Ramon Elizarraz v. United Rentals North America, Inc. et al, No. 2:2018cv09533 - Document 25 (C.D. Cal. 2019)
Court Description: ORDER DENYING PLAINTIFFS MOTION TO REMAND 14 by Judge Otis D. Wright, II (lc)
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Ramon Elizarraz v. United Rentals North America, Inc. et al Doc. 25 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 12 RAMON ELIZARRAZ, individually, and on behalf of other members of the general public similarly situated, 13 14 15 16 17 Case 2:18-CV-09533-ODW (JC) ORDER DENYING PLAINTIFF’S MOTION TO REMAND [14] Plaintiff, vs. UNITED RENTALS, INC., a Delaware corporation, and DOES 1 through 100, inclusive, Defendants. 18 19 I. INTRODUCTION 20 Plaintiff Ramon Elizarraz (“Plaintiff”) brought this putative class action against 21 United Rentals, Inc. (“Defendant”). Plaintiff filed his Complaint on October 9, 2018 in 22 Los Angeles Superior Court alleging eight causes of action: (1) Unpaid Overtime; (2) 23 Unpaid Meal Period Premiums; (3) Unpaid Rest Period Premiums; (4) Unpaid 24 Minimum Wages; (5) Final Wages Not Timely Paid; (6) Non-Compliant Wage 25 Statements; (7) Unreimbursed Business Expenses; and (8) Unfair Competition/Unfair 26 Business Practices. (Compl. ¶¶ 42-98, ECF No. 2-1.) On November 9, 2018, Defendant 27 removed the case, claiming federal jurisdiction under the Class Action Fairness Act 28 Dockets.Justia.com 1 (“CAFA”), 28 U.S.C. § 1332(d)(2). The Court finds that jurisdiction exists under 2 CAFA and DENIES Plaintiff’s Motion to Remand. 1 II. 3 BACKGROUND a. Factual Background 4 5 Plaintiff brought a class action against Defendant on behalf of himself and the 6 class he seeks to represent (collectively “Plaintiff Class”). Plaintiff Class consists of all 7 current and former California-based hourly-paid or non-exempt employees employed 8 by Defendant within the State of California at any time during the period from four 9 years preceding the filing of the Complaint to final judgment in this case. (Compl. 10 ¶ 12.) Plaintiff is a citizen of California. (Compl. ¶ 5.) Defendant is a Delaware 11 Corporation. (Compl. ¶ 6.) Plaintiff alleges that Defendant hired Plaintiff and other 12 class members and classified them as hourly-paid, non-exempt employees, and failed 13 to compensate them for all hours worked, missed meal periods, and/or missed breaks. 14 (Compl. ¶ 18.) Plaintiff does not allege a specific number of violations, nor a specific 15 amount of damages, but he alleges that the aggregate claims are below the $5,000,000 16 threshold for federal jurisdiction. (Mot. to Remand (“Mot.”) 1, ECF No. 14.) b. Procedural History 17 18 Plaintiff’s complaint was filed in Los Angeles Superior Court on October 9, 2018. 19 (Compl., ECF No. 2-1.) On November 9, 2018, Defendant removed the case. (Notice 20 of Removal (“Notice”), ECF No. 2.) Plaintiff moved to remand on December 10, 2018. 21 (Mot.) This motion is now before the Court. III. 22 LEGAL STANDARD 23 Defendant removed this case pursuant to 28 U.S.C. § 1441, claiming that this 24 Court has original jurisdiction under CAFA, 28 U.S.C. § 1332(d)(2). CAFA allows for 25 federal jurisdiction over a purported class action when (1) there is an amount in 26 controversy (“AIC”) exceeding $5,000,000; (2) at least one putative class member is a 27 28 1 After carefully considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 2 1 citizen of a state different from defendant; and (3) the putative class exceeds 100 2 members. 28 U.S.C. § 1332(d)(2). Generally, removal statutes are strictly construed 3 against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 4 “Federal jurisdiction must be rejected if there is any doubt as to the right of removal in 5 the first instance.” Id. “[T]he burden of establishing removal jurisdiction remains . . . 6 on the proponent of federal jurisdiction.” Abrego Abrego v. Dow Chem. Co., 443 F.3d 7 676, 685 (9th Cir. 2006). “[A] defendant’s notice of removal need include only a 8 plausible allegation that the amount in controversy exceeds the jurisdictional 9 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 10 (2014). If the alleged AIC is disputed by the plaintiff, “both sides submit proof and the 11 court decides, by a preponderance of the evidence, whether the amount-in-controversy 12 requirement has been satisfied.” Id. 13 Under CAFA, attorney’s fees are properly included in the calculation of the AIC. 14 Jasso v. Money Mart Express, Inc., No. 11-CV-5500 YGR, 2012 WL 699465 at *6 15 (N.D. Cal. Mar. 1, 2012) (citing Guglielmino v. McKee Foods Corp., 506 F.3d 696, 700 16 (9th Cir. 2007)). 17 IV. DISCUSSION 18 The parties do not dispute that the Plaintiff Class is made of more than 100 19 individuals and that the parties are minimally diverse as required by CAFA. Thus, the 20 only issue is whether Defendant has demonstrated by a preponderance of the evidence 21 that the AIC is greater than $5,000,000. For the reasons that follow, the Court finds 22 that Defendant has met its burden, and this Court has jurisdiction under CAFA. 23 a. Meal and Rest Period Claims 24 Defendant calculated the amount owed in penalties for missed meal and rest 25 period violations at $16,131,402, which is based on a violation rate of 50% for missed 26 meal periods and 25% for missed rest breaks. (Mot. 9–10.) In other words, Defendant 27 assumed Plaintiff Class missed 2.5 out of 5 meal periods per week and 2.5 out of 10 28 missed rest periods per week. (Id.) Plaintiff contests this calculation and argues that 3 1 the Court should calculate the amount of damages in terms of the number of workdays 2 per workweek an employee is deprived of meal and rest breaks. (Id. at 13.) Plaintiff 3 contends that Defendant’s AIC calculation for meal and rest period violations is 4 “implausible because it is based entirely upon unsupported assumptions.” (Id. at 12.) 5 According to Plaintiff, these unsupported assumptions are due to Defendant’s failure 6 “to provide competent evidence of the hourly rate of pay and workweeks,” instead 7 basing its AIC calculation on “unverified figures.” 8 contends that the “pattern and practice” language from the Complaint does not support 9 the violation rates relied upon by Defendant. (Id.) (Id.) Additionally, Plaintiff 10 Defendant relied upon the “pattern and practice” language in the Complaint, and 11 the Declaration of Cary Elliott in determining the AIC. (Notice 6; Decl. of Cary Elliott 12 (“Elliott Decl.”), ECF No. 5.) Mr. Elliott is a Senior Economist at an economics and 13 statistics consulting firm. (Elliott Decl. ¶ 1.) Mr. Elliott holds a Ph.D. in economics 14 with a primary focus on labor economics and specializes in applying advanced 15 statistical techniques to labor and employment litigation matters. (Id.) Mr. Elliott 16 asserts that he was provided payroll data files for current and former non-exempt 17 employees of Defendant for the period of October 1, 2014 through February 15, 2018. 18 (Id. ¶ 2.) These files contain information about employee work hours, earnings, dates 19 of employment, and locations. (Id.) For the period of October 9, 2014, through 20 February 15, 2018, Mr. Elliott testifies to such data as the average rate of pay for a 21 Defendant employee, the number of non-exempt employees employed by Defendant, 22 the number of workweeks those employees worked during this period, and the number 23 of non-exempt employees whose employment ended during this period. (Id. ¶¶ 3–5.) 24 Mr. Elliott additionally testifies that non-exempt employees of Defendant worked, on 25 average, about five days per week from October 9, 2014, to the present. (Id. ¶ 7.) 26 Defendant also submitted the Supplemental Declaration of Cary Elliott. 27 (Supplemental Decl. of Cary Elliott (“Elliott Supplemental Decl.”), ECF No. 16-1.) The 28 Supplemental Declaration provides additional information and updates calculations 4 1 made in Mr. Elliott’s original declaration. (Elliott Supplemental Decl. ¶ 3.) Mr. 2 Elliott’s Supplemental Declaration also explains the methodology behind each 3 calculation he used in estimating the AIC. (See generally Elliott Supplemental Decl.) 4 While Plaintiff contends that the language “pattern and practice” could “easily 5 be once every two weeks, once a month, or once every three months,” (Mot. 12), it is 6 entirely reasonable for Defendant to allege a 50% violation rate for missed meal periods 7 and a 25% violation rate for missed rest periods. Further, Defendant conservatively 8 alleged a 50% and 25% violation rate, and in any case numerous courts have found a 9 100% violation rate appropriate, which the Court will discuss herein. 10 Additionally, Plaintiff’s contention that Defendant fails to provide competent 11 evidence of the hourly rate of pay and workweeks is unfounded. At the current stage 12 of litigation, Defendant need not “produce business records setting forth the precise 13 number of employees in [the] putative class . . . and the precise calculation of damages 14 alleged to meet its burden regarding the amount in controversy.” Long v. Destination 15 Maternity Corp., No. 15CV2836-WQH-RBB, 2016 WL 1604968, at *6 (S.D. Cal. Apr. 16 21, 2016) (internal quotation marks omitted). See also Muniz v. Pilot Travel Centers 17 LLC, No. CIV. S-07-0325 FCD EFB, 2007 WL 1302504, at *4–5 (E.D. Cal. May 1, 18 2007) (“There is no obligation by defendant to support removal with production of 19 extensive business records to prove or disprove liability and/or damages . . . at this 20 premature (pre-certification) stage of the litigation.”). A defendant need only prove the 21 amount in controversy by a preponderance of the evidence and may do so by a 22 declaration or affidavit. Ray v. Wells Fargo Bank, N.A., No. CV 11-01477 AHM (JCx), 23 2011 WL 1790123, at *6 (C.D. Cal. May 9, 2011). Mr. Elliott established sufficient 24 foundation for his testimony. He is a senior economist, holds a Ph.D. in economics, 25 specializes in applying advanced statistical techniques to labor and employment 26 litigation matters, and was provided the relevant data in relation to this case. (Elliott 27 Supplemental Decl. ¶¶ 1–2.) The Declaration and the Supplemental Declaration of Cary 28 5 1 Elliott provide adequate evidence that by a preponderance of the evidence, the AIC 2 exceeds the jurisdictional threshold. 3 In his meal and rest period claims, Plaintiff alleges that “[a]s a pattern and 4 practice” Defendant required Plaintiff and Plaintiff Class to work during meal and rest 5 periods and failed to compensate Plaintiff and Plaintiff Class for work performed during 6 meal and rest periods. (Compl. ¶¶ 58–59, 67–68.) Based on this, Defendant assumes a 7 50% violation rate for the meal periods and a 25% violation rate for the rest periods. 8 (Notice 8.) Pursuant to the applicable Industrial Welfare Commission (IWC) Wage 9 Order and California Labor Code § 226.7(b), each class member is entitled to recover 10 one hour of pay for each work day that a meal period was not provided and also one 11 hour of pay for each work day that a rest period was not provided. 12 Numerous courts have found a 100% violation rate reasonable (i.e., missed meal 13 period and missed rest period every day), yet Defendant conservatively assumes a 50% 14 violation rate for the meal violations and a 25% violation rate for the rest period 15 violations. See Altamirano v. Shaw Indus., Inc., No. C-13-0939 EMC, 2013 WL 16 2950600, *11 (N.D. Cal. June 14, 2013) (100% rate approved when “meal break policy 17 resulted in non-exempt employees not receiving meal periods.”); Alvarez v. Limited 18 Express, LLC, No. 07CV1051 IEG (NLS), 2007 WL 2317125, at *3 (S.D. Cal. Aug. 8, 19 2007) (100% rate approved when plaintiff alleged rest period violations made it 20 “virtually impossible for defendant’s employees to take meal periods and rest breaks.”); 21 Muniz, 2007 WL 1302504, at *4 (100% rate approved when class members were “not 22 always provided” lawful meal or rest periods.). 23 Many courts, including this Court, have also found the conservative violation rate 24 of 50% proper. See Marquez v. Toll Glob. Forwarding (USA) Inc., No. 2:18-CV-03054- 25 ODW (ASx), 2018 WL 3046965, at *3 (C.D. Cal. June 19, 2018) (finding a 50% 26 violation rate reasonable where plaintiff alleged that defendant forced class members to 27 “often forego a meal period and/or work during their meal period . . . .”); Bryant v. NCR 28 Corp., 284 F. Supp. 3d 1147, 1151 (S.D. Cal. 2018) (finding a 60% violation rate for 6 1 the meal period claim and a 30% violation rate for the rest period claim proper where 2 the complaint offered no guidance as to the frequency of the violations alleging only 3 that Defendant had a “policy and practice” of meal and rest period violations. 4 “Defendant conservatively assumed the putative class members were not provided three 5 of the five meal periods and three of ten rest periods they were entitled to receive each 6 work week.”); Oda v. Gucci Am., Inc., Nos. 2:14-CV-7468-SVW (JPRx), 2:14-CV- 7 07469-SVW (JPRx), 2015 WL 93335, at *5 (C.D. Cal. Jan. 7, 2015) (finding 8 defendant’s assumption of a 50% violation rate reasonable where plaintiff’s complaint 9 alleged that defendant maintained a policy or practice of not paying meal or rest 10 premiums, that class members sometimes did not receive all of their meal periods and 11 that not all rest periods were given timely). 12 Here, Defendant used Plaintiff’s allegations of a “pattern and practice” to assume 13 violation rates of 50% for the meal period claim and 25% for the rest period claim. As 14 stated above, courts have found violation rates of 50% proper with language such as 15 “policy and practice.” In light of Plaintiff’s allegations of a “pattern and practice” of 16 meal and rest period violations, and the calculations of Mr. Elliott, the Court finds a 17 violation rate 18 reasonable. Since these claims alone put the AIC over the jurisdictional threshold, the 19 Court declines to analyze whether the rest of Plaintiff’s claims satisfy the AIC. of 50% for the meal period claim and 25% for the rest period claim V. 20 21 CONCLUSION For the foregoing reasons, Plaintiff’s Motion to Remand is DENIED. 22 23 IT IS SO ORDERED. 24 April 9, 2019 25 26 27 28 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 7
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