United States District Court, D. New Mexico
JOSHUA CORDOVA, on his own behalf, And on the behalf of all others similarly situated, Plaintiff,
JODY JENKINS and JENKINS, WAGNON & YOUNG, P.C., Defendants.
MEMORANDUM OPINION AND ORDER OF REMAND
matter comes before the Court on its Amended Memorandum
Opinion and Order, filed October 19, 2018, in which the Court
requested briefing on the issue of whether the amount in
controversy in this case is sufficient to establish federal
diversity subject matter jurisdiction. (Doc. 108). Defendants
filed their brief on November 5, 2018; Plaintiff filed a
response on November 16, 2018; and Defendants filed a reply
on November 26, 2018. (Docs. 109, 112, and 116). Having
considered this briefing, the Court determines that
Defendants have not carried their burden of showing that the
$75, 000 amount in controversy requirement necessary to
establish federal diversity jurisdiction is met.
Consequently, this matter will be remanded to the Second
Judicial District Court, Bernalillo County, State of New
Mexico, for lack of federal subject matter jurisdiction.
initial matter, the Court does not analyze the amount in
controversy issue under the Class Action Fairness Act (CAFA).
The Court observes that the Notice of Removal does not rely
on CAFA to support federal subject matter
jurisdiction. (Doc. 1) at ¶ 5. Hence, Defendants
cannot now invoke CAFA as a basis for federal subject matter
jurisdiction. See, e.g., Lindsay Transmission,
LLC v. Nationwide Gen. Ins. Co., 2015 WL 13389959, at *3
(W.D. Mo.) (finding that “Defendant's failure to
invoke CAFA jurisdiction in the Notice of Removal precludes
it from invoking CAFA jurisdiction” after 30-day period
for filing notice of removal expired).
action is removable from state court if the federal district
court has original jurisdiction over the matter. 28 U.S.C.
§ 1441(a). Pursuant to 28 U.S.C. § 1332(a), a
federal district court possesses original subject-matter
jurisdiction over a case when the parties are diverse in
citizenship and the amount in controversy exceeds $75,
000.00. See Johnson v. Rodrigues, 226
F.3d 1103, 1107 (10th Cir. 2000). As the parties invoking the
Court's jurisdiction in this case, Defendants “bear
the burden of establishing that the requirements for the
exercise of diversity jurisdiction are present.”
See Martin v. Franklin Capital Corp., 251 F.3d 1284,
1290 (10th Cir. 2001) abrogated on other grounds by Dart
Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct.
547 (2014). The Court also recognizes that there is a
presumption against removal jurisdiction. See Okla. Farm
Bureau Mut. Ins. Co. v. JSSJ Corp., 149 Fed.Appx. 775,
778 (10th Cir. 2005) abrogated on other grounds by Dart
Cherokee Basin Operating Co., LLC, 135 S.Ct. 547
(explaining that “[g]iven the limited scope of federal
jurisdiction, there is a presumption against removal, and
courts must deny such jurisdiction if not affirmatively
apparent on the record”).
complaint is silent as to the amount of damages a plaintiff
seeks, a defendant can establish the amount in controversy by
referring to things like the complaint's allegations,
contentions or admissions made in state court, and to
informal estimates of damages or settlement demands.
McPhail v. Deere & Co., 529 F.3d 947, 954 (10th
Cir. 2008) (citation omitted). The defendant can also include
in its estimate of damages a potential statutory award of
attorney's fees and award of punitive damages.
Woodmen of World Life Ins. Soc'y v. Manganaro,
342 F.3d 1213, 1218 (10th Cir. 2003) (holding that
“potential award of attorneys' fees, in addition to
compensatory and treble damages” under the New Mexico
Unfair Practices Act (UPA) should be considered in
determining amount in controversy; and noting that
“[p]unitive damages may be considered in determining
the requisite jurisdictional amount”). Once the
defendant provides an estimate of an amount in controversy
exceeds $75, 000, “the case stays in federal court
unless it is legally certain that the controversy is worth
less than the jurisdictional minimum.”
McPhail, 529 F.3d at 954 (citation omitted).
federal court has diversity jurisdiction over a non-CAFA
class action lawsuit if, in addition to complete diversity,
“at least one named plaintiff satisfied the amount in
controversy requirement of more than $75, 000.”
Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395,
398 (9th Cir. 2010). In other words, a defendant cannot
aggregate the damages of class members to determine the
amount in controversy. Likewise, a defendant cannot aggregate
class members' potential attorney's fees and punitive
damages to determine the amount in controversy. Martin v.
Franklin Capital Corp., 251 F.3d 1284, 1293 (10th Cir.
2001), abrogated on other grounds by Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S.Ct. 547 (2014).
time of the removal of this case, Plaintiff's Complaint
raised two FDCPA claims, two UPA claims, and malicious abuse
of process, fraud, and unjust enrichment
claims. (Doc. 1-1) at 13, ¶¶ 41-60.
Plaintiff, the only named plaintiff, alleges that Defendants
fraudulently charged him $1, 062.50 in attorney's fees
and fraudulently charged attorney's fees to at least 500
other persons, the proposed class. Id. at 10, ¶
21 and at 11-12, ¶ 35. Plaintiff sought statutory
damages, actual damages and attorney's fees and costs
under the FDCPA. Id. at 13, ¶ 42. Additionally,
Plaintiff still seeks treble actual damages for each
violation of the UPA, plus attorney's fees and costs.
Id. at 13, ¶ 45. Plaintiff, moreover, seeks
actual and punitive damages with respect to the malicious
abuse of process claim and sought actual and punitive damages
for the fraud claim. Id. at 14, ¶¶ 51 and
to removal, Plaintiff filed a “Court-Annexed
Arbitration Certification” in state court which states
that “Plaintiffs certify” they seek relief in
excess of $25, 000.00, “exclusive of punitive damages,
interest, costs, and attorney's fees.” (Doc. 1-1)
at 7. This arbitration certification clearly suggests that
the class, not Plaintiff individually, was seeking more than
$25, 000.00, excluding punitive damages, interest, costs, and
attorney's fees. Also, prior to removal, Plaintiff's
counsel sent counsel for Defendants an email describing
“relief to the class” which would be acceptable
to settle this lawsuit. (Doc. 109) at 11. Plaintiff's
counsel, however, did not state what specific monetary amount
would settle the case. Id. Finally, Plaintiff's
counsel submitted a declaration on November 16, 2018, stating
that the “current amount of attorney's fees
incurred in this case, including tax, is $41, 938.55.”
(Doc. 112-1) at 3, ¶ 2.
the Complaint and above evidence, the Plaintiff, as the only
named Plaintiff in this class action, suffered actual damages
of $1, 062.50. Under the FDCPA, Plaintiff could have been
awarded actual damages plus statutory damages up to $1,
000.00. 15 U.S.C. § 1692k(a). For two violations of the
FDCPA, as alleged in the Complaint, actual damages for
Plaintiff would consist of $1, 062.50 plus up to $2, 000.00
in statutory damages, $1, 000.00 per FDCPA violation. As to
attorney's fees, even if attorney's fees amount to
$1, 000, 000.00, each of the 500 class members, including
Plaintiff, would incur only $2, 000.00 in attorney's
respect to an award of punitive damages to Plaintiff, treble
damages under the UPA for two violations could amount to as
little as $6, 375.00. The Tenth Circuit has also observed
that a proper ratio between punitive and compensatory damages
could be a double digit ratio, like 10:1, if
“compensatory damages are low but the degree of
reprehensibility is high….” Lompe v.
Sunridge Partners, LLC, 818 F.3d 1041, 1069 (10th Cir.
2016) (finding that double digit ratio under that
circumstance “might ‘comport with due
process.'” (citation omitted)). Assuming that is
the case here and using a 10:1 ratio, Plaintiff could be
awarded $10, 625.00 in punitive damages. If, however,
Plaintiff was awarded both treble damages and punitive
damages, Plaintiff would have to elect between the awards and
would, presumably, choose the higher award of $10, 625.00.
See Hale v. Basin Motor Co., 1990-NMSC-068, ¶
20, 110 N.M. 314 (In discussing UPA provision permitting
treble damage award, New Mexico Supreme Court held that
“recovery of both statutory treble damages and punitive
damages based upon the same conduct would be
the above generous estimates of damages, Plaintiff would be
entitled to a total of just $15, 687.50. Even considering
other unforeseen damages, and doubling the estimate of
damages to, for example, $31, 375.00, the amount in
controversy as to Plaintiff is still far below the $75,
000.00 amount in controversy necessary for federal diversity
jurisdiction. The Court, therefore, concludes that Defendants
have failed to show that at the time of removal this Court
had federal diversity subject matter jurisdiction. Because
this Court has neither federal diversity jurisdiction nor
federal question jurisdiction, the Court is compelled to
remand this matter.
ORDERED that this lawsuit is remanded to the Second Judicial
District, County of Bernalillo, State of New Mexico.
 The Notice of Removal relies on both
diversity jurisdiction and federal question jurisdiction.
(Doc. 1) at ¶¶ 4 and 5. Because the Court dismissed
the federal Fair Debt Collection Practices Act (FDCPA) claims
raised in the Class Action Complaint for Damages (Complaint),
(Doc. 1-1) at 8-15, the ...