Joseph v. Sea World LLC

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 STEVEN JOSEPH, an individual, on Case No.: 24-cv-01937-AJB-SBC behalf of himself and on behalf of all [12] persons similarly situated, ORDER DENYING PLAINTIFF’s 13 MOTION TO REMAND CASE TO Plaintiff, STATE COURT [14] v. 15 (Doc. No. 13) SEA WORLD LLC, et al., [16] Defendants. [18] 19 Before the Court is Plaintiff Steven Joseph’s (“Plaintiff”) motion to remand the 20 instant action to state court. (Doc. No. 13.) Pursuant to Civil Local Rule 7.1.d.1, the Court 21 finds the matter suitable for determination on the papers. For the reasons set forth below, 22 the Court DENIES Plaintiff’s motion to remand. 23 I. BACKGROUND1 24 On September 16, 2024, Plaintiff, a former non-exempt employee of Defendant, 25 filed a putative wage and hour class action complaint in the Superior Court of the State of [27] 1 The following facts taken from the complaint are construed as true for the limited purpose of [28] 1 California for the County of San Diego, Case No. 24CU011286C, on behalf of himself and 2 other similarly situated hourly non-exempt employees of Defendant who worked in 3 California. (See Doc. No. 1-3 at 5–51, Complaint. (“Compl.”).) Plaintiff alleges nine causes 4 of action: (1) Violation of Unfair Competition Laws; (2) Failure to Pay Minimum Wages; 5 (3) Failure to Pay Overtime Compensation; (4) Failure to Provide Required Meal Periods; 6 (5) Failure to Provide Required Rest Periods; (6) Failure to Provide Accurate Itemized 7 Statements; (7) Failure to Reimburse Employees for Required Expenses; (8) Failure to Pay 8 Wages When Due; and (9) Failure to Pay Sick Pay Wages. (Id.) 9 On October 18, 2024, Defendant removed this action from the San Diego Superior 10 Court pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1332 , 11 1441, 1446, and 1453. (See generally Doc. No. 1.) One week later, Defendant filed its 12 answer, generally denying the allegations and raising affirmative defenses. (Doc. No. 9.) 13 On November 15, 2024, Plaintiff brought the instant motion to remand. (Doc. No. 13.) 14 II. LEGAL STANDARD 15 CAFA grants federal courts jurisdiction over certain class actions if the class has at 16 least 100 members, the parties are minimally diverse, and the amount in controversy 17 exceeds $5 million. See 28 U.S.C. § 1332 (d)(2), (5)(B); Std. Fire Ins. Co. v. Knowles, 568 18 U.S. 588 , 592 (2013). As Plaintiff only challenges the amount in controversy element, the 19 Court only addresses this issue. 20 A class action meeting CAFA standards may be removed to federal court. See 28 21 U.S.C. § 1332 (d)(2); 28 U.S.C. § 1441 (a). Because Congress enacted CAFA “to facilitate 22 adjudication of certain class actions in federal court,” “no antiremoval presumption attends 23 cases invoking CAFA[.]” Jauregui v. Roadrunner Transportation Servs., Inc., 28 F.4th 24 989, 992–93 (9th Cir. 2022) (quoting Dart Cherokee Basin Operating Co., LLC v. Owens, [25] 574 U.S. 81 , 89 (2014)). In fact, “Congress intended CAFA to be interpreted expansively.” 26 Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015); see also Dart 27 Cherokee, 574 U.S. at 89 (“CAFA’s provisions should be read broadly, with a strong 28 preference that interstate class actions should be heard in a federal court if properly 1 removed by any defendant.”). 2 Under CAFA, the burden of establishing removal jurisdiction rests on the removing 3 party. Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011). “[A] 4 removing defendant’s notice of removal ‘need not contain evidentiary submissions’ but 5 only plausible allegations of the jurisdictional elements.” Arias v. Residence Inn by 6 Marriott, 936 F.3d 920, 922 (9th Cir. 2019) (quoting Ibarra, 775 F.3d at 1197 ). “[T]he 7 defendant’s amount-in-controversy allegation should be accepted when not contested by 8 the plaintiff or questioned by the court.” Dart Cherokee, 574 U.S. at 87. However, if “a 9 defendant’s assertion of the amount in controversy is challenged[,] both sides submit proof 10 and the court decides, by a preponderance of the evidence, whether the amount-in11 controversy requirement has been satisfied.” Arias, 936 F.3d at 925 (quoting Dart 12 Cherokee, 574 U.S. at 88); see also Ibarra, 775 F.3d at 1197 (“Whether damages are 13 unstated in a complaint, or, in the defendant’s view are understated, the defendant seeking 14 removal bears the burden to show by a preponderance of the evidence that the aggregate 15 amount in controversy exceeds $5 million when federal jurisdiction is challenged.”). 16 “Under this system, CAFA’s requirements are to be tested by consideration of real 17 evidence and the reality of what is at stake in the litigation, using reasonable assumptions 18 underlying the defendant’s theory of damages exposure.” Ibarra, 775 F.3d at 1198 . “After 19 considering any evidence put forth by the parties, and assessing the reasonableness of the 20 defendant’s assumptions, ‘the court then decides where the preponderance lies.’” Harris v. 21 KM Indus., Inc., 980 F.3d 694, 701 (9th Cir. 2020) (quoting Ibarra, 775 F.3d at 1198 ). 22 “A defendant need not make the plaintiff’s case for it or prove the amount in 23 controversy beyond a legal certainty.” Id. Instead, “a defendant satisfies the amount-in24 controversy requirement under CAFA if it is reasonably possible that it may be liable for 25 the proffered punitive damages amount.” Greene v. Harley-Davidson, Inc., 965 F.3d 767 , 26 772 (9th Cir. 2020). The amount in controversy or “‘[a]mount at stake’ does not mean 27 likely or probable liability; rather, it refers to possible liability.” Id. (emphasis added). 28 /// 1 III. DISCUSSION 2 Plaintiff contends the amount in controversy does not meet or exceed CAFA’s 3 $5,000,000 amount in controversy requirement, making remand required. (See generally 4 Doc. No. 13-1.) Specifically, Plaintiff asserts that the declaration Defendant included with 5 its notice of removal is “insufficient” and “unreliable.” (Id. at 8, 14–17; Doc. No. 17 at 4– 6 5.) Second, Plaintiff contends Defendant’s assumptions regarding violation rate and wait 7 time penalties are unreasonable. (Doc. Nos. 13-1 at 9–17; 17 at 4–6.) Finally, Plaintiff 8 asserts that Defendant “fails to meet its burden as to any of Plaintiff’s additional claims” 9 because Defendant does not analyze or provide support for the other eight claims meeting 10 the amount in controversy. (Doc. No. 13-1 at 17–18.) To support his arguments, Plaintiff 11 asserts that there is a “‘strong presumption’ that the amount in controversy is insufficient 12 to confer federal jurisdiction,” essentially arguing that there is a presumption against 13 removal. (Doc. Nos. 13-1 at 6–7.) 14 In opposition, Defendant argues Plaintiff’s motion lacks merit because (1) there is 15 no antiremoval presumption in CAFA cases; (2) Defendant’s calculations are supported by 16 competent evidence sufficient to prove the amount in controversy; and (3) Defendant’s 17 assumptions are reasonable based on the language of Plaintiff’s complaint. (See generally 18 Doc. No. 15.) 19 1. No Antiremoval Presumption 20 First, Plaintiff argues Defendant “attempt[s] to shift the burden of proof” and 21 “conflates the standard for removal with the standard to oppose Plaintiff’s remand motion.” 22 (See Doc. No. 17 at 6–8.) In support, Plaintiff relies on case law setting forth an antiremoval 23 presumption in non-CAFA cases, (Doc. Nos. 13-1 at 7 (quoting Hunter v. Philip Morris 24 USA, 582 F.3d 1039, 1042 (9th Cir. 2009) and Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th 25 Cir. 1992); 17 at 7 (“Defendant, however, has not overcome the “strong presumption” that 26 the amount in controversy is insufficient to confer federal jurisdiction.”)), and 27 misstatements of the law (see id. at 7–8 (citing Dart Cherokee, 574 U.S. at 84)). To the 28 latter point, Plaintiff asserts that “as [he] specifically pled that the aggregate claim is under 1 $5 million[,] . . . Plaintiff’s assertion that this case involves an amount in controversy of 2 less than $5 million is presumed to be correct.” (Id. at 7 (citing Dart Cherokee, 574 U.S. at 3 84); Doc. No. 13-1 at 6.) 4 Plaintiff attempts to impose, both explicitly in his legal standard and implicitly in 5 his arguments, a presumption against CAFA jurisdiction, relying on the exact case law the 6 Ninth Circuit has addressed as inapposite to CAFA. See Jauregui v. Roadrunner 7 Transportation Servs., Inc., 28 F.4th 989, 993 (9th Cir. 2022) (stating the lower court was 8 “incorrect” to apply the “skepticism and resistance” of Gaus to CAFA). However, “no 9 antiremoval presumption attends cases invoking CAFA, which Congress enacted to 10 facilitate adjudication of certain class actions in federal court.” Dart Cherokee, 574 U.S. at 11 89. 12 Moreover, to presume a plaintiff’s alleged damages correct when challenged by the 13 defendant in a notice of removal would, in effect, create a presumption against CAFA 14 where a plaintiff artfully prays for damages not to exceed $5 million. Cf. Ibarra, 775 F.3d 15 at 1197 (“Whether damages are unstated in a complaint, or, in the defendant’s view are 16 understated, the defendant seeking removal bears the burden to show by a preponderance 17 of the evidence that the aggregate amount in controversy exceeds $5 million when federal 18 jurisdiction is challenged. . . . [T]his rule is not altered even if plaintiffs affirmatively 19 contend in their complaint that damages do not exceed $5 million.”) (emphasis added); see 20 also Std. Fire Ins. Co. v. Knowles, 568 U.S. 588 , 592–93 (2013) (holding that a class action 21 plaintiff’s stipulation in the complaint not to seek aggregate damages in excess of $5 22 million cannot bar CAFA jurisdiction). 23 Rather, the Court will consider the evidence put forth by the parties, assess the 24 reasonableness of Defendant’s assumptions, and then decide where the preponderance lies. 25 See Harris, 980 F.3d at 701 . 26 2. Reliability of the Evidence 27 Second, Plaintiff contends this Court should reject Defendant’s calculations as based 28 on “unreliable declaration testimony.” (Doc. Nos. 13-1 at 8–17; 17 at 2, 4–8.) Specifically, 1 Plaintiff asserts that the declaration “fails to provide any explanation as to why it is 2 reasonable to assume [a 100% violation rate] to all 9,193 of the former employees who are 3 potentially the subject of this claim.” (Doc. No. 13-1 at 16.) Plaintiff further asserts that 4 Defendant has not provided evidence addressing how many terminated employees were 5 full- versus part-time, what that average number of hours worked by the class members 6 was, and the class members’ rates of pay. (Id.) 7 In attempting to pigeon-hole the instant action into the circumstances of other 8 unpublished, district court cases, Plaintiff makes incorrect factual statements. In this action, 9 Defendant’s notice of removal was supported by the declaration of Christopher Hagerman, 10 a Business Analyst working for Defendant. (Doc. No. 1-5, Declaration of Christopher 11 Hagerman (“Hagerman Decl.”).) Hagerman avers under penalty of perjury that he 12 “reviewed or caused to be reviewed records for each non-exempt employee employed at 13 SeaWorld San Diego from September 16, 2021 to September 25, 2024.” (Hagerman Decl. 14 ¶ 4.) Based on this review, Hagerman further avers that 9,193 non-exempt putative class 15 members were terminated during that time period, that those individuals worked an average 16 of 6.63 hours per day, and that they earned an average hourly wage of $17.50. (Id.) 17 Hagerman’s personal knowledge of Defendant’s business records, which he had access to 18 and reviewed as part of his duties as a Business Analyst, provides sufficient foundation for 19 the evidence offered in his declaration. See Rivera v. Jeld-Wen, Inc., No. 21-CV-0181620 AJB-AHG, 2022 WL 3702934 , at *4 (S.D. Cal. Feb. 4, 2022) (sufficient foundation laid 21 by the defendant’s senior director of financial shared services attesting to knowledge of 22 business records based on personal review). 23 Additionally, Plaintiff asserts that, in order to meet its burden, Defendant must 24 provide in its opposition “actual figures” and “real evidence” supporting a 100% violation 25 rate. (Doc. No. 17 at 4–6.) Plaintiff’s argument in essence is that Hagerman’s declaration 26 is insufficient because it does not provide concrete proof from Defendant’s business 27 records that Defendant violated the law. Although the parties are to submit “summary28 judgment-type evidence” to support or oppose a motion to remand, a motion to remand is 1 not itself subject to the summary judgment standard. See e.g., Lopez v. First Student, Inc., [2] 427 F. Supp. 3d 1230 , 1236 (C.D. Cal. 2019) (“While Defendants bear the burden of 3 establishing removal was proper, they need not prove Plaintiffs’ case to do so.”); Bryant v. 4 NCR Corp., 284 F. Supp. 3d 1147 , 1150–51 (S.D. Cal. 2018) (“Plaintiff appears to argue 5 Defendant cannot rely on Ms. Hall’s declaration without producing evidence upon which 6 Ms. Hall bases her declaration. Contrary to Plaintiff’s argument, Defendant need not 7 produce business records setting forth the precise number of employees in the putative 8 class and the precise calculation of damages alleged to meet its burden regarding the 9 amount in controversy. Where, as here, a defendant must prove the amount in controversy 10 by a preponderance of the evidence, a declaration or affidavit may satisfy the burden.”) 11 (citations and quotation marks omitted). 12 Accordingly, the Court finds Hagerman’s declaration to be “summary-judgment13 type evidence relevant to the amount in controversy [that Defendant filed] at the time of 14 removal.” See Ibarra, 775 F.3d at 1197 . Although Plaintiff baldly claims that the 15 declaration is “unreliable,” Plaintiff fails to provide any support substantiating such a 16 claim. As such, the Court will consider Hagerman’s declaration in assessing the 17 reasonableness of Defendant’s assumptions. 18 2. Reasonableness of Defendant’s Calculations 19 Third, Plaintiff argues this Court should reject Defendant’s calculations as based on 20 “unsupported,” “unreasonable” assumptions. (Doc. Nos. 13-1 at 8–17; 17 at 2, 4–8.) 21 Specifically, Plaintiff asserts that Defendant provides no reasonable basis for a 100% 22 violation rate where “every single one of the 9,193 class members are [sic] owed the 23 maximum amount of waiting time penalties in the collective amount $31,998,534.75.” 24 (Doc. No. 13-1 at 9, 16.) 25 In its notice of removal, Defendant’s sole assertion regarding the amount in 26 controversy is based on Plaintiff’s eighth cause of action, which alleges that Defendant 27 failed to timely pay all earned wages at the time of separation of employment. (Doc. No. 1 28 at 4–5.) Defendant states that between September 16, 2021, to September 25, 2024, at least 1 9,193 non-exempt employees’ employment was terminated, their average hourly rate of 2 pay was approximately $17.50, and they worked an average of 6.63 hours per day. (Id. at 3 5.) Defendant asserts, based on the unqualified allegations in Plaintiff’s complaint, that it 4 failed to pay each class member their outstanding wages for the full 30-day statutory 5 period—a 100% violation rate. (Id.) Using these calculations, Defendant presents an 6 amount in controversy totaling at least $31,998,534.75. (Id.) 7 In its opposition to the instant motion, Defendant asserts that its calculations 8 regarding the waiting time penalties and the 100% violation rate are reasonably and 9 logically based on the plain language of Plaintiff’s complaint, which alleges maximum 10 recovery. (Doc. No. 15 at 9–12.) Because of this, Defendant argues the 100% violation rate 11 and waiting time penalties are proper, but notes that even a 16% violation rate would satisfy 12 the amount in controversy requirement. (Id. at 12–13.) Defendant further justifies its 100% 13 violation rate by relying upon Coleman v. Estes Express Lines, Inc., 730 F. Supp. 2d 1141 , 14 1149 (C.D. Cal. 2010), which holds a 100% violation rate as acceptable if a more precise 15 violation rate is not alleged. (Doc. No. 15 at 8 (quoting Coleman, 730 F. Supp. 2d at 1149 ).) 16 Although Plaintiff’s complaint does not expressly assert that all class members were 17 not tendered all wages as required by law at termination, the complaint asserts once that 18 many were and otherwise does not qualify or otherwise limit the putative class. (Compl. ¶ 19 111.) Additionally, Plaintiff alleges repeatedly that Defendant had a “practice, policy and 20 procedure to deny paying the Plaintiff and the other [putative class] members . . . all of 21 their vested vacation and holiday vacation and holiday time,” that Defendant’s “uniform 22 practice and policy of failing to pay the [putative class m]embers for all vested vacation 23 and holiday time accumulated at employment termination violated and continues to violate 24 Section 227.3 of the California Labor Code,” and that these violations occurred “at all 25 times” during the class period. (Id. (emphasis added).) 26 The Court agrees with Defendant that Plaintiff’s broad language supports a 100% 27 violation rate at this time. See Coleman, 730 F. Supp. 2d at 1149–50 (“Courts have assumed 28 a 100% violation rate in calculating the amount in controversy when the complaint does 1 not allege a more precise calculation . . . Plaintiff included no limitation on the number of 2 violations, and, taking his complaint as true, Defendants could properly calculate the 3 amount in controversy based on a 100% violation rate.”). Even considering the initial 4 qualifier of “many,” a violation rate of more than 16% is reasonable, which would still 5 exceed the required amount in controversy. 6 Considering that Defendant’s assumption of violation rates is reasonable, the Court 7 next turns to whether Defendant’s method of calculation is reasonable. Defendant’s 8 calculations consist of taking average values set forth in Hagerman’s declaration and 9 multiplying them to estimate the amount in controversy. This is an accepted method of 10 calculating potential waiting time penalties for determining CAFA jurisdiction. See Rippee 11 v. Boston Market Corp., 408 F. Supp. 2d 982 , 985–96 (S.D. Cal. 2005) (“The potential 12 amount of ‘waiting time penalties’ at stake can be calculated by multiplying the number of 13 former employees in the proposed class by thirty days’ wages; thirty days’ wages can be 14 calculated by multiplying the average number of hours worked by the average rate of 15 pay.”). 16 While Defendant bears the burden of proof to establish by a preponderance of the 17 evidence whether the amount in controversy requirement is satisfied, both parties had the 18 opportunity to submit proof regarding the amount in controversy. See Ibarra, 775 F.3d at 19 1199. Plaintiff submits no evidence to undermine the reasonableness of Defendant’s 20 calculations. 21 Accordingly, Hagerman’s declaration, the broad language of Plaintiff’s complaint, 22 and Defendant’s reasonable assumptions derived therefrom provide sufficient evidence to 23 demonstrate by a preponderance of the evidence that the amount in controversy exceeds 24 CAFA’s minimum threshold. See also Branch v. PM Realty Grp., L.P., 647 Fed. App’x 25 743, 744 (9th Cir. 2016) (finding a declaration submitted by the defendant “attesting to the 26 number of nonexempt hourly employees, the number of weeks they worked, and their 27 average hourly rate of pay” and reasonable assumptions based on those numbers sufficient 28 evidence that the amount in controversy exceeded $5 million). Defendant has met its 1 |}burden to demonstrate that federal jurisdiction is proper. 2 4. Plaintiff’s Other Claims 3 Finally, Plaintiff asserts without any legal basis that the case should be remanded 4 || because Defendant fails to analyze or place an amount in controversy as to any of Plaintiffs 5 || additional claims. (Doc. No. 13-1 at 17—18.) The jurisdictional requirement for the amount 6 || in controversy is based on the action not on the individual claims. Plaintiff's argument fails. 7 CONCLUSION 8 For the foregoing reasons, the Court DENIES Plaintiff's motion to remand. The 9 || Court ORDERS the parties to jointly contact Magistrate Judge Chu’s chambers within 10 || three days of the electronic docketing of this Order to request the Early Neutral Evaluation 11 Case Management Conference be reset. (See Doc. No. 19.) 12 IT IS SO ORDERED. 13 Dated: January 22, 2025 © ¢ 14 Hon. Anthony J.Battaglia 15 United States District Judge