Stephanie Briest v. Knot Standard

• Court: District Court, C.D. California
• Decided: March 5, 2020
• Docket: 2:19-cv-09630
• Status: Unknown

Opinion

JS-6 1 O 2

3 4

8 United States District Court 9 Central District of California

10 11 STEPHANIE BRIEST, Case No. 2:19-cv-09630-ODW(SSx) 12 Plaintiff, ORDER GRANTING IN PART 13 v. PLAINTIFF’S MOTION TO 14 KNOT STANDARD LLC; et al., REMAND AND MOTION FOR 15 Defendants. LEAVE TO FILE AMENDED COMPLAINT [10] 16

17 I. INTRODUCTION 18 Plaintiff Stephanie Briest (“Briest”) moves to remand this action to state court 19 based on lack of diversity jurisdiction, and in the alternative, moves for leave to file an 20 amended complaint to join Christine Ouzounian (“Ouzounian”) and Cheyenne Cali 21 (“Cali”) as Defendants. (Mot. to Remand and for Leave to Am. Compl. (“Mot.”) 5, 22 ECF No. 10.) For the reasons discussed below, the Court GRANTS Briest’s Motion 23 to Remand (“Motion”) and, therefore, DENIES as moot Briest’s Motion to Amend.1 24 II. FACTUAL BACKGROUND 25 Briest filed this action (“Complaint”) against Knot Standard LLC, Knot Standard 26 Los Angeles, Knot Standard, Alicynne Sher (“Sher”), and Liz Wendler (“Wendler”) 27

28 1 After carefully considering the papers filed in support of and in opposition to the Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. 1 (collectively, “Defendents”) in Superior Court. (Mot., Ex. 1 (“Compl.”) ¶ 2, ECF No. 2 10-1.) Briest alleges thirteen causes of action against Defendants related to her 3 employment and “constructive termination.” (Compl. ¶¶ 8–21.) On November 8, 2019, 4 Defendants removed the matter to this Court based on diversity jurisdiction. (See 5 generally Notice of Removal (“Removal”), ECF No. 1) 6 Briest asserts that she is a resident of California. (Compl. ¶ 1.) Whereas, 7 Defendants assert that Knot Standard LLC is a limited liability company domiciled in 8 Florida and Virginia, Sher is a resident of New York, Wendler is a resident of the Texas 9 and Knot Standard and Knot Standard Los Angeles are “improper parties” because they 10 are “not valid or existing entities.” (Removal ¶¶ 18, 29–31, 33.) According to Briest’s 11 Complaint, she seeks damages “exceed[ing] $25,000” but does not list any other 12 specific damages. (Compl. 22, Prayer). In her Motion, Briest again does not assert a 13 specific amount in controversy but asserts that Defendants have provided only a 14 “blanket contention” that the relief she seeks would exceed $75,000. (Mot. 17.) 15 However, Defendants assert in their Removal, and re-allege in their Opposition, 16 that a good faith value of the relief sought “far exceeds” $75,000. (Removal ¶ 49.; 17 Opp’n to Mot. (“Opp’n”) 6–7, ECF No. 11.) Accordingly, the Court must now 18 determine whether it must remand the matter. 19 III. LEGAL STANDARD 20 A civil action may be removed to federal court if the district court has original 21 jurisdiction over the action. 28 U.S.C. § 1441(a). A district court has original 22 jurisdiction over a civil action where the amount in controversy exceeds the sum or 23 value of $75,000, exclusive of interest and costs, and the dispute is between “citizens 24 of different states.” 28 U.S.C. § 1332. “Federal jurisdiction must be rejected if there is 25 any doubt as to the right of removal in the first instance.” Libhart v. Santa Monica 26 Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). “The strong presumption against 27 removal jurisdiction means that the defendant has the burden of establishing that 28 1 removal is proper.” Hunter v. Philip Morris U.S.A., 582 F.3d 1039, 1042 (9th Cir. 2009) 2 (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 3 IV. DISCUSSION2 4 A. Amount in Controversy 5 Briest demands only an amount that “exceeds $25,000” in his prayer for relief. 6 (Compl. 22.) Based on damages sought, including lost wages and future earnings, 7 emotional distress, and punitive damages, Defendants assert that the amount in 8 controversy exceeds $75,000. (Removal ¶ 40–48.) More specifically, Defendants assert 9 that Briest’s estimated bi-weekly earnings of $3,333 applied to 52-week standard would 10 bring the amount in controversy to $86,666.58. (Removal ¶ 42.) Defendants do not 11 allege a specific amount regarding emotional distress and punitive damages, but cite 12 cases containing jury verdicts alleged to be factually sufficient to show the amount in 13 controversy exceeds $75,000. (Removal ¶¶ 43–45.) Finally, Defendants estimate that 14 $300 per hour for a minimum of 250 hours in attorneys’ fees—a “conservative” estimate 15 for the case at hand—would exceed $75,000. (Removal ¶ 48.) 16 Briest disagrees and asserts that Defendants have provided no “summary 17 judgment-style” evidence in support of its removal. Therefore, the amount of 18 controversy is in dispute. 19 If the amount in controversy is unclear or ambiguous from the face of the 20 complaint, the defendant must provide facts to establish jurisdiction by a preponderance 21 of the evidence. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). 22 Additionally, “[i]n the event that the plaintiff [contests] the defendant’s allegations . . . 23 the court decides, by a preponderance of the evidence, whether the amount-in- 24 controversy requirement has been satisfied.” Dart Cherokee Basin Operating Co., LLC 25 v. Owens, 574 U.S. 81, 88 (2014); see also Ibarra v. Manheim Investments, Inc., 775 26 F.3d 1193, 1198 (9th Cir. 2015). Proof of the amount in controversy may be shown 27 2 Defendants also requests judicial notice of several documents in support of its Motion. (See Req. 28 for Judicial Notice, ECF No. 12.) However, as the documents are unnecessary to the Court’s resolution of the Motion, the Court DENIES as moot Defendant’s Request for Judicial Notice. 1 through summary judgment-type evidence. Fritsch v. Swift Transp. Co. of Ariz., LLC, 2 899 F.3d 785, 793 (9th Cir. 2018); see also Ibarra, 775 F.3d at 1196 (“[P]arties may 3 submit . . . affidavits or declarations, or other summary-judgment-type evidence 4 relevant to the amount in controversy . . . .”) (internal citation omitted). Here, the 5 amount in controversy is unclear from the Complaint, and Briest contests Defendants’ 6 alleged amount in controversy. Therefore, Defendants must show by a preponderance 7 of the evidence that the amount in controversy exceeds $75,000. 8 1. Lost Wages and Future Earnings 9 A plaintiff alleging a violation of the Fair Employment and Housing Act 10 (“FEHA”) may seek back pay and front pay. Andrade v. Arby’s Rest. Grp., Inc., 225 11 F.Supp.3d 1115, 1139–40 (N.D. Cal. 2016). Accordingly, the Court may consider back 12 pay and front pay damages to determine the amount in controversy. Id. 13 Here, Defendants argue that Briest’s wages alone meet the amount in controversy 14 requirement. (Opp’n 7.) Based solely on the declaration of Matthew Mueller, founder 15 and president of Knot Standard LLC, Defendants approximate Briest’s earnings at 16 $3,333.33 every two weeks. (See Removal, Decl. of Mathew Mueller (“Mueller Decl.”) 17 ¶ 2, ECF No. 1-5.) Accordingly, Defendants assert that Briest’s lost wages for a one- 18 year period is $86,666.58 (52 weeks x $3,333). (Removal ¶ 42.) However, Mr. 19 Mueller’s declaration is not substantiated by any record or proof of payment and, 20 therefore, yields limited probative value. Absent more reliable, summary judgment- 21 style evidence, Defendants have failed to show that Briest’s wages should be used as a 22 basis for determining the amount in controversy. See Farley v. Dolgen Cal., LLC, 2017 23 WL 3406096, at *3 (E.D. Cal. Aug. 8, 2017) (“Without corroborating documents, [the 24 reporting analyst’s] declaration, on which defendant heavily relies, is speculative and 25 self-serving”). 26 2. Damages for Emotional Distress 27 Emotional distress damages may be considered in the amount in controversy even 28 where the amount is vague in the pleadings. Richmond v. Allstate Ins. Co., 897 F. Supp. 1 447, 450 (S.D. Cal. 1995). “A defendant may introduce evidence of jury verdicts in 2 cases involving analogous facts to establish probable emotional distress damages.” 3 Rodriguez v. Home Depot, U.S.A., Inc. No. 16-cv-01945-JCS, 2016 WL 3902838, at *5 4 (N.D. Cal. 2016). However, while “jury verdicts in similar cases can provide evidence 5 of the amount in controversy, the cases must be factually identical or, at a minimum, 6 analogous to the case at issue.” Aguilar v. Wells Fargo Bank, N.A., No. EDCV 15- 7 1833-AB (SPx), 2015 WL 6755199, at *5 (C.D. Cal. Nov. 4, 2015). Nonetheless, 8 “district courts appear to require only ‘analogous’ or even ‘similar’ examples before 9 considering jury verdicts for the amount in controversy analysis.” Avila v. Kiewit Corp., 10 No. CV 19-5740-MWF-JPR, 2019 WL 4729641, at *3 (C.D. Cal. Sept. 26, 2019). 11 Accordingly, the Court may only consider jury verdicts from analogous or similar cases 12 when determining damages for emotional distress. See id. 13 Defendants cite to several cases to establish that Briest’s claims of emotional 14 distress satisfy the amount in controversy. (Removal ¶ 44.) However, Defendants fall 15 short in generating adequate similarities between the cases cited and the instant case. 16 First, Defendants list similar claims and jury verdicts but provide no analysis or context 17 analogizing the facts of those claims to the instant matter. Second, the cited cases are 18 clearly distinguishable. For instance, Defendants’ lead case Johnson v. BSI Consultants 19 Inc., involves the defendant allegedly inducing the plaintiff into employment, causing 20 him to relocate his family on two occasions, and making false representations about the 21 duration, compensation, and existence of employment. 26 Trials Digest 2d 23, 1996 22 WL 763115 (Cal. Super. Sept. 13, 1996). Defendants also cite Gary v. Nichols, 23 involving allegations of sustained sexual harassment towards an employee over the 24 course of a year. 45 Trials Digest 8th 7, 2004 WL 3576547 (Cal. Super. Dec. 10, 2004). 25 Here, Briest’s factual allegations are limited to criticisms about her ability to 26 communicate clearly and feeling retaliated against for bringing to light various 27 workplace non-compliances. (Compl. ¶¶ 5–7.) Unlike in Johnson and Gary, Briest 28 alleges no claims of employment misrepresentation, sexual harassment, or other 1 relatable facts that could reliably compel a similar jury verdict. Defendants claims are, 2 thus, speculative, and fail to show that damages sought for emotional distress should be 3 considered in determining the amount in controversy. See Daley v. Walmart Stores, 4 Inc., No. SA CV 18-0518-DOC (GJSx), 2018 WL 3104630 (C.D. Cal. 2018) (holding 5 that because the defendants cited cases with distinguishable facts, the defendants failed 6 to establish by a preponderance of the evidence that the emotional distress damages 7 would be adequate to satisfy the amount in controversy); Miller v. Michigan Millers 8 Ins. Co., No. C-96-4480 MHP, 1997 WL 136242 (N.D. Cal. 1997) (“[I]n the absence 9 of any papers suggesting [the] claim will yield an adequate amount in controversy, the 10 court will not speculate as to the damages potentially embodied in the plaintiffs’ vague 11 request for emotional distress.”). The Court finds that Defendants fail to support their 12 estimated liability for emotional damages, and thus, the Court does not consider the 13 figure in evaluating the amount in controversy. 14 3. Punitive Damages 15 Here, the Parties similarly dispute whether Defendants have introduced jury 16 verdicts from factually analogous cases to support its conclusion that a punitive damage 17 verdict would put the amount in controversy over the jurisdictional threshold. 18 “[P]unitive damages are part of the amount in controversy in a civil action.” 19 Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001). However, a defendant 20 must introduce evidence of jury verdicts in cases involving analogous or similar facts 21 when the plaintiff does not specify a particular amount. Ponce v. Medical Eyeglass 22 Center, Inc., No. S:15-cv-004035-CAS (JEMx), 2015 WL 4554336, at *4 (C.D. Cal. 23 2015) (internal quotation marks omitted). Accordingly, when a defendant cites to cases 24 that do not contain sufficiently analogous or similar facts, then the Court cannot 25 consider defendant’s punitive damages estimates. Aguilar, 2015 WL 6755199, at *5. 26 Here, Defendants merely cite two cases for the purpose of claiming that punitive 27 damages should be considered in determining the amount in controversy. Defendants 28 fail to provide factual analysis or indicate how the cases are analogous to the instant 1 case. On this basis alone, the Court finds that Defendants have not met is burden for 2 showing how punitive damages should be considered in the amount in controversy. 3 Moreover, even broad stroke analysis reveals that the cited cases are distinguishable to 4 the facts at hand. For example, Defendant cites Aucina v. Amoco Oil Co., 871 F. Supp. 5 332, 334. In Aucina, the court considered whether punitive damages exceeded $75,000. 6 The Court indicated that as the defendant was a Fortune 500 Company and the purpose 7 of punitive damages is to deter others from similar conduct, it is apparent that the 8 punitive damages alone would satisfy the amount in controversy requirement. 9 However, here, Defendants are not Fortune 500 Companies, nor do Defendants 10 provide evidence purporting similar financial resources as a Fortune 500 Company. 11 Thus, Defendants have failed to adequately cite analogous case law supporting punitive 12 damages in this case and the Court does not find that the punitive damages could satisfy 13 the amount in controversy requirement. 14 4. Attorney’s Fees 15 Additionally, Defendants assert that Briest’s attorneys’ fees, alone, would exceed 16 the $75,000 requirement for diversity jurisdiction. (Removal ¶ 48.) Briest argues not 17 so. Briest asserts that the Court may not consider its future attorneys’ fees because 18 Defendants have failed to satisfy their burden of proof. (Mot. 17–18.) Accordingly, 19 the Court considers whether Defendants have met their burden of proof. 20 The Ninth Circuit recently resolved a district court split and determined that a 21 “defendant may attempt to prove that future attorney’s fees should be included in the 22 amount in controversy.” Fritsch, 899 F.3d at 794. Thus, as with lost wages and future 23 earnings, proof of attorneys’ fees must be made with “summary-judgment-type 24 evidence.” Id. “A district court may reject the defendant’s attempts to include future 25 attorneys’ fees in the amount in controversy if the defendant fails to satisfy [the] burden 26 of proof.” Id. at 795. “[D]istrict courts may [] rely on their knowledge of customary 27 rates and their experience concerning reasonable and proper fees.” Id. (internal 28 quotation marks omitted). 1 Defendants argue that Briest’s attorneys’ fees would likely exceed $75,000 by 2 || applying a “conservative” rate of $300 per hour at over 250 hours. (Removal § 48.) 3 | Defendants, however, do not provide the required summary judgment-type evidence to substantiate this amount. Thus, the Court shall not consider attorneys’ fees in 5 || determining the amount in controversy. 6 Accordingly, The Court finds that Defendants have failed to substantiate that the 7 || amount in controversy exceeds $75,000. 8 B. Complete Diversity 9 Because Defendants have failed to show by a preponderance of the evidence that 10 | the amount in controversy exceeds $75,000, the Court does not reach the issue of 11 || complete diversity. 12 V. CONCLUSION 13 Defendants have failed to present the required summary judgment-type evidence 14 | to substantiate that the amount in controversy exceeds $75,000. Therefore, this Court 15 | lacks subject-matter jurisdiction over this action, and for this reason, the Court 16 | GRANTS Briest’s Motion to Remand. The Court DENIES as moot her Motion for 17 | Leave to Amend. (ECF No. 10.) Accordingly, the Court REMANDS the action to the 18 | Superior Court of the State of California, County of Los Angeles, 111 North Hill Street, 19 | Los Angeles, CA 90012, Case No. 19STCV33261. The Clerk of the Court shall close 20 || the case. 21 22 IT ISSO ORDERED. 23 24 March 5, 2020 ~ 25 ie oa 26 Geddiod OTIS D. WRIGHT, II 98 UNITED STATES DISTRICT JUDGE