Wang v. Asset Acceptance, LLC, — F.Supp.2d —-, 2010 WL 308800 (N.D. Cal., Jan 27, 2010) (NO. 09-4797 SC).

In Wang…alright, we’re going to take a quick break right off the bat so that we can go ahead and get the obvious out into the open—yes, the plaintiff’s name is Wang. But if you have any thoughts that we’re going to take advantage of the situation for the sake of a few sophomoric jokes, well….you’re in luck. Seriously, the guy’s name is Wang. How can we resist? You would probably stop reading our blog if we did not take advantage of the plaintiff’s name.

Johnny Wang (EDITOR’S NOTE: Giggles) brought a putative class action in California state court alleging that Asset Acceptance, LLC’s (“Asset”) reporting disputed debts and debts that were passed their statute of limitations to credit reporting agencies (“CRAs”) in violation of California’s Consumer Credit Reporting Agencies Act (“CCRAA”). 

Asset removed the action to the federal court under CAFA, arguing that Wang was too big for state court. Wang moved to remand, contending that Asset had not met its burden of proving federal jurisdiction under CAFA. In other words, Wang asserted a shrinkage defense.

The District Court found that, although Asset’s Notice of Removal provided no evidence as to how big Wang’s case was, Asset presented evidence in opposition to the motion to remand via an affidavit stating that it furnished information to CRAs concerning no less that 177,023 California accounts whose limitations periods had expired. 

Although Asset presented the affidavit for the first time in connection with its opposition to the motion to remand, the District Court determined that Asset did not assert a new basis for jurisdiction for the first time in its opposition because Asset’s Notice of Removal made allegations concerning the amount in controversy and the potential class size. In making this conclusion, the court found that Asset merely clarified its alleged basis for federal jurisdiction by presenting evidence showing the aggregate number of proposed plaintiffs and the amount in controversy. Therefore, it was not precluded from considering the evidence contained in the affidavit. 

In denying remand, the District Court also noted that Wang sought actual damages based on declined and reduced credit, forced purchases of credit reports and credit monitoring, postage and private courier costs, mileage, long-distance telephone charges, lost cell phone airtime, increased credit costs, and amounts paid to settle disputed debts not reduced to judgment to improve a credit rating. Per the court, if each potential member of the class had only $28.26 in actual damages, the amount-in-controversy requirement would be satisfied.

Also, because Wang sought punitive damages, attorneys’ fees, and injunctive and equitable relief under CCRAA, the Court found that class members could be entitled to punitive damages of anywhere from $100 to $5,000 each. Based on the fact that Asset had 177,023 California accounts where the limitations period had expired, and considering the minimum amount of punitive damages that could be recovered by the members of that putative class, the District Court found that the amount in controversy exceeded $5 million.

The verdict, the Northern District of California loves Wang.