Opinion
2:22-cv-01219-KJM-AC
10-05-2022
Sofia Rios, Plaintiffs, v. Magellan HRSC, Inc., Defendant.
ORDER
Plaintiff Sofia Rios moves to remand this case to the Sacramento County Superior Court. She argues the defendant, Magellan HRCS, Inc., has not shown that more than $5 million is in controversy, which would mean this court lacks jurisdiction under the Class Action Fairness Act. As explained in this order, Magellan has carried its burden to show the court has jurisdiction. It has relied on employment records and has made reasonable assumptions about the amount in controversy based on Rios's allegations. The court denies the motion to remand.
I. BACKGROUND
Magellan is an Ohio-based healthcare management company. Compl. ¶ 1, Jenkins Decl. Ex. A, ECF No. 1-1; Not. Removal ¶ 21, ECF No. 1. Rios works for Magellan in California as a customer service associate. Compl. ¶ 13. She alleges the company did not pay her overtime wages when she worked overtime, calculated her sick leave incorrectly, prevented her from taking breaks to eat, and did not reimburse her business expenses, all in violation of California law. See id. ¶¶ 13-32. She seeks damages, statutory penalties, and attorneys' fees, among other relief. See id. at 17-18 (Prayer for Relief). She also alleges Magellan's policies were uniform and applied to all of its similarly situated employees, so she seeks to represent these employees in a class action. See id. ¶¶ 33-40.
Rios originally filed this case in Sacramento County Superior Court. See generally Id. Magellan removed the case to this court under the Class Action Fairness Act. See generally Not. Removal. 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). Magellan submitted a declaration from its vice president, who is familiar with the company's human resources and payroll records. See generally Philpott Decl., ECF No. 1-2. She confirmed Magellan had more than 100 employees for the relevant period. Id. ¶ 2. Publicly available government records confirm Magellan is an Ohio corporation whose principal place of business is in Maryland. See Jenkins Decl. Ex. D, ECF No. 1-1. As a result, the amount-in-controversy requirement is the only contested condition of this court's jurisdiction under the Class Action Fairness Act. Rios moves to remand, arguing Magellan has not satisfied that condition. See generally Mot., ECF No. 4. The matter is now fully briefed and the court submitted it without oral argument. See generally Opp'n, ECF No. 5; Reply, ECF No. 7, Min. Order, ECF No. 6.
II. DISCUSSION
When a defendant removes a case to federal court, it must file “a short and plain statement of the grounds for removal,” including, if necessary, an allegation that the amount in controversy is above the jurisdictional threshold. 28 U.S.C. § 1446(a); see also Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 87-88 (2014). The amount in controversy is “an estimate of the total amount in dispute.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (quoting Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010)). It is not a “prospective assessment of defendant's liability.” Id. (quoting Lewis, 627 F.3d at 400). Nor does it depend on the likelihood that a specific dollar amount will be awarded. See Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018). If a plaintiff could recover more than $5 million, then more than $5 million is in controversy. Arias, 936 F.3d at 927.
A plaintiff can contest a defendant's allegations about the amount in controversy by making a facial attack or a 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 v. KM Indus., Inc., 980 F.3d 694, 700 (9th Cir. 2020). Rios relies on a factual attack. She argues, for example, that Magellan has made unreasonable assumptions about how frequently she could prove employees missed meal breaks and how many business expenses Magellan did not reimburse. See Mot. at 4-5, 8-9.
When a plaintiff mounts a factual attack in a proposed class action, the defendant must show the amount in controversy is more likely to exceed the $5 million threshold than fall short of it. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (citing Dart Cherokee, 574 U.S. at 88-89). The defendant need not predict the “eventual award with one hundred percent accuracy.” Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 993 (9th Cir. 2022) (quoting Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004)). It may cite evidence and “rely on reasonable assumptions.” Harris, 980 F.3d at 701. For example, a defendant might adopt or take a cue from the plaintiff's own allegations. See Arias, 936 F.3d at 926-27. But it may not rest on “speculation” or “conjecture.” Ibarra, 775 F.3d at 1197. In response, the plaintiff may also submit evidence, and it may seek to undermine the defendant's assumptions. See Harris, 980 F.3d at 699. The district court then considers the parties' evidence, “weigh[s] the reasonableness of the removing party's assumptions,” and decides whether the defendant has discharged its obligation to show more than $5 million is in dispute. Id. at 700.
Magellan begins with Rios's claim that the company denied meal breaks to its employees. Rios alleges employees “were often unable to take timely and uninterrupted 30-minute first meal periods” and “were not always allowed and permitted to take a mandated second meal period.” Compl. ¶ 25. She alleges these “meal period policies” were “uniform” for all class members “at all relevant times.” Id. ¶¶ 25, 26, 36. Based on these allegations, Magellan assumes Rios will attempt to prove each member of the proposed class was forced to skip at least two breaks per week, if not more. Twice per week is a reasonable interpretation of “often but not always.” Cf., e.g., Arias, 936 F.3d at 926 (finding it reasonable to assume “routinely” meant once per week or more); Cabrera v. S. Valley Almond Co., LLC, No. 21-00748, 2021 WL 5937585, at *8 (E.D. Cal. Dec. 16, 2021) (finding it reasonable to assume “at times” and “on occasion” meant one hour per week or more). Magellan then counted the employees it had during the relevant period, added together all of weeks they worked, and calculated their average hourly salary. See Philpott Decl. ¶¶ 4-7, ECF No. 5-2. It then checked its records and found that about 97 percent of its employees had worked full time during the relevant period. See id. ¶ 8. Multiplying these figures together resulted in Magellan's estimating a potential liability of almost $2.4 million. See Opp'n at 13. This was a reasonable conclusion to draw from the complaint and the company's records.
51,178 workweeks × 97% rate of full-time work × 2 days' missed meals per week × $23.77 per hour per missed meal break = $2.36 million.
Magellan also relies on Rios's claim that the company did not pay employees all wages due after their employment ended, the sixth claim in her complaint. See Compl. ¶¶ 67-72. As explained in the previous paragraph, it is reasonable to assume Rios will attempt to prove all of the proposed class members missed at least one meal period, which meant at least some “meal premiums” had gone unpaid if any of these people left the company. See id. ¶ 32. Rios alleges Magellan is liable for the maximum possible penalty for wages left unpaid at the close of an employee's tenure: thirty days' wages. Id. ¶ 72 (citing Cal. Lab. Code §§ 201, 202, 203). Magellan's records showed that 493 people ended their employment during the relevant period, and these employees' average hourly wage was $24.11. Philpott Decl. ¶¶ 12-13. This means Rios is seeking almost $2.9 million in connection with her sixth claim.
493 employees × $24.11 per hour × 30 days × 8 hours per day = $2.85 million.
As a result, based on Rios's claims for missed meal breaks and late wage penalties, at least $5.2 million is in dispute-above the required $5 million threshold. It is not necessary to consider Rios's other claims or her request for attorneys' fees.
III. CONCLUSION
The motion to remand (ECF No. 4) is denied.
IT IS SO ORDERED.