Chavez v. Huhtamaki, Inc.

          ORDER GRANTING PLAINTIFF'S MOTION TO REMAND [13]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiff Juan J. Chavez (“Chavez”) brings this putative wage and hour class action against Defendant Huhtamaki, Inc. (“Huhtamaki”). Huhtamaki removed the case, claiming federal jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2). (Notice of Removal (“Notice”) ¶ 1, ECF No. 1.) Chavez moves to remand (“Motion”). (See Mot. to Remand (“Mot.”), ECF No. 13.) The Court finds that jurisdiction does not exists under CAFA and GRANTS Chavez's Motion to Remand.^[1]

         II. BACKGROUND

         Chavez brought this wage and hour class action against Huhtamaki on behalf of himself and the class he seeks to represent (collectively “Plaintiff Class”).^[2] Plaintiff Class consists of “[a]ll persons who worked for any Defendant in California as an hourly paid, non-exempt employee at any time during the period beginning four years before the filing of the initial complaint in this action.” (Compl. ¶ 24.) Chavez is a citizen of California and has worked at Huhtamaki for 36 years. (Compl. ¶ 7.) Huhtamaki is a Kansas Corporation. (Compl. ¶ 9.) Chavez alleges that Huhtamaki hired Chavez and other class members and classified them as hourly-paid, non-exempt employees, and failed to compensate them for all hours worked, meal periods, and/or missed breaks. (Compl. ¶ 28.) Chavez does not allege a specific No. of violations, but he contends that the aggregate claims total only $4, 645, 491.99, below the threshold for federal jurisdiction. (Mot. 2, 20.) Whereas, Huhtamaki asserts that the aggregate claims total $11, 386, 044, above the threshold for federal jurisdiction. (Notice ¶ 63.)

         Chavez filed its complaint in Los Angeles Superior Court on June 5, 2019. (See Compl.) On July 10, 2019, Huhtamaki removed the case. (See Notice.) Chavez moved to remand on August 8, 2019. (See Mot.) This motion is now before the Court.

         III. LEGAL STANDARD

         Huhtamaki removed this case pursuant to 28 U.S.C. § 1441, claiming that this Court has original jurisdiction under CAFA, 28 U.S.C. § 1332(d)(2). (Notice ¶ 1.) CAFA allows for federal jurisdiction over a purported class action when (1) there is an amount in controversy (“AIC”) exceeding $5, 000, 000; (2) at least one putative class member is a citizen of a state different from defendant; and (3) the putative class exceeds 100 members. 28 U.S.C. § 1332(d)(2), (d)(5). Generally, removal statutes are strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

         However, the Supreme Court has stated that “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). Accordingly, three principles apply in CAFA removal cases. Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019). “First, a removing defendant's notice of removal ‘need not contain evidentiary submissions' but only plausible allegations of the jurisdictional elements.” Id. (quoting Ibarra v. Manheim Inv. 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.” Id. “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.” Id. (citing Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018)).

         “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.” Ibarra, 775 F.3d at 1198 (citing Dart Cherokee, 574 U.S. at 88).

         IV. DISCUSSION

         The parties do not dispute that the Plaintiff Class is made of more than 100 individuals and that the parties are minimally diverse as required by CAFA. Thus, the only issue is whether Huhtamaki has demonstrated by a preponderance of the evidence that the amount in controversy is greater than $5, 000, 000.

         “In determining the amount in controversy, courts first look to the complaint.” Id. at 1197. When damages are unstated in a complaint, “the defendant seeking removal bears the burden to show by a preponderance of the evidence that the aggregate amount in controversy exceeds $5 million if federal jurisdiction is challenged.” Id. (citing Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 981 (9th Cir. 2013)). “The 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.'” Id. at 1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir.1997)). As Ibarra teaches, “under this system, a defendant cannot establish removal jurisdiction by mere speculation and conjecture, with unreasonable assumptions.” Id.

         Here, damages are unstated in the complaint, but Chavez asserts that Huhtamaki improperly removed this action. (Mot. 1.) Through his Motion and declaration, Chavez challenges Huhtamaki's calculation assumptions and argues that, as a matter of law, Huhtamaki erroneously calculated the amount in controversy. (See Mot. 1; Decl. of Juan J. Chavez (“Chavez Decl.”), ECF No. 13-1.) Chavez contests the following four assumptions as unreasonable and unsupported: (1) each asserted class member employed by defendant worked one hour of non-overtime, off the clock time every single week of their employment; (2) using an “average” hourly rate instead of a “minimum” wage rate to calculate wages owed under a minimum wage claim; (3) using an estimate of 2 missed meal periods per workweek; (4) using an estimate of 2 missed ...