Andres Adame, et al. v. Comtrak Logistics, Inc. et al.
Filing
31
ORDER GRANTING PLAINTIFFS MOTION TO REMAND AND DENYING DEFENDANTS MOTION TO TRANSFER VENUE AS MOOT 12 , 13 , 15 . The request for fees and costs is DENIED. Case Remanded to San Bernardino County Superior Court, CIVDS 1511291 by Judge Dean D. Pregerson. ( MD JS-6. Case Terminated ) (lc). Modified on 4/8/2016 (lc).
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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ANDRES ADAME et al,
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Plaintiffs,
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v.
COMTRAK LOGISTICS, INC.,et
al,
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Defendants.
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Case No. EDCV 15-02232 DDP (KKx)
ORDER GRANTING PLAINTIFFS’ MOTION
TO REMAND AND DENYING DEFENDANTS’
MOTION TO TRANSFER VENUE AS MOOT
[Dkt. Nos. 12, 13, 15]
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Presently before the Court are (1) Defendants’ Motion to
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Transfer Venue to Western District of Tennessee; and (2)
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Plaintiffs’ Motion to Remand and Request Attorneys’ Fees.
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Nos. 13, 15.)
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Court adopts the following Order.
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I.
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(Dkt.
After considering the parties’ submissions, the
BACKGROUND
This employment law case alleges that Defendants, who are
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trucking companies and individuals who work for those companies,
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violated several California employment laws by treating Plaintiff
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truck drivers as independent contractors rather than employees.
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(Notice of Removal, Dkt. No. 1, ¶¶ 1-3.)
The case was originally
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filed in the California Superior Court for San Bernardino County
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and it alleges solely a Private Attorney General Act (“PAGA”) cause
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of action for underlying California Labor Code violations.
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1, Ex. A (Compl.).)
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a notice of related case in both the state and federal courts,
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citing Robles v. Comtrak Logs., Inc., No. 2:15-cv-02228-SHM-tmp
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(W.D. Tenn.).
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Defendants claim that there are the same Defendants in both cases
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and the plaintiffs all allege the same Labor Code violations based
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(Id. ¶
Defendants removed to federal court and filed
(Notice of Removal, Dkt. No. 1, ¶ 6, Ex. D.)
on misclassification.
(Id.)
Defendants allege in the Notice of Removal that three of the
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individual Defendants named in the complaint are “sham” defendants
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so that their California citizenship should not be considered for
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determining subject matter jurisdiction.
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claim that none of the five individuals are “employers” under the
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applicable law, so they cannot be held liable for the violations of
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the Labor Code alleged and their citizenship is not considered for
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diversity of citizenship purposes.
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(Id. ¶ 10.)
Defendants
(Id.)
According to Defendants, Defendants David Yeager and Dan Burke
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are residents of Illinois and are employed by Defendants in
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Illinois.
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and Ryan Kotaka are residents of California and are or were
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employed by Hub Group Trucking, Inc., based in either Ontario or
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Stockton, California.
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(Id. ¶ 16.)
Defendants Lorena Rodriguez, Johnny Moreno,
(Id. ¶ 17.)
For their part, Plaintiffs alleged Defendant Comtrack
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Logistics, Inc., is a Delaware corporation with a principal place
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of business in Illinois, but who maintains two terminals in
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California, one in Stockton and one in Ontario.
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(Compl. ¶ 76.)
1
Defendant Hub Group, Inc., is alleged by Plaintiffs to be a
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Delaware corporation with a principal place of business in
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Illinois, and to have acquired Comtrak Logistics in 2006.
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77.)
5
Delaware corporation with a principal place of business in
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Illinois,1 and is the same company as that formerly known as
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“Comtrak Logistics, Inc.,” just with a new name since 2014.
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78.)
(Id. ¶
Defendant Hub Group Trucking, Inc., Plaintiffs allege, is a
(Id. ¶
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Plaintiffs allege Defendant David Yeager is or was the CEO of
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Hub Group, Inc., and Director of Hub Group Trucking, Inc., and was
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“directly involved in the creation, negotiation and execution of
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independent contractor agreements with Plaintiffs.”
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Defendant Dan Burke is alleged to have been Chief Intermodal
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Officer for Hub Group, Inc., President of Hub Group Trucking, Inc.,
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and “directly involved in Comtrack’s efforts to settle wage and
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hour claims with individual drivers, including attempted waivers of
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rights to bring PAGA claims,” as well as involved in the
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independent contractor agreements as was Yeager.
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(Id. ¶ 79.)
(Id. ¶ 80.)
Defendant Lorena Majarro (aka Lorena Rodriguez) is alleged to
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be Manager of Hub Group Trucking, Inc., and Comtrak Logistics,
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Inc., and was alleged to be involved in both the independent
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contractor agreements and the settlements.
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Johnny Moreno was Operations Manager of Hub Group Trucking, Inc.,
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and Comtrak Logistics, Inc., and was also allegedly involved in
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both the agreements and settlements.
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Defendant Ryan Kotaka is alleged to be the Terminal Manager of Hub
(Id. ¶ 81.)
(Id. ¶ 82.)
Defendant
Lastly,
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Defendants claim Hub Group Trucking’s principal places of
business are Tennessee and Illinois. (Notice of Removal ¶ 15.)
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Group Trucking, Inc., and Comtrak Logistics, Inc., and involved in
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both the agreements and settlements.
3
(Id. ¶ 83.)
Plaintiffs also claim that their PAGA claims are brought
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against Defendants as individual persons, not just as employers,
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under Labor Code section 558.
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(Id. ¶¶ 201-202.)
Plaintiffs are sixty-three individuals who worked for
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Defendants.
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independent contractors, and thus were denied benefits and
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protections of the California Labor Code.
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They all allege that they were misclassified as
(Compl. ¶¶ 12-75.)
They
all claim to be citizens of California.2 (Id.)
The complaint alleges that Defendants “willfully misclassified
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Plaintiffs as independent contractors in violation of Labor Code
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sections 226.8 and 2753; failed to properly pay Plaintiffs in
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violation of Labor Code sections 204, 210, 221-223, 225.5, 558,
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1182.12, 1194, and 117, as well as section 4 of Wage Order number 9
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promulgated by the Industrial Welfare Commission (“IWC Wage Order
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No. 9”); failed to pay for employment-related expenses in violation
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of Labor Code section 2802 and IWC Wage Order No. 9 sections 8-9;
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failed to provide proper meal and rest breaks in violation of Labor
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Code sections 226.7, 512, and 516, and IWC Wage Order No. 9
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sections 11-12; failed to provide proper wage statements by not
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maintaining documentation of hours worked and wages earned, and
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failing to pay the wages due in violation of Labor Code sections
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1174 and 201-203, and IWC Wage Order No. 9 section 7.
(Compl. ¶¶
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Defendants
Plaintiff resides in
alleged to reside in
(Notice of Removal ¶
claim that their research shows all but one
California. The out-of-state Plaintiff is
Georgia, where no Defendant is a citizen.
13.)
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2-10.)
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2699.
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Plaintiff seek penalties under PAGA, Labor Code section
(Id. ¶ 10.)
Plaintiffs allege that around August 2014, Defendants held
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“mandatory meetings” with their California drivers where the
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drivers were told that the company was converting the drivers from
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independent contractors to employees.
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allege that the drivers were not told the purpose of the meetings
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in advance and were offered settlements, with prepared checks, on
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the spot if they signed releases of claims like those alleged in
(Id. ¶ 148.)
Plaintiffs
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this litigation.
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paperwork to convert to employee status, the latter paperwork
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required to maintain a work relationship with Defendants unless the
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driver bought Defendants out of the lease on their truck.
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149-50.)
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pass certain tests and that if the trucks failed, it would require
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a large sum of money to resolve.
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that the discussion of the settlement was “materially misleading”
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and that any release signed by any Plaintiff here — or any other
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driver — is void and unenforceable.
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(Id.)
The settlements were offered alongside the
(Id. ¶¶
Drivers were also allegedly told that the trucks had to
(Id. ¶ 151.)
Plaintiffs claim
(Id. ¶¶ 152-53.)
Plaintiffs claim to have exhausted administrative remedies by
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providing written notice to the Labor and Workforce Development
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Agency (“LWDA”) and Defendants of the alleged violations. (Id. ¶
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154.)
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Now, Plaintiffs have filed a Motion to Remand the case to
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California Superior Court, arguing that the Court lacks subject
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matter jurisdiction because there is not complete diversity of
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citizenship and Defendants have not shown that the amount in
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controversy is met.
(Dkt. No. 15, Mot. Remand.)
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Defendants have
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simultaneously filed a Motion to Transfer Venue to Western District
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of Tennessee.
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II.
(Dkt. No. 13, Mot. Transfer.)
LEGAL STANDARD
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A.
Motion to Remand
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A defendant may remove a case from state court to federal
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court if the case could have originally been filed in federal
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court.
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against removal and the defendant has the burden of establishing
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that removal is proper by a preponderance of evidence.
28 U.S.C. § 1441(a).
There is a “strong presumption”
Gaus v.
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Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992); Morrison v. Zangpo,
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No. C-08-1945 EMC, 2008 WL 2948696, at *1 (N.D. Cal. July 28,
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2008).
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after receiving, “through service or otherwise, . . . a copy of the
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initial pleading setting forth the claim for relief upon which such
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action or proceeding is based.”
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a “motion to remand the case on the basis of any defect other than
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lack of subject matter jurisdiction must be made within 30 days
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after the filing of the notice of removal under section 1446(a).”
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28 U.S.C. § 1447(c).
A defendant has thirty days in which to remove the case
28 U.S.C. § 1446(b)(1).
Likewise,
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B.
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“For the convenience of parties and witnesses, in the interest
Motion to Transfer Venue
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of justice, a district court may transfer any civil action to any
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other district or division where it might have been brought or to
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any district or division to which all parties have consented.”
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U.S.C. § 1404(a).
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a motion to transfer venue under Section 1404(a).
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Constr. Co. v. U.S. Dist. Court for W. Dist. Tex., 134 S. Ct. 568,
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579 (2013).
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A forum-selection clause is enforceable through
Atl. Marine
“[A] proper application of § 1404(a) requires that a
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forum-selection clause be ‘given controlling weight in all but the
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most exceptional cases.’”
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Corp., 487 U.S. 22, 33 (1988)).
4
selection clause, the court’s analysis changes from a typical
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motion to transfer venue in three ways: (1) the plaintiff’s choice
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of forum is not considered; (2) the private interests or
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inconvenience of the parties are not given any weight; and (3) the
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transfer of venue does not entail the ususal rule that the original
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venue’s choice-of-law rules will apply in the new venue.
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Id. (quoting Stewart Org., Inc. v. Ricoh
When there is a valid forum-
Id. at
581-82.
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III. DISCUSSION
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A.
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Plaintiffs argue this Court lacks subject matter jurisdiction
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over the case because there is no diversity jurisdiction: at least
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one defendant is a citizen of California, as are the plaintiffs and
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the real party in interest, the state of California; further, the
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amount in controversy is not satisfied.
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Plaintiffs argue that the Court should not consider the citizenship
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of the individual Plaintiffs because the real party in the action
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is the state of California in a PAGA suit, and a state is not a
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citizen for purposes of diversity jurisdiction. (Id. at 4-5 (citing
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Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1122-23 (9th
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Cir. 2013).)
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Motion to Remand
(Mot. Remand at 3.)
To the extent the Court does consider the individual
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Plaintiffs, Plaintiffs argue there are nondiverse Defendants who
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are not “sham” because they are subject to civil penalties under
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PAGA for causing Labor Code violations.
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(Id. at 6-7 (citing
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Velasquez v. HMS Host USA, Inc., No. 2:12-cv-02312-MCE-CKD, 2012 WL
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6049608 (E.D. Cal. Dec. 5, 2012); Ontiveros v. Zamora, No. CIV S-
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08-567 LKK/DAD, 2009 WL 425962, at *6 (E.D. Cal. Feb. 20, 2009).)
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Further, Plaintiffs argue that Defendants have not shown the
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amount in controversy is met because Defendants cannot aggregate
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the pro rata share of the individual Plaintiffs, who all expect as
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damages less than $75,000, and cannot aggregate the share of one
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individual Plaintiff with the share for the state.
9
(citing Lopez v. Ace Cash Express, Inc., No. LA CV11-07116 JAK
(Id. at 8-10
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(JCx), 2015 WL 1383535, at *3-5 (C.D. Cal. Mar. 24, 2015); Pulera
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v. F & B, Inc., No. 2:08-cv-00275-MCE-DAD, 2008 WL 3863489, at *3
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(E.D. Cal. Aug. 19, 2008).)
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fees and costs of $10,000 for bringing their Motion, arguing that
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Defendants’ removal was without legal basis in a private attorney
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general action.
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Lastly, Plaintiffs seek attorneys’
(Id. at 10-12.)
Defendants respond that the state is not a party for the
17
purposes of diversity jurisdiction.
18
9 (citing Archila v. KFC U.S. Props., Inc., 420 F. App’x 667, 668-
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69 (9th Cir. 2011)).)
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brought under the federal False Claims Act, where the Supreme Court
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has stated that the United States is not considered a party to the
22
action despite being a real party in interest and entitled to a
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share in the award.
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Plaintiffs’ cases and argue that there is no binding holding for
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the proposition that the state is the party for purposes of
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diversity citizenship and therefore destroys federal jurisdiction.
27
(Id. at 6-9.)
(Dkt. No. 23, Opp’n at 1-2, 3-
Defendants analogize to qui tam suits
(Id. at 4-5.)
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They further distinguish
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Further, Defendants argue that the individual Defendants are
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“sham” Defendants because PAGA claims are against an employer,
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which does not include a corporate agent under California law.
4
(Id. at 2; 9-13 (citing Martinez v. Combs, 231 P.3d 259 (Cal.
5
2010)).)
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section 558 is misplaced because Plaintiffs are still limited by
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the definition of employer in PAGA suits as provided by Martinez.
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(Id. at 11-12.)
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are also insufficient to establish they caused the Labor Code
Defendants claim that Plaintiffs’ reliance on Labor Code
The allegations against the individual Defendants
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violations in any case.
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the Court should aggregate an individual Plaintiff’s 25% share of
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potential penalties with LWDA’s 75% share, which would exceed
13
$75,000 and satisfy the amount in controversy requirement.
14
13-17 (citing Patel v. Nike Retail Servs., Inc., 58 F. Supp. 3d
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1032 (N.D. Cal. 2014)).)
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attorneys’ fees and costs should be denied because they had an
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“objectively reasonable basis” for removal, which was not “clearly
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foreclosed” by binding law, particularly because PAGA claims raise
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complex issues.
20
21
1.
(Id. at 13.)
And Defendants claim that
(Id. at
Lastly, Defendants argue the request for
(Id. at 2-3; 17-19.)
Diversity Jurisdiction and Remand Standard
Diversity jurisdiction requires complete diversity of the
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parties’ citizenship and satisfaction of the amount in controversy
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requirement, which is over $75,000.
24
diversity jurisdiction is an original basis of a federal court’s
25
jurisdiction, a defendant can remove a case to federal court if the
26
case satisfies the requirements of diversity jurisdiction.
27
U.S.C. § 1441(a).
28
removal statute against removal jurisdiction” and “[f]ederal
28 U.S.C. § 1332.
Because
See 28
However, federal courts “strictly construe the
9
1
jurisdiction must be rejected if there is any doubt as to the right
2
of removal in the first instance.”
3
564, 566 (9th Cir. 1992).
4
Gaus v. Miles, Inc., 980 F.2d
Defendants here removed this case on the basis of diversity
5
jurisdiction.
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citizenship because the three California-citizen Defendants are
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“sham” defendants under California law.
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the amount in controversy is satisfied because courts can consider
9
the total potential PAGA penalty for alleged violations of
They claim that there is complete diversity of
Further, they claim that
10
California’s Labor Code as to each individual plaintiff under Ninth
11
Circuit and district court cases.
12
grounds, relying on Urbino and other district court cases.
Plaintiffs contest these two
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2.
The Urbino Decision
The Ninth Circuit in Urbino was faced with the question of
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“whether the penalties recoverable on behalf of all aggrieved
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employees may be considered in their totality to clear the
18
jurisdictional hurdle” of $75,000 amount in controversy.
19
726 F.3d at 1122.
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not lie because their claims cannot be aggregated” and there was
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“no dispute that Urbino’s individual potential recovery would not
22
meet the $75,000 threshold.”
23
Urbino,
The court held that “diversity jurisdiction does
Id.
The court’s reasoning rested on the “anti-aggregation” rule:
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“multiple plaintiffs who assert separate and distinct claims are
25
precluded from aggregating them to satisfy the amount in
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controversy requirement.”
27
& Co., 22 U.S. 39, 40 (1911)).
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aggregation only occurs when the plaintiffs’ claims “are derived
Id. (citing Troy Bank v. G.A. Whitehead
In representative actions,
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from rights that they hold in group status” such that “they have a
2
common and undivided interest.”
3
U.S. 332, 335 (1969); Eagle v. Am. Tel. & Tel. Co., 769 F.2d 541,
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546 (9th Cir. 1985)) (internal quotations omitted).
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is common and undivided when ‘neither [party] can enforce [the
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claim] in the absence of the other.’”
7
U.S. at 41).
Id. (quoting Snyder v. Harris, 394
“[A]n interest
Id. (quoting Troy Bank, 222
8
Applying those principles to the PAGA case before it, the
9
court in Urbino found that aggrieved employees under PAGA have
10
other causes of action to vindicate their rights and rectify their
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employer’s violations of California’s Labor Code, but “all of these
12
rights are held individually.”
13
injury” that can be “redressed without the involvement of other
14
employees.”
15
different aggrieved employees could not be aggregated.
16
Id.
Id.
Each employee has a “unique
Therefore, the court found that the claims of the
Id.
The defendant argued that Urbino’s interest was not individual
17
but “the state’s collective interest in enforcing its labor laws
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through PAGA.”
19
a case were aggregation was appropriate because there was a single
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plaintiff aggregating multiple of his own claims against a single
21
defendant, which is allowed to satisfy the amount in controversy
22
requirement.
23
24
25
Id.
Id.
Thus, the defendant was arguing that this was
The court responded:
To the extent Plaintiff can — and does — assert anything
but his individual interest, however, we are unpersuaded
that such a suit, the primary benefit of which will inure
to the state, satisfies the requirements of federal
diversity jurisdiction. The state, as the real party in
interest, is not a citizen for diversity purposes.
26
Id. at 1122-23 (citing Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461
27
(1980) (stating courts “must disregard nominal or formal parties
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and rest jurisdiction only upon the citizenship of real parties to
2
the controversy”); Moor v. Cnty. of Alameda, 411 U.S. 693, 717
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(1973) (explaining that “a State is not a ‘citizen’ for purposes of
4
the diversity jurisdiction”)).
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courts lack subject matter jurisdiction over this quintessential
6
California dispute.”
The court concluded that “federal
Id. at 1123.
7
As the Ninth Circuit reiterated in a later case holding that
8
PAGA actions did not have original jurisdiction in federal courts
9
under the Class Action Fairness Act (“CAFA”), the court in Urbino
10
“held that potential PAGA penalties against an employer may not be
11
aggregated to meet the minimum amount in controversy requirement of
12
28 U.S.C. § 1332(a).”
13
1117, 1119 (9th Cir. 2014).
14
that under Urbino, what is considered for calculating the amount in
15
controversy is the individual plaintiff’s “portion of any recovery
16
(including fees).”
17
3.
Baumann v. Chase Inv. Servs. Corp., 747 F.3d
In Baumann, the Ninth Circuit noted
Id. at 1120 n.1.
Application of Urbino
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All the parties admit here that the individual Plaintiffs
19
cannot aggregate their potential PAGA penalties for the purposes of
20
satisfying the amount in controversy.
21
the court can aggregate an individual Plaintiff’s share (his 25%)
22
with the share that goes to the state (the LWDA’s 75%).
23
to Defendants’ estimates, which were not disputed by Plaintiffs in
24
their Opposition, if all the alleged Labor Code violations occurred
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on a weekly basis for the year-long PAGA period and there was a
26
willful misclassification as a result of pattern or practice, the
27
maximum total a Plaintiff could potentially receive would be
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$183,050.
The key dispute is whether
According
(Notice of Removal ¶¶ 43-45; Mot. Remand at 10; Opp’n at
12
1
17 n.12.)
2
25% share of that potential penalty, it would be $45,762.50, plus
3
fees, which Defendants argue would also raise the amount in
4
controversy to over $75,000.
5
have only asked for $10,000 in attorneys’ fees and costs in
6
bringing this motion, and it is unclear what are the fees and costs
7
accrued prior to the motion.3
8
9
If the Court only considers an individual plaintiff’s
(See Opp’n at 17 n.12.)
Plaintiffs
There are conflicting district court cases, some of which are
cited by Plaintiffs and Defendants in their briefing, as to whether
10
the state’s portion of potential PAGA penalties can be aggregated
11
with an individual plaintiff’s portion of the penalties.
12
grounded in the Urbino decision, the policies of PAGA, and the
13
question of whether a state’s interest, unlike those of other
14
individual plaintiffs, is a common and undivided interest with a
15
particular individual plaintiff for purposes of aggregating
16
penalties.
17
CV 11-07116 JAK (Jcx), 2015 WL 1383535 (C.D. Cal. Mar. 24, 2015)
18
(holding that the state’s 75% share is not aggregated); Willis v.
19
Xerox Bus. Servs., LLC, No. 1:13-cv-01353-LJO-JLT, 2013 WL 6053831,
20
at *8-9 (E.D. Cal. Nov. 15, 2013) (slip op.) (same), with, e.g.,
21
Patel v. Nike Retail Servs., Inc., 58 F. Supp. 3d 1032 (N.D. Cal.
22
2014) (holding that the state’s 75% share can be aggregated with an
23
individual plaintiff for purposes of satisfying the amount in
24
controversy); Mitchell v. Grubhub Inc., No. CV 15-05465-BRO (Asx),
All are
Compare, e.g., Lopez v. Ace Cash Express, Inc., No. LA
25
3
26
27
28
As another point of uncertainty, the Ninth Circuit
not determined whether all attorneys’ fees are aggregated as
individual plaintiff, or whether the proper measure would be
portion of the attorneys’ fees attributable to an individual
plaintiff. See Mitchell v. Grubhub Inc., No. CV 15-5465-BRO
2015 WL 5096420 (C.D. Cal. Aug. 28, 2015) (slip op.).
13
has
to an
a
(Asx),
1
2015 WL 5096420, at *5-6 (C.D. Cal. Aug. 28, 2015) (slip op.)
2
(same).
3
Thus, the law is unclear for determining the amount in
4
controversy in these PAGA cases as to the state’s share and an
5
aggrieved employee’s share.
6
Circuit in Urbino and the logic underlying the decision could point
7
in either direction, as amply demonstrated in the many conflicting
8
cases in the district courts of the Circuit.
9
line of cases to this Court is the line that did not aggregate the
The question was not before the Ninth
The more persuasive
10
state’s share with the aggrieved employee’s share.
11
on the language in Urbino disfavoring jurisdiction and stating that
12
the state is not considered for jurisdiction purposes, as well as
13
the PAGA statute itself which takes the total penalty award — not
14
an individual plaintiff’s share — and then allots 75% of the total
15
to the state and 25% to all aggrieved employees, not just an
16
individual representative plaintiff.
17
unclear, the Court finds that the presumption against diversity
18
jurisdiction also weighs in favor of remand.
19
20
4.
This is based
And, since the matter is
Individual California Defendants
There is a also a substantial question as to the allegedly
21
“sham” defendants that weighs in favor of remand on the basis of
22
lacking complete diversity of citizenship.
23
whether the three individual California Defendants can be liable
24
for the alleged offenses under California law.
25
That is, it is unclear
In Martinez v. Combs, 49 Cal. 4th 35 (2010), the California
26
Supreme Court adopted the IWC’s definition of “employer” rather
27
than solely the common law description of employment relationships
28
in actions under section 1194 of the Labor Code.
14
Id. at 52, 62,
1
66.
The court explained that the IWC defined an employer as “a
2
person who ‘employs or exercises control over the wages, hours, or
3
working conditions of any person.’” Id. at 59.
4
“To employ then, under the IWC’s definition, has three alternative
5
definitions.
6
hours or working conditions, or (b) to suffer or permit to work, or
7
(c) to engage, thereby creating a common law employment
8
relationship.”
9
Put another way:
It means: (a) to exercise control over the wages,
Id. at 64.
The court acknowledged that its previous decision in Reynolds
10
v. Bement, 36 Cal. 4th 1075 (2005), applied the common law standard
11
of employment to a section 1194 case, but stated that Reynolds
12
“properly holds that the IWC’s definition of ‘employer’ does not
13
impose liability on individual corporate agents acting within the
14
scope of their agency.”
15
Reynolds, 36 Cal. 4th at 1086).
16
left open personal liability on the basis of a “joint employer”
17
theory by exercising control over working conditions, though not
18
finding it present in the facts presented in that case.
19
76.
20
Martinez, 49 Cal. 4th at 66 (citing
But the court in Martinez also
Id. at 75-
Here, Plaintiffs argue both that the individual defendants are
21
joint employers and are persons who caused violations under Labor
22
Code section 558.
23
89).)
24
employer theory, it does allege against all three California
25
Defendants that they were personally and directly involved in the
26
independent contractor agreements and settlement attempts with
27
Plaintiffs that Plaintiffs allege violated California’s Labor Code.
28
Plaintiffs also allege these Defendants had some kind of
(Mot. Remand at 6-7 (citing Compl. ¶¶ 81-83, 85-
While the complaint is not very explicit about its joint
15
1
supervisory or managerial role in the terminals in which Plaintiffs
2
worked.
3
Further, claims under section 558 are available in a PAGA
4
action, and the section contemplates holding individuals liable:
5
“Any employer or other person acting on behalf of an employer who
6
violates, or causes to be violated, a section of this chapter or
7
any provision regulating hours and days of work in any order of the
8
Industrial Welfare Commission shall be subject to a civil penalty
9
as follows[.]”
Cal. Labor Code § 558(a); see Sarmiento v. Wells
10
Fargo Bank, N.A., No. CV 15-01181-RGK (PLA), 2015 WL 1756833, at
11
*2-4 (C.D. Cal. Apr. 17, 2015); Velasquez v. HMS Host USA, Inc.,
12
No. 2:12-cv-02312-MCE-CKD, 2012 WL 6049608, at *3-5 (E.D. Cal. Dec.
13
5, 2012).
14
There may be a question, raised by Defendants in their brief,
15
as to whether these three Defendants qualify as persons acting on
16
behalf of an employer who caused the violations, particularly if
17
they are not high-level employees or otherwise satisfy the
18
definition of “employer” from Martinez.
19
But that is a question resolved in Plaintiffs’ favor at this
20
pleading stage, and which again cuts against finding federal
21
jurisdiction here because these Defendants could be liable as
22
individuals under section 558 as well as if they are found to be
23
“joint employers.”
(See Opp’n at 10-12.)4
Therefore, the Court does not find these
24
25
26
27
28
4
Defendants allege that Defendants Moreno and Kotaka were
not addressed in the notice letter to the LWDA and thus they lacked
notice of their potential liability. This would not resolve the
diversity jurisdiction issue because there would still be one
nondiverse Defendant, Rodriguez, who was addressed in the letter.
16
1
Defendants were fraudulently joined and remands on this independent
2
basis as well.
3
5.
Costs on Remand
4
As established by the all the uncertainty in the law from the
5
amount in controversy to sham defendants, this is not a case where
6
Defendants’ removal was a dilatory tactic or plainly against
7
binding authority.
8
fees and costs is denied.
Therefore, Plaintiffs’ request for attorneys’
9
10
11
IV.
CONCLUSION
For all the above reasons, the Court GRANTS Plaintiffs’ Motion
12
to Remand.
The request for fees and costs is DENIED.
13
Motion to Transfer Venue is DENIED as moot.
14
Motion to Dismiss (Dkt. No. 12) is VACATED as moot.
15
Defendants’
REMANDED.
The later-noticed
The case is
16
17
IT IS SO ORDERED.
18
Dated: April 7, 2016
DEAN D. PREGERSON
United States District Judge
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25
26
27
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