Theodora Morris v. Data Media Associates, LLC

Summary

The United States District Court for the Central District of California granted Theodora Morris’s motion to remand a data-breach action to state court and denied her request for costs and attorney fees. The court held that Morris’s binding stipulation limiting damages to less than the federal diversity-jurisdiction threshold defeated removal jurisdiction, notwithstanding her prior, voluntarily dismissed action involving the same claims. The court found that the defendant had an objectively reasonable basis for removal and therefore declined to award sanctions.

Holdings

1. A plaintiff may avoid removal by filing a state-court complaint containing a binding stipulation that limits the amount recoverable to below the federal diversity-jurisdiction threshold. Morris's stipulation limited the amount in controversy to less than $75,000, so DMA failed to establish the jurisdictional threshold and remand was required.
2. The court was not required to defer ruling on the remand motion because the preliminary merits inquiry showed that removal was improper.
3. Morris was not entitled to costs or attorney fees because DMA had an objectively reasonable basis for seeking removal, even though the removal ultimately failed.

Questions Presented

1. Whether the plaintiff's binding stipulation limiting damages to less than $75,000 defeated the amount-in-controversy requirement for diversity jurisdiction and required remand.
2. Whether the plaintiff was entitled to costs and attorney fees under 28 U.S.C. § 1447(c) because the defendant lacked an objectively reasonable basis for removal.
3. Whether the court should defer ruling on the remand motion because of a potential transfer to an MDL proceeding.

Disposition

remanded