Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.1 Page 1 of 11
1 GREENBERG TRAURIG, LLP ROBERT J. HERRINGTON (SBN 234417) 2 [email protected] 3 KEVIN J. COLE (SBN 321555) [email protected] 4 1840 Century Park East, Suite 1900 5 Los Angeles, California 90067 Telephone: (310) 586-7700 6 Facsimile: (310) 586-7800 7 Attorneys for Defendants Hearst Magazine 8 Media, Inc. and CDS Global, Inc. 9
10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 FENELLA ARNOLD and KELLY CASE NO. '19CV1969 BEN MDD
14 NAKAI, individually and on behalf of all PUTATIVE CLASS ACTION 15 others similarly-situated, NOTICE OF REMOVAL OF DEFENDANTS HEARST MAGAZINE 16 Plaintiffs, MEDIA, INC., AND CDS GLOBAL, 17 INC. PURSUANT TO 28 U.S.C. v. SECTION 1332(d)(2)
18 Action Filed: September 10, 2019 19 HEARST MAGAZINE MEDIA, INC., a Action Removed: October 10, 2019 Delaware corporation; CDS GLOBAL, Removed from the Superior Court of the 20 INC., an Iowa corporation; and DOES 1- State of California, County of San Diego, 21 50, inclusive, Case No. 37-2019-00047733-CU-BT-CTL
22 Defendants. 23 24 25 26 27 28
NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.2 Page 2 of 11
1 NOTICE OF REMOVAL OF DEFENDANTS HEARST MAGAZINE MEDIA, INC. 2 and CDS GLOBAL, INC.: 3 TO THE CLERK OF THE ABOVE-ENTITLED COURT: 4 PLEASE TAKE NOTICE that pursuant to the Class Action Fairness Act (“CAFA”), 5 28 U.S.C. §§ 1332, 1441, and 1446, Defendants Hearst Magazine Media, Inc. (“HMM”) 6 and CDS Global, Inc. (“CDS”; together with HMM, “Defendants”) hereby remove the 7 above-captioned putative class action from the Superior Court of California, County of San 8 Diego, to the United States District Court for the Southern District of California. 9 Defendants deny the allegations and relief sought in the Complaint, and file this Notice 10 without waiving any defenses, exceptions, or obligations that may exist in their favor. 11 Defendants also file this Notice without conceding, and specifically reserving, their right to 12 contest the suitability of this lawsuit for certification as a class action. Defendants will 13 provide evidence to support the allegations of this pleading as required in the event a 14 challenge is raised to the Court’s jurisdiction.1 15 RELEVANT PROCEDURAL HISTORY 16 1. On September 10, 2019, Plaintiffs Fenella Arnold and Kelly Nakai 17 (“Plaintiffs”), individually and on behalf of all others similarly situated, filed a proposed 18 Class Action Complaint (“Compl.”) against Defendants, captioned Fenella Arnold and 19 Kelly Nakai v. Hearst Magazine Media, Inc., et al., Case No. 37-2019-00047733-CU-BT- 20
21 1 A removing defendant is only required to provide a “short and plain statement” of 22 the bases for removal and need not present or plead evidentiary detail. Dart Cherokee Basin 23 Operating Co., LLC v. Owens, 135 S. Ct. 547, 551 (2014); see also Janis v. Health Net, Inc., 472 F. App’x 533, 534 (9th Cir. 2012) (“Nothing in 28 U.S.C. § 1446 requires a 24 removing defendant to attach evidence of the federal court’s jurisdiction to its notice of 25 removal. Section 1446(a) requires merely a ‘short and plain statement of the grounds for removal.’ Moreover, we have observed that ‘it is clearly appropriate for the district courts, 26 in their discretion, to accept certain post-removal [evidence] as determinative of the 27 [jurisdictional requirements].’”); Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010) (“When challenged on allegations of jurisdictional facts, the parties [who assert jurisdiction] must 28 support their allegations by competent proof.”). 2 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.3 Page 3 of 11
1 CTL, in the Superior Court of California, County of San Diego (“State Court Action”). 2 Plaintiffs served HMM and CDS on September 12, 2019. 3 2. As required by 28 U.S.C. § 1446(a), Exhibit A to this Notice contains true 4 copies of all process, pleadings, and orders served upon Defendants in the State Court 5 Action. 6 3. Defendants are the only named defendants in the State Court Action. The 7 defendants designated as DOES 1 through 50 are fictitious defendants, are not parties to the 8 action, have not been named or served, and are properly disregarded for the purpose of this 9 removal. 28 U.S.C. § 1441(a); McCabe v. Gen. Foods, Inc., 811 F.2d 1336, 1339 (9th Cir. 10 1987). All Defendants consent and agree to removal. 11 ALLEGATIONS OF THE COMPLAINT 12 4. In the Complaint, Plaintiffs purport to represent two proposed classes. (Compl. 13 ¶ 35.) 14 5. Arnold and Nakai purport to represent the so-called “ARL Class,” which the 15 Complaint defines to be “[a]ll individuals in California who, within the applicable 16 limitations period, were enrolled by Defendants in an automatic renewal program or a 17 continuous service program and had a credit card, debit card, and/or a third-party payment 18 account charged by Defendants as part of such program.” (Id. ¶ 36.) According to the 19 Complaint, “[w]hen Arnold submitted the order” for a two-year subscription to HGTV 20 Magazine, “she was not aware that Defendants were going to enroll her in a program under 21 which the subscription would automatically renew for subsequent periods, and she did not 22 consent to be enrolled in such program.” (Id. ¶ 23.) The Complaint also alleges that “[i]f 23 Nakai had known that Defendants were going to treat her submission of a sweepstakes entry 24 as enrollment into an automatic-renewal subscription [to Food Network Magazine], she 25 would not have entered the sweepstakes, would not have requested the magazine issue from 26 Defendants, and would not have paid any money to Defendants for that magazine.” (Id. 27 ¶ 32.) 28 3 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.4 Page 4 of 11
1 6. Based on these allegations, the Complaint purports to allege claims on behalf 2 of the ARL Class for: (1) violations of the Automatic Renewal Law, Cal. Bus. & Prof. Code 3 § 17600 et seq.; (2) violations of the California Consumer Legal Remedies Act, Cal. Civ. 4 Code § 1750 et seq.; (3) violations of the California Unfair Competition Law, Cal. Bus. & 5 Prof. Code § 17200 et seq.; and (4) unjust enrichment. (Id. ¶¶ 44-47, 53-69.) 6 7. Nakai also purports to represent the so-called “False Invoice Class,” which the 7 Complaint defines to be “[a]ll individuals in California who, within the applicable 8 limitations periods, received an invoice, bill, or account statement from Defendants for 9 magazines that Defendants’ [sic] represented to be ‘free’ and/or for magazine subscriptions 10 that had not been ordered.” (Id. ¶ 37.) According to the Complaint, in connection with 11 submitting an entry into a sweepstakes, Nakai requested a “‘FREE’ issue” of Food Network 12 Magazine. (Id. ¶ 27.) Nakai then “received emails from Defendants purporting to be an 13 ‘INVOICE’ for a subscription to Food Network Magazine,” which she paid. (Id. ¶¶ 28-29.) 14 The Complaint alleges that, “[i]f Nakai had known that, upon receipt of her sweepstakes 15 entry, Defendants were going to enroll her in, and charge her for, a one-year subscription 16 for Food Network Magazine, she would not have submitted the sweepstakes entry.” (Id. ¶ 17 30.) 18 8. Based on these allegations, the Complaint purports to allege claims on behalf 19 of the False Invoice Class for: (1) violations of Section 1716 of the California Civil Code; 20 (2) violations of the California Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et 21 seq.; (3) violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code 22 § 17200 et seq.; and (4) unjust enrichment. (Id. ¶¶ 48-69.) 23 9. The Complaint seeks restitution, prejudgment interest, costs of suit, attorneys’ 24 fees, and injunctive relief. In addition, the Complaint seeks an order “that all goods sent to 25 ARL Class members are unconditional gifts,” and damages “[f]or three times the sum 26 solicited, pursuant to Civil Code § 1716(g).” (Compl. at pp. 17-18, Prayer.) 27 10. Defendants deny any and all liability to Plaintiffs or to the proposed classes 28 they seek to represent, and deny that Plaintiffs or the putative class members are entitled to 4 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.5 Page 5 of 11
1 recover the damages, restitution, and other relief requested in the Complaint. Defendants 2 also submit that this action does not satisfy the requirements for class certification under 3 Fed. R. Civ. P. 23. 4 SERVICE ON THE STATE COURT 5 11. As required by 28 U.S.C. § 1446(d), Defendants will promptly file with the 6 Clerk of the San Diego Superior Court and serve on all parties a copy of this Notice of 7 Removal. 8 VENUE 9 12. The State Court Action was filed in the Superior Court of the State of 10 California for the County of San Diego. Venue properly lies in the United States District 11 Court for the Southern District of California pursuant to 28 U.S.C. § 1441(a). 12 TIMELINESS 13 13. CAFA removal is timely so long as (1) the face of the complaint does not 14 plainly allege all elements needed for diversity jurisdiction under CAFA (including the 15 amount in controversy), and (2) plaintiff has not served some other “paper” that concedes 16 all elements needed for diversity jurisdiction. See Roth v. CHA Hollywood Med. Ctr., L.P., 17 720 F.3d 1121, 1125-26 (9th Cir. 2013) (a removing defendant may remove “on the basis 18 of its own information, provided that it has not run afoul of either of the thirty-day 19 deadlines” set forth in 28 U.S.C. § 1446(b)(1) or (b)(3)). 20 14. This removal is timely. The face of the Complaint does not allege all elements 21 needed for CAFA jurisdiction (including the amount in controversy), and Plaintiffs have 22 not served some other “paper” that concedes all the required elements. For example, no 23 amount in controversy is stated. Regardless, this removal is being filed within 30 days of 24 service. 25 15. Therefore, this removal is timely under CAFA. 26 ORIGINAL JURISDICTION UNDER CAFA 27 16. This Court has jurisdiction over this case under CAFA, 28 U.S.C. § 1332(d), 28 and this case may be removed under the provisions of 28 U.S.C. § 1441(a). Specifically, 5 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.6 Page 6 of 11
1 this is a putative civil class action where: (1) the proposed class contains at least 100 2 members; (2) no Defendant is a state, state official or other governmental entity; (3) the 3 total amount in controversy for all putative class members exceeds the sum or value of 4 $5,000,000, exclusive of interest and costs; and (4) there is diversity between at least one 5 putative class member and one Defendant. Therefore, CAFA authorizes the removal of this 6 action in accordance with 28 U.S.C. § 1446. 7 17. This action satisfies CAFA’s definition of a class action, which is “any civil 8 action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute . . . 9 authorizing an action to be brought by one or more representative persons as a class action.” 10 28 U.S.C. § 1332(d)(1)(B); 28 U.S.C. § 1453(a), (b). 11 A. The Proposed Class Contains At Least 100 Members. 12 18. Plaintiffs’ proposed classes contain at least 100 members. Plaintiffs bring this 13 action on their own behalves, and on behalf of the proposed ARL Class and the False 14 Invoice Class. (Compl. ¶ 10.) 15 19. During the four years before the filing of this Complaint, significantly more 16 than 100 individual customers in California were enrolled in a continuous service program 17 (as alleged by Plaintiffs) for their subscriptions to an HMM magazine and had a credit card, 18 debit card, and/or a third-party payment account charged as part of such program. In 19 addition, during the four years before the filing of this Complaint, significantly more than 20 100 individual customers in California received an invoice, bill, or account statement for an 21 HMM magazine after entering a sweepstakes. Plaintiffs also specifically allege that “each 22 class consists of at least 100 members.” (Compl. ¶ 40.) 23 B. Defendants Are Not States, State Officials, Or Other Governmental Entities. 24 20. Defendants are not states, state officials, or other governmental entities. 25 C. The Amount in Controversy Exceeds $5,000,000. 26 21. As an initial matter, Defendants in no way concede they have any liability to 27 Plaintiffs or to the putative classes, and deny that Plaintiffs or the putative class members 28 6 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.7 Page 7 of 11
1 are entitled to recover the compensatory damages, statutory damages, restitution, injunctive 2 relief, punitive damages, attorneys’ fees, or any other relief. 3 22. That said, the amount in controversy “is what amount is put ‘in controversy’ 4 by the plaintiff’s complaint, not what a defendant will actually owe.” Korn v. Polo Ralph 5 Lauren Corporation, 536 F. Supp. 2d 1199, 1205 (E.D. Cal. 2008) (quoting Rippee v. 6 Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005)). When measuring the 7 amount in controversy, “a court must ‘assume that the allegations of the complaint are true 8 and assume that a jury will return a verdict for the plaintiff on all claims made in the 9 complaint.’” Campbell v. Vitran Exp., Inc., 471 F. App’x 646, 648 (9th Cir. 2012) (citing 10 Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993, 1001 (C.D. 11 Cal. 2002)). Further, defenses that a defendant may assert are not considered in assessing 12 the amount placed in controversy. See Lara v. Trimac Transp. Servs. (W.) Inc., CV 10- 13 4280-GHK JCX, 2010 WL 3119366, at *3 (C.D. Cal. Aug. 6, 2010) (“affirmative defenses, 14 counterclaims, and potential offsets may not be invoked to demonstrate the amount-in- 15 controversy is actually less than the jurisdictional minimum.”). 16 23. Under 28 U.S.C. § 1332(d)(6), “[i]n any class action, the claims of the 17 individual class members shall be aggregated to determine whether the matter in 18 controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs.” 19 “Congress and the Supreme Court have instructed [courts] to interpret CAFA’s provisions 20 under section 1332 broadly in favor of removal,” Jordan v. Nationstar Mortg. LLC, 781 21 F.3d 1178, 1184 (9th Cir. 2015), and “no antiremoval presumption attends cases invoking 22 CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal 23 court.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014). 24 24. Plaintiffs seek multiple forms of monetary relief, including “restitution of all 25 amounts that Defendants charged to Plaintiffs’ and ARL Class members’ credit cards, debit 26 cards, or third-party payment accounts during the four years preceding the filing of this 27 Complaint and continuing until Defendants’ statutory violations cease” (Compl. ¶ 46), and 28 damages “[f]or three times the sum solicited, pursuant to Civil Code § 1716(g),” (Compl. 7 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.8 Page 8 of 11
1 at p. 17, Prayer), as well as injunctive relief, attorneys’ fees and costs. (Compl. at pp. 17- 2 18, Prayer for Relief.) Plaintiffs do not plead a specific amount of damages. 3 25. The amount sought for the proposed ARL Class alone exceeds $5,000,000, 4 exclusive of interest and costs. Again, the proposed ARL Class includes “[a]ll individuals 5 in California” who (in the last four years) were enrolled by Defendants “in an automatic 6 renewal program or continuous service program and had a credit card, debit card, and/or a 7 third-party payment account charged by Defendants as part of such program.” (Compl. ¶ 8 36.) Although Defendants disagree with Plaintiffs’ characterization of its subscriptions as 9 involving an “automatic renewal program” or a “continuous service program” as defined 10 by California’s ARL and disagree that there has been any violation of the ARL, the 11 Complaint asserts that both Arnold and Nakai are covered by this proposed class (Compl. 12 ¶¶ 25, 32), and they assume that HMM’s various subscription methods and magazines are 13 covered by this proposed class definition. (Id. ¶¶ 33-34, 41.) Plaintiffs also expressly seek 14 a 100% refund as to the ARL and UCL claims, alleging that “Plaintiffs and ARL Class 15 members are entitled to restitution of all amounts that Defendants charged to Plaintiffs’ and 16 ARL Class members’ credit cards, debit cards, or third-party payment accounts during the 17 four years preceding the filing of this Complaint….” (Compl. ¶¶ 46, 66.) Based on these 18 allegations and Defendants’ business records, the amount Plaintiffs are seeking as a 100% 19 refund just for members of the proposed ARL Class greatly exceeds $5,000,000. 20 26. Plaintiffs’ claim for attorneys’ fees must also be considered when calculating 21 the amount in controversy under CAFA. See, e.g., Galt G/S v. JSS Scandinavia, 142 F.3d 22 1150, 145 (9th Cir. 1998); Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 1000 (9th 23 Cir. 2007), overruled on other grounds, Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 24 975, 977 (9th Cir. 2013). 25 27. Here, Plaintiffs seek attorneys’ fees under Cal. Civ. Code § 1780(d) and Cal. 26 Code Civ. Proc. § 1021.5. In other class-action cases brought under California’s auto- 27 renewal law, class counsel sought to recover attorneys’ fees awards of $1.6 million and $2.3 28 8 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.9 Page 9 of 11
1 million. See, e.g., Noll v. eBay, Inc., 309 F.R.D. 593, 612 (N.D. Cal. 2015); Williamson v. 2 McAfee, Inc., No. 5:14-CV-00158-EJD, 2017 WL 6033070, at *2 (N.D. Cal. Feb. 3, 2017). 3 28. The additional categories of relief Plaintiffs seek further enlarge the amount in 4 controversy well beyond the $5,000,000 minimum under CAFA: 5 a. Plaintiffs’ claim for “damages in an amount equal to three times the sum 6 solicited by Defendants” from Nakai and members of the proposed False 7 Invoice Class; and 8 b. Plaintiffs’ claim for injunctive relief, which, if successful, would likely 9 require Defendants to incur substantial costs in order to, among other 10 things, revise their advertising materials, order forms, and customer 11 processes. 12 29. Thus, the amount Plaintiffs have placed in controversy substantially exceeds 13 the $5,000,000 threshold. 14 D. Diversity of Citizenship. 15 30. CAFA’s minimum diversity requirement is satisfied when at least one putative 16 class member is a citizen of a state different from any defendant. 28 U.S.C. § 1332(d)(2). 17 31. For diversity purposes, a person is a “citizen” of the state in which he or she is 18 domiciled. Gilbert v. David, 235 U.S. 561, 569 (1915); Kanter v. Warner-Lambert Co., 265 19 F.3d 853, 857 (9th Cir. 2001). Each Plaintiff alleges she is a citizen of the State of 20 California. (Compl. ¶¶ 2-3.) 21 32. For diversity purposes, a corporation “shall be deemed a citizen of any State 22 by which it has been incorporated and of the State where it has its principal place of 23 business.” 28 U.S.C. § 1332(c)(1). To determine a corporation’s principal place of 24 business, courts apply the “nerve center” test, which deems the principal place of business 25 to be the state in which the corporation’s officers direct, control, and coordinate the 26 corporation’s activities. Hertz Corp. v. Friend, 559 U.S. 77, 91 (2010). A corporation’s 27 principal place of business will typically be where the corporation maintains its 28 headquarters. Id. at 81. 9 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.10 Page 10 of 11
1 33. Plaintiffs allege HMM is incorporated in the State of Delaware (Compl. ¶ 5). 2 HMM’s principal place of business is in New York, New York, thus making it a citizen of 3 Delaware and New York. 4 34. Plaintiffs allege CDS is incorporated in the State of Iowa (Compl. ¶ 6). CDS’s 5 principal place of business is in Des Moines, Iowa, thus making it a citizen of Iowa. 6 35. Because neither Plaintiff Arnold nor Nakai is a citizen of Delaware, New York, 7 or Iowa, and because neither HMM nor CDS is a citizen of California, at least one putative 8 class member is diverse from a defendant and CAFA’s minimal diversity requirement is 9 met. 10 36. Doe defendants are disregarded when determining diversity jurisdiction for 11 removal. 28 U.S.C. § 1441(b)(1) (“In determining whether a civil action is removable on 12 the basis of the jurisdiction under section 1332(a) of this title, the citizenship of defendants 13 sued under fictitious names shall be disregarded.”); see Aguilar v. McKesson Corp., No. 14 1:16-CV-00308-LJO-SKO, 2016 U.S. Dist. LEXIS 61342, at *5-6 (E.D. Cal. May 6, 2016) 15 (“the citizenship of the unidentified Doe defendants is immaterial for determining diversity 16 jurisdiction.”). 17 37. Furthermore, all Defendants consent to the removal of this case to federal court 18 under CAFA. 19 NO ADMISSION 20 38. By this filing, Defendants do not admit any liability to Plaintiffs or to the 21 putative class members they seek to represent, concede the accuracy of Plaintiffs’ 22 allegations, admit Plaintiffs are adequate class representatives for the putative class they 23 seek to represent, or concede Plaintiffs or the putative class members are entitled to any of 24 the relief sought in the Complaint, or any relief of any kind. Defendants also in no way 25 admit the instant action satisfies the requirements for class certification. 26 /// 27 /// 28 /// 10 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1 Filed 10/10/19 PageID.11 Page 11 of 11
1 CONCLUSION 2 39. As Defendants have shown in this Notice of Removal and supporting 3 documents, this lawsuit meets CAFA’s requirements. Wherefore, the State Court Action is 4 hereby removed to this Court from the Superior Court of the State of California, County of 5 San Diego. 6 7 Respectfully submitted, 8 Dated: October 10, 2019 GREENBERG TRAURIG, LLP 9 By: /s/ Robert J. Herrington 10 Robert J. Herrington 11 Attorneys for Defendants Hearst Magazine Media, Inc. and CDS Global, Inc. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 NOTICE OF REMOVAL FROM STATE COURT ACTIVE 46478585v1 Case 3:19-cv-01969-BEN-MDD Document 1-2 Filed 10/10/19 PageID.13 Page 1 of 19
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