Garcia v. Commonwealth Fin. Network
| Decision Date | 24 November 2020 |
| Docket Number | Case No. 20-cv-1483-BAS-LL |
| Court | U.S. District Court — Southern District of California |
| Parties | MARISSA GARCIA, an individual, for the real party in interest, the State of California, and on behalf of other current and former employees Plaintiff, v. COMMONWEALTH FINANCIAL NETWORK; and DOES 1 through 50, Defendants. |
In this wage and hour litigation brought under the Private Attorneys General Act, Cal. Lab. Code §§ 2698, et seq. ("PAGA"), Plaintiff Marissa Garcia alleges that her former employer, Commonwealth Financial Network (CFN) failed to pay her and others the correct amounts of sick pay and overtime wages. CFN removed the action to federal court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. The Court is asked to decide whether CFN has shown by a preponderance of the evidence that the amount-in-controversy requirement and the complete diversity in citizenship requirement are met. The Court finds Garcia's motion to remand suitable for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the following reasons, the Court finds CFN's Notice of Removal is deficient and REMANDS this action to the San Diego Superior Court for lack of subject matter jurisdiction.
Plaintiff Marissa Garcia worked for Defendant CFN between 2018 and 2019. (Compl. ¶¶ 10, 31, ECF No. 1-2.) Garcia regularly received nondiscretionary incentive payments in the form of bonuses. (Id. ¶¶ 29, 40.) Sometimes Garcia worked more than 40 hours in a single workweek. (Id. ¶ 39.)
On June 15, 2020, Garcia filed suit in the Superior Court of the California in the County of San Diego, alleging that CFN violated several provisions of the California Labor Code. (Compl., ECF No. 1-2.) Garcia raises nine causes of action: (1) CFN underpaid Garcia and other employees by applying a lower pay rate for the sick leave than what is required under Section 246 of the California Labor Code; (2) CFN underpaid Garcia and other employees by not adequately compensating their overtime hours; (3) CFN issued wage statements that did not include the correct amounts of gross wages; (4) CFN issued wage statements that did not include the correct amounts of net wages; (5) CFN issued wage statements that did not include the correct hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate; (6) CFN failed to keep a duplicate copy of the wage statements; (7) CFN failed to timely pay Garcia and other employees during their employment; (8) CFN failed to pay Garcia and other employees all wages due upon termination or separation of employment; and (9) CFN required Garcia and other employees to sign an unlawful authorization form. (Id. ¶¶ 27-114.) As relief, Garcia seeks 25% pro rata share of civil penalties under PAGA. (Id.)
On July 31, 2020, CFN removed the action to federal court based on diversity jurisdiction under 28 U.S.C. § 1332. (Notice of Removal, ECF No. 1.) CFN estimated that Garcia's pro rata share of the PAGA civil penalties amounts to $30,764.49:
Causes of Action (COA) PAGA recovery First COA-Underpayment of sick leave $1,000.00 Second COA-Underpayment of overtime work $2,240.79 Third COA-Incorrect gross wages on wage statements $5,487.50 Fourth COA-Incorrect net wages on wage statements $5,487.50 Fifth COA-Incorrect hourly rates on wage statements $5,487.50 Sixth COA-Failure to keep records of wage statements $5,487.50 Seventh COA-Failure to timely pay during employment $1,873.70 Eighth COA-Failure to pay wages due upon termination $2,775.00 Ninth COA-Requiring employees to agree to unlawful terms $925.00 Total $30,764.49
(Id. ¶¶ 29-57) In addition, CFN estimated that the attorney's fees would exceed $44,235.51, and that the total amount in controversy would exceed the $75,000 threshold. (Id. ¶¶ 58-67.)
Garcia now moves to remand the action back to state court. (Mot. Remand, ECF No. 8.) She argues that neither the amount-in-controversy requirement nor the complete diversity of citizenship requirement is satisfied. Garcia's motion is ripe for decision.
"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Id. (citations omitted). "[A]ny civil action brought in a State court of which the district courts of theUnited States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States." 28 U.S.C. § 1441(a).
In order to invoke a district court's diversity jurisdiction, a party must demonstrate that there is complete diversity of citizenship between the parties and that the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332; see also Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). "The burden of establishing federal jurisdiction is on the party invoking federal jurisdiction." United States v. Marks, 530 F.3d 799, 810 (9th Cir. 2008); see also Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1106-07 (9th Cir. 2010) ().
To assert the amount in controversy in the removal notice, a "short and plain" statement need not contain evidentiary submissions and must include only "a plausible allegation that the amount in controversy exceeds the jurisdictional threshold." Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 84, 89 (2014). If the plaintiff challenges the defendant's asserted amount in controversy, both sides may submit proof and the court must find by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional threshold. Id. at 88 (quoting 28 U.S.C. § 1446(c)(2)(b)); see also Schneider v. Ford Motor Co., 756 F. App'x 699, 700-01 (9th Cir. 2018) (); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007) ().
Further, if the existence of diversity jurisdiction depends on the amount in controversy, "[t]he district court may consider whether it is 'facially apparent' from the complaint that the jurisdictional amount is in controversy." Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335-36 (5th Cir. 1995)). If not, a court may consider facts in the removal notice, and it may "require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal." Id.
The amount in controversy is "not a prospective assessment of [a] defendant's liability." Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010). Rather, it is the "amount at stake in the underlying litigation." Theis Research, Inc. v. Brown & Bain, 400 F.3d 659, 662 (9th Cir. 2005). In assessing the amount in controversy, a court must "assume that the allegations of the complaint are true and assume that a jury will return a verdict for the plaintiff on all claims made in the complaint." Campbell v. Vitran Exp., Inc., 471 F. App'x 646, 648 (9th Cir. 2012) (quoting Kenneth Rothschild Tr. v. Morgan Stanley Dean Witter, 199 F. Supp. 2d 993, 1001 (C.D. Cal. 2002)). "In that sense, the amount in controversy reflects the maximum recovery the plaintiff could reasonably recover." Arias v. Residence Inn by Marriott, 936 F.3d 920, 927 (9th Cir. 2019) (citing Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018)).
Garcia argues that her individual potential recovery, including her pro rata share of the PAGA civil penalty and attorney's fees, would not meet the $75,000 threshold that is required to invoke federal diversity jurisdiction under 28 U.S.C. § 1332(a).
Cal. Lab. Code § 2699(a). "In addition, to address violations for which no such penalty had been established, subdivision (f) of the statute created 'a default...
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