/>iGreetings CIPAWorld!
Let’s talk Civ Pro. Class is in session and today’s lesson comes courtesy of the United States District Court for the Southern District of California. Picture this: DesignTechnica Corporation (“DTC”) gets slapped with 36 separate arbitration claims under the California Invasion of Privacy Act (“CIPA”). See Designtechnica Corp. v. Swigart L. Grp., APC, No. 24-CV-1054 W (AHG), 2024 U.S. Dist. LEXIS 222498 (S.D. Cal. Dec. 9, 2024). Thinking fast, they decided that federal court was their escape hatch. But spoiler alert—their jurisdictional math didn’t add up, and the case flunked Civil Procedure 101. Ouch.
This lawsuit involved DTC, the operator behind DigitalTrends.com and TheManual.com. At first glance, DTC’s strategy seemed airtight. DTC had clearly diverse parties (Oregon vs. California) and faced serious money in arbitration fees and statutory penalties. When they added it all up—$70,000 in filing fees plus $180,000 in potential damages. That’s over $250,000! Indeed that clears the federal jurisdiction bar of $75,000? Right?
Well, not so fast. Judge Whelan’s analysis shows why first-year civil procedure still matters. As such, the Court broke down the jurisdictional requirements step by step:
First, in Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994), the Court stressed that federal courts start with a presumption against jurisdiction. The burden was squarely on DTC to prove they belonged in federal court.
Next came the key teaching moment. Take note. Under Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 559 (2005), you need at least one claim that independently hits the $75,000 mark. You can’t just add up a bunch of smaller claims against different defendants unless they’re jointly and severally liable—which DTC never alleged.
The distinction between aggregated and individual claims was the court’s main focus. Aggregation can only occur in limited circumstances, like when a plaintiff faces joint liability for the same harm across multiple defendants. However, DTC’s arbitration claims were standalone cases, each with its own penalties and fees. The $75,000 threshold had to be met separately for each claim without joint liability—and none came close.
When the court ran the actual numbers, DTC’s case fell apart. Each individual claim only amounted to about $7,000 in potential fees and penalties. Game over.
Adding to the blow, DTC failed to provide alternative theories for meeting the threshold. Their Complaint relied on conclusory assertions, a mistake the Court flagged as insufficient under precedents like Calleros v. Rural Metro of San Diego, No. 3:17-cv-00686-CAB-BLM, 2017 WL 9854429, at *1 (S.D. Cal. Apr. 6, 2017). Simply stating you meet jurisdictional requirements doesn’t make it true—you need evidence.
The Court’s math lesson exposes the flaw in DTC’s strategy. They tried to treat 36 separate $7,000 claims as one big $250,000 case. But that’s not how diversity jurisdiction works. Without joint and several liability, each claim stands alone.
Reality check, anyone? Federal court isn’t always the golden ticket for avoiding arbitration or unfavorable state forums. The kicker? DTC didn’t even try to argue they met the threshold another way. They just stated in their Complaint that they cleared the bar. As Judge Whelan reminded us, you can’t establish jurisdiction with “threadbare recitals.”
Creative arithmetic won’t save you from basic civil procedure. As always,
Keep it legal, keep it smart, and stay ahead of the game.
Talk soon!
