Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-07788/USCOURTS-cand-3_06-cv-07788-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ELADIO CELESTINO,

Plaintiff,

 v.

RENAL ADVANTAGE INC.,

Defendant. /

No. C 06-07788 JSW

ORDER DENYING PLAINTIFF’S

MOTION TO REMAND

Now before the Court is the motion to remand by plaintiff Eladio Celestino

(“Celestino”) pursuant to 28 U.S.C. §§ 1332, 1441 and 1446. Having carefully reviewed the

parties’ papers and considering the relevant legal authority, the Court hereby DENIES

Plaintiff’s motion to remand.

BACKGROUND

On August 15, 2006, Celestino filed suit in the Superior Court of California against

defendants Renal Advantage Inc. and RAI - San Leandro, alleging state law claims for wrongful

termination and disability discrimination pursuant to the California Fair Employment and

Housing Act (“FEHA”), Cal. Gov’t Code § 12900, et seq. (Notice to Adverse Party of Removal

to Federal Court (“Notice of Removal”), Ex. 1 ¶ 1.) Although his complaint does not specify

any amount, Celestino seeks general and special damages, compensatory damages including

lost wages, lost employee benefits and medical expenses, and damages for emotional distress

“in an amount according to proof.” (Id., Ex. 1 at 3.) In addition, Celestino seeks punitive

damages and attorneys fees. (Id.)

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Celestino is a California resident. (Id., Ex. 1, ¶ 1.) Renal Advantage is a Delaware

corporation with its principal place of business in Tennessee. (Id., Ex. 1, ¶ 2.) In his complaint, 

Celestino alleges that RAI - San Leandro is a California corporation with its principal place of

business in California. (Id.) However, on October 20, 2006, Renal informed Celestino that

RAI - San Leandro is not an existing entity. (Sarro Decl., Ex. 4.) On November 10, 2006,

Renal Advantage provided Celestino another notice that RAI - San Leandro does not exist as a

legal entity. (Id., Ex. 5.) On December 15, 2006, the Superior Court dismissed RAI - San

Leandro from the complaint. (Notice of Removal, Ex. 4.) 

On November 21, 2006, Celestino responded to Renal Advantage’s form interrogatories. 

(Id., Ex. 5.) In his response, Celestino stated that he suffered emotional injuries, lost income

exceeding $55,457.56, and future income loss estimated at $39,250. (Id., Ex. 5 at 4-5.) On

December 20, 2006, Renal Advantage removed the action to this Court on grounds of diversity

jurisdiction. (Notice of Removal.) Celestino now moves to remand the action to state court.

ANALYSIS

A. Legal Standards Relevant to Removal Jurisdiction.

“[A]ny civil action brought in a State court of which the district courts of the United

States have original jurisdiction, may be removed by the defendant . . . to the district court of

the United States for the district and division embracing the place where such action is

pending.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983)

(citation omitted); see also 28 U.S.C. § 1441. However, federal courts are courts of limited

jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 

Accordingly, the burden of establishing federal jurisdiction for purposes of removal is on the

party seeking removal, and the removal statute is strictly construed against removal jurisdiction. 

Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); see also Gaus v. Miles, Inc.,

980 F.2d 564, 566 (9th Cir. 1992). “Federal jurisdiction must be rejected if there is any doubt

as to the right of removal in the first instance.” Gaus, 980 F.2d at 566.

In order to remove on the basis of diversity jurisdiction, the action may be removed only

if no defendant is a citizen of the same state as any plaintiff and “only if none of the parties in

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interest properly joined and served as defendants is a citizen of the State in which the action is

brought.” 28 U.S.C. § 1441(b); see also 28 U.S.C. § 1332(a)(1). In addition, the removing

party “must show that ‘the matter in controversy exceeds the sum or value of $75,000, exclusive

of interest and costs.’” Valdez, 372 F.3d at 1116 (quoting 28 U.S.C. § 1332(a)). 

Pursuant to 28 U.S.C. § 1446, “[t]he notice of removal of a civil action or proceeding

shall be filed within thirty days, by the receipt of the Defendant, through service or otherwise,

of a copy of the initial pleading setting forth the claim for relief . . . .” The thirty-day period for

filing a notice of removal is triggered when the defendant first receives formal service of

process. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-56 (1999). 

However, in a diversity case, if the initial pleadings do not indicate that federal diversity

jurisdiction is available, the removal period does not begin until additional papers are filed

indicating that the case is removable. See 28 U.S.C. § 1446(b) (providing that the removal

period starts to run when the defendant receives a “paper from which it may first be ascertained

that the case is . . . removable”). If the initial pleadings provide some indication that removal is

available, it is generally held that the defendant has an obligation to determine whether or not

federal jurisdiction in fact exists. In such a situation, the removal period begins as soon as the

defendant receives a paper containing a clue that removal may be available. Kaneshiro v. N.

Am. Co. for Life & Health Ins., 496 F. Supp. 452, 460 (D. Haw. 1980) (citing Grigg v. S. Pac.

Co. 246 F.2d 613 (9th Cir. 1957)).

B. Plaintiff’s Motion to Remand.

The parties do not dispute that diversity of citizenship exists. However, Celestino

argues that the Court should remand this case because removal was untimely and the

jurisdictional amount requirement of 28 U.S.C. § 1332 is not satisfied. (Br. at 2.) 

1. Renal Advantage’s Removal Was Timely.

Celestino argues that Renal Advantage did not timely remove this action upon learning

that RAI - San Leandro did not exist. (Id. at 3.) Diversity jurisdiction requires both a “matter in

controversy exceed[ing] the sum or value of $75,000, exclusive of interest and costs, and . . .

Citizens of different States.” 28 U.S.C. § 1332(a). 

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As of October 20, 2006, Renal Advantage was notified that RAI - San Leandro is not an

existing legal entity, and thus knew or should have known that diversity of citizenship existed. 

(Sarro Decl., Ex. 4.) Celestino’s argument that removal on December 20, 2006 was untimely

rests on this October date. (Br. at 3.) However, as of October 2006, Renal Advantage did not

know the amount in controversy because Celestino’s pleading merely alleged damages “in an

amount according to proof.” (Notice of Removal, Ex. 1 at 3.) No document in this case

indicating that the amount in controversy may have exceeded the jurisdictional amount until

Celestino responded to interrogatories claiming lost wages. (See id., Ex. 5 at 4-5.) Thus, the

earliest date by which Renal Advantage could have ascertained the jurisdictional amount and

the existence of diversity jurisdiction was November 21, 2006, the date it received Celestino’s

responses to interrogatories. (Id., Ex. 5.) Twenty-nine days later, on December 20, 2006, Renal

Advantage removed the action to this Court. (Id. at 1.) Accordingly, Renal Advantage’s

removal was timely.

2. At the Time of Removal, the Jurisdictional Amount Existed.

Celestino also argues that the jurisdictional amount of $75,000 was not met because

only damages accrued at the time of removal may be counted toward the jurisdictional amount. 

(Br. at 3.) “The jurisdictional minimum may be satisfied by claims for special and general

damages, attorneys’ fees and punitive damages.” Simmons v. PCR Tech., 209 F. Supp. 2d 1029,

1031 (N.D. Cal. 2002). “The district court determines whether [a] defendant has met this

burden by first considering whether it is ‘facially apparent’ from the complaint that the

jurisdictional amount has been satisfied.” Id. (citing Singer v. State Farm Mut. Auto. Ins. Co.,

116 F.3d 373, 377 (9th Cir. 1997)). “In cases where a plaintiff’s state court complaint does not

specify a particular amount of damages, the removing defendant bears the burden of

establishing, by a preponderance of the evidence, that the amount in controversy exceeds

$[75,000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). When

satisfying the preponderance of the evidence test for jurisdiction, the Ninth Circuit permits

courts to consider “facts presented in the removal petition as well as any

summary-judgement-type evidence relevant to the amount in controversy at the time of

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removal. Conclusory allegations as to the amount in controversy are insufficient.” Matheson v.

Progressive Specialty Ins. Co., 319 F.3d 1089, 1090-1091 (9th Cir. 2003) (citing Singer, 116

F.3d at 377; Gaus, 980 F.2d at 567); see also Kroske v. US Bank Corp., 432 F.3d 976, 980 (9th

Cir. 2005) (holding that the district court properly considered plaintiff’s interrogatory

responses).

In Simmons, an employee filed suit in state court alleging a claim for retaliation and

discrimination under FEHA against his former employer. 209 F. Supp. 2d at 1030. The

employer removed, and the employee filed a motion to remand, claiming that the employer had

not established that the amount in controversy exceeded the jurisdictional amount. Id. at 1031. 

The court found that the employer had met its burden. Id. The court considered wage loss

incurred after the case was removed, noting that “[a]lthough the court declines to project future

wage loss until a hypothetical trail date, it is nonetheless reasonable to expect these damages to

exceed” the amount accrued at the time of removal. Id. at 1032. Attorneys’ fees reasonably

anticipated to be incurred after removal were also considered by the court in calculating the

jurisdictional amount. Id. at 1034-35. The court reasoned that the amount in controversy is

determined “based on the damages that can reasonably be anticipated at the time of removal. 

Similarly, the measure of fees should be the amount that can reasonably be anticipated at the

time of removal, not merely those already incurred.” Id. at 1035 (emphasis added).

Similarly, in Brady v. Mercedes-Benz USA, Inc., a district court found that the amount in

controversy exceeded $75,000 by including in its calculation compensatory damages, punitive

damages, the amount of relief from future payments, and a reasonable estimate of attorneys’

fees likely to be incurred up to resolution of the case. 243 F. Supp. 2d 1004, 1008-11 (N.D.

Cal. 2002). The court noted, “[w]hile an estimate of the amount in controversy must be made

based on facts known at the time of removal, that does not imply that items such as future

income loss, damages, or attorneys fees likely to be incurred cannot be estimated at the time of

removal.” Id. at 1011 n.4. 

In Lamke v. Sunstate Equip. Co., LLC, a district court found that the jurisdictional

amount likely would be met when $60,000 in damages were calculated at the time of removal,

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but “future economic damages (from the filing of the complaint and on),” compensatory

damages and punitive damages had yet to be taken into account. 319 F. Supp. 2d 1029, 1033-

34 (N.D. Cal. 2004). Finally, in Beaver v. NPC Int’l, Inc., the court held that “[t]he claim for

attorneys fees, the potential claim for punitive damages, and the claim for front pay, taken

together with the $ 37,000 in back pay and non-economic damages specifically sought in the

complaint, more likely than not total an amount in controversy greater than the $75,000

jurisdictional threshold.” 451 F. Supp. 2d 1196, 1200 (D. Or. 2006).

The opinions in Simmons, Brady, Lamke and Beaver indicate that the amount in

controversy includes not only damages accrued up to the time of removal, but also a reasonable

assessment of damages likely to be accrued after the time of removal. Here, considering

Celestino’s responses to form interrogatories, which were attached to the Notice of Removal, it

is more likely than not that the jurisdictional amount is met. At the time of removal, Celestino

claimed a loss of income and benefits of $55,457.56, plus dental, health and vision benefits and

stock options. (Notice of Removal, Ex. 5 at 5.) In addition, he stated that he would be out of

work for at least six months following November 2006, the date he responded to form

interrogatories. (Id.) For the six-month time period, Celestino claimed a total of $39,250 in

future income loss, plus benefits, based on a monthly income of $6,541.67. (Id.) By

Celestino’s own interrogatory responses, this future income loss was reasonably anticipated at

the time of removal. See Simmons, 209 F. Supp. 2d at 1035. Thus, lost wages up to the time of

removal, plus future income loss, total $94,707.56. Without even considering Celestino’s

claims of emotional distress, medical expenses, punitive damages and attorneys’ fees – all of

which are alleged in his complaint – the amount in controversy exceeds $75,000. (See id., Ex. 1

at 3.)

Celestino cites two cases supporting the proposition that the amount of controversy is

calculated at the time of removal, but none hold that damages may be considered only to the

extent that they have already accrued at that time. (Reply Br. at 2.) See Spencer v. U.S. Dist.

Court, 393 F.3d 867, 871 (9th Cir. 2004) (holding that post-removal joinder of a new party did

not destroy diversity jurisdiction); Sparta Surgical Corp. v. NASD, 159 F.3d 1209, 1213 (9th

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Cir. 1998) (holding that an amended complaint filed after removal did not affect federal

jurisdiction). 

Celestino also cites BEM I, LLC v. Anthropologie, Inc.. (Reply Br. at 2, citing 301 F.3d

548, 552 (7th Cir. 2002).) However, BEM I is out-of-circuit authority, and the Seventh Circuit

imposes a different burden of proof on a defendant seeking to defeat a plaintiff’s motion to

remand. Compare Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 (7th Cir. 1993) (requiring the

defendant to prove “to a reasonable probability that jurisdiction exists”) with Sanchez, 102 F.3d

at 404 (requiring “the defendant must provide evidence establishing that it is more likely than

not that the amount in controversy exceeds that amount”) (quotations omitted); see also Brady,

243 F. Supp. 2d at 1010-11 (rejecting the Seventh Circuit’s rule including only fees incurred as

of the date of filing in the amount in controversy). Similarly, Celestino’s reliance on Burns v.

Windsor Insurance Co. is misplaced. (Br. at 5.) In Burns, the plaintiff alleged in her complaint

damages of “not more than $45,000 plus costs.” 31 F.3d 1092, 1094 (11th Cir. 1994). The

Eleventh Circuit noted “the specific nature of plaintiff’s damage claim” and required the

defendant to prove to a legal certainty that the plaintiff had falsely assessed the case. Id. at

1095. Here, Celestino has not affirmatively declared that he seeks damages of less than

$75,000. Accordingly, none of the cases Celestino cites support remand. The Court finds that

removal was proper because diversity jurisdiction exists.

CONCLUSION

For the foregoing reasons, the Court hereby DENIES Plaintiff’s motion to remand.

IT IS SO ORDERED.

Dated: April 24, 2007 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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