Orozco, et al. v. Illinois Tool Works, Inc.

Filing 13

ORDER signed by Chief Judge Morrison C. England, Jr on 1/29/15 ORDERING Plaintiffs' Motion to Remand, ECF No. 6 is DENIED. (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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JUAN OROZCO and JUAN
OROZCO-BRISENO, individuals, on
behalf of themselves and all persons
similarly situated,

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MEMORANDUM AND ORDER

Plaintiffs,

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No. 2:14-cv-02113-MCE-EFB

v.
ILLINOIS TOOL WORKS INC., a
corporation, and Does 1 through 50,
inclusive,
Defendants.

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On August 15, 2014, Juan Orozco and Juan Orozco-Briseno (collectively

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“Plaintiffs”) filed a First Amended Class Action Complaint (“Complaint”) against Illinois

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Tool Works, Inc. (“Defendant”) in the Superior Court of California, County of

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Sacramento. The Complaint alleges the following causes of action: (1) unfair business

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practices; (2) failure to pay overtime; (3) failure to issue accurate itemized wage

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statements; and (4) failure to pay wages due at separation of employment. ECF No. 1-

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1. The Complaint also seeks relief pursuant to California’s Private Attorney General Act

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of 2004. Id. On September 12, 2014, Defendant removed the case to this Court

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pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). ECF No. 1.

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Presently before the Court is Plaintiffs’ Motion to Remand (“Motion”) the case to state

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court. ECF No. 6. For the following reasons, the Motion is DENIED.1

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BACKGROUND2

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Plaintiffs filed the present action on behalf of themselves and a “California Class,”

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defined as all individuals who are or previously were employed by Defendant in

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California as non-exempt, hourly workers during the period beginning four years prior to

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the filing of the initial complaint. Plaintiffs allege, among other things, that Defendant “as

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a matter of company policy, practice and procedure, intentionally, knowingly, and

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systematically failed to compensate [Plaintiffs] and other members of the California

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Class at the correct rate of pay for all overtime hours worked.” ECF No. 1-1 at 6.

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Plaintiffs also allege that Defendant had and has a “uniform policy and practice of

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denying Plaintiffs uninterrupted, off duty thirty (30) minute meal breaks each day.” Id. at

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“systematically, intentionally and uniformly subjected to Defendant’s company policy,

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practices and procedures. . . .” Id. at 17.

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STANDARD

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When a party brings a case in state court in “which the district courts of the United

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States have original jurisdiction,” the defendant may remove it to the federal court

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“embracing the place where such action is pending.” 28 U.S.C. § 1441(a). The removal

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statute is “‘strictly construed, and a ‘defendant seeking removal has the burden to

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Because oral argument would not be of material assistance, the Court ordered this matter
submitted on the briefs. See E.D. Cal. Local Rule 230(g); ECF No. 10.
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The following recitation of facts is taken, sometimes verbatim, from Plaintiffs’ Complaint. ECF

No. 1-1.

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establish that removal is proper and any doubt is resolved against removability.’” Hawaii

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ex rel. Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027, 1034 (9th Cir. 2014). “A

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plaintiff who contests the existence of removal jurisdiction may file a motion to remand,

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see 28 U.S.C. § 1447(c).” Leite v. Crane Co., 749 F.3d 1117, 1122 (9th Cir. 2014).

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“Federal jurisdiction under CAFA has three elements: (1) there must be minimal

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diversity between the parties, (2) the proposed class must have at least 100 members

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and (3) the amount in controversy must ‘exceed[ ] the sum or value of $5,000,000.’”

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Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (quoting

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28 U.S.C. § 1332(d)). In calculating the amount in controversy, a court must assume

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that the allegations in the complaint are true and that a jury will return a verdict for

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plaintiffs on all claims alleged. Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199,

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1205 (E.D. Cal. 2008). Moreover, the claims of class members may be aggregated to

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determine whether the amount in controversy requirement has been satisfied. Id.

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§ 1332(d)(6). In a CAFA case, “the proper burden of proof imposed on a [removing]

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defendant to establish the amount in controversy is the preponderance of the evidence

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standard.” Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013)

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(holding that the “legal certainty” test was no longer viable).

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ANALYSIS

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Plaintiffs do not dispute that this matter has been pled as a class action involving

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more than 100 class members or that minimal diversity exists between the parties.

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Accordingly, the only question before the Court is whether Defendants have established

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by a preponderance of the evidence that the amount in controversy exceeds $5,000,000.

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See 28 U.S.C. § 1332(d)(6); Rodriguez, 728 F.3d at 977. In its Notice of Removal,

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Defendant contends that the total aggregate potential liability based on Plaintiffs’ claims

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regarding meal breaks and rest periods alone exceeds the statutory requirement. 3 ECF

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Defendant had the opportunity to provide evidence and calculations regarding Plaintiffs’ other

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No. 1 at 12. In support, Defendant attached a spreadsheet (“Exhibit A”) containing data

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regarding all members of the California Class, including Plaintiffs. See ECF No. 1-7 at

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5-52. Exhibit A contains, among other things, the identification numbers, dates of hire,

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work locations, and hourly rates of pay of California Class members. See id. Plaintiffs

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do not dispute the authenticity of Exhibit A. Defendant thus appropriately relies on

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Exhibit A to calculate its potential liability based on the meal break and rest period

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claims. The Court addresses each of those calculations in turn.

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In the Complaint, Plaintiffs allege that they and every other class member were
denied “off duty thirty (30) minute meal breaks each day.” ECF No. 1-1

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¶ 17. For each of the years at issue, Defendant used the California Class members’

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actual rates of pay and assumed that each member was entitled to “just one additional

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hour of pay for each workweek” based on the alleged missed meal periods.4 ECF

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No. 1-6 at 4-5 (emphasis removed). For instance, Defendant provided evidence that

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800 California Class members worked at least 29,578 workweeks in 2010. Id. at 4.

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According to Defendant, using the assumptions outlined above, Defendant’s total

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potential liability for 2010 amounts to $595,434. Id. Defendant performed similar

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calculations for each succeeding year and calculated its total potential liability for 2011 at

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$761,814; for 2012 at $650,397; for 2013 at $502,385; and for 2014 at $204,086. Id. at

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4-5. Thus, Defendant calculates its total potential liability for missed meal periods is

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$2,714,117. Id. at 4.

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Utilizing the same actual rates of pay and same assumption that California Class

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members were each entitled to one additional hour of pay for each workweek, Defendant

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performed similar calculations to arrive at its total potential liability based on Plaintiffs’

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claim regarding missed rest periods. Id. at 5-6. As such, Defendant arrived at the same

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$2,714,717 amount. Id. Together, then, Defendant calculates its total potential liability

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claims for relief but chose not to do so. Accordingly, the Court will not speculate as to the potential
monetary value of Plaintiff’s other claims.
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The Complaint demands one hour of pay for each workday in which an off-duty meal break or
rest period was not provided. ECF No. 1-1 ¶¶ 50-51.

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based on Plaintiffs’ meal and rest period claims at $5,428,234, which exceeds the

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$5,000,000 CAFA jurisdictional threshold.

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Plaintiffs take issue with Defendant’s assumed violation rate, i.e., that each class

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member would be entitled to one additional hour of pay for each workweek on the meal

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period and rest period claims, respectively. Conversely, Defendant argues the assumed

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rate is in fact conservative based on Plaintiffs’ allegations as laid out in the Complaint.

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Defendant has the better argument. For instance, Plaintiffs allege that Defendant

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violated various provisions of the California Labor Code through a “uniform policy and

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practice” that “uniformly violated” Plaintiffs’ rights. ECF No. 1-1 ¶¶ 6, 27. Even more

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specifically, Plaintiffs allege that “DEFENDANT uniformly violated the rights of the

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CALIFORNIA CLASS under California law by . . . failing to provide mandatory meal

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[periods] . . . to the PLAINTIFFS and the CALIFORNIA CLASS members,” id. ¶ 27(c),

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and further contend that they suffered damages “as a direct result of DEFENDANT’S

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uniform policy and practice of denying PLAINTIFFS uninterrupted, off duty thirty (30)

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minute meal breaks each day.” Id. ¶ 17 (emphasis added). Based on Plaintiffs’

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allegations, the Court finds appropriate Defendant’s assumption that each class member

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would be entitled to one additional hour of pay for each workweek based on the meal

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period claim.

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The issue is not quite as clear with regard to Plaintiffs’ rest period claim, as the

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Complaint does not contain a commensurately explicit allegation as that described

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above. However, based on Plaintiffs’ allegations regarding Defendant’s systematic and

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uniform policy and practice of violating each of Plaintiffs’ rights by failing to provide

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required rest periods, the Court finds that Defendant’s calculations regarding that claim

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too are reasonable. See, e.g., Sanchez v. Capital Contractors Inc., 2014 WL 4773961,

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at *3 (N.D. Cal. Sep. 22, 2014) (denying remand where plaintiffs alleged violations

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occurred “systematically” and defendant assumed each class member missed one meal

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and one rest break each workweek); Jasso v. Money Mart Exp., Inc., 2012 WL 699465,

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at *5 (N.D. Cal. Mar. 1, 2012) (holding that defendant’s estimation of “one violation per
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week” was reasonable where plaintiffs alleged Labor Code violations occurred under a

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“uniform policy and scheme” and took place “at all material times”).

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Plaintiffs also take issue with Defendant’s reliance on the number of workweeks

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worked, rather than the days worked by each employee, and argue that the assumptions

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are improper because Defendant failed to demonstrate that each affected employee

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worked enough hours during every shift to justify a meal or rest break. These

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contentions perhaps would have had some force under the previously viable “legal

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certainty” test. However, following Rodriguez, Defendant must only demonstrate by a

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preponderance of the evidence that the aggregate amount in controversy exceeds

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$5,000,000, and thus the Court finds Plaintiffs’ contentions unpersuasive. The Court

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finds that Defendant has met its burden of demonstrating that the amount in controversy

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exceeds $5,000,000 and thus the Court has jurisdiction pursuant to CAFA.

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CONCLUSION

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For the foregoing reasons, Plaintiffs’ Motion to Remand, ECF No. 6, is DENIED.

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IT IS SO ORDERED.

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Dated: January 29, 2015

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