Shachno v. Marriott International, INC., et al

Filing 41

ORDER Denying Plaintiff's Motion to Remand Case to State Court. (ECF No. #10 ). Signed by Judge Todd W. Robinson on 01/19/2023.(All non-registered users served via U.S. Mail Service)(cxl1)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.537 Page 1 of 26

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11
12
13
14
15
16
17
18

MATTHEW SHACHNO, an individual,
on behalf of himself and all persons
similarly situated,

Case No.: 22-CV-1215 TWR (JLB)
ORDER DENYING PLAINTIFF’S
MOTION TO REMAND CASE TO
STATE COURT

Plaintiff,
v.

(ECF No. 10)

MARRIOTT INTERNATIONAL, INC., a
corporation; and DOES 1 through 50,
inclusive,
Defendants.

19
20

Presently before the Court is Plaintiff Matthew Shachno’s Motion to Remand Case

21

to State Court (ECF No. 10, “Mot.”). In addition, the Court has received and reviewed

22

Defendant’s Opposition to the Motion to Remand (ECF No. 22, “Opp’n”) and Plaintiff’s

23

Reply in Support of the Motion (ECF No. 26, “Reply”). The Court has carefully considered

24

the Parties’ arguments and the relevant law, as well as all pertinent filings, including

25

Plaintiff’s Complaint (ECF No. 1-2, “Compl.”) and Defendant’s Notice of Removal to

26

Federal Court (ECF No. 1, “NOR”). On December 1, 2022, the Court held a motion

27

hearing and issued a Minute Order that DENIED Plaintiff’s Motion. (See ECF No. 34).

28

This written Order now follows.
1
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.538 Page 2 of 26

1
2

BACKGROUND
I.

3

Facts
Plaintiff Matthew Shachno is an individual who was previously employed by

4

Defendant Marriott International, Inc.

5

incorporated in Delaware and maintains its principal place of business in Maryland but

6

operates in California. (ECF No. 1-6 (“Wright Decl.”) ¶ 2.) Defendant manages a chain

7

of hotels, resorts, and restaurants throughout California and conducts substantial business

8

in San Diego County, maintaining various facilities and offices within the County. (Compl.

9

¶ 2–3, 15, 31.)

(See generally Compl. at 1.)

Defendant is

10

From May 2, 2012, to December 31, 2019, Plaintiff was employed by Defendant at

11

Defendant’s Marriott Marquis Marina hotel in San Diego. (Compl. ¶ 3; ECF No. 1-7

12

(“Schafer Decl.”) ¶ 7.) At all times during his employment, Plaintiff was classified as a

13

non-exempt employee and was paid on an hourly basis. (Compl. ¶ 3.) Accordingly,

14

Plaintiff was legally entitled to meal and rest breaks, minimum and overtime wages, and

15

other employment rights and benefits. (Id.)

16

II.

Procedural History

17

On May 23, 2022, Plaintiff filed a putative Class Action Complaint in the Superior

18

Court of California, County of San Diego on behalf of himself and all other similarly

19

situated current and former California employees of Defendant. (See generally Compl.)

20

Plaintiff’s Complaint contains ten claims for: (1) unfair competition, (2) failure to pay

21

minimum wages, (3) failure to pay overtime wages, (4) failure to provide meal periods,

22

(5) failure to provide rest periods, (6) failure to provide accurate wage statements,

23

(7) failure to reimburse employees for required expenses, (8) failure to provide wages due

24

upon separation of employment; (9) failure to provide gratuities, and (10) failure to provide

25

sick pay wages. (See generally id.)

26

Plaintiff seeks to represent two classes of employees. For the first claim, Plaintiff

27

seeks to represent all non-exempt hourly employees who at some time during the four years

28

preceding the filing of the Complaint were employed by Defendant in California or staffed
2
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.539 Page 3 of 26

1

with Defendant by a third-party in California. (Id. ¶ 5.) For the remaining nine claims,

2

Plaintiff seeks to represent all non-exempt hourly employees who at some time during the

3

three years preceding the filing of the Complaint were employed by Defendant in

4

California or staffed with Defendant by a third-party in California. (Id. ¶ 42.)

5

Generally, Plaintiff’s Complaint alleges that Defendant had a “policy and practice”

6

of “fail[ing] to lawfully compensate [Plaintiff and putative class member] employees.” (Id.

7

¶ 6.) Plaintiff therefore seeks damages and injunctive relief on behalf of himself and all

8

other class members. (Id. at 48–50 (Prayer for Relief).) Plaintiff’s Complaint explicitly

9

maintains, however, that the amount in controversy for the aggregate claims of all class

10

members does not exceed five million dollars ($5,000,000). (Id. ¶ 5.)

11

On July 19, 2022, Plaintiff served Defendant, (see generally ECF No. 1-4), and on

12

August 18, 2022, Defendant timely filed a Notice of Removal of Action with the United

13

States District Court for the Southern District of California pursuant to the Class Action

14

Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d).

15

1–2.) The Notice of Removal asserts that CAFA provides this Court with original

16

jurisdiction over civil class actions in which any plaintiff is diverse from any defendant

17

and the total amount in controversy exceeds five million dollars ($5,000,000). (See id.

18

¶ 1.) According to Defendant, the CAFA requirements are satisfied here because Plaintiff

19

is a California citizen while Defendant is not, (see id. ¶¶ 17–18), and the amount in

20

controversy exceeds five million dollars, (see id. ¶ 20).

(See NOR at

21

The Notice of Removal asserts that the minimum amount in controversy for six of

22

Plaintiff’s ten claims is $11,102,793.75, including attorney’s fees. (See id. ¶ 21.) In

23

support of this estimate, Defense counsel J. Scott Carr filed a declaration explaining how

24

he calculated the amount in controversy for each of the six claims. (See generally ECF

25

No. 1-5 (“1st Carr Decl. 1”).) As additional support, Defendant also submitted Plaintiff’s

26

state court Complaint, (see generally Compl.), and sworn declarations from Defendant’s

27

Vice President of Human Resources, Tiffany Schafer, (see generally Schafer Decl.), and

28

Vice President and Secretary, Andrew Wright, (see generally Wright Decl.).
3
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.540 Page 4 of 26

1

On September 15, 2022, in response to Defendant’s Notice of Removal, Plaintiff

2

filed the instant Motion to Remand to State Court. (See generally Mot.) Plaintiff’s Motion

3

challenges Defendant’s amount-in-controversy estimate and asks this Court to remand the

4

pending action to the Superior Court of California, County of San Diego. (See id. at 2, 11.)

5

On October 17, 2022, Defendant filed an Opposition to the Motion in which it

6

recalculated the amount in controversy based on Plaintiff’s filings in a separate, state court

7

Private Attorney General Act (“PAGA”) action between the same parties involving largely

8

the same claims. (See generally Opp’n.) Relying on assertions made by Plaintiff in the

9

PAGA action, the Opposition estimates that the amount in controversy for four of

10

Plaintiff’s ten claims is $18,052,218.78, excluding attorney’s fees. (See id. at 2, 12.)

11

To support this estimate, Defense counsel J. Scott Carr submitted a second

12

declaration explaining how he calculated the amount in controversy for each of the four

13

claims. (See generally ECF No. 22-1 (“2d Carr Decl. 2”).) Defendant also submitted

14

various filings from the PAGA action, including the complaint, (ECF No. 22-2); a

15

declaration from Plaintiff Matthew Shachno, (ECF No. 22-3 (“Shachno Decl.”)); and a

16

declaration from Mr. Shachno’s damages consultant, (ECF No. 22-4 (“Lietzow Decl.”)).

17

Additionally, Defendant submitted Mr. Shachno’s interrogatory responses, (ECF No. 22-5

18

(“Interrog. Resp.”)), and initial disclosures, (ECF No. 22-7), from the present action.

19

On October 24, 2022, Plaintiff filed a Reply Brief in Support of the Motion to

20

Remand, challenging Defendant’s revised and initial calculations. (See generally Reply.)

21

The Court held a hearing on the Motion on December 1, 2022, during which the

22

undersigned denied the Motion from the bench. (See ECF No. 34.)

23

LEGAL STANDARD

24

Although “[f]ederal courts are courts of limited jurisdiction,” Kokkonen v. Guardian

25

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), “a defendant may remove an action filed in

26

state court to federal court if the federal court would have original subject matter

27

jurisdiction over the action,” either through diversity or a federal question. Moore-Thomas

28

v. Alaska Airlines, Inc., 553 F.3d 1241, 1243 (9th Cir. 2009) (describing 28 U.S.C. § 1441).
4
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.541 Page 5 of 26

1

In 2005, Congress passed the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No.

2

109-2, 119 Stat. 9-13 (2005). “CAFA ‘relaxed’ the diversity requirements for putative

3

class actions.” Canela v. Costco Wholesale Corp., 971 F.3d 845, 850 (9th Cir. 2020).

4

“CAFA gives federal courts jurisdiction over certain class actions, defined in § 1332(d)(1),

5

if the class has more than 100 members, the parties are minimally diverse, and the amount

6

in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co. v. Owens, 574

7

U.S. 81, 84–85 (2014).

8

CAFA not only confers original jurisdiction on federal courts, but also authorizes

9

the removal of certain class actions to federal courts. See 28 U.S.C. § 1453. Generally,

10

courts “strictly construe [] removal statute[s] against removal jurisdiction,” Gaus v. Miles,

11

Inc., 980 F.2d 564, 566 (9th Cir. 1992); however, “no antiremoval presumption attends

12

cases invoking CAFA,” Dart Cherokee, 574 U.S. at 89. Unlike other removal statutes,

13

“Congress intended CAFA to be interpreted expansively.” Ibarra v. Manheim Invs., Inc.,

14

775 F.3d 1193, 1197 (9th Cir. 2015).

15

“To remove a case from a state court to a federal court, a defendant must file in the

16

federal forum a notice of removal ‘containing a short and plain statement of the grounds

17

for removal.’” Dart Cherokee, 574 U.S. at 83 (quoting 28 U.S.C. § 1446(a)). Under

18

CAFA, “a defendant’s notice of removal need include only a plausible allegation that the

19

amount in controversy exceeds the jurisdictional threshold.” Id. at 89. If, however, a

20

plaintiff’s Complaint “affirmatively states that the amount in controversy does not exceed

21

$5 million,” the defendant’s notice of removal must “put forward evidence showing that

22

the amount in controversy exceeds $5 million” and must “persuade the court that the

23

estimate of damages in controversy is a reasonable one.” Ibarra, 775 F. 3d at 1197.

24

A plaintiff may challenge a defendant’s notice of removal through a motion to

25

remand.

26

“[R]emand may be ordered either for lack of subject matter jurisdiction or for ‘any defect’

27

in the removal procedure.” Aguon-Schulte v. Guam Election Comm’n, 469 F.3d 1236,

28

1240 (9th Cir. 2006) (quoting 28 U.S.C. § 1447(c)). If a plaintiff’s motion to remand

See Moore-Thomas, 553 F.3d at 1244 (discussing 28 U.S.C. § 1447(c)).

5
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.542 Page 6 of 26

1

challenges the amount-in-controversy estimate in the defendant’s notice of removal, “both

2

sides submit proof and the court decides, by a preponderance of the evidence, whether the

3

amount-in-controversy requirement has been satisfied.” Dart Cherokee, 574 U.S. at 88.

4

Although the defendant’s amount-in-controversy estimate must be grounded in the

5

plaintiff’s complaint, the parties may also submit additional “evidence outside the

6

complaint,” such as “affidavits or declarations, or other ‘summary-judgment-type evidence

7

relevant to the amount in controversy at the time of removal.’” Ibarra, 775 F.3d at 1197

8

(quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). In

9

addition, the parties may rely on “a chain of reasoning that includes assumptions.” Id.; see

10

also Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 992 (9th Cir. 2022). These

11

assumptions, however, must have “some reasonable ground underlying them” and cannot

12

be based on “mere speculation and conjecture.” Ibarra, 775 F.3d at 1197, 1199; see also

13

Jauregui, 28 F.4th at 992.

14

Because the court evaluates a challenged amount-in-controversy estimate under the

15

preponderance of the evidence standard, the defendant need only establish “that the

16

potential damage could exceed the jurisdictional amount.” Rea v. Michaels Stores Inc.,

17

742 F.3d 1234, 1239 (9th Cir. 2014) (emphasis added) (quoting Lewis v. Verizon

18

Commc’ns, Inc., 627 F.3d 395, 397 (9th Cir. 2010)). Still, “if the evidence submitted by

19

both sides is balanced, in equipoise, the scales tip against federal-court jurisdiction.”

20

Ibarra, 775 F.3d at 1199. In sum, the defendant has the burden of establishing by a

21

preponderance of the evidence that the amount in controversy could exceed $5 million; if

22

the defendant fails to do so, the federal court lacks subject matter jurisdiction and the case

23

must be remanded. See 28 U.S.C. § 1447(c).

24

ANALYSIS

25

Plaintiff does not dispute that the class contains over 100 members or that minimal

26

diversity of citizenship exists under CAFA. (See generally Mot.) Instead, Plaintiff

27

challenges removal jurisdiction based solely on the contention that the amount in

28

controversy does not exceed $5 million. (See id. at 11.) Therefore, the Court must analyze
6
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.543 Page 7 of 26

1

the amount in controversy for each of Plaintiff’s claims, “first look[ing] to the complaint”

2

and then to any relevant “summary-judgement-type evidence” submitted by either party.

3

See Ibarra, 775 F.3d at 1197. Next, the Court must determine whether Defendant’s

4

estimated amount in controversy is reasonably supported by a preponderance of the

5

evidence. See Dart Cherokee, 574 U.S. at 88.

6

Defendant has provided two amount-in-controversy estimates here:

7

Notice of Removal (NOR ¶ 21)

8

Minimum Wages

9
10
11

Opposition to Motion (Opp’n 12)

$656,357.00

Minimum Wages

$2,650,441.23

Meal Periods

$1,312,714.00

Meal Periods

N/A

Rest Periods

$1,312,714.00

Rest Periods

$7,606,123.56

12

Wage Statements

$282,750.00

Wage Statements

$3,168,000.00

13

Reimbursements

$690,136.00

Reimbursements

N/A

14

Separation Wages

$4,627,564.00

Separation Wages

Attorney’s Fees

$2,220,558.75

Attorney’s Fees

15
16

Total

17
18

I.

$11,102,793.75

Total

$4,627,564.00
N/A
$18,052,218.78

Scope of Materials Considered by the Court

19

Alongside the Opposition to the Motion to Remand, Defendant submitted as exhibits

20

several filings from the Parties’ prior PAGA action, including the complaint, (ECF No. 22-

21

2); the Shachno Declaration; and the Lietzow Declaration to support several recalculations

22

in its Opposition and to bolster its initial calculations in its Notice of Removal. In reply,

23

Plaintiff asserts that this Court may not consider the factual allegations from the PAGA

24

filings “because the California Court of Appeal recently confirmed that different and

25

distinct rights are being asserted in a PAGA action than in an action seeking damages.”

26

(See Reply at 2 (citing Gavriiloglou v. Prime Healthcare Mgmt., Inc., 83 Cal. App. 5th

27

595, 602–03 (2022)).)

28

///
7
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.544 Page 8 of 26

1

Plaintiff is correct that a litigant in a PAGA action asserts different primary rights

2

than a litigant in a typical class action. While a PAGA plaintiff acts as a representative for

3

the “state and general public,” the typical class action representative in a wage and hour

4

lawsuit acts as a representative for “individual employees.” See Gavriiloglou, 83 Cal. App.

5

5th at 604. This principle, however, does not prevent courts from taking judicial notice of

6

filings from a prior PAGA action. Instead, the primary rights doctrine prevents courts from

7

finding that there is claim or issue preclusion, meaning a final disposition on the merits in

8

a PAGA action does not preclude a subsequent non-PAGA class action involving the same

9

parties and claims. Id. at 602–06. Here, Defendant does not assert preclusion-based

10

theories; instead, Defendant asks this Court to consider the PAGA filings as evidence when

11

deciding whether Defendant’s amount-in-controversy estimate is reasonable for

12

jurisdictional purposes. Therefore, Plaintiff’s argument regarding the primary rights

13

doctrine is not relevant to the Court’s jurisdictional analysis.

14

In any event, at the motion hearing, Plaintiff conceded that the Court may consider

15

the Shachno Declaration as a party admission. (See ECF No. 34.) Although Plaintiff

16

argued that the Court may not consider the Lietzow Declaration and took no position on

17

whether the Court could consider the PAGA complaint, (see id.), the Court need not

18

address whether such evidence may be considered because the Court’s analysis does not

19

rely on that evidence. Rather, the Court relies on all relevant evidence that is not subject

20

to dispute, including: (1) the Shachno Declaration; (2) the present Complaint; (3) Mr.

21

Shachno’s initial disclosures and interrogatory responses in this present action; (4) the Carr

22

Declarations; and (5) the Schafer Declaration.

23

II.

Failure to Pay Minimum Wages

24

The first claim at issue in the amount in controversy analysis is Defendant’s alleged

25

failure to pay Plaintiff and putative class members minimum wages in violation of

26

California Labor Code §§ 1194 and 1197. (See generally Compl. ¶¶ 70–79.) In the

27

Complaint, Plaintiff alleges that Defendant “maintained a wage practice of paying

28

[Plaintiff and putative class members] without regard to the correct amount of time they
8
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.545 Page 9 of 26

1

work[ed],” (id. ¶ 71), and “consequently underpaid the actual time worked by [Plaintiff

2

and putative class members],” (id. ¶ 73). Specifically, Plaintiff asserts that class members

3

were not paid for: (1) completing work assignments during meal breaks “from time to

4

time;” (2) undergoing mandatory drug testing; (3) completing mandatory Covid

5

temperature checks and symptom questionnaires; (4) “several minutes off the clock” before

6

work complying with Defendant’s personal appearance regulations; and (5) actual time

7

worked, which was always rounded down to benefit Defendant. (Id. ¶ 9.)

8

Defendant, in its Notice of Removal, asserts that the amount in controversy for

9

Plaintiff’s minimum wage claim is at least $656,357. (NOR at 6.) Defendant bases this

10

estimate on only one of Plaintiff’s five allegations: the allegation that Defendant failed to

11

pay class members for “several minutes off the clock” spent “preparing themselves for

12

work in order to comply with Defendant’s extensive personal appearance regulations.”

13

(See 1st Carr Decl. ¶ 8 (quoting Compl. ¶ 9); see also Opp’n at 5.) To arrive at this figure,

14

Defendant used employment records to determine the total number of hours worked by

15

Plaintiff and putative class members during the statutory period. (See Schafer Decl. ¶ 4.)

16

Defendant then divided this number by eight hours—the length of a full shift—to reach a

17

conservative estimate of the total number of shifts worked. (See 1st Carr Decl. ¶ 8 (quoting

18

Compl. ¶ 9); see also Opp’n at 5.) Based on Plaintiff’s claim that class members spent

19

“several minutes” preparing for work, Defendant multiplied the number of shifts worked

20

by three minutes. (See id.) Defendant then converted this figure to hours and multiplied

21

that number by the average hourly minimum wage during the statutory period. (See id.)

22

Plaintiff challenges Defendant’s calculation on several grounds. First, Plaintiff

23

asserts that the estimate is improper because it includes time spent drug testing, complying

24

with mandatory Covid screening (before Covid emerged in 2019), and improper rounding.

25

(See Mot. at 3.) Plaintiff is mistaken. Defendant’s amount in controversy calculation for

26

the minimum wage claim only accounts for time spent complying with personal appearance

27

regulations, not time spent drug testing or Covid screening, or Defendant’s allegedly

28

improper rounding policy. Even so, it would have been proper for Defendant to include
9
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.546 Page 10 of 26

1

these alleged violations in its calculation if it chose to do so. Furthermore, excluding these

2

violations from the calculation yields a more conservative amount-in-controversy estimate.

3

Plaintiff next challenges Defendant’s assumption that class members spent “three

4

minutes off the clock” complying with grooming regulations before “each shift.” (Mot. at

5

3–4.) Plaintiff does not appear to challenge Defendant’s assumption that each grooming

6

violation lasted three minutes. At the motion hearing, Plaintiff admitted that his claim that

7

employees spent “several minutes off the clock” complying with grooming regulations,

8

(Compl. ¶ 9), reasonably supports the assumption that each violation lasted approximately

9

two to four minutes, (see ECF No. 34). Defendant’s three-minute estimate is within a range

10

that Plaintiff himself believes is reasonable. Nonetheless, Plaintiff asserts that Defendant’s

11

calculation is improper because it is unreasonable to assume that a violation occurred

12

before “each shift.” (See id.; Mot. at 3–4.) The Court disagrees.

13

The Complaint alleges that Plaintiff and putative class members “were required by

14

Defendant to spend several minutes off the clock preparing themselves for work in order

15

to comply with Defendant’s extensive personal appearance regulations.” (Compl. ¶ 9

16

(emphasis added).) If a plaintiff broadly alleges wage and hour violations, it may be

17

reasonable for the defendant to assume a 100% violation rate. See e.g., Coleman v. Estes

18

Express Lines, Inc., 730 F. Supp. 2d 1141, 1150 (C.D. Cal. 2010) (“Plaintiff included no

19

limitation on the number of [wage and hour] violations, and, taking his complaint as true,

20

Defendants could properly calculate the amount in controversy based on a 100% violation

21

rate.”). Here, Plaintiff’s Complaint does not contain any limiting language to negate the

22

ordinary and reasonable assumption that one must “prepar[e] themselves for work” each

23

time that they go to work, meaning, before every shift. (See Compl. ¶ 9.)

24

Furthermore, Plaintiff himself claims that he spent time adhering to Defendant’s

25

personal appearance regulations “before each shift,” (Interrog. Resp. at 10–11), and “each

26

day,” (Shachno Decl. ¶ 4). It is reasonable to assume that, as the class representative,

27

Mr. Shachno’s claims are “typical of the class.” See e.g., Amchem Prod., Inc. v. Windsor,

28

521 U.S. 591, 613 (1997) (describing the typicality requirement of class action
10
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.547 Page 11 of 26

1

representatives under Federal Rule of Civil Procedure 23(a)). Accordingly, the Court finds

2

that a three-minute violation before each shift is a reasonable assumption that is grounded

3

in the language of Plaintiff’s Complaint and the proof submitted by Defendant. Therefore,

4

the Court accepts Defendant’s estimate of $656,357 as the amount in controversy for

5

Plaintiff’s claim for failure to pay minimum wages for time spent complying with

6

Defendant’s personal appearance regulations.

7

In its Opposition to the Motion to Remand, Defendant recalculates the amount in

8

controversy for Plaintiff’s minimum wage claim to be at least $2,650,441.23 because

9

Plaintiff’s filings from the PAGA action support a 20-minute, rather than 3-minute,

10

violation before every shift. (See Opp’n at 10, 15; see also Carr Decl. 2 ¶ 10.) Defendant

11

grounds this assumption in Mr. Shachno’s PAGA declaration, (see Opp’n at 10 (relying on

12

Leitzlow Decl. ¶ 10–11 (relying on Shachno Decl. ¶¶ 3–4))), which Plaintiff has admitted

13

is proper for the Court to consider at this time, (see generally ECF 34). In the PAGA

14

declaration, Plaintiff claims that he spent five (5) minutes putting on his uniform before

15

work, five (5) minutes taking off his uniform after work, and ten (10) minutes complying

16

with Defendant’s personal appearance requirements, for a total of twenty (20) minutes of

17

unpaid work time each day. (See Shachno Decl. ¶¶ 3–4.)

18

While Mr. Shachno’s PAGA declaration asserts that Defendant is required to

19

compensate employees for time spent putting on and taking off their uniforms, Plaintiff

20

never makes such an allegation in his Complaint. (See generally Compl.) Although a

21

defendant may support its amount-in-controversy estimate with external evidence, the

22

defendant may not use such evidence to support claims not alleged in Plaintiff’s complaint.

23

The Court, therefore, finds Plaintiff’s PAGA claims regarding the donning and doffing of

24

uniforms irrelevant to the present amount in controversy determination. As a result,

25

Defendant is left with insufficient evidence to support its assumption that “every employee

26

worked 20 minutes off-the-clock on a daily basis.” (Opp’n at 15.) Consequently,

27

Defendant’s revised estimate of $2,650,441.23 is not reasonably supported by a

28

preponderance of the evidence.
11
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.548 Page 12 of 26

1

Ultimately, for Plaintiff’s minimum wage claim, the Court accepts Defendant’s

2

amount-in-controversy estimate of $656,357 from the Notice of Removal but rejects the

3

revised estimate of $2,650,441.23 from its Opposition.

4

III.

Failure to Provide Meal and Rest Periods

5

The Complaint also alleges that Defendant violated California Labor Code §§ 226.7

6

and 512 by failing to provide Plaintiff and putative class members with legally required

7

meal and rest breaks. (See generally Compl. ¶¶ 96–103.) Regarding rest breaks, Plaintiff

8

claims employees were “from time to time” denied a single ten-minute break for shifts of

9

two to four hours, two ten-minute breaks for shifts of six to eight hours, and three ten-

10

minute breaks for shifts of ten hours or more. (Id. ¶ 101.) As for meal breaks, Plaintiff

11

claims employees were “from time to time” not fully relieved of their duties during meal

12

periods, “from time to time” denied a single meal period prior to their fifth hour of work,

13

and “from time to time” denied a second meal period when working ten-hour shifts on

14

“some workdays.” (Id. ¶ 97.) The Complaint requests one hour of pay for each meal and

15

rest break violation, as mandated by the California Labor Code. (Id. ¶ 98, 102; see also

16

Cal. Labor Code § 226.7(c).)

17

In its Notice of Removal, Defendant asserts that the amount in controversy is at least

18

$1,312,714 for the meal period claim and $1,312,714 for the rest period claim. (NOR at

19

7–8.) To arrive at these estimates, Defendant used employment records to determine the

20

total number of hours worked by the class during the statutory period. (See Opp’n at 4.)

21

Defendant then divided this number by eight hours to reach a conservative estimate of the

22

total number of days worked. (See id.) Then, based on the allegation that Defendant denied

23

meal and rest breaks “from time to time,” Defendant multiplied the number of days worked

24

by a violation rate of 10% to approximate the total number of meal and rest break

25

violations. (See id.) Finally, because the statutory penalty for each violation is one hour

26

of pay, Defendant multiplied the number of violations by the average minimum wage

27

during the statutory period. (See id.)

28

///
12
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.549 Page 13 of 26

1

Plaintiff challenges this calculation on three grounds: first, Plaintiff claims it was

2

improper to assume a 10% violation rate; second, Plaintiff claims it was improper to use

3

an average minimum wage instead of employees’ actual wages; and third, Plaintiff claims

4

it was improper to assume that all employees worked a standard eight-hour shift. (See Mot.

5

at 5–6.) The Court addresses each argument in turn.

6

First, the Court finds a 10% violation rate reasonable based on the language in the

7

Complaint. Plaintiff’s Complaint not only alleges that meal and rest break violations

8

occurred “from time to time,” but also that, “as a matter of company policy, practice and

9

procedure,” Defendant “failed to record all meal and rest breaks missed by [Plaintiff and

10

putative class members].” (Compl. ¶ 34; see also id. ¶ 12.) This caused class members to

11

“forfeit meal breaks without additional compensation and in accordance with Defendant’s

12

corporate policy and practice.” (Id. ¶ 12.) In a similar wage and hour case, another Judge

13

in this District determined that a 20% violation rate was reasonable because the complaint

14

not only claimed that violations had occurred “from time to time” and for “some shifts,”

15

but also that the defendant had failed to compensate for such violations as a matter of

16

“company policy, practice and procedure.” See Cavada v. Inter-Cont’l Hotels Grp., Inc.,

17

No. 19CV1675-GPC(BLM), 2019 WL 5677846, at *5 (S.D. Cal. Nov. 1, 2019). This

18

language closely mirrors that used by Plaintiff in his Complaint. Here, however, Defendant

19

has employed a more conservative 10% violation rate instead of the 20% rate accepted by

20

the court in Cavada. Accordingly, the Court finds that Defendant’s assumed violation rate

21

is reasonably grounded in the allegations made in Plaintiff’s Complaint.

22

The Court also finds Defendant’s use of the average minimum wage reasonable.

23

According to Plaintiff, Defendant’s calculations cannot be accepted because Defendant

24

assumed “an arbitrary ‘average’ of minimum wages in effect without any evidence of what

25

[Plaintiff and putative class members] were actually paid.” (See Mot. at 5.) Although it

26

may have been possible for Defendant to use employee records to determine Plaintiff and

27

putative class members’ actual wages, a party’s access to additional information does not

28

necessarily render the assumptions made by that party unreasonable. Here, for example,
13
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.550 Page 14 of 26

1

Defendant used the average minimum wage during the statutory period “to make [its]

2

calculations as conservative as possible,” (Carr Decl. 1 ¶ 12), because employees’ actual

3

hourly rates “would have been higher” than minimum wage, (see Opp’n at 16).

4

Defendant’s assumption that its employees earned at least minimum wage is reasonable

5

because an employee’s “regular rate of compensation” must meet or exceed minimum

6

wage. See Cal. Lab. Code §§ 226.7(c), 1194. Therefore, using employees’ actual wages

7

in the calculation, as Plaintiff requests, would only result in a higher estimate.

8

Finally, Plaintiff challenges Defendant’s assumption that all employees worked

9

exactly eight hours each shift. (See Mot. at 5; Reply at 1.) According to Plaintiff,

10

“Defendant’s calculation completely fails to consider the actual number of shifts worked”

11

and “whether meal or rest breaks were owed based on the length of shifts.” (Reply at 1.)

12

The Court agrees that Defendant’s failure to determine whether breaks were owed based

13

on the length of each shift renders the amount-in-controversy estimate for the meal break

14

claim unreliable; however, this does not affect the reliability of the estimate for the rest

15

break claim.

16

According to Plaintiff’s Complaint, all of Defendant’s employees were owed a meal

17

break prior to their fifth hour of work and again when working shifts of ten hours or more.

18

(Compl. ¶ 97; see also id. ¶ 59.) Therefore, Defendant’s assumption that each shift lasted

19

exactly eight hours potentially overestimates the number of meal breaks owed, as

20

Defendant admitted at the motion hearing. (See ECF No. 34.) If even one putative class

21

member had worked a shift of less than five hours, and accordingly was not owed a meal

22

break, Defendant’s amount in controversy calculation would be an overestimate. A

23

defendant cannot “rely on speculative and self-serving assumptions about key unknown

24

variables.” Vasserman v. Henry Mayo Newhall Mem’l Hosp., 65 F. Supp. 3d 932, 976

25

(C.D. Cal. 2014) (quoting Garibay v. Archstone Comties., LLC, 539 F. App’x 763, 764

26

(9th Cir. 2013)). Here, the number of shifts during which a meal break was owed is a key

27

unknown variable, and Defendant’s assumption that meal breaks were owed for every shift

28

///
14
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.551 Page 15 of 26

1

is not reasonable. Therefore, Defendant’s $1,312,714 amount-in-controversy estimate for

2

the meal break violations must be rejected.

3

Defendant’s use of a presumptive eight-hour shift does, however, lead to a

4

conservative estimate of rest break violations. For the amount in controversy calculation,

5

Defendant assumed one rest break violation for every ten shifts, with each shift lasting

6

exactly eight hours. (See Opp’n at 4; 1st Carr Decl.) Unlike meal breaks, which are only

7

required for shifts of five hours or more, rest breaks are required for shifts as short as two

8

hours, according to Plaintiff’s Complaint.1 (See Compl. ¶¶ 12, 101.) Therefore, if Plaintiff

9

and putative class members in fact worked shorter, more frequent shifts, (see Opp’n at 5 n.

10

1), and these shifts typically lasted at least two hours, as is reasonable to assume, there

11

would be more shifts in which a rest break violation could have occurred. If, for example,

12

an employee in fact worked two four-hour shifts rather than one eight-hour shift, as

13

Defendant assumed, there would be twice as many shifts in which a rest break violation

14

could have occurred.

15

Thus, Defendant’s use of a presumptive eight-hour shift results in a conservative

16

estimate of total shifts and, in turn, a conservative estimate of rest break violations. If

17

Defendant instead used the actual number of shifts worked by Plaintiff and putative class

18

members lasting at least two hours, the amount in controversy would likely be higher. The

19

Court therefore finds Defendant’s amount in controversy calculation reasonable and

20

accepts the $1,312,714 estimate for rest break violations.

21

In the Opposition to the Motion to Remand, Defendant recalculates the amount in

22

controversy for the rest period claim using a 100% violation rate rather than a 10%

23

violation rate, yielding an amount in controversy of $7,606,123.56. (See Opp’n at 11.)

24
25
26
27
28

1

In the Opposition, Defendant asserts that, “a shift of at least 3.5 hours . . . triggered [Marriott
International, Inc.’s] rest break obligation,” (Opp’n at 11 (relying on PAGA filings)); however, Plaintiff’s
Complaint merely states that employees were denied rest breaks for shifts “of at least two (2) to four (4)
hours,” (see Compl. ¶ 101). For purposes of this jurisdictional analysis, the Court relies on the allegations
in the Complaint rather than the PAGA filings.
15
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.552 Page 16 of 26

1

According to Defendant, a 100% violation rate is reasonable because the Complaint implies

2

that the “rest break policy is per se unlawful because it purportedly restricts employees to

3

[Defendant’s] premises for their rest breaks, resulting in a violation every time an employee

4

is entitled to a rest break.” (Id. at 17 (emphasis omitted).) The Complaint, however, does

5

not go as far as Defendant claims.

6

The Complaint states, “Defendant’s policy restricts [Plaintiff and putative class

7

members] from unconstrained walks and is unlawful based on Defendant’s rule which

8

states [Plaintiff and putative class members] cannot leave the work premises during their

9

rest period.” (Compl. ¶ 13.) “Caselaw dictates that a 100% violation rate [for rest period

10

claims] is not reasonable based on allegations of a ‘pattern and practice,’ but violation[]

11

rates of 25–60% based on both ‘pattern and practice’ and ‘policy and practice’ are

12

reasonable.” See Cavada, 2019 WL 5677846, at *7 (citing Ibarra, 775 F.3d at 1198–99

13

and collecting district court cases). Here, Plaintiff’s Complaint alleges an unlawful rest

14

break “policy” but does not go so far as to claim Defendant had a “pattern or practice” of

15

enforcing this policy. Even if Plaintiff had alleged “a uniform or systematic violation of

16

labor laws pertaining to . . . rest breaks,” this would “not necessarily mean that a violation

17

occurred every single day that the employee worked.” See Sanders v. Old Dominion

18

Freight Line, Inc., No. 16-CV-2837-CAB-NLS, 2017 WL 5973566, at *4 (S.D. Cal. Feb.

19

2, 2017); see also Ibarra, 775 F. 3d at 1198–99.

20

Furthermore, the Complaint does not allege that class members are entitled to

21

penalties for every rest break because of Defendant’s policy. Instead, the Complaint seeks

22

penalties “for each workday that [a] rest period was not provided” and only for those “who

23

were not provided a rest period.” (Compl. ¶ 102.) In a similar wage and hour case in the

24

Central District of California, the plaintiff’s complaint used the exact same language that

25

Plaintiff uses here, demanding compensation “for each workday that a rest period was not

26

provided.” See Wheatley v. MasterBrand Cabinets, LLC, No. EDCV 18-2127 JGB (SPx),

27

2019 WL 688209, at *5 (C.D. Cal. Feb. 19, 2019). There, the court determined that such

28

language “impl[ied] that there were days when rest breaks were provided” and therefore
16
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.553 Page 17 of 26

1

the allegations in the complaint did not support a 100% violation rate. See id.; see also

2

Sanders, 2017 WL 5973566, at *4 (finding the same regarding the plaintiff’s meal break

3

claims). The language in Plaintiff’s Complaint here likewise implies that some employees

4

were in fact provided proper rest breaks during some shifts. Therefore, the Complaint does

5

not support a 100% violation rate. Consequently, the Court rejects Defendant’s revised

6

$7,606,123.56 estimate for rest period violations.

7

Ultimately, the Court accepts Defendant’s $1,312,714 amount-in-controversy

8

estimate for rest period violations but rejects its $1,312,714 estimate for meal period

9

violations and its $7,606,123.56 estimate for rest period violations.

10

IV.

Failure to Provide Accurate Wage Statements

11

Next, the Complaint alleges Plaintiff’s and putative class members’ wage statements

12

“from time to time” did not accurately reflect the total hours worked or wages earned, in

13

violation of California Labor Code § 226. (See Compl. ¶¶ 19, 106.) “More specifically,”

14

Plaintiff alleges, “the wage statements failed to identify the accurate total hours worked

15

each pay period.” (Id. ¶ 106.) Plaintiff asserts that these violations were knowing and

16

intentional, entitling Plaintiff and putative class members to $50 for each initial violation

17

and $100 for each subsequent violation up to a potential total of $4,000 per employee.

18

(See id. ¶ 107.)

19

In the Notice of Removal, Defendant asserts that the amount in controversy for the

20

wage statement claim is $282,750. (See NOR at 9; 1st Carr Decl. ¶¶ 16–18.) To reach this

21

estimate, Defendant assumed two wage statement violations per employee, resulting in a

22

$150 penalty each ($50 for the first violation and $100 for the second). (See 1st Carr Decl.

23

¶¶ 16–18; see also Opp’n at 6; Schafer Decl. ¶¶ 4–5.) Defendant then multiplied the $150

24

penalty by the total number of “non-exempt employees who received wage statements”

25

during the statutory period, “from May 23, 2021[,] through July 22, 2022.” (1st Carr Decl.

26

¶ 18; see also Schafer Decl. ¶ 4.)

27

///

28

///
17
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.554 Page 18 of 26

1

Plaintiff claims Defendant’s estimate is “unreasonable and unsupported” because

2

the Complaint “does not allege that the wage statement violation[s] occurred on two wage

3

statements issued to each [putative class member]” but that Defendant “from time to time”

4

engaged in wage statement violations. (Mot. at 8.) Because Defendant does not disclose

5

how many wage statements each class member received during the statutory period, the

6

Court cannot determine whether two violations is a reasonable assumption.

7

Although Defendant identifies how many employees received wage statements at

8

some point during the one-year statutory period, Defendant does not reveal how many

9

wage statements each employee received in total. When calculating the amount in

10

controversy for an inaccurate wage statement claim, the number of wage statements

11

received by each employee during the statutory period is a key variable. See Vasserman,

12

65 F. Supp. 3d at 976; see also Mariscal v. Ariz. Tile, LLC, No. 8:20-cv-02071-JLS-KES,

13

2021 WL 1400892, at *4 (C.D. Cal. 2021) (approving amount-in-controversy estimate

14

based on total number of wage statements); Wicker v. ASC Profiles, LLC, No. 2:19-cv-

15

02443-TLN-KJN, 2021 WL 1187271, at *4 (E.D. Cal. 2021) (approving amount-in-

16

controversy estimate based on total number of wage statements and employees).

17

Defendant’s reliance on the total number of employees rather than the total number

18

of wage statements renders its amount-in-controversy estimate unreliable. If, for example,

19

an employee worked for the entire one-year statutory period and received inaccurate wage

20

statements “from time to time,” two violations would be reasonable. If, however, an

21

employee worked for only one month during the statutory period and received inaccurate

22

wage statements “from time to time,” two violations would not be reasonable. Defendant’s

23

amount-in-controversy estimate is based on the unsupported assumption that all employees

24

in the class worked for Defendant long enough during the statutory period such that two

25

violations would constitute a violation “from time to time.” Cf., Blevins v. Republic

26

Refrigeration, Inc., No. CV 15-04019 MMM (MRWx), 2015 WL 12516693, at *11 (C.D.

27

Cal. 2015) (rejecting amount in controversy when Defendants failed to account for class

28

members “who did not work . . . for a sufficiently long period of time to accrue the
18
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.555 Page 19 of 26

1

maximum number of violations.”). Accordingly, the Court rejects Defendant’s $282,750

2

estimate for wage statement violations.

3

In the Opposition to the Motion to Remand, Defendant recalculates the amount in

4

controversy for Plaintiff’s inaccurate wage statement claim as $3,168,000. (See Opp’n at

5

12). Defendant’s revised calculation assumes that the PAGA filings support “a wage

6

statement violation every pay period,” (see id. (emphasis omitted); Carr Dec. 2 ¶ 12), even

7

though Plaintiff’s Complaint only claims that violations occurred “from time to time.” (See

8

Compl. ¶¶ 19, 106.) When a defendant’s assumptions directly conflict with the allegations

9

in the plaintiff’s complaint, the complaint controls, rendering the defendant’s assumption

10

unreasonable. See Ibarra, 775 F.3d at 1197, 1199.

11

Furthermore, Defendant’s revised calculation still disregards the number of wage

12

statements issued during the statutory period, instead using a wage statement estimate

13

provided by Mr. Lietzow in the PAGA action. (See Opp’n at 12; 2d Carr Dec. ¶ 12.) Use

14

of this metric is unreasonable because Defendant has access to records showing the number

15

of wage statements issued during the statutory period. For the foregoing reasons, the Court

16

rejects Defendant’s revised $3,168,000 estimate for wage statement violations.

17

V.

Failure to Reimburse

18

The Complaint next alleges that “[a]t all relevant times” Defendant failed to

19

“reimburse [Plaintiff and putative class members] for required expenses incurred in the

20

discharge of their job duties” in violation of California Labor Code § 2802. (Compl. ¶ 110.)

21

Specifically, Plaintiff claims that it was Defendant’s “policy and practice” to deny Plaintiff

22

and putative class members reimbursement for “expenses resulting from using their

23

personal cellular phones.” (Id.) Plaintiff also alleges that Defendant failed to reimburse

24

employees for uniform expenses, (see id.); however, Defendant does not factor this cost

25

into its amount in controversy calculation, (see generally NOR).

26

Defendant asserts that the amount in controversy for Plaintiff’s reimbursement claim

27

is $690,136 based on cell phone expenses alone. (See Opp’n at 20.) To arrive at this figure,

28

Defendant used employment records to determine the total number of hours worked by the
19
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.556 Page 20 of 26

1

class during the statutory period. (See Schafer Decl. ¶ 4.) Defendant then divided this

2

number by eight hours to reach a conservative estimate of the total number of days worked.

3

(See Carr Decl. 1 ¶ 27.) Defendant then divided this number by thirty days to reach a

4

conservative estimate of the total number of months worked, assuming each employee

5

worked a full shift every day. (See id.) Finally, Defendant multiplied the number of

6

months worked by $20, Defendant’s estimated monthly cell phone reimbursement fee per

7

employee. (Opp’n at 20.)

8

Plaintiff does not contest the $20 monthly reimbursement rate, (see generally Mot.),

9

as several courts in this district have approved a similar monthly fee, see e.g., Cavada,

10

2019 WL 5677846, at *7 (approving $20); Vallejo v. Sterigenics U.S., LLC, No. 3:20-cv-

11

01788-AJB-AHG, 2021 WL 2685348, at *6 (S.D. Cal. June 29, 2021) (approving $25).

12

This amount is generally considered “a reasonable percentage of [employees’] cell phone

13

bills” for an employer to pay. See Cochran v. Schwan’s Home Servs., Inc., 228 Cal. App.

14

4th 1137, 1140 (2014).

15

Instead, Plaintiff challenges “Defendant’s assumption that every [putative class

16

member] would require reimbursement every month of their employment.” (Mot. 10.)

17

According to Plaintiff, this assumption is “unreasonable and unsupported” because the

18

Complaint does not allege that Defendant denied reimbursement “due to a standard policy

19

and practice.” (See id.) Contrary to Plaintiff’s assertion, however, the Complaint does in

20

fact allege that Defendant denied reimbursement for work-related cell phone expenses as

21

a matter of “policy and practice.” (Compl. ¶ 110.)

22

Furthermore, the Complaint’s assertion that Plaintiff and putative class members

23

used their cell phones for work “over the course of their employment,” (id. ¶ 28), though

24

vague, is sufficient to support the assumption that these employees “incurred at least one

25

reimbursable cell phone expense for each month worked during the class period.” See

26

Vallejo, 2021 WL 2685348, at *4 (finding only one violation necessary to impose $25

27

monthly fee). Although the plaintiff is the master of their complaint, they cannot “avoid

28

federal jurisdiction by purposefully opaque pleading.”

Herrera v. Carmax Auto

20
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.557 Page 21 of 26

1

Superstores Cal., LLC, No. EDCV-14-776-MWF (VBKx), 2014 WL 12586254, at *2

2

(C.D. Cal. June 12, 2014). If a complaint uses broad or vague terms, as Plaintiff’s does

3

here, the defendant may “make reasonable, conservative estimates about the frequency of

4

the alleged violations based on the language used in [that] complaint.” Id.

5

Based on the language in Plaintiff’s Complaint here, Defendant’s estimate is

6

reasonable. In Vallejo, the complaint alleged that class members used personal cell phones

7

“for work-related duties” “[t]hroughout the time period.” 2021 WL 2685348, at *6

8

(alterations in original).

9

assumption that all employees were entitled to a monthly reimbursement. Id. As in Vallejo,

10

the Complaint here alleges that class members were required to use their personal cell

11

phones “in furtherance of their job duties” “in the course of their employment.” (Compl.

12

¶ 28; see also Interrog. Resp. at 30–31 (asserting phones were used “for work related

13

issues”).) This allegation also supports the assumption that employees are entitled to a

14

monthly reimbursement. Therefore, the Court accepts Defendant’s amount-in-controversy

15

estimate of $690,136 for Plaintiff’s failure to reimburse claim.

16

VI.

This allegation was sufficient to support the defendant’s

Failure to Provide Wages Upon Separation

17

The Complaint next alleges Defendant failed to pay Plaintiff and putative class

18

members wages due upon separation in violation of California Labor Code § 203. (See

19

generally Compl. ¶¶ 112–19.) When an employer willfully fails to pay wages upon

20

separation, the Labor Code provides that “the wages of the employee shall continue as a

21

penalty from the due date ther[e]of at the same rate until paid or until an action therefor is

22

commenced; but the wages shall not continue for more than 30 days.” Cal. Lab. Code

23

§ 203.

24

Defendant asserts that the amount in controversy for Plaintiff’s overdue wages claim

25

is $4,627,564. (See Opp’n at 20.) To reach this estimate, Defendant used employment

26

records to identify how many class members separated from employment during the

27

statutory period, when those class members separated, and what those class members’

28

hourly pay rates were at the time of separation, if available. (Id. at 19–20.) Defendant
21
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.558 Page 22 of 26

1

then calculated the daily wage of each separated employee by multiplying their actual

2

hourly rate at the time of termination by eight hours. (1st Carr Decl. ¶ 24.) When records

3

of an employee’s actual hourly rate were unavailable, Defendant used the California

4

minimum wage at the time of termination to calculate the employee’s daily wage. (Id.)

5

Then, for those class members whose employment terminated more than thirty days before

6

the filing of the Notice of Removal, Defendant multiplied each employee’s daily wage by

7

thirty days. (Id. ¶ 25.) For those class members whose work terminated less than thirty

8

days before the filing date, Defendant multiplied each employee’s daily wage by the

9

number of days between their termination date and the filing date. (Id.)

10

Plaintiff challenges Defendant’s calculation on multiple grounds. First, Plaintiff

11

claims Defendant’s estimate is unsupported because Defendant does not offer “justification

12

for the number of class members” used in the calculation. (Mot. at 9.) To the contrary,

13

Defendant has provided a form of justification typical in CAFA removal actions: a sworn

14

declaration from a member of Defendant’s management. (See generally Schafer Decl.) In

15

this declaration, Defendant’s Vice President of Human Resources explains that she

16

“carefully reviewed a report compiled from Defendant’s employee data records” and

17

determined that “at least 1,219 of Defendant’s non-exempt employees in the State of

18

California separated from employment” during the statutory period.

19

¶¶ 3–4.) This is the same number used by Defendant in its calculation. (See 1st Carr Decl.

20

¶¶ 23–24). Thus, Defendant has provided sufficient justification for the number of class

21

members used in its calculation.

(See id. Decl.

22

Next, Plaintiff challenges Defendant’s “assumption that every single [separated

23

employee] is owed 30 days of waiting time penalties, imputing that each of the former

24

employees worked eight hours for 30 consecutive days.” (Mot. at 9.) Plaintiff is mistaken

25

on multiple grounds. First, Defendant does not assume that every employee is owed thirty

26

days of waiting time penalties. For those employees whose employment terminated less

27

than thirty days before the filing date, Defendant did not assume thirty days of waiting time

28

penalties. Instead, Defendant calculated the number of days between each employee’s
22
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.559 Page 23 of 26

1

termination date and the filing date and only assessed penalties for those days. (1st Carr

2

Decl. ¶ 25.)

3

Additionally, Defendant’s conclusion that some employees would be owed a full

4

thirty days of waiting time penalties does not rely on the assumption that each of these

5

“former employees worked eight hours for 30 consecutive days” prior to separation, as

6

Plaintiff asserts. (See Mot. at 9.) A claim for “failure to pay wages [upon separation] has

7

nothing to do with the number of days an employee works during the month,” as “wages

8

continue to accrue on [a] daily basis while wages remain unpaid . . . not only on days that

9

[an] employee might have worked, but also on nonwork days.” Mamika v. Barca, 68 Cal.

10

App. 4th 487, 492–93 (1998). Furthermore, daily wages are commonly calculated by

11

multiplying each employee’s hourly rate by eight hours, as Defendant has done here. See

12

e.g., Andrade v. Arby’s Rest. Grp., Inc., 225 F. Supp. 3d 1115, 1139 (N.D. Cal. 2016); Kao

13

v. Holiday, 12 Cal. App. 5th 947, 963 (2017). Therefore, it is reasonable to assume that

14

penalties should accrue daily, regardless of how frequently an employee worked prior to

15

separation.

16

Finally, Plaintiff challenges Defendant’s assumption that each separated employee

17

would have been owed some unpaid wages. (Mot. at 9.) The Court finds such an

18

assumption adequately supported by the allegations in Plaintiff’s Complaint.

19

Complaint claims that “all who terminated employment” during the statutory period were

20

owed unpaid wages under California Labor Code § 203, and that it was “Defendant’s policy

21

and practice . . . to unlawfully and intentionally deny timely payment of wages due.”

22

(Compl. ¶¶ 71, 119 (emphasis added).) Multiple courts within this district have approved

23

a 100% violation rate when the plaintiff’s complaint made similar allegations. See e.g.,

24

Brumbach v. Hyatt Corp., No. 20-cv-2231-WQH-KSC, 2021 WL 926692, at *10 (S.D.

25

Cal. Mar. 11, 2021) (approving 100% violation rate when complaint alleged “consistent

26

and uniform policy, practice and procedure of failing to pay . . . wages”); Sanders v. Old

27

Dominion Freight Line, Inc., No. 17cv2340-CAB-NLS, 2019 WL 1193836, at * 6 (S.D.

28

///

The

23
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.560 Page 24 of 26

1

Cal. Mar. 8, 2018) (approving 100% violation rate when complaint requested overdue

2

wages for all separated employees).

3

Furthermore, as Defendant points out, Plaintiff’s overdue wages claim is

4

“derivative” of all other claims in Plaintiff’s Complaint. (See Opp’n at 18.) Thus, if

5

Defendant owed an employee for minimum wage violations, meal or rest break violations,

6

inaccurate wage statements, or unpaid reimbursements, Defendant would also owe this

7

employee waiting time penalties upon separation. For the purposes of this jurisdictional

8

analysis, the Court has determined that the Complaint reasonably supports the following

9

violations: a three-minute grooming violation before each shift, see supra Section II; one

10

unpaid rest break per ten-day work period, see supra Section III; and one unpaid cell phone

11

fee per month, see supra Section V. Based on these findings, it is reasonable to assume

12

that each separated employee would have been owed at least some unpaid wages upon

13

separation.

14

This presumption is bolstered by the court’s holding in Vallejo, in which another

15

judge in this District approved a 100% violation rate for separated employees based on the

16

following violations: “one hour of unpaid overtime per five-day work period” and “at least

17

five unpaid rest [breaks] and one unpaid meal break.” See 2021 WL 2685348, at *5. For

18

the foregoing reasons, the Court accepts Defendant’s $4,627,564 estimate for the overdue

19

wages claim as reasonably supported by a preponderance of evidence.

20

VII. Attorney’s Fees

21

Plaintiff’s Complaint also seeks reasonable attorneys’ fees.

(Compl. ¶ 128.)

22

Accordingly, the amount-in-controversy estimate in Defendant’s Notice of Removal

23

includes attorneys’ fees, approximated at 25% of the total damages. (See NOR at 10.)

24

“Because the law entitles [plaintiff] to an award of attorneys’ fees if he is successful, such

25

future attorneys’ fees are at stake in the litigation, and must be included in the amount in

26

controversy.” Fritsch v. Swift Transp. Co. of Az., 899 F.3d 785, 794 (9th Cir. 2018).

27

Plaintiff, however, asserts that a 25% benchmark fee is not supported by any evidence

28

provided by Defendant. (See Mot. at 9–10.)
24
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.561 Page 25 of 26

1

In wage and hour class actions such as this, courts commonly use a 25% benchmark

2

for attorneys’ fees when analyzing an amount-in-controversy estimate for jurisdictional

3

purposes. See e.g., Vallejo, 2021 WL 2685348, at *6; Ramos v. Schenker, Inc., No. 5:18-

4

cv-01551-JLS-KK, 2018 WL 5779978, at *3 (C.D. Cal. Nov. 1, 2018); see also Staton v.

5

Boeing Co., 327 F.3d 938, 968 (9th Cir. 2003). Generally, courts only deviate from this

6

benchmark in cases where a contract or statute limits the fee award. See Fritsch, 899 F.3d

7

at 797. Still, a “defendant must prove the amount of attorneys’ fees at stake by a

8

preponderance of the evidence,” and the Court “may not relieve the defendant of its

9

evidentiary burden by adopting a per se rule.” Id. at 796. Accordingly, Defendant, in its

10

Opposition, endeavored to meet this evidentiary burden by identifying several similar wage

11

and hour cases in this Circuit in which Plaintiff’s counsel sought and received a 33% fee

12

award. (Opp’n at 21–22 (discussing Ortega v. Loyal Source Gov’t Servs. LLC, No. 3:20-

13

cv-00879, 2022 WL 378426, at *1, *6 (S.D. Cal. Feb. 7, 2022); Order Granting Motion for

14

Attorneys’ Fees at 11, Ayala v. UPS Supply Chain Solutions, Inc., Case No. 5:20-cv-00117

15

(C.D. Cal. Jan. 18, 2022), ECF No. 110).)

16

Based on this evidence and the Court’s experience, Defendant’s use of a 25%

17

attorneys’ fee is reasonable and appropriate. Here, the Court has accepted Defendant’s

18

amount in controversy calculations for the minimum wage claim ($656,357), rest break

19

violation claim ($1,312,714), failure to reimburse claim ($690,136), and wages due upon

20

separation claim ($4,627,564), bringing the total amount in controversy for four of

21

Plaintiff’s ten claims to $7,286,771. Accordingly, a 25% attorneys’ fee of $1,821,692.75

22

($7,286,771 x 0.25) is appropriate.

23

///

24

///

25

///

26

///

27

///

28

///
25
22-CV-1215 TWR (JLB)

Case 3:22-cv-01215-TWR-JLB Document 41 Filed 01/19/23 PageID.562 Page 26 of 26

1

VIII. Total Amount in Controversy

2

Based on the above analysis, the Court concludes that Defendants have demonstrated

3

by a preponderance of the evidence that total amount in controversy for four of Plaintiff’s

4

claims and attorney’s fees is $9,108,463.75, broken down as follows:

5

Minimum Wages

6
7
8

$656,357.00

Meal Periods

N/A

Rest Periods

$1,312,714.00

9

Wage Statements

N/A

10

Reimbursements

$690,136.00

11

Separation Wages

$4,627,564.00

Attorney’s Fees

$1,821,692.75

Total

$9,108,463.75

12
13
14
15

This amount far exceeds the $5 million threshold required to bring a CAFA action in

16

federal court. As a result, this Court has subject-matter jurisdiction.

17
18
19
20
21
22
23
24

CONCLUSION
In light of the foregoing, the Court DENIES Plaintiff’s Motion to Remand to State
Court (ECF No. 10).
IT IS SO ORDERED.
Dated: January 19, 2023

~l ·i;S) ¼~
Honorable Todd W. Robinson
United States District Judge

25
26
27
28
26
22-CV-1215 TWR (JLB)