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Karlbom v. EDS

United States District Court, S.D. California

April 17, 2014

MICHAEL KARLBOM and DONALD PRATKO, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
EDS, AN HP COMPANY; HEWLETT PACKARD COMPANY, a Delaware Corporation; ELECTRONIC DATA SYSTEMS, LLC, a Delaware Limited Liability Entity; ELECTRONIC DATA SYSTEMS CORPORATION, a Texas Corporation, and DOES 1 through 100, Inclusive, Defendants.

ORDER

WILLIAM Q. HAYES, District Judge.

The matter before the Court is the Motion for Remand filed by Plaintiffs Michael Karlbom and Donald Pratko. (ECF No. 5).

I. Background

On March 16, 2009, Plaintiffs filed a "Class Action Complaint for Damages, Restitution, Injunctive and Declaratory Relief" ("Complaint") in San Diego County Superior Court, Case No. 37-2009-00085300-CU-OE-CTL. (Notice of Removal, Ex. 1, ECF No. 1-2). Plaintiffs alleged that certain current and former employees of Defendants were misclassified as exempt from overtime pay, and sought damages for regular overtime (hours in excess of 40 hours a week or 8 hours a day) and double time that they would have earned had they been properly classified. Plaintiffs alleged that the required amount in controversy under the Class Action Fairness Act of 2005 ("CAFA") would not be satisfied. Id. ¶ 7.

On April 23, 2009, Defendants filed a Notice of Removal in this Court, S.D. Cal. Case No. 09cv849-LAB(RBB), alleging diversity subject-matter jurisdiction pursuant to CAFA, 28 U.S.C. § 1332(d). (Notice of Removal, Ex. 3, ECF No. 1-2).

On September 17, 2009, the Court issued an Order allowing Defendants "discovery in order to be able to respond to Plaintiffs' challenge regarding the amount in controversy." Id., Ex. 4, ECF No. 1-2 at 121. The Court also granted Plaintiffs leave to amend the Complaint "to show the total amount they seek to recover." Id. at 122.

On November 30, 2009, Plaintiffs filed the "First Amended Class Action Complaint for Damages, Restitution, Injunctive and Declaratory Relief" ("First Amended Complaint"), which is the operative pleading. Id., Ex. 5, ECF No. 1-2. Plaintiffs allege that "the aggregate amount of all class member claim[s] is less than $5, 000, 000.00." Id. ¶ 7, ECF No. 1-2 at 128.

On March 12, 2010, the Court issued an Order remanding this action to state court. Id., Ex. 7, ECF No. 1-2. The Court stated that "[b]ecause Plaintiffs... requested relief valued at less than $5 million, ... the [CAFA] amount in controversy [of $5 million] was not met on the face of the complaint and Defendants could only show the Court had jurisdiction if they could demonstrate to a legal certainty that the threshold was met, in accordance with Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 998 (9th Cir. 2007)." Id. at 2, ECF No. 1-2 at 176. The Court held that Defendants "failed to demonstrate to a legal certainty that the amount Plaintiffs are seeking exceeds $5 million." Id. at 10, ECF No. 1-2 at 184. The docket reflects that Defendants did not appeal the March 12, 2010 Order remanding this action to state court.

On March 19, 2013, the United States Supreme Court issued Standard Fire Insurance Co. v. Knowles, 133 S.Ct. 1345 (2013), which held that in determining whether CAFA's $5, 000, 000 amount in controversy requirement is satisfied, a district court must ignore any stipulation by the plaintiff limiting the amount sought, "because a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified." Id. at 1349, 1350. On August 27, 2013, the Court of Appeals for the Ninth Circuit issued an opinion stating that " Lowdermilk has been effectively overruled by Standard Fire. " Rodriguez v. AT&T Mobility Servs., LLC, 728 F.3d 975, 982 (9th Cir. 2013).

On December 13, 2013, Defendants again filed a Notice of Removal in this Court, S.D. Cal. Case No. 13cv2996-WQH(DHB), alleging diversity subject-matter jurisdiction pursuant to CAFA, 28 U.S.C. § 1332(d). (ECF No. 1). The Notice of Removal is accompanied by exhibits and the Declaration of Gina Burges, Business Compensation Manager for an affiliate of Defendant Hewlett-Packard Company. Burges asserts that, based upon the allegations of the First Amended Complaint, the discovery responses from Plaintiffs, and the records of Defendants, "adding together all of the potential overtime damages for each putative class member of Plaintiff Class I yields an amount in controversy of over $24, 000, 000." (Burges Decl. ¶ 23, ECF No. 1-2).

On January 10, 2014, Plaintiffs filed the pending Motion for Remand. (ECF No. 5). On February 4, 2014, Defendants filed a response in opposition to the Motion for Remand. (ECF No. 9). On February 10, 2014, Plaintiffs filed a reply. (ECF No. 11). On April 11, 2014, the Court heard oral argument. (ECF No. 19).

II. Contentions of the Parties

In the Motion for Remand, Plaintiffs contend that remand is appropriate based on the following grounds:

(1) Defendants' Removal was untimely. The law and facts on which they rely to resurrect their removal rights were available and known to Defendants long ago, and not within ...

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