Ogues v. HealthSource Global Staffing Inc.

Filing 19

ORDER by Judge Thelton E. Henderson granting 9 Motion to Remand. (tehlc1, COURT STAFF) (Filed on 4/22/2014.)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ALICE OGUES,
Plaintiff,

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v.

Case No. 14-cv-00380-TEH
ORDER REMANDING CASE

HEALTHSOURCE GLOBAL
STAFFING INC.,
Defendant.

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This matter came before the Court on April 7, 2014, on Plaintiff’s motion to

United States District Court
Northern District of California

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remand. Having considered the arguments of the parties and the papers submitted, the

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Court GRANTS Plaintiff’s motion for the reasons set forth below.

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BACKGROUND
On May 30, 2013, Plaintiff Alice Ogues (“Ogues”) filed a class action suit in the

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Superior Court of California, Los Angeles County, alleging four state law causes of action

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against her former employer, Defendant Healthsource Global Staffing, Inc.

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(“Healthsource”), for failure to provide its employees meal and rest breaks, or to

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compensate them with premium wages for denying them such breaks. Ogues brings the

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following causes of action: (1) failure to provide meal periods, Cal. Labor Code §§ 204,

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223, 226.7, 512, 1198; (2) failure to provide rest periods, Cal. Labor Code §§ 204, 223,

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226.7, 1198; (3) violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code,

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§ 17200 et seq.; and (4) failure to timely pay all final wages, Cal. Labor Code §§ 201-203.

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The complaint states that the class’s “aggregate claim is under the $5,000,000 threshold for

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Federal jurisdiction[] under the Class Action Fairness Act of 2005.” Complaint at ¶ 3.

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On August 15, 2013, the parties stipulated to transfer the case to the Superior Court,

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Alameda County. On January 20, 2014, during a discussion to schedule Ogues’s

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deposition, Healthsource learned that Ogues is a resident of Nevada. Based on this

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information, and its belief that the amount in controversy exceeds $5 million, Healthsource

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removed the action to this Court claiming federal jurisdiction under the Class Action

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Fairness Act (“CAFA”), 28 U.S.C. 1332(d)(2). Under CAFA, district courts have original

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jurisdiction over class actions in which the amount in controversy exceeds $5 million “and

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any member of a class of plaintiffs is a citizen of a State different from any defendant.” 28

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U.S.C. 1332(d)(2).
Ogues moves to remand, arguing that Healthsource’s removal notice was not

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timely, and that Healthsource has not met its burden to show that the amount in

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controversy exceeds $5 million.

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United States District Court
Northern District of California

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LEGAL STANDARD
Generally, parties must file a notice of removal within thirty days of the defendant’s

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receipt of the original pleading. 28 U.S.C. § 1446. Where the initial pleading does not

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reveal that a case is removable, however, “a notice of removal may be filed within 30 days

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after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other

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paper from which it may first be ascertained that the case is one which is or has become

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removable.” 28 U.S.C. § 1446.

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The party seeking the federal forum bears the burden of establishing that the

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statutory requirements of federal jurisdiction have been met. Lewis v. Verizon Commc’ns,

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Inc., 627 F.3d 395, 399 (9th Cir. 2010). “A defendant seeking removal of a putative class

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action must demonstrate, by a preponderance of evidence, that the aggregate amount in

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controversy exceeds the jurisdictional minimum.” See Rodriguez v. AT&T Mobility Servs.

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LLC, 728 F.3d 975, 981-82 (9th Cir. 2013).

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DISCUSSION

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I.

Timeliness of Removal

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Ogues argues that Healthsource’s removal notice was untimely because it was filed

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eight months after Healthsource first received her complaint, not within thirty days as she
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alleges is required by 28 U.S.C. § 1446. Her argument, however, ignores the remainder of

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the statutory language of § 1446 which states that where the complaint does not reveal a

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basis for removal, “a notice of removal may be filed within 30 days after receipt . . . of a

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copy of an amended pleading, motion, order or other paper from which it may first be

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ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446.

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Here, the complaint itself did not indicate the parties’ diversity of citizenship. Complaint.

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Healthsource claims – and Ogues does not dispute – that it only learned of Ogues’s

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Nevada citizenship and the resulting diversity in the case at a January 20, 2014 meeting to

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schedule Ogues’s deposition. Healthsource filed its notice of removal nine days later, on
January 29, 2014. Because the complaint did not reveal any basis for removal and

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United States District Court
Northern District of California

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Healthsource filed its notice of removal within 30 days of first ascertaining the diversity of

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citizenship in this case, Healthsource’s notice of removal was timely under § 1446.

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II.

Jurisdictional Minimum Amount in Controversy
To support its position that the amount in controversy exceeds $5 million,

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Healthsource focuses only on Ogues’s fourth cause of action, her claim for failure to

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timely pay all final wages under California Labor Code Sections 201-203. Healthsource

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argues that the damages due under this cause of action alone exceed the jurisdictional

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minimum. Under Labor Code Section 201, once an employee is discharged, the

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employee’s earned and unpaid wages are due and payable immediately. Under Section

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203, if an employer fails to pay such wages immediately, the employee is entitled to an

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additional amount equivalent to his or her wage, for each day the wages continue unpaid,

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up to thirty days. Healthsource argues that there are at least 300 people in the putative

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class. It claims these 300 people worked 12-hour shifts, rendering their average daily

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wage $560, accounting for 8 hours at $40 per hour and 4 hours at an overtime rate of $60.

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Multiplying $560 by 30 days, by 300 people, Healthsource estimates that the amount in

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controversy on this cause of action alone is $5,040,000.00.

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Ogues argues that Healthsource’s unsupported statements regarding the fourth
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cause of action are insufficient to satisfy its preponderance of the evidence burden.

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Although the Ninth Circuit has “not addressed the types of evidence defendants may rely

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upon to satisfy the preponderance of the evidence test for jurisdiction, [it has] endorsed the

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Fifth Circuit’s practice of considering facts presented in the removal petition as well as any

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‘summary-judgment-type evidence relevant to the amount in controversy at the time of

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removal.’” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir.

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2003) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir.

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1997)).

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Here, Healthsource’s only evidence is a declaration from its counsel, Michael A.
Maxey, made “of his own personal knowledge.” Maxey Decl. ¶ 1. The declaration states

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United States District Court
Northern District of California

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that there are over 300 former Healthsource employees who worked in California within

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the three years prior to the filing of the action, who earned at least $40 per hour, and who

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worked 12-hour shifts. Maxey Decl. ¶ 2. It explains that a “conservative estimate” of the

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“daily gross pay of those employees is $560” and that the “matter in controversy exceeds

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the sum or value of $5 million . . . because 300 employees multiplied by 30 days

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multiplied by $560 is equal to $5,040,000.00.” Maxey Decl. ¶ 4. Nowhere in the

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declaration, however, does Maxey explain how he arrives at the number of employees who

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allegedly form the putative class, the basis for the average wage information, or why every

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putative class member would be entitled to the maximum 30 days of wages permitted.

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While Maxey’s statements may indeed be true, his declaration lacks sufficient

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foundation. It provides no indication that his knowledge is based on a review of any

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relevant business records or other reliable information. His declaration is not the type of

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evidence that would be admissible at the summary judgment stage. See Villiarimo v.

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Aloha Island Air, Inc., 281 F.3d 1054, 1059, 1061 n.5 (9th Cir. 2002) (disregarding

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declaration where the declaration in question included facts beyond the declarant’s

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personal knowledge and that provided no indication of how the facts were known to be

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true). Healthsource’s removal notice offers identical statements also unsupported by any

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foundation or facts.
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At the hearing, the Court expressed its concern that the declaration was not

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“summary-judgment type evidence” and asked Healthsource what additional evidence it

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could offer to meet its burden. Healthsource’s counsel, Michael Maxey, did not suggest

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any, and said only that he believed the declaration met the summary-judgment standard

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and that the case could proceed on the declaration alone. As the Court concludes that

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Maxey’s declaration is not “summary-judgment type evidence,” and there is no other

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evidence to support Healthsource’s position, Healthsource has failed to show, by a

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preponderance of the evidence, that the amount in controversy in this case exceeds $5

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million. See Garibay v. Archstone Communities LLC, 539 F. App’x 763, 764 (9th Cir.
2013) (affirming conclusion that Archstone did not establish amount in controversy where

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United States District Court
Northern District of California

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it merely “assume[d] that each employee would be entitled to the maximum statutory

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penalty, but provide[d] no evidence supporting that assertion” and “assumed each class

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member was wrongly denied a break twice each week” but “failed to provide any evidence

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regarding why” it assumed that). Accordingly, there is no basis for federal jurisdiction in

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this case.

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CONCLUSION
For the foregoing reasons, Plaintiff’s motion to remand is granted. It is hereby
ordered that this case is remanded to the Superior Court of California, Alameda County.

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IT IS SO ORDERED.

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Dated: 4/22/14

_____________________________________
THELTON E. HENDERSON
United States District Judge

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