Lazare v. Unifirst Corporation

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 TYLER LAZARE, Case No. 25-cv-03028-JST 8 Plaintiff, ORDER GRANTING MOTION TO 9 v. REMAND 10 UNIFIRST CORPORATION, Re: ECF No. 9 Defendant. [12] 13 Before the Court is Plaintiff Tyler Lazare’s motion to remand to state court. ECF No. 9. 14 The Court will grant the motion. 15 I. BACKGROUND 16 Lazare filed this action in the Superior Court of California for Alameda County, 17 challenging Defendant Unifirst Corporation’s “employment practices with respect to their non18 exempt hourly workers employed in the State of California as Route Service Representatives 19 (‘RSRs’) from November 10, 2023 to the present.” ECF No. 1-4 ¶ 1. Lazare alleges several 20 California Labor Code violations and seeks penalties established by Labor Code section 2699, the 21 Private Attorneys General ACT (“PAGA”). 22 Unifirst removed the action to this Court on April 2, 2025, alleging diversity jurisdiction. 23 ECF No. 1. Lazare moved to remand, ECF No. 9. Unifirst opposes the motion, ECF No. 14, and 24 Lazare filed a reply, ECF No. 15. The Court took the matter under submission without a hearing 25 on June 30, 2025. ECF No 21. 26 II. LEGAL STANDARD 27 “A defendant may remove an action to federal court based on federal question jurisdiction 1 (citing 28 U.S.C. § 1441 ). Diversity jurisdiction “requires complete diversity of citizenship; each 2 of the plaintiffs must be a citizen of a different state than each of the defendants.” Morris v. 3 Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). In addition, the amount in 4 controversy must exceed $75,000. 28 U.S.C. § 1332 (a). 5 “Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of 6 Am., 511 U.S. 375, 377 (1994). It is “presumed that a cause lies outside this limited jurisdiction, 7 and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Id. 8 (citations omitted). “Federal jurisdiction must be rejected if there is any doubt as to the right of 9 removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam). 10 “The ‘strong presumption’ against removal jurisdiction means that the defendant always has the 11 burden of establishing that removal is proper.” Id. (citation omitted). The court “resolves all 12 ambiguity in favor of remand.” Hunter, 582 F.3d at 1042. 13 III. DISCUSSION 14 A. Complete Diversity of Citizenship 15 The parties agree that Lazare is a California citizen and Unifirst is a Massachusetts citizen. 16 ECF No. 9 at 11; ECF No. 14 at 5. But Lazare contends that his “claims [are] brought on behalf 17 of an arm of the State of California”—namely, the California Labor & Workforce Development 18 Agency (LWDA), which collects 75% of penalties recovered in PAGA actions “for enforcement 19 of labor laws.” ECF No. 9 at 16; Cal. Lab. Code § 2699 (m)–(n). Thus, Lazare argues, the state of 20 California is the real party in interest, defeating complete diversity of citizenship. See Moor v. 21 Cnty. of Alameda, 411 U.S. 693, 717 (1973) ( “[A] State is not a ‘citizen’ for purposes of the 22 diversity jurisdiction”). 23 Lazare relies principally on Urbino v. Orkin Services of California, Inc., 726 F.3d 1118 , 24 1123 (9th Cir. 2013). In Urbino, the parties did not challenge the complete diversity of the parties. 25 But the Ninth Circuit opined in dicta that “[t]o the extent Plaintiff can—and does—assert anything 26 but his individual interest, . . . we are unpersuaded that such a suit, the primary benefit of which 27 will inure to the state, satisfied the requirements of federal diversity jurisdiction.” Id. at 1122–23. 1 plaintiff’s citizenship, and not the state’s, to be determinative of diversity jurisdiction in PAGA 2 cases.” Prestwood v. Marriott Ownership Resorts, Inc., No. SACV 19-766 AG (SSx), 2019 WL 3 2522674, at *2 (C.D. Cal. June 18, 2019); see also id. (noting that “Plaintiff takes that statement 4 from Urbino out of context”); Solis v. Dunbar Armored, Inc., No. 17-cv-2193 DMS (JLB), 2018 5 WL 259200 , at *2 (S.D. Cal. Jan. 2, 2018); Chavez v. Time Warner Cable LLC, No. CV 12-52916 RGK (RZx), 2016 WL 1588096 , at *2 (C.D. Cal. Apr. 20, 2016). 7 The Ninth Circuit, for its part, has continued to muse on Urbino’s suggestion that PAGA 8 actions create a diversity problem. Canela v. Costco Wholesale Corp., 971 F.3d 845 , 849 n.1 (9th 9 Cir. 2020) (“We were also unpersuaded [in Urbino] that the PAGA action could satisfy the 10 complete diversity element because the State of California was the real party in interest and was 11 not a citizen. . . . Because the amount-in-controversy requirement was not satisfied here, we do 12 not address the issue of whether the parties are completely diverse.”); but see Archila v. KFC U.S. 13 Properties, Inc., 420 Fed. App’x 667, 668 (9th Cir. 2011) (unpublished) (affirming district court 14 exercise of jurisdiction over PAGA claims because “[a]lthough California may be a real party in 15 interest to a PAGA action, . . . this does not convert California into an actual party to all PAGA 16 litigation”). 17 In the absence of a clear consensus, the Court declines to weigh in on this question at this 18 time. And, as demonstrated infra, the Court need not resolve this question, because even 19 assuming that complete diversity of parties exists, Unifirst fails to meet its burden to show that the 20 amount in controversy here exceeds $75,000. 21 B. Amount in Controversy 22 1. LWDA’s Penalties 23 Under PAGA, the LWDA is entitled to 75% of the penalties recovered in this action. Cal. 24 Lab Code § 2699(m). The parties disagree about whether the LWDA’s portion of the penalties 25 should count toward the amount in controversy. “The Ninth Circuit has yet to ‘squarely consider 26 the issue,’ and district courts remain split.’” Tighe v. Ferrellgas Partners, L.P., No. 5:24-cv27 01643-SSS-DTBx, 2025 WL 2410925 , at *2 (C.D. Cal. Aug. 19, 2025) (quoting Steenhuyse v. 1 is that only 25% of the civil penalties sought in a PAGA action, the amount that accrues to 2 employees rather than the LWDA, should be counted toward the amount in controversy.” 3 Prestwood, 2019 WL 2522674 , at *3; see also Hesselink v. Am. Family Life Assurance Co. of 4 Columbus, No. SACV 20-2051-CJC (DFMx), 2020 WL 7768711 , at *3 (C.D. Cal. Dec. 30, 2020) 5 ((a “growing number of courts . . . have held that the LWDA’s share cannot be aggregated with 6 the aggrieved employee’s share for purposes of determining the amount in controversy”); Garcia 7 v. Commonwealth Fin. Network, No. 20-cv-1483-BAS-LL, 2020 WL 6886267 , at *4 (S.D. Cal. 8 Nov. 24, 2020) (“the Court may only consider the 25% share allotted to the PAGA plaintiff . . . for 9 the purposes of calculating the amount in controversy”). Consistent with the greater weight of 10 opinion, the Court will count only 25% of the total penalties recoverable toward the amount in 11 controversy for jurisdictional purposes. 12 The parties disagree over the total amount of civil penalties potentially recoverable in this 13 action based on the complaint allegations. Lazare contends the amount is $20,949.40. ECF No. 9 14 at 19. Unifirst contends it is $58,599.40. ECF No. 14 at 8. The Court need not resolve the 15 parties’ conflicting calculations, because even accepting Unifirst’s number, the resulting amount 16 in controversy is below the requisite $75,000 when combined with recoverable attorney’s fees. 17 Accepting Unifirst’s figure, once reduced by the LWDA’s share, the total recoverable penalties 18 are $14,649.85. 19 2. Attorney’s Fees 20 “The amount in controversy includes . . . attorney’s fees, if authorized by statute or 21 contract.” Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005). “Any employee who 22 prevails in any [PAGA] action shall be entitled to an award of reasonable attorney’s fees and 23 costs.” Cal. Lab. Code § 2699 (g). 24 Unifirst’s “reasonable estimate” of attorney’s fees is $138,450, and its “conservative 25 estimate” is $65,000. ECF No. 14 at 10. Unifirst argues that this number need not be 26 disaggregated to Lazare’s pro rata share because “Plaintiff seeks individual relief and attorney’s 27 fees under Labor Code sections 226 and 1194.” ECF No. 14 at 12. This argument is puzzling, 1 65–92, seeks relief on behalf of “Plaintiff and the other aggrieved employees.” Id. Moreover, the 2 Ninth Circuit has held that “[a]ll PAGA actions are inherently representative.” Leeper, 107 Cal. 3 App. 5th at 1007. Accordingly, in PAGA removal actions, “only the portion of attorney’s fees 4 attributable to [plaintiff’s] claims count towards the amount in controversy.” Patel v. Nike Retail 5 Servs., Inc., 58 F. Supp. 3d 1032, 1049 (N.D. Cal. 2014); see id. (“When the rule is that claims are 6 not aggregated . . . as it is now for PAGA actions under Urbino . . . it would seriously undermine 7 the [anti-aggregation] rule to allow attorney’s fees to be allocated solely to a named plaintiff in 8 determining the amount in controversy.”) (quoting Garrett v. Bank of Am., N.A., No. 13-cv-052639 JST, 2014 WL 1648759 , at *8 (N.D. Cal. Apr. 24, 2014)). 10 Here Unifirst, having rejected disaggregation of attorney’s fees altogether, “provides no 11 estimate whatsoever as to what the named plaintiffs’ pro rata share of attorneys’ fees would be,” 12 and accordingly fails to meet its burden. Gunawan v. Transdev Alt. Servs., Inc., No. 22-cv-414113 HSG, 2023 WL 2560360 , at *3 (N.D. Cal. Mar. 17, 2023); see also Tighe v. Ferrellgas Partners, 14 L.P., No. 5:24-cv-2643-SSS-DTBx, 2025 WL 2410925 , at *3 (C.D. Cal. Aug. 19, 2025) (finding 15 “unpersuasive” defendants’ “speculati[on] [regarding] how many hours [plaintiff’s] counsel will 16 work to prosecute his claims”). Even accepting the higher of Unifirst’s proposed fee amounts 17 ($138,450), and assuming even as few as three “non-exempt hourly workers employed in the State 18 of California as Route Service Representatives (“RSRs”) from November 10, 2023 to the present,” 19 ECF No. 1-4 ¶ 1, Lazare’s share of the fees would be $46,150. Combined with the penalties 20 figure calculated supra, the total would be insufficient to meet the requisite $75,000 amount in 21 controversy. It seems likely that many more than three employees fit within this category. But in 22 any event, the evidentiary burden is on Unifirst to prove otherwise, and Unifirst has failed to 23 produce evidence necessary to meet its burden of showing that the amount in controversy 24 attributable just to Lazare’s claims exceeds $75,000. 25 IV. LEAVE TO AMEND 26 Unifirst requests leave to amend its notice of removal “to address any deficiencies.” ECF 27 No. 14 at 13–14. But the cases it cites are inapposite because they involve “incorrect statements 1 Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 831 (1989), and here Unifirst has not 2 || identified any statements in its notice that it contends are incorrect. The Court accordingly will 3 deny leave to amend. See Corin v. Arkema, Inc., No. 2:23-cv-9230-RGK-MRW, 2024 WL 53005 , 4 |} at *3 (C.D. Cal. Jan. 4, 2024) (where defendant “had two bites at the apple—the Notice and the 5 Opposition—and still fell short,” court “refuse[d] to grant it a third”). 6 CONCLUSION 7 For the reasons explained above, Lazare’s motion to remand 1s granted. The action is 8 || hereby remanded to the Superior Court of California for the County of Alameda. 9 IT IS SO ORDERED. 10 Dated: September 29, 2025 [11] JON S. TIGA 12 United States District Judge [16] = 17 Z 18