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Surendra K. Shrivastava v. Fry's Electronics

August 29, 2011

SURENDRA K. SHRIVASTAVA,
PLAINTIFF,
v.
FRY'S ELECTRONICS, INC.,
DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER REMANDING CASE FOR LACK OF FEDERAL JURISDICTION

(re: dkt. #11)

Presently before the Court is a motion to remand. See Dkt. #11. The Court deems this motion appropriate for resolution without oral argument, and vacates the September 1, 2011 19 motion hearing and case management conference. See Civ. L.R. 7-1(b). For the reasons explained 20 below, the Court GRANTS the motion to remand. This action is remanded to the Santa Clara County Superior Court.

I.BACKGROUND

This is an action arising from the alleged failure of Defendant Fry's Electronics, Inc. ("Defendant") to pay all earned and unused vacation at employment termination to Plaintiff 25 Surendra K. Shrivastava ("Plaintiff"). On January 19, 2011, Plaintiff, on behalf of himself and all 26 persons similarly situated, filed a class action complaint in Santa Clara County Superior Court 27 alleging two state law causes of action: (1) Unfair Competition in violation of California Business 28 & Professions Code § 17200 et seq.; and (2) Failure to Pay Accrued Vacation Compensation in violation of California Labor Code §§ 201, 203, 216, 218.5, and 227.3. Specifically, Plaintiff 2 alleges that he was a "non-exempt, hourly employee" of Defendant, and that he was not paid for 3 forfeited vacation and holiday time because of Defendant's "use it or lose it" vacation and holiday 4 pay policy. See Compl. ¶¶ 1-4. In addition, Plaintiff alleges that Defendant had a "Voluntary 5

However, according to Plaintiff's allegations, Defendant did not pay vacation benefits with funds 7 from the VEBA Plan, but instead paid benefits from its general assets. Id. at ¶ 2. 8

9 based on federal question jurisdiction. According to Defendant, Plaintiff's state law claims are 10 completely preempted by the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. See Notice of Removal ¶ 3.*fn1

Upon removal, Plaintiff filed a timely motion to remand. Defendant has filed an opposition, and Plaintiff has filed a reply. The motion is now ripe for the Court's decision.

removal." See Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir. 17 "strong presumption" against removal. See Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 19 2006). In general, courts look to the "well-pleaded complaint rule" to determine whether an action 20 falls within the bounds of federal question jurisdiction. See Marin General, 581 F.3d at 944. Thus, 21 if a complaint contains only state law causes of action, there is generally no federal question 22 jurisdiction even if there is a federal defense to the state law cause of action. See Aetna Health Inc. 23 v. Davila, 542 U.S. 200, 207 (2004). However, there is an exception to the well-pleaded complaint 24 rule for state law causes of action that are "completely preempted" by ERISA. See id. at 208; see 25 also Marin General, 581 F.3d at 944. 26 27 preempted by ERISA, and are thus removable on the ground of federal question jurisdiction. 28

Employees' Beneficiaries Association Trust ("VEBA") Plan" to provide vacation benefits. 6

Defendant removed this action on April 15, 2011. Defendant argues that removal is proper

II. ANALYSIS

"The burden of establishing federal subject matter jurisdiction falls on the party invoking 2009). The Court strictly construes the removal statute against removal jurisdiction, and there is a 18 Here, Defendant alleges that Plaintiff's two state law causes of action are completely Defendant contends that its VEBA Plan is an ERISA "employee welfare benefit plan" within the 2 meaning and governance of ERISA, 29 U.S.C. § 1002(1), which includes any plan maintained for 3 the purpose of providing "vacation benefits" for its participants. If Defendant is correct, ERISA 4 would preempt any state law relating to Defendant's VEBA Plan, 29 U.S.C. § 1144(a), and 5

The Court finds, however, that Defendant has failed to meet its burden of establishing removal jurisdiction. "In order to determine whether an asserted state-law cause of action comes 8 within the scope of ยง 502(a)(1)(B), the [Supreme] Court formulated a two-prong test. Under 9 ...


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