Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01690/USCOURTS-casd-3_10-cv-01690-1/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-(Citizenship)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARIANA LABASTIDA, et. al.,

Plaintiff,

CASE NO. 10cv1690-MMA (CAB)

ORDER GRANTING PLAINTIFFS’

MOTION FOR RECONSIDERATION

[Doc. No. 16]

REMANDING ACTION TO STATE

COURT

vs.

MCNEIL TECHNOLOGIES, INC., et. al.,

Defendant.

This matter is before the Court on Plaintiffs’ motion for reconsideration of the Court’s

November 23, 2010 Order denying Plaintiffs’ motion to remand [Doc. No. 8]. Defendants oppose

Plaintiffs’ motion, and Plaintiffs filed a reply [Doc. Nos. 17, 18]. Having considered the briefing,

and for the reasons stated herein, the Court GRANTS Plaintiffs’ motion for reconsideration and

REMANDS this action to state court. 

BACKGROUND AND PROCEDURAL POSTURE

The Court detailed the events giving rise to this action in its previous order denying

Plaintiffs’ motion to remand [Doc. No. 15]. Those sections of the Court’s November 23 Order are

incorporated by reference herein. The Court in its November 23 Order ultimately denied

Plaintiffs’ motion to remand because the Court found that Invizion’s Notice of Removal was

proper both procedurally and substantively, pursuant to 28 U.S.C. 1446(b), and the Class Action

Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Specifically, the Court found that

Case 3:10-cv-01690-MMA-CAB Document 20 Filed 02/25/11 Page 1 of 6
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Invizion’s Notice of Removal was timely, that the incorrect allegations of timeliness in the Notice

constituted defects in form, curable by amendment, and that Invizion established, by a

preponderance of the evidence, the jurisdictional amount requirement set forth in CAFA. 28

U.S.C. § 1332(d). See Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007);

Abrego v. Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006). After careful

reconsideration, the Court now finds that Invizion fails to put forth sufficient evidence that the

amount in controversy exceeds the statutory minimum.

LEGAL STANDARD

Plaintiffs move for reconsideration pursuant to Federal Rule of Civil Procedure 54(b),

which provides:

When an action presents more than one claim for relief . . . or when

multiple parties are involved, the court may direct entry of a final

judgment as to one or more, but fewer than all, claims or parties only

if the court expressly determines that there is no just reason for

delay. Otherwise, any order or other decision, however designated,

that adjudicates fewer than all the claims or the rights and liabilities

of fewer than all the parties does not end the action as to any of the

claims or parties and may be revised at any time before the entry of a

judgment adjudicating all the claims and all the parties' rights and

liabilities.

FED. R. CIV. P. 54(b) (emphasis added). As a threshold matter, Defendant Invizion asserts that

Plaintiffs’ motion is improper because Rule 54(b) applies only to “judgments” and does not

provide a basis for reconsideration. However, under Rule 54(b), a district court has inherent

authority to “reconsider and modify an interlocutory decision for any reason it deems sufficient,

even in the absence of new evidence or an intervening change in or clarification of controlling

law.” Jadwin v. County of Kern, 2010 U.S. Dist. LEXIS 30949 *26 (E.D. Cal. Mar. 31, 2010)

(quoting Abada v. Charles Schwab & Co., 127 F. Supp. 2d 1101, 1102 (S.D. Cal. 2001); City of

Los Angeles v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir. 2001)). “But a court should

generally leave a previous decision undisturbed absent a showing that it either represented clear

error or would work a manifest injustice.” Jadwin, 2010 U.S. Dist. LEXIS at *26-27 (quoting

Abada, 127 F. Supp. 2d at 1102). The Court therefore exercises its inherent authority to reconsider

and revise its November 23 Order pursuant to Rule 54(b). 

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Plaintiffs’ motion for reconsideration is also proper under Rule 60(b), which Invizion cites

as the applicable standard in its opposition brief. Rule 60(b) provides that a motion for “relief

from judgment or order” may be filed within a “reasonable time,” but usually must be filed “not

more than one year after the judgment, order, or proceeding was entered or taken.” FED. R. CIV. P.

60(b). Under Rule 60(b), reconsideration may be granted in the case of “mistake, inadvertence,

surprise or excusable neglect” or “any other reason [justifying] relief.” FED. R. CIV. P. 60(b). A

court’s determination that it committed error certainly qualifies, and in this respect, the standards

for review embodied in Rules 54(b) and 60(b) are complementary.

In addition to the foregoing, motions for reconsideration are also properly brought under

Civil Local Rule 7.1(i), which allows parties to seek reconsideration of an order. Generally, courts

will reconsider a decision if a party can show (1) new facts, (2) new law, or (3) clear error in the

court’s prior decision. See, e.g., School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d

1255, 1263 (9th Cir. 1993); Hydranautics v. FilmTec Corp., 306 F. Supp. 2d 958, 968 (S.D. Cal.

2003). Ultimately, however, the decision on a motion for reconsideration lies in the Court’s sound

discretion. Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona Enter. v.

Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000)). 

DISCUSSION

Plaintiffs request that the Court reconsider the evidentiary record related to Invizion’s

burden of establishing the amount in controversy requirement set forth in CAFA. In cases

removed from state court, a removing defendant bears the burden of establishing federal

jurisdiction, including any applicable amount in controversy requirement. Gaus v. Miles, Inc., 980

F.2d 564, 566 (9th Cir. 1992). A notice of removal pursuant to CAFA must be timely filed in

accordance with 28 U.S.C. 1446(b), and must indicate the amount in controversy satisfies the

jurisdictional amount requirement of $5 million. Id. at 567. In this circuit, when a complaint does

not contain any specific amount of damages sought, “the removing defendant must prove by a

preponderance of the evidence that the amount in controversy requirement has been met.” Abrego

Abrego v. The Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006). “Under this burden, the

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defendant must provide evidence that it is ‘more likely than not’ that the amount in controversy”

satisfies the federal diversity jurisdictional amount requirement. Sanchez v. Monumental Life Ins.

Co., 102 F.3d 398, 404 (9th Cir. 1996). The mere “legal possibility” that the amount in

controversy is jurisdictionally sufficient is “clearly inconsistent with the limits which Congress has

placed on both removal and diversity jurisdiction.” Id. at 403. The Ninth Circuit has expressly

applied this burden to complaints filed under CAFA that do not specify a particular amount in

controversy. Abrego, 443 F.3d at 683 (applying Sanchez to complaints filed under CAFA that do

not specify a particular amount in controversy).

When determining the amount in controversy, the Court looks to “facts presented in the

removal petition as well as any summary-judgment-type evidence relevant to the

amount-in-controversy at the time of removal.” Matheson v. Progressive Specialty Ins. Co., 319

F.3d 1089, 1090 (9th Cir. 2003). As the Court noted in its November 23 Order, a settlement letter

is relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of

the plaintiff’s claim. See Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002); Arellano v.

Home Depot U.S.A., Inc., 245 F. Supp. 2d 1102 (S.D. Cal. 2003) (relying upon a settlement

demand letter found to reflect a reasonable estimate of plaintiff's damages to conclude that

requisite amount was in controversy). 

Here, Invizion relied upon Plaintiffs’ Third Amended Complaint and the October 2009

settlement demand letter to establish the amount in controversy. As indicated in the Court’s

November 23 Order, reliance on Plaintiffs’ Third Amended Complaint is not proper, as a

superseded pleading may not be considered in determining whether the suit was removable. Thiel

v. Southern Pac. Co., 126 F.2d 710, 712 (9th Cir.1942). And, although a settlement demand letter

may be relevant evidence of the amount in controversy, Plaintiffs argue that here, Invizion’s

reliance on an outdated and inaccurate settlement demand is insufficient by itself to establish the

amount in controversy. Plaintiffs request the Court review the evidentiary record as a whole,

keeping particularly in mind Invizion’s burden of proof, and based thereon reconsider its previous

determination regarding whether the jurisdictional amount in controversy requirement is met in

this case.

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These facts support Plaintiffs’ assertion that the October 2009 settlement demand was both

unreasonably inflated and outdated by the time Invizion received a copy [Doc. 8-1].

2

In Cohn v. Petsmart, the Ninth Circuit noted that a settlement letter is relevant evidence of

the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff's claim. 281

F.3d 837, 840 (9th Cir. 2002). However, the court indicated that Cohn could have undermined the

reasonableness of the defendant’s reliance on the settlement demand letter to establish jurisdiction if

he had attempted “to disavow the letter or offer contrary evidence.” Id. In its November 23 Order,

theCourt noted that “Plaintiffs argue that the settlement demand wasimproperly inflated and therefore

cannot be relied upon at this juncture to establish the amount actually in controversy” [Doc. No. 15].

Based on Cohn, the Court erred to the extent it found Plaintiffs disavowal to be inapplicable to the

determination regarding whether Invizion satisfied its burden of proof.

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“The removal statute is strictly construed against removal and any doubt must be resolved

in favor of remand.” Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988). With this in mind, the

Court finds the following evidence and information, which existed at the time of removal, to be

relevant to this determination. First, the Court notes that the October 2009 settlement demand

letter, which was included with Invizion’s Notice of Removal, was prepared by Plaintiffs and

delivered to McNeil approximately nine months prior to the date Invizion filed its Notice of

Removal [Doc. No. 1]. In addition, Plaintiffs’ estimation that McNeil’s exposure was

approximately $10.3 million included prejudgment interest, which cannot be taken into account

when determining whether the amount in controversy exceeds $5 million. Abrego Abrego v. The

Dow Chem. Co., 443 F.3d 676, 680 (9th Cir. 2006). The demand letter also expressly stated that

the offer would only remain open until October 29, 2009 [Doc. No. 1].1

 Further, at a March 2010

settlement conference, McNeil’s counsel indicated that McNeil believed its maximum exposure

was $1,985,876.13, and shortly after the meeting Plaintiffs requested McNeil’s unredacted payroll

records in order to determine a reasonable counteroffer.2

The Court finds that the foregoing calls into serious question the relevance and

reasonableness of the October 2009 settlement demand letter. In cases with substantially similar

facts, removing defendants have provided courts with detailed calculations in order to establish the

amount in controversy. See Wilson v. Best Buy Co., 2011 U.S. Dist. LEXIS 14400, *4 (E.D. Cal.

Feb. 8, 2011); see also Schiller v. David’s Bridal, Inc., 2010 U.S. Dist. LEXIS 81128 (E.D. Cal.

July 14, 2010); Chochorowski v. Home Depot USA, 585 F. Supp. 2d 1085 (E.D. Mo. 2008). For

example, in the recent case of Wilson v. Best Buy Co., in order to establish the amount in 

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Because the Court concludes that Invizion failed to establish the amount in controversy by

a preponderance of the evidence, the Court does not reconsider whether Invizion’s Notice of Removal

was procedurally proper pursuant to 28 U.S.C. 1446(b).

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controversy by a preponderance of the evidence, the payroll manager of defendant Best Buy

calculated the amount in controversy based upon the precise number of employees, workweeks,

and average hourly rate earned by the employees in question. 2011 U.S. Dist. LEXIS 14400, at

*4. Based upon this evidence and allegations in plaintiffs’ complaint that corroborated the amount

in controversy, the court found that the defendant sufficiently established the amount in

controversy. Id. at *5-7. Here, by comparison, Invizion’s sole reliance on an outdated settlement

demand letter and failure to provide any additional support for its claim that the amount in

controversy exceeds the statutory minimum falls far short of establishing its burden of proof. 

The removal statute is strictly construed against removal, and the Court cannot base its

jurisdiction over this matter on a document that did not reflect a reasonable estimate of Plaintiffs’

claim at the time Invizion filed its Notice of Removal.3

CONCLUSION

Based on the foregoing, the Court GRANTS Plaintiffs’ motion for reconsideration and

REMANDS this action to the Superior Court of California, County of San Diego.

IT IS SO ORDERED. 

DATED: February 25, 2011

Hon. Michael M. Anello

United States District Judge

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