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Lopez v. Ace Cash Express, Inc.

United States District Court, C.D. California

March 24, 2015

Adriana Lopez
Ace Cash Express, Inc. et al.


JOHN A. KRONSTADT, District Judge.


I. Factual and Procedural Background

In 2011, Adriana Lopez ("Plaintiff") brought two actions against her employer, Ace Cash Express, Inc. ("Defendant"), in the Los Angeles Superior Court. The first, Lopez v. Ace Cash Express, Inc., LA CV11-04611 (" Lopez I ") was a putative class action asserting wage-and-hour violations under the California Labor Code. Lopez I, Dkt. 1. Defendant removed Lopez I pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d); Plaintiff's motion to remand was denied. Id.; Dkt. 21. The second action, Lopez v. Ace Cash Express, Inc., LA CV11-07116 (" Lopez II "), which is the subject of this Order, was brought pursuant to the California Private Attorney General Act of 2004 ("PAGA"), Cal. Lab. Code § 2698 et seq., based on similar alleged violations of the California Labor Code. Lopez II, Dkt. 1-1. It is a representative action "on behalf of [Plaintiff] and other current or former employees" of Defendant. Id. ¶ 16. It was alleged that Plaintiff's "pro rata share of penalties and pro rata share of attorneys' fees[] is less than $75, 000." Id. ¶ 4. Notwithstanding this allegation as to the amount in controversy, Lopez II was removed pursuant to 28 U.S.C. § 1332(a) on the basis of diversity jurisdiction. Dkt. 1. Defendant claimed that Plaintiff's " pro rata share of penalties and attorneys' fees is not determinative of the calculation of the amount in controversy, " and that, when the shares of other employees and of the state of California were considered, the aggregate amount in controversy would exceed the jurisdictional amount of $75, 000. Id. ¶¶ 14-22. On May 4, 2012, an order was issued with respect to several motions brought in these two actions. Dkt. 52. Defendant's motion to consolidate Lopez I and Lopez II, and Plaintiff's motion to remand Lopez II, were denied. Id. at 13. Defendant's motion to compel bilateral arbitration in Lopez I was granted. Id. Defendant's motion to compel arbitration in Lopez II was stayed pending the outcome of arbitration in

On September 23, 2013, the parties' stipulation to dismiss Lopez I pursuant to settlement was granted. Lopez I, Dkt. 73. Pursuant to this stipulation, the parties agreed to stay Lopez II "pending final determination of Urbino v. Orkin Services of California, Inc., Nos. 11-56944, 57002 (9th Cir. filed Nov. 3, 2011) and/or Iskanian (Arshavir) v. CLS Transportation of Los Angeles LLC, No. S204032, 2012 Cal. LEXIS 8925 (Cal. Sept. 19, 2012)." Id. at 2. On August 13, 2013, the Ninth Circuit decided Urbino, which concerned claim aggregation under PAGA. 726 F.3d 1118 (9th Cir. 2013). It was Plaintiff's position that "this Court likely no longer possesses subject matter jurisdiction" following this decision; however, the parties agreed that the action should remain stayed pending final disposition of Iskanian, which was "a critical element of the parties' agreement to settle Lopez I." Dkt. 78 at 2-3. On June 23, 2014, the California Supreme Court issued its opinion in Iskanian, which concerned, inter alia, the enforceability of agreements to waive and compel arbitration of representative PAGA claims. Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348, 383 (2014). The United States Supreme Court denied certiorari on January 20, 2015. 135 S.Ct. 1155 (2015).

On February 10, 2015, the parties submitted a 10-page joint status report expressing their respective positions as to whether remand or reinstatement of Lopez II to this Court's active calendar was appropriate in light of the Urbino and Iskanian decisions. Dkt. 83. Plaintiff contends that immediate remand is appropriate under Urbino, because it held that only Plaintiff's pro rata share could be considered for purposes of determining the amount in controversy. Id. at 2-4. Defendant disagrees for two reasons. First, California's 75% share of recovery may be aggregated with Plaintiff's. Second, even if there were a change in law between removal and the present, because jurisdiction existed at the time of removal, it continues. Id. at 4-9.

The joint status report sufficiently presents the positions of each party such that neither further briefing nor - pursuant to Local Rule 7-15 - a hearing is required.[1] For the reasons stated in this Order, due to the recent appellate decisions, the Court reconsiders its May 4, 2012 ruling denying Plaintiff's Motion to Remand, and GRANTS that Motion. Dkts. 17, 52. Defendant's Motion to Compel Arbitration is DENIED AS MOOT.

II. Analysis

A. Motion to Remand

1. Legal Standard

Federal courts are ones of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Therefore, a determination of subject matter jurisdiction must be made before the merits of a case can be addressed. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998). If at any time before final judgment the court determines that it is without subject matter jurisdiction, a removed action must be remanded to the state court in which it was originally filed. 28 U.S.C. § 1447(c). The party removing an action bears the burden of establishing federal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "Where doubt regarding the right to removal exists, a case should be remanded to state court, " because "it is well established that the plaintiff is master of her complaint and can plead to avoid federal jurisdiction." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

When a case does not arise under federal law, original jurisdiction generally exists only where there is "diversity of citizenship." 28 U.S.C. § 1332. Complete diversity of citizenship is required: "the citizenship of each plaintiff [must be] different from that of each defendant." Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009). An action may be filed in federal court based on diversity jurisdiction only where the civil action is between citizens of different states, and the amount in controversy exceeds $75, 000. Id . The claims of multiple plaintiffs may be aggregated for this purpose only where they "unite to enforce a single title or right in which they have a common and undivided interest." Snyder v. Harris, 394 U.S. 332, 335 (1969).

2. Application

a) Whether Defendant Meets Its Burden to Show ...

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