Elsa Chavez v. Jpmorgan Chase Bank

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ELSA CHAVEZ, No. 16-55957

Plaintiff-Appellant,

D.C. No.

v. 2:15-cv-02328-

DDP-PJW

JPMORGAN CHASE & CO.; DOES, 1

through 100, Inclusive,

Defendants-Appellees. OPINION

Appeal from the United States District Court

for the Central District of California

Dean D. Pregerson, Senior District Judge, Presiding

Argued and Submitted February 14, 2018

Pasadena, California

Filed April 20, 2018

Before: Marsha S. Berzon and Jay S. Bybee, Circuit

Judges, and John A. Woodcock, Jr.,* District Judge.

Opinion by Judge Bybee

*

The Honorable John A. Woodcock, Jr., United States District Judge

for the district of Maine, sitting by designation.

2 CHAVEZ V. JPMORGAN CHASE

SUMMARY**

Diversity Jurisdiction

The panel held that the amount-in-controversy

requirement for diversity jurisdiction under 28 U.S.C. § 1332

was satisfied.

Elsa Chavez sued her former employer in California state

court, and the employer removed to federal district court on

the basis of diversity jurisdiction.

The panel held that the amount in controversy was not

limited to damages incurred prior to removal – for example,

it was not limited to wages a plaintiff-employee would have

earned before removal (as opposed to after removal). The

panel further held that the amount in controversy was

determined by the complaint operative at the time of removal

and encompassed all relief a court may grant on that

complaint if the plaintiff was victorious. The panel applied

the standard and concluded that the amount-in-controversy

standard was easily satisfied in this case.

The panel reviewed the merits of the district court’s

summary judgment decision in a concurrently filed

memorandum disposition.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

CHAVEZ V. JPMORGAN CHASE 3

COUNSEL

Kelly R. Horwitz (argued) and Douglas G. Benedon, Benedon

& Serlin LLP, Woodland Hills, California; Christopher M.

Barnes and Marcus A. Mancini, Mancini & Associates,

Sherman Oaks, California; for Plaintiff-Appellant.

Sherry Swieca (argued) and Theresa M. Marchlewski,

Jackson Lewis P.C., Los Angeles, California, for Defendants-

Appellees.

OPINION

BYBEE, Circuit Judge:

Elsa Chavez sued her former employer JPMorgan Chase

Bank (“JPMC”) in California state court. JPMC removed to

federal district court on the basis of diversity jurisdiction

under 28 U.S.C. § 1332 and won summary judgment on all of

Chavez’s claims. We review the merits of the district court’s

summary judgment decision in an accompanying

memorandum disposition. Here, we address only Chavez’s

contention that subject matter jurisdiction is lacking because

§ 1332’s amount-in-controversy requirement was not met

when the case was removed.

Specifically, we write to clarify what it means to say that

the amount in controversy is determined as of “the time of

removal.” See, e.g., Kroske v. U.S. Bank Corp., 432 F.3d

976, 980 (9th Cir. 2005). We conclude that the amount in

controversy is not limited to damages incurred prior to

removal—for example, it is not limited to wages a plaintiff-

employee would have earned before removal (as opposed to

4 CHAVEZ V. JPMORGAN CHASE

after removal). Rather, the amount in controversy is

determined by the complaint operative at the time of removal

and encompasses all relief a court may grant on that

complaint if the plaintiff is victorious. Applying that

standard, the amount-in-controversy requirement is easily

satisfied here, and we have subject matter jurisdiction over

this action.

I. BACKGROUND

Elsa Chavez worked as a mortgage banker for JPMC.

JPMC terminated her employment on February 6, 2014. She

sued JPMC in California Superior Court, alleging

(1) harassment, discrimination, and retaliation on the basis of

disability under the California Fair Employment and Housing

Act (“FEHA”); (2) harassment, discrimination, and retaliation

on the basis of age under FEHA; (3) harassment,

discrimination, and retaliation for taking protected leave

under the California Family Rights Act (“CFRA”); (4) failure

to produce employment records under California Labor Code

§ 226; and (5) wrongful termination under California

common law. Her complaint sought “loss of earnings” and

“loss of earning capacity,” as well as “medical expenses,”

“reasonable attorneys’ fees and costs,” “prejudgment

interest,” “punitive and exemplary damages,” “a $750.00

penalty, pursuant to California Labor Code § 226(f),” and

injunctive relief.

On March 30, 2015, JPMC removed to the United States

District Court for the Central District of California on the

basis of diversity jurisdiction. Chavez did not contest

removal, and indeed, the parties filed a Stipulated Discovery

Plan and Scheduling Order stating: “The parties agree that

this Court has jurisdiction over this matter on the basis of

CHAVEZ V. JPMORGAN CHASE 5

diversity jurisdiction.” The district court granted summary

judgment for JPMC on all claims, and Chavez appealed. She

now argues for the first time that removal was improper and

that we lack subject matter jurisdiction over this action

because the amount in controversy does not exceed $75,000.

II. DISCUSSION

Although Chavez did not contest jurisdiction below, we

have an independent obligation to ensure subject matter

jurisdiction exists. Henderson v. Shinseki, 562 U.S. 428, 434

(2011). We review the existence of subject matter

jurisdiction de novo. Geographic Expeditions, Inc. v. Estate

of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1106 (9th Cir. 2010).

Even where subject matter jurisdiction is otherwise lacking,

we always “have jurisdiction to determine our own

jurisdiction.” Diaz-Covarrubias v. Mukasey, 551 F.3d 1114,

1117 (9th Cir. 2009).

A defendant generally may remove an action filed in state

court if a federal district court would have had original

jurisdiction over the action. 28 U.S.C. § 1441(a); Gonzales

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

Cir. 2016). The only jurisdictional basis alleged here is

diversity jurisdiction under 28 U.S.C. § 1332, which requires

complete diversity among the parties and an amount in

controversy in excess of $75,000, Corral v. Select Portfolio

Servicing, Inc., 878 F.3d 770, 774 (9th Cir. 2017). The

parties do not dispute complete diversity, and we have no

6 CHAVEZ V. JPMORGAN CHASE

difficulty finding it satisfied.1 We therefore pass directly to

considering the amount in controversy.

Where, as here, it is unclear from the face of the

complaint whether the amount in controversy exceeds

$75,000, “the removing defendant bears the burden of

establishing, by a preponderance of the evidence, that the

amount in controversy exceeds the jurisdictional threshold.”

Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1121–22

(9th Cir. 2013) (quotation marks and citations omitted). The

amount in controversy may include “damages (compensatory,

punitive, or otherwise) and the cost of complying with an

injunction, as well as attorneys’ fees awarded under fee

shifting statutes.” Gonzales, 840 F.3d at 648–49.

“Conclusory allegations as to the amount in controversy are

insufficient.” Corral, 878 F.3d at 774. In assessing the

amount in controversy, we may consider allegations in the

complaint and in the notice of removal, as well as summary-

judgment-type evidence relevant to the amount in

controversy. Kroske, 432 F.3d at 980.

As a threshold matter, although litigants cannot stipulate

to subject matter jurisdiction where it does not otherwise

exist, Janakes v. U.S. Postal Serv., 768 F.2d 1091, 1095 (9th

Cir. 1985), Chavez’s concession of diversity jurisdiction

below is strong evidence that the amount in controversy

1

Chavez is a California citizen. JPMC is a national bank and, as

such, “is a citizen of the State in which its main office, as set forth in its

articles of association, is located.” Wachovia Bank v. Schmidt, 546 U.S.

303, 307 (2006) (rejecting the view that a national bank is a citizen of

every state in which it has a branch because the bank’s access to a federal

forum would then “be drastically curtailed in comparison to the access

afforded state banks”). Because JPMC’s main office is located in Ohio,

JPMC is an Ohio citizen and is diverse as to Chavez.

CHAVEZ V. JPMORGAN CHASE 7

exceeds $75,000. See Shaw v. Dow Brands, Inc., 994 F.2d

364, 367–68 (7th Cir. 1993) (finding diversity jurisdiction

where the plaintiff conceded the amount in controversy “by

not contesting removal when the motion was originally made,

and by jurisdictional statements . . . in his first brief”),

holding modified on other grounds by Meridian Sec. Ins. Co.

v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006). Chavez is the

master of her complaint, and her concession evinces a good

faith belief that her complaint seeks over $75,000. See Singer

v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 374, 376

(9th Cir. 1997) (plaintiff’s judicial admission that his case

was “absolutely” worth “considerably more” than $50,000

satisfied the then-applicable amount-in-controversy

requirement). Such a concession is tantamount to a plaintiff

expressly alleging damages in excess of the jurisdictional

amount, which we accept as the amount in controversy if

done in good faith. See Dart Cherokee Basin Operating Co.,

LLC v. Owens, 135 S. Ct. 547, 551 (2014).

We need not rely on Chavez’s concession of jurisdiction

alone, as there is other, independently sufficient evidence that

the amount in controversy exceeds $75,000. As noted above,

Chavez’s prayer for relief included “loss of earnings” and

“loss of earning capacity.” Because Chavez did not contest

the amount in controversy below, the record with respect to

these claims is somewhat slim. Chavez did admit in her

deposition, however, that her salary as a mortgage banker was

greater than $39,000 a year and that she had intended to

continue working for another nine years. Chavez does not

contest these facts and agrees that, if victorious, California

8 CHAVEZ V. JPMORGAN CHASE

law could entitle her to over $350,000 in lost wages.2 See

Wysinger v. Auto. Club of S. Cal., 69 Cal. Rptr. 3d 1, 12 (Cal.

Ct. App. 2007) (“Under FEHA, an employee . . . may be

compensated for a future loss of earnings.”). Thus, Chavez’s

prayer for past and future lost wages by itself exceeds

$75,000, even before factoring in non-economic and punitive

damages, attorneys’ fees, or other requested relief.

Chavez nevertheless argues that, in calculating the

amount in controversy, we may only consider lost wages for

the period between her termination in February 2014 and

JPMC’s removal of this action a little over a year later in

March 2015. Looking only at this period, Chavez’s lost

wages would be less than $75,000 and would not satisfy the

amount-in-controversy requirement. Chavez bases this

argument on our oft-repeated statement that the amount in

controversy is assessed as of “the time of removal.” See, e.g.,

Kroske, 432 F.3d at 980. She contends that this means the

amount in controversy does not include any damages incurred

after the time removal, such as her lost earnings from after

March 2015.

2

Chavez does argue that these facts are insufficient to carry JPMC’s

burden of proof and attempts to analogize this case to Gaus v. Miles, Inc.,

980 F.2d 564 (9th Cir. 1992). But the removing defendant in Gaus

“offered no facts whatsoever to support the court’s exercise of

jurisdiction.” Id. at 567. Here, by contrast, JPMC cites Chavez’s

concession of jurisdiction and deposition admissions, which are sufficient

to carry its burden of proof. Cf. Singer, 116 F.3d at 376 (“We understand

Gaus to mean that where the plaintiff does not claim damages in excess

of [the jurisdictional threshold] and the defendant offers ‘no facts

whatsoever’ to show that the amount in controversy exceeds [this

threshold], then the defendant has not borne the burden on removal of

proving that the amount in controversy requirement is satisfied.”).

CHAVEZ V. JPMORGAN CHASE 9

In considering this argument, we begin with first

principles. The amount in controversy is “not a prospective

assessment of [a] defendant’s liability.” Lewis v. Verizon

Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010). Rather,

it is the “amount at stake in the underlying litigation.”

Gonzales, 840 F.3d at 648–49. If a plaintiff claims at the

time of removal that her termination caused her to lose future

wages, and if the law entitles her to recoup those future wages

if she prevails, then there is no question that future wages are

“at stake” in the litigation, whatever the likelihood that she

will actually recover them. In such a situation, although the

plaintiff’s employer would have paid the wages in the future

had she remained employed, they are presently in

controversy. Indeed, courts generally assume as much

without discussion. See, e.g., Andrews v. E.I. Du Pont De

Nemours & Co., 447 F.3d 510, 515 (7th Cir. 2006) (taking

into account plaintiff’s “lost wages (past and future)”);

Nelson v. Keefer, 451 F.2d 289, 294 n.10 (3d Cir. 1971) (the

amount in controversy includes “wages and earnings, past

and future”).

When we say that the amount in controversy is assessed

at the time of removal, we mean that we consider damages

that are claimed at the time the case is removed by the

defendant. So, for example, if a plaintiff files a complaint in

state court and voluntarily dismisses a claim before removal,

any relief that might have been awarded on the dismissed

claim will not be included in the amount in controversy.

Likewise, when the amount in controversy is satisfied at

removal, any subsequent amendment to the complaint or

partial dismissal that decreases the amount in controversy

below the jurisdictional threshold does not oust the federal

court of jurisdiction. See St. Paul Mercury Indem. Co. v. Red

Cab Co., 303 U.S. 283, 292–93 (1938). That the amount in

10 CHAVEZ V. JPMORGAN CHASE

controversy is assessed at the time of removal does not mean

that the mere futurity of certain classes of damages precludes

them from being part of the amount in controversy. See, e.g.,

Steel v. United States, 813 F.2d 1545, 1547 (9th Cir. 1987)

(noting that “past and future pension payments” exceeded the

amount-in-controversy requirement); Broglie v. MacKay-

Smith, 541 F.2d 453, 455 (4th Cir. 1976) (“[A] plaintiff may

properly include as part of the amount in controversy costs

which will not be incurred until after the suit is ended.”).

In sum, the amount in controversy includes all relief

claimed at the time of removal to which the plaintiff would be

entitled if she prevails.

III. CONCLUSION

The amount in controversy is what is at stake in the

litigation at the time of removal. Where, as here, a plaintiff’s

complaint at the time of removal claims wrongful termination

resulting in lost future wages, those future wages are included

in the amount in controversy. That being the case, the

amount in controversy here easily exceeds $75,000. We

therefore have subject matter jurisdiction over this action.