United States District Court, C.D. California
RAYMOND UNUTOA, an individual, on behalf of himself, and all others similarly situated, Plaintiff,
INTERSTATE HOTELS AND RESORTS, INC., a corporation; INTERSTATE HOTELS, LLC, a limited liability company; TODAY, IV, INC., a California corporation; PETER ZEN, an individual; and DOES 1-100. Defendants.
ORDER DENYING PLAINTIFF'S MOTION TO REMAND  AND ORDERING PLAINTIFF TO SHOW CAUSE WHY THIS COURT SHOULD NOT ISSUE SANCTIONS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 11
STEPHEN V. WILSON, District Judge.
I. Introduction and Background
This case is a wage and hour putative class action removed from state court pursuant to the Class Action Fairness Act ("CAFA"). Plaintiff Raymond Unutoa ("Unutoa") is a security guard at the Westin Bonaventure Hotel & Suites ("Westin Bonaventure") in Los Angeles, CA. (Compl. ¶ 3.) He asserts that defendants Interstate Hotels and Resorts, Inc. ("the Corporation"), Interstate Hotels, LLC ("the LLC, collectively with the Corporation, "Interstate"), Today's IV, Inc. ("Today's IV"), and Peter Zen ("Zen") are his employers. On November 14, 2014, Plaintiff filed suit in state court, asserting twelve causes of action for violations of California Labor Code provisions,  California's Unfair Competition Law ("UCL"), and seeking penalties under the Private Attorney General Act ("PAGA").
On December 23, 2014, Defendants removed the action to this Court pursuant to CAFA. (Dkt. 1.) Presently before the Court is Plaintiff's motion to remand. (Dkt. 10.) For the reasons discussed below, the Court DENIES Plaintiff's motion.
II. Legal Standard
Removal jurisdiction is generally disfavored. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). But it is proper if the case could have been filed in federal court originally. 28 U.S.C. § 1441.
One common basis is the presence of a well-pleaded federal question. 28 U.S.C. § 1331; Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The well-pleaded complaint rule "provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183 (9th Cir. 2002) (citation and internal quotation marks omitted).
Another basis for subject matter jurisdiction is the parties' diversity of citizenship. 28 U.S.C. § 1332(a). Diversity jurisdiction exists in "civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between... citizens of different States...." 28 U.S.C. 1332(a). The amount in controversy is determined from the complaint itself, "unless it appears or is in some way shown that the amount stated in the complaint is not claimed in good faith." Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961) (citation and internal quotation marks omitted).
Additionally, the Class Action Fairness Act ("CAFA") allows for subject matter jurisdiction over class actions in which the proposed class includes at least 100 members, any member of a plaintiff class is of diverse citizenship from any defendant, and the amount in controversy exceeds $5, 000, 000. 28 U.S.C. § 1332(d). CAFA was enacted to facilitate federal courts' adjudication of certain class actions. Dart Cherokee Basin Operating Company, LLC v. Owens, 135 S.Ct. 547, 554 (2014). Thus, "no antiremoval presumption attends cases invoking CAFA." Id.
A defendant removing a case on the basis of diversity must file a notice of removal containing a "short and plain statement of the grounds for removal." Id. at at 553 (quoting 28 U.S.C. § 1446(a)). The Supreme Court recently clarified that (at least in a CAFA case) the defendant need not submit evidence supporting this assertion with the notice of removal. Id. However, if the plaintiff contests the defendant's allegations regarding the amount in controversy, then the court must decide by a preponderance of the evidence that the amount in controversy requirement is met. Id. at 553-54 (citing 28 U.S.C. § 1446(c)(2)(b)). The defendant bears the burden of proving that the amount in controversy requirement is met. Id.; Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015).
In a pair of contrasting decisions, the Ninth Circuit further clarified the procedure to be followed on a motion for remand. Where the complaint contains generalized allegations of illegal behavior, a removing defendant must supply "real evidence" grounding any assumptions regarding the rate of statutory violations for purposes of calculating the amount in controversy. Ibarra, 775 F.3d at 1199. While the Ninth Circuit held that both parties are entitled to submit summary-judgment-style evidence regarding the propriety of removal, it declined to decide whether a plaintiff was required to submit evidence refuting the defendant's allegations and evidence of the amount in controversy in order to prevail on a motion to remand. Id. at 1199-1200. The Court noted that the plaintiff contested the defendant's assumed rates of violation but did not "assert an alternative violation rate grounded in real evidence, such as an affidavit by [the plaintiff] asserting how often he was denied meal and rest breaks." Id. at 1199. The Court then remanded the case to the district court with instructions to "set a reasonable procedure... so that each side has a fair opportunity to submit proof." Id.
In a companion case, the Ninth Circuit found that a court should deny a motion to remand where a defendant calculates the amount in controversy by relying on the clear allegations of the complaint regarding the frequency of violation and potential liability calculations supported by real evidence (such as total class period expenditures extrapolated from evidence of quarterly expenditures for one quarter in the relevant time period). LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202-03 (9th Cir. 2015).
A. Proof of CAFA ...