Crummie v. CertifiedSafety, Inc.

Filing 32

ORDER DENYING MOTION TO REMAND by Judge Richard Seeborg denying 16 Motion to Remand. (tlS, COURT STAFF) (Filed on 10/11/2017)

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT

8

NORTHERN DISTRICT OF CALIFORNIA

9
10

TIERRE CRUMMIE,

Case No. 17-cv-03892-RS

Plaintiff,
11
United States District Court
Northern District of California

v.

ORDER DENYING MOTION TO
REMAND

12
13

CERTIFIEDSAFETY, INC.,
Defendant.

14
15
I. INTRODUCTION

16
17

Plaintiff Tierre Crummie filed this putative class action in Alameda Superior Court. The

18

operative First Amended Complaint asserts various wage and hour violations against defendant

19

CertifiedSafety, Inc. on behalf of hourly-paid or non-exempt employees who worked for

20

CertifiedSafety during any period from April 24, 2013 through time of judgment. The complaint

21

does not disclose the dollar amount in controversy.

22

CertifiedSafety removed the action to this court pursuant to the Class Action Fairness Act

23

of 2005 (“CAFA”), see 28 U.S.C. § 1332(d), contending that the amount in controversy can be

24

reasonably estimated to exceed the $5 million threshold for jurisdiction under CAFA. Crummie

25

seeks remand, arguing that CertifiedSafety has not met its burden to establish the amount in

26

controversy is sufficient. Because CertifiedSafety has presented reasonable estimates sufficiently

27

grounded in evidence, and Crummie has provided no rebuttal evidence, the motion to remand will

28

be denied.

II. LEGAL STANDARDS

1
2

The applicable legal standards are well-summarized in Mackall v. Healthsource Glob.

3

Staffing, Inc., No. 16-CV-03810-WHO, 2016 WL 4579099, at *2-*3 (N.D. Cal. Sept. 2, 2016) as

4

follows:

5
6
7
8
9
10

The Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d), gives
federal courts original jurisdiction over class actions where there are at least 100
class members, at least one plaintiff is diverse in citizenship from any defendant,
and the amount in controversy exceeds $5,000,000, exclusive of interest and costs.
Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015). A class
action that meets CAFA standards may be removed to federal court. 28 U.S.C. §
1441(a). Unlike the general presumption against removal, “no antiremoval

11
United States District Court
Northern District of California

presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co.,
12
LLC v. Owens, 135 S. Ct. 547, 554 (2014). In fact, Congress intended CAFA
13
14

jurisdiction to be “interpreted expansively.” Ibarra, 775 F.3d at 1197.
Under CAFA, a defendant removing a case must provide “a short and plain

15

statement of the grounds for removal. . . .” Id. A defendant’s notice of removal

16

needs only a “plausible allegation that the amount in controversy exceeds the

17

jurisdictional threshold” and does not need evidentiary submissions. Id. (quoting

18

Dart, 135 S. Ct. at 554).

19

When testing the amount in controversy alleged, courts look first to the

20

allegations of the complaint. Id. If the damages are understated or if the defendant

21

argues the damages are understated, the defendant must show by a preponderance

22

of evidence that the aggregate amount exceeds the $5,000,000 threshold. Id. The

23

defendant in a jurisdictional dispute has the “burden to put forward evidence

24

showing that the amount in controversy exceeds $5 million, to satisfy other

25

requirements of CAFA, and to persuade the court that the estimate of damages in

26

controversy is a reasonable one.” Id. at 1197.

27

When the plaintiff contests the defendant’s amount-in-controversy
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
2

1

allegations, both sides submit proof, and the court decides whether the

2

jurisdictional threshold has been met. Id. (quoting Dart, 135 S. Ct. at 554). The

3

parties may submit evidence beyond the complaint such as affidavits, declarations,

4

or other “summary-judgment type evidence relevant to the amount in

5

controversy . . . .” Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th

6
7
8
9
10

United States District Court
Northern District of California

11

Cir. 1997).
“Mere speculation and conjecture, with unreasonable assumptions” is not
sufficient to establish removal jurisdiction. Ibarra, 775 F.3d at 1197; see also Fong
v. Regis Corp., No. 13-cv-04497-RS, 2014 WL 26996, at *2 (N.D. Cal. Jan. 2,
2014). However, the burden to establish the amount in controversy by a
preponderance of the evidence does not require the defendant to “research, state,
and prove the plaintiff’s claims for damages.” Donald v. Xanitos, Inc., No. 14-CV-

12
05416-WHO, 2015 WL 1774870, at *4 (N.D. Cal. 2015) (quoting Korn v. Polo
13
14
15
16
17

Ralph Lauren Corp., 536 F. Supp. 2d 1199, 1204 (E.D. Cal. 2008)). “CAFA’s
requirements are to be tested by consideration of real evidence and the reality of
what is at stake in the litigation, using reasonable assumptions underlying the
defendant’s theory of damages exposure.” Ibarra, 775 F.3d at 1198.
“When measuring the amount in controversy, a court must assume that the

18

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

19

plaintiff on all claims made in the complaints.” Fong 2014 WL 26996 at *2.

20

“[CAFA] tells the district court to determine whether it has jurisdiction by adding

21

up the value of the claim[s] of each person who falls within the definition of [the]

22

proposed class and determin[ing] whether the resulting sum exceeds $5 million.”

23

Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 (2013).

24
25

III. DISCUSSION

26

In support of its Notice of Removal, Certified Safety submitted the declaration of Stephen

27

Hines, its Vice President of Human Resources, setting out the assumptions and figures it had used
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
3

1

to calculate an amount in controversy of not less than $5,004,030.1 In opposition to the remand

2

motion, Hines provides a supplemental declaration, and Certified Safety claim additional items of

3

potential recovery to increase the amount in controversy to $6,743,912.50.2
Hines states, and Crummie does not challenge, that the number of employees encompassed

4
5

by the proposed class definition is 802.3 Hines sets out the hourly wage range for putative class

6

members ($13 to $31.50) and the cumulative total of workweeks. Hines explains the basis of his

7

calculations for estimated total unpaid wages ($131,062), missed meal breaks ($467,217), missed

8

rest breaks ($477,117), wage statement claim penalties ($331,200), and failure to pay minimum

9

wage penalties ($839,500). In each instance Hines sets out the number of employees believed to

10

be affected, and avers that the employees’ actual pay rates were used in making the calculations.
Finally, in the largest ticket item of the original $5,004,030 total, Hines calculates

United States District Court
Northern District of California

11
12

$2,757,034 as the amount in controversy for waiting time penalties, based on 684 putative class

13

members who left their employment with CertifiedSafety during the class period up to the time the

14

complaint was filed. The figure utilizes the actual pay rates of each employee, and is based on the

15

full 30 day maximum penalty available.
The parties’ dispute turns on whether CertifiedSafety is entitled to assume that class

16
17

members worked the equivalent of 30 minutes “off the clock” each and every work week, missed

18

one meal period in 50% of the shifts they worked, missed one rest period in 50% of the shifts, and

19

that they may be entitled to the maximum penalties on the wage statement, minimum wage, and

20
21
22
23
24
25
26
27

1

Crummie objects to the Hines declaration as vague and lacking in foundation, and faults it for
not attaching all of the underlying corporate records on which it is based. As support for the
original notice of removal, the declaration needed only to present “plausible allegations” and it did
not have to constitute an admissible evidentiary submission. Ibarra, 775 F.3d at 1197. To the
extent the declaration is offered as evidence in opposition to remand, the objections are overruled.
Hines lays an adequate foundation for the facts he asserts and neither the original nor
supplemental declarations are unduly vague or otherwise inadmissible.
2

CertifiedSafety omits $900 in estimated potential PAGA penalties, which Crummie argues do
not count towards the amount in controversy requirement.
3

That number could rise as the alleged class period has not terminated.
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
4

1

waiting time claims. The First Amended Complaint is replete with verbiage suggesting that the

2

alleged violations were pervasive, wide-spread, and ongoing. See, e.g., FAC, para. 32

3

(CertifiedSafety “engaged in a uniform policy/practice . . . . ); para. 44 (“At all material times set

4

forth herein, Defendants failed to pay overtime . . . .”). As Crummie points out, however, such

5

allegations, standing alone, do not support an assumption that the amount in controversy can be

6

properly calculated using an assumption of a “100% violation rate.” See Ibarra, 775 F.3d at

7

1198–99 (“a ‘pattern and practice’ of doing something does not necessarily mean always doing

8

something . . . . While it is true that the complaint alleges that Manheim maintains ‘an

9

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

11
United States District Court
Northern District of California

10

occurred in each and every shift.”)

12

Here, however, CertifiedSafety has not premised its calculations on a presumed 100%

13

violation rate. Rather, it has more conservatively assumed that putative class members were

14

required to work only a half hour unpaid overtime each week, and missed meal and rest breaks

15

only every other shift, on average. While Certified Safety does assume maximum penalties are at

16

stake, that is hardly an unreasonable position in the context of the claims being advanced. For

17

example, Crummie insists there must be some additional evidentiary showing that all or virtually

18

all putative class members may claim a full 30 days of waiting time penalties. If the gravamen of

19

the allegation were that CertifiedSafety was sometimes tardy in providing final paychecks, then

20

indeed it would not be reasonable to assume that nearly all employees did not get their final

21

paychecks for 30 or more days. Crummie’s theory, however, plainly is that putative class members

22

were owed (and are still owed) pay for overtime and missed meal and rest breaks, even if their

23

final paychecks were otherwise timely delivered. Thus, it is completely reasonable to assume

24

waiting time penalties accrued to the thirty-day limit because of those unpaid sums.

25

Crummie may be correct that CertifiedSafety has presented no direct evidence to ground

26

its assumptions of a weekly half hour in unpaid overtime and a 50% violation for meal and rest

27

breaks on empirical data. Crummie’s alternate proposal to assume a 25% violation rate, however,
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
5

1

is likewise untethered to factual evidence.4 Crummie insists he has no obligation to come forward

2

with such evidence because CertifiedSafety has the burden of establishing jurisdiction.
While the ultimate burden does lie with CertifiedSafety, most typically once jurisdiction

3
4

has been challenged, “both sides submit proof and the court decides, by a preponderance of the

5

evidence, whether the amount-in-controversy requirement has been satisfied.” Dart, 135 S. Ct. at

6

554. There nonetheless may be cases where plaintiff can successfully resist remand merely by

7

showing through argument (as opposed to by submitting rebuttal evidence) that the removing

8

defendant’s evidence is insufficient to support jurisdiction. This is not such a case, because

9

CertifiedSafety has made an adequate showing that the amount in controversy exceeds the $5
million threshold, notwithstanding that the violation rate and penalty rates it utilizes in its

11
United States District Court
Northern District of California

10

calculations are presumed, rather than established by statistical or other direct evidence.
CertifiedSafety is entitled to make such assumptions, as long as they are reasonable, given

12
13

both the allegations of the complaint, and whatever factual evidence may be available in the

14

record. See Ibarra, 775 F.3d at 1199 (“[E]vidence may be direct or circumstantial. In either event,

15

a damages assessment may require a chain of reasoning that includes assumptions.”); see also

16

Garza v. Brinderson Constructors, Inc., No. 15-CV-02661-RMW, 2016 WL 1298390, at *3 (N.D.

17

Cal. Apr. 4, 2016) (defendant’s “assumption of one violation per week is reasonable based on the

18

allegations of the SAC” that defendant regularly failed to provide rest breaks and had a “pattern

19

and practice” of failing to provide those breaks); see generally, Mackall, supra, 2016 WL 4579099

20

(rejecting calculations based on 100% violation rate, but denying remand where more conservative

21

assumptions, strikingly similar to those made by defendant here, still resulted in an amount in

22

controversy over the threshold).
Even with the $900 PAGA penalty eliminated, CertifiedSafety’s original calculation of the

23
24
25
26

4

See, Ibarra, 775 F.3d at 1199 (plaintiff “did not assert an alternative violation rate grounded in
real evidence, such as an affidavit . . . asserting how often he was denied meal and rest breaks.”)

27
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
6

1

amount in controversy submitted with the notice of removal exceeds $5 million. While the parties

2

dispute how large a dollar figure for attorney fees may properly be added on, such fees

3

unquestionably may be considered, and provide an additional margin of error here. As the total

4

therefore comfortably exceeds the jurisdictional threshold, this order need not reach the propriety

5

of considering the potential of additional penalties under Labor Code section 204, which Crummie

6

contends have not been sought as part of the class action claims.

7
IV. CONCLUSION

8
9

The motion to remand is denied.

10

United States District Court
Northern District of California

11

IT IS SO ORDERED.

12
13
14
15

Dated: October 11, 2017
______________________________________
RICHARD SEEBORG
United States District Judge

16
17
18
19
20
21
22
23
24
25
26
27
ORDER DENYING MOTION TO REMAND
CASE NO. 17-cv-03892-RS

28
7