Juan Garcia v. Wal-Mart Stores, Inc., et al

Filing 24

ORDER RE: PLAINTIFF'S MOTION TO REMAND 19 by Judge Beverly Reid O'Connell: The Court DENIES Plaintiffs Motion to Remand. The Court hereby VACATES the hearing set for October 17, 2016. IT IS SO ORDERED. (rfi)

LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

Present: The Honorable

BEVERLY REID O’CONNELL, United States District Judge

Renee A. Fisher

Not Present

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS)

ORDER RE: PLAINTIFF’S MOTION TO REMAND
[19]
I.

INTRODUCTION

Pending before the Court is Plaintiff Juan Garcia’s (“Plaintiff”) Motion to Remand.
(Dkt. No. 19 (hereinafter, “Mot.”).) After consideration of the papers filed in support of
and in opposition to the instant Motions, the Court deems these matters appropriate for
decision without oral argument of counsel. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.
For the following reasons, the Court DENIES Plaintiff’s Motion to Remand.
II.

BACKGROUND
A.

Factual Background

On July 28, 2016, Defendant Wal-Mart Stores, Inc. filed a Notice of Removal in
this Court pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §
1332(d). (See Dkt. No. 1 (hereinafter, “Removal”).) Defendant Wal-Mart Stores, Inc.
(“Wal-Mart”), is and was a Delaware corporation licensed to do business in California.
(Dkt. No. 1-1, Ex. A, at 39–68, (hereinafter, “FAC”) ¶ 4–5.) Plaintiff Juan Garcia
(“Garcia”), who resides in the County of San Bernardino, California, (id. ¶ 3), worked as
a non-exempt hourly employee for Defendant’s distribution center, (id . ¶ 16). Plaintiff
brings this matter as a class action on behalf of similarly situated non-exempt hourly
employees of Defendant’s Wal-Mart Distribution Center (“WDC employees”). (Id.) In
bringing the action, Plaintiff seeks to represent the following six classes: (1) The
“Overtime Class”; (2) The “Meal Break Violation Class”; (3) The “Rounding Class”;
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

(4) The “Off the Clock Class”; (5) The “Pay Stub Class”; (6) The “Waiting Time Penalty
Class.” (FAC ¶ 17.) Plaintiff further seeks to represent the following three subclasses:
(1) The “Short Shift O.T. Class”; (2) The “Second Meal Period Class”; (3) The “Meal
Period Waiver Subclass.” (Id.)
Plaintiff alleges that beginning on an unknown date (but before four years prior to
the filing of this actions) Wal-Mart engaged in a pattern and practice of acts of unfair
competition against Plaintiff and several other, similarly situated WDC employees in
violation of several state laws. (Id. ¶ 24.) Furthermore, Plaintiff pleads that per WalMart’s company policy, similarly situated WDC employees were scheduled to work in
excess of eight our shifts per day and in excess of forty hours per week without receiving
a proper overtime premium. (Id.¶ 27.) Plaintiff avers that Wal-Mart did not provide
employees with duty-free meal periods within the first five hours of their shift. (Id. ¶ 31.)
According to Plaintiff, Wal-Mart discouraged employees from taking 30-minute meal
breaks and deducted 30-minute meal breaks from employees’ pay regardless of whether
employees took meal breaks. (Id. ¶ 68.) Additionally, Plaintiff maintains that Wal-Mart
did not provide a second meal break to employees who worked in excess of ten hours.
(Id. ¶ 31.)
Plaintiff claims that Wal-Mart required non-exempt employees who had clocked
out for lunch or at the end of their shift, to stand in line and have their bags checked
before leaving the workplace. (Id. ¶ 32.) Similarly, Wal-Mart allegedly required nonexempt employees to stand in line and have their bags checked before clocking-in. (Id.
¶ 32.) Furthermore, Plaintiff alleges that non-exempt employees were either never paid
any premium compensation or paid significantly less than premium compensation for
work completed in excess of four hours per pay period and/or eight hours per day. (Id.
¶ 46.) Plaintiff avers that Wal-Mart implemented a uniform company policy for rounding
down the hours worked by members of the rounding class. (See id. ¶ 59.) Hours worked
by employees were rounded down and then recorded, and Wal-Mart then paid employees
based of these rounded times. (Id. ¶ 59.)
Plaintiff also maintains that Wal-Mart did not provide employees with timely and
accurate wage and hour statements that showed: (1) gross wages earned; (2) total hours
worked; (3) all deductions made; (4) net wages earned; (5) the name and address of the
legal entity employing employees; and, (6) all applicable hourly rates in effect during
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

each pay period and corresponding number of hours worked each hourly rate by that
employee. (Id. ¶ 73.)
B.

Procedural History

Plaintiff Juan Garcia originally filed this matter in the Superior Court of the State
of California, County of San Bernardino on May 17, 2016. (See generally Dkt. No. 1-1,
Ex. A, at 3–29, (hereinafter, “Compl.”).) On June 21, 2016, Plaintiff submitted a First
Amended Complaint. (See generally FAC.) After filing their answer on July 26, 2016,
(see generally Dkt No. 1, Ex. A, at 74–81, (hereinafter, “Answer”)), Defendants filed the
Notice of Removal to Federal Court on July 28, 2016, (Dkt. No. 1 (hereinafter,
“Removal”).) Plaintiff submitted the instant Motion to Remand to State Court
(“Motion”) on August 29, 2016, (see Mot.), together with a Request for Judicial Notice,
(Dkt. No. 19-3). Defendants opposed the Motion on September 26, 2016, (Dkt. No. 22
(hereinafter, “Opp’n”)), and Plaintiff replied on October 3, 2016, (Dkt. No. 23
(hereinafter, “Reply”)).
III.

REQUEST FOR JUDICIAL NOTICE

A Court may properly take judicial notice of (1) material which is included as part
of the complaint or relied upon by the complaint, and, (2) matters in the public record.
See Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006); Lee v. City of Los Angeles, 250
F.3d 668, 688–89 (9th Cir. 2001). Under Federal Rule of Evidence 201(b), a “judicially
noticed fact must be one not subject to reasonable dispute in that it is either (1) generally
known within the territorial jurisdiction of the trial court, or (2) capable of accurate and
ready determination by resort to sources whose accuracy cannot reasonably be
questioned.” Fed. R. Evid. 201(b). Further, a court “must take judicial notice if a party
requests it and the court is supplied with the necessary information.” See Fed. R. Evid.
201(c)(2); In re Icenhower, 755 F.3d 1130, 1142 (9th Cir. 2014).
A federal court may take notice of proceedings in other courts, both within and
without the federal judicial system, if those proceedings have a direct relation to matters
at issue. Corzine v. Baker, No. 14-15242, 2016 WL 1169800, at *2 (9th Cir. Mar. 25,
2016) (internal quotations omitted) (internal citations omitted); see also United States ex
rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.
1992). “While the authenticity and existence of a particular order, motion, pleading or
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

judicial proceeding, which is a matter of public record, is judicially noticeable, veracity
and validity of its contents (the underlying arguments made by the parties, disputed facts,
and conclusions of applicable facts or law) are not.” United States v. Southern California
Edison Co., 300 F. Supp. 2d 964, 974 (E.D. Cal 2004) (citing Lee v. City of Los Angeles,
250 F.3d 668, 690 (9th Cir. 2001) (a court may take judicial notice of another court's
opinion, but not of the truth of the facts recited therein)).
Wal-Mart requests that the court take judicial notice of two documents: (1) a true
and correct copy of the Notice of Removal of Civil Action to United States District Court
in the matter of “German v. Wal-Mart Stores, Inc.;” and (2) a true and correct copy of the
Declaration of Dane Englund in Support of Removal in the same action. (See Dkt.
No. 19-3 (hereinafter, “RJN”).) These documents are related to the instant case because
Plaintiff uses them as a point of reference to allegedly show how Defendant is overstating
the amount in controversy, and perhaps even cutting and pasting damages estimates from
German into the instant Removal. (See Motion at 1; Reply at 3–4.) Moreover,
Defendant also references the German case in a separate Declaration of Anthony
Sbardellati, arguing that Wal-Mart asserted its Removal in good faith. (See Dkt. No. 221.) Because the documents are in the public record and relate to the instant case, this
Court finds the documents to be appropriate for judicial notice. Accordingly, the Court
GRANTS Plaintiff’s Request for Judicial Notice as to Exhibits 1 and 2.
IV.

PLAINTIFF’S EVIDENTIARY OBJECTIONS

Plaintiff raises objections to Defendant’s evidence in his Motion and Reply. In
Particular, Plaintiff objects to the Declaration of Jared Egbert, (Dkt. No. 5), filed in
support of Defendant’s Removal, on hearsay, lack of foundation,
vagueness/ambiguousness, speculation, and relevance grounds. (Dkt. No. 19-4
(hereinafter, “Objection”).) Plaintiff argues that Egbert’s Declaration is inadmissible
because it “contains inadmissible hearsay evidence without exceptions, and lacks
foundation.” (Objection at 1.) Plaintiff also objects to the Supplemental Declaration of
Jared Egbert in Support of Defendant Wal-Mart Stores Inc.’s Opposition to Plaintiff Juan
Garcia’s Motion for Remand to State Court, (Dkt. No. 22-2 (“Egbert Supp. Decl.”)), on

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

vagueness/ambiguousness, hearsay, lack of foundation, and speculation grounds, (see
Dkt. No. 23-2).
In ruling on a motion to remand, courts “may 'view whatever evidence has been
submitted on the issue to determine whether subject matter jurisdiction exists,' including
summary judgment-type evidence.” Cardroom Int'l LLC v. Scheinberg, No. 12–02870
MMM (AGRx), 2012 WL 2263330, at *4 n.12 (C.D. Cal. June 18, 2012) (quoting
Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir. 1993)). Plaintiff provides
the Court with no authority—nor does this Court find any—to equate the “summary
judgment-type evidence” discussed by courts in connection with motions to remand, with
evidence actually admissible at trial (or at the summary judgment stage) pursuant to the
Federal Rules of Evidence. The Supreme Court has explained that “when 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.” Johnson v. Sunrise Senior Living Mgmt., Inc., No. CV16-00443-BRO-RAOX, 2016 WL 917888, at *4 (C.D. Cal. Mar. 8, 2016) (citing Dart
Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014). As such, the Court
OVERRULES Plaintiff's objections.
V.

LEGAL STANDARD

Federal courts are of limited jurisdiction and possess only that jurisdiction which is
authorized by either the Constitution or federal statute. Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994). Pursuant to CAFA, a federal district court has
jurisdiction over “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 in which any
member of a class of plaintiffs is a citizen of a State different from any defendant,” so
long as the class has more than 100 members. 28 U.S.C. § 1332(d)(2)(A), (d)(5)(B).
Generally, courts “strictly construe the removal statute against removal jurisdiction.”
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). However, “no antiremoval
presumption attends cases invoking CAFA, which Congress enacted to facilitate
adjudication of certain class actions in federal court.” Dart, 135 S. Ct. at 554 (citation
omitted).

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

“CAFA’s provisions should be read broadly, with a strong preference that
interstate class actions should be heard in a federal court if properly removed by any
defendant.” Dart, 135 S. Ct. at 554 (quoting S. Rep. No. 109–14, at 43). As noted
above, to meet the diversity requirement under CAFA, a removing defendant must show
“any member of a class of plaintiffs is a citizen of a State different from any defendant.”
28 U.S.C. § 1332(d)(2)(A). “Thus, under CAFA, complete diversity is not required;
‘minimal diversity’ suffices.” Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 (9th
Cir. 2007) (citations omitted).
To meet the amount-in-controversy requirement under CAFA, a removing
defendant must plausibly assert that the amount in controversy exceeds $5,000,000. See
Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). This requires
only a “short and plain statement” of the grounds for removal. 28 U.S.C. 1446; Dart, 135
S. Ct. at 553–54. This language tracks that of Federal Rule of Civil Procedure 8(a), and
the Supreme Court has instructed courts to apply this same liberal pleading standard in
cases of removal involving CAFA. See Dart, 135. S. Ct. at 553. “The ‘short and plain
statement’ language from § 1446(a) applies to the entire notice of removal, and therefore
would apply equally to all CAFA allegations and not just the amount-in-controversy
requirement.” Roa v. TS Staffing Servs., Inc., No. 2:14-cv-08424-ODW (MRW), 2015
WL 300413, at *2 (C.D. Cal. Jan. 22, 2015).
Where the amount in controversy is not contested, a defendant is not required to
submit evidence establishing the amount, and the amount pleaded by the defendant
should be generally accepted if made in good faith. Dart, 135. S. Ct. at 553. But where
“the plaintiff contests, or the court questions, the defendant’s allegation” in its notice of
removal, further evidence establishing that the amount in controversy meets the
jurisdictional minimum is required. Id. at 554. Although no presumption against
removal exists, the Court must determine, “by a preponderance of the evidence, whether
the amount-in-controversy requirement has been satisfied.” Id. “Under this system,
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.” Ibarra, 775 F.3d at 1198.

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

VI.

DISCUSSION

Plaintiff seeks to have the instant case remanded to state court. Plaintiff claims
that Defendants have failed to meet their burden to prove jurisdiction under § 1332(d),
and therefore, removal was improper. (See Mot. at 1.) For the following reasons, the
Court finds that Defendants have met their burden of showing, by a preponderance of the
evidence, that the jurisdictional requirements of CAFA are met in this case, and thus,
remand is inappropriate.
A.

The Minimal Diversity and Numerosity Requirements Are Met

Pursuant to CAFA, a federal district court has jurisdiction over “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 in which any member of a class of plaintiffs is a
citizen of a State different from any defendant,” so long as the class has more than 100
members. 28 U.S.C. § 1332(d)(2)(A), (d)(5)(B). For diversity purposes, “a corporation
shall be deemed to be a citizen of every State and foreign state by which it has been
incorporated and of the State or foreign state where it has its principal place of
business . . . .” 28 USC § 1332(c)(1). When determining a corporation’s principal place
of business for purposes of diversity jurisdiction, courts refer to the place where a
corporation’s officers direct, control, and coordinate the corporation’s activities. Hertz
Corp. v. Friend, 559 U.S. 77, 92–93 (2010). A corporation’s principal place of business
is where the corporation “maintains its headquarters—provided that the headquarters is
the actual center of direction, control and coordination.” Id.
Here, the Parties do not dispute that the proposed classes number at least 100
individuals. (See Removal at 3 (citing FAC ¶ 17 (“[I]t is estimated that the classes
number greater than 100 individuals.”)).) Further, the minimal diversity requirement is
met. In its Removal, Defendant Wal-Mart argues that it is “a corporation organized and
existing under the laws of the State of Delaware, with its principal place of business in
the State of Arkansas. (Compare Removal at 5 with FAC ¶ 17 (“Plaintiff is informed and
believes and thereon alleges that at all times mentioned herein, Defendant, Wal-Mart
Stores, Inc. is and was a Delaware corporation.”)).) Thus, the Court finds that the
minimal diversity and numerosity requirements are met by a preponderance of the
evidence.
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

B.

Defendant Has Established, By A Preponderance of the Evidence, that
the Amount in Controversy Exceeds $5,000,000

In his Motion for Remand, Plaintiff contends that Defendant failed to meet its
burden of establishing by a preponderance of the evidence that it is more likely than not
that the amount in controversy exceeds the CAFA jurisdictional amount. (Motion at 1.)
In particular, Plaintiff argues that Defendant “merely provided speculative, conclusory,
and self-serving calculations assumptions [sic] that are insufficient to meet its burden,”
and “assumes that each employee had one hour of overtime premium per day that was
unpaid.” (Motion at 1, 4, 7, 10–11.) Plaintiff contends that Wal-Mart assumes greater
rates of violation than are supported by the allegations of the complaint. (Motion at 12–
13.) For the reasons below, the Court disagrees.
At this stage, a defendant is only required to prove the amount in controversy by a
preponderance of the evidence, and in so doing may calculate the amount in controversy
based on reasonable assumptions. See Oda v. Gucci Am., Inc., No. 2:14-CV-07469SVW, 2015 WL 93335, at *5 (C.D. Cal. Jan. 7, 2015) (emphasis added) (finding that a
defendant opposing a motion to remand is “not required to comb through its records to
identify and calculate the exact frequency of violations”); Salcido v. Evolution Fresh,
Inc., No. 2:14-CV-09223-SVW-PLA, 2016 WL 79381, at *6 (C.D. Cal. Jan. 6, 2016).
In their Removal, Defendants claim that Plaintiff’s allegations place over
$5 million in controversy, and calculate that: (1) Plaintiff’s claim for unpaid hourly
wages places at least $30,780,000 in controversy, (Removal at 7); (2) Plaintiff’s claim for
failure to provide accurate itemized employee wage statements puts approximately
$7,360,000 in controversy, (Removal at 9); and, (3) Plaintiff seeks attorneys’ fees, which
could be as high as $9,535,000, (Removal at 10). In view of Plaintiff’s allegation that
Defendant Wal-Mart was errantly assuming greater rates of violation than are supported
by the pleadings, (Motion at 12–13), Defendant responded in its Opposition that, even
under a more limited, particularized analysis, Plaintiff’s allegations still place over $5
million in controversy. (See Opp’n at 14.) Defendant recalculates that: (1) The amount
in controversy for the alleged unpaid overtime wages is at least $15,019,434, (Opp’n at
9); (2) The amount in controversy for the alleged non-compliant wage statements is at
least $6,610,000, (Opp’n at 15); (3) The amount in controversy for attorney’s fees is at
least $5,407,358, (Opp’n at 17).
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

In his second cause of action for “Failure to Pay Overtime Compensation”,
Plaintiff claims that per corporate policy “the entirety of employees” (emphasis added)
were required to work overtime without premium overtime pay. (FAC ¶ 27.) Plaintiff
maintains that Plaintiff and all other similarly situated class members were and are
scheduled as a matter of company policy to work and in fact worked in excess of eight
hours per day. (FAC ¶ 30.) Defendant offers Egbert’s analysis of pertinent Wal-Mart
business records1 as evidence that WDC employees at the distribution centers worked
1,668,826 hours in excess of eight hours per day and/or forty hours per week from May
17, 2012 through July 28, 2016. (Opp’n at 12; Egbert Supp. Decl. ¶¶ 6–7.) Wal-Mart
further asserts that Defendant’s information systems “separated out any excess hours that
were compensated for over time” before reaching the 1,668,826 hours. (Opp’n at 13;
Egbert Supp. Decl. ¶ 7.) And according to Plaintiff’s allegations, these employees were
not compensated for that overtime. (FAC ¶ 25.) Plaintiff asserts that employees are
entitled to the unpaid portion of these time and a half wages.2 (FAC ¶ 27.)
Given that employees were paid regular time wages for the overtime hours, they
would be entitled to overtime compensation minus regular time compensation. Thus,
Plaintiff and all others similar situated may be entitled to an additional one-half of the
minimum wage owed per hour. Though Plaintiff does not indicate the class employees’
minimum wage, Wal-Mart argues that based on its knowledge, average base minimum
wage of WDC employees during the time periods claimed likely was $18.00 per hour.
(Opp’n at 12.) Thus, Defendants allegedly owe $9.00 multiplied by 1,668,826 hours in
excess of eight hours a day and/or forty hours per week worked by WDC employees.
The Court calculates this number to be at least $15,019,434. Thus the amount in
controversy for the second cause of action alone, without attorney’s fees, exceeds the
CAFA threshold.

1

Jared Egbert, a Divisional Human Resource Manager for Wal-Mart, relies in his Supplemental
Declaration on information he sourced from “Wal-Mart’s Human Resource information systems,
including particularly the electronic systems that Wal-Mart uses to create and record payroll data.”
(Egbert Supp. Decl. ¶ 2.)
2

California Labor Code Section 510 states that “[a]ny work in excess of eight hours in one workday and
any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day
of work in any one workweek shall be compensated at a rate of no less than one and one-half times the
regular rate of pay for an employee.” Cal. Lab. Code § 510(a).
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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

In view of (1) Plaintiff’s capacious pleadings, (2) Defendant’s arguments and
calculations, and (3) Egbert’s reasonable assumptions made based on his analysis of WalMart’s business records, the Court finds that Defendant here proved by a preponderance
of the evidence that the amount in controversy exceeds $5 million.
C.

The Potential Attorneys’ Fees in Connection With Plaintiff’s Second
Cause of Action Further Support CAFA Jurisdiction Here

Moreover, attorneys’ fees are properly included in calculations of the amount in
controversy where California Labor Code section 218.5 authorizes an award of attorneys’
fees. See Galt v. Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 1998) (“We hold that where
an underlying statute authorizes an award of attorneys’ fees, either with mandatory or
discretionary language, such fees may be included in the amount in controversy.”); Cal.
Lab. Code § 218.5 (“In any action brought for the nonpayment of wages, . . . the court
shall award reasonable attorney’s fees and costs to the prevailing party if any party to the
action requests attorney’s fees and costs upon the initiation of the action.”); (see also
Compl. ¶ 28 (seeking recovery of attorneys’ fees pursuant to California Labor Code
section 218.5).) Ninth Circuit cases have set twenty-five percent as the “benchmark”
level for reasonable attorneys’ fees in class action cases. See Hanlon v. Chrysler Corp.,
150 F.3d 1011, 1029 (9th Cir. 1998).
If Defendant can establish by a preponderance of the evidence that the overtime
penalties are at least $4 million dollars, the addition of twenty-five percent in attorneys’
fees would necessarily meet the $5 million amount in controversy requirement under
CAFA. Cf. Garibay v. Archstone Communities LLC, 539 F. App'x 763, 764 (9th Cir.
2013) (“Although [defendant] correctly notes that 25% recovery is the ‘benchmark’ level
for reasonable attorney’s fees in class action cases, and that such fees are properly
included in calculations of the amount in controversy, [defendant] has not established by
a preponderance of the evidence that the underlying amount upon which those fees would
be based is at least $4 million, as would be required to meet the $5 million minimum.”
(internal citations omitted)).
There is thus “substantial, plausible evidence that damages at issue exceed[]
$5,000,000 . . . .” See Rea v. Michaels Stores Inc., 742 F.3d 1234, 1238 (9th Cir. 2014)
(holding that the district court’s conclusion that the defendant failed to prove the amountCV-90 (06/04)

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LINK:
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

CV 16-01645-BRO (RAO)

Title

JUAN GARCIA V. WAL-MART STORES, INC., ET AL.

Date

October 14, 2016

in-controversy requirement was clearly erroneous). Accordingly, the Court DENIES
Plaintiff’s Motion to Remand.
VII. CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiff’s Motion to Remand. The
Court hereby VACATES the hearing set for October 17, 2016.
:

IT IS SO ORDERED.
Initials of Preparer

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