Opinion
Case No. 18-cv-06710-RS
03-15-2019
Imelda DE VEGA, Plaintiff, v. BAXTER HEALTHCARE CORPORATION, Defendant.
Douglas Han, Shunt Tatavos-Gharajeh, Justice Law Corporation, Pasadena, CA, for Plaintiff. Aaron Hunter Cole, Evan Reed Moses, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Los Angeles, CA, Thomas B. Song, Ogletree Deakins Nash Smoak and Stewart PC, Costa Mesa, CA, for Defendant.
Douglas Han, Shunt Tatavos-Gharajeh, Justice Law Corporation, Pasadena, CA, for Plaintiff.
Aaron Hunter Cole, Evan Reed Moses, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Los Angeles, CA, Thomas B. Song, Ogletree Deakins Nash Smoak and Stewart PC, Costa Mesa, CA, for Defendant.
ORDER DENYING MOTION TO REMAND
RICHARD SEEBORG, United States District Judge
I. INTRODUCTION
Plaintiff Imelda De Vega filed this putative class action in Alameda Superior Court. The complaint asserts various wage and hour violations against defendant Baxter Healthcare Corporation on behalf of California hourly-paid or non-exempt employees who worked for Baxter during any period within four years prior to filing of the complaint through time of judgment. The complaint does not disclose the dollar amount in controversy.
Baxter removed the action to this court pursuant to the Class Action Fairness Act of 2005 ("CAFA"), see 28 U.S.C. § 1332(d), contending that the amount in controversy can be reasonably estimated to exceed the $5 million threshold for jurisdiction under CAFA. De Vega moves to remand, arguing that Baxter has not met its burden to establish the amount in controversy is sufficient. Pursuant to Civil Local Rule 7-1(b), the motion has been submitted without oral argument. Because Baxter has presented reasonable estimates sufficiently grounded in evidence, and De Vega has provided no rebuttal evidence, the motion will be denied.
II. LEGAL STANDARDS
The Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d), gives federal courts original jurisdiction over class actions where there are at least 100 class members, at least one plaintiff is diverse in citizenship from any defendant, and the amount in controversy exceeds $5,000,000, exclusive of interest and costs. Ibarra v. Manheim Investments, Inc. , 775 F.3d 1193, 1195 (9th Cir. 2015). A class action that meets CAFA standards may be removed to federal court. 28 U.S.C. § 1441(a). Even assuming a presumption against the propriety of removal jurisdiction may apply in ordinary cases, "no antiremoval presumption attends cases invoking CAFA." Dart Cherokee Basin Operating Co., LLC v. Owens , 574 U.S. 81, 135 S. Ct. 547, 554, 190 L.Ed.2d 495 (2014). In fact, Congress intended CAFA jurisdiction to be "interpreted expansively." Ibarra , 775 F.3d at 1197.
Under CAFA, a defendant removing a case must provide "a short and plain statement of the grounds for removal...." Id. The notice of removal needs only a "plausible allegation that the amount in controversy exceeds the jurisdictional threshold" and need not be supported by evidentiary submissions. Id. (quoting Dart , 135 S. Ct. at 554 ).
When testing the amount in controversy alleged, courts look first to the allegations of the complaint. Id. If the damages are not stated or if the defendant contends the damages are understated, the defendant must show by a preponderance of evidence that the aggregate amount exceeds the $5,000,000 threshold. Id. The defendant in a jurisdictional dispute has the "burden to put forward evidence showing that the amount in controversy exceeds $5 million, to satisfy other requirements of CAFA, and to persuade the court that the estimate of damages in controversy is a reasonable one." Id. at 1197.
Typically, when the plaintiff contests the defendant's amount-in-controversy allegations, both sides submit proof, and the court decides whether the jurisdictional threshold has been met. Id. (quoting Dart , 135 S. Ct. at 554 ). The parties may submit evidence beyond the complaint such as affidavits, declarations, or other "summary-judgment type evidence relevant to the amount in controversy ...." Singer v. State Farm Mut. Auto. Ins. Co. , 116 F.3d 373, 377 (9th Cir. 1997).
"Mere speculation and conjecture, with unreasonable assumptions" is not sufficient to establish removal jurisdiction. Ibarra , 775 F.3d at 1197 ; see also Fong v. Regis Corp. , No. 13-cv-04497-RS, 2014 WL 26996, at *2 (N.D. Cal. Jan. 2, 2014). "CAFA's requirements are to be tested by consideration of real evidence and the reality of what is at stake in the litigation, using reasonable assumptions underlying the defendant's theory of damages exposure." Ibarra , 775 F.3d at 1198. The burden to establish the amount in controversy by a preponderance of the evidence, however, does not require the defendant to "research, state, and prove the plaintiff's claims for damages." Donald v. Xanitos, Inc. , No. 14-CV-05416-WHO, 2015 WL 1774870, at *4 (N.D. Cal. 2015) (quoting Korn v. Polo Ralph Lauren Corp. , 536 F. Supp. 2d 1199, 1204 (E.D. Cal. 2008) ); see also, Mackall v. Healthsource Glob. Staffing, Inc. , No. 16-CV-03810-WHO, 2016 WL 4579099, at *2-*3 (N.D. Cal. Sept. 2, 2016) (summarizing standards similarly).
III. DISCUSSION
In support of its Notice of Removal, Baxter submitted the declaration of Carolyn Eller, Senior Manager, Payroll & Time Entry, setting out the employment data underlying its calculation of the amount in controversy of not less than $10,750,520.03. In opposition to the remand motion, Eller provides a supplemental declaration with certain additional detail.
De Vega criticizes the original Eller declaration for failure to specify the records reviewed and for not attaching copies of relevant documents. As support for the original notice of removal, the declaration needed only to present "plausible allegations" and it did not have to constitute an admissible evidentiary submission. Ibarra , 775 F.3d at 1197. To the extent Eller's declarations are offered as evidence in opposition to remand, they lay an adequate foundation for the facts asserted and submission of copies of underlying documents is not critical.
Based on the number of employees in the putative class, the average hourly wage, and the number of work weeks at issue, Baxter calculates allegedly unpaid overtime in controversy of just under $3.7 million, purportedly missed meal period and rest period penalties of just over $4.9 million, and claimed wage statement and waiting time penalties of approximately $2.2 million. Applying the 25% "benchmark" for attorney fees to the damages claim, Baxter calculates another approximately $2.7 million, for a total amount in controversy of nearly $13.6 million. The parties’ dispute turns on whether Baxter is entitled to estimate that class members worked one hour of unpaid overtime, missed one meal period, and one rest period every work week, and that they may be entitled to the maximum penalties on the wage statement and waiting time claims. The complaint repeatedly states that Baxter's allegedly wrongful conduct was a matter of "pattern and practice." As De Vega points out such allegations, standing alone, do not support an assumption that the amount in controversy can be properly calculated using an assumption of a "100% violation rate." See Ibarra , 775 F.3d at 1198–99 ("a ‘pattern and practice’ of doing something does not necessarily mean always doing something .... While it is true that the complaint alleges that Manheim maintains ‘an institutionalized unwritten policy that mandates’ the employment violations alleged in the complaint, including the denial of meal and rest periods, this does not mean that such violations occurred in each and every shift.")
That number could rise as the alleged class period has not terminated.
Here, however, Baxter has not premised its calculations on a presumed 100% violation rate. Rather, it has conservatively assumed that putative class members were required to work only one hour of unpaid overtime each week, and missed meal and rest breaks only once a week on average as well. While Baxter does assume maximum penalties are at stake, that is hardly an unreasonable position in the context of the claims being advanced. If the gravamen of the allegation were that Baxter was sometimes tardy in providing final paychecks, then indeed it would not be reasonable to assume that nearly all employees did not get their final paychecks for 30 or more days. De Vega's theory, however, plainly is that putative class members were owed (and are still owed) pay for overtime and missed meal and rest breaks, even if their final paychecks were otherwise timely delivered. Thus, it is completely reasonable to assume waiting time penalties accrued to the thirty-day limit because of those unpaid sums, and that class members virtually all hold wage statement penalty claims as well.
The complaint does contain disclaimers that "not all" employees have wages statement and waiting time penalties claims. No factual basis for distinguishing among the employees is alleged, however. Even assuming the amount in controversy for these claims must be reduced significantly, the total claims remain well over the jurisdictional minimum.
De Vega may be correct that Baxter has presented no direct evidence to ground its assumptions of a one hour in unpaid overtime, one missed meal break, and one missed rest break each week. De Vega's alternate proposal to assume a quarter hour in unpaid overtime each week and one missed meal break or one missed rest break, however, is likewise untethered to factual evidence.
See, Ibarra , 775 F.3d at 1199 (plaintiff "did not assert an alternative violation rate grounded in real evidence, such as an affidavit ... asserting how often he was denied meal and rest breaks.")
De Vega insists she has no obligation to come forward with such evidence because Baxter has the burden of establishing jurisdiction. While the ultimate burden does lie with Baxter, most typically once jurisdiction has been challenged, "both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied." Dart , 135 S. Ct. at 554. There nonetheless may be cases where plaintiff can successfully resist remand merely by showing through argument (as opposed to by submitting rebuttal evidence) that the removing defendant's evidence is insufficient to support jurisdiction. This is not such a case, because Baxter has made an adequate showing that the amount in controversy exceeds the $5 million threshold, notwithstanding that the violation rate and penalty rates it utilizes in its calculations are presumed, rather than established by statistical or other direct evidence. Baxter is entitled to make such assumptions, as long as they are reasonable , given both the allegations of the complaint, and whatever factual evidence may be available in the record. See Ibarra , 775 F.3d at 1199 ("[E]vidence may be direct or circumstantial. In either event, a damages assessment may require a chain of reasoning that includes assumptions."); see also Garza v. Brinderson Constructors, Inc. , 178 F.Supp.3d 906, 910-12 (N.D. Cal. 2016) (defendant's "assumption of one violation per week is reasonable based on the allegations of the SAC" that defendant regularly failed to provide rest breaks and had a "pattern and practice" of failing to provide those breaks); see generally, Mackall, supra , 2016 WL 4579099 (rejecting calculations based on 100% violation rate, but denying remand where more conservative assumptions, strikingly similar to those made by defendant here, still resulted in an amount in controversy over the threshold).
De Vega's own proposed calculations result in an amount in controversy of more than $4.2 million. Even a slight upward adjustment to any one of her estimated figures can take the total over $5 million, further confirming that Baxter has not merely manufactured jurisdiction through unreasonably inflated estimates.
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IV. CONCLUSION
The motion to remand is denied.