1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DESIGNTECHNICA CORPORATION, Case No.: 24-CV-1054 W (AHG)

12 Plaintiff,

ORDER GRANTING DEFENDANT’S

13 v. MOTION TO DISMISS [DOC. 4] 14 SWIGART LAW GROUP, APC and Thirty-Six (36) Of Its Putative Clients, 15 Defendants. 16 17 18 19 Pending before the Court is Swigart Law Group’s (“SLG”) motion to dismiss 20 DesignTechnica Corporation’s (“DTC”) Complaint under Federal Rule of Civil Procedure 21 12(b)(1) and (b)(6). (Mtn. [Doc. 4].) The Court decides the matter on the papers submitted 22 and without oral argument. See CivLR 7.1(d)(1). For the reasons provided below, the 23 Court GRANTS the motion to dismiss based on lack of subject matter jurisdiction. 24 25 I. BACKGROUND 26 DesignTechnica (“DTC”) is a multimedia company incorporated in Delaware with 27 its principle place of business in Portland, Oregon. (Complaint [Doc. 1] 2, ¶ 2.) DTC 28 manages two websites pertinent to this lawsuit: www.themanual.com (“the Manual”) and 1 www.digitaltrends.com (“Digital Trends”) (collectively “the Websites”). (Id. at ¶ 8.) The 2 Manual is described as “the essential guide for men . . . offering a suite of expert guides on 3 a wide range of topics, including fashion, food, drink, travel, and grooming[.]” (Id.) 4 Digital Trends is described as a website “that guides consumers to the best products and 5 services available . . . .” (Id.) 6 Upon visiting the Websites, visitors are required to either agree to all the Terms of 7 Use or cease use of the services. (Id. at ¶ 9.) Under the Terms of Use, visitors agree that 8 any dispute “will be governed by and construed and enforced in accordance with the laws 9 of Oregon, except to the extent preempted by U.S. federal law . . . .” (Id. at ¶ 10.) Further, 10 “[a]ny dispute between the parties that is not subject to arbitration or cannot be heard in 11 small claims court will be resolved in the state or federal courts of Oregon and the United 12 States, respectively, sitting in Multnomah County, Oregon.” (Id.) The Terms of Use also 13 contain a binding mandatory arbitration provision requiring aggrieved parties to submit to 14 arbitration administered by JAMS. (Id. at ¶ 11.) 15 The present suit arises out of thirty-six separate claims brought on behalf of various 16 claimants (collectively “Claimants”) against DTC with JAMS. (Id. at ¶¶ 13–14.) DTC 17 alleges that Swigart Law Group has filed various “cookie-cutter allegations of . . . the 18 California Invasion of Privacy Act (CIPA)” in violation of the choice of law provision 19 requiring all disputes to be governed by Oregon substantive law. (Id. at ¶¶ 15–17.) DTC 20 argues that Claimants “have suffered no actual damages,” are “rely[ing] solely on CIPA’s 21 $5,000 . . . statutory penalty for any recovery,” and that “SLG is . . . filing large numbers 22 of baseless claims in contravention of the Terms’ choice of law provision in an effort to 23 compel DTC . . . to pay to settle claims rather than incur significant arbitration fees.” (Id. 24 at ¶¶ 18–19.) 25 In response to the arbitration claims brought with JAMS, DTC has filed the present 26 suit in federal court. Among other things, DTC prays for a declaratory judgment that the 27 Terms of Use and Choice of Law provision are enforceable against SLG and Claimants 28 (collectively “Defendants”), as well as an injunction enjoining present and potential future 1 CIPA claims arising out of the same facts and circumstances. (Id. at 7.) Defendants have 2 filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). 3 (Mtn. [Doc. 4].) DTC opposes. (Opp’n [Doc. 5].) 4 5 II. LEGAL STANDARD 6 Federal courts are courts of limited jurisdiction. Exxon Mobil Corp. v. Allapattah 7 Servs., Inc., 545 U.S. 546, 552 (2005). Limited jurisdiction means that federal courts can 8 only adjudicate cases that both the Constitution and Congress authorize them to adjudicate, 9 such as those involving diversity of citizenship, a federal question, or where the United 10 States is a party. Id. See also Ex parte Bollman, 8 U.S. 75, 94 (1807) (“To enable the court 11 to decide on such question, the power to determine it must be given by written law.”). 12 Federal courts are presumptively without jurisdiction over civil actions, and the burden of 13 establishing the contrary rests upon the party asserting jurisdiction. Kokkonen v. Guardian 14 Life Ins. Co., 511 U.S. 375, 377 (1994). 15 Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a defendant may seek 16 to dismiss a complaint for lack of subject matter jurisdiction. Because subject matter 17 jurisdiction involves the authority of the court to decide the case, the court cannot reach 18 the merits of any dispute until it confirms its own subject matter jurisdiction. See Steel Co. 19 v. Citizens for a Better Environ., 523 U.S. 83, 95 (1998). Additionally, lack of subject 20 matter jurisdiction may be raised either by the parties or sua sponte by the court. See 21 Washam v. Rabine, No. 3:12CV2433-GPC-BLM, 2013 WL 1849233, at *1 (S.D. Cal. May 22 1, 2013). 23 When considering a Rule 12(b)(1) motion to dismiss, the district court is free to hear 24 evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual 25 disputes where necessary. Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). 26 In such circumstances, “[n]o presumptive truthfulness attaches to [a] plaintiff’s allegations, 27 and the existence of disputed facts will not preclude the trial court from evaluating for itself 28 1 the merits of jurisdictional claims.” Id. (quoting Thornhill Publishing Co. v. General 2 Telephone & Electronic Corp., 594 F.2d 730, 733 (9th Cir. 1979). 3 DTC does not dispute SLG’s assertion that the lawsuit does not invoke federal 4 question jurisdiction. See (Opp’n at 5–6) (discussing only diversity jurisdiction). 5 Therefore, the only plausible jurisdictional hook is diversity jurisdiction. 28 U.S.C. § 1332. 6 Diversity jurisdiction requires complete diversity of citizenship between both parties and 7 an amount-in-controversy exceeding $75,000. See Agha v. U.S. Small Bus. Admin., No. 8 13-CV-1943-MMA (JMA), 2014 WL 12539701, at *1 (S.D. Cal. Apr. 17, 2014). 9 The parties also do not dispute that there is complete diversity of citizenship present 10 on both sides of the suit. (Reply at 1: 20); (Opp’n at 5: 6–12) (“[T]he parties are citizens 11 of different states as Plaintiff is a citizen of Oregon and Defendants are all citizens of 12 California . . . .”). Therefore, the only issue is whether the amount-in-controversy element 13 has been satisfied. 14 15 III. DISCUSSION 16 A court should not dismiss an action for failure to satisfy the amount-in-controversy 17 requirement unless it appears to a “legal certainty” that a plaintiff’s claim is for less than 18 the jurisdictional amount. See Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 683 19 n. 8 (9th Cir. 2006). To satisfy the amount-in-controversy requirement, the party seeking 20 to invoke the court’s jurisdiction must provide evidence that it is more likely than not that 21 the amount-in-controversy satisfies the federal diversity jurisdictional amount. Sanchez v. 22 Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996); Keithly v. Koninklijk Het 23 Friesch Paarden-Stamboek, No. 13-CV-2532-W WMC, 2013 WL 5739196, at *2 (S.D. 24 Cal. Oct. 22, 2013). Because DTC is attempting to invoke this Court’s diversity 25 jurisdiction, they bear the burden of proving the amount-in-controversy exceeds $75,000. 26 DTC argues that the amount-in-controversy requirement is satisfied because “if 27 Plaintiff is forced to defend the 36 CIPA actions . . . it is facing at least $70,000 in initial 28 filing fees and a minimum of $180,000 in damages under CIPA . . . .” (Opp’n at 6: 1–12.) 1 However, the problem with this argument is that—unless the plaintiff asserts joint and 2 several liability—the general rule is that damages cannot be aggregated among defendants 3 to satisfy the amount-in-controversy requirement. See Exxon Mobil Corp., 545 U.S. at 559 4 (“When the well-pleaded complaint contains at least one claim that satisfies the amount- 5 in-controversy requirement . . . the district court . . . has original jurisdiction . . . .”); De La 6 Rosa v. Reliable, Inc., 113 F. Supp. 3d 1135, 1151 (D.N.M. 2015) (“The [] amount-in- 7 controversy requirement . . . must be satisfied as between a single plaintiff and a single 8 defendant . . . a plaintiff cannot aggregate independent claims against multiple defendants 9 . . . . [unless] jointly or severally liable . . . .”). 10 Here, DTC has only argued that the amount-in-controversy is satisfied because of 11 the potential CIPA penalties and arbitration fees. However, the penalties and fees only 12 exceed the jurisdictional amount when aggregated, which is improper in this context. 13 While aggregation can be appropriate in cases where defendants are jointly and severally 14 liable, DTC has not made any allegations suggesting that is the case here. Therefore, in 15 calculating the amount-in-controversy, the damages alleged by the defendants will not be 16 aggregated. Using DTC’s estimates, the filing fees and CIPA penalty totals about $7,000 17 per Claimant, falling short of the minimum jurisdictional amount. 18 Additionally, DTC makes no other arguments or provides any other evidence that 19 the amount-in-controversy has been satisfied. The only other reference to the amount-in- 20 controversy is a recitation in the Complaint that the case exceeds the jurisdictional 21 requirement. (Complaint at 2, ¶ 2.) However, a “threadbare recital of the amount-in- 22 controversy element for subject matter jurisdiction [] is insufficient, without more, to 23 establish” subject matter jurisdiction. Calleros v. Rural Metro of San Diego, Inc., No. 24 317CV00686CABBLM, 2017 WL 9854429, at *1 (S.D. Cal. Apr. 6, 2017). Accordingly, 25 DTC has not satisfied their burden of showing the controversy exceeds $75,000. See Herko 26 v. FCA US, LLC, No. 19-CV-2057 JLS (WVG), 2019 WL 5587140, at *2 (S.D. Cal. Oct. 27 30, 2019); Mendez-Castro v. Mukasey, 552 F.3d 975, 978 (9th Cir. 2009) (dismissal 28 1 || appropriate where plaintiff failed to overcome the presumption against subject matter 2 || jurisdiction). 3 4 ||IV. CONCLUSION 5 Because DTC has failed to meet their burden in demonstrating that the controversy 6 ||exceeds $75,000, they have not satisfied the requirements for diversity jurisdiction. 7 || Therefore, the Court GRANTS SLG’s Motion to Dismiss based on lack of subject matter 8 || jurisdiction. 9 || IT ISSO ORDERED. 10 |}Dated: December 9, 2024 \ [pe Lon 12 Hn. 1 omas J. Whelan 13 Unted States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28