Marie Hernandez v. Starbucks Corporation et al

Filing 48

MINUTES (IN CHAMBERS): ORDER GRANTING Plaintiff Marie Hernandez's Renewed Motion to Remand Pursuant to 28 USC 1447 34 by Judge John F. Walter: In light of the evidence presented by Plaintiff which reduces Defendant's estimated amount in controversy below $5,000,000, the Court concludes that remand is warranted. For the foregoing reasons, Plaintiff's Renewed Motion to Remand is GRANTED. This action is hereby remanded to Ventura County Superior Court. (MD JS-6. Case Terminated.) (jp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES -- GENERAL
Case No.

CV 17-3150-JFW (SKx)

Title:

Marie Hernandez -v- Starbucks Corporation, et al.

Date: July 12, 2017

PRESENT:
HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE
Shannon Reilly
Courtroom Deputy

None Present
Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS:
None
PROCEEDINGS (IN CHAMBERS):

ATTORNEYS PRESENT FOR DEFENDANTS:
None

ORDER GRANTING PLAINTIFF MARIE HERNANDEZ'S
RENEWED MOTION TO REMAND PURSUANT TO 28
U.S.C. § 1447 [filed 6/19/2017; Docket No. 34]

On June 19, 2017, Plaintiff Marie Hernandez (“Plaintiff”) filed a Renewed Motion to Remand
Pursuant to 28 U.S.C. § 1447 (“Renewed Motion to Remand”). On June 26, 2017, Defendants
Starbucks Corporation and Teavana Corporation (collectively, “Defendants”) filed their Opposition.
On July 3, 2017, Plaintiff filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure
and Local Rule 7-15, the Court finds that this matter is appropriate for decision without oral
argument. The hearing calendared for July 17, 2017 is hereby vacated and the matter taken off
calendar. After considering the moving, opposing, and reply papers, and the arguments therein,
the Court rules as follows:
I.

FACTUAL AND PROCEDURAL BACKGROUND

On March 20, 2017, Plaintiff filed a Complaint in Ventura County Superior Court, alleging
claims against Defendants for violation of the California Labor Code, including failure to provide
meal breaks and rest breaks, failure to provide minimum wages and overtime wages, failure to
timely pay final wages, and failure to provide accurate wage statements. She also alleges a claim
for violation of California Business & Professions Code § 17200, et seq. She alleges these claims
on behalf of a putative class that includes all of Defendants’ “non-exempt manager employees who
worked in California during the period from March 20, 2013, to the present.”
Complaint at ¶
15.
On April 26, 2017, Defendants filed a Notice of Removal of Action Pursuant to 28 U.S.C. §§
1332(d)(2), 1441, 1446, and 1453 (“Notice of Removal”), alleging that this Court has jurisdiction
pursuant to 28 U.S.C. § 1332(d), the Class Action Fairness Act of 2005 (“CAFA”).
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In her Renewed Motion to Remand,1 Plaintiff argues that Defendants have failed to meet
their burden of proof that the amount in controversy exceeds $5,000,000, and moves to remand
this action to Ventura County Superior Court. Since filing the Renewed Motion to Remand, Plaintiff
has filed a First Amended Complaint, which adds a claim for failure to reimburse business
expenses under California Labor Code § 2802.
II.

LEGAL STANDARD

“CAFA provides expanded original diversity jurisdiction for class actions meeting the amount
in controversy and minimal diversity and numerosity requirements set forth in 28 U.S.C. §
1332(d)(2).” United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers
Int'l Union, AFL–CIO, CLC v. Shell Oil Co., 602 F.3d 1087, 1090–91 (9th Cir. 2010); see Ibarra v.
Manheim Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015) (“A CAFA-covered class action
may be removed to federal court, subject to more liberalized jurisdictional requirements”). CAFA
vests district courts with “original jurisdiction of any civil action in which the matter in controversy
exceeds the sum or value of $5,000,000, exclusive of interest and costs,” and is a class action
consisting of more than 100 members “in which . . . any member of a class of plaintiffs is a citizen
of a State different from any defendant.” 28 U.S.C. § 1332(d); see also Standard Fire Ins. Co. v.
Knowles, 568 U.S. 558, 133 S.Ct. 1345, 1348 (2013).
“[N]o antiremoval presumption attends cases invoking CAFA, which Congress enacted to
facilitate adjudication of certain class actions in federal court.” Dart Cherokee Basin Operating
System Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014). “[A] defendant's notice of removal need
include only a plausible allegation that the amount in controversy exceeds the jurisdictional
threshold. Evidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff
contests, or the court questions, the defendant's allegation.” Id. When, as here, “a defendant's
assertion of the amount in controversy is challenged ... both sides submit proof and the court
decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has
been satisfied.” Id.; see also Ibarra, 775 F.3d at 1195.
When the amount in controversy is challenged, “the defendant seeking removal bears the
burden to show by a preponderance of the evidence that the aggregate amount in controversy
exceeds $5 million . . . .” Ibarra, 775 F.3d at 1197. “The parties may submit evidence outside the
complaint, including affidavits or declarations, or other summary-judgment-type evidence relevant
to the amount in controversy at the time of removal.” Id. (quotations and citations omitted). “Under
this system, a defendant cannot establish removal jurisdiction by mere speculation and conjecture,
with unreasonable assumptions.” Id. “CAFA's requirements are to be tested by consideration of
real evidence and the reality of what is at stake in the litigation, using reasonable assumptions
underlying the defendant's theory of damages exposure.” Id. at 1198.
III.

DISCUSSION
Defendants, based on certain assumptions, calculate the amount in controversy to be at

1

On June 5, 2017, the Court denied Plaintiff’s original Motion to Remand for failure to
conduct an adequate Local Rule 7-3 Conference.
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least $5,118,969.2 Specifically, they calculate that Plaintiff’s claims place the following amounts at
issue:
•
•
•
•
•
•
•

At least $1,152,989 for failure to provide meal breaks;
At least $1,152,989 for failure to provide rest breaks;
At least $1,387,170 in unpaid wages and liquidated damages;
At least $460,480 in waiting time penalties;
At least $323,700 in wage statement penalties;
At least $98,803 for failure to reimburse business expenses; and
At least $542,838 in attorneys’ fees.

Opposition at 5, 25. Because the Court concludes that Defendants’ assumption of a 100% violation
rate as to Plaintiff’s meal break claim is not supported by the evidence, the Court concludes that
remand of this action is warranted.
Defendants estimate that the amount in controversy for Plaintiff’s meal break claim is
$1,152,989. This calculation is based on the assumption that each class member incurred one
meal break violation per shift during the class period. Defendants contend that this assumption is
warranted in light of Plaintiff’s allegation in her Complaint that pursuant to a “pattern and practice,”
Defendants “regularly failed to provide meal breaks due to the “uniform administration of corporate
policy.” Opposition at 6; Complaint at ¶¶ 29-30. Defendants failed to support their assumption of a
100% violation rate with any evidence other than the allegations in Plaintiff’s Complaint.
In contrast, in support of her Motion, Plaintiff has presented evidence that she was unable to
take an off-duty meal period approximately 70% of the time, or 3 to 4 times per work week
“because of the way the company required store managers to schedule employees.” Plaintiff’s
Amended Declaration at ¶¶ 5, 7. Extrapolating this 70% violation rate for the class, and relying on
the data Defendants provided, Plaintiff calculates the amount in controversy for her meal break
claim to be $807,092 ($1,152,989 x 0.7), $345,897 less than Defendants’ estimate of $1,152,989,
which would reduce the amount in controversy below $5,000,000.3
In light of the evidence submitted by Plaintiff, the Court concludes that Defendants have
failed to demonstrate, by a preponderance of the evidence, that the amount in controversy
exceeds $5,000,000. Although “a damages assessment may require a chain of reasoning that
includes assumptions,” those assumptions must be reasonable. Ibarra, 775 F.3d at 1199. Courts
generally distinguish between complaints alleging “uniform” violations as compared to those
alleging a “pattern and practice” of labor law violations. See, e.g., Dobbs v. Wood Grp. PSN, Inc.,
201 F. Supp. 3d 1184, 1188 (E.D. Cal. 2016); Duberry v. J. Crew Group, Inc., 2015 WL 4575018,
at *3 (C.D. Cal. July 28, 2015). “[W]here a plaintiff's complaint specifically alleges a ‘uniform’
practice, if a defendant in its amount-in-controversy calculus assumes a 100 percent violation rate
2

In their Notice of Removal, Defendants calculated the amount in controversy to be in
excess of $5,743,000. However, in their Opposition, Defendants have revised certain of their
calculations and now estimate the amount in controversy to be in excess of $5,118,969.
3

Plaintiff also contends that Defendants’ minimum and overtime wage estimates should be
reduced because they are derived from Defendants’ 100% meal break violation rate.
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and the plaintiff offers no competent evidence in rebuttal to a defendant's showing, courts have
found a defendant's assumption to be reasonable.” Dobbs, 201 F. Supp. 3d at 1188. In contrast,
“where, rather than universal, a plaintiff alleges a ‘pattern and practice’ of labor violations, the Ninth
Circuit has found that a defendant's assumption of a 100 percent violation rate would be
unreasonable.” Id. (citing Ibarra, 775 F.3d at 1198-99). Indeed, "‘a pattern and practice' of doing
something does not necessarily mean always doing something." Ibarra, 775 F.3d at 1198-99.
In this case, the Court concludes that the allegations of Plaintiff’s Complaint are more similar
to complaints alleging a “pattern and practice” of labor law violations than to those alleging
“uniform” violations. Indeed, the Court finds Plaintiff’s Complaint “alleges a ‘pattern and practice’ of
labor law violations but does not allege that this ‘pattern and practice’ is universally followed every
time the wage and hour violation could arise.” Ibarra, 775 F.3d at 1199. Although Plaintiff refers
to a “uniform administration of corporate policy,” the Court concludes that the most reasonable
reading of Plaintiff’s allegations is not that Defendants failed to provide an off-duty meal period on
each and every shift, but rather that Defendants had a uniform policy which resulted in class
members’ inability to take an off-duty meal period on a regular basis. Accordingly, the Court
concludes that Defendants’ assumption of a 100% violation rate is unreasonable.
More importantly, even if Defendants’ assumption of a 100% violation rate could have been
considered reasonable based solely on the allegations of Plaintiff’s Complaint, Plaintiff has
rebutted that assumption by presenting evidence of an alternative violation rate. In light of the fact
that Plaintiff’s violation rate is grounded in real evidence, whereas Defendants’ violation rate is not,
the Court has no choice but to conclude that Defendants have failed to meet their burden of
demonstrating by a preponderance of the evidence that the amount in controversy exceeds
$5,000,000. See Durberry v. J. Crew Group, Inc., 2015 WL 45750178, at *3 (C.D. Cal. July 28,
2015) (emphasis added)(“[C]ourts have generally found the amount in controversy satisfied where
a defendant assumes a 100% violation rate based on allegations of a ‘uniform’ illegal practice (or
other similar language) and where the plaintiff offers no evidence rebutting this violation rate.”);
Gillette v. Peerless Ins. Co., 2013 WL 3983872, at *3 (C.D. Cal. July 31, 2013) (“[W]here a
complaint is ambiguous as to the amount in controversy, a plaintiff's post-removal declaration that
the amount in controversy was less than $75,000 prior to removal may be sufficient to show lack of
jurisdiction.”); Lewis v. Verizon Communications, Inc., 627 F.3d 395, 401 (9th Cir. 2010) (emphasis
added) (concluding that the amount in controversy was satisfied where the plaintiff was “seeking
recovery from a pot that Defendant has shown could exceed $5 million and the Plaintiff has neither
acknowledged nor sought to establish that the class recovery is potentially any less.”); Ibarra, 775
F.3d at 1200 (remanding to the district court for both sides to submit proof related to the disputed
amount in controversy, because the plaintiff contested the defendant’s assumption regarding the
violation rate “but did not assert an alternative violation rate grounded in real evidence, such as an
affidavit by [plaintiff] asserting how often he was denied meal and rest breaks”).
Accordingly, in light of the evidence presented by Plaintiff which reduces Defendant’s
estimated amount in controversy below $5,000,000, the Court concludes that remand is warranted.

IV.

CONCLUSION

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For the foregoing reasons, Plaintiff’s Renewed Motion to Remand is GRANTED. This
action is hereby remanded to Ventura County Superior Court.

IT IS SO ORDERED.

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