Background
The plaintiff, Amezcua, sued Nissan North America, Inc. in California state court. Nissan removed the case to federal court, alleging that the amount in controversy exceeded the statutory threshold. The district court sua sponte remanded the case to state court, reasoning that the amount in controversy should be around one hundred seventy-five thousand dollars due to inflation adjustments since nineteen ninety-six. The district court excluded Amezcua’s claimed civil penalties and attorneys’ fees as speculative, finding that Nissan failed to show the amount exceeded seventy-five thousand dollars.
The court’s reasoning
The Ninth Circuit reviewed the remand order de novo. The court reiterated that under Dart Cherokee Basin Operating Co. v. Owens, a defendant’s notice of removal does not need to prove subject matter jurisdiction but must include a plausible allegation that the amount in controversy exceeds the threshold. The alleged amount must be accepted unless contested by the plaintiff or questioned by the court. If questioned, the district court must provide a fair opportunity for the defendant to submit evidence by a preponderance of the evidence. The court found that Nissan’s notice plausibly alleged the amount exceeded seventy-five thousand dollars by including actual damages, civil penalties of up to two times the damages, and estimated attorneys’ fees. The court held that the amount in controversy encompasses all relief a court may grant, including damages and attorneys’ fees under fee-shifting statutes. The district court erred by excluding these items and by not providing Nissan a fair opportunity to prove the amount.
What it means going forward
This decision reinforces that federal courts cannot remand removal cases based on the amount in controversy without first allowing the removing party a chance to present evidence supporting the jurisdictional threshold. It clarifies that civil penalties and attorneys’ fees are valid components of the amount in controversy calculation.