124 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com Yet the removing defendant is not limited to proof of the pre-removal amount in controversy. The Ninth Circuit has recognized 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). Rather, the amount in controversy 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.”619 The amount in controversy also may include attorneys’ fees that the prevailing party is entitled to recover under the applicable statute.620 And the amount in attorneys’ fees is not limited to the fees incurred at the time of the removal. The Ninth Circuit has held that “a court must include future attorneys’ fees recoverable by statute or contract when assessing whether the amount-in-controversy requirement is met.”621 The third scenario is when the complaint affirmatively states that the amount in controversy is less than $5 million. The Ninth Circuit addressed this situation in Lowdermilk v. United States Bank, holding that the removing defendant must prove to a “legal certainty“ that the CAFA amount in controversy has been met.622 Lowdermilk noted that federal courts are courts of “limited jurisdiction” and therefore should strictly construe subject matter jurisdiction.623 Second, Lowdermilk noted that the plaintiff is “master of her complaint” and can plead to avoid federal jurisdiction.624 Moreover, Lowdermilk raised the bar in cases where there is no evidence of bad faith, requiring the defendant to not only contradict the plaintiff’s own assessment of damages, but also overcome the presumption against federal jurisdiction.625 The Lowdermilk rule threatened to eviscerate CAFA by making it easy for plaintiffs to avoid removal by disingenuously stating that the amount in controversy was less than $5 million. Plaintiffs could then later amend their complaints or otherwise contend that they had discovered additional evidence supporting greater damages than they had initially alleged, and there was no way to bind class members to the initial amount-in-controversy estimate. Lowdermilk was dealt an initial blow in 2013 when the United States Supreme Court restored CAFA’s integrity in Standard Fire Insurance Co. v. Knowles.626 There, the named plaintiff, Knowles, claimed that his homeowners insurer had shorted him and “hundreds [or] possibly thousands” of other policyholders in the putative class that he sought to represent by failing to include certain benefits when paying out claims. Knowles sued in Arkansas state 619 Chavez v. JPMorgan Chase & Co., 888 F.3d 413 (9th Cir. 2018) (“When we say that the amount in controversy is assessed at the time of removal, we mean that we consider damages that are claimed at the time the case is removed by the defendant.”). 620 Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998) (“We hold that where an underlying statute authorizes an award of attorneys’ fees, either with mandatory or discretionary language, such fees may be included in the amount in controversy.”). 621 Fritsch v. Swift Transp. Co. of Arizona, LLC, 899 F.3d 785, 794 (9th Cir. 2018). 622 Lowdermilk v. United States Bank, 479 F.3d 994, 1000 (9th Cir. 2007); see also Cifuentes v. Red Robin Int’l, Inc., No. C11-5635-EMC, 2012 WL 693930 (N.D. Cal. 2012) (holding that defendants failed to provide “concrete evidence” to estimate the amount in controversy to a “legal certainty” as required under Lowdermilk —”a very high, although not insurmountable, threshold for defendants”). 623 Id. at 998. 624 Id. at 999. 625 Id. 626 133 S. Ct. 1345 (2013).
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