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Rodriguez v. AT&T Mobility Services LLC

United States Court of Appeals, Ninth Circuit

August 27, 2013

Robert Rodriguez, individually and on behalf of all others similarly situated, Plaintiff-Appellee,
v.
AT&T Mobility Services LLC, a Delaware limited liability company, Defendant-Appellant.

Argued and Submitted August 5, 2013—Pasadena, California

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding D.C. No. 2:12-cv-03694-GW-FMO

George W. Abele (argued), Elizabeth A. Brown, and Mario C. Ortega, Paul Hastings LLP, Los Angeles, California; and Laurie E. Barnes, AT&T Mobility Services LLC, Los Angeles, California, for Defendant-Appellant.

Michael S. Morrison (argued), Alexander Krakow & Glick, LLP, Santa Monica, California; Thomas W. Falvey and J.D. Henderson, Law Offices of Thomas W. Falvey, Pasadena, California; Jason W. Wucetich, Dimitrios V. Korovilas, Wucetich & Korovilas LLP, El Segundo, California, for Plaintiff-Appellee.

Before: Richard C. Tallman, Richard R. Clifton, and Consuelo M. Callahan, Circuit Judges.

SUMMARY[*]

Jurisdiction / Class Action

The panel vacated the district court's order remanding to state court a putative class action, which had been removed to federal district court by the defendant under the Class Action Fairness Act.

The panel held that the lead plaintiff's waiver of any claim in excess of the $5 million amount-in-controversy requirement of 28 U.S.C. § 1332(d)(2) was ineffective, and the waiver no longer had legal effect. The panel held that Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 999 (9th Cir. 2007) (imposing on defendants the burden to prove the amount-in-controversy to a "legal certainty"), was effectively overruled by the Supreme Court's holding in Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345 (2013), and that the proper burden of proof imposed upon a defendant to establish the amount-in-controversy is the preponderance of the evidence standard. Because the district court's remand order relied solely on the waiver, the panel remanded to the district court for consideration and application of the preponderance standard to the amount-in-controversy evidence.

OPINION

CLIFTON, Circuit Judge:

Plaintiff Robert Rodriguez filed a putative class action in state court, which Defendant removed to federal district court. Defendant contended that there was federal jurisdiction over the action under the Class Action Fairness Act of 2005 ("CAFA"), Pub. L. No. 109-2, 119 Stat. 4 (2005), and in particular 28 U.S.C. § 1332(d)(2). Rodriguez alleged that the amount in controversy did not exceed $5 million, as required for federal jurisdiction, and purported to waive any claim by the class in excess of that amount. Based on that waiver, the district court granted Rodriguez's motion to remand the case to state court. The Supreme Court later held that such a waiver was ineffective, however. Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345 (2013). As a result, we vacate the district court's order and remand to the district court for further proceedings.

In its remand order, the district court held that to establish federal jurisdiction over a putative class action, Defendant must demonstrate to a "legal certainty" that the amount in controversy exceeded the $5 million threshold amount, based upon our decision to that effect in Lowdermilk v. U.S. Bank National Association, 479 F.3d 994, 999 (9th Cir. 2007). Our reasoning there for imposing on defendants the burden to prove the amount in controversy to a legal certainty, rather than the ordinary preponderance of the evidence standard, is clearly irreconcilable with the Supreme Court's reasoning in Standard Fire. As a result, we hold that Lowdermilk has been effectively overruled, and that the proper burden of proof imposed upon a defendant to establish the amount in controversy is the preponderance of the evidence standard.

I. Background

Plaintiff Robert Rodriguez brought a putative class action against AT&T Mobility Services, LLC, on behalf of himself and all other similarly situated retail sales managers of AT&T wireless stores in Los Angeles and Ventura counties. Rodriguez asserted various claims under California law related to alleged unpaid wages, overtime compensation, and damages for statutory violations. Rodriguez filed his original complaint in Los Angeles County Superior Court. AT&T removed the case to federal court under 28 U.S.C. § 1332(d)(2).

Rodriguez moved to remand the case to California state court, arguing that AT&T could not establish subject-matter jurisdiction in federal court. Specifically, Rodriguez argued that the total amount in controversy in this putative class action did not exceed $5 million, the minimum amount for federal jurisdiction as required by ยง 1332(d). Rodriguez pointed to his First Amended Complaint, in which he alleged as much, that "the aggregate amount in controversy is less than five million dollars." To bolster his position, in that pleading, Rodriguez also "waive[d] ...


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