Oda v. Gucci Am., Inc., Case No. 2:14-cv-7468-SVW (JPRx)

• Decision Date: 07 January 2015
• Docket Number: Case No. 2:14-cv-07469-SVW (JPRx),Case No. 2:14-cv-7468-SVW (JPRx)
• Court: U.S. District Court — Central District of California
• Parties: Oda et al. v. Gucci America, Inc. et al.

Oda et al. v. Gucci America, Inc. et al.

Case No. 2:14-cv-7468-SVW (JPRx)

Case No. 2:14-cv-07469-SVW (JPRx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

January 7, 2015

CIVIL MINUTES - GENERAL

Present: The Honorable STEPHEN V. WILSON, U.S. DISTRICT JUDGE

Paul M. Cruz

Deputy Clerk

N/A

Court Reporter / Recorder

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Tape No.

Attorneys Present for Plaintiffs:

N/A

Attorneys Present for Defendants:

N/A

Proceedings: IN CHAMBERS ORDER GRANTING Plaintiffs' Motion to Remand PAGA case [No. 2:14-cv-7469, Dkt. 12] and DENYING Plaintiffs' Motion to Remand Putative Class Action [No. 2:14-cv-7468, Dkt. 16]

I. INTRODUCTION

On July 15, 2014, plaintiffs Janine Oda ("Oda") and Gissella Velasquez ("Velasquez") filed two lawsuits against defendant Gucci America, Inc. ("Gucci") in California state court. One case is a putative class action for alleged labor code violations. (No. 2:14-cv-7468 ("7468"), Dkt. 1.) The other case is a California Private Attorney General Act ("PAGA"), Cal. Lab. Code § 2698 et seq., action seeking PAGA penalties, unpaid wages and compensation on behalf of aggrieved employees, and attorney's fees and costs. (No. 2:14-cv-7469 ("7469"), Dkt.1.) On September 24, 2014, Gucci removed each of these cases to federal court. (7468, Dkt. 1; 7469, Dkt. 1.)

Currently before the Court are Plaintiffs' motions to remand each of these cases. (7468, Dkt. 16; 7469, Dkt. 12.) For the reasons discussed below, the Court GRANTS the motion to remand the PAGA action and DENIES the motion to remand the putative class action.

II. FACTUAL AND PROCEDURAL BACKGROUND

Gucci is a fashion designer free-standing retail stores and sales space in department stores within California. (7468 Compl. ¶ 3; 7469 Compl. ¶ 3.) Plaintiffs worked at Gucci's retail location in Beverly Hills, California. (7468 Compl.¶ ¶ 1-2; 7469 Compl. ¶¶ 1-2.) They worked as "non-exempt, hourly paid retail employee[s] during the relevant time period[.]" (7468 Compl. ¶¶ 1-2; 7469 Compl ¶¶ 1-2.) On roughly February 28, 2014, Oda's employment was terminated. (7468 Compl. ¶ 1.) Velasquez's employment was also terminated, though she does not allege the date of her termination. (7468 Compl. ¶ 2; 7469 Compl. ¶ 2.)

In their PAGA action, Plaintiffs assert that Gucci failed to pay to non-exempt retail employees all owed wages. (7469 Compl. ¶ 11.) For example, they claim that Gucci improperly rounded their hours. (Id.) They also assert that Gucci failed to pay overtime and vacation time wages. (Id.) They also assert that "employees (such as Plantiffs)" occasionally didn't receive "mandated rest, meal and/or recovery periods and were thereby owed premium compensation[.]" (Id.) Plaintiffs further allege that given these failures Gucci provided inaccurate or legally inadequate wage statements. (7469 Compl. ¶ 12.)

On July 15, 2014, Plaintiffs filed their PAGA case in the California Superior Court for the County of Los Angeles. (7469, Dkt. 1.) Plaintiffs purportedly bring this action on behalf of:

All current and former non-exempt, hourly paid retail employees of Defendants Gucci and Does 1-30 who worked at any of Gucci's California retail locations or any department store or other retail designer store in California where Gucci's non-exempt retail employees have been so employed during the covered time period and whose work time was tracked by one or more time management systems.

(7469 Compl. ¶ 7.) In this action Plaintiffs seek pursuant to PAGA to recover: (1) 25 percent of all penalties due under California law, Cal. Lab. Code § 2699; (2) all unpaid wages and other compensation owed to Plaintiffs and other aggrieved employees; and (3) costs and attorney fees.

On the same day they filed their PAGA case, Plaintiffs also filed a putative class action in the Los Angeles County Superior Court. (7468, Dkt. 1.) Plaintiffs seek to represent the class of:

All current and former non-exempt, hourly paid retail employees of Defendants Gucci and Does 1-30 who worked at any of Gucci's California retail locations or any department store or other retail designer store in California where Gucci's non-exempt retail employees have been so employed for any period of time within four years prior to the initiation of this action through certification ("the Class Period") and whose work time was tracked by one or more time management systems.

(7468 Compl. ¶ 10.) In their class complaint, Plaintiffs assert claims arising under California labor laws for: (1) failure to pay wages for hours worked; (2) failure to pay overtime; (3) failure to pay minimum wage; (4) unpaid wages at discharge; (5) failure to provide meal and rest periods; (6) failure to pray vested vacation benefits; (7) inaccurate wage statements; and (8) violation of California's Unfair Competition law, Cal, Bus. & Prof. Code. § 17200 et seq.

III. LEGAL STANDARD

Removal jurisdiction is generally disfavored. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). But it is proper if the case could have been filed in federal court originally. 28 U.S.C. § 1441.

One common basis is the presence of a well-pleaded federal question. 28 U.S.C. § 1331; Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The well-pleaded complaint rule "provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Wayne v. DHL Worldwide Express, 294 F.3d 1179, 1183 (9th Cir. 2002) (citation and internal quotation marks omitted).

Another basis for subject matter jurisdiction is the parties' diversity of citizenship. 28 U.S.C. § 1332(a). Diversity jurisdiction exists in "civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States . . . ." 28 U.S.C. 1332(a). The amount in controversy is determined from the complaint itself, "unless it appears or is in some way shown that the amount stated in the complaint is not claimed in good faith." Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961) (citation and internal quotation marks omitted).

Additionally, the Class Action Fairness Act ("CAFA") allows for subject matter jurisdiction over class actions in which the proposed class includes at least 100 members, any member of a plaintiff class is of diverse citizenship from any defendant, and the amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d). CAFA was enacted to facilitate federal courts' adjudication of certain class actions. Dart Cherokee Basin Operating Co., LLC v. Owens, No. 13-719, slip op. at 7 (Sup. Ct. Dec. 15, 2014). Thus, "no antiremoval presumption attends cases invoking CAFA." Id.

A defendant removing a case on the basis of diversity must file a notice of removal containing a "short and plain statement of the grounds for removal." Id. at 4-5 (quoting 28 U.S.C. § 1446(a)). The Supreme Court recently clarified that (at least in a CAFA case) the defendant need not submit evidence supporting this assertion with the notice of removal. Id. at 5. However, if the plaintiff contests the defendant's allegations regarding the amount in controversy, then the court must decide by a preponderance of the evidence that the amount in controversy requirement is met. Id. at 6 (citing 28 U.S.C. § 1446(c)(2)(b)). The defendant bears the burden of proving that the amount in controversy requirement is met. Id.; Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 978 (9th Cir. 2013).

IV. ANALYSIS

A. Plaintiffs' Motion to Remand the Class Action

Gucci removed Plaintiffs' putative class action under CAFA. Gucci asserts that this Court has jurisdiction over the case because: (1) its records indicate that it has employed over 350 individuals in non-exempt, hourly paid retail positions in California between July 15, 2010 and September 19, 2014, (Maser Decl. ¶ 5); (2) Gucci is a citizen of New York while Plaintiffs are California citizens; and (3) the amount in controversy exceeds $5,000,000. Plaintiffs do not contest that there are over 100 members in the proposed class and that the requisite diversity of citizenship is met. Instead, Plaintiffs argue that Gucci fails to sufficiently prove that the amount in controversy requirement is met.

Plaintiffs assert that Gucci's calculation of the amount in controversy improperly assumes the frequency with which labor code violations occurred rather than submitting evidence regarding the actual frequencies of violations.

Gucci submitted the declaration of Senior Human Resources Project Manager Cara Maser with its notice of removal. In her declaration, Maser asserts that she is familiar with Gucci's relevant payroll and personnel records. (Maser Decl. ¶ 1.) She testifies to such data as the number of wage statements Gucci issued during the relevant time period, the number of non-exempt retail employees Gucci employed during relevant time periods, the number of workweeks those employees worked during the relevant time period, the average wage those employees earned during the relevant time period, and the number of employees that Gucci terminated during the relevant time period. (Maser Decl. ¶ 3-8.)

Gucci submits an additional declaration from Maser in opposition to Plaintiffs' motion to remand. In this declaration, Maser asserts that the previously-described employees are "predominantly full time employees, who are typically scheduled to work 8 hour shifts, five days per week." (Decl. of Cara Maser in Supp. Def's Opp. ("Second Maser Decl.") ¶ 4.) Plaintiffs argue that Maser's second declaration is insufficient because it gives only a general description and not specific statistics. Plaintiffs' argument misunderstands the nature of Gucci's burden at the current stage of litigation: Gucci need only submit sufficient evidence to show that it is more likely than not that there is more than $5,000,000 in controversy. Gucci need not prove the merits of Plaintiffs' case. Muniz v. Pilot Travel Centers LLC, No. CIV. S-07-0325FCDEFB, 2007 WL 1302504, at...