Plaintiffs, package pick-up and delivery drivers, filed a class action in state court against defendants, including a delivery service, alleging violations of the California Labor Code and the California Business and Professions Code, and asserting claims for intentional and/or negligent misrepresentation. Defendants filed a notice of removal from state court. Plaintiffs filed a motion for remand to state court pursuant to 28 U.S.C.S. § 1447(c).

Overview

Plaintiffs alleged defendants misclassified them as “independent contractors” to avoid legal obligations under California labor laws. Plaintiffs’ motion contended that defendants failed to demonstrate that the amount in controversy satisfied the $ 75,000 jurisdictional prerequisite of 28 U.S.C.S. § 1332. Defendants bore the burden of proving the propriety of removal, and contended that the amount in controversy was met at least some of the named plaintiffs when calculating damages, punitive damages, and attorneys’ fees. The issue was whether the sum of all damages and attorneys’ fees satisfied the jurisdictional minimum. In a class action, at least the named class representative had to exceed the $ 75,000 amount in controversy requirement for diversity jurisdiction. The court was satisfied that defendants met their burden of proving the jurisdictional minimum a “more likely than not standard” for at least one named plaintiff. Therefore, given the circuit’s analysis of 28 U.S.C.S. § 1367 and the court’s reading of Gibson, it asserted diversity jurisdiction over that plaintiff’s claims and exercised supplemental jurisdiction on all claims for both named and unnamed plaintiffs. Parties’ litigation attorneys Los Angeles appeal.

Outcome

The court denied plaintiffs’ motion to remand the action to state court.

Procedural Posture

Defendant designer filed an action in Missouri against plaintiff website proprietor alleging that the proprietor had infringed upon its patents for ice-cube sculptures. The proprietor filed a suit in the court, alleging that the designer had illegally attempted to monopolize the market for such sculptures on the basis of a putatively invalid copyright. The designer moved to stay the proceedings pending action the Missouri district court

Overview

The designer claimed to own a copyright registration for ice-cube sculptures. It sent a series of “take down” letters to the proprietor after it discovered that companies were using the proprietor’s website to sell ice-cube sculptures that were similar to ones that it had designed. It filed a patent infringement suit in Missouri after the proprietor ignored the letters. The proprietor filed its own suit, alleging that the designer had violated California law and § 2 of the Sherman Act, 15 U.S.C.S. § 2. It also moved, in the Missouri district court, to dismiss the designer’s suit or to transfer it to the court. In granting the motion for a stay, the court noted that all three parts of the first-to-file test were satisfied: the designer had filed his suit first; the two suits involved significantly similar parties; and the two actions involved significantly similar facts and legal issues. Although the designer’s suit may have suffered jurisdictional shortcomings, those issues had been raised in the proprietor’s motions. The court would let the Missouri district court make the dismissal and transfer determinations; it would not jump unnecessarily into the race to the courthouse.

Outcome

The court granted the motion for a stay and ordered that the stay should remain in effect at least until the Missouri district court resolved the proprietor’s motions to dismiss or to transfer the designer’s suit.