1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MATTHEW SHACHNO, an individual, Case No.: 22-CV-1215 TWR (JLB) on behalf of himself and all persons 12 similarly situated, ORDER DENYING PLAINTIFF’S 13 MOTION TO REMAND CASE TO Plaintiff, STATE COURT 14 v. 15 (ECF No. 10) MARRIOTT INTERNATIONAL, INC., a 16 corporation; and DOES 1 through 50, inclusive, 17 Defendants. 18 19 20 Presently before the Court is Plaintiff Matthew Shachno’s Motion to Remand Case 21 to State Court (ECF No. 10, “Mot.”). In addition, the Court has received and reviewed 22 Defendant’s Opposition to the Motion to Remand (ECF No. 22, “Opp’n”) and Plaintiff’s 23 Reply in Support of the Motion (ECF No. 26, “Reply”). The Court has carefully considered 24 the Parties’ arguments and the relevant law, as well as all pertinent filings, including 25 Plaintiff’s Complaint (ECF No. 1-2, “Compl.”) and Defendant’s Notice of Removal to 26 Federal Court (ECF No. 1, “NOR”). On December 1, 2022, the Court held a motion 27 hearing and issued a Minute Order that DENIED Plaintiff’s Motion. (See ECF No. 34). 28 This written Order now follows. 1 BACKGROUND 2 I. Facts 3 Plaintiff Matthew Shachno is an individual who was previously employed by 4 Defendant Marriott International, Inc. (See generally Compl. at 1.) Defendant is 5 incorporated in Delaware and maintains its principal place of business in Maryland but 6 operates in California. (ECF No. 1-6 (“Wright Decl.”) ¶ 2.) Defendant manages a chain 7 of hotels, resorts, and restaurants throughout California and conducts substantial business 8 in San Diego County, maintaining various facilities and offices within the County. (Compl. 9 ¶ 2–3, 15, 31.) 10 From May 2, 2012, to December 31, 2019, Plaintiff was employed by Defendant at 11 Defendant’s Marriott Marquis Marina hotel in San Diego. (Compl. ¶ 3; ECF No. 1-7 12 (“Schafer Decl.”) ¶ 7.) At all times during his employment, Plaintiff was classified as a 13 non-exempt employee and was paid on an hourly basis. (Compl. ¶ 3.) Accordingly, 14 Plaintiff was legally entitled to meal and rest breaks, minimum and overtime wages, and 15 other employment rights and benefits. (Id.) 16 II. Procedural History 17 On May 23, 2022, Plaintiff filed a putative Class Action Complaint in the Superior 18 Court of California, County of San Diego on behalf of himself and all other similarly 19 situated current and former California employees of Defendant. (See generally Compl.) 20 Plaintiff’s Complaint contains ten claims for: (1) unfair competition, (2) failure to pay 21 minimum wages, (3) failure to pay overtime wages, (4) failure to provide meal periods, 22 (5) failure to provide rest periods, (6) failure to provide accurate wage statements, 23 (7) failure to reimburse employees for required expenses, (8) failure to provide wages due 24 upon separation of employment; (9) failure to provide gratuities, and (10) failure to provide 25 sick pay wages. (See generally id.) 26 Plaintiff seeks to represent two classes of employees. For the first claim, Plaintiff 27 seeks to represent all non-exempt hourly employees who at some time during the four years 28 preceding the filing of the Complaint were employed by Defendant in California or staffed 1 with Defendant by a third-party in California. (Id. ¶ 5.) For the remaining nine claims, 2 Plaintiff seeks to represent all non-exempt hourly employees who at some time during the 3 three years preceding the filing of the Complaint were employed by Defendant in 4 California or staffed with Defendant by a third-party in California. (Id. ¶ 42.) 5 Generally, Plaintiff’s Complaint alleges that Defendant had a “policy and practice” 6 of “fail[ing] to lawfully compensate [Plaintiff and putative class member] employees.” (Id. 7 ¶ 6.) Plaintiff therefore seeks damages and injunctive relief on behalf of himself and all 8 other class members. (Id. at 48–50 (Prayer for Relief).) Plaintiff’s Complaint explicitly 9 maintains, however, that the amount in controversy for the aggregate claims of all class 10 members does not exceed five million dollars ($5,000,000). (Id. ¶ 5.) 11 On July 19, 2022, Plaintiff served Defendant, (see generally ECF No. 1-4), and on 12 August 18, 2022, Defendant timely filed a Notice of Removal of Action with the United 13 States District Court for the Southern District of California pursuant to the Class Action 14 Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). (See NOR at 15 1–2.) The Notice of Removal asserts that CAFA provides this Court with original 16 jurisdiction over civil class actions in which any plaintiff is diverse from any defendant 17 and the total amount in controversy exceeds five million dollars ($5,000,000). (See id. 18 ¶ 1.) According to Defendant, the CAFA requirements are satisfied here because Plaintiff 19 is a California citizen while Defendant is not, (see id. ¶¶ 17–18), and the amount in 20 controversy exceeds five million dollars, (see id. ¶ 20). 21 The Notice of Removal asserts that the minimum amount in controversy for six of 22 Plaintiff’s ten claims is $11,102,793.75, including attorney’s fees. (See id. ¶ 21.) In 23 support of this estimate, Defense counsel J. Scott Carr filed a declaration explaining how 24 he calculated the amount in controversy for each of the six claims. (See generally ECF 25 No. 1-5 (“1st Carr Decl. 1”).) As additional support, Defendant also submitted Plaintiff’s 26 state court Complaint, (see generally Compl.), and sworn declarations from Defendant’s 27 Vice President of Human Resources, Tiffany Schafer, (see generally Schafer Decl.), and 28 Vice President and Secretary, Andrew Wright, (see generally Wright Decl.). 1 On September 15, 2022, in response to Defendant’s Notice of Removal, Plaintiff 2 filed the instant Motion to Remand to State Court. (See generally Mot.) Plaintiff’s Motion 3 challenges Defendant’s amount-in-controversy estimate and asks this Court to remand the 4 pending action to the Superior Court of California, County of San Diego. (See id. at 2, 11.) 5 On October 17, 2022, Defendant filed an Opposition to the Motion in which it 6 recalculated the amount in controversy based on Plaintiff’s filings in a separate, state court 7 Private Attorney General Act (“PAGA”) action between the same parties involving largely 8 the same claims. (See generally Opp’n.) Relying on assertions made by Plaintiff in the 9 PAGA action, the Opposition estimates that the amount in controversy for four of 10 Plaintiff’s ten claims is $18,052,218.78, excluding attorney’s fees. (See id. at 2, 12.) 11 To support this estimate, Defense counsel J. Scott Carr submitted a second 12 declaration explaining how he calculated the amount in controversy for each of the four 13 claims. (See generally ECF No. 22-1 (“2d Carr Decl. 2”).) Defendant also submitted 14 various filings from the PAGA action, including the complaint, (ECF No. 22-2); a 15 declaration from Plaintiff Matthew Shachno, (ECF No. 22-3 (“Shachno Decl.”)); and a 16 declaration from Mr. Shachno’s damages consultant, (ECF No. 22-4 (“Lietzow Decl.”)). 17 Additionally, Defendant submitted Mr. Shachno’s interrogatory responses, (ECF No. 22-5 18 (“Interrog. Resp.”)), and initial disclosures, (ECF No. 22-7), from the present action. 19 On October 24, 2022, Plaintiff filed a Reply Brief in Support of the Motion to 20 Remand, challenging Defendant’s revised and initial calculations. (See generally Reply.) 21 The Court held a hearing on the Motion on December 1, 2022, during which the 22 undersigned denied the Motion from the bench. (See ECF No. 34.) 23 LEGAL STANDARD 24 Although “[f]ederal courts are courts of limited jurisdiction,” Kokkonen v. Guardian 25 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), “a defendant may remove an action filed in 26 state court to federal court if the federal court would have original subject matter 27 jurisdiction over the action,” either through diversity or a federal question. Moore-Thomas 28 v. Alaska Airlines, Inc., 553 F.3d 1241, 1243 (9th Cir. 2009) (describing 28 U.S.C. § 1441). 1 In 2005, Congress passed the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 2 109-2, 119 Stat. 9-13 (2005). “CAFA ‘relaxed’ the diversity requirements for putative 3 class actions.” Canela v. Costco Wholesale Corp., 971 F.3d 845, 850 (9th Cir. 2020). 4 “CAFA gives federal courts jurisdiction over certain class actions, defined in § 1332(d)(1), 5 if the class has more than 100 members, the parties are minimally diverse, and the amount 6 in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co. v. Owens, 574 7 U.S. 81, 84–85 (2014). 8 CAFA not only confers original jurisdiction on federal courts, but also authorizes 9 the removal of certain class actions to federal courts. See 28 U.S.C. § 1453. Generally, 10 courts “strictly construe [] removal statute[s] against removal jurisdiction,” Gaus v. Miles, 11 Inc., 980 F.2d 564, 566 (9th Cir. 1992); however, “no antiremoval presumption attends 12 cases invoking CAFA,” Dart Cherokee, 574 U.S. at 89. Unlike other removal statutes, 13 “Congress intended CAFA to be interpreted expansively.” Ibarra v. Manheim Invs., Inc., 14 775 F.3d 1193, 1197 (9th Cir. 2015). 15 “To remove a case from a state court to a federal court, a defendant must file in the 16 federal forum a notice of removal ‘containing a short and plain statement of the grounds 17 for removal.’” Dart Cherokee, 574 U.S. at 83 (quoting 28 U.S.C. § 1446(a)). Under 18 CAFA, “a defendant’s notice of removal need include only a plausible allegation that the 19 amount in controversy exceeds the jurisdictional threshold.” Id. at 89. If, however, a 20 plaintiff’s Complaint “affirmatively states that the amount in controversy does not exceed 21 $5 million,” the defendant’s notice of removal must “put forward evidence showing that 22 the amount in controversy exceeds $5 million” and must “persuade the court that the 23 estimate of damages in controversy is a reasonable one.” Ibarra, 775 F. 3d at 1197. 24 A plaintiff may challenge a defendant’s notice of removal through a motion to 25 remand. See Moore-Thomas, 553 F.3d at 1244 (discussing 28 U.S.C. § 1447(c)). 26 “[R]emand may be ordered either for lack of subject matter jurisdiction or for ‘any defect’ 27 in the removal procedure.” Aguon-Schulte v. Guam Election Comm’n, 469 F.3d 1236, 28 1240 (9th Cir. 2006) (quoting 28 U.S.C. § 1447(c)). If a plaintiff’s motion to remand 1 challenges the amount-in-controversy estimate in the defendant’s notice of removal, “both 2 sides submit proof and the court decides, by a preponderance of the evidence, whether the 3 amount-in-controversy requirement has been satisfied.” Dart Cherokee, 574 U.S. at 88. 4 Although the defendant’s amount-in-controversy estimate must be grounded in the 5 plaintiff’s complaint, the parties may also submit additional “evidence outside the 6 complaint,” such as “affidavits or declarations, or other ‘summary-judgment-type evidence 7 relevant to the amount in controversy at the time of removal.’” Ibarra, 775 F.3d at 1197 8 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). In 9 addition, the parties may rely on “a chain of reasoning that includes assumptions.” Id.; see 10 also Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 992 (9th Cir. 2022). These 11 assumptions, however, must have “some reasonable ground underlying them” and cannot 12 be based on “mere speculation and conjecture.” Ibarra, 775 F.3d at 1197, 1199; see also 13 Jauregui, 28 F.4th at 992. 14 Because the court evaluates a challenged amount-in-controversy estimate under the 15 preponderance of the evidence standard, the defendant need only establish “that the 16 potential damage could exceed the jurisdictional amount.” Rea v. Michaels Stores Inc., 17 742 F.3d 1234, 1239 (9th Cir. 2014) (emphasis added) (quoting Lewis v. Verizon 18 Commc’ns, Inc., 627 F.3d 395, 397 (9th Cir. 2010)). Still, “if the evidence submitted by 19 both sides is balanced, in equipoise, the scales tip against federal-court jurisdiction.” 20 Ibarra, 775 F.3d at 1199. In sum, the defendant has the burden of establishing by a 21 preponderance of the evidence that the amount in controversy could exceed $5 million; if 22 the defendant fails to do so, the federal court lacks subject matter jurisdiction and the case 23 must be remanded. See 28 U.S.C. § 1447(c). 24 ANALYSIS 25 Plaintiff does not dispute that the class contains over 100 members or that minimal 26 diversity of citizenship exists under CAFA. (See generally Mot.) Instead, Plaintiff 27 challenges removal jurisdiction based solely on the contention that the amount in 28 controversy does not exceed $5 million. (See id. at 11.) Therefore, the Court must analyze 1 the amount in controversy for each of Plaintiff’s claims, “first look[ing] to the complaint” 2 and then to any relevant “summary-judgement-type evidence” submitted by either party. 3 See Ibarra, 775 F.3d at 1197. Next, the Court must determine whether Defendant’s 4 estimated amount in controversy is reasonably supported by a preponderance of the 5 evidence. See Dart Cherokee, 574 U.S. at 88. 6 Defendant has provided two amount-in-controversy estimates here: 7 Notice of Removal (NOR ¶ 21) Opposition to Motion (Opp’n 12) 8 Minimum Wages $656,357.00 Minimum Wages $2,650,441.23 9 Meal Periods $1,312,714.00 Meal Periods N/A 10 Rest Periods $1,312,714.00 Rest Periods $7,606,123.56 11 Wage Statements $282,750.00 Wage Statements $3,168,000.00 12 13 Reimbursements $690,136.00 Reimbursements N/A 14 Separation Wages $4,627,564.00 Separation Wages $4,627,564.00 15 Attorney’s Fees $2,220,558.75 Attorney’s Fees N/A 16 Total $11,102,793.75 Total $18,052,218.78 17 18 I. Scope of Materials Considered by the Court 19 Alongside the Opposition to the Motion to Remand, Defendant submitted as exhibits 20 several filings from the Parties’ prior PAGA action, including the complaint, (ECF No. 22- 21 2); the Shachno Declaration; and the Lietzow Declaration to support several recalculations 22 in its Opposition and to bolster its initial calculations in its Notice of Removal. In reply, 23 Plaintiff asserts that this Court may not consider the factual allegations from the PAGA 24 filings “because the California Court of Appeal recently confirmed that different and 25 distinct rights are being asserted in a PAGA action than in an action seeking damages.” 26 (See Reply at 2 (citing Gavriiloglou v. Prime Healthcare Mgmt., Inc., 83 Cal. App. 5th 27 595, 602–03 (2022)).) 28 / / / 1 Plaintiff is correct that a litigant in a PAGA action asserts different primary rights 2 than a litigant in a typical class action. While a PAGA plaintiff acts as a representative for 3 the “state and general public,” the typical class action representative in a wage and hour 4 lawsuit acts as a representative for “individual employees.” See Gavriiloglou, 83 Cal. App. 5 5th at 604. This principle, however, does not prevent courts from taking judicial notice of 6 filings from a prior PAGA action. Instead, the primary rights doctrine prevents courts from 7 finding that there is claim or issue preclusion, meaning a final disposition on the merits in 8 a PAGA action does not preclude a subsequent non-PAGA class action involving the same 9 parties and claims. Id. at 602–06. Here, Defendant does not assert preclusion-based 10 theories; instead, Defendant asks this Court to consider the PAGA filings as evidence when 11 deciding whether Defendant’s amount-in-controversy estimate is reasonable for 12 jurisdictional purposes. Therefore, Plaintiff’s argument regarding the primary rights 13 doctrine is not relevant to the Court’s jurisdictional analysis. 14 In any event, at the motion hearing, Plaintiff conceded that the Court may consider 15 the Shachno Declaration as a party admission. (See ECF No. 34.) Although Plaintiff 16 argued that the Court may not consider the Lietzow Declaration and took no position on 17 whether the Court could consider the PAGA complaint, (see id.), the Court need not 18 address whether such evidence may be considered because the Court’s analysis does not 19 rely on that evidence. Rather, the Court relies on all relevant evidence that is not subject 20 to dispute, including: (1) the Shachno Declaration; (2) the present Complaint; (3) Mr. 21 Shachno’s initial disclosures and interrogatory responses in this present action; (4) the Carr 22 Declarations; and (5) the Schafer Declaration. 23 II. Failure to Pay Minimum Wages 24 The first claim at issue in the amount in controversy analysis is Defendant’s alleged 25 failure to pay Plaintiff and putative class members minimum wages in violation of 26 California Labor Code §§ 1194 and 1197. (See generally Compl. ¶¶ 70–79.) In the 27 Complaint, Plaintiff alleges that Defendant “maintained a wage practice of paying 28 [Plaintiff and putative class members] without regard to the correct amount of time they 1 work[ed],” (id. ¶ 71), and “consequently underpaid the actual time worked by [Plaintiff 2 and putative class members],” (id. ¶ 73). Specifically, Plaintiff asserts that class members 3 were not paid for: (1) completing work assignments during meal breaks “from time to 4 time;” (2) undergoing mandatory drug testing; (3) completing mandatory Covid 5 temperature checks and symptom questionnaires; (4) “several minutes off the clock” before 6 work complying with Defendant’s personal appearance regulations; and (5) actual time 7 worked, which was always rounded down to benefit Defendant. (Id. ¶ 9.) 8 Defendant, in its Notice of Removal, asserts that the amount in controversy for 9 Plaintiff’s minimum wage claim is at least $656,357. (NOR at 6.) Defendant bases this 10 estimate on only one of Plaintiff’s five allegations: the allegation that Defendant failed to 11 pay class members for “several minutes off the clock” spent “preparing themselves for 12 work in order to comply with Defendant’s extensive personal appearance regulations.” 13 (See 1st Carr Decl. ¶ 8 (quoting Compl. ¶ 9); see also Opp’n at 5.) To arrive at this figure, 14 Defendant used employment records to determine the total number of hours worked by 15 Plaintiff and putative class members during the statutory period. (See Schafer Decl. ¶ 4.) 16 Defendant then divided this number by eight hours—the length of a full shift—to reach a 17 conservative estimate of the total number of shifts worked. (See 1st Carr Decl. ¶ 8 (quoting 18 Compl. ¶ 9); see also Opp’n at 5.) Based on Plaintiff’s claim that class members spent 19 “several minutes” preparing for work, Defendant multiplied the number of shifts worked 20 by three minutes. (See id.) Defendant then converted this figure to hours and multiplied 21 that number by the average hourly minimum wage during the statutory period. (See id.) 22 Plaintiff challenges Defendant’s calculation on several grounds. First, Plaintiff 23 asserts that the estimate is improper because it includes time spent drug testing, complying 24 with mandatory Covid screening (before Covid emerged in 2019), and improper rounding. 25 (See Mot. at 3.) Plaintiff is mistaken. Defendant’s amount in controversy calculation for 26 the minimum wage claim only accounts for time spent complying with personal appearance 27 regulations, not time spent drug testing or Covid screening, or Defendant’s allegedly 28 improper rounding policy. Even so, it would have been proper for Defendant to include 1 these alleged violations in its calculation if it chose to do so. Furthermore, excluding these 2 violations from the calculation yields a more conservative amount-in-controversy estimate. 3 Plaintiff next challenges Defendant’s assumption that class members spent “three 4 minutes off the clock” complying with grooming regulations before “each shift.” (Mot. at 5 3–4.) Plaintiff does not appear to challenge Defendant’s assumption that each grooming 6 violation lasted three minutes. At the motion hearing, Plaintiff admitted that his claim that 7 employees spent “several minutes off the clock” complying with grooming regulations, 8 (Compl. ¶ 9), reasonably supports the assumption that each violation lasted approximately 9 two to four minutes, (see ECF No. 34). Defendant’s three-minute estimate is within a range 10 that Plaintiff himself believes is reasonable. Nonetheless, Plaintiff asserts that Defendant’s 11 calculation is improper because it is unreasonable to assume that a violation occurred 12 before “each shift.” (See id.; Mot. at 3–4.) The Court disagrees. 13 The Complaint alleges that Plaintiff and putative class members “were required by 14 Defendant to spend several minutes off the clock preparing themselves for work in order 15 to comply with Defendant’s extensive personal appearance regulations.” (Compl. ¶ 9 16 (emphasis added).) If a plaintiff broadly alleges wage and hour violations, it may be 17 reasonable for the defendant to assume a 100% violation rate. See e.g., Coleman v. Estes 18 Express Lines, Inc., 730 F. Supp. 2d 1141, 1150 (C.D. Cal. 2010) (“Plaintiff included no 19 limitation on the number of [wage and hour] violations, and, taking his complaint as true, 20 Defendants could properly calculate the amount in controversy based on a 100% violation 21 rate.”). Here, Plaintiff’s Complaint does not contain any limiting language to negate the 22 ordinary and reasonable assumption that one must “prepar[e] themselves for work” each 23 time that they go to work, meaning, before every shift. (See Compl. ¶ 9.) 24 Furthermore, Plaintiff himself claims that he spent time adhering to Defendant’s 25 personal appearance regulations “before each shift,” (Interrog. Resp. at 10–11), and “each 26 day,” (Shachno Decl. ¶ 4). It is reasonable to assume that, as the class representative, 27 Mr. Shachno’s claims are “typical of the class.” See e.g., Amchem Prod., Inc. v. Windsor, 28 521 U.S. 591, 613 (1997) (describing the typicality requirement of class action 1 representatives under Federal Rule of Civil Procedure 23(a)). Accordingly, the Court finds 2 that a three-minute violation before each shift is a reasonable assumption that is grounded 3 in the language of Plaintiff’s Complaint and the proof submitted by Defendant. Therefore, 4 the Court accepts Defendant’s estimate of $656,357 as the amount in controversy for 5 Plaintiff’s claim for failure to pay minimum wages for time spent complying with 6 Defendant’s personal appearance regulations. 7 In its Opposition to the Motion to Remand, Defendant recalculates the amount in 8 controversy for Plaintiff’s minimum wage claim to be at least $2,650,441.23 because 9 Plaintiff’s filings from the PAGA action support a 20-minute, rather than 3-minute, 10 violation before every shift. (See Opp’n at 10, 15; see also Carr Decl. 2 ¶ 10.) Defendant 11 grounds this assumption in Mr. Shachno’s PAGA declaration, (see Opp’n at 10 (relying on 12 Leitzlow Decl. ¶ 10–11 (relying on Shachno Decl. ¶¶ 3–4))), which Plaintiff has admitted 13 is proper for the Court to consider at this time, (see generally ECF 34). In the PAGA 14 declaration, Plaintiff claims that he spent five (5) minutes putting on his uniform before 15 work, five (5) minutes taking off his uniform after work, and ten (10) minutes complying 16 with Defendant’s personal appearance requirements, for a total of twenty (20) minutes of 17 unpaid work time each day. (See Shachno Decl. ¶¶ 3–4.) 18 While Mr. Shachno’s PAGA declaration asserts that Defendant is required to 19 compensate employees for time spent putting on and taking off their uniforms, Plaintiff 20 never makes such an allegation in his Complaint. (See generally Compl.) Although a 21 defendant may support its amount-in-controversy estimate with external evidence, the 22 defendant may not use such evidence to support claims not alleged in Plaintiff’s complaint. 23 The Court, therefore, finds Plaintiff’s PAGA claims regarding the donning and doffing of 24 uniforms irrelevant to the present amount in controversy determination. As a result, 25 Defendant is left with insufficient evidence to support its assumption that “every employee 26 worked 20 minutes off-the-clock on a daily basis.” (Opp’n at 15.) Consequently, 27 Defendant’s revised estimate of $2,650,441.23 is not reasonably supported by a 28 preponderance of the evidence. 1 Ultimately, for Plaintiff’s minimum wage claim, the Court accepts Defendant’s 2 amount-in-controversy estimate of $656,357 from the Notice of Removal but rejects the 3 revised estimate of $2,650,441.23 from its Opposition. 4 III. Failure to Provide Meal and Rest Periods 5 The Complaint also alleges that Defendant violated California Labor Code §§ 226.7 6 and 512 by failing to provide Plaintiff and putative class members with legally required 7 meal and rest breaks. (See generally Compl. ¶¶ 96–103.) Regarding rest breaks, Plaintiff 8 claims employees were “from time to time” denied a single ten-minute break for shifts of 9 two to four hours, two ten-minute breaks for shifts of six to eight hours, and three ten- 10 minute breaks for shifts of ten hours or more. (Id. ¶ 101.) As for meal breaks, Plaintiff 11 claims employees were “from time to time” not fully relieved of their duties during meal 12 periods, “from time to time” denied a single meal period prior to their fifth hour of work, 13 and “from time to time” denied a second meal period when working ten-hour shifts on 14 “some workdays.” (Id. ¶ 97.) The Complaint requests one hour of pay for each meal and 15 rest break violation, as mandated by the California Labor Code. (Id. ¶ 98, 102; see also 16 Cal. Labor Code § 226.7(c).) 17 In its Notice of Removal, Defendant asserts that the amount in controversy is at least 18 $1,312,714 for the meal period claim and $1,312,714 for the rest period claim. (NOR at 19 7–8.) To arrive at these estimates, Defendant used employment records to determine the 20 total number of hours worked by the class during the statutory period. (See Opp’n at 4.) 21 Defendant then divided this number by eight hours to reach a conservative estimate of the 22 total number of days worked. (See id.) Then, based on the allegation that Defendant denied 23 meal and rest breaks “from time to time,” Defendant multiplied the number of days worked 24 by a violation rate of 10% to approximate the total number of meal and rest break 25 violations. (See id.) Finally, because the statutory penalty for each violation is one hour 26 of pay, Defendant multiplied the number of violations by the average minimum wage 27 during the statutory period. (See id.) 28 / / / 1 Plaintiff challenges this calculation on three grounds: first, Plaintiff claims it was 2 improper to assume a 10% violation rate; second, Plaintiff claims it was improper to use 3 an average minimum wage instead of employees’ actual wages; and third, Plaintiff claims 4 it was improper to assume that all employees worked a standard eight-hour shift. (See Mot. 5 at 5–6.) The Court addresses each argument in turn. 6 First, the Court finds a 10% violation rate reasonable based on the language in the 7 Complaint. Plaintiff’s Complaint not only alleges that meal and rest break violations 8 occurred “from time to time,” but also that, “as a matter of company policy, practice and 9 procedure,” Defendant “failed to record all meal and rest breaks missed by [Plaintiff and 10 putative class members].” (Compl. ¶ 34; see also id. ¶ 12.) This caused class members to 11 “forfeit meal breaks without additional compensation and in accordance with Defendant’s 12 corporate policy and practice.” (Id. ¶ 12.) In a similar wage and hour case, another Judge 13 in this District determined that a 20% violation rate was reasonable because the complaint 14 not only claimed that violations had occurred “from time to time” and for “some shifts,” 15 but also that the defendant had failed to compensate for such violations as a matter of 16 “company policy, practice and procedure.” See Cavada v. Inter-Cont’l Hotels Grp., Inc., 17 No. 19CV1675-GPC(BLM), 2019 WL 5677846, at *5 (S.D. Cal. Nov. 1, 2019). This 18 language closely mirrors that used by Plaintiff in his Complaint. Here, however, Defendant 19 has employed a more conservative 10% violation rate instead of the 20% rate accepted by 20 the court in Cavada. Accordingly, the Court finds that Defendant’s assumed violation rate 21 is reasonably grounded in the allegations made in Plaintiff’s Complaint. 22 The Court also finds Defendant’s use of the average minimum wage reasonable. 23 According to Plaintiff, Defendant’s calculations cannot be accepted because Defendant 24 assumed “an arbitrary ‘average’ of minimum wages in effect without any evidence of what 25 [Plaintiff and putative class members] were actually paid.” (See Mot. at 5.) Although it 26 may have been possible for Defendant to use employee records to determine Plaintiff and 27 putative class members’ actual wages, a party’s access to additional information does not 28 necessarily render the assumptions made by that party unreasonable. Here, for example, 1 Defendant used the average minimum wage during the statutory period “to make [its] 2 calculations as conservative as possible,” (Carr Decl. 1 ¶ 12), because employees’ actual 3 hourly rates “would have been higher” than minimum wage, (see Opp’n at 16). 4 Defendant’s assumption that its employees earned at least minimum wage is reasonable 5 because an employee’s “regular rate of compensation” must meet or exceed minimum 6 wage. See Cal. Lab. Code §§ 226.7(c), 1194. Therefore, using employees’ actual wages 7 in the calculation, as Plaintiff requests, would only result in a higher estimate. 8 Finally, Plaintiff challenges Defendant’s assumption that all employees worked 9 exactly eight hours each shift. (See Mot. at 5; Reply at 1.) According to Plaintiff, 10 “Defendant’s calculation completely fails to consider the actual number of shifts worked” 11 and “whether meal or rest breaks were owed based on the length of shifts.” (Reply at 1.) 12 The Court agrees that Defendant’s failure to determine whether breaks were owed based 13 on the length of each shift renders the amount-in-controversy estimate for the meal break 14 claim unreliable; however, this does not affect the reliability of the estimate for the rest 15 break claim. 16 According to Plaintiff’s Complaint, all of Defendant’s employees were owed a meal 17 break prior to their fifth hour of work and again when working shifts of ten hours or more. 18 (Compl. ¶ 97; see also id. ¶ 59.) Therefore, Defendant’s assumption that each shift lasted 19 exactly eight hours potentially overestimates the number of meal breaks owed, as 20 Defendant admitted at the motion hearing. (See ECF No. 34.) If even one putative class 21 member had worked a shift of less than five hours, and accordingly was not owed a meal 22 break, Defendant’s amount in controversy calculation would be an overestimate. A 23 defendant cannot “rely on speculative and self-serving assumptions about key unknown 24 variables.” Vasserman v. Henry Mayo Newhall Mem’l Hosp., 65 F. Supp. 3d 932, 976 25 (C.D. Cal. 2014) (quoting Garibay v. Archstone Comties., LLC, 539 F. App’x 763, 764 26 (9th Cir. 2013)). Here, the number of shifts during which a meal break was owed is a key 27 unknown variable, and Defendant’s assumption that meal breaks were owed for every shift 28 / / / 1 is not reasonable. Therefore, Defendant’s $1,312,714 amount-in-controversy estimate for 2 the meal break violations must be rejected. 3 Defendant’s use of a presumptive eight-hour shift does, however, lead to a 4 conservative estimate of rest break violations. For the amount in controversy calculation, 5 Defendant assumed one rest break violation for every ten shifts, with each shift lasting 6 exactly eight hours. (See Opp’n at 4; 1st Carr Decl.) Unlike meal breaks, which are only 7 required for shifts of five hours or more, rest breaks are required for shifts as short as two 8 hours, according to Plaintiff’s Complaint.1 (See Compl. ¶¶ 12, 101.) Therefore, if Plaintiff 9 and putative class members in fact worked shorter, more frequent shifts, (see Opp’n at 5 n. 10 1), and these shifts typically lasted at least two hours, as is reasonable to assume, there 11 would be more shifts in which a rest break violation could have occurred. If, for example, 12 an employee in fact worked two four-hour shifts rather than one eight-hour shift, as 13 Defendant assumed, there would be twice as many shifts in which a rest break violation 14 could have occurred. 15 Thus, Defendant’s use of a presumptive eight-hour shift results in a conservative 16 estimate of total shifts and, in turn, a conservative estimate of rest break violations. If 17 Defendant instead used the actual number of shifts worked by Plaintiff and putative class 18 members lasting at least two hours, the amount in controversy would likely be higher. The 19 Court therefore finds Defendant’s amount in controversy calculation reasonable and 20 accepts the $1,312,714 estimate for rest break violations. 21 In the Opposition to the Motion to Remand, Defendant recalculates the amount in 22 controversy for the rest period claim using a 100% violation rate rather than a 10% 23 violation rate, yielding an amount in controversy of $7,606,123.56. (See Opp’n at 11.) 24
25 26 1 In the Opposition, Defendant asserts that, “a shift of at least 3.5 hours . . . triggered [Marriott International, Inc.’s] rest break obligation,” (Opp’n at 11 (relying on PAGA filings)); however, Plaintiff’s 27 Complaint merely states that employees were denied rest breaks for shifts “of at least two (2) to four (4) hours,” (see Compl. ¶ 101). For purposes of this jurisdictional analysis, the Court relies on the allegations 28 1 According to Defendant, a 100% violation rate is reasonable because the Complaint implies 2 that the “rest break policy is per se unlawful because it purportedly restricts employees to 3 [Defendant’s] premises for their rest breaks, resulting in a violation every time an employee 4 is entitled to a rest break.” (Id. at 17 (emphasis omitted).) The Complaint, however, does 5 not go as far as Defendant claims. 6 The Complaint states, “Defendant’s policy restricts [Plaintiff and putative class 7 members] from unconstrained walks and is unlawful based on Defendant’s rule which 8 states [Plaintiff and putative class members] cannot leave the work premises during their 9 rest period.” (Compl. ¶ 13.) “Caselaw dictates that a 100% violation rate [for rest period 10 claims] is not reasonable based on allegations of a ‘pattern and practice,’ but violation[] 11 rates of 25–60% based on both ‘pattern and practice’ and ‘policy and practice’ are 12 reasonable.” See Cavada, 2019 WL 5677846, at *7 (citing Ibarra, 775 F.3d at 1198–99 13 and collecting district court cases). Here, Plaintiff’s Complaint alleges an unlawful rest 14 break “policy” but does not go so far as to claim Defendant had a “pattern or practice” of 15 enforcing this policy. Even if Plaintiff had alleged “a uniform or systematic violation of 16 labor laws pertaining to . . . rest breaks,” this would “not necessarily mean that a violation 17 occurred every single day that the employee worked.” See Sanders v. Old Dominion 18 Freight Line, Inc., No. 16-CV-2837-CAB-NLS, 2017 WL 5973566, at *4 (S.D. Cal. Feb. 19 2, 2017); see also Ibarra, 775 F. 3d at 1198–99. 20 Furthermore, the Complaint does not allege that class members are entitled to 21 penalties for every rest break because of Defendant’s policy. Instead, the Complaint seeks 22 penalties “for each workday that [a] rest period was not provided” and only for those “who 23 were not provided a rest period.” (Compl. ¶ 102.) In a similar wage and hour case in the 24 Central District of California, the plaintiff’s complaint used the exact same language that 25 Plaintiff uses here, demanding compensation “for each workday that a rest period was not 26 provided.” See Wheatley v. MasterBrand Cabinets, LLC, No. EDCV 18-2127 JGB (SPx), 27 2019 WL 688209, at *5 (C.D. Cal. Feb. 19, 2019). There, the court determined that such 28 language “impl[ied] that there were days when rest breaks were provided” and therefore 1 the allegations in the complaint did not support a 100% violation rate. See id.; see also 2 Sanders, 2017 WL 5973566, at *4 (finding the same regarding the plaintiff’s meal break 3 claims). The language in Plaintiff’s Complaint here likewise implies that some employees 4 were in fact provided proper rest breaks during some shifts. Therefore, the Complaint does 5 not support a 100% violation rate. Consequently, the Court rejects Defendant’s revised 6 $7,606,123.56 estimate for rest period violations. 7 Ultimately, the Court accepts Defendant’s $1,312,714 amount-in-controversy 8 estimate for rest period violations but rejects its $1,312,714 estimate for meal period 9 violations and its $7,606,123.56 estimate for rest period violations. 10 IV. Failure to Provide Accurate Wage Statements 11 Next, the Complaint alleges Plaintiff’s and putative class members’ wage statements 12 “from time to time” did not accurately reflect the total hours worked or wages earned, in 13 violation of California Labor Code § 226. (See Compl. ¶¶ 19, 106.) “More specifically,” 14 Plaintiff alleges, “the wage statements failed to identify the accurate total hours worked 15 each pay period.” (Id. ¶ 106.) Plaintiff asserts that these violations were knowing and 16 intentional, entitling Plaintiff and putative class members to $50 for each initial violation 17 and $100 for each subsequent violation up to a potential total of $4,000 per employee. 18 (See id. ¶ 107.) 19 In the Notice of Removal, Defendant asserts that the amount in controversy for the 20 wage statement claim is $282,750. (See NOR at 9; 1st Carr Decl. ¶¶ 16–18.) To reach this 21 estimate, Defendant assumed two wage statement violations per employee, resulting in a 22 $150 penalty each ($50 for the first violation and $100 for the second). (See 1st Carr Decl. 23 ¶¶ 16–18; see also Opp’n at 6; Schafer Decl. ¶¶ 4–5.) Defendant then multiplied the $150 24 penalty by the total number of “non-exempt employees who received wage statements” 25 during the statutory period, “from May 23, 2021[,] through July 22, 2022.” (1st Carr Decl. 26 ¶ 18; see also Schafer Decl. ¶ 4.) 27 / / / 28 / / / 1 Plaintiff claims Defendant’s estimate is “unreasonable and unsupported” because 2 the Complaint “does not allege that the wage statement violation[s] occurred on two wage 3 statements issued to each [putative class member]” but that Defendant “from time to time” 4 engaged in wage statement violations. (Mot. at 8.) Because Defendant does not disclose 5 how many wage statements each class member received during the statutory period, the 6 Court cannot determine whether two violations is a reasonable assumption. 7 Although Defendant identifies how many employees received wage statements at 8 some point during the one-year statutory period, Defendant does not reveal how many 9 wage statements each employee received in total. When calculating the amount in 10 controversy for an inaccurate wage statement claim, the number of wage statements 11 received by each employee during the statutory period is a key variable. See Vasserman, 12 65 F. Supp. 3d at 976; see also Mariscal v. Ariz. Tile, LLC, No. 8:20-cv-02071-JLS-KES, 13 2021 WL 1400892, at *4 (C.D. Cal. 2021) (approving amount-in-controversy estimate 14 based on total number of wage statements); Wicker v. ASC Profiles, LLC, No. 2:19-cv- 15 02443-TLN-KJN, 2021 WL 1187271, at *4 (E.D. Cal. 2021) (approving amount-in- 16 controversy estimate based on total number of wage statements and employees). 17 Defendant’s reliance on the total number of employees rather than the total number 18 of wage statements renders its amount-in-controversy estimate unreliable. If, for example, 19 an employee worked for the entire one-year statutory period and received inaccurate wage 20 statements “from time to time,” two violations would be reasonable. If, however, an 21 employee worked for only one month during the statutory period and received inaccurate 22 wage statements “from time to time,” two violations would not be reasonable. Defendant’s 23 amount-in-controversy estimate is based on the unsupported assumption that all employees 24 in the class worked for Defendant long enough during the statutory period such that two 25 violations would constitute a violation “from time to time.” Cf., Blevins v. Republic 26 Refrigeration, Inc., No. CV 15-04019 MMM (MRWx), 2015 WL 12516693, at *11 (C.D. 27 Cal. 2015) (rejecting amount in controversy when Defendants failed to account for class 28 members “who did not work . . . for a sufficiently long period of time to accrue the 1 maximum number of violations.”). Accordingly, the Court rejects Defendant’s $282,750 2 estimate for wage statement violations. 3 In the Opposition to the Motion to Remand, Defendant recalculates the amount in 4 controversy for Plaintiff’s inaccurate wage statement claim as $3,168,000. (See Opp’n at 5 12). Defendant’s revised calculation assumes that the PAGA filings support “a wage 6 statement violation every pay period,” (see id. (emphasis omitted); Carr Dec. 2 ¶ 12), even 7 though Plaintiff’s Complaint only claims that violations occurred “from time to time.” (See 8 Compl. ¶¶ 19, 106.) When a defendant’s assumptions directly conflict with the allegations 9 in the plaintiff’s complaint, the complaint controls, rendering the defendant’s assumption 10 unreasonable. See Ibarra, 775 F.3d at 1197, 1199. 11 Furthermore, Defendant’s revised calculation still disregards the number of wage 12 statements issued during the statutory period, instead using a wage statement estimate 13 provided by Mr. Lietzow in the PAGA action. (See Opp’n at 12; 2d Carr Dec. ¶ 12.) Use 14 of this metric is unreasonable because Defendant has access to records showing the number 15 of wage statements issued during the statutory period. For the foregoing reasons, the Court 16 rejects Defendant’s revised $3,168,000 estimate for wage statement violations. 17 V. Failure to Reimburse 18 The Complaint next alleges that “[a]t all relevant times” Defendant failed to 19 “reimburse [Plaintiff and putative class members] for required expenses incurred in the 20 discharge of their job duties” in violation of California Labor Code § 2802. (Compl. ¶ 110.) 21 Specifically, Plaintiff claims that it was Defendant’s “policy and practice” to deny Plaintiff 22 and putative class members reimbursement for “expenses resulting from using their 23 personal cellular phones.” (Id.) Plaintiff also alleges that Defendant failed to reimburse 24 employees for uniform expenses, (see id.); however, Defendant does not factor this cost 25 into its amount in controversy calculation, (see generally NOR). 26 Defendant asserts that the amount in controversy for Plaintiff’s reimbursement claim 27 is $690,136 based on cell phone expenses alone. (See Opp’n at 20.) To arrive at this figure, 28 Defendant used employment records to determine the total number of hours worked by the 1 class during the statutory period. (See Schafer Decl. ¶ 4.) Defendant then divided this 2 number by eight hours to reach a conservative estimate of the total number of days worked. 3 (See Carr Decl. 1 ¶ 27.) Defendant then divided this number by thirty days to reach a 4 conservative estimate of the total number of months worked, assuming each employee 5 worked a full shift every day. (See id.) Finally, Defendant multiplied the number of 6 months worked by $20, Defendant’s estimated monthly cell phone reimbursement fee per 7 employee. (Opp’n at 20.) 8 Plaintiff does not contest the $20 monthly reimbursement rate, (see generally Mot.), 9 as several courts in this district have approved a similar monthly fee, see e.g., Cavada, 10 2019 WL 5677846, at *7 (approving $20); Vallejo v. Sterigenics U.S., LLC, No. 3:20-cv- 11 01788-AJB-AHG, 2021 WL 2685348, at *6 (S.D. Cal. June 29, 2021) (approving $25). 12 This amount is generally considered “a reasonable percentage of [employees’] cell phone 13 bills” for an employer to pay. See Cochran v. Schwan’s Home Servs., Inc., 228 Cal. App. 14 4th 1137, 1140 (2014). 15 Instead, Plaintiff challenges “Defendant’s assumption that every [putative class 16 member] would require reimbursement every month of their employment.” (Mot. 10.) 17 According to Plaintiff, this assumption is “unreasonable and unsupported” because the 18 Complaint does not allege that Defendant denied reimbursement “due to a standard policy 19 and practice.” (See id.) Contrary to Plaintiff’s assertion, however, the Complaint does in 20 fact allege that Defendant denied reimbursement for work-related cell phone expenses as 21 a matter of “policy and practice.” (Compl. ¶ 110.) 22 Furthermore, the Complaint’s assertion that Plaintiff and putative class members 23 used their cell phones for work “over the course of their employment,” (id. ¶ 28), though 24 vague, is sufficient to support the assumption that these employees “incurred at least one 25 reimbursable cell phone expense for each month worked during the class period.” See 26 Vallejo, 2021 WL 2685348, at *4 (finding only one violation necessary to impose $25 27 monthly fee). Although the plaintiff is the master of their complaint, they cannot “avoid 28 federal jurisdiction by purposefully opaque pleading.” Herrera v. Carmax Auto 1 Superstores Cal., LLC, No. EDCV-14-776-MWF (VBKx), 2014 WL 12586254, at *2 2 (C.D. Cal. June 12, 2014). If a complaint uses broad or vague terms, as Plaintiff’s does 3 here, the defendant may “make reasonable, conservative estimates about the frequency of 4 the alleged violations based on the language used in [that] complaint.” Id. 5 Based on the language in Plaintiff’s Complaint here, Defendant’s estimate is 6 reasonable. In Vallejo, the complaint alleged that class members used personal cell phones 7 “for work-related duties” “[t]hroughout the time period.” 2021 WL 2685348, at *6 8 (alterations in original). This allegation was sufficient to support the defendant’s 9 assumption that all employees were entitled to a monthly reimbursement. Id. As in Vallejo, 10 the Complaint here alleges that class members were required to use their personal cell 11 phones “in furtherance of their job duties” “in the course of their employment.” (Compl. 12 ¶ 28; see also Interrog. Resp. at 30–31 (asserting phones were used “for work related 13 issues”).) This allegation also supports the assumption that employees are entitled to a 14 monthly reimbursement. Therefore, the Court accepts Defendant’s amount-in-controversy 15 estimate of $690,136 for Plaintiff’s failure to reimburse claim. 16 VI. Failure to Provide Wages Upon Separation 17 The Complaint next alleges Defendant failed to pay Plaintiff and putative class 18 members wages due upon separation in violation of California Labor Code § 203. (See 19 generally Compl. ¶¶ 112–19.) When an employer willfully fails to pay wages upon 20 separation, the Labor Code provides that “the wages of the employee shall continue as a 21 penalty from the due date ther[e]of at the same rate until paid or until an action therefor is 22 commenced; but the wages shall not continue for more than 30 days.” Cal. Lab. Code 23 § 203. 24 Defendant asserts that the amount in controversy for Plaintiff’s overdue wages claim 25 is $4,627,564. (See Opp’n at 20.) To reach this estimate, Defendant used employment 26 records to identify how many class members separated from employment during the 27 statutory period, when those class members separated, and what those class members’ 28 hourly pay rates were at the time of separation, if available. (Id. at 19–20.) Defendant 1 then calculated the daily wage of each separated employee by multiplying their actual 2 hourly rate at the time of termination by eight hours. (1st Carr Decl. ¶ 24.) When records 3 of an employee’s actual hourly rate were unavailable, Defendant used the California 4 minimum wage at the time of termination to calculate the employee’s daily wage. (Id.) 5 Then, for those class members whose employment terminated more than thirty days before 6 the filing of the Notice of Removal, Defendant multiplied each employee’s daily wage by 7 thirty days. (Id. ¶ 25.) For those class members whose work terminated less than thirty 8 days before the filing date, Defendant multiplied each employee’s daily wage by the 9 number of days between their termination date and the filing date. (Id.) 10 Plaintiff challenges Defendant’s calculation on multiple grounds. First, Plaintiff 11 claims Defendant’s estimate is unsupported because Defendant does not offer “justification 12 for the number of class members” used in the calculation. (Mot. at 9.) To the contrary, 13 Defendant has provided a form of justification typical in CAFA removal actions: a sworn 14 declaration from a member of Defendant’s management. (See generally Schafer Decl.) In 15 this declaration, Defendant’s Vice President of Human Resources explains that she 16 “carefully reviewed a report compiled from Defendant’s employee data records” and 17 determined that “at least 1,219 of Defendant’s non-exempt employees in the State of 18 California separated from employment” during the statutory period. (See id. Decl. 19 ¶¶ 3–4.) This is the same number used by Defendant in its calculation. (See 1st Carr Decl. 20 ¶¶ 23–24). Thus, Defendant has provided sufficient justification for the number of class 21 members used in its calculation. 22 Next, Plaintiff challenges Defendant’s “assumption that every single [separated 23 employee] is owed 30 days of waiting time penalties, imputing that each of the former 24 employees worked eight hours for 30 consecutive days.” (Mot. at 9.) Plaintiff is mistaken 25 on multiple grounds. First, Defendant does not assume that every employee is owed thirty 26 days of waiting time penalties. For those employees whose employment terminated less 27 than thirty days before the filing date, Defendant did not assume thirty days of waiting time 28 penalties. Instead, Defendant calculated the number of days between each employee’s 1 termination date and the filing date and only assessed penalties for those days. (1st Carr 2 Decl. ¶ 25.) 3 Additionally, Defendant’s conclusion that some employees would be owed a full 4 thirty days of waiting time penalties does not rely on the assumption that each of these 5 “former employees worked eight hours for 30 consecutive days” prior to separation, as 6 Plaintiff asserts. (See Mot. at 9.) A claim for “failure to pay wages [upon separation] has 7 nothing to do with the number of days an employee works during the month,” as “wages 8 continue to accrue on [a] daily basis while wages remain unpaid . . . not only on days that 9 [an] employee might have worked, but also on nonwork days.” Mamika v. Barca, 68 Cal. 10 App. 4th 487, 492–93 (1998). Furthermore, daily wages are commonly calculated by 11 multiplying each employee’s hourly rate by eight hours, as Defendant has done here. See 12 e.g., Andrade v. Arby’s Rest. Grp., Inc., 225 F. Supp. 3d 1115, 1139 (N.D. Cal. 2016); Kao 13 v. Holiday, 12 Cal. App. 5th 947, 963 (2017). Therefore, it is reasonable to assume that 14 penalties should accrue daily, regardless of how frequently an employee worked prior to 15 separation. 16 Finally, Plaintiff challenges Defendant’s assumption that each separated employee 17 would have been owed some unpaid wages. (Mot. at 9.) The Court finds such an 18 assumption adequately supported by the allegations in Plaintiff’s Complaint. The 19 Complaint claims that “all who terminated employment” during the statutory period were 20 owed unpaid wages under California Labor Code § 203, and that it was “Defendant’s policy 21 and practice . . . to unlawfully and intentionally deny timely payment of wages due.” 22 (Compl. ¶¶ 71, 119 (emphasis added).) Multiple courts within this district have approved 23 a 100% violation rate when the plaintiff’s complaint made similar allegations. See e.g., 24 Brumbach v. Hyatt Corp., No. 20-cv-2231-WQH-KSC, 2021 WL 926692, at *10 (S.D. 25 Cal. Mar. 11, 2021) (approving 100% violation rate when complaint alleged “consistent 26 and uniform policy, practice and procedure of failing to pay . . . wages”); Sanders v. Old 27 Dominion Freight Line, Inc., No. 17cv2340-CAB-NLS, 2019 WL 1193836, at * 6 (S.D. 28 / / / 1 Cal. Mar. 8, 2018) (approving 100% violation rate when complaint requested overdue 2 wages for all separated employees). 3 Furthermore, as Defendant points out, Plaintiff’s overdue wages claim is 4 “derivative” of all other claims in Plaintiff’s Complaint. (See Opp’n at 18.) Thus, if 5 Defendant owed an employee for minimum wage violations, meal or rest break violations, 6 inaccurate wage statements, or unpaid reimbursements, Defendant would also owe this 7 employee waiting time penalties upon separation. For the purposes of this jurisdictional 8 analysis, the Court has determined that the Complaint reasonably supports the following 9 violations: a three-minute grooming violation before each shift, see supra Section II; one 10 unpaid rest break per ten-day work period, see supra Section III; and one unpaid cell phone 11 fee per month, see supra Section V. Based on these findings, it is reasonable to assume 12 that each separated employee would have been owed at least some unpaid wages upon 13 separation. 14 This presumption is bolstered by the court’s holding in Vallejo, in which another 15 judge in this District approved a 100% violation rate for separated employees based on the 16 following violations: “one hour of unpaid overtime per five-day work period” and “at least 17 five unpaid rest [breaks] and one unpaid meal break.” See 2021 WL 2685348, at *5. For 18 the foregoing reasons, the Court accepts Defendant’s $4,627,564 estimate for the overdue 19 wages claim as reasonably supported by a preponderance of evidence. 20 VII. Attorney’s Fees 21 Plaintiff’s Complaint also seeks reasonable attorneys’ fees. (Compl. ¶ 128.) 22 Accordingly, the amount-in-controversy estimate in Defendant’s Notice of Removal 23 includes attorneys’ fees, approximated at 25% of the total damages. (See NOR at 10.) 24 “Because the law entitles [plaintiff] to an award of attorneys’ fees if he is successful, such 25 future attorneys’ fees are at stake in the litigation, and must be included in the amount in 26 controversy.” Fritsch v. Swift Transp. Co. of Az., 899 F.3d 785, 794 (9th Cir. 2018). 27 Plaintiff, however, asserts that a 25% benchmark fee is not supported by any evidence 28 provided by Defendant. (See Mot. at 9–10.) 1 In wage and hour class actions such as this, courts commonly use a 25% benchmark 2 for attorneys’ fees when analyzing an amount-in-controversy estimate for jurisdictional 3 purposes. See e.g., Vallejo, 2021 WL 2685348, at *6; Ramos v. Schenker, Inc., No. 5:18- 4 cv-01551-JLS-KK, 2018 WL 5779978, at *3 (C.D. Cal. Nov. 1, 2018); see also Staton v. 5 Boeing Co., 327 F.3d 938, 968 (9th Cir. 2003). Generally, courts only deviate from this 6 benchmark in cases where a contract or statute limits the fee award. See Fritsch, 899 F.3d 7 at 797. Still, a “defendant must prove the amount of attorneys’ fees at stake by a 8 preponderance of the evidence,” and the Court “may not relieve the defendant of its 9 evidentiary burden by adopting a per se rule.” Id. at 796. Accordingly, Defendant, in its 10 Opposition, endeavored to meet this evidentiary burden by identifying several similar wage 11 and hour cases in this Circuit in which Plaintiff’s counsel sought and received a 33% fee 12 award. (Opp’n at 21–22 (discussing Ortega v. Loyal Source Gov’t Servs. LLC, No. 3:20- 13 cv-00879, 2022 WL 378426, at *1, *6 (S.D. Cal. Feb. 7, 2022); Order Granting Motion for 14 Attorneys’ Fees at 11, Ayala v. UPS Supply Chain Solutions, Inc., Case No. 5:20-cv-00117 15 (C.D. Cal. Jan. 18, 2022), ECF No. 110).) 16 Based on this evidence and the Court’s experience, Defendant’s use of a 25% 17 attorneys’ fee is reasonable and appropriate. Here, the Court has accepted Defendant’s 18 amount in controversy calculations for the minimum wage claim ($656,357), rest break 19 violation claim ($1,312,714), failure to reimburse claim ($690,136), and wages due upon 20 separation claim ($4,627,564), bringing the total amount in controversy for four of 21 Plaintiff’s ten claims to $7,286,771. Accordingly, a 25% attorneys’ fee of $1,821,692.75 22 ($7,286,771 x 0.25) is appropriate. 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 || VIN. Total Amount in Controversy 2 Based on the above analysis, the Court concludes that Defendants have demonstrated 3 || by a preponderance of the evidence that total amount in controversy for four of □□□□□□□□□□□ 4 ||claims and attorney’s fees 1s $9,108,463.75, broken down as follows:
°
: 15 || This amount far exceeds the $5 million threshold required to bring a CAFA action in 16 || federal court. As a result, this Court has subject-matter jurisdiction. 17 CONCLUSION 18 In light of the foregoing, the Court DENIES Plaintiff's Motion to Remand to State 19 || Court (ECF No. 10). 20 IT IS SO ORDERED. 21 ||Dated: January 19, 2023 —_—— 22 | (2 re 23 Honorable Todd W. Robinson United States District Judge 25 26 27 28