Lisa Burkhartsmeier v. Power Mobile Life, LLC

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

LISA BURKHARTSMEIER, Case No. 2:24-cv-06617-SB-SK

Plaintiff,

v. ORDER GRANTING MOTION TO

REMAND AND FOR

POWER MOBILE LIFE, LLC et al., ATTORNEY’S FEES [DKT. NO. 9]

Defendants.

Plaintiff Lisa Burkhartsmeier filed a complaint in state court, asserting

various causes of action arising out of her employment and termination by

Defendants. Nearly two months after being served, Defendants removed the case,

invoking diversity jurisdiction and claiming that removal was timely because

Plaintiff had agreed to extend the time to answer. Plaintiff now moves to remand

because Defendants removed more than 30 days after they were served with the

complaint. Dkt. No. 9. Plaintiff also seeks attorney’s fees under 28 U.S.C.

§ 1447(c) and Local Rule 83-7. The Court held a hearing on October 4, 2024 and

heard argument from the parties. Because Defendants’ removal was untimely and

their asserted reasons for timeliness were objectively unreasonable, the Court

grants the motion to remand and awards attorney’s fees to Plaintiff.

I.

A defendant may remove a civil action from state to federal court if

jurisdiction originally would lie in federal court. 28 U.S.C. § 1441(a). The

removing party bears the burden of proving that removal is proper. Gaus v. Miles,

Inc., 980 F.2d 564, 566 (9th Cir. 1992). If removal is based on diversity

jurisdiction, 28 U.S.C. § 1441(b), the removing defendant must demonstrate

complete diversity of citizenship among the parties and that the amount in

controversy exceeds $75,000. 28 U.S.C. § 1332(a). There is a “strong

presumption” against removal jurisdiction, which requires remand “if there is any

doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566–67.

Under 28 U.S.C. § 1446(b), a defendant must file a notice of removal within

30 days of: (1) the day it received the complaint, or (2) “if the case stated by the

initial pleading is not removable,” the day the defendant received a paper from

which it could first ascertain that the case was removable. The Ninth Circuit has

interpreted § 1446(b) as providing that the 30-day removal period runs from the

date of receipt of the complaint “only when [the] pleading affirmatively reveals on

its face the facts necessary for federal court jurisdiction.” Harris v. Bankers Life &

Cas. Co., 425 F.3d 689, 690–91 (9th Cir 2005) (cleaned up). The fact that an

initial pleading provides a “clue” as to removability does not impose a duty to

investigate whether a case is removable—the basis of removal generally must be

determined from the four corners of the complaint. Id. at 694–95. However, when

evaluating a complaint, a defendant must exercise a “reasonable amount of

intelligence in ascertaining removability.” Kuxhausen v. BMW Fin. Servs. NA

LLC, 707 F.3d 1136, 1140 (9th Cir. 2013).

II.

Plaintiff filed her complaint in state court on May 29, 2024 and served

Defendants by certified mail two days later. Under California law, service was

effective on June 10, ten days after the summons and complaint were mailed. Cal.

Civ. Proc. Code § 415.40 (service by mail on persons outside California deemed

complete on the tenth day after mailing). Defendants removed the case on August

5—56 days after the effective date of service.

In their notice of removal, Defendants asserted that it was apparent from

“the face of Plaintiff’s complaint” that the amount in controversy exceeded

$75,000. Dkt. No. 1 ¶ 36. Defendants relied on Plaintiff’s allegation that she had a

base salary of $170,000 per year, with the potential to earn up to $308,000 a year,

and on her prayer for relief, which demanded general, compensatory, special, and

punitive damages, as well as interest on lost or unpaid wages, attorney’s fees and

costs, and statutory penalties. Id. ¶¶ 28–37. Defendants also explained that

diversity was complete because Plaintiff is a citizen of California and

Defendants—three limited liability companies whose sole board member and

director is a Chinese citizen—are citizens of China. Id. ¶¶ 13–27. Defendants

stated that removal was timely because the parties had stipulated to a 30-day

extension of time for Defendants to respond to the complaint, which Defendants

claimed also extended their time to remove. Id. ¶¶ 5–6.

Plaintiff moved to remand, arguing that the stipulation extending

Defendants’ time to respond to the complaint did not extend their time to remove.

During the parties’ meet-and-confer process, Plaintiff explained that she had never

agreed to extend the time to remove the case to federal court and that any such

agreement would be legally ineffective anyway. Dkt. No. 9-2 ¶ 5; see Transport

Indem. Co. v. Fin. Tr. Co., 339 F. Supp. 405, 407–08 (C.D. Cal. 1972) (holding 30-

day removal period cannot be extended by consent of plaintiff). Defense counsel

on two occasions (including after Plaintiff advised Defendants that she would seek

attorney’s fees if required to file a motion to remand) stated that Defendants would

consider stipulating to remand but ultimately declined to do so. Dkt. No. 9-2 ¶¶ 5–

6. Throughout these conversations, Defendants did not provide any legal authority

for their position or explain why they would not stipulate to remand. Id. ¶ 6.

In their opposition to the motion to remand, Defendants do not even attempt

to defend the argument in their removal notice that removal was timely based on

the parties’ stipulation to extend the time to respond to the complaint. They neither

produce evidence to support their assertion that Plaintiff agreed to extend the time

to remove the case nor identify any legal authority to suggest that any such

agreement could extend the statutory time to remove. Thus, Defendants have

abandoned the sole argument for timeliness asserted in the notice of removal—an

argument that in any event appears to be factually, if not legally, baseless.1

Instead, Defendants argue for the first time in their opposition that removal

was timely because they only discovered that the action was removable on July 9,

when they became aware of their own citizenship and the amount in controversy

after their counsel, Charmaine Huntting, received documentation of Plaintiff’s

salary and earnings and investigated Defendants’ citizenship. Dkt. No. 14.

Defendants neither explain their change in position nor cite authority permitting

1 A plaintiff can waive the 30-day procedural requirement by failing to timely

object to a late removal petition. Friedenberg v. Lane Cnty., 68 F.4th 1113, 1121

(9th Cir. 2023). The plaintiff in this case filed a timely remand motion and did not

previously agree to waive the 30-day removal requirement. Plaintiff merely agreed

to extend the time to respond to the complaint. It is manifestly unreasonable to

suggest—as Defendants did in their removal petition—that this routine extension

request constituted a knowing and intentional waiver of the 30-day removal

requirement.

them to assert new grounds for timeliness not present in their notice of removal.

Cf. Prado v. Dart Container Corp. of California, 373 F. Supp. 3d 1281, 1287

(N.D. Cal. 2019) (rejecting new timeliness ground asserted for first time in

opposition to motion to remand). But even if it were procedurally proper for

Defendants to belatedly raise this new argument, the argument fails on the merits.

First, Huntting represented in the notice of removal that it is evident from

“the face of [the] complaint” that the amount in controversy exceeds $75,000,

relying on the allegation that Plaintiff had “the potential to earn up to $308,000 per

year” and citing cases in which the amount in controversy had been satisfied when

the plaintiff’s alleged lost wages were far less. Dkt. No. 1 ¶¶ 35–36. Huntting

does not state in her declaration that she relied on any information outside the

complaint in determining the amount of controversy. In a complete turnabout, she

now submits a declaration in opposition to the remand motion suggesting that the

amount in controversy could not be determined on the face of the complaint,

stating that “[t]he fact that the amount in controversy meets or exceeds the

threshold only became apparent after [she] received and reviewed documentation

of Plaintiff’s salary and earnings on or about July 9, 2024.” Dkt. No. 14-1 ¶ 3.

Huntting provides no explanation for this inconsistency. For the reasons provided

in the notice of removal, the Court finds that it was intelligibly ascertainable from

the face of the complaint that the amount in controversy exceeded $75,000.

Second, Defendants’ argument that their own citizenship was not evident to

their counsel until July 9 is likewise unavailing. Huntting’s second declaration

does not specify how she determined Defendants’ citizenship—she simply asserts

that she “investigated and first learned on July 9, 2024 that Defendants’ sole board

member and Director is a citizen of China.” Id. ¶ 4. But even if the Court were to

credit this conclusory and belatedly presented statement, courts in the Ninth Circuit

have repeatedly (and sensibly) held that defendants are charged with knowledge of

their own citizenship. Bluemner v. Ergo Media Cap., LLC, No. 2:15-CV-01392-

MMM, 2015 WL 3533218, at *5 (C.D. Cal. June 4, 2015) (collecting cases); see

e.g., KDY, Inc. v. Hydroslotter Corp., No. 3:08-CV-4074, 2008 WL 4938281, at *4

(N.D. Cal. Nov. 17, 2008) (explaining that “courts surely can presume that a

defendant is aware of various basic personal facts, including the location of one’s

citizenship” and that this presumption is consistent with Harris). Defendants fail

to address this case law.2

2 At the hearing, defense counsel, Nicholas Krebs, made two misstatements that are

concerning—particularly in the context of the unexplained shift in positions taken

by the defense in this case. First, he stated that the notice of removal included

Accordingly, even under Defendants’ belatedly asserted theory, their notice

of removal was untimely.

III.

Plaintiff seeks $5,000 in attorney’s fees under 28 U.S.C. § 1447(c) and

Local Rule 83-7, arguing that Defendants had no objectively reasonable basis for

removal and failed to substantively meet and confer about the motion as required

under Local Rule 7-3.

Under § 1447(c), “[a]n order remanding the case may require payment of . . .

attorney fees incurred as a result of the removal.” 28 U.S.C. § 1447(c) (cleaned

up). Attorney’s fees are generally only available where the removing party lacked

an objectively reasonable basis for removal. Martin v. Franklin Cap. Corp., 546

U.S. 132, 141 (2005).

Defendants devote only a single paragraph of their opposition to arguing

against an award of attorney’s fees. Dkt. No. 14 at 4–5. Their sole argument is

that they had an objectively reasonable basis for removal because it is undisputed

that diversity jurisdiction exists. Defendants do not argue that they had an

objectively reasonable basis for their assertion in the notice of removal that the

removal was timely because Plaintiff consented to extend the time to answer. To

the contrary, they have abandoned that argument, effectively conceding its

unreasonableness. Nor have Defendants shown that their belated alternative theory

of timeliness was objectively reasonable. Moreover, Plaintiff explained to

Defendants the reasons their removal was untimely and presented them with an

opportunity to avoid an award of fees by stipulating to remand, but Defendants

declarations “about the discovery of [Defendants’] citizenship . . . during [the]

investigation process.” While the notice included declarations from Huntting and

Meng Yang (Defendants’ sole director and board member), neither described any

investigation into Defendants’ citizenship. Dkt. Nos. 1-1, 1-2. Second, when

asked whether the Ninth Circuit has held that a defendant may delay removal to

investigate its own citizenship, he incorrectly cited Roth v. CHA Hollywood

Medical Center, L.P., 720 F.3d 1121 (9th Cir. 2013)—which involved a

defendant’s investigation into a plaintiff class member’s citizenship. Id. at 1125.

The Court cautions counsel that the boundaries of zealous advocacy do not extend

beyond the duty of candor.

refused, requiring Plaintiff to file this motion. Accordingly, the Court finds that an

award of attorney’s fees under § 1447(c) is warranted.

The Court determines the amount of attorney’s fees by multiplying the

number of hours reasonably expended by a reasonable hourly rate under the

lodestar method. Alexander v. King Cnty., Washington, 776 F. App’x 463, 463

(9th Cir. 2019) (reviewing district court grant of fees under lodestar method);

Morales v. City of San Rafael, 96 F.3d 359, 363–64 (9th Cir. 1996) (describing the

lodestar calculation). Plaintiff produces a declaration explaining that counsel spent

7.4 hours researching, meeting and conferring, and preparing the motion to remand

and that counsel’s most recently approved hourly rate (in 2019) was $700. Dkt.

No. 9-2 ¶ 7. While a lodestar calculation based on the information provided would

yield $5,180, Plaintiff requests only $5,000. Counsel also provides a description of

his experience and awards, which provide support for the reasonableness of his

requested rate. Id.; see also Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir.

2011) (holding court can rely on its own knowledge and experience in assessing

reasonable hourly rate). Defendants do not address the amount of Plaintiff’s

requested fee or dispute its reasonableness. On this record, and in the absence of

any timely challenge to the amount of the fee requested, the Court finds that an

award of $5,000 in attorney’s fees incurred as a result of Defendants’ groundless

removal is warranted.

IV.

Because Defendants’ removal of the action was untimely, and they lacked an

objectively reasonable basis for asserting otherwise, the Court (1) awards Plaintiff

$5,000 in reasonable attorney’s fees under § 1447(c), which Defendants shall pay

to Plaintiff within 14 days after entry of this order, and (2) remands this action to

the Los Angeles Superior Court.

Date: October 7, 2024 ___________________________

Stanley Blumenfeld, Jr.

United States District Judge