Collin v. Cascade Living Group Mgt., LLC

[7] 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- [11] 12 KELLY COLLIN, an individual, on No. 2:24-cv-03236 WBS AC behalf of herself and all others 13 similarly situated, 14 Plaintiff, MEMORANDUM AND ORDER RE: PLAINTIFF’S MOTION TO REMAND 15 v. 16 CASCADE LIVING GROUP MANAGEMENT, LLC, a Washington Limited 17 Liability Company; CASCADE LIVING GROUP — GRASS VALLEY, 18 LLC, a Washington Limited Liability Company; and DOES 1 TO 19 50, 20 Defendants. [21] 22 ----oo0oo---- 23 Plaintiff Kelly Collin brought this putative wage-and24 hour class action in Nevada County Superior Court, alleging (1) 25 failure to pay minimum wages under Cal. Labor Code § 1197 ; (2) 26 failure to pay overtime wages under Labor Code § 510; (3) failure 27 to provide rest periods under Labor Code § 226.7; (4) failure to 28 provide meal periods under Labor Code §§ 226.7, 512; (5) failure 1 to maintain accurate employment records under Labor Code § 1174; 2 (6) failure to timely pay wages during employment under Labor 3 Code §§ 204, 210; (7) failure to pay wages at separation under 4 Labor Code § 203; (8) failure to reimburse business expenses 5 under Labor Code § 2802; (9) failure to provide accurate itemized 6 wage statements under Labor Code § 226; (10) failure to pay sick 7 pay under Labor Code § 246; and (11) violation of the Unfair 8 Competition Law, Cal. Bus. & Prof. Code § 17200 . (Compl. (Docket 9 No. 1-2).) Defendants Cascade Living Group Management, LLC and 10 Cascade Living Group – Grass Valley, LLC removed to this court 11 based on jurisdiction under the Class Action Fairness Act 12 (“CAFA”). Plaintiff moves to remand the action to state court. 13 (Docket No. 5.) 14 Under the federal removal statute, “any civil action 15 brought in a State court of which the district courts of the 16 United States have original jurisdiction may be removed by the 17 defendant . . . to the district court of the United States for 18 the district . . . where such action is pending.” 28 U.S.C. § 19 1441(a). Under CAFA, the federal courts have original 20 jurisdiction over class actions in which the parties are 21 minimally diverse, the proposed class has at least 100 members, 22 and the aggregated amount in controversy exceeds $5,000,000. 28 23 U.S.C. § 1332 (d)(2). “[N]o antiremoval presumption attends cases 24 invoking CAFA, which Congress enacted to facilitate adjudication 25 of certain class actions in federal court.” Dart Cherokee Basin 26 Operating Co., LLC v. Owens, 574 U.S. 81 , 89 (2014). 27 Plaintiff disputes that the $5,000,000 amount in 28 controversy is satisfied. “[I]f a defendant wants to pursue a 1 federal forum under CAFA, that defendant in a jurisdictional 2 dispute has the burden to put forward evidence showing that the 3 amount in controversy exceeds $5 million.” Ibarra v. Manheim 4 Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015); see also 5 Jauregui v. Roadrunner Transportation Servs., Inc., 28 F.4th 989 , 6 992 (9th Cir. 2022) (the “ultimate question” is “whether 7 [defendant] met its burden of showing the amount in controversy 8 exceeded $5 million”). 9 In determining whether the amount in controversy 10 requirement is satisfied, the court determines where the 11 preponderance of the evidence lies based on “proof” submitted by 12 the parties, including “affidavits, declarations, or ‘other 13 summary-judgment-type evidence relevant to the amount in 14 controversy at the time of removal.’” See Ibarra, 775 F.3d at 15 1198 (citing Dart Cherokee, 574 U.S. at 88-89). The amount in 16 controversy includes “damages (compensatory, punitive, or 17 otherwise) and the cost of complying with an injunction, as well 18 as attorneys’ fees awarded under fee shifting statutes.” 19 Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644 , 648-49 20 (9th Cir. 2016). 21 “[W]hen the claimed amount in controversy is 22 challenged[,] ‘CAFA’s requirements are to be tested by 23 consideration of real evidence and the reality of what is at 24 stake in the litigation, using reasonable assumptions underlying 25 the defendant’s theory of damages exposure.’” Salter v. Quality 26 Carriers, Inc., 974 F.3d 959, 963 (9th Cir. 2020) (quoting 27 Ibarra, 775 F.3d at 1197-98 ) (emphasis added); see also Ibarra, [28] 775 F.3d at 1199 (“[defendant] bears the burden to show that its 1 estimated amount in controversy relied on reasonable 2 assumptions”). 3 The only evidence defendants provide is a declaration 4 from Stacy Rayner, the Vice President of Human Resources for 5 Cascade Living Group, LLC. (See Rayner Decl. (Docket No. 1-5) ¶ 6 1.) Ms. Rayner attests that based on her review of business 7 records, the potential class1 of all current and former non8 exempt employees from October 19, 2020 to the present contains 9 709 individuals. (Id. ¶ 2.) 375 of those employees had been 10 terminated as of November 12, 2024. (Id.) Defendants compensate 11 non-exempt employees twice monthly. (Id.) During the class 12 period, potential class members worked a total of 15,963 two-week 13 pay periods, with 6,633 of those pay periods occurring from 14 November 12, 2023 to November 12, 2024. (Id.) The current 15 average hourly rate of pay for potential class members is $17.73. 16 (Id.) 17 In order to conclude that the amount in controversy 18 exceeds $5 million, the court would have to make a number of 19 assumptions. Relying upon the sparse facts provided by the 20 Rayner declaration, defendants ask the court to find the 21 complaint puts at issue $2,162,347.98 for minimum wage violations 22 and associated liquidated damages and penalties; $141,591.81 for 23 overtime wage violations; $566,047.98 for rest period violations; 24 $566,047.98 for meal period violations; $1,596,300.00 for 25 penalties for untimely payment of wages; $1,594,800.00 for [26] 1 The complaint defines the class as all individuals 27 employed by defendants as non-exempt employees in California beginning four years prior to the filing date of October 18, 28 2024. (See Compl. ¶¶ 2-3.) 1 penalties for untimely payment of wages at the end of employment; 2 $239,460.00 for unreimbursed business expenses; and $331,650.00 3 for failure to provide accurate itemized wage statements. 4 (Notice of Removal (Docket No. 1) at 8-17.) These numbers bring 5 the total to $7,198,245.75, to which defendants add 25% of that 6 value for attorneys’ fees (or $1,799,561.44), for a total of 7 $8,997,807.19. (Id. at 19.) 8 The problem with defendants’ figures is that they are 9 either untethered from the allegations of the complaint or 10 entirely unsupported by defendants’ evidence. Most glaringly, 11 defendants provide no evidence whatsoever concerning the full12 time vs. part-time composition of the workforce or shift lengths, 13 which are crucial to provide a reasonable estimate of the meal 14 and rest break claims and waiting time penalties. See, e.g., 15 Benitez v. Hyatt Corp., 722 F. Supp. 3d 1094 , 1102 (S.D. Cal. 16 2024) (“multiple district courts have refused to credit waiting17 time-penalty estimates [under § 203] offered by Defendants who 18 fail to provide shift-length evidence”) (collecting cases); 19 Holcomb v. Weiser Sec. Servs., Inc., 424 F. Supp. 3d 840 , 846 20 (C.D. Cal. 2019) (defendants’ estimated meal and rest break 21 violation rate was unsupported due to lack of information 22 concerning “the lengths of shifts, employees’ part-time or full23 time status, or frequency of violations that may have occurred”). 24 The information to support or refute defendants’ 25 estimate of the amount in controversy would be in the possession 26 of defendants. Defendants could easily have provided all of that 27 information if it existed, but they chose not to, instead 28 engaging in “mere speculation and conjecture” supported by 1 “unreasonable assumptions.” See Ibarra, 775 F.3d at 1197 ; see 2 also Garibay v. Archstone Communities LLC, 539 F. App’x 763 , 764 3 (9th Cir. 2013) (defendant’s evidence was insufficient to 4 establish CAFA jurisdiction because “[t]he only evidence the 5 defendants proffer to support their calculation of the amount in 6 controversy is a declaration . . . which sets forth only the 7 number of employees during the relevant period, the number of pay 8 periods, and general information about hourly employee wages,” 9 bolstered by “speculative and self-serving assumptions about key 10 unknown variables”). 11 This is to say nothing of the plain legal errors 12 underlying defendants’ estimated attorneys’ fees, which 13 improperly include claims not eligible under the fee shifting 14 statutes, see Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 15 F.3d 785, 796 (9th Cir. 2018); Kirby v. Immoos Fire Prot., Inc., [16] 53 Cal. 4th 1244, 1248 (2012) (cited with approval in Naranjo v. 17 Spectrum Sec. Servs., Inc., 13 Cal. 5th 93 , 110–11 (2022)); and 18 estimate of the penalties associated with untimely payment of 19 wages, which applies the wrong statute of limitations, see 20 Peppers v. Pac. Off. Automation, Inc., No. 23-cv-7181 JGB KKX, [21] 2023 WL 8653142 , at *5 (C.D. Cal. Dec. 14, 2023) (citing Cal. 22 Code Civ. Proc. § 340); Murphy v. Kenneth Cole Prods., Inc., 40 23 Cal. 4th 1094 , 1103–04 (2007). 24 The amount in controversy in this action may or may not 25 exceed $5 million. But defendants have failed to provide this 26 court with sufficient information to make that determination. As 27 the employer, defendants are the only parties in possession of 28 the basic employment data that is fundamental to establishing the 1 amount in controversy. Rather than providing that data, they 2 have chosen to play games with the court, presenting make-believe 3 figures and leaving the court to wring its hands over whether 4 those figures are “reasonable.” In attempting to evaluate 5 defendants’ calculations, the court is left with few answers and 6 a lot of frustration. 7 In effect, defendants’ “approach amounts to little more 8 than plucking [assumptions] out of the air and calling [them] 9 ‘reasonable’ -- a wasteful and silly, but routine, exercise in 10 mathematical fantasyland.” See Peters v. TA Operating LLC, No. 11 22-cv-1831 JGB SHK, 2023 WL 1070350 , at *9 (C.D. Cal. Jan. 26, 12 2023). While defendants need not “provide evidence proving the 13 assumptions correct,” the assumptions supporting defendants’ 14 calculations must have “some reasonable ground underlying them.” 15 Arias v. Residence Inn by Marriott, 936 F.3d 920, 925-27 (9th 16 Cir. 2019) (quoting Ibarra, 775 F.3d at 1199 ) (internal 17 quotations omitted). Defendants’ sweeping assumptions fall short 18 of the Ninth Circuit’s guidance for reasonableness. See id. 19 For the foregoing reasons, defendants have failed to 20 establish by a preponderance of the evidence that the amount in 21 controversy exceeds $5 million, and therefore have failed to show 22 that the court has jurisdiction under CAFA. Of course, should it 23 subsequently become apparent that the amount in controversy in 24 fact exceeds $5 million, defendants will be free again remove to 25 federal court, as CAFA cases “may be removed at any time” subject 26 to the requirements of 28 U.S.C. §§ 1446 (b)(1) and (b)(3). See 27 Roth v. CHA Hollywood Med. Ctr., 720 F.3d 1121, 1126 (9th Cir. 28 2013); Rea v. Michaels Stores Inc., 742 F.3d 1234, 1238 (9th Cir. ene enn meen enn on I OE IIE EID OE 1 2014). But if defendants wanted to avail themselves of federal 2 jurisdiction at this juncture, they should have made a good faith 3 effort to satisfy their burden. 4 IT IS THEREFORE ORDERED that plaintiff’s motion to 5 remand (Docket No. 5) be, and the same thereby is, GRANTED. This 6 action is hereby REMANDED to the Superior Court of the State of 7 California, in and for the County of Nevada. 8 | Dated: February 6, 2025 / tZ □ ak. 2 , 9 WILLIAM B. SHUBB 10 UNITED STATES DISTRICT JUDGE