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Deaver v. BBVA Compass Consulting and Benefits, Inc.

United States District Court, N.D. California

May 27, 2014




Plaintiff filed this putative state law wage and hour class action in Alameda County Superior Court. Defendants BBVA Compass Insurance Agency, Inc. ("BBVA Compass") and Compass Bank (collectively "Defendants") subsequently removed the case to federal court under the Class Action Fairness Act ("CAFA") of 2005. See 28 U.S.C. §§ 1332(d), 1441, 1453. Applying the "legal certainty" test set forth in Lowdermilk v. United States Bank National Association, 479 F.3d 994, 999 (9th Cir. 2007), the Court granted Plaintiff's motion to remand. Defendants appealed. While the appeal was pending, the Ninth Circuit overruled Lowdermilk and held that under CAFA a removing defendant need only establish that the amount in controversy is satisfied by a preponderance of the evidence. Rodriguez v. AT & T Mobility Services LLC, 728 F.3d 975 (9th Cir. 2013). In accordance with Rodriguez, the Ninth Circuit reversed and remanded the case to this Court for reconsideration of Plaintiff's motion to remand.

After considering the parties' pre and post-remand submissions, as well as the pleadings in the related case, the Court concludes that Defendants have met their burden by a preponderance of the evidence. Because the Court has diversity jurisdiction of this putative class action, Plaintiff's motion to remand must be DENIED. The Court also concludes, in the exercise of its discretion, that convenience and the interest of justice do not warrant transferring this action to the Central District of California and thus Defendants' motion to transfer must also be DENIED. Finally, as the Complaint lacks substantive factual allegations, the motion to dismiss will be GRANTED with leave to amend.


I. The Prior Action

Plaintiff initially filed suit in Riverside County Superior Court (the "Prior Action"). Pursuant to CAFA, Defendants removed the Prior Action to the Central District. (Case No. EDCV11-1489 PSG). Plaintiff did not move to remand, and the case remained in federal court. Although the parties stipulated and agreed to waive the deadlines for filing a class certification motion set forth in Central District Local Rule 23-3[1] on two occasions, the district court denied both stipulations. With mediation negotiations pending, Defendants submitted an ex parte application for an order clarifying whether the court considered the case a putative class action. The court checked the box on Defendants' proposed order indicating that "[t]his case is not a class action" and filed the order. (Dkt. No. 3-4 at 6-7.) Shortly thereafter, the parties stipulated to dismissal of the Prior Action without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), with each party to bear her or its own attorneys' fees and costs, and the court so ordered. ( Id. at 10-12.) The stipulation did not contain any conditions or limitations on Plaintiff's ability to file the same, or a similar action, in the future.

II. The Present Action

Approximately four months after the stipulated dismissal of the Prior Action, Plaintiff filed the present putative class action complaint ("the Complaint") in Alameda Superior Court. Plaintiff alleges five causes of action: (1) failure to pay wages for time worked; (2) failure to provide meal periods or compensation in lieu thereof; (3) failure to timely pay wages due at termination; (4) knowing and intentional failure to comply with itemized employee wage statement provisions; and (5) violation of the Unfair Competition Law ("UCL") (codified at California Business & Professions Code § 17200 et seq. ).

Although the Prior Action involved the same named Plaintiff and Defendants, there are significant differences between that action and the present Complaint. First, the Prior Action alleged two additional causes of action not present here: a claim for "failure to provide rest periods or compensation in lieu thereof" (Dkt. No. 3-3 at 17-18), and a claim under the Private Attorneys General Act, California Labor Code § 2698, et seq. ( Id. at 23-24.) In addition, Plaintiff's second amended complaint in the Prior Action provides a level of factual detail that is absent from the present Complaint.

III. Removal and the Motion to Remand

Defendants timely removed the Complaint on the ground that this Court has original jurisdiction under CAFA. In their removal papers, Defendants performed calculations for each of Plaintiff's causes of action on a class-wide basis and determined that the total amount in controversy was $5, 772, 662. However, as Plaintiff demonstrated in her motion to remand and as Defendants conceded, Defendants' original calculations contained errors that inflated the final amount above the $5, 000, 000 threshold. Defendants corrected those errors in their subsequent calculations in their opposition to the motion to remand ("Opposition"), [2] but in so doing, they also changed their approach to those calculations. Initially, Defendants based their calculations on the allegations of the Complaint. Upon realizing the errors in their calculations, however, Defendants changed their approach and based their amount in controversy calculations on the more detailed allegations from the Prior Action.

The Court determined that it could not consider Plaintiff's allegations in the Prior Action in determining whether Defendants had proved the requisite amount in controversy to a legal certainty. (Dkt. No. 32 at 5-6.) Applying the legal certainty test to the allegations of the Complaint together with Defendants' evidence, the Court concluded that the amount in controversy was not satisfied and remanded the case to Alameda County Superior Court. Pursuant to CAFA Defendants timely filed a petition with the Ninth Circuit for permission to appeal the remand order. See 28 U.S.C. § 1453(c)(1). While the petition was pending, the Ninth Circuit overruled the legal certainty test of Lowdermilk v. United States Bank National Association, 479 F.3d 994 (9th Cir. 2007), as a result of the United States Supreme Court's decision in Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345 (2013), and held that under CAFA a removing defendant must satisfy the amount in controversy by a preponderance of the evidence. Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 981-82 (2013). Rodriguez also held that in determining the amount in controversy courts "must necessarily look beyond the four corners of the complaint' when the complaint alleges damages below the jurisdictional minimum." Id. at 981. In light of Rodriguez, Defendants again removed the action from the Alameda Superior Court and the action was ultimately assigned to this judge. N.D. Cal. No. 13-cv-4598 (JSC). Plaintiff then moved, again, to remand. In the meantime, the Ninth Circuit vacated the remand order in this action and sent the case back to this Court for reconsideration in light of Rodriguez. Accordingly, Plaintiff's motion to remand (Dkt. No. 20), as well as Defendants' motions to change venue (Dkt. No. 12) and to dismiss (Dkt No. 13), are currently pending before the Court.



"CAFA vests a district court with original jurisdiction over a class action' where: (1) there are one-hundred or more putative class members; (2) at least one class member is a citizen of a state different from the state of any defendant; and (3) the aggregated amount in controversy exceeds $5 million, exclusive of costs and interest." Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011) (citing 28 U.S.C. § 1332(d)(2), 5(B), (6)). A civil action filed in state court may be removed if it could have properly been filed in federal court originally. 28 U.S.C. § 1441. The removal statutes are construed restrictively, however, and the district court must remand the case if it appears before final judgment that the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941). There is a "strong presumption" against removal jurisdiction, Gaus v. Miles. Inc., 980 F.2d 564, 566 (9th Cir. 1992), and doubts as to removability are resolved in favor of remand. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). See also Washington, 659 F.3d at 847 ("the general principles of removal jurisdiction apply in CAFA cases").

The burden of establishing federal jurisdiction is on the party seeking removal. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). This burden "remains, [under CAFA], on the proponent of federal jurisdiction." Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006). The defendant must establish, under a preponderance of the evidence standard, "that the potential damages could exceed the jurisdictional amount." Rea v. Michaels Stores Inc., 742 F.3d 1234, 1239 (9th Cir. 2014) (internal quotation marks and citation omitted); see also Rodriguez, 728 F.3d at 982 (applying preponderance standard). "[T]he amount in controversy is simply an estimate of the total amount in dispute, not a prospective assessment of defendant's liability." Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010); see also Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1205 (E.D. Cal. 2008) ("The ultimate inquiry is what amount is put in controversy' by the plaintiff's complaint, not what a defendant will actually owe."). "[T]he [CAFA] statute tells the District Court to determine whether it has jurisdiction by adding up the value of the claim of each person who falls within the... proposed class and determin[ing] whether the resulting sum exceeds $5 million." Standard Fire Ins. Co., 133 S.Ct. at 1348. Attorneys' fees are properly included in the calculation. Garibay v. Archstone Cmties. LLC, 539 F.App'x 763, 764 (9th Cir. 2013).

A court cannot base a finding of jurisdiction on a defendant's speculation and conjecture; "[r]ather, a defendant must set forth the underlying facts supporting its assertion that the amount in controversy exceeds the statutory minimum." Fong v. Regis Corp., No. C 13-04497 RS, 2014 WL 26996, at *2 (N.D. Cal. Jan. 2, 2014).


Plaintiff's motion for remand is based solely upon her assertion that Defendants have not established that this case meets CAFA's $5 million amount in controversy requirement. The Court disagrees. Under the preponderance of the evidence standard, Defendants have satisfied their burden.

A. Defendants Can Rely Upon the Allegations of the Prior Action

As explained above, although Defendants' Notice of Removal relied on the allegations of the Complaint to calculate the amount in controversy, in their revised calculations in opposition to Plaintiff's motion to remand Defendants rely, in part, on allegations made in the Prior Action and, more specifically, in the second amended complaint. See, e.g., Dkt. No. 22 at 5 ("the amount in controversy for the claims in the present action, based on the calculations warranted by the more specific factual allegations contained in the Second Amended Complaint in the Prior Action ") (emphasis added); id. at 20 (calculating amount in controversy for off-the-clock claims based on allegations in the Prior Action); id. at 21 ("the allegations in the SAC regarding the meal period claim clearly warrant applying a daily violation rate for each putative class member when assessing the amount in controversy for that claim"). In granting Plaintiff's motion to remand, the Court concluded that it could not rely on Plaintiff's allegations in the Prior Action when considering whether the amount of controversy is satisfied to a legal certainty in this action. The Court reasoned that because the parties stipulated to dismissal of the Prior Action without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(ii), the dismissal left "the situation as if the action never had been filed." City of South Pasadena v. Mineta, 284 F.3d 1154, 1157 (9th Cir. 2002) (internal citation omitted). "This means that any future lawsuit based on the same claim [is] an entirely new lawsuit unrelated to the earlier (dismissed) action." Id.

In Rodriguez, however, the court clarified that in determining the amount in controversy in CAFA cases the court must look beyond the four corners of the complaint. 728 F.3d at 981. Further, the Ninth Circuit has held that allegations of fact in an amended or withdrawn pleading are "competent evidence of the facts stated." Huey v. Honeywell, 82 F.3d 327, 333 (9th Cir. 1995) (quoting Kunglig Jarnvagsstyreslsen v. Dexter & Carpenter, Inc., 32 F.2d 195, 198 (2nd Cir. 1929)). In Huey, for example, the court held that the district court erred in granting summary judgment because allegations of fact in the defendant's initial answers, though subsequently amended and denied, created a material dispute of fact. Id. If the party made the allegation "without adequate information, that goes to its weight, not its admissibility." Id. ...

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