Evangelista v. Just Energy Mktg. Corp.

• Decision Date: 12 April 2018
• Docket Number: Case No.: SACV 17-02270-CJC(SSx)
• Court: U.S. District Court — Central District of California
• Parties: DANIEL EVANGELISTA, Plaintiff, v. JUST ENERGY MARKETING CORP., ET AL., Defendants.

DANIEL EVANGELISTA, Plaintiff, v. JUST ENERGY MARKETING CORP., ET AL., Defendants.

Case No.: SACV 17-02270-CJC(SSx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION

April 12, 2018

ORDER DENYING PLAINTIFF'S MOTION TO REMAND

I. INTRODUCTION

Plaintiff Daniel Evangelista filed this action on November 21, 2017, in Orange County Superior Court alleging various violations of California labor law and asserting seven claims on behalf of a putative class against Defendants Just Energy Marketing Corp. ("JEMC"), Just Energy Solutions Inc. ("JES"), Just Energy Limited ("JEL"), Just Energy Group Inc. ("JEG"), and various Doe defendants. (Dkt. 1-2 [Complaint, hereinafter "Compl."].) Defendants removed the action to this Court on December 29, 2017. (Dkt. 1.) On January 25, 2018, Plaintiff moved to remand this action to Orange County Superior Court, arguing that the local controversy exception to the Class Action Fairness Act ("CAFA") applied. (Dkt. 14.) On February 21, 2018, the Court held that Plaintiff had not sufficiently pled that the conduct of the one local defendant, JES, formed a significant basis for the claims asserted, but granted Plaintiff fourteen days' leave to amend to clarify issues pertaining to the Court's jurisdiction under CAFA. (Dkt. 30.) Plaintiff thereafter filed a First Amended Complaint ("FAC"). (Dkt. 31 ["FAC"].) Before the Court is Plaintiff's renewed motion to remand the case to Orange County Superior Court. (Dkt. 34 [hereinafter "Mot."].) For the following reasons, the motion is DENIED.¹

II. BACKGROUND

Defendants are a non-utility gas and electricity supplier that purchases gas or electricity at the wholesale level and sells it to residential and commercial end-use customers. (FAC ¶ 12.) Plaintiff alleges that Defendants, together, "[c]onstitute a single business enterprise," which Plaintiff refers to as "Just Energy." (Id. ¶ 4.) Defendant JEG is a citizen of Canada, and Defendants JEMC and JEL are citizens of Delaware. (Id. ¶¶ 4-5, 7.) Defendant JES is a citizen of California, is a wholly owned subsidiary of JEG, and "share[s] the same upper-management team, which exercises complete and ultimate control of Just Energy" with the other named Defendants. (Id. ¶ 4.) Plaintiff also alleges that JES, JEMC, and JEL are alter egos of JEG. (Id. ¶ 9.)

Defendant JEMC was "nominally and contractually Plaintiff's employer." (Id. ¶ 6.) Plaintiff also alleges that JES and JEG were the joint employers of Plaintiff and the putative class members. (Id. ¶¶ 5-6.) Plaintiff alleges that JES "is the only Just Energy entity authorized by California law to market and sell natural gas and electricity products and services in California. . . [thus] Plaintiff and the putative class members were actually marketing and selling (working) for, and employed jointly by, Defendant JES." (Id. ¶¶ 6, 13.) Specifically, Plaintiff alleges that JES "is the arm or department of Just Energy that serves (markets and sells to) residential customers in California." (Id. ¶ 13.) Plaintiff alleges that on the "Application for Gas Services (Residential)" that Plaintiff and the putative class members provided to customers when making door-to-door sales identifies JES "as the entity to which the customers are 'applying' for gas services." (Id.) Plaintiff alleges that JEMC is "purportedly the marketing and sales arm or department of Just Energy," but that JEMC is not authorized to market, or sell natural gas or electricity in California. (Id. ¶ 14.) Plaintiff further alleges that JES and JEG "knew that employees nominally employed by Defendant JEMC" were working for JES and JEG, that JES and JEG had "the ultimate authority and control over the day-to-day operations" of JEMC. (Id.) Specifically, Plaintiff alleges that "approval of middle- and/or upper-management personnel in Canada was required for day-to-day operational matters, such as increasing work hours for door-to-door salespersons in California" who were nominally employed by JEMC. (Id.)

Just Energy hired Plaintiff on July 25, 2017, to sell natural gas and electricity to residential customers as a door-to-door salesman. (Id. ¶ 15.) Plaintiff was required to sign documents acknowledging his agreement to abide by JEG's policies as part of his application and hire process. (Id.) Plaintiff alleges various violations of the California Labor Code occurred during his employment, such as failure to pay overtime wages, failure to provide meal and rest breaks, and failure to reimburse employees for necessary expenditures. (See generally id. ¶¶ 16-26.) Plaintiff alleges that he was retaliated againstfor reporting the unethical conduct of his supervisor, and chose to resign on October 11, 2017, after experiencing this alleged retaliation. (Id. ¶¶ 27-37.) Plaintiff's allegations related to his employment refer to all four named Defendants collectively as "Just Energy," and do not differentiate between the actions of any named party. (Id. ¶¶ 4, 16-37.)

Plaintiff filed this action on November 21, 2017, in Orange County Superior Court as a putative class action asserting seven causes of action on behalf of the class: failure to pay all wages due (e.g., overtime wages), failure to timely pay wages due at termination, failure to provide meal periods, failure to provide rest periods, knowing and intentional failure to comply with itemized employee wage statement provisions, failure to reimburse employees for necessary expenditures, and violation of the Unfair Competition Law. (Complaint ¶¶ 44-73.) Plaintiff's proposed class definition was "all persons who performed door-to-door sales work for Just Energy during the four years preceding the date" the action was filed. (Id. ¶ 36.) The Complaint also alleges that the class "consists of significantly more than one-hundred persons located in California." (Id. ¶ 37.) Plaintiff also asserted two causes of action solely on his own behalf: retaliation and constructive discharge in violation of public policy. (Id. ¶¶ 74-89.)

Plaintiff filed the FAC on March 1, 2018, after this Court granted leave to amend to address whether JES's conduct provided a "significant basis for his claims." (Dkt. 30 at 12.) Plaintiff added factual allegations, a new cause of action on behalf of the putative class for violation of the Labor Code Private Attorneys General Act of 2004, and an amended class definition. (See generally FAC.) Plaintiff's new class definition includes "all persons who performed door-to-door sales work for Just Energy in California" during the period from November 21, 2013, until judgment is entered in this action. (Id. ¶ 39.)

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III. LEGAL STANDARD

A civil action brought in a state court, but over which a federal court may exercise original jurisdiction, may be removed by the defendant to a federal district court. 28 U.S.C. § 1441(a). "A suit may be removed to federal court under 28 U.S.C. § 1441(a) only if it could have been brought there originally." Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 1371 (9th Cir. 1987); Infuturia Global Ltd. v. Sequus Pharmaceuticals, Inc., 631 F.3d 1133, 1135 n.1 (9th Cir. 2011) ("[A] federal court must have both removal and subject matter jurisdiction to hear a case removed from state court."). The party seeking removal bears the burden of establishing federal jurisdiction. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006).

Under the Class Action Fairness Act of 2005 ("CAFA"), federal courts have original jurisdiction over a class action if (1) the parties are minimally diverse, (2) the proposed class has more than 100 members, and (3) the aggregated amount in controversy exceeds $5 million. 28 U.S.C. § 1332(d)(2), (d)(5)(B); see also Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554-55 (2014). By statute, a district court must decline to exercise jurisdiction over a class action if the "local controversy" exception applies. 28 U.S.C. § 1332(d)(4). "The local controversy exception to CAFA jurisdiction is a narrow exception, and Plaintiff[] bear[s] the burden of showing its application." Allen v. Boeing Co., 821 F.3d 1111, 1116 (9th Cir. 2016) (citing Benko v. Quality Loan Serv. Corp., 789 F.3d 1111, 1116 (9th Cir. 2015)). "However, if the exception applies, the district court must remand the case to state court." Id. (citing Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1022 (9th Cir. 2007)). The local controversy exception applies to a class action in which:

(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;(II) at least 1 defendant is a defendant—

(aa) from whom significant relief is sought by members of the plaintiff class;

(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and

(cc) who is a citizen of the State in which the action was originally filed; and

(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and

(ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons[.]

28 U.S.C. § 1332(d)(4).

When a plaintiff moves to remand under the local controversy exception to CAFA, the burden shifts to the plaintiff to prove by a preponderance of the evidence that the exception applies to the facts of a given case. Mondragon v. Capital One Auto Finance, 736 F.3d 880, 883 (9th Cir. 2013). In determining whether these requirements are satisfied, "a federal district court is limited to the complaint." Coleman v. Estes Express Lines, 631 F.3d 1010, 1012 (9th Cir. 2011). "District courts are permitted to make reasonable inferences from facts in evidence . . . in applying CAFA's local controversy exception." Mondragon, 736 F.3d at...