United States District Court, D. New Jersey
ALICIA GARCIA, and PRISCILA DOMINGUEZ, on behalf of themselves and others similarly situated, Plaintiffs,
TEMPOE, LLC, TEMPOE NEW JERSEY, LLC, WHYNOT LEASING, LLC, BUY AND SAVE FURNITURE, INC., CLASSIC FURNITURE CORP., and JOHN DOE NEW JERSEY TEMPOE RETAILERS 1-100, Defendants.
REPORT AND RECOMMENDATION
DUNN WETTRE. United States Magistrate Judge.
matter comes before the Court on a motion by plaintiffs
Alicia Garcia and Priscila Dominguez to remand this action to
the Superior Court of New Jersey, Law Division, Essex County.
ECF No. 11. Defendant Tempoe, LLC ("Tempoe")
opposes the motion. ECF No. 16 United States District Judge
Susan D. Wigenton referred this motion to the undersigned for
a Report and Recommendation. Having considered the
parties' submissions, oral argument before the Court, and
for good cause shown, the Court recommends that
plaintiffs' motion be DENIED.
a putative class action alleging Defendant Tempoe's
rent-to-own contracts for furniture and appliances violate
New Jersey consumer protection laws. Complaint
("Compl."), ECF No. 1-3 ¶ 1. Tempoe, a
Delaware limited liability company that offers financing for
consumer goods, has relationships with various merchants
located in New Jersey and elsewhere throughout the United
States. Id. ¶ 2; Defendant Tempoe's
Opposition to Plaintiffs' Motion to Remand ("Def.
Opp."), ECF No. 16 at 3. Plaintiffs allege that
Tempoe's standard financing agreement is structured so
that a customer makes installment payments over the course of
several months, totaling about 90% of die retail price, after
which the customer has the option to purchase the product for
about 55% of the total price. Compl. ¶ 3. Plaintiffs
allege that this results in the "consumer paying
interest in excess of 175% APR to obtain ownership of the
goods, in violation of New Jersey's Criminal Usury
Statute." Id. Plaintiffs further allege
defendant characterizes these contracts as leases, rather
than a loan or installment sales contract, in an attempt to
circumvent usury and consumer protection laws. Id.
Alicia Garcia alleges she purchased furniture from Defendant
Buy & Save Furniture, Inc. and agreed to finance the
purchase through WhyNotLeaselt in April 2014, making a down
payment of $615 and financing the balance of $1400. Compl.
¶ 44. After me transaction, defendant sent Garcia a
Consumer Lease Agreement (the "Lease Agreement"),
which indicates that after the lease period, the consumer had
the following options: to continue the lease with additional
payments, negotiate a price to purchase the property, or
return the furniture. Id. ¶¶ 50-53. Before
a scheduled payment, Garcia called Tempoe's customer
service to make a principal reduction payment and was told
that the contract was a lease, rather than a purchase, and
that to purchase the furniture, she would have to finish the
terms of the lease and make an additional payment.
Id. ¶ 65. Garcia did not authorize additional
payments on the furniture and, after Garcia defaulted, Tempoe
sold and assigned her purported debt of $3, 273 to a
third-party debt-collector. Id. ¶ 68. The debt
collector filed suit against Garcia on January 22, 2016,
which suit has been stayed pending the outcome of this
litigation. Id. ¶¶ 69-70. Plaintiff
Priscila Dominguez alleges similar facts against defendants.
See Id. ¶¶ 74-101.
initiated this putative class action in the Superior Court of
New Jersey, Law Division, Essex County on January 9, 2017.
See Compl, ECF No. 1-3. They assert the following
claims: violations of the New Jersey Consumer Fraud Act
("CFA") for which they seek declaratory and
equitable relief (Count I); violations of the Truth in
Consumer Contract, Warranty and Notice Act
("TCCWNA") (Count II); and for a declaratory
judgment as to the dispute resolution provisions of the Lease
March 30, 2017, defendant Tempoe removed the case to this
Court pursuant to the Class Action Fairness Act
("CAFA"), 28 U.S.C. § 1332(d). See
ECF No. 1. On May 1, 2017, plaintiffs filed a motion to
remand pursuant to the local controversy exception to CAFA,
28 U.S.C. § 1332(d)(4)(A). See Plaintiffs'
Motion to Remand ("PI. Mot.") ECF No. 11. Defendant
opposed the motion. See Def. Opp. After
Plaintiffs' reply brief called into question whether the
amount in controversy had been met, this Court ordered
supplemental briefing on that issue. ECF Nos. 27-28. This
Court heard oral argument on this motion on October 23, 2017.
to the enactment of CAFA, many class actions, even those
implicating matters of national importance, were excluded
from federal courts as a result of the complete diversity of
citizenship rule and the rule against aggregating claims.
See Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144,
148 (3d Cir. 2009). CAFA was passed to provide for
"[f]ederal court consideration of interstate cases of
national importance under diversity jurisdiction."
Id. at 149 (quoting CAFA § 2, Pub. L. 109-2,
119 Stat. 4)). Pursuant to CAFA, federal courts have subject
matter jurisdiction over any civil action where there are at
least 100 members in the putative class, minimal diversity is
established, and the aggregated amount in controversy exceeds
$5, 000, 000, exclusive of interest and costs. 28 U.S.C.
§ 1332(d). CAFA allows a defendant to remove a
qualifying class action from state to federal court.
Id. § 1453(b).
also contains two mandatory exceptions, §§
1332(d)(4)(A) & (B), "which require a district court
to decline jurisdiction when the controversy is uniquely
local and does not reach into multiple states."
Kaufman, 561 F.3d at 149. First, the
"home-state" exception, not at issue here, requires
a court to decline jurisdiction "when the primary
defendants and at least two-thirds of the members of the
putative classes are local." Id., Second, the
"local controversy" exception, which plaintiffs
argue applies to the instant matter, requires a court to
decline jurisdiction "if certain conditions are met,
including that a super-majority of the members of the
putative class and at least one significant defendant are
from the state in which the class action was originally
filed." Id. at 148 (citing 28 U.S.C. §
move to remand on the grounds that the local controversy
exception requires this Court to decline jurisdiction. Before
reaching the issue of the local controversy exception,
however, the Court must satisfy itself as a preliminary
matter that it has subject matter jurisdiction over this
action and that it was properly removed to this Court.
See Kaufman, 561 F.3d at 151 (explaining that even
though the parties did not dispute that CAFA's threshold
requirements were met, "[w]e must nevertheless satisfy
ourselves that federal subject matter jurisdiction exists in
the first instance"). In deciding the motion, the Court
notes that "no antiremoval presumption attends cases
invoking CAFA, which Congress enacted to facilitate
adjudication of certain class actions in federal court."
Dart Cherokee Basin Operating Co., LLC v. Owens, 135
S.Ct. 547, 554 (2014) (citations omitted).
Amount In Controversy
stated above, CAFA provides that district courts have subject
matter jurisdiction over cases where, inter alia,
the total amount in controversy exceeds $5 million, exclusive
of interest and costs. 28 U.S.C. § 1332(d)(2). In their
reply brief on this motion, plaintiffs suggested, while not
arguing explicitly, that the amount in controversy may not
have been satisfied. See ECF No. 18 at 9. With this,
the Court sua sponte ordered supplemental briefing
regarding this issue to examine whether there is the
requisite $5 million in controversy to confer subject matter
jurisdiction on this Court.
is now settled in this Court that the party asserting federal
jurisdiction in a removal case bears the burden of showing,
at all stages of the litigation, mat the case is properly
before the federal court." Frederico v. Home
Depot, 507 F.3d 188, 193 (3d Cir. 2007). Generally,
"[w]hen the plaintiffs complaint does not state the
amount in controversy, the defendant's notice of removal
may do so, " and should be accepted when not
"contested by the plaintiff or questioned by the
court." Owens, 135 S.Ct. at 551-53 (citing 28
U.S.C. § 1446(c)(2)(A)). Where there are contested
jurisdictional facts, "both sides submit proof and the
court decides, by a preponderance of the evidence, whether
the amount-in-controversy requirement has been
satisfied." Id. at 554. "It must appear to
a legal certainty that the claim is really for less than the
jurisdictional amount to justify dismissal."
Auto-Owners Ins. Co. v. Stevens & Ricci Inc.,
835 F.3d 388, 395 (3d Cir. 2016) (quoting St. Paul
Mercury Indent. Co. v. Red Cab Co., 303 U.S. 283, 288-89
(1938)). The amount in controversy is measured "not ...
by the low end of an open-ended claim, but rather by a
reasonable reading of the value of the rights being
litigated." Werwinski v. Ford Motor Co., 286
F.3d 661, 666 (3d Cir. 2002).
determine if a claim meets the jurisdictional amount under
§ 1332, the Court must examine what damages are
available under state law. Muchler v. Greenwald, 624
Fed.Appx. 794, 798 (3d Cir. 2015) (citing Packard v.
Provident Nat'l Bank,994 F.2d 1039, 1046 (3d Cir.
1993)). CAFA "tells the District Court to determine
whether it has jurisdiction by adding up the value of the
claim of each person who falls within the definition of [the]
proposed class and determine whether the resulting sum
exceeds $5 million." Standard Fire Ins, Co. v.
Knowles, 568 U.S 588, 592 (2013). "If the sum
exceeds $5 million by a preponderance of the evidence-after
the court's evaluation of the submitted proofs-the amount