Rutledge et al v. Healthport Technologies, LLC et al

Filing 31

Order by Hon. Vince Chhabria granting #19 Motion to Remand. (vclc2S, COURT STAFF) (Filed on 2/24/2017)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

ALICE RUTLEDGE, et al.,

Case No. 16-cv-06920-VC

Plaintiffs,
ORDER GRANTING MOTION TO
REMAND

v.
HEALTHPORT TECHNOLOGIES, LLC, et
al.,

Re: Dkt. No. 19

Defendants.

The motion to remand is granted because the amount in controversy requirement for
CAFA jurisdiction is not met in this case.
CAFA jurisdiction requires that the amount in controversy exceed $5 million, the
proposed class include more than 100 members, and any plaintiff be a citizen of a state different
from any defendant. 28 U.S.C. § 1332(d). The plaintiffs do not dispute that the latter two
requirements are met. All or almost all members of the proposed class are citizens of California
and, as clarified in their letter brief, HealthPort and Ciox are citizens of Georgia for CAFA
purposes. The plaintiffs do not contest that the potential class of current and former employees
in California includes more than 100 people. To the extent there was any doubt about this, the
defendants have submitted a declaration explaining that the potential class includes more than
600 people. See Robinson Decl., at 1.
The plaintiffs contend, though, that the defendants have failed to demonstrate that the
amount in controversy exceeds $5 million. The plaintiffs do not identify the amount of monetary
recovery that they seek in their complaint. So the defendants, having removed this case from

state court, "must prove by a preponderance of the evidence that the amount in controversy
requirement has been met." Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 683 (9th Cir.
2006).
The defendants, in their opposition to the motion to remand, were required to "put
forward evidence showing that the amount in controversy exceeds $5 million." Ibarra v.
Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015).1 HealthPort and Ciox submitted a
declaration from a regional HR manager for Ciox, Jay Robinson, who reviewed the defendants'
records. Robinson's declaration includes estimates of the number of current and former
employees of the defendants in California over different limitations periods, the number of
employees who left HealthPort and Ciox, and average rates of pay for employees working for
and separated from the defendants. But the declaration did not include any information relevant
to the potential violation rates for the claims in the complaint, such as the frequency of shifts of
different lengths.
The defendants were permitted to draw reasonable inferences from the complaint and
from evidence, but they were not permitted to pull potential violation rates out of thin air. See
LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1201, 1202-03 (9th Cir. 2015); Ibarra, 775 F.3d
1198; see also Garibay v. Archstone Cmtys. LLC, 539 F. App'x 763 (9th Cir. 2013). The Ninth
Circuit provided an example of reasonable inferences in LaCross. The defendants, facing a
claim for fuel cost reimbursements, extrapolated from fuel costs on company discount cards

1

The parties disagree about whether the plaintiffs were required to include evidence in moving
to remand based on an insufficient amount in controversy. See Dart Cherokee Basin Operating
Co., LLC v. Owens, 135 S. Ct. 547, 550 (2014). The Ninth Circuit has declined to decide
whether the plaintiffs must submit evidence. Ibarra, 775 F.3d at 1199-1200. It has only held
that the district court should "'set a reasonable procedure . . . so that each side has a fair
opportunity to submit proof.'" Unutoa v. Interstate Hotels & Resorts, Inc., No. 2:14-cv-09809SVW-PJW, 2015 WL 898512, at *2 (C.D. Cal. Mar. 3, 2015) (quoting Ibarra, 775 F.3d at 1200).
Both sides have had a fair opportunity to submit proof in this case. The plaintiffs did not submit
evidence to suggest that the amount in controversy is less than $5 million. They argue instead
that the defendants have not met their burden on the issue. The absence of such evidence means
that the only evidence available in evaluating the amount in controversy is that submitted by the
defendants, but the defendants must still meet their burden to show that CAFA jurisdiction is
appropriate.

2

during a limited period to estimate the amount in controversy over a longer period, adjusting for
changes in the number of drivers over time.
The inferences that the defendants attempted to draw in their notice of removal in this
case were far less concrete. See Smith v. Diamond Resorts Mgmt., Inc., No. 15-cv-2477-VAP
(SPx), 2016 WL 356020 (E.D. Cal. Jan. 29, 2016); Nolan v. Kayo Oil Co., No. 11-cv-00707
MEJ, 2011 WL 2650973, at *4 (N.D. Cal. July 6, 2011). The defendants highlight allegations in
the complaint that several of the claims resulted from company policies and practices. The
allegation of a policy and practice may make the assumption of violations against all class
members reasonable. It does not shed light, though, on the frequency of the violations. See
Ibarra, 775 F.3d at 1199 ("While it is true that the complaint alleges that [the defendant]
maintains 'an institutionalized unwritten policy that mandates' the employment violations alleged
in the complaint, including the denial of meal and rest periods, this does not mean that such
violations occurred in each and every shift."). But see Mejia v. DHL Express (USA), Inc., No.
15-cv-890-GHK (JCx), 2015 WL 2452755, at *5 (C.D. Cal. May 21, 2015); Wilson v. Best Buy
Co., Inc., No. 2:10-cv-3136-GEB-KJN, 2011 WL 445848 (E.D. Cal. Feb. 8, 2011).2 Although
perhaps the defendants' $1.5 million estimate of the amount in controversy for the wage
statement claim is reasonable and evidence-based, their estimates of the amount in controversy
for the remaining claims (and the value of a potential claim for attorneys' fees) are too
speculative.3
2

Some district court cases have identified an apparent tension between Garibay and Lewis v.
Verizon Communications, Inc. about the evidence that defendants are required to present in
opposing remand. Compare Garibay, 539 F. App'x at 764 with Lewis v. Verizon Commc'ns, Inc.,
627 F.3d 395 (9th Cir. 2010); see, e.g., Mejia, 2015 WL 2452755, at *4; Patel v. Nike Retail
Servs., Inc., 58 F. Supp. 3d 1032, 1041 n.4 (N.D. Cal. 2014). The district court cases raise the
concern that defendants might be required to provide evidence of their own liability in order to
demonstrate the amount in controversy. This case does not seriously implicate the tension
identified in other district court cases, though, since HealthPort and Ciox have provided no
evidence relevant to the potential violation rates for most of the claims in the complaint apart
from the number of potential class members. The defendants could have submitted additional
information that would support inferences about the amount in controversy for the claims in the
complaint without providing evidence of liability.
3
The defendants submitted a request for judicial notice of attorneys' fees awarded in a state court
case with different parties and circumstances. It is appropriate to take judicial notice of the fee

3

Accordingly, the case is remanded to Alameda County Superior Court.
IT IS SO ORDERED.
Dated: February 24, 2017
______________________________________
VINCE CHHABRIA
United States District Judge

award. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006).
But the fee award in this other case is only slightly helpful in assessing what the attorneys' fees
might be in this case. Even if it is appropriate to assume that the attorneys' fees will be a
percentage of the projected damages in this case, the underlying damages calculation is based on
unsupported assumptions. See Campbell v. Vitran Express, Inc., No. 10-cv-442-RGK (SHx),
2010 WL 4971944, at *4 (C.D. Cal. Aug. 16, 2010).

4