Opinion
2:23-cv-01988-TLN-AC
07-15-2024
ULUALOFAIGA MANU, individually and on behalf of others similarly situated, Plaintiffs, v. GAT AIRLINE GROUND SUPPORT, INC., and DOES 1-50, inclusive, Defendants.
ORDER
TROY L. NUNLEY UNITED STATES DISTRICT JUDGE.
This matter is before the Court on Plaintiff Ulualofaiga Manu's (Plaintiff) Motion to Remand. (ECF No. 15.) Defendant Gat Airline Ground Support, Inc. (Defendant) filed an opposition. (ECF No. 16.) Plaintiff filed a reply. (ECF No. 18.) For the reasons set forth below, the Court DENIES Plaintiff's motion.
I. Factual and Procedural Background
Defendant, an aviation services company, employed Plaintiff as a non-exempt ramp agent from approximately December 2022 to April 2023. (ECF No. 1-1 at 6.) On June 20, 2023, Plaintiff filed the instant class action against Defendant, alleging violations of the California Labor Code and California Business and Professions Code in the Sacramento County Superior Court. (Id. at 2.) Plaintiff alleges Defendant: (1) failed to pay all minimum wages; (2) failed to pay all overtime wages; (3) did not provide requisite meal periods; (4) did not provide requisite rest periods; (5) failed to pay necessary business expenses; (6) failed to timely pay all compensation due and owing upon discharge; (7) provided inaccurate wage statements; and (8) engaged in unfair competition. (Id.)
On September 14, 2023, Defendant removed the instant class action to this Court pursuant to the Class Action Fairness Act of 2005 (“CAFA”). (ECF No. 1.) Defendant alleges the instant class action meets CAFA's requirements of class size, minimal diversity, and the amount in controversy. (Id. at 4.) On January 18, 2024, Plaintiff filed the instant motion to remand in which Plaintiff only contests Defendant's asserted amount in controversy. (ECF No. 15 at 11.)
II. Standard of Law
A civil action brought in state court, over which the district court has original jurisdiction, may be removed by the defendant to federal court in the judicial district and division in which the state court action is pending. 28 U.S.C. § 1441(a). CAFA gives federal courts original jurisdiction over certain class actions only if: (1) the class has more than 100 members; (2) any member of the class is diverse from the defendant; and (3) the aggregated amount in controversy exceeds $5 million, exclusive of interest and costs. See 28 U.S.C. § 1332(d)(2), (d)(5)(B).
Congress enacted CAFA “specifically to permit a defendant to remove certain class or mass actions into federal court” and intended courts to interpret CAFA “expansively.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). As a general rule, removal statutes are to be strictly construed against removal. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). However, “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). Nonetheless, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded” to state court. 28 U.S.C. § 1447(c).
A defendant seeking removal under CAFA must file in the federal forum a notice of removal “containing a short and plain statement of the grounds for removal.” Dart Cherokee, 574 U.S. at 83 (quoting 28 U.S.C. § 1446(a)). The notice of removal “need not contain evidentiary submissions,” but rather a defendant's “plausible allegation that the amount in controversy exceeds the jurisdictional threshold” suffices. Id. at 84, 89. When “a defendant's assertion of the amount in controversy is challenged ... both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 88. “The parties may submit evidence outside the complaint, including affidavits or declarations, or other ‘summary-judgment-type evidence relevant to the amount in controversy at the time of removal.'” Ibarra, 775 F.3d at 1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)).
“[W]hen the defendant relies on a chain of reasoning that includes assumptions to satisfy its burden of proof, the chain of reasoning and its underlying assumptions must be reasonable ones.” LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 2015). “CAFA's requirements are to be tested by consideration of real evidence and the reality of what is at stake in the litigation, using reasonable assumptions underlying the defendant's theory of damages exposure.” Ibarra, 775 F.3d at 1198. Then, “the district court must make findings of jurisdictional fact to which the preponderance standard applies.” Dart Cherokee, 574 U.S. at 89 (internal citation omitted).
III. Analysis
Plaintiff argues Defendant has not proven the amount in controversy exceeds $5,000,000 by a preponderance of the evidence. (ECF No. 15 at 11.) Specifically, Plaintiff argues Defendant's calculations “are inaccurate as they rely on speculative violation rates, and improperly account for employees who have released their claims against Defendant” in Nelson Gonzalez v. GAT Airline Ground Support, Inc., Los Angeles County Superior Court, Case No. 20BBCV00548 - a separate but related wage an Four class action against Defendant. (Id. at 12.) In opposition, Defendant argues the settlement in Gonzalez (the “Gonzalez Settlement”) has no impact on the amount in controversy in the instant action. (ECF No. 16 at 8.) Defendant also argues its amount in controversy calculations are “supported both by the weight of the case law and Plaintiff's own allegations ...” (Id.)
The Court will first address the impact of the Gonzalez Settlement on the amount in controversy, before addressing whether the amount in controversy is satisfied.
A. The Gonzalez Settlement
Plaintiff argues the Gonzalez Settlement reduces the amount in controversy in the instant class action because Defendant improperly included employees with released claims from the Gonzalez Settlement in its amount in controversy calculations. (ECF No. 15 at 12-15.) However, Defendant argues, and the Court agrees, that these employees from the Gonzalez Settlement did not release their claims until after Defendant removed the instant action and “[i]t is well settled that post filing developments do not defeat jurisdiction if the jurisdiction was properly invoked at the time of filing.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 928 (9th Cir. 2019) (quoting Visendi v. Bank of Am., N.A., 733 F.3d 863, 868 (9th Cir. 2013)) (internal quotation marks omitted)
Specifically, the parties fully executed the Gonzalez Settlement on April 26, 2023. (ECF No. 18. at 4.) Plaintiff then initiated this class action on June 23, 2023 in state court, addressing similar claims against Defendant to those raised in the Gonzalez action. (ECF No. 1-1.) Defendant removed this action on September 14, 2023, calculating the amount in controversy based on the allegations in Plaintiff's Complaint at the time of removal. (ECF No. 1.) The Los Angeles Superior Court then approved the Gonzalez Settlement on February 1, 2024, releasing some claims against Defendant. (ECF No. 18 at 4.)
While final approval of the Gonzalez Settlement may ultimately impact the amount of damages Plaintiff may recover in the instant action, it does not impact this Court's jurisdiction analysis as it occurred after removal. See LaCross v. Knight Transp., Inc., 775 F.3d 1200, 1203 (9th Cir. 2015) (“Plaintiffs are conflating the amount in controversy with the amount of damages ultimately recoverable.”); see also Visendi, 733 F.3d at 868 (finding once CAFA jurisdiction is properly invoked at the time of removal, post-filing developments do not defeat the federal court's jurisdiction). Plaintiff's Complaint alleges a class period beginning in June 2019 to present day, and it was proper for Defendant to rely on this class period when calculating the amount in controversy. Arias, 936 F.3d at 928. Thus, the Court finds the Gonzalez Settlement is not relevant to calculating the amount in controversy in this action.
B. Amount in Controversy
In its Notice of Removal, Defendant asserts the $5,000,000.00 amount in controversy requirement set by CAFA is satisfied because the amount in controversy for Plaintiff's first, second, third, fourth, sixth, and seventh causes of action, along with Defendant's calculation for attorneys' fees is at least $30,107,747.20. (ECF No. 1.) Plaintiff disputes the amount in controversy has been met, arguing Defendant's calculations are unreasonable, unsupported, and inflated. (ECF No. 15.) The Court will address whether Defendant has shown by a preponderance of the evidence that amount in controversy for Plaintiff's claims exceeds $5,000,000.00.
i. Unpaid Minimum Wage and Overtime Claims
In Plaintiff's first and second causes of action, Plaintiff alleges Defendant did not consistently pay Plaintiff and other class members minimum wage or overtime pay. (ECF No. 11 at 15-16.) In the Notice of Removal, Defendant argues Plaintiff does not “provide any details how allegedly undercompensated her and the proposed class [are], or how many hours per day or week she and other putative class members allegedly worked without compensation.” (ECF No. 1 at 12.) Defendant estimates the amount in controversy for Plaintiff's first and second causes of action for failure to pay minimum wages and failure to pay overtime wages to be $1,002,543.33 [$16.62/hour x 106,710 shifts x .5 hours x 1/5 shifts x 4 years], and $1,503,815.00 [$16.62/hour x 1.5 OT Premium x 36,645 overtime shifts x 1/5 shifts x 4 years], respectively. (ECF No. 16 at 17.) Defendant argues that this calculation is based on a reasonably conservative “20% violation rate of one half hour of unpaid straight time and one half hour of unpaid overtime per workweek.” (Id.) Plaintiff disagrees with Defendant's calculations and argues they are based on speculation and conjecture and a 10% violation rate is a more reasonable estimate for Plaintiff's minimum wage and overtime claims. (ECF No. 18 at 6.)
As an initial matter, “Defendant is not ‘required to comb through its records to identify and calculate the exact frequency of violations.'” Andrade v. Beacon Sales Acquisition, Inc., No. CV1906963CJCRAOX, 2019 WL 4855997, at *4 (C.D. Cal. Oct. 1, 2019) (quoting Lopez v. Aerotek, Inc., 2015 WL 2342558, at *3 (C.D. Cal. May 14, 2015)). While a 100% violation rate has been considered unreasonable when a complaint alleges a “pattern and practice” of violations, Ibarra, 775 F.3d at 1199, district courts in the Ninth Circuit have frequently approved a 20% violation rate where a plaintiff, as Plaintiff does in the instant case, alleges a “pattern and practice” of defendant's failing to provide minimum wage and overtime compensation. See Salazar v. PODS Enterprises, LLC, No. 1:19-CV-260-MWF, 2019 WL 2023726, at *3-4 (C.D. Cal. 2019); Kastler v. Oh My Green, Inc., No. 1:19-CV-02411-HSG, 2019 WL 5536198, at *4 (N.D. Cal. Oct. 25, 2019); see also (ECF No. 1-1 at 7) (“Defendants maintained a policy and practice of not paying Plaintiff and the Class for all hours worked, including all overtime wages.”).
Moreover, the Court finds Defendant's assumed 20% violation rate is reasonable because “assumptions made part of the defendant's chain of reasoning need not be proven; they instead must only have ‘some reasonable ground underlying them.'” Arias, 936 F.3d at 927 (quoting Ibarra, 775 F.3d at 1199). In Arias, the court found defendant's calculations reasonable because they were based on “personnel and payroll data” and assumptions of “the frequency of violations of the sort alleged in the complaint.” Id. at 926. In the instant case, Defendant also bases its calculations on personal and pay roll data as well as allegations from Plaintiff's Complaint that Defendant “maintained a systematic, company-wide policy and practice of failing to pay employees for all hours worked.” (ECF No. 1-1 at 4.)
Thus, the Court agrees with Defendant that a 20% violation rate is a reasonable estimate for calculating the amount in controversy for Plaintiff's first and second causes of action and will include $2,506,359.33 toward the $5,000,000.00 amount in controversy requirement.
ii. Meal and Rest Period Violation Claims
In Plaintiff's third and fourth causes of action, Plaintiff alleges Defendant did not provide Plaintiff and other class members with requisite meal and rest breaks. (ECF No. 1-1 at 18-19.) Plaintiff contests Defendant's assumption that all punitive class members missed 40% of their requisite meal and rest periods, a violation resulting in a $8,020,346.64 amount in controversy. (ECF No. 15 at 17.) Defendant argues its 40% violation rate is reasonable due to Plaintiff's allegation that Defendant “regularly failed” to provide employees with meal and rest breaks. (ECF No. 16 at 18.) The Court agrees with Defendant.
“Whether the plaintiff's complaint places limits on the claims alleged is relevant to the reasonableness of the defendant's assumed violation rate.” Diaz v. Ardagh Metal Beverage USA, Inc., No. 222CV00100TLNKJN, 2022 WL 3368537, at *5 (E.D. Cal. Aug. 15, 2022). However, where a complaint offers no guidance as to the frequency of violations, this Court has previously held a 20% to 60% violation rate for meal and rest period violations to be reasonable. See Kincaid v. Educ. Credit Mgmt. Corp., No. 2:21-cv-00863-TLN-JDP, 2022 WL 597158, at *4 (E.D. Cal. Feb. 28, 2022); Sanchez v. Abbott Labs., No. 2:20-cv-01436-TLN-AC, 2021 WL 2679057, at *4-5 (E.D. Cal. June 30, 2021). “Plaintiff cannot simply sit silent and take refuge in the fact that it is Defendant's burden to establish the grounds for federal jurisdiction.” Patel v. Nike Retail Servs., Inc., 58 F.Supp.3d 1032, 1042 (N.D. Cal. 2014). This is because a plaintiff is in the best position to know how often they experienced a meal or rest period violation. Id. Moreover, in the instant case, Plaintiff has not provided the Court with any evidence that a 40% violation rate would be unreasonable.
Thus, based on the allegations in Plaintiff's Complaint and a lack of any contrary evidence from Plaintiff, the Court finds a 40% violation rate - a median between 20% and 60% - is a reasonable estimate for calculating the amount in controversy for Plaintiff's third and fourth causes of action, and will include $8,020,346.64 [ 16.62/hour x 2 meal period premium payments x 2 rest period premium payments x 120,643 workweeks] toward the $5,000,000.00 amount in controversy requirement.
iii. Additional Calculations
Plaintiff also disputes Defendant's calculations related to Plaintiff's final pay claims, wage statement claims, and Defendant's calculations for attorneys' fees. (ECF No. 15 at 22-26.) However, Defendant shows by a preponderance of the evidence that at least $10,526,706.00 is in controversy with Plaintiff's first, second, third, and fourth causes of action. Therefore, the Court finds the minimum amount in controversy requirement under CAFA is satisfied and the Court declines to address the additional calculations.
IV. Conclusion
For the foregoing reasons, the Court hereby DENIES Plaintiff's Motion to Remand. Within thirty (30) days of the electronic filing date of this Order, the parties are ORDERED to file a joint status report with the Court with proposed dates for filing Plaintiff's motion for class certification. The Court will then issue an amended scheduling order.
IT IS SO ORDERED.