Elizabeth La Fuente v. Cott Beverages Inc. et al
Filing
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Order Granting Motion to Remand by Judge Virginia A. Phillips re: 11 MOTION to Remand Case to State Court Case Remanded to California Superior Court for the County of San Bernardino, CIVDS1510613. MD JS-6. Case Terminated. (mrgo)
United States District Court
Central District of California
Eastern Division
JS-6
Elizabeth La Fuente,
Plaintiff,
EDC V 15-1899-VAP (KKx)
v.
Order Granting Motion to Remand
Cott Beverages, Inc. et al.,
Defendants.
I. BACKGROUND
Plaintiff Elizabeth La Fuente filed this a class action lawsuit against
Defendants Cott Beverages, Inc. and Cott Corporation on July 28, 2015 in
the Superior Court for the County of San Bernardino alleging ten violations
of the California Labor Code. (See generally Complaint.) On September
16, 2015, Defendant Cott Beverages, Inc. removed the case to the U.S.
District Court for the Central District of California. (Removal (Doc. No. 1)).
II.
LEGAL STANDARD
Removal jurisdiction is governed by statute. See 28 U.S.C. §§ 1441 et
seq.; Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)
("The removal jurisdiction of the federal courts is derived entirely from the
statutory authorization of Congress" (citations omitted)). Defendants may
remove a case to a federal court when a case originally filed in state court
presents a federal question or is between citizens of different states. See
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28 U.S.C. §§ 1441(a)-(b), 1446, 1453. Only those state court actions that
originally could have been filed in federal court may be removed. 28 U.S.C.
§ 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).
Although CAFA gives district courts diversity jurisdiction to hear class
actions, defendants must show that "any member of a class of plaintiffs is a
citizen of a State different from any defendant" (minimum diversity); the
number of members of the proposed plaintiff class exceeds 100 in the aggregate (numerosity); and "the matter in controversy exceeds the sum or
value of $5,000,000, exclusive of interest and costs" (amount in controversy). 28 U.S.C. §1332(d); see also Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1033-34 (9th Cir. 2008); Serrano v. 180 Connect,
Inc., 478 F.3d 1018, 1020-21 (9th Cir. 2007).
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. Dart
Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014).
When the removed complaint fails to allege a specific amount in controversy, or when the complaint alleges an amount in controversy less than the
jurisdictional threshold, the removing defendant must prove by a preponderance of the evidence that the amount in controversy is greater than
$5,000,000. Rodriguez v. AT&T Mobility Servs., No. 13-56149, 2013 WL
4516757, at *6-7 (9th Cir. Aug. 27, 2013) (citing Standard Fire Ins. Co. v.
Knowles, 133 S. Ct. 1345, 1348 (2013)); Lewis v. Verizon Commc'ns, Inc.,
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627 F.3d 395, 400 (9th Cir. 2010) (citing Guglielmino v. McKee Foods Corp.,
506 F.3d 696, 699 (9th Cir. 2007)). If a defendant fails to meet the requisite
burden of proof, a court must remand for lack of subject matter jurisdiction.
In determining the amount in controversy, the Court considers not only
the facts alleged in the complaint, taken as true for purposes of calculating
the amount, but also "summary-judgment-type evidence relevant to the
amount in controversy at the time of removal." Singer v. State Farm Mut.
Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997). "[T]he amount in controversy is simply an estimate of the total amount in dispute, not a prospective
assessment of defendant's liability." Lewis, 627 F.3d at 400.
III.
DISCUSSION
A. The Amount-in-Controversy Requirement
Plaintiff argues that Defendants have not satisfied CAFA's amount-incontroversy requirement, and therefore this action must be remanded. In
the Notice of Removal, Defendants calculated the possible damages that
the proposed class could receive.
1. Alleged Meal Period Violations
Plaintiff seeks meal period premiums dating back four years from the
filing of the Complaint, to July 28, 2011. (See Compl. ¶¶ 67, 117.) During
the relevant time period, Cott Inc. employed non-exempt employees at two
locations in California: Fontana and San Bernardino. (See Virgen Decl., ¶
5.) Defendants argue that Plaintiff’s allegations concerning meal period
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violations place at least $1,666,583.10 1 in controversy, assuming a 50%
violation rate. (Removal ¶29.)
2. Minimum Wage Penalties
Plaintiff alleges that she and other members of the Putative Class were
required to work four or more hours without being authorized or permitted to
take legally-mandated, duty-free rest breaks of 10 minutes for every four
hours or major fraction thereof worked. (See Compl. ¶ 72.) Defendants
argue that Plaintiff’s allegations concerning rest break violations place at
least $3,333,166.20 2 in controversy, assuming a 50% violation rate.
(Removal ¶32.)
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Calculated as follows:
San Bernardino: 96 (minimum number of consistent employees) x 5
(meal periods missed per week) x $21.93 (minimum average hourly
rate) x 49 (weeks per year) x 4 (years in statutory period) / 2 (50% violation rate) = $1,031,587.20.
Fontana: 77 (minimum number of consistent employees) x 5 (meal periods missed per week) x $16.83 (minimum average hourly rate) x 49
(weeks per year) x 4 (years in statutory period) / 2 (50% violation rate)
= $634,995.90.
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Calculated as follows:
San Bernardino: 96 (minimum number of consistent employees) x 5
(rest breaks missed per week at 50% violation rate) x $21.93 (minimum average hourly rate) x 49 (weeks per year) x 4 (years in statutory
period) = $2,063,174.40.
Fontana: 77 (minimum number of consistent employees) x 5 (rest
breaks missed per week at 50% violation rate) x $16.83 (minimum average hourly rate) x 49 (weeks per year) x 4 (years in statutory period)
= $1,269,991.80.
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3. Rest Break Violations
Plaintiff seeks to recover allegedly unpaid minimum wages for purported
off-the-clock work by her and members of the Putative Class. According to
Plaintiff this was part of an alleged “uniform policy and systemic scheme.”
(Compl. ¶26). Defendants argue that Plaintiff’s claim for penalties puts an
additional $1,761,100.00 3 in controversy assuming a 100% violation rate.
(Removal ¶37.)
4. Itemized Wage Statements
Plaintiff seeks to recover penalties for allegedly non-compliant itemized
wage statements on behalf of herself and all members of the Putative Class.
(See Compl. ¶¶ 95-101.) Defendants argue that Plaintiff’s claim for
penalties puts an additional $592,350.00 4 in controversy assuming at 100%
violation rate. (Removal ¶40.)
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Calculated as follows:
San Bernardino: 99 (number of consistently employed non-exempts
in last year) x $100 (penalty for initial violation pay period) = $9,900.00,
and 99 (number of consistently employed non-exempts in last year) x
$250 (penalty for subsequent violation pay periods) x 51 (remaining
pay periods) = $1,262,250.00.
Fontana: 77 (number of consistently employed non-exempts in last
year) x $100 (penalty for initial violation pay period) = $7,700.00, and
77 (number of consistently employed non-exempts in last year) x $250
(penalty for subsequent violation pay periods) x 25 (remaining pay periods) = $481,250.00.
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Calculated as follows:
San Bernardino: $4,000 (maximum per employee penalty) x 99 (consistent number of employees during the year) = $396,000.00.
Fontana: $3,850 (first violation penalties) + $192,500 (subsequent violation penalties) = $196,350.00.
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Plaintiff takes issue with a number of these damages estimates, and
generally alleges that many of the above calculation are speculative for
purposes of calculating the amount-in-controversy. (See Mot. at 5-0.) The
Court agrees that the information submitted by Defendants is insufficient to
support its assumptions of 100% violation rates with respect to Plaintiff's
rest break and itemized wage statements claim. Defendants supported
each of these calculations with a Declaration made by Pearl Virgen, Cott
Inc.’s Director of Human Resources – West Region. (Declaration of Pearl
Virgen ("Virgen Decl.") (Removal Ex. 1.).) In her Declaration, Virgean notes
(1) the number of employees who worked for Defendants during the
proposed class period; (2) how many total weeks were worked; (3) the
average hourly wage for those employees; (4) the number of employees
who left the company during the class period; and (5) the average rate of
pay for the ex-employees. (Virgean Decl. ¶¶ 2-5.)
As the Ninth Circuit explained in Garibay v. Archstone Communities
LLC, 539 F. App'x 763 (9th Cir. 2013), such a declaration standing alone is
insufficient to make assumptions about other aspects of the amount-incontroversy calculation, for example, the possible number of wage
statement and waiting time violations. In Garibay, the defendants submitted
a "declaration by their supervisor of payroll, which set[] forth only the
number of employees during the relevant period, the number of pay periods,
and general information about hourly employee wages. Beyond this, the
defendants rel[ied] on speculative and self-serving assumptions about key
unknown variables." Id. at 764. For example, nothing in the declaration
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explained why each member of the class would be entitled to recovery for
every pay period for inaccurate wage statements, or why each member of
the class who had left the company would be entitled to the maximum
statutory penalty for the waiting period claim. Id. With respect to meal and
rest periods, the defendant in Garibay failed to "provide any evidence
regarding why the assumption that each employee missed two rest periods
per week was more appropriate than 'one missed rest period per paycheck
or one missed rest period per month.'" Id.
Removals under CAFA using similar methodologies similarly have been
rejected by district courts in California. See, e.g., Weston v. Helmerich &
Payne Inter. Drilling Co., 2013 WL 5274283, at *6; (E.D. Cal. Sept. 17,
2013) ("Defendant provides no factual underpinning for the assumption that
a meal and rest break violation occurred one time per week or why an
overtime violation should be presumed to occur for four hours every week.");
Emmons v. Quest Diagnostics Clinical Labs., Inc., 2014 WL 584393, at *6
(E.D. Cal. Feb. 12, 2014) ("Defendants conclude that because Plaintiffs
allege that all class members were not provided with complete and accurate
wage statements, Defendants are entitled to assume the maximum statutory
penalty applies. This, however, is an improper assumption."); Marshall v. G2
Secure Staff, LLC, 2014 WL 3506608, at *2 (C.D. Cal. July 14, 2014)
("[P]arties may not rely on the assumption that the 100–percent violation
rule applies without supporting the assumption with evidence.").
Moreover, since the Plaintiff here contests Defendants' amount-incontroversy calculations, Dart Cherokee makes clear that the requirements
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of § 1446(c)(2)(B) must be met, namely that the a defendant must show by
the preponderance of the evidence that the amount in controversy exceeds
$5,000,000. Dart Cherokee, 135 S. Ct. at 554. As the Court finds that
Defendants amount-in-controversy calculations are based on "speculation
and conjecture" (see Lowdermilk v. U.S. Bank Nat'l Ass'n, 479 F.3d 994,
1002 (9th Cir. 2007), overruled on other grounds, Rodriguez v. AT & T
Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013)), the Court disregards
those calculations for the purpose of determining whether the amount-incontroversy is satisfied here.
5. Attorneys' Fees
Defendants calculated an amount in controversy for attorneys’ fees
($2,451,066.33) using a 33% multiplier related to Plaintiff’s meal and rest
period violations. As CAFA's amount-in-controversy requirement has not
been met here, the Court will remand this action. Moreover, because the
Court remands on the basis that the amount-in-controversy requirement has
not been met, the Court need not address Plaintiff's argument that the
diversity of citizenship requirement had not been met. While courts in the
Ninth Circuit have considered potential attorneys’ fees in calculating the
amount in controversy in wage and hour cases, Defendants' fees estimate is
too conjectural to withstand its burden on removal. See, e.g., Jasso v.
Money Mart Exp., Inc., 2012 WL 699465, at *6-*7 (N.D. Cal. Mar. 1, 2012);
Hughes v. Fosdick, 2015 WL 3372396, at *4 (N.D. Cal. Apr. 29, 2015).
Here, Plaintiff does not dispute that the Court may consider reasonable
attorneys' fees, rather Plaintiff takes issue with calculating attorneys' fees
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based on Defendants' conjectural amount-in-controversy estimates Since
the Court has already disregarded those calculations for the purpose of
determining whether the amount-in-controversy is satisfied here, the Court
similarly disregards the attorneys' fee calculations.
IV.
CONCLUSION
For the reasons stated above, the Court GRANTS the Motion and
REMANDS this action to the California Superior Court for the County of San
Bernardino.
Dated:
11/17/15
Virginia A. Phillips
United States District Judge
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