Perez et al v. Del Monte Fresh Produce N.A., Inc.

Filing 96

ORDER: The Court ADOPTS Magistrate Judge Acosta's Findings and Recommendation 76 and, therefore, GRANTS Plaintiff's Motion 23 to Remand Case and REMANDS Plaintiff's Motion 35 to Amend for consideration by the State court. Signed on 07/12/2012 by Judge Anna J. Brown. See attached 14 page Order for full text. (bb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

CAROLINE PEREZ and MARIA
T. PEREZ, individually and
on behalf of all others
similarly situated,

3:11-CV–01243-AC
ORDER

Plaintiffs,
v.
DEL MONTE FRESH PRODUCE, N.A.,
INC., a Florida Foreign
Business Corporation,
Defendant.

BROWN, Judge.
Magistrate John V. Acosta issued Findings and Recommendation
(#76) on April 18, 2012, in which he recommends the Court grant
Plaintiffs' Motion (#23) to Remand Case and remand Plaintiffs'
Motion (#35) to Amend for consideration by the state court.

In

the alternative, the Magistrate Judge recommends this Court grant

1 - ORDER

Plaintiffs' Motion (#35) to Amend and conclude Defendant may not
rely on Plaintiffs' mistake "as sole support for the removal of
this action."
On May 17, 2012, Defendant filed timely Objections to the
Findings and Recommendation.

The matter is now before this Court

pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil
Procedure 72(b).
I.

Background
On June 17, 2009, Plaintiffs Caroline Perez and Maria T.

Perez filed a class-action complaint against Defendant Del Monte
Fresh Produce, N.A., Inc., in Multnomah County Circuit Court in
which they defined the potential class as
persons who worked at Del Monte's produce packing
plant in Portland, Oregon, during the period from
after June 12, 2007, through the filing of this
action, and for those employed thereafter with
respect to an violation of wage and hour laws
alleged herein, until such time as Del Monte
complied with the law.
Plaintiffs alleged Defendant breached Oregon's wage-and-hour laws
by failing to pay them for preparing and concluding activities
such as "time spent locating, obtaining, donning, doffing, and
returning their uniforms and protective equipment"; failing to
provide uninterrupted meal periods; and failing to provide paid,
uninterrupted ten-minute rest periods for each four hours worked.
According to Plaintiffs, Defendant underpaid each of the
Plaintiffs as a result of these violations for at least thirty

2 - ORDER

minutes of each full day of work, failed to pay overtime when
Plaintiffs worked more than ten hours per day or more than 40
hours per week, and breached a settlement agreement that
Defendant executed in July 2006.
On July 23, 2009, Plaintiffs filed an amended complaint in
state court in which they withdrew their claims based on
Defendant's alleged failure to provide uninterrupted ten-minute
rest periods and their claims as to all future employees in the
class; deleted their allegations that all class members are
minimum- or close-to-minimum-wage workers; and added claims for
damages for unpaid wages, statutory damages, and contract
damages.
On August 6, 2009, Defendant moved to dismiss Plaintiffs'
amended complaint on the grounds that Plaintiffs failed to join a
necessary party and "to state ultimate facts sufficient to
constitute a claim."
On September 4, 2009, before the state court ruled on
Defendant's motion to dismiss, Plaintiffs moved to file a second
amended complaint that specifically set out the amount of damages
sought by Plaintiffs.
On October 8, 2009, before the state court ruled on
Plaintiffs' motion for leave to file a second amended complaint,
Defendant removed the action to this Court on the basis of
diversity jurisdiction under 28 U.S.C. § 1332(a)(Del Monte I).

3 - ORDER

On October 9, 2009, Plaintiffs filed a Motion for Leave to
File Second Amended Complaint in this Court that mirrored the
motion they had filed in state court.
On October 21, 2009, Magistrate Judge Acosta held a status
conference and issued an Order directing Defendant to file an
amended notice of removal by October 23, 2009, and Plaintiffs to
file their motion to remand by November 6, 2009.

The Magistrate

Judge also suspended any further briefing on the motions removed
from state court.
On October 23, 2009, Defendant filed an Amended Notice of
Removal asserting the Class Action Fairness Act of 2005 (CAFA),
28 U.S.C. § 1332(d), as an additional basis for federal
jurisdiction.

On November 6, 2009, Plaintiffs filed a Motion to

Remand.
On January 21, 2010, Magistrate Judge Acosta issued Findings
and Recommendation in which he recommended the Court grant
Plaintiffs' Motion to Remand on the ground that Defendant failed
to establish by a preponderance of the evidence that Plaintiffs'
damages exceeded either the $75,000 amount-in-controversy
requirement of § 1332(a) or the $5,000,000 aggregate amount-incontroversy requirement of CAFA.
On April 2, 2010, this Court adopted the Findings and
Recommendation and entered a Judgment remanding the matter to
state court.

4 - ORDER

After remand Defendant submitted requests for admissions to
Plaintiffs related to (1) attorneys' fees and costs that
Plaintiff had incurred in a related wage-and-hour class-action
litigation against Defendant,1 (2) the attorneys' fees and costs
incurred in the current action, (3) the total damages sought by
the class members, and (4) the total damages sought on behalf of
the class.
On May 21, 2010, Plaintiffs filed in state court a revised
motion for leave to file a second amended complaint to include,
among other things, an allegation that "AGGREGATE OF ALL CLAIMS
DOES NOT EXCEED FIVE MILLION DOLLARS."

The state court granted

Plaintiffs' motion on June 4, 2010, and directed Plaintiffs to
file a revised second amended complaint no later than June 14,
2010.
On June 11, 2010, before Plaintiffs filed their revised
second amended complaint, Defendant removed the matter to this
Court a second time (Del Monte II) on the grounds of diversity
jurisdiction under § 1332(a) and/or CAFA based on evidence of the
number of potential class members and their damages that
Plaintiff provided to Defendant during discovery.
On July 14, 2010, Plaintiffs filed a Motion to Remand Del
Monte II to state court.

1

Cortez-Liborio v. Del Monte, Multnomah Cnty. Cir. Ct.
No. 0710-11657.
5 - ORDER

On May 23, 2011, Magistrate Judge Acosta issued Findings and
Recommendation in Del Monte II in which he recommended the Court
grant Plaintiffs' Motion to Remand.

The Magistrate Judge found,

among other things, that even though the Court must look to the
allegations in Plaintiffs' First Amended Complaint when
determining whether this Court has jurisdiction because
Plaintiffs had not filed their second amended complaint at the
time Defendant removed the matter, the Court, nevertheless, could
also consider the allegations in Plaintiff's proposed second
amended complaint for purposes of determining jurisdiction.

In

addition, the Magistrate Judge found (1) Defendant had the burden
to prove removal is proper by a preponderance of the evidence,
(2) Defendant failed to establish by a preponderance of the
evidence that the amount in controversy exceeded $75,000 as
required by § 1332(a), and (3) Defendant failed to establish by a
preponderance of the evidence that the amount in controversy
exceeded $5,000,000 as required by CAFA.
On June 17, 2011, Defendant filed a Notice of New Facts in
Del Monte II in which it noted on October 5, 2010, Plaintiffs'
counsel projected attorneys' fees of approximately $1.3 million
in the Cortez-Liborio action.

Magistrate Judge Acosta based his

analysis of the likely amount of attorneys' fees for Plaintiffs'
counsel in this action on Plaintiffs' $1.3 million estimate in
the Cortez-Liborio action and concluded Defendant had not

6 - ORDER

established the amount in controversy exceeded $5,000,000 as
required by CAFA.

In its Notice, however, Defendant pointed out

that Plaintiffs' counsel filed their petition for attorneys' fees
in Cortez-Liborio on June 10, 2011, seeking $2.9 million in
attorneys' fees, which was approximately 2½ times more than the
$1.3 million earlier projected by Plaintiff and relied on by the
Magistrate Judge in his analysis.

According to Defendant, the

$2.9 million in attorneys' fees sought in Cortez-Liborio
established by a preponderance of the evidence that the amount in
controversy exceeded $5,000,000 as required by CAFA, and,
therefore, this Court had jurisdiction under CAFA.
On August 19, 2011, the Court issued an Order in Del Monte
II adopting the May 23, 2011, Findings and Recommendation and
concluding, among other things, that Defendant had not
established by a preponderance of the evidence that the action
satisfied the amount-in-controversy requirement of CAFA even
after considering Defendant's Notice of New Facts.

The Court

also noted Plaintiffs were granted leave by the state court to
amend their First Amended Complaint to allege the aggregate
amount of their claims in this matter does not exceed $5,000,000.
Nevertheless, Plaintiffs' First Amended Complaint continued to be
the operative complaint with respect to the issue of removal
because, as noted, Defendant removed the matter to this Court
before Plaintiffs had a chance to file their proposed second

7 - ORDER

amended complaint.
On September 15, 2011, Plaintiffs filed a second amended
class-action complaint in state court.

The second amended

complaint filed was substantially similar to the proposed second
amended complaint that Plaintiffs attached to their May 21, 2010,
revised motion for leave to file a second amended complaint in
state court except that Plaintiffs expanded the class period from
two to seven years in paragraph seven.

Notice of Removal,

Ex. 1 at 405.
On September 28, 2011, Defendant filed a motion to stay the
state-court proceedings.

In its motion, Defendant noted

It appears that the Second Amended Class Complaint
. . . is not the same as the proposed Second
Amended Class Action Complaint that Plaintiffs
attached to the May 21, 2010, Revised Motion for
Leave to File Second Amended Complaint. For
instance, the proposed version defines the class
differently than the recently filed Second Amended
Class Action Complaint. . . . As such, to the
extent the Second Amended Class Action Complaint
. . . was improperly filed, Del Monte reserves its
rights to file the appropriate motion in response
thereto.
Notice of Removal, Ex. 1 at 435 n.1.

In their response to

Defendant's motion to stay, Plaintiffs acknowledged paragraph
seven of the second amended complaint differed from paragraph
seven in the proposed second amended complaint, but Plaintiffs
contended Defendant should be required to file any objection to
the second amended complaint in a formal motion before the state
court.
8 - ORDER

On October 14, 2011, Defendant removed the matter to this
Court a third time (Del Monte III) relying on CAFA and noting in
Plaintiff's September 15, 2011, Second Amended Complaint that
Plaintiffs expanded the class at issue because they
defined the class period from “June 12, 2007,
through the date of filing this action and for
those production workers employed thereafter with
respect to any violation of wage and hour law
alleged herein, until such time as Del Monte
complies with the law.”
Notice of Removal, Ex. 1 at 440-41.

In a November 9, 2011,

Status Report, Defendant indicated it only removed Del Monte III
because Plaintiffs greatly increased the class period in their
September 15, 2011, Second Amended Complaint, which likely
brought this matter within the amount-in-controversy requirement
of CAFA.

Defendant also advised the Court that Plaintiffs

asserted the change to the class period was inadvertent and,
therefore, Defendant requested the Court to require Plaintiffs to
amend their September 15, 2011, Second Amended Complaint to
clarify this issue.
On November 30, 2011, Plaintiffs filed a Motion to Remand in
Del Monte III noting
Del Monte has pointed out that paragraph 7 of the
second amended complaint actually filed in state
court differs from the one plaintiffs submitted
two years earlier with their motion for leave to
amend in that it expands the class period from two
years to some larger but unspecified time period.
This discrepancy was an unintentional error on the
part of plaintiffs’ counsel. Had the case not
been removed, plaintiffs would certainly have
9 - ORDER

amended the complaint in state court to correct
the mistake as soon as it was pointed out. They
are equally willing to do so in this Court.
Pls.' Memo. in Support of Mot. to Remand at 3.
On December 13, 2011, Plaintiffs filed a Motion to Amend
their September 15, 2011, Second Amended Complaint to correct the
drafting error in paragraph seven "that may have had the
unintended effect of expanding the class period beyond the time
period allowed by the state court's order granting leave to
amend."

Pls.' Mot. for Leave to Amend at 2.

In his Declaration

in support of Plaintiffs' Motion for Leave to Amend, attorney
Arthur Schmidt testifies he was responsible for filing the
inaccurate Second Amended Complaint and
[i]n doing so I did not intend to expand the class
period or to accomplish any other goal than filing
the second amended complaint with its express
waiver of amounts in excess of $5 million.
Plaintiffs have never obtained leave from any
court to expand the class period or the class
membership beyond “persons who worked as
production workers at Del Monte’s produce packing
plant in Portland, Oregon, during the period from
after June 12, 2007, through the date of filing of
this action."
Decl. of Arthur Schmidt at ¶¶ 2-3.
As noted, on April 18, 2012, the Magistrate Judge issued
Findings and Recommendation in which he recommends the Court
grant Plaintiffs' Motion to Remand and remand Plaintiffs' Motion
to Amend for consideration by the state court.

In the

alternative, the Magistrate Judge recommends this Court grant

10 - ORDER

Plaintiffs' Motion to Amend and conclude Defendant may not rely
on Plaintiffs' mistake "as sole support for the removal of this
action."
II.

Analysis
The right to remove a state-court action to federal court

must be determined according to the plaintiff's pleading at the
time of the petition for removal.

See, e.g., Provincial Gov't of

Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1085 n.1 (9th
Cir. 2009)("For purposes of determining whether removal was
proper, our analysis concerns the pleadings filed at the time of
removal without reference to subsequent amendments.").
As the Magistrate Judge properly noted, even though both
parties assume the September 15, 2011, Second Amended Complaint
is the operative complaint in Del Monte III, their assumption
"overlooks that a complaint [that is] filed without court
approval, consent of the parties, or in accordance with the civil
rules under either Oregon or federal law is without effect."
See, e.g., Shaughnessy v. Spray, 55 Or. App. 42 (1981)(court
treated the plaintiff's amended complaint filed without leave of
the court or consent of the parties as though it was never
filed); United States v. Healthsouth Corp., 332 F.3d 293 (5th
Cir. 2003)("Under Rule 15(a), Mathews needed permission before
his amended complaint could be filed, which he did not have on
August 2. . . .
11 - ORDER

[F]ailing to request leave from the court when

leave is required makes a pleading more than technically
deficient.

The failure to obtain leave results in an amended

complaint having no legal effect.

Without legal effect, it

cannot toll the statute of limitations period."); Murray v.
Archambo, 132 F.3d 609, 612 (10th Cir. 1998)(same); Hoover v.
Blue Cross and Blue Shield of Al., 855 F.2d 1538, 1544 (11th Cir.
1988)(same); Derusseau v. Bank of America, N.A., No. 11 CV 1766
MMA JMA, 2012 WL 1059928 (S.D. Cal. Mar. 28, 2012)(same).
Plaintiffs amended their state-court complaint as a matter
of right when they filed their first amended complaint in state
court on July 23, 2009.

Under Oregon Rule of Civil Procedure

23A, however, Plaintiffs were required to obtain leave from the
court or consent from Defendant before amending their first
amended complaint.

As noted, Plaintiffs moved in state court on

September 4, 2009, to file a second amended complaint.

The state

court never ruled on that motion because Defendant removed the
matter to this Court (Del Monte I).

On remand Plaintiffs filed a

motion for leave to file a second amended complaint.

The state

court granted Plaintiffs' motion and directed Plaintiffs to file
their second amended complaint before June 14, 2010.

Once again

Defendants removed the matter to this Court (Del Monte II) before
Plaintiffs filed a second amended complaint.

On remand

Plaintiffs filed the September 15, 2011, Second Amended
Complaint, over a year after the June 14, 2010, deadline set by

12 - ORDER

the state court and without leave from the state court or consent
from Del Monte.

This Court agrees with the Magistrate Judge's

conclusion that the September 15, 2011, Second Amended Complaint
does not have any legal effect under these circumstances because
it was filed without leave of court or consent by Defendant.
Thus, it cannot serve to satisfy the amount-in-controversy
requirement of CAFA.
In its Objections, Defendant reiterates the arguments
contained in its Response to Plaintiffs' Motion to Remand and
stated at oral argument.

This Court has carefully considered

Defendant's Objections and concludes they do not provide a basis
to modify the Findings and Recommendation.

The Court also has

reviewed the pertinent portions of the record de novo and does
not find any error in the Magistrate Judge's Findings and
Recommendation.

CONCLUSION
The Court ADOPTS Magistrate Judge Acosta’s Findings and
Recommendation (#76) and, therefore, GRANTS Plaintiffs' Motion
(#23) to Remand Case and REMANDS Plaintiffs' Motion (#35) to

13 - ORDER

Amend for consideration by the state court.2
IT IS SO ORDERED.
DATED this 12th day of July, 2012.

/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge

2

The Court does not consider the Magistrate Judge's
alternative recommendation.
14 - ORDER