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Leon v. Gordon Trucking, Inc.

United States District Court, C.D. California

December 31, 2014

SHAWN LEON, individually and on behalf of all others similarly situated, Plaintiffs,
GORDON TRUCKING, Inc., a Washington corporation, Defendant

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[Copyrighted Material Omitted]

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For Shawn Leon, individually, and on behalf of all similarly situtated current and former employees, Plaintiff: Brian J Mankin, LEAD ATTORNEY, Marisa L Kautz, LEAD ATTORNEY, Kirk A Lauby, Fernandez and Lauby LLP, Riverside, CA; Ira R Spiro, LEAD ATTORNEY, Spiro Law Corp, Los Angeles, CA; Jennifer L Connor, Michael D Singer, LEAD ATTORNEYS, Cohelan Khoury & Singer, San Diego, CA.

For Gordon Trucking, Inc., a Washington corporation, Defendant: Kathleen Collins Jeffries, LEAD ATTORNEY, Christopher Chad McNatt, Jr, Scopelitis Garvin Light Hanson and Feary LLP, Pasadena, CA; Adam C Smedstad, PRO HAC VICE, Scopelitis Garvin Light Hanson and Feary PC, Chicago, IL; Andrew J Butcher, PRO HAC VICE, Scopelitis Garvin Light Hanson and Feary PC, Washington, DC.

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On June 19, 2013, Shawn Leon filed this putative class action in Los Angeles Superior Court against Gordon Trucking, Inc. (" Gordon Trucking" ).[1] The complaint alleged claims for (1) violation of the Federal Labor Standards Act (" FLSA" ), 29 U.S.C. § 201 et seq., (2) failure to provide meal periods in violation of California Labor Code § § 226.7 and 512(a); (3) failure to provide rest periods in violation of California Labor Code § 226.7; (4) failure to reimburse business expenses and purchases in violation of California Labor Code § § 450, 2800, and 2802; (5) failure to timely pay wages in violation of California Labor Code § § 201 and 202; (6) failure to provide accurate wage statements in violation of California Labor Code § 226(a); (7) failure to maintain accurate records in violation of California Labor Code § 1174(d) and IWC Order § § 7(A)(3) and (5); (8) failure to pay wages using compliant non-cash instruments in violation of California Labor Code § 212(a)(1); and (9) violation of California's Unfair Competition Law (" UCL" ), California Business & Professions Code § 17200, et seq.[2] On August 21, 2014, Gordon Trucking removed the action to this court, invoking the court's diversity jurisdiction under the Class Action Fairness Act (" CAFA" ), 28 U.S.C. § 1332(d)(2), (d)(5)(B).

On September 18, 2014, Leon filed a motion to remand.[3] Gordon Trucking opposes the motion.[4] Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds the motion appropriate for decision without oral argument. The hearing calendared for January 5, 2015 is therefore vacated, and the matter taken off calendar.


This is the second time Gordon Trucking has removed this action to federal court. After it was served with the summons and complaint on June 26, 2013, Gordon Trucking timely removed the case on July 25, 2013, invoking the court's federal question jurisdiction based on Leon's FLSA claim.[5] On October 23, 2013, Leon filed a first amended complaint that pled all of his state law claims, but dropped the FLSA claim.[6] As a result, on June 3, 2014, the court issued an order directing Gordon Trucking to show cause why the action should not be remanded to state court.[7] The court noted that the FLSA cause of action had been the basis upon which Gordon Trucking premised federal subject matter jurisdiction, and that it had determined it was appropriate to decline to exercise supplemental jurisdiction over Leon's state law claims given the dismissal

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of the only federal claim.[8] On June 9, 2014, Gordon Trucking filed a response to the court's order.[9] Gordon Trucking asserted that the court continued to have jurisdiction for two reasons. It argued that the court had federal question jurisdiction because Leon alleged FLSA violations as one of the predicates for his UCL claim.[10] Second, it asserted that the court had diversity jurisdiction under the Class Action Fairness Act (" CAFA" ), 28 U.S.C. § 1332(d)(2), (d)(5)(B).[11] The court found that Gordon Trucking had failed to carry its burden of showing that the court had jurisdiction on either basis. First, it noted that the mere fact that a UCL claim was predicated on a violation of federal law did not convert the claim into one arising under federal law.[12] Next, it held that Gordon Trucking had failed to demonstrate that CAFA's minimal diversity requirement was met because it asserted only that it was a Washington corporation, and did not proffer evidence concerning its principal place of business.[13] The court therefore remanded the action to Los Angeles Superior Court.

On August 21, 2014, sixty-two days after remand, Gordon Trucking filed a second notice of removal. In it, Gordon Trucking contends that removal is proper under CAFA because the amount in controversy exceeds $5,000,000 and the citizenship of the parties is minimally diverse. In addition to noting that it is a Washington corporation, Gordon Trucking now asserts that its principal place of business is in Washington as well. In all other respects, its notice of removal is identical to its response to the court's order to show cause. On September 19, 2014, Leon filed a motion to remand.[14] Gordon Trucking opposed the motion on October 27, 2014.[15]


A. Legal Standard Governing Removal Jurisdiction

" Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). " If at any time before final judgment[, however,] it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).

The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove when a case originally filed in state court presents a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. § § 1441(a), (b); see also 28 U.S.C. § § 1331, 1332(a). Only state court actions that could originally have been filed in

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federal court can be removed. 28 U.S.C. § 1441(a); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988).

The Ninth Circuit " strictly construe[s] the removal statute against removal jurisdiction," and " [f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir. 1988), Takeda v. Northwestern Nat'l Life Ins. Co., 765 F.2d 815, 818 (9th Cir. 1985), and Libhart, 592 F.2d at 1064). " The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. (citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir. 1990); Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)). Doubts as to removability must be resolved in favor of remanding the case to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

B. Legal Standard Governing CAFA Jurisdiction

In 2005, Congress enacted the Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4. CAFA gives district courts original jurisdiction to hear class actions " in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," and " in which[, inter alia,] any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2); see also Luthis v. Countrywide Homes Loans Servicing LP, 533 F.3d 1031, 1033-34 (9th Cir. 2008) (" The Class Action Fairness Act of 2005 § 4(a), 28 U.S.C. § 1332(d)(2), amended the requirements for diversity jurisdiction by granting district courts original jurisdiction over class actions exceeding $5,000,000 in controversy where [the citizenship of] at least one plaintiff is diverse from at least one defendant. In other words, complete diversity is not required. CAFA also provided for such class actions to be removable to federal court. See 28 U.S.C. § 1453(b). CAFA was enacted, in part, to 'restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction.' Pub.L. No. 109-2, § 2(b)(2), 119 Stat. 4, 5 (codified as a note to 28 U.S.C. § 1711)" ).

Under CAFA, the number of members of all proposed classes must exceed 100 in the aggregate. 28 U.S.C. § 1332(d)(5)(B). See also Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020-21 (9th Cir. 2007) (" As a threshold matter, CAFA applies to 'class action' lawsuits where the aggregate number of members of all proposed plaintiff classes is 100 or more persons and where the primary defendants are not 'States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief.' § 1332(d)(5). . . . Once the prerequisites of § 1332(d)(5) are satisfied, CAFA vests federal courts with 'original' diversity jurisdiction over class actions if (1) the aggregate amount in controversy exceeds $5,000,000, and (2) any class member is a citizen of a state different from any defendant. § 1332(d)(2)" ); id. at 1021 n. 3 (" The Fifth Circuit characterized ยง 1332(d)(5) as an 'exception' to CAFA jurisdiction ...

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