Bloomquist v. Covance, Inc. et al

Filing 15

ORDER granting Plaintiff's 7 Motion to Remand to State Court. Court finds that the local-controversy exception to the Class Action Fairness Act (CAFA) applies to this case. Court remands this action to the San Diego Superior Court. Signed by Judge Cynthia Bashant on 5/3/2017 (Certified copy sent to State Court via US Mail Service) (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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DANIEL L. BLOOMQUIST, an
individual on behalf of himself and all
others similarly situated,

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Case No. 16-cv-2559-BAS (BLM)
ORDER GRANTING
PLAINTIFF’S MOTION TO
REMAND

Plaintiff,

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[ECF No. 7]

v.

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COVANCE, INC., et al.,

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Defendants.

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On August 3, 2016, Plaintiff Daniel L. Bloomquist commenced this wage-and-

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hour class action in San Diego Superior Court against Defendants Covance, Inc.

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(“Covance”), I-Shan Chiang, and Amy Stastny. Covance subsequently removed this

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action to federal court. Bloomquist now moves to remand this action to state court.

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(ECF No. 7.) Covance opposes.

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The Court finds this motion suitable for determination on the papers submitted

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and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the

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following reasons, the Court GRANTS Bloomquist’s motion to remand.

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I.

BACKGROUND

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Bloomquist is a citizen of California, and worked for Covance continuously

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from February 2009 until December 2015. (Compl. ¶ 5.) Covance is a Delaware

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corporation whose principle place of business is in Princeton, New Jersey, with a

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regional office in San Diego, California. (Id. ¶ 6.) Chiang and Stastny are citizens of

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the state of California, and are employed by Covance as the Senior Director of

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Strategy and Planning, and the Director of Global Clinical Trial Operations,

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respectively (collectively, “in-state defendants”). (Id. ¶¶ 7-8.) Bloomquist brings this

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class action on behalf of himself and all others similarly situated as current and

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former employees of Covance holding the title of Clinical Research Associate and/or

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Senior Clinical Research Associate at any time commencing on the date four years

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prior to the filing of the complaint and through the date of trial. (Id. ¶ 12.)

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Covance offers clinical development services in fifty-five different countries,

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providing services through all stages of pharmaceutical drug development. (Compl.

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¶ 21.) Covance is typically hired by pharmaceutical drug companies to assist in

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administering clinical trials for newly developed and unapproved drug compounds.

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(Id.) Clinical Research Associates and Senior Clinical Research Associates monitor

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clinical trials by conducting routine visits to trial sites and reporting the results of

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those visits to their superiors at Covance. (Id. ¶ 24-25.) Bloomquist alleges that

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Clinical Research Associates and Senior Clinical Research Associates were

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improperly classified by Covance as exempt employees ineligible for certain

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protections of the California Labor Code and Wage Order of the Industrial Welfare

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Commissions. (Id. ¶ 26.) As a result of this improper classification, Bloomquist

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alleges that he, and others, were denied overtime pay, meal periods, and rest periods

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prescribed by law. (Id. ¶ 28-29, 33.)

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On August 3, 2016, Bloomquist commenced this action against Covance,

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Chiang, and Stastny in the San Diego Superior Court, asserting causes of action

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against all defendants for: (1) failure to pay overtime compensation; (2) failure to

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provide meal periods and rest periods; (3) failure to properly itemize wage

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statements; (4) failure to pay all wages due owed upon termination; and (5) unlawful

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and unfair business practices in violation of California’s Business and Professions

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Code § 17200, et seq.1 (Compl. ¶¶ 34-81.)

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In the notice of removal, Covance asserts the basis for removal is diversity

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jurisdiction under 28 U.S.C. § 1332(d), the Class Action Fairness Act (“CAFA”).

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(Removal Notice ¶ 8, ECF No. 1.) Bloomquist now moves to remand based on a

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CAFA exception known as the “local controversy exception,” which requires federal

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courts to decline jurisdiction if certain conditions are met in cases that are truly local

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in nature. See 28 U.S.C. § 1332(d)(4). Covance opposes.

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II.

LEGAL STANDARD

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“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life

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Ins. Co. of Am., 511 U.S. 375, 377 (1994). “They possess only that power authorized

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by Constitution or a statute, which is not to be expanded by judicial decree.” Id.

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(internal citations omitted). “It is to be presumed that a cause lies outside this limited

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jurisdiction and the burden of establishing the contrary rests upon the party asserting

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jurisdiction.” Id. (internal citations omitted); see also Abrego Abrego v. The Dow

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Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006).

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Consistent with the limited jurisdiction of federal courts, the removal statute is

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strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566

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(9th Cir. 1992); see also Sygenta Crop Prot. v. Henson, 537 U.S. 28, 32 (2002);

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O’Halloran v. Univ. of Wash., 856 F.2d 1375, 1380 (9th Cir. 1988). “The strong

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Bloomquist’s complaint provides headers indicating six causes of action when only five
are listed. Omission of the fourth cause of action is an apparent typographical error.
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presumption against removal jurisdiction means that the defendant always has the

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burden of establishing that removal is proper.” Gaus, 980 F.2d at 566; see also

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Nishimoto v. Federman-Bachrach & Assoc., 903 F.2d 709, 712 n.3 (9th Cir. 1990);

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O’Halloran, 856 F.2d at 1380. “Federal jurisdiction must be rejected if there is any

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doubt as to the right of removal in the first instance.” Gaus, 980 F.2d at 566.

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CAFA confers federal jurisdiction over class actions involving: (1) minimal

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diversity; (2) at least 100 putative class members; and (3) at least $5 million in

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controversy, inclusive of attorneys’ fees but exclusive of interest and costs. 28 U.S.C.

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§§ 1223(d)(2), (5). CAFA maintains the historical rule that places the burden on the

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removing party to establish a prima facie case of removal jurisdiction. Serrano v. 180

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Connect, Inc., 478 F.3d 1018, 1020 (9th Cir. 2007) (citing Abrego, 443 F.3d at 684-

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85). However, when a plaintiff moving to remand seeks to rely on a statutory

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exception to CAFA, the burden shifts to the plaintiff to prove by a preponderance of

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the evidence that the exception, such as the local-controversy exception, applies to

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the facts of a given case. Mondragon v. Capital One Auto Finance, 736 F.3d 880,

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883 (9th Cir. 2013); Coleman v. Estes Express Lines, Inc., 631 F.3d 1010, 1013 (9th

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Cir. 2011); Serrano, 478 F.3d at 1019, 1022. But the burden of proof placed upon a

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plaintiff should not be exceptionally difficult to bear, and district courts are permitted

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to make reasonable inferences from facts in evidence in applying CAFA’s local-

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controversy exception. Mondragon, 736 F.3d at 886.

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III.

DISCUSSION

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CAFA’s local-controversy exception is intended to identify a controversy that

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“uniquely affects a particular locality and to ensure that it is decided by a state rather

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than a federal court.” Bridewell-Sledge v. Blue Cross of Cal., 789 F.3d 923, 928 (9th

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Cir. 2015) (quoting Evans, 449 F.3d at 1163-64)). CAFA’s language favors federal

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jurisdiction over class actions, and its legislative history suggests that Congress

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intended the local-controversy exception to be a narrow one. Benko v. Quality Loan
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Serv. Corp., 789 F.3d 1111, 1116 (9th Cir. 2015) (citing Evans v. Walter Indus. Inc.,

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449 F.3d 1159, 1163 (11th Cir. 2006)).

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Under CAFA’s local-controversy exception, a district court must decline to

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exercise jurisdiction if the following conditions are satisfied: (1) greater than two-

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thirds of the proposed class members are citizens of the State in which the action was

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originally filed; (2) at least one defendant is a defendant from whom significant relief

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is sought by the proposed class members, whose alleged conduct forms a significant

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basis for the claims asserted by the proposed class members, and who is a citizen of

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the State in which the action was originally filed; (3) the principal injuries resulting

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from the alleged conduct or any related conduct of each defendant were incurred in

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the State in which the action was originally filed; and (4) no similar class action has

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been filed against any of the defendants in the preceding three years. 28 U.S.C. §

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1332(d)(4)(A)(i)-(ii). The first, third, and fourth conditions are not disputed by

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Covance. All that remains is for Bloomquist to establish the significant-defendant

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requirement to the local-controversy exception. See 28 U.S.C. § 1332(d)(4)(A)(i)(I)-

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(II).

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The local-controversy exception requires that at least one defendant be a

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citizen of the state where the action was originally filed. 28 U.S.C. §

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1332(d)(4)(A)(II)(cc). The local defendant must be a defendant “from whom

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significant relief is sought by members of the plaintiff class” and “whose alleged

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conduct forms a significant basis for the claims asserted by the proposed plaintiff

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class.” 28 U.S.C. § 1332(d)(4)(A)(II)(aa)-(bb). In deciding whether “significant relief

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is sought” from a defendant who is a citizen of the state in which the suit is filed and

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whether the defendant’s “alleged conduct forms a significant basis for the claims

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asserted by the plaintiff class,” the district court may look only to the complaint.

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Coleman, 631 F.3d at 1015.

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A.

Significant Basis for Bloomquist’s Claims

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In determining whether in-state defendants’ alleged conduct forms a

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“significant basis” for Bloomquist’s claims, this Court may only look to the

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allegations in the complaint and may not consider extrinsic evidence for purposes of

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the local-controversy exception. Coleman, 631 F.3d at 1015. Whether the

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“significant basis” condition is met requires a “substantive analysis comparing the

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local defendant’s alleged conduct to the alleged conduct of all the other, non-local

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defendants.” Benko, 789 F.3d at 1118 (quoting Kaufman v. Allstate New Jersey Ins.

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Co., 561 F.3d 144, 156 (3d Cir. 2009)).

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In the complaint, Bloomquist alleges that the in-state defendants engaged in

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the exact same wage-and-hour violations as Covance, and seeks damages equally

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from all defendants under California Labor Code § 558.1. Section 558.1(a) provides

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a right of action against any employer, or “other person acting on behalf of an

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employer, who violates, or causes to be violated, any provision regulating minimum

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wages or hours and days of work in any order of the Industrial Welfare Commission,

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or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802.”

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Cal. Lab. Code § 558.1. “Other person” is further defined in § 558.1(b) as “an owner,

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director, officer, or managing agent of the employer.” Id. (emphasis added). Chiang

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is a “Senior Director [of] Strategy & Planning,” while Stastny is the “Director of

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Global Clinical Trial Operations.” (Compl. ¶¶ 7-8.) Both in-state defendants are

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alleged to have overseen the work of plaintiff and potential class members, and are

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being sued in their capacity as directors of Covance. (Id.) These allegations

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sufficiently satisfy the “significant basis” requirement. See 28 U.S.C. §

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1332(d)(4)(A)(II)(bb).

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Defendants rely on Christmas v. Union Pacific to argue that a listing of in-state

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agents or employees is insufficient to establish the local-controversy exception

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because in-state agents or employees are not the “real target of the action in order to

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qualify as local defendants under the exception.” (Defs.’ Opp’n 10, ECF No. 12)
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(quoting Christmas v. Union Pac. R.R. Co., No. CV15-02612-AB-(PLAX), 2015 WL

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5233983, at *5 (C.D. Cal. Sept. 8, 2015).) However, Christmas is distinguishable

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from the instant case. In Christmas, the in-state defendants were not considered the

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real targets of the action because they were only alleged to have “implement[ed]

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Union Pacific’s policy at the location where [defendant] works.” See Christmas, 2015

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WL 5233983, at *6. The in-state defendants, as local employees of Union Pacific,

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were not alleged to have been responsible for the policy itself that led to a violation

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of California Labor Code, and thus the plaintiff’s argument was “missing the critical

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nexus between California Defendants' actions and the effects on class members at

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large.” Id. at *6.

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Here, the in-state defendants are alleged in the complaint to be more than

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simply local agents or employees of Covance. Rather, they are directors within the

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company, and their liability is specifically provided for in California Labor Code §

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558.1(b). Moreover, the complaint alleges the exact same violations of California

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Labor Code against all defendants, and this Court need not look further than those

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allegations since “nothing in CAFA . . . indicates a congressional intention to turn a

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jurisdictional determination concerning the local defendant’s ‘alleged conduct’ into

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a mini-trial on the merits of the plaintiff’s claims.” Allen v. Boeing Co., 821 F.3d

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1111, 1118 (9th Cir. 2016) (quoting Coleman, 631 F.3d at 1017).

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Therefore, Bloomquist carries his burden with respect to the “significant basis”

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requirement of the local-controversy exception to CAFA. See 28 U.S.C. §

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1332(d)(4)(A)(II)(bb).

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B.

Significant Relief Sought by Bloomquist

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Whether Bloomquist seeks “significant relief” from the in-state defendants

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requires a comparison of the relief sought from the in-state defendants to the relief

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sought from the other, non-local defendant. Benko, 789 F.3d at 1119. A “defendant

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from whom significant relief is sought” does not mean a “defendant from whom
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significant relief may be obtained.” Coleman, 631 F.3d at 1015 (citing Coffey v.

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Freeport McMoran Copper & Gold, 581 F.3d 1240, 1245 (10th Cir. 2009)).

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“[N]othing in CAFA’s language indicates Congress intended district courts to wade

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into the factual swamp of assessing the financial viability of a defendant as part of a

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preliminary consideration.” Id. In Coleman, the plaintiffs alleged that both the in-

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state defendant and the out-of-state defendant violated California law and sought

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damages equally from both. Id. at 1013, 1020. The court found those allegations

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sufficient to satisfy the “significant relief” requirement from the in-state defendant.

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Id. at 1020. Additionally, in Benko, the court held that claims for general damages,

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punitive damages, and equitable relief were sufficient to show that the plaintiffs

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claimed “significant relief” from the in-state defendant. Benko, 789 F.3d at 1119.

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Considering the allegations in the complaint, Bloomquist sufficiently alleges

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that members of the class have suffered harm as a result of the in-state defendants’

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violations of the California Labor Code and IWC Wage Order. See Coleman, 631

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F.3d at 1015. Although Bloomquist did not quantify the alleged damages, he seeks

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damages from all defendants equally for their alleged wrongful conduct. These

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damages appear to be the same whether caused by the in-state defendants or Covance.

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Furthermore, the complaint seeks injunctive relief and restitution against all

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defendants as well. (Compl., Prayer for Relief ¶¶ 8-9.)

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Therefore, Bloomquist also carries his burden with respect to the “significant

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relief” requirement of the local-controversy exception to CAFA. See 28 U.S.C. §

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1332(d)(4)(A)(II)(aa).

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IV.

CONCLUSION & ORDER

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In light of the foregoing, the Court finds that the local-controversy exception

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to CAFA applies to this case. See 28 U.S.C. § 1332(d)(4); see also Benko, 789 F.3d

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at 1116 (“If the statutory conditions for the application of [CAFA’s] local controversy

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exception are met, a district court is required to remand the class action back to the
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originating state court.”). Accordingly, the Court GRANTS Bloomquist’s motion to

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remand (ECF No. 7), and REMANDS this action to the San Diego Superior Court.

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IT IS SO ORDERED.

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DATED: May 3, 2017

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