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Thomas v. American Family Mutual Insurance Co.

United States District Court, W.D. Washington, Seattle

October 20, 2017

MIRANDA THOMAS, Plaintiffs,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY, et al., Defendants.

          ORDER

          The Honorable Richard A. Jones, United States District Judge.

         I. INTRODUCTION

         This matter comes before the Court on Plaintiff Miranda Thomas' Motion to Remand. Dkt. # 19. Defendants American Family Mutual Insurance Company, American Family Insurance Company (collectively, “AF”), and AFNI, Inc. (“AFNI”) oppose the Motion. Dkt. ## 23, 26. For the reasons that follow, the Court GRANTS Plaintiff's Motion.

         II. BACKGROUND

         Plaintiff filed this putative class action against Defendants, alleging violations of the Washington Consumer Protection Act, in King County Superior Court. Dkt. # 1. Plaintiff alleges that Defendants committed “unfair and deceptive acts” while collecting on a debt Plaintiff incurred following a motor vehicle collision with one of AF's insureds. Plaintiff's Complaint alleges damages less than $5 million. Defendants removed the case to this Court under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2) (“CAFA”). Dkt. # 1. Plaintiff then filed this Motion for Remand. Dkt. # 19.

         III. DISCUSSION

         Removal jurisdiction is strictly construed in favor of remand, and any doubt as to the right of removal must be resolved in favor of remand. Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005). The party seeking a federal forum has the burden of establishing that federal jurisdiction is proper. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 682-83 (9th Cir. 2006). The removing party must carry this burden not only at the time of removal, but also in opposition to a motion for remand. See Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009).

         Pursuant to CAFA, federal courts have jurisdiction over certain class actions, defined in § 1332(d)(1), if the class has more than 100 members, the parties are minimally diverse, and the amount in controversy exceeds $5 million. 28 U.S.C. § 1332(d)(2); Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 552, 190 L.Ed.2d 495 (2014). “'[A] defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold, ' and need not contain evidentiary submissions.” Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (quoting Dart, 135 S.Ct. at 554.)

         In determining the amount in controversy, courts first look to the complaint. Ibarra, 775 F.3d at 1197. “Where . . . damages are unstated in a complaint, or, in the defendant's view are understated, the defendant seeking removal bears the burden to show by a preponderance of the evidence that the aggregate amount in controversy exceeds $5 million when federal jurisdiction is challenged.” Id. This burden remains the same even if the plaintiffs “affirmatively contend in that complaint that damages do not exceed $5 million.” Rodriguez v. AT & T Mobility Services LLC, 728 F.3d 975, 981 (9th Cir. 2013). When plaintiffs affirmatively state that the amount in controversy does not exceed $5 million, a defendant must show that the “estimate of damages in controversy is a reasonable one.” Ibarra, 775 F.3d 1197. Where a defendant's assertion of the amount in controversy is contested by the plaintiffs, both sides submit proof and the Court must decide, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied. Dart, 135 S.Ct. at 554.

         The parties do not dispute whether this putative class action meets the other requirements of § 1332(d). Plaintiff's Complaint alleges damages less than $5 million, thus, Defendants have the burden to establish, by a preponderance of the evidence, that the amount in controversy exceeds the jurisdictional threshold of $5 million. Plaintiff argues that Defendants have not met that burden, and that removal was improper.

         Defendants make several assertions regarding the amount of damages in controversy in this claim. First, Defendants asserted in their notice of removal that Plaintiff's allegations put at least $10.2 million in dispute. Dkt. # 1. They based this estimate on Plaintiff's class definition. The Class is defined as follows:

         All Washington motorists who were in automobile accidents with American Family Mutual Insurance Company insureds, and who, during the period from February 15, 2013 to February 15, 2017, 1) received an initial letter from AFNI, on behalf of American Family Mutual Insurance Company and/or American Family Insurance Company, seeking reimbursement for damage resulting from the accident; and 2) after payment of the claimed amount, received a second letter from AFNI seeking reimbursement for additional or different damage resulting from the same accident.

         Dkt. # 1 Ex. 1. Defendants determined that AF referred more than 2, 400 matters to AFNI involving potential subrogation claims against motorists residing in Washington State during the period at issue. According to their calculations, the total value of these claims was over $10.2 million. Dkt. # 2. Defendants provided a declaration, but no data or other evidence in support of these assertions. Dkt. # 2.

         Defendants acknowledge that they did not know at the time of removal how many of these subrogation matters involved a Washington motorist that received more than one letter from AFNI seeking reimbursement for damages resulting from the same accident, but AFNI maintains in its Response that the proffered number is an accurate estimate of the damages at issue. AFNI argues that the estimated $10.2 million includes all of the potential plaintiffs, and that once actual, statutory and treble damages, as well as attorneys' fees are taken into account for “even a fraction of the group”, the $5 million threshold would be met. Dkt. # 23. Dkt. # 1 ¶ 11. AFNI provides ...


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