Charles v. Transdev Servs.

• Docket Number: 2:23-cv-02011-ODW (AFMx)
• Decision Date: 07 July 2023
• Parties: SHANNA CHARLES, Plaintiff, v. TRANSDEV SERVICES, INC. et al., Defendants.
• Court: U.S. District Court — Central District of California

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SHANNA CHARLES, Plaintiff, v. TRANSDEV SERVICES, INC. et al., Defendants.

No. 2:23-cv-02011-ODW (AFMx)

United States District Court, C.D. California

July 7, 2023

ORDER REMANDING CASE

OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This is an employment discrimination and wage-and-hour action initially brought in state court by Plaintiff Shanna Charles against her employer Transdev Services, Inc. and Transdev supervisor Brian Otchis. Defendants removed the case to this Court, alleging subject matter jurisdiction based on both diversity and federal preemption under the Labor Management Relations Act (“LMRA”). The Court ordered the parties to show cause why the case should not be remanded for lack of subject matter jurisdiction. (OSC, ECF No. 19.) For the following reasons, the Court finds Defendants fail to establish subject matter jurisdiction and accordingly REMANDS the case.

II. BACKGROUND

As alleged in the operative Complaint, Charles, a Black woman, began working for Transdev in February 2018. (Notice of Removal (“NOR”), Ex. A (“Compl.”) ¶ 7, ECF No. 1.)

During her employment, Charles experienced race- and gender-based workplace harassment in the form of biased and harassing comments by one of her coworkers, a man. (Id. ¶ 8.) Charles complained to Transdev's human resources department, which failed to take action to address the harassment. (Id. ¶ 9.)

In 2021, Charles filed a complaint with the Equal Opportunity Employment Commission, and thereafter, Transdev fired the offending co-worker. (Id. ¶ 10.) However, Transdev also began retaliating against Charles by exaggerating minor transgressions and finding additional pretext to reprimand or discipline her. (Id. ¶ 12 (listing instances).) Additionally, Charles did not receive the meal breaks, rest breaks, regular wages, and overtime wages California's wage-and-hour statutes guarantee employees. (Id. ¶¶ 13-16.)

On February 14, 2023, Charles initiated this action against Defendants Transdev Services, Inc. and Brian Otchis in state court for workplace discrimination in violation of the California Fair Employment and Housing Act (“FEHA”), constructive discharge, and violations of the wage-and-hour provisions of the California Labor Code. (NOR ¶ 6; Compl.) On March 17, 2023, Defendants removed the action to this Court based on (1) diversity jurisdiction, and (2) federal question jurisdiction due to preemption under the LMRA. (See NOR ¶¶ 22-95.) The Court ordered the parties to show cause why the case should not be remanded for lack of subject matter jurisdiction. (OSC.) Defendants responded to the Court's Order to Show Cause, while Charles did not. (OSC Resp., ECF No. 20.)

III. LEGAL STANDARD

“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Federal courts have original jurisdiction where an action arises under federal law, or where the plaintiff's citizenship is diverse from each defendant's citizenship and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331, 1332(a). “[T]he core principle of federal removal jurisdiction on the basis of diversity” is that diversity “is determined (and must exist) as of the time the complaint is filed and removal is effected.” Strotek Corp. v. Air Transp. Ass'n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002).

Federal courts have an obligation to determine the existence of subject matter jurisdiction, regardless of whether the parties raise the issue. See Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). The court may raise the issue of subject matter jurisdiction on its own initiative at any stage in the litigation. Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002). “[B]oth sides submit proof,” and the court decides whether the defendant has proven the amount in controversy by a preponderance of the evidence. Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 88-89 (2014). “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

“The ‘strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper,” whether removal is challenged by an opponent or by the court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 290 (1938)).

IV. DISCUSSION

Defendants fail to demonstrate diversity jurisdiction because they fail to demonstrate by a preponderance of the evidence that over $75,000 is in controversy. Defendants also fail to demonstrate federal preemption under the LMRA because they fail to demonstrate that the operative collective bargaining agreement qualifies for the exemption provided by California Labor Code section 514. Thus, no basis for this Court's subject matter jurisdiction exists, and it is appropriate to remand the matter.

A. Diversity Jurisdiction-Amount in Controversy

With regard to diversity jurisdiction, the principal issue is whether the amount of money Charles places in controversy with her claims exceeds $75,000. In their Response to the Court's order to show cause, Defendants indicate that the following categories of damages are at issue: (1) lost wages; (2) emotional distress; (3) wage-and-hour claims; (4) punitive damages; and (5) attorneys' fees. (OSC Resp. 17-21.) Charles did not file a reply to Defendants' Response and therefore did not contest Defendants' characterization of her damages categories. The Court adopts Defendants' five categories of damages for the purpose of this analysis and considers each category in turn.

1. Lost Wages

Defendants assert that $3,688.00 in lost wages are in controversy, representing wages lost between the date of Charles's final workday and the date the case was removed. (OSC Resp. 17-18.) This category of damages arises from Charles's discrimination and retaliation claims and represents the wages Charles would have earned had her employment not terminated. See, e.g., Zamudio v. Aerotek, Inc., No. 1:21-cv-01673-JLT-BAK (SKO), 2022 WL 458059, at *3 (E.D. Cal. Feb. 15, 2022) (calculating lost wages for purposes of determining amount placed in controversy by wrongful termination claim); Adkins v. J.B. Hunt Transp., Inc., 293 F.Supp.3d 1140, 1144 (E.D. Cal. 2018) (defining this type of lost wages as “back pay” and distinguishing from “front pay”). However, Defendants provide no evidence whatsoever to substantiate (1) the date of Charles's final workday, (2) Charles's hourly wage, and (3) the number of hours per week Charles typically worked. (See generally Resp.) Moreover, none of this information appears on the face of the Complaint. (See generally Compl.) Defendants simply assert this information in their OSC Response and ask the Court to accept it as true.

In ordering Defendants to show cause regarding subject matter jurisdiction, the Court clarified that its Order to Show Cause was “a dual-pronged inquiry into both the facial sufficiency of Defendants' jurisdictional allegations as well as the factual sufficiency of Defendants' demonstration of subject matter jurisdiction, which the Court now calls on Defendants to make.” (OSC 2.) By way of this language and the remainder of the Order to Show Cause, the Court called upon Defendants to demonstrate, by a preponderance of the evidence, the amount of money Charles's Complaint places in controversy. (Id.) By failing to produce any evidence whatsoever to support their lost wages calculations, Defendants fail to demonstrate by a preponderance of the evidence that any amount of lost wages is in controversy.

Defendants makes an additional effort to demonstrate the amount of lost wages in controversy by pointing to Charles's prayer for relief “in the sum of $250,000.” (OSC Resp. 18.) However, Charles's prayer for $250,000 is not tethered to any specific factual allegations; moreover, the figure comprises not only lost wages but also “includ[es] losses for pain, suffering and emotional distress, . . . and other incidental and consequential expenses.” (Compl., Prayer ¶¶ 1-3.) Accordingly, Charles's prayer for $250,000 in relief provides little to no evidence of the amount of lost wages actually in controversy in this case and is insufficient to meet Defendants' burden.

2. Emotional Distress Damages

Defendants assert that $250,000 in emotional distress damages are in controversy, (Resp. 18-19), based on Charles's prayer “for general damages including losses for pain, suffering and emotional distress, as allowed by law, in the sum of $250,000.” (Id., Prayer ¶ 1.) Courts may properly consider emotional distress damages as part of the amount in controversy for jurisdictional purposes. Sasso v. Noble Utah Long Beach, LLC, No. 2:14-cv-09154-AB (AJWx), 2015 WL 898468, at *6 (C.D. Cal. Mar. 3, 2015). However, for two reasons, Defendants fail to demonstrate that any emotional distress damages are in controversy here.

First, as with their lost wages argument, Defendants point to a prayer for $250,000 that consists of several categories of damages, not just emotional distress damages, as proof of $250,000 in emotional distress damages alone. This is illogical. Charles's bare, conclusory prayer for amalgamated damages does not provide sufficient proof of the amount of emotional distress damages actually in controversy.

Second Defendants fail to present any similar cases for comparison. To determine the amount of emotional distress damages in controversy, courts consider the amount of emotional distress damages awarded by juries in similar cases. ...