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David Tompkins; Individually and On Behalf of Members of the v. C&S Wholesale Grocers

July 9, 2011

DAVID TOMPKINS; INDIVIDUALLY AND ON BEHALF OF MEMBERS OF THE GENERAL PUBLIC SIMILARLY SITUATED, AND AS AGGRIEVED EMPLOYEES PURSUANT TO THE PRIVATE ATTORNEY GENERAL ACT ("PAGA"), PLAINTIFFS,
v.
C&S WHOLESALE GROCERS, INC., A VERMONT CORPORATION; TRACY LOGISTICS, LLC, AN UNKNOWN BUSINESS ENTITY; AND DOES 1 THROUGH 100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING MOTION TO REMAND

On April 13, 2011, Plaintiff David Tompkins filed a motion seeking to remand this case to the Sacramento County Superior Court in California from which it was removed. (ECF No. 10.) Defendants C&S Wholesale Grocers, Inc. and Tracy Logistics, LLC (collectively, "Defendants") oppose the motion. (ECF No. 11.) Defendants argue in their opposition the motion should be denied because diversity jurisdiction exists under 28 U.S.C. § 1332(a) which supports the removal of this case to federal court based on the uncontroverted evidence establishing that the amount in controversy is well in excess of $75,000." (Opp'n 1:11- 12.) For the reasons stated below, Plaintiff's motion to remand will be GRANTED.

I. BACKGROUND

On February 3, 2011, Plaintiff filed a Complaint in the Sacramento County Superior Court, alleging the following three claims under state law. (Compl. ¶¶ 56-102.): (1) failure to pay minimum wages and overtime wages in violation of California Labor Code sections 510 and 1198; (2) civil penalties under California Labor Code sections 2698, et seq.; and (3) unfair business practices in violation of California Business and Professions Code sections 17200, et seq. Id. Plaintiff also alleges that the amount in controversy "including claims for compensatory damages, interest, and pro rata share of attorneys' fees, is less than $75,000." Id. ¶ 1.

On March 14, 2011, Defendants filed a Notice of Removal, removing this case to federal court on the basis of diversity jurisdiction. (Notice of Removal ¶ 7.) Defendants' Notice of Removal states that removal is proper since there is complete diversity of citizenship between Plaintiffs and Defendants and the amount in controversy exceeds the sum of $75,000, exclusive of costs and interest. Id.

II. LEGAL STANDARD

Removal to federal court is only proper under diversity jurisdiction when a case originally filed in state court is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. § 1332(a). "The removal statute is strictly construed against removal jurisdiction [and] [t]he defendant bears the burden of establishing that removal is proper." Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (citations omitted). "Where doubt regarding the right to removal exists, a case should be remanded to state court." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

"Where it is not facially evident from the complaint that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold." Matheson, 319 F.3d at 1090. Defendants need to "provide evidence establishing that it is 'more likely than not' that the amount in controversy exceeds" $75,000. Sanchez v. Monumental Life Insurance Co., 102 F.3d 398, 404 (9th Cir. 1996). The Court will "consider[] facts presented in the removal petition as well as any 'summary judgment-type evidence relevant to the amount in controversy at the time of removal.' Conclusory allegations as to the amount in controversy are insufficient." Matheson, 319 F.3d at 1090-91.

Plaintiff, citing Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007), argues that since he "unequivocally alleges the amount in controversy . . . is less than $75,000[,] . . . Defendants must prove to a legal certainty, that the federal jurisdiction amount is met." (Mot. 4:3-5, 18-19.) However, "[i]n a footnote, the Guglielmino court discussed and left open the question whether the . . . 'legal certainty' standard applies only in the [Class Action Fairness Act ("CAFA")] context." HSBC Bank USA, NA v. Valencia, No. 09-CV-1260-OWW-JLT, 2010 WL 546721, at *5 (E.D. Cal. Feb. 10, 2010). Several district courts have extended the legal certainty burden of proof to § 1332(a) diversity jurisdiction cases. See e.g. Lara v. Trimac Transp. Servs. Inc., No. CV 10-4280-GHK (JCx), 2010 WL 3119366, at *1 n.1 (C.D. Cal. Aug. 6, 2010) (applying the legal certainty standard in a § 1332(a) diversity jurisdiction case); accord Site Mgmt. Solutions, Inc. v. TMO CA/NV, LLC, No. CV 10--08679 MMM (JEMx), 2011 WL 1743285, at *3 (C.D. Cal. May 4, 2011); but see Lyon v. W.W. Grainger, Inc., No. C 10-00884 WHA, 2010 WL 1753194, at *1 (N.D. Cal. Apr. 29, 2010) (explaining "[i]t would be an unprecedented extension of Ninth Circuit caselaw to apply the burden of proof that plaintiff suggests to a non-CAFA case such as this"). However, this issue need not be determined in this case since, as discussed below, Defendants have not met their burden of proof under the preponderance of the evidence standard.

III. Discussion

Plaintiffs argue this action should be remanded to state court since Defendants failed to offer "evidence supporting [their] contention that the amount in controversy exceeds $75,000[.]" (Mot. for Remand ("Mot.") 6:1-2.) Defendants respond, arguing diversity jurisdiction exists since the "the uncontroverted evidence establishes that the amount in controversy is well in excess of $75,000." (Opp'n 1:11-12.)

A. Unpaid Overtime

Defendants argue the "amount in controversy [is] more than $75,000 on [Plaintiff's unpaid overtime] claim alone[.]" (Opp'n 8:13-14.) Plaintiff alleges that "Defendants regularly and consistently failed to pay overtime wages to Plaintiff" and Plaintiff was "required to work more than eight (8) hours per day and/or forty (40) hours per week without overtime compensation." (Compl. ¶ 40.) Defendants argue they "based their removal calculations on the amount in controversy for Plaintiff's overtime claim on the assumption that Plaintiff 'regularly and consistently' worked at least 10 hours of overtime per week." (Opp'n 6:14-16.) Defendants argue their "estimates [are] credible" since "[w]hen asked to stipulate that he worked less than 10 hours of overtime per week, Plaintiff refused to stipulate." Id. 7:15-17. Plaintiff counters that his "refusal to stipulate to the amount of overtime hours [he] worked is [not] evidence of bad faith" and "Defendants cannot prove their overtime calculations without [their] assumption" that Plaintiff worked ten hours of overtime per week. (Reply 2:24-25, 6:25-26.)

Defendants acknowledge their calculations of the amount in controversy in Plaintiff's unpaid overtime claim are based on an "assumption"; Plaintiff's refusal to stipulate to the amount of overtime hours he worked is not evidence and does not support Defendants' "assumption". See Bassel v. 4Access Communications Co., No. 07cv2346-L(JMA), 2008 WL 2157005, at *3 (S.D. Cal. May 21, 2008) ("If a plaintiff's refusal to stipulate is sufficient to satisfy that burden, a defendant could force the plaintiff to choose between stipulating against his or her future remedies and remaining in federal court."). Defendants fail to support their calculation of the amount in controversy in Plaintiff's unpaid overtime claim with evidence and ...


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