Sanchez v. American Para Professional Systems Inc et al

Filing 26

ORDER GRANTING 12 PLAINTIFF'S MOTION TO REMAND. Signed by Judge Edward J. Davila on 8/22/2017. The 8/24/2017 hearing is vacated. No appearance necessary. The Clerk shall remand this case to Santa Clara County Superior Court and close the file. (ejdlc2S, COURT STAFF) (Filed on 8/22/2017)

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UNITED STATES DISTRICT COURT

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United States District Court
Northern District of California

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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SHANNON SANCHEZ,

Case No. 5:17-cv-01835-EJD

Plaintiff,
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ORDER GRANTING PLAINTIFF’S
MOTION TO REMAND

v.
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AMERICAN PARA PROFESSIONAL
SYSTEMS INC, et al.,

Re: Dkt. No. 12

Defendants.

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Plaintiff Shannon Sanchez moves to remand this case to Santa Clara County Superior

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Court on the basis that Defendants American Para Professional Systems, Inc. and APPS of

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California (together, “APPS”) have failed to show that the amount in controversy exceeds the

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jurisdictional threshold. Sanchez’s motion will be GRANTED.

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I.

BACKGROUND
On February 27, 2017, Sanchez filed this action against APPS in Santa Clara County

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Superior Court, alleging a variety of labor violations. Pl.’s Mot. to Remand (“Mot.”) 1, Dkt. No.

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12. The complaint was styled as both a class action and a Private Attorney General Action under

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Case No.: 5:17-cv-01835-EJD
ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
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the California Private Attorney General Act (“PAGA”), Cal. Labor Code § 2628 et seq. Id. On

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March 31, Defendants removed the action to this Court under the Class Action Fairness Act

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(“CAFA”). Id. Sanchez now moves to remand on the basis that the amount in controversy is less

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than CAFA’s $5 million jurisdictional threshold.

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II.

LEGAL STANDARD

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A class action case may be removed under CAFA when there is diversity of citizenship

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between the parties and the amount in controversy exceeds $5 million. 28 U.S.C. § 1332(d)(2).

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Defendants bear the burden of showing that removal was proper. Gaus v. Miles, Inc., 980 F.3d

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564, 566 (9th Cir. 1992). Courts must strictly construe the removal statute against removal.
Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988). Cases should be remanded

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United States District Court
Northern District of California

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if there is any doubt about the existence of federal jurisdiction. Gaus, 980 F.2d at 566.

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III.

DISCUSSION

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A.

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Sanchez argues that this case must be remanded because APPS has failed to show that the

Amount in Controversy

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amount in controversy exceeds CAFA’s $5 million threshold. Mot. 1. APPS’s damages calculation

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in its notice of removal relies on PAGA damages, which total $1,062,698. Id. Without PAGA

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damages, the remaining damages amount to $4,250,795. Id. Sanchez argues that PAGA claims

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cannot be included as part of CAFA’s jurisdictional threshold because PAGA claims are not class

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claims. Id. at 2, 4 (citing Yocupicio v. PAE Group LLC, 795 F.3d 1057 (9th Cir. 2015)). Thus,

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because PAGA claims must be excluded from the damages calculation, Sanchez argues that APPS

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cannot meet the $5 million threshold.

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APPS responds that PAGA claims may be pled as class claims, and that Sanchez’s

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complaint “appears, in many respects, to seek class status with respect to the asserted PAGA

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claims.” Defs.’ Opp’n to Pl.’s Mot. to Remand (“Opp’n”) 7, Dkt. No. 13. For instance, APPS

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notes that the complaint is captioned as a “class action complaint for damages” and contains

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several references to “the class” and “this class action.” Id. at 7–8. As a result, APPS argues that

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PAGA damages are properly included in the amount in controversy. Id. APPS also offers a revised

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Case No.: 5:17-cv-01835-EJD
ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
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calculation of the amount in controversy in its opposition brief, and on that basis it argues that the

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amount exceeds $5 million even if PAGA damages are excluded. Id. at 9–24.
Sanchez replies that she is not pursuing PAGA claims on a class basis. She notes that the

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complaint asserts the PAGA cause of action “as a proxy for the State of California,” rather than on

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behalf of a class. Pl.’s Reply in Support of Mot. to Remand (“Reply”) 3, Dkt. No. 15. She also

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notes that the class definition encompasses a period beginning in February 2013, but that the

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PAGA claim is asserted for a period beginning in October 2015. Id. And she notes that the phrase

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“class action” in the complaint’s caption is irrelevant because the California Rules of Court require

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that designation if any claims are brought on a class basis, even if other claims are not. Id. at 3–4.
The Court agrees that Sanchez’s PAGA claims are not asserted as class claims. As such, the

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United States District Court
Northern District of California

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PAGA damages she seeks must be excluded from the $5 million CAFA threshold.
Sanchez also challenges APPS’s calculation of damages arising from her claims for missed

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rest periods. Reply 5–8. In its notice of removal, APPS based its calculation of damages for

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missed rest breaks on the assumption that class members suffered “three rest break violations per

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week worked.” Notice of Removal 11, Dkt. No. 1. It based this assumption on Sanchez’s

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allegation that “[a]s a pattern and practice, Plaintiff and class members regularly worked shifts of

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3.5 hours or more per day.” Id. at 11 n.5. Sanchez did not challenge this assumption in her motion

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to remand; instead, she introduced new evidence (in a declaration attached to her reply to APPS’s

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motion to remand) showing that she often worked for fewer than three hours per day—which, she

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argues, shows that APPS’s estimate of three rest break violations per week is unreasonably high.

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Reply 5–8; Sanchez Decl. ¶¶ 2–3, Dkt No. 15-1. But APPS correctly points out that Sanchez may

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not introduce new evidence in its reply brief. Defs.’ Mot. for Leave to File Sur-Reply (“Sur-

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Reply”) 3–4, Dkt. No. 16.1 The Court finds that APPS’s calculation of damages for missed rest

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periods was reasonable based on the allegations in the complaint. Accordingly, damages for

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missed rest periods are properly included in the amount in controversy.

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APPS’s motion for leave to file a sur-reply (Dkt. No. 16) is granted.
Case No.: 5:17-cv-01835-EJD
ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
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Finally, Sanchez argues that APPS’s calculation of damages under Cal. Labor Code

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§ 1197.1 must be excluded because that statute recognizes a private right of action for PAGA

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claims but not for class claims. Reply 4–5 (citing Ridgeway v. Wal-Mart Stores Inc., No. 08-cv-

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05221-SI, 2017 WL 363214 (N.D. Cal. Jan. 25, 2017)). APPS responds that there is, at least, a

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split of authority on the question of whether § 1197.1 allows for a private right of action for class

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claims. Sur-Reply Ex. A at 1–3. APPS argues that this case should proceed in federal court

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because a motion to remand is not the proper vehicle for determining whether a private right of

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action exists. Id. at 1. However, at this stage, APPS bears the burden of establishing federal

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jurisdiction in response to Sanchez’s motion to remand. Gov’t of Marinduque v. Placer Dome,
Inc., 582 F.3d 1083, 1087 (9th Cir. 2009) (“The party seeking removal bears the burden of

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United States District Court
Northern District of California

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establishing federal jurisdiction.”). If there are doubts about the existence of federal jurisdiction,

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the case must be remanded. Gaus, 980 F.2d at 566. Here, there is ambiguity surrounding whether a

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private right of action exists for class claims under § 1197.1. As such, the existence of federal

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jurisdiction is in doubt, and damages for claims under § 1197.1 must be excluded from the amount

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in controversy.

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The Court finds that APPS has not established that the amount in controversy exceeds

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CAFA’s $5 million threshold. Under APPS’s calculation, the total amount in controversy

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(excluding PAGA claims) is approximately $5.3 million. Opp’n 9. Penalties under § 1197.1

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amount to approximately $1.8 million. Id. at 9, 20–22. Thus, excluding § 1197.1 penalties, the

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amount in controversy is less than $5 million.
Attorneys’ Fees

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B.

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Sanchez seeks $5,400 in attorneys’ fees for filing her motion to remand. Mot. 5–6. The

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U.S. Supreme Court has held that, “absent unusual circumstances, attorney’s fees should not be

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awarded when the removing party has an objectively reasonable basis for removal.” Martin v.

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Franklin Capital Corp., 546 U.S. 132 (2005). Here, the Court finds that an award of attorneys’ fees

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is unwarranted APPS’s basis for removal was objectively reasonable because it was based on

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good-faith calculations of the amount in controversy.

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Case No.: 5:17-cv-01835-EJD
ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
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IV.

CONCLUSION
Sanchez’s motion to remand is GRANTED. Sanchez’s request for attorneys’ fees is

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DENIED. The Clerk shall remand this case to Santa Clara County Superior Court and close the

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file.

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IT IS SO ORDERED.
Dated: August 22, 2017
______________________________________
EDWARD J. DAVILA
United States District Judge

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United States District Court
Northern District of California

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Case No.: 5:17-cv-01835-EJD
ORDER GRANTING PLAINTIFF’S MOTION TO REMAND
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