Chin v. Cole Haan, LLC

Filing 24

Order Remanding Case by Hon. James Donato. (jdlc2S, COURT STAFF) (Filed on 12/13/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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ALEX CHIN,
Plaintiff,

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United States District Court
Northern District of California

ORDER REMANDING CASE

v.

Re: Dkt. No. 8
COLE HAAN, LLC,
Defendant.

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Case No.16-cv-02154-JD

This is a wage-and-hour putative class action that defendant Cole Haan, LLC removed to

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federal court under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(2).

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Dkt. No. 1. The case is remanded to the San Francisco Superior Court, where it was filed.
BACKGROUND

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Plaintiff Alex Chin, who is a former Cole Haan employee, moves to remand. Dkt. Nos. 8,

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23. The primary jurisdictional dispute between the parties is whether the $5 million amount-in-

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controversy requirement under CAFA is met in this case. Dkt. Nos. 8, 15, 18. The Court

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previously ruled that Chin’s complaint, which alleges a single cause of action under California’s

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Unfair Competition Law (Cal. Bus. & Prof. Code § 17200), does not seek wage statement or

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waiting time penalties, and even if it did, those penalties are unavailable under plaintiff’s lone

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UCL claim. Dkt. No. 21. The Court consequently found that Cole Haan had failed to establish by

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a preponderance of the evidence that the amount in controversy exceeds the jurisdictional

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minimum under CAFA, because defendant improperly relied on those penalties to cross the $5

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million threshold. Id. The Court allowed Cole Haan an opportunity to try to establish that the $5

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million minimum is met in this case even without the wage statement and waiting time penalties.

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Plaintiff was also permitted to file a declaration in response to Cole Haan’s supplemental

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submission. Id.

DISCUSSION

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The Court has now reviewed the additional submissions from both sides, Dkt. Nos. 22, 23,

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and remands. “When, as here, a defendant’s assertion of the amount in controversy is challenged,

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both sides submit proof and the court decides, by a preponderance of the evidence, whether the

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amount-in-controversy requirement has been satisfied.” LaCross v. Knight Transportation Inc.,

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775 F.3d 1200, 1202 (9th Cir. 2015) (quoting Dart Cherokee Basin Operating Co. v. Owens, 135

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S.Ct. 547, 554 (2014)) (internal quotation marks and ellipses omitted). Cole Haan, as the

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removing party, bears the burden of proof, as well as the burden of “persuad[ing] the court that the

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estimate of damages in controversy is a reasonable one.” Ibarra v. Manheim Investments, Inc.,

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775 F.3d 1193, 1197 (9th Cir. 2015). “[W]hen the defendant relies on a chain of reasoning that

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United States District Court
Northern District of California

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includes assumptions to satisfy its burden of proof, the chain of reasoning and its underlying

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assumptions must be reasonable ones.” LaCross, 775 F.3d at 1202 (citing Ibarra, 775 F.3d at

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1199). In Ibarra, another Labor Code violations case, our circuit held that even though the

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plaintiff had alleged a “pattern and practice” of violations on the employer’s part, this did not

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“necessarily mean always doing something.” 775 F.3d at 1198-99. The court held that “[b]ecause

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the complaint does not allege that Manheim universally, on each and every shift, violates labor

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laws by not giving rest and meal breaks, Manheim bears the burden to show that its estimated

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amount in controversy [which assumed a 100% violation rate] relied on reasonable assumptions.”

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Id. at 1199.

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As in Ibarra, the complaint here does not allege that Cole Haan violated the labor laws on

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each and every one of its employees’ shifts. At the same time, the complaint does not allege any

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other specific rate of violation, and instead more generally alleges that defendant “engaged in a

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uniform policy and systematic scheme of wage abuse” against its employees, and “at all material

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times” failed to do things like pay overtime wages and provide meal and rest periods as required

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by law. Dkt. No. 1, Ex. A ¶¶ 25, 38, 40.

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In the face of this ambiguity, Cole Haan’s supplemental declaration simply sets out a menu

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of different amount-in-controversy calculations options. For alleged overtime violations, it offers

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five different sets of calculations, ranging in their respective underlying assumptions from one
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hour of unpaid overtime per week per class member, to five hours of unpaid overtime per week

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per class member. Dkt. No. 22 ¶ 6. For unpaid minimum wages, Cole Haan simply “assum[es]

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plaintiff is alleging one hour of unpaid minimum wages per week, per putative class member.” Id.

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¶ 7. For meal periods, Cole Haan again supplies five options “[a]ssuming a range of one to five

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missed meal periods per week, per putative class member.” Id. ¶ 8. The same is true again for

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rest periods, with five sets of calculations ranging in assumptions from “one to five missed rest

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breaks per week, per putative class member.” Id. ¶ 9. Because of this divergent approach, the

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estimate of attorneys’ fees (at 25% of total liability) also comes in five different options. Id. ¶ 11.

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Significantly, adding up the lowest possible amounts in each of these categories produces a
sum of only $3.49 million, which is obviously below the $5 million minimum under CAFA. Dkt.

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United States District Court
Northern District of California

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No. 22 at 4. It appears that even that number may be overstated and unreliable. Although there is

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some case law support for the proposition that assuming a violation rate of one missed meal break

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and one missed rest period per workweek is reasonable when a plaintiff alleges a “pattern and

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practice” of violations and that he himself “regularly” missed meal breaks, Garza v. Brinderson

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Constructors, Inc., 178 F. Supp. 3d 906, 912 (N.D. Cal. 2016), the latter type of allegation is

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missing here. For overtime, Cole Haan assumes a violation rate from one to five hours per week,

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but fails to explain why any one of these is a reasonable rate or take a stand on which of these five

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might be the most reasonable. Dkt. No. 22. As a factual matter, plaintiff’s declaration refutes the

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reasonableness of even the lowest violation rate assumed by Cole Haan by stating that his records

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reflect only 30 minutes to 1 hour of unpaid overtime on one occasion in an 11-month period. Dkt.

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No. 23 ¶ 7. For unpaid minimum wages, too, Cole Haan assumes without any explanation that

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plaintiff “is alleging one hour of unpaid minimum wage per week,” Dkt. No. 22 ¶ 7, but plaintiff

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again refutes the reasonableness of this assumption by declaring as a matter of fact that he

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“generally worked no more than two hours of off-the-clock, straight-time work per month” in the

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11-month period between March 2012 and February 2013. Dkt. No. 23 ¶ 6.

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Cole Haan’s supplemental declaration fails to carry the day for removal even when

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considered by itself because it pulls various assumptions “from thin air” without explaining any

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factual bases for the reasonableness of those assumptions. Ibarra, 775 F.3d at 1199. Its failings
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are magnified when weighed against plaintiff’s counter-declaration. Consequently, Cole Haan has

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failed to meet its burden of proving by a preponderance of the evidence that the $5 million

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amount-in-controversy requirement under CAFA is satisfied here. Cf. LaCross, 775 F.3d at 1203

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($5 million requirement met where even the most conservative estimate of amount in controversy

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was $21 million). Cole Haan has implicitly conceded that remand is the right outcome by stating

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its view that $3.49 million is a reasonable, if conservative, estimate of the amount in controversy

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in this case. Dkt. No. 22 at 4.
CONCLUSION

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The case is remanded to the California Superior Court for the City and County of San

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Francisco pursuant to 28 U.S.C. § 1447(c). Plaintiff’s request for an award of attorneys’ fees

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United States District Court
Northern District of California

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under that section is denied as the Court does not find that defendant lacked an objectively

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reasonable basis for seeking removal.

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The case is closed.

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IT IS SO ORDERED.

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Dated: December 13, 2016

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JAMES DONATO
United States District Judge

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