Mejia v. DHL Express (Usa), Inc., Case No. CV 15-890-GHK (JCx)

• Decision Date: 21 May 2015
• Docket Number: Case No. CV 15-890-GHK (JCx)
• Court: U.S. District Court — Central District of California
• Parties: Jorge Alberto Mejia v. DHL Express (USA), Inc.

Jorge Alberto Mejia v. DHL Express (USA), Inc.

Case No. CV 15-890-GHK (JCx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

May 21, 2015

CIVIL MINUTES - GENERAL

Presiding: The Honorable GEORGE H. KING, CHIEF U. S. DISTRICT JUDGE

Beatrice Herrera

Deputy Clerk

N/A

Court Reporter / Recorder

N/A

Tape No.

Attorneys Present for Plaintiffs:

None

Attorneys Present for Defendants:

None

Proceedings: (In Chambers) Order re: Plaintiff's Motion to Remand (Dkt. 20)

This matter is before us on the above-captioned Motion. We have considered the papers filed in support of and in opposition to this Motion, and deem this matter appropriate for resolution without oral argument. L.R. 7-15. As the Parties are familiar with the facts, we will repeat them only as necessary. Accordingly, we rule as follows.

I. Procedural and Factual Background

On December 2, 2014, Plaintiff Jorge Alberto Mejia ("Mejia") brought this class action in state court against Defendant DHL Express (USA), Inc. ("Defendant") alleging various claims based on violations of the California Labor Code. (Dkt. 1-1, Compl.) On January 7, 2015, a First Amended Complaint ("FAC") was filed, and Defendant was served for the first time shortly thereafter. (Dkt. 1-2, FAC; Dkt. 1-3, Summons.) On February 6, 2015, Defendant removed this action to federal court on the basis of CAFA jurisdiction. (Dkt. 1, Notice of Removal ("NOR").) On March 20, 2015, Plaintiff filed this Motion to Remand ("Motion"), claiming that we lack jurisdiction because the amount in controversy does not exceed $5,000,0000. (Dkt. 20.)

Plaintiff alleges that Defendant "adopted and maintained uniform policies, practices and procedures . . . that violated California's labor law." (FAC at ¶ 11.) Among other things, he alleges that Defendant failed to pay for meal and rest breaks, failed to pay minimum wage, failed to pay hours worked, failed to supply accurate wage statements, and failed to promptly pay wages owed to class members at the end of their employment.

II. Legal Standard

CAFA provides that federal district courts have "original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which" there is minimum diversity between the parties. 28 U.S.C. § 1332(d)(2). "[U]nder CAFA[,] the burden of establishing removal jurisdiction remains, as before, on the proponent of federal jurisdiction." Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006) (per curiam). "Where the complaint does not specify the amount of damages sought, the removing defendant must prove by a preponderance of the evidence that the amount in controversy requirement has been met." Id. at 683.

To satisfy this standard, the "defendants' notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold." Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014). If the plaintiff or the court contests defendants allegation, however, "[e]vidence establishing the amount is required." Id. "In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied." Id. at 554. In proving the amount in controversy, "[t]he parties may submit evidence outside the complaint, including affidavits or declarations, or other summary-judgment-type evidence relevant to the amount in controversy at the time of removal." Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (citation and internal quotation marks omitted). Under this system, a defendant cannot establish removal jurisdiction by mere speculation and conjecture, with unreasonable assumptions. Id.

Defendant contends that the Supreme Court's reference to "both sides" submitting proof means that Plaintiff should have produced affirmative evidence showing that the amount in controversy is not satisfied with his Motion. We recently rejected a similar argument in our remand order for Erick Lina v. Barnes & Noble, Inc.:

[W]e do not believe that Dart Cherokee changed anything regarding the relevant procedure once a party challenges federal jurisdiction. See Manibhadra, Inc. v. Aspen Ins. UK Ltd., 2014 WL 7246858, at *1-2 (D. Kan. Dec. 17, 2014) (concluding that, with respect to "the procedure when the plaintiff challenges the defendant's assertion of the amount in controversy[,] . . . Dart does not change established [] law"). The Court's statement that "when a defendant's assertion of the amount in controversy is challenged . . . both sides submit proof was derived from 28 U.S.C. § 1446 . . . . Dart Cherokee, 135 S. Ct. at 554 (quoting § 1446(c)(2)(B) for the proposition that "removal . . . is proper on the basis of an amount in controversy asserted . . . if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the [necessary] amount"). The relevant House Judiciary Committee Report merely states that "[d]iscovery may be taken with regard to [the jurisdictional threshold]. In case of a dispute, the district court must make findings of jurisdictional fact to which the preponderance standard applies." H.R. Rep. No. 112-10, p. 16 (2011) (emphasis added).

Defendants claim that the Dart Cherokee Court's use of the phrase "both sides submit proof" means that both sides must submit proof of the amount of controversy now, but the Ninth Circuit has made clear that this remains an open question. See Ibarra, 775 F.3d at 1199-1200 ("Plaintiffs contend, on the other hand, that plaintiffs' motion to remand need not include evidence and is allowed to 'be based on the fact that Defendant'sevidence is insufficient to meet the burden of proof,' and that requiring plaintiffs to submit evidence first 'would fundamentally switch to plaintiffs the burden of defeating subject-matter jurisdiction.' The Supreme Court did not decide the procedure for each side to submit proof on remand, and here we need not decide the procedural issue, either."); Unutoa v. Interstate Hotels & Resorts, Inc., 2015 WL 898512, at *2 (C.D. Cal. Mar. 3, 2015) ("While the Ninth Circuit held that both parties are entitled to submit summary-judgment-style evidence regarding the propriety of removal, it declined to decide whether a plaintiff was required to submit evidence refuting the defendant's allegations and evidence of the amount in controversy in order to prevail on a motion to remand.").

CV 15-281-GHK (CWx), at *4-5 (C.D. Cal. April 1, 2015) (footnote omitted). While Plaintiff may rebut Defendant's evidence with his own evidence, he need not do so in order to prevail in his Motion.

III. Amount in Controversy

In the NOR, Defendant alleges that the amount in controversy is satisfied because the amount recoverable for three of Plaintiff's nine claims exceeds in $5,000,000. Those three claims are (1) failure to provide rest periods in violation of Labor Code § 226.7(b), (2) failure to provide accurate wage statements in violation of Labor Code § 226(a), and (3) failure to pay waiting time penalties in violation of Labor Code § 203(a).

A. Rest Period Violations

California Labor Code § 226.7(b) provides that "[a]n employer shall not require an employee to work during a meal or rest or recovery period." The penalty for violation of section 226.7(b) is "one additional hour of pay at the employee's regular rate of compensation for each workday that the meal or rest or recovery period is not provided." Cal. Lab. Code § 226.7(c). The statute of limitations for a claim based on any statutory claim in California, other than a penalty or a forfeiture, is three years. See Cal. Code Civ. Proc. § 338(a).

In its NOR, Defendant submits that it had 722 non-exempt employees in California between December 2, 2011 and January 15, 2015.¹ (NOR at ¶ 28.) Defendant further contends that the average pay for these employees was $21.40/hour and that the employees collectively worked 314,013 workdays. (Id. at ¶ 28.) As evidence to support these assertions, Defendant provides declarations fromits employees and its attorney.² (Nugen Decl. at ¶ 4, Lloyd Decl. at ¶ 3, Devaux Decl. at ¶ 6.) Assuming a violation occurred each workday, 314,013 multiplied by $21.40 equals $6,719,878.20. (NOR at ¶ 29.)

Plaintiff argues that this calculation overstates the amount in controversy because it is unreasonable to assume a "100% violation rate." Whether a removing defendant may assume a "100% violation rate" depends on the allegations in the plaintiff's complaint. In Lewis v. Verizon Commc'ns, Inc., the Ninth Circuit concluded that where the plaintiff alleged that the defendant billed customers for services without authorization, the defendant was free to include 100% of its billings for such services in its estimate of the amount in controversy since the plaintiff did "not attempt[] to demonstrate, or even argue, that the claimed damages are less than the total billed." 627 F.3d 395, 400 (9th Cir. 2010). In Ibarra v. Manheim Investments, Inc., the Ninth Circuit concluded that the removing defendant could not assume a 100% violation rate where the plaintiff had alleged only that the defendant had a "pattern and practice" of committing wage-and-hour violations, and the class representative had experienced violations only on "multiple occasions," not every occasion. 775 F.3d 1193, 1198 (9th Cir. 2015). In LaCross v. Knight Transportation Inc., the Ninth Circuit held that the removing defendant could assume a 100% violation rate where plaintiff had alleged that the defendant missclassifed truck drivers as independent contractors because all of drivers "allegedly should have been classified as employees rather than as independent contractors." 775 F.3d 1200, 1202 (9th Cir. 2015).

The only Ninth Circuit case that arguably stands for the proposition that there is a bright-line rule forbidding a removing defendant from assuming a 100%...