Rubalcaba v. R&L Carriers Shared Servs.

• Jurisdiction: United States,Federal,California
• Parties: JOSEPH RUBALCABA, Plaintiff, v. R&L CARRIERS SHARED SERVICES, L.L.C., Defendant.
• Citation: Rubalcaba v. R&L Carriers Shared Servs., 23-cv-06581-HSG (N.D. Cal. Apr 23, 2024)
• Decision Date: 23 April 2024
• Court: U.S. District Court — Northern District of California
• Docket Number: 23-cv-06581-HSG

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JOSEPH RUBALCABA, Plaintiff, v. R&L CARRIERS SHARED SERVICES, L.L.C., Defendant.

No. 23-cv-06581-HSG

United States District Court, N.D. California

April 23, 2024

Re Dkt. Nos. 33, 37, 38

ORDER DENYING PLAINTIFF'S MOTION TO REMAND GRANTING DEFENDANT'S MOTION TO DISMISS, AND GRANTING DEFENDANT'S REQUEST FOR JUDICIAL NOTICE

HAYWOOD S. GILLIAM, JR. United States District Judge

Pending before the Court are Plaintiff's motion to remand and Defendant's motion to dismiss.Dkt. Nos. 33, 37.The Court finds this matter appropriate for disposition without oral argument and the matter is deemed submitted.SeeCivilL.R. 7-1(b).For the reasons discussed below, the CourtDENIESPlaintiff's motion to remand, GRANTSDefendant's motion to dismiss, and GRANTSDefendant's request for judicial notice.

I.BACKGROUND

PlaintiffJoseph Rubalcaba(“Plaintiff”) originally filed this putative class action case against R&L Carriers Shared Services L.L.C.(“Defendant” or “R&L”) in Santa Clara County Superior Court on October 6, 2023.See Dkt.No 1-1.On December 21, 2023, Defendant removed the complaint to federal court.SeeDkt. No. 1(“Removal Notice”).In the Notice of Removal, Defendant cites the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), as the basis for this Court's jurisdiction, and argues that CAFA jurisdiction is present because, based on the allegations, (1) the proposed class is larger than 100 members (and actually numbers more than 2,000), (2) minimal diversity is present because Plaintiff is a California citizen and Defendant is not, and (3) the amount in controversy exceeds five million dollars based on Plaintiff's meal and rest break claims alone.Removal Notice¶¶ 9-34.

On January 9, 2024, Defendant filed a motion to dismiss.Dkt. No. 26.However, that motion was mooted when, on January 19, 2024, Plaintiff filed an amended class action complaint.Dkt. No. 31(“AC.”).Much like the original, the Amended Complaint (“AC”) alleges that Defendant committed a variety of labor violations against Plaintiff and other similarly situated individuals in its employ.AC¶¶ 17-50.In his complaint, Plaintiff seeks to represent a class comprised of “all current and former hourly-paid or non-exempt employees who worked for any of the Defendants within the State of California at any time during the period from April 11, 2019, to final judgment and who reside in California,”seeAC¶ 13(also defining two subclasses), and asserts ten causes of action under California state law for Defendant's failure to (1) pay overtime compensation (in violation of Labor Code sections 510and1198); (2) pay meal period premiums (in violation of Labor Code sections 226.7and512(a)); (3) pay rest period premiums (in violation of Labor Code section 226.7); (4) pay minimum wages (in violation of Labor Code sections 1194,1197, and1197.1); (5) pay wages upon ending employment (in violation of sections 201and202); (6) pay timely wages during employment (in violation of Labor Code section 204); (7) provide accurate wage statements (in violation of Labor Code section 226(a)); (8) keep requisite payroll records (in violation of a Labor Code section 1174(d)); (9) indemnify necessary business expenses (in violation of Labor Code sections 2800and2802); and (10) its consequent unfair competition practices (in violation of Business & Profession Code 17200, et seq).AC¶¶ 51-121.

The day after filing his AC, Plaintiff filed a motion to remand, arguing that CAFA did not provide a basis for federal jurisdiction.Dkt. No. 33(“MTR”).The motion focused on Defendant's alleged failure in the Notice of Removal to establish its principal place of business (and therefore minimal diversity) or the necessary amount in controversy (i.e. $5 million).Seeid.Defendant opposed the motion, Dkt. No. 40(“MTR Opp.”), and Plaintiff replied, Dkt. No. 41(“MTR Reply”).Meanwhile, Defendant filed a motion to dismiss on February 1, arguing that Plaintiff's complaint should be dismissed in its entirety for failure to plead sufficient facts in support of his claims.Dkt. No. 37(“MTD”).Plaintiff opposed, Dkt. No. 42(“MTD Opp.”), and Defendant replied, Dkt. No. 43(“MTD Reply”).Both motions are now ready for disposition.

II.MOTION TO REMAND

A.Legal Standard

A defendant may remove any civil action to federal court where the district court would have original jurisdiction over the action.28 U.S.C. § 1441;see alsoCaterpillar, Inc. v. Williams, 482 U.S. 286, 392(1987).To do so, a party seeking removal must file a notice of removal within 30 days of receiving the initial pleading or within 30 days of receiving “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.”28 U.S.C. § 1446(b)(1), (3).The notice must contain a “short and plain statement of the grounds for removal.”Id.§ 1446(a);see alsoIbarra v. Manheim Investments, Inc., 775 F.3d 1193, 1195(9th Cir.2015).

The removing party bears the burden of establishing removal jurisdiction, even in a case removed pursuant to CAFA.Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 683-85(9th Cir.2006)(“[U]nder CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction.”).CAFA vests the district courts with original jurisdiction over civil actions in which the amount in controversy exceeds $5 million, there is minimal diversity of citizenship between the parties, and the action involves at least 100 class members.28 U.S.C. § 1332(d).Under CAFA, “the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5,000,000.”Id.§ 1332(d)(6).

A plaintiff may seek to remand a case to the state court from which it was removed if the district court lacks jurisdiction or if there was a defect in the removal procedure.28 U.S.C. § 1447(c).However, there is no anti-removal presumption in cases invoking CAFA.^[1]Dart Cherokee Bain Operating, Co., LLC v. Owens, 574 U.S. 81, 89(2014).

B.Discussion

Plaintiff argues in his motion for remand that Defendant has not established removability under CAFA.Specifically, Plaintiff argues that Defendant falls short on two of CAFA's three requirements: minimal diversity and the amount in controversy.After carefully considering Defendant's Notice of Removal and its supplemental filings, the Court concludes that Defendant has adequately established CAFA jurisdiction.

i. Minimal Diversity

Plaintiff first argues that Defendant has not established minimal diversity, which requires that just a single plaintiff be a citizen of a different state from any single defendant.MTRat 1011.The Court disagrees.

The parties concur that half of the equation is clear: Plaintiff, as well as the class he seeks to represent, are California citizens.AC¶ 5.Plaintiff, however, argues that the other half of the equation - Defendant's citizenship - is murkier.Though Plaintiff concedes that Defendant is incorporated in Ohio, AC¶ 6, Plaintiff argues that the Notice of Removal “does not address . . . the location of [R&L's] principal place of business.”MTR at 10.Plaintiff is correct that this is the key fact: this Court has held that for purposes of CAFA jurisdiction, the citizenship of an LLC is determined by where its principal place of business, or “nerve center,” is located.SeeJack v. Ring LLC, 553 F.Supp.3d 711, 715(N.D. Cal.2021).This is generally a corporation's headquarters, or the place where “a corporation's officers direct, control, and coordinate the corporation's activities.”Hertz v Corp. v. Friend, 559 U.S. 77, 92-93(2010).In its motion, Plaintiff does not argue that diversity is destroyed because California is Defendant's principal place of business, but rather claims that Defendant has not done enough to identify where its nerve center actually is.

It is true that in the Notice of Removal itself, Defendant focuses on the citizenship of its members, which is germane to the citizenship test for LLCs in traditional diversity cases, but not dispositive in CAFAcases, which focus on a defendant's principal place of business.Namely, Defendant argues that based on its constituent members' citizenships, R&L is deemed to be a citizen of Ohio, South Carolina and Florida, and is minimally diverse from Plaintiff and the putative class.Id.¶ 16.To support that argument, Defendant lists the states of incorporation and the principal place of business for each of its six member entities (R+L Carriers, Inc., R&L Paramount Transportation Systems, Inc., R.L.R. Investments, LLC, R&L Transfer, Inc., Greenwood Motor Lines, Inc., Gator Freightways, Inc.), as well as the citizenship of the individuals who own the one LLC member (R.L.R. Investments, LLC).Removal Notice¶ 14, 15.The listed states include Ohio, North Carolina, and Florida.Id.

While the Notice of Removal concededly focuses on the citizenship of Defendant's members, it does not stand alone.It is accompanied by evidentiary submissions, which even Plaintiff admits contain “statements that might feasibly pertain to Defendant's principal place of business.”MTR at 11.The most relevant of the accompanying submissions is the Declaration of Daniel J. Brake, R&L's Vice President and Associate General Counsel.SeeDkt. No. 1-2, Ex 2(“Brake Decl.”).In his Declaration, Brake identifies Defendant's principal place of business as Wilmington, Ohio, BrakeDecl. ¶ 3, and attests that (1) R&L's administrative functions including but not limited to human resources, safety, sales, quality control, and partner relations, all take place primarily out of its Wilmington, Ohio headquarters (id., ¶ 3); (2) R&L's...