Adam Gomez v. Metro Air Service Inc. et al, No. 2:2022cv04979 - Document 31 (C.D. Cal. 2023)
Court Description: MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND by Magistrate Judge Sheri Pym re: NOTICE OF MOTION AND MOTION to Remand Case to Los Angeles Superior Court 24 . IT IS THEREFORE ORDERED that plaintiff's motion to remand (docket no. 24) is granted. The Court Clerk is directed to remand this action to the Superior Court of the State of California for the County of Los Angeles. (Made JS-6. Case Terminated.) (es)
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Adam Gomez v. Metro Air Service Inc. et al Doc. 31 JS-6 (REMAND) 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ADAM GOMEZ, 12 Plaintiff, 13 14 15 v. METRO AIR SERVICE INC., et al., Defendants. 16 17 ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:22-cv-04979-SP MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO REMAND 18 I. 19 INTRODUCTION 20 On August 19, 2022, plaintiff Adam Gomez filed a motion to remand this 21 case to the Superior Court of California, County of Los Angeles. Docket no. 24. 22 Plaintiff’s motion is supported by the declaration of plaintiff’s counsel Piya 23 Mukherjee and exhibit thereto. Defendant Metro Air Service, Inc. filed its 24 opposition to the motion on September 6, 2022. Docket no. 26. Defendant’s 25 opposition is supported by the declaration of its payroll manager Ashley Brice 26 (“9/6/22 Brice Decl.”). On September 13, 2022, plaintiff filed his reply. Docket 27 no. 27. 28 1 Dockets.Justia.com 1 The matter came before the court for a hearing on September 27, 2022. 2 After carefully considering the information provided and arguments advanced and 3 the record before it, the court now grants plaintiff’s motion to remand for the 4 reasons discussed below. 5 II. 6 FACTUAL AND PROCEDURAL BACKGROUND 7 Plaintiff filed the instant putative class action in the Los Angeles County 8 Superior Court on May 5, 2022, on behalf of himself and those individuals who 9 were employed by defendant in California at any time from four years prior to the 10 Complaint’s filing and classified as non-exempt. See docket no. 1, Compl. 11 Plaintiff alleges he and other employees were not compensated with all their wages 12 lawfully due in that, inter alia, they were from time to time: unable to take their 13 meal and rest breaks or required to work while clocked out during their breaks; not 14 provided complete and accurate wage statements; and not timely paid their correct 15 wages. Plaintiff asserts nine causes of action under California’s Business and 16 Professions Code and Labor Code: (1) unfair competition; (2) failure to pay 17 minimum wages; (3) failure to pay overtime wages; (3) failure to provide required 18 meal periods; (5) failure to provide required rest periods; (6) failure to provide 19 accurate itemized statements; (7) failure to reimburse employees for required 20 expenses; (8) failure to provide wages when due; and (9) failure to pay sick pay 21 wages. Plaintiff alleges the aggregate amount in controversy is less than $5 22 million. 23 On July 20, 2022, defendant removed the action to this court under the Class 24 Action Fairness Act (“CAFA”), 28 U.S.C. 1332(d). See docket no. 1, Notice of 25 Removal (“NOR”)). Defendant’s Notice of Removal was supported by, inter alia, 26 an earlier declaration of payroll manager Ashley Brice (“7/20/22 Brice Decl.”). 27 Defendant contends the aggregate amount in controversy exceeds $5 million, there 28 2 1 are more than 100 proposed class members, and there is diversity of citizenship. 2 III. 3 DISCUSSION 4 Plaintiff argues removal was improper because defendant has failed to prove 5 by a preponderance of the evidence that the amount in controversy exceeds $5 6 million. Mtn. at 3-10. Based on allegations in the Complaint and the declaration 7 of Ashley Brice and exhibits, defendant contends the amount in controversy 8 conservatively reaches $10,696,664.50. Opp. at 11. 9 Any civil action over which the United States district courts have original 10 jurisdiction may be removed to the district court for the district where such action 11 is pending. 28 U.S.C. § 1441(a). A defendant seeking to remove a case to federal 12 court must file a notice of removal containing a “short and plain statement of the 13 grounds for removal.” 28 U.S.C. § 1446(a). But “[i]f at any time before final 14 judgment it appears that the district court lacks subject matter jurisdiction, the case 15 shall be remanded.” 28 U.S.C. § 1447(c). 16 The Class Action Fairness Act gives federal district courts original 17 jurisdiction over any class action in which (1) the aggregate amount in controversy 18 exceeds $5 million, exclusive of interest and costs, (2) any member of a class of 19 plaintiffs is diverse in citizenship from any defendant, and (3) the number of 20 members of all proposed plaintiff classes exceeds 100 in the aggregate. 28 U.S.C. 21 §§ 1332(d)(2), 1332(d)(5)(B); Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1195 22 (9th Cir. 2015). A notice of removal based on CAFA jurisdiction must include “a 23 plausible allegation that the amount in controversy exceeds the jurisdictional 24 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89, 25 135 S. Ct. 547, 190 L. Ed. 2d 495 (2014). “[N]o antiremoval presumption attends 26 cases invoking CAFA, which Congress enacted to facilitate adjudication of certain 27 class actions in federal court.” Id. (citations omitted). 28 3 1 “[W]hen a defendant’s assertion of the amount in controversy is challenged 2 . . . both sides submit proof and the court decides, by a preponderance of the 3 evidence, whether the amount-in-controversy requirement has been satisfied.” Id. 4 at 88. But although both sides “may submit evidence supporting the amount in 5 controversy,” it is the defendant that has “the burden of supporting its 6 ‘jurisdictional allegations with competent proof.’” Harris v. KM Indus., Inc., 980 7 F.3d 694, 699, 701 (9th Cir. 2020) (citation omitted). The plaintiff “need only 8 challenge the truth of the defendant’s jurisdictional allegations by making a 9 reasoned argument as to why any assumptions on which they are based are not 10 supported by evidence.” Id. at 700 (citations omitted); accord Waltz v. Wal-Mart 11 Assocs., Inc., 2022 WL 489697, at *2 (C.D. Cal. Feb. 17, 2022) (the plaintiff 12 “bears no burden, here, to introduce any evidence”). 13 In determining the amount in controversy, the court considers the facts 14 alleged in the complaint and “summary-judgment-type evidence relevant to the 15 amount in controversy at the time of removal.” Fritsch v. Swift Trans. Co. of Ariz., 16 LLC, 899 F.3d 785, 793 (9th Cir. 2018). “[A] damages assessment may require a 17 chain of reasoning that includes assumptions. When that is so, those assumptions 18 cannot be pulled from thin air but need some reasonable ground underlying them.” 19 Ibarra, 775 F.3d at 1199. 20 Here, plaintiff’s Complaint alleges a putative class of “all individuals who 21 are or previously were employed by defendant in California, including any 22 employees staffed with defendant by a third party, and classified as nonexempt 23 employees [] at any time during the period beginning four (4) years prior to the 24 filing of this Complaint and ending on the date as determined by the Court[].” 25 Compl. ¶ 4. In support of its Notice of Removal, defendant submitted a declaration 26 that it employed 1,750 nonexempt employees in California during the proposed 27 class period, and the average hourly rate of all nonexempt employees in California 28 4 1 is $16.30. 7/20/22 Brice Decl. ¶¶ 3, 7. Based on this and various assumptions, in 2 its Notice of Removal defendant asserted over $22 million was in controversy on 3 plaintiff’s rest break claim alone. 4 In moving to remand, plaintiff argues defendant’s assumptions are 5 unreasonable and unsupported. Defendant opposes the motion with additional 6 evidence and new assertions of the amount in controversy. In particular, defendant 7 now asserts the aggregate amount in controversy is at least $10,696,664.50, 8 consisting of: $2,398,452 for rest break claims; $2,356,380 for waiting time 9 penalties; $3,837,200 for wage statement penalties; and $2,104,632.50 for 10 attorneys’ fees. Opp. at 10-11. The court examines each in turn. 11 A. Rest Break Claims 12 Under the California Industrial Welfare Commission’s wage orders, 13 employees are entitled to a ten-minute rest period for each four hours of work, or 14 major fraction thereof, but are not entitled to a rest period on any day they work 15 less than three and one-half hours; and are generally entitled to a 30-minute meal 16 period if they work more than five hours in a day. The California Labor Code 17 requires that an employer “pay the employee one additional hour of pay at the 18 employee’s regular rate of compensation for each workday” a legally required meal 19 or rest period is not provided. Cal. Lab. Code § 226.7(c). Defendant asserts 20 $2,398,452 is a reasonable estimate of the amount in controversy for plaintiff’s rest 21 break claims. Opp. at 3-6. Plaintiff argues defendant’s estimate lacks sufficient 22 evidentiary support. Mtn. at 5-9. 23 In support of its estimate, defendant offers another declaration of Ashley 24 Brice, who oversees payroll at Metro Air Service Inc., and is familiar with its 25 payroll database, timekeeping requirements policies and procedures, and the 26 recordation of time. 9/6/22 Brice Decl. ¶¶ 1-2. She is also familiar and has access 27 to the company’s human resources management system, payroll system, and 28 5 1 employee timekeeping system. Id. Based on her analysis of the data, Brice states 2 defendant employed 2100 non-exempt employees in California from May 5, 2018 3 to the present (1805 of which are former employees), and 1777 non-exempt 4 employees from May 5, 2019 to the present (1482 for which are former 5 employees). Id. ¶ 7. Approximately 96% of these employees worked part-time, 6 meaning 30 hours or less per week. Id. ¶ 8. She further states that “very few 7 employees work less than four hours each shift,” and “[v]ery few, if any, 8 employees work less than five days per week.” Id. Brice also sets forth the 9 average hourly wages for non-exempt employees for each year of the proposed 10 class period, ranging from $13.02 to $16.46. Id. ¶ 10. 11 Defendant calculates $2,398,452 as the amount in controversy for the rest 12 break claims by working from a three-year limitation period and then assuming all 13 1777 putative class members worked five days a week, every week for over three 14 years, at the highest average rate of pay during the class period, and had their right 15 to a rest break violated on 10% of those days. In other words, 1777 class members 16 x 164 weeks x 5 hours of premium pay per week x $16.46 per hour x 10% = 17 $2,398,452.44. Opp. at 6. These assumptions are unsupported and flawed on 18 multiple levels. 19 First, Brice declares that a total of 1777 employees worked since May 5, 20 2019, not that that was the average number who worked in any given week. She 21 does not say how many worked in any given week, but does say that 1482 of the 22 1777 are former employees, which would seem to indicate that 295 are working 23 there now. Whether it is fair to infer from this that 295 is a more reasonable 24 estimate of the number working in any given week, the court cannot say. But 25 whatever the average number of employees in a week, 1777 is plainly wrong, and 26 likely by a long shot. 27 Second, since Brice also declares that 96% of the employees worked part- 28 6 1 time, there is no reason to assume all of these part-time employees worked five 2 days a week. She does say “very few, if any” work less than five days a week, but 3 “very few” is quite vague. “[T]he employer . . . has access to employment and 4 payroll records that would allow it to provide more accurate figures.” Nolan v. 5 Kayo Oil Co., 2011 WL 2650973, at *5 (N.D. Cal. July 6, 2011). Defendant did 6 not bother to do so here. 7 Third, as set forth above, an employee needs to work at least three and one- 8 half hours in a day to be entitled to any rest break. Brice declares that “very few” 9 employees worked less than four hours each shift, but this again is vague. As such, 10 the assumption that every employee worked not only five days a week, but five 11 days in which the employee was entitled to a rest break, is unsupported and very 12 likely incorrect, although how far off is impossible to determine on this record. 13 Fourth, the assumption that all of these employees are entitled to premium 14 pay at the rate of $16.46 per hour since May 2019 is also contrary to the evidence, 15 since Brice declares that did not become the average rate of pay until 2022. For 16 2019-21, the average ranged from $13.02 to $13.39. 17 Finally, defendant assumes it violated class members’ right to a rest break 18 10% of the time – that is, one day every two weeks. Defendant provides no 19 evidentiary support for this assumption. Since defendant “does not provide 20 competent evidence, it must establish that its assumptions were ‘founded on the 21 allegations of the complaint.’” Waltz, 2022 WL 489697, at *2 (quoting Arias v. 22 Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019)). Defendant claims 23 plaintiff’s allegations of a “policy, practice, and procedure” of failing to provide 24 meal and rest breaks justify its assumed 10% violation rate. Opp. at 4; see Compl. 25 ¶¶ 12, 24, 29, 30, 33, 51, 91. 26 Allegations of “a ‘pattern and practice’ of doing something does not 27 necessarily mean always doing something,” and therefore the removing party still 28 7 1 “bears the burden to show that its estimated amount in controversy relied on 2 reasonable assumptions.” Ibarra, 775 F.3d at 1199. Defendant here cites “pattern 3 and practice” cases in which courts have found assumed violation rates of between 4 10% and 60% to be reasonable. See, e.g., Zamora v. Penske Truck Leasing Co., 5 L.P., 2020 WL 4748460, at *5 (C.D. Cal. Aug. 17, 2020) (“assumed violation rate 6 of 10% is reasonable in light of Plaintiffs’ allegations that [defendant] engaged in a 7 ‘policy and practice’ of various labor law violations”); Chavez v. Pratt (Robert 8 Mann Packaging), LLC, 2019 WL 1501576, at *3 (N.D. Cal. Apr. 5, 2019) 9 (upholding 20% violation rate estimate where “complaint does not describe a 10 specific rate of missed meal or rest period but alleges a ‘pattern or practice’ of such 11 violations”). But in this case plaintiff does not in fact allege defendant had a 12 pattern and practice of denying employees meal and rest breaks. Rather, plaintiff 13 alleges defendant “did not have a policy and practice which provided timely off14 duty meal and rest breaks to plaintiff.” Compl. ¶ 24; see id. ¶ 30. In other words, 15 plaintiff alleges defendant failed to have a policy in place to assure employees 16 received all their breaks and were compensated for those missed, but does not 17 allege there was an affirmative policy, pattern, or practice of missed breaks. 18 Plaintiff does allege a practice of failing to record those breaks that were missed 19 (id. ¶ 29), but again, this suggests nothing about how often breaks were missed. 20 Even so, this is not a case in which plaintiff utterly fails to allege anything about 21 the frequency of the violations. In that regard, plaintiff alleges employees were 22 required to work without their legally required breaks “from time to time.” Id. 23 ¶¶ 12, 91, 95. 24 For defendant to assume a 10% violation rate based on allegations that there 25 were violations from time to time is arbitrary. See Sanders v. Old Dominion 26 Freight Line, Inc, 2017 WL 5973566 at *4 (S.D. Cal. Feb. 2, 2017) (“[W]ithout 27 evidence to support this violation rate, the use of a 50% violation rate (or virtually 28 8 1 any violation rate for that matter) is completely arbitrary and little more than 2 speculation and conjecture.”). Although a 10% assumption is conservative 3 compared with 50% or 20%, it is still unsupported, and therefore does not meet 4 defendant’s burden. See Smith v. Diamond Resorts Mgmt., Inc., 2016 WL 356020, 5 at *3 (C.D. Cal. Jan. 29, 2016) (assumption of one meal period and one rest break 6 violation per week unsupported by any evidence). 7 In any event, even if the 10% violation rate assumption were reasonable 8 here, as set forth above, defendant has failed to put forth reasonable or supported 9 assumptions regarding the number of employees who worked each week, how 10 many days they worked each week during which they were entitled to a rest break, 11 or the hourly rate. By comparison, in other cases the courts had more reliable 12 information before them. See, e.g., Ibarra, 775 F.3d at 1198-99 (noting 13 defendant’s declaration had “table listing all of its non-exempt employees and their 14 corresponding number of shifts worked in excess of 5 hours and 3.5 hours,” 15 although still finding assumption about violation rate “not grounded in real 16 evidence”); Zamora, 2020 WL 4748460, at *4 (noting assumptions “grounded in 17 specific facts regarding the Plaintiffs’ work schedules and salaries,” and expert 18 declaration “calculations took into account the frequencies at which employees 19 earned the right to meal periods, rest breaks, and overtime pay, and in all cases 20 ‘utilized each employee’s lowest hourly wage rate to determined the value’ of the 21 claims”). Here, the court could correct the hourly rate assumptions, but has no 22 basis to estimate how many days or shifts were worked with entitlement to a break. 23 See Harris, 980 F.3d at 702 (where defendant offered no proof that all class 24 members work sufficient shifts long enough to entitle them to meal and rest 25 periods, defendant failed to carry its burden of proof regarding the amount in 26 controversy). 27 In short, many of defendant’s assumptions made in support of its calculation 28 9 1 of the amount in controversy on plaintiff’s meal and rest break claims are 2 “unreasonable on [their] face without comparison to a better alternative.” See 3 Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 996 (9th Cir. 2022). As 4 such, the court finds defendant has not met its burden and its asserted amount in 5 controversy for these claims does not support its removal of this case. 6 B. Waiting Time Penalties 7 “Under California Labor Code § 203, an employer must pay daily wages for 8 up to 30 days if it fails to pay all wages due within 72 hours of termination or 9 resignation.” Chavez, 2019 WL 1501576, at *3. This penalty accrues daily until 10 the wages are paid. Id. (citing Cal. Lab. Code § 203(a)). 11 Defendant argues that $2,356,380 is a reasonable estimate of the amount in 12 controversy for this claim. Opp. at 6. To reach this number, defendant started with 13 the 1482 employees within the three-year statute of limitations who are now former 14 employees (see 9/6/22 Brice Decl. ¶ 7(b)), and assumed a 100% violation rate. 15 Opp. at 7. Defendant then multiplied the 1482 former employees by the amount of 16 waiting time penalties due for 30 days’ wages, at four hours per day, and at the 17 supposed lowest hourly rate of $13.25, to arrive at $2,356,380 in controversy on 18 this claim. Id. Plaintiff argues that waiting time penalties “are predicated on the 19 previously pled violations” and because defendant did not provide “the total 20 workweeks worked or total days worked in excess of four (4) hours,” defendant 21 failed to show that the 100% violation rate is proper. Reply at 10. 22 The main issue here is the reasonableness of assuming a 100% violation rate. 23 The court finds it is reasonable. Plaintiff alleges the members of the class who 24 were terminated and who had not been paid their full wages at the time of 25 termination are entitled to waiting time penalties. See Compl. ¶ 113. A fair 26 reading of the complaint is that it alleges all putative class members suffered at 27 least some violation such that at the termination of their employment they all have 28 10 1 at least some unpaid wages. As defendant points out, plaintiff tied his waiting time 2 penalties claim to defendant’s alleged failure to pay a minimum wage, overtime 3 wages, and provide the required rest breaks. Opp. at 7. It follows that “if every 4 putative class member incurred damages for at least one other claim in the 5 complaint, every class member who departed [employment] during the statutory 6 period was due unpaid wages,” and thus entitled to 30 days of waiting time 7 penalties. Chavez, 2019 WL 1501576, at *4. 8 Nonetheless, the amount in controversy is not quite reasonably estimated at 9 $2,356,380. First, this is based on a supposed lowest hourly rate of $13.25, but 10 that was plaintiff’s hourly rate, not the lowest hourly rate of the putative class. See 11 9/6/22 Brice Decl. ¶ 12. The lowest average hourly rate during the class period 12 was $13.02 (id. ¶ 10), and therefore that is the rate that should be used in the 13 calculation. 14 Second, defendant assumes these former employees had four-hour 15 workdays, but the basis for that assumption is shaky. As set forth above, Ms. Brice 16 declares that 96% of employees worked part-time, and “very few” worked less than 17 four hours each shift (id. ¶ 8); but again, “very few” is vague. Based on this vague 18 assertion, the multiplier in determining waiting time penalties should be something 19 less than four hours, but the court is hard pressed on this record to say what that 20 number should be. “The district court should weigh the reasonableness of the 21 removing party’s assumptions, not supply further assumptions of its own.” Harris, 22 980 F.3d at 701. On the other hand, where “the reason a defendant’s assumption is 23 rejected is because a different, better assumption is identified,” then “the district 24 court should consider the claim under the better assumption – not just zero-out the 25 claim.” Jauregui, 28 F.4th at 996. 26 The better assumption than four hours has not been identified here. But a 27 fair, if generous, reading of Brice’s declaration may support a reasonable 28 11 1 assumption of a three-hour workday. Thus, multiplying 1482 former employees by 2 30 days by three hours by $13.02, the amount in controversy for plaintiff’s waiting 3 time penalties claim would be $1,736,607.60. 4 C. Wage Statement Penalties 5 California Labor Code § 226(a) requires that an employer furnish employees 6 with an “accurate itemized statement” reflecting, among other things, all gross and 7 net wages earned, total hours worked, and applicable hourly rates in effect during 8 the pay period. “[A]n employer owes a penalty of $50 per initial pay period and 9 $100 for each subsequent pay period when it fails to provide complete and accurate 10 wage statements to employees, with an aggregate cap of $4,000 per employee.” 11 Chavez, 2019 WL 1501576, at *3. Plaintiff alleges that “from time to time” 12 defendant failed to furnish accurate, itemized wage statements showing all 13 applicable hourly rates, all overtime hourly rates, and all gross and net wages 14 earned. Compl. ¶ 100. 15 Defendant estimates that the penalties for issuing non-compliant wage 16 statements amount to $3,837,200. Opp. at 7. Defendant supports this figure by 17 multiplying 1448 (the number of employees in a one-year limitations period 18 (9/6/22 Brice Decl. ¶ 7(c))) by 26 pay periods and by the $100 penalty for each 19 inaccurate workweek. Opp. at 7-8. Defendant then adds to this figure the 20 calculation of the initial pay period penalty, 1448 employees times $50. Id. 21 Defendant claims its 100% violation rate assumption is reasonable because 22 plaintiff made “broad allegations that Defendant systematically failed to pay 23 putative Class Members proper overtime wages, meal period premiums, and rest 24 break premiums.” Opp. at 8 (citing Compl. ¶¶ 100 - 101). 25 Defendant has again failed to meet its burden here, for two reasons. First, 26 and most basically, defendant apparently assumes two-week pay periods, and 27 28 12 1 therefore 26 wage statements over the course of a year.1 But there is absolutely no 2 evidence in the record as to how long defendant’s pay periods were, or how many 3 wage statements were issued to the 1448 employees. Neither of the Brice 4 declarations touches on this, although this information should be readily in 5 defendant’s possession. See 9/6/22 Brice Decl. ¶ 4. Without any basis for 6 determining the number of statements at issue, it is impossible to calculate the 7 amount of wage statement penalties in controversy. 8 Second, defendant’s assumption of a 100% violation rate is unsupported. 9 Unlike waiting time penalties, which are effectively triggered when there is a 10 single violation at any time for any employee, wage statement penalties only apply 11 if there is a pay or recording violation (resulting in an inaccurate wage statement) 12 for each statement in question. Defendant argues it is reasonable here to assume at 13 least one violation for each employee for each pay period given the allegations in 14 this case. Courts have upheld such assumptions where complaints alleged a 15 consistent policy or uniform practice of violations. See Lucas v. Michael Kors 16 (USA), Inc., 2018 WL 2146403, at *9 (C.D. Cal. May 9, 2018) (where plaintiff 17 alleged “consistent policy” of failing to provide breaks then wage statements 18 “would necessarily have been inaccurate 100% of the time”); Moppin v. Los 19 Robles Reg’l Med. Ctr., 2015 WL 5618872, at *3 (C.D. Cal. Sep. 24, 2015) 20 (upholding 100% violation assumption where complaint alleged defendants 21 “uniformly and systematically” failed to furnish accurate wage statements “[a]t all 22 times”). By contrast, here plaintiff alleges defendant failed to provide employees 23 with accurate wage statements “from time to time.” Compl. ¶ 100. This does not 24 support a 100% violation rate. 25 26 1 If this is so, then it seems defendant should have found one $50 penalty plus 27 25 $100 penalties for each employee over the course of the year rather than 26 28 $100 penalties. 13 1 Accordingly, for two separate reasons, there is no basis in the record to 2 determine how many wage statements may be at issue, leaving no basis to consider 3 an alternative potential amount in controversy. See Jauregui, 28 F.4th at 996; 4 Harris, 980 F.3d at 701. Defendant has not met its burden, and therefore its 5 asserted amount in controversy for this claim does not support its removal of this 6 case. 7 D. Attorneys’ Fees 8 Defendant also includes attorneys’ fees in its calculation of the amount in 9 controversy. See Fritsch, 899 F.3d at 794 (“a court must include future attorneys’ 10 fees recoverable by statute or contract when assessing whether the amount-in11 controversy requirement is met”). Defendant calculates that plaintiff’s claims 12 implicate $2,104,632.50 in attorneys’ fees, using a benchmark of 25% of projected 13 damages for the meal and rest break, waiting time, and wage statement penalties. 14 Opp. at 9. But although using a 25% benchmark has been found reasonable in 15 some cases, the Ninth Circuit has explicitly “reject[ed] [the] argument that [it] 16 should hold that, as a matter of law, the amount of attorneys’ fees in controversy in 17 class actions is 25% of all other alleged recovery.” Fritsch, 899 F.3d at 796. 18 Rather, “the defendant must prove the amount of attorneys’ fees at stake by a 19 preponderance of the evidence,” with such calculation taking into account the 20 applicability of any contractual or statutory requirements, such as whether the 21 lodestar method applies. Id. 22 By simply assuming a 25% benchmark here, defendant has not met its 23 burden with respect to the calculation of attorneys’ fees at issue. Moreover, even if 24 the court were to accept the 25% benchmark, as set forth above, the only amount in 25 controversy defendant has met its burden to demonstrate on any claim is 26 $1,736,607.60 for waiting time penalties. Adding 25% to that for attorneys’ fees 27 would result in a total of only $2,170,759.50 in controversy here, well below the 28 14 1 $5 million required for removal. 2 For these reasons, defendant has failed to prove, by a preponderance of the 3 evidence, that the amount in controversy exceeds the $5 million CAFA threshold 4 for removal. 5 IV. 6 CONCLUSION 7 IT IS THEREFORE ORDERED that plaintiff’s motion to remand (docket 8 no. 24) is granted. The Court Clerk is directed to remand this action to the 9 Superior Court of the State of California for the County of Los Angeles. 10 11 12 DATED: February 7, 2023 13 SHERI PYM United States Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15
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