United States District Court, E.D. California
MARIA AVILA, individually, and on behalf of other members of the general public similarly situated and on behalf of other aggrieved employees pursuant to the California Private Attorneys General Act, Plaintiff,
v.
RUE21, INC., an unknown business entity, and DOES 1-100, inclusive, Defendants. Claims Claims
CORRECTED [1] MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANT'S MOTION TO REMAND UNDER 28
U.S.C. § 1447. (ECF NO. 4)
LAWRENCE J. O'NEILL UNITED STATES DISTRICT JUDGE.
I.
INTRODUCTION
This is
a wage and hour putative class action first initiated by
Plaintiff Maria Avila (“Plaintiff”) in the Tulare
Superior Court. After Plaintiff filed the operative First
Amended Complaint (the “FAC”) for herself, as
well as on behalf of other members of the general public
similarly situated and on behalf of other aggrieved employees
pursuant to the California Private Attorneys General Act
(“PAGA”), Defendant Rue21, Inc.
(“Defendant”) removed the case to this Court
pursuant to the Class Action Fairness Act
(“CAFA”), 28 U.S.C. § 1332(d), on July 30,
2019. ECF No. 1. “A motion to remand is the proper
procedure for challenging removal.” Moore-Thomas v.
Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir.
2009). Seeking to challenge the removal, Plaintiff timely
brought the instant Motion to Remand on August 29, 2019, as
required by 28 U.S.C. § 1447(c). ECF No. 4. In
particular, Plaintiff contends that the removal was untimely
and that Defendant has failed to meet its burden of showing
by a preponderance of the evidence that the amount in
controversy exceeds $5 million as required by CAFA.
Id. at i. Defendant filed an Opposition on September
16, and Plaintiff replied on September 23. ECF Nos. 5-6.
Pursuant
to Local Rule 230(g), the Court finds this matter suitable
for a decision on the papers. Having considered all of the
arguments raised in the parties' submissions, relevant
law, and record in this case, the Court GRANTS the Motion.
II.
BACKGROUND
Defendant
allegedly employed Plaintiff as an hourly-paid, non-exempt
employee from approximately October 2013 to November 2018.
ECF No. 1, Exh. B (“FAC”) ¶ 25. The FAC
asserts eleven causes of action against Defendant.
Id., FAC at 1-2. The first nine causes of action are
based on violations of various sections of the California
Labor Code for unpaid overtime, meal and rest periods,
minimum wage, and business expenses; for non-compliant with
wage statements; and for failure to keep requisite payroll
records and to timely pay wages during employment and final
wages. Id. The tenth cause of action is for
violation of the California Business & Professions Code
§§ 17200, et seq., and the eleventh cause
of action is for violation of PAGA. Id.
III.
LEGAL STANDARD
“[A]ny
civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may
be removed by the defendant or the defendants, to the
district court of the United States for the district and
division embracing the place where such action is
pending.” 28 U.S.C. § 1441(a). Under CAFA,
“a district court has original jurisdiction over a
class action where: (1) there are one-hundred or more
putative class members; (2) at least one class member is a
citizen of a state different from the state of any defendant;
and (3) the aggregated amount in controversy exceeds $5
million, exclusive of costs and interest. Congress enacted
CAFA to curb perceived abuses of the class action device
which, in the view of CAFA's proponents, had often been
used to litigate multi-state or even national class actions
in state courts.” Singh v. Am. Honda Fin.
Corp., 925 F.3d 1053, 1067 (9th Cir. 2019) (internal
quotation marks and citations omitted.) “[N]o
antiremoval presumption attends cases invoking CAFA, which
Congress enacted to facilitate adjudication of certain class
actions in federal court.” Dart Cherokee Basin
Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014).
“[T]he
plaintiff is ‘master of her complaint' and can
plead to avoid federal jurisdiction.” Guglielmino
v. McKee Foods Corp., 506 F.3d 696, 700 (9th Cir. 2007)
(internal citation omitted). Nevertheless, “[t]he
burden of establishing removal jurisdiction, even in CAFA
cases, lies with the defendant seeking removal.”
Washington v. Chimei Innolux Corp., 659 F.3d 842,
847 (9th Cir. 2011) (citation omitted). “A defendant
seeking removal must file in the district court a notice of
removal ‘containing a short and plain statement of the
grounds for removal . . . .'” Ibarra v. Manheim
Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015)
(quoting 28 U.S.C. § 1446(a)).
IV.
ANALYSIS
Plaintiff
challenges the instant removal on two grounds. First, she
contends that Defendant untimely removed this action after
the 30-day time limitation set by 28 U.S.C. §§
1446(b)(1), (b)(3). ECF No. 4 at 5. Plaintiff also argues
that Defendant has failed to prove by a preponderance of the
evidence that the amount in controversy exceeds $5 million as
required by 28 U.S.C. § 1332(d)(2). Id. at
9-10.
A.
Timeliness of Removal
“Section
1446(b)'s time limit is mandatory [such that] a timely
objection to a late petition will defeat removal . . .
.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707
F.3d 1136, 1142 n.4 (9th Cir. 2013) (internal quotation marks
and citations omitted). Defendant had 30 days after receipt
of the initial pleading, summon, “amended pleading,
motion, order or other paper” to remove this action. 28
U.S.C. §§ 1446(b)(2)(B), (b)(3). The Summons,
Complaint, and FAC were served by substituted service and by
mail on Defendant on May 21, 2019. ECF No. 1, Exh. C
(“Proof of Service”). Given that substituted
service is considered complete on the 10th day after mailing
under California Code of Civil Procedure § 415.20(a),
Defendant had, according to Plaintiff, until July 2, 2019 to
remove this action. ECF No. 4 at 5-6. Because Defendant did
not remove this action until August 15, Plaintiff contends
that the removal is untimely under Section 1446(b).
Id. at 6. The Court is not persuaded.
Contrary
to Plaintiff's misinterpretation and misapplication of
Section 1446(b), the 30-day period for removal “starts
to run from defendant's receipt of the initial pleading
only when that pleading affirmatively
reveals on its face the facts necessary for federal
court jurisdiction.” Harris v. Bankers Life &
Cas. Co., 425 F.3d 689, 690-91 (9th Cir. 2005) (emphasis
added) (internal quotation marks and citation omitted).
Whether the removability of the FAC is affirmatively revealed
on its face is limited to “the four corners of the
applicable pleadings, not through subjective knowledge or a
duty to make further inquiry.” Id. at 694;
see also Kuxhausen, 707 F.3d at 1141
(“Preferring a clear rule, and unwilling to embroil the
courts in inquires ‘into the subjective knowledge of
[a] defendant,' [the Ninth Circuit has] declined to hold
that materials outside the complaint start the thirty-day
clock.” (internal citation omitted)). “[E]ven if
a defendant could have discovered grounds for
removability through investigation, it does not lose
the right to remove because it did not conduct such an
investigation and then file a notice of removal within thirty
days of receiving the indeterminate document.” Roth
v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125
(9th Cir. 2013) (emphasis added).
Here,
the FAC does not specify the total amount in controversy for
the proposed class; Plaintiff only pleads her damages as less
than $75, 000. ECF No. 1, FAC ¶ 2. Because the FAC does
not affirmatively reveal that the aggregated amount in
controversy, the 30-day period for removal was never
triggered. See, e.g., Rea v. Michaels Stores
Inc., 742 F.3d 1234, 1238 (9th Cir. 2014)
(“[U]nder the controlling law at the time Michaels
received the complaint, it did not ‘affirmatively
reveal[ ] on its face the facts necessary for federal court
jurisdiction,' so the initial 30-day removal period was
never triggered.” (internal quotation marks and
citation omitted)).
Alternatively,
while “defendants need not make extrapolations or
engage in guesswork; yet the statute ‘requires a
defendant to apply a reasonable amount of intelligence in
ascertaining removability.' Multiplying figures clearly
stated in a complaint is an aspect of that duty.”
Kuxhausen, 707 F.3d at 1140 (internal quotation
marks and citation omitted). Plaintiff does not explain how
multiplying the figures clearly stated in the FAC would
affirmatively show that the amount in controversy exceeds $5
million, thereby triggering the 30-day period for removal.
ECF No. 4 at 8-9. Nevertheless, the Court notes that
Plaintiff alleges her damages are less than $75, 000 and the
proposed class is estimated to be greater than 50
individuals. ECF No. 1, FAC ¶¶ 1, 15. Multiplying
$74, 999 with 51 individuals equal to approximately $3.82
million damages. This shows that even if Defendant multiplied
the stated figures in the FAC, it would not be affirmatively
clear that the amount in controversy exceeds $5 million.
Defendant has no obligation “to supply information
which [Plaintiff] had omitted” from the FAC or consult
“its business records to identify a representative
valuation.” Kuxhausen, 707 F.3d at 1141. The
Court therefore finds that the FAC fails to affirmatively
reveal enough information such that it was obvious, when a
reasonable amount of intelligence is applied, for Defendant
to ascertain the existence of removability. Accordingly, the
30-day period to remove this action under Section 1446(b) has
not been triggered.
As the
Ninth Circuit explained in Roth, “[i]f
plaintiffs think that their action may be removable and
think, further, that the defendant might delay filing a
notice of removal until a strategically advantageous moment,
they need only provide to the defendant a document from which
removability may be ascertained. Such a document will trigger
the thirty-day removal period, during which defendant must
either file a notice of removal or lose the right to
remove.” Roth, 720 F.3d at 1126 (citation
omitted). Plaintiff has failed to provide Defendant with any
such document here beyond the FAC for Defendant ascertain the
removability of this action. See Levanoff v. SoCal Wings
LLC, 22015 WL 248338, at *1-2 (C.D. Cal. Jan. 16, 2015)
(holding that the Statement of Damages providing that a total
of $8.16 million in damages for the proposed class triggered
the 30-day period). The Court, therefore, cannot say
Defendant has “ignored pleadings or other documents
from which removability may be ascertained and [sought]
removal only when it becomes strategically advantageous for
it to do so.” Roth, 720 F.3d at 1125.
Defendant's removal of this action is, for the above
reasons, timely.
B.
Establishing that the Amount in Controversy Exceeds $5
Million
Furthermore,
Plaintiff argues that Defendant has failed to show by a
preponderance of the evidence that the amount in controversy
exceeds $5 million as required by Section 1332(d)(2). ECF No.
4 at 9-10. Section 1332(d)(6) specifies that “[i]n any
class action, the claims of the individual class members
shall be aggregated to determine whether the matter in
controversy exceeds the sum or value of $5, 000, 000,
exclusive of interest and costs.” 28 U.S.C. §
1332(d)(6). Plaintiff contends that “Defendant is
required to produce ‘summary-judgment-type
evidence' of the amount in controversy if . . . it is
indeterminate from the face of the complaint that the
jurisdictional threshold is met.” ECF No. 6 at 3;
see also ECF No. 4 at 1. But Defendant disputes that
this is the correct burden for a removing party and insists
that “a defendant's notice of removal need include
only a plausible allegation that the amount in controversy
exceeds the jurisdictional threshold.” ECF No. 5
(internal quotation marks omitted) (quoting Dart
Cherokee, 135 S.Ct. at 554)).
“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) (internal
quotation marks and citation omitted). “[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. [A] defendant's
notice of removal need include only a plausible
allegation that the amount in controversy exceeds the
jurisdictional threshold.” Id. at 924-25
(emphasis added). “Yet, when the defendant's
assertion of the amount in controversy is challenged
by plaintiffs in a motion to remand, the Supreme Court has
said that both sides submit proof and the court then
decides where the preponderance lies. 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.”
Ibarra, 775 F.3d at 1198 (emphasis added).
Having
reviewed the FAC and Notice of Removal, ECF No. 1, the Court
finds that Defendant has provided plausible allegations
showing that the amount in controversy exceeds the
jurisdictional threshold. The Notice of Removal alleges that
the average hourly and overtime rates of non-exempt employees
in California similar to Plaintiff are $11.12 and $16.68,
respectively. ECF No. 1 (“Notice of Removal”)
¶ 29. Plaintiff proposes a class of all former and
current hourly-paid or non-exempt employees of Defendant in
California from February 6, 2015 to final judgment.
Id., FAC ¶ 13. Defendant claims that 2, 660 of
its employees in at least 28 stores in California fall within
the proposed class. Id. (“Notice of
Removal”) ¶ 30. Based on these numbers, Defendant
calculates Plaintiff's maximum potential liability as
follows:
-
Claims
|
Estimated Amounts in Controversy Beginning
from February 6, 2015 to Final Judgment
|
Unpaid Overtime Claim (1st Claim)
|
28 stores x $16.68 in overtime hourly rate x 2, 118
unpaid overtime hours = $989, 190.72
Id. ¶ 29
|
Unpaid Meal Period Claim (2nd Claim)
|
28 stores x $11.12 in average hourly rate x 2, 118
shifts where meal periods were not provided = $659,
460.48
Id. ¶ 33
|
Unpaid Rest Period Claim (3rd Claim)
|
28 stores x $11.12 in average hourly rate x 3, 177
shifts where rest periods were not provided = $989,
190.72
Id. ¶ 35
|
Unpaid Minimum Wage Claim (4th Claim)
|
28 stores x $9 in minimum hourly wage x 2, 118
hours where minimum wage was not paid = $533, 736
Id. ¶ 37
|
Statutory Penalty Claim for Failure to Pay Minimum
Wage (4th Claim)
|
2, 660 employees x ($100 for the initial failure to
timely pay minimum wage $250 for a subsequent
failure to pay each employee minimum wage)[2] =
$931, 000
Id. ¶ 38
|
Statutory Penalty Claim for Failure to Pay Final
Wages that Were Earned but Unpaid Within 72 Hours
of Leaving Defendant's Employment (5th Claim)
|
1, 459 employees x $2, 668.80 ($11.12 in average
hourly rate x 8 hours/day x 30 days maximum) = $3,
893, 779.20
Id. ¶ 40
|
TOTAL
|
$7, 996, 357.12 (exclusive of attorneys' fees)
|