District Court (Cal.) Addresses How to Value “Public Injunctive Relief” Claims for Purposes of Removal Jurisdiction

In Enriquez v. Sirius XM Radio, Inc., No. 1:21-CV-1240 AWI BAK, 2022 U.S. Dist. LEXIS 178999, at *13-14 (E.D. Cal. Sep. 30, 2022), Judge Ishii remanded a UCL public injunctive relief claim for lack of sufficient monetary controversy to support removal jurisdiction.

Much of SXM’s argument depends on valuing the injunction from its perspective, i.e. the cost of complying with the injunction with respect to all consumers/customers. To be sure, the general rule is that an injunction can be valued from either Enriquez’s perspective or SXM’s perspective. As both sides recognize, however, there is an exception in class action lawsuits.  In a class action that is not governed by CAFA, the “either viewpoint rule” does not apply (unless the class is uniting to enforce a single title or right in which they have a common and undivided interest) and the amount in controversy is based on the benefit to each individual plaintiff and not on the aggregate cost of compliance to the defendant as to all class members. Kanter v. Warner-Lambert Co., 265 F.3d 853, 859 (9th Cir. 2001); In re Ford, 264 F.3d at 959; Snow v. Ford Motor Co., 561 F.2d 787, 790-91 (9th Cir. 1977); Jack v. Ring, 553 F.Supp.3d 711, 716-18 (N.D. Cal. 2021); Beylerian v. Hillstone Rest. Grp., Inc., 2021 U.S. Dist. LEXIS 89904, *9-*10 (C.D. Cal. May 10, 2021). This prohibition includes excluding a defendant’s fixed administrative costs of compliance from the amount in controversy. See In re Ford, 264 F.3d at 960-61; Doe v. Aetna, Inc., 2018 U.S. Dist. LEXIS 57771, *18-*20 (N.D. Cal. Apr. 4, 2018). The rationale behind this exception is based on the Supreme Court’s prohibition in Snyder v. Harris, 394 U.S. 332, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969) against class action plaintiffs aggregating the amounts of their separate and distinct clams to meet the amount in controversy. See Kanter, 265 F.3d at 859; Snow, 561 F.2d at 790-91. The “defendant’s viewpoint approach” of examining the cost to the defendant of complying with an injunction as to the entire class would be the same as allowing the use of aggregation and thus, contrary to Snyder. See Kanter, 265 F.3d at 859; Snow, 561 F.2d at 791.  It is true that this is not a class action. Nevertheless, Enriquez is only pursuing public injunctive relief under the UCL and CLRA. That is, he seeks injunctive relief that will provide meaningful benefit primarily to California consumers and subscribers. See Capriole v. Uber Techs., Inc., 7 F.4th 854, 869 (9th Cir. 2021; McGill v. Citibank, N.A., 2 Cal.5th 945, 955, 216 Cal. Rptr. 3d 627, 393 P.3d 85 (2017); Maldonado v. Fast Auto Loans, Inc., 60 Cal.App.5th 710, 717, 275 Cal. Rptr. 3d 82 (2021). Courts that have examined the issue generally find that because such UCL and CLRA claims seek relief on behalf of numerous individuals, the claims are sufficiently akin to class actions that the prohibition against aggregation and use of the “either viewpoint rule”/”defendant viewpoint rule” will apply. See Doe, 2018 U.S. Dist. LEXIS 57771 at *12-*14; Hanan v. Ford Motor Co., 2003 U.S. Dist. LEXIS 14038, *4-*7 (N.D. Cal. Aug. 4, 2003); Ecker v. Ford Motor Co., 2002 U.S. Dist. LEXIS 26229, *10-*11 (C.D. Cal. Nov. 12, 2002); Boston Reed Co. v. Pitney Bowes, Inc., 2002 U.S. Dist. LEXIS 11683, *12-*16 (N.D. Cal. June 20, 2002); Surber v. Reliance Nat’l Indem. Co., 110 F.Supp.2d 1227, 1233 (N.D. Cal. 2000); Phipps v. Praxair, Inc., 1999 U.S. Dist. LEXIS 18745, *10-*18 (S.C. Cal. Nov. 12, 1999); but see Myers v. Merrill Lynch & Co., Inc., 1999 U.S. Dist. LEXIS 22642, *16 (N.D. Cal. Aug. 23, 1999); Mangini v. R.J. Reynolds Tobacco Co., 793 F.Supp. 925, 928 (N.D. Cal. 1992). After consideration, the Court agrees with this majority approach. As a result, if the rights at issue are not single or unified, then the value of the injunction is based on the nature of the right asserted by Enriquez. See Snow, 561 F.2d at 790; Boston Reed Co., 2002 U.S. Dist. LEXIS 11683 at *17-*18. Further, SXM’s fixed administrative costs for complying with the injunction cannot be considered for purposes of the amount in controversy. See In re Ford, 264 F.3d at 960-61; Doe, 2018 U.S. Dist. LEXIS 57771 at *18-*20.   Here, SXM does not argue that Enriquez and California consumers/subscribers have a single unified interest in its marketing and rebate practices. Although there is common conduct by SXM, Enriquez and each consumer or subscriber would be harmed individually. There is nothing before the Court that suggests that the rights at issue are anything other than individual “non-unified” rights. Therefore, the costs of the injunction to SXM cannot be aggregated and the administrative costs to SXM cannot be considered. See Kanter, 265 F.3d at 859; In re Ford, 264 F.3d at 960-61; Snow, 561 F.2d at 790-91; Doe, 2018 U.S. Dist. LEXIS 57771 at *18-*20; Doe, 2018 U.S. Dist. LEXIS 57771 at *16-*20; Hanan, 2003 U.S. Dist. LEXIS 14038 at *4-*7; Ecker, 2002 U.S. Dist. LEXIS 26229 at *10-*11; Boston Reed Co., 2002 U.S. Dist. LEXIS 11683 at *12-*16; Surber, 110 F.Supp.2d at 1233; Phipps, 1999 U.S. Dist. LEXIS 18745, *12-*13. Without aggregation and without considering administrative costs, SXM must show that the value to Enriquez of receiving appropriate rebate information, paying a rebated rate, and not being subject to false statements regarding rebates would exceed $75,000. See Snow, 561 F.2d at 790-91; Boston Reed Co., 2002 U.S. Dist. LEXIS 11683 at *17-*18; Phipps, 1999 U.S. Dist. LEXIS 18745 at *12-*13. SXM has not done this. Instead, SXM focuses largely on the administrative costs that an injunction would have on its national business.2 There is nothing that refutes the assertion that the value of the injunction to Enriquez would likely be about $15 per month. Enriquez is correct that it would be many years (that would likely exceed his lifespan) before he realized $75,000 worth of benefit from the requested injunction. Thus, SXM simply has not shown that the nature of the right being asserted has a value greater than $75,000 to Enriquez.

The District Court found that the attorneys’ that might be available were not sufficient, either.

There is no dispute that attorneys’ fees are available to Enriquez if he prevails in this case. However, for this UCL and CLRA case which seeks only public injunctive relief and does not vindicate a single unified right, attorneys’ fees cannot be aggregated for purposes of the amount in controversy; rather, only Enriquez’s pro rata share of the fees, i.e. his share of the fees of the California consumers/subscribers who would benefit from the public injunction, may be considered. See Doe, 2018 U.S. Dist. LEXIS 57771 at *22-*23; Boston Reed Co., 2002 U.S. Dist. LEXIS 1168 at *20; Phipps, 1999 U.S. Dist. LEXIS 18745 at *12-*13.   Here, SXM argues that, based on other fee applications, Enriquez’s counsel would likely seek an hourly rate of $500 per hour, that it would take only 150 hours at this rate to reach $75,000, and that in a prior cases Enriquez’s counsel attempted to bill over 250 hours for work on two motions to dismiss. However, among other concerns,3 none of this evidence addresses Enriquez’s pro rata share of any fees. Therefore, it is unknown what Enriquez’s pro rata share of the attorneys’ fees would be. Because the Court resolves all doubt and ambiguity concerning attorneys’ fees against SXM, the pro rata share is less than $75,000 (and more likely than not, extremely less). See Lake, 14 F.4th at 1000; Geographic Expeditions, 599 F.3d at 1107; Gaus, 980 F.2d at 566.