Goto v. Whelan Security of California, Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MICHAEL ANTHONY GOTO, Case No. 20-cv-01114-HSG 8 Plaintiff, ORDER GRANTING PLAINTIFF’S MOTION TO REMAND 9 vs. Re: Dkt. No. 17 10 WHELAN SECURITY OF CALIFORNIA, INC., 11 Defendant. 12 Pending before the Court is Plaintiff Michael Anthony Goto’s motion to remand. See Dkt. 13 Nos. 17 (“Mot.”), 18 (“Opp.”), 19 (“Reply”). After carefully considering the parties’ arguments, 14 the Court GRANTS Plaintiff’s motion. 15 I. BACKGROUND 16 On January 10, 2020, Plaintiff filed this proposed class action in San Francisco County 17 Superior Court against Defendant Whelan Security of California Inc. and DOES 1 through 10. 18 See Dkt. No. 1-1 at 2. Plaintiff subsequently filed his first amended class action complaint 19 (“FAC”) on February 7, 2020. Id. at 29. 20 The operative complaint alleges that Plaintiff worked for Defendant in California from 21 approximately April 2012 to October 2019, specifically as a non-exempt supervisor from about 22 2015 until October 2019. See FAC at ¶ 4. Plaintiff seeks to represent a class of “all other 23 similarly situated current and former non-exempt and exempt supervisory and office employees of 24 [Defendant] who worked in California and all individuals who were subjected to a background 25 check by [Defendant].” Id. at ¶ 8. Plaintiff further seeks to represent the following classes and/or 26 subclasses: (1) overtime wage class; (2) minimum and regular wage class; (3) vacation pay class; 27 (4) rest period class; (5) wage statement class; (6) waiting time class; (7) unreimbursed expenses 1 class; and (8) background check class. Id. 2 In total, Plaintiff alleges twenty causes of action on behalf of himself and the putative class 3 against Defendant for violations of the Fair Credit Reporting Act (“FCRA”) and various California 4 state law claims, including violations of labor laws, the California Investigative Consumer 5 Reporting Agencies Act (“ICRAA”), and Private Attorneys General Act (“PAGA”). See id. at 6 ¶¶ 1–2. 7 Defendant timely filed a notice of removal on February 12, 2020, asserting federal 8 question and supplemental jurisdiction. See Dkt. No. 1 at ¶¶ 7-9. Defendant identified two bases 9 for federal question jurisdiction. First, Plaintiff’s FCRA cause of action arises under federal law. 10 Id. at ¶ 8. Second, a substantial portion of the alleged events giving rise to Plaintiff’s claims 11 occurred on a federal enclave. Id.; see also Dkt. No. 3 at 2 (noting that “[a] number of courts have 12 taken judicial notice of the fact that the Presidio is a federal enclave.”). 1 Finally, Defendant 13 asserted that the Court has supplemental jurisdiction over the remaining alleged events, even those 14 that did not occur in the Presidio. Dkt. No. 1 at ¶ 26. 15 II. LEGAL STANDARD 16 A defendant may remove any civil action to federal court where the district court would 17 have original jurisdiction over the action. 28 U.S.C. § 1441; see also Caterpillar, Inc. v. Williams, 18 482 U.S. 386, 392 (1987). To do so, a party seeking removal must file a notice of removal within 19 30 days of receiving the initial pleading or within 30 days of receiving “an amended pleading, 20 motion, order or other paper from which it may first be ascertained that the case is one which is or 21 has become removable.” 28 U.S.C. § 1446(b)(1), (b)(3). The notice must contain a “short and 22 plain statement of the grounds for removal.” Id. § 1446(a); see also Ibarra v. Manheim Invs., Inc., 23 775 F.3d 1193, 1197 (9th Cir. 2015). 24 The removing party bears the burden of establishing removal jurisdiction. Abrego Abrego, 25 443 F.3d at 683–85; see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (noting that 26 1 The Court takes judicial notice that the Presidio is a federal enclave. See Kasperzyk v. Shetler 27 Sec. Servs., Inc., Case No. 13-cv-3383-EMC, 2014 WL 31434, at *4 n.2 (N.D. Cal. Jan. 3, 2014); 1 there is a “‘strong presumption’ against removal jurisdiction,” and the removing party “always has 2 the burden of establishing that removal is proper”). A plaintiff may seek to remand a case to the 3 state court from which it was removed if the district court lacks jurisdiction or if there was a defect 4 in the removal procedure. 28 U.S.C. § 1447(c). “[F]ederal jurisdiction must be rejected if there is 5 any doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566. 6 III. DISCUSSION 7 Plaintiff argues that the Court lacks jurisdiction over this action because he alleges only a 8 “bare procedural violation” of the FCRA, such that he lacks standing, and he has not alleged that 9 any claims occurred or arose on a federal enclave. See Mot. at 8–15. Additionally, Plaintiff 10 argues that the Court should decline to extend supplemental jurisdiction where it lacks original 11 jurisdiction. See id. at 15. The Court addresses each argument in turn. 12 A. Federal Question Jurisdiction Under FCRA 13 Plaintiff argues that the Court lacks federal subject matter jurisdiction over the FCRA 14 claim because Plaintiff does not have Article III standing. See Mot. at 12–15. Article III of the 15 Constitution limits federal jurisdiction to “cases and controversies.” See Lujan v. Defs. Of 16 Wildlife, 504 U.S. 555, 560 (1992). Standing is an essential element for a court to have federal 17 subject matter jurisdiction over a “case or controversy.” Id. A plaintiff must have: (1) suffered an 18 injury in fact; (2) that is fairly traceable to the defendant; and (3) is likely to be redressed by a 19 favorable judicial decision. Id. at 560–61. To establish “injury in fact,” a plaintiff must show that 20 they suffered an injury or invasion of a legally protected right that is concrete and particularized 21 and actual or imminent (not hypothetical or conjectural). Id. at 560. Even for a statutory 22 violation, as alleged here, plaintiff must establish a concrete injury. See Spokeo, Inc. v. Robins, 23 136 S. Ct. 1540, 1549 (2016). Generally, a plaintiff cannot satisfy the injury in fact requirement 24 with a bare allegation of a procedural violation of the FCRA. See id. at 1549–50. 25 Here, Plaintiff alleges that Defendant violated the FCRA by failing to provide a summary 26 of rights notice, in violation of §§ 1681d(a)(1) and 1681g(c), and by failing to provide a disclosure 27 in a “clear and conspicuous” manner that appears only “in a document that consists solely of the 1 allege that he was confused, misled, or otherwise harmed by these alleged violations, but instead 2 recites the FCRA requirements and states that Defendant failed to adhere to these requirements. 3 See id. at ¶¶ 67–69, 73, 74. Accordingly, the Court agrees that Plaintiff alleges only procedural 4 violations of §§ 1681d(a)(1) and 1681g(c). See Alvarez v. Transitamerica Services, Inc., Case No. 5 18-cv-03106-EJD, 2019 WL 4644909, at *3 (N.D. Cal. Sept. 24, 2019) (finding that a “mere 6 recitation of FCRA violations and ‘injury to statutory and procedural rights,’ is neither actual nor 7 concrete because there is no showing of how the Plaintiff is affected”); Mansapit v. Deluxe Corp., 8 Case No. 19-cv-00790-HSG, 2019 WL 2423423 (N.D. Cal. June 10, 2019) (finding that there was 9 no standing because the “complaint does not contain allegations of confusion, error, or other harm 10 from the alleged violations”); Benton v. Clarity Services, Inc., Case No. 16-cv-06583-MMC, 2017 11 WL 345583, at *2 (N.D. Cal. Jan. 24, 2017) (alleging that defendant failed to disclose source of 12 information in violation of 1681(g) or that information was inaccurate is a bare procedural 13 violation).2 14 Similarly, Plaintiff alleges only a procedural violation of § 1681b(b)(2)(A)’s stand-alone 15 disclosure document requirement. See FAC at ¶¶ 68–73. Plaintiff alleges that the disclosure 16 contained extraneous information, including “disclosures and information regarding state laws 17 other than the states where the individuals signed the disclosure and background check 18 authorization forms,” as well as the following language: (1) “I understand that nothing herein shall 19 be construed as an offer of employment or contract for services;” (2) “I also certify the 20 information I provided on an [sic] in connection with this form is true, accurate and complete;” (3) 21 22 2 Defendant points to Limson v. Bridge Prop. Mgmt. Co., 416 F. Supp. 3d 972, 990-91 (N.D. Cal. 2019), to argue that Plaintiff’s allegation that he was not provided with a summary of rights 23 established Article III standing. See Opp. at 19. In Limson, the court found that plaintiff had alleged an informational injury through allegations that the defendant failed to provide a summary 24 of rights notice, because the claimed violation “implicates the substantive rights that Congress created to allow individuals to verify the contents of credit reports and/or explain their contents.” 25 416 F. Supp. 3d at 991. Additionally, the plaintiff in Limson alleged that they were harmed by Defendant’s failure to provide a summary of rights under § 1681(a)(1) since they were required to 26 “execute illegal contracts.” Id. at 979. Significantly, as noted above, the majority of courts to confront the same question have held that alleging defendant’s failure to provide a written 27 summary of rights, without additional allegations of effect or harm, does not establish Article III 1 “a summary of your right under the Fair Credit Reporting Act, as well as certain state-specific 2 notices, are also being provided to you;” and (4) “I agree that this form in original, faxed, 3 photocopied or electronic (including electronically signed) form, will be valid for any background 4 reports that may be requested by or on behalf of the Company.” Id. at ¶ 70. 5 In Syed v. M-I, LLC, the Ninth Circuit found that the plaintiff had standing to bring a 6 § 1681b(b)(2)(A)(i) claim where the plaintiff alleged that defendant violated the same FCRA 7 requirement by including a liability waiver in the disclosure and authorization form. 853 F.3d 8 492, 499–500 (9th Cir. 2017). Importantly, the Syed plaintiff alleged the following: 9 [Plaintiff] discovered Defendant[’s] violation(s) within the last two years when he obtained and reviewed his personnel file from 10 Defendant[] and discovered that Defendant[] had procured and/or caused to be procured a ‘consumer report’ regarding him for 11 employment purposes based on the illegal disclosure and authorization form. 12 See id. at 499. Due to the plaintiff’s allegedly belated discovery, the Syed court inferred he “was 13 confused by the inclusion of the liability waiver with the disclosure and would not have signed it 14 had it contained a sufficiently clear disclosure.” Id. 15 Plaintiff makes no similar allegations in this case. Instead, he parrots the language of the 16 statute and contends that Defendant “obtained consumer reports and investigative consumer 17 reports multiple times after the application process and during the employment of P[laintiff] and 18 other Class members.” FAC at ¶ 71. Plaintiff does not allege belated discovery of these reports or 19 plead anything about his state of mind at all, and the Court thus cannot infer that Plaintiff is 20 claiming that he was confused by the inclusion of the “extraneous language.” Id. at ¶¶ 70–71. 21 Because Plaintiff has pled no more than a bare procedural violation of the FCRA (which appears 22 to have been an intentional choice), he does not have Article III standing and the Court lacks 23 jurisdiction over this claim. 24 B. Federal Enclave Doctrine 25 In its notice of removal, Defendant relied on the federal enclave doctrine to establish 26 jurisdiction over Plaintiff’s state law claims. See Dkt. No. 1 at ¶ 8. Actions arising from events 27 that take place on federal enclaves may be tried in federal court because “federal enclaves are 1 under the exclusive jurisdiction of the United States.” Swords to Plowshares v. Kemp, 423 F. 2 Supp. 2d 1031, 1034 (N.D. Cal. 2005); see also Kerr v. Delaware North Companies, Inc., Case 3 No. 16-cv-01797-LJO-SAB, 2017 WL 880409, at *3 (E.D. Cal. Mar. 6, 2017) (“federal enclave 4 jurisdiction revolves around ‘the precise location of the events giving rise to the claims for 5 relief’”). However, “[w]hen exposures allegedly occur partially inside and partially outside the 6 boundaries of an enclave, an argument would surface that the state’s interest increases 7 proportionally, while the federal interest decreases.” Ballard v. Ameron International Corp., Case 8 No. 16-cv-06074-JSC, 2016 WL 6216194, at *3 (N.D. Cal. Oct. 25, 2016). 9 Plaintiff contends that jurisdiction does not exist over the state law claims under the federal 10 enclave doctrine because (1) the Presidio is never referenced in the FAC; (2) some claims are 11 based on travel outside of the Presidio; and (3) Plaintiff is willing to stipulate in an amended 12 complaint that the claims arise solely from “acts, omissions, and/or events that occurred outside of 13 the Presidio.” See Mot. at 9–12. In contrast, Defendant contends that the Court has federal 14 subject matter jurisdiction because the majority of events that give rise to Plaintiff’s claims 15 occurred on the Presidio. See Dkt. No. 1 at ¶ 24. 16 Plaintiff alleges that he worked at various client locations including “San Anselmo, San 17 Francisco, Nicasio, and potentially other locations in California.” See FAC at ¶ 4. Defendant’s 18 notice of removal notes that Plaintiff spent about 97% of his time while employed at its location in 19 the Presidio. See Dkt No. 1–2 (“Parker Decl.”) ¶¶ 5-8. Significantly, however, Plaintiff does not 20 assert that any of the work performed or injuries sustained by the putative class occurred or arose 21 on the Presidio. Plaintiff never even mentions the Presidio in the FAC. See generally FAC. 22 Plaintiff simply alleges that a “substantial number of events, obligations and claims accrued or 23 occurred in [San Francisco] county.” See FAC at ¶ 3. Additionally, Plaintiff alleges that he and 24 the putative class members were not paid minimum wages or overtime for time spent driving 25 “between two client locations in a workday,” even “when they drove over 25 miles to a client’s 26 location,” or for all “hours they were clocked in during a defined workday or workweek.” See id. 27 at ¶ 8. 1 can maintain [his] claims on both state and federal grounds, [he] may ignore the federal question, 2 assert only state claims, and defeat removal.” Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 3 1996). Plaintiff chose not to base his state law claims on conduct that occurred on a federal 4 enclave. See generally FAC; see also Dkt. No. 17-4 (“Woodall Decl.”) Ex. B (indicating that 5 Plaintiff is willing to stipulate in an amended complaint that “the state law claims pleaded in this 6 Complaint arise solely from acts, omissions, and/or events that occurred outside of the Presidio or 7 any federal enclave”).3 Accordingly, remand is appropriate. See Segura v. Griffcon, Case No. 17- 8 cv-01209-AGK-ESX, 2017 WL 4271206, at *3 (C.D. Cal. Sept. 25, 2017) (finding that remand 9 was appropriate because plaintiff did not desire to assert claims for work performed on a federal 10 enclave and was willing to enter into a stipulation confirming as much); Schulz v. Crane Co., Case 11 No. 13-cv-02370-KJM, 2014 WL 280361, at *1-2 (E.D. Cal. Jan. 23, 2014) (granting remand after 12 plaintiffs filed an express waiver stating that they were waiving any claims against defendant that 13 arose out of events occurring on federal jobsites).4 14 The FAC alleges that “[Plaintiff] and other Class members generally worked at the 15 locations of [Defendant’s] clients,” but neither Plaintiff nor Defendant has provided any evidence 16 regarding whether putative class members did or did not work outside of the Presidio. FAC at 17 ¶ 12. Even if the Court accepts Defendant’s contention that Plaintiff spent 97% of his time in the 18 Presidio, it would be inappropriate for the Court to infer that a majority of instances that give rise 19 to the claims occurred on the Presidio for the putative class. This is especially so because Plaintiff 20 21 3 Although Defendant argues that Plaintiff is intentionally omitting pertinent facts to avoid federal jurisdiction, the Court is not convinced. See Opp. at 12. Plaintiff alleges that he and the putative 22 class (1) were not compensated or reimbursed for driving between client locations or to a client location; (2) were not reimbursed for using their cell phones for business reasons; (3) were not 23 paid “earned and accrued vacation pay;” (4) did not receive all wages due on termination or after resigning; and (5) did not receive compliant wage statements. Because these allegations are based 24 on travel or events occurring at client sites outside of the Presidio, federal enclave jurisdiction does not apply. 25 4 Defendant contends that Plaintiff’s proposed stipulation does not destroy federal enclave jurisdiction because he failed to “expressly and unequivocally disclaim[] ‘any’ ‘claims, damages, 26 or remedies’ that ‘arise by virtue of his’ employment at the Presidio or that are based on any ‘acts, omissions’ and/or events over which federal enclave jurisdiction exists.” See Opp. at 17. 27 However, the Court finds that Plaintiff’s stipulation sufficiently shows that he is not pursuing 1 basis the majority of his labor claims on the failure to pay wages or overtime for the time spent 2 || driving to and from the client sites, which he alleges in some instances involved a trip of over 25 3 || miles. This necessarily spans more than the Presidio area, increasing the state’s interest in this 4 case. See Ballard, 2016 WL 6216194, at *3. 5 Based on the materials submitted to the Court, Plaintiff has indicated that he does not 6 || intend to base his state claims on time worked at the Presidio client site, nor do the allegations 7 clearly implicate such conduct. As a result, the Court does not have jurisdiction over the 8 California state law claims based on the federal enclave doctrine. 9 C. Supplemental Jurisdiction 10 Section 1367(a) provides that: 11 [IJn any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction %L over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or 13 controversy under Article III of the United States Constitution. 14 28 U.S.C § 1367(a). However, as explained above, the Court lacks original jurisdiction under the 3 15 two bases identified by Defendant. Thus, the Court does not have supplemental jurisdiction over 16 || the state law claims. 2 17 || Iv. CONCLUSION 2 18 For the reasons set forth above, the Court hereby GRANTS Plaintiffs motion to remand. 19 The case is remanded to the San Francisco County Superior Court. The clerk is directed to close 20 || the case. 21 IT IS SO ORDERED. 22 || Dated: 8/11/2020 Alay 3 Mbt) HAYWOOD S. GILLIAM, JR. United States District Judge 25 26 27 28