Nunes v. Home Depot U.S.A., Inc. ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 NIKI NUNES, individually and No. 2:19-cv-01207-JAM-DB on behalf of all persons 12 similarly situated, CHRIS SMITH, individually and on 13 ORDER DENYING PLAINTIFFS’ behalf of all persons MOTION TO REMAND 14 similarly situated, MITZI WALLACE, individually and on 15 behalf of all persons similarly situated, 16 Plaintiffs, 17 v. 18 HOME DEPOT U.S.A., INC., a 19 Delaware corporation; and DOES 20 1 through 50, Inclusive, 21 Defendants. 22 23 Plaintiffs sued Home Depot U.S.A., Inc. (“Home Depot” or 24 “Defendant”) in San Joaquin County Superior Court for alleged 25 violations of the California Labor Code. Compl., ECF No. 1-2. 26 Home Depot removed the case to federal court. Notice of Removal, 27 ECF No. 1. Plaintiffs now move to remand the case to state 28 court. Mot., ECF No. 4. 1 For the reasons set forth below, this Court DENIES 2 Plaintiffs’ motion.1 3 4 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 5 Plaintiffs Niki Nunes, Chris Smith, and Mitzi Wallace 6 (collectively “Plaintiffs”) are hourly-paid, non-exempt Warehouse 7 Associate employees for Home Depot at its Tracy Distribution 8 Center. Compl. ¶¶ 3-5. Plaintiffs are citizens of California. 9 Mello Decl., ECF No. 1-5. Home Depot is Delaware corporation 10 with its principal place of business in Atlanta, Georgia. Id. 11 On May 24, 2019, Plaintiffs filed the Complaint in San 12 Joaquin County Superior Court (Case No. STK-CV-UOE-2019-6656), 13 bringing six causes of action against Home Depot for purported 14 violations of the California Labor Code for its failure to pay 15 minimum wages, pay overtime wages, provide meal breaks, provide 16 rest breaks, timely pay final wages due, and provide accurate 17 itemized wage statements. See Compl. Plaintiffs also assert a 18 claim under California’s unfair competition law. Id. Plaintiffs 19 bring these claims on behalf of a putative class of all current 20 and former non-exempt Warehouse Associates employed by Home Depot 21 at the Tracy Distribution Center at any time during the four 22 years (for the unfair competition law claim) or three years (for 23 the California Labor Code claims) prior to filing of the 24 Complaint. Compl. ¶¶ 30, 39. 25 Home Depot timely removed the case to federal court, 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for August 27, 2019. 1 asserting federal jurisdiction under CAFA. Notice of Removal; 28 2 U.S.C. § 1332(d)(2). Plaintiffs timely moved to remand the case 3 to San Joaquin County Superior Court. Mot. Home Depot opposes 4 the motion. Opp’n, ECF No. 5. 5 6 II. OPINION 7 A. Judicial Notice 8 Home Depot asks this Court to take judicial notice of the 9 complaint in Ramirez v. Carefusion Resources, LLC, No. 3:18-cv- 10 02852-BEN-KSC (S.D. Cal.). RJN, ECF No. 5-2. Plaintiffs do not 11 oppose this request. And since judicial notice of the existence 12 of court records is routinely accepted, the request for judicial 13 notice is granted as to the existence of the complaint but not as 14 to the truth of its contents. 15 B. CAFA Jurisdiction 16 CAFA gives federal district courts original jurisdiction in 17 any civil action where: (1) the amount in controversy exceeds $5 18 million, exclusive of interest and costs; (2) the number of 19 putative class members is not less than 100 persons; and (3) any 20 member of a class of plaintiffs is a citizen of a State different 21 from any defendant. 28 U.S.C. § 1332(d). Plaintiffs do not 22 contest the minimal diversity or class size requirements, and 23 this Court finds those requirements satisfied. 24 C. Disputed Amount in Controversy 25 In the Notice of Removal, Home Depot includes allegations 26 and calculations as to the amount in controversy and concludes, 27 “[i]n sum, by conservative estimates, . . . the total monetary 28 relief placed in controversy by the complaint exceeds $7 1 million.” Notice of Removal ¶¶ 13-23 (relying on Declaration of 2 G. Edward Anderson, Ph.D., ECF No. 1-6). Plaintiffs dispute this 3 estimate and argue, as alleged in their Complaint, the amount in 4 controversy is less than $5 million. See Mot.; Compl. ¶¶ 30, 39. 5 When challenged, as here, a defendant removing pursuant to 6 CAFA must prove, by a preponderance of the evidence, the amount 7 in controversy exceeds the $5 million jurisdictional threshold. 8 28 U.S.C. § 1446(c)(2)(B); Dart Cherokee Basin Operating Co., LLC 9 v. Owens, 135 S. Ct. 547, 553-54 (2014); see also Ibarra v. 10 Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) 11 (“[T]his rule is not altered even if plaintiffs affirmatively 12 contend in their complaint that damages do not exceed $5 13 million.”). “Under this system, CAFA’s requirements are to be 14 tested by consideration of real evidence and the reality of what 15 is at stake in the litigation, using reasonable assumptions 16 underlying the defendant’s theory of damages exposure.” Ibarra, 17 775 F.3d at 1198. Moreover, in contrast to the presumption 18 against removal for cases invoking diversity jurisdiction, “no 19 antiremoval presumption attends cases invoking CAFA, which 20 Congress enacted to facilitate adjudication of certain class 21 actions in federal court.” Dart, 135 S. Ct. at 554 (citing S. 22 Rep. No. 109–14, p. 43 (2005) (CAFA’s “provisions should be read 23 broadly with a strong preference that interstate class actions 24 should be heard in a federal court if properly removed by any 25 defendant.”)). 26 Plaintiffs argue the sum calculated in the Notice of Removal 27 is “supported by unreliable declaration testimony, unreasonable 28 assumptions, an ambiguous and speculative method of calculating 1 the data, and missing information and data points.” Mot. at 4. 2 As a threshold matter, this Court is not persuaded that the 3 Declaration of G. Edward Anderson, which forms the basis of Home 4 Depot’s amount in controversy calculation, is speculative or 5 self-serving. Dr. Anderson is an experienced, privately-retained 6 economist and statistical researcher, and his sources and methods 7 – discussed below and reinforced in his second declaration (ECF 8 No. 5-1) – are sound. Contra Garibay v. Archstone Communities 9 LLC, 539 F. App’x 763, 764 (9th Cir. 2013). 10 1. Meal and Rest Break Violations 11 Plaintiffs’ Fourth and Fifth Causes of Action allege meal 12 and rest break violations. Under California law, a plaintiff may 13 recover the equivalent of one hour of pay at his or her regular 14 rate for each workday that a required meal or rest break is not 15 provided. Cal. Lab. Code § 226.7(c). 16 To determine the amount in controversy for these claims, Dr. 17 Anderson reviewed Home Depot’s human resource, payroll, and 18 timekeeping records for non-exempt Warehouse Associates working 19 at the Tracy Distribution Center since May 24, 2015. Anderson 20 Decl. ¶ 5. Dr. Anderson discerned the number of relevant workers 21 (1,164), calculated the employees’ sum total workweeks (79,866), 22 and determined their average hourly pay ($16.43, excluding 23 extreme highs and lows). Id. ¶ 6; ECF No. 5-1 ¶¶ 5, 13-15. Home 24 Depot then assumed each employee missed just one meal break and 25 one rest break per week. Notice of Removal ¶¶ 14-15. The 26 Complaint alleges that Home Depot had a “uniform policy and 27 practice” with respect to meal breaks whereby it “often” failed 28 to provide class members with all legally required meal breaks, 1 causing class members to, “from time-to-time,” forfeit meal 2 breaks without compensation. Compl. ¶¶ 17, 93. The Complaint 3 further alleges that Home Depot had a “uniform policy, practice, 4 and procedure” restricting rest breaks resulting in class members 5 “periodically” (or “from time to time”) being denied required 6 rest breaks, with the number of missed rest breaks varying by 7 class members’ work schedules. Id. ¶¶ 19, 97. Based on this 8 language, this Court finds Home Depot’s assumption of one missed 9 meal break and one missed rest break per week to be reasonable. 10 See also ECF No. 5-1 ¶¶ 6-12. 11 Based on this analysis, Home Depot multiplied the relevant 12 values (number of workweeks x average hourly pay x one violation 13 per week for each claim), yielding an amount in controversy for 14 these two claims of over $2.62 million. Notice of Removal ¶ 14. 15 2. Waiting Time Penalties 16 Plaintiffs’ Seventh Cause of Action alleges that, as a 17 result of Home Depot’s failure to compensate for missed meal and 18 rest breaks, Home Depot failed to accurately pay final wages owed 19 to employees upon termination. See Compl. ¶ 110. Under 20 California law, a failure to pay all wages due upon termination 21 results in a penalty equal to the employee’s daily wages, for up 22 to 30 days of pay. Cal. Lab. Code § 203. 23 To calculate the potential amount in controversy for this 24 claim, Dr. Anderson determined the number of putative class 25 members who were terminated more than 30 days prior to the filing 26 of the complaint (541) and calculated the average daily wages of 27 these individuals ($135.82). Notice of Removal ¶ 17; Anderson 28 Decl. ¶ 7. Home Depot then assumed a 100 percent violation rate, 1 such that each employee would be owed the maximum 30-day’s wages. 2 Notice of Removal ¶ 16. The Complaint “demand[s] up to thirty 3 days of pay as penalty for not paying all wages due at time of 4 termination for all employees who terminated employment during 5 the [claims] period.” Compl. ¶ 111. Given the allegations, it 6 is reasonable to assume the terminated class members suffered at 7 least one violation (e.g. one missed meal or rest break) and were 8 therefore not paid all wages owed upon termination. Likewise, it 9 is reasonable to assume Home Depot did not remedy that alleged 10 error within 30 days of terminating any class member. This Court 11 therefore finds, based on the Complaint, Home Depot’s assumption 12 of the maximum penalty of 30 days of pay is reasonable. See 13 e.g., Ramirez v. Carefusion Res., LLC, No. 18-CV-2852-BEN-MSB, 14 2019 WL 2897902, at *4-5 (S.D. Cal. July 5, 2019). 15 Based on this analysis, Home Depot multiplied the relevant 16 values (number of terminated employees x average daily pay x 17 thirty days), yielding an amount in controversy for this claim of 18 over $2.2 million. Notice of Removal ¶ 17. 19 3. Inaccurate Wage Statements 20 Plaintiffs’ Sixth Cause of Action alleges that, as a result 21 of Home Depot’s failure compensate for missed meal and rest 22 breaks, Home Depot failed to provide employees with accurate wage 23 statements. See Compl. ¶¶ 25, 101; Cal. Lab. Code § 226(a). 24 Under California law, for an employer’s failure to provide 25 accurate wage statements, an employee may seek penalties of $50 26 for the initial pay period in which a violation occurred and $100 27 for each subsequent pay period with a violation, not to exceed an 28 aggregate of $4,000 per employee. Cal. Lab. Code § 226(e). 1 To calculate the potential amount in controversy for this 2 claim, Dr. Anderson first determined the number of putative class 3 members who worked during the relevant one-year limitations 4 period (595) and the average number of pay periods worked by 5 these employees during that period (16). Notice of Removal ¶ 19; 6 Anderson Decl. ¶ 8. Home Depot then assumed a 100 percent 7 violation rate, such that each employee would be owed for 16 8 violations. Notice of Removal ¶ 19. The Complaint alleges Home 9 Depot failed to provide an accurate statement not just as to 10 missed meal and rest breaks, but as to “all the requirements 11 under Labor Code § 226”, which “from time to time” resulted in 12 inaccurate wage statements. Given the allegations, it is 13 reasonable to assume the class members suffered at least one 14 violation (e.g. one missed meal or rest break) per pay period. 15 This Court therefore finds, based on the Complaint, Home Depot’s 16 assumption of a 100 percent violation rate is reasonable. See 17 e.g., Ramirez, 2019 WL 2897902, at *4. 18 Based on this analysis, Home Depot multiplied the relevant 19 values (number of class members within limitations period x 20 average number of pay periods x $50 for first pay period and $100 21 for the subsequent periods), yielding an amount in controversy 22 for this claim of over $922,000. Notice of Removal ¶ 19. 23 4. Attorneys’ Fees 24 In calculating the amount in controversy, Home Depot 25 properly included attorneys’ fees, and used the established 25% 26 benchmark in doing so. Garibay, 539 F. App'x at 764. Thus, the 27 potential attorneys’ fees on four claims discussed above place an 28 additional $1.4 million in controversy. Notice of Removal ¶ 22. 1 D. Conclusion 2 Plaintiffs’ attacks on Dr. Anderson’s declaration and the 3 assumptions in Home Depot’s Notice of Removal fail. Home Depot’s 4 assumptions are grounded in reason and drawn directly from the 5 allegations in the Complaint; they are not “pulled from thin 6 air.” Ibarra, 775 F.3d at 1199. The calculations in the Notice 7 of Removal, supported by the accompanying explanations and 8 declarations, are persuasive and yield an amount in controversy 9 of over $7 million. Thus, this Court finds Home Depot has 10 proven, by a preponderance of the evidence, that the amount in 11 controversy in this case exceeds $5 million. 12 Home Depot will “still [be] free to challenge the actual 13 amount of damages in subsequent proceedings and at trial.” 14 Ibarra, 775 F.3d at 1198. 15 16 III. Sanctions 17 This Court issued its Order re Filing Requirements (“Filing 18 Order”) on July 1, 2019. ECF No. 2-2. The Filing Order limits 19 reply memoranda for motions to remand to five pages. The Filing 20 Order also states that an attorney who exceeds the page limits 21 must pay monetary sanctions of $50 per page. Plaintiffs’ reply 22 brief exceeds the page limit by five pages. This Court therefore 23 ORDERS Plaintiffs’ counsel to pay $250 to the Clerk of the Court 24 within five days of the date of this Order. 25 /// 26 /// 27 /// 28 /// 1 Iv. ORDER 2 For the reasons set forth above, this Court DENIES 3 Plaintiffs’ Motion to Remand. ECF No. 4. 4 5 6 IT IS SO ORDERED. 7 Dated: September 11, 2019 Lh Ion teiren staves odermacr 7008 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10