Zacarias Alejandre Rodriguez v. Novelex Holdings, LLC et al.

• Court: District Court, C.D. California
• Decided: April 9, 2026
• Docket: 2:26-cv-00068
• Status: Unknown

Opinion

3 JS-6

6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA 8

9 ZACARIAS ALEJANDRE RODRIGUEZ, Case No.: 2:26-cv-00068-MEMF-SK

10 Plaintiff, ORDER GRANTING PLAINTIFF’S 11 v. MOTION TO REMAND [DKT. NO. 22]

12 NOVOLEX HOLDINGS, LLC et al.,

13 Defendants. 14 15 16 17 18

19 20 Before the Court is Plaintiff Zacarias Alejandre Rodriguez’s Motion to Remand. Dkt. No. 22 21 (“Motion”). For the reasons stated herein, the Court hereby GRANTS the Motion. 22 23 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 I. Background 2 A. Factual Allegations1 3 Plaintiff Zacarias Alejandre Rodriguez was employed by Defendant Novolex Holdings, LLC 4 (“Novolex”) as a non-exempt employee in the role of “Packer” from May 26, 2022, to December 13, 5 2024. Dkt. No. 15 (“1AC”) ¶ 16. Based in City of Industry, California, Rodriguez was responsible 6 for a variety of tasks, including, but not limited to, packing food bags and cleaning. Id. Novolex is a 7 leading manufacturer of food, beverage, and specialty packaging that serves multiple industries, 8 including foodservice, restaurant delivery and carryout, food processing, grocery and retail, and 9 industrial. Id. ¶ 1. 10 During his employment with Novolex, Novolex consistently failed to accurately record and 11 pay for all time worked, including the time non-exempt employees were under the employer’s 12 control. Id. ¶ 20. This included a policy and practice of failing to properly record the time worked by 13 non-exempt employees, including all time spent working off the clock. Id. As a result of this 14 company-wide policy/practice, Rodriguez and other non-exempt employees were not compensated 15 for all of the hours they worked and all of the overtime they worked. Id. 16 Due to certain policies, practices or procedures, Rodriguez and other class members suffered 17 various California Labor Code and Business and Professions Code violations. See generally id. In 18 particular, Novolex failed to pay Rodriguez for all of the hours he worked, including minimum wage 19 and overtime wages; failed to provide Rodriguez uninterrupted meal and rest periods; failed to 20 timely pay Rodriguez all final wages upon separation from employment; and failed to furnish 21 accurate, itemized wage statements. Id. As a result, over a period of time, Rodriguez and other non- 22 exempt employees were not properly paid for all hours worked. Id. ¶ 21. 23 Further, Rodriguez and other non-exempt employees worked regular shifts that lasted longer 24 than eight hours in a workday and resulted in non-exempt employees regularly working more than 25 forty hours in a workweek. Id. ¶ 24. However, Novolex uniformly failed to properly calculate and 26 pay overtime wages at the proper legal rate due to Novolex’s failure to include all forms of 27 1 The following factual background is derived from the allegations in Rodriguez’s First Amended Complaint, Dkt. No. 28 15 (“1AC”), except where otherwise indicated. The Court makes no finding on the truth of these allegations and includes 1 compensation/remuneration, including, but not limited to, stipends, shift pay, non-discretionary 2 bonuses, commissions, incentives, and all other forms of remuneration in calculating the “regular 3 rate of pay” for purposes of overtime compensation. Id. Novolex had a policy of requiring Rodriguez 4 and the other non-exempt employees to work in excess of eight (8) hours in a workday and/or forty 5 (40) hours in a workweek without compensating them at the lawful rate of one-half (1 1/2) their 6 regular rate of pay. Id. ¶ 27. 7 Novolex also failed in its obligation to provide Rodriguez and other non-exempt employees 8 with their legally required paid sick days. Id. ¶ 28. Rodriguez and other non-exempt employees were 9 also denied compliant and timely thirty-minute off-duty meal periods. Id. ¶ 31. Due to Novolex’s 10 uniform meal period policies/practices, operational requirements, and work demands, Rodriguez and 11 other non-exempt employees often could not take timely and uninterrupted net thirty-minute first 12 meal periods before the end of the fifth hour of work. Id. Further, when Rodriguez and other non- 13 exempt employees worked more than ten hours in a shift, they were not allowed or permitted to take 14 a mandated second meal period before the end of the tenth hour of work. Id. Indeed, their meal 15 periods were often interrupted and/or lasted fewer than thirty minutes due to Novolex’s meal period 16 policies/procedures, operational requirements, and work demands. Id. For each missed or non- 17 compliant meal period, Novolex failed and continues to fail to maintain a mechanism by which non- 18 exempt employees were paid meal period premiums at the regular rate of pay. Id. ¶ 32. Due to 19 Novolex’s uniform meal period practices, non-exempt employees were also regularly denied legally 20 compliant meal periods. Id. ¶ 33. 21 Additionally, Rodriguez and other non-exempt employees were not provided with all ten- 22 minute rest periods for every four hours worked, or a major fraction thereof, due to Novolex’s 23 uniform rest period policies/practices, operational requirements and work demands. Id. ¶ 34. As a 24 result, Rodriguez and other non-exempt employees were and are often unable to take a net ten- 25 minute duty-free rest period for every major fraction of four hours worked. Id. This includes a 26 second rest period for shifts in excess of six hours and a third rest period for shifts in excess of ten 27 hours in a workday. Id.

28 1 B. Procedural History 2 Rodriguez filed suit in Los Angeles County Superior Court on December 4, 2025. See Dkt. 3 No. 1-3. Novolex removed the action to this Court on January 5, 2025, pursuant to the Class Action 4 Fairness Act (“CAFA”). See Dkt. No. 1 (“NOR”). The Notice of Removal was appended with the 5 Declaration of Chase Williams. Dkt. No. 1-1 (“Williams Decl.”). 6 Rodriguez filed a First Amended Complaint on February 5, 2026, alleging the following 7 eight claims: (1) failure to pay minimum wages; (2) failure to pay overtime wages; (3) meal period 8 violations; (4) rest period violations; (5) failure to pay sick time; (6) wage statement violations; (7) 9 waiting time penalties; and (8) unfair competition. See generally 1AC. 10 Rodriguez filed the instant Motion on February 10, 2026. Dkt. No. 22 (“Motion”). Novolex 11 filed its Opposition on March 6, 2026. Dkt. No. 24 (“Opposition”). Rodriguez filed a Reply on 12 March 16, 2026.2 Dkt. No. 17 (“Reply”). 13 The Court finds this matter appropriate for resolution without oral argument and hereby 14 VACATES the hearing set for April 9, 2026, 2026. See Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15. 15 For the reasons stated below, the Court DENIES WITHOUT PREJUDICE the Motion. 16 I. Applicable Law 17 A. Class Action Fairness Act 18 “Federal courts are courts of limited jurisdiction. They possess only the power authorized by 19 [the] Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) 20 (citations omitted). Removal of a state action to federal court is appropriate only if the district court 21 would have had original jurisdiction over the action. See 28 U.S.C. § 1441(a). Under CAFA, federal 22 courts have original jurisdiction over civil class actions in which: (1) the aggregate number of 23 members in the proposed class is 100 or more; (2) the amount in controversy (“AIC”) exceeds the 24

25 2 Under Local Rule 7-12, “[a] Court may decline to consider any memorandum or other document not filed within the deadline set by order or local rule. The failure to file any required document, or the failure to file it within the deadline, 26 may be deemed consent to the granting or denial of the motion . . . .” The Court’s Civil Standing Order orders the parties that “all Motions must be filed in accordance with the following modified briefing schedule . . . . Reply: Must be filed no 27 later than seven (7) days after the Opposition.” Civil Standing Order § VIII(B). Here, Rodriguez filed his Reply ten (10) days after Novolex’s Opposition. Although Rodriguez has failed to comply with the Court’s Orders, the Court will not 28 deny Rodriguez’s Motion on this basis. The parties are admonished that future failure to comply with the Court’s Orders 1 sum or value of $5,000,000; and (3) the parties are minimally diverse. 28 U.S.C. §§ 1332(d)(2), 2 (5)(b). 3 When a plaintiff files an action in state court over which federal courts might have 4 jurisdiction, the defendant may remove the action to federal court. See 28 U.S.C. § 1446. When the 5 defendant does so pursuant to CAFA, the defendant must make a “plausible allegation that the 6 amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co., 7 LLC v. Owens, 574 U.S. 81, 89 (2014). If the plaintiff contests whether the amount of controversy is 8 sufficient for jurisdiction, “both sides submit proof and the court decides, by a preponderance of the 9 evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 88. 10 The defendant who removes bears the burden “to show the amount in controversy by a 11 preponderance of the evidence.” Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 994 (9th 12 Cir. 2022). There is “no antiremoval presumption” in cases invoking CAFA jurisdiction. Dart 13 Cherokee, 574 U.S. at 89. In other words, while a defendant bears the burden of showing removal is 14 proper, there is no “thumb on the scale against removal.” Jauregui, 28 F.4th at 994. 15 Rather, the procedure is that “[t]he parties may submit evidence outside the complaint, 16 including affidavits or declarations, or other ‘summary-judgment-type evidence relevant to the 17 amount in controversy at the time of removal.’” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 18 (9th Cir. 2015) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 19 1997)). In determining the AIC, the defendant may rely on “a chain of reasoning that includes 20 assumptions.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 925 (9th Cir. 2019). “An 21 assumption may be reasonable if it is founded on the allegations of the complaint.” Id. However, “a 22 defendant cannot establish removal jurisdiction by mere speculation and conjecture, with 23 unreasonable assumptions.” Ibarra, 775 F.3d at 1197. Thus, when the calculations cannot be 24 justified by the allegations in the First Amended Complaint—or are “unreasonable” assumptions— 25 the removing party must present evidence to support the assumptions made. Perez v. Rose Hills Co., 26 131 F.4th 804, 809 (9th Cir. 2025). Put another way, the district court must first consider whether 27 any assumptions made by the defendant are a reasonable interpretation of the complaint, and may 28 not reject assumptions on the basis that they are not supported by evidence. Perez, 131 F.4th at 809. 1 It is well-settled in the Ninth Circuit that CAFA’s provisions should be interpreted broadly 2 with a “strong preference” for class actions to be heard in federal court when properly removed. 3 Jauregui, 28 F.4th at 993. And in the early stages of litigation, a defendant has no choice but to rely 4 on assumptions when calculating an AIC using the plaintiff’s complaint before resolving any 5 disputes over key facts. Id. As a result, it is inappropriate to demand exact certainty from a defendant 6 in their calculations of the AIC. Id. However, “[w]here a defendant’s assumption is unreasonable on 7 its face without comparison to a better alternative, a district court may be justified in simply 8 rejecting that assumption and concluding that the defendant failed to meet its burden.” Id. at 996. 9 On the other hand, where “a defendant’s assumption is rejected because a different, better 10 assumption is identified . . . the district court should consider the claim under the better 11 assumption—not just zero-out the claim.” Id. In such circumstances, the Court should identify, 12 applying a preponderance of the evidence standard, the best possible assumptions, and use them to 13 calculate the total AIC. See id. If the total amount is found to be greater than $5 million, the action 14 will remain in federal court. See 28 U.S.C. § 1332(d)(2). If not, it should be remanded to state court. 15 See id. 16 II. Discussion 17 The parties do not dispute that the aggregate number of class members is 100 or more, or that 18 the parties are minimally diverse. 28 U.S.C. §§ 1332(d)(2), (5)(b); see generally Motion; Opposition; 19 Reply. Thus, the prevailing issue is whether the AIC is satisfied under CAFA. 20 A. Class Action Fairness Act Jurisdiction Does Not Exist. 21 Rodriguez argues that Novolex cannot prove, by a preponderance of the evidence, that 22 Novolex’s proffered evidence establishes the AIC exceeds $5 million. Motion at 3-4; Reply at 1-2. 23 Novolex contends that its estimations, reasonably based on the allegations set forth in Rodriguez’s 24 First Amended Complaint, see 1AC, as well as the supporting Williams Declaration, satisfy the AIC 25 under CAFA, Opposition at 4-6, 11. For the reasons stated below, the Court determines that Novolex 26 has not met the CAFA AIC threshold. 27 Rodriguez bases his argument on the following: (1) Novolex has failed to present any 28 documentary evidence substantiating its AIC calculations; and (2) Novolex’s assumptions are 1 unreasonable based on the allegations set forth in the First Amended Complaint. Motion at 3-4. 2 Specifically, Rodriguez asserts Novolex’s calculations are founded on unsupported assumptions 3 regarding frequency of violations. Id. Through the alleged baseless assumptions, Rodriguez accuses 4 Novolex of inflating the damages sought under each claim. Id. 5 In response, Novolex asserts the following: (1) it is not required to produce documentary 6 evidence at this pleading stage; and (2) its AIC calculations are reasonably based on the allegations 7 set forth in the First Amended Complaint. Opposition at 4-6. 8 The Court will address the disputed calculations under each asserted claim. 9 i. Novolex Is Not Required to Produce Documentary Evidence. 10 Rodriguez argues that Novolex failed to provide competent evidence supporting the asserted 11 workweeks, violation rates, and assumptions. See generally Motion. Novolex disagrees, claiming 12 that the AIC is properly based on the First Amended Complaint’s allegations and supporting 13 declaration of Chase Williams. Opposition at 4-6, 11. 14 Per the Ninth Circuit, the removing party has the burden to prove, by a preponderance of the 15 evidence, that CAFA jurisdiction exists—and may do so through “summary-judgment-type” 16 evidence. Jauregui, 28 F.4th at 994; Ibarra, 775 F.3d at 1197. Further, a removing party can base its 17 AIC calculations on the allegations of the operative First Amended Complaint so long as its 18 assumptions are reasonable. Perez, 131 F.4th at 809; Reply at 6-7. 19 Here, Novolex, in the Notice of Removal, indicated that its assumptions regarding the total 20 amount of non-exempt employees, workweeks, and violation rates were based on the First Amended 21 Complaint allegations and “business records” which are regularly maintained. NOR ¶¶ 21-23; 22 Williams Decl. ¶¶ 1, 4-6. From those records, Novolex concluded that: (1) from December 4, 2021, 23 to the Notice of Removal, there are “at least 340 non-exempt employees in California,” amounting to 24 “32,480 workweeks,” NOR ¶ 21; (2) from December 4, 2022, to the present, Rodriguez’s employer 25 “separated from at least 110 non-exempt employees in California,” with an “average rate of pay” of 26 $20.64, id. ¶ 22; and (3) from December 4, 2024, to the present, there are “at least 175 non-exempt 27 employees in California,” totaling “5,969 weekly pay periods” after “capping the pay periods at 40 28 per person,” id. ¶ 23. These assumptions are supported by Williams’ Declaration, which asserts that 1 Williams is the Vice President of Novolex, is “familiar with and have access to the business and 2 employment records of Novolex,” and has control over “personnel data” including “those of 3 Rodriguez and the putative class.” Williams Decl. ¶ 1. Contrary to Rodriguez’s contention, Motion 4 at 4-6; Reply at 2-4, Novolex is not required to produce its business records, Jauregui, 28 F.4th at 5 994; Ibarra, 775 F.3d at 1197. Accordingly, Novolex’s obligation was to submit reasonable 6 assumptions based on allegations set forth in the First Amended Complaint and supported by 7 summary judgment type evidence such as Declarations.3 Id. 8 ii. Novolex’s Proffered AIC Is Not Reasonable. 9 Because Novolex seeks removal, it has the burden to establish the requisite AIC by a 10 preponderance of the evidence. Jauregui, 28 F.4th at, 99; Dart Cherokee, 574 U.S. at 89. As 11 mentioned above, Rodriguez contends that Novolex’s proffered AIC calculations are based on 12 speculative and unsupported assumptions. Motion at 4-6; Reply at 4. As discussed below, the Court 13 finds that the relevant assertions in the Notice of Removal and Declaration of Chase Williams are 14 speculative, and the assumptions, improperly grounded in the language of the First Amended 15 Complaint, are unreasonable. 16 1. Rodriguez’s Meal and Rest Period Claim 17 The parties dispute Novolex’s calculated damages related to meal and rest periods. 18 In its Notice of Removal, Novolex assumed, from its review of business records and 19 allegations set forth in the original First Amended Complaint, that Novolex failed to provide a meal 20 and rest period fifty percent of the workweek. NOR ¶¶ 38-39, 42. Accounting for the average hourly 21 rate calculated based upon a review of Novolex’s business records regarding the putative class, 22 Williams Decl. ¶ 4, and Rodriguez’s allegation that Novolex’s uniform practices “regularly denied” 23 24 25

26 3 Novolex contends that Rodriguez “provides no evidence to rebut [Novolex’s] amount in controversy.” Opposition at 7 (citing Rea v. Michaels Stores Inc., 742 F.3d 1234, 1239 (9th Cir. 2014)). In Rea, the Court found removal was 27 appropriate where the defendant had submitted “substantial, plausible evidence” in support of its AIC and plaintiff subsequently failed to provide rebuttal evidence. 742 F.3d at 1239. Pursuant to Rea, the Court must first assess whether 28 Novolex presented sufficient AIC evidence before considering if Rodriguez submitted rebuttal evidence. Id. 1 or resulted in employees being “often unable” to take meal and rest periods,” it reached an AIC 2 calculation of $3,387,664.4 NOR ¶¶ 38-42. 3 Rodriguez asserts that these assumptions are unreasonable because Novolex unreasonably 4 assumes a fifty percent violation rate and failed to narrow the scope of employees to those eligible to 5 receive meal and rest periods. Motion at 6-10; Reply at 4. In response, Novolex points to allegations 6 in the operative First Amended Complaint regarding the alleged “uniform” policies and practices to 7 not provide meal periods or authorize rest periods.5 1AC ¶¶ 31, 34, 62-69; Opposition at 8-11. 8 Novolex also points to Williams’ Declaration, which provides that “Novolex employed, in the 9 aggregate, at least 340 non-exempt employees . . . that worked approximately 32,480 workweeks.” 10 Opposition at 11; Williams Decl. ¶ 4. In its Motion, Rodriguez posits that the Williams’ Declaration 11 “fails to mention distinctions among non-exempt employees and the length of shifts worked.” 12 Motion at 7. Rodriguez’s Reply reiterates that Novolex has failed to provide competent evidence 13 supporting its calculations. Reply at 4-5. 14 In Perez, the Ninth Circuit found that the defendant reasonably assumed a weekly violation 15 based on the plaintiff’s allegation that the defendant “committed violations ‘at times.’” 131 F.4th at 16 806-10. The Perez court reiterated the Ibarra standard: a defendant can base the AIC on reasonable 17 assumptions from allegations of the complaint. Id.; Ibarra, 775 F.3d at 1197. In the First Amended 18 Complaint, Rodriguez alleges that it was a “uniform” policy and practice for Novolex to not provide 19 meal and rest periods. 1AC ¶¶ 31, 34, 36, 62-69. The First Amended Complaint specifically states 20 that class members, “often” and “regularly”: (1) “were denied compliant and timely 30-minute off- 21 duty meal period”; (2) “were not allowed and permitted to take a mandated second meal period”; and 22 “were and often unable to take a ten minute duty-free rest period for every major fraction of four 23 hours worked.” Id. ¶¶ 31-34. These alleged violations occurred “at all relevant times.” Id. And the 24

25 4 Novolex, as with its minimum wage calculations, addressed the total damages under two categories: (1) damages accrued and (2) damages to be incurred throughout trial. NOR ¶¶ 56-57. As discussed above, the Court concludes that 26 this AIC calculation methodology is supported by binding authority. Chavez, 888 F.3d at 414-15.

27 5 Novolex cites to numerous nonbinding decisions finding that a fifty percent rate is proper when the operative complaint asserts a policy and practice. Opposition at 11. But Novolex’s assumptions here are not unreasonable due to the violative 28 rate. Rather, they are unreasonable because Novolex fails to justify the class members it is applying the rate to. Thus, 1 First Amended Complaint alleges that the violations were part of a “company-wide policy/practice.” 2 Id. ¶ 20. Thus, Novolex’s fifty percent violation assumption is in accord with binding precedent, and 3 the assumed wages are reasonable. Perez, 131 F.4th at 809. 4 Although the violation rate is reasonable, the Court finds that the Williams’ Declaration does 5 not provide a sufficient basis for Novolex’s assumption that members of the putative class were 6 eligible for meal and rest periods. As Rodriguez correctly notes, Williams does not clarify whether 7 each member of the putative class worked sufficient shift hours to be entitled to a meal (over a six- 8 hour shift) or rest period (over a four-hour shift). Motion at 6, 9-10. Thus, Novolex fails to provide 9 any evidence concerning the frequency that the members, in fact, worked shifts which entitled them 10 to meal and rest periods, rendering this assumption unreasonable. 11 As the Ninth Circuit made clear in Jauregui, if the removing party’s assumption “is 12 unreasonable on its face without comparison to a better alternative,” then the Court may “simply 13 reject that assumption and conclude that the defendant failed to meet its burden” without identifying 14 specific alternative assumptions. 28 F.4th at 996. Here, because Novolex relies on an unreasonable 15 assumption of 32,480 aggregate workweeks to make its AIC calculation, the Court finds that 16 Novolex’s AIC estimate to be speculative. Ibarra, 775 F.3d at 1197. Accordingly, the Court finds 17 that Novolex has not demonstrated its minimum wage calculation by a preponderance of the 18 evidence. 19 2. Rodriguez’s Overtime Claim 20 The parties dispute Novolex’s calculated overtime damages. 21 In its Notice of Removal, Novolex assumed, from its review of business records and 22 Rodriguez’s allegations, that Novolex failed to pay overtime wages to all class members at least one 23 hour per workweek. NOR ¶¶ 33-34, 36-37. Accounting for 32,480 workweeks, the average wage 24 rate for all employees, and a 0.2 hour per week of overtime work, it reached an AIC calculation of 25 $1,016,299. NOR ¶¶ 36-37. 26 Rodriguez contends that there is no support for the one hour per week assumption as 27 Novolex’s estimates are not tied to any allegation or evidence. Motion at 11-14. Novolex describes 28 how the First Amended Complaint explicitly stated that it failed to properly record time worked 1 which “resulted in [class members] not being paid for all hours” worked. Opposition at 12. 2 Rodriguez responds that “pattern and practice” does not reasonably result in a presumed 100% 3 violation rate. Reply at 14-15. 4 Here, the First Amended Complaint alleges that due to Novolex’s failure to accurately record 5 time worked, class members were “not compensated for all hours worked . . . , including all hours 6 they were subject to the control of [Novolex] and/or suffered or permitted to work under the Labor 7 Code and applicable Wage Orders.” 1AC ¶ 50. Notably, Novolex concedes that the First Amended 8 Complaint contains “broad claims of off-the-clock work” but relies on Perez to assert that it is 9 reasonable for Novolex to presume a 0.2 weekly violation. Opposition at 12-13. But Perez 10 emphasized that violation rate assumptions should have a nexus to the operative complaint. 131 11 F.4th at 808 (“[A] CAFA defendant can most readily ascertain the violation rate by looking at the 12 plaintiff’s complaint.”). There, the Ninth Circuit held it was reasonable to assume a one hour a week 13 violation rate where the complaint alleged such violations occurred “at times” and “throughout the 14 statutory period.” Id. at 806-07. But here, Rodriguez’s First Amended Complaint makes no 15 allegation as to the violation rate for off-the-clock work. See generally 1AC. As discussed by the 16 parties, the First Amended Complaint states Novolex’s failure to accurately record time worked 17 resulted in class members not being paid for all hours worked, without any details as to the amount 18 of off-the-clock hours worked. 19 As such, the Court finds that the AIC determination for the overtime claim is speculative and 20 unreasonable based on the First Amended Complaint allegations. Ibarra, 775 F.3d at 1197. 21 Accordingly, the Court finds that Novolex has not demonstrated its overtime claim calculation by a 22 preponderance of the evidence. 23 3. Rodriguez’s Waiting Time Penalty Claim 24 The parties dispute Novolex’s calculated waiting time penalty damages. 25 Pursuant to Labor Code Section 203, “[i]f an employer willfully fails to pay, without 26 abatement or reduction, in accordance with [California Labor Code] Sections 201 [or] 202 . . . any 27 wages of an employee who is discharged or who quits, the wages of the employee shall continue as a 28 1 penalty from the due date thereof at the same rate until paid or until an action therefor is 2 commenced; but the wages shall not continue for more than 30 days.” Cal. Lab. Code § 203. 3 In its Notice of Removal, Novolex assumed, from its review of business records and 4 allegations set forth in the First Amended Complaint, that it “willfully failed to pay the Waiting 5 Time Subclass for all hours worked.” NOR ¶ 24. Accounting for 110 former employees, a 100% 6 violation rate, and Rodriguez’s allegation that Novolex “willfully fail[ed] to pay” class members in 7 violation of Section 203, 1AC ¶ 85; NOR ¶ 27, Novolex reached an AIC calculation of $544,896, 8 NOR ¶¶ 25-27. 9 Rodriguez argues Novolex presumes every employee is entitled to waiting time penalties 10 without any data. Motion at 16-17. In Opposition, Novolex explains that given the alleged claim that 11 all former employees were owed waiting time penalties, it is reasonable to assume that every non- 12 exempt employee could be entitled to a waiting time penalty claim under California Labor Code 13 section 203. Opposition at 15. Rodriguez’s Reply reiterates that Novolex’s calculation rests on 14 improper assumptions and an incomplete evidentiary showing. Reply at 7-9. 15 Because Rodriguez asserts a variety and frequency of Labor Code violations against 16 Novolex, and importantly, has not alleged that any class members have been paid the wages at issue, 17 see generally 1AC, there is a reasonable basis to find that each class member may be entitled to 18 Section 203 penalties. Perez, 131 F.4th at 809. But the allegations in the First Amended Complaint 19 that Novolex cites to justify this assumption give no indication that all subclass members who may 20 be eligible for waiting time penalties are owed the maximum statutory penalty. Reply at 8. Moreover, 21 Novolex does not produce evidence to support this assumption. The deficiency in supporting 22 allegations combined with the absence of evidentiary support for Novolex’s assumption renders the 23 reliance on a maximum statutory penalty for each member of the subclass unreasonable. Ibarra, 775 24 F.3d at 1199 (“[A] damages assessment may require a chain of reasoning that includes 25 assumptions.”). Specifically, Novolex has not pointed to evidence or allegations in the First 26 Amended Complaint that sufficiently support a 100% violation rate. When that is so, those 27 28 1 “assumptions cannot be pulled from thin air but need some reasonable ground underlying them.”6 2 Arias, 936 F.3d at 925; see Garibay v. Archstone Communities LLC, 539 Fed. App’x. 763, 764 (9th 3 Cir. 2013) (finding defendants’ AIC calculation unreasonable where the only evidence was a 4 “declaration by their supervisor of payroll, which sets forth only the number of employees during the 5 relevant period, the number of pay periods, and general information about hourly employee wages”). 6 Therefore, the Court finds that Novolex has not demonstrated its waiting time penalty calculation by 7 a preponderance of the evidence. 8 4. Rodriguez’s Wage Statement Penalties 9 The parties dispute damages pertaining to Novolex’s alleged failure to provide accurate 10 itemized wage statements. 11 In its Notice of Removal, Novolex assumed, from its review of business records and 12 allegations set forth in the First Amended Complaint, that Novolex failed to provide wage statements 13 throughout the statutory period. NOR ¶ 28. Accounting for these assumptions, capping the pay 14 periods at forty (40) per person which totals 5,969 workweeks, it reached an AIC calculation of 15 $588,150 for wage statement penalties damages. Id. ¶¶ 30-32. 16 Rodriguez asserts that it is unreasonable for Novolex to presume “that all 5,969 wage 17 statements at issue were defective” under Section 226(a). Motion at 14. Novolex counters, stating 18 that Rodriguez alleged that the data and First Amended Complaint supports a 100% violation rate. 19 Opposition at 14-15. 20 The liability under Section 226(a) is expressed under subsection (e)(1): 21 An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual 22 damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, 23 not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to 24 an award of costs and reasonable attorney’s fees. Cal. Lab. Code § 226(e)(1). 25 26 6 Further, Novolex cites to numerous cases to argue that “courts have agreed with utilizing a 100% violation rate for 27 waiting time penalties when premised on the underlying allegations and claims.” Opposition at 15-17. However, as stated, the Court finds the violative rate reasonable but that the underlying allegations and claims fail to substantiate that 28 every employee suffered a wage violation entitling them to wage time penalties. Therefore, Novolex’s cited cases are 1 The Court finds—in light of the explicit language of the First Amended Complaint—that 2 Novolex, due to its “failure to pay” class members “for all minimum, overtime, and sick pay wages, 3 and missed meal and rest premiums,” Novolex “issued and continues to issue wage statements” that 4 are “inadequate under [Section] 226(a),” 1AC ¶¶ 78-79, Novolex’s reliance on a 100% violation rate 5 assumption is as unreasonable as its violation rates for the violations noted above id. ¶¶ 78-80. It is 6 true that the Williams’ Declaration supports Novolex’s assumption of 5,969 total wage statements 7 were issued during the relevant period. Williams’ Decl. ¶ 6. And it is true that at no time does 8 Rodriguez indicate Novolex proffered compliant wage statements. See generally 1AC. But under the 9 theory pleaded in the complaint, a wage statement is only non-compliant if there was a failure to 10 pay. Novolex has failed to establish that it is reasonable that there was a failure to pay on each and 11 every wage statement. Therefore, the Court finds that the AIC assumption made by Novolex is 12 unreasonable. 13 5. Rodriguez’s Labor Code Section 1197.1 Claim 14 The parties dispute Novolex’s calculated Labor Code Section 1197.1 claim. 15 Pursuant to Labor Code Section 1197.1: 16 Any employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage 17 less than the minimum fixed by an applicable state or local law, or by an order of the commission, shall be subject to a civil penalty, restitution of wages, liquidated 18 damages payable to the employee, and any applicable penalties imposed pursuant to 19 Section 203. Cal. Lab. Code § 1197.1. For an initial violation, which is intentionally committed, an employer 20 shall be penalized one-hundred dollars for each underpaid employee for each pay period for which 21 the employee is underpaid and two-hundred and fifty for each subsequent violation for each 22 underpaid employee for each pay period for which the employee is underpaid. Id. 23 In its Notice of Removal, Novolex assumed, from its review of business records and 24 allegations set forth in the First Amended Complaint, that it intentionally failed to compensate class 25 members “for all the hours that they work[ed].” NOR ¶¶ 44-47; see 1AC ¶¶ 20-21. Accounting for 26 175 non-exempt employees totaling 8,031 workweeks and a 100% violation rate, Novolex reached 27 an AIC calculation of $1,981,500. NOR ¶¶ 46-47. 28 1 Rodriguez argues that Section 1197.1 is “not a standalone private damages remedy” as there 2 “must be a properly pled Private Attorneys General Act (“PAGA”) claim.” Motion at 10-11. 3 Because the First Amended Complaint does not assert a PAGA cause of action, Rodriguez asserts 4 that Novolex’s inclusion of Section 1197.1 penalties must be excluded. Id. In Opposition, Novolex 5 states that Rodriguez explicitly “seeks penalties under [Section] 1197.1.” Opposition at 19. Novolex 6 concedes that Rodriguez’s contentions concern a defense Novolex may raise—but for removal 7 purposes, the Court must assume Rodriguez’s allegations and claims are true and will be awarded. 8 Id. Rodriguez’s Reply reiterates that Section 1191.1 is legally unsupported as there is no basis for 9 recovery given Rodriguez’s causes of action. Reply at 9-10. 10 Under California law, Section 1197.1 penalties are recoverable if brought by the Labor 11 Commissioner or by a private plaintiff under PAGA, Labor Code Section 2699. See Atempa v. 12 Pedrazzani, 238 Cal. Rptr. 3d 465, 479 (Cal. Ct. App. 2018). Novolex does not contest Section 13 1197.1’s recovery limitations. Rather, it points to Ninth Circuit holdings, in removal cases, finding: 14 “In determining the amount in controversy, the Court accepts the allegations contained in the 15 complaint as true and assumes the jury will return a verdict in the plaintiff’s favor on every claim.” 16 Henry v. Central Freight Lines, Inc., 692 F. App’x 806, 807 (9th Cir. 2017). And the “strength of 17 defenses” are “irrelevant” because such contentions “conflat[es] the amount in controversy with the 18 amount of damages ultimately recoverable.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 928 19 (9th Cir. 2019) (citing LaCross v. Novolex Transportation, Inc., 775 F.3d 1200, 1203 (9th Cir. 20 2015). Novolex attempts to label the non-recoverability of Section 1197.1 penalties as a valid 21 defense under Atempa and emphasizes that Rodriguez expressly seeks Section 1197.1 penalties, 1AC 22 ¶ 22, Prayer for Relief ¶ 4, thereby placing the penalties at stake in this action, Opposition at 19. 23 However, as stated in Rodriguez’s Reply, “[Novolex’s] calculation relies on a category of 24 penalties that are not legally recoverable in this action as a matter of law.” Reply at 9. Because 25 Rodriguez does not assert a PAGA claim or “assert a cause of action seeking civil penalties on 26 behalf of the State,” the damages Novolex includes in its AIC computation are not legally available. 27 Reply at 9-10. Therefore, the Court finds that Novolex has not demonstrated its Section 1197.1 28 calculation by a preponderance of the evidence. 1 6. Attorneys’ Fees 2 The parties dispute Novolex’s alleged attorneys’ fees calculations. 3 In its Notice of Removal, Novolex considered, from the allegations set forth in the First 4 Amended Complaint and the Ninth Circuit’s twenty-five percent benchmark, and valued 5 Rodriguez’s attorneys’ fees at $7,518,509. NOR ¶¶ 50-51. 6 The Ninth Circuit provides that “when a statute or contract provides for the recovery of 7 attorneys’ fees, prospective attorneys’ fees must be included in the assessment of the amount in 8 controversy.” Arias, 936 F.3d at 922 (emphasis added); see also Fritsch v. Swift Transp. Co. of Ariz., 9 LLC, 899 F.3d 785, 794 (9th Cir. 2018) (“[A] court must include future attorneys’ fees recoverable 10 by statute or contract when assessing whether the amount-in-controversy requirement is met.”). 11 Rodriguez asserts that AIC attorneys’ fees calculations cannot include “future attorneys’ 12 fees” and Novolex’s assumption ignores limitations on recoverable attorneys’ fees. Motion at 17-18; 13 Reply at 10-11. Novolex responds that the Ninth Circuit has upheld a twenty-five percent total 14 recovery benchmark for attorneys’ fees. Opposition at 14-15. 15 The Court need not address whether Novolex’s attorneys’ fees estimate is reasonable. 16 Considering the Court’s previous findings, the estimated judgment on which the proposed 17 “benchmark” attorney’s fees valuation relies is not supported by sufficient evidence. Put another 18 way, insofar as the Court finds the amounts in controversy estimates for the claims unreasonable, 19 Novolex’s attorneys’ fees estimate using the “benchmark” method, by derivation, would also be 20 calculated through the use of unreasonable violation rates. Moreover, even assuming the “lodestar” 21 method valuation is correct, as described above, the combined total falls below the $5 million 22 jurisdictional requirement. 23 In sum, the Court finds that Novolex has not established by a preponderance of the evidence 24 that its AIC calculations for Rodriguez’s claims meet the threshold for CAFA jurisdiction.

25 26 27 28 1 I. CONCLUSION 2 For the foregoing reasons, the Court GRANTS the Motion to Remand (Dkt. No. 22) and 3 || ORDERS as follows: 4 1. The Case is REMANDED to the Superior Court of California for the County of Los 5 Angeles. 6 7 IT IS SO ORDERED.

9 Dated: April 9, 2026 10 MAAME EWUSI-MENSAH FRIMPONG United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28