Michael Chavez v. Time Warner Cable

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 22, 2018
• Docket: 16-56067
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 22 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MICHAEL CHAVEZ, No. 16-56067

Plaintiff-Appellant, D.C. No. 2:12-cv-05291-RGK-RZ v.

TIME WARNER CABLE, LLC; TIME MEMORANDUM* WARNER ENTERTAINMENT COMPANY, LP; TIME WARNER CABLE SHARED SERVICES; DOES, 1 to 100, inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Submitted March 7, 2018** Pasadena, California

Before: GOULD and MURGUIA, Circuit Judges, and CHRISTENSEN,*** Chief District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Dana L. Christensen, Chief United States District Judge for the District of Montana, sitting by designation. Plaintiff-Appellant Michael Chavez appeals the district court’s grant of

summary judgment to Time Warner Cable, LLC, Time Warner Entertainment

Company, LP, and Time Warner Cable Shared Service (collectively “Defendants”)

in this dispute over alleged violations of California’s Labor Code. Chavez’s

arguments fall in two categories. First, he argues that the district court improperly

exercised diversity jurisdiction in this case. Second, he argues the district court

erred in granting Defendants’ summary judgment motion on the substance of his

overtime, late wage payments, and inaccurate wage statements claims. We have

jurisdiction under 28 U.S.C. § 1291 and we affirm.

1. This court reviews the existence of subject matter jurisdiction de

novo. See Campbell v. Aerospace Corp., 123 F.3d 1308, 1311 (9th Cir. 1997) (per

curiam). Chavez’s argument that the district court could not exercise diversity

jurisdiction in this case fails. First, California’s presence as a real party in interest

to Chavez’s Private Attorney General Act of 2004 (“PAGA”) claim does not

destroy the diversity between the parties. See Urbino v. Orkin Servs. of Cal., Inc.,

726 F.3d 1118, 1123 (9th Cir. 2013) (“The state, as the real party in interest, is not

a ‘citizen’ for diversity purposes.”) (citation omitted).

Second, the record does not compel holding that the district court clearly

erred in finding that Chavez’s asserted damages of $53,250, in addition to the

attorney’s fees Chavez sought, which were permitted by statute and Defendants

2 estimated to be $30,000, exceeded the $75,000 amount in controversy requirement.

28 U.S.C. § 1332(a); see Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir.

2004) (noting that it is defendant’s burden to establish that the amount in

controversy has been met); Tucson Airport Auth. v. General Dynamics Corp., 136

F.3d 641, 644 (9th Cir. 1998) (stating that this court reviews the district court’s

findings of fact relevant to subject matter jurisdiction for clear error); Galt G/S v.

JSS Scandinavia, 142 F.3d 1150, 1155 (9th Cir. 1998) (holding that attorney’s fees

can be counted toward the amount in controversy requirement when a statute

allows such fees).

Finally, even though Defendants removed the case just over a year after

Chavez commenced this lawsuit in state court, Defendants timely removed the case

to federal court. 28 U.S.C. § 1446(c)(1). Chavez’s argument that an interrogatory

response he provided Defendants put Defendants on notice that they had to remove

the case to federal court fails because, on its face, the interrogatory response did

not clearly state that the amount in controversy exceeded $75,000. 28 U.S.C.

§ 1446(b)(3); see Harris v. Bankers Life and Cas. Co., 425 F.3d 689, 694 (9th Cir.

2005). Further, the district court did not clearly err in determining that Chavez’s

counsel acted in bad faith by waiting over a year to file the statutorily required

notice with California’s Labor and Workforce Development Agency (“LWDA”),

which is a prerequisite to filing suit under PAGA. 28 U.S.C. § 1446(c)(1); see also

3 Tedford v. Warner-Lambert, 327 F.3d 423 (5th Cir. 2003); Tucson Airport Auth.,

136 F.3d at 644 (stating that this court reviews the district court’s findings of fact

relevant to subject matter jurisdiction for clear error). Therefore, the district court

did not err in making a finding of bad faith and tolling the time for Defendants to

remove the case to federal district court. 28 U.S.C. § 1446(c)(1).

2. Chavez’s arguments related to the district court’s grant of Defendants’

motion for summary judgment also fail. The record supports the finding that

Chavez was an “outside salesperson” because he spent more than fifty percent of

his time on sales activities, which means he was exempt from California’s

overtime laws. See Ramirez v. Yosemite Water Co., Inc., 20 Cal. 4th 785, 789

(1999) (“Labor Code section 1171 expressly excludes from the overtime laws

employees who are ‘outside salespersons,’ and the California Industrial Welfare

Commission (IWC), the agency charged with implementing section 1171, defined

the term ‘outside salesperson’ in Wage Order No. 7-80, as someone who ‘regularly

works more than half the working time’ engaged in sales activities outside the

workplace.”). His overtime claim therefore fails.

As to Chavez’s claim that Defendants violated Cal. Lab. Code § 204 by

paying his non-salary compensation on a monthly basis, this argument fails

because the record reflects that Chavez’s non-salary compensation based on his

performance was determined on a monthly basis pursuant to Defendants’ Multiple

4 Dwelling Unit (“MDU”) Concierge Sales Representative Compensation Plan. Such

agreements are permitted under California law and do not offend § 204. See

Peabody v. Time Warner Cable, Inc., 328 P.3d 1028, 1032 (Cal. 2014); see also

Koehl v. Verio, Inc., 142 Cal.App.4th 1313, 1335 (2006).

Lastly, Chavez’s inaccurate wage statement claim under Cal. Lab. Code

§ 226(a) also fails because § 226(a) does not apply to him as an “outside

salesperson.” Cal. Lab. Code § 226(j)(2)(B); see Peabody v. Time Warner Cable,

Inc. 689 F.3d 1134, 1136 (9th Cir. 2012).

AFFIRMED.