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Feao v. UFP Riverside, LLC

United States District Court, C.D. California

June 29, 2017

Aaron Feao
UFP Riverside, LLC

          Present: The Honorable Philip S. Gutierrez, United States District Judge


         Proceedings (In Chambers): Order DENYING Plaintiff's Motion to Remand and GRANTING Defendant's Motion to Dismiss

         Before the Court is Plaintiff Aaron Feao's motion to remand, Dkt. # 10, and Defendant UFP Riverside, LLC's motion to dismiss, Dkt. # 8. The Court finds these matters appropriate for decision without oral argument. See Fed. R. Civ.P. 78; L.R. 7-15. After considering the papers, the Court DENIES Plaintiff's motion to remand, and GRANTS Defendant's motion to dismiss. Plaintiff is permitted leave to amend claims one, two, three, four, five, nine, and ten and must do so, if desired, by July 31, 2017. Plaintiff is not permitted leave to amend claims six and eight. To the extent Plaintiff re-alleges claim seven in an amended complaint, Plaintiff may re-allege a claim for actual damages only; statutory penalties are barred by the statute of limitations.

         Additionally, the Court imposes sanctions on Plaintiff's counsel for their failure to heed the Court's instructions as to the federal pleading standard. Defendant may file a motion to recover attorneys' fees and costs associated with the filing of the motion to dismiss no later than July 31, 2017.

         I. Background

         Plaintiff Aaron Feao was employed by Defendant UFP Riverside, LLC as an hourly, non-exempt employee in California from June 2013 to August 2014. See Complaint (“Compl.”), Dkt. # 1-1, ¶ 18. On February 16, 2017, Plaintiff filed a wage and hour putative class action complaint against Defendant in the Superior Court for the County of Los Angeles. See generally Id. The putative class was comprised of: “All current and former hourly-paid or non-exempt employees who worked for any of the Defendants [sic] within the State of California at any time during the period from four years preceding the filing of this Complaint to final judgment.” Id. ¶ 13. Plaintiff asserts that Defendant “engaged in a uniform policy and systematic scheme of wage abuse against their [sic] hourly-paid or non-exempt employees . . . .” Id. ¶ 25. Plaintiff additionally avers that “[a]t all material times” Defendant violated various California Labor Code sections by failing to pay overtime wages, provide meal and rest periods, pay the minimum wage, and pay wages owed at termination, among other violations. Id. ¶¶ 37-45.

         Plaintiff asserts ten causes of action for violations of: (1) Cal. Lab. Code §§ 510, 1198 (unpaid overtime); (2) Cal. Lab. Code §§ 226.7, 512(a) (unpaid meal period premiums); (3) Cal. Lab. Code § 226.7 (unpaid rest period premiums); (4) Cal. Lab. Code §§ 1194, 1197, 1197.1 (unpaid minimum wages); (5) Cal. Lab. Code §§ 201, 202 (final wages not timely paid); (6) Cal. Lab. Code § 204 (wages not timely paid during employment); (7) Cal. Lab. Code § 226(a) (non-compliant wage statements); (8) Cal. Lab. Code § 1174(d) (failure to keep requisite payroll records); (9) Cal. Lab. Code §§ 2800, 2802 (unreimbursed business expenses); and (10) Cal. Bus. & Prof. Code §§ 17200 et seq. See Motion to Remand (“MTR”) 1:26-2:10 (summarizing causes of action).

         Defendant removed this case to federal court on April 24, 2017 pursuant to the Class Action Fairness Act of 2005 (“CAFA”). On April 28, 2017, Defendant filed the motion to dismiss, Dkt. # 8, and on May 3, 2017, Plaintiff filed the motion to remand to state court, Dkt. # 10. Both motions are opposed.

         II. Legal Standard

         A. Motion to Remand

         CAFA provides federal jurisdiction over class actions in which the amount in controversy exceeds $5, 000, 000, there is minimal diversity between the parties, and the number of proposed class members is at least 100. 28 U.S.C. §§ 1332(d)(2), 1332(d)(5)(B). “Congress designed the terms of CAFA specifically to permit a defendant to remove certain class or mass actions into federal court . . . [and] intended CAFA to be interpreted expansively.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). While “no antiremoval presumption attends cases invoking CAFA, ” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014), “the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction.” Abrego v. Dow Chem, 443 F.3d 676, 685 (9th Cir. 2006).

         Under CAFA, a defendant removing a case must file a notice of removal containing a “short and plain statement of the grounds for removal.” Dart Cherokee, 135 S.Ct. 547 at 553. Additionally, the Supreme Court clarified that “a defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold, ” unless a defendant's assertion is contested by the plaintiff. Id. at 554. Where, as here, a defendant's asserted amount in controversy is contested, “[e]vidence establishing the amount is required.” Id. “In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 550. Ultimately, the defendant bears the burden of proving that the amount in controversy is met. Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir.2013).

         B. Motion to Dismiss

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When deciding a Rule 12(b)(6) motion, the court must accept the facts pleaded in the complaint as true, and construe them in the light most favorable to the plaintiff. Faulkner v. ADT Sec. Servs., Inc., 706 F.3d 1017, 1019 (9th Cir. 2013); Cousins v. Lockyer, 568 F.3d 1063, 1067-68 (9th Cir. 2009). The court, however, is not required to accept “legal conclusions . . . cast in the form of factual allegations.” W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981); see Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555.

         After accepting all non-conclusory allegations as true and drawing all reasonable inferences in favor of the plaintiff, the court must determine whether the complaint alleges a plausible claim to relief. See Iqbal, 556 U.S. at 679-80. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. . . . The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678.

         III. Discussion

         The Court first addresses Plaintiff's motion to remand to determine whether it has subject matter jurisdiction over this case, and then turns to Defendant's motion to dismiss.

         A. Motion to Remand

         There is no dispute that the Complaint satisfies CAFA's requirements of minimal diversity or numerosity; the sole jurisdictional dispute involves the amount in controversy. See MTR 1:3-9. To obtain federal jurisdiction under CAFA, the amount in controversy must exceed $5, 000, 000. See 28 U.S.C. §§ 1332(d)(2), (d)(5)(B). For CAFA jurisdiction purposes, the amount in controversy “is determined by [the] universe of what the plaintiff puts at-issue in the complaint.” Schiller v. David's Bridal, Inc., No. CV 10-0616 AWI (SKOx), 2010 WL 2793650, at *6 (E.D. Cal. July 14, 2010); see also Ibarra, 775 F.3d at 1198; Lim v. Helio, LLC, No. CV 11-9183 PSG (PLAx), 2012 WL 359304, at *2 (C.D. Cal. Feb. 2, 2012) (“The ultimate inquiry is . . . what amount is put ‘in controversy' by the plaintiff's complaint or other papers, not what the defendant will actually owe for the actual number of violations that occurred, if any”).

         In the Notice of Removal, Defendant contends that the amount in controversy exceeds $5, 000, 000 based on damage calculations for (1) failure to pay overtime wages, (2) failure to pay the minimum wage, (3) minimum wage penalties, (4) failure to pay meal and rest period compensation, (5) waiting time penalties for failure to furnish timely wage statements at termination, (6) failure to provide accurate and itemized wage statements, and (7) attorneys' fees. See Notice of Removal (“NOR”) ¶¶ 22-36.

         To support the calculations in the NOR, Defendant submits the declaration of Jody Perrien, Defendant's Director of Compensation and HR Systems. Perrien Decl., Dkt. # 1-3, ¶ 1. In the declaration, Perrien provides statistics gleaned from Defendant's records, such as the number of putative class members, the putative class members' weighted average hourly wage, and the number of putative class members terminated during the relevant time period. See Id. ¶¶ 4-5. Although Plaintiff contends that the Perrien declaration is too conclusory to serve as evidence of each of these data points, the Court disagrees, finding Perrien competent to serve as a declarant in this matter. See Dart Cherokee, 135 S.Ct. at 554; see also Jones v. Tween Brands, Inc., No. CV 14-1631 ODW (PLAx), 2014 WL 1607636, at *2 (C.D. Cal. Apr. 22, 2014) (recognizing that an HR manager could be expected to have all the information and to testify competently about the contents of the declaration). Moreover, Perrien submitted a supplemental declaration with Defendant's Opposition that addressed many of the objections that Plaintiff raised to the declaration. See Dkt. # 16-1.

         Defendant calculates, based on Plaintiff's allegations and the Perrien declaration, that the amount in controversy, excluding attorneys' fees, for Plaintiff's claims amounts to $5, 119, 566.[1]NOR ¶ 34. Defendant's calculation of the amount in controversy assumes that there are 218 people in the putative class, and that the people worked approximately 22, 218 work weeks and earned roughly $16.26 per hour in the relevant time period. See Perrien Decl. ¶¶ 4-5. The calculations include:

         Overtime Claims: $541, 897.

Defendant assumes that each class member had at least one hour of unpaid overtime for each work week. NOR ¶ 22. Because overtime is compensated at a time-and-a-half rate, see Cal. Lab. Code § 510, an employee earning $16.26 per hour would be compensated $24.39 for each overtime hour worked. See NOR 7 n.2. Given these assumptions, Defendant asserts that the potential value of Plaintiff's overtime claim is $541, 897 ($24.39 x 22, 218 weeks worked). Id. 8 n.3.

         Minimum Wage Claims: $722, 530.

Defendant assumes that each class member had at least one hour of work below the minimum wage for each work week. Id. ¶ 25. Under California Labor Code section 1197.1, an employer who fails to pay the minimum wage owes the employee (1) the unpaid minimum wage and (2) liquidated damages in the same amount as the unpaid wage. Given these assumptions, Defendant contends that the potential value of Plaintiff's minimum wage claim is $722, 530, assuming (1) $361, 265 in unpaid minimum wage ($16.26 x 22, 218 weeks worked); and (2) $361, 265 in liquidated damages ($16.26 x 22, 218 weeks worked).

         Minimum Wage ...

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