1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 GLORIA GUINILING, on behalf of Case No.: 22-cv-1208-L-KSC herself and all persons similarly situated, 13 ORDER GRANTING MOTION TO Plaintiff, 14 REMAND v. 15 [ECF No. 7] ESCONDIDO MEDICAL INVESTORS 16 LIMITED PARTNERSHIP LIFE CARE 17 CENTER OF ESCONDIDO, and DOES 1–50, 18 Defendants. 19 20 Pending before the Court is Plaintiff Gloria Guiniling’s (“Plaintiff”) motion to 21 remand. (ECF No. 7.) Defendant Escondido Medical Investors Limited Partnership Life 22 Care Center of Escondido (“Defendant”) opposed, (ECF No. 8), and Plaintiff replied, 23 (ECF No. 7). The Court decides this matter on the papers without oral argument. 24 Civ. L.R. 7.1. For the reasons stated below, the Court GRANTS the motion. 25 I. BACKGROUND 26 According to the allegations in the complaint, (ECF No. 1-4), Plaintiff is a former 27 non-exempt employee of Defendant in the state of California. Plaintiff originally filed 28 this action in the San Diego Superior Court on behalf of herself and a class of “all 1 individuals who are or previously were employed by Defendant in California” and are or 2 were classified as non-exempt employees. (ECF No. 1-4, at 5.) Plaintiff asserts nine 3 causes of action: (1) unfair competition in violation of California Business and 4 Professions Code sections 17200 et seq., (2) failure to pay minimum wages, (3) failure to 5 pay overtime wages, (4) failure to provide required meal periods, (5) failure to provide 6 required rest periods, (6) failure to provide accurate itemized statements, (7) failure to 7 reimburse employees for required expenses, (8) failure to provide wages when due, and 8 (9) failure to pay sick-pay wages. (See generally id.) 9 Defendant timely removed this action on August 17, 2022, asserting that this Court 10 has jurisdiction over the putative class pursuant to the Class Action Fairness Act of 2005, 11 28 U.S.C. § 1332(d) (“CAFA”), and diversity jurisdiction over Plaintiff individually 12 pursuant to 28 U.S.C. § 1332(a). (See ECF No. 1.) On September 16, 2022, Plaintiff 13 filed the instant motion contesting the amount-in-controversy requirements for 14 jurisdiction under § 1332. (ECF No. 7.) 15 II. AMOUNT IN CONTROVERSY—CAFA 16 A. Legal Standard 17 Removal is proper where federal courts have original jurisdiction over an action 18 brought in state court. 28 U.S.C. § 1441(a). CAFA gives federal courts original 19 jurisdiction to hear a class action if the class has at least 100 members, the parties are 20 minimally diverse, and the amount in controversy exceeds $5 million. See U.S.C. 21 § 1332(d)(2), (5)(B); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013). 22 Initially, the removing defendant need only include a plausible allegation that the amount 23 in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating 24 Co., LLC v. Owens, 574 U.S. 81, 89 (2014); 28 U.S.C. § 1446(a). “Thereafter, the 25 plaintiff can contest the amount in controversy by making either a ‘facial’ or ‘factual’ 26 attack on the defendant’s jurisdictional allegations.” Harris v. KM Indus., Inc., 980 F.3d 27 694, 699 (9th Cir. 2020). “A ‘facial’ attack accepts the truth of the [defendant’s] 28 allegations but asserts that they ‘are insufficient on their face to invoke federal 1 jurisdiction.’” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (quoting Safe Air 2 for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). 3 “A factual attack, by contrast, ‘contests the truth of the [defendant’s] factual 4 allegations, usually by introducing evidence outside the pleadings.’” Salter v. Quality 5 Carriers, Inc., 974 F.3d 959, 964 (9th Cir. 2020) (quoting Leite, 749 F.3d at 1121). 6 “When a factual attack is mounted, the responding party ‘must support her jurisdictional 7 allegations with competent proof . . . under the same evidentiary standard that governs in 8 the summary judgment context.’” Id. (citing Leite, 749 F.3d at 1121 (9th Cir. 2014)). In 9 such a case, the movant “bears the burden of proving by a preponderance of the evidence 10 that each of the requirements for subject-matter jurisdiction has been met.”1 Leite, 749 11 F.3d at 1121 (citing Harris, 682 F.3d at 851); see also Dart Cherokee, 574 U.S. at 88; 28 12 U.S.C. § 1446(c)(2)(B). This rule applies regardless of whether Plaintiff affirmatively 13 states in the complaint that damages do not exceed $5 million. See Rodriguez v. AT&T 14 Mobility Servs. LLC, 728 F.3d 975 (9th Cir. 2013). Plaintiff only challenges the amount- 15 in-controversy requirement; thus the Court only addresses this issue. 16 B. Discussion 17 In the notice of removal, Defendant relied on the declarations of Cindy Cross, an 18 officer familiar with the Defendant organization, and Defendant’s counsel Stacey F. 19 Blank. (ECF Nos. 1-2, 1-3.) Ms. Cross’s declaration stated that Defendant employed 20 438 non-exempt hourly employees in the relevant time period. (Id. at 3.) Ms. Cross also 21 confirmed that the Defendant organization operated 7 days a week, 52 weeks a year and 22 issued paychecks every other week, or 26 times a year. (Id.) Ms. Blank’s declaration 23 used the figures in Ms. Cross’s declaration to conclude that the 438 putative class 24 25 26 27 1 Defendant’s argument that remand is inappropriate because Plaintiff failed to make specific allegations or offer evidence concerning the amount in controversy, (ECF No. 8, at 13–15), is unpersuasive because 28 1 members would have collectively worked 91,104 work weeks in the relevant four-year 2 period, equaling 45,552 pay periods. (ECF No. 1-3, at 3.) 3 To establish the amount in controversy Defendant assumed that each putative class 4 member experienced one of each of the following violations per pay period: failure to pay 5 minimum wage, failure to pay overtime wages, failure to provide meal periods, failure to 6 provide rest periods, and inaccurate wage statements.2 (ECF No. 1, at 16, 17, 18, 19, 20.) 7 Defendant also assumed that each putative class member is entitled to maximum damages 8 for waiting-period violations. (Id. at 22.) Plaintiff claimed that personal cell phones 9 were used for work, so Defendant calculated the damages for the reimbursement-of- 10 business-expenses claim for each class member to be $15 per month for half of the 11 relevant time period based on the cost of monthly plans for common cell phone carriers. 12 (Id. at 21.) Defendant supported this estimate by attaching excerpts from the carriers’ 13 websites to the opposition. (ECF No. 8-1, at 4, 6.) Lastly, Defendant adds attorneys’ 14 fees in the amount of 25% of recovery to the total amount in controversy.3 (ECF No. 1, 15 at 24.) Relying on these calculations, Defendant asserts that the amount in controversy 16 totals $9,055,650.00, far exceeding the $5 million requirement. (ECF No. 1, at 24.) 17 The Court finds that, without evidence supporting the assumptions that underlie the 18 above calculations, Defendant has failed to meet its burden.
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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 GLORIA GUINILING, on behalf of Case No.: 22-cv-1208-L-KSC herself and all persons similarly situated, 13 ORDER GRANTING MOTION TO Plaintiff, 14 REMAND v. 15 [ECF No. 7] ESCONDIDO MEDICAL INVESTORS 16 LIMITED PARTNERSHIP LIFE CARE 17 CENTER OF ESCONDIDO, and DOES 1–50, 18 Defendants. 19 20 Pending before the Court is Plaintiff Gloria Guiniling’s (“Plaintiff”) motion to 21 remand. (ECF No. 7.) Defendant Escondido Medical Investors Limited Partnership Life 22 Care Center of Escondido (“Defendant”) opposed, (ECF No. 8), and Plaintiff replied, 23 (ECF No. 7). The Court decides this matter on the papers without oral argument. 24 Civ. L.R. 7.1. For the reasons stated below, the Court GRANTS the motion. 25 I. BACKGROUND 26 According to the allegations in the complaint, (ECF No. 1-4), Plaintiff is a former 27 non-exempt employee of Defendant in the state of California. Plaintiff originally filed 28 this action in the San Diego Superior Court on behalf of herself and a class of “all 1 individuals who are or previously were employed by Defendant in California” and are or 2 were classified as non-exempt employees. (ECF No. 1-4, at 5.) Plaintiff asserts nine 3 causes of action: (1) unfair competition in violation of California Business and 4 Professions Code sections 17200 et seq., (2) failure to pay minimum wages, (3) failure to 5 pay overtime wages, (4) failure to provide required meal periods, (5) failure to provide 6 required rest periods, (6) failure to provide accurate itemized statements, (7) failure to 7 reimburse employees for required expenses, (8) failure to provide wages when due, and 8 (9) failure to pay sick-pay wages. (See generally id.) 9 Defendant timely removed this action on August 17, 2022, asserting that this Court 10 has jurisdiction over the putative class pursuant to the Class Action Fairness Act of 2005, 11 28 U.S.C. § 1332(d) (“CAFA”), and diversity jurisdiction over Plaintiff individually 12 pursuant to 28 U.S.C. § 1332(a). (See ECF No. 1.) On September 16, 2022, Plaintiff 13 filed the instant motion contesting the amount-in-controversy requirements for 14 jurisdiction under § 1332. (ECF No. 7.) 15 II. AMOUNT IN CONTROVERSY—CAFA 16 A. Legal Standard 17 Removal is proper where federal courts have original jurisdiction over an action 18 brought in state court. 28 U.S.C. § 1441(a). CAFA gives federal courts original 19 jurisdiction to hear a class action if the class has at least 100 members, the parties are 20 minimally diverse, and the amount in controversy exceeds $5 million. See U.S.C. 21 § 1332(d)(2), (5)(B); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013). 22 Initially, the removing defendant need only include a plausible allegation that the amount 23 in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating 24 Co., LLC v. Owens, 574 U.S. 81, 89 (2014); 28 U.S.C. § 1446(a). “Thereafter, the 25 plaintiff can contest the amount in controversy by making either a ‘facial’ or ‘factual’ 26 attack on the defendant’s jurisdictional allegations.” Harris v. KM Indus., Inc., 980 F.3d 27 694, 699 (9th Cir. 2020). “A ‘facial’ attack accepts the truth of the [defendant’s] 28 allegations but asserts that they ‘are insufficient on their face to invoke federal 1 jurisdiction.’” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (quoting Safe Air 2 for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). 3 “A factual attack, by contrast, ‘contests the truth of the [defendant’s] factual 4 allegations, usually by introducing evidence outside the pleadings.’” Salter v. Quality 5 Carriers, Inc., 974 F.3d 959, 964 (9th Cir. 2020) (quoting Leite, 749 F.3d at 1121). 6 “When a factual attack is mounted, the responding party ‘must support her jurisdictional 7 allegations with competent proof . . . under the same evidentiary standard that governs in 8 the summary judgment context.’” Id. (citing Leite, 749 F.3d at 1121 (9th Cir. 2014)). In 9 such a case, the movant “bears the burden of proving by a preponderance of the evidence 10 that each of the requirements for subject-matter jurisdiction has been met.”1 Leite, 749 11 F.3d at 1121 (citing Harris, 682 F.3d at 851); see also Dart Cherokee, 574 U.S. at 88; 28 12 U.S.C. § 1446(c)(2)(B). This rule applies regardless of whether Plaintiff affirmatively 13 states in the complaint that damages do not exceed $5 million. See Rodriguez v. AT&T 14 Mobility Servs. LLC, 728 F.3d 975 (9th Cir. 2013). Plaintiff only challenges the amount- 15 in-controversy requirement; thus the Court only addresses this issue. 16 B. Discussion 17 In the notice of removal, Defendant relied on the declarations of Cindy Cross, an 18 officer familiar with the Defendant organization, and Defendant’s counsel Stacey F. 19 Blank. (ECF Nos. 1-2, 1-3.) Ms. Cross’s declaration stated that Defendant employed 20 438 non-exempt hourly employees in the relevant time period. (Id. at 3.) Ms. Cross also 21 confirmed that the Defendant organization operated 7 days a week, 52 weeks a year and 22 issued paychecks every other week, or 26 times a year. (Id.) Ms. Blank’s declaration 23 used the figures in Ms. Cross’s declaration to conclude that the 438 putative class 24 25 26 27 1 Defendant’s argument that remand is inappropriate because Plaintiff failed to make specific allegations or offer evidence concerning the amount in controversy, (ECF No. 8, at 13–15), is unpersuasive because 28 1 members would have collectively worked 91,104 work weeks in the relevant four-year 2 period, equaling 45,552 pay periods. (ECF No. 1-3, at 3.) 3 To establish the amount in controversy Defendant assumed that each putative class 4 member experienced one of each of the following violations per pay period: failure to pay 5 minimum wage, failure to pay overtime wages, failure to provide meal periods, failure to 6 provide rest periods, and inaccurate wage statements.2 (ECF No. 1, at 16, 17, 18, 19, 20.) 7 Defendant also assumed that each putative class member is entitled to maximum damages 8 for waiting-period violations. (Id. at 22.) Plaintiff claimed that personal cell phones 9 were used for work, so Defendant calculated the damages for the reimbursement-of- 10 business-expenses claim for each class member to be $15 per month for half of the 11 relevant time period based on the cost of monthly plans for common cell phone carriers. 12 (Id. at 21.) Defendant supported this estimate by attaching excerpts from the carriers’ 13 websites to the opposition. (ECF No. 8-1, at 4, 6.) Lastly, Defendant adds attorneys’ 14 fees in the amount of 25% of recovery to the total amount in controversy.3 (ECF No. 1, 15 at 24.) Relying on these calculations, Defendant asserts that the amount in controversy 16 totals $9,055,650.00, far exceeding the $5 million requirement. (ECF No. 1, at 24.) 17 The Court finds that, without evidence supporting the assumptions that underlie the 18 above calculations, Defendant has failed to meet its burden. “[A] damages assessment 19 may require a chain of reasoning that includes assumptions,” but “those assumptions 20 cannot be pulled from thin air” and must be “grounded in real evidence.” Ibarra v. 21 Manheim Invs., Inc., 775 F.3d 1193, 1199 (9th Cir. 2015). Courts in this district have 22 consistently rejected assumptions as arbitrary, despite any level of objective 23 reasonableness, where the defendant has not offered any supporting evidence. See, e.g., 24 Baretich v. Everett Fin., Inc., No. 18-cv-1327-MMA-BGS, 2018 WL 4579857, at *5 25
26 2 The damages for each violation were calculated using the minimum wage for California in 2022. (See 27 ECF No. 1, at 16, 17, 18, 19, 20.) 3 Defendant did not address damages for the claims of unpaid sick pay and untimely payment of wages 28 1 (S.D. Cal. Sep. 25, 2018) (“Ms. Dworshak’s declaration does not address defendant’s 2 alleged violation rates and thus ‘offers no information by which the Court may conclude 3 that Defendant’s assumptions were not pulled from thin air’” (quoting Ibarra, 775 F.3d at 4 1199)); Sanders v. Old Dominion Freight Line, Inc., No. 16-cv-2837-CAB-NLS, 2017 5 WL 5973566, at *4 (S.D. Cal. Feb. 2, 2017) (noting that “without evidence to support 6 this violation rate, the use of a 50% violation rate (or virtually any violation rate for that 7 matter) is completely arbitrary and little more than speculation and conjecture”); Basile v. 8 Aaron Bros., Inc., No. 3:17CV485-L(NLS), 2018 WL 655360, at *2 (S.D. Cal. Feb. 1, 9 2018) (finding allegations based only on the complaint and that lack evidentiary support 10 are “insufficient to support the assumption of any particular rate violation”). 11 The Defendant’s declarations support half of their calculations. The declarations 12 evidence the number of employees and possible work weeks but do not offer any 13 additional evidence to support the violation rates. The Court therefore cannot decipher 14 the reasonableness of a violation rate that brings the damages above the jurisdictional 15 threshold. For example, it may be reasonable to calculate the damages of claims using 16 minimum wage, but without evidence concerning the number by which the minimum 17 wage rate is to be multiplied, it is impossible to determine whether such damages exceed 18 the jurisdictional threshold. 19 Defendant argues that Plaintiff pled “at least two claims based upon a uniform 20 policy and practice” and pled the rest of the claims in a generalized manner that suggests 21 widespread violations and supports a high violation rate. (ECF No. 8, at 12–13.) 22 “Although these allegations indicate that violations were regular, they do not speak to 23 their frequency, and are therefore insufficient to support the assumption of any particular 24 rate of violation.” Basile, 2018 WL 655360, at *2 (citing Ibarra, 775 F.3d at 1198–99); 25 see also Ibarra, 775 F.3d at 1198–99 (“[A] ‘pattern and practice’ of doing something 26 does not necessarily mean always doing something.”). As such, Defendant’s reliance on 27 the general allegations in the complaint to form the foundation for the amount in 28 controversy is unavailing. 1 As for attorneys’ fees, Defendant “did not meet their burden to establish that 2 amount in controversy as to any of the claims”; therefore any fee calculation is likewise 3 “unsupported.” Basile, 2018 WL 655360, at *2. In sum, Defendant has not shown by a 4 preponderance that the amount-in-controversy requirement is satisfied as to the putative 5 class. Accordingly, the putative class action must be remanded. 6 III. AMOUNT IN CONTROVERSY—DIVERSITY JURISDICTION 7 A. Legal Standard 8 “Because CAFA explicitly expands diversity jurisdiction rather than diminishes its 9 scope, failure to meet CAFA requirements does not preclude the possibility of meeting 10 traditional diversity jurisdiction requirements under § 1332(a).” Weaver v. Amentum 11 Servs., Inc., No. 22-CV-00108-AJB-NLS, 2022 WL 959789, at *6 (S.D. Cal. Mar. 30, 12 2022) (quotation omitted). Standard diversity jurisdiction requires complete diversity of 13 citizenship between the parties and an amount in controversy exceeding $ 75,000. 14 28 U.S.C. § 1332. The procedural framework and preponderance standard used to 15 analyze a contested amount in controversy under CAFA also applies to claims brought 16 pursuant to § 1332(a). Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 683 (9th 17 Cir. 2006); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 18 B. Discussion 19 Defendant contends that the total amount in controversy as to Plaintiff individually 20 totals $125,681.25. (ECF No. 1, at 29.) To support this contention, Defendant includes 21 evidence that Plaintiff worked a total of 820 shifts during the relevant time period. (ECF 22 No. 1-3, at 4.) Defendant then assumed, based on the general allegations in the 23 complaint, that Plaintiff is entitled to an extra hour and a half of pay for each day worked 24 and that Plaintiff suffered from one meal-period violation every workday. (ECF No. 1, at 25 27.) Defendant calculated these damages using an average pay of $30.50 per hour even 26 though Plaintiff’s pay increased by the end of her employment. (Id. at 27–30.) 27 Defendant also assumed maximum recovery for wage-statement penalties and waiting- 28 period penalties in addition to an award of 25% attorneys’ fees. (Id. at 28–30.) Defendant’s calculations suffer from the same deficiencies noted above. The 2 ||assumptions Defendant relies on lack any evidentiary support concerning the frequency 3 || of the violations Plaintiff suffered individually. It follows that Plaintiffs individual 4 claims must be remanded for the same reasons as the class claims. 5 CONCLUSION 6 For the foregoing reasons, Plaintiffs motion to remand is GRANTED.‘ 7 IT IS SO ORDERED. 8 9 Dated: February 13, 2023 10 11 H . James Lorenz United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 95 ||* Defendant requests a short continuance in order to conduct discovery specific to the amount in controversy if the Court finds remand appropriate. (ECF No. 8, at 28-29.) The Ninth Circuit has held 26 || that where a defendant “fail[s] to present to the district court any pleading, evidence, or admission that establishes that it is more likely than not that jurisdiction lies . . . itis well within the court’s discretion 27 remand to state court rather than ordering jurisdictional discovery, with the knowledge that later- 28 discovered facts may prompt a second attempt at removal.” Abrego Abrego, 443 F.3d at 691. Thus, the Court declines to grant a stay in order to conduct further discovery.