Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 123 2. Premature Removal and Sanctions The Ninth Circuit disfavors premature removal. The seminal case, Abrego Abrego v. Dow Chemical Co., reaffirmed the principle of “guard[ing] against premature and protective removals and minimiz[ing] the potential for a cottage industry of removal litigation.”612 The Ninth Circuit reminded the parties that CAFA’s legislative history supported such a conclusion, citing a portion of the Senate Judiciary Committee Report: The Committee understands that in assessing the various criteria established in all these new jurisdictional provisions, a federal court may have to engage in some fact-finding, not unlike what is necessitated by the existing jurisdictional statutes. The Committee further understands that in some instances, limited discovery may be necessary to make these determinations. However, the Committee cautions that these jurisdictional determinations should be made largely on the basis of readily available information. Allowing substantial, burdensome discovery on jurisdictional issues would be contrary to the intent of these provisions to encourage the exercise of federal jurisdiction over class actions.613 Defendants eager to remove a case should also consider the possibility of sanctions in the event their removal petition is deemed unreasonable. The Supreme Court has noted that an award of costs and fees is permissible, under Section 1447(c), when “such an award is just” and “the removing party lacked an objectively reasonable basis for removal.”614 The Ninth Circuit had also previously stated that an award of attorney fees is permitted even when defendant’s removal was “fairly supportable,” but wrong as a matter of law.615 However, a California federal district court has held that all a defendant may need to support the removal is an argument “that is not irrational or implausible.”616 3. Establishing The “Amount In Controversy” In A CAFA Removal If a complaint alleges damages in excess of $5 million, then the amount in controversy is “presumptively satisfied” unless it appears to a legal certainty that the claim is actually for less than the jurisdictional minimum.617 If the complaint fails to specify any amount in damages, the removal papers must provide the court with facts to support the jurisdictional amount. Moreover, the U.S. Supreme Court has held that the defendant seeking removal must prove by a “preponderance of the evidence“ that the amount in controversy has been met.618 612 Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 691 (9th Cir. 2006). 613 Id. at 692 (citing S. Rep. No. 109-14, at 44, 2005 U.S.C.C.A.N. at 42). 614 Martin v. Franklin Capital Corp., 546 U.S. 132 (2005); see also Mosaic Sys., Inc. v. Bechtolsheim, 2007 WL 3022581, at *5 (N.D. Cal. Oct. 15, 2007) (denying request for fees and costs given “objectively reasonable” basis for removal); Gardner v. UICI, 508 F.3d 559, 561-62 (9th Cir. 2007) (reversing award of fees and costs where removing party had “an objectively reasonable basis for removal;” if a “reasonable litigant ... could have concluded that federal court was the proper forum,” a request for fees and costs must be denied). 615 Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1106 n.6 (9th Cir. 2000). 616 Hornung v. City of Oakland, No. C-05-4825 EMC, 2006 WL 279337 at *4 (N.D. Cal. Feb. 3, 2006). 617 Abrego Abrego, 443 F.3d at 683 n.8. 618 Dart Cherokee Basin Operating Co., LLC, 135 S. Ct. at 554 (“a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold” and “[e]vidence establishing the amount is required … only when the plaintiff contests, or the court questions, the defendant's allegation”).
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