Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-02016/USCOURTS-casd-3_17-cv-02016-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 28:1332nr Diversity-Notice of Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TRACY R. HORN,

Plaintiff,

vs.

ACCESS GROUP, INC., A 

DELAWARE CORPORATION; and 

DOES 1 through 10, inclusive,

Defendants.

Case No. 3:17-cv-02016-JAH-RBB

ORDER GRANTING PLAINTIFF’S 

MOTION TO REMAND [DOC. NO. 5] 

AND DENYING AS MOOT 

DEFENDANT’S MOTION TO 

DISMISS INITIAL COMPLAINT

[DOC. NO. 2]

INTRODUCTION

Pending before the Court is Plaintiff Tracy R. Horn’s (“Horn” or “Plaintiff”)

motion to remand, pursuant to 28 U.S. Code § 1447 (Doc. No. 5) and Defendant 

AccessLex Institute’s (“Access” or “Defendant”) motion to dismiss the initial 

complaint pursuant to Rule 12(b)(6) (Doc. No. 2). The motion to remand and the 

motion to dismiss have been fully briefed. After a careful review of the pleadings and 

for the reasons set forth below, Plaintiff’s motion to remand is GRANTED and 

Defendant’s motion to dismiss is DENIED AS MOOT.

BACKGROUND

On June 27, 2017, Plaintiff filed a limited civil case for unlawful debt collection 

practices in violation of the California Rosenthal Fair Debt Collection Practices Act 

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(RFDCPA), California Civil Code §§ 1788-1788.33 in the San Diego County Superior 

Court. Plaintiff’s single cause of action describes seven (7) attempts by Defendant to 

communicate directly with plaintiff after notification of attorney representation and 

alleges this conduct constitutes the knowing and willful violation of eight (8) 

provisions of the Fair Debt Collection Practices Act (FDCPA), as incorporated by Cal. 

Civ. Code § 1788.17. Plaintiff prays for relief in the form of statutory damages, 

attorney’s fees, litigation expenses, and actual damages for “harm resulting from 

Defendant's actions, including worry, emotional distress, anxiety, humiliation, [and]

telephone charges.” 

On September 29, 2017, Defendant filed a notice of removal based solely on 

diversity of citizenship in accordance with 28 U.S.C. § 1446(b) [Doc No. 1] followed 

by a Motion to Dismiss Plaintiff’s Complaint or in the alternative, to transfer venue 

[Doc. No. 2]. Plaintiff moved for remand pursuant to 28 U.S.C. § 1447(c) and L.R. 7-

1 on the grounds that “this Court lacks subject matter jurisdiction to hear this case and 

Defendant improperly removed this action to federal court.” [Doc. No. 5.] Although 

Plaintiff does not dispute complete diversity exists between the parties, she challenges

Defendant’s proffer that the amount in controversy exceeds $75,000. In addition, 

Plaintiff requests attorney’s fees and costs pursuant to 28 U.S.C. 1447(c). Both 

motions, having been briefed and taken under submission, are now before the Court. 

DISCUSSION

I. Legal Standard

The federal court is one of limited jurisdiction. Gould v. Mutual Life Ins. Co. v. 

New York, 790 F.2d 769, 774 (9th Cir. 1986). As such, it cannot reach the merits of 

any dispute until it confirms its own subject matter jurisdiction. Steel Co. v. Citizens 

for a Better Environ., 523 U.S. 83, 93-94 (1998). The Ninth Circuit “strictly construe[s] 

the removal statute against removal jurisdiction,” and “[f]ederal jurisdiction must be 

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rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. 

Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 

 The removal statute, 28 U.S.C. §1441 allows defendants to remove an action 

when a case originally filed in state court is between citizens of different states and 

involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1441(a) and 

(b); 28 U.S.C. §§ 1331, 1332(a). The amount in controversy is determined as of the 

date of removal. Conrad Associates v. Hartford Acc. & Indem. Co., 994 F. Supp. 1196 

(N.D. Cal. 1998). “[T]he removing defendant bears the burden of establishing, by a 

preponderance of the evidence, that the amount in controversy exceeds [the 

jurisdictional amount]. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th 

Cir. 2007) (quoting Sanchez v. Monumental Life Ins. Co. 102 F.3d 398, 404 (9th Cir. 

1996)).

In circumstances where defendant’s removal of the action is objectively 

unreasonable, the Court may award attorney's fees under § 1447(c). Martin v. Franklin 

Capital Corp., 546 U.S. 132, 140–41 (2005). As noted by the Supreme Court in Martin, 

The process of removing a case to federal court and then having it remanded 

back to state court delays resolution of the case, imposes additional costs on both 

parties, and wastes judicial resources. Assessing costs and fees on remand 

reduces the attractiveness of removal as a method for delaying litigation and 

imposing costs on the plaintiff. The appropriate test for awarding fees under § 

1447(c) should recognize the desire to deter removals sought for the purpose of 

prolonging litigation and imposing costs on the opposing party, while not 

undermining Congress' basic decision to afford defendants a right to remove as 

a general matter, when the statutory criteria are satisfied.

Id. While the appropriateness of fee shifting is left to the discretion of the Court in this 

instance, it must be mindful of Congressional intent. 

II. Analysis

A. Lack of Diversity Jurisdiction: Amount-In-Controversy

Plaintiff moves to remand this action to state court based on lack of diversity 

jurisdiction. Specifically, Plaintiff contends that removal is improper because the 

amount in controversy falls well below the $75,000 threshold. In looking first to the 

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complaint, the prayer for relief generally requests statutory damages and actual 

damages for mental anguish. The specific amount of damages are unclaimed. However, 

Plaintiff points to: (1) the civil case cover sheet, which accompanied the filing of 

Plaintiff’s lawsuit and invokes limited jurisdiction – designating the amount demanded 

as $25,000 or less, (2) the statutory limit on damages of $1,000 per person, per action

regardless of the number of violations (Marseglia v. JP Morgan Chase Bank, 750 F. 

Supp. 2d 1171, 1180 (S.D. Cal. 2010)) and (3) the lack pecuniary loss, in the form of 

medical bills or lost wages, alleged in the Complaint. Further, in support of her motion, 

Plaintiff’s attorney filed a declaration indicating “the sum of Plaintiff’s claim for actual 

damages, expenses and attorney’s fees would at most be $15,500 prior to 

commencement of Defendant’s removal action.” 

In response, and in light of Plaintiff’s declaration, Defendant does not oppose 

the motion to remand, but objects to Plaintiff’s request for an award of fees under 

§ 1447(c). 

B. Award of fees under § 1447(c)

An award of fees under § 1447(c) is discretionary, although guided by the 

underlying objective to deter removals intended to “prolong[] litigation and impose[] 

costs on the opposing party.” Martin, 546 U.S. 132, 140–41 (2005). Accordingly, “the 

standard for awarding fees ... turn[s] on the reasonableness of the removal.” Id. 

Defendant contends removal was objectively reasonable on three grounds: (1) 

Plaintiff did not expressly limit the amount of her claims within the complaint, (2) 

Plaintiff’s counsel did not implement reasonable methods of resolving the 

jurisdictional dispute after receiving the notice of removal and (3) removal was a 

procedural precaution to avoid waiver of the right to a federal forum in the instance 

Plaintiff’s action was reclassified as an unlimited action after amendment to the initial 

pleading. The Court is unpersuaded. 

It is uncontested that neither the body of Plaintiff’s Complaint, nor the prayer for 

relief alleges a specific amount of damages. However, it is in these circumstances,

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when “a plaintiff's state court complaint does not specify a particular amount of 

damages, [that] the removing defendant bears the burden of establishing, by a 

preponderance of the evidence, that the amount in controversy exceeds [the 

jurisdictional amount.]” Sanchez, 102 F.3d 398 at 404 (9th Cir.1996). Plaintiff’s 

failure to specify damages does not somehow alleviate Defendant’s burden nor provide 

an objectively reasonable ground for removal. While the Court agrees that the

jurisdictional dispute could have been easily resolved amongst the parties, it is the party 

who bears the burden of establishing the jurisdictional amount that would benefit most 

from an open discussion prior to embarking on a federal escapade.

While Defendant does not oppose the motion to remand, the Court considers the 

reasonableness of removal in light of Defendant’s initial assertion that Plaintiff’s 

claims included “ ‘statutory damages...in the amount of up to $1,000.00’ for each 

allegedly willful violation.” As clarified in Plaintiff’s motion to remand, statutory 

damages under the RFDCPA are awarded per proceeding, not per violation. Marseglia, 

750 F. Supp. 2d at 1180. Defendant’s misinterpretation of the law, however, would 

account for no more than a $7000 discrepancy when calculating the amount-incontroversy, limited by the case designation elected (i.e. limited jurisdiction) at the 

time of filing.

Plaintiff’s action was filed in state court as a limited jurisdiction civil case. In 

such cases, “the amount in controversy does not exceed twenty-five thousand dollars 

($25,000),” exclusive of attorneys' fees, interest, and costs. CCP § 85a. Defendant,

citing Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir.1998), contends that 

although attorney’s fees are not considered when determining the amount in 

controversy in state court, they may be included for purposes of Section 1332(a)’s 

amount in controversy requirement. 

In bringing the motion to remand, Plaintiff’s counsel billed $3,100. The total, 

includes “$2,300 in attorney’s fees, costs and expenses for researching, preparing and 

filing this Motion for Remand ... [and] $800 in attorney fees to reply to Defendant’s 

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opposition.” [Doc. No. 5-1, pg 8]. Defendant does not contest the amount billed as 

unreasonable, but proposes that the fees billed in relation to the motion to remand are 

a “strong indication that the total amount of her claim, together with fees....will exceed 

$75,000.” This assumption would require Plaintiff’s counsel to expend over 124 

billable hours throughout the pendency of the case and bill an amount more than double 

that which the plaintiff is able to recover in damages. Whereas here, Plaintiff’s 

damages are capped at $25,000, it is inconceivable that Plaintiff’s counsel would be 

entitled to $50,001 in “reasonable attorney’s fees.” See Cal. Civ. Code §1788.30(c)

(entitling the prevailing party to reasonable attorney’s fees based on time necessarily 

expended to enforce liability). 

Lastly, Defendant asserts that removal was reasonable to safeguard its right to a 

federal forum if Plaintiff was to amend the Complaint increasing the recovery sought. 

Defendant’s concern is misplaced in light of the statutory procedural protection 

outlined in §1446(b)(3). Section 1446(b)(3) allows a defendant to remove to federal 

court within thirty days of receiving information in an “amended pleading, motion, 

order or other paper” which allows the defendant to “ascertain ... that the case is one 

which is or has become removable ....” See Eyak Native Village v. Exxon Corporation, 

25 F.3d 773, 779 (9th Cir. 1994), cert. denied, 513 U.S. 1102 (1995) (plaintiffs’ reply 

brief, filed two years after commencement of the action in state court, set forth 

removable federal claim which triggered thirty-day removal period).

With no claim for pecuniary loss by Plaintiff, a thousand dollar limit on statutory 

damages, and a total maximum recovery amount of $25,000, excluding costs and fees, 

the Court is strained to find sufficient justification for the removal of this action. 

Finding removal was not objectively reasonable, the Court GRANTS Plaintiff’s 

counsel an award of $3100.00 for just costs and actual expenses incurred as a result of 

the removal.

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C. Defendant’s Motions to Dismiss

The Court declines to rule on Defendant’s motion to dismiss. “Article III 

generally requires a federal court to satisfy itself of its jurisdiction over the subject 

matter before it considers the merits of a case.” Ruhrgas AG v. Marathon Oil Co., 526 

U.S. 574, 583 (1999). Given the notice of removal in this case was based solely on 

diversity jurisdiction and the complaint alleges state law causes of action, the state court 

is the appropriate forum to litigate the merits of the motion to dismiss. The Court lacks 

subject matter jurisdiction and therefore DENIES AS MOOT Defendant’s motion to 

dismiss.

CONCLUSION AND ORDER

For the foregoing reasons, IT IS HEREBY ORDERED

1. Plaintiff’s Motion to Remand is GRANTED.

2. Plaintiff’s request for an award of fees is GRANTED in the amount of 

$3100.00 for costs and actual expenses.

3. Defendant’s motion to dismiss is DENIED AS MOOT.

IT IS SO ORDERED.

Dated: January 26, 2018

 

HON.JOHN A. HOUSTON

United States District Judge

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