Mann v. Altec Industries, Inc.

• Court: District Court, E.D. California
• Decided: April 16, 2020
• Docket: 2:20-cv-00273
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 ROBERT EARL MANN, on behalf of No. 2-20-cv-00273 WBS DB himself and all other similarly 13 situated, 14 Plaintiff, ORDER RE: MOTION TO REMAND 15 v. 16 ALTEC INDUSTRIES, INC., an Alabama Corporation, 17 Defendant. 18

19 ----oo0oo---- 20 Plaintiff Robert Mann filed this class action against 21 defendant Altec Industries, Inc. (“Altec”) in Solano County 22 Superior Court alleging various violations of the California 23 Labor Code. (Compl. (Docket No. 1, Ex. A).) Defendant removed 24 the action to this court pursuant to the Class Action Fairness 25 Act (“CAFA”), 28 U.S.C. § 1332(d). (Notice of Removal (Docket 26 No. 1).) Before the court now is plaintiff’s motion to remand 27 for failure to meet the required amount in controversy. (Mot. to 28 1 Remand (“Mot.”) (Docket No. 5).) 2 I. Background 3 Plaintiff worked for defendant as a non-exempt employee 4 in its manufacturing plant beginning in December 2018. (Compl. ¶ 5 10.) Plaintiff alleges eight causes of action in connection with 6 his complaint: (1) failure to pay overtime wages (California 7 Labor Code §§ 204, 510, 558, 1194, 1198); (2) minimum wage 8 violations (California Labor Code §§ 1182.12, 1194, 1194.2, 9 1197); (3) failure to provide meal periods (California Labor Code 10 §§ 226.7, 512); (4) failure to provide rest periods (California 11 Labor Code §§ 226.7, 516); (5) failure to indemnify all necessary 12 business expenditures (California Labor Code § 2802); (6) failure 13 to provide accurate itemized wage statements (California Labor 14 Code § 226); (7) failure to provide wages due at separation of 15 employment (California Labor Code §§ 201-203); and (8) violation 16 of California Business & Professions Code § 17200, et seq. 17 Defendant filed a notice of removal based on CAFA on February 5, 18 2020. (Docket No. 1.) 19 II. Discussion 20 “Congress designed the terms of CAFA specifically to 21 permit a defendant to remove certain class or mass actions into 22 federal court.” Arias v. Residence Inn by Marriott, 936 F.3d 23 920, 924 (9th Cir. 2019) (internal citations omitted). It was 24 intended to be interpreted “expansively.” Id. However, certain 25 threshold requirements, such as the amount in controversy, must 26 still be met. “CAFA provides the federal district courts with 27 ‘original jurisdiction’ to hear a ‘class action’ if the class has 28 more than 100 members, the parties are minimally diverse, and the 1 ‘matter in controversy exceeds the sum or value of $5,000,000.’” 2 Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013) 3 (citing 28 U.S.C. § 1332(d)(2), (d)(5)(B)). 4 Here, plaintiff does not contest the minimal diversity 5 and numerosity requirements; plaintiff solely argues defendant 6 has failed to show by a preponderance of the evidence that the 7 total amount in controversy exceeds $5,000,000. (Mot. at 1.) To 8 determine the amount in controversy, the court must first look to 9 the complaint. Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 10 1197 (9th Cir. 2015). Here, the complaint does not allege a 11 specific amount in damages. (See Compl.) In the absence of a 12 precise number, defendant estimated that the amount in 13 controversy is $5,160,737.50. (Notice of Removal ¶ 56.) 14 Defendant now “has the burden to put forward evidence showing 15 that the amount in controversy exceeds $5 million . . . and to 16 persuade the court that the estimate of damages in controversy is 17 a reasonable one.” Ibarra, 775 F.3d at 1197. This can include 18 affidavits, declarations, or “other summary-judgment-type 19 evidence relevant to the amount in controversy at the time of 20 removal.” Id. 21 Defendant submitted a three-page declaration from 22 Debbie Muhl, Altec’s Human Resources Manager, in support of its 23 motion to remand. (See Decl. of Debbie Muhl (“Muhl Decl.”) 24 (Docket No. 1-5).) Muhl declared that, based on Altec’s payroll 25 and timekeeping records from December 26, 2015 through January 26 21, 2020, there were 397 current and former hourly, non-exempt 27 associates in California, who worked at least 49,720 weeks 28 collectively. (Id. ¶¶ 3-6.) Non-exempt employees were paid on a 1 weekly basis and issued wage statements each week. (Id. ¶ 8; see 2 also Supp. Decl. of Debbie Muhl (“Muhl Supp. Decl.”) ¶ 6 (Docket 3 No. 6-1).) The lowest hourly rate for these employees during the 4 period was $15.50. (Muhl Decl. ¶ 7.) 5 Defendant relied on these numbers to estimate that the 6 amount in controversy was at least $5,160,737.50. (Notice of 7 Removal ¶ 56.) Specifically, defendant argues that plaintiff 8 could claim $1,155,990 in overtime wages, $497,200 in unpaid 9 wages and $424,440 in accompanying liquidated damages, $770,660 10 in unpaid meal breaks and another $770,660 in unpaid rest 11 periods, and $509,640 in waiting time penalties, for a total 12 estimated recovery of $4,128,590. (Id. ¶¶ 28, 32, 36, 41, 45, 13 51.) This figure, combined with an estimated 25 percent of the 14 total recovery in attorney’s fees ($1,032,147.50), places the 15 amount in controversy over $5 million. (Id. ¶ 55.) Plaintiff 16 argues these estimates are exaggerated and that defendant relied 17 upon unreasonable assumptions to arrive at this total. (See 18 generally Mot.) 19 When a party relies on a chain of reasoning that 20 includes assumptions, those assumptions must be reasonable. 21 Arias, 936 F.3d at 925 (citing Ibarra, 775 F.3d at 1199). While 22 “[a]n assumption may be reasonable if it is founded on the 23 allegations of the complaint,” the Ninth Circuit has suggested 24 “assum[ing] a violation rate of 100% may or may not [be] valid.” 25 Id. 26 Defendant purportedly provided a “conservative 27 analysis” in its overtime wage analysis by assuming one one-hour 28 violation per employee (397) per week (49,720) at time and a half 1 of the minimum hourly rate ($23.25) to arrive at $1,155,990. 2 (Notice of Removal ¶ 28.) However, this calculation ignores the 3 allegations in plaintiff’s complaint. The complaint does not 4 allege that the non-exempt employees were not paid at all for the 5 overtime hours worked. Rather, it alleges that “non-exempt 6 employees were not properly paid at the correct overtime rate for 7 all hours worked in excess of eight hours per shift” because 8 defendant “failed to include . . . non-discretionary Production 9 and Attendance bonuses.” (Compl. ¶ 14 (emphasis added).) 10 Defendant’s calculation seems to assume that all 397 putative 11 class members were not paid any overtime wages at all, rather 12 than using plaintiff’s theory that the overtime pay did not 13 properly take bonuses into consideration. As the employer, 14 defendant is presumed to know how overtime wages were calculated 15 and the actual rate paid, and could have used those figures in 16 its estimation. Accordingly, defendant’s $1,155,990 estimate is 17 ill-founded and overstated. 18 Next, defendant’s calculation for unpaid minimum wages 19 and, by extension, liquidated damages, also sweeps too broadly. 20 Defendant assumes each putative class member (397) is entitled to 21 one hour of unpaid minimum wages per work week (49,720) for time 22 spent donning and doffing protective gear, without offering any 23 evidence to support its contention that each action took six 24 minutes per day. (See Notice of Removal ¶ 32.) Accordingly, 25 defendant has failed to offer proper evidence to support $921,640 26 of its estimated amount in controversy. (See id. ¶¶ 32, 36.) 27 Defendant also ignores the relevant class for purposes 28 of calculating meal break violations. In his complaint, 1 plaintiff narrowed his meal period violations to those who did 2 not receive a meal period “before the end of the fifth hour of 3 work and second meal period before the end of the tenth hour of 4 work.” (Compl. ¶ 17.) There is no allegation, or even a 5 suggestion, in the complaint that all of the non-exempt employees 6 fell into that category every week. Again, as the employer, 7 defendant could be expected to know, or at least be able to 8 approximate, how many of the employees worked through a ten hour 9 shift without the requisite meal break. Rather than provide 10 relevant information to determine the size of the class, 11 defendant calculated one violation for all 397 non-exempt 12 employees for the 49,720 weeks worked, resulting in an estimated 13 recovery of $770,660 for meal break violations. (Notice of 14 Removal ¶¶ 41, 45.) This overbroad definition of the relevant 15 class, and consequently the damages recoverable, supports 16 remanding the action. See Miller v. A-1 Express Delivery Servs., 17 Inc., No. 16-cv-06251-WHO, 2017 WL 462406, at *1 (N.D. Cal. Feb. 18 3, 2017). 19 Finally, when estimating waiting time penalties, 20 defendant assumes that each of the 137 separated employees 21 suffered a wage violation for the entire 30-day period. (Notice 22 of Removal ¶ 51.) As stated above, the Ninth Circuit has 23 consistently found it is unreasonable to rely on maximum 24 assumptions when defendant’s evidence lacks specificity. See, 25 e.g., Arias, 936 F.3d at 925; LaCross v. Knight Transportation, 26 Inc., 775 F.3d 1200, 1203 (9th Cir. 2015) (finding use of the 27 maximum assumption reasonable after defendant included all 28 available evidence in its amount in controversy computation). UV Ve POV DDIM SO POM Vee AY

1 Accordingly, defendant’s estimated damages of $509,640 are 2 | unsupported by the evidence provided. 3 While defendant need not “provide evidence proving the 4 assumptions correct,” the assumed rate of violations must have 5 “some reasonable ground underlying them.” Arias, 936 F.3d at 6 925-27 (quoting Ibarra, 775 F.3d at 1199) (internal quotations 7 omitted). Defendant’s sweeping assumptions fall short of the 8 | Ninth Circuit’s guidance for reasonability. See id. at 925-27. 9 In sum, defendant’s total amount in controversy of $4,128,590 is 10 | unsupported, which in turn alters the attorney’s fee calculation 11 responsible for carrying defendant’s amount in controversy over 12 the threshold requirement. (See Notice of Removal @ 55.) 13 | Accordingly, defendant has failed to produce appropriate evidence 14 to support its amount in controversy calculation, and it cannot 15 avail itself of this court’s jurisdiction. 16 IT IS THEREFORE ORDERED that plaintiff’s motion to 17 remand (Docket No. 5) be, and the same thereby is, GRANTED; 18 AND IT IS FURTHER ORDERED that this action be, and the 19 same hereby is, REMANDED to the Superior Court of the State of 20 California, in and for the County of Solano. 21 | Dated: April 15, 2020 bette 2d. □□ 22 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28