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Robert Zator, Individually and On Behalf v. Sprint/United Management Company

March 29, 2011

ROBERT ZATOR, INDIVIDUALLY AND ON BEHALF OF OTHER MEMBERS OF THE GENERAL PUBLIC SIMILARLY SITUATED, AND AS AN AGGRIEVED EMPLOYEE PURSUANT TO THE
PRIVATE ATTORNEY'S GENERAL ACT ("PAGA), PLAINTIFF,
v.
SPRINT/UNITED MANAGEMENT COMPANY, A KANSAS CORPORATION, AND DOES 1 THROUGH 10, DEFENDANTS.



The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge

[Docket nos. 9, 20]

ORDER GRANTING MOTION FOR REMAND; AND

ORDER OF REMAND

Zator originally brought this wage and hour action in the Superior Court of California for the County of San Diego, as an aggrieved employee under California's Private Attorneys General Act (PAGA), alleging that Sprint had not properly reimbursed him and other employees for business expenses. Sprint removed this action from the Superior Court of California for the County of San Diego, on the basis of diversity pursuant to 28 U.S.C. § 1332. This case is related to Zator v. Sprint, 09cv935-LAB (MDD) which, however, seeks PAGA penalties under other theories.

Zator then filed a motion seeking remand, and questioning the amount in controversy. Sprint pointed out that in the complaint, Zator sought civil penalties under California Labor Code § 2699(f) and (g) in the amount of $100 for each violation per pay period for the initial violation, $200 per aggrieved employee per pay period for each subsequent violation, costs, and attorney's fees. Sprint also pointed to citations to California Labor Code §§ 510, 1198, 201, 202, 203, and 204, and allegations that Zator and other aggrieved employees were deprived of overtime wages owed to them.

I. Amount in Controversy

Here, jurisdiction turns on the amount in controversy. Where a complaint has pleaded an amount in controversy less than the jurisdictional threshold, the party seeking removal must prove to a legal certainty that the amount in controversy is met. Lowdermilk v. U.S. Bank N.A., 479 F.3d 994, 100 (9th Cir. 2007). Where, on the other hand, the complaint pleads no amount in controversy, or the amount in controversy is ambiguous, the party seeking removal must show by a preponderance of the evidence that the amount in controversy is met. Guglielmino v. McKee Food Corps., 506 F.3d 696, 699 (9th Cir. 2007). In either case, the burden of showing the jurisdictional amount is met falls on the removing party, i.e., Sprint. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). The removal statute is strictly construed, Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006), and if there is any doubt about the propriety of removal, the action should be remanded. Id. at 690 (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)).

The claim by one plaintiff must satisfy the $75,000 amount in controversy requirement; the claims of other aggrieved employees cannot be aggregated to reach that threshold. See Bernal v. Comerica Bank, 2010 WL 3037259, *4 (C.D.Cal., July 30, 2010). While Sprint urges application of the "either viewpoint" rule, this is primarily applicable in cases where courts are called on to set the value of injunctive relief.*fn1 See In re Ford Motor Co., 264 F.3d 952, 958 (9th Cir. 2001) ("[W]here the value of a plaintiff's potential recovery . . . is below the jurisdictional amount, but the potential cost to the defendant of complying with the injunction exceeds that amount, it is the latter that represents the amount in controversy for jurisdictional purposes.") It does not mean the claims of all plaintiffs in a non-CAFA action can be aggregated to reach the jurisdictional amount. See Gibson v. Chrysler Corp., 261 F.3d 927, 944 (9th Cir.2001) ("Aggregation is appropriate only where a defendant owes an obligation to the group of plaintiffs as a group and not to the individuals severally.")

The complaint brings one cause of action, under California's Private Attorney General Act (PAGA), Cal. Lab. Code §§ 2698 et seq. Within this section, the complaint seeks penalties for violations of Cal. Lab. Code §§ 2800, 2802 (Compl., ¶ 35), 201, 202 (id., ¶ 36), and 204 (id., ¶ 37.) Accordingly, the complaint seeks, on behalf of Zator and all other aggrieved employees, "business expenses, unpaid wages, and/or untimely wages . . . attorneys' fees and costs pursuant to California Labor Code section 218.5, as well as all statutory penalties against Defendants . . ." of $100 per aggrieved employee per pay period for the initial violation, plus $200 per aggrieved employee per pay period for subsequent violations under both Cal. Labor Code §§ 2699 and 210. (Compl., ¶ 38.) The amount of business expenses, unpaid wages, and untimely wages is never alleged and the parties present no evidence on this point.

The complaint limits the recovery somewhat:

The amount of monetary penalties in controversy as a result of misconduct experienced by Plaintiff, and those attorney's fees and costs attributable to recovery of PAGA penalties for Plaintiff, is less than $75,000. (Compl., ¶ 2.) This is not an overall limitation on recovery, however. While the amount of penalties and attorney's fees may be less than $75,000, the amount of other damages ("business expenses, unpaid wages, and/or untimely wages") is not included. The parties present no evidence on how much these might amount to. As in Guglielmino, 506 F.3d at 700--01, a disclaimer of some but not all forms of relief sought leaves the amount in controversy uncertain. The Court therefore applies the "preponderance" standard in determining whether the amount in controversy is met.

A. Diversity Jurisdiction

Paragraph 15 of the notice of removal calculates the amount in controversy as $29,000 in PAGA penalties to Zator himself, plus statutory attorney's fees of over $75,000. No amount is assigned for business expenses or unpaid wages. The basis for penalty calculations is included in the notice, and the statutory attorney's fees calculation is supported by a declaration.

Both the notice of removal and Sprint's opposition to the motion for remand project that Zator's attorney's fees will approach or exceed $75,000. The notice of removal, for example, is supported by the declaration of Harold Brody, who makes estimates based on his experience litigating this and similar cases. (Brody Decl. in Supp. of Notice of Removal, ΒΆ 6.) See Brady v. Mercedes-Benz, 243 F. Supp. 2d 1004, 1010--11 (N.D.Cal. 2002) (holding that, where attorney's fees are recoverable ...


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