Molina v. Pacer Cartage, Inc.
| Decision Date | 15 September 2014 |
| Docket Number | CASE NO. 13cv2344-LAB (JMA) |
| Court | U.S. District Court — Southern District of California |
| Parties | EDWIN MOLINA, Plaintiff, v. PACER CARTAGE, INC., et al., Defendant. |
After Defendant Pacer Cartage removed this putative class action from state court, Plaintiff Manuela Mendoza moved to remand. Later, Edwin Molina was substituted in as named Plaintiff, and therefore replaces Mendoza as movant. Pacer later asked the Court to consider a supplemental response.
The unopposed motion for leave to file a supplemental response (Docket no. 13) is GRANTED. The Court will consider it along with the other briefing on the issue of remand. Removal
Under 28 U.S.C. § 1441(a), a case can be removed from state to federal court, provided it could originally have been brought in federal court. This statute is construed strictly against removal, and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992); see also Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir.1988). The removing partybears the burden of establishing that the court has subject matter jurisdiction. Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006).
Federal courts are presumed to lack jurisdiction, and the burden always falls on the party invoking it. See Gen. Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968-69 (9th Cir.1981). Although the Court looks in the first instance to the remand motion, the Court is also under an independent obligation to confirm its own jurisdiction even if jurisdictional defects are not raised by the parties. See United Investors Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960, 966 (9th Cir. 2004). Thus, Molina's failure to raise issues or make arguments does not prevent the Court from considering those issues or arguments sua sponte; rather, the Court is obligated to consider any possible defects in jurisdiction its analysis may discover, even if Molina has not raised them. By contrast, the Court is not allowed to create arguments or engage in speculation in favor of jurisdiction; any doubts must be resolved against jurisdiction and in favor of remand. Gaus, 980 F.2d at 566.
In removing the case, Pacer relied on the Class Action Fairness Act, 28 U.S.C. § 1332(d), under which the Court has jurisdiction over matters where, among other things, the amount in controversy exceeds five million dollars. The remand motion argues that the threshold is not met, and the Court therefore lacks jurisdiction.
This is a wage and hour case, arising under California law. The complaint alleges that Pacer misclassified employees as independent contractors, wrongly required class members to work through meal breaks, did not provide required rest breaks, and failed to pay overtime. The notice of removal bases the amount in controversy on these three claims.
As mentioned in the notice of removal, the complaint does not plead a particular amount in controversy or seek particular amounts of damages. Pacer therefore must establish by a preponderance of evidence that the aggregate amount in controversy exceeds $5 million. Rodriguez v. AT&T Mobility Servs., LLC, 728 F.3d 975, 981 (9th Cir. 2013). This cannot be based on speculation and conjecture, see Roth v. Comerica Bank, 799 F. Supp.2d 1107, 1118 (C.D.Cal., 2010), but must be based instead on facts. See Korn v. Polo Ralph Lauren Corp., 536 F.3d 1199, 1206 (E.D.Cal., 2008) (citing Gaus, 980 F.2d at 567).
This means that Pacer is required to "set forth underlying facts to support key variables used in [its] calculations." See Manier v. Medtech Products, Inc., 2014 WL 1609655, slip op. at *2 (S.D.Cal., Apr. 22, 2014). The facts may come from the complaint itself (i.e., facts pleaded on the face of the complaint), or facts set forth in the removal petition. Abrego, 443 F.3d at 690. The Court may also consider "summary-judgment-type" evidence. Id. Estimates must be reasonable and fact-based, not speculative or inflated. See Romsa v. Ikea U.S. West, Inc., 2014 WL 4273265, at *2 (C.D.Cal., Aug. 28, 2014) (citing Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002)). See also Behrazfar v. Unisys Corp., 687 F. Supp. 2d 999, 1004 (C.D.Cal., 2009) (). Because Pacer bears the burden of showing removal was proper, its failure to produce evidence (whether by pointing out allegations in the complaint or by presenting facts in its own briefing) would mean it has not carried its burden, at least as to that claim. See, e.g., Reames v. AB Car Rental Servs., Inc., 899 F. Supp. 2d 1012, 1016 (D.Or., 2012) ().
There is no real dispute between the parties about these standards. Rather, the focus is on how they apply to the pleadings and facts. The remand motion argues that Pacer's estimates are inflated, not conservative, and not based on facts.
The complaint gives an estimate of over 200 putative class members. (Compl., ¶ 24.) Pacer's CEO, in a declaration attached to the notice of removal, estimates based on a review of records at least 309 class members, some of whom are no longer working for Pacer. (Decl. of Van Noel (Docket no. 1-5), ¶¶ 3-5.) According to Pacer's supplemental briefing, there are at least 584 putative class members, who worked a total of at least 49,640weeks during the period covered by this action. (Docket no. 13.) This estimate is based on new information unavailable at the time the motion was originally briefed. Although the number of workers is considerably higher, the number of weeks increased by only a few thousand. Apparently, the newly-identified workers did not work as much time during the relevant period as did the previously-identified workers.
Both Molina and Pacer cite Ray v. Wells Fargo Bank, NV, 2011 WL 1790123, at *7 (C.d.Cal., May 9, 2011), a wage and hour action in which conservative estimates were used to determine the amount in controversy. Molina argues that although Pacer's estimates are supported in part by declarations, the amount of meal and rest periods missed and the number of days worked overtime are "pure conjecture," unsupported by any facts. Molina also points out that Pacer's estimates are significantly higher than those approved in Ray.
Molina agrees that the workers' hourly rate of $15 for ordinary work and 41,090 weeks1 are based on declarations, but contests the amount of meal periods per week missed. Molina points out that Molina relies on an allegation in the complaint that class members were, "routinely required to work without an uninterrupted meal break," to conclude that this happened at least twice a week. (Mot., 5:25-28 ()
Molina also distinguishes Ray. In that case, the plaintiff alleged that all class members were paid on a salary basis with no overtime compensation and were "consistently" required to work overtime without extra pay. The Ray court, based on this, determined that a conservative estimate was one hour of unpaid overtime every two weeks, and one missed meal period every two weeks. Molina argues that "routinely" does not imply that putative class members were denied two meal breaks a week or two rest periods per week, or anything close to it. But here, Molina is merging two different claims. The claim for missed meal breaks does allege that employees "routinely" had to work through meals. (Compl.,¶ 41.) And the Court agrees that "routinely" leaves open a wide range of frequency. But with regard to overtime, the complaint alleges that "during the Class period, Plaintiff and other members of the Class consistently worked three to seven (7) days per week for nine (9) hours or more." (Compl., ¶ 55 (emphasis added).) This implies at least three hours of overtime per week (for those who worked three days), and "consistently" suggests it was at least commonplace.
Molina argues that Pacer's "conservative estimate" of five hours of overtime per week is similarly based on conjecture, and does not represent a conservative estimate. The notice of removal says Pacer selected five hours because the complaint alleged that class members worked from three to seven hours per week, and five is the midpoint of that range.
While the complaint requests attorney's fees as provided by law, it did not request a particular amount or percentage. Molina argues that Pacer's estimate that these will amount to 25% of the overall recovery is merely speculation. For claims arising from a violation of the Labor Code, California provides for an award of attorney's fees based on the lodestar method, not on a percentage of the recovery, see Ketchum v. Moses, 24 Cal.4th 1122, 1135-36 (2001), so a reasonable estimate of attorney's fees would be based on the number of hours it is expected Plaintiff's counsel will work, multiplied by a reasonable fee. This can be shown by introducing evidence regarding the usual amount of fees recovered in similar actions, but Pacer did not do this.
Pacer cites to Mendoza's work logs, showing how many overtime hours she worked during the relevant period, or how many meal or rest breaks she missed. From this, Pacer infers what it considers a conservative and reasonable estimate of what other workers' claims are likely to be. At the outset is worth remembering that this is a class of hundreds of workers, and that when, as here, class members may have claims of various sizes, the person selected to be class...
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