Melody Armstrong v. Ruan Transport Corporation, No. 5:2016cv01143 - Document 32 (C.D. Cal. 2016)

Court Description: ORDER Granting Plaintiff's Motion to Remand by Judge Virginia A. Phillips granting 16 MOTION to Remand Case to State Court: For the reasons stated above, the Court finds Defendant has failed to sustain its evidentiary burden for the purposes of removal. Accordingly the Court GRANTS Plaintiffs Motion and DIRECTS the Clerk to REMAND this action to the Superior Court of the State of California for the County of San Bernardino. MD JS-6. Case Terminated. (bm)

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Melody Armstrong v. Ruan Transport Corporation 1 Doc. 32 United States District Court Central District of California 2 JS-6 OCT 25, 2016 3 4 5 Melody Armstrong et al., EDCV 16-1143-VAP (SPx) Plaintifs, 6 7 8 Order Granting Plaintiff’s Motion to Remand v. Ruan Transport Corporation et al., Defendants. 9 United States District Court Central District of California 10 11 On August 22, 2016, Plaintif Melody Armstrong (“Plaintif”) led her 12 Motion to Remand (“Motion”) the instant action to the Superior Court of the State 13 of California for the County of San Bernardino (“Superior Court”). (Doc. No. 16.) 14 Defendant Ruan Transport Corporation (“Defendant”) opposed the Motion on 15 September 26, 2016. (Doc. No. 27.) Plaintif did not le a reply. 16 17 After consideration of the papers led in support of, and in opposition to, the 18 Motion, as well as the arguments advanced at the hearing, the Court GRANTS the 19 Motion. 20 21 22 I. BACKGROUND On August 28, 2015, Plaintif led her initial complaint against Defendant in 23 Superior Court, alleging violations of various California Labor Code sections. (Doc. 24 No. 1-1.) The alleged violations include failure to pay minimum wages in violation of 25 sections 1194 and 1197 of the California Labor Code (id. ¶ 27); provide rest periods 26 in violation of section 226.7 of the California Labor Code (id. ¶ 41); provide meal 1 Dockets.Justia.com 1 periods in violation of section 226.7 and 512 of the California Labor Code (id.); 2 provide accurate wage statements in violation of section 226(a) of the California 3 Labor Code (id. ¶ 27); pay wages upon discharging employees in violation of section 4 201 of the California Labor Code (id. ¶ 70); and pay wages within 72 hours of 5 employees quitting in violation of section 202 of the California Labor Code (id. 6 ¶ 72). 7 8 Based on these violations, Plaintif brought a class action on behalf of herself and those similarly situated. (Id. ¶¶ 15-31.) Plaintif served Defendant with the 10 United States District Court Central District of California 9 complaint on May 2, 2016, and served Defendant with the summons on May 20, 11 2016. (Doc. No. 1 ¶ 6.) 12 13 14 Plaintif seeks to recover unpaid wages, statutory penalties, and attorney’s fees. (Doc. No. 1-1 at 29–30.) 15 II. 16 17 LEGAL STANDARD Removal jurisdiction is governed by statute. See 28 U.S.C. §§ 1441 et seq.; 18 Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979) (“The 19 removal jurisdiction of the federal courts is derived entirely from the statutory 20 authorization of Congress” (citations omitted)). Defendants may remove a case to a 21 federal court when a case originally led in state court presents a federal question or 22 is between citizens of diferent states. See 28 U.S.C. §§ 1441(a)-(b), 1446, 1453. 23 Only those state court actions that originally could have been led in federal court 24 may be removed. 28 U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 25 (1987). 26 2 1 Although the Class Action Fairness Act (“CAFA”) gives district courts 2 diversity jurisdiction to hear class actions, defendants must show that “any member 3 of a class of plaintifs is a citizen of a State diferent from any defendant” (minimum 4 diversity); the number of members of the proposed plaintif class exceeds 100 in the 5 aggregate (numerosity); and “the matter in controversy exceeds the sum or value of 6 $5,000,000, exclusive of interest and costs” (amount in controversy). 28 U.S.C. 7 §1332(d); see also Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 8 1033-34 (9th Cir. 2008); Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020-21 (9th 9 Cir. 2007). United States District Court Central District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 A defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. Evidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintif contests, or the court questions, the defendant’s allegation. Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014). When the removed complaint fails to allege a speci c amount in controversy, or when the complaint alleges an amount in controversy less than the jurisdictional threshold, the removing defendant must prove by a preponderance of the evidence the amount in controversy is greater than $5,000,000. Rodriguez v. AT&T Mobility Servs., No. 13-56149, 2013 WL 4516757, at *6-7 (9th Cir. Aug. 27, 2013) (citing Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 (2013)); Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010) (citing Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007)). If a defendant fails to meet the requisite burden of proof, a court must remand for lack of subject matter jurisdiction. 25 26 3 1 In determining the amount in controversy, the Court considers not only the 2 facts alleged in the complaint, taken as true for purposes of calculating the amount, 3 but also “summary-judgment-type evidence relevant to the amount in controversy at 4 the time of removal.” Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 5 (9th Cir. 1997). “[T]he amount in controversy is simply an estimate of the total 6 amount in dispute, not a prospective assessment of defendant’s liability.” Lewis, 7 627 F.3d at 400. 8 9 United States District Court Central District of California 10 III. DISCUSSION Plaintif contends that removal was improper because Defendant failed to 11 provide evidence (1) of diversity of citizenship, (2) to show there are more than 100 12 class members, and (3) that there is more than $5,000,000 in controversy. (Doc. 13 No. 16-1 at 3–4.) As the Court nds Defendant fails to carry its burden to show 14 there is more than $5,000,000 in controversy, the Court declines to consider the 15 diversity of citizenship and numerosity requirements. 16 17 A. The Amount-in-Controversy Requirement 18 A class action cannot be removed to the district court under CAFA unless 19 “the matter in controversy exceeds the sum or value of $5,000,000, exclusive of 20 interest and costs.” 28 U.S.C. §1332(d). “[A] damages assessment may require a 21 chain of reasoning that includes assumptions. When that is so, those assumptions 22 cannot be pulled from thin air but need some reasonable ground underlying them.” 23 Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1199 (9th Cir. 2015). 24 25 26 Based on the allegations in the complaint, Defendants contends that when Plaintif’s damages for meal and rest-period penalties, waiting-time penalties, wage- 4 1 statement penalties, minimum-wage penalties, and attorneys’ fees are combined, the 2 amount in controversy is “at least $12,726,330.07.” (Doc. No. 27 at 24.) 3 4 5 1. Meal- and Rest-Period Penalties California law states: 6 7 If an employer fails to provide an employee a meal or rest or recovery 8 period in accordance with a state law, including, but not limited to, an 9 applicable statute or applicable regulation, standard, or order of the United States District Court Central District of California 10 Industrial Welfare Commission . . . the employer shall pay the 11 employee one additional hour of pay at the employee's regular rate of 12 compensation for each workday that the meal or rest or recovery 13 period is not provided. 14 15 Cal. Lab. Code § 226.7. 16 17 Defendant argues a conservative estimate of its exposure for meal- and rest- 18 period premiums is “$4,259,764.57.” (Doc. No. 27 at 18.) To support this gure, it 19 argues Plaintif alleges, “Defendant had a practice of failing to provide ‘all the 20 legally required unpaid, of-duty meal periods and all the legally required of-duty 21 rest periods to Plaintif and the other California Class Members.” (Id. at 17 22 (emphasis in original).) Based on this allegation, Defendant states, “although 23 Plaintif alleges that Defendant had a practice of failing to provide ‘all’ meal breaks 24 and ‘all’ rest breaks, Defendant will use a conservative estimate of assuming one 25 meal and rest period violation per workweek for purposes of its [exposure] 26 calculations.” (Id.) Thus, based on 1,099 class members, who worked a total of 5 1 118,015 workweeks during the relevant class period at an average hourly wage of 2 $18.05, Defendant concludes the total exposure would be “$4,259,764.57 for meal 3 and rest period premiums.” (Id. at 18.) 4 5 Defendant’s calculations, however, are awed for two reasons: (1) they misstate the claims in Plaintif’s complaint and (2) they lack adequate factual 7 support. First, paragraph nine of Plaintif’s complaint states, “Defendant failed to 8 provide all the legally required unpaid, of-duty meal periods and all the legally 9 required of-duty rest periods to Plaintif and the other California Class Members as 10 United States District Court Central District of California 6 required by the applicable Wage Order and Labor Code.” (Doc. No. 1-1 ¶ 9.) From 11 this, Defendant jumps to the conclusion that “one meal and rest period violation per 12 workweek” is a “conservative estimate” for its exposure (Doc No 27 at 17). 13 Defendant’s reasoning appears to be based on an assumption that by stating, 14 “Defendant failed to provide all the legally required unpaid, of-duty meal [and rest] 15 periods,” Plaintif means “Defendant failed to provide [each and every] legally 16 required unpaid, of-duty meal [and rest] period [to every class member.]” This is 17 far from a reasonable assumption. The allegation “Defendant failed to provide all 18 the legally required. . . meal [and rest] periods” could also mean: (1) Defendant 19 denied one class member one meal and rest break once per year, (2) Defendant 20 denied a small group of class members one meal and rest period once a month, or (3) 21 Defendant denied half the class members all meal and rest periods every week. In 22 each of these scenarios, Defendant “failed to provide all the legally required. . . meal 23 [and rest] periods.” Hence, there is no logical basis for the Court to assume Plaintif 24 means “Defendant led to provide [each and every] legally required unpaid, of-duty 25 meal [and rest] period [to every class member,]” as Defendant contends. 26 6 1 Second, Defendant did not present any facts supporting its assumption that 2 “one meal and rest period violation per workweek” per class member is appropriate 3 “for . . . its [exposure] calculations.” The only evidence Defendant presents to 4 support its assumption is a declaration by its Human Resources Business Partner 5 Ben Williams. (Doc. No 27 at 16.) Williams’s declaration only sets forth (1) the 6 number of class members (Doc. No. 27-2 ¶¶ 5–6), (2) the average amount of days 7 worked each week (id. ¶ 8), (3) the average amount of hours worked per day (id. 8 ¶ 7), (4) the average length of pre- and post-trip truck inspections (id. ¶ 9), (5) the 9 average hourly rate of Defendant’s truck drivers (id. ¶ 11–13), (6) the frequency United States District Court Central District of California 10 wage statements were issued (id. ¶ 14), and (7) the total hours worked by 11 Defendant’s truck drivers (id. ¶ 15). Nowhere does Williams address the possible 12 rate of meal- and rest-period violations, the number of complaints Defendant 13 received regarding the lack of meal and rest periods, Defendant’s policy addressing 14 how meal and rest periods are scheduled, or anything else to provide factual support 15 for Defendant’s assumption of “one meal and rest period violation per workweek” 16 for every class member. Thus, as Defendant “provides no factual underpinning for 17 the assumption that a meal and rest break violation occurred one time per week,” 18 the Court nds it has failed to sustain its evidentiary burden for purposes of 19 removal. Weston v. Helmerich & Payne Inter. Drilling Co., No. 1:13-cv-01092-LJO- 20 JLT, 2013 WL 5274283, at *6 (E.D. Cal. Sept. 17, 2013). 21 22 Case law supports the conclusion Defendant may not rely on statistical 23 assumptions to prove the amount-in-controversy requirement. In Weston, a former 24 employee sued a drilling company that previously employed him for California 25 Labor Code violations almost identical to the ones Plaintif alleges. 2013 WL 26 5274283 at *1. Before discovery began, the drilling company removed the case to 7 district court, and the employee led a motion for remand. Id. To establish the 2 amount in controversy, the drilling company produced a declaration by its personnel 3 manager, who compiled data showing, among other things, the drilling company 4 “‘employed 749 non-exempt and hourly California-based rig employees ... from June 5 5, 2009 to the present.’ In addition, [the personnel manage] report[ed] ‘there are 6 approximately 475 non-exempt and hourly California-based rig employees who 7 ended their employment with [Defendant], either voluntarily or involuntarily.’” Id. 8 at 3. The declaration also stated “the average number of work weeks during the 9 class period, and the average hourly wage of the employees.” Id. at 5. Much like 10 United States District Court Central District of California 1 Defendant, in lieu of using 100% violation rates, the drilling company used more 11 conservative assumptions, such as one meal- and rest-break violation per week, four 12 hours of overtime violations per week, and a ten-day waiting period violation for 13 each employee. Id. at 4. This was not enough to prove the required amount in 14 controversy. Id. at 6. The court made clear, “just as the factual justi cation was 15 lacking for the use of [a] 100% violation rate, the evidence supporting the 16 justi cation for using the revised rates likewise is missing,” and “the fact that [the 17 drilling company’s] revised gures are smaller than [a 100% violation rate] does not 18 lessen the burden of providing evidence, rather than assumptions” to support the 19 calculations. Id. 20 21 In Garibay v. Archstone Communities LLC, 539 Fed. App'x 763 (9th Cir. 22 2013), an unpublished Ninth Circuit decision, the court reached a similar 23 conclusion. In Garibay, an employee sued an employer for meal- and rest-break 24 violations, failure to provide accurate wage statements, and waiting-time penalties. 25 Id. at 764. Before discovery, the employer removed the case to district court, and 26 the employee moved to remand. Garibay v. Archstone Communities LLC, No. CV 8 1 12-10640 PA (VBKx) at 1 (C.D. Cal. led Feb. 4, 2013.) Much like Defendant, in 2 attempting to show the amount in controversy was greater than $5,000,000, the 3 employer used conservative estimates of (1) two missed breaks per week for each 4 employee, (2) thirty days of waiting-time penalties for each employee, and (3) 5 inaccurate wage-statement penalties for every paycheck received by every employee. 6 Id., Doc. No. 27 at 17–20. To support these calculations, the employer provided a 7 declaration by its “supervisor of payroll, which set[] forth only the number of 8 employees during the relevant period, the number of pay periods, and general 9 information about hourly employee wages.” Garibay, 539 F. App'x at 764. This, United States District Court Central District of California 10 however, was not suicient evidence to show the amount in controversy was over 11 $5,000,000. Id. Speci cally, the court stated, “[the employer] failed to provide any 12 evidence regarding why the assumption that each employee missed two rest periods 13 per week was more appropriate than ‘one missed rest period per paycheck or one 14 missed rest period per month.’” Id. Hence, “[the employer’s] evidence was 15 insuicient to support removal jurisdiction under CAFA.” Id. 16 17 Other courts have held similarly. Rodriguez v. US Bank Nat'l Ass'n, No. 18 216CV05590 CAS (RAOx), 2016 WL 5419403, at *6 (C.D. Cal. Sept. 26, 2016) 19 (“Here, because defendant's calculations are based on attenuated and unsupported 20 assumptions, defendant has failed to demonstrate by a preponderance of the 21 evidence that Section 226(e) penalties amount to $10,516,000 or even that they 22 exceed $5,000,000.”); Munoz v. Central Parking Sys., Inc., 2010 WL 3432239, at *2 23 (C.D. Cal. Aug. 30, 2010) (dismissing Defendant’s assumption of one meal period 24 violation per week because Defendant “fail[ed] to provide . . . evidentiary support”); 25 see Nolan v. Kayo Oil Co., No. C 11-00707 MEJ, 2011 WL 2650973, at *4 (N.D. Cal. 26 July 6, 2011) (“Simply assuming that every employee . . . worked at least one hour of 9 1 overtime a week, without some facts or evidence to support these assumptions, is 2 insuicient to meet Defendant’s evidentiary burden.”); Ray v. Nordstrom Inc., No. 3 2:11-cv-07277-JHN (CWx), 2011 WL 6148668, at *3 (C.D. Cal. Dec. 9, 2011) 4 ( nding Plaintif’s allegation that Defendant “failed to pay all California hourly 5 employees at least some regular and overtime hours” insuicient to support 6 Defendant’s assumption that “purported class members missed . . . one hour of 7 overtime pay per pay period” (internal quotation marks omitted)); Roth v. Comerica 8 Bank, 799 F. Supp. 2d 1107, 1119-20 (C.D. Cal. 2010) (“More signi cantly, 9 defendants’ calculation admittedly rests on the speculative assumption that every United States District Court Central District of California 10 class member was denied three to ve hours of overtime pay every week.”).1 11 The Court acknowledges other district courts have found to the contrary. 12 13 14 15 16 17 18 19 20 See, e.g., Wilson v. Best Buy Co., Inc., No. 2:10-cv-3136-GEB-KJN, 2011 WL 445848, at *2 (E. D. Cal. Feb. 8, 2011) ( nding Plaintif’s allegation he worked overtime “[d]uring the relevant time period” suicient to support Defendant’s assumption that each class member was denied one hour of overtime pay per week (internal quotation marks omitted)). The Court is unpersuaded by such cases primarily because “[a]s the employer, Defendant[s] ha[ve] access to employment and payroll records that would allow [them] to provide more accurate gures,” rather than mere estimations. See Nolan, 2011 WL 2650973, at *5. Furthermore, 21 22 23 24 25 26 1 Defendant cites two cases, Roa v. TS Staing Services., Inc., 2015 WL 300413 (C.D. Cal. Jan. 22, 2015), and Sanchez v. The Ritz Carlton, 2015 WL 4919972 (C.D. Cal. Aug. 17, 2015), that indicate plaintifs must put forth evidence to rebut employers’ assumptions about the amount in controversy. (Doc. No. 27 at 10–11) However, cases cited supra, including Garibay and Weston, held employers did not put forth enough evidence to establish a $5,000,000 amount in controversy, even though plaintifs disputed the employers’ claims without producing their own evidence. 10 1 Defendants have failed to show how often the class members were deprived of meal 2 and rest breaks. Such a showing could possibly justify Defendants’ assumption, but 3 on this record, the Court nds Defendants have failed to meet their burden by a 4 preponderance of the evidence. 5 6 7 2. Waiting-Time Penalties Section 203 of the California Labor Code states: 8 9 If an employer willfully fails to pay, without abatement or reduction, United States District Court Central District of California 10 . . . any wages of an employee who is discharged or who quits, the 11 wages of the employee shall continue as a penalty from the due date 12 thereof at the same rate until paid or until an action therefor is 13 commenced; but the wages shall not continue for more than 30 days. 14 15 Cal. Lab. Code § 203. 16 17 Defendant argues a conservative exposure estimate for waiting-time 18 premiums is “$2,425,591.48.” (Doc. No. 27 at 20.) To support its calculation, 19 Defendant explains, “Plaintif airmatively alleges Defendant ‘has not tendered 20 payment of all wages owed as required by law’ and therefore seeks ‘thirty days of pay 21 as penalty for not paying all wages due at time of termination for all employees who 22 terminated employment during the CALIFORNIA LABOR SUB-CLASS 23 PERIOD,’” citing paragraphs 73 and 74 of the complaint. (Id. at 19.) Then, 24 Defendant continues, “[b]y asserting class claims for Section 203 penalties, Plaintif 25 claims that every putative class member is owed waiting-time penalties. Therefore, 26 it is reasonable for Defendant to assume that each putative class member would be 11 1 entitled to the maximum 30 days of waiting time penalties if Plaintif was to prevail.” 2 (Id.) Thus, as there are approximately 560 class members who terminated 3 employment during the class period, and the average wage was $144.00 per 4 workday, the total exposure is $2,425,591.48. (Id. at 20.) 5 6 Defendant’s calculations, however, are awed because they misstate the 7 complaint’s allegations. Although Defendant relies on the above partial quotations 8 to argue “Plaintif claims that every putative class member is owed waiting time 9 penalties,” when the very same sentences are read in their entirety, it is clear United States District Court Central District of California 10 Plaintif is not claiming “every putative class member is owed waiting time 11 penalties.” (Id. at 19.) Speci cally, paragraphs 73 and 74 of Plaintif’s complaint 12 state, in full, 13 14 73. 15 LABOR SUB-CLASS Members has terminated and DEFENDANT has 16 not tendered payment of all wages owed as required by law. The employment of PLAINTIFF and many CALIFORNIA 17 18 74. Therefore, as provided by Cal Lab. Code § 203, on behalf of 19 herself and the members of the CALIFORNIA LABOR SUB-CLASS 20 whose employment has terminated and who have not been fully paid their 21 wages due to them, PLAINTIFF demands thirty days of pay as penalty 22 for not paying all wages due at time of termination for all employees 23 who terminated employment during the CALIFORNIA LABOR SUB- 24 CLASS PERIOD and demands an accounting and payment of all 25 wages due, plus interest and statutory costs as allowed by law. 26 12 1 (Doc. No. 1-1 ¶¶ 73–74. (emphasis added)) 2 3 Thus, as the complaint is worded, it is clear Plaintif is not alleging “every 4 putative class member is owed waiting time penalties.” In fact, Plaintif speci cally 5 states her claims are limited to “herself and the members of the CALIFORNIA 6 LABOR SUB-CLASS whose employment has terminated and who have not been 7 fully paid their wages due to them.” (Doc. No. 1-1 ¶ 74.) The closest Plaintif comes 8 to alleging a speci c number of violations is stating “the employment of . . . many 9 CALIFORNIA LABOR SUB-CLASS Members has terminated and DEFENDANT United States District Court Central District of California 10 has not tendered payment of all wages owed as required by law.” (Id. ¶ 73.) 11 “Many” is de ned as “consisting of or amounting to a large but inde nite number” 12 and depending upon the context and speaker, can mean anything more than one. 13 (Merriam-Webster, De nition of Many, http://www.merriam- 14 webster.com/dictionary/many.) Nevertheless, by specifying “many CALIFORNIA 15 LABOR SUB-CLASS Members”—instead of simply “CALIFORNIA LABOR 16 SUB-CLASS Members”—Plaintif indicated she is certainly not alleging “every 17 putative class member is owed waiting time penalties.” 18 19 Defendant also alleges “[b]ecause premiums for missed meal periods and rest 20 breaks are considered wages, and not penalties, the failure to pay any such premiums 21 due and owing at the time of separation could trigger Section 203 penalties.” (Doc. 22 No 27 at 18.) As discussed above, however, Defendant provided no factual basis for 23 an estimate of how many meal- and rest-period violations are alleged to have 24 occurred. Garibay, 539 F. App'x at 764 (“Archstone assumes that each employee 25 would be entitled to the maximum statutory [waiting-time] penalty, but provides no 26 13 1 evidence supporting that assertion.”). Thus, it is unclear how many class members 2 would be owed section 203 penalties based on nonpayment of section 203 penalties. 3 4 5 Accordingly, the Court nds Defendant has failed to sustain its evidentiary burden regarding waiting-period penalties for the purposes of removal. 6 7 8 9 3. Wage-Statement Penalties Defendant estimates its exposure for wage-statement penalties is $1,465,850.00. (Doc. No. 27 at 22.) Defendant bases its calculations on Plaintif’s United States District Court Central District of California 10 statements that, “Defendant failed to provide Plaintif and the other members of the 11 California Class with complete and accurate wage statements which failed to show, 12 among other things, the correct minimum wages for time worked, and allocation of 13 lawfully required, paid, and of-duty rest periods.” (Id. at 20.) Thus, Defendant 14 reasons, “because there was at least two unpaid meal and rest premiums per week, 15 Defendant may also reasonably assume that each of the bi-weekly paychecks issued 16 to employees failed to re ect the unpaid premiums such that employees might 17 recover penalties under Cal. Lab. Code § 226(e)(1).” (Id.) 18 19 Such an assumption is unwarranted. As discussed above, Defendant 20 provided no factual basis for its estimate of how many meal and rest period 21 violations occurred. Munoz v. Cent. Parking Sys., Inc., No. CV 10-6172 PA, 2010 22 WL 3432239, at *2 (C.D. Cal. Aug. 30, 2010). Thus it is unclear how many class 23 members would be owed penalties under section 226 of the California Labor Code. 24 Accordingly, the Court nds Defendant has failed to sustain its evidentiary burden 25 regarding wage-statement penalties for the purposes of removal. 26 14 1 2 4. Minimum-Wage Penalties Defendant estimates its exposure for minimum-wage penalties is 3 $2,029,858.00. (Doc. No. 27 at 23.) Defendant bases its calculations on Plaintif’s 4 statements that, 5 6 PLAINTIFF and the other CALIFORNIA CLASS Members 7 employed by DEFENDANT performed these manual tasks but were 8 not paid the minimum wages to which they were entitled because of 9 DEFENDANT's systematic policies and practices of failing to United States District Court Central District of California 10 correctly record all time worked, including, but not limited to, time 11 spent during pre and post trip inspections of DEFENDANT's trucks 12 and time spent waiting for DEFENDANT's loads to be ready for 13 transport. 14 15 (Doc. No. 1-1 ¶ 6.) 16 17 Based on this and Williams’s declaration stating, “each pre-trip and post-trip 18 inspection lasts, on average, at least approximately 15 minutes,” (Doc. No. 27-2 ¶ 9) 19 Defendant assumes “a violation rate of one hour of missed minimum wages per 20 work week [per employee], in spite of Plaintif alleging at least 2.5 hours of unpaid 21 time” (Doc. No. 27 at 23). 22 23 Again, as discussed above, Defendant’s calculations are not adequately 24 supported because Defendant ofers no facts to show how often these violations 25 allegedly occurred. Nowhere does Williams’s declaration address the likely average 26 rate of minimum-wage violations, the number of complaints Defendant received 15 1 regarding minimum-wage violations, or anything else that provides factual support 2 for Defendant’s assumption of “a violation rate of one hour of missed minimum 3 wages per work week [per class member.]” See Munoz, 2010 WL 3432239 at *2 4 (Holding that an employer may not assume employees “were not paid minimum 5 wage one time per week” without further supporting evidence.). Accordingly, the 6 Court nds Defendant has failed to sustain its evidentiary burden regarding 7 minimum-wage penalties for the purposes of removal. 8 9 United States District Court Central District of California 10 5. Attorneys’ Fees Defendant calculated its exposure for attorneys’ fees as 25% of Plaintif’s 11 projected damages. (Doc. No. 27 at 24.) While courts in the Ninth Circuit have 12 considered potential attorneys’ fees in calculating the amount in controversy in 13 wage-and-hour cases, Defendant’s fee estimate is based on a conjectural damages 14 calculation and should be disregarded. See Campbell v. Vitran Express, Inc., No. 15 CV-10-04442-RGK(SHx), 2010 WL 4971944, at *4 (C.D. Cal. Aug. 16, 2010) 16 (“[B]ecause such uncertainty surrounds Defendant’s calculation of damages and 17 penalties, the Court cannot nd that the inclusion of a 25% attorneys’ fee, which 18 Defendant recommends, would necessarily place the amount in controversy over the 19 $5,000,000 CAFA threshold.”) 20 21 22 IV. CONCLUSION The Court recognizes defendants’ burden of proof to show an amount in 23 controversy above ve-million dollars requires them to navigate a treacherous strait 24 between Scylla and Charybdis. Should defendants stray too far right—by providing 25 minimal or speculative evidence of their alleged violations—they risk losing the 26 ability to litigate in federal court under CAFA. On the other hand, should 16 1 defendants stray too far left—by providing ample evidence of their alleged 2 violations—they may be admitting liability and ultimately lose their case. 3 Nonetheless, there are options that avoid such risks. For instance, defendants may 4 wait until plaintifs conduct enough discovery to show their claims exceed ve- 5 million dollars, or if plaintifs attempt to remain in state court even after discovery 6 eforts clearly show the amount-in-controversy exceeds ve-million, defendants may 7 present their own investigation results to the court and remove the case to district 8 court. Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 (9th Cir. 2013) 9 (“even if a defendant could have discovered grounds for removability through United States District Court Central District of California 10 investigation, it does not lose the right to remove because it did not conduct such an 11 investigation and then le a notice of removal within thirty days of receiving the 12 indeterminate document”). Alternatively, if defendants wish to remove a case 13 before discovery occurs, “there are methods of determining a reasoned basis for the 14 calculations such as random sampling and . . . using actual numbers, rather than 15 averages to determine the amount put in controversy by the complaint.” Weston, 16 2013 WL 5274283 at *6. 17 18 For the reasons stated above, the Court nds Defendant has failed to sustain 19 its evidentiary burden for the purposes of removal. Accordingly the Court 20 GRANTS Plaintif’s Motion and DIRECTS the Clerk to REMAND this action to 21 the Superior Court of the State of California for the County of San Bernardino. 22 23 24 25 26 17 1 IT IS SO ORDERED. 2 3 Dated: 10/25/16 Virginia A. Phillips Chief United States District Judge 4 5 6 7 8 9 United States District Court Central District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 18

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