FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

P. REA; S. SADLOWSKI; D. SPERLINE;

A. SARABIA,

Plaintiffs-Appellees,

v.

MICHAELS STORES INC., a Delaware

corporation,

Defendant-Appellant.

No. 14-55008

D.C. No.

8:13-cv-00455-

GW-AGR

OPINION

Appeal from the United States District Court

for the Central District of California

George H. Wu, District Judge, Presiding

Argued and Submitted

February 3, 2014—Pasadena, California

Filed February 18, 2014

Before: Andrew J. Kleinfeld, Barry G. Silverman,

and Andrew D. Hurwitz, Circuit Judges.

Per Curiam Opinion
2 REA V. MICHAELS STORES

SUMMARY*

Class Action Fairness Act

The panel reversed the district court’s order remanding

the case back to state court, and held that the Class Action

Fairness Act’s amount-in-controversy requirement was met.

The panel held that the action was not moot based on the

state court’s subsequent determination to certify the class

because post-remand developments do not defeat jurisdiction

that was properly invoked at the time of filing. The panel also

held that the second removal of the case under the Class

Action Fairness Act (“CAFA”) was timely. Finally, the panel

held that under the preponderance of the evidence standard,

the appellant established that the potential damages could

exceed CAFA’s $5 million jurisdictional amount.

COUNSEL

Jesse A. Cripps, Gibson, Dunn &Crutcher LLP, Los Angeles,

California, for Defendant-Appellant.

David J. Gallo, Law Offices of David J. Gallo, Del Mar,

California, for Plaintiffs-Appellees.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
REA V. MICHAELS STORES 3

OPINION

PER CURIAM:

Plaintiffs brought the present action against Michaels

Stores, Inc. on behalf of Michaels’ California store managers,

alleging that Michaels had improperlyclassified the managers

as exempt from overtime. Michaels removed the case within

30 days to federal district court under the Class Action

Fairness Act. The district court remanded the case back to

state court, finding that CAFA’s $5,000,000 amount-incontroversy requirement was not met because the plaintiffs

expressly disclaimed any recovery for the class over

$4,999,999.99.

On March 19, 2013, the Supreme Court held in Standard

Fire Insurance Co. v. Knowles that attempted damages

waivers, such as the plaintiffs’, are ineffective, and will not

defeat removal under CAFA. 133 S. Ct. 1345, 1347 (2013).

The next day, Michaels removed again under the Class

Action Fairness Act. And the district court remanded again,

this time on the basis that the removal ran afoul of CAFA’s

30-day time limit. The court held in the alternative that

Michaels had failed to carry its burden to demonstrate that the

amount in controversy exceeded $5,000,000.

Michaels appeals. We have jurisdiction under 28 U.S.C

§ 1453(c). We review the remand decision de novo, Serrano

v. 180 Connect, Inc., 478 F.3d 1018, 1020 (9th Cir. 2007), but

review the district court’s factual findings for clear error, Fed.

R. Civ. Pro. 52(a)(6). “Under CAFA, we have 60 days from

the time we accept the appeal to complete all action on such

appeal, including rendering judgment.” Lowdermilk v. United

States Bank Nat’l Ass’n, 479 F.3d 994, 996 (9th Cir. 2007),
4 REA V. MICHAELS STORES

abrogated on other grounds by Standard Fire Insurance Co.,

133 S. Ct. 1345 (internal quotation marks omitted).

As a preliminary matter, we must consider the plaintiffs’

argument that this appeal is now moot in light of post-remand

developments. We have already considered this argument

once before on a motion to dismiss Michaels’ petition to

appeal, which we denied in a two-judge order. However,

“[t]he fact that the motions panel denied the . . . motion to

dismiss this appeal does not free this court from the

independent duty to decide whether we have jurisdiction.”

United States v. Houser, 804 F.2d 565, 568 (9th Cir. 1986)

(internal quotation marks omitted).

The plaintiffs argue that after the most recent remand, the

amount in controversy cannot exceed $5,000,000 for two

reasons. First, they point out that a class has now been

certified in state court, which they contend makes the

damages waiver in their complaint binding notwithstanding

Standard Fire. Second, they argue that the certified class is

significantly smaller than the proposed class was, so much so

that it could not possibly recover more than $5,000,000. We

need not consider whether either of these propositions are

correct, however, because the general rule is that “the amount

in controversy is determined from the pleadings as they exist

at the time a petition for removal is filed.” Eagle v. Am. Tel.

& Tel. Co., 769 F.2d 541, 545 (9th Cir. 1985). This action is

not moot based on the state court’s subsequent determination

to certify the class because “post-filing developments do not

defeat jurisdiction if jurisdiction was properly invoked as of

the time of filing.” Visendi v. Bank of America, N.A.,

733 F.3d 863, 868 (9th Cir. 2013) (internal quotation marks

omitted).
REA V. MICHAELS STORES 5

Plaintiffs point us to a Tenth Circuit case, Dudley-Barton

v. Serv. Corp. Int’l., 653 F.3d 1151 (10th Cir. 2011). That

decision is inapposite. There, the Tenth Circuit dismissed a

CAFA appeal as moot when the plaintiffs had dismissed their

case in state court, noting that there was “no meaningful

dispute remaining between the parties.” Id. at 1152. That is

not the case here. The plaintiffs continue to claim damages

for wage and hour violations against the defendant and the

defendant continues to dispute them. This case is therefore

not moot.

As to timeliness, Michaels did remove this case within 30

days. The removal statutes generally require a party to

remove a case within 30 days of receiving the complaint. See

28 U.S.C. § 1446, 1453(b). The statutes provide an exception

to this rule: “if the case stated by the initial pleading is not

removable, a notice of removal may be filed within 30 days

after receipt by the defendant, through service or otherwise,

of a copy of an amended pleading, motion, order or other

paper from which it may first be ascertained that the case is

one which is or has become removable.” Id. § 1446(b)(3)

(emphasis added). Thus, we have held “that the thirty day

time period [for removal] . . . starts to run from defendant’s

receipt of the initial pleading only when that pleading

affirmatively reveals on its face the facts necessaryfor federal

court jurisdiction.” Harris v. Bankers Life & Cas. Co.,

425 F.3d 689, 691–92 (9th Cir. 2005) (internal quotation

marks omitted). We also recently held in Roth v. CHA

Hollywood Medical Center, L.P., that the two 30-day periods

are not the exclusive periods for removal. 720 F.3d 1121,

1124–25 (9th Cir. 2013). In other words, as long as the

complaint or “an amended pleading, motion, order or other

paper” does not reveal that the case is removable, the 30-day
6 REA V. MICHAELS STORES

time period never starts to run and the defendant may remove

at any time.

Here, the district court first remanded this case on

grounds that subsequently became incorrect. Michaels

removed it again the day after the Supreme Court announced

its decision in Standard Fire. When Michaels first received

the plaintiffs’ complaint, it had a damage waiver, purporting

to waive any recovery over $4,999,999.99, one penny shy of

the jurisdictional threshold. At the time, our decision in

Lowdermilk controlled, which had held that such damage

waivers were valid and effective, unless the defendant could

prove to a “legal certainty” that damages exceeded $5

million. Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994,

997–99 (9th Cir. 2007). Thus, under the controlling law at the

time Michaels received the complaint, it did not

“affirmatively reveal[] on its face the facts necessary for

federal court jurisdiction,” so the initial 30-day removal

period was never triggered. See Harris, 425 F.3d at 691

(internal quotation marks omitted); Roth, 720 F.3d at 1125.

Because the two thirty-day removal periods are nonexclusive

under our decision in Roth, Michaels’ second CAFA removal

was timely. See Roth, 720 F.3d 1121, 1124–25.

Citing our decision in Seedman v. U.S. Dist. Court for

Cent. Dist. of California, 837 F.2d 413 (9th Cir. 1988), the

plaintiffs argue that the district court could not sustain a

successive removal attempt based on the same grounds as the

first. In Seedman, we interpreted the provision in 28 U.S.C.

§ 1447(d) stating that a remand order “is not reviewable on

appeal or otherwise” as preventing the district court from

considering a removal based on the same grounds as one the

court had previously remanded. Id. at 414. Seedman does not

dictate the result in this case because CAFA explicitly allows
REA V. MICHAELS STORES 7

review of remand orders “notwithstanding section 1447(d)[.]”

See 28 U.S.C. § 1453(c)(1). Moreover, the Supreme Court’s

decision in Standard Fire is “a relevant change of

circumstances . . . justify[ing] a reconsideration of a

successive, good faith petition for removal.” Kirkbride v.

Cont’l Cas. Co., 933 F.2d 729, 732 (9th Cir. 1991). Thus,

even if Roth did not control the outcome of this case,

Michaels’ second removal would still be proper.

In its alternative holding, the district court found that

Michaels’ evidence failed to demonstrate that the amount in

controversy exceeded the $5,000,000 threshold. The factual

findings underlying the district court’s determination that

removal jurisdiction exists are reviewed for clear error. See

Schnabel v. Lui, 302 F.3d 1023, 1029 (9th Cir. 2002) (“[t]he

district court’s findings of fact relevant to subject matter

jurisdiction are reviewed under the clearly erroneous

standard.”); 13E Charles Alan Wright, Arthur R. Miller, &

Edward H. Cooper, Federal Practice and Procedure § 3612

(3d ed. 2009).

It is unclear which legal standard, “legal certainty” or

“preponderance of evidence,” the district court applied to

Michaels’ evidence of the amount in controversy. While the

court’s remand order mentioned the preponderance of the

evidence standard, at the time it issued its order, the

Lowdermilk “legal certainty” standard was still Ninth Circuit

law. After the district court issued its remand decision, we

held in Rodriguez v. AT&T Mobility Services that the

Lowdermilk “legal certainty” test is no longer good law in

light of Standard Fire, and that the preponderance of the

evidence standard applies instead. 728 F.3d 975, 981 (9th Cir.

2013). If the district court applied the Lowdermilk standard,

reversal would be required under Rodriguez. If the district
8 REA V. MICHAELS STORES

court applied the preponderance of the evidence standard, its

finding that the amount-in-controversy requirement was not

met was clearly erroneous. Thus, regardless of what standard

the district court applied, we are required to reverse.

To prove the amount in controversy, Michaels submitted

evidence that store managers work more than 45 hours a

week, which would entitle them to over $5,000,000 if the

plaintiffs prevailed. First, Michaels submitted a declaration

from its Vice President of Field Human Resources showing

that Michaels’ managers were expected to work at least 45

hours a week normally, and 50 hours a week during the

holiday season. Michaels also submitted a letter sent by the

plaintiffs in connection with settlement negotiations where

the plaintiffs valued their claim at over $5,000,000. And the

named plaintiffs in this case all testified that they worked at

least 45 hours each week. No evidence to the contrary was

submitted.

The district court faulted Michaels for only showing that

the managers were expected to work 45 hours or more each

week rather than showing they actually worked that amount.

But managers testified, without contradiction, that they did

work 45 hours or more each week. There was no evidence

that the expectation of 45 hours or more was not met. Under

the preponderance of the evidence standard, Michaels

established “that the potential damages could exceed the

jurisdictional amount.” Lewis v. Verizon Commc’ns, Inc.,

627 F.3d 395, 397 (9th Cir. 2010). There was substantial,

plausible evidence that damages at issue exceeded

$5,000,000, and no evidence at all to the contrary. The district

court’s finding that the defendant failed to prove that the

amount-in-controversy requirement was met was clearly
REA V. MICHAELS STORES 9

erroneous even under the preponderance of the evidence

standard.

REVERSED and REMANDED.