Opinion
5:24-cv-00465-SSS-SHKx
05-23-2024
Nickolas Scott Wrightnour v. Marriott Hotel Service, LLC, et al.
Present: The Honorable SUNSHINE S. SYKES, UNITED STATES DISTRICT JUDGE
CIVIL MINUTES-GENERAL
Proceedings: (IN CHAMBERS) ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND [Dkt. 17]
Before the Court is Plaintiff Nickolas Wrightnour's motion for remand [(Mot.) Dkt. 17]. The motion is fully briefed [Opp. (Dkt. 18); Reply (Dkt. 21)] and was taken under submission without a hearing. See Fed.R.Civ.P. 78(b); C.D. Cal. L.R. 7-15. For the reasons provided below, the motion is GRANTED. The matter is REMANDED to Riverside Superior Court.
I. BACKGROUND
A. Plaintiff's Complaint
At all times relevant to the complaint, Plaintiff was employed by Defendants as an hourly-paid and non-exempt worker. He brings this action on behalf of himself and a proposed class of those individuals employed by Defendants in California within the statute of limitations who either (a) “received overtime compensation at a rate lower than their respective regular rate[s] of pay” and/or (b) “were required by Defendants to stay on Defendants' premises for rest breaks.”
Plaintiff brings ten causes of action alleging various policies and/or practices maintained by Defendant in violation of California labor regulations. [Compl. (Dkt. 2)].
B. Notice of Removal
Plaintiff filed his complaint in Riverside Superior Court on January 16, 2024. Defendants timely removed to this Court under the Class Action Fairness Act (“CAFA”). [Notice of Removal (“NOR”) (Dkt. 1)]. To establish federal jurisdiction under CAFA, the removing party must show that the putative class exceeds 100 members; that there is “minimal diversity” between the parties; and that the amount in controversy alleged in the complaint exceeds $5 million.
Defendant asserts that the putative class includes at least 500 employees [NOR at ¶ 17] and that both the diversity requirement and amount-in-controversy requirements are satisfied [NOR at ¶ 7].
Defendant's notice of removal states that the amount-in-controversy requirement is satisfied by the damages sought in Plaintiff's Fifth Cause of Action, alleging that Defendants “failed to pay all compensation owed at the time of termination” to Plaintiff and all other class members terminated by Defendants during the relevant period. The notice does not specifically address the amount placed in controversy by Plaintiff's other causes of action.
II. LEGAL STANDARD
CAFA confers district courts subject matter jurisdiction over certain class actions. 28 U.S.C. § 1332(d)(2). A defendant seeking to remove a class action from state court under CAFA must file a notice of removal alleging facts that demonstrate the case meets CAFA's jurisdictional requirements: a class of more than 100 members, minimal diversity, and an amount in controversy that exceeds $5,000,000. 28 U.S.C. §§ 1332(d)(2); 1446(a).
Where, as here, the complaint does not enumerate the putative class's claimed damages, a removing defendant need only allege in its notice of removal that the amount in controversy requirement is met. See Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 88-89, (2014).
Thereafter, the plaintiff can contest the amount in controversy by making either a “facial” or “factual” attack on the defendant's jurisdictional allegations. See Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 2020). “A ‘facial' attack accepts the truth of the [defendant's] allegations but asserts that they ‘are insufficient on their face to invoke federal jurisdiction.'” Id. A factual attack “contests the truth of the ... allegations” themselves. Id. (citation omitted). When a plaintiff mounts a factual attack, the burden is on the defendant to show, by a preponderance of the evidence, that the amount in controversy exceeds the $5 million jurisdictional threshold. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). Both parties may submit evidence supporting the amount in controversy before the district court rules. Salter, 974 F.3d at 963; Ibarra, 775 F.3d at 1197.
III. DISCUSSION
Plaintiff's Fifth Cause of Action alleges that “Defendants intentionally and willfully failed to pay Plaintiff and the other class members who are no longer employed by Defendants” their full wages, “earned and unpaid, within seventy-two (72) hours of [the terminated employees'] leaving Defendants' employ” as required by Cal. Labor Code § 201 and § 202. [Compl. at ¶¶ 89, 90]
Cal. Labor Code § 203 provides that an employer owes waiting time penalties when it fails to pay an employee immediately upon termination (or, in certain circumstances, within 72 hours thereof). For each day that the employer fails to pay, it owes the employee one day of that employee's regular wages. The penalty is capped at 30 days. Wages” for the purposes of § 203 includes money the employer owed the employee at the time of termination for missed meal and rest breaks, unpaid overtime, and underpayment of minimum wage. See Naranjo v. Spectrum Sec. Servs., Inc., 13 Cal. 5th 93, 102, 109, 117 (2022).
Defendants' notice of removal and opposition to remand assert that Plaintiff's Section 203 claim places a minimum of $9 million in controversy. Defendants state that 2,998 putative class members are former employees potentially entitled to waiting-time penalties [and that the average hourly wage of these former employees is $20.41. Defendants substantiate both of these figures with sworn declarations informed by Defendants' payroll records. [Schafer Decl. at ¶ 6; Wright Decl. at ¶ 6; Supp. Schafer Dec., at ¶ 7]. Defendants then estimate the penalties allegedly owed to this subclass of terminated employees if each employee were entitled to approximately eight hours' worth of wages per day throughout the full 30-day penalty period. [Opp. at 9].
In his motion for remand, Plaintiff challenges Defendants' contentions (1) that the terminated class members worked, on average, approximately eight-hour days, and (2) that Plaintiff's complaint indicates that these class members seek penalties for the entire 30 days allowable under Section 203.
The Court finds that Defendants have satisfied their burden as to the first assumption but failed to adequately support the second. As such, Defendants have not established that jurisdiction is proper under CAFA.
A. Average Shift Length
The amount-in-controversy inquiry begins with the plaintiff's complaint. Greene v. Harley-Davidson, Inc., 965 F.3d 767, 771 (9th Cir. 2020). Here, the complaint states - without qualification - that Plaintiff and “the other class members worked over eight (8) hours in a day, and/or forty hours in a week during their employment with Defendants.” [Compl. (Dkt. 2) at ¶¶ 25, 40]. This language is, at a minimum, wholly consistent with Defendants' claim that Plaintiff has indicated all terminated class members may be entitled to waiting time penalties equivalent to full-time wages. Cf. Benitez v. Hyatt Corp., No. 23-1696, 2024 WL 1401712 at *4 (S.D. Cal. Mar. 21, 2024) (Defendant could not “rely on the Complaint to justify its assumption that class members consistently worked shifts of sufficient length” where the complaint alleged only that California class members “were required from time to time to work as ordered by [Defendant] for more than five (5) hours”).
Defendants also offer competent evidence indicating that the “average shift length for all currently known Putative Class Members is 7.89 hours per day.” [Supp. Schafer Dec., at ¶ 7]. Although Defendants' estimate incorporates data for both the terminated employees eligible for payments and the still-employed class members who would not be eligible, the Court concludes that - particularly in light of the allegations cited above - Defendants may rely on this figure as part of their amount-in-controversy calculation.
B. Maximum 30-Day Penalty
Next, the Court turns to Defendants' assumption that every terminated class member is entitled to the maximum thirty-day penalty available under Section 203.
Courts are split on the requisite allegations necessary to assume class members are entitled to the maximum 30-day penalty. On one hand, some courts have found that language “up to” does not by itself justify a 100% violation rate. See, e.g., Peters v. TA Operating LLC, No. 22-1831, 2023 WL 1070350 at *11 (C.D. Cal. Jan 26, 2023) (finding unreasonable the assumption that because plaintiff alleges she and the putative class are entitled to “up to” the 30-day maximum penalty that there was a 100% violation rate); Vasserman v. Henry Mayo Newhall Mem'l Hosp., 65 F.Supp.3d 932, 978 (C.D. Cal. 2014) (same); Barajas v. CPC Logistics Sols., LLC, No. 22-03911, 2022 WL 4397723 at *4 (N.D. Cal. Sept. 23, 2022) (same). Other courts have found otherwise, construing “up to” as a request for the maximum 30-day penalty and thus supports a 100% violation rate. See, e.g., Avila v. Rue21, Inc., 432 F.Supp.3d 1175, 1188 (E.D. Cal. 2020); Ford v. CEC Ent., Inc., No. 14-01420, 2014 WL 3377990, at *3 (N.D. Cal. July 10, 2014).
The Court agrees with the former line of cases and rejects Defendants' assumption that the class members are entitled to the entire maximum penalty period. Plaintiff alleges he and the class members are entitled to waiting penalties for the days that passed after termination or resignation “up to a thirty (30) day maximum.” [Compl. at ¶¶ 91, 92 (emphasis added)]. In this Court's view, the phrase “up to” leaves open the possibility that Defendants paid overdue wages to at least some of the terminated employees before the full statutory period had elapsed.
Because Defendants' opposition neither offers evidence to substantiate their contrary position, nor otherwise addresses the concerns outlined above, the Court finds that Defendants have failed to carry their burden to show that the terminated employees may be uniformly entitled to the maximum thirty-day penalty.
Further, because Defendants have not supported this necessary component of their amount-in-controversy estimate, the Court cannot conclude that CAFA's jurisdictional requirements are satisfied. It therefore finds that remand is required.
IV. CONCLUSION
For the reasons provided above, Plaintiff's motion is GRANTED. [Dkt. 17]. The matter is REMANDED to Riverside Superior Court for all further proceedings.
IT IS SO ORDERED.