Sifuentes v. Roofline, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 GARY SIFUENTES, on behalf of No. 2:20-cv-00052 WBS KJN himself and all others similarly 13 situated, 14 Plaintiff, ORDER RE: MOTION TO REMAND 15 v. 16 ROOFLINE, INC. d.b.a. ROOFLINE SUPPLY & DELIVERY, an Oregon 17 corporation; and DOES 1 through 100, inclusive, 18 Defendant. 19 20 ----oo0oo---- 21 Plaintiff Gary Sifuentes filed this class action 22 against defendant Roofline, Inc. (“Roofline”) in Sacramento 23 County Superior Court alleging various violations of the 24 California Labor Code. (Compl. (Docket No. 1-1, Ex. A).) 25 Defendant removed the action to this court pursuant to the Class 26 Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Notice of 27 Removal (Docket No. 1).) Before the court now is plaintiff’s 28 1 motion to remand for failure to meet the required amount in 2 controversy. (Docket No. 9.) Because of the current situation 3 with regard to the Coronavirus and this court’s General Orders 4 relating thereto, the court decides the motion without oral 5 argument. 6 I. Background 7 Defendant employed plaintiff as a non-exempt 8 driver/mover in Sacramento for over ten years. (Compl. ¶¶ 4, 9 13.) Plaintiff brings this action on behalf of current and 10 former non-exempt California-based employees from November 27, 11 2015 to the date of final judgment. (Compl. ¶ 25.) Plaintiff 12 alleges seven causes of action in connection with his complaint: 13 (1) failure to pay overtime wages (Labor Code §§ 204, 510, 558, 14 1194, 1198); (2) failure to provide meal periods (Labor Code §§ 15 226.7, 512); (3) failure to provide rest periods (Labor Code § 16 226.7); (4) failure to provide wages due at separation of 17 employment (Labor Code §§ 201-203); (5) failure to provide 18 accurate itemized wage statements (Labor Code § 226); (6) failure 19 to reimburse necessary business expenses (Labor Code §§ 2802- 20 2804); and (7) violation of California’s Business & Professions 21 Code § 17200, et seq. Defendant filed a notice of removal based 22 on CAFA on January 6, 2020. (Docket No. 1.) 23 II. Discussion 24 “Congress designed the terms of CAFA specifically to 25 permit a defendant to remove certain class or mass actions into 26 federal court.” Arias v. Residence Inn by Marriott, 936 F.3d 27 920, 924 (9th Cir. 2019) (internal citations omitted). It was 28 intended to be interpreted “expansively.” Id. However, certain 1 threshold requirements, such as the amount in controversy, must 2 still be met. “CAFA provides the federal district courts with 3 ‘original jurisdiction’ to hear a ‘class action’ if the class has 4 more than 100 members, the parties are minimally diverse, and the 5 ‘matter in controversy exceeds the sum or value of $5,000,000.’” 6 Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013) 7 (citing 28 U.S.C. § 1332(d)(2), (d)(5)(B)). 8 To determine the amount in controversy, the court must 9 first look to the complaint. Ibarra v. Manheim Invs., Inc., 775 10 F.3d 1193, 1197 (9th Cir. 2015). Here, the complaint does not 11 allege a specific amount of damages. Instead, it merely states 12 that the amount in controversy for the plaintiff and the class 13 members “in aggregate, is less than $5,000,000.” (Compl. ¶ 8.) 14 Where, as here, the plaintiff “affirmatively states that the 15 amount in controversy does not exceed $5 million,” a removing 16 defendant “has the burden to put forward evidence showing that he 17 amount in controversy exceeds $5 million . . . and to persuade 18 the court that the estimate of damages in controversy is a 19 reasonable one.” Ibarra, 775 F.3d at 1197. This includes 20 affidavits, declarations, or “other summary-judgment-type 21 evidence relevant to the amount in controversy at the time of 22 removal.” Id. 23 Defendant submitted a declaration from Carla Elliot, 24 Manager of Payroll Services for defendant Roofline’s payroll 25 services, SRS Distribution, Inc. in support of its motion to 26 remand. (See Decl. of Carla Elliot (“Elliot Decl.”) (Docket No. 27 1-3).) Elliot declared that, based on Roofline’s records, the 28 putative class is composed of approximately 436 members who 1 “worked at least the approximate of 16,280 workweeks, consisting 2 of an average of five (5) days per week, either (8) hours per 3 day, during the [relevant] period.” (Id. ¶¶ 4-5.) According to 4 Elliot’s review, class members would have received an average 5 base hourly rate of $19.21. (Id.) Per the records, at least 348 6 putative class members were terminated from November 27, 2016 to 7 January 2020, and at least 227 putative class members were each 8 issued at least 41 wage statements for the applicable pay periods 9 from November 27, 2018 to the present. (Id. ¶¶ 7-8.) 10 Defendants used those numbers to ascertain the maximum 11 amount plaintiffs could seek to recover by calculating what the 12 penalties would be if a violation occurred every work day of 13 every pay period for every employee during the relevant time 14 period. Consequently, defendant estimates plaintiff could claim 15 $1,563,694 in unpaid meal premiums, $1,563,694 in unpaid rest 16 premiums, $1,604,419 in waiting time penalties, $1,246,650 in 17 wage statement penalties, and $1,494,614 in attorneys’ fees, 18 bringing the amount in controversy to $7,473,071. (Notice of 19 Removal at 7.) But when a party relies on a chain of reasoning 20 that includes assumptions, those assumptions must be reasonable. 21 Ibarra, 775 F.3d. at 1199. While “[a]n assumption may be 22 reasonable if it is founded on the allegations of the complaint,” 23 the Ninth Circuit has suggested “assum[ing] a violation rate of 24 100% may or may not [be] valid.” Arias, 936 F.3d at 925. 25 In Arias, the Ninth Circuit found Marriott’s removal 26 calculation reasonable because it did not assume the maximum 27 violation unless the complaint specifically used all-encompassing 28 language, such as “not one.” Id. at 926. For example, when 1 plaintiffs claimed defendants “routinely” failed to pay 2 compensation for missed rest and meal breaks, Marriott assumed 3 they missed 1 rest break per week, and calculated the amount in 4 controversy accordingly. Id. Conversely, Marriott used the 5 maximum amount when the plaintiff’s complaint said “not one” of 6 the wage statements complied with the Labor Code. Id. 7 Here, defendant relied upon the broad language in the 8 complaint (e.g., “at all relevant times” references to 9 “policies/practices”) to justify using the maximum potential for 10 violation to calculate the amount in controversy. (Opp. at 6-8, 11 ¶¶ 15-16, 19, 23.) To calculate the amount recoverable for 12 unpaid meal and rest period pay, defendant took $19.21 (the 13 average base hourly rate for putative class members during the 14 four-year period) and multiplied that by 5 (five un-provided meal 15 periods per work week) and then multiplied that by 16,280 (weeks 16 worked by putative class during the applicable four-year period) 17 to arrive at $1,563,694. (Opp. ¶¶ 15-16.) Defendant engaged in 18 a similar calculation for waiting time penalties and wage 19 statement violations, bringing the total amount in controversy to 20 $5,978,457. (Id. ¶¶ 19, 25-26.) Finally, without providing 21 evidence, defendant argues it is “not uncommon” for a requested 22 attorney fee award to be around 25% of the total recovery, adding 23 an additional $1,494,614 to its total amount in controversy. 24 (Id. ¶ 27.) 25 While the Ninth Circuit has allowed defendants to rely 26 on maximum assumptions in limited instances, here, defendants 27 lack the level of specificity required to do so. In LaCross v. 28 Knight Transportation, Inc., 775 F.3d 1200 (9th Cir. 2015), the 1 Ninth Circuit found defendant’s use of the maximum assumption was 2 reasonable after the defendant included all fuel costs during the 3 class period in its calculation of the amount in controversy. 4 775 F.3d at 1203. But here, to arrive at the amount in 5 controversy, defendant relies on calculations based on averages 6 rather than concrete costs. (Opp. TI 15-16, 19, 23, 25-26, 27.) 7 While defendant need not “provide evidence proving the 8 assumptions correct,” the assumed rate of violations must have 9 “some reasonable ground underlying them.” Arias, 936 F.3d at 10 925-27 (quoting Ibarra, 775 F.3d at 1199) (internal quotations 11 omitted). These maximum assumptions fall short of the Ninth 12 Circuit’s guidance for reasonability. See id. at 925-27. 13 | Accordingly, the defendant has failed to produce appropriate 14 evidence to support its amount in controversy calculation, and it 15 cannot avail itself of this court’s jurisdiction. 16 IT IS THEREFORE ORDERED that plaintiff’s motion to 17 remand (Docket No. 9) be, and the same thereby is, GRANTED; 18 AND IT IS FURTHER ORDERED that this action be, and the 19 same hereby is, REMANDED to the Superior Court of the State of 20 California, in and for the County of Sacramento. 21 | Dated: March 18, 2020 dete, : 4h. □□□ □ 22 WILLIAM B. SHUBB 53 UNITED STATES DISTRICT JUDGE 24 25 26 27 28