Palma v. Golden State FC, LLC

Filing 21

ORDER Requiring Supplemental Briefing, signed by District Judge Dale A. Drozd on 4/12/2018. (Gaumnitz, R)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ROMEO PALMA,

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No. 1:18-cv-00121-DAD-MJS

Plaintiff,
v.

ORDER REQUIRING SUPPLEMENTAL
BRIEFING

GOLDEN STATE FC, LLC, d/b/a
AMAZON.COM,

(Doc. No. 10)

Defendant.

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This matter is before the court on plaintiff’s motion to remand (Doc. No. 10) and

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defendant’s motion to dismiss. (Doc. No. 12.) On March, 20, 2018, those motions came before

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the court for hearing. Attorney Graham Lambert appeared on behalf of plaintiff Romeo Palma.

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Attorney Barbara J. Miller appeared on behalf of Golden State FC, LLC (“Golden State”).

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However, as explained below, the court has determined that it requires supplemental briefing

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from defendant in order to resolve plaintiff’s motion to remand.

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BACKGROUND
In his first amended complaint (“FAC”), plaintiff alleges as follows. Plaintiff is employed

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by defendant in its Patterson, California fulfillment center. (Doc. No. 11 (FAC) at ¶ 11.)

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Plaintiff’s job duties at the fulfillment center include packaging, loading, unloading, and various

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other tasks. (Id. at ¶ 8.) Plaintiff brings this action on behalf of himself and all other similarly
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situated employees, alleging that they have been exposed to, have suffered, and/or were permitted

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to work under defendant’s unlawful employment practices. (Id. at ¶ 18.) The FAC defines the

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class as “[a]ll current or former California residents who worked for Defendant as non-exempt

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employees at any time beginning four years prior to the filing of the Complaint through the date

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notice is mailed to the Class (the “Class period”).” (Id. at ¶ 19.)

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According to the FAC, employees are required to report for duty at the beginning of their

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shift, but prior to doing so, they must “clock in.” (Id. at ¶ 10.) In addition, upon ending their

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shift, employees must “clock out.” (Id.) However, the facility in which the class members work

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is quite large, and the location to clock in and clock out is frequently located far away from where

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an employee actually performs his or her job duties. (Id. at ¶¶ 9–10.) Accordingly, it often takes

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several minutes to walk from the clock in location to where an employee must report for duty and

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shifts frequently last longer than the scheduled ten hours to account for time clocking in and out.

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(Id. at ¶¶ 10, 11.)

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than ten hours necessitates an additional rest break, which was not provided by defendant. (Id. at

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¶ 12.)

Plaintiff argues that under California law, the fact that the shifts lasted more

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Plaintiff asserts four causes of action against defendant. On January 3, 2018, defendant

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removed this action to this court. (Doc. No. 1.) On February 2, 2018, plaintiff filed a motion to

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remand. (Doc. No. 10.) On February 7, 2018, plaintiff filed its FAC.1 (Doc. No. 11.) On

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February 20, 2018, defendant moved to dismiss plaintiff’s second cause of action. (Doc. No. 12.)

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Oppositions to both motions were filed on March 6, 2018. (Doc. Nos. 13, 14.) Replies were filed

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on March 13, 2018. (Doc. Nos. 15, 16.)

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LEGAL STANDARD

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The Class Action Fairness Act of 2005 (“CAFA”) gives federal courts jurisdiction over

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class actions if (1) the class has more than 100 members, (2) the parties are minimally diverse,

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and (3) the amount in controversy exceeds $5 million. Dart Cherokee Basin Operating Co. v.

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Owens, ___ U.S. ___, 135 S. Ct. 547, 552 (2014) (citing 28 U.S.C. § 1332(d)). A defendant’s

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The court has examined both the original complaint and the FAC, but for purposes of
determining whether this court possesses jurisdiction, the two complaints appear identical.
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notice of removal under CAFA “‘need include only a plausible allegation that the amount in

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controversy exceeds the jurisdictional threshold,’ and need not contain evidentiary submissions.”

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Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (quoting Dart, 135 S. Ct. at

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554). However, if the plaintiff contests (or the court questions) whether the amount in

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controversy requirement has been satisfied, “both sides submit proof and the court decides, by a

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preponderance of the evidence, whether the amount-in-controversy requirement has been

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satisfied.” Dart, 135 S. Ct. at 554. When federal jurisdiction is challenged, “the defendant

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seeking removal bears the burden to show by a preponderance of the evidence that the aggregate

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amount in controversy exceeds $5 million.” Ibarra, 775 F.3d at 1197. In cases which are

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removed pursuant to CAFA, there exists no “antiremoval presumption.” Dart, 135 S. Ct. at 554;

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see also Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1183–84 (9th Cir. 2015) (noting that in

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passing CAFA, Congress had an “overall intent . . . to strongly favor the exercise of federal

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diversity jurisdiction over class actions with interstate ramifications”) (quoting S. REP. NO. 109-

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14, at 35 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 34).

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DISCUSSION
In support of its contention that the amount in controversy requirement is satisfied here,

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defendant pointed the court to evidence submitted in conjunction with its notice of removal. (See

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Doc. No. 1-3 (the “Nickerson Declaration”).) This evidence consists of a declaration by Peter

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Nickerson, an economist and consultant specializing in economic and statistical analysis. (Id. at

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¶ 2.) Nickerson conducted an analysis of defendant’s payroll data for putative class members in

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this action, but limited his analysis to only one of defendant’s facilities. (Id. at ¶ 3.) Applying

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Nickerson’s analysis to plaintiff’s causes of action, defendant averred in its notice of removal that

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the amount in controversy is well in excess of the jurisdictional minimum. (See Doc. No. 1 at 9–

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10.) In response to concerns about the methodology employed by Nickerson which were raised

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in plaintiff’s opposition brief, defendant provided a second Nickerson Declaration addressing

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those concerns. (Doc. No. 14-1.)

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At oral argument, plaintiff raised a new objection to the methodology of these analyses.
In both declarations submitted by Nickerson, the analysis assumed a violation rate of 100%—that
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is, it assumed that in every case in which an employee worked a certain number of hours, the

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employee was not provided with a third rest break as required. Plaintiff contended at oral

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argument that this assumption is unwarranted based on the allegations in the complaint, resulting

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in an inflated damages estimate.

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In a case presenting similar circumstances, the Ninth Circuit noted that “[t]he complaint

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alleges a ‘pattern and practice’ of labor law violations but does not allege that this ‘pattern and

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practice’ is universally followed every time the wage and hour violation could arise.” Ibarra, 775

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F.3d at 1199. Because the complaint did not “allege that [defendant] universally, on each and

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every shift, violate[d] labor laws by not giving rest and meal breaks,” defendant bore the burden

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of showing that its estimated amount in controversy was based on a violation rate “grounded in

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real evidence.” Id. Because neither party in Ibarra had submitted evidence as to the possible

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violation rate, the Ninth Circuit remanded the case to the district court with instructions to

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consider such evidence from the parties. Id. at 1200; see also Salcido v. Evolution Fresh, Inc.,

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No. 2:14-cv-09223-SVW-PLA, 2016 WL 79381, at *4 (C.D. Cal. Jan. 6, 2016) (“It would be

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unreasonable to assume a 100% violation rate based only on a plaintiff’s allegation of a ‘pattern

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and practice’ of labor violations.”); Moreno v. Ignite Rest. Grp., No. C 13-05091 SI, 2014 WL

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1154063, at *5 (N.D. Cal. Mar. 20, 2014) (noting that district courts in the Northern District of

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California “disavow the use of a 100% violation rate when calculating the amount in controversy

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absent evidentiary support.”).

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Here, plaintiff’s complaint alleges that defendant “regularly” requires plaintiff to work

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shifts in excess of 10 hours without providing a third rest break. (FAC at ¶ 2.) However, neither

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party has addressed whether the FAC alleges that this practice was “universally followed” in

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every instance. Ibarra, 775 F.3d at 1199. Because plaintiff has challenged jurisdiction by

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arguing that the violation rate in this case is less than 100%, defendant now bears the burden of

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demonstrating that jurisdiction is proper in this court. Id. at 1197.

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Accordingly, within twenty-one days of the date of service of this order, defendant is

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ordered to submit supplemental briefing addressing the following issues: (1) whether the

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allegations of the FAC, as pleaded, allege a 100% violation rate under Ibarra; (2) if not, what
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constitutes a reasonable violation rate based on the allegations of the FAC and the available

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evidence; and (3) what constitutes a reasonable estimate of the amount in controversy in light of

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that violation rate. See Mortley v. Express Pipe & Supply Co., No. SACV 17-1938-JLS-JDE,

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2018 WL 708115, at *3 (C.D. Cal. Feb. 5, 2018) (“Defendants bear the burden to demonstrate

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that its estimated amount in controversy relies on reasonable assumptions.”); Lafountain v.

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Meridian Senior Living, LLC, No. CV 15-03297-RGK (PJWX), 2015 WL 3948842, at *3 (C.D.

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Cal. June 29, 2015) (granting plaintiff’s motion to remand on the basis that “Defendant has not

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evidentiarily supported the variables used in its amount in controversy calculations”). Plaintiff is

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directed to file its response to defendant’s supplemental brief, if any, within fourteen days

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thereafter.

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IT IS SO ORDERED.

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Dated:

April 12, 2018
UNITED STATES DISTRICT JUDGE

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