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Reyes v. Carehouse Healthcare Center, LLC

United States District Court, C.D. California, Southern Division

July 5, 2017

MARICELA REYES, individually and on behalf of all others similarly situated, Plaintiff,



         On December 16, 2013, Plaintiff Maricela Reyes filed a single-plaintiff employment action in Orange County Superior Court against Defendants Carehouse Healthcare Center, LLC, Southwest Payroll Services, LLC, and Does 1 through 20, inclusive, for (1) race discrimination in violation of California Government Code § 12940(a); (2) age discrimination in violation of California Government Code § 12940(a); (3) retaliation in violation of California Government Code § 12940(h); (4) wrongful termination in violation of public policy, California Labor Code §§ 98.6, 232.5; (5) unpaid wages in violation of California Labor Code §§ 1194, 1194.2; (6) failure to pay overtime compensation in violation of California Labor Code § 510; (7) failure to provide meal periods in violation of California Labor Code §§ 226.7, 512; (8) failure to permit rest breaks in violation of California Labor Code § 226.7; (9) failure to provide accurate wage statements in violation of California Labor Code §§ 226, 1174; (10) failure to pay all wages due upon separation of employment in violation of California Labor Code §§ 201, 202, 203; and (11) unfair business practices in violation of California's Unfair Competition Law (“UCL”), California Business and Professions Code §§ 17200 et seq. (Dkt. 1-1.) On December 23, 2013, Plaintiff filed a First Amended Complaint adding a claim for failure to prevent discrimination or retaliation in violation of California Government Code § 12940(k). (Dkt. 1-2 [First Amended Complaint, hereinafter “FAC”].)

         More than two years later, Plaintiff filed a Second Amended Complaint on March 17, 2016, transforming the sixth through twelfth claims from the FAC (unpaid wages, failure to pay overtime compensation, failure to provide meal periods, failure to permit rest breaks, failure to provide accurate wage statements, failure to pay all wages due upon separation of employment, and unfair business practices) into class claims. (Dkt. 1-3 [Second Amended Complaint, hereinafter “SAC”].) She identified the class as all hourly-paid, non-exempt employees who had worked for Defendants since December 13, 2009. (Id. ¶ 31.) Defendant Southwest removed the action to this Court on June 22, 2016. (Dkt. 1.)

         Almost one year after removal, on June 12, 2017, Plaintiff filed a motion to remand this action to state court for failure to meet the amount in controversy required for federal jurisdiction under the Class Action Fairness Act (“CAFA”). (Dkt. 35 [Motion, hereinafter “Mot.”].) For the following reasons, the motion is DENIED.[1]


         CAFA provides original federal jurisdiction over class actions in which the amount in controversy exceeds $5 million, 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). “[N]o antiremoval presumption attends cases invoking CAFA” because CAFA was enacted to facilitate federal courts' adjudication of certain class actions. Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 550 (2014).

         Under CAFA, a defendant removing a case must file a notice of removal containing a “short and plain statement of the grounds for removal.” Id. at 553. Additionally, “a defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold” unless the defendant's assertion is contested by the plaintiff. Id. at 554. Where the 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). However, this “burden is not daunting, as courts recognize that under this standard a removing defendant is not obligated to research, state, and prove the plaintiff's claims for damages.” Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1204-05 (E.D. Cal. 2008) (internal quotation marks omitted).


         A. Timeliness

         As an initial matter, Defendants incorrectly argue that Plaintiff's motion is untimely. (See Dkt. 37 [Opposition, hereinafter “Opp.”] at 4-7.) Defendants believe that Plaintiff's motion is subject to the thirty-day time limit required by 28 U.S.C. § 1447(c), which requires that “[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction . . . be made within 30 days after the filing of the notice of removal.” Defendants contend that Plaintiff's motion is a “belated attack on the sufficiency of [their] pleading, i.e. the sufficiency of its allegations of the amount in controversy contained in its removal petition, ” which is “best characterized as an alleged ‘defect' in removal procedure, ” and “[a]t worst, it is a procedural attack outside the scope of § 1447(c), and thus subject to a ‘reasonable' time limitation.” (Opp. at 4-5.) Not so. Plaintiff's motion is entirely premised on Defendants' purported failure to satisfy the amount in controversy. (See generally Mot.) “The amount in controversy requirement is a substantive requirement for subject matter jurisdiction based on CAFA.” Avila v. Con-Way Freight, Inc., No. SACV1101949CJCRNBX, 2012 WL 12887771, at *1 (C.D. Cal. May 18, 2012), aff'd, 588 F. App'x 560 (9th Cir. 2014).

         Defendants believe that because their notice of removal contained a plausible statement giving rise to CAFA jurisdiction, subject matter jurisdiction unquestionably attaches. (See Id. at 5 (citing Dart Cherokee, 135 S.Ct. at 553).) However, the portion of Dart Cherokee that Defendants rely on explains that the “defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court.” Dart Cherokee, 135 S.Ct. at 553 (emphasis added). Here, Plaintiff has clearly questioned Defendants' amount in controversy allegation. Although the Court appreciates Defendants' frustration that Plaintiff waited almost one full year before filing the motion, the motion is nevertheless timely as it questions the Court's subject matter jurisdiction, which may be challenged at any time. 28 U.S.C. § 1447.

         B. Amount in Controversy

         In the notice of removal, Defendants offered calculations for Plaintiff's claims for unpaid meal and rest period premiums, unpaid overtime compensation, waiting time penalties, and attorneys' fees in order to reach the jurisdictional threshold. (Dkt. 1 at 8- 14.) Plaintiff contends that Defendants have not met their burden of establishing the amount in controversy under CAFA because their calculations are based on “unreasonable assumptions” about her claims.[2] (Mot. at 3.)

         According to the SAC, Defendants “engaged in a systematic pattern of wage and hour violations.” (SAC ¶ 14.) Regarding the unpaid meal and rest period claims, [3] the SAC alleges that Defendants “required Plaintiff and class members to work for more than five and/or ten hours per day without providing timely, uninterrupted thirty-minute meal periods.” (Id. ¶ 91.) It further alleges that “Plaintiff and class members routinely worked shifts in excess of eight hours per day during her employment with Defendants, but was [sic] not permitted to take rest breaks.” (Id. ¶ 95.) To calculate the amount in controversy for these meal and rest period claims, Defendants assigned a violation rate of one meal break violation and one rest break violation per week per class member. (Dkt. 1 at 9.) Defendants cite numerous CAFA cases within the Ninth Circuit in support of this assumption. (Id. (citing Campbell v. Vitran Exp., Inc., 471 Fed. App'x 646, 648-9 (9th Cir. 2012) (finding an assumption that “each claimant missed at least one rest break and one meal break per week” was adequately supported by the complaint's allegations of regular, consistent, and routine violations and the deposition testimony of the class representatives); Byrd v. Masonite Corp., No. EDCV 16-35 JGB (KKX), 2016 WL 2593912, at *5 (C.D. Cal. May 5, 2016) (Allegations of employment violations “at all material times” and as the result of a “uniform policy/practice” supported the “assumption that each class member missed one meal period and one rest period per week”); Garza v. Brinderson Constructors, Inc., 178 F.Supp.3d 906, 912 (N.D. Cal. 2016) (“In this case, plaintiff does not allege that class members were ‘never' permitted breaks, but plaintiff does allege that he ‘regularly' missed meal breaks and that defendants maintained a ‘policy or practice' of both meal and rest break violations. Brinderson's assumption of one violation per week is reasonable based on the allegations of the SAC.”) (internal citations omitted); Arreola v. Finish Line, No. 14-CV-03339-LHK, 2014 WL 6982571, at *4 (N.D. Cal. Dec. 9, 2014) (finding that pleading “regular or consistent” practice supports assumption that every class member “experienced at least one violation once per week”); and Jasso v. Money Mart Express, 2012 WL 699465, *4- 6 (N.D. Cal. 2012) (“Given the allegations of a “uniform policy and scheme” and that the violations took place “at all material times, ” one violation per week on each claimed basis is a sensible reading of the alleged amount in controversy, as ...

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