Harp v. California Cemetery and Funeral Services, LLC ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 SCOTT HARP, on behalf of himself and Case No. 1:21-cv-01118-JLT-BAK all others similarly situated, 12 ORDER GRANTING MOTION TO REMAND Plaintiffs, AND GRANTING REQUEST FOR 13 ATTORNEYS’ FEES v. (Doc. 7) 14 CALIFORNIA CEMETERY AND 15 FUNERAL SERVICES, LLC, a Delaware Corporation and Does 1 to 100 inclusive, 16 Defendants. 17 18 Scott Harp, acting on his own behalf and on the behalf of similarly situated employees, 19 initiated suit in state court for violations of the California Labor Code and California Business 20 and Professions Code by his former employer, California Cemetery and Funeral Services, LLC 21 (“CCFS”). (Doc. 1 at 18-20.) CCFS removed the case to federal court, asserting diversity 22 jurisdiction. (Id. at 3.) Harp moved to remand the case to state court because it contends CCFS 23 has not satisfied the amount in controversy requirement for diversity jurisdiction. (Doc. 7.) For 24 the reasons set for below, the Court GRANTS Harp’s motion to remand. 25 I. BACKGROUND 26 Harp filed his complaint in the Superior Court of California in Kern County, alleging 27 CCFS violated sections of the California Labor Code §§ 226, 2699, 2751 and California Business 28 and Professions Code § 17200 for failure to provide accurate wage statements and written 1 contracts to employees. (Doc. 1 at 18-35.) Harp brought these claims on behalf of himself, all 2 similarly situated employees, and as a representative for the California Labor and Workforce 3 Development Agency under the Private Attorneys General Act (“PAGA”), Cal. Lab. Code 4 § 2699. (Id. at 18, 29-32.) On July 23, 2021, CCFS filed a notice of removal. (Id. at 1-15.) 5 On August 23, 2021, Harp filed a motion to remand the case, arguing CCFS failed to 6 adequately establish the amount in controversy for diversity jurisdiction. (Doc. 7 at 6.) Harp also 7 seeks an award of attorneys’ fees associated with its motion, arguing CCFS lacked an objective 8 basis for removal. (Id. at 14-15.) In the notice of removal, CCFS alleged federal subject matter 9 jurisdiction existed under two avenues of diversity jurisdiction: 28 U.S.C. § 1332 for Harp’s 10 individual claims and the Class Action Fairness Act (“CAFA”) for all employees’ claims. (Doc. 1 11 at 2-14.) In opposition to the motion to remand,1 however, CCFS did not provide any factual or 12 legal basis for jurisdiction under CAFA and only maintains diversity jurisdiction exists under 13 § 1332. (Doc. 9 at 13.) CCFS estimates the amount in controversy to be $76,200, attributing 14 $70,000 to attorneys’ fees. (Id.) Because CCFS no longer asserts subject matter jurisdiction under 15 CAFA, the only issue before the Court is whether Harp’s individual claims for relief satisfy the 16 jurisdictional requirements under § 1332. 17 II. DIVERSITY JURISDICTION 18 To satisfy the requirements of diversity jurisdiction under § 1332, the party invoking 19 federal jurisdiction must show complete diversity among the parties and the amount in 20 controversy exceeds $75,000. 28 U.S.C. § 1332. Complete diversity means that “the presence of a 21 single plaintiff from the same State as a single defendant deprives the district court of original 22 diversity jurisdiction over the entire action.” Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 23 679 (9th Cir. 2006) (citations omitted). 24 25 1 Harp contends CCFS’s opposition was “late-filed.” (Doc. 10 at 4 n.1.) Harp alleges CCFS’s opposition was due on 26 September 6, 2021, but CCFS filed a day late on September 7, 2021. Harp notes that September 6, 2021, fell on a federal holiday and contends this moved CCFS’s deadline to September 3, 2021. Id. Harp’s argument contradicts the 27 Federal Rules of Civil Procedure which extend rather than shorten deadlines falling on federal holidays. Fed. R. Civ. Pro. 6(a)(2)(C) (“[I]f the period would end on a Saturday, Sunday, or legal holiday, the period continues to run until 28 the same time on the next day that is not a Saturday, Sunday, or legal holiday.”) (emphasis added). Thus, CCFS 1 When the plaintiff’s complaint does not state the amount in controversy, the defendant 2 bears the burden to establish the amount in controversy at removal. Rodriguez v. AT&T Mobility 3 Servs. LLC, 728 F.3d 975, 981 (9th Cir. 2013). The removing party’s notice of removal must 4 include “a plausible allegation that the amount in controversy exceeds the jurisdictional 5 threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). If the 6 plaintiff does not contest the amount, the defendant’s asserted amount should be accepted. Id. at 7 87. If, however, the plaintiff challenges the defendant’s assertion, “both sides submit proof and 8 the court decides, by a preponderance of the evidence, whether the amount-in-controversy 9 requirement has been satisfied.” Id. at 88. This proof can include affidavits, declarations, or other 10 “summary-judgment-type evidence relevant to the amount in controversy at the time of removal.” 11 Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (quoting Singer v. 12 State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). The defendant may also rely 13 on “reasonable assumptions underlying the defendant’s theory of damages exposure.” Ibarra, 775 14 F.3d at 1198. The party seeking to invoke the jurisdiction of the court bears the burden of 15 supporting its jurisdictional allegations with competent proof. See Sharma v. HIS Asset Loan 16 Obligation Trust 2007-1, 23 F.4th 1167, 1169 (9th Cir. 2022). 17 III. DISCUSSION 18 Harp does not dispute the parties are completely diverse but asserts that the amount in 19 controversy is not satisfied. (Doc. 7 at 6; Doc. 9 at 14.) CCFS maintains this case exceeds the 20 amount in controversy threshold because the civil penalties and damages flowing from the alleged 21 Labor Code, Business and Professions Code, and PAGA claims amount to $6,200 and attorneys’ 22 fees total $70,000. (Doc. 9 at 13-14.) Harp does not contest the $6,200 amount but argues CCFS’s 23 calculation of attorneys’ fees improperly aggregates all fees to a single plaintiff. (Doc. 7 at 9-10; 24 Doc. 10 at 5-6.) Therefore, the parties’ dispute turns on whether CCFS may attribute all 25 attorneys’ fees to a single plaintiff in a PAGA action. 26 A. Calculating Attorneys’ Fees for the Amount in Controversy under PAGA 27 The Ninth Circuit does not permit defendants to aggregate penalties or attorneys’ fees in 28 cases involving PAGA claims to satisfy the amount in controversy requirement. Canela v. Costco 1 Wholesale Corp. 971 F.3d 845, 850 (9th Cir. 2020). In Urbino v. Orkin Services of California, 2 Inc., the Court explained that civil penalties arising from PAGA actions cannot be attributed to a 3 single plaintiff for purposes of calculating the amount in controversy under § 1332 (i.e., the 4 penalties could not be “aggregated” to a single plaintiff) because PAGA is a representative action 5 brought on behalf of the California Labor and Workforce Development Agency. 726 F.3d 1118, 6 1122-23 (9th Cir. 2013). In representative actions, claims cannot be aggregated unless they “unite 7 to enforce a single title or right in which they have a common and undivided interest.” Id. at 1122 8 (quoting Snyder v. Harris, 394 U.S. 332, 335 (1969)). When the defendant owes individual 9 obligations to the group rather than as a collective obligation, the right is not a common and 10 undivided interest. Id.; see also Gibson v. Chrysler Corp., 261 F.3d 927, 944 (9th Cir. 2001) 11 (internal quotations omitted) (“Aggregation is appropriate only where a defendant owes an 12 obligation to the group of plaintiffs as a group and not to the individuals severally.”). The Court 13 concluded PAGA claims that address violations of California Labor Code involve injuries unique 14 to each employee, and employers do not owe an obligation to employees “as a group.” Urbino, 15 726 F.3d at 1122. Therefore, defendants cannot aggregate civil penalties under PAGA actions to a 16 single plaintiff to meet the jurisdictional threshold. Id. 17 In Canela, the Ninth Circuit applied the same reasoning and prohibited aggregation of 18 attorneys’ fees stemming from PAGA actions. 971 F.3d at 849-50 (holding diversity jurisdiction 19 requirements not met where Costco relied on a total of $1,064,800 of undivided attorneys’ fees to 20 meet the amount in controversy). Instead, courts may only consider the pro rata share of 21 attorney’s fees attributable to each plaintiff in determining whether the amount in controversy is 22 met. Id.; see also Higginbotham v. S. E. Emp. Leasing Servs., Inc., 2020 WL 5535421, at *4 (E.D. 23 Cal. Sep. 15, 2020) (“In PAGA actions, only the named plaintiff-employees’ pro rata share of 24 attorneys’ fees is considered.”); Arrellano v. Optum Med. Grp., 2019 WL 247220, at *4 (C.D. 25 Cal. Jan 17, 2019) (citing Patel v. Nike Retail Servs., Inc., 58 F. Supp. 3d 1032, 1049 (N.D. Cal. 26 2014)) (“But, in PAGA cases, that amount must be reduced to reflect only Plaintiff’s pro rata 27 share of those fees.”). 28 CCFS has not provided a pro rata share of attorneys’ fees associated with Harp’s 1 individual claims. Instead, CCFS argues that two recent decisions from the California Court of 2 Appeals permit CCFS to aggregate attorneys’ fees to meet the amount in controversy: Robinson v. 3 S. Ctys. Oil Co., 53 Cal. App. 5th 476 (2020), and Starks v. Vortex Industries, Inc., 268 Cal. Rptr. 4 3d 274 (Cal. Ct. App. 2020) (ordered unpublished). (Doc. 9 at 7-9.) According to CCFS, 5 Robinson and Starks stand for the proposition that “when multiple employees incur legal fees, if 6 they do so in separate suits, only one of them can recover their fees under § 3699(g)(1) because 7 only one of them could ever successfully bring a PAGA claim.” (Id. at 8.) Under this reasoning, 8 CCFS concludes that prorating attorneys’ fees “would result in an absurdity” because Harp is the 9 only named plaintiff and therefore, no other aggrieved employees could recover attorney fees 10 under PAGA. CCFS contends: “That cannot be the law.” (Id. at 9.) 11 But, in fact, that is the law of the Ninth Circuit. See e.g., Canela, 971 F.3d at 849; Urbino, 12 726 F.3d at 1122; Higginbotham, 2020 WL 5535421, at *4. The Robinson or Starks opinions do 13 not suggest a different result. Neither case addresses federal jurisdictional requirements. Rather, 14 the outcome of Robinson depended on principles of claim preclusion and barred recovery under 15 PAGA by a subsequent employee when the employer previously settled the same PAGA claim 16 with another employee in the suit. Robinson, 53 Cal.App.5th at 480. The California Court of 17 Appeals explained that because PAGA does not provide a “mechanism for opting out of the 18 judgment entered on the PAGA claim,” unlike typical class action claims, the first resolution of 19 the PAGA claim resolves it for all other employees. Id. at 482. Unlike class actions, plaintiffs 20 asserting a PAGA claim act as a proxy, or representative, for the state interest. Id. at 482-83. In 21 Starks, the court followed the same reasoning and held the employee had no individual interest to 22 warrant vacating the PAGA judgment entered in a case brought by another employee, because the 23 PAGA action “functions a substitute for an action brought by the government itself.” Starks, 268 24 Cal. Rptr. 3d at 282 (internal quotations omitted). 25 Neither Robinson nor Starks address aggregation of attorneys’ fees for the purpose of 26 determining the amount in controversy for federal jurisdiction. Furthermore, the reasoning of 27 Robinson and Starks does not undermine the Ninth Circuit’s precedent prohibiting the 28 aggregation of fees under PAGA actions. The opinions in Robinson and Stark rest on the nature 1 of PAGA actions as representative actions on behalf of the state interest. Robinson, 53 2 Cal.App.5th at 482-83; Starks, 268 Cal. Rptr. 3d at 282. In Urbino, the Ninth Circuit expressly 3 rejected the argument that because PAGA actions provide redress for “the state’s collective 4 interest in enforcing its labor laws,” claims can be combined to satisfy the amount in controversy 5 requirement. Urbino, 726 F.3d at 1122. Rather, the “state, as the real party in interest, is not a 6 ‘citizen’ for diversity purposes.” Id. at 1123. 7 District courts have also rejected similar challenges to the Ninth Circuit precedent 8 prohibiting aggregation under PAGA. In Higginbotham, the defendant argued intervening 9 California cases held “plaintiffs may not sever PAGA claims and settle them individually.” 2020 10 WL 5535421, at *3 (citing Kim v. Reins, 9 Cal. 5th 73 (2020); Khan v. Dunn-Edwards Corp., 19 11 Cal. App. 5th 804 (2018)). In Kim and Khan, the court explained that the representative nature of 12 PAGA actions, where employees act as a proxy for the state interest, stands separately from the 13 individual interests and rights of the employees. Higginbotham, 2020 WL 5535421, at *3. 14 However, the cases “are silent as to the federal amount in controversy requirement” and they “do 15 not recast PAGA claims from multiple employees as enforcing ‘a single title or right’ in which 16 the employees have ‘a common and undivided interest.’” Id. (quoting Urbino, 726 F.3d at 1122). 17 The California state opinions do not disturb well-settled law that PAGA actions do not provide 18 redress for a common and undivided interest of a group of aggrieved employees. See Medina v. 19 W. Distrib. Co., 2021 WL 1941691, at **2-3 (C.D. Cal. May 13, 2021) (maintaining no “common 20 or undivided” interest for purposes of the amount in controversy requirement despite a California 21 court’s finding that “a representative action under PAGA is not a class action”). 22 Ninth Circuit authority makes clear that even though PAGA claims are representative 23 actions that accord a one-time recovery for civil penalties and attorneys’ fees, defendants cannot 24 aggregate damages to establish removal jurisdiction. See Navarro v. Gruma Corp., 2022 WL 25 279008, *3 (C.D. Cal. Jan. 28, 2022) (refusing to aggregate attorneys’ fees in PAGA action 26 because “any doubt regarding the existence of subject matter jurisdiction must be resolved in 27 favor of remanding the action to state court”). The Court declines to extrapolate from the 28 reasoning in Robinson and Starks to contradict the binding precedent from the Ninth Circuit. See 1 Canela, 971 F.3d at 849; see also Medina, 2021 WL 1941691, at *3 (citing FDIC v. McSweeney, 2 976 F.2d 532, 535 (9th Cir. 1992) (“Absent intervening California case law, the Court is bound 3 by the Ninth Circuit’s interpretation of California law.”). 4 Because CCFS provides no alternative basis to calculate attorneys’ fees apart from 5 aggregation, and because it concedes Harp’s individual claims only amount to $6,200 (Doc. 9 at 6 13), CCFS has not met its burden to establish the amount in controversy exceeds $75,000. Thus, 7 the Court lacks subject matter jurisdiction and remands the case to state court. 8 B. Harp’s Motion for Attorneys’ Fees 9 Harp requests the Court award attorneys’ fees associated with his motion to remand. “An 10 order remanding the case may require payment of just costs and any actual expenses, including 11 attorney fees, incurred as a result of removal.” 28 U.S.C. § 1447(c). “Absent unusual 12 circumstances, courts may award attorneys’ fees under § 1447(c) only where the removing party 13 lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively 14 reasonable basis exists, fees should be denied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 15 141 (2005). The defendant lacks an objectively reasonable basis for removal when the law 16 compelling remand is well established. Pineda v. Sun Valley Packing, L.P., 2021 WL 5755586, at 17 *5 (E.D. Cal. Dec. 3, 2021). 18 CCFS argues it had an objectively reasonable basis for removal because it relies on the 19 recent precedent in Robinson and Starks and has not found case law rejecting its arguments 20 arising from these cases. (Doc. 9 at 13-14.) As detailed above, however, Ninth Circuit precedent 21 prohibiting aggregation of attorneys’ fees in PAGA actions to satisfy the amount in controversy 22 threshold is well established, despite California state cases that describe PAGA claims as 23 representative actions. See Urbino, 726 F.3d at 1122-23; see also Higginbotham, 2020 WL 24 5535421, at *5. Although the case law may not explicitly explain the inapplicability of Robinson 25 and Starks to federal removal jurisdiction, the Higginbotham court warned against contorting 26 California court opinions, irrelevant to federal jurisdictional matters, to overcome contrary Ninth 27 Circuit precent in PAGA cases. Higginbotham, 2020 WL 5535421, at *5 (noting defendant’s 28 “argument that removal was proper is frivolous in light of on-point, controlling authority”). Harp 1 should “not be required to pay for [CCFS’s] desire to make an attempt to change long standing 2 rules governing removal to federal court.” See Shaw v. Daifuku N. Am. Holding Co., 2021 WL 3 5578554, at *3 (E.D. Cal. Nov. 30, 2021). The Court finds awarding attorneys’ fees to Harp is 4 appropriate. 5 Harp requested a total fee award of $9,035.00. (Doc. 7 at 14-15.) Harp’s attorney, Gregg 6 Lander, submitted a declaration to support the request and explained his billable rate is $695.00 7 per hour. (Doc. 7-1 at 1-2.) He declared he spent nine hours researching and drafting the initial 8 motion and anticipated four hours for drafting the reply and attending the hearing. (Id.) However, 9 the Court did not hold a hearing to resolve this motion. (Doc. 17.) Because Harp did not delineate 10 how much time he spent on the reply brief, the Court does not find sufficient support to award 11 fees associated with the reply. See Pineda, 2021 WL 5755586, at *5 (awarding $6,255 in 12 attorneys’ fees associated with the motion to remand but refusing to award fees associated with 13 the reply briefing because counsel did “not specify how much of the $5,335.00 in fees were 14 incurred in preparing plaintiff’s reply brief specifically”). The Court, in its discretion, finds the 15 billable rate of $695.00 and nine hours spent drafting the motion reasonable and grants an award 16 of $6,255.00 in attorneys’ fees. See Travelers Commer. Ins. Co. v. Liberty Utils. (Calpeco Elec.) 17 LLC, 2022 WL 992935, at *2 (E.D. Cal. Apr. 1, 2022) (“The court has broad discretion to award 18 costs and fees whenever it finds that removal was wrong as a matter of law.”); see also Shaw, 19 2021 WL 5578554, at *3 (finding $6,500.00 to be a reasonable attorneys’ fees award for a motion 20 to remand in a PAGA action). 21 IV. CONCLUSION AND ORDER 22 For the reasons set forth above, the Court ORDERS: 23 1. Harp’s motion to remand (Doc. 7) is GRANTED. 24 2. Harp’s request for attorneys’ fees associated with this motion is GRANTED in the 25 amount of $6,255.00 26 3. This action is remanded to the Superior Court of California in Kern County. 27 /// 28 /// 1 4. The Clerk of Court is directed to close this case. 2 3 IT IS SO ORDERED. 4] Dated: _ May 24, 2022 Charis [Tourn TED STATES DISTRICT JUDGE 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28