Luis Licea v. RUGS.COM, LLC

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No.: 2:21-cv-05308-AB-GJS Date: September 14, 2021

Title: Luis Licea v. RUGS.COM, LLC, et al.

Present: The Honorable ANDRE BIROTTE JR., United States District Judge

Carla Badirian N/A

Deputy Clerk Court Reporter

Attorney(s) Present for Plaintiff(s): Attorney(s) Present for Defendant(s):

None Appearing None Appearing

Proceedings: [In Chambers] ORDER GRANTING MOTION FOR REMAND

[Dkt. No. 8]

Before the Court is Plaintiff Luis Licea’s (“Plaintiff”) Motion for Remand

(“Motion,” Dkt. No. 8). Defendant Rugs.com, LLC (“Defendant’) filed an

opposition and Plaintiff filed a reply. The Motion is GRANTED.

I BACKGROUND

Plaintiff, who is permanently blind, filed this action in Los Angeles County

Superior Court, alleging that Defendant’s website has accessibility barriers that

deny him the full use and enjoyment of the website. See Compl. (Dkt. No. 1-1) 47.

Plaintiff asserts one count for violation of the Unruh Civil Rights Act, Cal. Civ.

Code § 51, et seg. Plaintiff seeks statutory damages, attorneys’ fees, costs, and an

injunction requiring Defendant to “take the steps necessary to make the Website

readily accessible to and usable by visually-impaired individuals.” Jd. § 26.

Plaintiff also purports to limit the cost of injunctive relief to no more than $20,000,

and the total recovery including statutory damages, attorneys’ fees, costs, and the

cost of injunctive relief to no more than $74,999. See Compl. Prayer.

CV-90 (12/02) CIVIL MINUTES — GENERAL Initials of Deputy Clerk CB

Defendant removed the action on the grounds of diversity jurisdiction,

arguing that Plaintiff’s attempt to limit the damages to no more than $74,999 is of

no effect because the cost of providing injunctive relief Plaintiff seeks is not

subject to his control and will exceed 80,000. As a result, Defendant argues, the

amount in controversy exceeds $75,000.

In the Motion, Plaintiff argues that Defendant has not established that the

amount in controversy is satisfied because its estimate for remediation of the

website is unreasonable and unsupported, and furthermore, no other amounts

should be considered since none were referenced in the Notice of Removal.

Plaintiff further provided a proposal from third-party vendor VaShaun Jones

(“Jones Decl.,” Dkt. No. 8-13) to remediate the website for $14,300. In Opposition,

Defendant argues that the statutory damages and attorneys’ fees Plaintiff seeks

should be considered and provides amounts for them. Defendant also provides

explanation from its CEO Johnny Nassri (“Nassri Decl.,” Dkt. No. 16-2) as to the

costs to comply with injunctive relief. In reply, Plaintiff argues that none of

Defendant’s arguments or evidence are plausible and that therefore Defendant has

not met its burden.

II. LOCAL RULE 7-3

The Court first addresses the parties’ dispute about whether Plaintiff

satisfied Local Rule 7-3’s meet and confer requirement. There were 18 written

communications between them regarding the Motion. This correspondence was

attached multiple times to the filings and the Court unfortunately did review it.

Defense counsel claims Plaintiff’s counsel did not meet and confer in good faith

because instead of talking on the phone to sincerely try to narrow the issues, he

insisted on communicating via letters, a time-consuming and burdensome endeavor

by which Plaintiff evaded engaging with Defendant. Plaintiff’s counsel claims he

preferred conferring in writing in order to avoid miscommunication.

Local Rule 7-3 does not require in person or even telephonic conferences,

but it does say in person conferrals are “preferabl[e].” It therefore follows that

conferring over the phone is generally preferable to conferring through letters

alone. Plaintiff’s counsel’s rather combative letters in response to Defense

counsel’s initially cordial emails requesting a call reflect no willingness to engage

with Defendant in a mutually convenient way. Plaintiff’s concern about

miscommunication is not unsolvable: counsel commonly confer over the phone

then exchange confirming emails so there is no miscommunication. They can also

confer over the phone and continue conferring in writing. There are many ways to

confer in a mutually convenient and productive way. Instead, Plaintiff’s counsel

insisted on his way alone, unwilling to schedule any call whatsoever with Defense

counsel and demanding that any response be in writing. This is uncivil.

Yet, ultimately, the correspondence reflects meaningful consideration and

exchange of legal argument including case law—matters better communicated in

writing than over the phone. The Court cannot conclude that the parties thoroughly

conferred because it will not squander more of its time studying their

correspondence. The Court finds that compliance with Local Rule 7-3 was

adequate, largely because Defense counsel acquiesced to Plaintiff’s demands to

confer in writing. This is not a credit to Plaintiff’s counsel, who should have at

least extended the courtesy of taking a phone call on the subject in lieu of or even

in addition to correspondence. That small gesture would have likely averted this

protracted dispute over compliance with Local Rule 7-3.

III. LEGAL STANDARD

Federal courts are courts of limited jurisdiction and thus have subject matter

jurisdiction only over matters authorized by the Constitution and Congress. See

Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986). “Because of

the Congressional purpose to restrict the jurisdiction of the federal courts on

removal,” statutes conferring jurisdiction are “strictly construed and federal

jurisdiction must be rejected if there is any doubt as to the right of removal in the

first instance.” Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996) (citations

and quotations omitted).

There is a strong presumption that the Court is without jurisdiction until

affirmatively proven otherwise. See Fifty Assocs. v. Prudential Ins. Co. of America,

446 F.2d 1187, 1190 (9th Cir. 1970). When an action is removed from state court,

the removing party bears the burden of demonstrating that removal is proper.

Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

Federal diversity jurisdiction exists when the parties are completely diverse

and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332. Pursuant to

28 U.S.C. § 1441, a defendant may remove an action from state court to federal

court if the diversity and amount in controversy requirements are satisfied and if

none of the defendants are citizens of the forum state.

The amount in controversy, for purposes of diversity jurisdiction, is the total

“amount at stake in the underlying litigation.” Theis Research, Inc. v. Brown &

Bain, 400 F.3d 659, 662 (9th Cir. 2005). “[T]his includes any result of the

litigation, excluding interests and costs, that ‘entails a payment’ by the defendant.”

Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016).

“Among other items, the amount in controversy includes damages (compensatory,

punitive, or otherwise), the costs of complying with an injunction, and attorneys’

fees awarded under fee-shifting statutes or contract.” Fritsch v. Swift

Transportation Co. of Arizona, LLC, 899 F.3d 785, 793 (9th Cir. 2018)

“The ‘strong presumption’ against removal jurisdiction means that the

defendant always has the burden of establishing that removal is proper.” Gaus, 980

F.2d at 566. And while “‘a defendant’s notice of removal need include only a

plausible allegation that the amount in controversy exceeds the jurisdictional

threshold,’ . . . ‘[e]vidence establishing the amount is required’” when “defendant’s

assertion of the amount in controversy is contested by plaintiffs.” Ibarra v.

Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (quoting Dart Cherokee

Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014)).

In determining the amount in controversy, courts first look to the allegations

in the complaint. Ibarra, 775 F.3d at 1197. But “where it is unclear or ambiguous

from the face of a state-court complaint whether the requisite amount in

controversy is pled[,]” courts apply a preponderance of the evidence standard,

which requires the defendant to provide evidence showing that it is more likely

than not that the $75,000.00 amount in controversy is met. Guglielmino v. McKee

Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (citing Sanchez v. Monumental

Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). In considering whether the

removing defendant has satisfied its burden, the court “may consider facts in the

removal petition” and “summary-judgment-type evidence relevant to the amount in

controversy at the time of removal.” Singer v. State Farm Mut. Auto. Ins. Co., 116

F.3d 373, 377 (9th Cir. 1997) (quoting Allen v. R & H Oil & Gas. Co., 63 F.3d

1326, 1335–36 (5th Cir. 1995)).

IV. DISCUSSION

The parties agree and the Court finds that they are completely diverse. The

only dispute is whether Defendant has satisfied its burden to show by a

preponderance of the evidence that the amount in controversy is satisfied. Both

sides submitted evidence. Defendant has not met its burden.

There are three contributors to the amount in controversy in this case: the

civil penalty, the cost of injunctive relief, and attorneys’ fees. The Court will

discuss each.

I. Statutory Damages

The Unruh Act entitles a prevailing plaintiff to actual damages and statutory

damages of no less than $4,000 per violation. See Cal. Civ. Code § 52(a). Plaintiff

seeks only statutory damages. Defendant argues that Plaintiff could recover up to

$12,000 in statutory damages because the Complaint appears to allege that he

visited the website 3 times and therefore experienced a violation 3 times. But “the

amount in controversy reflects the maximum recovery the plaintiff could

reasonably recover.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th

Cir. 2019) (emphasis added). Here, it is not reasonable to conclude that Plaintiff

would recover 3 penalties for visiting the website 3 times. Defendant has cited no

case making such an award, and of all the Unruh Act claims that have been

adjudicated by this Court, often by default judgment or summary judgment, the

Court does not recall awarding more than a single statutory penalty even where

there were arguably multiple violations. It is rare for a plaintiff to seek multiple

penalties. Defendant has therefore not shown that the $12,000 would be a

reasonable likely recovery for the Unruh Act violation here. The Court finds that

the civil penalty reasonably puts $4,000 in issue.

II. Injunctive Relief

The Court next considers the injunctive relief Plaintiff seeks. In the Ninth

Circuit, the value of the injunction for purposes of determining the amount in

controversy may be assessed from “either viewpoint,” that is, the amount that

either party can gain or lose from the case. In re Ford Motor Co./Citibank (So.

Dakota), N.A., 264 F.3d 952, 958 (9th Cir. 2001).

Plaintiff seeks an injunction “requiring Defendant to take the steps necessary

to make [its website] readily accessible to and usable by visually-impaired

individuals.” Compl. Prayer ¶ 2. Plaintiff purports to “expressly limit[] the

injunctive relief to require that Defendant expend no more [than] $20,000 as the

cost of injunctive relief.” Id. But Defendant responds that this limitation is illusory

because Plaintiff has no control over the cost of complying with an injunction and

therefore cannot limit it. Defendant states in the NOR that compliance would cost

at least $80,000 per year. See NOR p. 3. With its opposition, Defendant filed a

declaration from its CEO contending that the initial work to ensure compliance

would cost about $48,428.75, and that thereafter, it will cost about $80,437.50 per

month (the monthly cost for 10 new in-house coders). See Nassri Decl. ¶¶11-14.

Defendant claims that the work will be extensive because its website is massive: it

has about 200,000 webpages, and uploads about 7,150 rugs to its website each

month. See Nassri Decl. ¶¶ 3, 13. Plaintiff responds that its Complaint caps the cost

of injunctive relief at $20,000. Plaintiff also filed an offer from a vendor to

remediate the website for $14,300. See Jones Decl. And in reply, Plaintiff indicates

that there is a plethora of automated services that can efficiently survey a website

for inaccessibility.1

The Court is skeptical that a plaintiff can effectively limit the cost of

injunctive relief with the kind of disclaimer asserted in the Complaint. See

Martinez v. CotN Wash, Inc., No. 220CV09327VAPAGRX, 2020 WL 6799076, at

*2 (C.D. Cal. Nov. 18, 2020) (“Although a plaintiff may limit his monetary

damages in the complaint, Courts in this district have ruled that a plaintiff cannot

expressly limit the cost of injunctive relief, and this Court agrees.”) (emphasis

added). However, the Court need not resolve this question because Defendant’s

estimate (like its attorneys’ fee estimate discussed below) is not reasonable. It is

true that Defendant’s estimate is detailed, but it is also extravagant. It appears that

Defendant believes a manual review of each and every webpage is required. But at

the same time, Defendant acknowledges using templates to create its webpages:

templates should streamline bringing the website into compliance without having

to manually review each and every page. Furthermore, the Complaint asserts only

four types of communication barriers on the website (see Compl. ¶18), whereas

Defendant’s estimate assumes approximately 15 WCAG 2.1 guidelines are in

issue. This indicates that Defendant’s estimate covers matters beyond those

asserted in the Complaint. The Court therefore does not find Defendant’s estimate

persuasive or reliable and therefore disregards it.

The Court is therefore left with Plaintiff’s estimate of $14,300, which is less

than the $20,000 cap their Complaint asserts. Without a more realistic counter-

estimate than that provided by Plaintiff, the Court relies on the Complaint’s

indication that injunctive relief will cost no more than $20,000. This Court does

not view this as a “cap,” but instead it appears to be a reasonable upper limit of the

costs of the injunction based on the Jones estimate.

1 The Court overrules Defendant’s objections to the evidence filed in reply. It was

filed in response to matters raised by the opposition and is otherwise admissible.

III. Attorneys’ Fees

The Unruh Act also permits recovery of attorneys’ fees. This amount must

be considered as part of the amount in controversy. See Fritsch, 899 F.3d at 793.

“[C]alculations [of attorney’s fees] should be conservative estimates.” Sasso v.

Noble Utah Long Beach, LLC, 2015 WL 898468, at *5 (C.D. Cal. Mar. 3, 2015)

(Birotte, J.) (citing Guglielmino, 506 F.3d at 701). “The reasonableness of

attorney’s fees, when such fees are unascertainable on the face of the complaint,

can be calculated by looking to other attorney’s fees awards in similar cases.”

Garcia v. ACE Cash Express, Inc., No. SACV 14–0285–DOC, 2014 WL 2468344,

at *5 (C.D.Cal. May 30, 2014), at *5 (citing Kroske v. U. S. Bank Corp., 432 F.3d

976, 980 (9th Cir. 2005)); see also Brady v. Mercedes-Benz USA, Inc., 243 F.

Supp. 2d 1004, 1011 (N.D. Cal. 2002) (“The amount of fees commonly incurred in

similar litigation can usually be reasonably estimated based on experience.”).

The amount put in controversy by statutory damages ($4,000) and injunctive

relief ($20,000) together is $24,000. Therefore, to exceed the $75,000

jurisdictional threshold, Defendant must demonstrate that the attorneys’ fees put

more than $51,000 in issue. They do not. Defendant states that Plaintiff will incur

no less than $67,750 in attorneys’ fees, but this is not a reasonable estimate.

Defendant asserts that “Plaintiff’s counsel will spend no less than 271 attorney

hours on this case,” which at the rate of $250, works out to $67,750. See McKown

Decl. ¶ 14. This 271 hours is a vast overestimate that includes 30 hours for written

discovery (id. ¶ 6), 50 hours for electronic discovery (id. ¶ 7), 30 hours for

depositions (id. ¶ 8), 25 hours for expert discovery and depositions (id. ¶ 9), 50

hours for pre-trial matters (id. ¶ 12), and 40 hours for a jury trial (id. ¶ 13), for

example. Plaintiff’s Complaint asserts a single Unruh Act claim based on a

website. Although it is an extensive website, litigating this case will unlikely take

this much time. Neither side has provided the Court with any example of attorneys’

fees actually awarded in a similar case, but the Court is not persuaded that the

amount could reasonably exceed $51,000 (i.e., 204 hours at $250 an hour) as

necessary to satisfy the jurisdictional minimum.

IV. CONCLUSION

For the foregoing reasons, Defendant has not established by a preponderance

of the evidence that the amount in controversy exceeds $75,000. Therefore, this

Court lacks jurisdiction over the action, GRANTS the Motion for Remand, and

ORDERS the Clerk of Court to remand this case back to the court from which it

was removed. IT IS SO ORDERED.