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Pulera v. F&B

August 18, 2008

ANTHONY J. PULERA, PLAINTIFF,
v.
F&B, INC., MANCHESTER ENTERPRISES, INC., CHARLENA MANCHESTER, CHARLES MANCHESTER, AND DOES 1-10, DEFENDANTS.
F&B, INC., MANCHESTER ENTERPRISES, INC., THIRD PARTY PLAINTIFFS,
v.
TW CONSTRUCTION CO., INC., AND DOES 1-25, INCLUSIVE, THIRD PARTY DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Plaintiff Anthony J. Pulera ("Plaintiff" or "Pulera") seeks monetary relief against Defendants F&B, Inc. ("F&B"), Manchester Enterprises, Inc. ("Manchester, Inc."), Charlena Manchester ("Charlena"), Charles Manchester ("Charles"), and DOES 1-10 (collectively "Defendants"), for failure to pay overtime and minimum wages, breach of contract, failure to provide meal periods, failure to provide accurate pay stubs, submitting false and fraudulent certified payroll records, failure to pay wages due at end of employment, violation of California Business and Professions Code §§ 17200 and 17203, and civil penalties pursuant to California Labor Code Private Attorneys General Act (California Labor Code § 2698, et seq.*fn1 ).

Defendants seek contractual and equitable indemnity as Third Party Plaintiffs against TW Construction Co., Inc. and DOES 1-25, (hereinafter collectively referred to as "TW") for allegedly misleading Defendants into believing the development project ("Project") for which Defendants hired Pulera was not subject to the payment of prevailing wages. TW now moves to dismiss Plaintiff's complaint pursuant to Federal Rule of Civil Procedure 12(b)(1)*fn2 for lack of subject-matter jurisdiction, on grounds that under Plaintiff's theory of diversity jurisdiction, Plaintiff's claim fails to exceed the amount in controversy requirement of $75,000.00. See 28 U.S.C. § 1332. Defendants join in this motion.

For the reasons stated below, the Motion to Dismiss is GRANTED with leave to amend.*fn3

BACKGROUND*fn4

Plaintiff was hired by Defendants to work on the Project, which comprises a convention center, hotels, condominiums, and retail uses, on the California side of South Lake Tahoe. Plaintiff's job duties included soft and hard demolition, and the moving of materials. (Amended Joint Status Report 2:16-17.) The Project was allegedly funded in whole or in part by public funds from the City of South Lake Tahoe and South Tahoe Redevelopment Agency. Plaintiff asserts that this use of public funds made the Project subject to the payment of prevailing wages required by California's Department of Industrial Relations.

On January 22, 2008, Plaintiff filed his Complaint for Damages and Demand for Jury Trial in this Court under diversity jurisdiction. Plaintiff alleges seven causes of action in his Complaint: (1) Failure to Pay Overtime and Minimum Wages; (2) Breach of Contract; (3) Failure to Provide Rest and Meal Periods; (4) Failure to Provide Accurate Pay Stubs and Records and Submitting False and Fraudulent Certified Payroll Records; (5) Failure to Pay Wages Due at End of Employment and Waiting Time Penalties; (6) Violation of California Business and Professions Code §§ 17200 and 17203; and (7) Civil Penalties pursuant to Labor Code Private Attorneys General Act ("PAGA") (Labor Code § 2698, et seq.).

TW filed this Motion to Dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction on the grounds that Plaintiff's claim fails to exceed the amount in controversy threshold of $75,000.00. 28 U.S.C. § 1332. TW alleges that because some of Plaintiff's claims are subject to a 75% apportionment to the California Labor & Workforce Development Agency ("LWDA") under PAGA, Plaintiff's possible recovery, less the apportionment to LWDA, does not meet the statutory threshold requirement, and therefore his Complaint must be dismissed. Defendants join in this motion.

STANDARD

Where the parties in an action are citizens of different states, a district court "shall have original jurisdiction ... where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). This amount includes claims for general and special damages (excluding costs and interests), attorneys fees if recoverable by statute or contract, and punitive damages, if recoverable as a matter of law. Conrad Assocs. v. Hartford Accident & Indem. Co., 994 F. Supp. 1196, 1198 (N.D. Cal. 1998).

The amount is "determined at the time the action commences, and a federal court is not divested of jurisdiction ... if the amount in controversy subsequently drops below the minimum jurisdictional level." Hill v. Blind Industries and Services of Maryland, 179 F.3d 754, 757 (9th Cir. 1999).

The Supreme Court has stated that in diversity cases where the amount in controversy is in doubt, "[i]t must appear to a legal certainty that the [plaintiff's] claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). Federal courts are courts of limited jurisdiction, and thus when faced with a motion to dismiss, the party seeking the federal court jurisdiction bears the burden of proving that jurisdiction is proper. McNutt v. General Motors Acceptance Corp. of Indiana, 298 U.S. 178, 189, 56 S.Ct. 780, 785 (1936).

ANALYSIS

TW claims that Plaintiff's Complaint appears to a legal certainty to fall below the amount in controversy requirement under 28 U.S.C. ยง 1332, and thus Plaintiff's claims must be dismissed. St. Paul Mercury, 303 U.S. at 289. The Ninth Circuit stated that such "legal certainty" exists "when a rule of law or limitation of damages would make it virtually impossible for a plaintiff to meet the ...


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