Johnson v. Bamia 2, LLC

• Court: District Court, E.D. California
• Decided: July 22, 2022
• Docket: 2:22-cv-00548
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 Paris Johnson, No. 2:22-cv-00548-KJM-AC 12 Plaintiff, ORDER 13 v. 14 Bamia 2 LLC, et al., 1S Defendants. 16 17 Plaintiff Paris Johnson brought this putative wage-and-hour class action against her 18 | employer, defendants Reef Global, Inc., Reef Technologies, Inc., and Bamia 2 LLC, in 19 | Sacramento County Superior Court. Defendants timely removed to this court, invoking the 20 | court’s jurisdiction under the Class Action Fairness Act (CAFA). Plaintiff has moved to remand, 21 | arguing defendants failed to establish the amount in controversy exceeds $5 million. As 22 | explained below, the court finds defendants have established it is more likely than not the amount 23 | in controversy exceeds $5 million; the court therefore denies plaintiffs motion. 24 | I. BACKGROUND 25 Plaintiff worked as a kitchen line cook for defendants. Compl. § 16, Not. Removal Ex. A, 26 | ECF No. 1-3. Plaintiff sued defendants in February 2022, alleging unfair business practices and 27 | seven violations of the California Labor Code: (1) failure to pay minimum wage in violation of 28 | section 1197 and 1182.12; (2) failure to pay overtime wages in violation of sections 510 and

1 1198; (3) failure to provide meal period premiums in violation of sections 226.7 and 512(a); 2 (4) failure to provide rest break premiums in violation of section 226.7; (5) failure to provide 3 complete itemized wage statements in violation of section 226(a); (6) failure to timely pay wages 4 upon termination in violation of sections 201 to 203; and (7) failure to reimburse business 5 expenses in violation of sections 2800 and 2802. See generally Compl. Plaintiff seeks to 6 represent a class comprising current and former non-exempt California employees who worked 7 for defendants during the four years preceding the filing of the complaint through the date of the 8 trial. Id. ¶ 40. 9 As noted, defendants timely removed to this court, invoking this court’s jurisdiction under 10 CAFA. See generally Not. Removal, ECF No. 1. Plaintiff moved to remand, arguing this court 11 lacks subject matter jurisdiction because defendants have not shown that more than $5 million is 12 in controversy. See generally Mot. Remand, ECF No. 7. The court received full briefing and 13 submitted the matter without oral argument. See Opp’n, ECF No. 8; Reply, ECF No. 9; Min. 14 Order, ECF No. 10. 15 II. DISCUSSION 16 Under the federal removal statute, “any civil action brought in a State court of which the 17 district courts of the United States have original jurisdiction may be removed by the defendant . . . 18 to the district court of the United States for the district . . . where such action is pending.” 19 28 U.S.C. § 1441(a). Under CAFA, the federal courts have original jurisdiction over class actions 20 in which the parties are minimally diverse, the proposed class has at least one hundred members, 21 and the aggregated amount in controversy exceeds $5 million dollars. See 28 U.S.C. 22 § 1332(d)(2), (5). The parties do not dispute that they are diverse or that the proposed class has at 23 least one hundred members; the only issue before the court is whether the amount in controversy 24 exceeds $5 million. 25 Because plaintiff’s complaint does not quantify damages, the defendants must show by a 26 preponderance of the evidence that the amount in controversy exceeds the jurisdictional 27 threshold. Canela v. Costco Wholesale Corp., 971 F.3d 845, 849 (9th Cir. 2020); Sanchez v. 28 Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). In making this showing, a 1 removing defendant “must be able to rely ‘on a chain of reasoning that includes assumptions.’” 2 Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 993 (9th Cir. 2022) (quoting LaCross 3 v. Knight Transp. Inc., 775 F.3d 1200, 1201 (9th Cir. 2015)); see also id. (“[A] CAFA defendant's 4 amount in controversy assumptions in support of removal will always be just that: 5 assumptions.”). These assumptions must reflect more than “mere speculation and conjecture,” 6 Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015), and they “need some 7 reasonable ground underlying them,” see id. at 1199, but they “need not be proven,” Arias v. 8 Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (overturning remand order where 9 district court held lack of evidence precluded use of assumed violation rates). “An assumption 10 may be reasonable if it is founded on the allegations of the complaint.” Arias, 936 F.3d at 925. 11 The core dispute here is whether defendants have sufficiently supported the assumptions 12 undergirding their amount-in-controversy calculation. Defendants calculate the amount in 13 controversy in three steps. First, defendant Bamia 2’s Senior Human Resources Manager – West, 14 Amy Johnson, attests to the size of the putative class and each class member’s actual hourly 15 wage,1 among other relevant metrics. See generally Johnson Decl., ECF No. 1-1. To generate 16 these numbers, Ms. Johnson reviewed Bamia 2’s records. See id. ¶¶ 2, 5–6. Second, defendants 17 assume a violation rate of at least two violations per week for both the meal and rest break claims, 18 totaling four violations per week. Id. ¶¶ 6–7. Defendants argue plaintiff’s allegations could 19 support a violation rate of up to 100 percent. Not. Removal ¶ 13 (citing cases). Third, combining 20 Ms. Johnson’s data and defendants’ inferred violation rates, defendants calculate the amount in 21 controversy for each of plaintiff’s claims. Johnson Decl. ¶¶ 6–9; see also Johnson Suppl. Decl. 22 ¶¶ 2–4, ECF No 8-1. Plaintiff does not offer alternative calculations, so the court summarizes 23 defendants’ calculations below: 24 ///// 1 Throughout her motion, plaintiff objects to defendants’ use of each class member’s individual hourly rate of pay, suggesting courts require an “average” hourly rate for the entire class for CAFA removal calculations and estimates. See generally Mot. Remand. This court sees no reason why a class-wide average hourly rate of pay is necessary where defendants have used each class member’s actual wage statement data, which are inherently more precise. 1 Claim Plaintiff’s Defendants’ Lowest Calculation Defendants’ Highest Calculation Calculation (Notice of Removal) (Notice of Removal) Meal Break NA $948,747.85 $1,423,121.78 Violations [Assuming two violations per [Assuming three violations per week and 25,130 workweeks week and 25,130 workweeks for a for a class of 860] class of 860] Rest Break NA $948,747.85 $1,423,121.78 Violations [Assuming two violations per [Assuming three violations per week and 25,130 workweeks week and 25,130 workweeks for a for a class of 860] class of 860] Wage NA $937,550.00 $937,550.00 Statement [9,730 pay periods for a class of [9,730 pay periods for a class of Penalties 709] 709] Waiting Time NA $2,202,120.00 $2,202,120.00 Penalties [Class of 474] [Class of 474] Total Incomplete $5,037,165.70 $5,985,913.56 2 Because plaintiff challenges defendants’ estimates, defendants bear the burden to establish 3 jurisdiction by a preponderance of the evidence. Ibarra, 775 F.3d at 1197 (emphasizing “[party] 4 seeking removal bears the burden to show by a preponderance of the evidence that the amount in 5 controversy exceeds $5 million”) (citation omitted). Accordingly, defendants must present more 6 than a plausible case to show it satisfies the jurisdictional prerequisite, and the absence of 7 plaintiff’s rebuttal evidence does not change that requirement. In response to plaintiff’s 8 challenge, defendants submitted a supplemental declaration from Ms. Johnson, which included 9 additional clarification about the numbers defendants used in their calculations, see generally 10 Johnson Suppl. Decl., and reaffirmed the total amount placed in controversy by plaintiff’s causes 11 of action is at least $5,037,165.70, see id.; Opp’n at 20. 12 The question then is whether defendants have shown by a preponderance of the evidence 13 that the amount in controversy is indeed $5 million or more. In determining the appropriate 14 calculation, the court is guided by the Ninth Circuit’s recent decision in Jauregui, in which the 15 court explained how to assess assumptions underlying amount-in-controversy calculations: 16 Where a defendant’s assumption is unreasonable on its face without 17 comparison to a better alternative, a district court may be justified in 18 simply rejecting that assumption and concluding that the defendant 19 failed to meet its burden. But often . . . the reason a defendant’s 20 assumption is rejected is because a different, better assumption is 21 identified. Where that’s the case, the district court should consider 22 the claim under the better assumption—not just zero-out the claim. 1 28 F.4th at 996. Following this directive, the court eliminates assumptions that are self-evidently 2 unreasonable or baseless. Id.; see also Ibarra, 775 F.3d at 1199 (“[A]ssumptions cannot be 3 pulled from thin air but need some reasonable ground underlying them.”). Where alternative 4 assumptions have been offered, the court adopts the best reasonable alternative. Jauregui, 5 28 F.4th at 996. The court sets forth its application of this approach below, by claim.2 6 A. Meal and Rest Break Violations 7 Defendants initially determined that missed meal and rest breaks put a total of 8 $1,897,495.70 in controversy. See Not. Removal ¶ 12. Defendants reached this figure by 9 assuming a violation rate of 40 percent, meaning class members missed an average of two 10 required meal breaks and two required rest breaks per workweek. See id. In support of this 11 assumption, defendants point to language in plaintiff’s complaint alleging putative class members 12 were “regularly denied” legally compliant breaks and were “often” or “routinely” unable to take 13 compliant breaks due to defendants’ “uniform policies/practices.” Opp’n at 13–14, 16 (citing 14 Compl. ¶¶ 26, 28, 29, 31). Defendants cite case law supporting 40 to 60 percent violation rate 15 estimates where a plaintiff makes broad allegations of violations. Id. (citing cases). Plaintiff first 16 argues defendants offer no reliable data regarding the frequency of missed meal and rest periods, 17 and that an assumption of four meal and rest violations per workweek is unreasonable. Mot. 18 Remand at 9–11. Plaintiff does not offer an alternative assumption. See generally id. Plaintiff 19 further argues defendants failed to limit their meal break calculations to only those non-exempt 20 employees who were entitled to first and second meal periods, instead assuming all purported 860 21 non-exempt employees were entitled to the breaks. Id. at 10–11. 22 As an initial matter, the court finds defendants’ original assumption—that class members 23 missed two meal breaks and two rest breaks per week—is not facially unreasonable. Throughout 24 her complaint, plaintiff references defendants alleged “policies,” “practices,” and “policy” and/or 2 Plaintiff argues Jauregui is inapplicable because defendants have “provided no evidence or clearly inadequate evidence supporting its valuation for a claim . . . .” Reply at 7 (quoting Jauregui, 28 F.4th at 996 (emphasis in original)). However, defendants here have provided the same summary judgment style evidence defendants offered in Jauregui: a declaration of a senior employee who reviewed the company’s payroll data and calculated the potential value of the various claims. See generally Not. of Removal; see also Jauregui, 28 F.4th at 991. 1 “practice” of denying compliant breaks, among other violations. See generally Compl. Courts 2 routinely approve higher violation rates based on allegations of “policies and practices” denying 3 meal and rest breaks to class members. See, e.g., Bryant v. NCR Corp., 284 F. Supp. 3d 1147, 4 1151 (S.D. Cal. 2018) (reasonable to assume putative class members missed three meal periods 5 and three rest periods per workweek where complaint “offered no guidance as to the frequency of 6 the alleged violations, only that Defendant had ‘a policy and practice’ of meal and rest period 7 violations”); Sanchez v. Abbott Labs., No. 20-cv-01436, 2021 WL 2679057, at *4–5 (E.D. Cal. 8 June 30, 2021) (reasonable to assume putative class members missed three meal periods and two 9 rest periods per week based on complaint’s allegation of “pattern and practice” of denying such 10 breaks); Oda v. Gucci Am., Inc., No. 14-cv-07469, 2015 WL 93335, at *4–5 (C.D. Cal. Jan. 7, 11 2015) (reasonable to assume putative class members missed 2.5 meal periods and 2.5 rest periods 12 per week based on complaint’s allegations that class members “sometimes” did not receive all 13 meal periods and defendant-employer “maintained a policy or practice” of not compensating 14 employees for missed breaks). Similarly, because plaintiff alleges non-exempt employees 15 “regularly worked various shifts, many of which were in excess of 8.0 hours in a workday,” 16 Compl. ¶ 20, defendants could reasonably assume all putative class members were regularly 17 entitled to at least one meal break per shift. 18 Because plaintiff does not propose a better or more reasonable alternative, and defendant’s 19 approach is reasonable, the court accepts defendant’s original assumption that all 860 putative 20 class members missed two meal breaks and two rest breaks per week. Using this estimate, 21 defendants calculate that plaintiff’s claims for missed meal and rest breaks put $1,897,495.70 in 22 controversy. See Opp’n at 14. Defendants arrive at this figure by multiplying three numbers 23 together: 25,310 workweeks completed by class members, four meal and rest violations per week, 24 and the actual hourly rate of each of those 860 class members. See Johnson Decl. ¶¶ 5–6; see 25 also Cal. Lab. Code § 226.7(c) (employer shall pay one hour’s pay for each missed meal period 26 or rest break). The court adopts this estimate. 27 ///// 1 B. Waiting Time and Wage Statement Penalties 2 In connection with plaintiff’s claims for waiting time and wage statement penalties, 3 defendants assume no terminated employee was paid in full by the thirty-first day after 4 termination, see Not. Removal ¶ 12; Johnson Suppl. Decl. ¶ 4, and all pay stubs issued during the 5 limitations period contained at least one error, see Not. Removal ¶ 12; Johnson Suppl. Decl. ¶ 3. 6 Plaintiff does not propose an alternative violation rate for either claim. The court’s analysis is 7 thus limited to whether defendants’ proposed assumptions are reasonable. 8 Defendants’ proposed assumptions are reasonable. Both waiting time and wage statement 9 penalties can be derivative of other Labor Code violations. See Cabrera, 2021 WL 5937585, at 10 *10; Nunes v. Home Depot U.S.A., Inc., No. 19-cv-01207, 2019 WL 4316903, at *3 (E.D. Cal. 11 Sept. 12, 2019). The assumed frequency with which class members performed unpaid work and 12 were denied breaks therefore logically supports defendants’ assumptions here. See, e.g., Cabrera, 13 2021 WL 5937585, at *10 (because court assumed “one overtime violation, one minimum wage 14 violation, one meal break violation and one rest period violation per week for each putative class 15 member[, i]t follows that each of the bi-weekly wage statements Defendants issued to putative 16 class members during the period in question contained an error of some sort”); Nunes, 2019 WL 17 4316903, at *3 (“Given the allegations, it is reasonable to assume the terminated class members 18 suffered at least one violation (e.g., one missed meal or rest break) and were therefore not paid all 19 wages owed upon termination.”); see also Jauregui, 28 F.4th at 994 (rejecting district court’s 20 unwillingness to assume “vast majority (if not all)” terminated class members were entitled to 30 21 days of waiting time penalties in an analogous case). Because these two assumptions are 22 reasonable and plaintiff offers no alternatives for comparison, the court adopts both. 23 In reliance on these assumptions, defendants generate their estimate for waiting time 24 penalties—$2,202,120.00—by multiplying together three numbers: the number of class members 25 terminated during the limitations period (474), 30 days of penalties for each terminated class 26 member, and the average daily pay rate of each employee, which is based on each eligible 27 employee’s regular hourly pay rate. See Not. Removal ¶ 12; Johnson Suppl. Decl. ¶ 4; see also 28 Cal. Lab. Code § 203(a) (authorizing recovery of up to thirty days’ pay for failure to timely pay 1 | final wages). Defendants value plaintiffs claim for wage statement penalties at $937,550.00 by 2 | applying the initial penalty amount ($50) and subsequent penalty amount ($100) to each eligible 3 | putative class member’s number of pay period wage statements (9,730), up to an aggregate 4 | penalty of $4,000. See Opp’n at 17; Johnson Suppl. Decl. 3 (noting 709 employees with at least 5 | one pay period during applicable time period); see a/so Cal. Lab. Code 226(e)(1) (entitling 6 | employees to recover $50 for first pay period in which they receive a noncompliant wage 7 | statement and $100 for each subsequent pay period in which they receive a noncompliant wage 8 | statement). The court adopts both figures. 9 The following chart reviews and totals the minimum amount in controversy the court 10 | adopts, by claim, as discussed above: 13

13 Without needing to reach plaintiff's remaining claims for attorneys’ fees, unreimbursed 14 | business expenses, and failure to timely pay minimum wage or overtime, the court finds 15 | defendants have shown it is more likely than not that more than $5 million dollars is in 16 | controversy here. 17 | HI. CONCLUSION 18 Plaintiff's motion to remand 1s denied. 19 This order resolves ECF No. 7. 20 IT IS SO ORDERED. 21 | DATED: July 22, 2022. [ (] 22 l ti / { q_/ CHIEF NT] ED STATES DISTRICT JUDGE