Deaver v. BBVA Compass Consulting And Benefits, Inc., 2014 U.S. Dist. Lexis 72074 (N.D. Cal. May 27, 2014)

The U.S. District Court for the Northern District of California (the “Northern District”) reconsidered its remand order in light of the Ninth Circuit’s ruling in Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975 (2013). In originally remanding the case, the court relied on the “legal certainty” test promulgated by Lowdermilk v. United States Bank National Association, 479 F.3d 994 (9th Cir. 2007). Because the Rodriguez court overruled Lowdermilk and held that a defendant removing an action under CAFA need only establish the amount in controversy by a preponderance of the evidence, the court re-evaluated whether the removing defendants satisfied the amount in controversy requirement under CAFA.

By way of background, Cheryl Deaver (“Deaver”) and BBVA Compass Consulting and Benefits (“BBVA”) stipulated to the voluntary dismissal of a prior class action for state law wage and hour violations, which was pending in the U.S. District Court for the Central District of California (the “Central District”). The dismissal was precipitated by Deaver’s failure to timely file a motion for class certification. Shortly after the dismissal, Deaver filed a new action in the Alameda County Superior Court, a venue that she admittedly chose, in part, to avoid the class certification deadlines prescribed by the Central District Local Rules. Like it did in the first action, BBVA removed the case to the district court, this time to the Northern District, which is the district embracing the Alameda County Superior Court.

Deaver moved to remand the case to the state court on the basis that BBVA failed to establish that the amount in controversy exceeded the $5,000,000 threshold under CAFA. Applying the “legal certainty” test set forth in Lowdermilk v. United States Bank National Association, 479 F.3d 994 (9th Cir. 2007), the Northern District agreed with Deaver and determined that BBVA failed to prove the requisite amount in controversy to a legal certainty. Notably, the court was not willing to consider allegations that Deaver made in the prior class action in determining the amount in controversy. As a result, the Northern District remanded the action. BBVA then appealed the court’s remand order.

While BBVA’s appeal was pending, the Ninth Circuit decided Rodriguez. In light of the Rodriguez decision, BBVA once again removed the case from the Alameda County Superior Court and Deaver responded by seeking another remand order. At or about this same time, the Ninth Circuit vacated the Northern District’s remand order, leaving the Northern District to decide whether it had jurisdiction over the action based on the Rodriguez court’s “preponderance of the evidence” test.

Significantly, the Rodriguez court held that courts must look beyond the four corners of the complaint in the event that a complaint alleges damages below the jurisdictional limit. Rodriguez, 728 F.3d at 981. Thus, the Northern District was required to consider the allegations from Deaver’s prior action in analyzing whether the amount in controversy exceeded the $5,000,000 threshold. Given the additional details from Deaver’s prior complaint, the court concluded that BBVA established the requisite amount in controversy by a preponderance of the evidence. Having determined that it had jurisdiction over the action, the Northern District denied Deaver’s remand motion. It also declined to transfer the case to the Central District at BBVA’s request because it was no more convenient a forum than the Northern District. Finally, the Northern District granted BBVA’s rule 12(b)(6) motion on the ground that Deaver’s complaint was insufficiently pled, but denied BBVA’s request for a dismissal with prejudice.