F.3d 952, 12 958 (9th Cir. 2001). 13 Here, based on the allegations of his proposed first amended complaint, Plaintiff does not 14 carry his burden of demonstrating that the amount in controversy is met. See Matheson v. 15 Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). Cf. Martinez v. Epic Games, 16 Inc., No. CV1910878CJCPJWX, 2020 WL 1164951, at *3–4 (C.D. Cal. Mar. 10, 2020) (examining 17 declarations containing estimates for making websites compliant with ADA and Unruh Act 18 standards); Mejico v. Online Labels, Inc., No. 518CV02636ODWSHKX, 2019 WL 3060819, at *4 19 (C.D. Cal. July 12, 2019) (finding remediation costs and bid estimates to be relevant to the amount 20 in controversy). 21 Plaintiff’s lodged FAC does not estimate the value or discuss the nature of the injunctive 22 relief beyond broad requests to compel Defendant to comply with statutory requirements under the 23 ADA and the Unruh Act. (Doc. 37 ¶¶ 22, 26, 37(c)-(e)). Plaintiff does not submit supporting 24 estimates or declarations. Plaintiff states generally in his motion that “the amount in controversy 25 exceeds $75,000.00.” (Doc. 38). Plaintiff’s lodged FAC also alleges that the “barriers identified 26 above are easily removed without much difficulty or expense. They are the types of barriers that 27 are readily achievable to remove. Moreover, there are numerous alternative accommodations that 28 could be made to provide a greater level of access if complete removal were not achievable.” (Id. 1 ¶17). It is therefore speculative whether remedying the barriers identified by Plaintiff (see Doc. 37 2 ¶¶ 9, 12) “would require minor, inexpensive fixes or major, costly construction.” Gastelum v. Hie 3 River Park LLC, Case No. 1:23-cv-00472-SKO, 2023 WL 4161416, at *6 (E.D. Cal. June 22, 4 2023), report and recommendation adopted, 2023 WL 6148222 (E.D. Cal. Sept. 20, 2023). Without 5 any estimate or citation to authority to inform the Court as to the value of injunctive relief sought, 6 “the request for injunctive relief is too speculative for the Court to appropriately include it in the 7 amount in controversy.” Gastelum v. Best Buy, Inc., Case No. 1:23-cv-00244-ADA-BAM, 2023 8 WL 2588009, at *2 (E.D. Cal. Mar. 21, 2023), report and recommendation adopted, 2023 WL 9 4305113 (E.D. Cal. June 30, 2023); see Jackson v. Am. Bar Ass’n, 538 F.2d 829, 831 (9th Cir. 10 1976) (finding the amount in controversy requirement not met when the protected rights asserted 11 “appear to be intangible, speculative, and lack the capability of being translated into monetary 12 value”). 13 Second, Plaintiff seeks damages under the Unruh Act “in an amount no less than $4,000.00 14 per Unruh violation per encounter as alleged” in the FAC and for “treble damages pursuant to Cal. 15 Civ. Code § 3345(b)[.]” (Doc. 37 ¶¶ 37(f)&(g)). Plaintiff alleges he encountered a number of 16 unlawful barriers to accessibility at Defendant’s locations in Bakersfield and Fresno. (Id. at 2-4). 17 At Tilly’s Bakersfield, Plaintiff points to three barriers to accessibility: (1) “Entrance door requires 18 greater than 5 lbs of force to open”; (2) “Clear width of accessible routes is less than 32 inches 19 between rows of merchandising displays”; and (3) “Protruding objects reduce clear width of 20 accessible routes between rows of merchandising displays.” (Id. ¶¶ 9(a)-(c)). At Tilly’s Fresno, 21 Plaintiff points to two barriers to accessibility: (1) “Clear width of accessible routes is less than 32 22 inches between rows of merchandising displays”; and (2) “Protruding objects reduce clear width 23 of accessible routes between rows of merchandising displays.” (Id. ¶¶ 12(a)&(b)). 24 The Unruh Act allows for the recovery of monetary damages. Molski v. M.J. Cable, Inc., 25 481 F.3d 724, 731 (9th Cir. 2007). A plaintiff may recover “actual damages … up to a maximum 26 of three times the amount of actual damage but in no case less than four thousand dollars” for “each 27 and every offense” of prohibited discrimination. Cal. Civ. Code § 52(a). While the phrase “each 28 offense” is undefined, courts have interpreted it according to its most natural reading as “each 1 violation.” Best Buy, Inc., 2023 WL 2588009, at *2 (citing cases). Construed in this manner, § 2 52(a) “provides for statutory damages based on each specific instance of non-compliance” under 3 the Unruh Act. (Id.). Cal. Civ. Code § 52 also permits the award of treble damages under the 4 Unruh Act. Dep’t of Fair Employment and Housing v. Law School Admission Council Inc., 896 F. 5 Supp. 2d 849, 876 (N.D. Cal. Sept. 18, 2012) (citing Cal. Civ. Code § 52); see Molski v. Gleich, 6 318 F.3d 937, 951 (9th Cir. 2003) (“the statutory damages in section 52 … provide for treble 7 damages[.]”), overruled in part on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 8 (9th Cir. 2010). A trier of fact may treble damages pursuant to Cal. Civ. Code § 3345(b) “in an 9 amount up to three times greater than authorized by the statute[.]” Cal. Civ. Code § 3345(b). 10 However, district courts have been disinclined to award treble damages where the record is 11 undeveloped. See Spikes v. Shockley, Case No. 19-CV-523 DMS (JLB), 2019 WL 5578234, at *6 12 (S.D. Cal. Oct. 28, 2019) (“while Defendant bears the burden on this default judgment due to his 13 failure to respond, there is no indication Plaintiff’s injury would not be adequately redressed with 14 statutory minimum damages, attorney’s fees, and injunctive relief. Therefore, the Court declines 15 to award treble damages for Plaintiff and finds the award of statutory damages is sufficient.”); 16 Spikes v. Mann, No. 19-CV-633 JLS (RBB), 2020 WL 5408942, at *6 (S.D. Cal. Sept. 9, 2020) 17 (same). At this stage of the pleadings, where the record is underdeveloped, it is difficult to infer 18 that Plaintiff is entitled to treble damages. Best Buy, Inc., 2023 WL 2588009, at *2. 19 From the face of the lodged FAC and Plaintiff’s allegations therein, it appears that Plaintiff 20 would be entitled to statutory damages of $4,000 for each of the five identified barriers to 21 accessibility he encountered at both of Defendant’s locations in Fresno and Bakersfield, adding up 22 to a maximum of $20,000 for Unruh Act violations. (Doc. 37 ¶¶ 9, 12); Hie River Park LLC, 2023 23 WL 4161416, at *7 (“From the face of the FAC, it appears Plaintiff could be entitled to statutory 24 damages of $4,000 for each of the five barriers to accessibility he encountered, adding up to 25 approximately $20,000 for Unruh Act violations.”). Even assuming arguendo that Plaintiff’s 26 statutory damages were trebled pursuant to Cal. Civ. Code § 3345(b), which provides an “amount 27 up to three times greater than authorized by the [Unruh Act,]” this would amount to $60,000.00, 28 which by itself is under the $75,000 amount in controversy threshold. See Best Buy, Inc., 2023 WL 1 2588009, at *2 (finding four barriers to accessibility added up to approximately $16,000 in Unruh 2 Act violations, trebled to $64,000, “which by itself is under the $75,000 amount in controversy 3 threshold.”). 4 Third, Plaintiff seeks “costs and expenses and lawyer’s fees should [he] hire a lawyer[.]” 5 (Doc. 37 ¶ 37(i)). “[As] a general rule, attorneys’ fees are excludable in determining the amount 6 in controversy because, normally, the successful party does not collect his attorneys’ fees in 7 addition to or as part of the judgment.” Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1155 (9th Cir. 8 1998) (quoting Velez v. Crown Life Ins. Co., 599 F.2d 471, 474 (1st Cir. 1979)). But, “attorneys’ 9 fees can be taken into account in determining the amount in controversy if a statute [or contract] 10 authorizes fees to a successful litigant.” JSS Scandinavia, 142 F.3d at 1155 (quoting Goldberg v. 11 CPC Int'l Inc., 678 F.2d 1365, 1367 (9th Cir. 1992), cert. denied, 459 U.S. 945 (1982)). The Unruh 12 Act permits recovery of attorney’s fees. Cal. Civ. Code § 52(a); Molski, 481 F.3d at 731. However, 13 Plaintiff is representing himself pro se and has not indicated an intent to hire counsel. Accordingly, 14 the request for attorney’s fees, expenses, and costs is too speculative and conclusory for the 15 undersigned to appropriately include it in the amount in controversy. See Matheson, 319. F.3d at 16 1090-91. 17 Lastly, Plaintiff seeks punitive damages “for the sake of example and by way of punishing 18 Defendant in an amount sufficient to deter, make example of, and punish Defendant” and 19 “[d]isgorgement of ill-gotten profits realized through intentional discrimination.” (Doc. 37 ¶ 36). 20 Cal. Civ. Code § 3294 provides for the recovery of punitive damages, which states: “In an action 21 for the breach of an obligation not arising from contract, where it is proven by clear and convincing 22 evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition 23 to the actual damages, may recover damages for the sake of example and by way of punishing the 24 defendant.” Cal. Civ. Code § 3294. However, district courts have called into question whether 25 punitive damages are recoverable in addition to treble damages under the Unruh Act. See Aguilar 26 v. Marinello Sch. of Beauty, No. CV0900854DMGAJWX, 2010 WL 11582978, at *10 (C.D. Cal. 27 Mar. 29, 2010) (“Where, as here, the social objectives pursued by two categories of damages sought 28 in one cause of action are the same, an award for both would create an impermissible double 1 recovery... Accordingly, the Court agrees with the other district courts that have considered this 2 issue and finds Plaintiff ineligible for punitive damages under [Cal. Civ. Code §] 3294.”); Best Buy, 3 Inc., 2023 WL 2588009, at *3 (citing cases). For example, in Doran v. Embassy Suites Hotel, the 4 district court noted that “the Legislature took the importance of disability rights into account when 5 it crafted the stringent remedies of minimum statutory damages, even in the absence of actual 6 damages, and treble actual damages and attorney’s fees, which can be a sizeable amount.” Doran 7 v. Embassy Suites Hotel, No. C-02-1961 EDL, 2002 WL 1968166, at *3 (N.D. Cal. Aug. 26, 2002). 8 “At the same time that the Legislature specifically provided for these several types of damages 9 in Civil Code sections 52(a) and 54.3(a), it chose not to provide for unlimited punitive damages.” 10 Id. The Doran court also compared the remedies in other similar statutes, and concluded that the 11 “Unruh Act, like the [Mobilehome Residency Law] and other statutes such as the Song–Beverly 12 Act and the Unfair Business Practices Act, expressly provide for judicial remedies that are punitive 13 in nature, rendering the catchall punitive damages remedy of Civil Code section 3294 unavailable.” 14 (Id.). Therefore, it is unclear whether Plaintiff may recover any punitive damages in this case. Best 15 Buy, Inc., 2023 WL 2588009, at *3. 16 Examining the amount in controversy from the face of the lodged FAC, Plaintiff has only 17 demonstrated an amount of approximately $20,000 to $60,000 resulting from Unruh Act statutory 18 damages. The $75,000 amount in controversy is not met and the lodged FAC as proposed fails to 19 set forth a basis for diversity jurisdiction over Plaintiff’s Unruh Act claim. See 28 U.S.C. § 1332(a); 20 Best Buy, Inc., 2023 WL 2588009, at *5 (“[T]he $75,000 amount in controversy is not met and the 21 Court should find that it does not have diversity jurisdiction over Plaintiff’s Unruh Act claim [and 22 related state claims].”). The amendments as proposed are futile or would be subject to dismissal 23 such that this factor weighs against granting leave to amend. Carrico, 656 F.3d at 1008. 24 Therefore, the undersigned recommends that the Court deny Plaintiff’s motion to amend 25 given Plaintiff’s undue delay in seeking leave to amend and given the proposed amendments are 26 futile or would be subject to dismissal because the Court does not have diversity jurisdiction. 27 /// 28 /// 1 | IV. QRDER, FINDINGS, AND RECOMMENDATIONS 2 For the reasons set forth above, IT IS HEREBY ORDERED that the Findings and 3 | Recommendations issued October 30, 2024 (Doc. 36) are VACATED. 4 And IT IS RECOMMENDED that: 5 1. The Court GRANT Defendant’s motion to dismiss for lack of Jurisdiction (Doc. 6) and 6 DECLINE to exercise supplemental jurisdiction over Plaintiff's Unruh Act claim pursuant 7 to 28 U.S.C. § 1367(c)(4). 8 2. The Court DENY Plaintiffs motion for leave to amend (Doc. 38). 9 3. Plaintiff's Unruh Act be DISMISSED without prejudice to Plaintiff's filing of this claim in 10 state court. 11 These Findings and Recommendations will be submitted to the United States District Judge 12 || assigned to this case, pursuant to the provisions of 28 U.S.C. § 636(b)(). Within 14 days after 13 | being served with a copy of these Findings and Recommendations, a party may file written 14 | objections with the Court. Local Rule 304(b). The document should be captioned, “Objections to 15 | Magistrate Judge’s Findings and Recommendations” and shall not exceed 15 pages without leave 16 | of Court and good cause shown. The Court will not consider exhibits attached to the Objections. 17 | To the extent a party wishes to refer to any exhibit(s), the party should reference the exhibit in the 18 | record by its CM/ECF document and page number, when possible, or otherwise reference the 19 | exhibit with specificity. Any pages filed in excess of the 15-page limitation may be disregarded by 20 | the District Judge when reviewing these Findings and Recommendations under 28 U.S.C. § 21 | 636(b)()(C). A party’s failure to file any objections within the specified time may result in the 22 | waiver of certain rights on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th Cir. 2014). 23 | IT IS SO ORDERED. 24 | } ) | 2 Dated: _ February 3, 2025 25 UNITED STATES MAGISTRATE JUDGE 26 27 28 18