Opinion
CV 20-10840-GW-PVCx
01-28-2021
Crystal Toney v. Capacity West LLC
Attorneys Present for Plaintiffs: Sang D. Song Attorneys Present for Defendants: David L. Cheng
Attorneys Present for Plaintiffs: Sang D. Song
Attorneys Present for Defendants: David L. Cheng
Present: The Honorable GEORGE H. WU, UNITED STATES DISTRICT JUDGE
CIVIL MINUTES - GENERAL
PROCEEDINGS: TELEPHONIC HEARING ON PLAINTIFF'S MOTION TO REMAND PURSUANT TO 28 U.S.C. § 1447 [9]; and SCHEDULING CONFERENCE
The Court's Tentative Ruling is circulated and attached hereto. Court hears oral argument. For reasons stated on the record, Defendant will have until February 4, 2021 to file its supplemental citation. Matter will stand submitted.
The scheduling conference is taken off-calendar to be reset if necessary.
The following abbreviations are used for the filings: (1) Notice of Removal (“NoR”), ECF No. 1; () Complaint (“Compl.”), ECF No. 1-2; () Plaintiff's Motion to Remand (“Mot.”), ECF No. 9; (3) Defendant's Opposition to Plaintiff's Motion to Remand (“Opp.”), ECF No. 11; (4) Plaintiff's Reply in Support of its Motion to Remand (“Reply”), ECF No. 14.
At issue in this wage-and-hour lawsuit is whether the Defendant has carried its burden of demonstrating that the amount-in-controversy requirement for diversity jurisdiction has been met. Before the Court is the Plaintiff's motion to remand this case back to state court, arguing that the Defendant has not made the required showing.
A. The Complaint
Plaintiff Crystal Toney worked at a warehouse operated by defendant Capacity West LLC. NoR ¶ 15. She filed a statewide class action on behalf of herself and other similarly-situated non-exempt Capacity West employees. The complaint alleges various violations of California's wage-and-hour laws, including failures to pay overtime wages, provide adequate meal and rest periods, and reimburse class members for business-related expenses. See generally Compl.
B. Procedural History
Toney filed this putative class action against Capacity West in Los Angeles County Superior Court in October 2020. See Compl. Capacity West removed the case to federal court, arguing that it falls within the federal courts' diversity jurisdiction. See NoR; 28 U.S.C. § 1332(a). Although this suit is brought as a class action, Capacity West does not rely on the diversity jurisdiction hook provided by the Class Action Fairness Act of 2005. Instead, Capacity West argues that because there is jurisdiction under § 1332(a) because there is complete diversity between it and Toney and the amount-in-controversy of Toney's individual claims exceeds $75,000.
Even if Capacity West relied on CAFA's jurisdiction hook (28 U.S.C. § 1332(d)), it would still need to show that “there is at least one plaintiff whose claims can remain in federal court”: i.e., satisfy the $75,000 amount-in-controversy requirement. Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 689 (9th Cir. 2006) (emphasis added); see 28 U.S.C. § 1332(d)(11)(B)(i) (providing that “jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under [§ 1332(a)]”).
Toney filed this motion to remand. Her sole argument is that the amount-in-controversy requirement has not been met.
II. Legal Standard
Federal courts operate under the presumption that they do not have jurisdiction over state-law causes of action. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). The party seeking removal has the burden of showing that the federal court has jurisdiction over the matter and that removal is proper. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
Where the complaint does not allege a specific amount in damages, the removing defendant relying on the federal court's diversity jurisdiction bears the burden of proving by a preponderance of the evidence that the amount in controversy exceeds the statutory minimum. See Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 683 (9th Cir. 2006); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (observing that the “defendant must provide evidence establishing that it is ‘more likely than not' that the amount in controversy exceeds that amount”).
A court “cannot base [its] jurisdiction on a [d]efendant's speculation and conjecture.” Lowdermilk v. United States Bank Nat'l Ass'n, 479 F.3d 994, 1002 (9th Cir. 2007). The defendant must “prov[e] the facts to support jurisdiction, including the jurisdictional amount.” Gaus, 980 F.2d at 567. In addition to the contents of the removal petition, the court considers “summary-judgment-type evidence relevant to the amount in controversy at the time of removal, ” such as affidavits or declarations. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir.2004) (internal quotations omitted); Singer, 116 F.3d at 374 (“defense counsel submitted declarations to show that the amount in controversy exceeded $50,000”). A court may also consider supplemental evidence later proffered by the removing defendant, which was not originally included in the removal notice. Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n. 1 (9th Cir. 2002).
III. Discussion
Besides a disclaimer that the amount in controversy is less than $75,000, the complaint contains very few factual allegations regarding Toney's individual claims. For starters, it is not even clear what kind of company Capacity West is or what kind of work Toney or the rest of the proposed class members do. All we are told is that Toney worked for Capacity West from 2016 to 2018. Compl. ¶ 18. As for the alleged violations, the complaint states only that Capacity West engaged in a “pattern and practice” of failing to pay overtime wages, provide meal and rest breaks, or comply with the other requirements of California's wage and hour laws. See, e.g., Compl. ¶¶ 35-42.
Paragraph 1 of the complaint states: “The ‘amount in controversy' for the named Plaintiff, including claims for compensatory damages, restitution, penalties, wages, premium pay, and pro rata share of attorney's fees' fees, is less than seventy-five thousand dollars . . . .”
The fact that Toney worked at a Capacity West warehouse was not contained in the complaint, but rather Capacity West's notice of removal.
Capacity West must rely on the possible award of attorney fees to reach the $75,000 amount because the value of Toney's claims themselves is far too low. Toney has not provided any estimate of their value, while Capacity West's own latest estimate is about $8,821. Opp. at 23.
In the Notice of Removal, Defendant's estimate of the value of Toney's individual claims (without attorney's fees) was $11,089.50. See NoR at 7.
Courts must include future attorney fees recoverable by statute or contract in assessing whether the amount-in-controversy requirement is met. See Fritsch v. Swift Transp. Co. of Az., LLC, 899 F.3d 785, 794 (9th Cir. 2018). The removing defendant, however, must use “summary-judgment-type evidence” to show that it is “more likely than not” that the amount in controversy (including attorneys' fees) exceeds $75,000. Id. at 795-96.
Capacity West has not shown that it is “more likely than not” that the award of attorney fees in this case will be great enough to satisfy the amount-in-controversy requirement. It “conservatively estimates Plaintiff's counsel would claim at least 545 hours of attorney time solely on Plaintiff's individual claims” to litigate it “through trial and appeal.” Opp. at 8-9. According to Capacity West, this is a “completely reasonable assumption in the context of an employment action.” Id. at 9. In support of this, Capacity West notes that in Lankford - another employment lawsuit - plaintiff's counsel spent 900 hours before seeking court approval of a class action settlement. Id. at 7. That case, Capacity West concedes, does not provide an apples-to-apples comparison because the billed hours covered work on class action claims. As noted earlier, while this is a putative class action, Capacity West does not rely on CAFA and the proposed class for the jurisdiction hook, but rather § 1332(a) and Toney's individual claims. Therefore it must show that the attorney fees associated with Toney's individual claims will help those claims meet the $75,000 threshold. While Capacity West tries to extract the individual-claim-specific work from the billable hours of plaintiff's counsel in Lankford, it does not provide any comparison of the factual backgrounds and litigation strategies of Lankford and this case. For example, while plaintiff's counsel spent 21 hours on document review in Lankford, there is no explanation for why document review (should it even happen) will take a similar amount of time here. There is also no explanation for why it is likely that this matter will drag out as long. Capacity West's claim is mere conjecture. See, e.g., Schneider v. Ford Motor Co., 441 F.Supp.3d 909, 914 (N.D. Cal. 2020) (where defendant asserted that “claims for attorneys' fees in these cases regularly approach[] or exceed[] $50,000” based on solely on conjecture and a reference to another lawsuit litigated by plaintiff's counsel, observing that courts “routinely hold that such evidence [is] insufficient”).
IV. Conclusion
Based on the foregoing discussion, the Court GRANTS the motion.