United States District Court, S.D. California
May 27, 2014
LAURA AVILEZ, and ROES 1-50, on behalf of themselves and in a representative capacity for all others similarly situated, Plaintiffs,
OMNICARE, INC. and DOES 1-50, inclusive, Defendants.
ORDER GRANTING PLAINTIFF'S MOTION TO REMAND TO STATE COURT [Dkt. No. 5.]
GONZALO P. CURIEL, District Judge.
Before the Court is Plaintiff's motion to remand to state court. (Dkt. No. 5.) Defendant filed an opposition on May 9, 2014. (Dkt. No. 9.) A reply was filed on May 16, 2014. (Dkt. No. 10.) Based on the briefs, supporting documentation, and the applicable law, the Court GRANTS Plaintiff's motion to remand.
Plaintiff Laura Avilez ("Plaintiff") brought a putative class action case against Defendant Omnicare, Inc. ("Defendant") in state court on January 17, 2014. (Dkt. No. 1-1, N. of Removal, Compl.) Plaintiff alleges wage and hour causes of action for failure to pay wages and overtime compensation; failure to provide rest periods and proper meal periods or compensation; failure to timely pay wages due at termination; unfair business practices; failure to provide accurate wage statements; declaratory relief; accounting; and injunctive relief. (Id.)
On February 21, 2014, Defendant filed a notice of removal to this Court pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), § 1441 and § 1446. (Dkt. No. 1.) In her motion, Plaintiff seeks to remand the case back to state court arguing that Defendant has failed to demonstrate the amount in controversy exceeds $5, 000, 000.
A. Motion to Remand/Amount in Controversy
Federal courts have original jurisdiction over class actions where 1) any member of the plaintiff class is diverse from any defendant; 2) the proposed class contains 100 or more putative class members; 3) and the amount in controversy exceeds the "sum or value of $5, 000, 000, exclusive of interest and costs." 28 U.S.C. § 1332(d); Rodriguez v. AT & T Mobility Servs., LLC , 728 F.3d 975, 978 (9th Cir. 2013). Plaintiff moves on the third factor alleging that Defendant failed to demonstrate the $5, 000, 000 amount in controversy by a preponderance of the evidence. Defendant contends that it has met its burden to demonstrate the amount in controversy.
"A defendant seeking removal of a putative class action must demonstrate, by a preponderance of evidence, that the aggregate amount in controversy exceeds the jurisdictional minimum. This standard conforms with a defendant's burden of proof when the plaintiff does not plead a specific amount in controversy." Rodriguez , 728 F.3d at 981; Abrego Abrego v. The Dow Chem. Co. , 443 F.3d 676, 683 (9th Cir. 2006). A preponderance of the evidence standard requires a defendant to "provide evidence establishing that it is more likely than not' that the amount in controversy exceeds that amount." Sanchez v. Monumental Life Ins. Co. , 102 F.3d 398, 404 (9th Cir. 1996) (citation omitted). This burden is not "daunting, " and the removing defendant is not obligated to "research, state, and prove the plaintiff's claims for damages." McCraw v. Lyons , 863 F.Supp. 430, 434 (W.D. Ky. 1994). "Specifically, the removing defendant must establish the amount in controversy by "[t]he greater weight of the evidence, ... [a] superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other." Lowery v. Alabama Power Co. , 483 F.3d 1184, 1209 (11th Cir. 2007) (citations omitted).
The removing defendant bears the burden of proof. Abrego Abrego , 443 F.3d at 678. The court looks at the amount in controversy at the time of the filing of the complaint and the ultimate inquiry is what amount is put "in controversy" by the plaintiff's complaint, not what a defendant will actually owe. Rippee v. Boston Market Corp. , 408 F.Supp.2d 982, 986 (S.D. Cal. 2005).
"[T]he amount-in-controversy inquiry in the removal context is not confined to the face of the complaint." Valdez v. Allstate Ins. Co. , 372 F.3d 1115, 1117 (9th Cir. 2004). In addition to the complaint, the court considers "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.'" Id . (quoting Matheson v. Progressive Specialty Ins. Co. , 319 F.3d 1089, 1090 (9th Cir. 2003)).
Calculations that are based on speculation and conjecture are not sufficient to meet the preponderance of the evidence standard. Fong v. Regis Corp., No. C 13-04497 RS, 2014 WL 26996, at *2 (N.D. Cal. Jan. 2, 2014); see also Lowdermilk v. U.S. Bank Nat'l Ass'n , 479 F.3d 994, 1002 (9th Cir. 2007), overruled on other grounds, Rodriguez v. AT & T Mobility Servs. LLC , 728 F.3d 975, 977 (9th Cir. 2013). A removing defendant is required to set forth underlying facts to support key variables used in their calculations. Andersen v. The Schwan Food Co., No. C 13-2362 PJH, 2013 WL 3989562, at *2 (N.D. Cal. Aug. 2, 2013) (citing Singer v. State Farm Mut. Auto. Ins. Co. , 116 F.3d 373, 377 (9th Cir. 1997)); Korn v. Polo Ralph Lauren Corp , 536 F.Supp.2d 1199, 1205 (E.D. Cal. 2008) ("a defendant must set forth the underlying facts supporting its assertion that the amount in controversy exceeds the statutory minimum"); Gaus v. Miles , 980 F.2d 564, 567 (9th Cir. 1992) (a defendant must set forth the underlying facts supporting its assertion that the amount in controversy exceeds the statutory minimum).
Here, the Complaint does not allege a specific amount in controversy and the "preponderance of the evidence" standard applies. See Rodriguez , 728 F.3d at 978. In order to demonstrate the amount in controversy, Defendant presents the declaration of Sandy Koch, the Human Resources Director, who is familiar with Omnicare's business operations and its record-keeping practices for employee personnel files. (Dkt. No. 1-4, Koch Decl. ¶¶ 1-2.) She reviewed payroll and personnel information to Omnicare's California personnel who worked from January 17, 2010 through January 29, 2014 during the putative class period. (Id. ¶ 6.) She also "reviewed employment start and end dates and rates of pay pertaining to all present and former employees holding a non-exempt position as a dispensing pharmacist and/or pharmacy technician and/or Order Entry Technicians during the putative class period." (Id.) Based on her review, she assessed there are 448 putative class members. (Id. ¶ 7.) Koch conducted calculations as to meal periods, rest periods, overtime pay, wage statement penalties, waiting time penalties and attorneys' fees and came to a total amount in controversy of $9, 657, 915.53. (Id. ¶¶ 9-15.)
Plaintiff objects to Koch's declaration as rife with speculation and conjecture which does not support the amount in controversy. Plaintiff alleges that Koch's calculations are not supported by any evidence or data and speculates as to the number of actual violations that occurred and the specific amount of damages for each potentially affected class member. Defendant argues that it has provided sufficient information to support its calculations.
Courts have held that assumptions without any supporting evidentiary support is speculative and cannot be used to support an amount in controversy. Roth v. Comerica Bank , 799 F.Supp.2d 1107, 1124 (C.D. Cal. Aug. 31, 2010) (granting plaintiff's motion to remand holding that assumptions upon which defendant's calculations were based were unsupported by summary judgment-type evidence under preponderance of the evidence standard); Ray v. Nordstrom Inc., No. 2:11cv7277-JHN-CWx, 2011 WL 6148668 (C.D. Cal. Dec. 9. 2011) (granting motion to remand in wage and hour case where Defendant did not support its assumptions with evidence under preponderance of the evidence standard); see also De Leon v. NCR Corp., 2013 WL 503092 (N.D. Cal. Feb. 8. 2013) (granting the plaintiffs' motion to remand for failure to meet the $5, 000, 000 amount in controversy due to lack of any evidence to support numbers stated in HR's declaration under "legal certainty" standard).
In Roth, the defendant assumed the potential class members were owed 3 to 5 hours of overtime per work week. Based on the approximate 65, 413 weeks worked during the class period multiplied by 3 or 5 hours and multiplying the resulting number by $19.50, plaintiff's standard overtime wage, the defendant came to an unpaid overtime range of $3, 826, 660 to $6, 377, 767. Roth , 799 F.Supp.2d at 1119. The complaint alleged "class member[s] regularly and/or consistently worked in excess of eight (8) hours in a day, in excess of twelve (12) hours in a day, and/or in excess of forty (40) hours in a week." Id. at 1124. The court noted that the failure to pay overtime allegation did not support defendant's assumption that the class members routinely worked 3-5 hours of overtime per week without receiving overtime pay. Id . The Court concluded the calculations were speculative. Id . The same analysis and conclusion applied to the other wage and hour causes of action. Id.
Similarly, in Ray, the vice president for human resources operations provided competent evidence as to the number of California hourly employees, their average hourly wage, the number of hours worked per day and average days worked per pay period. Ray, 2011 WL 6148668 at 3. However, defendant relied on a number of assumptions. For example, as to the claim for failure to pay regular and overtime wages, defendant assumed that 1, 500 out of 2, 500 hourly employees did not receive full compensation for all regular and overtime hours worked. Next, it assumed that those 1, 500 employees missed one hour of regular pay and one hour of overtime pay per pay period. Id . Because the complaint only alleged that the defendant "failed to pay all' California hourly employees at least some regular and overtime hours, " the court concluded that Defendant's contention that the purported class members missed one hour of regular pay and one hour of overtime pay per pay period is not supported. Id.
In this case, the Complaint alleges a "pattern and practice" of denying meal breaks. (Dkt. No. 1-1, Compl. ¶ 26.) As to meal periods, Koch wrote:
Based on my review of the aforementioned data, I was able to determine the actual hourly rate of pay corresponding to each week worked by a putative class member during the putative class period. Multiplying the rate of pay by one (1) to represent one hour's premium pay for a missed meal period for each of those workweeks, and adding together the one hour's pay figures for every week that was worked by the putative class member during the putative class period for all of the 448 individual members of the putative class results in a total of $2, 097, 027.35 for the putative class.
(Dkt. No. 1-4, N. of Removal, Koch Decl. ¶ 9.)
First, Koch's declaration provides less facts or calculations than the other district court cases cited above that granted plaintiff's motion to remand. Next, she improperly assumes that all employees missed one hour of rest period for every week during the purported class period. This assumption is not supported by evidence or data and is not alleged in the complaint. Moreover, she does not provide any evidence to support an hourly rate of pay, the number of hours worked per day, and the number of work weeks during the class period.
Similar problems exist with Defendant's other calculations of Plaintiff's rest period as well as overtime pay. As to overtime pay and rest period, Defendant improperly assumes that each class member worked one hour of overtime or missed one hour of rest period each week. The complaint makes no such allegation. As to wage statement penalties, Defendant improperly assumes that all of the putative members received inaccurate wage statements during every single pay period; however, the complaint merely alleges that Defendant knowingly failed to provide the putative class members with a true and accurate wage statement. (Dkt. No. 1-1, Compl. ¶ 58.) Defendant has not shown that Plaintiff's complaint supports its assumptions and has not supported these assumptions with evidence. See Ray, 2011 WL 6148668 at 3. Lastly, as to waiting time penalties, Defendant has not provided the "most recent hourly rate" and why that rate was used to support its calculations. Accordingly, the Court concludes that Defendant has not shown by a preponderance of the evidence that the $5 million amount in controversy is met.
B. Attorneys' Fees and Costs
Plaintiff requests attorneys' fees and costs for improper removal under 28 U.S.C. § 1447(c). "[C]ourts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal." Lussier v. Dollar Tree Stores, Inc. , 518 F.3d 1062, 1065 (9th Cir. 2008). "[R]emoval is not objectively unreasonable solely because the removing party's arguments lack merit, or else attorney's fees would always be awarded whenever remand is granted." Id . The Court concludes that there was not a lack of an objectively reasonable basis by Defendants to seek removal. Accordingly, the Court DENIES Plaintiffs' request for attorneys' fees and costs.
Based on the above, the Court GRANTS Plaintiff's motion to remand to state court. The Court also DENIES Plaintiffs' request for attorney's fees and costs. The Court vacates the hearing set for May 30, 2014.
IT IS SO ORDERED.