Gonzalez et al v. Barnard Construction Company Incorporated et al

Filing 17

ORDER Denying Plaintiffs' Motion to Remand (Doc. No. 11 ). Signed by Judge Anthony J. Battaglia on 11/17/2022. (jrm)

Case 3:22-cv-00534-AJB-KSC Document 17 Filed 11/17/22 PageID.219 Page 1 of 8

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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FRANK GONZALEZ, FRANCISCO
GONZALEZ RIOS, and PABLO
GONZALEZ RIOS, individually, and on
behalf of all others similarly situated,

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Case No.: 22-cv-00534-AJB-KSC
ORDER DENYING PLAINTIFFS’
MOTION TO REMAND

Plaintiffs,

(Doc. No. 11)

v.
BARNARD CONSTRUCTION
COMPANY, INC., a corporation; BFBC,
LLC, a Limited Liability Company; and
DOES 1 through 10, inclusive,
Defendants.

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Before the Court is Frank Gonzalez, Francisco Gonzalez Rios, and Pablo Gonzalez

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Rios’ (“Plaintiffs”) motion to remand. (Doc. No. 11.) Barnard Construction Company, Inc.

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and BFBC (“Defendants”) filed an opposition, to which Plaintiffs replied. (Doc. Nos. 14,

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15.) Having considered the parties’ moving papers and for the reasons set forth below, the

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Court DENIES the motion to remand.
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I.

BACKGROUND

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Plaintiffs were hourly-paid, non-exempt employees of Defendants, who separated

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from the company in January 2021. (Doc. No. 1-2 at 40.)1 On October 27, 2021, Plaintiffs

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filed suit against Defendants in San Diego County Superior Court, asserting claims on

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behalf of themselves and putative class members of similarly situated employees employed

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by Defendant in California. (Id., Compl. at 6.)

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On January 5, 2022, Plaintiffs filed a First Amended Complaint (“FAC”). (Id., FAC

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at 37.) The FAC contains nine causes of action under California law: (1) failure to pay

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minimum and straight time wages; (2) failure to pay overtime wages; (3) failure to provide

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meal periods; (4) failure to provide rest periods; (5) failure to pay all wages due upon

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termination; (6) failure to provide accurate wage statements; (7) failure to indemnify

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employees for expenditures; (8) unfair business practices; and (9) civil penalties under the

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Private Attorneys General Act for violations of the California Labor Code. (Id.)

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Defendants filed an Answer to the FAC on February 18, 2022 and removed the

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action to federal court on April 18, 2022, asserting diversity jurisdiction over this case

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pursuant to the Class Action Fairness Act (“CAFA”). (Doc. Nos. 1, 2.) Plaintiffs thereafter

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filed the instant motion to remand, arguing that removal was untimely, and that Defendants

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failed to establish that the amount-in-controversy requirement under CAFA is met. (Doc.

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No. 11-1 at 2.) This Order follows.

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II.

LEGAL STANDARD

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CAFA gives federal courts jurisdiction over certain class actions if the class has (1)

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at least 100 members, (2) the parties are minimally diverse, and (3) the

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amount-in-controversy exceeds $5 million. See 28 U.S.C. § 1332(d)(2), (5)(B); Standard

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Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013). An action that meets CAFA standards

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may be removed to federal court. See 28 U.S.C. § 1441(a). Unlike the general presumption

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against removal, “no antiremoval presumption attends cases invoking CAFA.” Dart

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The pinpoint page citations refer to the ECF-generated page numbers at the top of each filing.
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Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). Even in CAFA

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cases, however, the burden of establishing removal jurisdiction, remains on the defendant

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seeking removal. See Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir.

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2011).

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If the defendant’s notice of removal was untimely, a plaintiff may move to remand

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the case back to state court. Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 885 (9th

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Cir. 2010). The timeliness of removal is governed by 28 U.S.C. Section 1446(b), which

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identifies two thirty-day periods for removing a case. Id. The first is triggered “if the case

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stated by the initial pleading is removable on its face.” Harris v. Bankers Life & Cas. Co.,

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425 F.3d 689, 694 (9th Cir. 2005). The second is triggered “if the initial pleading does not

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indicate that the case is removable, and the defendant receives ‘a copy of an amended

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pleading, motion, order, or other paper’ from which removability may first be ascertained.”

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Carvalho, 629 F.3d at 885 (quoting 28 U.S.C. § 1446(b)(3)). “[D]efendants need not make

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extrapolations or engage in guesswork; yet the statute requires a defendant to apply a

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reasonable amount of intelligence in ascertaining removability.” Kuxhausen v. BMW Fin.

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Servs. NA LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (internal quotations omitted). A

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defendant may remove a case “outside the two thirty-day periods on the basis of

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[defendant’s] own information, provided that it has not run afoul of either of the thirty-day

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deadlines.” Roth v. CHA Hollywood Med. Ctr, L.P., 720 F.3d 1121, 1124–25 (9th Cir.

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2013).

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III.

DISCUSSION

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As previously noted, Plaintiffs seek remand of their case to state court, arguing that

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removal was untimely and that Defendants have not shown that CAFA’s

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amount-in-controversy requirement is met. Defendants maintain that removal was timely,

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and that Plaintiffs’ claim for waiting time penalties alone satisfies CAFA’s monetary

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threshold. The Court discusses the parties’ arguments in turn. 2

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Plaintiffs do not dispute Defendants’ showing of CAFA’s other requirements (minimum diversity and
numerosity).
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A.

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First, the Court considers whether Defendants’ removal was timely. Plaintiffs

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contend that removal was untimely because both thirty-day periods for removal had passed

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by the time Defendants filed their Notice of Removal on April 18, 2022. Defendants argue

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that removal was timely because neither removal period was ever triggered.

Timeliness

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As earlier mentioned, the first thirty-day period for removal is triggered “if the case

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stated by the initial pleading is removable on its face.” Harris, 425 F.3d at 694. The second

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thirty-day period for removal is triggered when the defendant receives “a copy of an

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amended pleading, motion, order, or other paper’ from which removability may first be

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ascertained.” Carvalho, 629 F.3d at 885 (quoting 28 U.S.C. § 1446(b)(3)).

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The Court agrees with Defendants that neither removal period was triggered in this

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case. Neither the Complaint nor the FAC allege Plaintiffs’ states of citizenship or specify

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an amount in controversy. Because the pleadings did not affirmatively reveal information

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that would allow Defendants to ascertain that the parties were minimally diverse and that

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the amount in controversy exceeds $5 million, the Court does not find the Complaint or

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FAC removable on its face. Accordingly, Plaintiffs’ pleadings did not trigger the thirty-day

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removal periods. See Harris, 425 F.3d at 695. (“The face of Harris’s initial pleading did

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not affirmatively reveal information to trigger removal based on diversity jurisdiction

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because the initial pleading only stated Brown’s 1972 residency, not his citizenship, and

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certainly not his citizenship as of the filing of the complaint.”); Roth, 720 F.3d at 1125

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(“The FAC in this case was at best indeterminate. It did not reveal on its face that there

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was diversity of citizenship or that there was sufficient amount in controversy to support

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jurisdiction under CAFA.”) (internal quotations and citation omitted).

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Where, as here, neither of the thirty-day removal deadlines has been triggered, a

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defendant may remove a case “outside the two thirty-day periods on the basis of its own

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information.” Roth, 720 F.3d at 1124–25. Defendants did just that. They consulted their

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employment files and determined that there are approximately 500 individuals who meet

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Plaintiffs’ proposed class definition, that Plaintiffs were citizens of Arizona, and that
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Plaintiffs’ claims amount to more than $5 million. (Doc. No. 1 at 8–11.) As neither

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thirty-day removal period was triggered, Defendants were permitted to remove this case

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“at any time.” Roth, 720 F.3d at 1126. Consequently, the Court does not find Defendants’

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removal untimely. 3

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B.

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Second, the parties dispute whether CAFA’s amount-in-controversy requirement is

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met. The Court thus considers whether Defendants have demonstrated, by a preponderance

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of evidence, that the amount in controversy exceeds $5 million.

Amount in Controversy

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“[A] defendant’s notice of removal need include only a plausible allegation that the

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amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee, 574 U.S. at

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89. “[T]he amount-in-controversy allegation should be accepted when not contested by the

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plaintiff or questioned by the court.” Id. at 87. If, however, the plaintiff challenges the

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defendant’s allegations, “both sides submit proof and the court decides, by a preponderance

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of the evidence whether the amount-in-controversy requirement has been satisfied.” Id. at

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88. A removing defendant cannot satisfy its burden “by mere speculation and conjecture,

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with unreasonable assumptions.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th

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Cir. 2015). “The parties may submit evidence outside the complaint, including affidavits

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Plaintiffs’ brief raises objections similar to those previously considered and rejected by the Ninth Circuit
as set forth below. The Court rejects them here for the same reasons.
It may be that in some diversity cases, defendants will be able to take advantage of the fact
that neither the “initial pleading” nor any later document received from plaintiff triggers
one of the two thirty-day periods. In such cases, defendants may sometimes be able to delay
filing a notice of removal until it is strategically advantageous to do so.
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Our best answer—and a likely sufficient answer—is that plaintiffs are in a position to
protect themselves. If plaintiffs think that their action may be removable and think, further,
that the defendant might delay filing a notice of removal until a strategically advantageous
moment, they need only provide to the defendant a document from which removability
may be ascertained.
Roth, 720 F.3d at 1126.
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or declarations, or other summary-judgment-type evidence relevant to the amount in

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controversy at the time of removal.” Id. (internal quotations and citation omitted).

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As earlier mentioned, Defendants argue that the amount in controversy exceeds $5

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million based on Plaintiffs’ claim for waiting time penalties alone. With respect to these

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claims, Plaintiffs allege that Defendants violated California Labor Code §§ 201 and 202 by

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failing to pay Plaintiffs and “many other members of the Class. . . their wages earned and

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unpaid at the time of discharge, or within seventy-two (72) hours of their leaving

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Defendants’ employ[.]” (Doc. No. 1-2 at 54.) An employer’s failure to timely pay wages

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owed pursuant to California Labor Code §§ 201 or 202 results in a penalty of the

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employee’s wages for every day it is late, up to a maximum of thirty days’ wages. See Cal.

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Labor Code § 203.

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Defendants approximate that Plaintiffs’ claim for waiting time penalties amount to

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over $6 million and submitted declarations from their counsel and Vice President (“VP”)

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of Finance in support of their calculation. (Doc. Nos. 14-1, 14-2.) Defendants arrived at

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their estimate by assuming at least one wage and hour violation giving rise to waiting time

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penalties. (Doc. No. 14-1 at 2.) The VP of Finance analyzed the company’s business

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records, and based thereon, estimated the number of class members who separated from

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employment during the limitations period for waiting time penalties (511) and the average

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daily wage for class members ($414.07). (Doc. No. 14-2 at 3–4.) Defendants multiplied

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those figures by the thirty-day maximum for waiting time penalties for a total of

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$6,347,693.10 (511 class members x $414.07 average daily wage x 30 maximum days).

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Plaintiffs assert three problems with Defendants’ calculations: (1) Defendants

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impermissibly assume a 100% violation rate; (2) Defendants’ identification of the number

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of separated employees is mere speculation; and (3) Defendants improperly push onto

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Plaintiffs their burden to prove the amount in controversy. (Doc. No. 11 at 6, 8–10.) The

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Court disagrees.

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First, Defendants did not assume a 100% violation in calculating the waiting time

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penalties above. The VP of Finance identified the full class size to be 573 employees. (Doc.
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14-2 at 3.) Defendants calculated the waiting time penalties using only the number of class

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members the VP of Finance determined to have been separated from employment, which

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was 525 employees. (Id. at 3–4.) This is not the full class size, and thus, not a 100%

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violation rate. Even if Defendants did use a 100% violation rate, other district courts have

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concluded that allegations of the willful failure to timely pay final wages (based on alleged

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overtime and meal and rest break violations) were sufficient to support estimations of

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waiting time penalties at a 100% rate. See, e.g., Ford v. CEC Entm’t, Inc., No. CV 14-01420

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RS, 2014 WL 3377990 (N.D. Cal. July 10, 2014) (“Assuming a 100% violation rate is thus

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reasonably grounded in the complaint . . . Because no averment in the complaint supports

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an inference that these sums were ever paid, Ford cannot now claim class members may

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be awarded less than the statutory maximum.”).

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Second, with respect to Plaintiffs’ challenge to Defendants’ method of identifying

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the number of terminated employees, the Court notes that a defendant may make

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assumptions in its calculations so long as they are reasonably grounded. Ibarra, 775 F.3d

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at 1197. Here, the VP of Finance detailed in his declaration the basis for his calculation.

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(Doc. No. 14-2 at 3–4.) He explained that because the employee data he reviewed did not

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include termination dates for the class members, he set a 42-day threshold to determine the

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number of terminated employees. (Id. at 4.) In other words, he assumed that “[a]ny

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employee who did not receive a paycheck in the last 42 days of data (March 7, 2022 – April

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18, 2022)” was terminated. (Id. at 4.) To account for his use of a 42-day threshold, the VP

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of Finance explained that based on his experience, “it is extremely likely (~95% or more)

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that an employee who does not receive a paycheck for a six-week period has separated

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employment.” (Id.) As Defendants’ calculations are based on its VP of Finance’s

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experience with and analysis of employee records, the Court finds them reasonably

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grounded. See Ibarra, 775 F.3d at 1199 (“A damages assessment may require a chain of

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reasoning that includes assumptions. When that is so, those assumptions cannot be pulled

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from thin air, but need some reasonable ground underlying them.”).

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Finally, Plaintiffs do not offer any alternative calculation for waiting time penalties.

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While the burden of proof rests with Defendants, “if [the] defendant’s asserted amount in

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controversy is challenged, ‘both sides submit proof and the court decides, by a

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preponderance of the evidence, whether the amount-in-controversy requirement has been

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satisfied.’” Ibarra, 775 F.3d at 1197. Plaintiffs’ attempt to discount the VP of Finance’s

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declaration with mere argument is not enough. Counsel’s argument is not evidence.

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Plaintiffs have not rebutted Defendants’ evidence nor have Plaintiffs provided any

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evidence to suggest that payments were provided. Thus, the Court finds Defendants’

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asserted amount in controversy of $6,347,693.10 for waiting time penalties proper here.

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IV.

CONCLUSION

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Based on the foregoing, the Court finds that removal was timely, and Defendants

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have satisfied their burden to demonstrate the amount-in-controversy requirement under

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CAFA is met. Accordingly, the Court DENIES Plaintiffs’ motion to remand. (Doc. No.

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11.)

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IT IS SO ORDERED.
Dated: November 17, 2022

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