Porfiria Yocupicio v. Pae Group, LLC , 795 F.3d 1057 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PORFIRIA YOCUPICIO, and on behalf No. 15-55878
of all others similarly situated,
Plaintiff-Appellant, D.C. No.
2:14-cv-08958-
v. GW-JEM
PAE GROUP, LLC; ARCH OPINION
RESOURCES GROUP LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted
July 6, 2015—Pasadena, California
Filed July 30, 2015
Before: Ferdinand F. Fernandez and Richard R. Clifton,
Circuit Judges, and Kimberly J. Mueller,* District Judge.
Opinion by Judge Fernandez
*
The Honorable Kimberly J. Mueller, District Judge for the U.S. District
Court for the Eastern District of California, sitting by designation.
2 YOCUPICIO V. PAE GROUP, INC.
SUMMARY**
Class Action / Jurisdiction
The panel reversed the district court’s denial of a
plaintiff’s motion to remand the action to state court after the
case had been removed to federal court pursuant to the
provisions of the Class Action Fairness Act of 2005, and
remanded with instructions to remand the matter to the state
court.
The panel held that where a plaintiff files an action
containing class claims as well as non-class claims, and the
class claims do not meet the CAFA amount-in-controversy
requirement while the non-class claims, standing alone, do
not meet diversity of citizenship jurisdiction requirements,
the amount involved in the non-class claims cannot be used
to satisfy the CAFA jurisdictional amount, and the CAFA
diversity provisions cannot be invoked to give the district
court jurisdiction over the non-class claims.
COUNSEL
Thomas Stephen Campbell and Justin F. Marquez (argued),
Rastegar Law Group, APC, Torrance, California, for
Plaintiff-Appellant.
Michael E. Chase (argued) and Bruce Michael Timm, Boutin
Jones Inc., Sacramento, California, for Defendants-Appellees.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
YOCUPICIO V. PAE GROUP, INC. 3
OPINION
FERNANDEZ, Circuit Judge:
Porfiria Yocupicio appeals the district court’s denial of
her motion to remand this matter to the Superior Court of the
State of California, County of Los Angeles (“Superior
Court”) after PAE Group, LLC, and Arch Resources Group,
LLC (collectively, “Arch”) removed1 it pursuant to the
provisions of the Class Action Fairness Act of 2005, Pub. L.
No. 109-2, 119 Stat. 4 (codified in scattered sections of
28 U.S.C.) (“CAFA”). The district court determined that it
had diversity jurisdiction over the action because it was a
class action that came within the CAFA provisions. See
28 U.S.C. § 1332(d).2 We reverse and remand.
BACKGROUND
Yocupicio filed this action against Arch in the Superior
Court based upon allegations of numerous violations by Arch
of the California Labor Code. See, e.g., Cal. Lab. Code
§§ 201 (timely pay), 226.7 (meal and rest periods), 512 (meal
periods), 1194 (minimum wages). The complaint alleged ten
causes of action, the first nine of which were brought as class
claims on behalf of Yocupicio and “certain current and
former employees” of Arch. The tenth cause of action,
however, was not brought as a class claim; it was brought as
a representative claim under the California Labor Code
Private Attorneys General Act of 2004 (PAGA). Cal. Lab.
1
See 28 U.S.C. §§ 1446, 1453(b).
2
Unless otherwise stated, all references hereafter to section numbers are
to sections of Title 28 of the United States Code.
4 YOCUPICIO V. PAE GROUP, INC.
Code §§ 2698–2699.5. Based on the record, and on the
presentations by the parties, we will assume for purposes of
this opinion that, not including attorney’s fees, the amount
sought pursuant to the class claims was $1,654,874 and the
amount sought pursuant to the PAGA claim was $3,247,950.
We note that those amounts add up to $4,902,824, but, while
the parties dispute the district court’s estimate of the
reasonable amount of attorney’s fees sought, we will assume,
without deciding, that addition of reasonable attorney’s fees
would cause the total recovery for the class claims and the
PAGA claim to reach $5,000,001 at least.3 We will proceed
on that basis.4
After the district court denied Yocupicio’s motion, she
petitioned for permission to appeal pursuant to § 1453(c)(1);
we granted permission.
JURISDICTION AND STANDARDS OF REVIEW
We have jurisdiction pursuant to § 1453(c)(1). The
district court’s jurisdiction was premised on 28 U.S.C.
§ 1332(d). Whether it properly assumed jurisdiction is the
subject of this appeal.
“‘We review de novo a district court’s denial of a motion
to remand to state court for lack of federal subject matter
3
See Mo. State Life Ins. Co. v. Jones, 290 U.S. 199, 202, 54 S. Ct. 133,
134, 78 L. Ed. 267 (1933); Galt G/S v. JSS Scandinavia, 142 F.3d 1150,
1155–56 (9th Cir. 1998).
4
As it is, if the amounts of the class claims and the PAGA claim are not
aggregated, the amount of the attorney’s fees, if any, need not be
considered.
YOCUPICIO V. PAE GROUP, INC. 5
jurisdiction.’” Haw. ex rel. Louie v. HSBC Bank Nev., N.A.,
761 F.3d 1027, 1034 (9th Cir. 2014) (citation omitted). “We
also review CAFA construction and applicability de novo.”
United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied
Indus. & Serv. Workers Int’l Union v. Shell Oil Co., 602 F.3d
1087, 1090 (9th Cir. 2010). We review the district court’s
factual findings for clear error. Rea v. Michaels Stores Inc.,
742 F.3d 1234, 1237 (9th Cir. 2014) (per curiam).
DISCUSSION
In any removal case, the first and overarching condition
has been outlined by the Supreme Court, that is:
As a general matter, defendants may remove
to the appropriate federal district 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).
The propriety of removal thus depends on
whether the case originally could have been
filed in federal court.
City of Chi. v. Int’l Coll. of Surgeons, 522 U.S. 156, 163,
118 S. Ct. 523, 529, 139 L. Ed. 2d 525 (1997). As relevant
here, that condition focuses on “CAFA [, which] gives federal
courts jurisdiction over certain class actions, defined in
§ 1332(d)(1), if the class has more than 100 members, the
parties are minimally diverse, and the amount in controversy
exceeds $5 million.” Dart Cherokee Basin Operating Co.,
LLC v. Owens, __ U.S. __, __, 135 S. Ct. 547, 552, 190 L. Ed.
2d 495 (2014); see also Standard Fire Ins. Co. v. Knowles, __
U.S. __, __, 133 S. Ct. 1345, 1348, 185 L. Ed. 2d 439 (2013).
6 YOCUPICIO V. PAE GROUP, INC.
There is no dispute that causes of action one through nine
are class claims, and that they would satisfy CAFA’s
numerosity and minimal diversity requirements. See
§ 1332(d)(2)(A)–(C), (d)(5)(B); see also United Steel
Workers, 602 F.3d at 1090–91.5 But those claims, taken
singly or aggregated, do not meet the over $5,000,000
requirement. See § 1332(d)(2). The tenth cause of action, the
PAGA claim, was not brought as a class claim; it was brought
as a representative claim6 and cannot be deemed to be a class
claim.7
The district court, however, considered both the amounts
asked for in the class claims and the amount asked for in the
PAGA claim when it decided that the CAFA $5,000,000
threshold was exceeded. In so doing, it determined that the
plain language of CAFA so required, even though CAFA’s
focus is on class action questions. We disagree.
5
The parties concede as much, and we agree. See Serrano v. 180
Connect, Inc., 478 F.3d 1018, 1021 (9th Cir. 2007).
6
No doubt all class claims are representative in nature. However, not
all representative claims are class claims; to say that they are would be a
logical fallacy. See Washington v. Chimei Innolux Corp., 659 F.3d 842,
848 (9th Cir. 2011).
7
See Louie, 761 F.3d at 1040–41; Baumann v. Chase Inv. Servs. Corp.,
747 F.3d 1117, 1121, 1124 (9th Cir.), cert. denied, __ U.S. __, 135 S. Ct.
870, 190 L. Ed. 2d 702 (2014); Arias v. Super. Ct., 46 Cal. 4th 969, 981,
985, 209 P.3d 923, 930, 933, 95 Cal. Rptr. 3d 588, 596, 599–600 (2009).
Indeed, the fact that Yocupicio expressly did not seek class status for that
claim is “fatal to CAFA jurisdiction” over it. Louie, 761 F.3d at 1040.
Moreover, the parties do not assert that there would be diversity of
citizenship jurisdiction over the PAGA claim. See § 1332(a), (c); Urbino
v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1122–23 (9th Cir. 2013).
YOCUPICIO V. PAE GROUP, INC. 7
We do, of course, agree that:
As always, our starting point is the plain
language of the statute. “[W]e examine not
only the specific provision at issue, but also
the structure of the statute as a whole,
including its object and policy.” If the plain
meaning of the statute is unambiguous, that
meaning is controlling and we need not
examine legislative history as an aid to
interpretation unless “the legislative history
clearly indicates that Congress meant
something other than what it said.”
Chimei, 659 F.3d at 847–48 (internal citations omitted). But
when we apply that standard, we reach a conclusion quite the
opposite of that reached by the district court.
The language of the statute shows that in enacting CAFA,
Congress was focused on class actions rather than on all
representative actions or on cases where a class claim was
only a part, perhaps a small part, of a civil action. As the
Supreme Court has pointed out, “Congress enacted [CAFA]
to facilitate adjudication of certain class actions in federal
court.” Dart, __ U.S. at __, 135 S. Ct. at 554. And “CAFA’s
primary objective . . . [is to ensure] ‘Federal court
consideration of interstate cases of national importance.’”
Standard Fire Ins., __ U.S. at __, 133 S. Ct. at 1350 (citation
omitted). That does not suggest that every case with a class
claim can be brought in federal court. The language of the
statute indicates as much. It states that “district courts shall
have original jurisdiction of any civil action in which the
matter in controversy exceeds the sum or value of
8 YOCUPICIO V. PAE GROUP, INC.
$5,000,000, exclusive of interest and costs, and is a class
action.” § 1332(d)(2).
Moreover, it states that a “‘class action’” is “any civil
action filed under” class action rules “as a class action.”
§ 1332(d)(1)(B). Notably, it does not state or suggest that the
mere presence of even a relatively minor class claim in an
action will suffice for federal diversity jurisdiction purposes.
The same is true of the concept of aggregation, where “the
claims of the individual class members” are to be aggregated
in determining the amount in controversy,8 but class members
are those “who fall within the definition of the proposed or
certified class in a class action.”9 Again, the focus is on class
actions and on claims of individuals as members of the
class.10 The provisions do not speak to claims that are not
part of the class action itself; there appears to be no reason to
include those large or small claims in the threshold
calculations. Congress showed no intent to have actions with
insufficiently large class components heard in the federal
courts, and filing them in or removing them to the federal
courts would not comport with the language or purpose of
CAFA.
For example, suppose a California plaintiff brought a
class claim against a California defendant that had
8
§ 1332(d)(6).
9
§ 1332(d)(1)(D).
10
The provisions did solve aggregation problems regarding jurisdiction
over class claims, themselves, but did not purport to do more. See Exxon
Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 550–52, 572, 125 S.
Ct. 2611, 2616, 2628, 162 L. Ed. 2d 502 (2005) (referring to the state of
the law before CAFA and to CAFA’s limited reach).
YOCUPICIO V. PAE GROUP, INC. 9
misrepresented its product to have a somewhat higher quality
rating than it had, and a separate individual claim because the
product had allegedly failed in a situation affecting the
plaintiff and caused him to incur very substantial damages.
Suppose, also, that the amount of the false representation
claim11 came to a total value of $100,000 for all class
members, but the alleged damage to the individual plaintiff
due to the product failure12 came to $5,000,000. Is it
plausible to believe that in enacting CAFA, Congress
intended to vest jurisdiction over that controversy in the
federal courts? We are satisfied that the answer is no, but that
is what Arch’s reading of the statute would require.
We recognize that a district court need not always eschew
taking supplemental jurisdiction of claims over which it
would not otherwise have jurisdiction. See, e.g., § 1367;
Brown v. Mortg. Elec. Registration Sys., Inc., 738 F.3d 926,
930, 933–34 (8th Cir. 2013). In Allapattah Servs., Inc.,
545 U.S. at 558, 125 S. Ct. at 2620, the Court was faced with
the question of whether a district court had jurisdiction over
a case where some plaintiffs’ claims satisfied the amount in
controversy requirement, but others did not. The Court held:
When the well-pleaded complaint contains at
least one claim that satisfies the amount-in-
controversy requirement, and there are no
other relevant jurisdictional defects, the
district court, beyond all question, has original
jurisdiction over that claim. The presence of
other claims in the complaint, over which the
11
See, e.g., Cal. Bus. & Prof. Code §§ 17200, 17500.
12
A typical product liability tort claim.
10 YOCUPICIO V. PAE GROUP, INC.
district court may lack original jurisdiction, is
of no moment. If the court has original
jurisdiction over a single claim in the
complaint, it has original jurisdiction over a
“civil action” within the meaning of
§ 1367(a), even if the civil action over which
it has jurisdiction comprises fewer claims than
were included in the complaint. Once the
court determines it has original jurisdiction
over the civil action, it can turn to the
question whether it has a constitutional and
statutory basis for exercising supplemental
jurisdiction over the other claims in the
action.
Id. at 559, 125 S. Ct. at 2620–21. The lynchpin in that
holding was that the court did have jurisdiction over one of
the claims. Here, however, the district court would not have
had jurisdiction over any of the claims. It would not have had
jurisdiction over the class claims because taken together they
did not exceed the $5,000,000 threshold; it would not have
had jurisdiction over the PAGA claim because of a lack of
complete diversity. But Arch would have us find jurisdiction
over the class claims by using the amounts sought in the
PAGA claim, and, we suppose, have us find jurisdiction over
the PAGA claim because the court would have jurisdiction
over the class claims. While that argument is Daedalian, we
find no basis in statutory or case law to support it.13
13
Yocupicio raises other issues challenging the mathematics of
jurisdiction: calculation of the amount of the PAGA claim and the amount
of attorney’s fees that should be added. However, in light of our decision
on this issue, we need not and do not consider the other issues.
YOCUPICIO V. PAE GROUP, INC. 11
CONCLUSION
Where a plaintiff files an action containing class claims
as well as non-class claims, and the class claims do not meet
the CAFA amount-in-controversy requirement while the non-
class claims, standing alone, do not meet diversity of
citizenship jurisdiction requirements, the amount involved in
the non-class claims cannot be used to satisfy the CAFA
jurisdictional amount, and the CAFA diversity provisions
cannot be invoked to give the district court jurisdiction over
the non-class claims. The district court should have granted
Yocupicio’s motion to remand. Thus, we reverse and remand
to the district court with directions to remand this matter to
the Superior Court.
REVERSED and REMANDED. Costs on appeal are
awarded to Yocupicio.