Hector A. Avila v. Northwood Hospitality LLC et al

Filing 27

ORDER DENYING MOTION TO REMAND [DKT. NO. 14 ] by Judge Stanley Blumenfeld, Jr.: The Court DENIES the motion to remand. See order for details. (jgr)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

HECTOR A. AVILA,

Case No. 2:23-cv-09598-SB-AS

Plaintiff,
ORDER DENYING MOTION TO
REMAND [DKT. NO. 14]

v.
NORTHWOOD HOSPITALITY LLC,
Defendant.

Plaintiff Hector Avila filed this putative class action against his employer,
Defendant Northwood Hospitality, LLC, for various wage and hour violations.
The alleged violations are based in substantial part on Defendant’s policy requiring
all employees to keep their employer-issued walkie talkies on at all times during
their shifts, including during meal and rest breaks. Defendant removed the case
under the Class Action Fairness Act (CAFA), contending that the amount in
controversy exceeded $5 million. Plaintiff now moves to remand, arguing that
Defendant’s calculations are based on unreasonable assumptions. Because the
allegations in the complaint allege universal violations for which the amount in
controversy exceeds the jurisdictional threshold, the Court DENIES the motion to
remand.
I.
Plaintiff is a current employee of Defendant, where he has worked for
almost 14 years. Dkt. No. 1-1 ¶ 4. Plaintiff brought this class action based on two
of Defendant’s policies that Plaintiff claims caused it to violate California labor
laws. The first policy, allegedly in place from March 2020 through the summer of
2021, required employees to wait in line to undergo unpaid security checks of their
bags and hats before starting their shifts. Id. ¶ 15. The second policy, allegedly
still in place, requires all putative class members to keep employer-provided
1

walkie talkies on (and be available for work) at all times, including during
statutorily mandated rest periods and off-the-clock meal breaks. Id. ¶¶ 15, 20, 26,
31, 44, 54, 62, 70. Plaintiff brought claims for violations of California labor laws
governing minimum wage, overtime, meal and rest break periods, wage
statements, and timely payment upon termination (“waiting time”), along with a
claim for unfair business practices.
Plaintiff filed his complaint in state court on September 18, 2023.
Defendant accepted service on October 11 and removed on November 13. Plaintiff
now moves to remand, alleging that Defendant failed to meet the amount-incontroversy requirement under CAFA by basing its calculations on unreasonable
and unsupported assumptions. The Court heard argument on the motion on
February 2, 2024.
II.
CAFA generally establishes federal jurisdiction over class actions in which
the amount in controversy exceeds $5 million and any member of the class is a
citizen of a state different from any defendant. 28 U.S.C. § 1332(d)(2). A party
removing a case under CAFA bears the burden to demonstrate federal jurisdiction.
Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006).
Because Congress enacted CAFA to facilitate adjudication of certain class actions
in federal court, “no antiremoval presumption attends cases invoking CAFA.”
Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014).
CAFA requires a removing defendant to provide a “short and plain statement of the
grounds for removal.” Id. at 87; 28 U.S.C. § 1446(a). The notice of removal
“need include only a plausible allegation that the amount-in-controversy exceeds
the jurisdictional threshold.” Dart Cherokee, 574 U.S. at 89. When a defendant’s
allegations are challenged in a motion to remand, the defendant must show by a
preponderance of the evidence that the amount in controversy exceeds CAFA’s
$5 million threshold. Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir.
2015). In making this showing, Defendant may rely on reasonable assumptions.
Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019). “[T]hose
assumptions cannot be pulled from thin air but need some reasonable ground
underlying them,” and the removing party “bears the burden to show that its
estimated amount in controversy relied on reasonable assumptions.” Ibarra, 775
F.3d at 1199. Where a defendant “relie[s] on a reasonable chain of logic and
present[s] sufficient evidence to establish that the amount in controversy exceeds
$5 million,” it has met its burden of proof. LaCross v. Knight Transp. Inc., 775
F.3d 1200, 1201 (9th Cir. 2015).
2

III.
The Court first addresses the parties’ dispute over whether an antiremoval
presumption applies, before turning to the assumptions underlying the calculation
of the total amount in controversy.
A.
As a threshold matter, Plaintiff’s briefing fails to acknowledge controlling
Ninth Circuit and Supreme Court authority repudiating any presumption against
removal in the CAFA context. Plainly, “no antiremoval presumption attends cases
invoking CAFA . . . .” Dart Cherokee, 574 U.S. at 89. The Ninth Circuit,
perceiving that “some remnants of our former antiremoval presumption seem to
persist” post-Dart Cherokee, reiterated the Supreme Court’s pronouncement in
2019 and again in 2022. Arias, 936 F.3d at 922; see Jauregui v. Roadrunner
Transportation Servs., Inc., 28 F.4th 989, 993 (9th Cir. 2022) (reversing CAFA
remand where district court applied antiremoval presumption).
In this case, Plaintiff titled an entire section of his motion, “The Ninth
Circuit has a strong presumption against removal,” in which he states head-on:
“This strong presumption against removal jurisdiction equally applies to removal
under CAFA.” Dkt. No. 14-1 at 4 (citing a district court case predating Dart
Cherokee by more than nine years). After Defendant pointed out the correct
standard in its opposition by quoting a recent order from this Court that cites
controlling case law, Dkt. No. 24 at 7 (quoting McGrath v. All Med. Pers., Inc.,
No. 2:23-CV-05181-SB, 2023 WL 5507175 at *2 (C.D. Cal. Aug. 25, 2023)
(Blumenfeld, J.) (quoting Dart Cherokee)), Plaintiff doubled down, stating:
Defendant’s Opposition, while long on rhetoric, is short on substance.
As asserted in Plaintiff’s Motion for Remand, it is well-settled that the
Ninth Circuit has a strong presumption against removal . . . .
Defendant fails to refute the Ninth Circuit[’]s strong presumption
against removal[.] A defendant removing a case from state to federal
court under CAFA faces a strong presumption against removal.
[citation to two cases predating Dart Cherokee by 8 and 9 years
omitted]. Although Defendant asserts that the presumption does not
exist, Courts continue to hold that defendants seeking removal under
CAFA face a strong presumption against removal.

3

Dkt. No. 25 at 3.1
Plaintiff’s repeated misstatement of the law is concerning. The Court raised
this concern in its tentative order and directed Plaintiff’s counsel to be prepared to
address it at the motion hearing. The Court is satisfied that the misstatement was
the product of neglect rather than intent, and counsel represented that she
understood the mistake and would work diligently to avoid such errors in the
future. Counsel is cautioned to exercise greater care to conduct proper legal
research and read relevant authority in the future.
Having clarified that there is no antiremoval presumption in the CAFA
context, the Court turns to the challenged calculation of the amount in controversy.
B.
Aside from his incorrect reliance on the presumption against removal
jurisdiction, Plaintiff’s primary argument is that Defendant’s amount-incontroversy calculation is not supported by reasonable assumptions.
In its notice of removal, Defendant calculated the amount in controversy to
be $8,934,816. This calculation comprises the following: (1) $1,468,800 for
minimum wage violations; (2) $2,436,984 for meal period violations; (3)
$2,436,984 for rest period violations; (4) $403,700 for wage statement violations;

Plaintiff’s counsel cite a district court case that applied the incorrect standard.
Dkt. No. 25 at 2 (citing Guijarro v. Healthcare Servs. Grp., Inc., No. 20-CV00324-VAP, 2020 WL 1983872 (C.D. Cal. Apr. 24, 2020)). But she ignores the
decision by this Court, cited in the opposition, applying the correct standard. Dkt.
No. 24, at 7 (citing McGrath v. All Med. Pers., Inc, No. 23-CV-05181-SB, 2023
WL 5507175 (C.D. Cal. Aug. 25, 2023). She also overlooked Ninth Circuit case
law emphasizing the absence of any presumption against CAFA removal
jurisdiction. See Arias, 936 F.3d at 922 (reaffirming that there is no antiremoval
presumption in CAFA cases despite the fact that “some remnants of our former
antiremoval presumption seem to persist”); Jauregui, 28 F.4th at 992 (noting that
“the district court [incorrectly] imposed . . . a presumption against CAFA’s
jurisdiction”); Moe v. GEICO Indem. Co., 73 F.4th 757, 762 (9th Cir. 2023)
(noting that “no antiremoval presumption attends cases invoking CAFA”) (cleaned
up)).
1

4

(5) $401,385 in waiting time penalties; and (6) $1,786,963 in attorney’s fees
(equivalent to 25% of the common fund).
In support of this calculation, Defendant submitted two declarations from
Tricia Price, its Senior Vice President in charge of Defendant’s Human Resources.
In the first, Price states that, based on her review of the company’s records,
Defendant employed 244 nonexempt employees in California during the class
period, and that those employees worked in excess of 24,480 workweeks in that
period for an average hourly wage of $19.91 per hour. In the second, Price states
that Defendant typically hires employees to work a full-time schedule of 30–40
hours per week, generally consisting of up to five weekly shifts, each lasting 6–8
hours. Price’s review of Plaintiff’s own records reflects that he falls within this
range, as he worked an average of 4.3 shifts per week with an average of 7.3 hours
per shift.
Relying on these figures and the walkie-talkie requirement alleged in the
complaint, Defendant calculates the amount in controversy for the meal and rest
break violations to be the largest of all the claims.2 Allegations in the complaint
are the “first source of reference in determining the amount in controversy.”
LaCross, 775 F.3d at 1202. Where a complaint alleges a universal violation, the
consequences of that violation inform the amount in controversy. Id. The
complaint in this case alleges that Defendant “requir[ed]” employees to keep their
walkie-talkies on “at all times,” including during meal and rest breaks, pursuant to
a company “polic[y].” Dkt. No. 1-1 ¶¶ 15, 20; see also id. ¶¶ 26, 31, 44, 54, 62,
70. This alleges a universal violation that applies to every putative class member
for every meal and rest break.
Plaintiff argues that “‘a “pattern and practice” of doing something does not
necessarily mean always doing something.’” Dkt. No. 14-1 at 8 (quoting Ibarra,
775 F.3d at 1198). But as the Ninth Circuit has recognized, there is an “important
distinction” between alleging a “pattern and practice” of violations and alleging a
“universal” violation. LaCross, 775 F.3d at 1202; accord Branch v. PM Realty
Grp., L.P., 647 F. App’x 743, 746 (9th Cir. 2016) (holding defendant’s meal and
rest break assumptions were reasonable because the complaint alleged a policy
“uniformly” depriving class members of breaks). Here, Plaintiff alleges a practice
The parties dispute whether Defendant’s calculation of the wage and overtime
claim, which includes an assumption of thirty minutes per shift of unpaid wages, is
adequately supported. The Court need not reach the issue, however, in light of its
analysis of the amount in controversy on the meal, rest, and waiting time claims.
2

5

that would result in a universal violation if the violation as asserted is ultimately
proven.
Plaintiff seeks a statutory penalty equivalent to one hour of pay for each day
worked with a noncompliant meal or rest break. All that remains for Defendant to
establish is the number of workdays with noncompliant meal and rest breaks. The
second Price declaration states that employees work four-to-five weekly shifts,
each lasting more than five hours, entitling them to both a meal break and a rest
break for each shift. Dkt. No. 1-1 ¶¶ 24, 25, 29, 30. Based on Defendant’s
declarations and the allegations in the complaint, the Court finds it reasonable to
assume that each putative class member suffered four weekly violations of the law
requiring meal and rest breaks. 3 Multiplying the number of shifts per week (4) by
the total number of workweeks (24,480) by the average hourly wage ($19.19)
equates to $1,949,587.20 for the meal period claim and $1,949,587.20 for the rest
period claim—for a total of $3,899,174.40 (for these two claims).
Defendant’s calculation of waiting time penalties is likewise supported by
the allegations in the complaint. Under California Labor Code § 203, an employer
owes waiting time penalties when it fails to pay an employee immediately upon
termination (or, in certain circumstances, within 72 hours thereof). Cal. Lab. Code
§ 203. For every day the employer fails to pay, it owes the employee one day of
that employee’s regular wages. Id. The penalty is capped at 30 days. Id.
“Wages” in § 203 includes money the employer owed the employee at the time of
termination for missed meal and rest breaks, unpaid overtime, and underpayment
of minimum wage. Naranjo v. Spectrum Sec. Servs., Inc., 13 Cal. 5th 93, 102, 109,
117 (2022).
The “very nature” of a wage-and-hour class action “requires [a p]laintiff to
allege that putative class members have not received all wages owed in violation of
the law.” Ramos v. Schenker, Inc., No. 5:18-CV-01551-JLS, 2018 WL 5779978,
at *2 (C.D. Cal. Nov. 1, 2018). Every class member, by virtue of being a member
of the class, allegedly has not received, and is necessarily owed, outstanding
wages. Gomez v. Metro Air Serv. Inc., No. 2:22-CV-04979-SP, 2023 WL
1822373, at *5 (C.D. Cal. Feb. 7, 2023). And every member of the subclass of
terminated employees was necessarily owed money at termination and is
consequently eligible for waiting time penalties. Id.; see also Ramos, 2018 WL
5779978 at *2 (“[A]llegations of unpaid wages are implicit allegations of
Defendant assumed five days of noncompliant meal and rest breaks in its notice
of removal but assumed four in its opposition.
3

6

maximum damages for waiting time penalties.”). Since the lawsuit alleges
violations that remain unremedied at the time of filing, a class member terminated
more than 30 days before the filing of a lawsuit is entitled to the full 30-day
penalty. See Jauregui, 28 F.4th at 994 (finding assumption that all class members
were entitled to full 30-days of waiting time penalties reasonable “even if a very
small percentage of employees might possibly not be entitled to the maximum
penalty”).
Here, Plaintiff alleges claims for unpaid minimum wages, unpaid overtime,
and unpaid meal and rest breaks. Each of these claims qualifies as “wages” under
Naranjo and entitles class members to waiting time penalties. The complaint
defines the waiting time class as all current and former employees “who did not
receive payment of all unpaid wages upon separation of employment” within the
three-year statutory time period. Defendant identifies 84 employees who have
separated from their employment with Defendant since September 18, 2020. As in
Jauregui, it is reasonable to assume that all 84 of these employees are entitled to
the full 30-day penalty. Multiplying the number of terminated employees (84) by
the average hourly wage ($19.91) by the hours in a full workday (8) and by the
maximum days contemplated as a penalty (30) yields a total of $401,385.60 in
controversy on this claim.
* * *
At this point, the Court can stop. Adding the amounts in controversy for the
claims calculated thus far—meal period violations ($1,949,587.20), rest period
violations ($1,949,587.20), and waiting time penalties ($401,385.60)—yields a
subtotal of $4,300,560. Adding 25% of this subtotal ($1,075,140) for attorney’s
fees, as Defendant did in its calculation and which Plaintiff does not challenge,
yields an amount in controversy of $5,375,700.4 This exceeds the threshold
required under CAFA.

This total does not include any value for Plaintiff’s claims for minimum wage,
overtime, and wage statement violations, claims to which Plaintiff obviously
attributes some value, but which the Court need not analyze since the claims
discussed above surpass the jurisdictional threshold.
4

7

IV.
CAFA’s amount-in-controversy requirement is met, and its citizenship
requirement is not at issue. Accordingly, the Court DENIES the motion to remand.

Date: February 5, 2024

___________________________
Stanley Blumenfeld, Jr.
United States District Judge

8