Hinsley v. CreditBox.com, LLC

CourtDistrict Court, D. New Mexico
DecidedJuly 20, 2021
Docket2:21-cv-00281
StatusUnknown

This text of Hinsley v. CreditBox.com, LLC (Hinsley v. CreditBox.com, LLC) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hinsley v. CreditBox.com, LLC, (D.N.M. 2021).

Opinion

FOR THE DISTRICT OF NEW MEXICO ___________________________________________________________________

TIFFANY HINSLEY,

Plaintiff, v. No. 2:21-cv-00281-WJ-GJF

CREDITBOX.COM, LLC,

Defendant.

MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR REMAND AND ATTORNEY’S FEES AND REMANDING THE CASE TO THE FIRST JUDICIAL DISTRICT COURT THIS MATTER is before the Court upon Plaintiff’s Motion for Remand, filed April 4th, 2021 (Doc. 11). Plaintiff submits that the Tenth Circuit’s anti-aggregation principle precludes aggregation of attorney’s fees in determining whether the amount in controversy meets the threshold for federal jurisdiction. Defendant responds that recent caselaw from this District Court opens the door to considering aggregated attorney’s fees in the context of claims brought under the New Mexico Unfair Trade Practices Act (the “UPA”), NM Stat § 57-12-10 (2019). Having reviewed the parties’ submissions and the controlling law, the Court has decided that remand back to state court is proper but no attorney’s fees will be awarded to Plaintiff for filing her Motion for Remand. BACKGROUND

In 2017, Plaintiff Tiffany Hinsley entered into a series of loans with Defendant CreditBox.com LLC (“Defendant” or “CreditBox”), an internet loan provider licensed in New Mexico. Doc. 1-1 at 3, ¶¶ 16-17. In each loan, CreditBox required the use of debit authorizations for repayment of the loan—so called “payday loans,” as defined in NMSA § 58-15-2(H). Id., ¶¶ 19-20. Plaintiff alleges that the charges drawn from her account were significantly more than was permitted under New Mexico law. For instance, CreditBox imposed a finance charge on one loan in the amount of $4,760.72, when finance charges were capped at $248.50 by NMSA § 58-15-33(A) through (D). Id., payment. Id., ¶¶ 27-28. On February 9, 2021, Plaintiff filed her Class Complaint for Damages (Doc. 1-1) in the First Judicial District Court, Rio Arriba County. Therein, Plaintiff alleges that CreditBox violated the UPA, and asks the Court to void the allegedly unlawful loans CreditBox made to class members and enjoin CreditBox from collecting any further interest on the loans. Doc. 1-1. On March 26, 2021, CreditBox removed the case to the United States District Court for the District of New Mexico. Doc. 1. Plaintiff now challenges the Court’s subject matter jurisdiction under 28 U.S.C. § 1332(a), claiming that Defendant has failed to establish that the amount in controversy could possibly exceed the $75,000 required for this case to remain in federal court. See Doc. 11 at 2-2.

LEGAL STANDARD 28 U.S.C. § 1332(a) grants original jurisdiction to federal district courts in “all civil actions where the amount in controversy exceeds the sum of $75,000 exclusive of interest and costs, [] between . . . citizens of different States.” The amount in controversy includes actual damages and a “reasonable estimate” of attorney’s fees. See Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998). Moreover, in the context of class action litigation, the amount of controversy must be established by a single plaintiff and a single defendant, not through an aggregation of the claims across the class. See Snyder v. Harris, 394 U.S. 332, 336 (1969). When diversity jurisdiction is challenged, the removing “defendant must prove facts in support of the amount in controversy by a ‘preponderance of the evidence.’” McPhail v. Deere &

Co., 529 F.3d 947, 953 (10th Cir. 2008) (quoting McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). Once the jurisdictional facts have been established by a preponderance of the evidence, a defendant’s claim that the amount in controversy exceeds $75,000 need only be plausible to remain in federal court. See Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). facts that ma[k]e it possible that $75,000 [is] in play …” McPhail 529 F.3d. at 955 (emphasis removed). Jurisdictional facts may be established by: [C]ontentions, interrogatories or admissions in state court; by calculation from the complaint's allegations[;] by reference to the plaintiff's informal estimates or settlement demands[;] or by introducing evidence, in the form of affidavits from the defendant's employees or experts, about how much it would cost to satisfy the plaintiff's demands. The list is not exclusive; any given proponent of federal jurisdiction may find a better way to establish what the controversy between the parties amounts to, and this demonstration may be made from either side's viewpoint …. Id. at 954 (citing Meridian Security Ins. Co. v. Sadowski, 441 F.3d 536, 540–43 (7th Cir.2006)). Generally, attorney’s fees are not aggregated in calculating the amount in controversy for diversity jurisdiction. See Martin v. Franklin Capital Corp., 251 F.3d 1284, 1293 (10th Cir. 2001) (overruled on other grounds). However, footnote 7 of Martin states that “[t]he result might be different if the state statute under which fees are sought expressly awards those fees solely to the class representatives.” Id. at 1293 n.7 (emphasis added). DISCUSSION Parties do not dispute that diversity of citizenship exists. Doc. 11 at 2. Plaintiff disputes whether Defendant has met its burden with respect to the amount in controversy for federal jurisdiction. I. Actual Damages Defendant and Plaintiff agree that Plaintiff’s claim for actual damages cannot be aggregated across the class. Doc. 11 at 4. Defendant suggests that Plaintiff’s actual damages amount to $7,541.68. Doc. 1 at 7. Plaintiff argues that the amount of actual damages is $6,185.28. Doc. 11 at 4. The award of actual damages may be subject to trebling pursuant to the UPA. NMSA § 57-12-10(B). Under either calculation of actual damages, the potential amount of damages is $18,555.84 or $22,625.04, significantly less than the $75,000 threshold for diversity jurisdiction. Therefore, for the Court to maintain federal jurisdiction over this matter, the sum of the “reasonable estimate” of attorney’s fees must surpass roughly $56,444.16, per Plaintiff’s calculations, or $52,374.96, per Defendant’s calculations, to meet the $75,000 jurisdictional threshold. See Miera 143 F.3d at 1340. Whether a “reasonable estimate” of the attorney’s fees could exceed the required amounts listed above depends on whether the attorney’s fees are calculated on a pro rata or aggregated basis. Id. When attorney’s fees are calculated on a pro rata basis, the attorney’s fees awarded to a plaintiff’s counsel must be divided across all members of the class, and once divided by the number of members in a class action, the attorney’s fees can then be added with the potential damages to determine the amount in controversy. For example, on a pro rata basis, $101,000 in attorney’s fees

awarded to a named plaintiff across a 101-person class becomes $1,000 towards the amount in controversy. 1 In this case, if the attorney’s fees were calculated on a pro rata basis, the attorney’s fees would need to be $5,700,860.17, assuming a class of 101 people, to achieve the jurisdictional amount upon pro rata division among the class members.

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Hinsley v. CreditBox.com, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hinsley-v-creditboxcom-llc-nmd-2021.