Rebecca Houpt v. Victoria Fire & Casualty Company

MEMORANDUM

Because Houpt’s parenthetical request for relief above CAFA’s $5 million jurisdictional limit rendered her complaint ambiguous as to the total recovery sought, the district court erred in concluding that the defendant insurers needed to prove the amount in controversy to a legal certainty rather than by a preponderance of the evidence. See Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir.2007). Here the insurers have satisfied CAFA’s jurisdictional requirements: because Houpt alleged that the insurers improperly reduced the plaintiffs’ sales commissions, the full amount of those commissions, $12,375,968, rather than the sum of all “improper” deductions, is properly included in the amount in controversy. See 28 U.S.C. § 1332 (d)(2); Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 397-98 (9th Cir.2010).

Finally, by alleging only that the plaintiffs are “California-based” sales agents, rather than California citizens, Houpt failed to plead or prove a necessary element of both the discretionary abstention and local controversy exceptions to CAFA jurisdiction. See 28 U.S.C. § 1332 (d)(3), (4)(A)(i)(I); Snell v. Cleveland, Inc., 316 F.3d 822, 824 (9th Cir.2002)…