Jamal F. Holcomb v. Weiser Security Services, Inc

JS-6 [1] O [7] United States District Court [8] Central District of California [10] 11 JAMAL F. HOLCOMB, Case No. 2:19-cv-02108-ODW (ASx) [12] 13 Plaintiff, ORDER GRANTING MOTION TO 14 v. REMAND [15] 15 WEISER SECURITY SERVICES, INC., 16 et al., [17] 18 Defendants. 19 I. INTRODUCTION 20 On February 7, 2019, Plaintiff Jamal F. Holcomb (“Holcomb”) filed this 21 putative class action in Los Angeles Superior Court against his employer Weiser 22 Security Services, Inc. (“Weiser”). (Decl. of Bradley E. Schwan Ex. A (“Compl.”), 23 ECF No. 1-2.) On March 21, 2019, Weiser removed the action pursuant to the Class 24 Action Fairness Act, 28 U.S.C. § 1332 (d) (“CAFA”). (Notice of Removal 25 (“Removal”) ¶ 1, ECF No. 1.) Holcomb now moves to remand this action for lack of 26 subject matter jurisdiction (“Motion”). (Mot. to Remand (“Mot.”), ECF No. 15.) For 27 the reasons discussed below, the Court finds that Weiser has not met its evidentiary 28 burden to establish that the amount in controversy exceeds $5 million. Accordingly, 1 the Court GRANTS Holcomb’s Motion to Remand and DENIES Holcomb’s Motion 2 for Reimbursement of Fees.1 3 II. FACTUAL BACKGROUND 4 Holcomb brings this class action against Weiser on behalf of himself and the 5 class he seeks to represent (collectively “putative class”). The putative class consists 6 of “[a]ll current and former persons employed by Weiser . . . in California as non7 exempt employees at any time during the period beginning four years prior to the 8 filing of this Complaint.” (Compl. ¶ 7.) Holcomb is a citizen of California. (See 9 Compl. ¶ 6.) Weiser is incorporated and has its principal place of business in 10 Louisiana. (Removal ¶ 22.) Holcomb alleges ten causes of action against Weiser: 11 (1) Failure to Pay Minimum Wage; (2) Failure to Pay Overtime Wages; (3) Failure to 12 Provide Meal Periods; (4) Failure to Provide Rest Periods; (5) Failure to Furnish 13 Accurate Wage Statements; (6) Failure to Pay All Wages Due to Discharged and 14 Quitting Employees; (7) Failure to Maintain Required Records; (8) Failure to 15 Indemnify Employees for Necessary Expenditures Incurred in Discharge of Duties; 16 (9) Unfair and Unlawful Business Practices (“UCL”); and (10) Civil Penalties Under 17 PAGA. (Compl. ¶¶ 38–96.) Holcomb does not allege a specific damages amount. 18 (See Compl. at 23.) 19 Weiser removed the action to this Court on March 21, 2019, pursuant to CAFA. 20 (Removal ¶ 2.) On July 11, 2019, Holcomb moved to remand arguing that Weiser’s 21 removal relies on speculative violation rates to calculate the amount in controversy 22 (Mot. 1.) Holcomb contends that, as a result, Weiser has not established that the 23 amount in controversy is met and, thus, the Court lacks subject matter jurisdiction. 24 (Mot. 1.) Weiser opposes the Motion and argues that the amount in controversy is 25 satisfied because Weiser calculated the alleged violation rates based on reasonable 26 assumptions derived from the Complaint. (Opp’n to Mot. (“Opp’n”) 9, ECF No. 20.) [27] 28 1 After carefully considering the papers filed in support of and in opposition to the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. 1 III. LEGAL STANDARD 2 CAFA allows for federal jurisdiction over a purported class action when all of 3 the following apply: (1) the amount in controversy exceeds $5 million (2) at least one 4 putative class member is a citizen of a state different from any defendant, and (3) the 5 putative class exceeds 100 members. 28 U.S.C. §§ 1332 (d)(2), (5). “[T]he burden of 6 establishing removal jurisdiction remains . . . on the proponent of federal jurisdiction.” 7 Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). Generally, 8 removal statutes are strictly construed against removal jurisdiction. Gaus v. Miles, 9 Inc., 980 F.2d 564, 566 (9th Cir. 1992). However, “no antiremoval presumption 10 attends cases invoking CAFA.” Dart Cherokee Basin Operating Co. v. Owens, 574 11 U.S. 81, 89 (2014). 12 “[A] defendant’s notice of removal need include only a plausible allegation that 13 the amount in controversy exceeds the jurisdictional threshold. Id. If the plaintiff 14 disputes the alleged amount in controversy, “both sides submit proof and the court 15 decides, by a preponderance of the evidence, whether the amount-in-controversy 16 requirement has been satisfied.” Id. at 88 . The parties may submit evidence, 17 “including affidavits or declarations, or other summary-judgment-type evidence 18 relevant to the amount in controversy at the time of removal.” Ibarra, 775 F.3d at 19 1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 20 1997)). “[A] defendant cannot establish removal jurisdiction by mere speculation and 21 conjecture, with unreasonable assumptions.” Id. 22 IV. DISCUSSION 23 Weiser asserts that removal is proper because there are more than 100 putative 24 class members, minimal diversity is satisfied, and the amount in controversy exceeds 25 $5 million. (Removal ¶¶ 2, 13–16, 24, 30.) Holcomb does not dispute that the class is 26 over 100 members or that the parties are minimally diverse, but argues Weiser has not 27 established the amount in controversy. (Mot. 4.) [28] 1 Weiser contends that the face of the Complaint clearly demonstrates that the 2 amount in controversy exceeds $5 million, and over $6,461,288.13 when including 3 attorney’s fees, reimbursement, and maintenance of records claims. (Removal ¶¶ 30, 4 71.) Weiser reaches this calculation by adding together Weiser’s estimates for 5 Holcomb’s claims: (1) minimum wage, (2) overtime compensation, (3) meal periods, 6 (4) rest periods, (5) accurate wage statements, (6) final wages due, (7) and attorney 7 fees. (See Removal ¶ 71.) Holcomb argues that Weiser has not provided sufficient 8 evidence in support of the amount in controversy and relies on fabricated violation 9 rates in its amount in controversy calculation. (Mot. 6–8.) 10 A. Amount in Controversy 11 Holcomb does not allege a specific amount in damages, but seeks compensatory 12 damages, available penalties, interest, costs and attorney’s fees. (Compl., Prayer for 13 Relief ¶¶ 1–12.) Weiser alleges that the amount in controversy, excluding attorney’s 14 fees, is $5,169,030.50. (Removal ¶ 71.) Holcomb responds that the amount in 15 controversy, excluding attorney’s fees, is only $2,994,767.50. (Mot. 8.) 16 1. Determining the Violation Rate 17 “As seemingly is always the case in wage-and-hour lawsuits attempting to find 18 their way to federal court, violation rates are key to the calculations necessary to reach 19 the [$5 million] amount-in-controversy figure CAFA requires.” Toribio v. ITT 20 Aerospace Controls LLC, No. 19-cv-5430-GW (JPRx), 2019 WL 4254935 , at *2 21 (C.D. Cal. Sept. 5, 2019). Hence, determining whether the amount in controversy 22 exceeds $5 million is contingent upon whether Weiser’s calculations of violation rates 23 are reasonable. See Ibarra, 775 F.3d at 1197 (finding assumptions of damages 24 “cannot be pulled from thin air but need some reasonable ground underlying them.”) 25 Weiser, as the removing party, bears the burden to establish that its asserted amount in 26 controversy relies on reasonable assumptions. Id. at 1199. 27 “Where the complaint contains generalized allegations of illegal behavior, a 28 removing defendant must supply ‘real evidence’ grounding its calculations of the 1 amount in controversy.” Dobbs v. Wood Group PSN, Inc., 201 F. Supp. 3d 1184 , 2 1188 (E.D. Cal. 2016) (citing Ibarra, 775 F.3d at 1199). “Generally, the spectrum of 3 similar cases has two end-points: the Ninth Circuit distinguishes between complaints 4 of ‘uniform’ violations and those alleging a ‘pattern and practice’ of labor law 5 violations.” Id. at 1188 (citing LaCross v. Knight Transp. Inc., 775 F.3d 1200 , 1202 6 (9th Cir. 2015)). For instance, it is reasonable to assume a 100% violation rate if the 7 “complaint specifically alleges a ‘uniform’ practice” and the plaintiff offers no 8 competent evidence in rebuttal to a defendant’s showing. Id. However, it is 9 unreasonable to assume a 100% violation rate based only on a plaintiff’s allegation of 10 a “pattern and practice” of labor law violations. Id. at 1189 (citing Ibarra, 775 F.3d at 11 1198–99 (“a ‘pattern and practice’ of doing something does not necessarily mean 12 always doing something”)). In “pattern and practice” cases, the removing party may 13 still establish the requisite amount in controversy if its calculations rely on 14 extrapolations from admissible statistical evidence. LaCross, 775 F.3d at 1202–03. 15 2. Whether Weiser’s Assumed Violation Rates are Reasonable 16 To reach the $5 million threshold, Weiser uses a 100% violation rate2 for 17 Holcomb’s claims of (1) failure to provide meal periods; (2) failure to provide rest 18 periods; and (3) failure to furnish accurate wage statements. (See Removal ¶¶ 50, 55, 19 60.) Weiser uses a calculation of one violation per week for failure to pay overtime 20 wages. (See Removal ¶ 46.) 21 a. Meal and Rest Period Claims 22 Weiser argues that its assumption of a 100% violation rate for meal and rest 23 breaks is reasonable based on language in the Complaint. (Opp’n 13–15.) For 24 instance, Holcomb alleges that Weiser, “engaged in a uniform policy and systematic 25 scheme of wage abuse.” (Compl. ¶ 1.) Weiser also directs the Court to Holcomb’s 26 allegations of policies that denied employees meal and rest breaks. (See Opp’n 14.) [27] 28 2 A 100% violation rate calculation assumes violations occurring in every identified shift for each class member. See Ibarra v. Manheim Invs., Inc., 775 F.3d 1193 , 1199 n.3 (9th Cir. 2015). 1 Additionally, in connection with his UCL claim, Holcomb alleges that Weiser’s 2 “violations of California wage and hour laws . . . were done repeatedly over a 3 significant period of time, and in a systematic manner, to the detriment of Plaintiff and 4 Class members.” (Compl. ¶ 87.) 5 However, courts in the Ninth Circuit have found a general allegation of a 6 uniform policy and systematic scheme of wage abuse does not always support a 100% 7 violation rate. See Vilitchai v. Ametek Programmable Power, Inc., 8 No. 3: 15-CV-1957-L (BLM), 2017 WL 875595 , at *3 (S.D. Cal. Mar. 6, 2017) 9 (finding “[a]lthough Plaintiff alleges Defendants had a ‘uniform policy and systematic 10 scheme of wage abuse,’ such allegations do not support a 100% violation rate”) 11 (citations omitted); Beck v. Saint-Gobain Containers, No. 2:16-cv-03638-CAS (SKx), [12] 2016 WL 4769716 , at *9 (C.D. Cal. Sept. 12, 2016) (finding that the defendant 13 impermissibly assumed a 100% violation rate where the plaintiff asserted in his 14 general allegations that the defendant “engaged in a uniform policy and systematic 15 scheme of wage abuse”); but see Ritenour v. Carrington Mortg. Servs. LLC, 228 F. 16 Supp. 3d 1025, 1030 (C.D. Cal. 2017) (finding the defendant’s inference of 100% 17 violation rate based on a “uniform policy” reasonable in light of the plaintiff’s failure 18 to rebut the defendant’s evidence supporting such rates.). Accordingly, Holcomb’s 19 allegations that Weiser had a uniform policy or did something “repeatedly over a 20 significant period of time” “does not necessarily mean [that Weiser was] always doing 21 something,” and therefore does not support a 100% violation rate. Ibarra, 775 F.3d at 22 1198–99. 23 Further, Holcomb makes it clear that he does not allege that Weiser 24 “universally, on each and every shift, violate[d] labor laws.” Id. For example, the 25 Complaint does not allege that Plaintiff was never provided meal and rest breaks. To 26 the contrary, Holcomb alleges “Plaintiff and similarly situated employees were not at 27 all times provided 30-minute meal breaks.” (Compl. ¶ 16 (emphasis added).) 28 Holcomb alleges that he and the class members were not paid an additional hour when 1 a meal and rest break was missed or not provided (Compl. ¶¶ 16, 17), and are 2 accordingly entitled to recover one-hour of premium pay for each day in which a meal 3 or rest break violation occurred (Compl. ¶¶ 59, 64). The Complaint does not allege 4 that class members missed all meal and rest breaks or even that Weiser failed to 5 compensate them for every meal or rest break which was missed. Therefore, the 6 Complaint alleges violations that are “clearly less than a 100% violation rate.” Leidy 7 Silva Martinez v. BAART Programs, Inc., No. CV 19-07178-AB (PLAx), 2019 WL 8 6210932, at *2 (C.D. Cal. Nov. 21, 2019) (finding allegations of meal and rest break 9 violations “at certain times” to be “clearly less than a 100% violation rate.”). 10 Despite Weiser’s “burden to show that its estimated amount in controversy 11 relied on reasonable assumptions,” Weiser provides no data from which the Court 12 may extrapolate that Weiser denied every employee a rest and meal break each day 13 they worked. Ibarra, 775 F.3d at 1199 ; compare LaCross, 775 F.3d at 1203 (finding 14 defendant’s calculations for the amount in controversy reasonable because the 15 defendant extrapolated costs based on, “actual invoiced . . . costs” and the number of 16 employees during the putative class period), with Akana v. Estee Lauder Inc., No. 17 LACV 19-00806-JAK (PLAx), 2019 WL 2225231 , at *6 (C.D. Cal. May 23, 2019) 18 (rejecting defendant’s calculations for the amount in controversy because the 19 defendant failed to provide relevant information necessary to calculate potential 20 liability). Here, the only evidence Weiser submits is a Declaration from Charlene 21 Lee-Sutherlin (“Lee-Sutherlin”), Weiser’s Vice President of Human Resources. 22 (Decl. of Charlene Lee-Sutherlin (“Lee-Sutherlin Decl.”) ¶ 1, ECF No. 1-1.) In her 23 declaration, Lee-Sutherlin provides the number of employees in the putative class, the 24 weighted average hourly rate for those employees, and the number of work weeks. 25 (Lee-Sutherlin Decl. ¶¶ 6–9.) However, Lee-Sutherlin is silent as to the lengths of 26 shifts, employees’ part-time or full-time status, or frequency of violations that may 27 have occurred. (Lee-Sutherlin Decl. ¶¶ 6–9.) As such, Lee-Sutherlin’s declaration 28 provides no support for Weiser’s estimated violation rates. See Akana, 2019 WL 1 2225231, at *5–6 (finding the defendant’s declaration presenting evidentiary support 2 of the number of class members, the number of class members that are former 3 employees, and the hourly rate did not demonstrate by a preponderance of the 4 evidence that the amount in controversy exceeds $5 million). Consequently, Weiser 5 fails to support its estimated meal and rest break violation rates. 6 b. Wage Statement Violations 7 The Court finds that Holcomb’s wage-statement violation claims are derivative 8 of his meal and rest period claims. Holcomb contends that employees received 9 inaccurate wage statements because Weiser did not include the pay due to the 10 employees for missed meal and rest periods. (Compl. ¶¶ 16–17, 67–68.) If the 11 calculations for missed meal and rest periods are faulty, then the wage statement 12 violation calculations are also inherently flawed. Marshall v. G2 Secure Staff, LLC, 13 No. 2:14-CV-04322-ODW (MANx), 2014 WL 3506608 , at *3 (C.D. Cal. July 14, 14 2014). Accordingly, the calculations for wage statement violations are unreasonable 15 for amount in controversy purposes as well. 16 c. Unpaid Overtime 17 Weiser calculates the amount in controversy for unpaid overtime wages 18 assuming one hour of unpaid overtime for each employee each workweek. (Removal 19 ¶¶ 41–47.) The Court is not persuaded by Weiser’s contention that it “conservatively 20 assumed only one hour of unpaid overtime per workweek for each putative class 21 member.” (Opp’n 11.) Weiser offers no evidence supporting that a one-hour-per22 workweek violation rate is suitable for calculation purposes. See Toribio, 2019 WL 23 4254935, at *3 (finding Defendant cannot “pull violation rates out of thin air, whether 24 it characterizes them as ‘conservative’ or not, and conclusively state that they are 25 ‘reasonable inference[s]’ about the most important variables involved in the necessary 26 calculation.”) (citing Ibarra, 775 F.3d at 1193 ). Weiser fails to justify the use of a 27 once-per-week violation rate over some other rate. See Garibay v. Archstone Cmts. 28 LLC, 539 F. App’x 763, 764 (9th Cir. 2013) (finding the defendants failed to provide 1 evidence that the assumption of two rest break violations per week was “more 2 appropriate” than one violation per pay period or one violation per month). Without 3 evidentiary support, Weiser’s violation rate is merely an assumption, seemingly 4 plucked from thin air. Accordingly, the Court finds Weiser’s overtime violation rate 5 to be unreasonable. 6 Weiser fails to support its asserted violation rates for meal breaks, rest breaks, 7 wage statements, and overtime. 3 Consequently, the Court finds that Weiser has not 8 satisfied its burden to establish that the amount in controversy is greater than 9 $5 million.4 10 B. Removal Fees 11 “Absent unusual circumstances, courts may award attorney’s fees under 12 § 1447(c) only where the removing party lacked an objectively reasonable basis for 13 seeking removal. Conversely, when an objectively reasonable basis exists, fees 14 should be denied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). 15 “[R]emoval is not objectively unreasonable solely because the removing party’s 16 arguments lack merit.” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th 17 Cir. 2008). [19] 3 Weiser requests a short continuance to conduct discovery specific to the amount in controversy if 20 the Court believes Weiser has not met its burden. (Opp’n 20.) The Court believes when “[f]aced with a vague pleading, it seems to this Court that the much-more-sensible route would be to try to [21] pin Plaintiff down, in state court, . . . with respect to what the Complaint’s allegations actually mean 22 with respect to violation rates.” Toribio, 2019 WL 4254935 , at *3. “[D]efendants in this type of litigation will either have to change their approach, . . . the Ninth Circuit will have to reconsider 23 Ibarra and tell district courts to accept whatever number a defendant can imagine, or the Supreme Court or (don’t hold your breath) Congress will have to step on to clear up what has become a [24] wasteful and silly, but routine exercise in mathematical fantasy land.” Id. 25 4 The amount in controversy cannot reach the $5 million threshold without Holcomb’s meal break ($1,091,785), rest break ($1,091,785), wage statement ($763,075), and overtime claims ($404,334) 26 included in the calculation. The Court need not address the minimum wage and final wage claims to conclude that the amount in controversy has not been met. (See Opp’n 20) (the amount in [27] controversy alleged with these two claims is $2,053,864). Weiser has not offered a figure for 28 Holcomb’s Business Expense, Records Violation and Overtime Miscalculation therefore, the Court will not consider an amount in controversy figure for these claims. (See Opp’n 20.) 1 Although Weiser fails to show that the Court has jurisdiction over this class 2|| action, the Court finds Weiser did not lack an objectively reasonable basis for 3 || removing the action and opposing Holcomb’s Motion, particularly in light of courts’ 4|| treatment in the Ninth Circuit of defendants’ estimation of labor code violation rates. 5|| See Toribio, 2019 WL 4254935 , at *3 (“District courts are all-over-the-map in 6 || deciding how to handle, and whether to accept, the type of approach... [the 7 || defendant] has adopted.”) Therefore, the Court denies Holcomb’s request for fees. 8 Vv. CONCLUSION 9 For the reasons discussed above, the Court GRANTS Holcomb’s Motion, and 10 | REMANDS this case to the Superior Court of California for the County of Los 11 |} Angeles, Case No. 19STCV03843 located at 111 North Hill Street, Los Angeles, 12 | California 90012. (ECF No. 15.) The Court DENIES Holcomb’s requests for fees 13 || and costs incurred from removal. The Clerk of the Court shall close the case. [14] 15 IT IS SO ORDERED. [16] 17 December 3, 2019 18 . ff i Gieddioid 30 OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE