Lacasse v. USANA Health Sciences, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 Megan Lacasse, individually, and on behalf of No. 2:20-cv-01186-KJM-AC other members of the general public similarly 12 situated, ORDER 13 Plaintiffs, 14 v. 15 USANA Health Sciences, Inc., et al. 16 Defendants. 17 18 19 Plaintiff Megan Lacasse moves to remand this case to the Sacramento County Superior 20 | Court. She argues the defendant, USANA Health Services, Inc., has not shown that more than 21 | $5 million is in controversy, so this court lacks jurisdiction over the case under the Class Action 22 | Fairness Act. USANA has moved to dismiss. Both motions were submitted without a hearing. 23 | Because USANA has not carried its burden to establish this court’s jurisdiction, the motion to 24 | remand is granted, and the motion to dismiss is denied as moot. 25 | I. BACKGROUND 26 Lacasse alleges USANA hired her as an “Associate” about five years ago. See Compl. 27 | §§| 12-13, 18, ECF No. 1-2. She stopped working for USANA about two years later. 28 | See id. § 18. According to her complaint, USANA classified Lacasse as an independent 1 contractor when it should have treated her as its employee. As a result, she claims, she was 2 deprived of minimum wages, overtime pay, reimbursements for business expenses, and meal and 3 rest breaks. See id. ¶¶ 28–39, 48–55. The complaint does not say how often Lacasse (or any 4 other associates) worked overtime, how much less than the minimum wage she earned, how often 5 USANA deprived her of rest or meal breaks, or the amount of her unreimbursed businesses 6 expenses, but she alleges her individual claims are less than $75,000. See id. ¶ 1. She asserts a 7 single claim under California’s Unfair Competition Law and seeks to represent a class of “[a]ll 8 current and former California-based . . . independent contractors” with the same job title who 9 worked for USANA within the last four years. See id. ¶¶ 13, 41–44. 10 Lacasse filed her complaint in Sacramento County Superior Court. USANA removed the 11 case to this court under the Class Action Fairness Act. See Not. Removal, ECF No. 1. That act 12 gives U.S. District Courts original jurisdiction over class actions if (1) the proposed class has at 13 least 100 members, (2) the amount in controversy is at least $5 million, and (3) the parties are 14 minimally diverse. See 28 U.S.C. § 1332(d). USANA submitted a declaration by Dan Whitney 15 with its notice of removal. See Not. Removal Ex. D, ECF No. 1-4. Whitney is USANA’s Vice 16 President of Ethics and Market Expansion. Id. ¶ 1. He says USANA had about 4,400 associates 17 in California in March 2020 and is a Utah Corporation. Id. ¶¶ 2, 4. The amount-in-controversy 18 requirement is therefore the only contested condition of this court’s jurisdiction under the Class 19 Action Fairness Act. 20 USANA made the following assumptions in reaching its conclusion that more than 21 $5 million is in controversy: 22  It had 4,400 associates in California for the whole four-year class period. 23  All of its California associates worked at least eight hours per day and forty hours 24 per week every week. (The complaint alleges Lacasse and other proposed class 25 members were required to work more than eight hours per day or more than forty 26 hours per week or both, but it does not say how often. See Compl. ¶ 36.) 27  All of its California associates worked at least two hours of unpaid overtime per 28 week every week. 1  All of its California associates earned the minimum California wage, $10 per hour. 2  Each of its California associates was deprived of at least one meal break and one 3 rest break per week every week over the four-year period. 4  Associates worked fifty weeks per year for each of the four years. 5 See Not. Removal at 6–10 & nn.3–4. USANA argued in the alternative that more than $5 million 6 would be in controversy if it assumed it had paid 4,400 associates $1 less than the minimum wage 7 and they all worked forty hours per week, fifty weeks per year, in each of the previous four years. 8 See id. at 10 n.5. USANA also proposes many alternative assumptions, all of which, it contends, 9 would lead to the same result. See Opp’n Remand at 11–14, ECF No. 9. 10 Lacasse moves to remand the case to state court. ECF No. 7. She argues USANA’s 11 assumptions are unreasonable and baseless. USANA also moved to dismiss for improper venue 12 or to transfer this case to the District of Utah. See Mot. Dismiss, ECF No. 5. Both motions are 13 fully briefed and the court submitted them without oral argument. See Opp’n Remand, ECF 14 No. 9; Reply Remand, ECF No. 13; Opp’n Dismiss, ECF No. 10; Reply Dismiss, ECF No. 14; 15 Minute Order, ECF No. 12. 16 II. DISCUSSION 17 When a complaint does not allege an amount in damages, a defendant who removes the 18 complaint to federal court under the Class Action Fairness Act “need only allege in its notice of 19 removal” that more than $5 million is in controversy. Harris v. KM Indus., Inc., 980 F.3d 694, 20 699 (9th Cir. 2020). The plaintiff may then contest the removal in either a facial or factual attack. 21 Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 2020). “A ‘facial’ attack accepts the truth 22 of the [jurisdictional] allegations but asserts that they ‘are insufficient on their face to invoke 23 federal jurisdiction.’” Id. (quoting Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). “A 24 factual attack, by contrast, ‘contests the truth of the [jurisdictional] allegations, usually by 25 introducing evidence outside the pleadings.’” Id. (quoting Leite, 749 F.3d at 1121). But outside 26 evidence is not necessary; a factual attack can also rest on a plaintiff’s “reasoned argument” 27 challenging “the truth of the defendant’s jurisdictional allegations” and explaining why those 28 assumptions are “not supported by evidence.” Harris, 980 F.3d at 700. 1 The Ninth Circuit’s recent decision in Harris v. KM Industrial is controlling and shows 2 why Lacasse’s motion must be granted. In Harris, the plaintiff asserted similar wage and hour 3 claims, including failures to provide rest and meal breaks and to pay overtime wages. Id. at 696– 4 97. She sought to represent a class of former employees, including one subclass that had not 5 received the required meal breaks and another that had not received the required rest breaks. 6 See id. at 697. The employer removed the case from state court. Its notice of removal cited the 7 declaration of a human resources executive, who said the employer had employed 442 members 8 of the proposed class who had together worked about 40,000 workweeks. Id. at 698. The 9 employer then calculated the amount in controversy by assuming among other things that all 10 members of the meal break subclass were members of the rest break subclass and had all missed 11 one meal break and two rest breaks in each week they worked. See id. 12 The plaintiff moved to remand, arguing the employer’s assumptions were unreasonable. 13 The defendant opposed that motion and offered some additional evidence to support some, but 14 not all, of its assumptions. The district court granted the motion to remand. See Harris v. KM 15 Indus., Inc., No. 19-7801, 2020 WL 1970704, at *3 (N.D. Cal. Apr. 24, 2020). The district court 16 held the employer was required to respond with evidence supporting its assumptions. See id. The 17 Ninth Circuit affirmed on essentially the same basis. See, e.g., 980 F.3d at 702 (“We . . . agree 18 with the district court that relying on the factually unsupported and unreasonable assumption that 19 the 442 Hourly Employee Class members worked shifts long enough to entitle them to meal and 20 rest periods would exaggerate the amount in controversy.”). 21 Like the plaintiff in Harris, Lacasse here makes a factual attack by contesting the 22 reasonableness of the assumptions underlying USANA’s conclusion that more than $5 million is 23 in controversy. Like the defendant in Harris, USANA has not cited evidence to support its 24 assumptions. And as in Harris, its assumptions are unreasonable without that evidence. USANA 25 does not explain why it is reasonable to assume that it had the same number of associates for all 26 of the last four years; that every associate regularly worked one or two or any number of hours of 27 ///// 28 ///// 1 overtime per week; that every associate qualified for and was consistently deprived of meal and 2 rest breaks every week, fifty weeks per year for four years; and that associates were consistently 3 paid a specific amount less than the minimum wage. These assumptions, in defense against a 4 factual attack, do not establish this court’s jurisdiction. 5 The many alternative calculations USANA proposes in its opposition do not take the place 6 of evidence. They are also only allegations. See Opp’n at 11–14. These alternative calculations 7 also demonstrate how arbitrary USANA’s assumptions are: they show how simple it is to 8 manipulate the assumptions to produce totals larger or smaller than the $5 million threshold. 9 See id. at 11–13 & n.6 (showing amount in controversy would fall below $5 million if fewer 10 associates worked fewer hours or made closer to the minimum wage). 11 Nor can USANA succeed by arguing Lacasse is in a better position to collect and produce 12 evidence. See id. at 6–7. This court is bound by the Ninth Circuit’s decisions, including Harris, 13 and cannot relieve USANA of its evidentiary burden. Even if it could, the unfairness USANA 14 protests is illusory. If a defendant suspects but does not know that more than $5 million is in 15 controversy, then it may investigate its own records, conduct discovery, and obtain the evidence it 16 needs to assure itself and prove that a federal district court would have jurisdiction over its 17 claims. See, e.g., 28 U.S.C. § 1446(b)(3) (permitting removal “within 30 days after receipt by the 18 defendant . . . of a copy of an . . . order or other paper from which it may first be ascertained that 19 the case is one which is or has become removable”); Roth v. CHA Hollywood Med. Ctr., L.P., 20 720 F.3d 1121, 1125 (9th Cir. 2013) (permitting defendant to remove action under Class Action 21 Fairness Act “outside the two thirty-day periods on the basis of its own information, provided that 22 it has not run afoul of either of the thirty-day deadlines”). 23 III. CONCLUSION 24 Like the defendant in Harris, USANA had every opportunity to offer evidence in response 25 to Lacasse’s objections. See 980 F.3d at 702. It did not. The motion to remand is thus granted, 26 and the motion to dismiss is denied as moot. The parties’ recent joint request to reschedule the 27 ///// 28 ///// 1 status conference is also denied as moot. This order resolves ECF Nos. 5, 7, and 18. This action 2 is remanded to the Sacramento County Superior Court. 3 IT IS SO ORDERED. 4 DATED: January 11, 2021.