Veronica Rodriguez v. Swissport USA Inc et al

Filing 47

MINUTES OF PLAINTIFF'S MOTION TO REMAND AND FOR ATTORNEYS' FEES AND COSTS FOR IMPROPER REMOVAL 31 Case Remanded to Motion Hearing held before Judge George H. Wu: Court hears oral argument. The Tentative circulated and attached hereto, is adopted as the Court's Final Ruling. Plaintiffs Motion to Remand is GRANTED. The above-entitled action is remanded to the Los Angeles County Superior Court (BC441173). Plaintiffs request for attorneys' fees is DENIED.Court Reporter: Katie Thibodeaux. Los Angeles Superior Court, BC441173. MD JS-6. Case Terminated.; (pj)

REMAND/JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

~.D~t¢ · August 20, 2015

Case No; , CV 15-3951-GW(PLAx)

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Veronica Rodriguez v. Swissport USA, Inc., et al.

,Present:.The 1-I~h~r~ble
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GEORGE
- - - - H. WU, UNITED STATES DISTRICT JUDGE- - - - - ---------------

Javier Gonzalez

Katie Thibodeaux

Deputy Clerk

Court Reporter I Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Melissa Grant
RyanH. Wu

Harold M. Brody
Robert A. Escalante
Kenneth D. Sulzer

PROCEEDINGS:

PLAINTIFF'S MOTION TO REMAND AND FOR ATTORNEYS' FEES
AND COSTS FOR IMPROPER REMOVAL [31]

Court hears oral argument. The Tentative circulated and attached hereto, is adopted as the Court's Final
Ruling. Plaintiffs Motion to Remand is GRANTED. The above-entitled action is remanded to the Los
Angeles County Superior Court (BC441173). Plaintiffs request for attorneys' fees is DENIED.

25
Initials of Preparer
CV-90 (06/04)

CIVIL MINUTES - GENERAL

JG

--------Page I of I

Rodriguez v. Swissport USA, Inc., Case No. CV-15-3951-GW (PLAx)
Tentative Ruling on Motion to Remand

I. Background
On July 7, 2010, Veronica Rodriguez ("Plaintiff') filed this action in the Los Angeles
Superior Court asserting six claims against Swissport USA, Inc. ("Defendant"), including the
failure to provide complete and accurate wage statements in violation of California Labor Code
§ 226.

1

See generally Compl., Docket No. 1-1. Plaintiff filed a First Amended Complaint on

August 9, 2010. See generally First Am. Compl. ("FAC"), Docket No. 1-3. On April 12, 2013,
two subclasses were certified: 1) the Non-Compliant Wage Statement Subclass and 2) the PAGA
Wage Statement Subclass. See Class Cert. Ruling, Docket No 2-65.
On May 14, 2015, Plaintiff sought leave to file a Second Amended Complaint, which
states that "the aggregate amount in controversy for the proposed class action, including
monetary damages, restitution and attorneys; fees requested by Plaintiff, is less than five million
dollars ($5,000,000), exclusive of interests and costs. Plaintiffs reserve the right to seek a larger
amount based upon new and different information resulting from investigation and discovery. "2
See generally Mot. for Leave to Amend Compl. at 1, Docket No. 2-168; Proposed Second Am.

Compl. ,-i 1, Docket No. 2-169.
Defendant then filed a Notice of Removal on May 26, 2015, after nearly five years of
litigation and just weeks before trial. See Notice of Removal ,-i 10, Docket No. 1; Mot. to

1

Originally, Plaintiff also named Swissport North America, Inc. ("Swissport North America") as a defendant, see
FAC, but Swissport North America was subsequently dismissed from the action on August 15, 2011, see Stip. &
Order Dismissing Def. Swissport North America, Docket No. 1-17.
2

Although Plaintiffs Complaint and First Amended Complaint also indicated that the amount in controversy was
less than $5,000,000 (without reserving the right to seek a larger amount), Plaintiff cannot avoid CAFA jurisdiction
by alleging that the total amount in controversy is less than $5,000,000. See Standard Fire Ins. Co. v. Knowles, _
U.S. , 133 S. Ct. 1345, 1349-50 (2013) (holding that a CAFA plaintiff who stipulates, prior to certification of the
class, to aggregate damages less than $5,000,000 does not remove the case from CAFA's scope). As such,
Defendant's argument that it was "entitled to rely on Plaintiffs purportedly good faith allegation that the amount in
controversy did not exceed $5 million" is unavailing. See Opp'n at 13:20-21, Docket No. 34. Rather, Defendant
had the burden to put forward evidence showing that the amount in controversy exceeded $5,000,000, and was
obligated to do so within the time periods for removal provided by statute. See Ibarra v. Manheim Invs., Inc., 775
F.3d 1193, 1197 (9th Cir. 2015) ("When plaintiffs favor state court and have prepared a complaint ... that
affirmatively states that the amount in controversy does not exceed $5 million, if a defendant wants to pursue a
federal forum under CAFA, that defendant in a jurisdictional dispute has the burden to put forward evidence
showing that the amount in controversy exceeds $5 million.").

1

Remand at 1:3-7, Docket No. 31. Defendant maintains that it was never "required to conduct
any ... investigation into the grounds of removability," but that it "recently did conduct such an
investigation, which revealed that the amount in controversy exceeds $5,000,000, exclusive of
interests and costs." See Notice of Removal~~ 11-12. Plaintiff now moves to remand this action
on the grounds that removal was untimely and/or that Defendant waived its right to remove, and
seeks attorneys' fees in the amount of $9,500. See generally Mot. to Remand, Docket No. 31.

II. Legal Standard
The right to remove a case to federal court is entirely a creature of statute. Libhart v.
Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). Ordinarily, it "is presumed that a

cause lies outside the limited jurisdiction of federal courts," Abrego Abrego v. Dow Chem. Co.,
443 F.3d 676, 684 (9th Cir. 2006), and the Ninth Circuit "strictly construe[s] the removal statute
against ... jurisdiction," Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992). But, as the
Supreme Court recently explained, the rule is different in CAFA cases; no "antiremoval
presumption attends cases invoking CAFA" because "Congress enacted [CAFA] to facilitate
adjudication of certain class actions in federal court." Dart Cherokee Basin Operating Co., LLC

I

I ~

v. Owens, _U.S._, 135 S. Ct. 547, 554 (2014).
The removal statutes impose both procedural and jurisdictional requirements. 28 U.S.C.
§ 1447(c); Gray v. Moore Bus. Forms, Inc., 711 F.Supp. 543, 544 (N.D. Cal. 1989) ("A diversity
action will be remanded to state court for two reasons: (1) lack of subject matter jurisdiction; and
(2) procedural defects in the removal process."). As relevant here, the procedural requirements
include two limitations on the time for removal.

See 28 U.S.C. § 1446(b); Roth v. CHA

Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1123 (9th Cir. 2013) ("[T]he two periods specified in

§ 1446(b)(l) and (b)(3) operate as limitations on the right to removal."). Under 28 U.S.C.
§ 1446(b)( 1), a defendant must remove within thirty days of receiving an initial complaint if, on
its face, the complaint alleges all of the information necessary to establish federal subject matter

jurisdiction. Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013) ("The
first thirty-day removal period is triggered if the case stated by the initial pleading is removable
on its face."); Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694-95 (9th Cir. 2005) ("[T]he
ground for removal must be revealed affirmatively in the initial pleading in order for the first
thirty-day clock under§ 1446(b) to begin."). "The second thirty-day removal period is triggered
if the initial pleading does not indicate that the case is removable, [but] the defendant receives 'a
2

copy of an amended pleading, motion, order or other paper' from which removability may first
be ascertained." Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 885 (9th Cir. 2010)
(quoting 28 U.S.C. § 1446(b)(3)); see also Harris, 425 F.3d at 695 ("[W]e will allow the court to
rely on the face of the initial pleading and on the documents exchanged in the case by the parties
to determine when the defendant had notice of the grounds for removal, requiring that those
grounds be apparent within the four corners of the initial pleading or subsequent paper.").
(quoting Lovern v. Gen. Motors Corp., 121 F.3d 160, 162 (4th Cir. 1997)).

If the initial pleading is not removable on its face and a defendant has not yet received a
document from which removability can be ascertained, a defendant may remove at any point
after it "discovers, based on its own investigation, that a case is removable." Roth, 720 F.3d at
1123 ("[A] defendant who has not lost the right to remove because of a failure to timely file a
notice of removal under § 1446(b)(1) or (b)(3) may remove to federal court when it discovers,
based on its own investigation, that a case is removable."). At the same time, however, "[a]
defendant should not be able to ignore pleadings or other documents from which removability
may be ascertained and seek removal only when it becomes strategically advantageous for it to
do so." Id at 1125 (indicating that it is "theoretically possible in a CAFA case for a defendant to
wait until the state court has shown itself ill-disposed to defendant, or until the eve of trial in
state court, before filing a notice of removal").

The "theoretical possibility of abusive

gamesmanship" is a particular concern in CAFA cases, which "may be removed at any time"
rather than only within one year of the commencement of the action (the outer limit on removal
in non-CAF A diversity cases). Id at 1126.

III. Analysis
Federal jurisdiction under CAFA has three elements: (1) there must be minimal diversity
of citizenship between the parties, (2) the proposed class must have at least 100 members and (3)
the amount in controversy must "exceed[ ] the sum or value of $5,000,000." See 28 U.S.C.

§ 1332(d). Defendant concedes Plaintiffs Complaint, First Amended Complaint, and Proposed
Second Amended Complaint all revealed the requisite class size. See Notice of Removal ,-r 34.

A. Diversity
In its Opposition, but not in its Notice of Removal, Defendant contends that Plaintiffs
failure to affirmatively identify her citizenship means the thirty-day removal periods were never

3

triggered and removal was timely. 3 See Opp'n at 12:13-13:2, Docket No. 34. The Court agrees
that Defendant had no duty to investigate Plaintiffs citizenship. See Harris, 425 F.3d at 695-97.
Given that Plaintiff stated that she was a resident of Los Angeles County, California and was
employed by Defendant in Los Angeles, California since June 2007, however, Defendant had a
sufficient basis on which to assert minimal diversity. See Compl.

also Deel. of Veronica Rodriguez

~

~~

7, 22, Docket No. 1-1; see

2, Docket No. 1-65 (indicating that Plaintiff worked for

Defendant from approximately June 2007 to May 2010); State Farm Mut. Auto. Ins. Co. v. Dyer,
19 F.3d 514, 520 (10th Cir. 1994) ("Residence alone is not the equivalent of citizenship, but the
place of residence is prima facie the domicile.") (citations omitted).

Indeed, Defendant

ultimately based its assertion of Plaintiffs citizenship on these facts. See Notice of Removal
~

19 ("Plaintiff is a citizen of the United States and domiciled in the State of California. As

indicated by her job application, work history, complaint, and sworn declaration, Plaintiff has
resided in the State of California for at least six years. Residence is prima facie evidence of
domicile."). As such, whether Defendant's removal of this action was timely hinges on when, if
ever, Defendant had notice that the amount in controversy exceeded $5,000,000.

B. Amount in Controversy
Defendant contends it could not ascertain removability until it recently conducted an
investigation "which revealed that the amount in controversy exceeds $5,000,000, exclusive of
interests and costs." See Notice of Removal ~~ 11-12. Defendant concluded that the amount in
controversy for Plaintiffs wage statement claims for statutory penalties under California Labor
Code § 226 alone is $5,158,100;4 Defendant reached this figure by determining that there were
1,705 class members and multiplying that figure by the statutory cap of $4,000 for each class
member. See

id.~~

27-30.

A Motion to Compel filed by Plaintiff on November 28, 2012 indicated that the putative

3

With its Opposition, Defendant filed evidentiary objections to the Declaration of Melissa Grant. See Docket No.
37. The Court declines to rule on the first objection because it did not rely on the cited evidence in reaching its
decision. The Court overrules the second objection.
4

In addition, Defendant calculated potential recoverable attorneys' fees of25% of this figure, or $1,289,775, and
that the total amount in controversy for Plaintiffs claim for civil penalties under PAGA was $12,832,000. See
Notice of Removal ifil 30-32, n.5. Plaintiffs claim for civil penalties under PAGA was brought, and certified, as a
class claim, and thus could be aggregated with Plaintiffs other class claim to satisfy the amount in controversy. See
Yocupicio v. PAE Grp., LLC, No. 15-55878, _ F.3d _, 2015 U.S. App. LEXIS 13273, at *6-7, 2015 WL 4568722,
at *4 (9th Cir. July 30, 2015) (indicating that PAGA claims brought as representative claims, rather than class claims
could not be used to satisfy the CAFA jurisdictional amount).

4

class in this case involved "more than 4,500 employees." See Mot. to Compel at 1: 14, Docket
No. 1-80. Given the $4,000 statutory cap on damages, Defendant easily should have ascertained
removability at that point. See Dart Cherokee Basin Operating Co., 135 S. Ct. at 554 ("[A]
defendant's notice of removal need include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold."); Kuxhausen, 707 F.3d at 1140 (indicating that
a defendant must "apply a reasonable amount of intelligence in ascertaining removability,"
which includes performing simple multiplication). Moreover, on August 7, 2013, Defendant
itself provided an estimate that 1,900 class members belonged to the wage statement subclass.
See Reply at 10:6-16, Docket No. 39 (citing Docket No. 2-86 at 4, n.3). At the latest, Defendant

was on notice of removability upon receipt of a September 5, 2014 class notice report from the
third-party administrator indicating that the wage statement subclass consisted of 1,827 class
members. See Opp'n at 15:17-18; see also Deel. of Melissa Grant~ 7, Docket No. 31-1.
In addition, Plaintiff points to two prior instances in which Defendant, by its own
calculations, represented to the court that Plaintiffs wage statement claim alone exceeded
$5,000,000. See Mot. to Remand at 10:7-11:8. First, in its Opposition to Plaintiff's Motion for
Class Certification, filed on November 28, 2012, Defendant stated that "Plaintiff seeks in excess
of ten million dollars" on the wage statement claim alone. See Opp'n to Mot. for Class Cert. at
20, Docket No. 1-72. Second, in its Supplemental Brief supporting its Motion to Deny Class
Certification, filed on January 17, 2013, Defendant provided an explanation of its calculations
showing that the wage statement claims exceeded $20 million, based on the number of class
members and the violations at issue:
The parties estimate that this putative class is roughly 4000-5000
class members. Assuming the Plaintiff seeks the maximum of
amount of penalties and argues that [Defendant] is liable for
penalties related to the wage statements, [Defendant]' s estimated
liability well exceeds $20 million dollars for these violations."
See Supp'l Brief in Supp. of Mot. to Deny Class Cert., at 1 n.4, Docket No. 2-15. Strangely,

Defendant now argues that calculating the amount in controversy with respect to the wage
statement claim in this way - by multiplying the 4,500 putative class members by the $4,000
statutory cap on damages - is "absurd," "untenabl[e,]" "misleading[,] and borders on bad faith"
because not all 4,500 putative class members are necessarily members of the wage statement
subclass or entitled to $4,000 in statutory penalties. See Opp'n at 14:16-17:19. The Court finds

5

Defendant's instant position to be disingenuous, especially given that Defendant's Notice of
Removal still relies on the $4,000 statutory maximum to calculate the amount in controversy.

See Notice of Removal

~

29. In any event, given the overall number of putative class members,

Plaintiffs affirmative statement that there were 585 wage statement subclass members employed
in Los Angeles alone, see Docket No. 1-61 at 2:23-24, the availability of attorneys' fees, and
Plaintiffs other class claim, Defendant was long ago put on notice of the removability of this
action. See Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 397 (9th Cir. 2010) (indicating that
the CAF A amount in controversy "is simply an estimate of the total amount in dispute, not a
prospective assessment of defendant's liability"); see also McPhail v. Deere & Co., 529 F.3d
947, 956 (10th Cir. 2008) ("The amount in controversy is not proof of the amount the plaintiff
will recover. Rather, it is an estimate of the amount that will be put at issue in the course of the
litigation."). Under these circumstances, the Court would find that Defendant failed to timely
remove this action. See Banta v. Am. Med Response Inc., No. CV 11-03586 GAF RZX, 2011
U.S. Dist. LEXIS 77558, at *18-19, 2011 WL 2837642 (C.D. Cal. July 15, 2011) (granting
motion to remand because: "It [was] not credible that [the defendants] could not ascertain the
amount in controversy until they were told that the plaintiff contended that more than $5 million
was at stake. Indeed, the evidence discussed below indicates that [the d]efendants have known
for years that the amount in controversy in this case exceeded the CAFA jurisdictional
minimum.").
C. Attorney Fees

Under 28 U.S.C. § 1447(c), an "order remanding the case may require payment of just
costs and any actual expenses, including attorney fees, incurred as a result of the removal."
Requiring the payment of fees and costs is appropriate where "the removing party lacked an
objectively reasonable basis for seeking removal." Martin v. Franklin Capital Corp., 546 U.S.
132, 140-41 (2005). "[R]emoval is not objectively unreasonable solely because the removing
party's arguments lack merit, or else attorney's fees would always be awarded whenever remand
is granted." Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008). Instead,
the objective reasonableness of a removal depends on the clarity of the applicable law and
whether established law "clearly foreclosed" the arguments in support of removal. Id. at 106667. Here, although the Court ultimately disagrees with Defendant's position, it does not find
Defendant's position objectively unreasonable. Thus, the Court would deny Plaintiffs request
6

for an award of fees under§ 1447(c).
IV. Conclusion
In sum, the Court would conclude that Defendant's removal is untimely and would
remand this action to state court. Because Defendant's removal attempt was not objectively
unreasonable, however, the Court would deny Plaintiffs request for fees.

7