Emilio Padilla v. Primerica, Inc.
5:21-cv-00883
C.D. Cal.Nov 24, 2021Background
- Plaintiff Emilio Padilla filed a PAGA-only complaint in Riverside County Superior Court alleging willful misclassification, unpaid meal/rest wages, unpaid minimum/overtime, inaccurate wage statements, unpaid final wages, and unreimbursed business expenses; his LWDA notice (attached) alleges recurring subscription/application fees and seeks §226.8 penalties.
- Defendants removed to federal court asserting diversity jurisdiction and calculating the amount in controversy at $145,603.12, largely from Cal. Lab. Code §226.8 penalties and estimated attorneys’ fees.
- Padilla moved to remand, arguing (1) California is the real party in interest in PAGA actions (destroying diversity) and (2) Defendants failed to meet the $75,000 amount-in-controversy requirement.
- Defendants argued the State is not an actual party for diversity purposes and relied on plaintiff’s allegations and LWDA notice to plausibly calculate per-violation §226.8 penalties over the relevant period, then applied the 25% plaintiff share and estimated attorneys’ fees (~25% of damages).
- The Court treated plaintiff’s complaint and attached LWDA notice as judicial admissions, found diversity established (plaintiff effectively conceded), rejected aggregation of the LWDA’s share with the plaintiff’s share and double-counting of §226.8(b) and (c) penalties, corrected defendants’ arithmetic, and recalculated fees.
- After adjustments, the Court concluded the amount in controversy exceeds $75,000 (using plaintiff’s alleged penalties plus attorneys’ fees) and DENIED the motion to remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether California (LWDA) is the real party in interest for diversity | PAGA makes the State the real party; destroys diversity | The State is not an actual party when it declines prosecution; named plaintiff’s citizenship controls | Diversity exists; plaintiff conceded and federal courts treat named plaintiff's citizenship as determinative |
| Whether amount in controversy exceeds $75,000 | Defs. fail to prove amount in controversy | Removal plausibly alleged >$75K based on §226.8 per-violation penalties over ~9 months and ~25% plaintiff share plus attorneys’ fees | Court accepted defendants’ plausible allegations, corrected calculations, excluded double-counting and LWDA aggregation, still found >$75K and denied remand |
Key Cases Cited
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014) (notice of removal need only plausibly allege amount in controversy)
- Salter v. Quality Carriers, Inc., 974 F.3d 959 (9th Cir. 2020) (distinguishes facial vs. factual attacks on amount allegations)
- Harris v. KM Indus., Inc., 980 F.3d 694 (9th Cir. 2020) (plaintiff may contest amount by facial or factual attack)
- Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373 (9th Cir. 1997) (removing defendant bears preponderance when amount is contested)
- Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224 (9th Cir. 1988) (statements in pleadings can constitute judicial admissions)
- Leite v. Crane Co., 749 F.3d 1117 (9th Cir. 2014) (describes factual attack as contesting allegations with outside evidence)