Rapisura v. BMW of North America, LLC ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 ISAAC RAPISURA, an individual, No. 2:22-cv-00455 WBS AC on behalf of himself and all 13 others similarly situated, 14 Plaintiff, MEMORANDUM AND ORDER RE: MOTION TO REMAND 15 v. 16 BMW OF NORTH AMERICA, LLC, a Delaware limited liability 17 company; and DOES 1 TO 50, 18 Defendants. 19 20 ----oo0oo---- 21 Plaintiff Isaac Rapisura commenced this class action 22 against defendant BMW of North America alleging violations of the 23 California Labor and Business and Professions Codes. Defendant 24 removed the action from San Joaquin County Superior Court 25 pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 26 1332(d). (Notice of Removal (“Notice”) (Docket No. 1).) 27 Plaintiff now moves to remand pursuant to 28 U.S.C. § 1447, 28 contending that defendant has not established that the amount in 1 controversy exceeds $5,000,000. (Mot. to Remand (Docket No. 6).) 2 I. Background 3 Plaintiff seeks to represent a class of current and 4 former non-exempt California-based employees who were employed by 5 defendant since February 3, 2018. (Notice, Ex. A (“Compl.”) 6 (Docket No. 1-1).) Plaintiff alleges the following nine claims: 7 (1) failure to pay all minimum wages, Cal. Lab. Code § 1197; (2) 8 failure to pay all overtime wages, id. §§ 510, 1194; (3) failure 9 to provide rest periods and pay rest period premiums, id. § 10 226.7; (4) failure to provide meal periods and pay meal period 11 premiums, id. §§ 226.7, 512; (5) failure to maintain accurate 12 employment records, id. § 1174 (6) failure to pay wages timely 13 during employment, id. §§ 204, 210; (7) failure to pay owed wages 14 at time of separation, id. §§ 201, 202; (8) failure to furnish 15 accurate itemized wage statements, id. § 226; and (9) violation 16 of California’s Unfair Competition Law, Cal. Bus. & Professions 17 Code § 17200. (Compl. ¶ 4.) 18 The complaint does not allege a specific amount of 19 damages, though it does allege that removal under CAFA is not 20 appropriate because the amount in controversy is less than 21 $5,000,000. (Id. ¶ 9.) 22 II. Discussion 23 Under the federal removal statute, “any civil action 24 brought in a State court of which the district courts of the 25 United States have original jurisdiction may be removed by the 26 defendant . . . to the district court of the United States for 27 the district . . . where such action is pending.” 28 U.S.C. § 28 1441(a). Under CAFA, the federal courts have original 1 jurisdiction over class actions in which the parties are 2 minimally diverse, the proposed class has at least 100 members, 3 and the aggregated amount in controversy exceeds $5,000,000. 28 4 U.S.C. § 1332(d)(2). The parties agree that the parties are 5 minimally diverse and that the proposed class has at least 100 6 members, and thus the only issue in dispute here is whether the 7 amount in controversy is met. 8 A defendant “need include only a plausible allegation 9 that the amount in controversy exceeds the jurisdictional 10 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 11 U.S. 81, 89 (2014). Defendant’s allegation is “normally accepted 12 when invoking CAFA jurisdiction, unless it is ‘contested by the 13 plaintiff or questioned by the court.’” Jauregui v. Roadrunner 14 Transp. Servs., Inc., 28 F.4th 989, 992 (2022) (quoting Dart 15 Cherokee, 574 U.S. at 89). “When a plaintiff contests the amount 16 in controversy allegation, ‘both sides submit proof and the court 17 decides, by a preponderance of the evidence, whether the amount- 18 in-controversy requirement has been satisfied.’” Id. (quoting 19 Dart Cherokee, 574 U.S. at 88). 20 There is no anti-removal presumption in CAFA cases. 21 Rather, Congress enacted CAFA to “facilitate adjudication of 22 certain class actions in federal court.” Dart Cherokee, 574 U.S. 23 at 89. Notably, the Ninth Circuit recently reiterated that 24 “CAFA’s provisions should be read broadly, with a strong 25 preference that interstate class actions should be heard in 26 federal court if properly removed by any defendant.” Jauregui, 27 28 F.4th at 993 (citations omitted). Further, the Ninth Circuit 28 stated that “at this stage of the litigation, the defendant is 1 being asked to use the plaintiff’s complaint –- much of which it 2 presumably disagrees with –- to estimate an amount in 3 controversy.” Id. Therefore, defendant must rely “on a chain of 4 reasoning that includes assumptions to satisfy its burden . . . 5 that the amount in controversy exceeds $5 million, as long as the 6 reasoning and underlying assumptions are reasonable.” Id. 7 (citations and quotations omitted). 8 Defendant relies on payroll and human resources 9 information systems records for California employees from 10 February 2018 to the date of removal, March 10, 2022. Defendant 11 submits two declarations in support, one from its counsel and one 12 from its HR manager. (Docket Nos. 7-1, 7-2.) Defendant 13 calculates that approximately 400 employees are members of the 14 putative class. (Def.’s Opp’n, Decl. of Kristin M. Halsing 15 (“Halsing Decl.”) ¶ 3 (Docket No. 7-1).) Based on those 16 individuals’ start and end dates of employment, they worked a 17 combined total of approximately 12,184 pay periods from February 18 3, 2018 to the date of removal. (Id.) Based on the individuals’ 19 current or final rate of pay, their average hourly rate is 20 $25.28. (Id.) They also generally are or were paid on a bi- 21 weekly basis and scheduled to work 40 or 36.25 hours per week. 22 (Def.’s Opp’n, Decl. of Megan Hernandez (“Hernandez Decl.”) ¶ 3 23 (Docket No. 7-2).) 24 In opposition, plaintiff does not submit any evidence, 25 though he is allowed to because he is contesting defendant’s 26 alleged amount in controversy. See Jauregui, 28 F.4th at 992. 27 A. Minimum Wage 28 Under plaintiff’s claim for failure to pay minimum 1 wage, plaintiff alleges that he and the putative class members 2 are allowed to recover the unpaid amount of minimum wages, 3 liquidated damages, including interest thereon, statutory 4 penalties, attorneys’ fees, and costs of suit. (Compl. ¶ 75.) 5 Defendant’s assumption that all putative class members 6 were unpaid minimum wages for two hours per pay period (one hour 7 per workweek) is analogous to the defendant’s assumption in 8 Cabrera v. South Valley Almond Co., LLC, No. 1:21-cv-00748-AWI- 9 JLT, 2021 WL 5937585 (E.D. Cal. Dec. 16, 2021). There, the court 10 determined it was reasonable to assume that all putative class 11 members were subject to unpaid minimum wages because the 12 complaint did not “allege subclasses (or otherwise draw relevant 13 distinctions as to the posture of different members of the 14 putative class) and state[d] that the violations were due to 15 ‘policies and/or practices.’” Cabrera, 2021 WL 5937585 at * 8. 16 Here, plaintiff also makes no distinctions between members of the 17 putative class and alleges there were “uniform payroll policies 18 and practices” that led to unpaid minimum wages. (Compl. ¶ 24.) 19 Further, the court in Cabrera determined defendant 20 reasonably assumed one hour of unpaid work per week because the 21 complaint alleged that the “violations occurred ‘at times’ and 22 ‘on occasion,’” and were “due to ‘policies and/or practices.’” 23 Cabrera, 2021 WL 5937585 at * 8. The allegations in the 24 complaint in Cabrera are similar to the allegations in the 25 complaint here, as plaintiff alleges the violations happened 26 “routinely,” there were “periodic shortages in the hours” 27 putative class members were compensated, and the unpaid minimum 28 wages were due to “uniform payroll policies and practices.” 1 (Compl. ¶ 24.) 2 Defendant multiples two hours of unpaid minimum wages 3 by the average minimum wage from 2018 to 2021, $12.50,1 and 4 multiplies it by the 12,184 pay periods that putative class 5 members worked from February 3, 2018 to the date of removal to 6 estimate that plaintiff and class members could recover $304,600 7 for the minimum wage claim. (Notice ¶ 27); see Jauregui, 28 8 F.4th at 994-95 (stating the only issue with an assumption of one 9 hour of unpaid work per week and a similar calculation by the 10 defendant was that the defendant had miscalculated the average 11 minimum wage). 12 California law also allows plaintiff and class members 13 to recover liquidated damages “in an amount equal to the wages 14 unlawfully unpaid and interest thereon.” Cal. Lab. Code § 15 1194.2(a). Therefore, defendant adds liquidated damages in the 16 same amount to estimate that the minimum wage claim totals 17 $609,200. (Notice ¶ 28.) Defendant’s estimated total does not 18 include any statutory penalties that California Labor Code 19 section 1197.1 allows, and plaintiff requests, for unpaid minimum 20 wages. (See compl. ¶ 75.) 21 Therefore, the court will apply defendant’s minimum 22 wage estimate of $609,200 to the CAFA amount in controversy 23 estimate. 24 B. Overtime Wages 25 1 Plaintiff argues that defendant provides no explanation for how it calculates the average hourly rate. (Mot. to Remand 26 at 8.) However, defendant’s notice of removal and submitted 27 declarations state how the average minimum wage is calculated and how the average hourly rate for putative class members is 28 calculated. (Notice ¶¶ 27, 31 n.2.; Halsing Decl. ¶ 3.) 1 Plaintiff alleges that he and the putative class are 2 allowed to recover the unpaid amount of overtime premiums, 3 including interest thereon, statutory penalties, attorneys’ fees, 4 and costs of suit. (Compl. ¶ 78.) As an initial matter, 5 plaintiff argues that defendant “double counts” allegedly 6 uncompensated time for both minimum wage and overtime damages. 7 (Mot. to Remand at 6-7.) However, the complaint presents 8 separate claims for minimum wages and overtime wages and states 9 different theories for these claims. (Compl. ¶¶ 23-24, 32.) The 10 complaint includes no indication that the two claims are pled in 11 the alternative for the same hours of time. “[B]oth overtime and 12 minimum wages can properly be included in the amount in 13 controversy, since they are separate types of damages.” Cabrera, 14 2021 WL 5937585 at * 9 (quotations and citations omitted). 15 Accordingly, the court will consider estimates for both claims. 16 Defendant reasonably assumes that all putative class 17 members were unpaid for two hours of overtime per pay period (one 18 hour per week). (Notice ¶ 32-33.) In Cabrera, the court applied 19 the same analysis it did for the unpaid minimum wage claim to the 20 overtime claim to determine that an assumption of one hour of 21 unpaid overtime per week per class member was reasonable. 22 Cabrera, 2021 WL 5937585 at * 8. Here, defendant reasonably 23 assumes that all putative class members were not compensated for 24 overtime work because the complaint does not draw any 25 distinctions between the putative class members. Further, the 26 complaint alleges that putative class members “periodically 27 worked hours that entitled them to overtime compensation” and 28 that class members were not compensated for overtime due to 1 “uniform and unlawful pay policies and practices.” (Compl. ¶¶ 2 32, 78); see Mortley v. Express Pipe & Supply Co., No. SACV 17- 3 1938-JLS, 2018 WL 708115 at *4 (C.D. Cal. Feb. 5, 2018) (“[A]n 4 assumption of one hour of overtime per week is reasonable when a 5 plaintiff alleges a pattern or practice of violation”). 6 Defendant calculates the amount in controversy for the 7 overtime wage claim to be $924,034.56 based on two hours of 8 unpaid overtime per pay period at plaintiff and putative class 9 members’ average hourly rate of $25.28 and the estimated 12,184 10 pay periods the putative class members worked. (Notice ¶ 32 11 n.3.) Notably, defendant’s estimate does not include any alleged 12 double time owed to plaintiff and putative class members. 13 Therefore, the court will apply defendant’s overtime 14 wage estimate of $924,034.56 to the CAFA amount in controversy 15 estimate. 16 C. Meal and Rest Period Premiums 17 Plaintiff alleges defendant is responsible for paying 18 premium compensation for meal and rest period violations, 19 including interest thereon, statutory penalties, and costs of 20 suit. (Compl. ¶¶ 82, 85.) Plaintiff alleges that meal and rest 21 break laws were violated because defendant “periodically did not 22 permit” the breaks, and “often expected and required” employees 23 to continue working. (Compl. ¶¶ 37, 45.) Plaintiff also alleges 24 multiple theories for how the meal and rest breaks were 25 noncompliant. (Id. ¶¶ 37, 45 (alleging that breaks were not 26 permitted, breaks that were “duty-free” were not permitted, and a 27 third mandated rest break or second mandated meal break for 28 shifts over 10 hours was not permitted).) 1 Based on these allegations and that plaintiff and 2 putative class members were scheduled to work 40 or 36.25 hours 3 per week, defendant reasonably assumes that plaintiff and 4 putative class members missed four meal and/or rest breaks per 5 pay period and are therefore owed four premiums (one hour of pay 6 for each missed meal or rest break) -- a 20 percent violation 7 rate. (See Notice ¶ 36; Hernandez Decl. ¶ 3); Cal. Lab. Code § 8 226.7. Defendant’s assumption of a 20 percent violation rate is 9 consistent with what other courts have deemed reasonable. See 10 Cabrera, 2021 WL 5937585, at *6 (holding that a 20 percent 11 violation rate was consistent with allegations in the complaint 12 that violations occurred “at times” and violations were premised 13 on multiple theories “(missed, delayed, interrupted or 14 incomplete)”); Mendoza v. Savage Servs. Corp., No. 2:19-CV-00122- 15 RGK, 2019 WL 1260629, at *2 (C.D. Cal. Mar. 19, 2019) (collecting 16 cases in which the courts in the district routinely applied a 20 17 percent violation rate for meal and rest period premiums). 18 Therefore, the court will apply defendant’s estimate of 19 $1,232,046.08, based on four meal and/or rest premiums at 20 plaintiff and the putative class’s average hourly rate of $25.28 21 and the 12,184 pay periods the putative class worked, to the CAFA 22 amount in controversy estimate. (Notice ¶ 36.) 23 D. Failure to Pay Wages During Employment 24 Plaintiff alleges defendant’s failure to compensate him 25 and the putative class members based on the violations described 26 above also resulted in defendant’s failure to fully pay plaintiff 27 and the putative class members within seven days of the close of 28 payroll as required by law. (Compl. ¶ 93.) For this reason, 1 plaintiff seeks penalties in accordance with California Labor 2 Code section 210, which dictates that an initial violation incurs 3 a “$100 penalty for each failure to pay each employee” and each 4 subsequent violation is a “$200 [penalty] for each failure to pay 5 each employee plus 25 percent of the amount unlawfully withheld.” 6 Cal. Lab. Code § 210(a). 7 The statute of limitations for this claim is one year 8 prior to the date of filing. Cal. Civ. Proc. § 340(a). Based on 9 its records, defendant calculates that approximately 363 putative 10 class members worked for defendant from February 3, 2021 to the 11 date of removal and they worked a combined total of 7,773 pay 12 periods. (Halsing Decl. ¶ 4.) 13 Defendant reasonably assumes that plaintiff and 14 putative class members were not timely paid wages for every pay 15 period based on the complaint’s allegations that defendant has a 16 “pattern, practice, and uniform administration of its corporate 17 policy” to deny employees compensation “on a regular and 18 consistent basis.” (Compl. ¶¶ 51, 95.) Further, the complaint 19 draws no distinctions between the putative class members, so it 20 is reasonable for defendant to assume that all putative class 21 members were not timely paid wages. 22 Therefore, the court will apply defendant’s estimate of 23 $1,518,300.00 for statutory penalties for failure to pay wages 24 during employment. (Notice ¶ 44.) Notably, defendant’s estimate 25 does not include the 25 percent of allegedly withheld wages that 26 plaintiff and putative class members can claim for subsequent 27 violations, and thus defendant’s estimate may be lower than what 28 would be justified. 1 E. Failure to Pay Wages at Separation 2 Plaintiff alleges defendant’s failure to compensate him 3 and the putative class members based on the violations described 4 above leads to failure to fully pay putative class members who no 5 longer work for defendant. (Compl. ¶ 99.) Therefore, plaintiff 6 alleges that defendant is liable to “formerly-employed [putative] 7 [c]lass [m]embers for waiting time penalties amounting to thirty 8 days wages” pursuant to California Labor Code section 203, which 9 allows “wages of the employee” to “continue as a penalty from the 10 due date thereof at the same rate until paid or until an action 11 is commenced . . . [up to] 30 days.” (Compl. ¶ 100); Cal. Lab. 12 Code § 203(a). 13 The statute of limitations for this claim is three 14 years, and therefore, only employees who quit or were fired from 15 February 3, 2019 onward are at issue for this claim. Cal. Civ. 16 Proc. § 338. Based on a review of its records, defendant 17 estimates that there are 120 putative class members who were 18 discharged or quit from February 3, 2019 to the date of the 19 notice of removal. (Halsing Decl. ¶ 5.) The average hourly rate 20 for these employees was $21.84, based on their hourly rate of pay 21 at the time of their employment separation. (Id. ¶ 5.) 22 Here, it is reasonable for defendant to assume that all 23 putative class members who are former employees were owed waiting 24 time penalties because the complaint does not differentiate 25 between any of the putative class members and the claim is 26 premised on defendant’s “faulty pay policies.” (Compl. ¶ 100.) 27 Defendant also reasonably assumes a 30-day waiting time penalty 28 for all putative class members because plaintiff alleges that 1 defendant is liable for “waiting time penalties amounting to 2 thirty day wages.” (Id.) Further, the Ninth Circuit recently 3 held that it is reasonable to assume a maximum 30-day waiting 4 time penalty because the “vast majority (if not all) of the 5 alleged violations . . . would have happened more than 30 days 6 before the suit was filed.” Jauregui, 28 F.4th at 994.2 7 Therefore, the court will accept defendant’s failure to 8 pay wages at separation estimate of $628,992.00 as part of the 9 CAFA amount in controversy estimate. (Notice ¶ 48; Hernandez 10 Decl. ¶ 3.) 11 F. Wage Statements 12 The complaint alleges defendant’s failure to compensate 13 him and the putative class members based on the violations 14 described above leads to failure to provide plaintiff and 15 putative class members with accurate wage statements. (Compl. ¶ 16 103.) Therefore, plaintiff alleges that he and the putative 17 class members are “each entitled to recover an initial penalty of 18 $50, and subsequent penalties of $100, up to an amount not 19 exceeding an aggregate penalty of $4,000” per person. (Id. ¶ 20 105 (citing Cal. Labor Code § 226(e)).) 21 2 Plaintiff cites to this court’s decision in Amaya v. 22 Apex Merchant Group, LLC, No. 2:16-cv-00050-WBS, 2016 WL 881152, at *4 (E.D. Cal. Mar. 7, 2016), where the court held it was 23 unreasonable to assume the maximum 30-day waiting time penalty without any supporting evidence. However, that decision was 24 issued prior to the Ninth Circuit’s decision in Jauregui. Further, in Amaya, the complaint “did not allege that every 25 employee was entitled to the full thirty days,” whereas here the complaint explicitly alleges defendant is liable to the formerly 26 employed putative class members for “waiting time penalties 27 amounting to thirty day wages,” without making any distinctions between the putative class members. Compare Amaya, 2016 WL 28 881152, at *4, with (Compl. ¶ 100). 1 The statute of limitations for this claim is one year. 2 Cal. Civ. Proc. § 340(a). As noted above, defendant calculates 3 that approximately 363 putative class members worked for 4 defendant from February 3, 2021 to the date of removal, and these 5 employees worked a combined total of 7,773 pay periods. (Halsing 6 Decl. ¶ 4.) 7 It is reasonable for defendant to assume that plaintiff 8 and all putative class members received inaccurate wage 9 statements because the complaint draws no distinctions between 10 the putative class members and plaintiff alleges that they are 11 “each entitled to recover” for the wage statement claim. (Compl. 12 ¶ 105 (emphasis added).) Further, it is reasonable for defendant 13 to assume that every wage statement for the 7,773 pay periods was 14 inaccurate because the complaint contains a comprehensive list of 15 possible errors the wage statements allegedly had, and the 16 complaint states that defendant “knowingly and intentionally” 17 failed to correct its “unlawful practices and policies.” (Compl. 18 ¶¶ 54, 56); see Cabrera, 2021 WL 5937585 at *10 (holding that 19 because the court found that “it is reasonable to assume one 20 overtime violation, one minimum wage violation, one meal break 21 violation and one rest period violation per week for each 22 putative class member[,] it follows that each of the bi-weekly 23 wage statements . . . during that period contained an error of 24 some sort.”)3 25 3 Plaintiff argues that the recent decision in Naranjo v. Spectrum Security Services, Inc., 40 Cal. App. 5th 444 (2d. Dist. 26 2019), review granted January 2, 2020, held that unpaid premium 27 wages for meal breaks do not entitle employees to pursue derivative waiting time or wage statement penalties. The Naranjo 28 decision is not binding upon this court and is currently under eee EIEIO IIE IIE IER I ORE ISIE IE II OO OI ND 1 Therefore, the court will apply defendant’s wage 2 statement penalty estimate of $759,150.00 to the CAFA amount in 3 controversy. (See Notice JI 40.) 4 Based on reasonable assumptions, the amount in 5 controversy exclusive of interest, costs, and attorney’s fees is 6 approximately $5,671,722.64, which exceeds the required 7 $5,000,000 under CAFA.* The court expresses no opinion as to 8 defendant’s estimate on attorneys’ fees because the amount in 9 controversy is met based on the amount of damages and penalties, 10 and any attorneys’ fees would only increase the amount in 11 controversy. Therefore, consistent with CAFA’s “strong 12 | preference,” this action will be heard in federal court because 13 it was properly removed by defendant. See Jauregui, 28 F.4th at 14 993 (citations omitted). 15 IT IS THEREFORE ORDERED that plaintiff’s motion to 16 remand (Docket No. 6) be, and the same hereby is, DENIED. 17 | Dated: May 17, 2022 ted . ak. 2 / 18 WILLIAM B. SHUBB 19 UNITED STATES DISTRICT JUDGE 20 21 22 23 review by the California Supreme Court. Further, plaintiff’s wage statement claim is premised on theories separate from meal 24 | break violations. (Compl. 9 54.) 29 4 Defendant’s notice of removal does not include the civil penalty that could be imposed for plaintiff’s claim for 26 failure to maintain accurate and employment records. California 27 Labor Code section 1174.5 states that a penalty of $500 incurs upon each violation. 28 14