Andersen v. Schwan Food Co.
| Decision Date | 02 August 2013 |
| Docket Number | No. C 13-2362 PJH,C 13-2362 PJH |
| Court | U.S. District Court — Northern District of California |
| Parties | KELLY ANDERSEN, Plaintiff, v. THE SCHWAN FOOD COMPANY and DOES 1 through 50, inclusive, Defendants. |
On July 31, 2013, plaintiff's motion to remand came on for hearing before this court. Plaintiff Kelly Andersen ("plaintiff" or "Andersen") appeared by his counsel Michael C. Righetti. Defendant Schwan Food Company ("defendant" or "Schwan") appeared by its counsel, Alan L. Rupe. Having carefully reviewed the parties' papers and considered the arguments of counsel and the relevant legal authority, and good cause appearing, the court hereby GRANTS Andersen's motion to remand as follows.
In April 2013, Andersen filed a class action complaint against Schwan in state court, alleging: (1) violation of Labor Code § 1194; (2) violation of Business and Professions Code ("B & P") § 17200, et seq.; (3) failure to provide mandated meal periods and rest breaks; (4) failure to indemnify employees for expenditures and/or losses; (5) failure to make payments within the required time; (6) private attorney general act ("PAGA") penalties; and (7) failure to furnish accurate wage and hour statements.
Andersen pleads that Schwan engaged in a "uniform policy and systematic scheme of wage abuse" against its Route Sales Representatives ("RSRs") in California.Specifically, Andersen alleges that the scheme involved, among other things, "categorically misclassifying the Route Sales Representatives position as 'exempt' for the purposes of the payment of overtime compensation and minimum wage," denying RSRs meal and rest breaks mandated under California law, failing to indemnify RSRs for business cellular phone expenses, failing to pay former RSRs owed wages within 72 hours of termination, and failing to provide RSRs with timely and accurate wage and hour statements.
Further, Andersen claims in his complaint that "[t]he total damages for the entire case [do] not exceed $5,000,000.00." Compl. at 2. However, on May 24, 2013, Schwan filed a notice of removal pursuant to the Class Action Fairness Act of 2005 ("CAFA") and had the case removed to this court.
On June 25, 2013, Andersen filed the present motion to remand the case back to state court. The parties do not dispute that CAFA's minimal diversity and minimal class size requirements are met. Andersen seeks remand solely on the basis that Schwan has failed to make a sufficient showing that the amount in controversy satisfies the $5,000,000 minimum required by CAFA for federal jurisdiction.
"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district and division embracing the place where such action is pending." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 7-8 (1983) (citation omitted). See also 28 U.S.C. § 1441. However, federal courts are courts of limited jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Accordingly, the burden of establishing federal jurisdiction for purposes of removal is on the party seeking removal, and the removal statute is construed strictly against removal jurisdiction. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). See alsoGaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus, 980 F.2d at 566.
CAFA provides that district courts have original jurisdiction over any class action in which (1) the amount in controversy exceeds five million dollars, (2) any plaintiff class member is a citizen of a state different 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 number of plaintiffs in the class is at least 100. 28 U.S.C. §§ 1332(d)(2), (d)(5). Further, "under CAFA the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction." Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006).
The Ninth Circuit has held that if it is "unclear or ambiguous from the face of a state-court complaint whether the requisite amount in controversy is pled," a "preponderance of the evidence" standard applies. Guglielmino v. McKee Foods, Inc., 506 F.3d 696, 699 (9th Cir. 2007) (citing Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). Further, the preponderance standard applies where the complaint merely states that "damages" are less than $5,000,000, as attorneys' fees are included in the amount in controversy but are not included in a calculation of damages. See Guglielmino, 506 F.3d at 700 ().
As stated above, the parties' only dispute is whether Schwan has shown, by a preponderance of the evidence, that the $5,000,000 amount in controversy is met.
However, as a threshold issue, the parties disagree over whether Schwan is required to submit summary judgment type evidence to support its opposition to remand. In the Ninth Circuit, 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, 1335-36 (5th Cir. 1995)).
Schwan argues that a removing party, who may produce evidence, is not required to produce evidence to support CAFA jurisdictional requirements. Andersen, on the other hand, argues that evidence is not required to support CAFA jurisdiction in every case, but that it is required in cases, such as this, where the amount in controversy is not "facially apparent" from the complaint.
Both parties cite the same case in support of their argument, Altamirano v. Shaw Indus., Inc., 2013 WL 2950600 (N.D. Cal. June 14, 2013). In Altamirano, the plaintiff argued that in order to meet its burden to demonstrate removability, the defendant was required to submit "summary-judgment-type evidence." Id. at *4. However, the court rejected the notion that "the fact that courts may consider such evidence necessarily requires the removing party to produce it." Id.; see also Jimenez v. Allstate Ins. Co., 2011 WL 65764 (C.D. Cal. Jan.7, 2011) (); Gardner v. GC Servs., LP, 2010 WL 2721271 (S.D. Cal. July 6, 2010) ().
However, this does not mean that Altamirano, 2013 WL 2950600 at *4 (citing Singer, 116 F.3d at 377).
Therefore, Schwan is correct that it is not required to submit evidence to support CAFA jurisdictional requirements. However, the court will reject Schwan's calculations asspeculative and conclusory if, in light of the lack of evidence presented, Andersen's complaint provides no basis for the assumptions made.
Having established the type of evidence required to support removal, the court now turns to the specific amount-in-controversy calculations performed by Schwan, and whether they are adequately supported by the complaint or Schwan's declaration.
Schwan argues that it "based [its] calculations on [Andersen's] own statements and documents" and that it did not rely on "conclusory allegations" or "speculation and conjecture." Dkt. 18 at 1. Andersen, on the other hand, claims that Schwan's calculations are based on unsupported assumptions and fail to include necessary information such as "the number of workweeks, work hours, average pay rates, and payroll periods/shifts worked by the putative class." Dkt. 19 at 4.
One of the major disagreements in the present case is whether Schwan is entitled to base its calculations on the assumption that each member of the class will have experienced each of the types of violations listed in the complaint. Schwan argues that it can extrapolate Andersen's claims to the putative class as a whole and assume a 100% violation rate because Anderson alleges that his claims are "typical of the claims of all members of the class." However, Andersen argues that "[t]his type of gambit has been attempted - and rejected - in the past." Dkt. 19 at 4-6 (citing Roth v. Comerica Bank, 799 F.Supp.2d 1107, 1119-1120 (C.D. Cal. 2010)).
District courts in California have disagreed over whether defendants may assume certain variables, such as "average hours of overtime worked per week or the rate of wage statement violations," when calculating the amount in controversy. Roth, 799 F.Supp.2d at 1127. For example, compare Coleman v. Estes Express Lines, Inc., 730 F. Supp. 2d 1141, 1150 (C.D. Cal. 2010) () with Smith v. Brinker Int'l, Inc., 2010 WL 1838726 at *4 (N.D. Cal. May 5, 2010) (...
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