Escareno v. RPM Living

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JOE ESCARENO and JUSTIN Case No.: 3:26-cv-597-CAB-MMP MANSOUR, on behalf of themselves and 12 all others similarly situated, ORDER: 13 Plaintiffs, (1) GRANTING MOTION TO 14 v. REMAND, [Doc. No. 5]; and 15 RPM LIVING, LLC, (2) DENYING MOTION TO STRIKE, 16 Defendant. [Doc. No. 4], AND MOTION TO 17 DISMISS, [Doc. No. 3].

18 19 20 On December 24, 2025, Plaintiffs Joe Escareno and Justin Mansour filed a class 21 action against RPM Living, LLC (“RPM” or “Defendant”) in the San Diego County 22 Superior Court, alleging that RPM—their apartment management company—violated 23 several California statutes by hiding various “junk fees” until late in the apartment 24 application process. [See generally Doc. No. 1 (“Notice of Removal” or “NOR”), id. at 25 Doc. No. 1-2, Exhibit A (“Compl.” or “Complaint”).] RPM removed the case to federal 26 court alleging diversity jurisdiction under 28 U.S.C. § 1332(a). [NOR at 3.] Now before 27 the Court is Plaintiffs’ motion to remand the case back to state court for lack of subject 28 matter jurisdiction. [Doc. No. 5.] The motion has been fully briefed and the Court finds it 1 suitable for determination on the papers submitted and without oral argument. See CivLR 2 7.1(d)(1). For the reasons set forth below, the Court GRANTS the motion to remand. 3 I. BACKGROUND 4 RPM is an apartment management company with residential apartment properties 5 across the country. [Compl. ¶ 6.] Both Plaintiffs rented apartments at one of RPM’s 6 properties in San Diego. [Id. at ¶ 7.] Plaintiffs allege that RPM entices renters to begin 7 the application process by advertising a lower rent than the price a renter would ultimately 8 pay after mandatory “junk fees” for things like pest control or liability insurance. [Id. at 9 ¶¶ 6, 67.] Plaintiffs say that these “junk fees” were “not disclosed until deep in the 10 application process or, worse, until a prospective renter has a copy of the lease agreement 11 in his hands.” [Id. at ¶ 6.] The proposed class is “[a]ll California residents who rented an 12 apartment managed by RPM through RPM’s website or after viewing listings on RPM’s 13 website” for a specific period. [Id. at ¶ 73.] The Complaint seeks (1) injunctive relief to 14 stop RPM’s deceptive advertising and fee practices and (2) restitution—the amount and 15 kind of which is the subject of dispute in the motion to remand. 16 RPM removed the case to federal court on the basis of diversity jurisdiction under 17 28 U.S.C. § 1332(a). RPM’s NOR alleged that there is complete diversity of citizenship 18 between the parties and the amount in controversy exceeds $75,000.00. [NOR at 3.] To 19 reach the requisite amount in controversy, RPM included the “junk fees” and the monthly 20 rent each named Plaintiff paid during their lease period. Plaintiff Mansour paid at least 21 $1,260 in “junk fees” and $43,200 in rent over a 12-month lease. [NOR at ¶ 19–20.] 22 Plaintiff Escareno paid at least $2,205 in “junk fees” and $82,950 in rent over a 21-month 23 lease. [Id.] 24 II. LEGAL STANDARD 25 A suit filed in state court may be removed to federal court by the defendant if the 26 federal court would have had original subject matter jurisdiction over that suit. 28 U.S.C. 27 § 1441(a); Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 977–78 (9th Cir. 2013). 28 Usually, “[t]he removal statute is strictly construed, and any doubt about the right of 1 removal requires resolution in favor of remand.” Moore-Thomas v. Alaska Airlines, Inc., 2 553 F.3d 1241, 1244 (9th Cir. 2009). 3 When challenged, a defendant must show by a preponderance of the evidence that 4 the amount-in-controversy exceeds $75,000. 28 U.S.C. § 1332(a); Sanchez v. Monumental 5 Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). “Under the preponderance of the evidence 6 standard, if the evidence submitted by both sides is balanced, in equipoise, the scales tip 7 against federal-court jurisdiction.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1199 8 (9th Cir. 2015). 9 III. DISCUSSION 10 The parties do not dispute the citizenship requirement of § 1332(a), and based on the 11 filings, the Court finds that requirement met. The only jurisdictional dispute concerns the 12 amount in controversy and whether Plaintiffs’ Complaint should be read to encompass the 13 Plaintiffs’ rent because without this amount, the “junk fees” Plaintiffs paid would total only 14 $3,465, far short of the $75,000 required by § 1332(a). As explained below, the Court 15 finds that RPM has not met its burden to demonstrate by a preponderance of the evidence 16 that the amount in controversy requirement is satisfied and so GRANTS the motion to 17 remand. 18 A. Plaintiffs’ Complaint Did Not Seek A Refund of the Initially Advertised Rent 19 20 RPM argues that the inclusion of Plaintiffs’ rent in the amount in controversy is 21 warranted because the Complaint alleges that RPM’s tactics resulted in “injury in fact and 22 lost money by spending time and money they would not have spent but for [RPM’s] 23 misleading drip pricing.” [Compl. ¶¶ 89, 94.] Plaintiffs counter that a plain reading of the 24 Complaint does not warrant including the initially advertised rent in the AIC, particularly 25 because the thrust of the litigation is that Plaintiffs were willing to pay the initially 26 advertised price before the addition of “junk fees.” [Doc. No. 5-1 at 8.] The Court agrees 27 with Plaintiffs. 28 1 Plaintiffs’ Complaint is clear that they do not take issue with paying the initially 2 advertised price for their apartments, before any “junk fees” were tacked on. [E.g., Compl. 3 ¶ 68 (“Plaintiffs believed the initially listed rents would be the actual rents they would 4 pay.”), ¶ 70 (“Plaintiffs relied on the up-front price in comparing units . . . and in their 5 initial rental decisions.”).] In other words, if Plaintiffs are compensated for the “junk fees” 6 they paid and RPM is prevented from charging such fees moving forward, Plaintiffs will 7 be made whole. Tellingly, the Court also notes the following question the Complaint 8 asserts is common to the proposed class: “whether Plaintiffs are entitled to restitution of 9 the deceptively extracted junk fees[.]” [Compl. at ¶ 76(e).] No similar question is listed 10 with regard to restitution for the initially advertised rent. 11 B. RPM Cannot Assert a New Basis for Removal Jurisdiction 12 In the event the Court did not find diversity jurisdiction, RPM “requests to modify 13 the Notice of Removal through this Opposition, or seek leave to amend the removal notice, 14 to establish that removal was also proper under CAFA [the Class Action Fairness Act].” 15 [Doc. No. 8 at 10.] Binding Ninth Circuit precedent prevents this relief: 16 A defendant seeking to remove a case to federal court must do so within thirty days of being served with the complaint. See 28 U.S.C. § 1446(b). 17 The Notice of Removal ‘cannot be amended to add a separate basis for 18 removal jurisdiction after the thirty day period.’

19 ARCO Env’t Remediation, L.L.C. v. Dep’t of Health & Env’t Quality of Montana, 213 F.3d 20 1108, 1117 (9th Cir. 2000) (quoting O’Halloran v. Univ. of Washington, 856 F.2d 1375, 21 1381 (9th Cir. 1988)). 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 1 IV. CONCLUSION 2 Based on the foregoing, RPM has not met its burden to establish this Court’s 3 || diversity jurisdiction under 28 U.S.C. § 1332(a). Plaintiffs’ motion to remand is 4 ||GRANTED. As a result, Plaintiffs’ motion to dismiss, [Doc. No. 3], and RPM’s motion 5 || to strike portions of Plaintiffs’ Complaint, [Doc. No. 4], are DENIED. 6 It is SO ORDERED. 7 Dated: April 16, 2026 Hon. Cathy Ann Bencivengo 8 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28