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Dejong v. Production Associates, Inc.

United States District Court, C.D. California

March 19, 2015

LORNE DEJONG, an individual, Plaintiff,
PRODUCTION ASSOCIATES, INC., a Nevada corporation doing business as PA EVENTS; and DOES 1 through 100, inclusive, Defendants.


MARGARET M. MORROW, District Judge.

On October 15, 2014, Lorne Dejong filed this action against Production Associates, Inc. ("PA") and various fictitious defendants in San Bernardino Superior Court.[1] On November 17, 2014, PA timely removed the action, invoking the court's diversity jurisdiction under 28 U.S.C. § 1332.[2] Dejong's complaint pleads claims for violation of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200, [3] and violation of various sections of the California Labor Code.[4] PA answered the complaint on December 8, 2014.[5]

On December 15, 2014, Dejong filed a motion to remand the action to San Bernardino Superior Court, asserting that the citizenship of the parties was not completely diverse.[6] PA opposed Dejong's motion on March 2, 2015.[7] Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds this matter appropriate for decision without oral argument. The hearing calendared for March 23, 2015, is therefore vacated, and the matter is taken off calendar.


On November 4, 2013, PA hired Dejong as an executive accountant at an annual salary of $150, 000.[8] Dejong alleges that executive accountants normally have responsibility, inter alia, for overseeing accounts receivables, such as project budgets and customer billing; financial reporting; payroll and accounts payable payment processing; and bank functions, including wire transfers, deposits, and bank reconciliations.[9] She asserts that she was never given authority to perform such tasks, however, because those functions were handled by Michael Thuney, PA's technical director, and Christopher Cheek, PA's Chief Financial Officer ("CFO").[10] Dejong was instead required to handle PA's accounts payable, which is not a task ordinarily performed by executive accountants.[11] She asserts that approximately ninety-five percent of her time was spent processing accounts payable, a task that purportedly did not involve any analytic work or the exercise of discretion and/or independent judgment.[12] As a result, Dejong alleges, she was misclassified as an exempt employee during her tenure at PA.[13]

Dejong contends that from November 2013 until several weeks prior to her June 5, 2014, termination, she worked six to seven days a week, including major holidays.[14] She also purportedly worked sixteen hour days - from 6:30 a.m. to 12:00 a.m. - on a regular basis and did not take lunch or dinner breaks.[15] Given her purported misclassification as an exempt employee, Dejong alleges that she was not compensated for the overtime work that she performed and that she is owed more than $167, 000 in overtime compensation.[16]

Based on these allegations, Dejong pleads six claims against PA: (1) violation of California's UCL, California Business and Professions Code § 17200;[17] (2) failure to pay overtime wages in violation of California Labor Code §§ 510 and 1194;[18] (3) failure to provide meal periods in violation of California Labor Code §§ 226.7 and 512;[19] (4) failure to provide rest breaks in violation of California Labor Code § 226.7;[20] (5) waiting time penalties under California Labor Code §§ 201-203;[21] and (6) failure to provide accurate itemized wage statements in violation of California Labor Code §§ 221 and 223.[22]


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 federal court can be removed. 28 U.S.C. § 1441(a); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); Ethridge v. Harbor House Restaurant, 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 Diversity Jurisdiction[23]

Under 28 U.S.C. § 1332(a), "[t]he district courts... have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000.00, exclusive of interest and costs, and is between... citizens of different states." 28 U.S.C. § 1332(a); see also Matheson, 319 F.3d at 1090 ("[J]urisdiction founded on [diversity] requires that the parties be in complete diversity and the amount in controversy exceed $75, 000"). In any case where subject matter jurisdiction is premised on diversity, there must be complete diversity, i.e., all plaintiffs must have citizenship ...

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