Gipson v. Champion Home Builders, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 KEISHON GIPSON, individually, and on No. 1:20-cv-00392-DAD-SKO behalf of other members of the general 12 public similarly situated, 13 Plaintiff, ORDER REQUIRING PARTIES TO SUBMIT ADDITIONAL EVIDENCE REGARDING 14 v. AMOUNT IN CONTROVERSY 15 CHAMPION HOME BUILDERS, INC., (Doc. No. 10) 16 Defendant. 17 18 This matter is before the court on plaintiff’s motion to remand this class action to Tulare 19 County Superior Court, where it was initially filed on February 2, 2020. (Doc. No. 10.) 20 On March 16, 2020, defendant timely removed this action to this court pursuant to the 21 Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Doc. No. 1.) On April 21, 2020, 22 plaintiff filed the pending motion to remand this action to state court, contending that defendant 23 has failed to prove by a preponderance of the evidence that the amount in controversy exceeds $5 24 million as required by CAFA. (Doc. No. 10.) 25 Consistent with the Ninth Circuit’s opinion in Ibarra v. Manheim Invs. Inc., 775 F.3d 26 1193, 1197 (9th Cir. 2015), the court will now order the parties to submit additional evidence 27 related to the amount in controversy in this action. 28 ///// 1 In Ibarra, the defendant removed a wage and hour class action to federal court based on 2 CAFA jurisdiction and justified its calculation of the amount in controversy by relying on a 3 declaration from its senior director of employee services. 775 F.3d at 1198. However, the 4 defendant there “relied on an assumption about the rate of its alleged labor law violations that was 5 not grounded in real evidence,” and the plaintiff contested that assumption “but did not assert an 6 alternative violation rate grounded in real evidence, such as an affidavit by [plaintiff] asserting 7 how often he was denied meal and rest breaks.” Id. at 1199.1 Faced with this record, the Ninth 8 Circuit remanded the case back to the district court “for both sides to submit proof related to the 9 disputed amount in controversy.” Id.; see also Dart Cherokee Basin Operating Co., LLC v. 10 Owens, 574 U.S. 81, 88 (2014) (holding that when the defendant’s assertion of the amount in 11 controversy is challenged, “both sides submit proof and the court decides, by a preponderance of 12 the evidence, whether the amount-in-controversy requirement has been satisfied”). 13 In remanding the matter to the district court in Ibarra, the Ninth Circuit gave further 14 guidance that “[u]nder the preponderance of the evidence standard, if the evidence submitted by 15 both sides is balanced, in equipoise, the scales tip against federal-court jurisdiction.” Ibarra, 775 16 F.3d at 1199. However, subsequently the Ninth Circuit has also noted, “[w]here a removing 17 defendant has shown potential recovery ‘could exceed $5 million and the [p]laintiff has neither 18 acknowledged nor sought to establish that the class recovery is potentially any less,’ the 19 defendant ‘has borne its burden to show the amount in controversy exceeds $5 million.’” Arias v. 20 Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (quoting Lewis v. Verizon 21 Commc’ns, Inc., 627 F.3d 395, 401 (9th Cir. 2010). 22 Here, defendant submitted some evidence with its notice of removal in the form of a 23 declaration from Ryan Boehm, defendant’s HR Director, (Doc. No. 1-5) and plaintiff has not 24 submitted any evidence in connection with his motion to remand. Defendant did not submit any 25 1 To justify the amount in controversy calculation, the defendant in Ibarra “relied on a declaration of its senior director of employee services and administration, which had a table 26 listing all of its non-exempt employees and their corresponding number of shifts worked in excess 27 of 5 hours and 3.5 hours during the relevant class period.” Id. at 1198. The Ninth Circuit held that this was not sufficient and “vacate[d] and remand[ed] because neither side has submitted 28 proof regarding the violation rate.” Id. at 1195. 1 additional evidence in support of its opposition to plaintiff’s motion to remand. Defendant does, 2 however, request the opportunity to provide further evidence in the event “any question remains 3 as to the propriety of the removal of this action.” (Doc. No. 13 at 12.) 4 Rather than reach a determination on plaintiff’s motion to remand based on the evidence 5 submitted thus far, the court finds it prudent and consistent with Ninth Circuit precedent for the 6 parties to submit additional evidence addressing the violation rate and the disputed amount in 7 controversy to assist the court in making that determination under the legal standards set out 8 above. 9 In addition, although defendant asserts that it applied a conservative 20% violation rate, 10 resulting in a total amount in controversy of $11,211,985.00, defendant also calculated other rates 11 for sake of argument and comparison. (Doc. No. 13 at 11–12.) On the low end, defendant asserts 12 that applying a 10% violation rate would result in an amount in controversy of $7,189,086.25. 13 (Id.) Plaintiff argues that defendant’s calculations are flawed because they assume that all 14 putative class members worked every week of the entire class period. (Doc. No. 14 at 12.) 15 Nevertheless, given that defendant’s low-end estimate substantially exceeds the jurisdictional 16 threshold under CAFA, it appears to the court that after the parties address the purported flaws in 17 defendant’s calculations, the parties might not reasonably dispute that the amount in controversy 18 exceeds $5 million. Thus, the court will order the parties to meet and confer prior to filing any 19 additional evidence to share their additional evidence, if any, and to discuss whether the parties 20 are able to reach an agreement that the amount in controversy in this action exceeds $5 million. If 21 so, the parties shall file a joint stipulation no later than twenty-one (21) days after the date of this 22 order. 23 ///// 24 ///// 25 ///// 26 ///// 27 ///// 28 ///// 4 OVE MEARE SINR MVOC BPO ET EN AY OT Mt 1 Accordingly, the parties are ordered to submit any additional evidence they wish to submit 2 | regarding the amount in controversy in this action within twenty-one (21) days of the date of this 3 | order. Alternatively, if the parties are able to reach an agreement that the amount in controversy 4 | exceeds $5 million, then they shall file a joint stipulation no later than twenty-one (21) days from 5 | the date of this order. 6 | IT IS SO ORDERED. a 7 Li. wh F Dated: _ June 4, 2020 wee TE OO 8 UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28