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Thompson v. Target Corp.

United States District Court, C.D. California

August 2, 2016

Stacy Thompson
v.
Target Corporation et al.

          Present: Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

          ORDER DENYING PLAINTIFF STACY THOMPSON’S MOTION TO REMAND (DOC. NO. 32) (IN CHAMBERS)

          Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Stacy Thompson’s (“Plaintiff”) Motion to Remand (“Motion, ” Doc. No. 32). After considering the papers filed in support of and in opposition to the Motion and the arguments of counsel, the Court DENIES the Motion to Remand.

         I. BACKGROUND

         In December 2011, Plaintiff filed two actions against defendant Target Corporation (“Defendant”) in the Los Angeles County Superior Court (“Superior Court”), identified by case numbers BC475813 (hereinafter Thompson I) and BC474522 (hereinafter Thompson II). (Doc. No. 1-1, 1-2.) The complaint in Thompson I was filed on December 22, 2011 and asserted two class action claims under California Labor Code § 226.7 and California Business and Professions Code § 17200 for failure to provide meal and rest periods and unfair business practices. (Doc. No. 1-2.) The complaint asserted these claims on behalf of a putative class of individuals, other than pharmacists, employed by Defendant on an hourly basis in California retail stores. (Id.) The complaint in Thompson II was filed on December 5, 2011 and proceeded on behalf of the same class of employees as Thompson I, alleged many of the same meal and rest period violations, but sought civil penalties under the Private Attorney General Act (“PAGA”). (Doc. No. 1-1.)

         On January 3, 2012, Defendant removed both Thompson I and Thompson II to this Court, where they were consolidated and identified by case number CV 12-0010 JGB (MRWx). (Doc. No. 1-3.) Defendant removed Thompson II based on the Court’s diversity jurisdiction and the Class Action Fairness Act (“CAFA”) and removed Thompson I based on the Court’s CAFA jurisdiction. (See id.) On May 9, 2014, the Court remanded the action to the Superior Court, finding: (1) Defendant had not proven the total amount in controversy for Plaintiff’s claims in Thompson I exceeded $5, 000, 000, for purposes of removal jurisdiction under CAFA; and (2) the Court had no basis for diversity or CAFA jurisdiction over Thompson II. (Id.)

         After remand, Thompson I and Thompson II resumed their prior status as separate cases. On May 13, 2014, Plaintiff filed a First Amended Complaint in both Thompson I and Thompson II. (Doc. No. 1-4, 1-8.) The First Amended Complaint in Thompson I (“Thompson I FAC”) again asserted claims under California Labor Code § 226.7 and California Business and Professions Code § 17200 for failure to provide meal and rest breaks and unfair business practices. (See Doc. No. 1-8.) The Thompson I FAC asserted these claims on behalf of a putative class of individuals employed by Defendant on an hourly basis in California retail stores. (Id.) Unlike the original complaint filed in Thompson I, the Thompson I FAC did not exclude pharmacists from the class of employees Plaintiff purported to represent. (Id.)

         The First Amended Complaint in Thompson II (“Thompson II FAC”) asserted five PAGA claims, on behalf of the same class of employees as Thompson I. (See Doc. No. 1-4.) The Thompson II FAC asserted the following five PAGA claims: (1) PAGA claim for failure to provide meal breaks in violation of Cal. Labor Code §§ 512, 1198; (2) PAGA claim for failure to pay wages required by Cal. Labor Code § 204; (3) PAGA claim for failure to pay wages upon termination under Cal. Labor Code §§ 201, 202; (4) PAGA claim for failure to provide an accurate itemized statement in violation of Cal. Labor Code § 226; and (5) PAGA claim for failure to provide suitable seats in violation of Cal. Labor Code §1198. (Id.)

         On April 13, 2015, the Superior Court granted Defendant’s motion to consolidate the two actions. (Doc. No. 1-12.) On November 16, 2015, the Superior Court certified a putative class (the “Class”) encompassing hourly employees who worked shifts from 2007 to the time of class certification (“Covered Period”) and who were not provided with meal and rest breaks by Defendant. (“Class Cert. Order, ” Doc. No. 1-13.)

         On February 5, 2016, Defendant removed the consolidated action to this Court on the basis of CAFA jurisdiction, arguing it had discovered the amount in controversy for Plaintiff’s meal period claims under California Labor Code section 226.7(b) exceeded $5 million, as of November 30, 2015. (“Notice of Removal, ” Doc. No. 1.) Defendant claimed that on January 11, 2016, Plaintiff sent it an e-mail representing that the term “hourly employees, ” as it appeared in Plaintiff’s pleadings and the Superior Court’s certification order, included hourly pharmacists employed by Defendant after February 13, 2012. (Id. ¶ 13.) Defendant alleged that until January 11, 2016, it had understood the term “hourly employees” to not include hourly pharmacists and that Plaintiff’s e-mail was the first time Plaintiff had represented she was asserting claims on behalf of hourly pharmacists. (Id. ¶¶ 9, 13.) Based on such new information, Defendant claimed it had discovered that the amount in controversy was larger than it had previously believed. (Id. ¶¶ 22-23.) Defendant presented evidence showing that the inclusion of hourly pharmacists in the Class raised the amount in controversy over the $5 million threshold required for CAFA jurisdiction. (Id.)

         In support of its Notice of Removal, Defendant presented a declaration by Labor Economist Paul F. White. (“White Decl., ” Doc. No. 4.) White averred he had reviewed time-punch and hourly wage data for Defendant’s employees and had developed an estimate of Defendant’s potential liability for Plaintiffs meal period premium claims. (Id. ¶ 4.) Based on Defendant’s data, White estimated Defendant could potentially be liable for $2, 207, 819 in unpaid meal premiums for hourly employees other than pharmacists, for the period of time spanning December 30, 2007 to November 30, 2015. (Id. ¶ 5.a.) White also estimated Defendant could be liable for $4, 894, 077 in unpaid meal premiums for hourly pharmacist employees, for the period of time spanning February 14, 2012 to November 30, 2015. (Id. ¶ 5.b.) Hence, White concluded Defendant’s total exposure for Plaintiffs meal period premium claims as of November 30, 2015 amounted to a total of $7, 101, 896. (Id. ¶ 5.c.) Citing White’s declaration, Defendant contended it had demonstrated the amount in controversy in this action exceeds $5 million for purposes of CAFA. (Not. of Removal ¶¶ 22-23.)

         On March 7, 2016, Plaintiff filed the instant Motion to Remand, seeking remand of both her class claims and her PAGA claims. (Doc. No. 32, 32-1.) In support, Plaintiff filed the following documents:

• Declaration of Plaintiff s counsel Allen Graves (“Graves Decl.”) and thirteen accompanying exhibits (Doc. No. 32-2. 32-3); and
• Declaration of D. Scott Bosworth and an accompanying exhibit (Doc. No. 32-4).

         On March 14, 2016, Defendant filed an Opposition to the Motion. (Doc. No. 33.) In support, Defendant filed a declaration by its counsel Jeffrey D. Wohl (“Wohl Decl.”) and forty-one accompanying exhibits. (Doc. No. 34, 34-1, 34-2, 35-1, 35-2, 35-3, 36-1, 36-2, 36-3.)

         On March 21, 2016, Plaintiff filed a Reply to Defendant’s Opposition. (Doc. No. 38.) In support, Plaintiff filed a supplemental declaration by her counsel Allen Graves (“Graves Supp. Decl.”) and an accompanying exhibit. (Doc. No. 38-1.)

         On April 11, 2016, the Court held a hearing on the Motion and considered the arguments of counsel.

         II. LEGAL STANDARD

         Generally, a state court action is only removable to federal court if it might have been brought there originally. 28 U.S.C. § 1441(a). The party seeking removal bears the burden of proving its propriety. Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 683-85 (9th Cir. 2006).

         Federal courts have original jurisdiction under CAFA where the number of proposed plaintiffs is greater than 100, there is a diversity of citizenship between any member of the class and any defendant, and the amount in controversy is more than $5, 000, 000, exclusive of interests and costs. 28 U.S.C. § 1332(d); Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015). Though a notice of removal need only include a plausible allegation that the amount in controversy exceeds the jurisdictional threshold, when the amount in controversy is contested, “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 550 (2014) (analyzing jurisdiction in the context of when a defendant removes an action to federal court under CAFA). Once jurisdiction under CAFA is established by a preponderance of the evidence, it becomes the burden of the party challenging federal subject-matter jurisdiction to establish the applicability of any statutory exception to CAFA jurisdiction. See Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1024 (9th Cir. 2007).

         The removal statutes are construed restrictively, however, and the Court must remand the case if it appears before final judgment that the Court lacks subject matter jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); 28 U.S.C. § 1447(c). However, no presumption against removal exists in cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court. Dart Cherokee, 135 S.Ct. at 554.

         III. PLAINTIFF’S CLASS CLAIMS

         Plaintiff argues Defendant improperly removed her class claims (i.e. the subject of Thompson I) on three grounds. First, Plaintiff argues that even assuming CAFA’s amount in controversy requirement has been satisfied, removal here was untimely under 28 U.S.C. § 1446(b)(3). (Mot. at 4-16.) Second, Plaintiff contends there have been no events triggering a right to removal because the amount in controversy at the time she filed the Thompson I FAC did not exceed $5 million. (Id. at 16-20.) Third, Plaintiff argues Defendant has waived its right to remove her class claims. (Id. at 20-23.) The Court assesses each of these arguments in turn.

         A. Timeliness of Removal

         1. Applicable Law

         Procedures for removal are set forth in 28 U.S.C. § 1446. Section 1446(a) provides generally that a defendant seeking to remove a civil action shall file a notice of removal in the district court. 28 U.S.C. § 1446(a). Section 1446(b) requires that a notice of removal be filed within two thirty-day periods: (1) thirty days of receipt from the plaintiff of an initial pleading or (2) if the initial pleading does not clearly indicate whether the case is removable, thirty days from receipt of an amended pleading or some other document from which it is ascertainable that the case is removable. 28 U.S.C. §§ 1446(b)(1), (b)(3). Specifically, the statute reads:

(b) Requirements; generally.-(1) The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
(3) Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. §§ 1446(b)(1), (b)(3).

         “[T]he first thirty-day period for removal in 28 U.S.C. § 1446(b) only applies if the case stated by the initial pleading is removable on its face.” Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). The grounds for removal must be set forth “affirmatively in the initial pleading in order for the first thirty day clock under § ...


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