Opinion
Case No.: 23-CV-1815 JLS (MSB)
2024-01-08
Andrea URIAS, individually, and on behalf of all others similarly situated, Plaintiff, v. LABCORP PERI-APPROVAL AND COMMERCIALIZATION INC., an unknown entity; Covance Market Access Services, Inc., a corporation; Covance Inc., a corporation; and Does 1 through 10, inclusive, Defendants.
Benjamin Hickson Haber, Justin F. Marquez, Maxim Gorbunov, Wilshire Law Firm, PLC, Los Angeles, CA, for Plaintiff. Kimberly C. Carter, Epstein Becker Green, P.C., Los Angeles, CA, Ronnie Arenas, Kelley Drye & Warren LLP, Los Angeles, CA, Mark A. Konkel, Pro Hac Vice, Kelley Drye & Warren, LLP, New York, NY, for Defendants Labcorp Peri-Approval and Commercialization Inc., Covance Market Access Services, Inc.
Benjamin Hickson Haber, Justin F. Marquez, Maxim Gorbunov, Wilshire Law Firm, PLC, Los Angeles, CA, for Plaintiff.
Kimberly C. Carter, Epstein Becker Green, P.C., Los Angeles, CA, Ronnie Arenas, Kelley Drye & Warren LLP, Los Angeles, CA, Mark A. Konkel, Pro Hac Vice, Kelley Drye & Warren, LLP, New York, NY, for Defendants Labcorp Peri-Approval and Commercialization Inc., Covance Market Access Services, Inc. ORDER GRANTING PLAINTIFF'S MOTION TO REMAND PURSUANT TO 28 U.S.C. § 1447
(ECF Nos. 4-5)
Janis L. Sammartino, United States District Judge
Presently before the Court are Plaintiff Andrea Urias's Motion to Remand Pursuant to 28 U.S.C. § 1447 ("Mot.," ECF No. 5) and her Memorandum of Points and Authorities in support thereof ("Mem.," ECF No. 5-1). Defendant Labcorp Peri-Approval and Commercialization, Inc. filed an Opposition to the Motion ("Opp'n," ECF No. 12), to which Plaintiff filed a Reply ("Reply," ECF No. 13). The Court took Plaintiff's Motion under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). See ECF No. 9. Having carefully considered the Parties' arguments and the law, the Court GRANTS Plaintiff's Motion.
BACKGROUND
Plaintiff initiated this putative class action by filing her Complaint ("Compl., ECF No. 1-4") on June 30, 2023, in the Superior Court of California, County of San Diego. The Complaint contains eight causes of action, including alleged violations of (1) California Labor Code §§ 204, 1194, 1194.2, and 1197 (Unpaid Minimum and Straight Time Wages); (2) California Labor Code §§ 1194 and 1198 (Unpaid Overtime Wages); (3) California Labor Code §§ 226.7 and 512 (Failure to Provide Meal Breaks); (4) California Labor Code § 226.7 and 512 (Failure to Provide Rest Periods); (5) California Labor Code §§ 201 through 203 (Failure to Timely Pay Final Wages); (6) California Labor Code § 226 (Failure to Provide Accurate Wage Statements); (7) California Labor Code § 2802 (Failure to Indemnify Employees for Expenditures); and (8) California Business and Professional Code §§ 17200, et seq. (Unfair Business Practices). See generally Compl. at 12-21.
On October 2, 2023, Defendant filed its Notice of Removal ("NOR," ECF No. 1) pursuant to 28 U.S.C. §§ 1332, 1441, 1446, and 1452. See NOR at 1. Defendant alleged that this Court had diversity jurisdiction under the Class Action Fairness Act ("CAFA") pursuant to 28 U.S.C. §§ 1332(d)(2) and (d)(6). Id. Plaintiff's Motion followed.
LEGAL STANDARD
Generally, defendants may remove to federal court "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). In other words, "[t]he propriety of removal depends on whether the case originally could have been filed in federal court." City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 163, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997). "The party seeking the federal forum bears the burden of establishing that the statutory requirements of federal jurisdiction have been met." Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir. 2013).
CAFA gives federal courts jurisdiction over certain class actions if (1) the class has more than 100 members, (2) the parties are minimally diverse, and (3) the amount-in-controversy exceeds $5,000,000. 28 U.S.C. §§ 1332(d)(2), (d)(5)(B); see Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592, 133 S.Ct. 1345, 185 L.Ed.2d 439 (2018). While courts typically "strictly construe the removal statute against removal jurisdiction," Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992), "no antiremoval presumption attends cases invoking CAFA," Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89, 135 S.Ct. 547, 190 L.Ed.2d 495 (2014). To satisfy CAFA's amount-in-controversy requirement, "a removing party must initially file a notice of removal that includes 'a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.'" LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 2015) (quoting Dart Cherokee, 574 U.S. at 89, 135 S.Ct. 547). At that point, the "notice of removal 'need not contain evidentiary submissions.'" Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019) (quoting Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015)).
When a plaintiff contests the defendant's calculations, "both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied." Dart Cherokee, 574 U.S. at 88, 135 S.Ct. 547. "The preponderance of the evidence standard, in practical terms, requires the defendant to provide persuasive evidence that 'the potential damages could exceed the jurisdictional amount,' as opposed to requiring 'a prospective assessment of defendant's liability' to any degree of certainty." Richards v. Now, LLC, No. 218CV10152SVWMRW, 2019 WL 2026895, at *5 (C.D. Cal. May 8, 2019) (internal citations omitted) (quoting Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 397, 400 (9th Cir. 2010)).
The amount-in-controversy inquiry begins with the complaint, Greene v. Harley-Davidson, Inc., 965 F.3d 767, 771 (9th Cir. 2020), but parties may also provide "affidavits or declarations, or other 'summary-judgment-type evidence,'" Ibarra, 775 F.3d at 1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). Further, a defendant's "damages assessment" may rely on "a chain of reasoning that includes assumptions" if such assumptions have "some reasonable ground underlying them." Id. at 1199. Once a plaintiff has challenged removal, defendants must establish that their assumptions are reasonable, not merely plausible. See Arias, 936 F.3d at 927.
In short, "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. Courts "weigh the reasonableness of the removing party's assumptions" and should "not supply further assumptions of [their] own." Harris v. KM Indus., Inc., 980 F.3d 694, 701 (9th Cir. 2020). And though both parties may offer evidence, the burden of proof ultimately rests on the removing defendant. "[I]f the evidence submitted by both sides is balanced, in equipoise, the scales tip against federal-court jurisdiction." Ibarra, 775 F.3d at 1199.
ANALYSIS
The sole issue before the Court is whether CAFA's amount-in-controversy requirement is met, as neither side disputes that the proposed class consists of more than 100 individuals or that the Parties are minimally diverse. Defendant provides two estimates of the amounts that each of Plaintiff's claims put in controversy. See generally NOR; Opp'n. Plaintiff argues that key assumptions underlying Defendant's calculations are flawed. See generally Mem. For the reasons that follow, the Court agrees.
I. Defendant's Assumptions
Some baseline figures are not in dispute. Plaintiff defines the putative class as "[a]ll persons who worked for any Defendant in California as an hourly-paid or non-exempt employee at any time during the period beginning four years and 178 days before" the Complaint was filed. Compl. ¶ 24. The
Parties thus presume that the class period runs from January 3, 2019, to June 30, 2023, totaling approximately 234 weeks. See, e.g., NOR ¶ 29. Defendant also produced evidence showing that, during the relevant period, (1) Defendant employed "on average 427 non-exempt employees in California per year"; (2) said employees "received an average hourly wage of $22.46"; and (3) the employees "each worked at least 5 hours per day." Suppl. Presher Decl. Supp. Opp'n ("Suppl. Presher Decl.") ¶¶ 8-10, ECF No. 12-1.
However, the assumptions Defendant uses to extrapolate amount-in-controversy estimates from the data above are inherently flawed. Defendant presumes a hypothetical class size of 427 members, based on the average number of workers it employed per year. See generally NOR; Opp'n. But that logical leap proves problematic when considered alongside Defendant's assumption about the total number of weeks worked by class members. Further, Defendant makes unsupported assumptions regarding the number of days— and the length of the shifts—worked by putative class members. The Court will illustrate these issues by evaluating Plaintiff's claims for unpaid minimum and straight time wages and unpaid overtime wages. The Court will then turn to Defendant's estimate of potential attorneys' fees, which suffers from an additional defect.
A. Unpaid Minimum and Straight Time Wages
According to the Complaint, Defendant "maintained a systemic, company-wide policy and practice of" failing to pay minimum and straight time wages for all hours worked. Compl. ¶ 4(a). From that allegation, Defendant contends "it is reasonable... to assume an average of 1 uncompensated non-overtime hours [sic] per week for each" putative class member. NOR ¶ 27. Defendant next calculates that the 427 hypothetical class members worked "a cumulative total of 99,918 weeks during" the relevant period (427 workers × 234 total workweeks). Id. ¶ 29. So, per Defendant, the amount in controversy for this claim is approximately $2,244,158.28.
$2,244,158.28 = 99,918 workweeks × 1 unpaid hour per week × $22.46 average hourly wage. NOR ¶ 32.
1. Number of Workweeks
Defendant's workweek estimates are almost certainly inflated. By contending that 427 putative class members worked the entire relevant period of 234 weeks, Defendant assumes that each employee worked 52 weeks every year. But per Defendant's own evidence, 431 non-exempt California workers left Defendant's employ during the class period. Suppl. Presher Decl. ¶ 11. Unless Defendant regularly experienced a mass exodus every New Years Eve, those employees did not work all 52 weeks of their final years. And unless Defendant hired new workers only on New Years Day, incoming employees did not work all 52 weeks of their first years either.
As Plaintiff notes, one could also view Defendant's workweek estimate as inflating the size of the class itself by double counting workers. See Reply at 2-3. Suppose Employee A works the first 25 weeks of a year before quitting, after which point Defendant begins to seek her replacement. If it takes Defendant two weeks to hire Employee B to do A's job, and B works the rest of the year, A and B will have each worked 25 weeks of the same year. Presumably, Defendant's annual headcount would include both A and B as two separate employees. Applying Defendant's 52-week logic would thus lead to the assumption that A and B worked a combined 104
weeks in one year, more than double the true number—50 weeks.
Defendant could have bolstered its workweek assumption with supporting evidence. Justifying such an assumption is not a burdensome task; courts accept several different methodologies for doing so. See, e.g., Amezcua v. CRST Expedited Inc., 653 F. Supp. 3d 712, 721 (N.D. Cal. 2023) (accepting "500,000-workweek figure" calculated based on the total number of employees "during the relevant period and their hire and termination dates"); Morris v. Camden Dev., Inc., No. CV 18-3089-GW(FFMX), 2018 WL 4156593, at *2 (C.D. Cal. Aug. 27, 2018) (crediting workweek estimate derived by "dividing ... the number of workdays ... by five"). Defendant, however, neither presents summary-judgment-type evidence nor points to language from the Complaint to support its 52-week assumption. And absent some reasonable ground to support that assumption, the Court cannot credit it. See Avilez v. Omnicare, Inc., No. 14CV409 GPC JMA, 2014 WL 2196844, at *4 (S.D. Cal. May 27, 2014) (rejecting a defendant's calculations in part due to lack of "any evidence to support" the alleged "number of work weeks during the class period").
Defendant also provides the alternative assumption that "putative class members worked only 45 weeks each year." Opp'n at 11. But an equally baseless alternative assumption is not more creditable just because it is more conservative. See Cackin v. Ingersoll-Rand Indus. U.S., Inc., No. 820CV02281JLSJDE, 2021 WL 2222217, at *3 (C.D. Cal. June 2, 2021) ("[A]lternative calculations provided by the parties do 'not take the place of evidence'; rather, they 'merely demonstrate how arbitrary [Defendant's] assumptions are....'" (second alteration in original) (quoting Vanegas v. DHL Express (USA), Inc., No. CV 21-01538 PA (JCX), 2021 WL 1139743, at *3 (C.D. Cal. Mar. 24, 2021))). Defendant neither presents evidence supporting the 45-week assumption nor explains why 45 weeks per year is more reasonable than any other number. The Court thus rejects Defendants 45-week alternative along with its original 52-week suggestion. See Garibay v. Archstone Cmtys. LLC, 539 F. App'x 763, 764 (9th Cir. 2013) (affirming remand where a defendant "failed to provide any evidence regarding why [one] assumption... was more appropriate than" another).
2. Number of Days Worked Per Week
Defendant's estimate of Plaintiff's unpaid minimum and straight time wages claim is also based on the assumption that "employees can suffer a 30-minute violation per day" twice a week, representing a 40% violation rate ("2 out of 5 days" every week). NOR ¶ 27. Alternatively, Defendant contends, one can "conservatively" assume a 20% violation rate (one unpaid 30-minute violation a day, once per week). Opp'n at 11. Per Defendant, violation rates of 20% to 40% are reasonable as a matter of law in light of Plaintiff's "pattern and practice" allegations. See id. at 9. Using the "20% rate," and assuming each employee worked 45 weeks per year, the damages associated with Plaintiff's claim come to an estimated $968,632.42. Id. at 11-12.
$968,632.42 = 0.5 hours per week × 22.46 average hourly pay × (427 class members × 202 weeks). Opp'n at 12 n.3. Defendant presumably derived 202 weeks by multiplying the percentage of each year worked (45 weeks/52 weeks = 86.5%) by the 234-week class period (234 weeks × 86.5% = 202.41).
Defendant's violation rate argument, like its workweek assumption, withers quickly upon inspection. A violation rate represents the percentage of shifts—not weeks—in which putative class members experience a violation. See Holcomb v. Weiser Sec. Servs., Inc., 424 F. Supp. 3d
840, 845 n.2 (C.D. Cal. 2019) ("A 100% violation rate calculation assumes violations occurring in every identified shift for each class member." (citation omitted)). Defendant's "conservative" estimate of one 30-minute violation per week could therefore constitute a 50% rate if class members worked two shifts per week, or a 100% rate if class members worked one shift per week.
Consequently, Defendant could claim to be using a 20% violation rate only if putative class members worked five days per week on average. But Defendant provides no grounds to support that assumption, undermining Defendant's amount-in-controversy calculation further. See Crowe v. Wal-Mart Assocs., Inc., No. CV 16-6718 FMO (SSX), 2016 WL 5661754, at *3 (C.D. Cal. Sept. 28, 2016) (rejecting estimate where a defendant "provide[d] no evidence to support its assumption[] ... that plaintiff worked five days per week"); Lopez v. PVH Corp., No. 2:15-CV-02266-SVW-AS, 2015 WL 9200230, at *8 (C.D. Cal. Dec. 14, 2015) (finding defendants' "selection of five days per week" to be "arbitrary" where they "fail[ed] to explain how they arrived" at that number). Defendant's argument about the inherent reasonableness of a 20% violation rate is thus inapposite.
Per Defendant's evidence, each of its non-exempt employees in California "worked at least 5 hours per day." Suppl. Presher Decl. ¶ 10. The Court reads that statement to mean that each employee worked at least five hours every shift. Defendant does not, however, explain how many days and/or shifts its employees worked per week.
B. Unpaid Overtime Wages — Hours Worked Per Day
Defendant's overtime-violations reasoning presents a related issue. As with its minimum and straight time wages claim, the Complaint alleges that Defendant failed to pay putative class members "for all hours worked, including ... overtime wages." Compl. ¶ 4. Defendant assumes, with no explanation, that each employee incurred "an average of 1.5 uncompensated overtime hours per week." NOR ¶ 34. So, relying again on its flawed 52-workweek logic, Defendant calculates that Plaintiff's overtime claim puts $5,049,356.13 in controversy. Defendant adds the alternative estimate of $2,905,897.26, based on only one uncompensated overtime hour per week and 45 weeks worked per year.
$5,049,356.13 = 99,918 workweeks × 1.5 unpaid hours per week × ($22.46 average hourly rate × 1.5 overtime premium). NOR ¶ 38.
$2,905,897.26 = 1 hour per week × $33.69 average overtime payrate × (427 class members × 202 weeks). Opp'n at 12 n.4.
Here, Defendant relies on the unfounded assumption that each class member worked overtime each week. Defendants must cite allegations from the complaint or provide evidence of their own to support assumptions about the frequency of employees' overtime work. See, e.g., Wilson v. IKEA N. Am. Servs., LLC, No. CV2009075CJCASX, 2020 WL 7334486, at *3 (C.D. Cal. Dec. 14, 2020) (explaining that "the number of employees and the number of workweeks" does not constitute evidence "that each of the employees worked full time"); Gonzalez v. Hub Int'l Midwest Ltd., No. EDCV19557PAASX, 2019 WL 2076378, at *3 (C.D. Cal. May 10, 2019) (rejecting assumed rate of overtime violations where a defendant's evidence did "not address the frequency of employees' overtime work"); Williams v. ETC Inst., No. 18-CV-01011-MEJ, 2018 WL 3105117, at *11 (N.D. Cal. June 25, 2018) (concluding defendant did not meet burden as "[t]here [was] no evidence that every putative class member worked overtime, let alone did so every week"); cf. Harris, 980 F.3d at 701 (rejecting assumptions where
defendant "failed to provide any evidence" that "all [class members] worked shifts long enough to qualify for meal or rest periods").
Defendant cannot support its violation rate assumption solely by referencing Plaintiff's alleged work schedule. Per the Complaint, Plaintiff "typically" worked "at least five days in a workweek and at least eight hours per day, but [she] regularly worked more than eight hours in a workday and/or more than forty (40) hours in a workweek." Compl. ¶ 13. Defendant suggests that those allegations can be extrapolated to the rest of the class because Plaintiff purports to adequately represent the class and its members' individual claims. See Opp'n at 11. However, the typicality condition set by Federal Rule of Civil Procedure 23(a)(3) requires only "that the named plaintiffs claims are 'reasonably coextensive with those of absent class members; they need not be substantially identical.'" Reyes v. Vitas Healthcare Corp. of Cal., No. 22-CV-01724-WHO, 2022 WL 1774128, at *3 (N.D. Cal. June 1, 2022) (quoting Castillo v. Bank of Am., NA, 980 F.3d 723, 729 (9th Cir. 2020)). "Because the claims need not be identical, typicality provides no grounds from which to extrapolate the amount in controversy." Id. (citations omitted).
C. Attorneys' Fees
Defendant's evaluation of Plaintiff's prayer for attorneys' fees is similarly unsupported. Defendant initially assumed that Plaintiff could be awarded attorney's fees "of at least 25% of the total award to the class." NOR ¶ 72. After Plaintiff challenged that figure, Defendant argued that "the Ninth Circuit assumes attorney's fees at 25% of the other claims is reasonable." Opp'n at 17-18. Nevertheless, Defendant also offered 10% as a more conservative alternative. See id. at 18. Defendant did not attempt to justify the use of one number over the other.
While attorneys' fees may be included in an amount-in-controversy estimate, Defendant "must prove the amount of attorneys' fees at stake by a preponderance of the evidence" using "summary-judgment-type evidence." See Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 785, 795-96 (9th Cir. 2018). Despite Defendant's suggestion to the contrary, the Ninth Circuit has specifically declined to adopt a per se rule regarding attorneys' fees in CAFA calculations. See id. at 796 ("[W]e may not relieve the defendant of its evidentiary burden by adopting a per se rule for one element of the amount at stake in the underlying litigation.").
Defendants can meet their evidentiary burden in several ways. For example, a defendant can identify awards in cases "similar enough to the case at hand that the [C]ourt can conclude it is more likely than not that [Plaintiff] may incur a similar fee award." Weaver v. Amentum Servs., Inc., No. 22-CV-00108-AJB-NLS, 2022 WL 959789, at *5 (S.D. Cal. Mar. 30, 2022). Defendants can also "introduce[] evidence of billing rates for Plaintiffs' counsel" or evidence of "fees Plaintiffs' counsel has been awarded in similar cases." Id.; see also Greene, 965 F.3d at 774 n.4 (accepting estimated attorneys' fees of 25% given "evidence that Greene's attorney sought 35 percent in a similar case").
Defendant provides no such evidence here. Instead, Defendant cites cases that supposedly adopt its rule that attorneys' fees of 25% are reasonable as a matter of law. See Opp'n at 17-18. Even if Defendant meant to put forward evidence of fees awarded in "similar cases," its argument fails because all of Defendant's cases are distinguishable. See Staton v. Boeing Co., 327 F.3d 938, 968 (9th Cir. 2003) (explaining
one method of determining attorneys' fees in the context of deciding whether to approve class settlement agreement); Heejin Lim v. Helio, LLC, No. CV 11-9183 PSG PLAX, 2012 WL 359304, at *3 (C.D. Cal. Feb. 2, 2012) (taking note of defendant's 25% fee estimate, without deciding whether the estimate was reasonable, after determining that the underlying claim itself put $5 million in controversy); Cortez v. United Nat. Foods, Inc., No. 18-CV-04603-BLF, 2019 WL 955001, at *6-7 (N.D. Cal. Feb. 27, 2019) (accepting "25% benchmark rate" as "typical" in "wage and hour class action[s]" after defendants provided "previous awards [p]laintiff's counsel ha[d] received in a similar wage and hour class action").
D. Conclusion
As Defendant's assumptions are essentially pulled from "thin air," the Court must reject them. See Ibarra, 775 F.3d at 1199; see also Guiniling v. Escondido Med. Invs. Ltd. P'ship Life Care Ctr. of Escondido, No. 22-CV-1208-L-KSC, 2023 WL 1963861, at *2 (S.D. Cal. Feb. 13, 2023) ("Courts in this district have consistently rejected assumptions as arbitrary, despite any level of objective reasonableness, where the defendant has not offered any supporting evidence." (citations omitted)). Defendant cannot change that result by offering more conservative but equally unsupported alternative assumptions. See Peters v. TA Operating LLC, No. EDCV221831JGBSHKX, 2023 WL 1070350, at *9 (C.D. Cal. Jan. 26, 2023) ("[T]he problem is not necessarily that Defendants picked a violation rate that is too high. The problem is that the Court cannot discern why it picked that number at all, because Defendants ... provide no real evidence in support of it."); Vanegas, 2021 WL 1139743, at *4 ("The alternative calculation of 20% provided by Defendant again does 'not take the place of evidence.'" (quoting Lacasse v. USANA Health Scis., Inc., No. 2:20-CV-01186-KJM-AC, 2021 WL 107143, at *3 (E.D. Cal. Jan. 12, 2021))).
II. Alternative Valuations
Courts may assign a "$0 value" to a claim when "a defendant provide[s] no evidence or clearly inadequate evidence supporting its valuation" of that claim. Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 994 (9th Cir. 2022). And the evidence supporting Defendant's total workweek assumptions—let alone Defendant's other assertions—is "clearly inadequate." Indeed, Defendant fails to cite any case in which a court accepted an estimated amount in controversy based on as little evidence as available here—an approximated class size and average wage information. That failure is not surprising, as courts typically receive at least some evidence about the total number of hours, days, or weeks worked by potential class members.
Compare, e.g., Carlson v. Swift Transp. Co. of Ariz., LLC, No. 3:23-CV-05722-RJB, 2023 WL 6633858, at *3 (W.D. Wash. Oct. 12, 2023) (accepting assumptions based on class size, aggregate weeks worked, average number of hours worked weekly, and average payrate (emphasis added)), and Sanchez v. Abbott Lab'ys, No. 2:20-CV-01436-TLN-AC, 2021 WL 2679057, at *2 (E.D. Cal. June 30, 2021) (finding supporting declaration sufficient when it provided "the number of workweeks, the number of scheduled hours, and the average hourly pay rate" (emphasis added)), with Garibay, 539 Fed. App'x at 764 (holding "the number of employees during the relevant period, the number of pay periods, and general information about hourly employee wages ... insufficient to support removal jurisdiction under CAFA").
Accordingly, the Court is inclined to assign $0 to estimates that rely on Defendant's 45-workweeks-per-year assumption. Said estimates include those pertaining to
Plaintiff's claims for (1) unpaid minimum and straight time wages, (2) unpaid overtime wages, (3) failure to provide meal breaks, (4) failure to provide rest periods, and (5) failure to indemnify employees for expenditures. Further, aside from its own underlying issues, Defendant's "attorney's fees calculation[] w[as] derivative of its calculations regarding the other claims" and thus "suffer[s] the same infirmity." Waltz v. Wal-Mart Assocs., Inc., No. EDCV2101538TJHRAOX, 2022 WL 489697, at *3 (C.D. Cal. Feb. 17, 2022). If the Court assigns $0 to those claims, Defendant cannot establish the Court's subject matter jurisdiction under CAFA.
However, while "zeroing out" claims is sometimes permissible, courts should look to alternative assumptions where possible. See Jauregui, 28 F.4th at 994. And Plaintiff presents alternative assumptions in her Reply. Framing Defendant's workweek logic as artificially inflating the assumed size of the class, Plaintiff notes that—per Defendant's own evidence—104 California workers left Defendant's employ between January 3, 2019 and January 3, 2020. Reply at 3-4. But as each of those former employees appear to have worked at least one day in 2019, all of them "are presumably included in the employee 'headcount,' along with their presumed replacements." Id. at 4. To correct the headcount and resulting inflated workweek total, Plaintiff suggests reducing the assumed 427-worker class size by 104—the number of employees who left Defendant and may thus have been double counted. See id. By doing so, Plaintiff proposes a hypothetical class size of 323 (427 minus 104). Id. And as 323 represents a 25% decrease in class size from 427, Plaintiff suggests that the Court reduce Defendant's more conservative estimates by at least that percentage. See id.
The Court is skeptical of Plaintiff's proposed alternative values, which are no more supported by evidence than Defendant's original calculations. But even if the Court accepted Plaintiff's suggestions, the amount in controversy in this action would still fall short of $5 million. As shown by the table on the last page of this Order, infra, applying Plaintiff's theory results in an estimated amount in controversy of $4,687,033.01. Consequently, Defendant fails to establish this Court's subject matter jurisdiction over this case whether or not the Court "zeroes out" certain claims.
Plaintiff makes clear that she remains equally skeptical of the revised assumptions and offers them only as an alternative argument in favor of remand. See Reply at 5.
CONCLUSION
In light of the foregoing, the Court GRANTS Plaintiff's Motion to Remand (ECF No. 5) and REMANDS this action to the Superior Court for the State of California, County of San Diego. Accordingly, the Court DENIES AS MOOT Defendant's pending Motion to Dismiss (ECF No. 4). As this concludes the litigation in this matter, the Clerk of the Court SHALL CLOSE the file.
IT IS SO ORDERED.
Attachment
Defendant's Claims Defendant's Estimates Estimates Multiplied by 0.76 Unpaid Minimum and Straight $968,632.42 $736,160.64 Time Wages Unpaid Overtime Wages $2,905,897.26 $2,208,481.92 Failure to Provide Meal Breaks $384,002.81 $291,842.14 Failure to Provide Rest Periods $384,002.81 $291,842.14 Failure to Timely Pay Final $550,831.50 $418,631.94 Wages Failure to Provide Accurate Wage $154,370.00 $117,321.20 Statements Failure to Indemnify Employees $258,762.00 $196,659.12 for Expenditures Sub-total (before Attorneys' $5,606,498.80 $4,260,939.09 Fees) 10% Attorneys' Fees $560,649.88 $426,093.91 Total with Attorneys' Fees $6,167,148.68 $4,687,033.01
Defendant's estimates regarding Plaintiff's claims for failure to timely pay final wages and failure to provide accurate wage statements are also premised on Defendant's inflated class-size calculation. See Opp'n at 15-17. Plaintiff's 25%-reduction argument thus applies to those claims as well. Even if that were not the case, and the Court reduced all of Defendant's estimates except those two, the amount in controversy would still fall below $5 million: $4,430.187.46 = $736,160.64 + $2,208,481.92 + $291,842.14 + $291,842.14 + $550,831.50 + $154,370.00 + $196,659.12 $4,873,206.21 = $4,430,187.46 × 1.10 (accounting for 10% in attorneys' fees)
See Opp'n at 19.
Plaintiff recommends using 0.75 as a multiplier, which lines up with the contention that the estimated class size should be reduced by 25%. See Reply at 4. However, as 104 (the number of workers to be subtracted) divided by 427 (Defendant's initial estimate of the putative class size) is .243 or 24.3%, the Court rounds to a 0.76 multiplier rather than to 0.75.
[Editor's Note: The preceding image contains the reference for footnotes 8, 9, 10].