Bricine Mitchell v. Continental Casualty Insurance

Background

Bricine Mitchell filed a putative class action against Continental Casualty Insurance in state court. The complaint alleges violations of California Business and Professions Code sections 16600, 16600.1, 16600.5, and 17200. Mitchell challenges Continental’s use of non-compete and/or non-solicitation clauses, arguing that they are void under California law.

Continental removed the case to federal court based on diversity jurisdiction, rather than under the Class Action Fairness Act. The parties agree that Mitchell is a California citizen and Continental is an Illinois citizen. The complaint did not state a specific amount in controversy. Continental argued that attorney’s fees and the cost of complying with the requested injunction would exceed $75,000.

Legal standard

Federal diversity jurisdiction requires complete diversity of citizenship and an amount in controversy exceeding $75,000. The defendant seeking removal bears the burden of showing that federal jurisdiction exists. When the complaint does not clearly establish the amount in controversy, the defendant must prove by a preponderance of the evidence that the amount exceeds $75,000.

Attorney’s fees may count toward the amount in controversy, but the removing defendant must support that assertion with evidence comparable to the evidence used at the summary-judgment stage. In a putative class action, potential attorney’s fees must be attributed proportionally among class members.

The court also recognized that the cost of complying with an injunction may count toward the amount in controversy. However, the defendant must provide evidence supporting the claimed cost.

Court’s analysis

Continental argued that Mitchell’s attorney’s fees would exceed $75,000 based on counsel’s asserted $400 hourly rate, the median time from filing to civil trial in the Northern District of California, and an estimate that counsel would spend at least four hours per month on the case. The court rejected this showing because California law allows attorney’s fees to any prevailing employee, while Mitchell seeks to represent a class. Continental therefore had not shown that the fees attributable proportionally to the class members would exceed $75,000.

Continental also argued that complying with the requested injunction would cost more than $75,000. The proposed injunction would require Continental to issue individualized notices to current and former employees and refrain from including non-compete or non-solicitation provisions in future agreements. The court found that Continental supplied no evidence that identifying, reviewing, and contacting affected employees, preparing notices, and distributing them would cost more than $75,000. Continental also cited no authority showing that these compliance costs should not be treated proportionally among class members.

Disposition

The court concluded that Continental’s notice of removal did not satisfy its burden of showing that the amount-in-controversy requirement was met. Judge Jacqueline Scott Corley ordered Continental to show cause, on or before December 8, 2025, why the action should not be remanded to state court for lack of subject-matter jurisdiction. The opinion does not state that the case had already been remanded.