Anderson et al v. SeaWorld Parks and Entertainment

Northern District of California, cand-4:2015-cv-02172

ORDER GRANTING, IN PART, AND DENYING, IN PART, {{55}} Motion for Reconsideration. Signed by Judge Jeffrey S. White on January 12, 2016. (jswlc3, COURT STAFF)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MARC ANDERSON, et al., Case No. 15-cv-02172-JSW 8 Plaintiffs, ORDER GRANTING, IN PART, AND DENYING, IN PART, MOTION FOR 9 v. RECONSIDERATION OF ORDER DENYING MOTION FOR REMAND 10 SEAWORLD PARKS AND AND ORDER REQUIRING STATUS ENTERTAINMENT, INC., REPORTS 11 Defendant. 12 Re: Docket No. 55 Northern District of California United States District Court 13 14 Now before the Court for consideration is the motion for reconsideration of the order 15 denying Plaintiffs' motion for remand.1 The Court has considered the parties' papers, relevant 16 legal authority, the record in this case, and it finds the motion suitable for disposition without oral 17 argument. See N.D. Civ. L.R. 7-1(b). The Court HEREBY VACATES the hearing scheduled for 18 January 15, 2016, and it GRANTS, IN PART, AND DENIES, IN PART, Plaintiffs' motion. 19 BACKGROUND2 20 This case is one of four putative class actions pending against defendant SeaWorld Parks 21 and Entertainment, Inc. ("SeaWorld"), regarding SeaWorld's representations about its treatment of 22 orcas, i.e. killer whales, at its various theme parks. The other three cases have been consolidated 23 and are pending in the United States District Court for the Southern District of California as Hall 24 25 1 This matter was initially assigned to the Honorable Samuel Conti. Upon his retirement, 26 the matter was reassigned to the undersigned Judge. 2 27 The facts and procedural history of this case were set forth in a prior order of the Court, and they shall not be repeated here, except as necessary to the analysis. (See Docket No. 46, Order 28 Denying Remand at 2:1-4:18.) 1 v. SeaWorld Entertainment, Inc., No. 3:15-CV-660-CAB-RBB (the "Hall litigation").3 In contrast 2 to the Plaintiffs in the Hall litigation, Plaintiffs here, Marc Anderson and Ellexa Conway 3 (collectively "Plaintiffs"), originally filed their complaint in the Superior Court of the State of 4 California for the City and County of San Francisco ("Superior Court"). (Docket No. 1-1, 5 Complaint; Docket No. 9-1; First Amended Complaint ("FAC").) 6 SeaWorld then removed the action to this Court and asserted the Court had jurisdiction 7 under the Class Action Fairness Act ("CAFA"), 28 U.S.C. section 1332(d). (Docket No. 1, Notice 8 of Removal, ¶ 3.) On September 22, 2015, Judge Conti denied Plaintiffs' motion to remand, 9 finding that: (1) SeaWorld met its burden to show the value of injunctive relief exceeded CAFA's 10 jurisdictional minimum of $5,000,000; and (2) the potential preclusive effect of this case on the 11 Hall litigation created "a conflict with CAFA's intent, making remand improper." (Order 12 Denying Remand at 19:6-7.) The latter finding was based on the Court's conclusion that the Northern District of California United States District Court 13 Plaintiffs were intimately involved the Hall litigation. (Id. at 19:18-22.) 14 The Court will address additional facts as necessary in its analysis. 15 ANALYSIS 16 Plaintiffs move to reconsider the Order Denying Remand on the basis that the Court 17 manifestly failed to consider material facts and dispositive legal arguments. See School Dist. No. 18 1J, Multnomah County, Or. v. ACand S, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (setting forth 19 bases on which a party may seek reconsideration); see also N.D. Civ. L.R. 7-9(b)(3). 20 Specifically, Plaintiffs argue that "[a]ny attempt to measure the specific impact on 21 SeaWorld of an injunction directed towards advertising statements," including the Court's attempt, 22 "is inherently speculative." (Docket No. 55, Motion for Reconsideration at 1:27-2:2.) They also 23 contend that the Court's factual assumption that they had any involvement with preparing or filing 24 the Hall litigation is erroneous. 25 // 26 27 3 The court in that case recently granted SeaWorld's motion to dismiss and granted the 28 plaintiffs leave to amend in part. (See Docket No. 64, Defendant's Statement of Recent Decision.) 2 1 A. Applicable Legal Standards. 2 1. Standards on Motion to Remand. 3 "[A]ny civil action brought in State court of which the district courts of the United States 4 have original jurisdiction, may be removed by the defendant. . . to the district court of the United 5 States for the district and division embracing the place where such action is pending." Franchise 6 Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted); see also 28 7 U.S.C. § 1441. Federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian 8 Life Ins. Co. of America, 511 U.S. 375, 377 (1994). An action originally filed in state court may 9 be removed to federal court only if the district court could have exercised jurisdiction over such 10 action if initially filed there. 28 U.S.C. § 1441(a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 11 (1987). 12 A district court must remand the case if it appears before final judgment that the court Northern District of California United States District Court 13 lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). Accordingly, the burden of establishing 14 federal jurisdiction for purposes of removal is on the party seeking removal. Valdez v. Allstate 15 Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th 16 Cir. 1992). In general, a court must construe the removal statute strictly and reject jurisdiction if 17 there is any doubt regarding whether removal was proper. Duncan v. Stuetzle, 76 F.3d 1480, 1485 18 (9th Cir. 1996). However, "no antiremoval presumption attends cases invoking CAFA, which 19 Congress enacted to facilitate adjudication of certain class actions in federal court." Dart 20 Cherokee Basin Operating Co., LLC v. Owens, __ U.S. __, 135 S.Ct. 547, 554 (2014). 21 2. CAFA Jurisdictional Requirements and Standard of Review. 22 CAFA provides that district courts have original jurisdiction over any class action in which 23 (1) the amount in controversy exceeds five million dollars, (2) any plaintiff class member is a 24 citizen of a state different from any defendant, (3) the primary defendants are not states, state 25 officials, or other government entities against whom the district court may be foreclosed from 26 ordering relief, and (4) the number of plaintiffs in the class is at least 100. 28 U.S.C. §§ 27 1332(d)(2), (d)(5). "[U]nder CAFA the burden of establishing removal jurisdiction remains, as 28 before, on the proponent of federal jurisdiction." Abrego Abrego v. The Dow Chemical Co., 443 1 F.3d 676, 685 (9th Cir. 2006). 2 Thus, SeaWorld has the burden of proving by a preponderance of the evidence that the 3 amount in controversy exceeds $5,000,000. Standard Fire Insurance Company v. Knowles, – U.S. 4 –, 133 S.Ct. 1345, 1348-49 (2013) ("Standard Fire"); see also Rodriguez v. AT&T Mobility 5 Services, LLC, 728 F.3d 975 (9th Cir. 2013) (finding that "legal certainty standard" set forth in 6 Lowdermilk v. U.S. Bank National Ass'n, 479 F.3d 994 (9th Cir. 2007) had been "effectively 7 overruled" by Standard Fire). In order to determine whether SeaWorld has met its burden, the 8 Court may consider the complaint, the contents of the removal petition, and "summary-judgment- 9 type evidence." Valdez, 372 F.3d at 1117; accord Ibarra v. Manheim Investments, Inc., 775 F.3d 10 1193, 1197 (9th Cir. 2014). However, SeaWorld "cannot establish removal jurisdiction by mere 11 speculation and conjecture, with unreasonable assumptions" Ibarra, 775 F.3d at 1197. 12 B. The Court Grants, in part, and Denies, in part, the Motion for Reconsideration. Northern District of California United States District Court 13 1. Amount in Controversy. 14 The Court determined the amount in controversy by calculating the value of compliance 15 with the injunction to SeaWorld, measured by the potential losses in ticket sales. (Order Denying 16 Remand at 7:15-8:6 & n.4.) Because SeaWorld had the burden of proof to demonstrate the 17 amount in controversy, the Court used a conservative model to make that calculation. (Order 18 Denying Remand at 12 n.6.) 19 Plaintiffs do not move for reconsideration on the basis that the Court applied an incorrect 20 legal standard, i.e. they do not contest the Court's application of the "either viewpoint" rule. 21 Although they argue that SeaWorld should be precluded from relying on the cost of compliance 22 with an injunction to satisfy the amount in controversy, the Court finds that Plaintiffs' arguments 23 on that point do not warrant reconsideration of that issue. 24 Plaintiffs also argue that the Court should reconsider its ruling on the basis that it is 25 inherently speculative to assume that the requested injunctive relief would cause SeaWorld to lose 26 ticket sales, given other variables that have affected SeaWorld's business in the last few years. 27 The Court is not persuaded that reconsideration is warranted on this basis either. 28 Plaintiffs have not contested the evidence SeaWorld presented in its Notice of Removal. 4 1 (See Notice of Removal, at p. 9 (Declaration of William Powers, ¶ 5).) Those figures formed the 2 basis of the Court's calculation and, thus, stand unrebutted. As the Court found in its Order 3 Denying Remand, if complying with the injunction caused SeaWorld to lose 166,667 on-line 4 ticket sales during a one-year period, CAFA's jurisdictional minimum would be satisfied.4 5 In support of their motion for reconsideration, Plaintiffs submit press reports about 6 negative publicity that SeaWorld has received following: release of the Blackfish documentary; the 7 filing of a securities class action lawsuit; and restrictions imposed by the California Coastal 8 Commission. Plaintiffs also include briefing filed in the securities lawsuit. Plaintiffs argue that 9 these materials demonstrate that there are a number of variables that might impact future ticket 10 sales, and, thus it would be unreasonable and speculative to assign a figure to a decline in sales 11 based upon compliance with the injunction. However, some of the press reports submitted by 12 Plaintiffs do not necessarily undercut the Court's calculations. Indeed, at least one of the reports Northern District of California United States District Court 13 state that SeaWorld San Diego, the park at issue in this case, had a 12% decline in attendance in 14 2014, a figure not that far off from the percentage identified in the Order Denying Remand. 15 (Docket No. 55-2, Declaration of Christine S. Haskett ("Haskett Decl."), Ex. 1 at ECF p. 26.) 16 Plaintiffs also argue that their injunction merely requires SeaWorld to comply with the 17 law. If Plaintiffs, in fact, merely asked SeaWorld to discontinue existing practices, their argument 18 might have some force. However, that is not the relief Plaintiffs seek.5 (See FAC ¶ 80.b.) The 19 20 4 As noted, the Court applied a conservative model to determine the number of lost ticket 21 sales that would be required to meet the jurisdictional minimum. Therefore, the Court's calculations did not take into account any reduction in on-site ticket sales, where ticket prices are 22 significantly higher. 5 23 In support of this argument, Plaintiffs rely on Velasquez v. HMS Host USA, INc., No. 2:12- CV-02312-MCE-CKD, 2012 WL 6049608 (E.D. Cal. Dec. 5, 2012), Lopez v. Source Interlink 24 Cos., Inc., No. 2:12-CV-00003-JAM-CKD (E.D. Cal. Mar. 29, 2012), and Longmire v. HMS Host USA, Inc., 12-CV-2203-AJB (DHB), 2012 WL 5928485 (S.D. Cal. Nov. 26, 2012). Each of those 25 cases involved alleged violations of California's wage and hour laws. Thus, they are factually inapposite. In addition, in those cases, the injunctions requested in those cases required the 26 defendants to do nothing more than comply with the various labor code provisions at issue going forward. As set forth above, Plaintiffs are not simply asking SeaWorld to comply with the 27 California laws at issue. Rather, they are asking SeaWorld to make affirmative – and purportedly corrective – statements to consumers regarding the subject matter of the litigation. Therefore, the 28 Court finds Plaintiffs' reliance on these cases unpersuasive. 5 1 Court also considered reputational damage in its analysis of the value of the injunction. (Order 2 Denying Remand at 13:1-15.) Given the record, which shows that the mere specter of wrongdoing 3 and maltreatment of its orcas has contributed to declining sales, the Court cannot say it is 4 unreasonable to conclude that if SeaWorld is required to affirmatively acknowledge that it has 5 made the alleged misrepresentations at issue, ticket sales would decline even further as a result. 6 Accordingly, the Court will not reconsider its ruling that, based on the record in this case, 7 SeaWorld has demonstrated by a preponderance of the evidence that the amount in controversy 8 exceeds $5,000,000. The Court DENIES the motion for reconsideration on that basis. 9 2. Preclusion. 10 The Court's second basis for denying Plaintiff's motion to remand was based upon the fact 11 that the Plaintiffs in this case and the Hall litigation were the same. (See, e.g., Order Denying 12 Remand at 19:18-22.) Plaintiffs have submitted a declaration in which they, through their counsel, Northern District of California United States District Court 13 attest that: (1) neither they nor their counsel were involved with or prepared the lawsuits that 14 comprise the Hall litigation, and the plaintiffs and counsel in the Hall litigation were not involved 15 with or prepared this case; (2) plaintiffs first learned of the Hall litigation through media reports in 16 March 2015, after that case was filed but before their filed suit in Superior Court; and (3) 17 Plaintiffs' counsel has had some communications with plaintiffs' counsel in the Hall litigation, 18 which have been limited to issues relating proceedings before the Judicial Panel on Multidistrict 19 Litigation and efforts to coordinating discovery. (Haskett Decl., ¶¶ 2-6.) 20 Based on the Haskett declaration, Plaintiffs have demonstrated that the Court's factual 21 statement that the Plaintiffs were the same was incorrect. As SeaWorld notes, that does not alter 22 the fact that the putative class members in this case do fall within the scope of the putative class in 23 the Hall litigation, and Plaintiffs here fall within the scope of the putative class in Hall. However, 24 to the extent the Court's determination that the intent of CAFA would be frustrated if it were to 25 remand depends upon the factual determination that Plaintiffs are the same, the Court grants, in 26 part, Plaintiffs' motion for reconsideration on that limited basis.6 27 6 28 Plaintiffs were aware of the Hall litigation by the time they filed suit in Superior Court. This Court, as did Judge Conti, finds the potential for preclusion troubling. As Judge Conti noted, 6 1 USION CONCLU 2 For the foregoing reeasons, the Court C GRAN NTS, IN PAR RT, AND D DENIES, IN P PART, 3 Plaaintiffs' motiion for recon nsideration. Plaintiffs prreviously filed a requestt to the Ninthh Circuit 4 seeeking leave to t appeal thee Order Deny ying Remandd, and that aappeal remaiins pending. 5 Acccordingly, th he Court willl defer rulin ng on the mootion to dism miss and will defer settingg a case 6 maanagement co onference peending a ruliing from thee Ninth Circuuit. 7 The parrties shall fille a joint stattus report onn April 11, 22016, and eveery 90 days thereafter, 8 unttil the Ninth Circuit has either: (1) denied Plaintiiffs' requestt for permisssion to appeaal; or (2) 9 graanted Plaintiffs' request for leave to appeal and iissued a finaal order on thhe issue of reemand. 10 IT IS SO S ORDER RED. 11 Daated: January y 12, 2016 12 __________________________________________ Northern District of California United States District Court JEFFFREY S. W WHITE 13 Unnited States D District Judgge 14 15 16 17 18 19 20 21 22 23 24 25 whhile, in generral, it is perm missible to maintain m an innjunction onnly suit, this is not a casee where the faccts underlyinng Plaintiffs' monetary in njuries differr from thosee of the absennt class mem mbers in this 26 casse or from thhe absent claass members in the Hall llitigation. (SSee Order D Denying Rem mand at 17::14-19.) Thee Court also recognizes thatt Plaintiff ffs may not liiterally be atttempting to bind absentt 27 claass members from obtain ning a form of o monetary relief to whhich they migght otherwise be entitled d. Hoowever, Plain ntiffs' strateg gic choice does appear tto violate thee spirit – if nnot the letter – of the 28 Sup preme Courtt's ruling in Knowles as well as Conngress' intentt to provide a federal forrum for cerrtain class acctions. 7