Perez v. Waterco of the Central States, Inc.

• Court: District Court, S.D. California
• Decided: August 11, 2025
• Docket: 3:25-cv-00922
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 NATHAN PEREZ, an individual, on ) Case No.: 3:25-cv-00922-BEN-KSC behalf of himself and all others similarly ) 12 situated, )

13 ) Plaintiff, ) 14 v. )

15 ) WATERCO OF THE CENTRAL ORDER DENYING PLAINTIFF’S ) 16 STATES, INC.; CULLIGAN MOTION FOR REMAND ) INTERNATIONAL COMPANY; 17 ) CULLIGAN BY WATERCO, DBA [Docket No. 9] ) 18 CULLIGAN; and DOES 1 through 50, ) inclusive, 19 ) Defendants. ) 20 ) 21 ) 22 I. INTRODUCTION 23 Plaintiff Nathan Perez, an individual, and on behalf of himself and all others 24 similarly situated (“Plaintiff”), brings this action against Defendants Waterco of the 25 Central States, Inc., Culligan International Company, and Culligan by Waterco DBA 26 Culligan (collectively, “Defendants”) alleging violations of the California Labor Code, 27 28 1 California Business and Professions Code, §§ 17200, et seq., the applicable IWC Wage 2 Order, and related common law principles. Compl. ¶¶ 4 and 12. 3 Before the Court is Plaintiff’s motion to remand (“Motion”). ECF. No. 9. 4 Defendants filed an opposition and Plaintiff filed a reply. The Motion was submitted on 5 the papers without oral argument pursuant to Civil Local Rule 7.1(b) and Rule 78(b) of 6 the Federal Rules of Civil Procedure. 7 After considering the papers submitted, supporting documentation, and applicable 8 law, the Court DENIES Plaintiff’s Motion to Remand. ECF No. 9. 9 II. BACKGROUND 10 On April 17, 2025, Plaintiff filed his complaint (“Complaint”) in the Superior 11 Court of California, County of San Diego. Plaintiff alleges that, at all relevant times, he 12 was employed by Defendant as a Field Technician. Compl. ¶ 2. Plaintiff alleges that 13 Defendants failed to pay all wages and overtime compensation owed to its non-exempt 14 employees; failed to provide required meal periods; failed to provide required rest 15 periods; failed to pay all sick leave wages; failed to furnish timely, proper, and accurate 16 wage statements; failed to reimburse business expenses; and failed to conduct lawful and 17 fair business practices. Compl. at 4. 18 On April 17, 2025, Defendants filed a Notice of Removal to federal court under the 19 Class Action Fairness Act of 2005 (“CAFA”), see 28 U.S.C. § 1332, 1441, 1453. The 20 Notice asserted that the amount in controversy exceeded CAFA’s jurisdictional threshold 21 of five million dollars. Plaintiff filed the instant Motion, arguing Defendants have not 22 met their burden of establishing jurisdiction under CAFA. ECF No. 9-1. 23 III. DISCUSSION 24 LEGAL STANDARD 25 A civil action in state court may be removed to federal district court if the district 26 court had original jurisdiction over the matter at the time the complaint was filed. 28 27 U.S.C. § 1441(a). CAFA gives federal courts “original jurisdiction of any civil action in 28 1 which, inter alia: the amount in controversy exceeds the sum or value of $5,000,000, 2 exclusive of interest and costs;” the aggregate number of proposed plaintiffs is 100 or 3 greater; and any member of the plaintiff class is a citizen of a state different from any 4 defendant. 28 U.S.C. § 1332(d). The burden of establishing removal jurisdiction remains 5 on the defendant and does not shift to the plaintiff. Abrego v. Dow Chem. Co., 443 F.3d 6 676, 685-86 (9th Cir. 2006). 7 The Court must first determine what level of proof Defendants must meet to satisfy 8 their burden. Here, the plaintiff has not specified an amount in controversy, opting for 9 the recovery to be determined at trial. Compl. 1-2 at 12, ¶ 22-27. Therefore, Defendants 10 are permitted to establish federal jurisdiction by demonstrating the amount in controversy 11 exceeds $5 million, through the preponderance of the evidence standard. Moe v. GEICO 12 Indem. Co., 73 F.4th 757, 762 (9th Cir. 2023) (quoting Dart Cherokee Basin Operating 13 Co., LLC v. Owens, 574 U.S. 81, 89 (2014)). “The preponderance standard does not 14 require a district court to perform a detailed mathematical calculation of the amount in 15 controversy before determining whether the defendant has satisfied its burden.” Harris v. 16 KM Indus., Inc., 980 F.3d 694, 701 (9th Cir. 2020). 17 While the defendant may make reasonable assumptions when calculating the amount 18 in controversy, some "[e]vidence establishing the amount is required by 28 U.S.C.S. § 19 1446(c)(2)(B)," when the amount is contested. Moe, 73 F.4th at 762. However, “a 20 removing defendant need not present evidence of what its ultimate liability will be” . . . . 21 “[i]nstead, the defendant ‘is permitted to rely on “a chain of reasoning that includes 22 assumptions”’ to calculate the amount in controversy.” Perez v. Rose Hills Co., 131 23 F.4th 804, 808 (9th Cir. 2025) (citations omitted). The assumptions “can be ‘founded on 24 the allegations of the complaint’ and do not necessarily need to be supported by 25 evidence.” Id. (quoting Arias v. Residence Inn, 936 F.3d 920, 925 (9th Cir. 2019)). The 26 district court's task is simply to determine if the defendant's "reasoning and underlying 27 assumptions are reasonable." Id. (quoting Jauregui v. Roadrunner Transp. Servs., 28 28 F.4th 989, 993 (9th Cir. 2022)). 1 A. Minimal Diversity and Numerosity 2 Under CAFA, original federal jurisdiction exists where there is: (1) minimal 3 diversity; (2) class numerosity of 100 or greater; and (3) an amount in controversy greater 4 than five million dollars. 28 U.S.C. § 1332(d).1 With respect to minimal diversity, 5 Plaintiff resides in the County of Solano, California and is, therefore, a citizen of 6 California. ECF No. 1-1; see 28 U.S.C. § 1332(a)(1) (an individual is a citizen of the 7 state in which he or she is domiciled). Defendant Waterco of the Central States, Inc. 8 (“Waterco”) is incorporated in Delaware, with its principal place of business in 9 Rosemont, Illinois. ECF No. 3. Culligan International Company (“Culligan”) is 10 incorporated in Delaware, with its principal place of business in Rosemont, Illinois. ECF 11 No. 3. Both are citizens of Delaware and Illinois. Therefore, neither defendant is a 12 citizen of California and Plaintiff is a citizen of a state different from each Defendant. As 13 to numerosity, Defendants confirmed that there were over 100 employees that could be 14 included in this class. ECF No. 1-5. The Court concludes that the suit satisfies CAFA’s 15 requirements of minimal diversity and numerosity. 16 B. Amount in Controversy 17 Whether the amount in controversy exceeds the jurisdictional threshold in 18 the instant case is the primary issue. To determine the amount in controversy, 19 [t]he district court may consider whether it is facially apparent from the complaint 20 that the jurisdictional amount is in controversy. If not, the court may consider facts 21 in the removal petition, and may require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal. 22 23 Abrego, 443 F.3d at 690-91 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 24 373, 377 (9th Cir. 1997) (internal quotations omitted)). 25 There are two types of attacks a plaintiff may use to challenge the amount in 26 controversy: a facial attack or a factual attack. Harris, 980 F.3d at 699. “A 'facial' attack 27 1 Minimal diversity and class numerosity are not contested by the Plaintiff, and this Court is satisfied 28 1 accepts the truth of the [defendant's] allegations but asserts that they 'are insufficient on 2 their face to invoke federal jurisdiction.’” Id. (citations omitted). However, when a 3 plaintiff launches a factual attack, the plaintiff, “challenge[s] the truth of the defendant's 4 jurisdictional allegations by making a reasoned argument as to why any assumptions on 5 which they are based are not supported by evidence.” Id. at 700. While the Plaintiff 6 asserts he has mounted a “facial attack”, Plaintiff’s direct challenge of the Defendants’ 7 100% rest break violation rate, is better considered as a factual attack. 8 This Court agrees that "[e]vidence establishing the amount is required . . . when the 9 plaintiff contests, or the court questions, the defendant's allegation,” and “the party 10 seeking removal—and invoking the jurisdiction of the federal courts—bears the burden 11 of demonstrating by a preponderance of the evidence that the amount in controversy 12 exceeds $5 million.” Perez, 131 F.4th at 808. Additionally, “[b]oth sides must have an 13 opportunity to ‘submit proof.’” Moe, 73 F.4th at 762. 14 When responding to a factual attack a defendant may use evidence in the form of 15 reasonable assumptions. Perez, 131 F.4th at 808. This reasonability may vary depending 16 on “which element of the amount-in-controversy calculation is at issue.” Id. For 17 example, “in a wage-and-hour case, the number of employees in the class may be most 18 easily determined by examining the defendant's employment records. It therefore may 19 make sense to expect a defendant to introduce evidence of that number.” Id. 20 Nonetheless, this does not mean the Court requires “‘that [the defendant] prove it actually 21 violated the law at the assumed rate,’ even when . . . [it] maintains that it did not violate 22 the law at all.” Perez, 131 F.4th at 808 (quoting Arias, 936 F.3d at 925) (emphasis 23 added). The assumptions derived from the evidence are not required to be precise and 24 discovery-level calculations, “CAFA defendant's amount in controversy assumptions in 25 support of removal will always be just that: assumptions.” Jauregui, 28 F.4th at 993. 26 The Defendants have submitted the Declaration of Mary Odegaard. Ms. Odegaard 27 has been, and is currently, the Culligan International Company Payroll Manager since 28 2005. Decl. 1-5 at 1 ¶ 5-7. Ms. Odegaard’s Declaration contains her knowledge of: the 1 number of non-exempt employees employed by Defendants from March 14, 2021, 2 through March 28, 2025; the number of pay periods during this time; and the number of 3 shifts in this time period where employees had worked more than 3.5 hours. Decl. 1-5 at 4 4, ¶ 13-16. The Defendants use this data to support their calculations. ECF No. 21 at 2- 5 7. Based on these calculations and the language in the complaint the Defendants 6 assumed an 100% violation rate for particular claims. ECF No. 21 at 3 ¶ 6-10. The 7 Plaintiffs argue that the Defendants should not have assumed, “a 100% violation rate 8 because every terminated employee worked a shift that was eligible for a rest break,” but 9 should have rather assumed that a lower percentage of eligible shifts were worked. ECF 10 No. 21 at 5 ¶ 12. 11 When evaluating the reasonableness of a proposed violation rate courts look at the 12 current complaint, as well as any “alternative violation rate[s] grounded in real evidence, 13 such as an affidavit [from the Plaintiff].” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 14 1199 (9th Cir. 2015). As the master of his complaint, the Plaintiff here uses absolute 15 language for some claims and limiting language for others. In his complaint the Plaintiff 16 uses concrete language stating that he and other class members were required to work 17 through breaks, they did not receive late payment waiting time penalties, they did not 18 receive accurate wage statements, and they failed to be paid all wages and premiums in 19 the required pay period.2 When Plaintiff alleged “Defendants required Plaintiff and the 20 class members to work through their days without breaks,” Defendant assumed an 100% 21 violation rate. Compl. 1 at 2 ¶ 13. When Plaintiff alleged “Plaintiff and the class 22 members often experienced missed, late, short, and interrupted 19 meal periods to keep 23 2 The Plaintiff alleges in his Complaint: 24 (1) “Defendants required Plaintiff and the class members to work through their days without breaks.” 25 Compl. 1-2 at 7 ¶ 13; (2) “Defendants did not pay waiting time penalties for the late payments.” Compl. 1-2 at 8 ¶ 16-17; 26 (3) “Defendants failed to provide accurate itemized wage statements to the class members each pay period as a result of the policies and practices set forth in this notice.” Compl. 1-2 at 8 ¶ 18-19; 27 (4) “Because Defendants failed to pay all wages and premiums in each pay period in which such wages were earned at the lawful rate, Defendants violated Labor Code section 204 and/or 204b (for weekly 28 1 up with the demands of the job,” Defendant instead assumed a 60% violation rate. 2 Compl. 1 at 6 ¶ 18 (emphasis added). Accordingly, the Defendant adjusted the violation 3 rate assumptions of each claim individually based on this language. “[I]f [a plaintiff] . . . 4 believed that some other assumption would have been more reasonable, she was free to 5 propose that rate.” Perez, 131 F.4th at 810. The Plaintiff has not proposed alternative 6 rates with affidavits. Therefore, the Court finds that Defendants’ assumptions here are 7 reasonable, and “founded on the allegations of the complaint.” Id. at 808 (quoting Arias, 8 936 F.3d at 925). As discussed, “[t]he district court's task is simply to determine if the 9 defendant's "reasoning and underlying assumptions are reasonable." Perez, 131 F.4th at 10 808 (quoting Jauregui, 28 F.4th at 993). 11 Further the Court disagrees with the Plaintiff that attorney’s fees should be entirely 12 excluded from the amount in controversy. The defendant retains the burden of “prov[ing] 13 the amount of future attorneys' fees at stake by a preponderance of the evidence.” Fritsch 14 v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 796 (9th Cir. 2018). However, 15 attorney’s fees cannot be excluded altogether, as "the amount in controversy includes all 16 relief claimed at the time of removal to which the plaintiff would be entitled if she 17 prevails." Id. at 793 (quoting Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 418 (9th 18 Cir. 2018)). The “amount in controversy is supposed to be an estimate of 19 the entire potential amount at stake in the litigation.” Jauregui, 28 F.4th at 993 (9th Cir. 20 2022). The Plaintiff requests the judgment to include, “attorneys' fees and costs of suit, 21 including expert fees” in the Complaint. Compl. at 16, ¶ 23. Therefore, the Court finds 22 the Defendants’ inclusion of attorney’s fee in calculating the amount in controversy to be 23 reasonable. 24 Finally, both parties have had an opportunity to “submit evidence after the amount 25 in controversy had been contested.” Harris, 980 F.3d at 702 (quoting Ibarra v. Manheim 26 Invs., Inc., 775 F.3d 1193, 1199 (9th Cir. 2015)). Defendants’ submitted evidence, 27 Plaintiff declined. The Court finds that it has CAFA jurisdiction over the case, based on 28 1 || Defendants’ evidence and reasonable assumptions. Therefore, the motion to remand is 2 || denied. > || CONCLUSION 4 For the above reasons, the Court ORDERS as follows: > 1. Plaintiff's Motion to Remand, ECF No. 9, is DENIED. 6 IT IS SO ORDERED. . DATED: August 11, 2025 / Wt 8 TROGER T. BENITE 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.