Court Opinion

ID: 4301921
Source: CourtListenerOpinion
Date Created: 2018-08-08 17:00:31.241392+00
Date Added: 2024-06-11T14:29:20.053523
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 GRANT FRITSCH, an individual,                    No. 18-55746
                 Plaintiff-Appellee,
                                                    D.C. No.
                     v.                          5:17-cv-02226-
                                                    JGB-SP
 SWIFT TRANSPORTATION COMPANY
 OF ARIZONA, LLC,
               Defendant-Appellant.                 OPINION

        Appeal from the United States District Court
            for the Central District of California
         Jesus G. Bernal, District Judge, Presiding

             Argued and Submitted July 12, 2018
                    Pasadena, California

                      Filed August 8, 2018

   Before: Sandra S. Ikuta and N. Randy Smith, Circuit
    Judges, and Stephen M. McNamee,* District Judge.

                     Opinion by Judge Ikuta

    *
      The Honorable Stephen M. McNamee, United States Senior District
Judge for the District of Arizona, sitting by designation.
2             FRITSCH V. SWIFT TRANSPORTATION

                            SUMMARY**

                    Class Action Fairness Act

    The panel reversed the district court’s order that
remanded this action to state court on the ground that the
defendant removing party failed to prove that the matter in
controversy exceeded the sum or value of $5 million, as
required for jurisdiction under the Class Action Fairness Act
(“CAFA”).

   As an initial matter, the panel considered whether the
appeal was moot due to defendant’s second removal. The
panel concluded that, pursuant to the collateral consequences
doctrine, defendant’s appeal of the first remand order was not
moot.

    The panel held that the district court erred in concluding
that the defendant failed to prove that CAFA’s amount-in-
controversy requirement was met. The panel held that in
light of Chavez v. JPMorgan Chase & Co., 888 F.3d 413 (9th
Cir. 2018), and this court’s precedents, a court must include
future attorneys’ fees recoverable by statute or contract when
assessing whether the amount-in-controversy was met.
Applying the rule, the panel vacated the district court’s
remand order, and remanded to allow the district court to
determine whether the defendant carried its burden of proving
that the amount in controversy exceeded the jurisdictional
threshold. The panel further held that the defendant retained

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            FRITSCH V. SWIFT TRANSPORTATION                  3

the burden of proving the amount of attorneys’ fees by a
preponderance of the evidence.

    The panel rejected the plaintiff’s argument that future
attorneys’ fees should not be included in the amount in
controversy because they were inherently speculative. The
panel also rejected plaintiff’s argument that it should adopt a
per se equitable rule that the amount of attorneys’ fees in
controversy in class actions is 25 percent of all other alleged
recovery.

                         COUNSEL

Paul Scott Cowie (argued), Karin Dougan Vogel, John D.
Ellis, and Reanne Swafford-Harris, Sheppard Mullin Richter
& Hampton LLP, San Francisco, California, for Defendant-
Appellant.

Michael A. Strauss (argued), Strauss & Strauss, Ventura,
California; Daniel J. Palay and Brian D. Hefelfinger, Palay
Hefelfinger APC, Ventura, California; for Plaintiff-Appellee.
4            FRITSCH V. SWIFT TRANSPORTATION

                           OPINION

IKUTA, Circuit Judge:

    Swift Transportation Company of Arizona (Swift)
removed Grant Fritsch’s third amended class action
complaint to district court, alleging that it had subject matter
jurisdiction under the Class Action Fairness Act (CAFA),
28 U.S.C. §§ 1332(d), 1453, and 1711–1715. The district
court remanded the action to state court on the ground that
Swift failed to prove that the matter in controversy exceeded
the sum or value of $5 million, as required for jurisdiction
under CAFA. In reaching this conclusion, the court held that
only attorneys’ fees that had been incurred as of the date of
removal could be included in the amount in controversy. We
conclude that if a plaintiff would be entitled under a contract
or statute to future attorneys’ fees, such fees are at stake in
the litigation and should be included in the amount in
controversy. The defendant retains the burden, however, of
proving the amount of future attorneys’ fees by a
preponderance of the evidence.

                                 I

   Because the issues in this appeal arise from a defendant’s
removal of a case filed in state court to federal court, we
begin with the relevant background principles for such a
removal.

    Under 28 U.S.C. § 1441(a), a defendant may remove
certain actions filed in state court to a district court so long as
a federal court has jurisdiction over the action, and certain
procedural requirements are met. The defendant starts the
process by filing a notice of removal in the appropriate
             FRITSCH V. SWIFT TRANSPORTATION                     5

district court, 28 U.S.C. § 1446(a), and giving notice to the
adverse parties and the state court, id. § 1446(d). The filing
of a copy of the notice in state court “effect[s] the removal
and the State court shall proceed no further unless and until
the case is remanded.” Id.

    In this case, Swift alleged that the district court had
jurisdiction over Fritsch’s action under CAFA, which gives
district courts jurisdiction over civil actions in which “the
matter in controversy exceeds the sum or value of
$5,000,000, exclusive of interest and costs,” the proposed
class consists of more than 100 members, and “any member
of [the] class of plaintiffs is a citizen of a State different from
any defendant.” Id. § 1332(d)(2).

     The defendant must also meet certain procedural
requirements. Most important here, the removal must be
timely. A defendant must generally remove a case within
30 days of receiving the complaint. See id. § 1446(b)(1); Rea
v. Michaels Stores Inc., 742 F.3d 1234, 1237 (9th Cir. 2014).
If the complaint itself does not provide a basis for removal,
however, a defendant may file a notice of removal within
30 days after receipt of information “from which it may first
be ascertained that the case is one which is or has become
removable.” 28 U.S.C. § 1446(b)(3). “[I]nformation relating
to the amount in controversy in the record of the State
proceeding, or in responses to discovery” triggers the 30-day
time limit. Id. § 1446(c)(3)(A).

    The notice of removal “need include only a plausible
allegation that the amount in controversy exceeds the
jurisdictional threshold,” and need not contain evidentiary
submissions. Dart Cherokee Basin Operating Co., LLC v.
Owens, 135 S. Ct. 547, 554 (2014). If the amount in
6           FRITSCH V. SWIFT TRANSPORTATION

controversy is not clear from the face of the complaint, “the
defendant seeking removal bears the burden to show by a
preponderance of the evidence that the aggregate amount in
controversy exceeds $5 million when federal jurisdiction is
challenged.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193,
1197 (9th Cir. 2015).

    If the district court decides that a removed case does not
satisfy the requirements for removal, the court must remand
the action to state court. A party may appeal a district court’s
order “granting or denying a motion to remand a class action
to the State court from which it was removed if application is
made to the court of appeals not more than 10 days after entry
of the order.” 28 U.S.C. § 1453(c)(1).

    After a remand, the defendant may generally not remove
the case a second time. Reyes v. Dollar Tree Stores, Inc.,
781 F.3d 1185, 1188 (9th Cir. 2015); Kirkbride v. Cont’l Cas.
Co., 933 F.2d 729, 732 (9th Cir. 1991). Nevertheless, a
defendant “who fails in an attempt to remove on the initial
pleadings can file a removal petition when subsequent
pleadings or events reveal a new and different ground for
removal.” Kirkbride, 933 F.2d at 732 (quoting FDIC v.
Santiago Plaza, 598 F.2d 634, 636 (1st Cir. 1979) (emphasis
omitted)). An intervening change in the law that “gives rise
to a new basis for subject-matter jurisdiction” qualifies as a
subsequent event that justifies a successive removal petition.
Reyes, 781 F.3d at 1188; see also Rea, 742 F.3d at 1238;
Kirkbride, 933 F.2d at 732. A defendant can file a successive
removal notice within 30 days after a change in law that
revealed the facts necessary for federal court jurisdiction.
Rea, 742 F.3d at 1237–38.
               FRITSCH V. SWIFT TRANSPORTATION                        7

                                     II

    We now turn to the facts of this case. Fritsch filed this
wage-and-hour class action in San Bernardino Superior
Court. According to the third amended complaint filed in
state court, Fritsch worked for Swift, a trucking and
transportation company, as a local driver. He alleged that
Swift denied him and other employees proper overtime pay,
meal periods, and appropriate wage statements. Fritsch
sought wages and premiums owed, prejudgment interest,
statutory penalties, attorneys’ fees under California Labor
Code §§ 218.5 and 1194,1 and costs of suit. He also asked for
equitable relief under California’s unfair competition law and
statutory damages under California’s Private Attorneys
General Act (PAGA).

   1
       Cal. Labor Code § 218.5(a) provides in relevant part:

          In any action brought for the nonpayment of wages,
          fringe benefits, or health and welfare or pension fund
          contributions, the court shall award reasonable
          attorney’s fees and costs to the prevailing party if any
          party to the action requests attorney’s fees and costs
          upon the initiation of the action.

   Cal. Labor Code § 1194(a) provides in relevant part:

          [A]ny employee receiving less than the legal minimum
          wage or the legal overtime compensation applicable to
          the employee is entitled to recover in a civil action the
          unpaid balance of the full amount of this minimum
          wage or overtime compensation, including interest
          thereon, reasonable attorney’s fees, and costs of suit.
8           FRITSCH V. SWIFT TRANSPORTATION

    On October 18, 2017, Fritsch delivered a mediation brief
to Swift. The brief included a damages chart that contained
the following information:

        •   $1,806,080 Unpaid Overtime Wages
        •   $361,216 Unpaid Double-time Wages
        •   $531,404 Interest on Unpaid Overtime
            Wages
        •   $948,192 Unpaid Meal Period Premiums
        •   $948,192 Unpaid Rest Period Premiums
        •   $150,000 Attorneys’ Fees and Costs (as of
            October 18, 2017)
        •   $515,000 Wage Statement Penalties
        •   $664,020 Waiting Time Penalties
            Total: $5,924,104.

Fritsch also estimated that Swift faced PAGA penalties of
$5,874,079.

    On October 31, 2017, Swift filed a notice of removal in
district court, alleging that the district court had jurisdiction
under CAFA. To establish that the action exceeded $5
million, Swift relied on the damages chart. Subtracting
estimated interest payments and PAGA penalties (which are
not included in the amount in controversy, see 28 U.S.C.
§ 1332(d)(2); Yocupicio v. PAE Grp., LLC, 795 F.3d 1057,
1060–61 (9th Cir. 2015)), Swift alleged that the amount in
controversy was $5,392,700. In addition to the $150,000 in
attorneys’ fees and costs that had been incurred as of October
18, 2017 (according to the damages chart), Swift noted that
the court could also recognize future attorneys’ fees that
would accrue over the course of the case. Based on Swift’s
estimate, such future fees would increase the amount in
controversy to $6,553,375.
               FRITSCH V. SWIFT TRANSPORTATION                              9

    In determining its jurisdiction under CAFA, the district
court first noted that the parties did not dispute that CAFA’s
minimum diversity and class numerosity requirements were
met. The court rejected Fritsch’s argument that the removal
notice was untimely. The court reasoned that Fritsch’s
complaint did not establish the amount in controversy, and
therefore Swift’s first notice that Fritsch’s claims were
removable occurred when Swift received the damages chart
on October 18, 2017. Swift timely removed the action within
thirty days after receiving the chart.

    Turning to the amount in controversy, the court held that
because Fritsch’s complaint did not include a claim for failure
to provide rest periods, the entry in the damages chart —
“$948,192 Unpaid Rest Period Premiums” — could not be
included as part of the jurisdictional amount. With respect to
the attorneys’ fees, the court explained “that when calculating
attorneys’ fees to establish jurisdiction, the only fees that can
be considered are those incurred as of the date of removal.”
(internal quotations omitted).2 The court therefore included
only the $150,000 of attorneys’ fees that Fritsch had set forth
in the damages chart as having been incurred prior to

    2
      At the time of the district court’s ruling, district courts in the Ninth
Circuit were split on whether a court could include future attorneys’ fees
in the amount in controversy. Compare Simmons v. PCR Tech., 209 F.
Supp. 2d 1029, 1035 (N.D. Cal. 2002) (“[T]he measure of fees should be
the amount that can reasonably be anticipated at the time of removal, not
merely those already incurred.”), with Fortescue v. Ecolab Inc., No. CV
14-0253-FMO-RZX, 2014 WL 296755, at *3 (C.D. Cal. Jan. 28, 2014)
(“[T]he better view is that attorneys’ fees incurred after the date of
removal are not properly included because the amount in controversy is
to be determined as of the date of removal.” (quoting Dukes v. Twin City
Fire Ins. Co., No. CV-09-2197-PHX-NVW, 2010 WL 94109, at *2 (D.
Ariz. Jan., 6, 2010))). At the time the district court ruled, we had not yet
addressed the issue.
10            FRITSCH V. SWIFT TRANSPORTATION

removal. The court held that Swift had not been able to prove
by a preponderance of the evidence that the amount in
controversy exceeded $5 million; rather, Swift’s evidence
established that only $4,778,575 was at stake. Because this
amount did not meet the minimum required by CAFA, the
court held that it lacked jurisdiction, and remanded the action
to the state court.

   Swift timely petitioned this Court for permission to
appeal under 28 U.S.C. § 1453(c).3 While the petition was
pending, litigation proceeded in state court.

    On April 20, 2018, we issued our decision in Chavez v.
JPMorgan Chase & Co., which, as explained in more detail
below, held that “the amount in controversy is not limited to
damages incurred prior to removal — for example, it is not
limited to wages a plaintiff-employee would have earned
before removal (as opposed to after removal),” but rather “is
determined by the complaint operative at the time of removal
and encompasses all relief a court may grant on that
complaint if the plaintiff is victorious.” 888 F.3d 413,
414–15 (9th Cir. 2018).

    We granted Swift’s petition to appeal on June 11, 2018.
Two days later, Swift filed a second notice of removal in
district court, contending that our intervening decision in
Chavez “now demonstrates beyond any doubt that the amount
in controversy in this action exceeds the jurisdictional
minimum.”

     3
      Under § 1453(c)(1), “a court of appeals may accept an appeal from
an order of a district court granting or denying a motion to remand a class
action to the State court from which it was removed if application is made
to the court of appeals not more than 10 days after entry of the order.”
            FRITSCH V. SWIFT TRANSPORTATION                 11

    We ordered the parties to submit supplemental briefing on
whether Swift’s second notice of removal rendered the
present appeal moot. Shortly after we heard oral argument,
Fritsch moved to remand Swift’s second notice of removal on
a number of grounds, including that it was untimely. Fritsch
argued that our rule that a defendant can file a successive
removal notice within 30 days after a change in law, see Rea,
742 F.3d at 1237–38, did not help Swift, because Swift had
filed its second removal order 59 days after we issued
Chavez.

                              III

    We first consider whether this appeal is moot due to
Swift’s second removal. There is no case or controversy, and
an appeal becomes moot, when “it is impossible for a court to
grant any effectual relief whatever to the prevailing party.”
Chafin v. Chafin, 568 U.S. 165, 172 (2013) (citation omitted).
Fritsch contends that the present appeal is moot because the
only relief available to Swift is a reversal of the district
court’s December 2017 remand order, which would merely
return Swift to district court. Because Swift is already in
district court, Fritsch argues, we cannot give it any effective
relief.

    Fritsch is correct that Swift’s case is now pending in
district court, which is the relief Swift seeks. Nevertheless,
a case is not moot so “long as the parties have a concrete
interest, however small, in the outcome of the litigation.”
Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 669 (2016)
(quoting Chafin, 568 U.S. at 172). If “a party can
demonstrate that a lower court’s decision, if allowed to stand,
may have collateral consequences adverse to its interests,” the
party can avoid dismissal for mootness. City of Colton v. Am.
12          FRITSCH V. SWIFT TRANSPORTATION

Promotional Events, Inc.-W., 614 F.3d 998, 1006 (9th Cir.
2010) (quoting Connectu LLC v. Zuckerberg, 522 F.3d 82, 88
(1st Cir. 2008)).

     We have applied the collateral consequence doctrine in a
case analogous to this one. See id. at 1006. In that case, the
district court granted summary judgment in favor of the
defendants and dismissed the plaintiff’s declaratory judgment
action. Id. at 1004. While the dismissal of the first
declaratory judgment action was on appeal, the plaintiff filed
a second declaratory judgment action raising the same claim.
Id. at 1005. The defendants argued that the first appeal was
now moot because the plaintiff had effectively redressed its
injury (dismissal of its first declaratory judgment action) by
filing a second action seeking the same relief. Id. at 1005–06.
We disagreed, noting that certain defendants had raised a
statute of limitations defense to the plaintiff’s claims, and
those defendants had pressed those claims in the second
action. Id. at 1006. We reasoned that “[a] reversal by this
court could put [the plaintiff] on better footing with regard to
limitations defenses, which ‘is a collateral consequence of the
type that suffices to defuse a claim of mootness.’” Id.
(quoting Connectu, 522 F.3d at 89). In other words, we
recognized that, if we decided that the district court erred in
dismissing the first action, the plaintiff could argue that its
first declaratory judgment action tolled the statute of
limitations. Id. By contrast, if we dismissed the appeal of the
first action, the plaintiff might face a potential statute of
limitations bar against its second action. Id. In light of this
collateral consequence, we determined that the plaintiff’s
appeal was not moot. Id.

   Applying the collateral consequence doctrine here, we
conclude that Swift’s appeal of the first remand order is not
              FRITSCH V. SWIFT TRANSPORTATION                          13

moot. In his motion in district court to remand Swift’s
second removal, Fritsch argued that the removal was
untimely, because Swift had removed the action more than
30 days after we issued our decision in Chavez. As in City of
Colton, if we dismiss Swift’s appeal of the first remand as
moot, Swift will have to defend against this timeliness
challenge.4 By contrast, the district court determined that
Swift’s first notice of removal was timely because Swift
removed the action within 30 days of receiving Fritsch’s
damages chart. Fritsch did not appeal that determination. If
we hold that the district court’s first remand order was
erroneous, Swift will not be vulnerable to the argument that
its removal was untimely. Because our decision on the merits
will “put [Swift] on better footing with regard to” a timeliness
argument, id., we conclude that Swift’s appeal of the first
remand order is not moot.

                                   IV

    We now turn to the merits of Swift’s appeal. The only
issue on appeal is whether the district court erred in
concluding that Swift failed to prove, by a preponderance of

    4
       At oral argument, Fritsch asserted that Swift would not face
collateral consequences from our dismissal of its appeal because it could
move for reconsideration of the previous order in district court.
United States Court of Appeals for the Ninth Circuit, 18-55746, Fritsch
v. Swift Transp. Co of Ariz., YouTube 14:15–30 (July 12, 2018)
https://www.youtube.com/watch?v=KD_Flj44mhA. Swift argued that
such a motion would not be timely. Regardless whether Swift could move
for reconsideration, the availability of an alternative form of relief does
not render Swift’s present appeal moot because an appeal is not moot if
“the appellate court can give the appellant any effective relief.” City of
Colton, 614 F.3d at 1005 (emphasis added) (quoting NASD Dispute
Resolution, Inc. v. Judicial Council of State of Cal., 488 F.3d 1065, 1068
(9th Cir. 2007)).
14            FRITSCH V. SWIFT TRANSPORTATION

the evidence, that CAFA’s amount-in-controversy
requirement was met.5 We review remand orders in CAFA
cases de novo. Bridewell-Sledge v. Blue Cross of Cal.,
798 F.3d 923, 927 (9th Cir. 2015).

    “Where, as here, it is unclear or ambiguous from the face
of a state-court complaint whether the requisite amount in
controversy is pled, the removing defendant bears the burden
of establishing, by a preponderance of the evidence, that the
amount in controversy exceeds the jurisdictional threshold.”
Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1121–22
(9th Cir. 2013) (internal citations and quotation marks
omitted). Along with the complaint, we consider allegations
in the removal petition, as well as “summary-judgment-type
evidence relevant to the amount in controversy at the time of
removal.” Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th
Cir. 2005) (quoting Singer v. State Farm Mut. Auto. Ins. Co.,
116 F.3d 373, 377 (9th Cir. 1997)).

     We have previously explained that the amount in
controversy is the “amount at stake in the underlying
litigation.” Gonzales v. CarMax Auto Superstores, LLC,
840 F.3d 644, 648 (9th Cir. 2016) (quoting Theis Research,
Inc. v. Brown & Bain, 400 F.3d 659, 662 (9th Cir. 2005)).
“[T]his includes any result of the litigation, excluding
interests and costs, that ‘entails a payment’ by the defendant.”
Id. (quoting Guglielmino v. McKee Foods Corp., 506 F.3d
696, 701 (9th Cir. 2007)). Among other items, the amount in

     5
       Fritsch does not dispute that the district court correctly included
$4,628,575 in undisputed damages and $150,000 in attorneys’ fees in its
calculation of the amount in controversy. Swift does not appeal the
district court’s decision to exclude any claim for unpaid rest period
premiums from the amount in controversy.
            FRITSCH V. SWIFT TRANSPORTATION                  15

controversy includes damages (compensatory, punitive, or
otherwise), the costs of complying with an injunction, and
attorneys’ fees awarded under fee-shifting statutes or
contract. See id. at 648–49; Lowdermilk v. U.S. Bank Nat’l
Ass’n, 479 F.3d 994, 1000 (9th Cir. 2007), overruled on other
grounds by Standard Fire Ins. Co. v. Knowles, 568 U.S. 588
(2013); Kroske, 432 F.3d at 980.

    Prior to Chavez, however, we had not clarified what it
meant to say that the amount in controversy is determined “at
the time of removal,” Kroske, 432 F.3d at 980 (citation
omitted), and district courts had not consistently applied this
language. Compare Aguilar v. Wells Fargo Bank, N.A., No.
CV 15-01833-AB-SPX, 2015 WL 6755199, at *4 (C.D. Cal.
Nov. 4, 2015) (considering only lost wages incurred through
the time of removal), with Garcia v. ACE Cash Express, Inc.,
No. SACV 14-0285-DOC, 2014 WL 2468344, at *4 (C.D.
Cal. May 30, 2014) (considering defendant’s estimate of lost
wages incurred between removal and trial). We wrote to
clarify this issue in Chavez.

    In Chavez, the plaintiff sued her former employer for
employment harassment, discrimination, and retaliation.
888 F.3d at 415. The employer removed the action to district
court and the court granted summary judgment for the
employer. Id. at 414. On appeal, the plaintiff argued that
removal was improper and we lacked subject matter
jurisdiction because the amount in controversy did not exceed
$75,000. Id. at 415. The plaintiff agreed that if she had
succeeded in her claim, she would have been entitled to over
$350,000 in lost wages under California law. Id. at 416.
Nevertheless, the plaintiff argued that the rule that the amount
in controversy must be assessed as of “the time of removal”
meant that the amount in controversy included only the lost
16          FRITSCH V. SWIFT TRANSPORTATION

wages for the period between her termination and the
defendant’s removal of the action, which was less than
$75,000. Id. at 417.

     We rejected this argument. We explained that the amount
in controversy is the “amount at stake in the underlying
litigation,” and therefore “the amount in controversy includes
all relief claimed at the time of removal to which the plaintiff
would be entitled if she prevails.” Id. at 417–18. In the
plaintiff’s case, we explained, “if the law entitles her to
recoup those future wages if she prevails, then there is no
question that future wages are ‘at stake’ in the litigation,
whatever the likelihood that she will actually recover them.”
Id. at 417. Because the plaintiff’s complaint at the time of
removal claimed wrongful termination resulting in lost future
wages, those future wages were included in the amount in
controversy, and the court had subject matter jurisdiction over
the action. Id. at 418.

    Although Chavez noted that the amount in controversy
may include damages, costs of compliance with injunctions,
and attorneys’ fees awarded under contract or fee shifting
statutes, it did not expressly address whether attorneys’ fees
incurred after removal were properly included in the amount
in controversy. This appeal requires us to address this issue.
We conclude, in light of Chavez and our precedents, that a
court must include future attorneys’ fees recoverable by
statute or contract when assessing whether the amount-in-
controversy requirement is met. See id. at 417–18; Gonzales,
840 F.3d at 648; Lowdermilk, 479 F.3d at 1000; Kroske,
432 F.3d at 980. We have long held (and reiterated in
Chavez) that attorneys’ fees awarded under fee-shifting
statutes or contracts are included in the amount in
controversy. Gonzales, 840 F.3d at 648; Lowdermilk,
            FRITSCH V. SWIFT TRANSPORTATION                    17
479 F.3d at 1000; Kroske, 432 F.3d at 980. As explained in
Chavez, when we assess the amount in controversy at the
time of removal, we must include all relief to which a
plaintiff is entitled if the action succeeds. 888 F.3d at 418.
Accordingly, if the law entitles the plaintiff to future
attorneys’ fees if the action succeeds, “then there is no
question that future [attorneys’ fees] are ‘at stake’ in the
litigation,” id. at 417, and the defendant may attempt to prove
that future attorneys’ fees should be included in the amount
in controversy.

    Applying this rule here, we must vacate the district
court’s remand order. In his complaint, Fritsch demanded
attorneys’ fees permitted by California law. See Cal. Labor
Code §§ 218.5, 226, 1194. Because the law entitles Fritsch
to an award of attorneys’ fees if he is successful, such future
attorneys’ fees are at stake in the litigation, and must be
included in the amount in controversy. Therefore, the district
court’s conclusion that, as a matter of law, the amount in
controversy included only the $150,000 in attorneys’ fees
incurred up to the time of removal and could not include any
future fees, was incorrect. Accordingly, we must remand to
allow the district court to determine whether Swift can carry
its burden of proving that the amount in controversy
(including future attorneys’ fees) exceeds the jurisdictional
threshold. Urbino, 726 F.3d at 1121–22.

    Fritsch raises two arguments against this conclusion.
First, Fritsch urges us to limit Chavez to its facts, arguing that
Chavez applies only to claims for future wage loss. But while
Chavez itself concerned a claim for future wage loss, its
holding applies to any class of damages included in the
amount in controversy. See 888 F.3d at 418. Although we
did not explicitly address attorneys’ fees in Chavez, we noted
18          FRITSCH V. SWIFT TRANSPORTATION

that the amount in controversy “may include ‘damages . . . as
well as attorneys’ fees awarded under fee shifting statutes.’”
Id. at 416 (quoting Gonzales, 840 F.3d at 648–49). We
emphasized that “the amount in controversy includes all
relief claimed at the time of removal to which the plaintiff
would be entitled if she prevails.” Id. at 418 (emphasis
added). Further, we explained that “the mere futurity of
certain classes of damages” does not preclude them from
being part of the amount in controversy. Id. at 417 (emphasis
added). The phrases “all relief” and “certain classes of
damages” encompass all of the plaintiff’s future recovery, not
lost wages alone. Accordingly, Chavez’s reasoning clearly
applies to attorneys’ fees.

    Second, Fritsch argues that future attorneys’ fees should
not be included in the amount in controversy because they are
inherently speculative and can be avoided by the defendant’s
decision to settle an action quickly. In making this argument,
Fritsch relies on Gardynski-Leschuck v. Ford Motor Co.,
142 F.3d 955, 958 (7th Cir. 1998). In that case, the Seventh
Circuit analyzed the jurisdictional provision in the
Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d), which
gives federal courts jurisdiction over claims where the
amount in controversy equals or exceeds a specified amount.
Gardynski-Leschuck, 142 F.3d at 956. Gardynski-Leschuck
held that the amount in controversy cannot include attorneys’
fees that have not yet been incurred because “[u]nlike future
income lost to injury, legal fees are avoidable” if the
defendant promptly settles the case. Id. at 958. For this
reason, Gardynski-Leschuck stated, “legal expenses that lie in
the future and can be avoided by the defendant’s prompt
satisfaction of the plaintiff’s demand are not an amount ‘in
controversy’ when the suit is filed.” Id. at 959; see also ABM
Sec. Servs., Inc. v. Davis, 646 F.3d 475, 479 (7th Cir. 2011)
            FRITSCH V. SWIFT TRANSPORTATION                    19

(holding that only attorneys’ fees incurred up to the time of
removal could be included in the amount in controversy);
Smith v. Am. Gen. Life & Accident Ins. Co., 337 F.3d 888,
896–97 (7th Cir. 2003) (same).

     Our precedent requires us to part ways with the Seventh
Circuit. We have held that attorneys’ fees awarded under fee-
shifting statutes or contracts are part of the amount in
controversy, Gonzales, 840 F.3d 648, and that the amount in
controversy includes all relief to which the plaintiff is entitled
if the action succeeds, Chavez, 888 F.3d at 418. We may not
depart from this reasoning to hold that one category of relief
— future attorneys’ fees — are excluded from the amount in
controversy as a matter of law.

    Moreover, we are confident that district courts are well
equipped to determine whether defendants have carried their
burden of proving future attorneys’ fees, and to determine
when a fee estimate is too speculative because of the
likelihood of a prompt settlement. Unlike the Seventh
Circuit, where the defendant need show only “a reasonable
probability” that the amount in controversy exceeds the
minimum, Brill v. Countrywide Home Loans, Inc., 427 F.3d
446, 449 (7th Cir. 2005), we require a removing defendant to
prove that the amount in controversy (including attorneys’
fees) exceeds the jurisdictional threshold by a preponderance
of the evidence. We also require the defendant to make this
showing with summary-judgment-type evidence, Chavez,
888 F.3d at 416; Corral v. Select Portfolio Servicing, Inc.,
878 F.3d 770, 774 (9th Cir. 2017). A district court may reject
the defendant’s attempts to include future attorneys’ fees in
the amount in controversy if the defendant fails to satisfy this
burden of proof. Moreover, district courts have developed
expertise in determining “the number of hours reasonably
20             FRITSCH V. SWIFT TRANSPORTATION

expended on the litigation multiplied by a reasonable hourly
rate” when awarding attorneys’ fees under a statute or
contract authorizing recovery of “reasonable attorneys’ fees”
at the close of litigation. Hensley v. Eckerhart, 461 U.S. 424,
433 (1983); see 42 U.S.C. § 1988(b) (authorizing recovery of
“a reasonable attorney’s fee”); Cal. Labor Code §§ 218.5(a),
1194(a) (same). In estimating future attorneys’ fees, district
courts may likewise rely on “their own knowledge of
customary rates and their experience concerning reasonable
and proper fees.” Ingram v. Oroudjian, 647 F.3d 925, 928
(9th Cir. 2011). Given district courts’ expertise in evaluating
litigation expenses and defendants’ obligation to prove future
attorneys’ fees by a preponderance of the evidence, we do not
share the Seventh Circuit’s concern that calculating future
attorneys’ fees is inherently too speculative.

    For the same reason, we reject Swift’s argument that we
should hold that, as a matter of law, the amount of attorneys’
fees in controversy in class actions is 25 percent of all other
alleged recovery. Swift argues that this per se rule is
appropriate because, in common fund cases, we have
estimated reasonable attorneys’ fees to be 25 percent of the
total recovery. Vizcaino v. Microsoft Corp., 290 F.3d 1043,
1047 (9th Cir. 2002); Hanlon v. Chrysler Corp., 150 F.3d
1011, 1029 (9th Cir. 1998). Such a per se equitable rule is
inapplicable in this context, however.6 As we have already

     6
       We do not hold that a percentage-based method is never relevant
when estimating the amount of attorneys’ fees included in the amount in
controversy, only that a per se rule is inappropriate. See City of Riverside
v. Rivera, 477 U.S. 561, 574 (1986) (“The amount of damages a plaintiff
recovers is certainly relevant to the amount of attorney’s fees to be
awarded under § 1988. It is, however, only one of many factors that a
court should consider in calculating an award of attorney’s fees.”) (citation
omitted).
              FRITSCH V. SWIFT TRANSPORTATION                        21

explained, the defendant must prove the amount of attorneys’
fees at stake by a preponderance of the evidence; we may not
relieve the defendant of its evidentiary burden by adopting a
per se rule for one element of the amount at stake in the
underlying litigation. Moreover, a court’s calculation of
future attorneys’ fees is limited by the applicable contractual
or statutory requirements that allow fee-shifting in the first
place. See Winterrowd v. Am. Gen. Annuity Ins. Co.,
556 F.3d 815, 827 (9th Cir. 2009). A state may adopt the
lodestar method for determining reasonable attorneys’ fees
under certain statutes, see Ketchum v. Moses, 24 Cal. 4th
1122, 1131 (2001), or (as in this case) not allow recovery of
attorneys’ fees for legal work on certain types of claims, see
Kirby v. Immoos Fire Prot., Inc., 53 Cal. 4th 1244, 1255
(2012) (stating that the attorneys’ fees shifting provisions in
California Labor Code §§ 218.5 and 1194 do not apply to
legal work relating to meal and rest period claims). The
court’s determination regarding the amount of attorneys’ fees
at stake must take into account these statutory and contractual
restrictions.

    Accordingly, we leave the calculation of the amount of
the attorneys’ fees at stake to the district court on remand.7

    REVERSED AND REMANDED.

    7
      Because we reverse and remand the district court’s remand order on
this basis, we need not address Swift’s argument that, since the first
removal, sufficient damages have accrued to meet the amount-in-
controversy threshold.