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Benedetto v. Lumber Liquidators Inc.

United States District Court, D. Arizona

February 10, 2016

Stephen Benedetto, Plaintiff,
v.
Lumber Liquidators Incorporated, et al., Defendants.

ORDER

David G. Campbell United States District Judge

Plaintiff has filed a motion to lift stay and a motion to remand to state court. Docs. 8, 9. Defendants oppose lifting the stay generally, but do not oppose the Court’s consideration of Plaintiff’s motion to remand. No party has requested oral argument. The Court will lift the stay for purposes of considering Plaintiff’s motion to remand, and remand this case to Maricopa County Superior Court.

I. Background.

Plaintiff Stephen Benedetto filed a complaint against Defendants Lumber Liquidators Inc. (“LLI”) and several unnamed defendants in Maricopa County Superior Court on October 26, 2015. Doc. 8. Plaintiff alleged breach of contract, consumer fraud, and products liability claims against Defendants (Doc. 1-1) in connection with Plaintiff’s purchase of $3, 148.17 of laminate flooring. Doc. 8. Plaintiff sought six categories of recovery, including: (1) consequential damages; (2) damages for pain, suffering, mental anguish, lost wages, and lost future income; (3) punitive damages (4) attorneys’ fees; (5) prejudgment interest; and (6) costs and expenses. Doc. 1-1. Plaintiff sought these “in an amount to be proven at trial.” Doc. 8-1.

When Plaintiff filed his complaint, he also filed an Arizona Certificate of Compulsory Arbitration. Doc. 8. This document certified that the matter was worth less than $50, 000 and thus was subject to compulsory arbitration under A.R.S. § 12-133.

On November 10, 2015, Plaintiff sent an offer of judgment to LLI under Rule 68 of the Arizona Rules of Civil Procedure, requesting $9, 999.00. Doc. 15. Plaintiff also sent a cover letter (“Cover Letter”) that itemized $6, 217.17 in special damages and costs, and stated that “[Plaintiff] fully expect[s] [punitive damages] to reach six figures if this case were to proceed to trial.” Doc. 8.

Three days later, LLI filed a notice of removal, claiming diversity jurisdiction under 28 U.S.C. § 1332. Doc. 1. On December 15, 2015, LLI filed an unopposed motion to stay. Doc. 6. The magistrate judge assigned to the case granted the stay. Doc. 7.

II. Legal Standard.

For a federal court to exercise removal jurisdiction under 28 U.S.C. § 1446, the amount in controversy must “exceed[] the sum or value of $75, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(a). Courts “strictly construe the removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Id.

When a state court complaint does not clearly plead the requisite amount in controversy and the plaintiff contests the amount, the removing defendant “must provide evidence establishing that it is more likely than not that the amount in controversy exceeds [$75, 000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (quotation marks omitted). A defendant “cannot establish removal jurisdiction by mere speculation and conjecture, with unreasonable assumptions.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). Rather, a defendant meets the burden of proof when it “relie[s] on a reasonable chain of logic and present[s] sufficient evidence” that the amount in controversy exceeds $75, 000. LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1200 (9th Cir. 2015). To establish the amount in controversy, “[t]he parties may submit evidence outside the complaint, including affidavits or declarations, or other summary-judgment-type evidence relevant to the amount in controversy at the time of removal.” Ibarra, 775 F.3d at 1197 (quotation marks omitted).

III. Analysis.

LLI argues that the amount in controversy is satisfied by the combination of punitive damages, consequential damages, ongoing physical injuries, and attorneys’ fees. Doc. 10. The Court does not agree.

A. Punitive Damages.

“It is well established that punitive damages are part of the amount in controversy in a civil action.” Gibson v. Chrysler Corp., 261 F.3d 927, 945 (9th Cir. 2001). “However, the mere possibility of a punitive damages award is insufficient to prove that the amount in controversy requirement has ...


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