Llamas v. Everon

Background

Everon, LLC removed this putative class action from state court to federal court. Removal is the process of transferring a case from state court to federal court. Everon argued that the amount in controversy—the value of the claims potentially at stake—exceeded the $75,000 threshold for federal jurisdiction based on diversity of citizenship. It estimated Erika Llamas’s actual damages at $64,773.36 and the total potential attorney-fee award at $198,655.

The complaint did not specify the size of the proposed class. The court found that the only reasonable inference was that the class had far more than 20 members. The court noted that, even assuming a class of only 20 members and accepting Everon’s damages estimate, the jurisdictional minimum would not be met if attorney fees were divided among the class members. In that example, the fees attributable to each member would be $9,932.75, producing a total of $74,706.11 for Llamas’s damages and allocated fees.

Jurisdictional Analysis

The court ordered supplemental briefing on whether all potential attorney fees for a certified class could count toward the amount in controversy or whether only the fees attributable to the named plaintiff could be considered. Everon argued that Green v. Flowers Bakeries Sales of Norcal, LLC was wrongly decided or should not be followed. Green held that potential attorney fees must be apportioned among class members under Ninth Circuit authority.

The court acknowledged that Green was not controlling because it was a district court decision, but found it persuasive. Everon relied on the Supreme Court’s decision in Exxon Mobil Corporation v. Allapattah Services, Inc., which held that legislation expanding supplemental jurisdiction had overruled part of Zahn v. International Paper Co. The court explained that the portion of Zahn displaced by that legislation required every class member to satisfy the jurisdictional amount. According to the court, Exxon did not hold that a named plaintiff could count attorney fees potentially recoverable for the entire class toward the amount in controversy for the named plaintiff’s own claims.

The court also rejected Everon’s argument that fees should not be apportioned because the class might never be certified. The court stated that the possibility of noncertification did not change the analysis. Everon did not contend that federal jurisdiction existed if the attorney-fee claim had to be apportioned.

Disposition

The court granted Llamas’s motion to remand. The action was remanded to Alameda Superior Court. The order resolved the federal court’s removal-jurisdiction question and did not decide the merits of the underlying claims.