1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 CHRISTOPHER LEE REMILLARD, 10 Case No. 23-cv-02639-RS Plaintiff, 11 v. ORDER DENYING MOTION TO 12 REMAND THE CHARLES MACHINE WORKS, et 13 al., 14 Defendants.
15 16 I. INTRODUCTION 17 Plaintiff Christopher Lee Remillard filed this putative wage and hour class action in 18 Sonoma County Superior Court, raising nine state law claims for relief. Defendants then removed 19 under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Plaintiff has moved to 20 remand on the grounds that Defendants have not shown CAFA’s $5 million amount-in- 21 controversy requirement is satisfied. This motion is suitable for disposition without oral argument, 22 see Civ. L.R. 7-1(b), and for the reasons discussed below, it is denied. 23 II. LEGAL STANDARD 24 CAFA provides federal court jurisdiction over class actions where three requirements are 25 satisfied: (1) “the class has more than 100 members”; (2) “the parties are minimally diverse”; and 26 (3) “the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co., LLC v. 27 Owens, 574 U.S. 81, 84–85 (2014) (citing 28 U.S.C. § 1332(d)). As with the typical case, the 1 assessment of [the] defendant’s liability.” Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 400 2 (9th Cir. 2010). It is, in other words, “the maximum recovery the plaintiff could reasonably 3 recover.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019). This amount 4 includes “attorneys’ fees awarded under fee-shifting statutes or contracts.” Id. (quoting Fritsch v. 5 Swift Transp. Co. of Ariz., 899 F.3d 785, 794 (9th Cir. 2018)). 6 If the complaint states an amount in controversy that exceeds $5 million, a defendant may 7 rely on this figure to invoke federal jurisdiction under CAFA. See Ibarra v. Manheim Inv., Inc., 8 775 F.3d 1193, 1197–98 (9th Cir. 2015). However, if the complaint “does not assert the amount in 9 controversy, or . . . affirmatively states that the amount in controversy does not exceed $5 10 million,” it is the defendant’s burden “to put forward evidence showing that the amount in 11 controversy exceeds $5 million, . . . and to persuade the court that the estimate of damages in 12 controversy is a reasonable one.” Id. The notice of removal itself need only include “plausible 13 allegations of the jurisdictional elements,” rather than evidentiary submissions. Arias, 936 F.3d at 14 922. When jurisdiction is challenged in a motion to remand, both sides may submit proof and the 15 district court determines whether the defendant has shown the amount in controversy is met by a 16 preponderance of the evidence. Ibarra, 775 F.3d at 1198–99. In doing so, “a removing defendant 17 is permitted to rely on ‘a chain of reasoning that includes assumptions’”; however, these 18 assumptions “cannot be pulled from thin air but need some reasonable ground underlying them.” 19 Arias, 936 F.3d at 925 (quoting Ibarra, 775 F.3d at 1198–99). 20 III. DISCUSSION 21 Plaintiff’s concise motion argues that Defendants have failed to prove, by a preponderance 22 of the evidence, that the amount in controversy here exceeds $5 million. Though the Notice of 23 Removal included calculations (rather than bare assertions of the amount in controversy), Plaintiff 24 contends these were all based on unreasonable assumptions “that are unsupported by the 25 allegations in the Complaint or by the evidence.” Dkt. 14, at 4. The Notice of Removal provided 26 damages estimates for six of the nine claims for relief, as well as for attorney fees; those estimates 27 are summarized in the table below. See Dkt. 1 ¶¶ 22–50. It did not include estimated damages for 1 Claims 5, 7, and 9, nor did it include potential liquidated damages. Defendants calculated these 2 figures based on employee data, as described in a declaration provided by one of the Defendant’s 3 employees. See Dkt. 1-3. For instance, between October 3, 2018, and the date of the Notice of 4 Removal, there were “at least 642 employees in California who worked approximately 88,420 5 workweeks” with an average hourly salary of $20.86. Id. ¶ 22. They also rely on the estimated 6 number of workers whose employment was separated from October 3, 2019, onward, and the 7 number of wage statements issued from October 3, 2021, onward. Id. ¶¶ 23–24. 8 Damages Category Damages Amount Method of Calculation 9 Unpaid Minimum Wages (Claim 1) $1,844,863 One unpaid hour/week 10 Unpaid Overtime Wages (Claim 2) $2,766,295 One unpaid hour/week 11 Unpaid Meal Period Premiums 20% violation rate (one meal $1,844,863 (Claim 3) period violation/week) 12 Unpaid Rest Period Violations 20% violation rate (one rest 13 (Claim 4) $1,844,863 period violation/week) 14 Wage Statements (Claim 6) $1,515,300 All wage statements 15 30-day penalty based on daily Waiting Time Penalties (Claim 8) $1,046,683 wage rate 16 Subtotal $10,863,868 17 Attorney Fees $2,715,967 25% of subtotal 18 TOTAL $13,579,835 19 20 Reviewing the available evidence, Defendants’ calculations are all based on reasonable 21 assumptions. It should be noted at the outset that the Complaint describes what courts in the Ninth 22 Circuit have typically referred to as a “pattern and practice of labor law violations,” meaning that 23 while violations have occurred, they did not necessarily occur “every time the wage and hour 24 violation could arise.” Ibarra, 775 F.3d at 1199; see, e.g., Dobbs v. Wood Grp. PSN, Inc., 201 F. 25 Supp. 3d 1184, 1188–89 (E.D. Cal. 2016). For example, it clearly states that “Defendants engaged 26 in a systematic pattern of wage and hour violations” and that they “systematically engaged in 27 unlawful conduct.” Dkt. 1, Ex. A ¶¶ 3, 101. As such, it would generally be inappropriate for 1 Defendants to rely on an assumed 100% violation rate. Dobbs, 201 F. Supp. 3d at 1189. However, 2 despite Plaintiff’s assertions to the contrary, that is not what Defendants have presented. 3 With respect to unpaid minimum wages and overtime wages, Defendants rely on an 4 assumption that only one hour per week was not compensated at the correct rate1 — “a 5 conservative estimate routinely endorsed by courts in evaluating CAFA’s amount in controversy 6 requirement when plaintiff fails to include specific allegations.” Kastler v. Oh My Green, Inc., No. 7 19-cv-02411-HSG, 2019 WL 5536198, at *4 (N.D. Cal. Oct. 25, 2019) (citing Arreola v. Finish 8 Line, No. 14-cv-03339-LHK, 2014 WL 6982571, at *4 (N.D. Cal. Dec. 9, 2014)). Similarly, the 9 reliance on a 20% violation rate for meal period and rest period violations has been permitted 10 where the complaint, as here, “does not specify the frequency of the alleged missed meal or rest 11 periods.” Chaves v. Pratt (Robert Mann Packaging), LLC, No. 19-cv-00719-NC, 2019 WL 12 1501576, at *3 (collecting cases); see Kastler, 2019 WL 5536198, at *5. Granting that the 13 damages estimates for these four claims are sound, Defendants have already cleared the $5 million 14 threshold (to wit, $8,300,884). 15 Since the estimates for these four claims are credible, the wage statement estimate is 16 credible as well, because any one of the four violations in a given week would render the wage 17 statements incorrect. Defendants’ choice to rely on the maximum waiting time penalties for the 18 229 separated employees was similarly reasonable. See Jauregui v.
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 CHRISTOPHER LEE REMILLARD, 10 Case No. 23-cv-02639-RS Plaintiff, 11 v. ORDER DENYING MOTION TO 12 REMAND THE CHARLES MACHINE WORKS, et 13 al., 14 Defendants.
15 16 I. INTRODUCTION 17 Plaintiff Christopher Lee Remillard filed this putative wage and hour class action in 18 Sonoma County Superior Court, raising nine state law claims for relief. Defendants then removed 19 under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Plaintiff has moved to 20 remand on the grounds that Defendants have not shown CAFA’s $5 million amount-in- 21 controversy requirement is satisfied. This motion is suitable for disposition without oral argument, 22 see Civ. L.R. 7-1(b), and for the reasons discussed below, it is denied. 23 II. LEGAL STANDARD 24 CAFA provides federal court jurisdiction over class actions where three requirements are 25 satisfied: (1) “the class has more than 100 members”; (2) “the parties are minimally diverse”; and 26 (3) “the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co., LLC v. 27 Owens, 574 U.S. 81, 84–85 (2014) (citing 28 U.S.C. § 1332(d)). As with the typical case, the 1 assessment of [the] defendant’s liability.” Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 400 2 (9th Cir. 2010). It is, in other words, “the maximum recovery the plaintiff could reasonably 3 recover.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019). This amount 4 includes “attorneys’ fees awarded under fee-shifting statutes or contracts.” Id. (quoting Fritsch v. 5 Swift Transp. Co. of Ariz., 899 F.3d 785, 794 (9th Cir. 2018)). 6 If the complaint states an amount in controversy that exceeds $5 million, a defendant may 7 rely on this figure to invoke federal jurisdiction under CAFA. See Ibarra v. Manheim Inv., Inc., 8 775 F.3d 1193, 1197–98 (9th Cir. 2015). However, if the complaint “does not assert the amount in 9 controversy, or . . . affirmatively states that the amount in controversy does not exceed $5 10 million,” it is the defendant’s burden “to put forward evidence showing that the amount in 11 controversy exceeds $5 million, . . . and to persuade the court that the estimate of damages in 12 controversy is a reasonable one.” Id. The notice of removal itself need only include “plausible 13 allegations of the jurisdictional elements,” rather than evidentiary submissions. Arias, 936 F.3d at 14 922. When jurisdiction is challenged in a motion to remand, both sides may submit proof and the 15 district court determines whether the defendant has shown the amount in controversy is met by a 16 preponderance of the evidence. Ibarra, 775 F.3d at 1198–99. In doing so, “a removing defendant 17 is permitted to rely on ‘a chain of reasoning that includes assumptions’”; however, these 18 assumptions “cannot be pulled from thin air but need some reasonable ground underlying them.” 19 Arias, 936 F.3d at 925 (quoting Ibarra, 775 F.3d at 1198–99). 20 III. DISCUSSION 21 Plaintiff’s concise motion argues that Defendants have failed to prove, by a preponderance 22 of the evidence, that the amount in controversy here exceeds $5 million. Though the Notice of 23 Removal included calculations (rather than bare assertions of the amount in controversy), Plaintiff 24 contends these were all based on unreasonable assumptions “that are unsupported by the 25 allegations in the Complaint or by the evidence.” Dkt. 14, at 4. The Notice of Removal provided 26 damages estimates for six of the nine claims for relief, as well as for attorney fees; those estimates 27 are summarized in the table below. See Dkt. 1 ¶¶ 22–50. It did not include estimated damages for 1 Claims 5, 7, and 9, nor did it include potential liquidated damages. Defendants calculated these 2 figures based on employee data, as described in a declaration provided by one of the Defendant’s 3 employees. See Dkt. 1-3. For instance, between October 3, 2018, and the date of the Notice of 4 Removal, there were “at least 642 employees in California who worked approximately 88,420 5 workweeks” with an average hourly salary of $20.86. Id. ¶ 22. They also rely on the estimated 6 number of workers whose employment was separated from October 3, 2019, onward, and the 7 number of wage statements issued from October 3, 2021, onward. Id. ¶¶ 23–24. 8 Damages Category Damages Amount Method of Calculation 9 Unpaid Minimum Wages (Claim 1) $1,844,863 One unpaid hour/week 10 Unpaid Overtime Wages (Claim 2) $2,766,295 One unpaid hour/week 11 Unpaid Meal Period Premiums 20% violation rate (one meal $1,844,863 (Claim 3) period violation/week) 12 Unpaid Rest Period Violations 20% violation rate (one rest 13 (Claim 4) $1,844,863 period violation/week) 14 Wage Statements (Claim 6) $1,515,300 All wage statements 15 30-day penalty based on daily Waiting Time Penalties (Claim 8) $1,046,683 wage rate 16 Subtotal $10,863,868 17 Attorney Fees $2,715,967 25% of subtotal 18 TOTAL $13,579,835 19 20 Reviewing the available evidence, Defendants’ calculations are all based on reasonable 21 assumptions. It should be noted at the outset that the Complaint describes what courts in the Ninth 22 Circuit have typically referred to as a “pattern and practice of labor law violations,” meaning that 23 while violations have occurred, they did not necessarily occur “every time the wage and hour 24 violation could arise.” Ibarra, 775 F.3d at 1199; see, e.g., Dobbs v. Wood Grp. PSN, Inc., 201 F. 25 Supp. 3d 1184, 1188–89 (E.D. Cal. 2016). For example, it clearly states that “Defendants engaged 26 in a systematic pattern of wage and hour violations” and that they “systematically engaged in 27 unlawful conduct.” Dkt. 1, Ex. A ¶¶ 3, 101. As such, it would generally be inappropriate for 1 Defendants to rely on an assumed 100% violation rate. Dobbs, 201 F. Supp. 3d at 1189. However, 2 despite Plaintiff’s assertions to the contrary, that is not what Defendants have presented. 3 With respect to unpaid minimum wages and overtime wages, Defendants rely on an 4 assumption that only one hour per week was not compensated at the correct rate1 — “a 5 conservative estimate routinely endorsed by courts in evaluating CAFA’s amount in controversy 6 requirement when plaintiff fails to include specific allegations.” Kastler v. Oh My Green, Inc., No. 7 19-cv-02411-HSG, 2019 WL 5536198, at *4 (N.D. Cal. Oct. 25, 2019) (citing Arreola v. Finish 8 Line, No. 14-cv-03339-LHK, 2014 WL 6982571, at *4 (N.D. Cal. Dec. 9, 2014)). Similarly, the 9 reliance on a 20% violation rate for meal period and rest period violations has been permitted 10 where the complaint, as here, “does not specify the frequency of the alleged missed meal or rest 11 periods.” Chaves v. Pratt (Robert Mann Packaging), LLC, No. 19-cv-00719-NC, 2019 WL 12 1501576, at *3 (collecting cases); see Kastler, 2019 WL 5536198, at *5. Granting that the 13 damages estimates for these four claims are sound, Defendants have already cleared the $5 million 14 threshold (to wit, $8,300,884). 15 Since the estimates for these four claims are credible, the wage statement estimate is 16 credible as well, because any one of the four violations in a given week would render the wage 17 statements incorrect. Defendants’ choice to rely on the maximum waiting time penalties for the 18 229 separated employees was similarly reasonable. See Jauregui v. Roadrunner Transp. Servs., 19 Inc., 28 F.4th 989, 994 (9th Cir. 2022) (“[I]t was not unreasonable for [the defendant] to assume 20 that the vast majority (if not all) of the alleged violations over the four years at issue in this case 21 would have happened more than 30 days before the suit was filed, which would entitle the 22 employees to the 30-day penalty.”). Finally, though Plaintiff is partially correct that the Ninth 23
24 1 In his Reply, Plaintiff argues that Defendants’ overtime calculations rely on an unasserted “off- 25 the-clock” theory, rather than simply that employees were undercompensated. See Dkt. 18, at 4. As this argument was not included in the motion, it need not be considered here. See Nathanson v. 26 Polycom, Inc., No. 13-3476 SC, 2015 WL 12964727, at *1 (N.D. Cal. Apr. 16, 2015) (collecting cases). Even if it were factored in, and the damages estimates reduced, Defendants’ proffered 27 amount in controversy more than meets the $5 million requirement. 1 Circuit has rejected a per se rule that attorney fees be calculated at 25% of the damages total for 2 the purposes of the amount in controversy, see Fritsch, 899 F.3d at 796, it has not held that such a 3 figure is per se unreasonable. Indeed, many courts typically rely on such a figure based “on their 4 own knowledge of customary rates and their experience concerning reasonable and proper fees.” 5 Id. at 795; see Kastler, 2019 WL 5536198 at *7. Here, reducing the attorney fee award to 20%, or 6 15%, or even nothing at all, would not change the calculus, because the damages estimates alone 7 readily surpass $5 million.2 8 Plaintiff’s motion attempts to poke holes in Defendants’ calculations by describing them as 9 speculative and unsubstantiated. However, it is Plaintiff’s own attacks that are cursory and 10 conclusory. The motion is unaccompanied by any declaration or any “alternative violation rate 11 grounded in real evidence.” Ibarra, 775 F.3d at 1199. Plaintiff does not suggest what a more 12 accurate amount in controversy would look like, and it is not the Court’s job to fill in the blanks. 13 See Harris v. KM Indus., Inc., 980 F.3d 694, 701 (9th Cir. 2020). While the Supreme Court has 14 instructed district courts to weigh the parties’ proof once jurisdiction has been challenged, see 15 Dart, 574 U.S. at 88, there is no competing proof to weigh here. In addition, Plaintiff points 16 repeatedly to the Ninth Circuit’s admonition that defendants cannot “pull violation rates out of 17 thin air,” but this refrain cannot sustain the weight Plaintiff places on it. At this early stage, with 18 the scant information provided in the Complaint, it is just as arbitrary to select a 20% meal period 19 violation rate, for example, as it would be to use a 10% rate or a 40% rate. Such arbitrary choices 20 are to some extent unavoidable,3 but that does not mean Defendants’ estimates are inherently 21 unsound. See Jauregui, 28 F.4th at 993. The bottom-line question is whether “the reasoning and 22 underlying assumptions are reasonable,” not whether the numbers are 100% accurate. Id.; see also 23
24 2 For this reason, Plaintiff’s argument that attorney fees are not recoverable for some of the violations alleged here need not be considered. 25 3 In part for this reason, one district court in this Circuit has described the process of estimating an 26 amount in controversy in CAFA cases as “a wasteful and silly, but routine, exercise in mathematical fantasyland.” Toribio v. ITT Aerospace Controls LLC, No. CV 19-5430-GW-JPRx, 27 2019 WL 4254935, at *3 (C.D. Cal. Sept. 5, 2019). 1 Salter v. Quality Carriers, Inc., 974 F.3d 959, 965 (9th Cir. 2020). As concluded above, the 2 answer to that question is yes. 3 IV. CONCLUSION 4 Defendants’ Notice of Removal provides a reasonable basis to conclude that the amount in 5 controversy exceeds CAFA’s $5 million requirement. The motion to remand is therefore denied. 6 7 || ITISSO ORDERED. 8 9 Dated: July 7, 2023 10 , RICHARD SEEBORG Chief United States District Judge 12
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Z 18 19 20 21 22 23 24 25 26 27 28 ORDER DENYING MOTION TO REMAND CASE No. 23-cv-02639-RS