1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 LORI ANN GONZALEZ, individually and CASE NO. 1:19-CV-00342-AWI-EPG on behalf of others similarly situated, 9 a Plaintiff, ORDER ON PLAINTIFF’S MOTION TO 10 REMAND v. 11 COMENITY CAPITAL BANK, DOES 1- (Doc. No. 9) 12 30,
13 Defendants.
14 15 16 17 18 INTRODUCTION 19 On January 25, 2019, Plaintiff Lori Ann Gonzalez (“Gonzalez”) filed a putative class 20 action in Fresno County Superior Court alleging that Defendant Comenity Capital Bank 21 (“Comenity Capital”) routinely violates California statutes relating to identity theft in connection 22 with credit cards branded for “Blair” and “Overstock.com.” Comenity Capital removed the action 23 to this Court on March 14, 2019 and Gonzalez sought remand. For the reasons set forth below, 24 Gonzalez’s motion to remand will be denied. 25 BACKGROUND 26 The Complaint, as filed in Fresno Superior Court, alleges as follows:1 27 1 The Court did not have cause to consider the materials referenced in Comenity’s request for judicial notice (Doc. No. 28 15-2) or the materials referenced in Gonzalez’s requests for judicial notice (Doc. No. 11 & Doc. No. 18) in deciding 1 In 2017 or 2018, Gonzalez began receiving telephone calls from Comenity Capital to 2 collect on two credit card accounts issued by Comenity Capital, one branded for a retailer called 3 “Overstock.com” and the other branded for a retailer called “Blair.” Doc. No. 1, Ex. A 4 (Complaint) ¶¶ 13 & 18. In those telephone calls, Gonzalez verbally informed Comenity Capital 5 that she had not opened either account and that she was a victim of identity theft, but Comenity 6 Capital did not inform Gonzalez that claims of identity theft must be in writing. Id., Ex. A ¶¶ 20- 7 21. 8 On or about March 16, 2018, Comenity Capital sent Gonzalez a form letter “seeking to 9 collect on the alleged Overstock.com credit card debt” and “threatening to bring ‘Legal action’ if 10 Plaintiff did not ‘[m]ake a payment online or by phone.’” Doc. No. 1, Ex. A ¶ 23. According to 11 Gonzalez, the representations in this form letter were “false, deceptive, and misleading” because 12 Comenity Capital “had no intention of bringing any legal action against [Gonzalez] for the 13 purported Overstock.com debt.” Id., Ex. A ¶¶ 24-26. Moreover, the Complaint alleges that 14 Comenity Capital “maintain[s] a pattern and practice of automatically sending [threatening 15 collection letters] to alleged delinquent debtors” without first determining whether the debts in 16 question satisfy its criteria for initiating legal action. Id., Ex. A ¶¶ 30-31. 17 In August 2018, Gonzalez sent a letter notifying Comenity Capital that she had been a 18 victim of identity theft in connection with the Overstock.com account and a letter notifying 19 Comenity Capital that she had been a victim of identity theft in connection with the Blair account, 20 but Comenity Capital “did not cease collection activities” as to either account. Doc. No. 1, Ex. A 21 ¶¶ 32-39. 22 In December 2018, Gonzalez sent additional letters to Comenity Capital seeking 23 documents and information relating to the accounts, and again stating that she was a victim of 24 identity theft. Doc. No. 1, Ex. A ¶¶ 40-41. Comenity Capital did not provide the information or 25 documents requested as to either account, and the Complaint alleges that Comenity Capital 26 “maintain[s] a pattern and practice” of failing to respond to requests involving identity theft in the 27 manner required under Section 530.8 of the California Penal Code. Id., Ex. A ¶¶ 45-47. 28 Moreover, the Complaint alleges that Gonzalez “suffered actual damage” as a result of Comenity 1 Capital’s conduct, that Comenity Capital’s “practices … present a continuing threat” to the public 2 “unless enjoined or restrained,” and that Comenity Capital’s conduct as to “empty threats of legal 3 action,” “oral claims of identity theft,” “written claims of identity theft,” and “requests for 4 information and/or documents” “was and is persistent, frequent, willful and knowing.” Id., Ex. A 5 ¶¶ 48-49, 65, 74, 77 & 80. 6 Based on these factual allegations, Gonzalez alleges seven causes of action against 7 Comenity Capital: (i) “Violations of California Civil Code, § 1788.13, subd. (j)”; (ii) “Violations 8 of California Civil Code, § 1788.17”; (iii) “Violations of California Civil Code, § 1788.18’s 9 Requirement to Notify Oral Identity Theft Claimants that the Claim Must Be in Writing”; (iv) 10 “Violations of California Civil Code, § 1788.18’s Requirements for Responses to Written Identity 11 Theft Claims”; (v) “Violations of California Penal Code, § 530.8, subd. (a)”; (vi) “Violations of 12 California Business & Professions Code, §§ 17200 et seq.”; and (vii) “Action to Establish Identity 13 Theft under California Civil Code, § 1798.93.”2 Doc. No. 1, Ex. A, pp. 10-15. 14 Gonzalez brings the first six causes of action individually and on behalf of putative classes, 15 and brings the seventh cause of action solely as an individual claim. Doc. No. 1, Ex. A, pp. 10-15. 16 As to the first four causes of action, Gonzalez seeks actual damages and statutory damages, as well 17 as attorneys’ fees and costs. Id., Ex. A, Prayer for Relief ¶¶ 1-4. As to the Fifth Cause of Action, 18 Gonzalez seeks actual damages and “a penalty as authorized by Penal Code section 530.8, 19 subdivision (d)(2),” equitable relief, and attorneys’ fees and costs. Id., Ex. A, Prayer for Relief ¶ 20 5. As to the Sixth Cause of Action, Gonzalez seeks restitution and equitable relief, as well as 21 attorneys’ fees and costs. Id., Ex. A, Prayer for Relief ¶ 6. And on the Seventh Cause of Action, 22 Gonzalez seeks damages and “a civil penalty,” as well as attorneys’ fees and costs, along with 23 equitable relief. Id., Ex. A, Prayer for Relief ¶ 7. 24 On March 14, 2019, Comenity Capital removed the case to this forum based on diversity 25
26 2 Sections 1788.13, 1788.17 and 1788.18 of the Civil Code are provisions of the Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”) and Section 1798.93 of the Civil Code is a provision of the California Identity Theft 27 Act (“CITA”). See Cutler ex rel. Jay v. Sallie Mae, Inc., 2015 WL 1909482, *2 (C.D. Cal. Apr. 24, 2015). The causes of action under Section 1788.13, 1788.17 and 1788.18 of the Civil Code are sometimes referred to herein as the 28 “Rosenthal Act claims,” and the cause of action under Section 1798.93 of the Civil Code is sometimes referred to as 1 of citizenship pursuant to 28 U.S.C. § 1441(b). Doc. No. 1 ¶ 6. The notice of removal asserts that 2 Gonzalez and Comenity Capital are citizens of different states and that “the total amount of 3 individual relief to which [Gonzalez] claims she is entitled if she prevails in this action exceeds 4 $75,000.” Id. ¶¶ 2-4. Gonzalez now seeks remand.3 5 PLAINTIFF’S MOTION TO REMAND 6 The notice of removal asserts that Comenity Capital and Gonzalez are citizens of different 7 states and that Gonzalez stands to recover “an amount greater than $75,000” if she prevails on all 8 of her claims, Doc. No. 1 ¶¶ 2, 3 & 17 – factoring in penalties under the Rosenthal Act, the CITA 9 claim and Section 530.8 of the California Penal Code, as well as attorneys’ fees. Id. ¶ 9, 13, 15 & 10 16. 11 In moving for remand, Gonzalez does not dispute that she and Comenity Capital are 12 citizens of different states but contends that the Court lacks subject matter jurisdiction over this 13 action – and that remand is required under 28 U.S.C. § 1447(c) – because Comenity Capital 14 cannot meet its burden to show that the amount in controversy exceeds the $75,000 jurisdictional 15 threshold set forth in 28 U.S.C. § 1332(a). See Doc. No. 10 at 7:15-17. Specifically, Gonzalez 16 argues that using the maximum penalty under the Rosenthal Act and the maximum penalty under 17 the CITA to calculate the amount in controversy is improper because the award amounts are 18 discretionary and the Complaint does not expressly seek – or allege facts to support – the 19 maximum award under either statute. Doc. No. 10, Part 3.B.(1). Gonzalez also takes the position 20 that it is speculative to assume that she would recover a separate civil penalty on each of her four 21 causes of action under the Rosenthal Act, since past cases have capped the penalty “at $1,000 per 22 plaintiff, per lawsuit, not per violation.” Id., Part 3.B.(2). Further, Gonzalez asserts that it is 23 speculative and unreasonable to assume that the post-removal portion of penalties under Section 24 530.8 of the California Penal Code will continue to accrue through trial. Doc. No. 12, Part 25
26 3 On January 29, 2019, Gonzalez filed a putative class action in Fresno Superior Court against Comenity Bank alleging facts and causes of action similar to the facts and causes of action in this case in connection with a credit card 27 branded for a clothing retailer called “The Limited.” Comenity Bank removed that action to the United States District Court for the Eastern District of California on March 14, 2019, the same day this action was removed. The Court 28 issued an order in this action relating that case to this case. See Doc. No. 7. Gonzalez filed a motion to remand in that 1 3.B.(3). According to Gonzalez, the Section 530.8 civil penalty will stop accruing (well in 2 advance of trial) once Comenity Capital fulfills its obligation to produce documents relating to the 3 account at issue in discovery. Id., Part 3.B.(3)(b). Finally, Gonzalez contends that Comenity 4 Capital’s estimate of attorneys’ fees cannot be credited because it overstates the incremental costs 5 associated with litigating Gonzalez’s individual CITA claim and because the underlying 6 methodology is unsound. Doc. No. 16, Part 2.D. 7 Comenity Capital’s Opposition 8 Comenity Capital argues that using the maximum penalty under the Rosenthal Act4 and the 9 maximum penalty under the CITA to calculate the amount in controversy in this action is proper 10 because recent Ninth Circuit decisions make it clear that the amount in controversy in a case 11 includes all relief a court may grant on a complaint if the plaintiff prevails on all claims, Doc. No. 12 15 at 1:6-13, and because Gonzalez has not stipulated that she is seeking less than the maximum 13 penalty under either statute. Id. at 1:20. Further, Comenity Capital contends that it is proper to 14 assume the penalty under Section 530.8 of the California Penal Code will continue to accrue 15 through completion of the trial – at the statutory rate of $100 per day for each of the two credit 16 card accounts at issue – because Gonzalez “refuses to stipulate that she is not seeking post- 17 removal penalties” and because the amount in controversy is to be estimated at the time of 18 removal, without regard to future events (such as settlement or the production of documents in 19 discovery) that might reduce the amount in controversy after removal. Id. at 12:5-13:17. Finally, 20 Comenity Capital argues that at a rate of $300 per hour, Gonzalez could recover attorneys’ fees in 21 the amount of at least $23,229 on her individual CITA claim alone. Id., Part III.D. 22 Legal Standard 23 Under 28 U.S.C. § 1441, “[a] defendant generally may remove an action filed in state court 24 if a federal district court would have had original jurisdiction over the action.” Chavez v. 25 4 For purposes of this motion, Comenity Capital appears to assume a single award under the Rosenthal Act for the 26 entire lawsuit, as opposed to a separate award for each of the credit card accounts at issue and/or each of Gonzalez’s causes of action under the Rosenthal Act. See Doc. No. 15 at 1:14-23. Gonzalez herself similarly takes the position 27 that the Court should assume a maximum of one penalty under the Rosenthal Act in this lawsuit for purposes of calculating the amount in controversy. Doc. No. 10, Part 3.B.(2). The Court therefore assumes that Gonzalez can 28 recover only one penalty under the Rosenthal Act for purposes of the amount-in-controversy analysis, but expresses 1 JPMorgan Chase & Co, 888 F.3d 413, 415-16 (9th Cir. 2018) (citing 28 U.S.C. § 1441(a) and 2 Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016)). The Ninth 3 Circuit “strictly construe[s] the removal statute against removal jurisdiction,” and “[f]ederal 4 jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” 5 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). 6 There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction 7 under 28 U.S.C. § 1331, which gives federal courts original jurisdiction over “all civil actions 8 arising under the Constitution, laws, or treaties of the United States”; and (2) diversity jurisdiction 9 under 28 U.S.C. § 1332, which gives federal courts original jurisdiction where the amount in 10 controversy “exceeds the sum or value of $75,000, exclusive of interest and costs” and there is 11 “complete diversity among the parties.” See Chavez, 888 F.3d at 415 (citing Corral v. Select 12 Portfolio Servicing, Inc., 878 F.3d 770, 774 (9th Cir. 2017)). Where a putative class action is 13 removed on the basis of diversity jurisdiction under 28 U.S.C. § 1332, courts examine “only the 14 claims of named class plaintiffs for purposes of the amount-in-controversy requirement.”5 Gibson 15 v. Chrysler Corp., 261 F.3d 927, 941 (9th Cir. 2001), holding modified by Exxon Mobil Corp. v. 16 Allapattah Servs., Inc., 545 U.S. 546 (2005) (citing Supreme Tribe of Ben–Hur v. Cauble, 255 17 U.S. 356, 366–67 (1921)); see also Pruell v. Caritas Christi, 645 F.3d 81, 83 (1st Cir. 2011) (“The 18 usual rule in class actions is that to establish subject matter jurisdiction one looks only to the 19 named plaintiffs and their claims.”)). 20 The Ninth Circuit has “defined the amount in controversy as the ‘amount at stake in the 21 underlying litigation.’” Gonzales, 840 F.3d at 648–49 (quoting Theis Research, Inc. v. Brown & 22 Bain, 400 F.3d 659, 662 (9th Cir. 2005)); see also Chavez, 888 F.3d at 417 (explaining that the 23 amount in controversy includes all amounts “at stake” in the litigation at the time of removal, 24 “whatever the likelihood that [the plaintiff] will actually recover them”). It “is simply an estimate 25 of the total amount in dispute, not a prospective assessment of defendant’s liability.” Lewis v. 26 Verizon Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010) (citation omitted). “In that sense, the 27 amount in controversy reflects the maximum recovery the plaintiff could reasonably recover.” 28 1 Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (citing Chavez, 888 F.3d at 2 417) (emphasis original). 3 “Where … it is unclear or ambiguous from the face of a state-court complaint whether the 4 requisite amount in controversy is pled, the removing defendant bears the burden of establishing, 5 by a preponderance of the evidence, that the amount in controversy exceeds the jurisdictional 6 threshold.” Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 793 (9th Cir. 7 2018) (quoting Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1121–22 (9th Cir. 2013)) 8 (internal quotation marks omitted). “[A] removing defendant is not obligated to research, state, 9 and prove the plaintiff’s claims for damages,” Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 10 1199, 1204–05 (E.D. Cal. 2008) (citation and internal quotation marks omitted), but “[c]onclusory 11 allegations as to the amount in controversy are insufficient.” Matheson v. Progressive Specialty 12 Ins. Co., 319 F.3d 1089, 1090-1091 (9th Cir. 2003) (citation omitted). “[T]he defendant must 13 provide evidence establishing that it is ‘more likely than not’ that the amount in controversy 14 exceeds” the jurisdictional threshold for diversity jurisdiction. Sanchez v. Monumental Life Ins. 15 Co., 102 F.3d 398, 404 (9th Cir.1996) (citations omitted). 16 “In assessing the amount in controversy, [courts] may consider allegations in the complaint 17 and in the notice of removal, as well as summary-judgment-type evidence relevant to the amount 18 in controversy,” Chavez, 888 F.3d at 416 (citation omitted), including “supplemental evidence 19 later proffered by the removing defendant, which was not originally included in the removal 20 notice.” Korn, 536 F.Supp.2d at 1205 (citing Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th 21 Cir. 2002)). 22 ANALYSIS 23 Neither party disputes that the diversity requirement is satisfied in this case, so the only 24 issue for the Court to resolve on this motion is whether it is “more likely than not” that the amount 25 in controversy – in connection with Gonzalez’s individual claims – exceeds the jurisdictional 26 threshold of $75,000. See Sanchez, 102 F.3d at 404. In making that determination, the Court 27 considers each aspect of the amount in controversy calculation in turn. 28 1 I. Statutory Penalties Under the Rosenthal Act and the CITA 2 Two of the statutes at issue in this action – the Rosenthal Act and the CITA – contain 3 provisions that specify maximum penalties. The Rosenthal Act provides for penalties ranging 4 from a minimum of $100 to a maximum of $1,000, see Cal. Civ. Code § 1788.30, subd. (b), while 5 the CITA provides for penalties of up to $30,000. See Cal. Civ. Code § 1798.93, subd. (a)(6). 6 One of the key points of contention in this motion is whether the maximum penalties 7 available under these statutes should be included in the amount-in-controversy calculation. 8 Gonzalez contends that the statutory maximum penalties should not be included in the amount-in- 9 controversy calculation because the Complaint does not seek – or allege facts justifying – 10 maximum penalties, and because Comenity has failed to meet its burden to show that maximum 11 penalties will be awarded if Gonzalez prevails on her claims. Doc. No. 10, Part 3.B.(1). 12 Comenity, for its part, contends that it is proper to include maximum penalties in the 13 amount-in-controversy calculation because, whether or not they are ultimately imposed, they are 14 within the scope of relief that could be awarded and are, thus, “at stake” in the litigation. Doc. No. 15 15, Part III.B. Further, Comenity argues that Gonzalez has not disclaimed maximum penalties in 16 this case, and that the facts alleged in the Complaint could justify maximum penalties under both 17 of the statutes in question for Gonzalez’s individual claims. Id. 18 The use of maximum statutory penalties in jurisdictional amount-in-controversy 19 calculations was addressed by this district in Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 20 1199 (E.D. Cal. 2008). Korn was a putative class action involving alleged violations of Section 21 1747.08 of the California Civil Code, which provides for “a civil penalty not to exceed two 22 hundred fifty dollars ($250) for the first violation and one thousand dollars ($1,000) for each 23 subsequent violation.” Cal. Civ. Code § 1747.08, subd. (e). Defendant removed the action to 24 federal court under the CAFA and, in seeking remand, plaintiff took the position that the $1,000 25 maximum penalty set forth in the statute should not be included in the amount in controversy 26 because “the class plaintiffs could be awarded less than the maximum statutory penalty per 27 violation.” Id. at 1205. The court rejected that argument on the ground that it “overlook[ed] the 28 critical distinction between the likely recovery per plaintiff and the actual issue before the court, 1 the amount in controversy in th[e] litigation.” Id. at 1205 (citing Brill v. Countrywide Home 2 Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005)). Further, the court found that the maximum 3 penalty was properly included in the amount in controversy because plaintiff alleged that he and 4 every other class member were “entitled to civil penalties in amounts up to one thousand dollars 5 ($1,000) per violation” and had not “stipulat[ed] that he [would] demand less than the maximum 6 civil penalty.” Id. at 1205. In short, the court found that “[w]here a statutory maximum is 7 specified, courts may consider the maximum statutory penalty available in determining whether 8 the jurisdictional amount in controversy requirement is met,” id. (citing Chabner v. United of 9 Omaha Life Ins. Co., 225 F.3d 1042, 1046 n.3 (9th Cir. 2000)), and that plaintiff could not “avoid 10 satisfaction of the amount in controversy by arguing that the class plaintiffs may be awarded less 11 than the statutory maximum.” Id. at 1206 n.4 (emphasis original). 12 The finding in Korn as to the use of maximum penalties in amount-in-controversy 13 calculations comports with – and is, indeed, compelled by – the findings in recent Ninth Circuit 14 decisions relating to amount-in-controversy calculations, including Arias, where the Ninth Circuit 15 found that “the amount in controversy reflects the maximum recovery [a] plaintiff could 16 reasonably recover” on a complaint, Arias, 936 F.3d at 927 (emphasis original), and Chavez, 17 where the Ninth Circuit found that the amount in controversy includes all amounts “at stake” in 18 the litigation at the time of removal, “whatever the likelihood that [the plaintiff] will actually 19 recover them.” Chavez, 888 F.3d at 417. The Court therefore finds that the maximum penalty 20 specified in a statute is properly included in a jurisdictional amount-in-controversy calculation 21 where a plaintiff could reasonably recover such penalty. The amounts in controversy as to 22 Gonzalez’s claims under the Rosenthal Act and the CITA are evaluated accordingly below. 23 a. Rosenthal Act Claims 24 Gonzalez alleges that Comenity Capital violated Sections 1788.13, 1788.17 and 1788.18 of 25 the California Civil Code through “persistent, frequent, willful and knowing” wrongdoing that 26 included “sending … empty threats of legal action,” Doc. No. 1, Ex. A ¶¶ 65, 70; failing to notify 27 Gonzalez and others that “claims of identity theft must be in writing,” id., Ex. A ¶ 75; and failing 28 to cease collections upon receipt of written notification of identity theft. Id., Ex. A ¶ 78. 1 Gonzalez further alleges that she received multiple telephone calls from Comenity Capital in 2 connection with the credit card accounts at issue here, id., Ex. A ¶ 18; that Comenity Capital 3 “maintain[s] a pattern and practice of automatically sending [threatening collection letters] to 4 alleged delinquent debtors” without first determining whether the debts in question satisfy its 5 criteria for initiating legal action, id., Ex. A ¶¶ 30-31; that Comenity Capital disregarded her 6 written notifications of identity theft in connection with the accounts at issue here on more than 7 one occasion, id., Ex. A ¶¶ 32-39; and that Comenity Capital’s “practices … present a continuing 8 threat” to the public “unless enjoined or restrained.” Id., Ex. A ¶ 49. In connection with her 9 Rosenthal Act claims, Gonzalez prays for actual damages, statutory damages, and attorneys’ fees 10 and costs. Id., Ex. A, Prayer for Relief ¶¶ 1-4. 11 As noted above, Section 1788.30, subdivision (b), of the California Civil Code provides 12 that a defendant will be liable for a “penalty” of up to $1,000 for “willfully and knowingly” 13 violating the Rosenthal Act. Cal. Civ. Code § 1788.30, subd. (b). In Lyon v. Bergstrom Law, Ltd., 14 the court awarded a penalty in the amount of $250 in connection with a violation of Section 15 1788.18 because the defendant “left only a single infringing voicemail without any aggravating 16 circumstances,” 2017 WL 2350447, *10 (E.D. Cal. May 31, 2017), and in Gonzales v. Arrow Fin. 17 Servs., LLC, a jury awarded a penalty of $250 for violations of Section 1788.17 to the named 18 plaintiff in a class action involving the collection of unpaid health club dues, where a boilerplate 19 collection letter falsely threatened to submit a negative credit report to a credit reporting agency. 20 660 F.3d 1055, 1059-60 (9th Cir. 2011). At the other end of the spectrum, the court in Ortega v. 21 Griggs & Assocs. LLC awarded the maximum $1,000 penalty on default judgment for violation of 22 Section 1788.17 on allegations that defendant called plaintiff multiple times and falsely 23 represented that she was subject to criminal prosecution for failure to pay her debt, 2012 WL 24 2913202, *1, *5 (N.D. Cal. July 13, 2012), and in Washington v. City Title Loan, LLC, the court 25 imposed the maximum penalty of $1,000 for violation of Section 1788.17 on a mere finding that 26 the plaintiff had “alleged and provided evidence that [the defendant] willfully and knowingly 27 violated [the Rosenthal Act].” 2018 WL 4005447, *7 (C.D. Cal. Feb. 26, 2018). 28 While awards vary, the allegations in the Complaint (including, for example, the allegation 1 that Comenity contacted Gonzalez on several occasions and engaged in multiple forms of 2 misconduct under the Rosenthal Act) appear sufficient, in light of relevant caselaw, to show that 3 Comenity’s conduct was willful and knowing and that Gonzalez “could reasonably recover” the 4 maximum penalty under the Rosenthal Act in this action. See Arias, 936 F.3d at 927. Further, 5 Gonzalez has not disclaimed the maximum penalty or otherwise limited her prayer under the 6 Rosenthal Act, which expressly calls for “statutory damages.” 6 See Doc. No. 1, Ex. A, Prayer for 7 Relief ¶¶ 1-4. Therefore, the Court finds that the Complaint puts the maximum penalty under the 8 Rosenthal Act “at stake” in this action, see Chavez, 888 F.3d at 415, 417, and assigns a value of 9 $1,000 to Gonzalez’s individual claim under the Rosenthal Act for purposes of the amount-in- 10 controversy calculation. See Morey v. Louis Vuitton N. Am., Inc., 461 F. App’x 642, 643 (9th 11 Cir. 2011). 12 b. CITA Claim 13 The CITA provides for: 14 A civil penalty, in addition to any other damages, of up to thirty thousand dollars ($30,000) if the victim establishes by clear and convincing evidence all of the 15 following:
16 (A) That at least 30 days prior to filing an action or within the cross-complaint pursuant to this section, he or she provided written notice to the claimant at the 17 address designated by the claimant for complaints related to credit reporting issues that a situation of identity theft might exist and explaining the basis for that belief. 18 (B) That the claimant failed to diligently investigate the victim's notification of a 19 possible identity theft.
20 (C) That the claimant continued to pursue its claim against the victim after the claimant was presented with facts that were later held to entitle the victim to a 21 judgment pursuant to this section.
22 Cal. Civ. Code § 1798.93, subd. (a)(6). 23 Gonzalez prays for “declaratory relief, injunctive relief, and such other equitable relief as 24 the Court may deem appropriate; actual damages according to proof; a civil penalty; and 25 attorneys’ fees and costs,” Doc. No. 1, Ex. A, Prayer for Relief ¶ 7, based on allegations that 26 Gonzalez provided written notice to Comenity Capital that she was “the victim of an identity theft 27 6 The “penalty” set forth in Section 1788.30, subdivision (b), of the Civil Code is often referred to as “statutory 28 damages.” See, e.g., Marseglia v. JP Morgan Chase Bank, 750 F.Supp.2d 1171, 1180 (S.D. Cal. Nov. 12, 2010) 1 crime” with respect to the Overstock.com and Blair accounts, but that Comenity Capital “failed to 2 diligently investigate [her] notification of identity theft and “continued to pursue [its] claim 3 against [her] after being presented with the facts underlying [her] claim of identity theft.” Id., Ex. 4 A, ¶¶ 32, 97-100. 5 Comenity cites a couple of cases in which the $30,000 statutory maximum was awarded to 6 the prevailing plaintiff under the CITA. In Washington, the district court awarded the $30,000 7 statutory maximum penalty on default judgment based on a mere finding that “the FAC has 8 sufficiently alleged a claim under the CITA.” 2018 WL 4005447, *3-*4, *7 (C.D. Cal. Feb. 26, 9 2018). In Seungtae Kim v. BMW Fin. Servs. NA, LLC, similarly, the district court found that a jury 10 award of $30,000 was “not excessive” because it “was within the statutory limit.” 142 F.Supp.3d 11 935, 947 (C.D. Cal. 2015), aff’d sub nom. Kim v. BMW Fin. Servs. NA LLC, 702 F.App’x 561 12 (9th Cir. 2017). Gonzalez, for her part, cites Heidorn v. BDD Marketing & Management Co., LLC 13 to show an award of a much smaller amount – just $3,000 – on default judgment. Doc. No. 12 at 14 11:3-6. That $3,000 award, however, is predicated not on the CITA but on California’s Shine the 15 Light Law, California Civil Code § 1798.83,7 for which $3,000 is, in fact, the maximum penalty 16 that can be awarded. Miller v. Hearst Commc’ns Inc., 554 F.App’x 657, 658 (9th Cir. 2014); Cal, 17 Civ. Code §1798.84, subd. (c). 18 Here again, Gonzalez has prayed without caveat for a penalty under a statute that specifies 19 a maximum penalty while alleging facts that appear, in light of relevant case law, to be sufficient 20 to justify the statutory maximum penalty under the CITA. The Court, therefore, finds that it is 21 proper to include the statutory maximum penalty in the amount-in-controversy calculation. 22 Further, the Court sees no merit in Gonzalez’s argument that it is improper to include two CITA 23 penalties in the amount-in-controversy calculation. See Doc. No. 16 at 14:1-8. Gonzalez never 24 states that she will not seek a separate civil penalty for each of the credit card accounts at issue in 25 this action, and the plain language of Section§ 1798.93, subdivision (c), provides for a civil 26
27 7 See Heidorn v. BDD Mktg. & Mgmt. Co., LLC, 2013 WL 6571168, *1 (N.D. Cal. Oct. 9, 2013); Heidorn v. BDD Mktg. & Mgmt. Co., LLC, 2013 WL 6571629, *17 (N.D. Cal. Aug. 19, 2013), report and recommendation adopted, 28 2013 WL 6571168 (N.D. Cal. Oct. 9, 2013) (recommending “an award of $3,000 as a penalty” under “California’s 1 penalty “as to a particular claim” – where “claim” refers to an attempt to collect a particular debt. 2 Cal. Civ. Code § 1798.93 (emphasis added). At the time of removal, it appeared Gonzalez could 3 reasonably recover the maximum CITA penalty of $30,000 in connection with the Overstock.com 4 account and the maximum CITA penalty of $30,000 in connection with the Blair account. Thus, 5 the Court assigns a combined value of $60,000 to Gonzalez’s claim for penalties under the CITA 6 for purposes of the amount-in-controversy calculation. See Arias, 936 F.3d at 927; Chavez, 888 7 F.3d at 418. 8 II. Statutory Penalty Under Section 530.8 of the California Penal Code 9 Section 530.8 of the California Penal Code gives victims of identity theft the right to 10 certain information – like transaction records and account applications – relating to accounts 11 opened in their names by unauthorized persons. See Cal. Penal Code § 530.8. Subdivision (a) of 12 Section 530.8 governs requests for such information and provides that the person or entity with 13 which an unauthorized account was opened “shall provide copies of all paper records, records of 14 telephone applications or authorizations, or records of electronic applications or authorizations 15 required by [Section 530.8, subd. (a)], without charge, within 10 business days of receipt of the 16 person’s request and submission of the required copy of the police report and identifying 17 information.” Cal. Penal Code § 530.8, subd. (a). Subdivision (d)(2) of Section 530.8 provides 18 that, “[i]n addition to any other civil remedy available, the victim may bring a civil action against 19 the entity for damages, injunctive relief or other equitable relief, and a penalty of one hundred 20 dollars ($100) per day of noncompliance, plus reasonable attorneys’ fees.” Cal. Penal Code § 21 530.8, subd. (d)(2). 22 Gonzalez alleges that Comenity has “willfully and knowingly violated Penal Code section 23 530.8, subdivision (a),” Doc. No. 1, Ex. A ¶ 80, and prays for “actual damages according to proof 24 and a penalty as authorized by Penal Code section 530.8, subdivision (d)(2), to be paid to 25 [Gonzalez] and each Information Request Class member; injunctive relief and such other equitable 26 relief as the Court may deem appropriate and reasonable attorneys’ fees and costs.” Id., Ex. A, 27 Prayer for Relief ¶ 5. 28 Comenity Capital contends – and Gonzalez does not dispute – that the penalty under 1 Section 530.8, subdivision (d)(2) totaled $23,300 for the two credit card accounts at issue in this 2 action at the time of removal. See Doc. No. 15, p. 10 n.16 (reducing Comenity Capital’s initial 3 figure of $24,500 by $1,200 per the correction set forth by Gonzalez, Doc. No. 10 at 12:21-26). 4 Thus, there is a minimum of $23,300 in penalties at stake in connection with Gonzalez’s claim 5 under Section 530.8 of the California Penal Code, without even considering accruals after the date 6 of removal. Combined with the Court’s findings as to the penalties at stake under the Rosenthal 7 Act and the CITA, this brings the total amount in controversy in this action – as to penalties alone 8 – to $84,300. 9 III. ACTUAL DAMAGES, EQUITABLE RELIFE & ATTORNEYS’ FEES 10 Gonzalez also seeks actual damages, equitable relief and attorneys’ fees in connection with 11 the claims discussed above, as well as equitable relief in connection with her claim under Section 12 17200, et seq. of the California Business and Professions Code. While quantification as to each is 13 not necessary for purposes of deciding this motion, such costs and recoveries further confirm the 14 Court’s finding that the amount in controversy in this action exceeds the $75,000 jurisdictional 15 threshold in 28 U.S.C. § 1332(a). See Fritsch, 899 F.3d at 794 (allowing for inclusion of the 16 future attorneys’ fees in amount-in-controversy calculations); Gonzales, 840 F.3d at 648–49 17 (finding that the “amount at stake” in litigation involves anything other than interest and costs that 18 “entail[s] a payment by the defendant,” including compensatory damages and “the cost of 19 complying with an injunction” (citations and internal quotation marks omitted)). 20 IV. CONCLUSION 21 The Court finds that there is $61,000 “at stake” in connection with Gonzalez’s claims 22 under the Rosenthal Act and the CITA, and there is no dispute between the parties that at least 23 $23,300 at issue in connection with Gonzalez’s claim under Section 530.8 of the Penal Code. 24 Thus, the amount in controversy in this action is at least $84,300, even without counting the post- 25 removal portion of the Section 530.8 penalty, attorneys’ fees or Gonzalez’s prayers for actual 26 damages and equitable relief. Therefore, the Court properly has jurisdiction over this action 27 pursuant to 28 U.S.C. § 1332(a) and remand is not warranted. 28 1 ORDER 2 Accordingly, IT IS HEREBY ORDERED that Gonzalez’s motion to remand (Doc. No. 9) 3 |is DENIED. 4 5 IT IS SO ORDERED. J 6 | Dated: _ October 21, 2019 ZS : Cb ut _-SENIOR DISTRICT JUDGE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28