Opinion
No. 2:20-cv-01186-KJM-AC
01-11-2021
Megan Lacasse, individually, and on behalf of other members of the general public similarly situated, Plaintiffs, v. USANA Health Sciences, Inc., et al. Defendants.
ORDER
Plaintiff Megan Lacasse moves to remand this case to the Sacramento County Superior Court. She argues the defendant, USANA Health Services, Inc., has not shown that more than $5 million is in controversy, so this court lacks jurisdiction over the case under the Class Action Fairness Act. USANA has moved to dismiss. Both motions were submitted without a hearing. Because USANA has not carried its burden to establish this court's jurisdiction, the motion to remand is granted, and the motion to dismiss is denied as moot.
I. BACKGROUND
Lacasse alleges USANA hired her as an "Associate" about five years ago. See Compl. ¶¶ 12-13, 18, ECF No. 1-2. She stopped working for USANA about two years later. See id. ¶ 18. According to her complaint, USANA classified Lacasse as an independent contractor when it should have treated her as its employee. As a result, she claims, she was deprived of minimum wages, overtime pay, reimbursements for business expenses, and meal and rest breaks. See id. ¶¶ 28-39, 48-55. The complaint does not say how often Lacasse (or any other associates) worked overtime, how much less than the minimum wage she earned, how often USANA deprived her of rest or meal breaks, or the amount of her unreimbursed businesses expenses, but she alleges her individual claims are less than $75,000. See id. ¶ 1. She asserts a single claim under California's Unfair Competition Law and seeks to represent a class of "[a]ll current and former California-based . . . independent contractors" with the same job title who worked for USANA within the last four years. See id. ¶¶ 13, 41-44.
Lacasse filed her complaint in Sacramento County Superior Court. USANA removed the case to this court under the Class Action Fairness Act. See Not. Removal, ECF No. 1. That act gives U.S. District Courts original jurisdiction over class actions if (1) the proposed class has at least 100 members, (2) the amount in controversy is at least $5 million, and (3) the parties are minimally diverse. See 28 U.S.C. § 1332(d). USANA submitted a declaration by Dan Whitney with its notice of removal. See Not. Removal Ex. D, ECF No. 1-4. Whitney is USANA's Vice President of Ethics and Market Expansion. Id. ¶ 1. He says USANA had about 4,400 associates in California in March 2020 and is a Utah Corporation. Id. ¶¶ 2, 4. The amount-in-controversy requirement is therefore the only contested condition of this court's jurisdiction under the Class Action Fairness Act.
USANA made the following assumptions in reaching its conclusion that more than $5 million is in controversy:
• It had 4,400 associates in California for the whole four-year class period.
• All of its California associates worked at least eight hours per day and forty hours per week every week. (The complaint alleges Lacasse and other proposed class members were required to work more than eight hours per day or more than forty hours per week or both, but it does not say how often. See Compl. ¶ 36.)
• All of its California associates worked at least two hours of unpaid overtime per week every week.
• All of its California associates earned the minimum California wage, $10 per hour.See Not. Removal at 6-10 & nn.3-4. USANA argued in the alternative that more than $5 million would be in controversy if it assumed it had paid 4,400 associates $1 less than the minimum wage and they all worked forty hours per week, fifty weeks per year, in each of the previous four years. See id. at 10 n.5. USANA also proposes many alternative assumptions, all of which, it contends, would lead to the same result. See Opp'n Remand at 11-14, ECF No. 9.
• Each of its California associates was deprived of at least one meal break and one rest break per week every week over the four-year period.
• Associates worked fifty weeks per year for each of the four years.
Lacasse moves to remand the case to state court. ECF No. 7. She argues USANA's assumptions are unreasonable and baseless. USANA also moved to dismiss for improper venue or to transfer this case to the District of Utah. See Mot. Dismiss, ECF No. 5. Both motions are fully briefed and the court submitted them without oral argument. See Opp'n Remand, ECF No. 9; Reply Remand, ECF No. 13; Opp'n Dismiss, ECF No. 10; Reply Dismiss, ECF No. 14; Minute Order, ECF No. 12.
II. DISCUSSION
When a complaint does not allege an amount in damages, a defendant who removes the complaint to federal court under the Class Action Fairness Act "need only allege in its notice of removal" that more than $5 million is in controversy. Harris v. KM Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020). The plaintiff may then contest the removal in either a facial or factual attack. Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 2020). "A 'facial' attack accepts the truth of the [jurisdictional] allegations but asserts that they 'are insufficient on their face to invoke federal jurisdiction.'" Id. (quoting Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). "A factual attack, by contrast, 'contests the truth of the [jurisdictional] allegations, usually by introducing evidence outside the pleadings.'" Id. (quoting Leite, 749 F.3d at 1121). But outside evidence is not necessary; a factual attack can also rest on a plaintiff's "reasoned argument" challenging "the truth of the defendant's jurisdictional allegations" and explaining why those assumptions are "not supported by evidence." Harris, 980 F.3d at 700.
The Ninth Circuit's recent decision in Harris v. KM Industrial is controlling and shows why Lacasse's motion must be granted. In Harris, the plaintiff asserted similar wage and hour claims, including failures to provide rest and meal breaks and to pay overtime wages. Id. at 696-97. She sought to represent a class of former employees, including one subclass that had not received the required meal breaks and another that had not received the required rest breaks. See id. at 697. The employer removed the case from state court. Its notice of removal cited the declaration of a human resources executive, who said the employer had employed 442 members of the proposed class who had together worked about 40,000 workweeks. Id. at 698. The employer then calculated the amount in controversy by assuming among other things that all members of the meal break subclass were members of the rest break subclass and had all missed one meal break and two rest breaks in each week they worked. See id.
The plaintiff moved to remand, arguing the employer's assumptions were unreasonable. The defendant opposed that motion and offered some additional evidence to support some, but not all, of its assumptions. The district court granted the motion to remand. See Harris v. KM Indus., Inc., No. 19-7801, 2020 WL 1970704, at *3 (N.D. Cal. Apr. 24, 2020). The district court held the employer was required to respond with evidence supporting its assumptions. See id. The Ninth Circuit affirmed on essentially the same basis. See, e.g., 980 F.3d at 702 ("We . . . agree with the district court that relying on the factually unsupported and unreasonable assumption that the 442 Hourly Employee Class members worked shifts long enough to entitle them to meal and rest periods would exaggerate the amount in controversy.").
Like the plaintiff in Harris, Lacasse here makes a factual attack by contesting the reasonableness of the assumptions underlying USANA's conclusion that more than $5 million is in controversy. Like the defendant in Harris, USANA has not cited evidence to support its assumptions. And as in Harris, its assumptions are unreasonable without that evidence. USANA does not explain why it is reasonable to assume that it had the same number of associates for all of the last four years; that every associate regularly worked one or two or any number of hours of ///// ///// overtime per week; that every associate qualified for and was consistently deprived of meal and rest breaks every week, fifty weeks per year for four years; and that associates were consistently paid a specific amount less than the minimum wage. These assumptions, in defense against a factual attack, do not establish this court's jurisdiction.
The many alternative calculations USANA proposes in its opposition do not take the place of evidence. They are also only allegations. See Opp'n at 11-14. These alternative calculations also demonstrate how arbitrary USANA's assumptions are: they show how simple it is to manipulate the assumptions to produce totals larger or smaller than the $5 million threshold. See id. at 11-13 & n.6 (showing amount in controversy would fall below $5 million if fewer associates worked fewer hours or made closer to the minimum wage).
Nor can USANA succeed by arguing Lacasse is in a better position to collect and produce evidence. See id. at 6-7. This court is bound by the Ninth Circuit's decisions, including Harris, and cannot relieve USANA of its evidentiary burden. Even if it could, the unfairness USANA protests is illusory. If a defendant suspects but does not know that more than $5 million is in controversy, then it may investigate its own records, conduct discovery, and obtain the evidence it needs to assure itself and prove that a federal district court would have jurisdiction over its claims. See, e.g., 28 U.S.C. § 1446(b)(3) (permitting removal "within 30 days after receipt by the defendant . . . of a copy of an . . . order or other paper from which it may first be ascertained that the case is one which is or has become removable"); Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1125 (9th Cir. 2013) (permitting defendant to remove action under Class Action Fairness Act "outside the two thirty-day periods on the basis of its own information, provided that it has not run afoul of either of the thirty-day deadlines").
III. CONCLUSION
Like the defendant in Harris, USANA had every opportunity to offer evidence in response to Lacasse's objections. See 980 F.3d at 702. It did not. The motion to remand is thus granted, and the motion to dismiss is denied as moot. The parties' recent joint request to reschedule the ///// ///// status conference is also denied as moot. This order resolves ECF Nos. 5, 7, and 18. This action is remanded to the Sacramento County Superior Court.
IT IS SO ORDERED. DATED: January 11, 2021.
/s/_________
CHIEF UNITED STATES DISTRICT JUDGE