Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-07793/USCOURTS-cand-3_18-cv-07793-0/pdf.json

Parties Involved:
AMCO Insurance Company
Defendant
Robert Gitlin
Plaintiff

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United States District Court 

Northern District of Californi

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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

ROBERT GITLIN, 

Plaintiff, 

v. 

AMCO INSURANCE COMPANY, 

Defendant. 

Case No. 18-cv-07793-CRB 

ORDER REMANDING CASE 

The Court lacks subject-matter jurisdiction over this case, and therefore 

REMANDS it to state court. 

I. BACKGROUND 

Plaintiff Robert Gitlin (“Gitlin”) initiated an insurance claim after his property was 

among the more than 500 homes destroyed by the Redwood Valley Complex Fire in 

October 2017. Mtn. for Declaratory Relief (dkt. 17) at 2–3. At the time, Gitlin had a fire 

insurance policy with Defendant AMCO Insurance Company (“AMCO”). Id. AMCO’s 

investigation into Gitlin’s losses included taking a recorded statement, or interview, from 

Gitlin soon after the fire occurred. Compl. (dkt. 1 Ex. A) ¶¶ 6–8; Def. Opening Brief 

(dkt.16) at 2. Gitlin subsequently asked AMCO to provide him with copies of all claimrelated documents pursuant to California Insurance Code §§ 2071 and 2071.1, which 

require that insurers produce copies of most claim–related documents upon request. Cal. 

Ins. Code § 2071; Compl. ¶ 8. AMCO produced some documents but refused to turn over 

a copy of the recorded statement. Compl. ¶ 8. 

Gitlin brought suit against AMCO in state court, seeking declaratory and injunctive 

relief based on violations of California Insurance Code §§ 2071 and 2071.1. Id. ¶¶ 10–22. 

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Gitlin does not seek damages. Rather, he asks for a declaration that the recorded interview 

is either a “claims-related document” or an “examination under oath” to which he is 

statutorily entitled, injunctive relief consisting of AMCO producing the recorded interview 

before it can examine him, and attorneys’ fees. Id. at 6–7. Defendants removed the case 

to this Court, asserting that there is diversity jurisdiction. See Notice of Removal (dkt. 1) 

at 1, 3–6. There is no other litigation underway between these parties. Def. Reply to OSC 

(dkt. 23) at 4. 

On May 16, 2019, this Court ordered AMCO to show cause as to why this suit 

should not be remanded to state court because of an inadequate amount in controversy. 

OSC (dkt. 19) at 3. AMCO responded. See Def. Reply to OSC. Gitlin also responded. 

See Pltf. Reply to OSC (dkt. 24). 

II. LEGAL STANDARD 

A defendant who seeks to remove a case to federal court must file a notice of 

removal “containing a short and plain statement of the grounds for removal.” 28 U.S.C. 

§ 1446(a). This “short and plain statement” requirement mirrors the one found in Rule 

8(a)(1) of the Federal Rules of Civil Procedure, the general pleading rule for cases filed in 

federal court. The use of the same language is “[b]y design,” the Supreme Court has 

explained: “Congress, by borrowing the familiar ‘short and plain statement’ standard from 

Rule 8(a), intended to ‘simplify the “pleading” requirements for removal’ and to clarify 

that courts should ‘apply the same liberal rules to removal allegations that are applied to 

other matters of pleading.’” Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 

553 (2014) (quoting H.R. Rep. No. 100–889, at 71 (1988)). 

At issue in this case is diversity jurisdiction. See Notice of Removal at 1. District 

courts have subject-matter jurisdiction over civil cases where (1) the matter “is between . . 

. citizens of different States,” and (2) the amount in controversy “exceeds the sum or value 

of $75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)(1). Consistent with the 

framework outlined above, “[t]he party seeking to invoke the district court’s diversity 

jurisdiction always bears the burden of both pleading and proving diversity jurisdiction.” 

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NewGen LLC v. Safe Cig, LLC, 840 F.3d 606, 613–14 (9th Cir. 2016). 

Subject-matter jurisdiction must exist when a case is first filed. A federal court that 

is considering whether it has jurisdiction on the basis of diversity must therefore evaluate 

“the state of things at the time of the action brought.” Rockwell Int’l Corp. v. United 

States, 549 U.S. 457, 473 (2007) (quoting Mullan v. Torrance, 22 U.S. 537, 539 (1824)). 

This means examining whether the parties’ citizenship was diverse, and whether the 

amount in controversy exceeded $75,000 at the time the case was originally filed. 

III. DISCUSSION 

A. Diversity of Citizenship 

Diversity jurisdiction requires “complete diversity”: “each plaintiff must be of a 

different citizenship from each defendant.” Grancare, LLC v. Mills ex rel. Thrower, 889 

F.3d 543, 548 (9th Cir. 2018). Plaintiff Gitlin is a citizen of California, because that is the 

place of his domicile. See Compl. ¶ 1. Defendant AMCO is a citizen of Delaware and 

Iowa, because it is incorporated in Delaware and has its principal place of business in 

Iowa. See 28 U.S.C. § 1332(c)(1); Pardini Decl. (dkt. 1, Doc. 1–2, Ex. A) ¶ 2. Thus, the 

parties to this case are not citizens of the same state. Complete diversity of citizenship 

exists. 

B. Amount in Controversy 

When removal is based on diversity jurisdiction under 28 U.S.C. § 1332(a), the 

defendant bears the burden of establishing that the amount in controversy exceeds $75,000. 

See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Consistent with the pleading 

requirements outlined above, the Supreme Court has explained that “a defendant’s notice 

of removal need include only a plausible allegation that the amount in controversy exceeds 

the jurisdictional threshold.” Dart Cherokee, 135 S. Ct. at 554. 

Gitlin does not challenge AMCO’s assertion that the amount in controversy exceeds 

$75,000. See generally Pltf. Reply to OSC. Nevertheless, a district court may sua sponte 

raise the issue of subject-matter jurisdiction. See Galt G/S v. Hapag-Lloyd AG, 60 F.3d 

1370, 1373 (9th Cir. 1995). The Supreme Court instructs that “[w]hen a defendant’s 

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assertion of the amount in controversy is challenged . . . . both sides submit proof and the 

court decides, by a preponderance of the evidence, whether the amount-in-controversy 

requirement has been satisfied.” Dart Cherokee, 135 S. Ct. at 554. 

The parties’ arguments over the amount in controversy in this case turn on (1) the 

amount of money at stake, and (2) attorneys’ fees. 

1. Amount of Money at Stake 

Gitlin and AMCO disagree as to whether the amount of money at stake in this case 

satisfies the $75,000 amount in controversy requirement. AMCO contends that it does 

because “[t]he relief sought by Plaintiff cannot be divorced from its effect and cost to 

AMCO.” Def. Reply to OSC at 5. According to AMCO, the amount in controversy in this 

case is “the amount at stake in the underlying litigation,” which includes “any result of the 

litigation.” Id. (citing to Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648–

49 (9th Cir. 2016)). 

This case, however, is different from Gonzales and the other cases upon which 

AMCO relies. See Def. Reply at 3. The amount at stake in the underlying litigation in 

those three cases was clearly defined. First, in Gonzales, this Circuit found that the 

controversy was worth over $75,000 because the plaintiff sought damages, injunctive 

relief, and attorneys’ fees from a car dealer that violated state consumer protection laws. 

840 F.3d at 648–49. Plaintiff sought $49,000 in actual damages, $25,000 in punitive 

damages, rescission of the original car purchase contract, and injunctive relief “to restore 

any monies wrongfully obtained by CarMax to Plaintiff.” Notice of Removal at 5–6; 

Gonzales v. CarMax Auto Superstores, LLC, 2013 U.S. Dist. LEXIS 189140 (C.D. Cal. 

Dec. 30, 2013) (Dkt. 1). Plaintiff therefore requested damages surpassing the amount in 

controversy requirement. See Gonzales, 840 F.3d at 649. 

Second, in BEM I, LLC v. Anthropologie, Inc., the Seventh Circuit found that the 

amount in controversy stemming from damages and injunctive relief in a commercial lease 

dispute exceeded $75,000. 301 F.3d 548, 553 (7th Cir. 2002). Although damages were 

$48,197.23 and alone would not have met the amount in controversy threshold, the value 

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of injunctive relief was the nearly $3 million at stake in the commercial lease. BEM I, 

LLC v. Anthropologie, Inc., 1999 U.S. Dist. LEXIS 19478, *7 (N.D. Ill. Dec. 13, 1999), 

aff’d 301 F.3d 548 (7th Cir. 2002). Thus, the amount in controversy was well over 

$75,000. 

Third, in In re Brand Name Prescription Drugs Antitrust Litigation, the Seventh 

Circuit determined that damages per plaintiff plus injunctive relief in a price-fixing class 

action against pharmaceutical manufacturers and wholesalers did not meet the 

jurisdictional minimum. 123 F.3d 559, 610 (7th Cir. 2002). The plaintiffs in the case 

“were careful to plead that the damages sought by each did not exceed $50,000 [the 

minimum amount in controversy required at the time]” because “they did not want their 

case removed to federal court.” Id. at 607. The court found this reasonable, considering 

“you would have to buy an awful lot of expensive drugs to run up a bill the overcharge 

portion of which alone was more than that amount.” Id. Injunctive relief was also 

inadequate, because an injunction in favor of any one plaintiff would be unlikely to impose 

a “heavy cost” on any one defendant. Id. at 610. The case therefore failed to meet the 

required amount in controversy. 

In contrast, Gitlin does not ask the Court to resolve the underlying insurance dispute 

between the parties, and seeks no damages related to that dispute. See Pltf. Reply to OSC 

at 2. Instead, Gitlin asks for a declaration that the recorded interview is either a “claimsrelated document” or an “examination under oath” to which he is statutorily entitled, 

injunctive relief consisting of AMCO producing the recorded interview before it can 

examine him, and attorneys’ fees. Compl. at 6–7. The cost for AMCO to provide Gitlin 

with a copy of the interview—and therefore the amount at stake in this case—is likely to 

be a few hundred dollars, if that. 

AMCO argues, though, that the declaratory and/or injunctive relief plaintiff seeks 

would “disrupt [its] investigation of the underlying claim and will have a significant and 

material impact on AMCO’s coverage determination.” Def. Reply to OSC at 4. But the 

larger coverage dispute between the parties is not part of the case before this Court. 

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AMCO does not explain the connection between the relief sought in this case and the 

larger insurance coverage determination—it certainly does not do so well enough to 

persuade the Court that the amount in controversy exceeds $75,000. Presumably, AMCO 

is concerned that if it is forced to give a recording or transcript of the interview to Gitlin, 

then Gitlin could tailor his answers in a future deposition to conform with the answers he 

provided in the interview. Yet even this theory is highly speculative, as it is not clear what 

Gitlin’s testimony would be, whether he would testify inconsistently with his recorded 

interview, or what impact the recorded interview would have on his testimony. 

Therefore, the amount of money at stake in this controversy is minimal. 

2. Attorneys’ Fees 

The other asserted basis for satisfying the amount in controversy here is attorneys’ 

fees. When state law “authorizes an award of attorneys’ fees, either with mandatory or 

discretionary language, such fees may be included in the amount in controversy.” Galt 

G/S, 142 F.3d at 1156. The Circuit has determined that “‘there is no question that future 

[attorneys’ fees] are ‘at stake’ in the litigation,’ and the defendant may attempt to prove 

that future attorneys’ fees should be included in the amount in controversy.” See Fritsch v. 

Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018). 

Gitlin and AMCO agree that if Gitlin is successful in this suit, his claim for 

attorneys’ fees will exceed $75,000. Pltf. Reply to OSC at 3; Def. Reply to OSC at 5–6. 

While AMCO offers no support for this claim, Gitlin cites to California Code of Civil 

Procedure § 1021.5. Pltf. Reply to OSC at 3. 

California Code of Civil Procedure § 1021.5 is a fee-shifting statute that entitles a 

party to an award of attorneys’ fees when that party has succeeded in an action that results 

in the enforcement of an important right affecting the public interest. Cal. Code Civ. Proc. 

§ 1021.5. The purpose of awarding attorneys’ fees per § 1021.5 is to encourage litigation 

that transcends individual financial interests, and furthers issues of societal importance. 

Satrap v. Pacific Gas & Elec. Co., 42 Cal. App. 4th 72, 49 (1996). “[T]he legislature did 

not intend to authorize an award of attorney [sic] fees in every case involving a statutory 

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