Duran et al v. Fernandez Brothers Inc.
Filing
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ORDER by Judge Lucy Koh denying 10 Motion to Remand (lhklc2S, COURT STAFF) (Filed on 11/12/2015)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
United States District Court
Northern District of California
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GERARDO GONZALEZ DURAN, et al.,
Plaintiffs,
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ORDER DENYING MOTION TO
REMAND
v.
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Case No. 15-CV-03058-LHK
Re: Dkt. No. 10
FERNANDEZ BROTHERS, INC.,
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Defendant.
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Plaintiffs Gerardo Gonzalez Duran and Virginia Chavez Rodriguez (collectively,
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“Plaintiffs”) bring this action against Defendant Fernandez Brothers, Inc. (“Defendant” or
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“Fernandez Brothers”). Before the Court is Plaintiffs’ motion to remand the case to Monterey
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County Superior Court. ECF No. 10 (“Mot.”). The Court finds that this motion is suitable for
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decision without oral argument pursuant to Civil Local Rule 7-1(b) and thus vacates the hearing
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set for November 19, 2015, at 1:30 p.m. The case management conference, currently scheduled
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for November 19, 2015, at 1:30 p.m., remains as set. Having considered the parties’ submissions,
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the relevant law, and the record in this case, the Court DENIES Plaintiffs’ motion to remand.
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I.
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BACKGROUND
A. Factual Background
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
Plaintiffs Gerardo Gonzales Duran (“Gonzales”) and Virginia Chavez Rodriguez
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(“Chavez”) allege that they are piece-rate agricultural workers who worked for Defendant and
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who “were not paid wages pursuant to California law.” ECF No. 1-1 (“Compl.”) ¶ 1.
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Specifically, Plaintiffs allege that Defendant “did not and do not compensate piece-rate
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agricultural workers for all unproductive time, including but not limited to unproductive time
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spent performing mandatory exercises, attending mandatory meetings, changing harvesting
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locations in the same workday, and for the rest period time during which they performed no piece-
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rate work.” Id. ¶ 2. Plaintiffs also allege that Defendant “did not provide . . . employees accurate
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itemized wage statements (check stubs) and did not pay . . . employees all the wages owed to them
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upon termination.” Id.
Plaintiffs assert four causes of action in their complaint. First, Plaintiffs allege that
United States District Court
Northern District of California
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Defendant failed to pay minimum wages in violation of California Labor Code §§ 558, 1194,
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1197, and 1198. Second, Plaintiffs allege that Defendant failed to provide accurate wage
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statements in violation of California Labor Code §§ 226 and 558. Third, Plaintiffs allege that
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Defendant failed to pay all wages owed upon termination in violation of California Labor Code §§
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201–203 and 558. Fourth, Plaintiffs allege that they are entitled to restitution pursuant to
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California Business and Professions Code §§ 17200 et seq. Compl. ¶ 17–39. Plaintiffs seek relief
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for themselves and as class representatives on behalf of “[a]ll persons who . . . worked for
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[Defendant] as piece-rate agricultural workers” during a certain time period. Id. ¶ 14.1
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B. Procedural History
On June 2, 2015, Plaintiffs filed suit in Monterey County Superior Court. Defendant
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removed this case to federal court on July 1, 2015. ECF No. 1 (“Notice of Removal”). In
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The complaint alleges four sub-classes: a minimum wages class, comprised of all persons who
worked for Defendant in the three years prior to the filing of this action; a wage settlement class,
comprised of all persons who worked for Defendant in the one year prior to the filing of this
action; a terminated employees class, comprised of all persons who worked for Defendant in the
three years prior to the filing of this action; and a restitution class, comprised of all persons who
worked for Defendant in the four years prior to the filing of this action. Compl. ¶ 14. These
classes correspond to Plaintiffs’ four causes of action. Id. ¶¶ 21, 25, 34, 39.
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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Defendant’s notice of removal, Defendant alleged that federal jurisdiction was proper pursuant to
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the Class Action Fairness Act (“CAFA”). Plaintiffs filed a motion to remand on July 31, 2015.
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Defendant filed an opposition on September 24, 2015, ECF No. 19 (“Opp’n”), and Plaintiffs filed
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a reply on October 9, 2015, ECF No. 20 (“Reply”). On October 15, 2015, Defendant filed an
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administrative motion to file a sur-reply. ECF No. 22. In this administrative motion, Defendant
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contended that “Plaintiffs’ Reply . . . raise[d] entirely new legal and factual issues challenging the
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interpretation of the plain language of CAFA.” Id. at 3. On October 25, 2015, the Court denied
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Defendant’s motion. ECF No. 25. However, the Court noted that, “under Ninth Circuit precedent,
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the Court shall not consider issues that are raised for the first time by the parties in their reply
briefs.” Id. at 1.
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United States District Court
Northern District of California
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II.
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LEGAL STANDARD
A suit may be removed from state court to federal court only if the federal court would
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have had subject matter jurisdiction over the case in the first instance. 28 U.S.C. § 1441(a); see
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Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that originally
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could have been filed in federal court may be removed to federal court by the defendant.”). “In
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civil cases, subject matter jurisdiction is generally conferred upon federal district courts either
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through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C.
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§ 1331.” Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). If it appears at any
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time before final judgment that the federal court lacks subject matter jurisdiction, the federal court
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must remand the action to state court. 28 U.S.C. § 1447(c).
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There is no presumption against removal jurisdiction in CAFA cases. See Dart Cherokee
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Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014) (vacating district court’s remand
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order in putative class action on the ground that “a defendant’s notice of removal need include
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only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold”).
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The defendant, however, still bears the burden of establishing removal jurisdiction. Id. A notice
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of removal must contain a “short and plain statement of the grounds for removal,” a requirement
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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that tracks the general pleading standard in Rule 8(a) of the Federal Rules of Civil Procedure. Id.
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at 553 (citing 28 U.S.C. § 1446(a)).
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III.
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DISCUSSION
A. Minimal Diversity
CAFA provides federal courts with original jurisdiction to hear a class action if the (1)
class has more than 100 members, (2) the parties are minimally diverse, and (3) the matter in
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controversy exceeds $5,000,000 in value. Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345,
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1348 (2013). Of these requirements, Plaintiffs challenge only Defendant’s contention that the
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parties are minimally diverse. Mot. at 3; Notice of Removal ¶¶ 11, 17. On this point, Plaintiffs
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argue that “[b]oth named Plaintiffs are residents of California,” that “Defendant is a California
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United States District Court
Northern District of California
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corporate citizen,” and that “the putative class is explicitly limited to individuals who worked for
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Defendant in California.” Mot. at 4. These facts, Plaintiffs contend, make the exercise of federal
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jurisdiction inappropriate.
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Plaintiffs’ contentions lack merit. CAFA provides that federal “district courts shall have
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original jurisdiction of any civil action [that] . . . is a class action in which any member of a class
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of plaintiffs is . . . a citizen or subject of a foreign state and any defendant is a citizen of a State.”
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28 U.S.C. § 1332(d)(2)(B). Thus, for purposes of federal jurisdiction, the operative question is not
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Plaintiffs’ residency, but Plaintiffs’ citizenship. See, e.g., Kanter v. Warner-Lambert Co., 265
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F.3d 853, 857 (9th Cir. 2001) (“[T]he diversity jurisdiction statute, 28 U.S.C. § 1332, speaks of
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citizenship, not of residency.”); McMorris v. TJX Companies, Inc., 493 F. Supp. 2d 158, 162 (D.
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Mass. 2007) (“Federal courts that have focused on the issue consistently have rejected the
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proposition that mere residence establishes a party’s citizenship for the purpose of diversity.”).
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Defendant alleges that one of the named Plaintiffs “was at the time the Complaint was
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filed, and is at the time the Complaint was removed, a citizen or a subject of a foreign state.”
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Notice of Removal at 5; Opp’n at 4. Moreover, Defendant alleges that “multiple members of the
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putative class were and are also citizens or subjects of a foreign state.” Notice of Removal at 5. In
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support of this allegation, Defendant has submitted a Declaration by Terri Martinez, an office
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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manager at Fernandez Brothers. ECF No. 19-1 (“Martinez Decl.”) ¶¶ 1–2. After conducting a
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review of Defendant’s personnel records, Martinez identified “1,075 piece-rate agricultural
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workers employed by Defendant from 2011 through the present.” Id. ¶ 3. “In total, of these 1,075
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piece-rate employees employed by Defendant . . . , their respective I-9 forms indicate that only
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eleven (11) are United States citizens and one thousand and sixty-four (1,064) are not United
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States citizens.” Id. ¶ 6.
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Considered together, these statements sufficiently allege federal jurisdiction under CAFA.
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Even if most class members are residents of California, most class members are not citizens of
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California, because these class members are not citizens of the United States. See Kanter, 265
F.3d at 857 (“To be a citizen of a State, a natural person must first be a citizen of the United
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United States District Court
Northern District of California
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States.”). Indeed, Defendant’s personnel records suggest that most class members are not citizens
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of the United States, but are instead “citizen[s] or “subject[s] of a foreign state.” 28 U.S.C. §
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1332(d)(2)(B). These records, alongside the rest of Defendant’s allegations, satisfy the
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requirement that the removing party provide a “short and plain statement of the grounds for
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removal.” 28 U.S.C. § 1446(a).
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Plaintiffs in fact concede that Plaintiffs seek to represent “[a] class of individuals whose
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status is overwhelming[ly] that of ‘Permanent Resident Alien[s].’” Reply at 2. Nonetheless,
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Plaintiffs argue, for the first time in Plaintiffs’ reply, that the Court should reject Ninth Circuit
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precedent and treat permanent resident aliens as U.S. citizens for purposes of this case. In support
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of this argument, Plaintiffs point to certain statutory language in an earlier version of CAFA. Id.
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at 2–5. Plaintiffs acknowledge, however, that “this language [has now been] deleted.” Id. at 1.
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The Court rejects Plaintiffs’ argument. First, as the Court has noted, the Court shall not
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consider issues raised for the first time by the parties in their reply briefs. See ECF No. 25 at 1
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(citing Thompson v. Comm’r, 631 F.2d 642, 649 (9th Cir. 1980)). Plaintiffs did not raise the
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instant argument in Plaintiffs’ motion to remand, nor did Defendant raise the argument in
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Defendant’s opposition. Second, Ninth Circuit precedent makes clear that “[t]o be a citizen of a
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State, a natural person must first be a citizen of the United States.” Kanter, 265 F.3d at 857. In
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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other words, lawful permanent residents cannot be considered citizens of a particular state because
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they are, by definition, not U.S. citizens. Finally, Plaintiffs’ entire argument is premised on
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statutory language that has since been removed. The Court declines to apply statutory language
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that is no longer in force. The language currently in place provides federal district courts with
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original jurisdiction for class actions that involve plaintiffs who are “citizen[s] or subject[s] of a
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foreign state and any defendant [that] is a citizen of a State.” 28 U.S.C. § 1332(d)(2)(B).
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Defendant has sufficiently alleged that members of the proposed class are “citizen[s] or subject[s]
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of a foreign state.” Thus, these allegations sufficiently establish federal jurisdiction under CAFA.
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B. “Home State” and “Local Controversy” Exceptions
The Court turns next to whether any exceptions to CAFA jurisdiction may apply.
United States District Court
Northern District of California
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Plaintiffs claim that two exceptions to CAFA jurisdiction are applicable: the local controversy
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exception and the home state exception. Mot. at 5. The local controversy exception applies only
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if more than “two-thirds of the members of all proposed plaintiff classes . . . are citizens of the
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State in which the action was originally filed.” 28 U.S.C. § 1332(d)(4)(A)(i)(I). Likewise, the
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home state exception applies only where “two-thirds or more of the members of all proposed
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plaintiff classes . . . are citizens of the State in which the action was originally filed.” 28 U.S.C. §
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1332(d)(4)(B). In other words, for either exception to apply, at least two thirds of all class
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members must be citizens of the State where the action was originally filed. That requirement is
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not met here. Of the 1075 potential members in the class, only 11 are U.S. citizens. The
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remaining class members are not U.S. citizens and cannot, therefore, be citizens of the State in
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which the action was originally filed. Accordingly, the home state and local controversy
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exceptions are inapplicable to the instant case.
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C. Remaining Matters
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The Court turns finally to two remaining matters. First, Plaintiffs request that the Court
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award Plaintiffs’ “reasonable attorneys’ fees and costs incurred in remanding this proceeding.”
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Mot. at 8. In light of the Court’s decision to deny Plaintiffs’ motion to remand, the Court denies
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this request. See, e.g., Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005) (“[C]ourts may
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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award attorney’s fees . . . only where the removing party lacked an objectively reasonable basis for
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seeking removal.”). Second, Plaintiffs request an expedited discovery schedule “concerning the
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citizenship of the putative class.” Mot. at 7. This request is governed by the good cause standard.
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Semitool, Inc. v. Tokyo Electron Am., Inc., 208 F.R.D. 273, 274 (N.D. Cal. 2002). The Court finds
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that Plaintiffs have failed to demonstrate good cause. There is no reason why expedited discovery
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should occur here: through the normal course of discovery, Plaintiffs shall be able to examine
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Defendant’s personnel records and determine the citizenship of putative class members.
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Plaintiffs’ request for an expedited discovery schedule is denied.
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IV.
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CONCLUSION
For the foregoing reasons, the Court DENIES Plaintiffs’ motion to remand this case to
United States District Court
Northern District of California
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Monterey County Superior Court. The Court also DENIES Plaintiffs’ request for attorney’s fees
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and costs and DENIES Plaintiffs’ request for an expedited discovery schedule.
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IT IS SO ORDERED.
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Dated: November 12, 2015
______________________________________
LUCY H. KOH
United States District Judge
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Case No. 15-CV-03058-LHK
ORDER DENYING MOTION TO REMAND
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