1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TENIAH TERCERO, No. 2:24-cv-00953-DC-JDP 12 Plaintiff, 13 v. ORDER DENYING PLAINTIFF’S MOTION FOR RECONSIDERATION AND 14 SACRAMENTO LOGISTICS, LLC, et al., GRANTING PLAINTIFF’S MOTION TO REMAND AND REMANDING THIS 15 Defendants. ACTION TO THE SACRAMENTO COUNTY SUPERIOR COURT 16 (Doc. Nos. 34, 35) 17 18 This matter came before the court on June 13, 2025 for a hearing on Plaintiff’s motion for 19 reconsideration and motion to remand this action to the Sacramento County Superior Court. (Doc. 20 Nos. 34, 35.) Attorney Sepideh Ardestani appeared on behalf of Plaintiff. Attorney Sylvia Kim 21 appeared on behalf of Defendants. For the reasons explained below, the court will deny Plaintiff’s 22 motion for reconsideration and grant Plaintiff’s motion to remand. 23 BACKGROUND 24 On February 16, 2024, Plaintiff Teniah Tercero filed a wage-and-hour class action 25 complaint against Defendants Sacramento Logistics, LLC (“Sacramento Logistics”) and C&S 26 Wholesale Grocers, LLC (“C&S Wholesale”) (collectively, “Defendants”) in Sacramento County 27 ///// 28 ///// 1 Superior Court.1 (Doc. No. 1 at 38–66.) Plaintiff’s complaint alleges seven causes of action: (1) 2 recovery of unpaid minimum wages and liquidated damages in violation of California Labor 3 Code §§ 218, 218.5, 222-24, 1194, 1194.2, 1197; (2) recovery of unpaid overtime wages in 4 violation of California Labor Code §§ 510 and 1194; (3) failure to provide meal periods or 5 compensation in lieu thereof in violation of California Labor Code §§ 226.7 and 512; (4) failure 6 to provide rest periods or compensation in lieu thereof in violation of California Labor Code § 7 226.7; (5) failure to timely pay all wages due upon separation of employment in violation of 8 California Labor Code §§ 201-03; (6) failure to reimburse business expenses in violation of 9 California Labor Code § 2802; and (7) unfair business practices in violation of California’s 10 Unfair Competition Law, Business & Professions Code §§ 17200 et seq. (Doc. No. 1 at 56–65.) 11 Plaintiff seeks to represent a proposed class defined as: 12 All current and former non-exempt employees that worked either directly or via a staffing agency for any one or more of the 13 DEFENDANTS at any location in California at any time within the four years prior to the filing of the initial Complaint (“Class Period”). 14 15 (Id. at 43.) Plaintiff alleges she worked for Defendants from approximately July 2021 through 16 August 2022 in Sacramento, California. (Id. at 39.) 17 On March 27, 2024, Defendants removed this action to this federal district court pursuant 18 to 28 U.S.C. § 1446, alleging diversity jurisdiction under the Class Action Fairness Act 19 (“CAFA”) (28 U.S.C. § 1332(d)), traditional diversity jurisdiction (28 U.S.C. § 1332(a)), and 20 federal question jurisdiction (28 U.S.C. § 1331) arising from the complete preemption of 21 Plaintiff’s state law wage and hours claims by Section 301 of the Labor Management Relations 22 Act (“LMRA”) (29 U.S.C. § 185(a)). (Doc. No. 1.) Defendants’ notice of removal alleges 23 Plaintiff was represented by General Teamsters Local #150 (the “Union”) at all times during her 24 employment, and therefore her employment was governed by collective bargaining agreements 25 between Defendant Sacramento Logistics and the Union (the “CBAs”). (Id. at 32; see also Doc. 26 1 Plaintiff also named Defendant C&S Logistics of Sacramento/Tracy LLC in her complaint. 27 (Doc. No. 1.) On November 25, 2024, the court granted Defendant C&S Logistics of Sacramento/Tracy LLC’s motion to dismiss for lack of personal jurisdiction and dismissed 28 Defendant C&S Logistics of Sacramento/Tracy LLC from this action. (Doc. No. 32.) 1 No. 1-2.) 2 On May 31, 2024, Defendants moved to compel arbitration of Plaintiff’s individual claims 3 and to stay all proceedings pending completion of arbitration.2 (Doc. No. 15.) On June 14, 2024, 4 Plaintiff filed her opposition to Defendants’ motion to compel arbitration. (Doc. No. 21.) On June 5 24, 2024, Defendants filed their reply thereto. (Doc. No. 27.) On January 7, 2025, the court 6 granted Defendants’ motion to compel arbitration of Plaintiff’s claims and stayed all proceedings 7 pending the completion of arbitration. (Doc. No. 33.) 8 Over three months later, on March 26, 2025, Plaintiff filed the pending motion for 9 reconsideration of the court’s order dated January 7, 2025, which granted Defendants’ motion to 10 compel arbitration and stayed all proceedings pending the completion of arbitration. (Doc. No. 11 34.) Plaintiff seeks reconsideration of the court’s order granting Defendants’ motion to compel 12 arbitration pursuant to Federal Rule of Civil Procedure 60(b)(4) and (b)(6). (Doc. No. 34 at 8–9.) 13 On April 9, 2025, Defendants filed an opposition to Plaintiff’s motion for reconsideration. (Doc. 14 No. 36.) On April 18, 2025, Plaintiff filed a reply thereto. (Doc. No. 40.) 15 Federal Rule of Civil Procedure 60(b) authorizes courts to grant relief from “a final 16 judgment, order, or proceeding for the following reasons. . . (4) the judgment is void. . . (6) any 17 other reason that justifies relief.” At the June 13, 2025 hearing on the pending motions, Plaintiff’s 18 counsel conceded that the court’s order granting Defendants’ motion to compel arbitration is not a 19 “final judgment [or] order” within the meaning of Rule 60(b). On this basis alone, the court will 20 deny Plaintiff’s motion for reconsideration. See Broadnax v. Uber Techs., Inc., No. 2:25-cv- 21 00113-JAD-MDC, 2025 WL 1808513, at *2 (D. Nev. July 1, 2025) (“[A]n order compelling 22 arbitration and staying proceedings is not a final, appealable judgment; it’s an interlocutory one to 23 which FRCP 60(b) does not apply.”); Mota v. BMW of N. Am., LLC, No. 2:21-cv-00630-MCS- 24 AFM, 2022 WL 2199825, at *1 (C.D. Cal. Mar. 15, 2022) (denying Rule 60(b) motion as 25 procedurally improper because an order compelling arbitration is “not a final, appealable order or 26 2 On May 31, 2024, Defendants also filed a motion to dismiss Plaintiff’s individual and putative 27 class claims. (Doc. No. 17.) In its order granting Defendants’ motion to compel arbitration, the court administratively terminated Defendants’ motion to dismiss, to be reactivated upon the 28 lifting of the stay, if appropriate. (Doc. No. 33.) 1 judgment”). 2 Also on March 26, 2025, nearly a year after Defendants removed this action to federal 3 court, Plaintiff filed the pending motion to remand this action back to Sacramento County 4 Superior Court. (Doc. No. 35.) On April 9, 2025, Defendants filed an opposition to the pending 5 motion. (Doc. No. 38.) On April 18, 2025, Plaintiff filed her reply thereto.3 (Doc. No. 41.) 6 LEGAL STANDARD 7 A defendant may remove to a federal district court “any civil action brought in a state 8 court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. 9 § 1441(a). Federal district courts have original jurisdiction over cases involving claims arising 10 under federal law (“federal question jurisdiction”) or where the parties are diverse citizens and the 11 amount in controversy exceeds $75,000, exclusive of interest and costs (“traditional diversity 12 jurisdiction”). 28 U.S.C. §§ 1331, 1332(a). For class actions, traditional diversity jurisdiction 13 exists when there is complete diversity of citizenship between any named plaintiffs and 14 defendants, and the amount in controversy for at least one named plaintiff plausibly exceeds 15 $75,000. See Snyder v. Harris, 394 U.S. 332, 340 (1969); Exxon Mobil Corp. v. Allapattah Servs., 16 Inc., 545 U.S. 546, 549 (2005). 17 To protect the jurisdiction of state courts, removal jurisdiction is strictly construed in 18 favor of remand. Harris v. Bankers Life and Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005). It is 19 presumed that a case lies outside the limited jurisdiction of the federal courts, and the burden of 20 establishing the contrary rests upon the party asserting jurisdiction. Abrego v. The Dow Chem.
21 3 In support of her motion to remand, Plaintiff requests that the court take judicial notice of several filings in other actions, as well as a remand order issued by this court in a separate related 22 action, Tercero v. C&S Logistics of Sacramento/Tracy, LLC, et al., No. 2:24-cv-00963-DC-JDP. 23 (Doc. No. 35-1.) Federal Rule of Evidence 201(b) provides that a court “may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial 24 court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Courts regularly take judicial 25 notice of court filings and other matters of public record. See Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). However, “judicial notice is not required for the 26 court to consider [] cited opinions as matters of law and potentially persuasive precedents.” 27 Phillips v. Nat’l City Bank of Ind. First Franklin Div., 462 F. App’x 666, *1 n.1 (9th Cir. 2011). Therefore, the court will take judicial notice of the filings in other actions, but need not take 28 notice of its prior orders. 1 Co., 443 F.3d 676, 684 (9th Cir. 2006); see also Provincial Gov’t of Marinduque v. Placer Dome, 2 Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (“The defendant bears the burden of establishing that 3 removal is proper.”). If there is any doubt as to the right of removal, a federal court must reject 4 jurisdiction and remand the case to state court. Geographic Expeditions, Inc. v. Estate of Lhotka, 5 599 F.3d 1102, 1107 (9th Cir. 2010). 6 CAFA confers original jurisdiction to federal district courts in any class action where 7 there are at least 100 class members, any plaintiff is diverse in citizenship from any defendant, 8 and the amount in controversy exceeds $5,000,000, notwithstanding interest and costs. 28 U.S.C. 9 § 1332(d). CAFA was enacted “specifically to permit a defendant to remove certain class or mass 10 actions into federal court.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). 11 Congress intended CAFA to be interpreted “expansively.” Id. Unlike cases removed under 12 traditional diversity or federal question jurisdiction, “no antiremoval presumption attends cases 13 invoking CAFA.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). 14 However, “the burden of establishing removal jurisdiction remains, as before, on the proponent of 15 federal jurisdiction.” Abrego, 443 F.3d at 685. 16 A defendant’s notice of removal must contain “a short and plain statement of the grounds 17 of removal,” but “need not contain evidentiary submissions.” Dart Cherokee, 574 U.S. at 83–84. 18 A plaintiff may seek remand of a case that has been removed to federal court by “making either a 19 ‘facial’ or ‘factual’ attack on the defendant’s jurisdictional allegations.” Harris v. KM Indus., Inc., 20 980 F.3d 694, 699 (9th Cir. 2020) (citing Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 21 2020)). “A facial attack accepts the truth of the [defendant’s] allegations but asserts that they are 22 insufficient on their face to invoke federal jurisdiction.” Id. at 699 (citations and quotations 23 omitted). When evaluating a facial attack, the court accepts defendant’s allegations as true and 24 draws all reasonable inferences in the defendant’s favor to determine whether the allegations are 25 sufficient to invoke the court’s jurisdiction. Salter, 974 F.3d at 964. 26 By contrast, a factual attack contests the truth of the allegations themselves. Harris, 980 27 F.3d at 699. To mount a factual attack, Plaintiff “need only challenge the truth of the defendant’s 28 jurisdictional allegations by making a reasoned argument as to why any assumptions on which 1 they are based are not supported by evidence.” Harris, 980 F.3d at 700. If the plaintiff mounts a 2 factual attack, the defendant bears the burden of showing by a preponderance of the evidence that 3 jurisdictional requirements are satisfied. Id. at 699. This burden may be satisfied by submitting 4 “affidavits or declarations, or other ‘summary-judgment-type evidence relevant to the amount in 5 controversy at the time of removal.’” Ibarra, 775 F.3d at 1197 (quoting Singer v. State Farm Mut. 6 Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). 7 ANALYSIS 8 Plaintiff seeks remand of this action to the Sacramento County Superior Court on the 9 grounds that Defendants have failed to satisfy their burden of establishing (1) the amount in 10 controversy for putative class members exceeds the $5,000,000 threshold for CAFA jurisdiction, 11 (2) the amount in controversy for her individual claims exceeds the $75,000 threshold for 12 traditional diversity jurisdiction, or (3) federal question jurisdiction exists based on preemption 13 under Section 301 of the LMRA. (Doc. No. 35.) The court will first address the amount in 14 controversy, and then turn to preemption under Section 301 of the LMRA. 15 A. Amount in Controversy 16 Plaintiff does not dispute that her putative class exceeds 100 members and minimal 17 diversity of citizenship exists for CAFA purposes.4 Nor does she dispute that her citizenship as 18 the named plaintiff is diverse from all Defendants as required for traditional diversity jurisdiction. 19 The only issue before the court regarding diversity jurisdiction is the amount in controversy. 20 Specifically, Plaintiff argues this case should be remanded because Defendants have failed to 21 establish the amount in controversy exceeds $5,000,000 for jurisdiction under CAFA, or, in the 22 alternative, $75,000 for traditional diversity jurisdiction. (See Doc. Nos. 35 at 16–26; 41 at 9–18.) 23 For reasons explained below, the court concludes that Defendants have not met their burden of 24 establishing, by a preponderance of the evidence, that the amount in controversy exceeds either 25 jurisdictional minimum. 26 4 In her motion to remand, Plaintiff alleges “Defendants acknowledge that removal requires more 27 than 100 class members yet have not evidenced that this requirement is met.” (Doc. No. 35 at 9.) Plaintiff’s complaint, however, alleges that she “is informed and believes the class consists of at 28 least 100 individuals.” (Doc. No. 1 at 43.) 1 1. CAFA 2 The amount in controversy is not apparent from the face of Plaintiff’s complaint. (See 3 Doc. No. 1 at 38–66.) Defendants’ notice of removal calculates the amount in controversy for 4 putative class members to be $5,640,257.50, above CAFA’s $5,000,000 threshold.5 (Doc. No. 1 5 at 23.) Defendants allege they used “payroll, employment, and operational data” to determine the 6 amount in controversy under CAFA, including the aggregate number of workdays, shift lengths, 7 number of pay periods, and hourly rates of pay. (Id. at 11–12.) Applying these data points and 8 assumptions regarding the rates of violation, Defendants calculate unpaid minimum wages and 9 liquidated damages, unpaid overtime, meal and rest period premiums, waiting time penalties, 10 unreimbursed business expenses, and statutory attorneys’ fees, as follows: 11 12 Claim Amount in Controversy 13 Unpaid Minimum Wages and Liquidated $398,315.64 14 Damages 15 Unpaid Overtime/Double Time Premiums $837,517.10 16 Meal Period Violations $1,125,784.20 17 Rest Period Violations $1,154,844.90 18 Waiting Time Penalties $871,097.40 19 Unreimbursed Business Expenses $124,646.76 20 Statutory Attorneys’ Fees $1,128,051.50 21 Total $5,640,257.50 22 (Id. at 23.) 23 In her motion to remand, Plaintiff argues Defendants’ amount in controversy calculations 24 5 Defendants’ notice of removal included calculations for the amount in controversy through 25 March 9, 2024. (Doc. No. 1 at 11.) In their opposition to the pending motion, Defendants provide updated calculations for the amount in controversy through March 29, 2025. (Doc. No. 38 at 11.) 26 For example, Defendants’ provide an updated figure of $1,529,523.68 for meal period violations, 27 and $1,563,721.66 for rest period violations. (Id. at 39.) Even with those updated figures, however, Defendants fail to meet their burden of showing CAFA’s jurisdictional requirements are 28 satisfied for the reasons discussed herein. 1 must be set aside because they unreasonably assume labor code violations “pulled from thin air,” 2 which are contrary to the complaint’s plain language. (Doc. No. 35 at 19.) More precisely, 3 Plaintiff alleges that Defendants’ assumption of a 100% violation rate for her claims ignores 4 “limiting language” in her complaint that Defendants’ labor violations occurred “at times” and 5 “merely ‘predominate.’” (Id. at 19.) 6 Plaintiff further argues Defendants have failed to provide competent supporting evidence 7 for the data points and assumed violation rates used to estimate the amount in controversy. (Id. at 8 18, 21–22.) Despite having access to wage records, the only evidence Defendants proffered with 9 their notice of removal was the declaration of Brandon Driscoll, associate HR business partner for 10 Defendant C&S Wholesale and its subsidiaries. (Doc. No. 1-2.) Mr. Driscoll’s declaration 11 describes CBAs relevant to Plaintiff’s employment but does not provide any information related 12 to Defendants’ amount in controversy calculations. (Id.) 13 In opposition, Defendants argue Plaintiff has not adequately challenged its amount in 14 controversy calculations because she has not submitted proof that less than $5 million is in 15 controversy. (Doc. No. 38 at 17–18.) Defendants assert that “when a removing defendant’s 16 [amount in controversy] calculations are challenged by a remand motion, both sides must submit 17 proof, and then the [c]ourt decides, based on a preponderance of the evidence if the AIC 18 requirement is satisfied.” (Id.) (citing Dart Cherokee, 574 U.S. at 88). According to Defendants, 19 Plaintiff’s failure to submit evidence to contradict Defendants’ AIC calculations is an 20 independent basis upon which to deny her motion to remand. (Id. at 18). 21 Defendants also contend that their assumptions of a 100% violation rate are supported by 22 Plaintiff’s “unqualified and indeterminate allegations of Labor Code violations.” (Id. at 20.) For 23 example, Defendants contend that a 100% violation rate is appropriate for Plaintiff’s meal and 24 rest break violation claims because Plaintiff’s complaint alleges such violations occurred as a 25 matter of Defendants’ “policies and/or practices,” putative class members were “consistently 26 unable” to take complaint meal breaks, and putative class members “were frequently if not always 27 unable to take compliant rest periods.” (Id. at 23–24.) 28 Finally, although Defendants maintain the notice of removal is sufficient to establish the 1 amount in controversy under CAFA, they nevertheless concurrently filed along with their 2 opposition to the pending motion a declaration from Sylvia Ryan. (Doc. No. 38-2.) Ms. Ryan is 3 the “Manager, HR Business Partner” for Defendant C&S Wholesale. (Id. at 2.) Ms. Ryan’s 4 declaration is based upon her personal knowledge and review of business information and records 5 pertaining to Plaintiff and the class during the relevant class period. (Id. at 2–3.) In her 6 declaration, Ms. Ryan lists the data points used by Defendants to calculate the amount in 7 controversy. (Doc. No. 38-2 at 3–6.) 8 a. Evidentiary Burden 9 At the outset, the court will address the parties’ dispute regarding the evidentiary burden 10 for removal. Defendants argue that Plaintiff has failed to properly challenge its amount in 11 controversy calculation because she has not presented rebuttal evidence. (Doc. No. 38 at 17–18.) 12 Plaintiff counters that she is not required to submit evidence to make a factual attack on 13 Defendants’ amount in controversy allegations because Defendants bear the evidentiary burden of 14 establishing jurisdiction by a preponderance of the evidence. (Doc. No. 41 at 8–9.) The court 15 agrees with Plaintiff. 16 Plaintiffs can mount a factual attack by making a reasoned argument that Defendants’ 17 assumptions are not supported by the evidence, without introducing extrinsic rebuttal evidence. 18 See Harris, 980 F.3d at 700 (plaintiff is not required to proffer an alternative assumption 19 grounded in real evidence to mount a factual attack). Defendants’ “burden of establishing 20 removal” does not shift to Plaintiff at any time. Abrego, 443 F.3d at 678, 685. “This approach is 21 akin to the procedure in the summary judgment context whereby, if the party with the initial 22 burden of production fails to carry its burden, the other party ‘has no obligation to produce 23 anything.’” Giles v. Nat’l Express Transit Corp., No. 1:22-cv-00257-JLT-BAM, 2023 WL 24 2681974, at *1 (E.D. Cal. Mar. 29, 2023) (quoting Nissan Fire & Marine Ins. Co., Ltd. v. Fritz 25 Cos., Inc., 210 F.3d 1099, 1102–03 (9th Cir. 2000)). Put differently, if the court determines 26 Defendants have not satisfied their burden of establishing removal jurisdiction, it need not 27 address Plaintiff’s evidence or lack thereof. 28 ///// 1 b. Violation Rates 2 To determine whether CAFA’s amount in controversy threshold is satisfied, “courts first 3 look to the complaint.” Ibarra, 775 F.3d at 1197. A removing defendant is permitted to rely on “a 4 chain of reasoning that includes assumptions” when calculating an amount in controversy. Id. at 5 1199. However, a defendant’s “assumptions cannot be pulled from thin air.” Id. at 1199. The 6 assumptions “need some reasonable ground underlying them.” Id; see also Ellis v. Pac. Bell Tel. 7 Co., No. 8:10-cv-01141-CJC-FFM, 2011 WL 499390, at *2–3 (C.D. Cal. Feb. 10, 2011) (noting 8 that a defendant may rely on good-faith calculations to satisfy its burden, but those calculations 9 cannot be based on unreasonable or speculative assumptions). “Reasonable grounds may be 10 established on the basis of the complaint and extrinsic evidence.” Moore v. Dnata US Inflight 11 Catering LLC, No. 3:20-cv-08028-JD, 2021 WL 3033577, at *2 (N.D. Cal. July 19, 2021) 12 (citation omitted). 13 In wage-and-hour cases, it is common that “the amount in controversy turns on the 14 frequency of the alleged violations of California labor laws.” Hayes v. Salt & Straw, LLC, No. 15 2:20-cv-03063-CJC-KS, 2020 WL 2745244, at *3 (C.D. Cal. May 27, 2020). “Whether the 16 alleged violations occur from time to time, as a matter of pattern and practice, or uniformly, as 17 alleged in the complaint, has a significant impact on the amount in controversy 18 calculation.” Cocroft v. EquipmentShare.com Inc., No. 3:24-cv-00645-BAS-AHG, 2024 WL 19 3877274, at *7 (S.D. Cal. Aug. 19, 2024). “This frequency informs the court’s adoption of a 20 violation rate expressed as a percentage when calculating the amount in controversy.” Id. 21 Plaintiff’s motion to remand attacks the violation rate assumptions underlying 22 Defendants’ amount in controversy estimates for all claims. The court begins by assessing the 23 reasonableness of Defendants’ violation rate assumptions for Plaintiff’s meal and rest break 24 claims because those claims account for a significant portion ($2,280,629.10) of Defendants’ 25 $5,640,257.50 amount in controversy estimate, and the $5 million threshold cannot be met in this 26 case without the amounts in controversy for those claims. (Doc. Nos. 1 at 23; 38 at 39.) 27 Under California Labor Code § 512(a), employers must provide an uninterrupted meal 28 period of not less than thirty minutes to employees who work more than five hours per day. A 1 second meal period must be provided if an employee works more than ten hours per day. Cal. 2 Lab. Code § 512(a). Similarly, employers must permit employees to take rest periods for ten 3 minutes per four hours worked in a workday. Cal. Lab. Code § 226.7(b). Employers are required 4 to pay an employee an additional one hour of pay at the employee’s regular pay rate for each 5 workday that a compliant meal or rest period is not provided. Cal. Lab. Code § 226.7(c). 6 Plaintiff’s complaint alleges that putative class members “were at times interrupted during 7 purported meal periods,” “were consistently unable to take timely, off duty, thirty-minute, 8 uninterrupted meal periods,” and Defendants “implemented policies and/or practices that failed to 9 relieve [c]lass [m]embers of all duties and [Defendants’] control during unpaid meal periods.” 10 (Doc. No. 1 at 50.) Plaintiff’s complaint further alleges that putative class members “were 11 frequently if not always unable to take complaint rest periods” and Defendants “implemented 12 policies and/or practices that failed to relieve [Plaintiff] and other [c]lass [m]embers of all duties 13 and [Defendants’] control during rest periods.” (Id. at 52–53.) Plaintiff claims that the class is 14 entitled to “one additional hour’s pay at the employee’s regular rate of compensation for each day 15 a meal period was missed, late, interrupted, or otherwise unlawful,” and “one hour of additional 16 pay at the regular rate of compensation for each workday that a required rest period was not 17 provided.” (Id. at 60–61.) 18 Based on these allegations, Defendants’ notice of removal alleges it is reasonable to 19 assume that “each of the [putative class members] will claim to have not been provided nor paid 20 premiums for one non-compliant meal break each day they worked a meal-break eligible shift 21 (i.e. over five hours) during the 4-Year [statute of limitations] period.” (Doc. No. 1 at 17.) 22 Defendants also argue they can reasonably assume “each of the [putative class members] who 23 worked a rest eligible shift (i.e. more than 3.5 hours in a workday) will claim to have not been 24 authorized or permitted to take at least one rest break nor paid a rest break premium for the 25 missed rest break on each 3.5-Hour Workday during the 4-Year [statute of limitations] Period.” 26 (Id. at 18.) In their opposition to the pending motion, Defendants similarly argue that it is 27 “reasonabl[e] [to] assume that [putative class members] would claim to have experienced at least 28 one meal and rest break violation on each meal and rest break eligible shift.” (Doc. No. 38 at 25.) 1 Put differently, Defendants claim that 100% of class members experienced one meal period and 2 one rest break violation every shift that they were eligible to receive one. 3 Defendants assert their timekeeping and payroll data shows there were 47,804 five-hour 4 workdays and 49,038 three-and-a-half hour workdays recorded during the relevant time period. 5 (Doc Nos. 1 at 12, 18, 19; 38 at 23; 38-2 at 3.) Defendants also identify the average base regular 6 rate of pay as $23.55. (Doc Nos. 1 at 12; 38 at 23; 38-2 at 3.) Assuming a 100% violation rate, 7 Defendants calculate an amount in controversy for Plaintiff’s meal period claim as $1,125,784.20 8 ($23.55 average regular rate of pay × 47,804 total number of putative meal break violations) and 9 rest period claim as $1,154,844.90 ($23.55 average regular rate of pay × 49,038 total number of 10 putative rest break violations). 11 The assumption underlying Defendants’ calculation—that putative class members 12 received none of the meal or rest breaks they were entitled to during eligible shifts—is not 13 supported by Plaintiff’s complaint. The complaint states that meal break violations occurred “at 14 times.” (Doc. No. 1 at 50.) “The language ‘at times’. . . clearly limit[s] the allegations regarding 15 how many employees were affected and how often they were affected.” Davis v. Empire 16 Chauffeur Serv., Ltd., No. 2:23-cv-07968-MEMF-SSC, 2024 WL 1217377, at *6 (C.D. Cal. Mar. 17 18, 2024). District courts have held that language indicating violations occurred “at times” cannot 18 reasonably support a 100% violation rate. Id.; Duran v. Allegis Glob. Sols., Inc., No. 3:20-cv- 19 09025-JD, 2021 WL 3281073, at *3 (N.D. Cal. Aug. 2, 2021) (finding a 100% violation rate 20 unreasonable where plaintiff alleged that defendants “acted ‘at times’ in a manner that violated 21 California state employment laws” and “the violations may have happened to only ‘some’ of the 22 putative class members”); cf. Powell v. USI Ins. Serv., LLC, No. 23-cv-04129-ODW-BFM, 2023 23 WL 6276578, at *4 (C.D. Cal. Sept. 25, 2023) (a 60% violation rate for meal periods and a 30% 24 violation rate for rest periods was proper where plaintiff alleged that defendants “sometimes, but 25 not always” violated protections). 26 As Defendants argue to support their 100% violation rate, Plaintiff’s complaint also states 27 that meal and rest break violations occurred “consistently,” “frequently,” and as a result of 28 Defendants’ “policies and/or practices.” (Doc. No. 1 at 50–53.) Defendants cite to cases where 1 district courts have accepted 100% violation rates as reasonable based on allegations that an 2 employer engaged in “consistent” or “uniform” violations. See e.g., Mendoza v. OSI Indus., LLC, 3 No. 5:22-cv-01202-JGB-SP, 2022 WL 4291327, at *5 (C.D. Cal. Sept. 16, 2022) (finding a 100% 4 violation rate reasonable where plaintiffs alleged defendant’s official policy uniformly prevented 5 class members from taking compliant meal and rest breaks); Archuleta v. Avcorp Composite Fab., 6 Inc., 2018 WL 6382049, at *4-5 (C.D. Cal. Dec. 6, 2018) (100% violation rate where plaintiff 7 alleged a “consistent policy” of failing to provide meal breaks). However, courts have also 8 determined that a 100% violation rate may be unreasonable even where there are “policy and 9 practice” allegations. See e.g., Powell v. USI Ins. Serv., LLC, No. 2:23-cv-04129-ODW-BFM, 10 2023 WL 6276578, at *4 (C.D. Cal. Sept. 25, 2023) (complaint allegations of a pattern and 11 practice could not reasonably support a 100% violation rate); Davis, 2024 WL 1217377, at *6 12 (holding that “policy” and “practice” cannot reasonably be read as 100% of employees). The 13 court agrees with the latter approach. “While it is true that the complaint alleges that [the 14 defendant] maintains ‘an institutionalized unwritten policy that mandates’ the employment 15 violations alleged in the complaint, including the denial of meal and rest periods, this does not 16 mean that such violations occurred in each and every shift.” See e.g., Ibarra, 775 F.3d at 1199. 17 Defendants have not provided any support to show their interpretation of a 100% violation 18 rate is reasonable in this case. Ibarra, 775 F.3d at 1198–99 (the removing party has the “burden to 19 show that its estimated amount in controversy relied on reasonable assumptions”). It would be 20 just as consistent with the complaint to assume a frequency of one or three violations per week as 21 it is to assume one violation for every shift that class members were eligible to receive a meal or 22 rest break. See Duran, 2021 WL 3281073, at *3 (noting that an assumption of once-per-week for 23 meal and rest break violations was arbitrary where defendant did not provide any evidence to tip 24 the analysis in its direction); Li v. Golftec Mgmt. LLC, No. 3:24-cv-01678-RFL, 2024 WL 25 4553148, at *2 (N.D. Cal. May 29, 2024) (“In the absence of any evidence from [defendant], the 26 [c]ourt simply has no reasonable basis to identify whether violations occurred only every other 27 week, every month, or every other month, on average as to each putative class member.”). 28 Accordingly, the court finds Defendants’ assumed 100% violation rate untethered to 1 allegations in Plaintiff’s complaint. 2 c. Defendants’ Supporting Evidence 3 Defendants have not offered any other “extrinsic evidence independently validating” their 4 assumptions of a 100% violation rate for meal and rest break claims. Duran, 2021 WL 3281073, 5 at *3. Defendants’ only supporting evidence for its CAFA amount in controversy calculations is 6 Ms. Ryan’s declaration. (Doc. No. 38-2.) But, as Plaintiff emphasizes in her motion and reply 7 brief (Doc. No. 41 at 9–10), Ms. Ryan’s supplemental declaration is inadequate because it does 8 not mention any alleged violation rates, or the percentage of class members affected by 9 Defendants’ violations. See also Gipson v. Champion Home Builders, Inc., No. 1:20-cv-00392- 10 DAD-SKO, 2020 WL 4048503, at *5 (E.D. Cal. July 20, 2020) (determining that a declaration 11 alone was not sufficient to support defendant’s amount in controversy where it failed to “provide 12 any evidence regarding the frequency of violations with respect to each of plaintiff’s claims or the 13 violation rate generally”). 14 Because Defendants’ assumed violation rate is not supported by the complaint or tied to 15 any evidence, the court concludes that it is arbitrary and unreasonable. Ibarra, 775 F. 3d at 1199 16 (defendants must provide some support for their assumed violations rates, they cannot be “pulled 17 from thin air”). “Where a defendant’s assumption is unreasonable on its face without comparison 18 to a better alternative, a district court may be justified in simply rejecting that assumption and 19 concluding that the defendant failed to meet its burden.” Jauregui v. Roadrunner Transp. Servs., 20 Inc., 28 F.4th 989, 996 (9th Cir. 2022); Li, 2024 WL 4553148, at *2 (concluding that defendant 21 failed to satisfy its burden of establishing a sufficient amount in controversy where its assumed 22 violation rate was unreasonable, and no alternative violation was provided to the court). Indeed, 23 courts have declined to “propose a reasonable violation rate” because the “[c]ourt need only 24 weigh the reasonableness of the removing party’s assumptions, not supply further assumptions of 25 its own.” Peters v. TA Operating LLC, No. 5:22-cv-01831-JGB-SHK, 2023 WL 1070350, at *9 26 (C.D. Cal. Jan. 26, 2023) (cleaned up). When combined, Defendants’ estimates for Plaintiff’s 27 meal and rest break claims account for $2,280,629.10 of the total $5,640,257.50 amount in 28 controversy. (Doc. No. 1 at 23.) Therefore, the court need not address Defendants’ valuations of 1 the remaining claims because even assuming they are correct, their combined total is below 2 CAFA’s $5,000,000 threshold. In sum, the court concludes that the Defendants have failed to 3 meet their burden of showing by preponderance of the evidence that CAFA’s jurisdictional 4 requirements are satisfied. 5 2. Traditional Diversity Jurisdiction 6 Defendants’ notice of removal calculates the individual amount in controversy for 7 Plaintiff to be $96,079.12, above the $75,000 threshold for traditional diversity jurisdiction. (Doc. 8 No. 1 at 29.) Defendants allege they used Plaintiff’s “payroll, employment, and operational data” 9 to determine the amount in controversy for traditional diversity jurisdiction, including Plaintiff’s 10 number of workdays, shift lengths, number of pay periods, and hourly rates of pay. (Id. at 25.) 11 Applying these data points and many of the same assumptions used to calculate the amount in 12 controversy under CAFA, Defendants calculate Plaintiff’s unpaid minimum wages and liquidated 13 damages, unpaid overtime, meal and rest period premiums, waiting time penalties, unreimbursed 14 business expenses, and statutory attorneys’ fees, as follows: 15 16 Claim Amount in Controversy 17 Unpaid Minimum and Straight Time Wages $1,715.24 18 and Liquidated Damages 19 Unpaid Overtime/Double Time Premiums $4,669.73 20 Meal Period Violations $3,675.36 21 Rest Period Violations $3,693.03 22 Waiting Time Penalties $6,789.00 23 Unreimbursed Business Expenses $536.76 24 Statutory Attorneys’ Fees $75,000 25 Total $96,079.12 26 (Id. at 29.) 27 With respect to statutory attorneys’ fees, Defendants estimate Plaintiff’s counsel will 28 1 spend “(a) at least 100 hours litigating Plaintiff’s individual claims on written discovery and 2 related motions (35 hours), non-expert depositions (20 hours), non-discovery motion practice, 3 including dispositive motions (40 hours), and expert witness discovery and depositions (5 hours); 4 and (b) at least 50 additional hours prosecuting those claims at trial or arbitration (40 hours) and 5 engaging in post-trial or post-arbitration motions (10 hours).” (Doc. No. 1 at 28.) Assigning 6 Plaintiff’s counsel an “average hourly rate of $500 per hour,” Defendants calculate attorneys’ fees 7 in the amount of $75,000 (150 hours × $500 per hour), or 78% of the $96,079.12 individual 8 amount in controversy for Plaintiff’s claims. (Id.) In Defendants’ view, their attorneys’ fees 9 estimate is “conservative.” (Id.) 10 In her motion to remand, Plaintiff argues that Defendants’ attorneys’ fees calculation lacks 11 evidentiary support. (Doc. No. 35 at 25–26.) In addition, Plaintiff alleges Defendants’ attorneys’ 12 fees estimate is flawed because “Defendants fail to take into account that any future attorneys’ 13 fees will be spread out across the class and not just attributed to the named plaintiff.” (Id. at 26.) 14 In their opposition to the pending motion, Defendants counter that their statutory 15 attorneys’ fees estimate is “reasonable.” (Doc. No. 38 at 16.) In support of this contention, 16 Defendants provide the declaration of their counsel, Attorney Matthew C. Kane. (Doc. No. 38-1). 17 In his declaration, Attorney Kane provides estimates for statutory attorney’s fees that differ from 18 the estimates provided in Defendants’ notice of removal. Specifically, Attorney Kane estimates 19 Plaintiff’s counsel will spend “at least 150 hours, budgeted as follows: (a) written discovery on 20 Plaintiff’s individual claims and related motions; 35 hours; (b) non-expert depositions . . . 55 21 hours; (c) expert witness discovery and depositions of Plaintiff’s expert who will analyze 22 Plaintiff’s time and pay records and Defendants’ experts: 20 hours; and (d) non-discovery motion 23 practice, including opposing dispositive motions on Plaintiff’s individual claims: 40 hours.” (Id. 24 at ¶ 11.) Attorney Kane further states that “while Defendants estimate $500/hour for Plaintiff’s 25 attorneys’ fees” in their notice of removal, “Plaintiff’s counsel’s firm have provided declarations 26 in other matters. . . in why they testified [Plaintiff’s counsel’s] hourly rates range from $700/hour 27 28 1 to $850/hour.”6 (Id. at ¶ 12.) Attorney Kane explains that for the last 20 years, his practice has 2 almost exclusively focused on employment and wage and hour litigation. (Id. at ¶ 6.) Based on 3 his experience and extensive knowledge, Attorney Kane estimates that Plaintiff’s counsel will 4 spend at least 150 hours litigating Plaintiff’s individual claims. (Id. at ¶ 6.) Finally, Defendants 5 cite to the declaration of Plaintiff’s counsel, Sepideh Ardestani, as support for their attorneys’ 6 fees estimate. (Doc. No. 38 at 26) (citing Doc. No. 21-1). In her declaration, Attorney Ardestani 7 stated that she “will need to depose more than two individuals.” (Doc. No. 21-1.) 8 a. Type of Jurisdictional Challenge 9 As an initial matter, the court finds Plaintiff has mounted a factual attack on Defendants’ 10 amount in controversy allegations. Rather than accepting the truth of Defendants’ amount in 11 controversy allegations, Plaintiff challenges both the lack of evidence supporting Defendants’ 12 calculations and the reasonableness of assumptions underlying Defendants’ calculations. (See 13 Doc. No. 35); see Rodriguez v. Rentokil N. Am., Inc., No. 8:24-cv-01356-DOC-DFM, 2024 WL 14 4467517, at *3 (C.D. Cal. Oct. 10, 2024) (plaintiff mounted a factual attack where they not only 15 challenged the lack of evidence but the factual assumptions being made by the defendant). For 16 example, Plaintiff emphasizes that Defendants include statutory attorneys’ fees in their amount in 17 controversy calculation for Plaintiff’s individual claims, but those fees are not awarded solely to a 18 named plaintiff; they are allocated amongst the class. (Doc. No. 35 at 26.) Because the court 19 concludes that Plaintiff has mounted a factual rather than facial attack, it will “apply the higher 20 evidentiary standard requiring the Defendant[s] to submit ‘competent proof’ that shows, by a 21 preponderance of the evidence, that the [amount in controversy is] satisfied.” Fuentes v. Hous. 22 Auth. of the City of L.A., No. 2:23-cv-03295-SPG-JPR, 2023 WL 5530027, at *3 (C.D. Cal. Aug. 23 25, 2023) (citing Harris, 980 F.3d at 701). 24 /////
25 6 Attorney Kane’s declaration attaches as exhibits several declarations filed by Plaintiff’s counsel in other matters. (Doc. No. 38-1.) Defendants request that the court take judicial notice of the 26 declarations. (Doc. No. 39.) As previously discussed, courts regularly take judicial notice of court 27 filings and other matters of public record. See Reyn’s Pasta Bella, LLC, 442 F.3d at 746 n.6. Accordingly, the court will take judicial notice of the declarations filed by Plaintiff’s counsel in 28 other matters, which are attached as exhibits to Attorney Kane’s declaration. 1 b. Reasonableness of Defendants’ Calculations 2 Attorneys’ fees may be “considered in determining the amount in controversy if such fees 3 are recoverable by plaintiff, either by statute or by contract.” Campbell v. Hartford Life Ins. Co., 4 825 F. Supp. 2d 1005, 1009 (E.D. Cal. 2011) (citing Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 5 1156 (9th Cir. 1998)). Future attorneys’ fees awards may be included in determining the amount 6 in controversy under fee-shifting statutes. Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 7 785, 795 (9th Cir. 2018). However, district courts may exclude future fees if they are too 8 speculative. Id. It bears repeating that that there is a strong presumption against removal on 9 traditional diversity jurisdiction grounds. Geographic Expeditions, 599 F.3d at 1107. Defendants 10 must overcome this strong presumption by “us[ing] ‘summary-judgment-type evidence’ to show 11 that it is ‘more likely than not’ that the amount in controversy (including attorneys’ fees) exceeds 12 $75,000.” Schneider v. Ford Motor Co., 441 F. Supp. 3d 909, 914 (N.D. Cal. 2020) (quoting 13 Fritsch, 899 F.3d at 795–96). 14 Defendants have failed to meet their burden of proving the amount in controversy exceeds 15 $75,000 for traditional diversity jurisdiction because their future attorneys’ fees estimate is 16 speculative. Attorney Kane’s declaration does not demonstrate why his estimate that it would take 17 at least 150 hours to litigate Plaintiff’s individual claims is reasonable. (See Doc. No. 38-1.) 18 Although Attorney Kane relies on his experience litigating wage and hour matters, he does not 19 explain what specific factors in this case led him to make his estimates beyond the fact that 20 Plaintiff’s counsel has expressed their desire to take more than two depositions. See Elias v. 21 Integon Preferred Ins. Co., No. 2:24-cv-01981-WLH-RAO, 2024 WL 2732228, at *2 (C.D. Cal. 22 May 28, 2024). Attorney Kane’s estimate “lacks the type of evidentiary support that typically 23 allows for the inclusion of [attorneys’] fees” in an amount in controversy calculation, “such as fee 24 petitions submitted in similar cases.” Newsome v. FCA USA LLC, No. 1:20-cv-01189-JLT-BAK, 25 2022 WL 408631, at *6 (E.D. Cal. Feb. 10, 2022); see also Martinez v. Ford Motor Co., No. 26 1:18-cv-01607-LJO-JLT, 2019 WL 1988398, at *7 (E.D. Cal. May 6, 2019) (defendant included 27 “five petitions for attorneys’ fees filed in other similar cases” to support its amount in controversy 28 calculation). 1 Defendants’ attorneys’ fees assumptions are also flawed because they fail to account for 2 the impact of class claims. Defendants allege that their attorneys’ fees calculation is based solely 3 on work required for Plaintiff’s individual claims. (Doc. No. 1 at 30–31.) But Attorney Kane’s 4 estimate includes legal work that would be performed on behalf of the entire class, such as 5 conducting discovery. (Doc. No. 38-1 at 4–5); see Rodriguez v. Goodrich Corp., No. 2:14-cv- 6 01026 JAM AC, 2014 WL 3842904, at *4 (E.D. Cal. Aug. 1, 2014) (defendants’ attorneys’ fees 7 estimates were not based solely on fees applicable to plaintiff because they included pretrial 8 activities that are typically “conducted on behalf of the entire putative class”). Furthermore, if 9 Plaintiff is successful on the merits of her claims, she would be entitled to an award for attorneys’ 10 fees pursuant to California Labor Code Section 1194, which does not authorize an award of fees 11 “solely to named plaintiffs in a class action,” but rather to “any employee” who prevails on his or 12 her claim. (See e.g., Doc. No. 1 at 54–55, 58); Rodriguez, 2014 WL 3842904, at *4. “In such 13 cases, courts determine the plaintiff’s appropriate share of attorneys’ fees by distributing the total 14 estimated fees on a pro rata basis amongst the named plaintiff(s) and class members.” Jurado v. 15 Aequor Heathcare Servs., LLC, No. 2:21-cv-02633-VAP-AS, 2021 WL 2178846, at *2 (C.D. 16 Cal. May 27, 2021). As Plaintiff notes, Defendants have not attempted to estimate her pro-rata 17 share of attorneys’ fees. 18 For these reasons, Defendants have not met their burden to show by a preponderance of 19 the evidence that the amount in controversy requirement is satisfied. Even if the court were to 20 adopt the rest of Defendants’ calculations in full, the total would still fall below the $75,000 21 threshold. (Doc. Nos. 1 at 31; 38 at 39.) Therefore, the inadequacy of Defendants’ attorneys’ fees 22 estimate is fatal to removal on traditional diversity jurisdiction grounds. 23 B. Preemption under Section 301 of the LMRA 24 Section 301 of the LMRA provides federal courts with original jurisdiction, regardless of 25 the amount in controversy or citizenship of the parties, over any lawsuits “for violation of 26 contracts between an employer and a labor organization representing employees in an industry 27 affecting commerce.” 29 U.S.C. § 185(a). In the specific context of preemption under Section 301 28 of the LMRA, the Ninth Circuit has recognized that preemption “has such ‘extraordinary pre- 1 emptive power’ that it ‘converts an ordinary state common law complaint into one stating a 2 federal claim for purposes of the well-pleaded complaint rule.’” Curtis v. Irwin Indus., Inc., 913 3 F.3d 1146, 1152 (9th Cir. 2019) (quoting Metro. Life Ins. v. Taylor, 481 U.S. 58, 65 (1987)); see 4 also Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“The presence or absence of federal- 5 question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that 6 federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s 7 properly pleaded complaint.”). 8 In Burnside v. Kiewit Pacific Corp., 491 F.3d 1053 (9th Cir. 2007), the Ninth Circuit 9 established a two-part test to determine whether a state law claim is preempted by Section 301 of 10 the LMRA. The first step requires courts to consider “whether the asserted cause of action 11 involves a right conferred upon an employee by virtue of state law, not by a [collective bargaining 12 agreement].” Burnside, 491 F.3d at 1059. At this first step, courts consider “the legal character of 13 a claim, as ‘independent’ of rights under the collective-bargaining agreement and not whether a 14 grievance arising from ‘precisely the same set of facts’ could be pursued.” Livadas v. Bradshaw, 15 512 U.S. 107, 123 (1994) (cleaned up). “If the right exists solely as a result of the [collective 16 bargaining agreement], then the claim is preempted” and the analysis ends without proceeding to 17 step two. Burnside, 491 F.3d at 1059. If not, the court proceeds to the second step and asks 18 whether a plaintiff’s state law right is nevertheless “substantially dependent” on interpretation of 19 the collective bargaining agreement. Burnside, 491 F.3d at 1059. “[T]he term ‘interpret’ is 20 defined narrowly—it means something more than ‘consider,’ ‘refer to,’ or ‘apply.’” Balcorta v. 21 Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir. 2000). If the claim merely 22 requires “looking to” the collective bargaining agreement, then the claim it is not preempted. 23 Burnside, 491 F.3d at 1060. If interpretation of the collective bargaining agreement is required, 24 then the claim is preempted. Id. 25 Defendants assert that this court has federal question jurisdiction because Plaintiff’s 26 claims regarding overtime, meal and rest break, and paid sick leave violations are preempted by 27 Section 301 of the LMRA. (Doc. Nos. 1 at 29-35; 38 at 31-33.) Specifically, Defendants allege 28 that adjudication of Plaintiff’s claims is substantially dependent on interpretation of the CBAs 1 between Defendant C&S Wholesale and the Union under step two of the Burnside test. (Doc. No. 2 38 at 31–32.) Defendants assert that Plaintiff’s claims are predicated on the theory that Defendant 3 failed to pay for overtime hours, meal and rest break premiums, and paid sick leave, and 4 California law requires the payment of such wages at the “regular rate of pay.” (Doc. No. 38 at 5 32.) The CBAs state that the overtime rate shall be “one and one-half (1 ½) times the straight time 6 rate,” but do not define the “straight time rate” or “regular rate of pay” for purposes of calculating 7 overtime wages and break premiums. (Id.) Therefore, Defendants argue that the court will have to 8 analyze forms of pay provided by the CBAs and decide if they should have been included in 9 employees’ “regular rate.” (Id.) 10 Defendants analogize this case to McKinley v. Southwest Airlines Co., No. 2:15-cv-02939- 11 AB-JPR, 2015 WL 2431644 (C.D. Cal. May 19, 2015), in which the court held the plaintiff’s 12 overtime rate required interpretation of a collective bargaining agreement fand was therefore 13 preempted by Section 301 of the LMRA. There, the collective bargaining agreement governing 14 plaintiff’s employment did not explicitly define plaintiff’s regular rate of pay for the purpose of 15 calculating overtime pay. McKinley, 2015 WL 2431644, at *8. Instead, it applied multipliers to 16 employees’ hourly rate. Id. However, the collective bargaining agreement did not state the types 17 of remuneration that were to be included in the hourly rate. Id. Because plaintiff alleged that 18 defendant did not calculate and/or factor all remuneration earned in the regular rate of pay, the 19 court concluded that it would have to “examine each form of pay provided by the [collective 20 bargaining agreement], determine when that pay was due, and then decide whether the pay should 21 have been included in [p]laintiff’s regular rate.” Id. at *6. In other words, the court “would have 22 to consider the interaction of multiple [collective bargaining agreement] provisions to calculate 23 [p]laintiff’s regular rate of pay.” Id. 24 Defendants’ reliance on McKinley is unavailing. In McKinley, defendant’s “liability 25 hing[ed] on whether it properly calculated [p]laintiff’s regular rate of pay,” which required the 26 court to evaluate “many different provisions” of the collective bargaining agreement to assess 27 plaintiff’s claim. Id. at *8. By contrast here, the court does not need to consider the interaction of 28 multiple CBA provisions. See Peters v. RFI Enters., Inc., No. 5:18-cv-01187-BLF, 2018 WL 1 3869564, at *6 (N.D. Cal. Aug. 15, 2018) (LMRA did not preempt plaintiff’s claims where the 2 court did not need to consider the interaction of multiple collective bargaining agreement 3 provisions to determine the regular rate of pay because employees’ hourly rates were clearly set 4 forth in an addendum to the agreement). Plaintiff’s allegations focus on Defendants’ failure to pay 5 for overtime work and missed meal and rest breaks. (Doc. No. 1 at 57-62.) As Plaintiff correctly 6 notes, employees are paid wages according to “Appendix A” of the CBAs, which lists hourly 7 rates of pay for different positions. (Doc. No. 41 at 18.) The CBAs state that the overtime rate is 8 “one and one-half (1 ½) times the straight time rate.” (Doc. No. 1-2 at 12, 52.) Thus, the CBAs 9 provide instructions on how to calculate the regular rate of pay for purposes of calculating 10 overtime wages with a compensation formula that is not complicated. See Div. of Lab. Standards 11 Enf’t v. Save Mart Supermarkets, No. 2:21-cv-07402-ODW, 2022 WL 837206, at *5 (C.D. Cal. 12 Mar. 21, 2022) (concluding interpretation of collective bargaining agreements was not required 13 where they provided a table of wage rates from which the court could “readily determine in a 14 clear and straightforward manner the [employees’] regular hourly rates of pay”); Flournoy v. 15 Watts Healthcare Corp., No. 2:20-cv-06607-RGK-SK, 2020 WL 5960686, at *5 (C.D. Cal. Oct. 16 6, 2020) (court only needed to reference rather than interpret a collective bargaining agreement 17 where plaintiff’s claim was that defendant failed to pay for overtime hours worked and not that 18 defendant misapplied a complex premium schedule). 19 Further, Defendants fail to identify any active dispute between the parties regarding the 20 regular rate of pay used to calculate premiums. See Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 21 921 (9th Cir. 2018) (“[C]laims are only preempted to the extent there is an active dispute over 22 ‘the meaning of contract terms.’”); Anguiano v. Mann Packing Co., No. 5:19-cv-02133-VKD, 23 2019 WL 2929789 (N.D. Cal. July 8, 2019) (“The [c]ourt rejects [defendant’s] suggestion that the 24 absence of an express definition for a term used in a [collective bargaining agreement] necessarily 25 creates [] a dispute.”). Notably, Defendants do not specify how their definition of the regular rate 26 of pay or straight-time rate differs from Plaintiff’s. Nor do Defendants claim that the regular rate 27 of pay cannot be determined based on the hourly rates for various job classifications listed in 28 Appendix A. See e.g., Peters, 2018 WL 3869564, at *6 (court did not need to interpret a 1 collective bargaining agreement to determine the amount of overtime pay where the regular rate 2 of pay was “indisputably” the hourly rate set forth in an addendum to the agreement). In fact, 3 Defendants acknowledge in their notice of removal that “Appendix A of the CBAs sets forth the 4 bargained for regular rates of pay for covered employees.” (Doc. No. 1 at 33.) Although the court 5 may need to refer to the CBAs to calculate premiums, referring to the CBAs is not considered 6 interpretation. See e.g., Wilson-Davis v. SSP Am., Inc., 434 F. Supp. 3d 806, 813 (C.D. Cal. 2020) 7 (“It is not enough for Defendants to provide a laundry list of provisions that they allege the 8 [c]ourt must interpret to resolve Plaintiffs claims; Defendants must explain why interpretation, as 9 opposed to mere reference to the [collective bargaining agreement], is necessary.”); Vasserman v. 10 Henry Mayo Newhall Mem’l Hosp., 65 F. Supp. 3d 932, 957–58 (C.D. Cal. 2014) (mere reference 11 to a collective bargaining agreement is not enough to find a claim substantially dependent on the 12 agreement). Because Defendants have not established that interpretation of the CBAs is required 13 to adjudicate Plaintiff’s claims, the court finds that LMRA preemption does not apply. 14 Having found that none of Defendants’ asserted bases for subject matter jurisdiction exist, 15 the court will grant Plaintiff’s motion to remand. 16 CONCLUSION 17 For the reasons explained above, 18 1. Plaintiff’s motion for reconsideration (Doc. No. 34) is DENIED; 19 2. Plaintiff’s motion to remand (Doc. No. 35) is GRANTED; 20 3. Plaintiff’s request for judicial notice (Doc. No. 35-1) is GRANTED in part and 21 DENIED in part, as set forth herein; 22 4. Defendants’ request for judicial notice (Doc. No. 39) is GRANTED, as set forth 23 herein; 24 5. This action is remanded to the Sacramento County Superior Court for all further 25 proceedings; 26 6. The court’s order dated January 7, 2025, granting Defendants’ motion to compel 27 arbitration (Doc. No. 33) is VACATED; and 28 ///// 1 7. The Clerk of the Court is directed to close this case. 2 3 4 IT IS SO ORDERED. □ 5 | Dated: _ October 2, 2025 EIU Os Dena Coggins 6 United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24