Altamirano v. Shaw Indus., Inc.
| Decision Date | 14 June 2013 |
| Docket Number | No. C-13-0939 EMC,C-13-0939 EMC |
| Parties | FIDEL ALTAMIRANO, on behalf of himself and others similarly situated, Plaintiff, v. SHAW INDUSTRIES, INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Pending before the Court is Plaintiff's motion to remand this case to state court. This putative class action was filed in Alameda County Superior Court on January 22, 2013. Plaintiff brings suit against his employers Shaw Industries, Inc. and Shaw Industries Group, alleging violations of various wage and hour provisions of the California Labor Code, and seeks back wages on behalf of a putative class of Defendants' current and former non-exempt hourly employees. Defendants removed the case to federal court on March 1, 2013 under the Class Action Fairness Act ("CAFA"). The parties do not dispute that CAFA's minimal diversity and minimal class size requirements are met. Plaintiff seeks remand solely on the basis that Defendants have not made a sufficient showing that there is more than $5,000,000 in controversy in this case, as is required to establish federal jurisdiction under CAFA.
Plaintiff alleges that Defendants maintain various payroll policies and procedures that violate the California Labor Code.1 First, Plaintiff alleges that Defendants engage in illegal "shaving" or "rounding" of time at the beginning and end of shifts, and around lunch periods, and that this practice results in hourly employees not being paid for all minutes actually worked. First Amended Complaint ("FAC") ¶¶ 13, 16, (Docket No. 1 at 103 of 144). While the complaint does not provide detail regarding the alleged rounding practices, time cards submitted by Plaintiff in connection with this motion indicate that Defendants pay employees in tenth-hour increments. Docket No. 20-1. Plaintiffs first and second causes of action are based on this practice, and allege failure to pay minimum wage for all hours worked, and failure to pay overtime wages for all overtime worked, respectively. FAC ¶¶ 28-39.
Plaintiff also alleges in his third cause of action that Defendants fail to provide proper meal breaks or compensation to employees who worked shifts longer than ten hours. FAC ¶¶ 40-45. California law requires that employees working ten or more hours per day must be provided with two 30 minute meal periods, subject to certain exceptions. Cal. Labor Code § 512(a). Where the employer does not provide a required meal period, the employer must pay the employee one hour of pay at the employee's regular rate for each day the meal period is not provided. Cal. Labor Code § 226.7. Plaintiff alleges that Defendants fail to provide a second meal break for employees working shifts lasting ten hours or more, and that Defendants also fail to provide one hour of pay in lieu of the second meal break. FAC ¶¶ 18-20.
Plaintiff further alleges in his fourth cause of action that Defendants fail to provide accurate wage statements to its hourly employees. FAC ¶¶ 46-55. Specifically, Plaintiff alleges that the wage statements provided to hourly employees (1) fail to include all hours worked; (2) fail to accurately state gross wages earned; (3) fail to include the employer's name and address; and (4) failto include accurate hourly rates and accurate corresponding number of hours worked at each hourly rate. FAC ¶ 22. Other than the failure to include the employer's name and address, all of these alleged violations appear to be based on the practices alleged in causes of action one through three. FAC ¶ 49. Plaintiff alleges that Defendants' failure to produce accurate wage statements was knowing and intentional. FAC ¶ 51. It is not entirely clear from the face of the complaint, but it is possible that the alleged failure to include the employer's name and address may be related to Plaintiff's allegation that Defendants Shaw Industries, Inc. and Shaw Industries Group Inc. ("Shaw Defendants") were joint employers with Does 1-50, who are unknown corporations who had arrangements to share the employees' services with the Shaw Defendants. FAC ¶¶ 6-8.
Plaintiff's fifth cause of action alleges failure to timely pay wages upon separation of employment. FAC ¶¶ 56-65. This cause of action is based in large part on the same practices alleged in causes of action one through three, in that Defendants' failure to pay wages for the shaved times and unprovided meal periods meant that these wages were not paid upon the end of employment. FAC ¶ 25. At some places in the complaint, it appears that these earlier allegations are the entire basis for the allegation that Defendants failed to timely pay wages at the end of employment, but in other places the allegations appear to contemplate the possibility that Defendants failed to timely pay wages upon separation apart from these underlying practices. FAC ¶¶ 25, 59.
Plaintiff additionally brings a cause of action for violations of California's unfair business practices statute. FAC ¶¶ 66-69. Finally, Plaintiff seeks civil penalties under California's Private Attorney General Act ("PAGA"). FAC ¶¶ 70-77.
In response to the instant motion, Defendant filed an opposition and provided the declaration of Vice President of Human Resources Paul Richard, who provided estimates of the number of employees in the putative class and the average hourly wage for employees in Defendant's California locations, and stated that putative class members are paid on a weekly basis. Docket No. 14-1. After reviewing the briefing on the motion, the Court continued the hearing and issued an order requesting additional information from Defendant relevant to the calculation of damages.Docket No. 16. In response, Defendant filed a supplemental declaration from Mr. Richards, providing the following information:
In response to this supplemental declaration, Plaintiff filed a supplemental brief, and attached the declaration of attorney Jordan Bello and two of Plaintiff's time cards which were apparently randomly selected to provide an indication of the magnitude of rounding errors caused by Defendants' time shaving policy. Docket No., 20-1.2
As it was not clear from the supplemental Richard declaration whether the average hourly wage provided was for non-exempt employees only, this Court issued a further order directing Defendants to file evidence of the average hourly wage of non-exempt employees during the class period. Docket No. 23. Defendants responded with a second supplemental Richard declaration, which indicated that the $17.92 hourly wage did pertain to non-exempt California employees during the class period asserted in the complaint. Docket No. 24.
Additional details are provided where relevant to the analysis below.
Under the Class Action Fairness Act ("CAFA"), district courts have original jurisdiction over class actions where (1) the amount in controversy exceeds $5,000,000; (2) any member of the plaintiff class is a citizen of a different state from any defendant; (3) the primary defendants are not states, state officials or other government entities against whom the district court may be foreclosed from ordering relief; and (4) the class has at least 100 members. 28 U.S.C. §§ 1332(d)(2), (d)(5). In the instant motion, the parties dispute only whether the amount in controversy requirement is met.
The burden of establishing removal jurisdiction under the CAFA lies with the proponent of federal jurisdiction. Lowdermilk v. United States Bank National Association, 479 F.3d 994, 997 (9th Cir.2007) (citing Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir.2006) (per curiam)). In the Ninth Circuit, courts must "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). Where, as here, the plaintiff fails to plead a specific amount of damages, the defendant seeking removal must prove by a preponderance of the evidence that the amount in controversy requirement has been met. Abrego, 443 F.3d at 683.
In determining the amount in controversy for the purposes of removal jurisdiction, the court's determination may not "be based simply upon conclusory allegations." Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (quoting Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir.1995)). Nor can a court base its "jurisdiction on [a] Defendant's speculation and conjecture." Lowdermilk, 479 F.3d at 1002. The Ninth Circuit has described the following proper considerations in determining the amount in controversy:
The district court may consider whether it is "facially apparent" from the complaint that the jurisdictional amount is in controversy. If not, the court may consider facts in the removal petition, and may "require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal."
Singer, 116 F.3d at 377 (quoting Allen). A court may properly consider evidence the removing party submits in its opposition to...
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