Virgin Mobile Stopped Ringing At California Courts

Article by CAFA Law Blog

Previously published by CAFA Law Blog on 29 March 2012.

Heejn Lim v. Helio, LLC, 2012 WL 359304 (C.D. Cal. Feb. 2, 2012).

In this action, a District Court in California held that under the "preponderance of evidence" standard, it cannot require a stronger showing which would require a defendant to concede liability.

The plaintiff, Heejin Lim, filed this action in state court against the defendants Helio, LLC, Virgin Mobile USA, L.P., Virgin Mobile USA, Inc., and Helio, Inc., asserting individual and class claims on behalf of all residents of the United States who paid refundable deposits to Helio/Virgin Mobile who did not receive a refund of those deposits. Although several thousand customers nationwide were alleged to comprise the class, an amount in controversy was not pleaded.

The defendants removed this action to federal court under CAFA, 28 U.S.C. § 1332(d).

In support of the Notice of Removal, the defendants attached the declaration of Stephen F. Bunker declaring that more than $5 million in deposits were collected in connection with the Helio prepaid wireless service during the class period.

The plaintiff challenged federal jurisdiction under CAFA, arguing that because the Complaint challenged only those "deposits that were wrongfully withheld and not the total amount that was collected when accounts were opened," evidence that the defendants collected deposits in excess of $5 million alone was insufficient to satisfy the jurisdictional threshold.

The District Court denied the plaintiff's motion to remand.

The Court, relying upon the ratio in Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 397 (9th Cir.2010), noted that where, as here, "the complaint does not contain any specific amount of damages sought, the party seeking removal under diversity bears the burden of showing, by a preponderance of the evidence, that the amount in controversy exceeds the statutory amount." Under preponderance of the evidence standard, the ultimate inquiry is what amount is put 'in controversy' by the plaintiff's complaint or other papers, not what the defendant will actually owe for the actual number of violations that occurred, if any. (Editors' Note: see CAFA Law Blog analysis of Lewis posted on September 21, 2010.)

The Court found that the decision in Lewis was controlling in this case. In Lewis, the plaintiff sought recovery on behalf of defendant's customers who had been billed for certain premium services they had not...