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Rodriguez v. Cleansource, Inc.

United States District Court, S.D. California

August 4, 2014

MICHAEL RODRIGUEZ and JOSE DE SANTOS, on behalf of themselves and all others similarly situated, and on behalf of the general public, Plaintiffs,
v.
CLEANSOURCE, INC., INTERLINE BRANDS, INC., and DOES 2-100, Defendants.

ORDER DENYING PLAINTIFFS' MOTION TO REMAND [DOC. 13.]

M. JAMES LORENZ, District Judge.

Pending before the Court is Plaintiffs' motion to remand. ( MR [Doc. 13].) The motion is fully briefed. ( Opp'n [Doc. 18]; Reply [Doc. 19].) The Court finds this motion suitable for determination on the papers submitted and without oral argument in accordance with Civil Local Rule 7.1(d.1). For the following reasons, the Court DENIES Plaintiffs' motion.

I. BACKGROUND

According to the Complaint, Plaintiffs Michael Rodriguez ("Rodriguez") and Jose De Santos ("De Santos") were "hourly paid drivers" for Defendant Cleansource, Inc. ("Cleansource"). ( NOR [Doc. 1] Att. 2, Ex. A, ¶ 4.) Rodriguez and De Santos reside in California and "were employed in a non-exempt capacity as an hourly industrial truck worker, industrial truck driver, industrial vehicle driver, and/or industrial worker" by Cleansource. ( Id . ¶ 22.) Interline Brands, Inc. ("IBI") purchased a substantial amount of Cleansource assets and named CSE Holdings as the successor in interest. ( Id. ¶ 17.) IBI is "a New Jersey corporation with its corporate headquarters and principal of business in Jacksonville, Florida." ( NOR ¶ 17.)

Plaintiffs filed a class action complaint pursuant to Cal. Civ. Proc. Code § 382 against Cleansource in San Diego County Superior Court on September 25, 2013 on behalf of all current and former drivers employed by Cleansource since September 25, 2009. ( MR [Doc. 13], Att. 1, ¶ 5.) Rodriguez and De Santos then filed an amended complaint on February 5, 2014 to include IBI as a defendant. ( Id. ¶ 6.) Plaintiffs allege IBI violated Cal. Lab. Code §§ 203, 226.7, 512, and 1194; IWC Wage Order No. 9-2001 subsections (7)(a), (7)(b), and 7(c); Cal. Code Regs. tit. 8, § 11090; and Cal. Bus. and Prof. Code § 17200. ( NOR, Att. 2, Ex. A, ¶ 35 (1), (9), (14), (15), and (16).) Rodriguez and De Santos also seek attorneys' fees pursuant to Cal. Lab. Code §§ 218.5, 226(e), and 1194. ( Id. ¶ 40.)

On April 4, 2014, IBI filed its Notice of Removal asserting that this Court has jurisdiction under the Class Action Fairness Act ("CAFA"), enacted as 28 U.S.C. § 1332(d). ( NOR ¶ 6.) Defendant alleges that the Court has original jurisdiction over this action because "(1) the number of members of all proposed plaintiff classes in the aggregate is at least 100 members; (2) there is diversity of citizenship between Plaintiffs and IBI; and (3) the amount in controversy exceeds $5 million, exclusive of interests and costs." ( NOR ¶ 14.) The parties only contest the jurisdictional amount at this time.

Rodriguez and De Santos do not provide a specific amount of damages in the Complaint. ( NOR ¶ 20.) However, Defendant alleges that the "aggregate value of the claims of all Putative Class Members exceeds the $5 million amount in controversy." ( Id. ¶ 23.) IBI calculated the amount in controversy for Plaintiffs' first cause of action to be $668, 984.84. ( Id. ¶ 29.) It arrived at $334, 492.42 as the amount in controversy for Rodriguez and De Santos' second cause of action. ( Id. ¶ 31.) The amount in controversy for Plaintiffs' third and fourth causes of action is at least $2, 675, 939.36. ( Id. ¶ 36.) Rodriguez and De Santos' fifth cause of action pertaining to inaccurate wage statements totals $389, 700. ( Id. ¶ 38.) Plaintiffs' ninth cause of action for statutory waiting time penalties comes out to $205, 072.80. ( Id. ¶ 39.) Thus, according to Defendant, the total amount in controversy exclusive of attorneys' fees is $4, 274, 189.42. ( Id . ¶ 41.) Since Rodriguez and De Santos are also seeking attorneys' fees, IBI calculated the total amount in controversy by multiplying the foregoing amount by 25%, the benchmark allegedly used in the Ninth Circuit. ( Id. ) 25% of $4, 274, 189.42 is $1, 068, 547.36. ( Id . ¶ 42.) This brings the total amount in controversy to $5, 342, 736.78, which exceeds the $5 million jurisdictional threshold established by CAFA. ( Id. )[1]

On June 9, 2014, Plaintiffs filed the instant motion for remand. Rodriguez and De Santos argue that Defendant "had to show by a preponderance of the evidence that the amount in controversy exceeded $5, 000, 000" and "have not satisfied this burden." ( MR, Att. 2, 1.) Specifically, they argue that IBI's calculation of attorneys' fees at $1, 068, 547.78, "based exclusively on its conclusion that the Ninth Circuit awards a benchmark 25%' for attorneys' fees in class[, ]" is "misleading and entirely speculative for two main reasons." ( Id. at 2.) The first reason is that the calculation "assumes without analysis that the percentage-of-the-fund approach will be more appropriate for measuring attorney fees here than the lodestar method'." ( Id. ) The second is that "it disregards the fact that, even if the percentage approach is appropriate here, it would have to show that the 25% fee is reasonable." ( Id. ) Therefore, Plaintiffs argue that if the Court were to subtract the "speculative attorney fee" from the Defendants' alleged total in controversy, the amount in controversy would total... significantly less" than $5, 000, 000. ( Id. at 3.) IBI opposes. ( Opp'n. 17.)

II. LEGAL STANDARD

"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "They possess only that power authorized by Constitution or a statute, which is not to be expanded by judicial decree." Id. (internal citations omitted). "It is to be presumed that a cause lies outside this limited jurisdiction and the burden of establishing the contrary rests upon the party asserting jurisdiction." Id. (internal citations omitted); see also Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006).

Consistent with the limited jurisdiction of federal courts, the removal statute is strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002); O'Halloran v. University of Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus, 980 F.2d at 566; see also Nishimoto v. Federman-Bachrach & Assoc., 903 F.2d 709, 712 n.3 (9th Cir. 1990); O'Halloran, 856 F.2d at 1380. "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus, 980 F.2d at 566.

III. DISCUSSION

CAFA vests district courts with "original jurisdiction of any civil action in which, inter alia, the amount in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs, and in which the aggregate number of proposed plaintiffs is 100 or greater, and any member of the plaintiff class is a citizen of a state different from any defendant." Lowdermilk v. United States Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir. 2007) (quoting 28 U.S.C. § 1332(d)) (internal quotations marks omitted). After a plaintiff files an action in state court, the defendant must allege and bear the burden of proof that the amount in controversy exceeds $5, 000, 000. See Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). Mere conclusory allegations are insufficient. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). The defendant must set forth, in the removal petition itself, the underlying facts supporting its assertion that the amount in controversy exceeds $5, 000, 000. See Abrego Abrego, 443 F.3d at 689. "[W]here an underlying statute authorizes an award of attorneys' fees, either with mandatory or discretionary language, ...


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