MARGARET M. MORROW, District Judge.
On June 18, 2014, Tanya Vasserman filed this putative class action in Los Angeles Superior Court against Henry Mayo Newhall Memorial Hospital ("Newhall Memorial") and various fictitious defendants, alleging violations of state wage and hour laws.
On September 8, 2014, Vasserman filed a motion to remand the action to Los Angeles Superior Court for lack of subject matter jurisdiction.
Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds this matter appropriate for decision without oral argument. The hearing calendared for December 8,
Vasserman is a clinical registered nurse who, prior to this litigation, worked at Newhall Memorial as an hourly, non-exempt employee.
Vasserman alleges, on information and belief, that pursuant to an established business practice and policy, Newhall Memorial schedules its non-exempt hourly employees to work in excess of eight hours a day; at times, it purportedly schedules employees to work shifts in excess of ten and twelve hours.
Vasserman asserts that Newhall Memorial's policy is to pay straight time, rather than overtime, for all hours worked in excess of eight hours a day.
Vasserman also alleges that Newhall Memorial's meal period policies violate the California Labor Code and Wage Order 5-2001 of the California Industrial Welfare Commission ("IWC").
Vasserman alleges, on information and belief, that in addition to Newhall Memorial's allegedly unlawful overtime and meal period policies, it consistently failed to provide its employees itemized wage statements in accordance with California Labor Code § 226.
Finally, Vasserman contends that Newhall Memorial employs a rounding policy in calculating employee wages that disproportionately and negatively impacts employees.
Vasserman seeks to represent five putative classes of current and former Newhall Memorial employees:
On behalf of these classes, Vasserman pleads claims for (1) violation of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200 et seq.;
Vasserman requests that the court take judicial notice of two documents in connection with her motion to remand the action to Los Angeles Superior Court,
A court can consider evidence in deciding a remand motion, including documents that can be judicially noticed. See, e.g., Ryti v. State Farm General Ins. Co., No. C 12-01709 JW, 2012 WL 2339718, *1 n. 4 (N.D.Cal. May 30, 2012) (granting plaintiffs' request for judicial notice and considering documents that were proper subjects of judicial notice in deciding a remand motion); Vasquez v. Arvato Digital Services, LLC, No. CV 11-02836 RSWL (AJWx), 2011 WL 2560261, *2 (C.D.Cal. June 27, 2011) (considering documents that were proper subjects of judicial notice in deciding a remand motion); Aniel v. TD Serv. Co., No. C 10-05323 WHA, 2011 WL 109550, *3 (N.D.Cal. Jan. 13, 2011) (taking judicial notice of court orders and the judgment in a prior case as public records in deciding a motion to remand); Deutsche Bank Nat. Trust Co. v. Sitanggang, No. 1:09CV01835 AWI DLB, 2010 WL 144439, *1 n. 1 (E.D.Cal. Jan. 11, 2010) (taking judicial notice of documents proffered by plaintiff in deciding a motion
In deciding a Rule 12(b)(6) motion, however, courts generally look only to the face of the complaint and documents attached thereto. Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir.1990). Although a court must normally convert a Rule 12(b)(6) motion into a Rule 56 motion for summary judgment if it "considers evidence outside the pleadings ... [it] may consider certain materials — documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice — without converting the motion to dismiss into a motion for summary judgment." United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir.2003). See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (a court may consider "other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice"); Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir.1994) (noting that a court may consider a document whose contents are alleged in a complaint, so long as no party disputes its authenticity), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir.2002).
Thus, in deciding Vasserman's motion to remand and Newhall Memorial's motion to dismiss, the court can consider material that can be judicially noticed under Rule 201 of the Federal Rules of Evidence. FED.R.EVID. 201. Under Rule 201, the court can take judicial notice of "[o]fficial acts of legislative, executive, and judicial departments of the United States," and "[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably undisputable accuracy."
The parties request that the court take notice of four court orders: (1) an order by Judge Philip S. Gutierrez remanding Marincovich v. Aramark Uniform & Career Apparel, Inc., No. CV 12-10245 PSG (JEMx), filed March 11, 2013;
"Under Federal Rule of Evidence 201, the [c]ourt may take judicial notice of matters of public record if the facts are not `subject to a reasonable dispute.'" Olds v. Metlife Home Loans, No. SACV 12-55 JVS (RNBx), 2012 WL 10420298, *1 n. 1 (C.D.Cal. Mar. 19, 2012) (citing Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir.2001)). Court orders
Newhall Memorial also asks that the court take judicial notice of the operative complaint in this action.
Newhall Memorial also requests that the court take judicial notice of Wage Order No. 52001 of the California Industrial Welfare Commission ("IWC").
Before addressing the merits of the parties' respective motions, the court first considers various evidentiary objections Vasserman asserts to declarations submitted by Newhall Memorial in support of its notice of removal and in opposition to Vasserman's motion to remand.
Puleo states, under penalty of perjury, that the statements in the declaration are based on personal knowledge he has gained as Newhall Memorial's Vice President and Chief Human Resources Officer; this provides adequate foundation for the statements. See FED.R.EVID. 602 ("A witness may testify to a matter only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may consist of the witness's own testimony"); Barthelemy v. Air Line Pilots Ass'n., 897 F.2d 999, 1018 (9th Cir.1990) (concluding that a CEO's personal knowledge of various corporate activities could be presumed). Indeed, Puleo explains that many of his statements are based on his review of Newhall Memorial records that are available to him as Vice President and Chief Human Resources Officer.
The statements in Puleo's declaration are, moreover, relevant because they bear directly on whether the court has subject matter jurisdiction. See FED. R.EVID. 401 ("Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action"). Puleo's declaration makes it more likely that Vasserman's claims are preempted and/or that the requirements for removal under the Class Action Fairness Act are satisfied. Vasserman's relevance objection is thus overruled.
Even if evidence is relevant, of course, the court may exclude it under Rule 403 "if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence." Undue prejudice means an "undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one." FED.R.EVID. 403, Advisory
Similarly unavailing are Vasserman's objections under Rules 701, 702, 704, 801, 802, and 901 of the Federal Rules of Evidence. Puleo's statements do not constitute expert opinion. Rule 702 of the Federal Rules of Evidence governs the admission of expert testimony. Under Rule 702,
See also United States v. Finley, 301 F.3d 1000, 1007 (9th Cir.2002) ("[Rule 702] consists of three distinct but related requirements: (1) the subject matter at issue must be beyond the common knowledge of the average layman; (2) the witness must have sufficient expertise; and (3) the state of the pertinent art or scientific knowledge permits the assertion of a reasonable opinion"); Sterner v. U.S. Drug Enforcement Agency, 467 F.Supp.2d 1017, 1033 (S.D.Cal.2006) ("There are three basic requirements that must be met before expert testimony can be admitted. First, the evidence must be useful to a finder of fact. Second, the expert witness must be qualified to provide this testimony. Third, the proposed evidence must be reliable or trustworthy" (citations omitted)).
In contrast, Rule 701 permits lay opinion testimony that is "(a) rationally based on the witness's perception; (b) helpful to clearly understanding the witness's testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702." FED.R.EVID. 701. Rule 701's requirement that opinion testimony be based on a witness's perception derives from Rule 602. That rule states in pertinent part that "[a] witness may testify to a matter only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may consist of the witness's own testimony." FED.R.EVID. 602.
Puleo's statements are based on personal knowledge; they are not the product of "scientific, technical, or other specialized knowledge." That Puleo knows the information as a result of his work for Newhall Memorial does not convert factual observations into expert testimony. Courts routinely permit witnesses to offer lay opinion testimony concerning matters
Moreover, although Puleo provides calculations concerning the number of putative class members, the approximate number of paychecks they received, and their average hourly rate of pay, none of this information concerns subject matter "beyond the common knowledge of the average layman," such that Puleo would have to qualify as an expert. Vasserman does not explain why simple mathematical calculations constitute expert testimony. Although she contends that Puleo must be "an expert qualified to provide an opinion as to ... who constitutes [a] class member[ ],"
Vasserman objects finally that the challenged paragraphs of Puleo's declaration contain inadmissible hearsay and lack authentication. She offers no substantive argument supporting the objections and the court finds no basis for them. Puleo is not recounting an out-of-court statement to prove the truth of the matter asserted; rather, he testifies based on personal knowledge of Vasserman's personnel files. Cf. FED.R.EVID. 801(c) ("`Hearsay' means a statement that: (1) the declarant does not make while testifying at the current trial or hearing; and (2) a party offers in evidence to prove the truth of the matter asserted in the statement"). Moreover, it is unclear what portions of Puleo's statements Vasserman contends must be authenticated. Accordingly the court overrules Vasserman's authentication objection. See, e.g., Burch v. Regents of University of California, 433 F.Supp.2d 1110, 1123-24 (E.D.Cal.2006) ("Because defendants only generally raise this objection without specifying which of the numerous exhibits ... are actually not self authenticating, the court overrules this objection. The burden is on defendants to state their objections with specificity. Cf. 10B Wright, Miller & Kane, FEDERAL PRACTICE AND PROCEDURE § 2738 (`It follows that a motion to strike should specify the objectionable portions of the affidavit and the grounds for each objection. A motion asserting only a general challenge to an affidavit will be effective.') Moreover, because defendants do not actually dispute the authenticity of these documents, the court is confident plaintiff would be able to authenticate them at trial" (emphasis added)).
For the reasons stated, the court overrules each of Vasserman's objections to Puleo's declaration and will consider the declaration in its entirety in ruling on the motion to remand.
Vasserman also objects to portions of the declarations of Angela Watkins
As discussed infra, Vasserman's assertion that neither Watkins nor Bergado is a putative class member as defined in the complaint is unavailing; their statements are thus relevant because they make it more probable that minimal diversity exists between Newhall Memorial and the putative class members. See FED. R.EVID. 401 (evidence is relevant if it has "any tendency to make the existence of any fact ... more or less likely that it would be without the evidence"). The court thus overrules Vasserman's relevance objection to the Watkins and Bergado declarations. It similarly overrules her objection under Rule 403. Vasserman does not explain how she will be unfairly prejudiced by consideration of the Watkins and Bergado declarations; rather, it appears the only form of "prejudice" she will suffer is that the declarations make it less likely her remand motion will be granted. As noted, the fact that evidence is adverse to a party's position does not support its exclusion under Rule 403; rather, the evidence must result in "unfair prejudice." See Old Chief, 519 U.S. at 180, 117 S.Ct. 644 (unfair prejudice means an "undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one," quoting FED.R.EVID. 403, Advisory Committee Notes, 1972 Proposed Rules). See also United States v. Munoz, 36 F.3d 1229, 1233 (1st Cir.1994) ("The damage done to the defense is not a basis for exclusion; the question under Rule 403 is `one of "unfair" prejudice — not of prejudice alone'"); Dollar, 561 F.2d at 618. Consequently, the court overrules Vasserman's Rule 403 objection to Watkins' and Bergado's declarations.
The right to remove a case to federal court is entirely a creature of statute. See Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir.1979). The removal statute, 28 U.S.C. § 1441, allows defendants to remove when a case originally filed in state court presents a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75,000. See 28 U.S.C. §§ 1441(a), (b); see also 28 U.S.C. §§ 1331, 1332(a). A case presents a "federal question" if a claim "`aris[es] under the Constitution, laws, or treaties of the
There is an exception to the "well pleaded complaint" rule, however. Under the "artful pleading" doctrine, a plaintiff cannot defeat removal of a federal claim by disguising or pleading it artfully as a state law cause of action. If the claim arises under federal law, the federal court will recharacterize it and uphold removal. Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398 n. 2, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981); Schroeder v. Trans World Airlines, Inc., 702 F.2d 189, 191 (9th Cir.1983). The "artful pleading" doctrine applies to state claims that are completely preempted by federal law. See Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425 ("Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law"); ARCO Environmental Remediation, L.L.C. v. Department of Health & Environmental Quality of Montana, 213 F.3d 1108, 1114 (9th Cir.2000) ("A state-created cause of action can be deemed to arise under federal law ... where federal law completely preempts state law").
To support a finding of complete preemption, the preemptive force of the federal statute at issue must be "extraordinary." See Metropolitan Life Ins. Co., 481 U.S. at 65, 107 S.Ct. 1542; Holman v. Laulo-Rowe Agency, 994 F.2d 666, 668 (9th Cir.1993) ("The [complete preemption] doctrine applies in select cases where the preemptive force of federal law is so `extraordinary' that it converts state common law claims into claims arising under federal law for purposes of jurisdiction," citing Caterpillar, 482 U.S. at 386, 107 S.Ct. 2425). For this reason, the complete preemption doctrine is narrowly construed. See Holman, 994 F.2d at 668 ("The [complete preemption] doctrine does not have wide applicability; it is a narrow exception
Section 301(a) of the LMRA gives federal courts exclusive jurisdiction to hear "[s]uits for violation of contracts between an employer and a labor organization." 29 U.S.C. § 185(a). See Franchise Tax Bd., 463 U.S. at 23, 103 S.Ct. 2841 ("The preemptive force of § 301 is so powerful as to displace entirely any state cause of action `for violation of contracts between an employer and a labor organization.' Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301"); see also Caterpillar, 482 U.S. at 394, 107 S.Ct. 2425 ("Section 301 governs claims founded directly on rights created by collective-bargaining agreements, and also claims `substantially dependent on analysis of a collective-bargaining agreement,'" quoting Electrical Workers v. Hechler, 481 U.S. 851, 859 n. 3, 107 S.Ct. 2161, 95 L.Ed.2d 791 (1987)). Section 301 "mandate[s] resort to federal rules of law in order to ensure uniform interpretation of collective-bargaining agreements, and thus to promote the peaceable, consistent resolution of labor-management disputes." Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 404 n. 3, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988).
To further the goal of uniform interpretation of labor contracts, the preemptive effect of § 301 has been extended beyond suits that allege the violation of a collective bargaining agreement. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210-11, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) ("The interests in interpretive uniformity and predictability that require that labor-contract disputes be resolved by reference to federal law also require that the meaning given a contract phrase or term be subject to uniform federal interpretation"). Thus, a state law claim will be preempted if it is so "inextricably intertwined" with the terms of a labor contract that its resolution will require judicial interpretation of those terms. Id. at 213, 105 S.Ct. 1904 (holding that a claim for breach of the duty of good faith and fair dealing was preempted by § 301 because "good faith" and "fair dealing" had to be assessed with reference to the contractual obligations of the parties).
Despite the broad preemptive effect of § 301, a claim that seeks to vindicate "nonnegotiable state-law rights ... independent of any right established by contract" is not within its scope. Allis-Chalmers Corp., 471 U.S. at 213, 105 S.Ct. 1904;
Nor can a defendant invoke preemption merely by alleging a "hypothetical connection between the claim and the terms of the CBA," or a "creative linkage" between the subject matter of the suit and the wording of the CBA. Id. at 691-92. To prevail, "the proffered interpretation argument must reach a reasonable level of credibility." Id. at 692. A preemption argument is not credible "simply because the court may have to consult the CBA to evaluate [a plaintiff's claim]; [similarly,] `look[ing] to' the CBA merely to discern that none of its terms is reasonably in dispute does not require preemption." Id. (quoting Livadas, 512 U.S. at 125, 114 S.Ct. 2068). In Cramer, the Ninth Circuit clarified the scope of the LMRA's preemptive effect:
See also Humble v. Boeing Co., 305 F.3d 1004, 1007-08 (9th Cir.2002) (recognizing that Cramer "revised [the] framework for analyzing § 301 preemption and synthesized the considerations involved").
The Ninth Circuit has articulated a two-part test to determine whether a cause of action is preempted by the LMRA. Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1059 (9th Cir.2007). First, the court must determine "whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the right exists solely as a result of the CBA, then the claim is preempted, and ... analysis ends .... If however, the right exists independently of the CBA, [the court] must still consider whether it is nevertheless `substantially dependent on analysis of a collective-bargaining agreement.' If such dependence exists, then the claim is preempted by section 301; if not,
Vasserman alleges state law claims for unfair business practices under California Business and Professions Code § 17200 et seq.; failure to pay overtime compensation in violation of California Labor Code §§ 204, 510, 1194, 1198; waiting time penalties under California Labor Code § 200 et seq.;
Vasserman contends that her second claim for failure to provide overtime compensation in violation of California Labor Code §§ 204, 510, 1194, 1198 is "based on and conferred by substantive non-waivable rights under state law — specifically, the California Labor Code — and not by rights or duties under [Newhall Memorial's] CBAs."
The CBAs suggest that Vasserman's claim may be based on a statute that does not apply. Labor Code § 514 exempts
Section 514 is an affirmative defense that must be pled and proved by Newhall Memorial. See Mireles v. Paragon Systems, Inc., No. 3:13-CV-00122-L-BGS, 2013 WL 3450090, *3-4 (S.D.Cal. July 9, 2013) (denying a motion to strike a § 514 affirmative defense to plaintiff's overtime claims); see also Araquistain v. Pacific Gas & Electric Company, 229 Cal.App.4th 227, 231, 176 Cal.Rptr.3d 620 (2014) (recognizing that California Labor Code §§ 512(e)-(g), the statutory exemptions to meal period violations, are affirmative defenses to a claim for violation of § 512(a)). Vasserman asserts it is premature to determine whether § 514 applies because Newhall Memorial has not yet pled the defense.
Second, because, as noted, Newhall Memorial's reliance on § 514 is essentially a defense to Vasserman's overtime claim, it does not give rise to § 301 preemption. See Humble, 305 F.3d at 1011 ("Boeing argues that when it offers a non-discriminatory justification for its conduct by relying on authorizing CBA provisions, that suffices to trigger preemption of Humble's reasonable accommodation claim. This argument is unavailing after Cramer, which held that reliance on CBA provisions to defend against an independent state law claim does not trigger § 301 preemption"). Accordingly, the court finds that Vasserman's second claim is not preempted.
In so holding, the court reaches the same conclusion as several other courts in this district, each of which has recognized that "reliance on the CBA as an aspect of a defense is not enough to `inject[ ] a federal question into an action that asserts what is plainly a state-law claim.'" Placencia v. Amcor Packaging Distribution, Inc., No. SACV 14-0379 AG (JPRx), 2014 WL 2445957, *2 (C.D.Cal. May 12, 2014) (citing Caterpillar, 482 U.S. at 399, 107 S.Ct. 2425). These courts have rejected the arguments Newhall Memorial makes here — i.e., that an overtime claim arises under the CBA, rather than state law, when the defendant asserts an affirmative defense under § 514.
In Placencia, 2014 WL 2445957 at *2-3, for example, Judge Andrew Guilford remanded a wage and hour action to state court; he concluded that Placencia's overtime claim did not arise under the CBA
Similarly, in Bart v. Parkview Community Hospital Medical Center, No. EDCV 14-01614 JGB (DTBx) (C.D.Cal. Sept. 18, 2014),
The court finds the reasoning of Judges Guilford and Bernal instructive. As the Ninth Circuit has recognized, "[i]t is `settled law that a case may not be removed to federal court on the basis of a federal defense, including a defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue.'" Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1106 (9th Cir.2000) (quoting Franchise Tax Bd., 463 U.S. at 14, 103 S.Ct. 2841). Newhall Memorial, however, seeks to remove precisely on this basis. Even if Newhall Memorial's § 514 defense ultimately prevails, Vasserman's claim is premised on state law rights afforded by § 510, not on rights created by the CBA. Humble, 305 F.3d at 1008 ("[T]he plaintiff's claim is the touchstone for the preemption analysis, and `the need to interpret the CBA must inhere in the nature of plaintiff's claim' to trigger preemption," citing Cramer, 255 F.3d 683). See, e.g., Morales v. Amcor Packaging (USA), Inc., No. 2:14-CV-03612-ODW (AJW), 2014 WL 2931174, *4 (C.D.Cal. June 30, 2014) ("Here, the issue is whether Amcor provided meal and rest periods in accordance with California wage-and-hour law. As a defense, Amcor may submit the CBA and argue that Morales and the rest of the class agreed to forgo off-duty meal and rest breaks. However, a valid defense will not support removal to district court; it simply means that Amcor prevails in state court"); Placencia, 2014 WL 2445957 at *2 ("Amcor argues [that because] `Plaintiff's only right to overtime is the one that
The Ninth Circuit's holding in Firestone v. Southern California Gas Company, 219 F.3d 1063 (9th Cir.2000), is not to the contrary. Plaintiffs were meter readers, whose unions negotiated "flat sums for completing meter reading routes of assigned lengths." Id. at 1065. Meter readers who worked more than eight hours in a day "received an adjustment to the flat sum normally paid." Id. The agreement set forth a formula for determining the number of overtime hours; defendant, however, calculated overtime pay a different way. Id. at 1065-66. "The district court held that one could not determine whether plaintiffs were receiving a `premium wage rate' for overtime under the collective bargaining agreement — making them exempt from California overtime laws — without interpreting that agreement to determine, inter alia, what the regular rate was." Id. at 1066. The Ninth Circuit agreed. It concluded that to resolve the parties' dispute, the court would have to interpret the terms of the CBA to determine if plaintiffs were receiving a premium wage for overtime, and based on that interpretation, decide if California's overtime exemption applied. Id. at 1067 ("Because the collective bargaining agreement must be interpreted to determine whether the PPR document provides for premium wage rates for overtime work and, therefore, whether California's overtime exemption provision applies, ... [p]laintiffs' state law claim is preempted by the LMRA"). Here, by contrast, no interpretation is required to determine the applicability of the exemption. The overtime provisions of the CBAs are straightforward and clear.
Vasserman does not dispute the applicable wage rates that are provided in the CBA — instead, she argues that she was not paid overtime as required by California law. Although it is apparent that calculations will be required to resolve her overtime claims given the three overtime plans set forth in the CBAs,
Although Newhall Memorial asserts that several terms of the CBAs require interpretation to determine whether it is entitled to invoke the exemption, the court is not persuaded.
Newhall Memorial contends that the court must interpret the CBAs to determine whether on-call time is de minimis or not.
The court is not convinced that whether time is "de minimis" will require interpretation of the CBAs, as the agreements specifically define "de minimis" as less than fifteen minutes in the aggregate. As with Section 18's provision governing paid education leave, the real question is whether de minimis time constitutes "hours worked" under California law. Resolution of this question necessarily requires interpretation and application of state law, not
For the reasons stated, the court concludes that Vasserman's second claim for relief is not preempted by § 301.
Newhall Memorial contends that Vasserman's meal period claim is preempted under § 301 because each of the CBAs provide for meal periods and also "sets forth detailed procedures describing what employees must do if they claim they did not receive meal periods."
Meal periods are a non-negotiable right under state law. Courts have thus held that California state law claims alleging meal period violations are not preempted even where the CBA includes language entitling employees to such breaks. Valles v. Ivy Hill Corp., 410 F.3d 1071, 1082 (9th Cir.2005) ("We need not, indeed may not, construe the Ivy Hill [CBA] in order to consider whether a waiver exists because any provision of the [CBA] purporting to waive the right to meal periods would be of no force or effect: The right in question is plainly non-negotiable"). See Roth v. CHA Hollywood Medical Center, L.P., No. 2:12-cv-07559 ODW (SHx), 2013 WL 5775126, *3 (C.D.Cal. Oct. 25, 2013) ("HPMC also argues that Section 301 preempts Ekin's meal-break claims. Ekin claims that (1) HPMC did not provide off-duty meal breaks to her and putative class members in violation of the Labor Code due to understaffing and frequent interruptions; and (2) HPMC only provided Ekin and putative class members one meal break per 12-hour shift, whereas the Labor Code requires two meal breaks during a 12-hour shift. California law mandates that an employer provide off-duty meal periods, and that right is independent of any provision of the CBA. Again, Ekin's meal-break claims can be resolved simply by looking to payroll and time records and employee testimony. Like Ekin's rest-break claims, Section 301 does not preempt her mealbreak claims"); Meyer v. Irwin Indus., Inc., 723 F.Supp.2d 1237, 1244 (C.D.Cal. 2010) ("Here, [plaintiff's] claims are based on rights conferred by California Labor Code §§ 512(a) and 226.7, and Wage Order No. 16. Thus, Plaintiff's second meal period claims arise under state law and do not substantially depend upon an interpretation of the CBA. Additionally, that the CBA includes terms that entitle employees to second meal periods is of no import .... As such, it is irrelevant that the CBA provides for similar claims under its own terms because the state law claims can be
Newhall Memorial argues that "[t]o evaluate [p]laintiff's claims that she did not receive meal periods, it will be necessary to analyze whether she (and others) complied with their obligations under the CBA concerning notification of their supervisors," because whether or not they complied with these obligations "will bear on (a) the credibility of his or her claims, (b) whether he or she comes with clean hands, and (c) whether Defendant was given an opportunity to correct prior unreported untaken meal periods."
As with her overtime claim, Vasserman clearly and explicitly invokes the protections provided by the California Labor Code, not similar rights to meal periods provided by the CBAs.
Newhall Memorial disputes this, arguing that the resolution of the meal period claim will necessarily involve CBA provisions requiring that employees notify their supervisors of any meal period violation they experienced.
Allis-Chalmers is distinguishable. There, resolution of a state tort claim for breach of the duty of good faith and fair dealing required a determination as to whether defendant's claims handling breached the duty of "good faith" and "fair dealing," which, in turn, required that the court interpret the parties' agreement to determine how they had agreed claims would be handled. Here, by contrast, Vasserman pleads a claim for violation of a state law that unambiguously requires employers to provide their employees with uninterrupted, paid meal periods. The statute is violated when an employer fails to the meal periods available. There is no need to look to the CBAs to determine whether a violation has occurred, i.e., whether Vasserman or the putative class members were denied the ability to take meal periods guaranteed by statute. Therefore, the court concludes that Vasserman's meal period claim is not preempted by § 301 of the LMRA.
Although it contends that Vasserman's overtime and meal period claims are preempted, Newhall Memorial does not argue that her other claims are likewise preempted by § 301. Vasserman's first cause of action alleges violation of California's UCL, Business and Professions Code § 17200 et seq.; her third claim alleges violation of Labor Code § 200 et seq., while the fourth pleads a violation of § 226. The sixth cause of action seeks civil penalties under PAGA, and the seventh alleges violation of Labor Code §§ 510(a), 1194, and IWC Wage Order 5-2001. In its notice of removal, Newhall Memorial does not indicate which claims it asserts are preempted by § 301; rather, it states, in the most general terms, that "various terms of the different CBAs must be interpreted in this matter to address Plaintiff's claims."
Even had Newhall Memorial not abandoned any preemption argument it may have had regarding these claims, the court would conclude that it had failed to demonstrate that resolution of Vasserman's first, third, fourth, sixth, and seventh claims requires interpretation of the CBAs. The claims all seek to vindicate rights provided by state law. None, moreover, requires interpretation of the CBAs. While the calculation of waiting time penalties will require reference to wage rates set forth in the CBA, this is insufficient to preempt the claim. See Livadas, 512 U.S. at 124, 114 S.Ct. 2068 (holding that a Labor Code § 203 claim was not preempted because "the primary text for deciding whether Livadas was entitled to a penalty was not the Food Store Contract, but a calendar"); see Lara v. San Bernardino Steel Inc., CV 11-1357 PA (Ex), 2011 WL 4480167, *3 (C.D.Cal. Sept. 20, 2011) (finding that Labor Code §§ 203 and 2802 claims arose under state law and were not preempted); Meyer, 723 F.Supp.2d at 1245-46 (finding that a § 203 claim arose under California law, was not waivable, and thus was not preempted). Similarly, while inaccurate wage statement claims may require reference to the CBAs, the relevant provisions of those agreements do not, as the court has noted, require interpretation. Thus, the claim is not preempted. Avalos v. Foster Poultry Farms, 798 F.Supp.2d 1156, 1162 (E.D.Cal. July 27, 2011) (holding that claims for violations of California Labor Code §§ 201-03, 204, 226, 226.7, 512, 510, and 1194, IWC Wage Order 4-2001, and California Business and Professions Code § 17200 et seq. arose under California law and were not preempted). As respects Vasserman's rounding claim, it is unclear that it even requires resort to the CBAs. If it does, however, it would not be preempted because no interpretation of the agreements is required. Avalos, 798 F.Supp.2d at 1162; Bonilla v. Starwood Hotels & Resorts Worldwide, Inc., 407 F.Supp.2d 1107, 1112-13 (C.D.Cal.2005) (holding that claims for violations of state wage and hours laws, including California Labor Code §§ 203 and 226.7, and violation of IWC Wage Order 5-2001 arose under state law and were not preempted). Finally, Vasserman's UCL claim is wholly derivative of her other
Finally, Newhall Memorial contends that various grievance and arbitration procedures set forth in each of the CBAs "raise additional issues of CBA interpretation."
"[A] court may look to the CBA to determine whether it contains a clear and unmistakable waiver of state law rights without triggering [§] 301 preemption." Meyer, 723 F.Supp.2d at 1243 (citing Burnside, 491 F.3d at 1059-60). "[I]n order for a grievance and arbitration provision to implicate preemption, the `union-negotiated waiver of employees' statutory right to a judicial forum' must be `clear and unmistakable.'" Munoz v. Atlantic Express of L.A., Inc., No. CV 12-6074 GHK (FMOx), 2012 WL 5349408, *4 (C.D.Cal. Oct. 30, 2012) (quoting Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 80-81, 119 S.Ct. 391, 142 L.Ed.2d 361 (1998)).
When a CBA's grievance and arbitration procedure does not directly reference the statutes at issue, courts have concluded that the agreement does not contain a "clear and unmistakable waiver" of an `employee's right to a judicial forum. See, e.g., Wright, 525 U.S. at 80-81, 119 S.Ct. 391 (concluding that a CBA that purported to `cover all matters affecting wages, hours, and other terms and conditions of employment' did not contain a clear and unmistakable waiver of the covered employees' rights to a judicial forum to assert discrimination claims under the ADA); Martinez v. J. Fletcher Creamer & Son, Inc., No. CV 10-0968 PSG (FMOx), 2010 WL 3359372, *3 (C.D.Cal. Aug. 13, 2010) ("concluding that the plaintiff `was not required to file a grievance under the CBA to pursue his statutory claims,' given that `the CBA [did] not directly reference the [relevant federal and state wage and hour] statutes at issue, ... [such that it] [did] not `clearly and unmistakably' waive Plaintiff's rights under those statutes"); see also Munoz, 2012 WL 5349408 at *5 ("Here, the CBA provides that `[t]he grievance procedure provided herein shall be the sole and exclusive remedy for an alleged grievance under this Agreement and
Newhall Memorial does not cite the relevant grievance and arbitration provisions of the CBAs, nor does it articulate why the court would need to do more than "look to" the provisions of the CBAs to determine whether the grievance and arbitration procedures apply, and whether they constitute a clear and unmistakable waiver of Vasserman's rights under the Labor Code. It is apparent, however, from "looking to" the CBAs, that the relevant grievance and arbitration provision is found in Article 12.
The court would find no preemption, in fact, even if Vasserman's claims fell within the scope of the CBAs' grievance and arbitration procedure. Numerous courts have held that a defendant's argument that a plaintiff has waived her right to pursue state law claims due to a grievance and arbitration provision in a CBA constitutes a "defense" that does not give rise to preemption under the LMRA or create a federal question. See, e.g., Townsend v. Brinderson Corp., No. CV 14-5320 FMO (RZx), 2014 WL 3694142, *4 (C.D.Cal. July 23, 2014) ("Brinderson contends that these claims are nonetheless `preempted by Section 301 because the Court must analyze and interpret the CBA to determine, inter alia, whether its comprehensive grievance and arbitration provisions extend to Defendants BP America, Inc., and BP Corporation North America, Inc., despite the fact that the BP Defendants are not themselves parties to the CBA.' Brinderson's contention is unpersuasive.... Brinderson (and presumably the BP defendants) are merely relying upon the CBA to mount its defenses, which is insufficient for preemption purposes," citing Dahl v. Albertson's Inc., 234 Fed.Appx. 446, 449 (9th Cir.2007) (Unpub.Disp.) ("Because [defendants] are looking to the Settlement Agreement's arbitration and release provisions in `mounting their defenses,' there is no preemption
For the reasons stated, the court concludes that Vasserman has alleged claims that arise under state law, rather than the CBAs that governed her employment and that of putative class members, and that resolution of her claims will not substantially depend on interpretation of those agreements. Accordingly, the court lacks federal question jurisdiction.
In 2005, Congress enacted the Class Action Fairness Act of 2005, Pub.L. No. 109-2, 119 Stat. 4. CAFA gives district courts original jurisdiction to hear class actions "in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," and "in which [, inter alia,] any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2); see also Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1033-34 (9th Cir.2008) ("The Class Action Fairness Act of 2005, § 4(a), 28 U.S.C. § 1332(d)(2), amended the requirements for diversity jurisdiction by granting district courts original jurisdiction over class actions exceeding $5,000,000 in controversy where [the citizenship of] at least one plaintiff is diverse from at least one defendant. In other words, complete diversity is not required. CAFA also provided for such class actions to be removable to federal court. See 28 U.S.C. § 1453(b). CAFA was enacted, in part, to "restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction." Pub.L. No. 109-2, § 2(b)(2), 119 Stat. 4, 5 (codified as a note to 28 U.S.C. § 1711)").
Under CAFA, the number of members of all proposed classes must exceed 100 in the aggregate. 28 U.S.C. § 1332(d)(5)(B). See also Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020-21 (9th Cir.2007) ("As a threshold matter, CAFA applies to `class action' lawsuits where the aggregate number of members of all proposed plaintiff classes is 100 or more persons and where the primary defendants are not `States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief.' § 1332(d)(5).... Once the prerequisites of § 1332(d)(5) are satisfied, CAFA vests federal courts with `original' diversity jurisdiction over class actions if (1) the aggregate amount in controversy exceeds $5,000,000, and (2) any class member is a citizen of a state different from any defendant. § 1332(d)(2)"); id. at 1021 n. 3 ("The Fifth Circuit characterized § 1332(d)(5) as an `exception' to CAFA jurisdiction conferred under § 1332(d)(2).... We view § 1332(d)(5) somewhat differently....
The Ninth Circuit has confirmed that CAFA does not disturb the traditional rule that the burden of establishing removal jurisdiction is on the proponent of federal jurisdiction. Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006) ("We ... hold that under CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction").
As noted, under CAFA, the number of members of all putative classes must exceed 100 in aggregate. 28 U.S.C. § 1332(d)(5)(B). In its notice of removal, Newhall Memorial proffers Puleo's declaration to show that this requirement is satisfied. Puleo, who, as noted, is Newhall Memorial's Vice Present and Chief Human Resources Officer,
Vasserman asserts that Newhall Memorial has failed to adduce sufficient evidence showing that CAFA's minimal diversity requirement is satisfied.
In support of removal, Newhall Memorial proffered the declarations of Rolando Bergado and Angela Watkins, two former non-exempt hourly employees who worked for it in California during the class period.
Vasserman argues that Bergado and Watkins are not members of any putative class.
Vasserman seeks to represent five classes of non-exempt employees who worked at Newhall Memorial during the class period:
As noted, both Bergado and Watkins were non-exempt hourly employees who
Vasserman next contends that Newhall Memorial has failed to establish that the amount in controversy exceeds $5,000,000.
Newhall Memorial's estimate of the amount in controversy addresses five types of relief sought in Vasserman's complaint:
No. Claim Newhall Memorial's Estimated Amount 1. Unpaid Overtime $8,267,903 in Controversy111 2. Waiting Time Penalties $2,164,140 3. Provide Accurate Wage Statements 4. Missed Meal Periods $9,183,758 5. Penalties under PAGA $8,021,900TOTAL $31,516,051
In estimating the value of the class claims, Newhall Memorial has calculated the potential recovery for unpaid overtime and meal period claims for the four-year class period alleged in the complaint; it has assumed, by contrast, that a one-year limitations period applies to claims under Labor Code § 226 and PAGA.
In estimating that the class might recover as much as $8,267,903 on its unpaid overtime claim, Newhall Memorial first approximated the number of putative class
Using the "45% of putative class member[s] [who] work[ed] shifts that are over 8 hours but are not paid `daily overtime'" for hours in excess of eight hours, Newhall Memorial assumed that each class member worked eight hours of "daily overtime" per pay period" during the entire class period. Because Puleo states that class members collectively worked 140,039 pay periods during the class period and Vasserman alleges that the class members were only paid straight time for hours in excess of eight per day,
California Labor Code § 203(a) states in relevant part: "If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days."
In estimating the potential class recovery on Vasserman's waiting time penalties claim under § 203, Newhall Memorial "assum[ed] each terminated employee worked 8 hours per day,"
California Labor Code § 226(a) provides that "[e]very employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees ... an accurate itemized statement in writing showing (1) gross wages earned; (2) total hours worked by the employee ... (5) net wages earned, ... (8) the name and address of the legal entity that is the employer,... and (9) all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee." Section 226(e) provides that "[a]n employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of four thousand dollars ($4,000)."
In calculating a potential class recovery of $3,878,350 on this claim, Newhall Memorial assumed that each of the 1,583 putative class members it has employed since June 18, 2013, would be entitled to recover for violations each pay period, i.e., every two weeks from June 18, 2013 until the date of removal, August 8, 2014.
As can be seen, Newhall Memorial assumed a 100 percent violation rate — i.e., that every putative class member received an inaccurate wage statement every pay period during the limitations period. Newhall Memorial adduces no evidence supporting this assumption.
In estimating that the missed meal period class could recover total damages of $9,183,758, Newhall Memorial "assume[d] [] two missed meal periods per pay period."
As with Newhall Memorial's other calculations, its estimate of meal period damages under Labor Code § 226.7 relies on an assumption that every class member missed two meal periods each pay period during the class period. Like Newhall Memorial's assumption that each class member worked eight hours of daily overtime per week, the suggestion that each class member missed two meal breaks per pay period is entirely speculative and unsupported.
The Private Attorneys General Act ("PAGA") provides for the recovery of civil penalties for violations of the California Labor Code. See CAL. LAB.CODE § 2699(f). The Act states, in relevant part:
In calculating class PAGA penalties, Newhall Memorial assumed that the 1,583 putative class members who were employed since June 18, 2013 would be able to recover PAGA penalties each pay period on each of Vasserman's Labor Code claims.
In reaching its calculation of the amount in controversy related to Vasserman's PAGA claim, Newhall Memorial again assumes a 100 percent violation rate, calculating PAGA penalties for each of 40,901 pay periods without proffering any evidence to support such an assumption.
Although other courts have reached the opposite result,
As the Pulera court noted, however, concluding that employees' individual rights should be aggregated does not compel aggregation of their rights with those of a state agency, the LWDA. Citing Troy Bank of Troy, Ind. v. G.A. Whitehead & Co., 222 U.S. 39, 40, 32 S.Ct. 9, 56 L.Ed. 81 (1911), the Pulera court observed that the "common and undivided interest" exception relies on the notion that "neither [party] can enforce [the claim] in the absence of the other." Pulera, 2008 WL 3863489 at *3. Under PAGA, "[h]owever, the LWDA can choose to enforce those claims itself, regardless of the employee's involvement," just as employees can, if the LWDA approves, sue without any direct involvement by the agency. The statute thus permits either the LWDA or the aggrieved employees to act independently to enforce the Labor Code. Id. This cuts against aggregating the agency's claims with the employees' claims, even if the employees' individual claims should be aggregated under the "common and undivided interest" exception. Consequently, the court concludes that only 25% of the recovery possible on the cause of action can be included in calculating the amount in controversy on the PAGA claim. As a result, Newhall Memorial's calculation of the amount in controversy on Vasserman's PAGA claim is significantly overstated in addition to being based on speculative assumptions.
As noted, Newhall Memorial asserts the amount in controversy is $31,516,051 — well above the jurisdictional threshold. Vasserman contends, however, that Newhall
Specifically, Vasserman argues that key variables used in Newhall Memorial's calculations are not based on summary judgment-type evidence.
Newhall Memorial has proffered credible evidence regarding the size of the class, the number of former employees who are potential class members, the number of class members during the one year prior to the filing of the complaint, the percentage of class members who worked under each overtime plan, the average hourly rate of pay, and the number of pay periods and work weeks in the class period.
First, Newhall Memorial assumed that the 45 percent of class members who worked under the 10/40 and 12/36 overtime plans worked an average of eight hours of "daily overtime" per week.
Newhall Memorial simply provides no explanation as to why it selected a figure of eight hours of overtime per pay period. It does not adduce evidence concerning the average hours worked by putative class members under the two plans in a given week, or any other evidence that could support a finding that its assumption of eight hours of overtime per pay period is reasonable. Rather, its assumption that 45 percent of the class worked an average of eight hours of overtime per pay period is speculative and unsupported. Thus, its calculation of the amount in controversy on Vasserman's overtime claim is speculative and unreliable as well. See Smith, 2010 WL 1838726 at *3 ("The complaint does not quantify the number of overtime hours that are allegedly subject to compensation, nor the number of meal and rest periods that defendants allegedly failed to provide. Defendants provide no sufficient basis to apply the assumption of 2.5 overtime hours each day towards calculating the amount in controversy. The court may not base
Second, Newhall Memorial assumed that all class members were denied meal periods two times per pay period.
Third, Newhall Memorial's calculation of waiting time penalties presumes that each of the 275 class members who separated from Newhall Memorial during the class period did not receive the wages he or she was due for a full thirty days. Newhall Memorial does not explain why such an assumption is warranted, and neither the allegations in the complaint nor evidence support using such a variable. Vasserman alleges that "each member of the class[ ] that no longer works for Defendant, and who was not timely paid is entitled to one (1) day of pay in penalties for each day that he or she was paid late, until payment was made, up [to] a maximum of thirty (30) days."
Similarly, Newhall Memorial assumes that every wage statement class members received during the limitations period was inaccurate. Vasserman's allegations, however, suggest only that some wage statements during the class period were inaccurate; she pleads that "[d]uring the Class Period, [d]efendant knowingly and intentionally failed to provide the [c]lass [m]embers, including [p]laintiff, with timely and accurate wage and hour statements."
Absent evidence or allegations supporting the reasonableness of such an assumption, Newhall Memorial's use of a 100 percent violation rate is speculative and unsupported. Consequently, the court cannot credit its calculation of the potential recovery on Vasserman's § 226 claim. See De Leon v. NCR Corp., No. C 12-01637 SBA, 2013 WL 503092, *4 (N.D.Cal. Feb. 8, 2013) ("The Court cannot credit Defendant's damages calculation because it is predicated on an assumption that has no basis either in the complaint's plain language or in any `summary-judgment-type' evidence. The complaint does not allege that every customer engineer that worked for Defendant during the relevant one-year period received inaccurate wage statements every pay period. Nor has Defendant submitted any concrete evidence demonstrating ... that each of the 192 putative class members
For similar reasons, Newhall Memorial's calculation of PAGA penalties is unsupported because it is premised on the unsupported inference that each putative class member employed since July 18, 2013, had his or her rights under the Labor Code violated every pay period. Newhall Memorial simply does not proffer sufficient evidence from which the court can conclude that such an assumption is warranted.
In sum, many of the assumptions that are key to Newhall Memorial's damages calculations are not supported by summary judgment-type evidence. See Korn v. Polo Ralph Lauren Corp., 536 F.Supp.2d 1199, 1205 (E.D.Cal.2008) ("[A] defendant must set forth the underlying facts supports its assertion that the amount in controversy exceeds the statutory minimum"); Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F.Supp.2d 993, 1001 (C.D.Cal.2002) ("If the amount in controversy is not clear on the face of the complaint, ... defendant must do more than point to a state law that might allow recovery above the jurisdictional minimum"). Accordingly, the court concludes that Newhall Memorial has not proffered sufficient evidence to demonstrate that the amount placed in controversy by Vasserman's complaint exceeds $5,000,000.
As the court has found that several of the assumptions on which Newhall Memorial's damages estimate is based are not supported by summary-judgment-type evidence, the analysis suggested by Singer for determining the amount in controversy on removal would appear to be at an end. 116 F.3d at 377. See Harrington v. Mattel, Inc., No. C07-05110 MJJ, 2007 WL 4556920, *3 (N.D.Cal. Dec. 20, 2007) ("Because it is not clear from the face of the complaint if the jurisdictional amount in controversy is met, Defendants have the burden to prove, by a preponderance of the evidence, that the amount exceeds $5 million," citing Matheson, 319 F.3d at 1090).
In evaluating whether it is "more likely than not" that wage-and-hour claims exceed the jurisdictional threshold, however, California district courts have disagreed as
When applying the preponderance of the evidence standard to California Labor Code claims, many California district courts have refused to credit damage calculations based on variables not clearly suggested by the complaint or supported by evidence, concluding that the defendant's calculations are mere conjecture. In Martinez v. Morgan Stanley, for example, defendants sought to remove a wage-and-hour class action under CAFA and calculated the amount in controversy based in part on an assumption that every class member worked four hours of unpaid overtime every day. 2010 WL 3123175 at *5. The court rejected this assumption and the calculation of potential class damages based on it, stating that "[a]lthough Plaintiff alleged that her claims are typical of the class as a whole and that class members consistently worked overtime, this does not provide a basis to assume that ever class member worked any particular number of overtime hours." Id. The court similarly rejected the calculation of meal/ rest period violations, waiting time penalties, and wage statement penalties because the variables used were not clearly suggested by the complaint or supported by evidence. Id. at *6. See also Smith, 2010 WL 1838726 at *5 ("Because defendants' calculation of damages for alleged overtime and missed meal and rest periods is speculative and based on conjecture, the court limits the calculation of the amount in controversy to the reasonably certain amount of statutory penalties that could be claimed"); Verner v. Swiss II, LLC, No. CV 09-5701 PA (CTx), 2010 WL 99084, *3 (C.D.Cal. Jan. 6, 2010) ("In its Notice of Removal, Defendant alleges that because the First Amended Complaint alleges that Defendant `consistently' violated California's wage and hour laws by failing to provide meal and rest periods, the amount in controversy is Plaintiff's hourly wage times 250 work days per year times three meal and rest break premiums per day times four years. Nothing in the First Amended Complaint or the Notice of Removal supports a conclusion that the amount in controversy is three premiums for each day worked for the last four years. Defendant has no `summary-judgment type evidence' to support its calculation of the amount in controversy for the unpaid meal and rest breaks").
Other California district courts, however, have relied on calculations of wage and hour claims that utilized assumed variables where the complaint did not provide a basis for clear calculation. See, e.g., Gardner v. GC Servs. LP, No. 10-CV-997-IEG (CAB), 2010 WL 2721271, *3 (S.D.Cal. July 6, 2010) (crediting defendant's overtime calculation based solely on evidence regarding the number of potential class members, and stating "[a]ccording to Defendant, if those employees, earning on average $14.50 per hour, worked 30 minutes of overtime per day over four years, the unpaid overtime owed on the overtime claim would exceed $3,000,000"); Lippold v. Godiva Chocolatier, Inc., No. C 10-00421
Several of these courts focused on the fact that plaintiff is the "master of the complaint," and commented that plaintiffs could choose to limit their damage claims. See Muniz, 2007 WL 1302504 at *4 ("[P]laintiff includes no fact-specific allegations that would result in a putative class or violation rate that is discernibly smaller than 100%, used by defendant in its calculations. Plaintiff is the `master of [her] claim[s],' and if she wanted to avoid removal, she could have alleged facts specific to her claims which would narrow the scope of the putative class or the damages sought," citing Caterpillar, 482 U.S. at 392, 107 S.Ct. 2425). See also Coleman, 730 F.Supp.2d at 1150 ("Plaintiff only broadly alleges his wage-and-hour violations.... Plaintiff included no limitation on the number of violations, and, taking his complaint as true, Defendants could properly calculate the amount in controversy based on a 100% violation rate").
The court finds the latter group of cases unpersuasive, however, as they improperly shift the burden to plaintiff to refute speculative assertions of jurisdiction and establish that there is no jurisdiction. See Abrego Abrego, 443 F.3d at 685 ("We... hold that under CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction"). Plaintiffs are not required affirmatively to deny speculative calculations of the amount in controversy to avoid removal. See Smith, 2010 WL 1838726 at *4 ("Defendants suggest that plaintiffs have not submitted evidence to dispute defendants' estimates, but plaintiffs do not bear the burden to demonstrate the amount in controversy"). Indeed, at this early stage of the litigation, neither side may be able to calculate potential damages reliably.
Moreover, by crediting speculative estimates of the amount in controversy,
It is, of course, true that a removing defendant is not responsible for "conduct[ing] a fact-specific inquiry into whether the rights of each and every potential class member were violated," answering "the ultimate question the litigation presents," or "try[ing] the case [itself] for the purposes of establishing jurisdiction." Bryan v. Wal-Mart Stores, Inc., No. C 08-5221 SI, 2009 WL 440485, *3 (N.D.Cal. Feb. 23, 2009). Nonetheless, in evaluating whether a party has met its burden of proof with respect to jurisdiction, several circuits have held that it is proper for district courts to consider which party has access to or control over the records and information required to determine whether the amount in controversy requirement is met. See, e.g., Amoche v. Guarantee Trust Life Insurance Co., 556 F.3d 41, 51 (1st Cir.2009) ("[D]eciding whether a defendant has shown a reasonable probability that the amount in controversy exceeds $5 million may well require analysis of what both parties have shown.... In the course of that evaluation, a federal court may consider which party has better access to the relevant information. See Evans v. Walter Indus., Inc., 449 F.3d 1159, 1164 n. 3 (11th Cir.2006) (`Defendants have better access to information about conduct by defendants, but plaintiffs have better access to information about which plaintiffs are injured and their relationship to various defendants')"); Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 447-48 (7th Cir.2005) ("That the proponent of jurisdiction bears the risk of non-persuasion is well established.... Whichever side chooses federal court must establish jurisdiction; it is not enough to file a pleading and leave it to the court or the adverse party to negate jurisdiction.... And the rule makes practical sense. If the burden rested with the proponent of remand, then Countrywide could have removed without making any effort to calculate its maximum exposure, and without conceding that it had faxed thousands of ads. That would have thrown on Brill the burden of showing that Countrywide could not possibly have sent more than 3,333 junk faxes.... Brill would have no way to show this early in the litigation, and plaintiffs in other kinds of suits would encounter similar difficulty. When the defendant has vital knowledge that the plaintiff may lack, a burden that induces the removing party to come forward with the information — so that the choice between state and federal court may be made accurately — is much to be desired").
Here, Newhall Memorial is in the best position to adduce evidence regarding the working hours and wages of its non-exempt, hourly employees. In support of its notice of removal, Newhall Memorial could have conducted a sampling or other analysis to show that it was more likely than not that many of its employees covered under the various overtime plans worked more
For the reasons stated, the court grants Vasserman's motion to remand and denies Newhall Memorial's motion to dismiss at moot.
Since the Ninth Circuit's decision in Baumann, no court has directly addressed whether PAGA penalties can be included in the amount in controversy when defendant seeks to remove a class action complaint that pleads a PAGA claim. Courts that have considered removals under CAFA, however, have implicitly addressed the question and reached conflicting conclusions. Compare Hughes v. McDonald's Corp., No. C 14-17001 PJH, 2014 WL 3797488, *8-9 (N.D.Cal. July 31, 2014) (remanding action to state court after concluding that the amount in controversy, including damages on class claims for violations of the California Labor Code and PAGA penalties, did not exceed $5,000,000); Ford v. CEC Entertainment, Inc., No. CV 14-01420 RS, 2014 WL 3377990, *6 (N.D.Cal. July 10, 2014) (concluding that CAFA's amount in controversy requirement was satisfied after including PAGA penalties in the calculation of total class damages) with Sanchez v. Capital Contractors, Inc., No. C 14-2622 MMC, 2014 WL 4773961, *1-3 (N.D.Cal. Sept. 22, 2014) (discharging an order to show cause why a case should not be remanded for lack of subject matter jurisdiction under CAFA because defendant's initial calculation of the amount in controversy was based on PAGA penalties, and finding that the amount in controversy, not including PAGA penalties, exceeded $5,000,000). The court need not reach the issue, because it concludes that the assumption underlying Newhall Memorial's calculation of PAGA penalties, i.e., that there was a 100 percent violation rate with respect to each of Vasserman's Labor Code claims, is speculative and unsupported.
The home state controversy exception applies if the party seeking remand establishes that (i) two-thirds or more of all class members are citizens of California; and (ii) the "primary defendants" are citizens of California. See 28 U.S.C. § 1332(d)(4)(B). As the party seeking remand, Vasserman bears the burden of establishing that the home state controversy exception applies. See Coleman v. Estes Exp. Lines, Inc., 631 F.3d 1010, 1013 (9th Cir.2011) ("A plaintiff whose putative class action has been removed can obtain a remand to state court under any of three exceptions to the district court's subject matter jurisdiction under CAFA.... A plaintiff seeking remand has the burden of showing that the [ ] exception applies" (citations omitted)); Serrano, 478 F.3d at 1019 ("Defendant-Appellants 180 Connect, Inc., Ironwood Communications, Inc., and Mountain Center, Inc. (`the Employers') appeal from the district court's order remanding a putative class action lawsuit to California state court under CAFA's `home-state controversy' exception to federal jurisdiction. The district court held that the Employers, the parties seeking removal, bear the burden to establish the exception. We disagree. The structure of the statute and the long-standing rule of proof of exceptions to removal dictate that the party seeking remand bears the burden of proof as to any exception under CAFA. Consequently, we reverse, thus joining our sister circuits that have considered the issue. See Hart v. FedEx Ground Package System, Inc., 457 F.3d 675 (7th Cir.2006); Frazier v. Pioneer Americas LLC, 455 F.3d 542 (5th Cir.2006); Evans v. Walter Indus., Inc., 449 F.3d 1159 (11th Cir.2006)").
It is undisputed that Newhall Memorial, the only named defendant, is the "primary defendant" and that is a citizen only of California. The parties disagree, however, as to whether Vasserman has adequately shown that "two-third or more of the members of all proposed plaintiff classes in aggregate" are California citizens. Newhall Memorial asserts Vasserman has "provided no evidence at all on [the] issue." (MTR Opp. at 23.) Specifically, it argues that she has "failed to show where any putative class members currently reside," and "has provided no evidence at all regarding any putative class members' intention to continue to reside indefinitely in a particular state." (Id. at 23-24.)
Vasserman counters that she need not adduce evidence concerning the citizenship of the putative class members because "[a]n inference [arises] that [d]efendant's non-exempt employees who worked in Valencia, California, and are [the] subject of this class action are citizens of California." (Motion to Remand at 24-25.) Vasserman relies on Mondragon v. Capital One Auto Finance, 736 F.3d 880, 881-82 (9th Cir.2013), where the Ninth Circuit stated that "[a] pure inference regarding the citizenship of prospective class members may be sufficient if the class is defined as limited to citizens of the state in question." (Id.) While Mondragon permits drawing an inference of citizenship if a class is limited to citizens of a particular state, there is no basis for such an inference in this case. As the court has noted, Vasserman does not define her classes by reference to the citizenship of putative class members; rather, she defines the classes, without limitation, as comprised of all "hourly, non-exempt employees who worked for [d]efendant" during the relevant limitations period. (See Complaint, ¶ 18.) When the class is not limited to citizens of a particular state, a plaintiff seeking remand must affirmatively demonstrate the citizenship of the putative class members; inferring that citizenship is impermissible "guesswork." Mondragon, 736 F.3d at 881-82 ("A pure inference regarding the citizenship of prospective class members may be sufficient if the class is defined as limited to citizens of the state in question, but otherwise such a finding should not be based on guesswork" (emphasis added)). Because Vasserman has adduced no evidence concerning putative class members' citizenship, she has not sufficiently demonstrated that more than two-thirds of putative class members are California citizens such that the home state controversy exception applies.
