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Ramirez v. Carefusion Resources, LLC

United States District Court, S.D. California

July 1, 2019

LISA RAMIREZ, an individual, on behalf of herself and on behalf of all persons similarly situated, Plaintiff,
v.
CAREFUSION RESOURCES, LLC, a Limited Liability Company; and DOES 1-50, Inclusive, Defendants.

          ORDER DENYING MOTION TO REMAND [Doc. 9]

          Hon. Roger T. Benitez United States District Judge.

         Pending before the Court is Plaintiffs motion to remand. For the following reasons, the motion is DENIED.

         I. DISCUSSION

         Plaintiff Lisa Ramirez filed this action against her employer, Defendant Carefusion Resources, LLC, in the California Superior Court, County of San Diego, Plaintiff brings suit for various California Labor Code violations, including (1) failure to pay overtime wages in violation of Cal. Lab. Code § 510, (2) failure to provide required meal and rest periods in violation of §§ 226.7 and 512, (3) failure to provide accurate itemized wage statements in violation of § 226, and (4) failure to provide wages when due in violation of §§ 201, 202, and 203.

         Defendant removed this action based on original jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d)(2). Plaintiff now moves to remand, arguing that Defendant has not carried its burden to show either minimal diversity or the requisite amount in controversy. Plaintiff further contends that, even if the Court finds the CAFA requirements are satisfied, both the "local controversy" and "home-state controversy" exceptions apply to deprive this Court of jurisdiction. See 28 U.S.C. § 1332(d)(3)-(4). As a threshold matter, the Court first considers whether it has jurisdiction under CAFA.

         A. Jurisdiction Under CAFA

         Defendant removed this action under CAFA, which confers jurisdiction on district courts in any civil action where three requirements are met: "the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interests and costs, the proposed class consists of more than 100 members, and any member of the class of plaintiffs is a citizen of a State different from any defendant." Fritsch v. Swift Transportation Co. of Arizona, LLC, 899 F.3d 785, 788 (9th Cir. 2018) (quoting 28 U.S.C. § 1332(d)(2)) (internal quotation marks omitted). As required, Defendant filed a notice of removal "containing a short and plain statement of the grounds for removal." 28 U.S.C. § 1146(a). Importantly, "no antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court." Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 554 (2014). The parties appear to agree, and the Court is satisfied by the evidence, that the proposed class consists of more than 100 members. Thus, the Court turns to Plaintiffs attack on both the minimal diversity and amount in controversy requirements.

         1. Minimal Diversity

         CAFA requires only "minimal diversity" between the parties. Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 (9th Cir. 2007). The minimal diversity requirement is satisfied if "any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2)(A). For purposes of determining diversity, an individual person is deemed to be a citizen of the state in which he or she is domiciled. Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). Defendant offers a declaration in support of its assertion that at least one class member is domiciled in Texas, which Defendant identifies by name. [Doc. 1-9 at ¶ 5.] Plaintiff does not dispute this fact or offer any evidence to the contrary.

         Determining Defendant's citizenship, however, is a more complicated matter, in part because of its status as a Limited Liability Company ("LLC"). In traditional diversity cases, LLCs are treated like partnerships for purposes of diversity jurisdiction, meaning that an LLC is deemed a citizen of every state of which its members are citizens. Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). In § 1332(d)(10), however, CAFA seemingly carves out an exception to that rule, Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006), providing that "an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it is organized."

         In the Ninth Circuit, whether an LLC is "an unincorporated association" for CAFA purposes under § 1332(d)(10) remains an open question. Nonetheless, the Fourth Circuit- the only federal circuit to expressly resolve the question-offers persuasive guidance. In Ferrell v. Express Check Advance of S.C. LLC, 591 F.3d 698 (4th Cir. 2010), the Fourth Circuit expressly held that an LLC is properly considered an "unincorporated association" within the meaning of § 1332(d)(10) "and therefore is a citizen of the State under whose laws it is organized and the State where it has its principal place of business." Id. at 700. Likewise, most courts to consider the issue have reached the same conclusion, finding that § 1332(d)(10) applies to all types of non-corporate business entities. See, e.g., Marroquin v. Wells Fargo, LLC, 2011 WL 476540, at *2 (S.D. Cal. Feb. 3, 2011) (treating an LLC as an unincorporated association under CAFA); Davis v. HSBC Bank Nevada, N.A., 557 F.3d 1026, 1032, n. 13 (9th Cir. 2009) (applying § 1332(d)(10) to a limited partnership); Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (recognizing that an LLC is a type of "unincorporated association" and that "in the limited context of class actions, Congress has created a statutory exception to [the traditional] rule of citizenship for unincorporated associations").

         Accordingly, the Court finds that for purposes of CAFA, Defendant is "a citizen of the State where it has its principal place of business and the State under whose laws it is organized." § 1332(d)(10); see also Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) ("§ 1332(d)(10) . . . departs from the rule that frequently destroys diversity jurisdiction, that a limited partnership's or unincorporated association's citizenship for diversity purposes can be determined only by reference to all of the entity's members."). Plaintiffs reliance on non-CAFA case law does not require a different conclusion. See, e.g., Johnson, ATI F.3d at 899 (9th Cir. 2006) (explaining in non-CAFA case that LLCs are treated like partnerships for purposes of diversity jurisdiction, meaning that an LLC is a citizen of every state of which its members are citizens). Moreover, to apply the traditional diversity rule holding that LLCs are citizens of every state in which their members are domiciled would likely undermine Congress's intent "to facilitate adjudication of certain class actions in federal court" by excluding from federal adjudication the vast majority of class actions brought against LLCs. See Dart Cherokee, 135 S.Ct. at 554.

         Applying the § 1332(d)(10) citizenship test to Defendant, then, the Court must determine (1) the state under whose laws it is organized and (2) where it maintains its principal place of business. There is no dispute that Defendant is a citizen of Delaware under whose laws it is organized. The parties dispute, however, where Defendant holds its principal place of business. In Hertz Corp. v. Friend, the Supreme Court held that a corporation's principal place of business "refer[s] to the place where a corporation's officers direct, control, and coordinate the corporation's activities." 559 U.S. 77, 92-93 (2010). This place "should normally be the place where the corporation maintains its headquarters - provided that the headquarters is the actual center of direction, control, and coordination, i.e., the 'nerve center."' Id. at 93.

         Although Defendant's notice of removal did not identify its principal place of business, it did assert that "its principal place of business is not in Texas." [Doc. 1-9 at ¶ 5.] In opposition to remand, Defendant now, for the first time, contends its principal place of business is in New Jersey. In support, Defendant provides a declaration stating that its officers "are primarily located in New Jersey, including the Corporate Secretary and Vice President of Tax, who are generally responsible for CareFusion's corporate and administrative activities." [Doc. 10-1 at ¶ 2.] For the first time in her reply, Plaintiff attaches evidence suggesting that Defendant's principal place of business is actually in California.[1] [Doc. 11-1.] For example, Plaintiff attaches a Statement of Information filed with the California Secretary of State, which lists a California address as Defendant's "principal office" and "mailing address." Defendant's Notice and Acknowledgment of Pay Rate and Payday lists a California address as Defendant's "Main Office" and ...


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