Donovan Lucas v. Daiichi Sankyo Company, Inc.

Filing 1

NOTICE OF REMOVAL (no process) (with jury demand) from Alameda County Superior Court. Their case number is RG10550221. (Filing fee $350 receipt number 34611056533). Filed by Daiichi Sankyo Company, Inc. (vlk, COURT STAFF) (Filed on 2/18/2011) Modified on 2/25/2011 (cjl, COURT STAFF). (Additional attachment(s) added on 2/28/2011: # 1 Civil Cover Sheet) (cjl, COURT STAFF). [Transferred from California Northern on 6/8/2011.]

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TABLE OF CONTENTS

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Page
I.
II.

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III.
IV.
V.

THE REMOVAL IS TIMELY ........................................................................................... 1
THIS COURT HAS ORIGINAL SUBJECT MATTER JURISDICTION ........................ 2
A.
Diversity Exists Between The Parties ..................................................................... 2
1.
Plaintiff and the Members of the Putative Class Are California
Citizens........................................................................................................ 3
2.
Defendant Is Not a Citizen of California .................................................... 3
B.
The Amount Plaintiff Places in Controversy Exceeds $5 Million.......................... 4
1.
Plaintiff’s Meal Period Claim Puts Into Controversy More than $3.3
Million......................................................................................................... 6
2.
Plaintiff’s Overtime Claim Puts Intro Controversy More than $1
Million......................................................................................................... 7
3.
Plaintiff’s Wage Statement Claim Puts Into Controversy More than
$650,000...................................................................................................... 9
4.
Plaintiff’s Waiting Time Penalty Claims Puts Into Controversy
Nearly $500,000........................................................................................ 10
5.
Plaintiff’s Claim for Attorney’s Fees Puts Into Controversy an
Additional $1.3 Million............................................................................. 11
6.
The Amount in Controversy Is Satisfied for Diversity Jurisdiction
Purposes .................................................................................................... 11
VENUE ............................................................................................................................. 12
NOTICE ............................................................................................................................ 12
CONCLUSION ................................................................................................................. 12

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

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1

TABLE OF AUTHORITIES

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Page

3

Cases

4

Behrazfar v. Unisys Corp.,
687 F. Supp. 2d 999 (C.D. Cal. 2009) ..................................................................................... 5, 7

5
6

City of Clarksdale v. Bellsouth Communications, Inc.
428 F.3d 206 (5th Cir. 2005)........................................................................................................ 1

7

Guglielmino v. McKee Foods Corp.
506 F.3d 696 (9th Cir. 2007)...................................................................................................... 10

8
9

Hertz Corp. v. Friend
559 U.S. __, 130 S. Ct. 1181, 175 L. Ed. 2d 1029 (2010) ........................................................... 3

10

HMG Ben. Services, LLC v. Fringe Ins. Benefits, Inc.
No. 07cv1704 DMS (LSP), 2007 WL 3333115 (S.D. Cal. Nov. 7, 2007) .................................. 1

11
12

In re Quintus Securities Litigation
148 F. Supp. 2d 967 (N.D. Cal. 2001) ....................................................................................... 11

13

Jimena v. UBS AG Bank, Inc.
No. 1:07-CV-00367 OWW TAG, 2007 WL 1687045 (E.D. Cal. June 7, 2007)......................... 1

14
15

Johnson v. U.S. Vision, Inc., et al.
No. 10-CV-0690-BEN-CAB, 2010 WL 3154847 (S.D. Cal. Aug. 9, 2010) ............................... 6

16

Kenneth Rothschild Trust v. Morgan Stanley Dean Witter
199 F. Supp. 2d 993 (C.D. Cal. 2002) ......................................................................................... 4

17
18

Korn v. Polo Ralph Lauren Corp.
536 F. Supp. 2d 1199 (E.D. Cal 2008)..................................................................................... 4, 5

19

Lowdermilk v. U.S. Bank Nat’l Assoc.,
479 F.3d 994 (9th Cir. 2007)........................................................................................................ 4

20
21

Muniz v. Pilot Travel Centers LLC, No. CIV.S-07-0325 FCD EFB, 2007 WL 1302504 (E.D. Cal.
May 1, 2007) ................................................................................................................................ 6

22

Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc.
526 U.S. 344, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999) .............................................................. 2

23
24

Murphy v. Kenneth Cole Productions
40 Cal. 4th 1094 (2007) ............................................................................................................... 6

25

Newcombe v. Adolf Coors Co.
157 F.3d 686 (9th Cir. 1998)........................................................................................................ 3

26
27

Rippee v. Boston Market Corp.
408 F. Supp. 2d 982 (S.D. Cal. 2005).......................................................................................... 4

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

ii

1

TABLE OF AUTHORITIES
(continued)

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3

Page
Roylance v. ADT Sec. Services, Inc.
No. C 08-1101 JF (RS), 2008 WL 2168690 (N.D. Cal. May 22, 2008)...................................... 1

4
5

Sanchez v. Wal-Mart Stores, Inc.
No. Civ. S-06-cv-2573 DFL KJM, 2007 WL 1345706 (E.D. Cal. May 8, 2007) ..................... 10

6

Scherer v. Equitable Life Assurance Society of the United States
347 F.3d 394 (2d Cir. 2003)......................................................................................................... 4

7
8

Singer v. State Farm Mut. Auto. Ins. Co.
116 F.3d 373 (9th Cir. 1997)........................................................................................................ 4

9

Villareal v. Demarco
No. CV 09-0452 PA (VBKx), 2009 WL 279111 at *2 (C.D. Cal. Feb. 5, 2009)........................ 1

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Statutes
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28 U.S.C. § 1332 .............................................................................................................................. 1
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28 U.S.C. § 1332(d)(2)..................................................................................................................... 2
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28 U.S.C. § 1332(d)(2)(A) ............................................................................................................... 2
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28 U.S.C. § 1332(d)(6)................................................................................................................. 3, 4
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28 U.S.C. § 1441 ........................................................................................................................ 1, 11
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28 U.S.C. § 1441(a) ......................................................................................................................... 3
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28 U.S.C. § 1446 .................................................................................................................... 1, 2, 11
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28 U.S.C. § 1446(b) ......................................................................................................................... 1
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28 U.S.C. § 1453 .......................................................................................................................... 1, 2
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Business & Professions Code § 17200 ............................................................................................ 5
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Cal. Civ. Proc. Code § 415.40.......................................................................................................... 1
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Labor Code § 203....................................................................................................................... 5, 10
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Labor Code § 226............................................................................................................... 5, 8, 9, 10
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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

iii

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TO THE HONORABLE JUDGES OF THE UNITED STATES DISTRICT COURT FOR

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THE NORTHERN DISTRICT OF CALIFORNIA:

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PLEASE TAKE NOTICE THAT, pursuant to 28 U.S.C. §§ 1332, 1441, 1446 and 1453,

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Defendant DAIICHI SANKYO, INC. (“Defendant”)1 hereby removes the above-entitled action

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from the Superior Court of the State of California, in and for the County of Alameda, to the

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United States District Court for the Northern District of California. Removal is based on the

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following grounds:

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I.

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THE REMOVAL IS TIMELY
This Notice of Removal is timely filed, pursuant to 28 U.S.C. § 1446(b), because it is filed

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within thirty days from January 20, 2010, the effective date of service of the original Complaint

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and Summons, which was sent to Defendant via certified mail on January 10, 2010.

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When calculating the deadline to remove, the effective date of service is determined by

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state law. City of Clarksdale v. Bellsouth Communications, Inc., 428 F.3d 206, 210-11 (5th Cir.

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2005) (holding that “the term ‘service of process’ is defined by state law” when calculating the

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deadline for an out-of-state corporation to timely file for removal). When serving a complaint

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and summons on an out-of-state corporation via certified first class mail (as Plaintiff has done

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here), California law provides that service is deemed made on the out-of-state defendant ten days

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after mailing. Cal. Civ. Proc. Code § 415.40; Villareal v. Demarco, No. CV 09-0452 PA

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(VBKx), 2009 WL 279111 at *2 (C.D. Cal. Feb. 5, 2009) (holding that the thirty-day period to

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remove begins to run “on the tenth day after mailing” pursuant to California Code of Civil

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Procedure § 415.40); HMG Ben. Services, LLC v. Fringe Ins. Benefits, Inc., No. 07cv1704 DMS

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(LSP), 2007 WL 3333115 at *2-*3 (S.D. Cal. Nov. 7, 2007) (same); Jimena v. UBS AG Bank,

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Inc., No. 1:07-CV-00367 OWW TAG, 2007 WL 1687045 at *5 (E.D. Cal. June 7, 2007) (same);

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Roylance v. ADT Sec. Services, Inc., No. C 08-1101 JF (RS), 2008 WL 2168690 at *3 (N.D. Cal.

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May 22, 2008) (holding that, for removal purposes, service was complete on the tenth day after

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mailing, even if defendant received the summons and complaint sooner); see also Murphy Bros.,

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1

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

Plaintiff amended his complaint on January 14, 2011 to replace the erroneous defendant
“Daiichi Sankyo Company, Inc.” with “Daiichi Sankyo, Inc.” Ex. C.
DB1/66559893.4

NOTICE OF REMOVAL

1

Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 347-48, 119 S.Ct. 1322, 143 L.Ed.2d 448

2

(1999) (holding that mere receipt of complaint unattended by formal service does not start the 30-

3

day deadline to remove). Plaintiff mailed the Complaint and Summons on January 10, 2011,

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which results in an effective date of service of January 20, 2011. Because this Notice of Removal

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is filed within thirty days of the effective date of service of the Complaint and Summons, it is

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timely under 28 U.S.C. §§ 1446(b).

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No previous Notice of Removal has been filed or made with this Court for the relief

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sought herein.

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II.

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THIS COURT HAS ORIGINAL SUBJECT MATTER JURISDICTION
This Court has original subject matter jurisdiction based on diversity of citizenship under

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CAFA, because Plaintiff is diverse from Defendant and the amount in controversy exceeds $5

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million. 28 U.S.C. § 1332(d)(2). Plaintiff brings this action as a class action, and alleges that he

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is a citizen of California. Ex. A, Complaint ¶ 7. Defendant is a citizen of New Jersey. Ex. A,

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Complaint ¶ 8; see also Ex. B, Declaration of Craig Mangean (“Mangean Decl.”) ¶ 3. In

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addition, Plaintiff’s class claims, when aggregated for potential class members, puts into

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controversy an amount in excess of $5 million.2

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Removal under diversity jurisdiction is therefore proper pursuant to 28 U.S.C. §§ 1446

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and 1453.

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A.

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The parties meet the diversity requirements of CAFA because one or more Plaintiffs,

Diversity Exists Between The Parties

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including members of the putative class, are citizens of different states from Defendant. 28

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U.S.C. § 1332(d)(2)(A) (providing that diversity under is met under this subsection where “any

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member of a class of plaintiffs is a citizen of a State different from any defendant”). Diversity

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2

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Defendant's estimates of the amount in controversy are based on the allegations in the
Complaint, which are presumed to be true for the purposes of this removal only, and which
Defendant expressly denies. Defendant submits that all of Plaintiff's claims are meritless as
supported by the recent holding in Christopher v. SmithKline Beecham Corp., Case No. 10-15257
(9th Cir. Feb. 14, 2011), which holds that pharmaceutical representatives, like those in this action,
are properly classified as exempt.

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

2

NOTICE OF REMOVAL

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therefore exists between the parties under CAFA.

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3

1.

Plaintiff and the Members of the Putative Class Are California Citizens

At the time Plaintiff filed this action, Plaintiff alleged that he is a citizen of California.

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Ex. A, Complaint ¶ 7. In addition, Defendant’s records reflect that Plaintiff’s last known address

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was in California. Ex. B, Mangean Decl. ¶ 2. For diversity purposes, he is therefore considered a

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citizen of California.

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Members of the putative class are also alleged to be citizens of California, because

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Plaintiff purports to represent a putative class of all persons who are employed or have been

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employed by Defendant in California. Ex. A, Complaint ¶ 21.

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2.

Defendant Is Not a Citizen of California

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For diversity determination purposes, Defendant is diverse from Plaintiff and putative

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members because Defendant is not a citizen of California, and Plaintiff admits that Defendant

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resides in the State of New Jersey. Ex. A, Complaint ¶ 8; Ex. B, Mangean Decl. ¶ 3.

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Defendant is Deleware corporation with its principal place of business located in New

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Jersey. Ex. A, Complaint, ¶ 8; Ex. B, Mangean Decl. ¶ 3. Defendant maintains its headquarters in

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New Jersey, and their officers direct, control, and coordinate its business activities from New

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Jersey. Ex. B, Mangean Decl. ¶ 3 Accordingly, New Jersey is the “nerve center” for diversity

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purposes, and Defendant is not now, and was not at the time this action was instituted, a citizen of

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the State of California. See Hertz Corp. v. Friend, 559 U.S. __, 130 S. Ct. 1181, 1186, 1192, 175

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L. Ed. 2d 1029 (2010) (a corporation’s principal place of business for diversity purposes is its

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“nerve center” -- the location where the corporation’s officers direct, control, and coordinate the

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corporation’s activities).

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Although Plaintiff has named 50 fictitiously named “Doe” defendants, the citizenship of

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these “Doe” defendants is disregarded for purposes of removal. 28 U.S.C. § 1441(a); Newcombe

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v. Adolf Coors Co., 157 F.3d 686, 690-91 (9th Cir. 1998) (for removal purposes, the citizenship

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of defendants sued under fictitious names shall be disregarded).

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

Accordingly, Defendant is not a resident of California for diversity jurisdiction purposes,
and is therefore diverse from Plaintiff and the putative class he purports to represent.
DB1/66559893.4

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NOTICE OF REMOVAL

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B.

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Pursuant to CAFA, the amount in controversy component of diversity jurisdiction is

The Amount Plaintiff Places in Controversy Exceeds $5 Million

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satisfied when the aggregated claims of the individual members in a class action exceed the sum

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or value of $5 million. See 28 U.S.C. § 1332(d)(6). Furthermore, Congress intended for federal

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jurisdiction to be appropriate under CAFA “if the value of the matter in litigation exceeds

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$5,000,000 either from the viewpoint of the plaintiff or the viewpoint of the defendant, and

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regardless of the type of relief sought (e.g., damages, injunctive relief, or declaratory relief.).”

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Senate Judiciary Report, S. REP. 109-14, at 42.

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The amount in controversy is determined at the time of removal and is to be decided based

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on the allegations in the operative pleading. Lowdermilk v. U.S. Bank Nat’l Assoc., 479 F.3d 994,

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994 (9th Cir. 2007). Where a plaintiff alleges an amount in controversy greater than the

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jurisdictional amount ($5 million), the amount in controversy is presumptively satisfied. Id. at

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998. Where, as here, a plaintiff does not expressly plead a specific amount of damages, a

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defendant need only make a factual showing that the amount in controversy exceeds $5 million.

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Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997). “Said burden is not

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‘daunting,’ as courts recognize that under this standard, a removing defendant is not obligated to

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‘research, state, and prove the plaintiff's claims for damages.’” Korn v. Polo Ralph Lauren Corp.,

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536 F. Supp. 2d 1199, 1204-05 (E.D. Cal 2008).

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In measuring the amount in controversy, the court must assume that the allegations of the

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complaint are true and that a jury will return a verdict for the plaintiff on all claims made in the

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complaint. Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993, 1001

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(C.D. Cal. 2002). The ultimate inquiry is what amount is put “in controversy” by the plaintiff’s

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complaint, not what a defendant will actually owe. See Rippee v. Boston Market Corp., 408 F.

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Supp. 2d 982, 986 (S.D. Cal. 2005); Scherer v. Equitable Life Assurance Society of the United

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States, 347 F.3d 394, 397-99 (2d Cir. 2003) (recognizing that the ultimate or provable amount of

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damages is not what is considered when determining the amount in controversy; rather, it is the

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amount put in controversy by the plaintiff’s complaint).

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

Although Defendant denies Plaintiff’s allegations and denies that he or the class that he
DB1/66559893.4

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NOTICE OF REMOVAL

1

purports to represent are entitled to any relief, Plaintiff’s allegations and prayer for relief put into

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controversy an amount that exceeds the $5 million threshold when aggregating the claims of the

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potential class members as set forth in 28 U.S.C. § 1332(d)(6).

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A removing party seeking to invoke CAFA jurisdiction may use estimates and

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assumptions when they are relatively conservative and based on evidence. Behrazfar v. Unisys

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Corp., 687 F. Supp. 2d 999, 1004 (C.D. Cal. 2009). Such estimates may be calculated by

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presenting evidence of the number of putative class members or class claims. Korn v. Polo Ralph

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Lauren, 536 F. Supp. 2d 1199, 1206 (E.D. Cal. 2008) (plaintiff’s motion for remand denied). The

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number of putative class claims can then be multiplied by the damages alleged per claim to

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determine the amount in controversy. Id. In Korn, for example, plaintiffs brought a class action

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alleging violations of California Civil Code section 1747.08, which carries a maximum civil

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penalty of $1,000 per claim. To establish the $5 million amount in controversy for CAFA

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jurisdiction purposes, the defendant offered evidence that more than 5,000 potential claims (credit

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card transactions) took place during the class period. The court found this evidence sufficient to

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prove, by a preponderance of the evidence, that the amount in controversy under CAFA was met,

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by multiplying the number of claims by the statutory penalty. Id. In addressing the defendant’s

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evidentiary burden, the court held, “defendant need only demonstrate that there are at least 5,001

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putative class claims.” Id. Because the 5,001 putative class claims multiplied by the $1,000

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statutory penalty resulted in an amount in controversy greater than $5 million, the district court

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found the amount in controversy satisfied, and denied plaintiff’s motion to remand.

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Here, Plaintiff seeks to represent a putative class of all persons who are employed or have

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been employed as “Pharmaceutical Representatives” by Defendant in the State of California and

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“for at least four (4) years prior to the filing of this action” (which was filed on December 7,

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2010). Ex. A, Compl. ¶ 21. Plaintiff’s Complaint alleges five causes of action under the

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California Labor Code and Business & Professions Code: failure to pay overtime under the

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California Labor Code, violation of Business & Professions Code § 17200 for failure to provide

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meal periods, violation of Business & Professions Code § 17200 for failure to provide overtime,

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failure to provide accurate wage statements under Labor Code § 226, and waiting time penalties

M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

5

NOTICE OF REMOVAL

1

under Labor Code § 203. These causes of action are premised on theory that Pharmaceutical

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Representatives are misclassified as exempt from overtime requirements. Ex. A, Complaint ¶ 12.

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During the period between December 7, 2006 (which is four years prior to the filing of the

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complaint) through February 3, 2011 (“covered period”), there were at least 214 employees who

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meet this definition. Mangean Decl. ¶ 4. During the period between December 7, 2006 and

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February 3, 2011, these 214 employees worked a cumulative total of approximately 27,524 work

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weeks in a covered position. Id. ¶ 5. The average annual base salary for these employees was

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approximately $66,097, which does not include bonuses or other incentive compensation. Id. ¶ 6.

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In addition, in the three-year period prior to the filing of the complaint, approximately 68

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employees left their employment with Defendant. Id. ¶ 7. Applying these facts to the allegations

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in the Complaint, demonstrates that the amount in controversy exceeds $5 million.

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1.

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Plaintiff’s Meal Period Claim Puts Into Controversy More than $3.3
Million

Plaintiff’s Second Cause of Action alleges that Defendant failed to provide putative class
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members with meal breaks in violation of California law. Ex. A, ¶¶ 14, 35-44. Taking Plaintiff’s
15
allegations to be true – that Plaintiff and putative class members were not provided with meal
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periods – then the amount in controversy arising from Plaintiff’s meal period claim is more than
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$3.3 million.
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If, as Plaintiff contends, putative class members were not provided with meal and rest
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breaks, they would be entitled to one hour of premium pay for each missed meal period per day at
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the employee’s regular hourly rate. Murphy v. Kenneth Cole Productions, 40 Cal. 4th 1094
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(2007). Class members typically work five or more days a week, and work shifts longer than five
22
hours. Mangean Decl. ¶ 9. Thus, taking as true Plaintiff’s claim that Defendant did not provide
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meal breaks (as Plaintiff’s Second Cause of Action alleges), putative class members would be
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eligible for one hour of premium pay for each day worked. See Johnson v. U.S. Vision, Inc., et
25
al., No. 10-CV-0690-BEN-CAB, 2010 WL 3154847 at *3-*4 (S.D. Cal. Aug. 9, 2010) (where
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complaint alleges that all class members were not provided with meal breaks, removing party
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may estimate meal period violations occurred on all eligible days worked); Muniz v. Pilot Travel
28
M ORGAN , L EWIS &
B OCKIUS LLP

ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

6

NOTICE OF REMOVAL

1

Centers LLC, No. CIV.S-07-0325 FCD EFB, 2007 WL 1302504 (E.D. Cal. May 1, 2007) (where

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plaintiff does not allege facts specific to the circumstances of allegedly missed meal and/or rest

3

periods, defendant may use 100% violation rate in calculating the amount in controversy).

4

During the class period, the 214 members of the putative class worked approximately

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27,524 work weeks combined. Mangean Decl. ¶ 5. These putative class members would be

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eligible for five meal period premiums per work week, or approximately 137,620 meal period

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violations during the class period (5 x 27,524 = 137,620). The base average hourly rate (i.e.,

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without including incentive compensation) for these putative class members is $31.78 per hour

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(calculated by taking the average annual base compensation for putative class members, before

10

inclusion of incentive compensation, and dividing by 2080). Id. at ¶ 6. One meal break premium

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for each work day during class period results equals $4,373,564, calculated as follows:

12

137,620 workdays x 1 meal premium x $31.78 base avg rate = $4,373,564

13

Class members do not actually work 52 weeks out of a 52 week year, but take time off for

14

vacations, sick time, holidays, and other time off. When accounting for this time off, putative

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class members worked at least 40 weeks out of a 52 week year. Mangean Decl. ¶ 10. Using 40

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actual workweeks in a 52-week year has been found to be a “good faith” estimate of the actual

17

number of days employees worked when calculating the amount in controversy under CAFA.

18

Behrazfar v. Unisys Corp., 687 F. Supp. 2d 999, 1004 (C.D. Cal. 2009) (calculating amount in

19

controversy based on 40 workweeks per year was “relatively conservative, made in good faith,

20

and based on evidence”). When accounting for this time off, the amount in controversy for meal

21

break premiums is $3,364,280:

22

$4,373,564 meal premiums x 40/52 = $3,364,280

23

Accordingly, when multiplying the actual number of putative class members times their

24

potential recovery, and accounting for days not actually worked, results in an amount in

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controversy of more than $3.3 million.

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2.

Plaintiff’s Overtime Claim Puts Intro Controversy More than $1 Million

27

Plaintiff’s First Cause of Action alleges that Defendant systematically failed to pay

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overtime compensation to putative class members in violation of California law. Ex. A, ¶¶ 31-34.

M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

7

NOTICE OF REMOVAL

1

Plaintiff alleges that he and putative class members “were forced to work on a regular and

2

consistent basis” more than 40 hours per week and/or 8 hours per day. Ex. A, ¶ 33.

3

Taking these allegations to be true, then the amount in controversy arising from Plaintiff’s

4

overtime claim is over $1 million, and as much as $5 million. If, as Plaintiff contends, putative

5

class members regularly worked more than 40 hours per week and/or 8 hours per day, then they

6

would arguably be entitled to at least 1 hour of overtime pay for each work week (12 minutes per

7

day). Multiplying the 27,524 total number of class workweeks by 1 hour of unpaid overtime and

8

by the average overtime rate of $47.67 (which is 1.5 times the regular, pre-incentive rate of

9

$31.78), results in an amount in controversy of $1,312,069, calculated as follows:

10

27,524 workweeks x 1 hr OT per week x $47.67/hr OT rate = $1,312,069

11

When accounting for a 40 workweek year, the amount in controversy would be

12

$1,009,284 ($1,312,069 x 40/52 = $1,009,284). If one estimates 2 overtime hours per week (24

13

minutes per day), this amount increases to place over $2,018,568 at issue. At 3 overtime hours

14

per week (36 minutes per day), the amount at issue increases to at least $3,027,852. At just 5

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overtime hours per week, the amount at issue on this claim alone without penalties or fees

16

exceeds $5 million:

17
18

OT Hours Per
Week

Amount In
Controversy

19

1

$1,009,284

20

2

$2,018,568

21

3

$3,027,852

22

4

$4,037,136

5

$5,046,420

23
24
25
26

Accordingly, when multiplying the number of putative class members times their potential
overtime recovery, and accounting for days not actually worked, results in an amount in
controversy of over $1 million.

27
28

M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

8

NOTICE OF REMOVAL

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3.

Plaintiff’s Wage Statement Claim Puts Into Controversy More than
$650,000

In this Fourth Cause of Action, Plaintiff alleges that Defendant failed to comply with
Labor Code § 226 “on each and every wage statement that should have been provided to Plaintiff
and members of the proposed class.” Ex. A, Complaint, ¶ 57. He further alleges that Plaintiff
and the class he purports to represent are thus entitled to damages as provided for in Labor Code
section 226. Ex. A, Complaint, ¶ 59.
Labor Code section 226(e) provides that an employee is entitled to recover the greater of
all actual damages or $50 for the initial violation and $100 for each subsequent violation, up to a
maximum of $4,000, plus costs and reasonable attorneys’ fees, if an employer knowingly and
intentionally fails to provide an accurate, itemized wage statement. Cal. Labor Code § 226(e).
Such an award may be granted for each wage statement issued that fails to comply with section
226’s requirements. Thus, according to Plaintiff’s theory, he would be entitled to no less than
$50 for the first violation, plus $100 for each subsequent violation, for every pay period during
the class period where he allegedly did not receive an accurate statement of wages, subject to a
maximum award of $4,000. This maximum award of $4,000 would be reached if he (or
employees similarly situated) received 41 or more allegedly inaccurate wage statements ($50 first
alleged violation + 40 alleged subsequent violations x $100 = $4,050, in excess of the statutory
maximum); or, in other words, was employed for at least 41 pay periods. In addition, under
Plaintiff’s alleged claim, each member of the putative class that he purports to represent would
also be entitled to such an award, up to a maximum award of $4,000 for each putative class
member.
Defendant pays Pharmaceutical Representatives on a bi-weekly basis, for a total of 26 pay
periods per year. Ex. B, Mangean Decl., ¶ 8. As alleged in the Complaint, the class period began

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

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NOTICE OF REMOVAL

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four years prior to the filing of the original action, or December 7, 2006.3 Between December 7,

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2006 and February 3, 2011, 164 current or former Pharmaceutical Representatives were

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employed by Defendant for 41 or more pay periods within the alleged applicable statute of

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limitations period. Ex. B, Mangean Decl., ¶ 6. These 164 putative class members would

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therefore be eligible for the statutory maximum of $4,000. Cal. Lab. Code § 226(e). Thus, the

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amount in controversy for these employees alone is $656,000 (164 class members x $4,000

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maximum award = $656,000). This figure does not include those employee who worked less

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than 41 pay periods, which would increase the amount in controversy further.

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4.

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Plaintiff’s Waiting Time Penalty Claims Puts Into Controversy Nearly
$500,000

In Plaintiff’s fifth cause of action for waiting time penalties pursuant to Labor Code § 203,
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Plaintiff alleges that Defendant failed to pay Plaintiff and members of the putative class all earned
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and unpaid wages upon termination Ex. A, Complaint ¶¶ 60-63. He seeks waiting time penalties
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equal to their daily wage for 30 days. Id. ¶ 62 and Prayer for Relief ¶ 4. This claims puts into
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controversy nearly $500,000.
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During the three-year period before December 7, 2010 (the date the complaint was filed),
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68 putative class members terminated from Defendant. Ex. B, DSI Decl. ¶ 4. Of these, 65
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terminated more than 30 days before December 7, 2010, and would be eligible for the maximum
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30 days waiting time penalty. At the average equivalent hourly rate for members of the putative
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class, the amount in controversy for Plaintiff’s waiting time penalty claim is at least $495,768 (65
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terminated x 30 days x 8 hrs/day x $31.78/hr = $495,768). The waiting time penalties for the
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three employees who terminated less than 30 days before the filing of the complaint would
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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

3

Defendant contends that a one-year limitations period applies to this claim. As pleaded,
however, the Complaint alleges a four-year limitations period. Using a one-year limitations
period, the amount in controversy is still over $300,000. During the period between December 7,
2009 and February 3, 2011, there were 123 putative class members who were employed for 26 or
more pay periods. Assuming each were entitled to 1 initial violation penalty of $50 and 25
subsequent violation penalties of $100, the amount in controversy over a one-year limitations
period is $313,650 ([123 x 1 x 50] + [123 x 25 x 100] = $313,650.) The actual amount is higher,
because the majority of these employees were employed for more than 26 pay periods, thereby
increasing the amount in controversy further.

DB1/66559893.4

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NOTICE OF REMOVAL

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increase the amount in controversy further.
Although Defendant disputes the merits of Plaintiff’s waiting time penalty claims, based
on these figures, this claims puts at least an additional $495,768 into controversy.

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5.

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Plaintiff’s Claim for Attorney’s Fees Puts Into Controversy an Additional
$1.3 Million

The Complaint also seeks attorneys’ fees, which are properly included in determining the
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amount in controversy. Ex. A, Complaint (Prayer for Relief) ¶ 9; Guglielmino v. McKee Foods
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Corp., 506 F.3d 696, 698 (9th Cir. 2007); Sanchez v. Wal-Mart Stores, Inc., No. Civ. S-06-cv8
2573 DFL KJM, 2007 WL 1345706, *2 (E.D. Cal. May 8, 2007) (“Attorney’s fees, if authorized
9
by statute or contract, are also part of the calculation”).
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Although Defendant denies Plaintiff’s claim for attorney’s fees, for purposes of removal,
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the Ninth Circuit uses a benchmark rate of 25% of the potential damages as the amount of
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attorney’s fees. In re Quintus Securities Litigation, 148 F. Supp. 2d 967, 973 (N.D. Cal. 2001)
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(benchmark for attorneys’ fees is 25% of the common fund). Given the $5,525,332 minimum
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amount in controversy discussed above ($3,364,280 (meal period allegations) + $1,009,284 (OT
15
allegations) + $656,000 (wage statement allegations) + $495,768 (waiting time penalty
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allegations) = $5,525,332), an award of such attorney’s fees would increase the amount in
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controversy by $1,381,333, for a total of $6,906,665. Thus, adding these attorney’s fees further
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increases Plaintiff’s alleged amount in controversy well in excess of $5 million.
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6.

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The Amount in Controversy Is Satisfied for Diversity Jurisdiction Purposes

Thus, although Defendant denies Plaintiff’s allegations and denies that he or the class that
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he purports to represent are entitled any relief, based on Plaintiff’s allegations, theories, and
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prayer for relief, Plaintiff’s Complaint places in controversy at least $6,906,665, an amount that
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far exceeds the $5 million threshold set forth under CAFA.
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Because there is diversity between the parties and the amount in controversy threshold has
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been satisfied in this Action, this Court has original subject matter jurisdiction to hear this
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dispute.
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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66559893.4

11

NOTICE OF REMOVAL

EXHIBIT A

EXHIBIT B

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MORGAN, LEWIS & BOCKIUS LLP
BARBARA J. MILLER, State Bar No. 167223
JENNIFER WHITE, State Bar No. 166504
MARIA GUTIERREZ, State Bar No. 209995
JOHN HAYASHI, State Bar No. 211077
5 Park Plaza, Suite 1750
Irvine, CA 92614
Tel: [phone]
Fax: [phone]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Defendant
DAIICHI SANKYO, INC.

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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DONOVAN LUCAS, on behalf of himself
and others similarly situated,
Plaintiff,

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DECLARATION OF CRAIG MANGEAN IN
SUPPORT OF DEFENDANT DAIICHI
SANKYO, INC.’S NOTICE OF REMOVAL

vs.

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Case No.

DAIICHI SANKYO COMPANY, INC.;
and DOES 1 to 50, Inclusive,

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Defendant.

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66588862

DECLARATION OF CRAIG MANGEAN

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DECLARATION OF CRAIG MANGEAN
I, Craig Mangean, declare as follows:
1.

I currently serve as interim Executive Director of Human Resources for Defendant

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Daiichi Sankyo, Inc. (“DSI”). I have personal knowledge of the facts stated herein, and if called

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and sworn as a witness, I could and would testify competently to these facts.

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2.

According to DSI’s records, while employed at DSI, Plaintiff Donovan Lucas’ last

known address was in California.
3.

DSI is a Delaware corporation with a principal place of business in Parsippany,

New Jersey. Its officers direct, control, and coordinate the corporations’ business activities from
Parsippany, New Jersey.
4.

According to DSI’s records, for the period between December 7, 2006 and

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February 3, 2011, DSI employed approximately 214 current and former pharmaceutical

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representatives who worked in California.

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5.

For the period between December 7, 2006 and February 3, 2011, the number of

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cumulative weeks that these 214 pharmaceutical representatives were employed is approximately

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24,524. This number was calculated using the date that employees first held a pharmaceutical

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representative position and the date they no longer held that position or left the company.

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6.

The average annual base compensation, not including bonuses or incentive

compensation, for these 214 employees is approximately $66,097.
7.

Between December 7, 2007 and December 7, 2010, approximately 68 DSI

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pharmaceutical representatives ended their employment with DSI. Of these, 65 terminated 30 or

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more days before December 7, 2010.

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8.

DSI pharmaceutical representatives are paid on a bi-weekly basis. Between

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December 7, 2006 and February 3, 2011, approximately 164 DSI pharmaceutical representatives

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were employed for 41 or more pay periods, and would have received 41 or more wage statements.

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Between December 7, 2009 and February 3, 2011, at least 123 pharmaceutical representatives

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were employed for 26 or more pay periods, and would have received 26 or more wage statements.

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M ORGAN , L EWIS &
B OCKIUS LLP
ATTORNEYS AT LAW
IRVINE

DB1/66588862

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DECLARATION OF CRAIG MANGEAN

EXHIBIT C