Weight v. The Active Network, Inc. et al, No. 3:2014cv00790 - Document 17 (S.D. Cal. 2014)
Court Description: ORDER granting plaintiff's 8 Motion to Remand, and denying as moot defendant's 5 , 11 Motions to Dismiss. Signed by Judge Janis L. Sammartino on 6/27/14 (cc: Superior Court for County of San Diego) (kas)
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Weight v. The Active Network, Inc. et al Doc. 17 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CHRISTOPHER WEIGHT, an individual, on behalf of himself and all others similarly situated, 12 13 14 Plaintiff, v. CASE NO. 14-CV-790 JLS (KSC) ORDER: (1) GRANTING PLAINTIFF’S MOTION TO REMAND; AND (2) DENYING AS MOOT DEFENDANT’S MOTIONS TO DISMISS (ECF Nos. 5, 8, 11) 15 16 17 18 19 THE ACTIVE NETWORK, INC., a Delaware corporation; and DOES 1 through 100, inclusive, Defendants. 20 21 Presently before the Court is Plaintiff Christopher Weight’s (“Plaintiff”) Motion 22 to Remand. (ECF No. 8.) Also before the Court is Defendant The Active Network, 23 Inc.’s (“Active”) Response in Opposition (ECF No. 10), Plaintiff’s Reply in Support 24 (ECF No. 15), and Active’s two Motions to Dismiss (ECF Nos. 5, 11). The Court 25 vacated the hearings set for May 15 and June 5, 2014 and took the matters under 26 submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF Nos. 27 12, 16). Having considered the parties’ arguments and the law, the Court GRANTS 28 Plaintiff’s Motion to Remand and DENIES AS MOOT Active’s Motions to Dismiss. -1- 14cv790 Dockets.Justia.com BACKGROUND1 1 2 Plaintiff, a citizen of California, brings this consumer-fraud class action against 3 Active, a citizen of both California and Delaware. (First Am. Compl. (“FAC”) ¶¶ 2–3, 4 ECF No. 7; Notice of Removal ¶ 10, ECF No. 1.) Active operates the sports and 5 recreation website Active.com (“the Website”), which serves as the exclusive method 6 of online registration for certain events. (FAC ¶ 9, ECF No. 7.) 7 On or about December 7, 2013, Plaintiff registered for the 2014 San Diego 8 Resolution 5k and 15k (“the Race”) via the Website, using his credit card to pay Active 9 both a $35 registration fee and a $3.61 processing fee. (Id. ¶ 10.) Allegedly without 10 Plaintiff’s knowledge or consent, registering for the Race automatically enrolled him 11 in Active’s Active Advantage program (“the Program”), which provides “discounts on 12 certain travel and outdoor gear” and future races. (Id. ¶ 11.) After a thirty-day free trial 13 period, Plaintiff was charged $64.99 for an annual membership in the Program. (Id.) 14 Plaintiff alleges that “[s]ince at least February 2010,” Active has been placing, 15 “in small font near the bottom of the [registration] page, . . . a pre-checked selection for 16 Class members to enroll in a ‘free trial’ of the Active Advantage program, after which 17 time Class members would be billed an annual charge of $59.99 (subsequently raised 18 to $64.99).” (Id. ¶ 12.) Plaintiff alleges that thousands of California consumers have 19 been similarly misled by Active’s practice. (Id. ¶ 14.) 20 On February 24, 2014, Plaintiff filed this action in the Superior Court for the 21 State of California, County of San Diego. (See Notice of Removal Ex. 1, ECF No. 1-2.) 22 In the Complaint, Plaintiff defined the class as “[a]ll California residents who, within 23 four years of the filing of this Complaint, were enrolled in the Active Advantage 24 program in connection with a credit or debit card purchase they made on the Active.com 25 website.” (Compl. ¶14, ECF No. 1-2 (emphasis added).) 26 On April 4, 2014, Active removed the action to this Court. (See generally Notice 27 1 The facts set forth in this section are drawn exclusively from Plaintiff’s First Amended 28 Complaint (“FAC”). (ECF No. 7). Although certain alterations to the FAC are disputed, the facts alleged therein do not differ from those appearing in the original Complaint. -2- 14cv790 1 of Removal, ECF No. 1). Active claimed that this Court had diversity jurisdiction 2 because, “[a]ccording to Active’s enrollment and payment records, the proposed class, 3 as defined by Plaintiff, includes many ‘California residents’ who are domiciled in states 4 other than California or Delaware,” and thus citizens of other states. (Id. ¶ 11 (citations 5 omitted); see also Decl. of Stacey Fernandes in Supp. of Notice of Removal ¶¶ 3, 5, 6 ECF No. 1-3.) On April 11, 2014, Active moved to dismiss. 7 On April 30, 2014, Plaintiff filed his FAC, which defined the class to include 8 “[a]ll individuals who . . . were citizens of California as of February 24, 2014.” (FAC 9 ¶ 21, ECF No. 7 (emphasis added).) Subsequently, Plaintiff filed the instant Motion to 10 Remand and again moved to dismiss. 11 12 LEGAL STANDARD In cases “brought in a State court of which the district courts of the United States 13 have original jurisdiction,” a defendant may remove the case to federal district court. 14 28 U.S.C. §1441(a). However, the removing party bears the burden of establishing that 15 federal subject-matter jurisdiction exists. Emrich v. Touche Ross & Co., 846 F.2d 1190, 16 1195 (9th Cir. 1988). Moreover, courts “strictly construe the removal statute against 17 removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations 18 omitted). Therefore, “[f]ederal jurisdiction must be rejected if there is any doubt as to 19 the right of removal in the first instance.” Id. (citing Libhart v. Santa Monica Dairy 20 Co., 592 F.2d 1062, 1064 (9th Cir. 1979)). 21 In general, “jurisdiction must be analyzed on the basis of the pleadings filed at 22 the time of removal without reference to subsequent amendments.” Williams v. Costco 23 Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006). Thus, to prevent plaintiffs from 24 manipulating the forum, generally “post-removal pleadings have no bearing on whether 25 the removal was proper.” Abada v. Charles Schwab & Co., 300 F.3d 1112, 1117 (9th 26 Cir. 2002). However, when a pleading is amended to clarify the original complaint 27 rather than manipulate the forum, the court can look to the amended complaint to 28 determine whether the court exercised jurisdiction over the action at the time of -3- 14cv790 1 removal. See, e.g., Schuster v. Gardner, 319 F. Supp. 2d 1159, 1164–65 (S.D. Cal 2 2003). 3 4 ANALYSIS The Class Action Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”), grants district 5 courts original jurisdiction over class actions in which (1) the parties are minimally 6 diverse—in other words, at least one member of the class of plaintiffs is a citizen of a 7 state different from any defendant; and (2) the amount in controversy exceeds $5 8 million. 28 U.S.C. § 1332(d)(2). For purposes of diversity jurisdiction, an individual 9 is the citizen of the state in which he is domiciled. See Guinto v. Marcos, 654 F. Supp. 10 276, 278 (S.D. Cal. 1986) (citations omitted). A corporation, on the other hand, has 11 dual citizenship—it is a citizen of both the state in which it was incorporated and the 12 state in which it has its principal place of business. See Bank of Cal. Nat’l Ass’n v. 13 Twin Harbors Lumber Co., 465 F.2d 489, 492 (9th Cir. 1972) (citing 28 U.S.C. 14 § 1332(c). 15 Active is a citizen of both California and Delaware, as it acknowledged in its own 16 Notice of Removal. (Notice of Removal ¶ 10, ECF No. 1 (citing Compl. ¶ 3, ECF No. 17 1-2).) Whether this Court has jurisdiction over this case therefore depends on the 18 citizenship of the proposed class members. If every proposed class member is a citizen 19 of California, then there is no minimal diversity, and the Court must remand this case. 20 See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district 21 court lacks subject matter jurisdiction, the case shall be remanded”). However, if the 22 proposed class members are merely residents of California, and therefore include 23 citizens of other states, then this Court may have jurisdiction over the case. Ultimately 24 at issue is whether the FAC’s revised class definition, redefining the class in terms of 25 “citizens” rather than “residents,” constitutes an amendment to, or merely a clarification 26 of, the original Complaint. 27 If the revision is an amendment, as Active argues, then, pursuant to Abada, the 28 Court cannot rely on the revised class definition in assessing its jurisdiction over this -4- 14cv790 1 matter. See 300 F.3d at 1117. Thus, “residents” not being equivalent to “citizens” 2 under federal law, the parties would be minimally diverse, and the Court would have 3 had jurisdiction over the case pursuant to CAFA at the time of removal. Accordingly, 4 to support his Motion to Remand, Plaintiff would have to meet the requirements of the 5 Home-State Exception2 and provide a factual basis for his contention that at least two6 thirds of the proposed class members are California citizens, as required by Mondragon 7 v. Capital One Auto Finance. 736 F.3d 880, 884 (9th Cir. 2013).3 If the revision is 8 merely a clarification, on the other hand, then at the time of removal the class—defined, 9 per the FAC, in terms of California citizenship—would be comprised solely of 10 California citizens. Thus, Active being a citizen of California as well, minimal diversity 11 would be lacking, and the Court would be required to remand the case. 12 In light of the particular facts of this case, the Court finds that Plaintiff’s revision 13 is a clarification rather than an amendment. As in Schuster, where the plaintiff’s 14 amended complaint clarified that he had no intention of pursuing federal claims, here 15 Plaintiff’s amended complaint merely clarifies that his original intent was to litigate on 16 behalf of California citizens only. See 319 F. Supp. 2d 1159. Plaintiff’s original 17 Complaint limited the class to a set of California “residents.” (Compl. ¶14, ECF No. 18 1-2). While, under federal law, “resident of” is not equivalent to “domiciled in”—and, 19 therefore, also not equivalent to “citizen of”—the instant action was originally filed in 20 the California state court system, which has no equivalent of diversity jurisdiction and 21 thus does not require the careful distinction between “residents” and “citizens.” Indeed, 22 people often colloquially use the term“residence” interchangeably with the word 23 24 2 Pursuant to CAFA’s Home-State Exception, a district court must decline to exercise 25 jurisdiction over a class action when at least two-thirds of the class members and the defendant 26 are citizens of the state in which the action was originally filed. 28 U.S.C. § 1332(d)(4). 3 In Mondragon, the Ninth Circuit held that when a plaintiff moves to remand due to 27 the Home-State Exception, the court should not base its decision “simply on a plaintiff's allegations, when they are challenged by the defendant.” Id. at 884 (citations omitted). Rather, 28 “[a] district court makes factual findings regarding jurisdiction under a preponderance of the evidence standard.” Id. (citations omitted). -5- 14cv790 1 “domicile.”4 Thus, after the action was removed to federal court, Plaintiff filed the FAC 2 simply to “make clear that he is suing on behalf of California citizens only.” (Mot. to 3 Remand 2, ECF No. 8-1.) 4 Active argues that Plaintiff’s post-pleading amendment of the class definition is 5 an improper attempt at forum manipulation and thus should have no bearing on whether 6 to remand the action; rather, the class definition provided in the original Complaint, 7 which offered a basis for federal jurisdiction, should control. (Resp. in Opp’n 10, ECF 8 No. 10.) In so arguing, Active relies extensively on Mondragon. In Mondragon, 9 however, the plaintiff was suing on behalf of “[a]ll persons who . . . purchased a 10 vehicle in California for personal use to be registered in the State of California.” 736 11 F.3d at 883 (emphasis in original). This phrasing—which does not reference the class 12 members’ residency, domicile, or citizenship—did not provide a similar basis for the 13 plaintiff to argue that he intended to limit the class to California citizens. The definition 14 in Mondragon was indiscriminate as to the domicile of the class members and instead 15 focused on the vehicles at issue, providing significant details about where those vehicles 16 should have been purchased and registered. Here, on the other hand, the definition is 17 phrased in relation to the class members themselves and instead, rather inartfully, 18 attempts to address the domicile of those persons who meet the class criteria. In light 19 of these significant differences, the Court finds Mondragon inapposite. 20 Having reviewed the record, the Court determines that Plaintiff did not file his 21 FAC to manipulate the forum, but rather to clarify a point that happens to bear on this 22 Court’s jurisdiction. Active points to no concrete reason to believe otherwise. In light 23 of the Court’s interpretation of the revised class definition as a clarification rather than 24 an amendment, the Home-State Exception, upon which Active bases its argument, does 25 26 4 Compare Domicile, Merriam-Webster, http://www.merriam-webster.com/dictionary/ domicile?show=0&t=1402617799 (last visited June 12, 2014) (defining “domicile” as “a 27 dwelling place: place of residence: home”) with Residence, Merriam-Webster, http://www. merriam-webster.com/dictionary/residence (last visited June 12, 2014) (defining “residence” 28 as “the act or fact of dwelling in a place for some time” or “the place where one actually lives”). -6- 14cv790 1 not even come into play. Because Plaintiff pleaded a class limited to California 2 citizens, and because Active is also a California citizen, there is no diversity of 3 citizenship. Thus, at the time of removal, this Court lacked subject-matter jurisdiction 4 over this action. Accordingly, pursuant to 28 U.S.C. § 1447(c), the Court GRANTS 5 Plaintiff’s Motion to Remand. 6 7 CONCLUSION In light of the foregoing, the Court GRANTS Plaintiff’s Motion to Remand. 8 Accordingly, the Court HEREBY REMANDS this action to the Superior Court for the 9 County of San Diego. Moreover, in light of the Court’s disposition of this matter, the 10 Court DENIES AS MOOT Active’s Motions to Dismiss. 11 IT IS SO ORDERED. 12 DATED: June 27, 2014 13 14 Honorable Janis L. Sammartino United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- 14cv790
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