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Sadler v. Ensignal, Inc.

United States District Court, E.D. California

May 26, 2017

ETHAN SADLER, Plaintiff,
v.
ENSIGNAL, INC., Defendant.

          FINDINGS AND RECOMMENDATIONS RECOMMENDING REMANDING ACTION FOR LACK OF JURISDICTION (ECF NO. 1, 13, 14)

         I.

         BACKGROUND

         On December 16, 2016, Plaintiff Ethan Sadler filed this class action complaint in the Superior Court of California for the County of Madera against Defendant Ensignal, Inc. (“Defendant”). (ECF No. 1-2.) Plaintiff Ethan Sadler (“Plaintiff”) raises six causes of action for failure to pay overtime wages, failure to provide all mandated meal periods or additional wages in lieu thereof, failure to provide all mandated rest periods or additional wage in lieu thereof, failure to furnish itemized statements of wages, failure to timely pay wages due at termination, and violation of the unfair competition law. (Id.) On March 3, 2017, Defendant removed this action to the Eastern District of California on the basis of diversity jurisdiction.[1] (ECF No. 1.)

         Upon review of the notice of removal, the Court sua sponte raised the issue of whether federal jurisdiction exists in this action during the May 16, 2017 scheduling conference.[2] (ECF No. 12.) An order was filed on May 16, 2017, directing the parties to file briefing addressing the Court's jurisdiction in this matter. (ECF No. 11.) On May 23, 2017, the parties filed briefs addressing subject matter jurisdiction. (ECF Nos. 13, 14.)

         II.

         LEGAL STANDARD

         Federal courts are courts of limited jurisdiction and only possess that power authorized by the Constitution and statute. Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 552 (2005). Congress has conferred the district courts with original jurisdiction in all civil cases that arise under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. Additionally, Congress has provided a neutral forum by granting the district court jurisdiction over civil actions between citizens of different states in which the amount in controversy exceeds a specified amount. Exxon Mobil Corp., 545 U.S. at 552. District courts have authority to dismiss actions sua sponte for lack of jurisdiction. Franklin v. State of Or., State Welfare Division, 662 F.2d 1337, 1342 (9th Cir. 1981).

         “[A]ny 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 . . . to the district court of the United States for the district . . . where such action is pending.” 28 U.S.C. § 1441(a). A notice of removal must be filed within thirty days of receiving the initial pleading setting forth the claim for relief, 28 U.S.C. § 1446(b).

         In a diversity action, the removing defendant has the burden of establishing the amount in controversy by a preponderance of the evidence. Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013). Jurisdiction is analyzed based upon the pleadings filed at the time of removal without reference to any subsequent pleadings filed in the action. Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998). “The removal statute is strictly construed against removal jurisdiction.” Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). If the district court determines that it lacks jurisdiction, the action should be remanded back to the state court. Martin v. Franklin Capital Corp., 546 U.S. 132, 134 (2005).

         III.

         ANALYSIS

         Defendant removed this action on the basis of diversity jurisdiction alleging that the jurisdictional amount was met because Plaintiff's claim under section 203 of the California Labor Code places at least $155, 790.60 in controversy. However, Defendant calculated the $155, 790.60 for Plaintiff's claim under section 203 of the California Labor Code by aggregating the sums of waiting time penalties for 67 non-exempt full-time former employees who resigned or were terminated and issued final wages during the statutory period and who customarily worked 35 or more hours per week over an estimated average of five days per week..

         As relevant here, district courts have original jurisdiction over all civil actions where amount in controversy exceeds $75, 000.00 and the action is between citizens of different states. 28 U.S.C. § 1332(a). Plaintiff contends that this action must be remanded because Defendant has not demonstrated that the amount in controversy for any named plaintiff exceeds the jurisdictional amount. Defendant argues that the claim for violation of California Business Code section 17200 falls under the common and undivided interest exception to the anti-aggregation principle and alternatively, Plaintiff's claims in this action meet the jurisdictional threshold.

         A. Diversity of Citizenship

         The Supreme Court has interpreted § 1332 to require complete diversity between parties, where “the citizenship of each plaintiff is diverse from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). A corporation is deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 94 (2005) (quoting 28 U.S.C. § 1332(c)(1)). Defendant is a Kansas corporation, with its principal place of business in Wichita, Kansas. Accordingly, Defendant is a citizen of Kansas.

         While Defendant contends that the complaint alleges that Plaintiff is a citizen of California, Plaintiff alleges that he was at all times residing in Madera County, California. However, “the diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of citizenship, not of residency.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). “A person residing in a given state is not necessarily domiciled there, and thus is not necessarily a citizen of that state.” Kanter, 265 F.3d at 857. Plaintiff's complaint does not allege that he is a citizen of California. However, Defendant has presented evidence that Plaintiff has continuously worked in the State of California since November 5, 2004. (Decl. of Greg Reed ¶ 3, ECF No. 1-8.) Plaintiff does not dispute that he is a citizen of California.

         For the purposes of jurisdiction, the Court finds that Plaintiff is a resident of California; and Defendant is a resident of Kansas. Therefore, complete diversity of citizenship exists in this action.

         B. Jurisdictional Amount

         The substance of the instant dispute is whether the amount in controversy requirement is met in this action. In a removal action, “the defendant bears the burden of actually proving the facts to support jurisdiction, including the jurisdictional amount.” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403 (9th Cir. 1996) (quoting Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir.1992)). To meet this burden, the defendant must provide evidence that more likely than not the amount in controversy exceeds the jurisdictional amount. Sanchez, 102 F.3d at 404. However, the defendant is not required to research and prove the plaintiff's claims for damages, but “must set forth the ...


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