Amount in controversy includes all relief claimed at time of removal to which plaintiff would be entitled if victorious
News
Wednesday, April 25, 2018

Amount in controversy includes all relief claimed at time of removal to which plaintiff would be entitled if victorious

By Kathleen Kapusta, J.D.

The amount-in-controversy requirement for diversity jurisdiction is what is at stake in the litigation at the time of removal, the Ninth Circuit asserted, and where, as here, a plaintiff’s complaint at the time of removal alleges wrongful discharge resulting in lost future wages, those future wages are included in the amount in controversy. Because that amount here easily exceeded $75,000, the court found it had subject matter jurisdiction over this appeal. In a concurrently filed unpublished opinion, the court affirmed summary against an employee’s FEHA disability and age discrimination claims, her wrongful termination claim, and her CFRA retaliation claim. It reversed the grant of summary judgment, however, as to her CFRA interference claim and her claim under California Labor Code Section 226(c) (Chavez v. JPMorgan Chase & Co., April 20, 2018, Bybee, J.).

Suing her former employer, JPMorgan Chase Bank (JPMC), in state court, the mortgage banker alleged claims under the California Fair Employment and Housing Act (FEHA) for disability and age discrimination, as well as claims under the California Family Rights Act (CFRA), failure to produce employment records under California Labor Code Section 226, and wrongful termination under California common law. She 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 penalty pursuant to California Labor Code § 226(f), and injunctive relief.

Removed. JPMC removed the action to federal court on the basis of diversity jurisdiction and the employee did not contest removal. After the district court granted summary judgment for JPMC on all claims, she appealed, arguing for the first time that the Ninth Circuit lacked subject matter jurisdiction over the action because the amount in controversy did not exceed $75,000.

Amount in controversy. The only jurisdictional basis alleged here was 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. The parties did not dispute complete diversity and it was unclear from the face of the complaint whether the amount in controversy exceeded $75,000. In assessing the amount in controversy, the court noted that it could consider allegations in the complaint and in the notice of removal, as well as summary judgment-type evidence relevant to the amount in controversy.

Although the court found the employee’s concession of diversity jurisdiction below to be strong evidence that the amount controversy exceeded $75,000, there was also other, independently sufficient evidence of this. Her prayer for relief included loss of earnings and loss of earning capacity. Further, she admitted that her salary was greater than $39,000 and she had intended to continue working for another nine years, which if victorious, would have entitled her to over $350,000 in lost wages. Thus, observed the court, her prayer for past and future lost wages by itself exceeded $75,000.

Relief claimed at time of removal. She argued, however, that, in calculating the amount in controversy, the court could consider lost wages only for the period between her termination in February 2014 and JPMC’s removal of this action a little over a year later, and thus her lost wages would be less than $75,000. Asserting that the amount in controversy is assessed at the time of removal, she contended that this meant the amount in controversy does not include lost earnings from after the removal.

Disagreeing, the court explained that “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.” Thus, the amount in controversy includes all relief claimed at the time of removal to which the plaintiff would be entitled if she prevails, said the court, finding that because her complaint at the time of removal claimed wrongful termination resulting in lost damages, those future wages were included in the amount in controversy. Accordingly, the amount in controversy here exceeded $75,000 and the court had subject matter jurisdiction over the action.

FEHA claims. As to the merits of her claim, the court, in a concurrently filed opinion, affirmed summary judgment on the employee’s FEHA disability discrimination claim, finding that JPMC presented extensive evidence that it terminated her for failing to meet its minimum performance standards. While she alleged in response that she told her supervisor she felt stressed, experienced numbness and headaches, and saw a doctor on one occasion, this was insufficient to carry her ultimate burden of showing that JPMC’s stated reason for terminating her was pretext for disability discrimination.

Likewise, summary judgment was appropriate on her FEHA age discrimination claim, said the court, observing that although she alleged she was replaced by a younger employee and that a branch manager told her “you should be retired by now” and called her “Tia,” there was no evidence her successor was in fact substantially younger and the branch manager’s remarks did not raise a triable issue in light of JPMC’s evidence of her consistently poor performance. And because her claim for wrongful termination under California common law was derivative of her FEHA claims, it failed for the same reasons.

CFRA claims. As to her CFRA retaliation claim, which was subject to the same burden-shifting framework as her FEHA discrimination claims, it also failed because she could not show that JPMC’s reason for terminating her was pretextual. Reversing summary judgment against her CFRA interference claim, however, the court observed that she testified she told her supervisor she was experiencing numbness and a lot of headaches; informed him that she needed to see a doctor for these reasons; and complained that she was not able to take a vacation. This was enough to raise a triable fact issue as to whether she provided notice sufficient to make JPMC aware she needed CFRA-qualifying leave.

Labor Code Section 226(c). A fact issue also existed as to her claim under California Labor Code Section 226(c), which grants current and former employees the right to inspect or copy their employment records upon request. Specifically, her attorney sent JPMC a letter by certified mail requesting her employment records, which JMPC contended was improperly addressed or not received. But JPMC offered no evidence to support its assertion that the letter was improperly addressed, and assuming it was properly addressed, JPMC did not rebut the presumption it was received. Observing that Section 226(f) provides the statutory penalty for a violation of subdivision (c) and includes no “knowing and intentional” requirement, the court found the employee did not need to establish that JPMC knowingly and intentionally disregarded her request. Thus, summary judgment was reversed as to this claim as well.

Interested in submitting an article?

Submit your information to us today!

Learn More