Dobbs v. Wood Group PSN, Inc.

Filing 17

MEMORANDUM DECISION and ORDER Granting Plaintiff's Motion to Remand 6 and Denying as Moot Defendant's 5 Motion to Dismiss, signed by Chief Judge Lawrence J. O'Neill on 8/16/16. CASE CLOSED. Copy of remand order sent to Kern County Superior Court. (Gonzalez, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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DAVID DOBBS, INDIVIDUALLY, AND
ON BEHALF OF ALL OTHERS
SIMILARLY SITUATED,
Plaintiff,

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v.
WOOD GROUP PSN, INC., AN
UNKNOWN ENTITY,

Case No. 1:16-CV-00838-LJO-JLT
MEMORANDUM DECISION AND ORDER
GRANTING PLAINTIFF’S MOTION TO
REMAND AND DENYING AS MOOT
DEFENDANT’S MOTION TO DISMISS.
(Docs. 5, 6)

Defendant.

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Before the Court is Plaintiff David Dobbs’ Motion to Remand, filed June 23, 2016 (Doc. 6).

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On July 19, 2016, Defendant The Wood Group PSN, Inc. (“The Wood Group”) timely filed its

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Opposition (Doc. 12), and Plaintiff timely filed a Reply (Doc. 14). Also pending before the Court is

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Defendant The Wood Group’s Motion to Dismiss, also filed June 23, 2016 (Doc. 5), to which

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Plaintiff filed his Opposition on July 18, 2016 (Doc. 11), and Defendant timely filed a Reply (Doc.

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13). The Court has deemed the matters appropriate for resolution without oral argument. See E.D.

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Cal. Civ. L.R. 230(g); see Docs. 15, 16. Having considered the record in this case, the parties’

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briefing, and the relevant law, the Court will grant Plaintiff’s motion to remand and deny as moot

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Defendant’s motion to dismiss for the reasons set forth below.

BACKGROUND

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This is a wage and hour case arising out of David Dobbs’ employment at The Wood Group.

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On May 12, 2016, Plaintiff Dobbs filed a complaint in the Superior Court of the State of California

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for the County of Kern alleging six causes of action on behalf of himself and similarly situated

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individuals: (1) Violation of California Labor Code1 Sections 226.7 and 512 (Unpaid Meal and Rest

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Premiums); (2) Violation of Labor Code Sections 510 and 1194 (Unpaid Overtime and Minimum

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Wages); (3) Violation of Labor Code Section 203 (Waiting Time Penalties); (4) Violation of Labor

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Code Section 226 (Non-compliant Wage Statements); (5) Violation of Labor Code Section 2802

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(Failure to Reimburse Business Expenses); and (6) Violation of Business and Professions Code

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Section 17200, et seq. (Unfair Competition/Unfair Business Practices). See generally Doc. 1-1,

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Complaint (“Compl.”), ¶¶ 26-56. The facts are otherwise known to the parties and need not be

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repeated here.
In his Complaint, Plaintiff did not specify a damages amount. See generally Compl. On

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June 16, 2016, based on its assertion2 that the requisite amount in controversy to create diversity

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jurisdiction pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. Section 1332(d),

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exceeds $5 million and thus is satisfied, Defendant removed the case to this Court. See Doc. 1. By

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his motion to remand, filed June 23, 2016 (Doc. 6), Plaintiff challenges the sufficiency of

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Defendant’s evidence, arguing that, under Ibarra v. Manheim Investments, Inc., 775 F.3d 1193,

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1197 (9th Cir. 2015), Defendant’s showing is inadequate to meet its burden of showing that the

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amount in controversy exceeds the amount required under Section 1332(d).
LEGAL STANDARD

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“[A]ny civil action brought in a State court of which the district courts of the United States

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have original jurisdiction, may be removed by the defendant or the defendants, to the district court

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of the United States for the district and division embracing the place where such action is pending.”

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28 U.S.C. § 1441(a). “To remove a case from state court to federal court, a defendant must file in

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Hereinafter, unless otherwise noted, all references to “Code Sections” are to those of the State of California.
Record evidence includes the following: a declaration from Marsha Houston, a Payroll Lead employed by Wood Group
Mustang, Inc., a subsidiary of Wood Group, Inc., which itself is the parent company of Defendant Wood Group PSN, Inc.
(see Houston Decl., Doc. 12-1 at 2, ¶ 2); an apparent list of employees by employee number, the employees’ full- or parttime status, and pay rate (see Doc. 12-2); and, timekeeping reports (see Doc. 12-3). Defendant asserts that the reports are
business records kept in the ordinary course of business. See Houston Decl., Doc. 12-1 at 3:10-11.
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the federal forum a notice of removal ‘containing a short and plain statement of the grounds for

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removal.’” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 551 (2014) (quoting

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28 U.S.C. § 1446(a)). However, “[i]f at any time before final judgment it appears that the district

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court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

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CAFA vests federal courts with “jurisdiction over certain class actions, defined in

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§ 1332(d)(1), if the class has more than 100 members, the parties are minimally diverse, and the

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amount in controversy exceeds $5 million.” Dart, 135 S.Ct. at 551 (quoting § 1332(d)(2), (5)(B)).

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“[U]nder CAFA[,] the burden of establishing removal jurisdiction remains, as before, on the

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proponent of federal jurisdiction.” Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th

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Cir. 2006) (per curiam).
“If the plaintiff’s complaint, filed in state court, demands monetary relief of a stated sum,

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that sum, if asserted in good faith, is ‘deemed to be the amount in controversy.’” Dart, 135 S.Ct. at

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551 (quoting 28 U.S.C. § 1446(c)(2)). “When plaintiff’s complaint does not state the amount in

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controversy, the defendant’s notice of removal may do so.” Id. (quoting 28 U.S.C. §1446(c)(2)(A));

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see also Abrego, 443 F.3d at 683.

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Under CAFA, there is no presumption against removal. Id. at 554. “Where facts are in

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dispute, the statute requires district courts to make factual findings before granting a motion to

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remand a matter to state court.” Mondragon v. Capital One Auto Fin., 736 F.3d 880, 883 (9th Cir.

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2013). On a plaintiff’s motion to remand, it is a defendant’s burden to establish jurisdiction by a

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preponderance of the evidence. Dart, 135 S.Ct. at 553-54; Rodriguez v. AT & T Mobility Serv’s.

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LLC, 728 F.3d 975, 978 (9th Cir. 2013).

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In proving the amount in controversy, “[t]he parties may submit evidence outside the

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complaint, including affidavits or declarations, or other summary-judgment-type evidence relevant

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to the amount in controversy at the time of removal.” Ibarra, 775 F.3d at 1197 (citation and internal

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quotation marks omitted). The parties submit summary-judgment style evidence and using the

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preponderance standard “the court decides … whether the amount-in-controversy requirement has

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been satisfied.” Dart, 135 S.Ct. at 554; see also Ibarra, 775 F.3d at 1199-1200. Thus, “‘removal...is

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proper on the basis of [an] amount in controversy asserted’ by the defendant ‘if the district court
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finds,” using the preponderance standard, “that the amount in controversy exceeds’ the

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jurisdictional threshold.” Id. at 553 (quoting 28 U.S.C. § 1446(c)(2)(B)). When a party relies on a

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chain of reasoning that includes assumptions, those assumptions must be reasonable. Ibarra, 775

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F.3d at 1199 (assumptions “cannot be pulled from thin air but need some reasonable ground

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underlying them”). A defendant cannot establish removal jurisdiction by mere speculation, or prove

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the requirement on the basis of unreasonable assumptions. Id. at 1197.

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DISCUSSION
The parties do not dispute that the first two requirements of § 1332(d) are satisfied. Thus the

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single question put to the Court in Plaintiff’s motion to remand is whether Defendant has proven

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the amount-in-controversy requirement. See Pl. Mtn. to Remand, Doc. 6 at 5-12; Def. Oppo., Doc.

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12 at 3:27-28, 4:1-3. The Court first proceeds to answer that potentially dispositive question before

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turning to Defendant’s motion to dismiss.
Plaintiff contends that Defendant failed to provide competent evidence to prove that the

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amount in controversy exceeds $5 million, whereas Defendant contends that jurisdiction is proper

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because it has established by a preponderance of the evidence that the amount in controversy

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exceeds $5 million. Defendant emphasizes that Plaintiff did not counter its evidence.
Where the complaint contains generalized allegations of illegal behavior, a removing

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defendant must supply “real evidence” grounding its calculations of the amount in controversy.

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Ibarra, 775 F.3d at 1199. Generally, the spectrum of similar cases has two end-points: the Ninth

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Circuit distinguishes between complaints of “uniform” violations and those alleging a “pattern and

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practice” of labor law violations. LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir.

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2015).

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About the first type, where a plaintiff’s complaint specifically alleges a “uniform” practice,

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if a defendant in its amount-in-controversy calculus assumes a 100 percent violation rate and the

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plaintiff offers no competent evidence in rebuttal to a defendant’s showing, courts have found a

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defendant’s assumption to be reasonable. See, e.g., Amaya v. Consol. Container Co., LP, No.

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215CV03369SVWPLA, 2015 WL 4574909, at *1–2 (C.D. Cal. July 28, 2015) (citing Unutoa, 2015

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WL 898512, at *2-3); see also Ibarra, 775 F.3d at 1199 (suggesting that an allegation that the
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defendant “universally, on each and every shift” would be sufficient to ground an assumed 100%

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violation rate). Dart and Ibarra illustrate that a defendant is required to show more than an assumed

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universal violation rate, but is not required to provide extensive business documents to prove the

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amount in controversy to a legal certainty. See Dart, 135 S. Ct. at 554; Ibarra, 775 F.3d at 1199;

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see also Unutoa v. Interstate Hotels and Resorts, Inc., No. 2:14-cv-9809–SVW–PJW, 2015 WL

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898512, at *3 (C.D.Cal. Mar. 3, 2015).

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In contrast, about the second type of case where, rather than universal, a plaintiff alleges a

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“pattern and practice” of labor violations, the Ninth Circuit has found that a defendant’s assumption

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of a 100 percent violation rate would be unreasonable. Id. at 1198-99 (“a ‘pattern and practice’ of

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doing something does not necessarily mean always doing something”). Although in such “pattern

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and practice” cases a defendant may still establish the requisite amount if, in making its calculation,

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it relies on extrapolations from admissible statistical evidence. See LaCross,775 F.3d at 1202-03.

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In this case, Plaintiff’s complaint alleges that Defendant violated Labor Code Sections

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“regularly” (see Compl. ¶ 41 (Third Cause of Action), or as a “pattern and practice.” See Compl.

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¶ 28 (First Cause of Action), ¶¶ 34-36 (Second Cause of Action), ¶ 46 (Fourth Cause of Action),

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¶ 50 (Fifth Cause of Action), and does not allege uniform violations, see generally Doc. 1 Ex. 1.

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Based on Plaintiff’s general allegations of a “pattern and practice” and “institutionalized unwritten

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policy that mandates these unlawful practices,” the Court finds that Defendant cannot simply

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assume a 100% violation rate. See Ibarra, 775 F.3d at 1198-99 & n.3.

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To succeed, Defendant must demonstrate that its method of calculation is based on a

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representative sample from admissible data, from which it “extrapolate[s] … for the entire class.”

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LaCross,775 F.3d 1200, 1202-03 (9th Cir. 2015). To that end, Defendant relies on testimony from a

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Payroll Lead at The Wood Group’s sister company, The Wood Group Mustang, Inc., about two

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reports submitted as evidence. See Houston Decl., Doc. 12-1 ¶ 1. Houston describes the first of the

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two supporting reports, see Ex. A, Doc. 12-2, as data taken from a sample of pay periods (four from

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each of the years 2012-2014). See Doc. 12-1 ¶ 3. About the second report, see Ex. B., Doc. 12-3,

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Houston describes it as taken from a timekeeping report prepared by selecting a sample time frame

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(May 2012 through the end of 2014), which she has exported into an Excel spreadsheet. See Doc.
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12-1 ¶ 4. Upon review of the two reports submitted as summary-judgment-type evidence, the Court

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finds that the first is a list of employees by their employee number, giving their employment status

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and individual pay rate, and which lacks any statistical analysis or extrapolated calculation. See

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Doc. 12-2. The second report, the Excel spreadsheet, is indecipherable. See Doc. 12-2. It has no

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column headers, draws no apparent conclusions, and lacks any statistical analysis or extrapolation.

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See id. Absent from Houston’s testimony is an assertion that she, or anyone else, performed a

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statistical analysis of the data. See generally Doc. 12-1.

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Based on this paucity of evidence, the Court finds Defendant’s assumption of a 100 percent
violation rate unreasonable. See Ibarra, 775 F. 3d at 1199. Because Defendant relies on this

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unreasonable assumption to make its amount-in-controversy calculation, the Court finds

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Defendant’s assertion that the figure exceeds $5 million to be merely speculative. Id. at 1197.

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Where, as here, Defendant has failed to meet its burden to prove the amount in controversy exceeds

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the requisite minimum, remand is appropriate. Id. at 1199 (finding remand “necessary”).
CONCLUSION

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For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand

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(Doc. 6) is GRANTED. The case is remanded to the Superior Court for the State of California,

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County of Kern. Accordingly, IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss

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(Doc. 5) is DISMISSED AS MOOT. Finally, the Clerk of Court is directed to CLOSE the case.

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IT IS SO ORDERED.
Dated:

/s/ Lawrence J. O’Neill _____

August 16, 2016

UNITED STATES CHIEF DISTRICT JUDGE
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