Richard Reyes v. Dollar Tree Stores, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICHARD REYES, as an individual No. 15-55176
and on behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellee, 2:14-cv-04581-
R-VBK
v.
DOLLAR TREE STORES, INC., a OPINION
corporation,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted
March 5, 2015—Pasadena, California
Filed April 1, 2015
Before: Stephen Reinhardt, N. Randy Smith,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz
2 REYES V. DOLLAR TREE STORES
SUMMARY*
Class Action Fairness Act / Jurisdiction / Removal
The panel reversed the district court’s order remanding
the case to state court, and remanded with instructions for the
district court to exercise federal jurisdiction under the Class
Action Fairness Act.
Defendant Dollar Tree Stores removed the case from state
to federal court in 2012 invoking jurisdiction under CAFA,
and the district court granted plaintiff Richard Reyes’ request
to remand back to state court because the CAFA $5 million
amount-in-controversy requirement was not satisfied. In May
2014, a California superior court certified a broader class and
the amount-in-controversy for the class actually certified
exceeded $5 million. Dollar Tree again removed to federal
court, and the district court found removal untimely because
the order was based on the same complaint that was the
subject of the first removal.
The panel held that the state court’s class certification
order created a new occasion for removal, and the second
removal was permissible. The panel also held that the second
removal was timely because Dollar Tree removed within
thirty days of the class certification order. The panel
concluded that because the jurisdictional requirements of
CAFA were met, the district court had subject matter
jurisdiction.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
REYES V. DOLLAR TREE STORES 3
COUNSEL
Dominic J. Messiha (argued), Littler Mendelson, Los
Angeles, California; Lindbergh Porter, Tarun Mehta, Jeffrey
Mann, Littler Mendelson, San Francisco, California, for
Defendants-Appellants.
Kenneth H. Yoon (argued), Stephanie E. Yasuda, Law
Offices of Kenneth Y. Yoon, Los Angeles, California; Peter
M. Hart, Travis Hodgkins, Law Offices of Peter M. Hart, Los
Angeles, California, for Plaintiff-Appellee.
OPINION
HURWITZ, Circuit Judge:
Defendant Dollar Tree Stores, Inc. removed this case to
federal court in 2012, invoking jurisdiction under the Class
Action Fairness Act of 2005 (CAFA), 28 U.S.C. §§ 1332(d),
1453, 1711–1715. Plaintiff Richard Reyes moved to remand,
representing that the amended complaint defined the
proposed class narrowly and that the CAFA $5,000,000
amount-in-controversy requirement was therefore unsatisfied.
The district court agreed and remanded.
In May 2014, a California superior court certified a
broader class than the one described by Reyes during the first
removal. It is uncontested that the amount in controversy for
the class actually certified exceeds $5,000,000. Dollar Tree
again removed after the superior court entered the class
certification order, but the district court found removal
untimely because the order was based on the same complaint
that was the subject of the first removal.
4 REYES V. DOLLAR TREE STORES
The issue before us is whether the class certification order
created a new occasion for removal. We conclude that it did
and remand to the district court to exercise jurisdiction under
CAFA.
I.
Reyes filed this action in California state court in July
2012, alleging that Dollar Tree violated California Labor
Code § 226.7 by denying proper rest breaks to its employees.
Reyes filed an amended complaint in December 2012,
asserting a second cause of action for unlawful business
conduct in violation of California Business and Professions
Code § 17200.
Paragraph fourteen of the amended complaint sought
certification of a class of
all current and former non-exempt employees
of [Dollar Tree] who worked as assistant
managers in California who worked one or
more work periods in excess of three and one-
half (3.5) hours without receiving a paid ten
(10) minute break during which they were
relieved of all duties, from and after July 13,
2008.
The amended complaint alleged that the “amount in
controversy is less than $5,000,000.00 in the aggregate for the
putative Class.”
In December 2012, Dollar Tree removed the action to the
United States District Court for the Central District of
California, asserting CAFA jurisdiction. In support of the
REYES V. DOLLAR TREE STORES 5
removal, Dollar Tree noted that the amended complaint
alleged that plaintiffs “regularly” missed their breaks, and
“conservatively interpret[ed] ‘regularly’ to mean a rest period
was not ‘authorized or permitted’ in 65% of shifts that were
sufficiently long to trigger an obligation to authorize or
permit rest periods.” This assumption placed the amount in
controversy at $5,525,950.
Reyes moved to remand, arguing that the assumed 65%
violation rate was inaccurate. Reyes argued that Dollar Tree
had misread the amended complaint: “Defendant goes beyond
Plaintiff’s allegations to establish the amount in controversy
by including claims that Plaintiff has not included in his
[amended complaint]—namely, Plaintiff has limited his
allegations to shifts where ‘Class Members at times worked
without another manager at the same time.’” In support of
this position, Reyes cited paragraph twenty-eight of the
amended complaint, which alleges:
As a pattern and practice, Defendants
regularly required employees to work through
their rest breaks without proper compensation
in that Class Members at times worked
without another manager at the same time,
and per Defendant policy and practice, were
not authorized and permitted to take fully
compliant 10-minute rest breaks.
Reyes claimed that only one-third of shifts were worked
alone, and that the amount in controversy was therefore only
$2,866,772. The district court agreed, finding that the
amended complaint limited the putative class to employees
who worked alone, and that the amount in controversy
therefore did not reach the $5,000,000 CAFA threshold.
6 REYES V. DOLLAR TREE STORES
After remand, Reyes moved, consistent with his position
in the district court, for certification of a class of
all current and former non-exempt employees
of Defendants who worked as Assistant Store
Managers in California who worked without
another Assistant Store Manager on the clock
according to Defendant’s time records and
without another Store Manager scheduled to
work according to Defendant’s schedule
records, and who worked one or more work
periods in excess of three and one-half (3.5)
hours.
Before oral argument on the motion, however, the superior
court issued a tentative ruling concluding that a class of
assistant managers who worked alone would not be
ascertainable. Noting that California law permitted the court
to depart from the plaintiff’s proposed definition and redefine
the class, the tentative ruling instead proposed certifying a
class consisting of all assistant managers who did not receive
proper breaks, regardless of whether they worked alone. At
the class certification hearing, Dollar Tree argued that the
amended complaint had previously been construed by the
district court—at Reyes’s urging—to limit the class to
plaintiffs who worked alone, and noted that it was now “faced
with a class definition that’s really new.” On May 15, 2014,
the superior court nonetheless certified the class described in
the tentative ruling.
Dollar Tree filed a notice of removal on June 13, 2014,
arguing that the expanded class certified by the superior court
placed at least $5,000,000 in controversy. In granting
Reyes’s motion to remand, the district court held that the
REYES V. DOLLAR TREE STORES 7
second removal was untimely because it was based on the
same class definition—found in paragraph fourteen of the
amended complaint—that had been the subject of the first
removal.
The district court’s order granting the second remand
motion is the subject of this appeal. We have appellate
jurisdiction under 28 U.S.C. § 1453(c), and review the
remand order de novo. Ibarra v. Manheim Invs., Inc.,
775 F.3d 1193, 1196 (9th Cir. 2015).
II.
A defendant generally may remove a civil action if a
federal district court would have original jurisdiction over the
action. 28 U.S.C. § 1441(a). Dollar Tree asserted federal
jurisdiction under CAFA, which vests district courts with
jurisdiction over civil actions in which “the matter in
controversy exceeds the sum or value of $5,000,000,
exclusive of interest and costs,” the proposed class consists of
more than 100 members, and “any member of [the] class of
plaintiffs is a citizen of a State different from any defendant.”
Id. § 1332(d); see also Standard Fire Ins. Co. v. Knowles,
133 S. Ct. 1345, 1348 (2013). It is undisputed that the class
actually certified by the superior court satisfies these statutory
requirements. Reyes argues that the removal violated the
prohibition against successive removals and was untimely.
A.
A successive removal petition is permitted only upon a
“relevant change of circumstances”—that is, “when
subsequent pleadings or events reveal a new and different
ground for removal.” Kirkbride v. Cont’l Cas. Co., 933 F.2d
8 REYES V. DOLLAR TREE STORES
729, 732 (9th Cir. 1991). We have recognized such changes
in circumstances, for example, when an intervening change
of law gives rise to a new basis for subject-matter
jurisdiction. See Rea v. Michaels Stores Inc., 742 F.3d 1234,
1238 (9th Cir. 2014); Kirkbride, 933 F.2d at 732. Successive
petitions are also permitted when the pleadings are amended
to create federal subject-matter jurisdiction for the first time.
See O’Bryan v. Chandler, 496 F.2d 403, 409 (10th Cir. 1974)
(collecting authorities).
On the first remand motion, the district court construed
the amended complaint to cover only rest breaks during shifts
in which a class member worked alone and found that it
therefore did not meet the CAFA amount-in-controversy
threshold. In contrast, the superior court certified a class of
employees who worked shifts without proper rest breaks,
regardless of whether they worked alone. In doing so, the
state court expressly acknowledged that it had diverged from
the narrower definition of the class that the district court
settled upon, and for which the plaintiff sought certification
after remand. The superior court’s class certification order
thus altered the circumstances bearing on jurisdiction by
expanding the amount in controversy.
For removal purposes, the certification order is
functionally indistinguishable from an order permitting the
amendment of pleadings to alter the class definition, creating
CAFA jurisdiction for the first time. When pleadings are
amended so as to establish federal jurisdiction where none
existed before, a successive removal petition is plainly
proper. See O’Bryan, 496 F.2d at 409. No different
conclusion is warranted simply because the result was
obtained through a class certification order, rather than an
order permitting amendment of the complaint.
REYES V. DOLLAR TREE STORES 9
Reyes argues that the class certification order did not
create a “new and different ground for removal” because the
proposed class definition in the amended complaint never
changed. Of course, defendants are not entitled to more than
one bite at the apple, but the superior court’s certification
order substituted a new apple. In its first remand order, the
district court accepted Reyes’s narrow construction of the
amended complaint. When the superior court later certified
a broader class, it increased the amount in controversy,
effectively amending the complaint. See Rea, 742 F.3d at
1238 (finding that a Supreme Court decision invalidating the
damages waiver in the complaint created a new ground for
removal, despite a prior removal attempt on the basis of the
same complaint); Kirkbride, 933 F.2d at 731–32 (permitting
a successive removal because intervening legislation
established jurisdiction over a complaint that was previously
held not removable). Because the first remand was on
“grounds that subsequently became incorrect,” the successive
removal was permissible. Rea, 742 F.3d at 1238.
B.
Our second conclusion—that removal was timely—
follows logically from the first. The removal statute provides
for two thirty-day windows during which a case can be
removed: (1) during the first thirty days after the defendant
receives the initial pleading, or (2) during the first thirty days
after the defendant receives “an amended pleading, motion,
order or other paper from which it may first be ascertained
that the case is one which is or has become removable.”
28 U.S.C. § 1446(b) (emphasis added); see also Harris v.
Bankers Life & Cas. Co., 425 F.3d 689, 692 (9th Cir. 2005).
The district court found that the time to remove was
conclusively triggered when the amended complaint was first
10 REYES V. DOLLAR TREE STORES
filed. But this ignored the significance of the class
certification order, which created a new amount in
controversy not presented in the amended complaint as
construed by the district court on the first remand motion.
See Sullivan v. Conway, 157 F.3d 1092, 1094 (7th Cir. 1998)
(noting that the time begins to run upon occurrence of an
event “that discloses that the case is or has become
removable”). Because Dollar Tree removed within thirty
days of the class certification order, the removal was timely.
See Rea, 742 F.3d at 1237–38; Roth v. CHA Hollywood Med.
Ctr., L.P., 720 F.3d 1121, 1125–26 (9th Cir. 2013).
We are unpersuaded by Reyes’s claim that the removal
was rendered untimely by either the superior court’s tentative
ruling on the class certification motion or Reyes’s reply brief
in support of class certification. The tentative ruling had no
jurisdictional effect precisely because it was tentative. See
Sullivan, 157 F.3d at 1094 (declining to start the clock before
a motion to amend was granted because, “[u]ntil the state
judge granted the motion to amend, there was no basis for
removal”). And although a footnote in the reply brief, taken
out of context, might be read to signal Reyes’s belief that the
jurisdictional amount is satisfied,1 it appears near the end of
a brief that repeatedly argues for certification of precisely the
narrow class that had already been determined not to satisfy
the jurisdictional threshold. The footnote did not provide a
sufficient basis for ascertaining removability. See Kuxhausen
v. BMW Fin. Servs. NA, LLC, 707 F.3d 1136, 1141 (9th Cir.
1
The footnote states that “Plaintiff believes that . . . 969,000 shifts
would be eligible for a rest break premium.” If almost one million shifts
were eligible for an additional hour of wages, the amount in controversy
would be substantially greater than $5,000,000.
REYES V. DOLLAR TREE STORES 11
2013); Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876,
886 (9th Cir. 2010).
III.
Because Dollar Tree offers an “unchallenged, plausible
assertion” that the jurisdictional requirements of CAFA are
met, the district court has subject-matter jurisdiction. Ibarra,
775 F.3d at 1197–98; see also Dart Cherokee Basin
Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014) (citing
28 U.S.C. § 1446(a)). We therefore REVERSE the district
court’s order remanding this case to state court, and
REMAND with instructions for the district court to exercise
jurisdiction.