Vanessa Hernandez v. DermCare Management, LLC

• Court: District Court, C.D. California
• Decided: September 28, 2023
• Docket: 2:23-cv-01949
• Status: Unknown

Opinion

1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 VANESSA HERNANDEZ, Case No. 2:23-cv-01949-FLA (Ex)

12 Plaintiff, ORDER GRANTING PLAINTIFF’S 13 v. MOTION TO REMAND [DKT. 13] 14 DERMCARE MANAGEMENT, LLC, 15 et al., 16 Defendants. 17

18 19

20 21 22 23 24 25 26 27 28 1 RULING 2 Before the court is Plaintiff Vanessa Hernandez’s (“Plaintiff”) Motion to 3 Remand (“Motion”). Dkt. 13 (“Mot.”). Defendants DermCare Management, LLC 4 and Skin and Beauty Center, Inc. (collectively, “Defendants”) oppose the Motion. 5 Dkt. 14 (“Opp’n”). 6 On May 8, 2023, the court found this matter appropriate for resolution without 7 oral argument and vacated the hearing set for May 12, 2023. Dkt. 24; see Fed. R. Civ. 8 P. 78(b); Local Rule 7-15. For the reasons stated herein, the court GRANTS the 9 Motion and REMANDS the action to the Los Angeles County Superior Court. 10 BACKGROUND 11 Plaintiff is a California citizen who filed this action in the Los Angeles County 12 Superior Court on December 29, 2022. Dkt. 1-1 (“Compl.”). Defendants employed 13 Plaintiff from October 2021 to October 2022. Compl. ¶ 7. Plaintiff alleges that 14 during her employment, Defendants failed to (1) pay for all hours worked, (2) provide 15 meal periods, (3) authorize and permit rest periods, (4) pay final wages, (5) furnish 16 accurate wage statements, and (6) indemnify employees for expenditures. Id. ¶ 1. As 17 a result, Plaintiff asserts eight causes of action on behalf of a putative class of 18 similarly situated former employees for various violations of California’s Labor Code 19 and Unfair Competition Law. See generally Compl. 20 On March 15, 2023, Defendants filed a Notice of Removal, invoking this 21 court’s diversity jurisdiction pursuant to the Class Action Fairness Act of 2005 22 (“CAFA”), 28 U.S.C. § 1332(d). See Dkt. 1 (“NOR”). On April 14, 2023, Plaintiff 23 moved to remand the action based on the local controversy exception to this court’s 24 CAFA jurisdiction and an insufficient amount in controversy. See Mot. Defendants 25 filed an opposition on April 21, 2023. 26 / / / 27 / / / 28 / / / 1 DISCUSSION 2 I. Legal Standard 3 CAFA provides district courts with original jurisdiction “over class actions in 4 which the class members number at least 100, at least one plaintiff is diverse in 5 citizenship from any defendant, and the aggregate amount in controversy exceeds $5 6 million, exclusive of interest and costs.” Ibarra v. Manheim Invs., Inc., 775 F.3d 7 1193, 1195 (9th Cir. 2015) (citing 28 U.S.C. § 1332(d)). CAFA’s requirement of 8 minimal diversity exists when “any member of a class of plaintiffs is a citizen of a 9 State different from any defendant.” Id. (citing 28 U.S.C. § 1332(d)(2)(A)). 10 “The party seeking the federal forum bears the burden of establishing that the 11 statutory requirements of federal jurisdiction have been met.” Rodriguez v. AT & T 12 Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir. 2013); see also Abrego Abrego v. 13 The Dow Chemical Co., 443 F.3d 676, 683-85 (9th Cir. 2006) (“[U]nder CAFA the 14 burden of establishing removal jurisdiction remains, as before, on the proponent of 15 federal jurisdiction.”). Although “a defendant’s notice of removal need include only a 16 plausible allegation that the amount in controversy exceeds the jurisdictional 17 threshold,” when the allegation is challenged by plaintiff or the court, “[e]vidence 18 establishing the amount is required.” Id. “[B]oth sides submit proof,” and the court 19 decides whether the defendant has demonstrated, by a preponderance of the evidence, 20 that the amount in controversy requirement has been satisfied. Dart Cherokee Basin 21 Operating Co., LLC v. Owens, 574 U.S. 81, 88 (2014). 22 II. Analysis 23 Defendants removed the action invoking this court’s diversity jurisdiction 24 pursuant to CAFA. See generally NOR. At issue is whether Defendants demonstrate 25 that over $5 million is in controversy, as required by CAFA. Plaintiff argues 26 Defendants have not satisfied their burden because the local controversy exception to 27 this court’s jurisdiction applies and Defendants fail to substantiate the amount in 28 controversy requirement with sufficient evidence. See generally Mot. 1 When federal jurisdiction is challenged and the amount of damages is not 2 evident from the face of the complaint, “the defendant seeking removal bears the 3 burden to show by a preponderance of the evidence that the aggregate amount in 4 controversy exceeds $5 million.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 5 (9th Cir. 2015) (citing Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 981 6 (9th Cir. 2013)). The removing party “may submit evidence outside the 7 complaint…or other ‘summary judgement-type evidence relevant to the amount in 8 controversy at the time of removal.’” Ibarra, 775 F.3d at 1197 (citing Singer v. State 9 Farm Mut. Auto Ins. Co., 116 F.3d 373, 377 (9th Cir. 1977)). 10 A. Actual Damages 11 Here, Plaintiff’s Complaint does not specify any particular amount of damages 12 incurred by her or the class. Defendants aggregate calculations for the alleged 13 violations as well as attorney’s fees. In sum, Defendants assert a total amount in 14 controversy of $13,233,800. (See NOR ¶¶ 15-17.) The specific breakdown is as 15 follows: 16  $1,218,240 for the failure to pay final wages due at termination claim, based 17 on an hourly rate of $21.60, 30 days, and 8 hours per day for 235 former 18 employees (Id. ¶ 15); 19  $3,175,200 for the off-the-clock claim, based on an hourly rate of $21.60 x a 20 1.5 statutory penalty, 50 work weeks, and a violation rate of 4 hours per week 21 for all 490 putative class members. (Id. ¶ 15); 22  $2,116,800 for the unpaid meal period claim, based on an hourly rate of $21.60, 50 work weeks, and a violation rate of 4 hours per week for all 490 23 putative class members. (Id. ¶ 15); 24  $2,116,800 for the unpaid rest period claim, based on an hourly rate of $21.60, 25 50 work weeks, and a violation rate of 4 hours per week for all 490 putative 26 class members. (Id. ¶ 15); and 27 28 1  $1,960,000 for the failure to furnish accurate wage statements claim, based on 2 a $4,000 statutory maximum penalty per employee, and 490 putative class 3 members (Id. ¶ 15). 4 Defendants include attorney’s fees in the amount of 25% of “the amount associated 5 with the alleged unpaid wages and penalties.” Id. ¶ 16. The court finds these 6 calculations do not satisfy Defendants’ burden because the violation rates are arbitrary 7 and addresses each in turn below. 8 As an initial matter, Defendants fail to provide any evidence or support for 9 these claims, despite conceding “evidence establishing the amount in controversy is 10 required… only when the plaintiff contests, or the court questions, the defendant’s 11 allegations.” Arias v. Residence Inn, 936 F.3d 920, 922 (9th Cir. 2019); Opp’n at 9. 12 Plaintiff here has questioned Defendants’ allegations by filing this Motion and, thus, 13 Defendants were required to provide evidence substantiating claims in its Notice of 14 Removal. Defendants offer only the Declaration of Marc Grad, DermCare’s 15 Executive Vice President. Dkt. 14-2. The declaration, however, does not provide any 16 information that would allow the court to determine reasonably the likelihood of 17 Defendants’ claims. 18 Even if the court were to look past the lack of evidence, Defendants nonetheless 19 fail to establish the amount in controversy via a reasonable chain of assumption. “As 20 seemingly is always the case in wage-and-hour lawsuits attempting to find their way 21 to federal court, violation rates are key to the calculations necessary to reach the 22 $5,000,001 amount-in-controversy figure CAFA requires.” Toribio v. ITT Aerospace 23 Controls LLC, No. 19-cv-5430-GW (JPRx), 2019 WL 4254935, at *2 (C.D. Cal. 24 Sept. 5, 2019). 25 Here, Plaintiff’s Complaint alleges Defendants “regularly, but not always” 26 failed to provide compliant meal breaks and it was their “pattern and practice” not to 27 provide compliant meal or rest periods. Comp. ¶ 16 (emphasis added). Despite the 28 admitted absence of a reliable pattern of violation, Defendants assumed every single 1 putative class member missed four hours per week, of meal and rest break periods, for 2 all fifty work weeks for the year. NOR ¶ 15. The absence of any case-specific facts 3 or allegations in the record makes these assumptions arbitrary and “amounts to little 4 more than plucking a violation rate out of the air and calling it reasonable.” Gonzalez 5 v. H & M Hennes Mauritz L.P. et al, No. 21-cv-01611-JLS (JDE), 2022 WL 179292, 6 at *4 (C.D. Cal. Jan. 20, 2022) (internal citations and quotations omitted). Courts in 7 this district have routinely held doing so is impermissible. See Salazar v. Johnson & 8 Johnson Consumer Inc., Case No. 2:18-cv-05884-SJO (Ex), 2018 WL 4560683 (C.D. 9 Cal. Sept. 19, 2018) (“[O]ther courts in this district have held [defendant] may not rely 10 on statistical assumptions to sustain the amount in controversy requirement.”) 11 (compiling cases). 12 Defendants’ calculations of off-the-clock and unpaid overtime damages are 13 similarly speculative and arbitrary. Defendants assert these violations place 14 $3,175,2000 in controversy, again based on a 100% assumed violation rate, without 15 any reasonable basis to support its assumptions that all putative class members 16 worked a total of 50 weeks during the class period, worked more than eight hours a 17 day, and were all owed overtime. This is especially unconvincing given that 18 Plaintiff’s Complaint specifically alleges Defendants’ violations occurred “regularly, 19 but not always,” and “much of this unpaid work should have been paid at the overtime 20 rate.” Compl. ¶ 15 (emphasis added). 21 Defendants similarly assume a 100% violation rate for Plaintiff’s claims 22 regarding failure to pay wages due at termination, stating 235 putative class members 23 are former employees. NOR ¶ 15. The court rejects these contentions for the same 24 reasons stated above. 25 Finally, Defendants allege Plaintiff’s wage statement claims involve a $4,000 26 maximum penalty, as dictated by California Labor Code § 226(a), for each putative 27 class member. NOR ¶ 15. In spite of further limiting language in the Complaint with 28 respect to these allegations, Defendants again unreasonably assume a 100% violation | || rate and that every single putative class member is entitled to the maximum penalty. 2 B. Attorney’s Fees 3 Defendants’ claim a “commonly used measure of attorneys’ fees for purposes 4 | of establishing CAFA jurisdiction is 25% the amount associated with the alleged 5 | unpaid wages and penalties.” NOR 4 16. The court need not opine on the 6 | reasonability of Defendants’ assertion because Defendants failed to substantiate the 7 || purported damages they state. Because the sum of Plaintiff’s actual damages is not 8 | ascertainable, the court cannot determine a corresponding amount in attorney’s fees. 9 CONCLUSION 10 For the foregoing reasons, the court GRANTS Plaintiff's Motion to Remand 11 | (Dkt. 13). The court REMANDS this action to the Los Angeles County Superior 12 | Court, Case Number 22STCV40910. The Clerk of the Court shall administratively 13 || close the case. 14 15 IT IS SO ORDERED. 16 17 | Dated: September 28, 2023

19 FERNANDO L. AENLLE-ROCHA United States District Judge 20 21 22 23 24 25 26 27 28