Blanca Argelia Arias, individually and on behalf of herself and others similarly situated, Plaintiff-Appellee,
Residence Inn by Marriott, a Delaware limited liability company; Marriott International, Inc., a Delaware corporation, Defendants-Appellants.
and Submitted August 13, 2019 Pasadena, California
from the United States District Court for the Central
District of California, No. 2:18-cv-08818-RGK-JPR R, Gary
Klausner, District Judge, Presiding
P. Long (argued), Seyfarth Shaw LLP, Los Angeles, California;
William Dritsas, Seyfarth Shaw LLP, San Francisco,
California; for Defendants-Appellants.
Gashgian (argued) and Ramin R. Younessi, Law Offices of Ramin
R. Younessi, Los Angeles, California, for Plaintiff-Appellee.
Before: Consuelo M. Callahan, D. Michael Fisher, [*] and Morgan
Christen, Circuit Judges.
Action Fairness Act / Amount in Controversy
panel vacated the district court's order sua sponte
remanding to state court a putative class action brought by
employees against Residence Inn by Marriott, which had been
removed to federal court under the Class Action Fairness Act.
panel held that when a notice of removal plausibly alleges a
basis for federal court jurisdiction, a district court may
not remand the case back to state court without first giving
the defendant an opportunity to show by a preponderance of
the evidence that the jurisdictional requirements were
satisfied. Marriott's notice of removal alleged that the
amount in controversy requirement was satisfied, and the
district court did not conclude that Marriott's
allegations were implausible. The panel held that by
remanding the case to state court sua sponte, the district
court deprived Marriott of a fair opportunity to submit
proof. The panel concluded that this error warranted vacatur
of the remand order.
panel held that when a defendant's allegations of removal
jurisdiction are challenged, the defendant's showing on
the amount in controversy may rely on reasonable assumptions.
The panel held that Marriott's notice of removal included
personnel and payroll data, and with that data, Marriott
estimated the amount-in-controversy by making assumptions
that were plausible and may prove to be reasonable in light
of allegations in the complaint. The panel held that on
remand Marriott must show that its estimated amount in
controversy relied on reasonable assumptions.
panel held that when a statute or contract provides for the
recovery of attorneys' fees, prospective attorneys'
fees must be included in the assessment of the amount in
panel rejected plaintiff's contention that the position
taken by Marriott in its summary judgment motion in state
court - that plaintiff's claims are barred by a release
from a prior class action settlement - defeated federal court
panel remanded on an open record for the district court to
permit the parties to submit evidence and arguments on the
amount in controversy.
CALLAHAN, CIRCUIT JUDGE.
Arias filed a putative class action against Residence Inn by
Marriott, LLC and Marriott International, Inc.
("Marriott") in California superior court, alleging
that Marriott failed to compensate its employees for wages
and missed meal breaks and failed to issue accurate itemized
wage statements. Marriott removed the action to federal court
alleging diversity jurisdiction under the Class Action
Fairness Act ("CAFA"). The district court sua
sponte remanded the case back to state court, and Marriott
of our early cases interpreting CAFA, we adopted legal
standards that were influenced by a general "presumption
against federal jurisdiction." See Lowdermilk v.
U.S. Bank Nat'l Ass'n, 479 F.3d 994, 999 (9th
Cir. 2007). The Supreme Court has made clear that regardless
of whether such a presumption exists in run-of-the-mill
diversity cases, "no antiremoval presumption attends
cases invoking CAFA." Dart Cherokee Basin Operating
Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014). Because
some remnants of our former antiremoval presumption seem to
persist,  we
reaffirm three principles that apply in CAFA removal cases.
First, a removing defendant's notice of removal
"need not contain evidentiary submissions" but only
plausible allegations of the jurisdictional elements.
Ibarra v. Manheim Investments, Inc., 775 F.3d 1193,
1197 (9th Cir. 2015). Second, when a defendant's
allegations of removal jurisdiction are challenged, the
defendant's showing on the amount in controversy may rely
on reasonable assumptions. See id. at 1197-99.
Third, when a statute or contract provides for the recovery
of attorneys' fees, prospective attorneys' fees must
be included in the assessment of the amount in controversy.
Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d
785, 794 (9th Cir. 2018). We vacate the district court's
order remanding the action to state court, and we remand for
further proceedings to allow the parties to present evidence
and argument on the amount in controversy.
works for defendant Residence Inn by Marriott, LLC in Los
Angeles, California. On August 23, 2018, Arias filed a
putative class action in state court against Marriott
alleging that Marriott failed to pay wages, provide rest
breaks, and provide itemized wage statements, all in
violation of state wage and hour laws. Arias seeks
certification of a class of all employees of Marriott
"who were subjected to individual wage and hour
violations, during the period within four years from the
filing of th[e] Complaint and continuing through trial."
In addition to compensatory damages, Arias seeks civil
penalties under the California Private Attorney General Act,
disgorgement of "ill-gotten gains" under
California's Unfair Competition Law, and attorneys'
October 12, 2018, Marriott removed the case to federal
district court, invoking CAFA jurisdiction. Specifically, Marriott
alleged that the district court had original jurisdiction
over the matter because the class action satisfied CAFA's
requirements of minimum diversity (any member of the class is
a citizen of a state different from any defendant), class
size (at least 100), and amount in controversy (exceeding $5,
000, 000). See 28 U.S.C. § 1332(d)(2),
(d)(5)(B). To show minimum diversity, Marriott alleged that
it is a citizen of Maryland and Delaware and it relied on the
allegation in the complaint that Arias is a citizen of
California. To satisfy the class size requirement, Marriott
provided a declaration from a human resources officer stating
that Marriott employed at least 2193 nonexempt employees
during the period identified in the complaint.
satisfy the amount-in-controversy requirement, Marriott
relied on a combination of the complaint's definition of
the class, Marriott's employee data (e.g., number of
nonexempt employees, hourly rate of pay, and number of
workweeks worked by putative class members), and assumptions
about the frequency of the violations alleged in the
complaint. Based on its assumptions and calculations,
Marriott alleged a potential amount in controversy exceeding
$15 million with its most "conservative estimate"
totaling over $5.5 million, excluding attorneys' fees
(which Marriott alleged should be included in the
calculation). Marriott's calculation in its notice of
removal breaks down as follows: