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Cavada v. Inter-Continental Hotels Group, Inc.

United States District Court, S.D. California

November 1, 2019

MALLORY CAVADA, on individual, on behalf of herself and on behalf of all persons similarly situated, Plaintiff,
v.
INTER-CONTINENTAL HOTELS GROUP, INC., a Corporation; IHG MANAGEMENT MARYLAND LLC, a Limited Liability Company; INTERCONTINENTAL HOTELS GROUP RESOURCES, INC., a Corporation; INTERCONTINENTAL HOTELS GROUP RESOURCES, LLC, a Limited Liability Company; and DIES 1 through 50, inclusive, Defendants.

          ORDER DENYING PLAINTIFF'S MOTION TO REMAND [DKT. NO. 8.]

          Hon. Gonzalo P. Curiel United States District Judge

         Before the Court is Plaintiff's motion to remand a putative class action to state court. (Dkt. No. 8.) Defendants filed an opposition on September 27, 2019, and Plaintiff filed a reply on October 4, 2019. (Dkt. Nos. 13, 14.) The Court finds that the matter is appropriate for decision without oral argument pursuant to Local Civ. R. 7.1(d)(1). Based on the reasoning below, the Court DENIES Plaintiff's motion to remand.

         Background

         On July 29, 2019, Plaintiff Mallory Cavada (“Plaintiff”) filed a putative class action in San Diego Superior Court against her joint employers Defendants InterContinental Hotels Group, Inc.; IHG Management Maryland LLC (“IHGM”); Intercontinental Hotels Group Resources, Inc. (“IHGR”); and Intercontinental Hotels Group Resources, LLC (“IHGRLLC”) (collectively “Defendants”) alleging (1) unfair competition, in violation of Cal. Bus. & Prof. Code § 17200 et seq.; (2) failure to pay minimum wages, in violation of Cal. Lab. Code §§ 1194, 1197, 1197.1; (3) failure to pay overtime wages, in violation of Cal. Lab. Code § 510 et seq.; (4) failure to provide required meal periods, in violation of Cal. Lab. Code §§ 226.7, 512 and the applicable Industrial Welfare Commission (“IWC”) Wage Order; (5) failure to provide required rest periods, in violation of Cal. Lab. Code §§ 226.7, 512, and the applicable IWC Wage Order; (6) failure to reimburse necessary business-related expenses and costs, in violation of Cal. Lab. Code § 2802; (7) failure to provide complete and accurate wage statements, in violation of Cal. Lab. Code § 226; and (8) failure to timely pay wages, in violation of Cal. Lab. Code §§ 201, 202, 203. (Dkt. No. 1-4, Not. of Removal, Ex. C, Compl.) On September 3, 2019, Defendants removed the case to this Court. (Dkt. No. 1.)

         Plaintiff was employed by Defendants at the Staybridge Suites in the Rancho Bernardo area of San Diego from October 2017 to September 2018 as a Front Desk Agent, as a non-exempt employee, paid on an hourly basis, and entitled to the legally required meal and rest periods and payment of minimum and overtime wages due for all time worked. (Dkt. No. 1-4, Not. of Removal, Compl. ¶ 7.)

         She brings a class action on behalf of herself and a California class on the First Cause of Action for UCL violations as defined

as all individuals who are or previously were employed by Defendant InterContinental Hotels Group, Inc. and/or Defendant IHG Management Maryland LLC and/or Defendant Intercontinental Hotels Group Resources, LLC and/or Intercontinental Hotels Group Resources, Inc. in California and classified as non-exempt employees (the "CALIFORNIA CLASS") at any time during the period beginning four (4) years prior to the filing of this Complaint and ending on the date as determined by the Court (the "CALIFORNIA CLASS PERIOD")

(Id. ¶ 9, 24.) She also seeks to certify a California labor sub-class on the Second, Third, Fourth, Fifth, Sixth, Seventh and Eighth causes of action defined as

all members of the California Class who are or previously were employed by Defendant Inter-Continental Hotels Group, Inc., and/or Defendant IHG Management Maryland LLC and/or Defendant Intercontinental Hotels Group Resources, LLC and/or Intercontinental Hotels Group Resources, Inc. in California (the “CALIFORNIA LABOR SUB-CLASS”) at any time during the period three (3) years prior to the filing of the complaint and ending on the date as determined by the Court (the “CALIFORNIA LABOR SUB-CLASS PERIOD”)

(Id. ¶ 34.) She claims that the amount in controversy does not exceed $5, 000, 000. (Id. ¶¶ 24, 34.) On September 11, 2019, Plaintiff filed a motion to remand the case to state court challenging Defendants' claim in their Notice of Removal that the $5, 000, 000 amount in controversy has been met. (Dkt. No. 8.) The motion is fully briefed. (Dkt. Nos. 13, 14.)

         Discussion

         A. Legal Standard

         Federal courts have original jurisdiction over class actions where (1) any member of the plaintiff class is diverse from any defendant; (2) the proposed class contains 100 or more putative class members; (3) and the amount in controversy exceeds the “sum or value of $5, 000, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(d); Rodriguez v. AT & T Mobility Servs., LLC, 728 F.3d 975, 978 (9th Cir. 2013). Plaintiff moves solely on the third factor alleging that Defendants failed to demonstrate, with supporting evidence and with reasonable assumptions, the $5, 000, 000 amount in controversy. In response, Defendants contend that they made reasonable assumptions based on the allegations in the Complaint and have met their burden to demonstrate the $5, 000, 000 amount in controversy.

         “[W]hen a defendant seeks federal-court adjudication, the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 87 (2014). When the amount in controversy is challenged, both sides submit evidence and the court must decide whether the amount-in-controversey requirement has been met by a preponderance of the evidence. Id. at 89. However, ultimately, the defendant bears the burden of proving the amount in controversy. Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir. 2013). “The amount in controversy is simply an estimate of the total amount in dispute, not a prospective assessment of defendant's liability.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (quoting Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010)).

         A preponderance of the evidence standard requires a defendant to “provide evidence establishing that it is ‘more likely than not' that the amount in controversy exceeds that amount.” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (citation omitted). A removing defendant may rely on “a chain of reasoning that includes assumptions” and “an assumption may be reasonable if it is founded on the allegations of the complaint.” Arias, 936 F.3d at 925 (quoting Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1198-99 (9th Cir. 2015)).

         “In assessing the amount in controversy, [courts] may consider allegations in the complaint and in the notice of removal, as well as summary-judgment-type evidence relevant to the amount in controversy”, Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 416 (9th Cir. 2018) (citation omitted), as well as “supplemental evidence later proffered by the removing defendant, which was not originally included in the removal notice.” Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1205 (E.D. Cal. Feb. 27, 2008) (citing Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th Cir. 2002)).

         In support, Defendants present the declaration and supplemental declaration of Robert Hadfield who has been employed as Director of Human Resources, Americas Hotel Operations, and in similar positions, since July 2000 by Six Continents Hotels, Inc., the direct corporate parent of InterContinental Hotels Group Resources LLC. (Dkt. No. 1-7, Hadfield Decl. ¶ 2; Dkt. No. 13-2, Suppl. Hadfield Decl. ¶ 2.) He is the primary human resources business partner for the extended stay and/or limited service hotels managed by Defendants which include the Staybridge Suites hotels. (Dkt. No. 1-7, Hadfield Decl. ¶ 2; Dkt. No. 13-2, Suppl. Hadfield Decl. ¶ 2.)

         Hadfield determined that between July 29, 2015 and August 28, 2019, Defendants IHGR and IHGRLLC employed about 482 individuals as non-exempt employees at seven Staybridge Suites hotels in California. (Dkt. No. 1-7, Hadfield Decl. ¶ 5.) Between the same time period, Defendant IHGM employed about 147 individuals as non-exempt employees at two Staybridge Suites hotels in California. (Id. ¶ 6.) Therefore, the putative class consists of a total of about 629 non-exempt employees with an average hourly rate of $14.31 per hour. (Id. ¶ 7.)

         Hadfield also determined that in addition to the Staybridge Suites hotels, about 1, 918 non-exempt employees were also employed at Defendants' six other hotels in California and worked about 201, 415 workdays during July 29, 2015 and August 28, 2019. (Dkt. No. 13-2, Suppl. Hadfield Decl. ¶ 13.) These non-exempt employees were part of a wage and hour class action settlement in Akli Merzouki v. IHG Mgmt. Maryland LLC, and Intercontinental Hotels Group in Los Angeles County Superior Court and have released claims on causes of actions alleged in that case. (Dkt. No. 1-4, Not. of Removal, Ex. C, Compl. ¶ 8.) However, Defendants note that the Merzouki settlement does not exclude claims for violation of meal rest periods and failure to reimburse business expenses because those claims were not raised in the case and may be used to calculate the amount in controversy in this case. (Dkt. No. 13; Dkt. No. 13-2, Ds' RJN[1], Exs. 1, 3.) In reply, Plaintiff does not dispute this contention.[2]

         In Arias, the defendant's notice of removal contained the number of putative class employees, the average rate of pay and the number of workweeks worked during the class period and based on this data, the defendant made assumptions about the frequency of the violations based on the allegations in the complaint. Arias, 936 F.3d at 926. Relying on the complaint's allegation that the defendant “routinely” failed to pay overtime wages and compensated for missed rest and meal breaks, the defendant assessed 6 minutes of unpaid overtime per day and one missed rest break per week. Id. Because the defendant tied its assumed violation rates to the complaint, the Ninth ...


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