MARICELA REYES, individually and on behalf of all others similarly situated, Plaintiff, v. CAREHOUSE HEALTHCARE CENTER, LLC, SOUTHWEST PAYROLL SERVICES, LLC, and DOES 1 through 20, inclusive, Defendants.
Case No.: SACV 16-01159-CJC(MRWx)
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION
July 5, 2017
CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE
I. INTRODUCTION & BACKGROUND
On December 16, 2013, Plaintiff Maricela Reyes filed a single-plaintiff employment action in Orange County Superior Court against Defendants Carehouse
More than two years later, Plaintiff filed a Second Amended Complaint on March 17, 2016, transforming the sixth through twelfth claims from the FAC (unpaid wages, failure to pay overtime compensation, failure to provide meal periods, failure to permit rest breaks, failure to provide accurate wage statements, failure to pay all wages due upon separation of employment, and unfair business practices) into class claims. (Dkt. 1-3 [Second Amended Complaint, hereinafter “SAC“].) She identified the class as all hourly-paid, non-exempt employees who had worked for Defendants since December 13, 2009. (Id. ¶ 31.) Defendant Southwest removed the action to this Court on June 22, 2016. (Dkt. 1.)
II. LEGAL STANDARD
CAFA provides original federal jurisdiction over class actions in which the amount in controversy exceeds $5 million, there is minimal diversity between the parties, and the number of proposed class members is at least 100.
Under CAFA, a defendant removing a case must file a notice of removal containing a “short and plain statement of the grounds for removal.” Id. at 553. Additionally, “a defendant‘s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold” unless the defendant‘s assertion is contested by the plaintiff. Id. at 554. Where the defendant‘s asserted amount in controversy is contested, “[e]vidence establishing the amount is required.” Id. “In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been
III. DISCUSSION
A. Timeliness
As an initial matter, Defendants incorrectly argue that Plaintiff‘s motion is untimely. (See Dkt. 37 [Opposition, hereinafter “Opp.“] at 4–7.) Defendants believe that Plaintiff‘s motion is subject to the thirty-day time limit required by
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B. Amount in Controversy
In the notice of removal, Defendants offered calculations for Plaintiff‘s claims for unpaid meal and rest period premiums, unpaid overtime compensation, waiting time penalties, and attorneys’ fees in order to reach the jurisdictional threshold. (Dkt. 1 at 8–14.) Plaintiff contends that Defendants have not met their burden of establishing the amount in controversy under CAFA because their calculations are based on “unreasonable assumptions” about her claims.2 (Mot. at 3.)
According to the SAC, Defendants “engaged in a systematic pattern of wage and hour violations.” (SAC ¶ 14.) Regarding the unpaid meal and rest period claims,3 the SAC alleges that Defendants “required Plaintiff and class members to work for more than five and/or ten hours per day without providing timely, uninterrupted thirty-minute meal
As to the unpaid overtime compensation claim, the SAC alleges that Defendants engaged in a “regular practice of willfully, unfairly and unlawfully” depriving Plaintiff and class members of premium overtime compensation. (SAC ¶ 87; see also id. ¶¶ 85–88.) Specifically, Plaintiff and the class allegedly had to (a) “clock out at the end of [their] scheduled shift, even though [they] worked well past [their] scheduled shift and ending times” and (b) “clock out for meal periods when [they were] actually working through [their] meal periods.” (Id. ¶¶ 15–16.) Again, Defendants estimated one violation per workweek per class member. (Dkt. 1 at 11 (relying on Campbell, Inc., 471 Fed. App‘x at 647–49; Ray v. Wells Fargo Bank, N.A., 2011 WL 1790123, *6–7 (C.D. Cal. May 9, 2011) (The defendant‘s estimates based on one hour of unpaid overtime per class member were conservative and reasonable given allegation of consistent failure to pay overtime); Stevenson v. Dollar Tree Stores, Inc., 2011 WL 4928753, *4 (E.D. Cal. 2011) (Where it was plaintiff‘s standard practice not to pay “requisite compensation for all hours worked,” without more specific allegations to narrow the potential scope of damages, the complaint was not susceptible to precise calculations and defendant‘s assumptions were thus reasonable); Quintana v. Claire‘s Stores, Inc., 2013 WL 1736671, *6 (N.D. Cal. 2013) (“According to Defendants’ declarant, store managers and assistant store managers are ‘regularly scheduled to work eight (8) hour days’ and that assistant store managers are ‘regularly scheduled to work at least 30 hours per week.’ Given Plaintiffs’ allegations that Defendants systematically failed to pay overtime, this evidence persuades the court that Defendants reasonably
Regarding the waiting time penalty claims,4 the SAC alleges that “Defendants willfully, unfairly, fraudulently, or unlawfully failed to pay Plaintiff and certain class members compensation owed upon separation of employment.” (SAC ¶ 107.) The notice of removal explains that “[v]iewing Plaintiff‘s SAC as a whole, Plaintiff undoubtedly alleges that each putative class member was underpaid by Defendant in some way during the applicable period.” (Dkt. 1 at 12 (citing SAC ¶¶ 15(a)–(c) (“Defendants have increased their profits by violating state wage and hour laws by, among other things: (a) failing to pay all wages; (b) failing to pay overtime; (c) failing to provide meal periods or compensation in lieu thereof; (c) [sic] failing to authorize or permit rest breaks or provide compensation in lieu thereof . . . .“))).) 348 putative class members were terminated from their employment with Defendant from December 16, 2010, to the date of removal. (Young Decl. ¶ 7.) Consequently, Defendants calculate the
Finally, for Plaintiff‘s desired attorneys’ fees, Defendants maintain that 25% of recovery is a reasonable amount of fees in a class action such as this one. (Dkt. 1 at 13 (citing Hanlon v. Center for Auto Safety, 150 F.3d 1011, 1029 (9th Cir. 1998); In re Activision Securities Litigation, 723 F. Supp. 1373, 1378 (N.D. Cal. 1989); Giannini v. Northwestern Mut. Life Ins. Co., 2012 WL 1535196, at *4 (N.D. Cal. 2012); Jasso, 2012 WL 699465, at *6–7).) Defendants contend that Plaintiff is not entitled to attorneys’ fees for her meal and rest break or her waiting time claims, so 25% of her unpaid overtime claims would total $349,645.85 (i.e., 25% of $1,398,583.39 unpaid overtime wage liability). (Dkt. 1 at 14.)
Based on these calculations, Defendants assert the total amount in controversy is at least $5,389,185.30. (Id.) Plaintiff counters that Defendants assume “every single class member suffered a violation under each claim during every single week of their employment.” (Mot. at 3.) Plaintiff relies primarily on Ibarra for the proposition that “a ‘pattern and practice’ of doing something does not necessarily mean always doing something.” (Id. (quoting Ibarra, 775 F.3d at 1198–99).) Plaintiff argues that the SAC does not allege that her complained-of violations were regular and consistent or that Defendants never provided meal and rest periods. (Id. at 5.)
These challenges are unconvincing. As an initial matter, Defendants did not assume that a violation occurred on each and every shift, as was the case in Ibarra, 775 F.3d at 1199, but employed more reasonable estimates of one violation per week per employee for the meal and rest break and overtime claims. Additionally, Plaintiff concedes that the SAC does not specify the frequency of the violations or the number of class members affected. (Id. at 6, 8, 10.) Rather, the SAC alleges that Defendants’ wage
Furthermore, unlike in Ibarra, Defendants have presented evidence that their calculations were conservative. In her discovery responses, Plaintiff stated that she was “not properly paid for all hours worked every day that she worked for Defendant.” (Dkt. 37-1 [Declaration of Graham Hoerauf, hereinafter “Hoerauf Decl.“] Ex. B at Interrogatory No. 16 (emphasis added).) At her deposition, Plaintiff also estimated that Defendants did not allow her to take rest breaks three or four days per week and did not provide her with meal breaks six days per week. (Hoerauf Decl. Ex. A at 168:13–18, 169:11–14.) Defendants’ estimates are lower than the rates Plaintiff herself previously suggested and are reasonably calculated. See Korn, 536 F. Supp. 2d at 1204–05 (the defendant is not obligated to “research, state, and prove the plaintiff‘s claims for damages“). Plaintiff argues that these responses were only solicited with regard to her own employment record, which spanned from 2006 until 2012, while the class period begins in 2009 and extends until removal in 2016. (Reply at 6.) However, Plaintiff
The only limiting language in the SAC is Plaintiff‘s allegation that “certain” class members suffered waiting time violations. (SAC ¶¶ 106–07.) But as Defendants point out, the term “certain” is meant to distinguish former and current employees, since only former employees would be entitled to the waiting time claims. (Opp. at 20.) And Defendants’ own calculations for the waiting time penalty claims were properly limited to former employees, not all class members.
Plaintiff also offers her own calculations to challenge that of Defendants. Plaintiff argues that her rest break claims are based on Defendants’ policy that only allows two fifteen-minute breaks for work periods greater than six hours in duration, so Defendants’ estimates should only have included shifts over ten hours, when employees would be entitled to a third rest period. (Mot. at 6.) In support, she cites a motion for leave to file the SAC that was filed in state court wherein she made this argument. (Id.; see Dkt. 35-2.) Plaintiff‘s counsel apparently reviewed Plaintiff‘s time punches for the 658 shifts she worked and calculated the violation rate to be .26 per workweek based on the number of shifts over 10 hours, resulting in a total amount in controversy of $242,383.14 for the rest break claims. (Mot. at 7; Dkt. 35-1 [Declaration of Jessica Campbell, hereinafter “Campbell Decl.“] ¶ 7.) Plaintiff argues that her overtime claim, in turn, is based on Defendants’ policy of automatically deducting thirty minutes from the total hours worked by an employee for meals, again citing on the motion for leave to file the SAC in state court. (Mot. at 9.) Plaintiff‘s counsel calculated her violation rate “by applying an automatic deduction rate of 20% (derived from the calculation . . . using Plaintiff‘s time records), which resulted in 0.5 hours of unpaid overtime per workweek,” and applied that rate from the last six months of her employment through the date of removal to arrive at a
Plaintiff‘s calculations are unavailing for two reasons. First, they conflict with Plaintiff‘s own discovery responses and deposition testimony. Second, they are based on contentions made in a motion filed in state court that are much more specific than the allegations in the SAC. (See, e.g., SAC ¶ 91 (“Defendants required Plaintiff and class members to work for more than five and/or ten hours per day without providing timely, uninterrupted thirty-minute meal periods“) (emphasis added); id. ¶ 95 (“Plaintiff and class members routinely worked shifts in excess of eight hours per day during her employment with Defendants, but was [sic] not permitted to take rest breaks) (emphasis added); see generally SAC (containing no allegations of automatic deductions).) Plaintiff cannot rely on a motion filed in state court to narrow the scope of the SAC. Ray, 2011 WL 1790123, at *5 (“[T]he amount in controversy is determined at the time of removal and is to be decided based on the allegations in the operative pleading.“).
Finally, Plaintiff argues that Defendants’ notice of removal employs a class period from December 16, 2009, to present, which contradicts their argument in their previously-filed motion to dismiss before this Court that Plaintiff‘s class claims do not relate back to the date of the filing of her original complaint. (Mot. at 12 (referencing Dkt. 26).) Plaintiff contends that Defendants’ calculations should begin on March 17, 2013, which Defendants previously argued was as far back as Plaintiff‘s claims could
In sum, Defendants’ calculations are reasonable based on the evidence available and the allegations of the SAC, so Defendants have demonstrated that the amount in controversy is met by a preponderance of the evidence.
IV. CONCLUSION
For the foregoing reasons, Plaintiff‘s motion to remand is DENIED.
DATED: July 5, 2017
CORMAC J. CARNEY
UNITED STATES DISTRICT JUDGE