Barakat v. Costco Wholesale Corporation

Background

Morhaf Barakat filed a personal-injury action against Costco Wholesale Corporation in San Mateo County Superior Court on January 8, 2020. He alleged that he slipped and fell on a liquid substance at a Costco store on February 11, 2019. His complaint asserted premises-liability and negligence claims and sought unspecified damages for lost wages, lost earning capacity, medical expenses, and general damages. It alleged that his injuries required significant recovery time and surgery, that he had not fully recovered, and that he might need additional surgeries.

Costco removed the case to federal court on April 2, 2020, invoking diversity jurisdiction under 28 U.S.C. § 1332. Costco argued that the removal was timely because it first learned on March 9, 2020, that the amount in controversy exceeded the $75,000 jurisdictional threshold. According to Costco, counsel discussed Barakat’s three prior surgeries, a $30,000 medical lien, a possible future fusion surgery, and Barakat’s counsel’s refusal to agree to limit damages to $75,000.

Barakat moved to remand, arguing that Costco should have known from the complaint, or at least from medical records received on February 12, 2020, that the case met the amount-in-controversy requirement. Barakat’s counsel said the records showed a laminectomy after the fall and an indication that future fusion surgery might be needed. Costco responded that the complaint was too general and that the medical records contained no billing information.

Legal standard

Under 28 U.S.C. § 1446(b)(1), a defendant generally has 30 days to remove a case after receiving the initial pleading if removability is clear from the pleading itself. If the initial pleading does not make the case removable, § 1446(b)(3) provides another 30-day period after the defendant receives an amended pleading, motion, order, or other paper from which removability can first be ascertained. The court applied Ninth Circuit precedent requiring the information to be clear and certain; a defendant does not have to investigate clues or speculate about whether the amount in controversy exceeds the jurisdictional threshold.

Court’s analysis

The court held that the complaint did not trigger the first 30-day removal period. The allegations about significant recovery time, surgery, incomplete recovery, and possible future surgeries were not specific enough to establish that the amount in controversy exceeded $75,000. Although the complaint identified categories of damages, it did not provide amounts or other details showing that those damages crossed the jurisdictional threshold.

The court also rejected Barakat’s argument concerning the medical records. The records did not contain billing information. Although they indicated that Barakat had undergone a laminectomy and might need future fusion surgery, Costco would have needed further inquiry to determine the cost of past and possible future treatment. Under the applicable Ninth Circuit rule, that need for further inquiry did not start the 30-day removal period.

Disposition

The court denied Barakat’s motion to remand. It also found the motion suitable for decision without oral argument, vacated the July 10, 2020 motion hearing, and moved the initial case management conference scheduled for that date to 2:00 p.m. The opinion does not decide the underlying premises-liability or negligence claims.