O 1 JS-6 2 3 4 5 6 7 United States District Court 8 Central District of California 9 10 11 TAMARA MINASYAN, Case №: 2:19-cv-1516-ODW-JPRx 12 Plaintiffs, 13 v. ORDER GRANTING MOTION TO REMAND [11] WESTERN UNION FINANCIAL 14 SERVICES, INC.; and DOES 1 through 15 10, inclusive, 16 Defendants. 17 18 I. INTRODUCTION AND FACTUAL BACKGROUND 19 This is a wage-and-hour lawsuit brought under the Labor Code Private Attorneys 20 General Act (“PAGA”). (Cal. Lab. Code § 2698 et seq.) Defendant Western Union 21 Financial Services Inc., (“WUFSI”) a Colorado Corporation, has employed Plaintiff 22 Tamara Minasyan (“Minasyan”) since April 2015. (Notice of Removal Ex. 5 23 (“Compl.”), ECF No. 1-5.) Minasyan is a Compliance Officer; her primary duty is to 24 supervise the contracted agents’ compliance program. (Compl. ¶ 12.) After April 2018, 25 Minasyan claims she consistently works more than eight hours per day and over forty 26 hours per week. (Id. ¶ 13.) Accordingly, Minasyan brought this representative action 27 against WUFSI for failing to pay its employees for all time worked, including premium 28 pay for failure to provide meal and rest periods, and failing to provide accurate wage 1 statements. (Id. at ¶ 1.) WUFSI then removed this action to federal court based on 2 diversity jurisdiction. (Notice of Removal, ECF No. 1.) Minasyan subsequently moved 3 to remand the case, arguing that the statutory penalties she seeks do not exceed $75,000. 4 (Pl.’s Mot. to Remand (“Motion”), ECF No. 11.) For the following reasons, the Court 5 GRANTS Plaintiff’s Motion and REMANDS this action to state court.1 6 II. LEGAL STANDARD 7 Federal courts have subject matter jurisdiction only as authorized by the 8 Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. 9 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court may 10 be removed to federal court only if the federal court has original jurisdiction over the 11 suit. 28 U.S.C. § 1441(a). Federal courts have original jurisdiction where an action 12 arises under federal law, id. § 1331, or where each plaintiff’s citizenship is diverse from 13 each defendant’s citizenship and the amount in controversy exceeds $75,000. Id. § 14 1332(a). “Where it is not facially evident from the complaint that more than $75,000 is 15 in controversy, the removing party must prove, by a preponderance of the evidence, that 16 the amount in controversy meets the jurisdictional threshold.” Matheson v. Progressive 17 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 18 The removal statute is strictly construed against removal, and “[f]ederal 19 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 20 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking 21 removal bears the burden of establishing federal jurisdiction. Id. 22 III. DISCUSSION 23 The chart below illustrates the penalties and unpaid wages that each party alleges 24 that Minasyan is entitled to if she proves her case. The Court assumes, without 25 deciding, that the undisputed penalties are fully recoverable. (Def.’s Opp’n. to Mot 26 (“Opp’n”) 5–14, ECF No. 12; Mot. ¶¶ 20–33.) The Court adjusted Minasyan’s 27
28 1 After carefully considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 computation of the amount in controversy based on accrued penalties of twelve months 2 rather than her calculation of six months of accrued penalties. (See Mot. ¶ 33.) 3 Labor Code Defendant’s Plaintiff’s Court’s 4 Violation Calculation Calculation Calculation 5 Failure to Pay $24,999.55 $21,242.94 $300 Overtime 6 Failure to $9,675.24 $9,675.24 $412.50 7 Provide Meal Breaks 8 Failure to $9,675.24 $8,675.24 $412.50 9 Provide Rest 10 Breaks Inaccurate $825 $825 $825 11 Records 12 Noncompliant $825 $825 $825 Wage 13 Statements 14 Untimely $825 $825 $825 15 Wage Payments 16 Total PAGA $46,825.03 $42,068.42 $3,600 17 Weekly $668.93 $600.98 $51.43 18 Penalty Accrued After 19 Removal 20 12 Month $34,784.36 $31,250.96 $2,674.36 Accrued 21 Penalty 22 Attorney Fees $20,402.35 $18,329.85 $1,568.59 23 Total $102,011.74 $91,649.23 $7,842.95 Here, the parties included unpaid wages in their calculations for amount in 24 controversy. The Court did not because the California Supreme Court states that, 25 “unpaid wages are not recoverable as civil penalties under the PAGA.” ZB, N.A. v. 26 Superior Court of San Diego Cty., No. S246711, 2019 WL 4309684, at *8 (Cal. Sept. 27 12, 2019). “Although section 558 authorizes the Labor Commissioner to recover 28 1 [underpaid wages] . . . this amount, understood in context, is not a civil penalty that a 2 private citizen has authority to collect through the PAGA.” Id. at *1. Therefore, 3 Minasyan as a private citizen is unable to recover unpaid overtime and premium pay 4 from missed meal and rest breaks. Id. at *8. 5 Here, “[t]he Complaint asserts a single cause of action for alleged violations of 6 the Private Attorneys General Act.” (Notice of Removal ¶ 1.) Accordingly, when 7 determining the amount in controversy the Court will only consider the civil penalties 8 that Minasyan is entitled to under PAGA. See ZB, N.A., 2019 WL 4309684, at *8 9 (holding that employees cannot recover unpaid wages in lawsuits brought under PAGA 10 because the only remedy available is a civil penalty based on the alleged violation). 11 The statute of limitations for recovery of PAGA penalties is one year from the 12 date that Minasyan submitted her intent letter to the California Labor and Workforce 13 Development Agency (“LWDA”). Cal. Civ. Proc. Code § 340. Even though Minasyan 14 has been employed since April 2015, she is only entitled to recover for violations that 15 occurred following November 1, 2017. (Compl. ¶ 7.) 16 Here, Plaintiff alleges that her PAGA damages span from November 1, 2017 to 17 March 1, 2019, a sum of thirty-three pay periods. (Notice of Removal ¶ 13.) Pay 18 periods are used to determine the number of violations WUFSI allegedly committed 19 during this timeframe. Id. at ¶ 18. 20 The Court addresses each item in turn. 21 A. Failure to Pay Overtime 22 WUFSI asserts that Minasyan worked two hours of overtime on one day per 23 quarter from November 1, 2017 through March 31, 2018. (Opp’n 6.) Minasyan 24 alleges that she rarely worked overtime, thus there were “effectively no overtime 25 violations during that timeframe.” (Mot. ¶ 20.) This contradicts the Complaint where 26 she alleges she “occasionally” worked overtime. (Compl. ¶ 13.) When a plaintiff 27 makes generalized allegations regarding the frequency of violations a defendant may 28 calculate the amount in controversy based on reasonable assumptions. Oda v. Gucci 1 Am., Inc., No. 2:14-CV-07469-SVW, 2015 WL 93335, at *1 (C.D. Cal. Jan.
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O 1 JS-6 2 3 4 5 6 7 United States District Court 8 Central District of California 9 10 11 TAMARA MINASYAN, Case №: 2:19-cv-1516-ODW-JPRx 12 Plaintiffs, 13 v. ORDER GRANTING MOTION TO REMAND [11] WESTERN UNION FINANCIAL 14 SERVICES, INC.; and DOES 1 through 15 10, inclusive, 16 Defendants. 17 18 I. INTRODUCTION AND FACTUAL BACKGROUND 19 This is a wage-and-hour lawsuit brought under the Labor Code Private Attorneys 20 General Act (“PAGA”). (Cal. Lab. Code § 2698 et seq.) Defendant Western Union 21 Financial Services Inc., (“WUFSI”) a Colorado Corporation, has employed Plaintiff 22 Tamara Minasyan (“Minasyan”) since April 2015. (Notice of Removal Ex. 5 23 (“Compl.”), ECF No. 1-5.) Minasyan is a Compliance Officer; her primary duty is to 24 supervise the contracted agents’ compliance program. (Compl. ¶ 12.) After April 2018, 25 Minasyan claims she consistently works more than eight hours per day and over forty 26 hours per week. (Id. ¶ 13.) Accordingly, Minasyan brought this representative action 27 against WUFSI for failing to pay its employees for all time worked, including premium 28 pay for failure to provide meal and rest periods, and failing to provide accurate wage 1 statements. (Id. at ¶ 1.) WUFSI then removed this action to federal court based on 2 diversity jurisdiction. (Notice of Removal, ECF No. 1.) Minasyan subsequently moved 3 to remand the case, arguing that the statutory penalties she seeks do not exceed $75,000. 4 (Pl.’s Mot. to Remand (“Motion”), ECF No. 11.) For the following reasons, the Court 5 GRANTS Plaintiff’s Motion and REMANDS this action to state court.1 6 II. LEGAL STANDARD 7 Federal courts have subject matter jurisdiction only as authorized by the 8 Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v. 9 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court may 10 be removed to federal court only if the federal court has original jurisdiction over the 11 suit. 28 U.S.C. § 1441(a). Federal courts have original jurisdiction where an action 12 arises under federal law, id. § 1331, or where each plaintiff’s citizenship is diverse from 13 each defendant’s citizenship and the amount in controversy exceeds $75,000. Id. § 14 1332(a). “Where it is not facially evident from the complaint that more than $75,000 is 15 in controversy, the removing party must prove, by a preponderance of the evidence, that 16 the amount in controversy meets the jurisdictional threshold.” Matheson v. Progressive 17 Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 18 The removal statute is strictly construed against removal, and “[f]ederal 19 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 20 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party seeking 21 removal bears the burden of establishing federal jurisdiction. Id. 22 III. DISCUSSION 23 The chart below illustrates the penalties and unpaid wages that each party alleges 24 that Minasyan is entitled to if she proves her case. The Court assumes, without 25 deciding, that the undisputed penalties are fully recoverable. (Def.’s Opp’n. to Mot 26 (“Opp’n”) 5–14, ECF No. 12; Mot. ¶¶ 20–33.) The Court adjusted Minasyan’s 27
28 1 After carefully considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 computation of the amount in controversy based on accrued penalties of twelve months 2 rather than her calculation of six months of accrued penalties. (See Mot. ¶ 33.) 3 Labor Code Defendant’s Plaintiff’s Court’s 4 Violation Calculation Calculation Calculation 5 Failure to Pay $24,999.55 $21,242.94 $300 Overtime 6 Failure to $9,675.24 $9,675.24 $412.50 7 Provide Meal Breaks 8 Failure to $9,675.24 $8,675.24 $412.50 9 Provide Rest 10 Breaks Inaccurate $825 $825 $825 11 Records 12 Noncompliant $825 $825 $825 Wage 13 Statements 14 Untimely $825 $825 $825 15 Wage Payments 16 Total PAGA $46,825.03 $42,068.42 $3,600 17 Weekly $668.93 $600.98 $51.43 18 Penalty Accrued After 19 Removal 20 12 Month $34,784.36 $31,250.96 $2,674.36 Accrued 21 Penalty 22 Attorney Fees $20,402.35 $18,329.85 $1,568.59 23 Total $102,011.74 $91,649.23 $7,842.95 Here, the parties included unpaid wages in their calculations for amount in 24 controversy. The Court did not because the California Supreme Court states that, 25 “unpaid wages are not recoverable as civil penalties under the PAGA.” ZB, N.A. v. 26 Superior Court of San Diego Cty., No. S246711, 2019 WL 4309684, at *8 (Cal. Sept. 27 12, 2019). “Although section 558 authorizes the Labor Commissioner to recover 28 1 [underpaid wages] . . . this amount, understood in context, is not a civil penalty that a 2 private citizen has authority to collect through the PAGA.” Id. at *1. Therefore, 3 Minasyan as a private citizen is unable to recover unpaid overtime and premium pay 4 from missed meal and rest breaks. Id. at *8. 5 Here, “[t]he Complaint asserts a single cause of action for alleged violations of 6 the Private Attorneys General Act.” (Notice of Removal ¶ 1.) Accordingly, when 7 determining the amount in controversy the Court will only consider the civil penalties 8 that Minasyan is entitled to under PAGA. See ZB, N.A., 2019 WL 4309684, at *8 9 (holding that employees cannot recover unpaid wages in lawsuits brought under PAGA 10 because the only remedy available is a civil penalty based on the alleged violation). 11 The statute of limitations for recovery of PAGA penalties is one year from the 12 date that Minasyan submitted her intent letter to the California Labor and Workforce 13 Development Agency (“LWDA”). Cal. Civ. Proc. Code § 340. Even though Minasyan 14 has been employed since April 2015, she is only entitled to recover for violations that 15 occurred following November 1, 2017. (Compl. ¶ 7.) 16 Here, Plaintiff alleges that her PAGA damages span from November 1, 2017 to 17 March 1, 2019, a sum of thirty-three pay periods. (Notice of Removal ¶ 13.) Pay 18 periods are used to determine the number of violations WUFSI allegedly committed 19 during this timeframe. Id. at ¶ 18. 20 The Court addresses each item in turn. 21 A. Failure to Pay Overtime 22 WUFSI asserts that Minasyan worked two hours of overtime on one day per 23 quarter from November 1, 2017 through March 31, 2018. (Opp’n 6.) Minasyan 24 alleges that she rarely worked overtime, thus there were “effectively no overtime 25 violations during that timeframe.” (Mot. ¶ 20.) This contradicts the Complaint where 26 she alleges she “occasionally” worked overtime. (Compl. ¶ 13.) When a plaintiff 27 makes generalized allegations regarding the frequency of violations a defendant may 28 calculate the amount in controversy based on reasonable assumptions. Oda v. Gucci 1 Am., Inc., No. 2:14-CV-07469-SVW, 2015 WL 93335, at *1 (C.D. Cal. Jan. 7, 2015) 2 (defendant’s assumption of a 50 percent violation rate is reasonable when plaintiff 3 alleges employees occasionally didn’t receive mandated rest, meal, and recovery 4 periods.) Here, the Court finds that WUFSI’s assumption that Minasyan worked one 5 day of overtime over the span of three months is reasonable. 6 Accordingly, the Court finds that from November 1, 2017 to March 31, 2018, 7 PAGA penalties may be imposed for the failure to pay overtime wages for two pay 8 periods. (Cal. Lab. Code § 558; Opp’n 6.) The PAGA penalty is determined by a $50 9 initial rate x 2 pay periods = $100. Id. Here, the Court reduces the PAGA penalty by 10 75% because under a PAGA action LWDA is entitled to recover 75% of the civil 11 penalties whereas Plaintiff is only entitled to recover 25% of the civil penalties. (Cal. 12 Lab. Code § 2699(i) (“civil penalties recovered by aggrieved employees shall be 13 distributed as follows: 75 percent to the Labor and Workforce Development Agency for 14 enforcement of labor laws”); Notice of Removal ¶ 18.) Therefore, the maximum 15 recoverable amount is approximately $25. ($100 x .25 = $25.) (Opp’n 6.) 16 The Court also finds that from April 1, 2018 to March 1, 2019, PAGA penalties 17 may be imposed for failure to pay overtime wages for twenty-two pay periods. (Mot. ¶ 18 20.) The penalty is determined by a $50 initial rate x 22 pay periods = $1,100. Id.; Cal. 19 Lab. Code § 558. The Court reduces the penalty by 75% to exclude the potential 20 recovery of LWDA. (Cal. Lab. Code § 2699(i); Notice of Removal ¶ 21.) Therefore, 21 the maximum recoverable amount is approximately $275. ($1,100 x .25 = $275). 22 (Opp’n 9; Mot. ¶ 20.) 23 Therefore, the maximum recoverable amount of civil penalties for the failure to 24 pay overtime wages is approximately $300. ($25 + $275 = $300.) (Opp’n 6, 9.) 25 B. Failure to Provide Meal and Rest Breaks 26 For the purposes of determining the amount in controversy, the Parties contend 27 that from November 1, 2017 to March 31, 2018, Plaintiff sustained approximately one 28 meal period and one rest break violation per week. (Mot. ¶ 24; Opp’n. 10–11.) Parties 1 also contend that from April 1, 2018 to March 1, 2019, Plaintiff sustained approximately 2 five meal period and five rest break violations per week. (Mot. ¶ 24; Opp’n. 10–11.) 3 The penalties are determined by multiplying a $50 initial violation rate against thirty- 4 three pay periods, which equates to $1,650. (Cal. Lab. Code § 558; Notice of Removal 5 ¶¶ 26, 33; Mot. ¶¶ 24–25.) Here, the Court reduces the penalty by 75% to exclude the 6 potential recovery of LWDA. (Cal. Lab. Code § 2699(i); Notice of Removal ¶¶ 26, 33; 7 Mot. ¶¶ 24–25.) Therefore, the maximum recoverable amount is $412.50 in civil 8 penalties for the failure to provide meal breaks and $412,50 for the failure to provide 9 rest breaks. ($1,650 x .25 = $412.50.) (Notice of Removal ¶¶ 26, 33; Mot. ¶¶ 24, 25.) 10 C. Inaccurate Record Keeping, Wage Statement Violations, and Semi- 11 Monthly Payment of Wages 12 For the purposes of determining the amount in controversy, the Parties agree that 13 the penalty for inaccurate record keeping, wage statement violations, and semi-monthly 14 payment of wages are each $825. (Mot. ¶¶ 26–28; Opp’n. 11–12.) The penalty is 15 determined by a $100 initial violation rate x 33 pay periods = $3,300. (Cal. Lab. Code 16 § 2699(f)(2); Notice of Removal ¶¶ 37–42.) Here, the Court reduces the penalty by 17 75% to exclude the potential recovery of LWDA. (Cal. Lab. Code § 2699(i); Notice of 18 Removal ¶¶ 37–42.) Therefore, the maximum recoverable amount is $825 for 19 inaccurate record keeping violations, $825 for wage statement violations, and $825 for 20 semi-monthly payment of wages violations. ($3,300 x .25 = $825.) (Notice of Removal 21 ¶¶ 37–42.) 22 D. Total PAGA Amount 23 Accordingly, after adding all the claims together, the maximum recoverable 24 amount under PAGA is approximately $3,600. (Opp’n 6–12.) ($300 + $412.50 + 25 $412.50 + $825 + $825 + $825 = $3,600.) (See ZB, N.A., 2019 WL 4309684, at *1) 26 (the Court may not consider unpaid wages when determining the total civil penalties, a 27 plaintiff may seek through a PAGA claim, for the purposes of amount in controversy.) 28 1 E. Twelve Month Penalty Accrued 2 For the purposes of determining the amount in controversy, the Parties agree 3 that from the time of the removal, additional PAGA penalties must be assessed and 4 included in the amount in controversy calculation. (Mot. ¶ 31; Opp’n 13.) See 5 Celestino v. Renal Advantage Inc., No. C 06-07788 JSW, 2007 WL 1223699, at *4 6 (N.D. Cal. Apr. 24, 2007) (the amount in controversy includes a reasonable 7 assessment of damages likely to be accrued after the time of removal.) 8 Minasyan asserts the calculation for penalties accrued after removal should be 9 for violations continuing for six months and WUFSI asserts it should be for six or 10 twelve months. Id. However, as of September 20, 2019, seven months have elapsed 11 since the date of removal to federal court. (Notice of Removal 18.) The Parties have 12 yet to enter into discovery, therefore the Court determines that the Parties may 13 continue to litigate this case for about five additional months. (Opp’n. 13.) 14 Consequently, the penalty accrued calculation is calculated for twelve months after the 15 removal because “WUFSI has no intention of conceding that Plaintiff is actually a 16 non-exempt employee who is due overtime and payment for meal periods.” (Notice 17 of Removal ¶ 47.) Therefore, additional alleged PAGA violations will occur and civil 18 penalties shall accrue. Id. 19 To calculate the penalties that will accrue, the Court determines that Minasyan 20 will likely sustain the same average alleged violations per week for twelve months (52 21 weeks) since removal. Id. The PAGA period that Minasyan alleges, before removal, 22 amounts to seventy weeks. Id. Accordingly, the average weekly penalty of PAGA 23 violations is $51.43. ($3,600/70 weeks = $51.43.) Id. Therefore, the average weekly 24 penalty of $51.43 multiplied by 52 additional weeks results in civil penalties of 25 $2,674.36. ($51.43 x 52 = $2,674.36.) Id. 26 F. Attorney Fees 27 For the purposes of determining the amount in controversy, the Parties also agree 28 that attorneys’ fees must be included in the amount-in-controversy calculation. (Cal. 1 || Lab. Code § 2699(g)(1); Mot. § 32 & 33; Opp’n 14.) Here, the Parties adopt a standard 2 || 25% attorney’s fee recovery. Jd. Accordingly, PAGA period damages of $3,600 and 3 | penalties accrued of $2,674.36 equate to $6,274.36. (Mot. 431; Opp’n 13.) Therefore, 4|| attorney’s fees amount to $1,568.50. ($6,274.36 x .25 = $1,568.50.) (Mot. □ 32, 33; 5 || Opp’n 14.) 6 G. Total Amount in Controversy 7 Thus, the total amount in controversy consisting of PAGA violations from 8 || November 1, 2017 to March 1, 2019, PAGA violations accrued over a twelve months 9 || period from the removal date, and attorney fees is $7,842.95. ($3,600 + $2,674.36 + 10 | $1,568.59 = $7,842.95.) 1] IV. CONCLUSION 12 Because WUFSI has not shown that the amount in controversy exceeds $75,000, 13 || the Court lacks diversity jurisdiction over this matter. The Court therefore GRANTS 14 || Minasyan’s Motion, and REMANDS this case to the Superior Court of California for 15 || the County of Los Angeles, Case No. 19STCCV02545 located at 111 North Hill Street, 16 || Los Angeles, California 90012. The Clerk of the Court shall close the case. 17 18 19 IT IS SO ORDERED. 20 21 September 26, 2019 es 22 . ig
34 OTIS D. WRIGHT, II 05 UNITED STATES DISTRICT JUDGE
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