United States District Court, D. Oregon, Eugene Division
OPINION AND ORDER
Aiken, United States District Judge
William Wardlow is an Oregon citizen and an attorney.
Defendant U-Haul International, Inc. is a business
incorporated in Nevada with its primary business location in
Arizona. Plaintiff filed suit in Deschutes County Circuit
Court alleging intentional and negligent misrepresentations
and unlawful trade practice by defendant. Defendant removed
the case to federal court based on diversity jurisdiction
under 28 U.S.C. § 1332(a). Plaintiff moves for an order
remanding this case to state court, (doc. 10) Defendant
subsequently moved to dismiss the complaint or, in the
alternative, stay proceedings and compel arbitration, (doc.
reasons set forth below, plaintiffs Motion to Remand is
DENIED, and defendant's Motion to Stay and Compel
Arbitration is GRANTED.
case arises from a dispute over a trailer rental. On May 26,
2016, plaintiff called defendant's office in Port
Angeles, Washington to inquire about the availability of a
6' x 12' trailer. After confirming the availability
of the trailer, plaintiff made a reservation to rent the
trailer for May 29, 2016, through defendant's online
portal. Plaintiff drove with his family to Port Angeles,
Washington on May 27, 2016. On May 28, 2016, plaintiff
alleges that he received a call informing him that the
trailer he reserved was not available. Due to this
unavailability, plaintiff asserts that he had to rent and use
a smaller trailer on May 29, 2016. He alleges that this
forced him to make a second trip from Sunriver, Oregon to
Port Angeles, Washington to move items that would not fit on
the first trip. Plaintiff also alleges that items were left
behind and not moved due to the lack space in the trailer.
avers that he was initially unable to serve defendant in
Oregon because defendant's status with the Oregon
Secretary of State was "inactive, " and its
registered agent in Oregon declined to accept service.
Wardlow Decl. at ¶ 4. After failed attempts to
communicate with defendant's legal department, plaintiff
filed his First Amended Complaint listing defendant's two
entities in Arizona and Oregon alleging intentional and
negligent misrepresentations and unlawful trade practice in
Deschutes County Circuit Court. After plaintiff filed a
Second Amended Complaint ("SAC"), defendant removed
the case to federal court based on diversity jurisdiction.
filed the present motion to remand, alleging that there is no
diversity jurisdiction between the parties. Defendant
subsequently moved to dismiss or, in the alternative, stay
proceedings and compel arbitration.
defendant may remove an action filed in state court to
federal court if there is diversity or federal question
jurisdiction. 28 U.S.C. § 1441(a), (b). If the federal
court's jurisdiction is based on diversity rather than a
federal question, the action "may be removed only if
none of the parties properly joined and served as defendants
is a citizen of the State in which such action is
brought." 28 U.S.C. § 1441(b)(2).
Plaintiff's Motion to Remand
motion to remand is proper for challenging removal. 28 U.S.C.
§§ 1447(c), 1448. Here, plaintiff challenges
defendant's removal arguing that this Court lacks subject
matter jurisdiction and that diversity jurisdiction has not
been established. For district courts to have original
subject matter jurisdiction over civil actions through
diversity, the matter in controversy should exceed $75, 000
exclusive of interest or costs and the parties must be
citizens of different states. 28 U.S.C. § 1332(a).
Amount in Controversy
motion to remand, plaintiff alleges that the amount in
controversy is under the required $75, 000 threshold. The
amount in controversy depends on the value of the
unaggregated individual claims, both for monetary damages and
equitable relief. In re Ford Motor Co./Citibank (S.D.),
N.A., 264 F.3d 952, 958-59 (9th Cir. 2001). Potential
punitive damages are also part of the amount in controversy.
Gibson v. Chrysler Corp., 261 F.3d 927, 946 (9th
Cir. 2001). Where a statute authorizes an award of attorney
fees, the fees are part of the amount in controversy.
Gait G/S v. JSS Scanimma, 142 F.3d 1150, 1155-56
(9th Cir. 1998). The Ninth Circuit has not definitively ruled
whether prospective, unaccrued attorney fees are part of the
amount in controversy when a case is removed. Gonzales v.
CarMax Auto Superstores, LLC, 840 F.3d 644, 649 n.2 (9th
Cir. 2016). Thus, I examine whether the value of plaintiffs
unaggregated claim exceeds the jurisdictional threshold.
amounts proffered for compensatory and statutoiy damages are
not in controversy. Plaintiff requests compensatory damages
in the amount of $1, 400. Plaintiff also prays for statutory
damages of $200 for each of defendant's alleged
violations of O.R.S § 646.608. Plaintiff alleges 44
distinct violations of the statute, meaning that the total
request for statutory damages is $8, 800 (44 violations times
$200 per violation).
look to plaintiffs potential punitive damages. Oregon law
does not allow the pleading of punitive damages in an initial
complaint. O.R.S. § 31.725. However, despite
Oregon's punitive damages pleading requirements, federal
courts may consider the potential for punitive damages when
determining the amount in controversy. Gibson, 261
F.3d at 946; See also Culpepper v. Wells Fargo Bank,
N.A., 2012 WL 3779038 (D. Or. 2012).
reviewing awards for punitive damages for unlawful trade
practices, Oregon courts have approved ratios of 3.9:1
between the punitive damage award and the economic damage
award. See Allen v. Morgan Drive Away, Inc., HZ Or.
614, 615-16 (1975). I find that applying a ratio of 3.9:1 is
appropriate here though Oregon Courts have approved awards
involving much higher ratios. See Parrott v. Can
Chevrolet, Inc., 331 Or. 537, 564-65 (2001) (upholding a
punitive damage award that exceeded economic damages by a
ratio of 87:1); Lithia Medford LM, Inc. v. Yovan,
254 Or.App. 307, 328-29 (2012). (upholding a punitive damages
award that exceeded the economic damages by a 200:1 ratio)
plaintiffs compensatory and statutory damages applied to the
ratio of 3.9:1 yields $40, 800 in potential punitive damages
(total of compensatory and statutory damages multiplied by
consider the amount of plaintiffs attorney fees. When an
underlying statute authorizes an award of attorneys'
fees, either with mandatory or discretionary language, such
fees may be included in the amount in controversy,
Missouri State Life Insurance Company v. Jones, 290
U.S. 199, 202 (1933); Gait G/Sv. JSS Scandinavia,
142 F.3d 1150, 1156 (9th Cir. 1998).
plaintiff seeks an award of pre-removal attorney fees based
on Rule 11 of the Federal Rules of Civil Procedure. While
preserving arguments as to the reasonableness of plaintiffs
fee expenditures or the merit of any of plaintiff s claims,
defendants do not dispute the inclusion of pre-removal
attorneys' fees in assessing the amount in controversy
requirement. Therefore, pre-removal attorneys' ...