Opinion
EDCV 23-2568 JGB (SHKx)
02-21-2024
Zeqoia Pearson v. Walmart Associates, Inc., et al.
Present: The Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE
CIVIL MINUTES-GENERAL
Proceedings: Order (1) DENYING Plaintiff's Motion to Remand (Dkt. No. 15); and (2) VACATING the February 26, 2024 Hearing (IN CHAMBERS)
Before the Court is Plaintiff Zeqoia Auju'Lii Pearson's motion to remand. (“Motion,” Dkt. No. 15.) The Court finds this matter appropriate for resolution without a hearing. See Fed.R.Civ.P. 78; L.R. 7-15. After considering all papers filed in support of and in opposition to the motion, the Court DENIES the Motion and VACATES the February 26, 2024 hearing.
I. BACKGROUND
On October 30, 2023, Plaintiff Zeqoia Auju'Lii Pearson (“Plaintiff”) filed a complaint in the Superior Court of California for the County of San Bernardino against Defendants Walmart Associates, Inc. and Walmart Inc. (jointly, “Defendants”), and Does 1 through 20, inclusive. (“Complaint,” Dkt. No. 1-2.) The Complaint alleges twelve causes of action: (1) discrimination in violation of the Fair Employment and Housing Act (“FEHA”), Cal. Gov. Code §§ 12940, et seq.; (2) retaliation in violation of the FEHA; (3) failure to prevent discrimination and retaliation in violation of the FEHA; (4) failure to provide reasonable accommodations in violation of the FEHA; (5) failure to engage in a good faith interactive process in violation of the FEHA; (6) declaratory judgment; (7) wrongful termination in violation of public policy; (8) failure to pay wages in violation of Cal. Labor Code §§ 201, 1194; (9) failure to provide rest periods in violation of Cal. Labor Code § 226.7; (10) failure to provide itemized wage and hour statements in violation of Cal. Labor Code §§ 226, et seq.; (11) waiting time penalties in violation of Cal. Labor Code §§ 201-203; and (12) unfair competition in violation of Cal. Bus. & Prof. Code §§ 17200, et seq. (See Complaint.)
On December 14, 2023, Defendants removed the action based on diversity jurisdiction. (“Notice of Removal,” Dkt. No. 1.) On January 17, 2024, Plaintiff filed the Motion. (See Motion.) Defendants opposed the Motion on February 5, 2024. (“Opposition,” Dkt. No. 16.) On February 12, 2024, Plaintiff replied. (“Reply,” Dkt. No. 17.)
II. LEGAL STANDARD
Pursuant to 28 U.S.C. § 1441(a), a defendant may remove a matter to federal court where the district court would have original jurisdiction. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Federal courts have limited jurisdiction, “possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013). As such, a defendant may remove civil actions in which a federal question exists or in which complete diversity of citizenship between the parties exists and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332. A removing defendant must file a notice of removal within thirty days after receipt of the initial pleading. Id. § 1446(b).
The Ninth Circuit “strictly construe[s] the removal statute against removal jurisdiction,” 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). “The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Jackson v. Specialized Loan Servicing, LLC, 2014 WL 5514142, at *6 (C.D. Cal. Oct. 31, 2014). The court must resolve doubts regarding removability in favor of remanding the case to state court. Id.
III. DISCUSSION
Neither party disputes that they are citizens of different states, as required by 28 U.S.C. § 1332(a). (See Motion; Opposition at 2.) They dispute only whether Defendants have shown that the amount in controversy exceeds $75,000.
The Court first considers whether it is "facially apparent" from the Complaint that the jurisdictional amount has been satisfied. See Simmons v. PCR Tech., 209 F.Supp.2d 1029, 1031 (N.D. Cal. 2002) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). Here, the Complaint does not specify the amount of damages sought, stating only that Plaintiff seeks “a money judgment representing compensatory damages including lost wages, earnings, commissions, retirement benefits, and other employee benefits, and all other sums of money, . . . for other special damages; and for general damages for mental pain and anguish and emotional distress and loss of earning capacity.” (Complaint at 25.) The Complaint also seeks damages pursuant to California Labor Code Sections 558, 226.7, 226, and 201-203 for a total amount no less than $18,261.15. (See id. at 25.) Finally, Plaintiff seeks punitive damages, restitutionary disgorgement of profits, attorneys' fees, and costs. (Id. at 25-26.) Because the Complaint sets a floor for damages but does not provide a specific amount, the amount in controversy is not facially apparent.
When a complaint does not specify the amount of damages, “the court may examine facts in the complaint and evidence submitted by the parties.” Simmons, 209 F.Supp.2d at 1031. The jurisdictional minimum may be satisfied by claims for special and general damages, attorneys' fees, and punitive damages. See Conrad Assoc. v. Hartford Accident & Indem. Co., 994 F.Supp. 1196, 1198 (N.D. Cal. 1998). The defendant bears the burden to establish the amount in controversy at removal. Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 981 (9th Cir. 2013). If “defendant's assertion of the amount in controversy is 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 Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014). This proof can include affidavits, 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) (quoting Singer, 116 F.3d at 377). Additionally, the defendant may rely on “reasonable assumptions underlying the defendant's theory of damages exposure.” Ibarra, 775 F.3d at 1198.
Defendants estimate that the amount in controversy exceeds $75,000. (See Opposition.) Plaintiff argues that Defendants' calculations of Plaintiff's lost wages, emotional distress damages, punitive damages, and attorneys' fees are speculative and unreasonable. (See Motion; Reply at 5.) The Court considers whether Defendants' estimates satisfy the amount in controversy requirement by a preponderance of the evidence. Dart Cherokee Basin Operating Co., LLC, 135 S.Ct. at 554.
A. Lost Wages
Plaintiff seeks recovery of economic damages, including past and future lost wages. (See Complaint at 8, 25.) Defendants estimate the amount in controversy for past and future lost wages is $67,877.84. (See Notice of Removal ¶¶ 21(a)-(b).) First, Plaintiff argues that Defendants' lost wages calculation is “mere speculation” because Defendants do not provide any “factual evidence” supporting it in their Notice of Removal. (See Motion at 5.) But Plaintiff's argument misstates the legal standard. Defendants are not required to submit “summary judgment-type evidence” at the time of removal, as Plaintiff seems to contend. (Id. at 4; Reply at 4.) See Dart Cherokee Basin Operating Co., LLC, 135 S.Ct. at 554. In fact, it appears that Plaintiff's counsel was recently informed of the proper legal standard in another case in this district but chose to again rely on the same incorrect argument before this Court. See Ortega v. AT&T Services, Inc., 2023 WL 8530002, at *1 (C.D. Cal. Dec. 8, 2023) (“Defendant was under no obligation to present evidence in support of its Notice of Removal. Although . . . it may present ‘summary-judgment-type evidence,' it is not required to have done so.”) (emphasis in original).
Moreover, Defendants are permitted to use allegations in the Complaint to calculate the amount in controversy. See Simmons, 209 F.Supp.2d at 1031 (“[T]he court may examine facts in the complaint.”); Campbell v. Vitran Express, Inc., 471 F. App'x. 646, 648 (9th Cir. 2012) (“[I]n 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.”) (internal quotations and citations omitted). Here, the Court finds that Defendants' lost wages estimate is reasonable. “Courts separate lost wages into two categories: past wages-i.e., lost wages between the date of Plaintiff's termination and the date of removal- and future wages-i.e., lost wages between the date of removal and trial.” Thayer v. Securitas Security Services USA, Inc., 2021 WL 1263837, at *2 (C.D. Cal. Apr. 6, 2021). Contrary to Plaintiff's contention that Defendants' estimate of lost wages is “unsupported” and relies on “nothing more than [Defendants'] own calculation,” the estimate of lost wages from the point of Plaintiff's termination to the date of removal is based on allegations in the Complaint itself. (See Reply at 2; Notice of Removal ¶ 21(a).) The Complaint alleges that Defendants wrongfully terminated Plaintiff's employment on December 10, 2022. (Complaint ¶ 17.) At the time, Plaintiff alleges she was paid $16.65 per hour and worked on a fixed schedule of five days per week, for approximately nine hours per day. (Id. ¶ 21.) As such, Defendants estimate that Plaintiff was paid $728.42 per week. The action was removed to this Court on December 14, 2023, just over 52 weeks from Plaintiff's date of termination. (Notice of Removal.) Accordingly, the estimated amount in controversy for lost wages, from the date of termination to the date of removal, is $37,877.84.
The Court's calculation of Plaintiff's weekly pay, based on the allegations in the Complaint, is $749.25 ($16.65 per hour x 9 hours per day x 5 days per week). Defendants, however, appear to reach a more conservative estimate of $728.42 per week by accounting for 40 hours per week at Plaintiff's regular pay rate, and then accounting for only an additional 2.5 hours per week at an overtime pay rate that is 1.5x the normal pay rate ($16.65 per hour x 40 hours per week + $24.97 per overtime hour x 2.5 hours per week). (See Notice of Removal ¶ 21(a); Opposition at 5.) Because Defendants' weekly pay estimate is more conservative than the Court's calculation, the Court uses Defendants' estimate. However, the Court notes that it cannot locate any affidavits, declarations, or information in the Complaint detailing the overtime pay rate or how overtime hours are accounted for to support Defendants' methodology.
The amount in controversy estimate also includes future lost wages, calculated from the date of removal to an estimated date of trial. Ortega, 2023 WL 8530002, at *2 (“[T]he Court must take into consideration not just lost wages up until the time of removal, but beyond that point as well.”). “[I]f the law entitles [a plaintiff] to recoup . . . future wages if she prevails, then there is no question that future wages are ‘at stake' in the litigation, whatever the likelihood that she will actually recover them.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018). “In such a situation, although the plaintiff's employer would have paid the wages in the future had she remained employed, they are presently in controversy.” Id. (emphasis in original). In Chavez, the Ninth Circuit further clarified: “When we say that the amount in controversy is assessed at the time of removal, we mean that we consider damages that are claimed at the time the case is removed by the defendant.” Id. While it was standard for courts in this district to decline projecting future lost wages, “[s]ince Chavez, district courts consistently have included as part of the amount in controversy future wages up to the expected date of trial in this action.” Uloa v. California Newspaper Partners, 2021 WL 6618815, at *6 (C.D. Cal. Oct. 21, 2021).
Here, Defendants' future lost wages estimate is based on the reasonable assumption that a trial will occur “one year from removal.” (Opposition at 6.) See Fisher v. HNTB Corp., 2018 WL 6323077, at *5 (C.D. Cal. Dec. 4, 2018) (“[T]he Court finds Defendants' proposed date of trial for purposes of this motion-one year from the date of removal-is a conservative estimate of the trial date.”); Beltran v. Procare Pharmacy, LLC, 2020 WL 748643, at *3 (C.D. Cal. Feb. 14, 2020) (“Next, the Court considers future wages....[T]his Court will apply the conservative one-year prospective trial date.”). Plaintiff's lost wages for these additional 52 weeks would amount to another $37,877.84 in damages-which Defendants conservatively estimate at $30,000. (See Opposition at 6.) The Court finds this estimate is reasonable.
Plaintiff also mentions that she has obtained “other full time employment a little after a month following [her] termination, thereby reducing the lost wages,” but provides no wages, hours, or other information related to that employment. (Motion at 1; Dkt. No. 15-1 ¶ 4.) In any case, the amount in controversy reflects the “amount at stake in the underlying litigation” and does not reflect the impact of affirmative defenses such as the duty to mitigate. Greene v. Harley-Davidson, 965 F.3d 767, 774 (9th Cir. 2020) (“The district court erred in considering the merits of Harley-Davidson's affirmative defense to determine the amount in controversy.”); see also Geographic Expeditions, Inc. v. Est. of Lhotka ex. rel. Lhotka, 599 F.3d 1102, 1108 (9th Cir. 2010) (“[J]ust because a defendant might have a valid defense that will reduce recovery to below the jurisdictional amount does not mean the defendant will ultimately prevail on that defense.”); Jackson v. Compass Grp. USA, Inc., 2019 WL 3493991, at *4 (C.D. Cal. July 31, 2019) (“[M]itigation of damages is an affirmative defense, and a potential defense does not reduce the amount in controversy for purposes of establishing federal jurisdiction.”) (internal citations and quotations omitted). “[I]f a district court had to evaluate every possible defense that could reduce recovery below the jurisdictional amount the district court would essentially have to decide the merits of the case before it could determine if it had subject matter jurisdiction.” Id. The Court notes that Plaintiff, as in Ortega, also fails to “present[] any authority that the possibility of mitigation might matter.” Ortega, 2023 WL 85300 02, at *3. As such, the Court does not consider the impact of Plaintiff's new job in estimating the amount in controversy.
The Court finds that Defendants' calculation of lost wages is reasonable, and the estimated amount in controversy for lost wages is $67,877.84.
B. Labor Code Violations
In the Complaint, Plaintiff separately seeks penalties and damages for alleged California Labor Code violations, in specified amounts. (See Complaint at 25.) Plaintiff seeks: (1) statutory penalties or damages pursuant to Labor Code Section 558 no less than $2,450; (2) rest period compensation pursuant to Labor Code Section 226.7 no less than $7,611.15; (3) damages pursuant to Labor Code Section 226 no less than $4,000; and (4) waiting time penalties pursuant to Labor Code Sections 201-203 no less than $4,200. (Id.) These penalties and damages amount to a minimum of $18,261.15, and they are apparent on the face of the Complaint. As such, the Court considers these damages in its total amount in controversy calculation. See Simmons v. PCR Tech., 209 F.Supp.2d at 1031.
In total, the amount in controversy stemming from the estimates of lost wages and Labor Code violations-both of which the Court deems reasonable-is $86,138.99. This amount in controversy exceeds the threshold of $75,000 required to establish diversity jurisdiction. See 28 U.S.C. §§ 1331, 1332. As such, the Court does not analyze Defendants' estimates of emotional distress damages, punitive damages, and attorneys' fees, and it finds Defendants have met their burden of satisfying the amount in controversy by a preponderance of the evidence.
Accordingly, diversity jurisdiction exists.
IV. CONCLUSION
For the above reasons, the Court DENIES Plaintiff's motion to remand. The Court VACATES the February 26, 2024 hearing.
IT IS SO ORDERED.