Debra L Marshall v. G2 Secure Staff, L.L.C.

Filing 15

ORDER GRANTING PLAINTIFFS MOTION TO REMAND 11 . The Clerk of the Court shall close this case by Judge Otis D. Wright, II. cc: order, docket, remand letter to Los Angeles Superior Court, BC 541579. MD JS-6. Case Terminated. (Attachments: # 1 rmdltr). (lc) .Modified on 7/14/2014 (lc).

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JS-6

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United States District Court
Central District of California

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DEBRA L. MARSHALL, on behalf of

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herself and all others similarly situated,

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Case No. 2:14-cv-04322-ODW(MANx)
ORDER GRANTIING MOTION TO

Plaintiff,

REMAND [11]

v.

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G2 SECURE STAFF, LLC; and DOES

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1–100, inclusive

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Defendants.

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I.

INTRODUCTION

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This action was removed from Los Angeles County Superior Court based on

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diversity jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C.

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§ 1332(d). Plaintiff Debra L. Marshall moves the Court to remand based on lack of

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minimal diversity and insufficiency of evidence in support of the amount in

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controversy. (ECF No. 11.) Marshall is a former employee of Defendant G2 Secure

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Staff, LLC (“G2”). Marshall is suing G2 for violations of California wage-and-hour

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laws on behalf of herself and a putative class of current and former employees. The

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Court finds that G2 has not met its evidentiary burden in establishing that the amount

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in controversy exceeds $5 million, and accordingly GRANTS Marshall’s Motion to

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Remand. (ECF No. 11.)

II.

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FACTUAL BACKGROUND

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On April 3, 2014, Marshall filed the class-action Complaint in Los Angeles

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County Superior Court. Marshall alleges that G2 (1) failed to pay overtime wages;

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(2) failed to pay minimum wages; (3) failed to provide meal periods; (4) failed to

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provide rest periods; (5) failed to pay all wages upon termination; (6) failed to provide

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accurate wage statements; and (7) engaged in unfair competition. (ECF No. 1, Ex. A

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(“Compl.”).) Marshall raises only state-law claims. Marshall defines the putative

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class members as “[Marshall] and all other current and former similarly situated

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employees employed by or formerly employed by G2 Secure Staff, L.L.C. and any

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subsidiaries or affiliated companies . . . within the State of California.” (Compl. ¶ 1.)

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G2 removed this action on June 1, 2014, on the basis of diversity jurisdiction

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under CAFA. (ECF No. 1. (“Not. of Removal”).) On June 23, 2014, Marshall filed

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the present Motion to Remand, alleging that G2’s removal was based on speculation

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and assumptions. (ECF No. 11.) G2 timely opposed. (ECF No. 12.) G2 supports its

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Opposition with two declarations from Julia Gostic, the Vice-President of Human

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Resources and Administration at G2. Marshall’s Motion is now before the Court for

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decision.
III.

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LEGAL STANDARD

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Federal courts are courts of limited jurisdiction, having subject-matter

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jurisdiction only over matters authorized by the Constitution and Congress. U.S.

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Const. art. III, § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.

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375, 377 (1994). A suit filed in state court may be removed to federal court if the

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federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a).

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But courts strictly construe the removal statute against removal jurisdiction, and

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“[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal

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in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The

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party seeking removal bears the burden of establishing federal jurisdiction. Durham v.

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Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006) (citing Gaus, 980 F.2d

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at 566).

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Subject-matter jurisdiction exists in civil cases involving a federal question or

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diversity of citizenship. 28 U.S.C. §§ 1331, 1332. Under CAFA, federal district

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courts have original jurisdiction to a hear a class action if the proposed class has

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(1) more than 100 members, (2) the parties are minimally diverse, and (3) the amount

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in controversy in the aggregate exceeds the sum or value of $5 million. 28 U.S.C.

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§ 1332(d)(2), (d)(5)(B); see also Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345,

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1348–49 (2013). In removal cases, the removing party bears the burden of proving

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subject-matter jurisdiction under CAFA by a preponderance of the evidence.

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Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013).
IV.

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DISCUSSION

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G2 asserts that removal is proper here because there are more than 100 putative

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class members, minimal diversity is satisfied, and the amount in controversy exceeds

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$5 million.

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employees, which well exceeds the 100-member requirement under CAFA.

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further argues that the parties are minimally diverse, because G2 is a limited liability

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company and all of its members are citizens of Texas, while the at least one member

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of the plaintiff class is a citizen of California. Lastly, G2 argues that the amount in

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controversy has been satisfied, because according to its calculations, the amount in

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controversy is $7,409,799.20, exclusive of attorneys’ fees. (Not. of Removal ¶ 35.)

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G2 reaches this calculation by adding together the estimates for unpaid meal and rest

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period premiums, waiting-time penalties, and wage statement penalties. (Id.)

G2 contends that the number of putative class members is 2,594
G2

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Marshall does not dispute the class size. However, Marshall disputes whether

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the parties are minimally diverse and whether the amount in controversy has been

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established.

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speculation in calculating the amount in controversy, and therefore has not met its

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burden of showing by a preponderance of the evidence that the amount in controversy

(Mot. 8–9.)

Marshall argues that G2 relies on assumptions and

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is at least $5 million. (Id.) For the reasons discussed below, the Court finds that G2

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has not established the $5 million CAFA amount in controversy requirement, and

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therefore does not reach the question of whether the parties are minimally diverse.

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In determining the amount in controversy for subject-matter jurisdiction, federal

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district courts look to the complaint. Singer v. State Farm Mut. Auto. Ins. Co., 116

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F.3d 373, 376 (9th Cir. 1997). A 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

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made in this complaint.” Roth v. Comerica Bank, 799 F. Supp. 2d 1107, 1117 (C.D.

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Cal. 2010) (citations omitted) (quoting Kenneth Rothschild Trust v. Morgan Stanley

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Dean Witter, 199 F. Supp. 2d 993, 1001 (C.D. Cal. 2002)).

If the amount in

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controversy is not facially apparent in the complaint, a court may consider the removal

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petition and any “summary-judgment-type evidence relevant to the amount in

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controversy at the time of removal,” similar to a review under Federal Rule of Civil

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Procedure 56. Singer, 116 F.3d at 376; accord, Korn v. Polo Ralph Lauren Corp.,

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536 F. Supp. 2d 1199, 1205 (E.D. Cal. 2008). Summary-judgment-type evidence

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includes “materials in the record, including . . . affidavits and declarations[.]” Fed. R.

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Civ. P. 56(c)(1). However, the removing party is not required to provide extensive

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business records in order to establish the amount in controversy. Muniz v. Pilot

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Travel Ctrs. LLC, No. CIV.S-07-0325 FCB EFB, 2007 WL 1302504, at *5 (C.D. Cal.

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May 1, 2007).

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Similarly, courts sometimes allow the use of a 100-percent violation rate for

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determining the amount in controversy. Courts have assumed a 100-percent violation

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rate where the complaint does not allege facts specific enough to “‘narrow the scope

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of the putative class or the damages sought.’” Coleman v. Estes Express Lines, Inc.,

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730 F. Supp. 2d 1141, 1150 (C.D. Cal. 2010) (quoting Muniz, 2007 WL 1302504,

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at *4). But, parties may not rely on the assumption that the 100-percent violation rule

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applies without supporting the assumption with evidence.

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Cmtys. LLC, 539 Fed. App’x 763 (9th Cir. 2013) (emphasis added). Additionally,

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Garibay v. Archstone

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courts have “rejected the unsupported use of 100% maximum violation rates.” See

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Emmons v. Quest Diagnostics Clinical Labs, Inc., No. 1:13–cv–0474 AWI–BAM,

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2014 WL 584393, at *5 (E.D. Cal. Feb. 12, 2014) (emphasis added) (quoting Weston

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v. Helmerich & Payne Int’l Drilling Co., No. 1:13–cv–01092–LJO–JLT, 2013

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WL 5274283, at *5–6 (E.D. Cal. Sept. 16, 2013).

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Here, G2 includes meal and rest period violations, wage statement violations,

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and late pay violations in its calculation of amount in controversy. (Not. of Removal

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¶¶ 19–32.) Marshall alleges that G2 “consistently” failed to provide employees with

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meal and rest periods. (Compl. ¶¶ 14, 16.) But, nowhere in the Complaint does the

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Court find any mention of the actual frequency of violations. The Court finds a

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similar void in G2’s Notice of Removal, Opposition, and Declarations. G2 assumes a

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once per week violation rate for meal and rest period violations, arguing that its

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assumption is conservative and therefore justified. (Not. of Removal ¶ 24; Opp’n 8.)

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However, without evidence supporting the conclusion that once per week is suitable

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for calculation purposes, it is still an assumption, seemingly plucked from thin air.

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Further, “consistently” does not necessarily amount to once per week. Some

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regularity can be discerned, but without further support, there is no justification for

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using a once-per-week rubric versus a twice-per-month rubric or a three-times-per-

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year rubric. G2 simply does not provide any support for its assumption. Because the

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calculation provided by G2 for meal and rest period violations is not supported by

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sufficient summary-judgment-type evidence, the Court finds that G2’s calculations for

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meal and rest period violations are insufficient to support the amount-in-controversy

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requirement.

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Additionally, the fines for wage-statement violations are derivative of the meal

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and rest period claims. Marshall contends that employees received wage statements

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that were inaccurate because they did not include the pay due to the employees for

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missed meal and rest periods. (Compl. ¶ 67.) If the calculations for missed meal and

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rest periods are faulty, then the wage statement violation calculations are also

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inherently flawed. Accordingly, the calculations for wage statement violations fines

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are insufficient for amount-in-controversy purposes as well.

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The remaining calculations are for waiting-time penalties, which G2 calculates

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to be $2,090,004.00 (Not. of Removal ¶ 28)—an amount insufficient to establish the

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requisite $5 million amount in controversy for CAFA claims. Even if attorneys’ fees

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were included, they could only amount to $522,501.00 using a 25-percent benchmark.

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See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (holding that where attorneys’

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fees are permissibly used in calculating amount in controversy, a benchmark of 25

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percent of the common fund was appropriate).1 Thus, the addition of the 25 percent

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benchmark here does not bring the amount in controversy even near the $5 million

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CAFA requirement. Accordingly, the Court finds that G2 has not met its evidentiary

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burden of showing by a preponderance of the evidence that the amount in controversy

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here is at least $5 million.
V.

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CONCLUSION

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For the reasons discussed above, the Court GRANTS Marshall’s Motion to

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Remand. (ECF No. 11.) This case is remanded to Los Angeles County Superior

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Court, Case No. BC541579. The Clerk of the Court shall close this case.
IT IS SO ORDERED.

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July 14, 2014

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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cc:order, docket, remand letter to
Los Angeles Superior Court, No. BC 541579

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In order to determine the amount of the 25-percent benchmark here, the Court multiplied the waiting-time penalties
($2,090,004.00) by 25 percent (.25).

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