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Lucas v. Michael Kors (USA), Inc.

United States District Court, C.D. California

May 9, 2018

Victoria E. Lucas
v.
Michael Kors (USA), Inc., et al.

          PRESENT: HONORABLE MICHAEL W. FITZGERALD, U.S. DISTRICT JUDGE

          CIVIL MINUTES-GENERAL

         PROCEEDINGS (IN CHAMBERS): ORDER RE PLAINTIFF'S MOTION TO REMAND CASE [12]

         Before the Court is Plaintiff Victoria E. Lucas's Motion to Remand (the “Motion”), filed March 28, 2018. (Docket No. 12). Defendant Michael Kors (USA), Inc. (“MK”), filed its Opposition on April 9, 2018. (Docket No. 14). Defendant Decton, Inc. joined in MK's Opposition on April 11, 2018. (Docket No. 16). On April 16, 2018, Plaintiff replied. (Docket No. 17). The Court has reviewed and considered the papers submitted on the Motion and held a hearing on April 30, 2018.

         The Motion is DENIED. The Court concludes that the Complaint adequately alleges an amount in controversy of over $5 million. Therefore, subject matter jurisdiction exists under CAFA.

         I. BACKGROUND

         On December 26, 2017, Plaintiff filed a putative class action against Defendants MK, Decton, Inc., and Decton Staffing Services in California Superior Court asserting claims for failure to pay overtime; failure to pay minimum wage; failure to provide meal periods; failure to provide rest periods; failure to pay all wages due upon termination; failure to provide accurate wage statements; and violation of California's Unfair Competition Law (“UCL”). (Notice of Removal (“NOR”), Ex. A (Compl.), Docket No. 1). In her complaint, Plaintiff proposes the following five classes:

Non-Exempt Employee Class: All current and former employees of Defendants within the State of California at any time commencing four (4) years preceding the filing of Plaintiff's complaint up until the time that notice of the class action is provided to the class.
Meal Period Class: All current and former employees of Defendants within the State of California at any time commencing four (4) years preceding the filing of Plaintiff's complaint up until the time that notice of the class action is provided to the class, who worked shifts of 5 hours or more.
Rest Period Class: All current and former employees of Defendants within the State of California at any time commencing four (4) years preceding the filing of Plaintiff's complaint up until the time that notice of the class action is provided to the class, who worked shifts of 4 hours or more.
Late Pay Class: All former employees of Defendants within the State of California at any time commencing three (3) years preceding the filing of Plaintiff's complaint up until the time that notice of the class action is provided to the class, who did not receive all their wages upon termination and or resignation of their employment.
Wage Statement Class: All current and former employees of Defendants within the State of California, to whom, at any time commencing one (1) year preceding the filing of Plaintiff's complaint up until the time that notice of the class action is provided to the class, were provided with wage statements.

(Id. ¶ 23). Plaintiff believes that over 100 employees would fall within the putative classes, and alleges that “[a]ccounting for employee turnover during the relevant periods necessarily increases this number substantially.” (Id. ¶¶ 26-27).

         After filing an answer in state court, Defendant MK removed the action to this Court on February 27, 2018. (NOR, Docket No. 1).

         II. DISCUSSION

         A. Jurisdiction Under the Class Action Fairness Act

         Defendant MK's Notice of Removal asserts jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). (NOR at 1). Under CAFA, the Court has “original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs, and is a class action in which” there is minimal diversity. 28 U.S.C. § 1332(d).

         “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). In a notice of removal, a defendant need only plausibly allege that these prerequisites are met. Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 553 (2014). Once confronted with a motion to remand, however, the defendant bears the burden of establishing jurisdiction by a preponderance of the evidence. Id. at 553- 54.

         Relevant here, on a motion to remand, both “parties may submit evidence outside the complaint, including affidavits or declarations, or other ‘summary-judgment type evidence relevant to the amount in controversy at the time of removal.'” Ibarra, 775 F.3d at 1199-1200. “Under this system, CAFA's requirements are to be tested by consideration of real evidence and the reality of what is at stake in the litigation, using reasonable assumptions underlying the defendant's theory of damages exposure.” Id. at 1198. Lastly, there is no presumption against removal under CAFA. Dart Cherokee, 135 S.Ct. at 554.

         B. CAFA “Amount in Controversy”

         The parties dispute the “amount in controversy” element of CAFA jurisdiction. Defendant MK contends that the amount in controversy for CAFA jurisdiction is at least $6, 548, 582.50, broken down as follows:

.Missed meal break premiums = $ 1, 470, 030.20
.Missed rest break premiums = $ 1, 470, 030.20
.Potential unpaid overtime = $ 1, 102, 522.65
.Wage statement penalties = $ 445, 950.00
.Waiting time penalties = $ 398, 858.40
.Unpaid minimum wage = $ 351, 495.00
.Potential attorneys' fees = $ 1, 309, 716.50

(NOR ¶¶ 34, 37, 40, 42, 44, 48).

         Disputed here is whether this Court lacks jurisdiction because Defendant MK has not sufficiently established these amounts. (Plaintiff acknowledges in her Reply (at 5) that the “local controversy” exception to CAFA jurisdiction does not apply.) Specifically, Plaintiff contends that Defendant MK “relies on a series of unsupported speculative assumptions about Plaintiff and the putative class in an attempt to inflate the damages[.]” (Motion at 8). The Court will address each category in turn.

         1. General Sufficiency of the Evidence

         Defendant MK has “no obligation . . . to support removal with production of extensive business records to prove or disprove liability and/or damages with respect to Plaintiff or the putative class members at this premature (pre-certification) stage of the litigation.” Muniz v. Pilot Travel Centers LLC, 2007 WL 1302504, at *5 (E.D. Cal. May 1, 2007). Where a defendant must prove the amount in controversy by a preponderance of the evidence, a declaration or affidavit may satisfy the burden. See Lewis v. Verizon Commc'ns, Inc.,627 F.3d 395, 397 (9th Cir. 2010) (“To satisfy its burden in this case, the removing defendant . ...


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