Williams v. VibrantCare Rehabilitation, Inc.

[5] 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA [8] 9 COLLEEN WILLIAMS, individually, No. 2:21-cv-01179-JAM-JDP and on behalf of other members 10 of the general public similarly situated and on behalf of other 11 aggrieved employees pursuant to ORDER GRANTING PLAINTIFF’S the California Private Attorneys MOTION TO REMAND 12 General Act, 13 Plaintiff, 14 v. 15 VIBRANTCARE REHABILITATION, INC., a California corporation; 16 and DOES 1 through 100, inclusive, [17] Defendants. [18] 19 This matter is before the Court on Plaintiff Colleen 20 Williams’ (“Plaintiff”) motion to remand for lack of subject 21 matter jurisdiction. See Mot. to Remand (Mot.), ECF No. 12. 22 Defendant VibrantCare Rehabilitation Inc. (“Defendant”) opposes 23 the motion. See Opp’n, ECF No. 15. Plaintiff replied. See 24 Reply, ECF No. 16. For the reasons set forth below, the Court 25 GRANTS Plaintiff’s motion to remand.1 [26] 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for March 1, 2022. 1 I. BACKGROUND 2 Plaintiff filed a class action complaint in the Sacramento 3 County Superior Court on January 17, 2019. Ex. A to Notice of 4 Removal, ECF No. 1. Plaintiff filed a first amended complaint 5 (“FAC”) on September 2, 2020. Ex. B to Notice of Removal, ECF 6 No. 1. Defendant then removed the action to this Court on 7 July 6, 2021. Notice of Removal at 1, ECF No. 1. Defendant’s 8 Notice of Removal asserts that this Court has subject matter 9 jurisdiction over Plaintiff’s complaint pursuant to the Class 10 Action Fairness Act (“CAFA”), 28 U.S.C. S 1332 (d). Id. at 7 . 11 Plaintiff asserts that removal was improper and seeks remand on 12 the grounds that Defendant has not met CAFA’s jurisdictional 13 amount in controversy requirement. Mot. at 1. 14 Plaintiff was formerly employed by Defendant as an hourly15 paid or non-exempt employee within the state of California. 16 Ex. B, FAC ¶ 24. Plaintiff’s FAC contain nine causes of action 17 against Defendant asserted on behalf of herself and others 18 similarly situated: (1) Violation of California Labor Code §§ 510 19 and 1198 (Unpaid Overtime); (2) Violation of California Labor 20 Code §§ 226.7 and 512(a) (Unpaid Meal Period Premiums); 21 (3) Violation of California Labor Code § 226.7 (Unpaid Rest 22 Period Premiums); (4) Violation of California Labor Code §§ 1194, 23 1197, and 1197.1 (Unpaid Minimum Wages); (5) Violation of 24 California Labor Code §§ 201 and 202 (Final Wages Not Timely 25 Paid); (6) Violation of California Labor Code § 226(a) (Non26 Compliant Wage Statements); (7) Violation of California Labor 27 Code §§ 2800 and 2802 (Unreimbursed Business Expenses); 28 (8) Violation of Business and Professions Code §§ 17200, et seq.; 1 and (9) Violation of California Labor Code § 2698, et seq. 2 (California Labor Code Private Attorneys General Act of 2004). [3] 4 II. OPINION 5 A. Judicial Notice 6 Federal Rule of Evidence 201 allows the Court to notice a 7 fact if it is “not subject to reasonable dispute,” such that it 8 is “generally known” or “can be accurately and readily 9 determined from sources whose accuracy cannot reasonably be 10 questioned.” Fed. R. Evid. 201(b). The Court may take judicial 11 notice of court records, including “opinions, complaints, 12 briefs, and evidence filed in other actions.” BP W. Coast Prod. 13 LLC v. Greene, 318 F.Supp.2d 987, 994 (E.D. Cal. 2004). 14 Plaintiff asks the Court to take judicial notice of 15 documents filed in the Superior Court of California, County of 16 Alameda, in conjunction with Beckwith-Cohen v. Vibrant 17 Rehabilitation, Inc., Case No. RG19006376. See Pl.’s Request 18 for Judicial Notice, Exhibits A-C, ECF No. 13. Defendant 19 requests that the Court take judicial notice of Plaintiff’s 20 opposition to Defendant’s motion for protective order, which was 21 filed in the Sacramento Superior Court before removal. See 22 Def.’s Request for Judicial Notice, Exhibit 1, ECF No. 15-3. 23 All four exhibits are public records appropriate for judicial 24 notice. A court, however, “may not take judicial notice of 25 proceedings or records in another case so as to supply, without 26 formal introduction of evidence, facts essential to support a 27 contention in the cause then before it.” See M/V Am. Queen v. 28 San Diego Marine Constr. Corp., 708 F.2d 1483, 1491 (9th Cir. 1 1983). Thus, the Court grants Plaintiff’s request for judicial 2 notice of Exhibits A-C and Defendant’s request for judicial 3 notice of Exhibit 1 for the fact that these documents exist but 4 not for the contents within them. 5 B. Motion to Remand 6 Federal district courts have subject matter jurisdiction 7 over class actions in which the amount in controversy exceeds 8 $5,000,000 and there exists at least minimal diversity of 9 citizenship between the parties and the class consists of at 10 least 100 members. CAFA, 28 U.S.C. §§ 1332 (d)(2), 1332(d)(5). 11 A defendant may remove such an action from state to federal 12 court. 28 U.S.C. § 1441 (a). 13 The parties do not dispute that the class is sufficiently 14 numerous or that minimal diversity exists. Plaintiff argues 15 that remand is proper only on the basis that she pleads 16 entitlement to less than five million dollars in damages. 17 Defendant opposes remand arguing that the amount in controversy 18 is greater than five million dollars. 19 1. Legal Standard 20 A defendant's initial burden of proof as to the amount in 21 controversy for removal purposes is lenient. “A defendant 22 seeking to remove a case from state to federal court must file 23 in the federal forum a notice of removal ‘containing a short and 24 plain statement of the grounds for removal.’” Dart Cherokee 25 Basin Operating Co., LLC v. Owens, 574 U.S. 81 , 81 (2014) 26 (quoting 28 U.S.C. § 1446 (a)). The notice of removal “need not 27 contain evidentiary submissions,” rather a “plausible allegation 28 that the amount in controversy exceeds the jurisdictional 1 threshold” can suffice. Id. at 84, 89 . 2 When “a defendant's assertion of the amount in controversy 3 is challenged [however,] both sides submit proof and the court 4 decides, by a preponderance of the evidence, whether the amount5 in-controversy requirement has been satisfied.” Id. at 89 . The 6 parties may submit evidence outside the complaint including 7 affidavits or declarations or other “summary-judgment-type 8 evidence relevant to the amount in controversy at the time of 9 removal.” Singer v. State Farm Mut. Ins. Co., 116 F.3d 373 , 377 10 (9th Cir. 1997) (internal citation omitted). The district court 11 “must [then] make findings of jurisdictional fact to which the 12 preponderance standard applies.” Dart Cherokee, 574 U.S. at 89 13 (internal citation omitted). 14 To determine whether Defendant has met its burden here, the 15 Court must evaluate “the reliability of the variables 16 [D]efendants use to calculate the amount in controversy as 17 exceeding $5 million.” Calloway v. Affiliated Computer Servs., 18 Inc., No. 2:13-CV-01648-KJM, 2014 WL 791546 , at *7 (E.D. Cal. 19 Feb. 25, 2014) (citing Garibay v. Archstone Communities LLC, 539 20 F. App'x 763, 764 (9th Cir. 2013)). In its evaluation, a 21 “district court may not find [that Defendant has] met the 22 preponderance of evidence standard based on defendant[‘s] mere 23 speculation and conjecture.” Id. “CAFA's requirements are to 24 be tested by consideration of real evidence and the reality of 25 what is at stake in the litigation, using reasonable assumptions 26 underlying the defendant's theory of damages exposure.” Ibarra 27 v. Manheim Invs., Inc., 775 F.3d 1193, 1198 (9th Cir. 2015). If 28 “the evidence submitted by both sides is balanced, in equipoise, 1 the scales tip against federal-court jurisdiction.” Id. at 1199 . 2 2. Analysis 3 Plaintiff argues Defendant failed to show by a 4 preponderance of the evidence that the amount in controversy 5 exceeds five million dollars, because Defendant’s estimates are 6 speculative, unreasonable, and unsupported. Reply at 5. 7 Defendant estimates the total amount in controversy exceeds 8 $10,529,582.11 based on class claims for unpaid overtime, meal 9 period premiums, rest periods premiums, untimely final wages, 10 inaccurate wage statements, minimum wages, and attorney’s fees. 11 See Opp’n. Defendant submitted one set of calculations in its 12 Notice of Removal and another set in its opposition briefing. 13 The Court addresses Defendant’s opposition briefing. 14 Claim Notice of Removal Opposition 15 (Claim 1) Unpaid Overtime $422,550.42 $428, 189.79 16 (Claims 2&3) Unpaid Meal/Rest $3,378,668.04 $3,427,271.40 17 Period Premiums 18 (Claim 5) Waiting Time $2,051,897.40 $2,079,711.00 19 Penalties 20 (Claim 6) Non-Compliant Wage $1,176,000.00 $1,190,800.00 21 Statement Penalties 22 (Claim 4) Unpaid Minimum (Not Calculated) $1,713,635.70 23 Wages 24 Attorney’s Fees $1,757,278.97 $1,689,974.22 25 Total: $8,786.394.83 $10,529,582.11 [28] 1 a. Claim One: Unpaid Overtime 2 Defendant argues the amount in controversy with respect to 3 Plaintiff’s class claim for unpaid wages is at least $428,189.79. 4 Opp’n at 5. Defendant contends that it is reasonable to apply a 5 100% violation rate based on Plaintiff’s own allegations. Id. 6 Plaintiff alleges “Defendants engaged in a pattern and practice 7 of wage abuse against their hourly-paid or non-exempt employees 8 within the State of California. This pattern and practice 9 involved, inter alia, failing to pay them for all regular and/or 10 overtime wages earned.” FAC ¶ 32. Defendant further contends it 11 provided sufficient evidence and reasonable calculations to 12 support its estimate. Opp’n at 7. Defendant relies heavily on a 13 declaration from Heather Tenconi, Defendant’s Director of Human 14 Resources and Recruiting. Decl. of Heather Tenconi, ECF No. 1515 2. 16 Tenconi states that her statements are based on her 17 personal knowledge of Defendant’s business records kept in the 18 ordinary course of business, including personnel files and 19 payroll records. Id. ¶ 4. Tenconi states she evaluated 20 information from a cloud-based HR program known as UKG Ready and 21 determined “that the total number of non-exempt employees in 22 California who worked for VibrantCare from January 17, 2015 to 23 July 5, 2021 is 755,” which includes 334 full-time employees, 49 24 part-time employees with benefits, 67 part-time employees 25 without benefits, and 305 per diem employees. Id. ¶¶ 8-9. 26 Tenconi further claims that these 755 non-exempt employees 27 “worked a total of approximately 43,827 workweeks” in the 28 applicable time period and that their average hourly rate is 1 “$19.55 per hour.” Id. ¶ 9. Based on the number of workweeks 2 for 755 putative class members and “the half part of time and a 3 half” at a rate of 1 overtime hour per week, Defendant 4 calculates the amount in controversy for Plaintiff’s first claim 5 to be $428,189.79. Opp’n at 7. 6 Plaintiff argues that Defendant has not met its burden of 7 proof, because the assertions and calculations from Tenconi’s 8 declaration are “impermissibly ambiguous and speculative— 9 especially in the absence of corroborating evidence.” Reply at 10 4. Plaintiff points out Tenconi’s declaration sets forth 11 different figures and assumptions from the ones given in the 12 Notice of Removal without explaining or providing evidence as to 13 why. Id. Plaintiff observes that “the new estimated class size 14 is now 755 rather than 767, yet the workweeks have increased by 15 almost 500, from 43,484 workweeks to now 43,827 [with] no 16 explanation for how removing twelve employees from her analysis 17 resulted in such a dramatic increase in the number of workweeks 18 for the exact same timeframe.” Id. Plaintiff also challenges 19 Defendant’s conclusory assertions about the putative class size, 20 the average hourly rate for the putative class, and the number of 21 workweeks throughout the putative period. Mot. at 5. Plaintiff 22 argues that these estimations are proffered without evidence and 23 that the Court cannot rely on calculations that are not supported 24 by competent evidence. Id. 25 With respect to the putative class, Plaintiff alleged that 26 she “and other class members worked over eight (8) hours in a 27 day, and/or forty (40) hours in a week during their employment 28 with Defendants,” yet Defendant includes part-time and per diem 1 workers in its class size calculations. Ex. B to Notice of 2 Removal, FAC ¶ 31 (emphasis added). Setting aside the 334 full3 time employees identified by Defendant, there are 421 employees 4 who worked on average less than 40 hours a week. (Part-time 5 workers with benefits worked on average 32-40 hours a week; part6 time workers without benefits worked on average 20 hours a week; 7 and per diem employees worked an average of 12 hours per week. 8 Decl. of Tenconi ¶ 9.) Although Tenconi explains that “some per 9 diem employees actually worked full-time schedules of 40 hours a 10 week,” she does not separate those who worked full time from 11 those who did not. Id. Instead, all part-time and per diem 12 workers are included in her class calculation even though only 13 some meet Plaintiff’s class member description of working “over 14 eight (8) hours in a day, and/or forty (40) hours in a week.” 15 FAC ¶ 31. Defendant has not provided sufficient explanation for 16 its inclusion of part-time or per diem employees in the putative 17 class. 18 The Court agrees with Plaintiff that Defendant has not 19 provided sufficient evidence to support its putative class 20 calculations. By extension, the variables Tenconi calculated 21 with respect to the number of workweeks and the average rate of 22 pay are also suspect to the extent they were based on the number 23 of putative class members. Defendant did not submit any other 24 supporting documents such as business records or spreadsheets 25 for the Court’s consideration. In the absence of any supporting 26 document before the Court to corroborate Tenconi’s assertions, 27 the Court cannot evaluate and/or rely on the accuracy of 28 Defendant’s calculations. 1 The Ninth Circuit dealt with similar supporting evidence 2 for removal in Garibay v. Archstone Cmtys. LLC., 539 Fed. Appx. 3 763, 764 (9th Cir. 2013). There the court observed that the 4 only support for the defendants' calculation of the amount in 5 controversy was "a declaration by their supervisor of payroll, 6 which set[] forth only the number of employees during the 7 relevant period, the number of pay periods, and general 8 information about hourly employee wages." Id. The court found 9 the district court properly concluded the evidence "was 10 insufficient to support removal jurisdiction under CAFA," 11 reasoning that beyond the declaration, "the defendants rely on 12 speculative and self-serving assumptions about key unknown 13 variables." Id. For this and the reasons given above, 14 Tenconi’s unsupported declaration is insufficient to support 15 removal jurisdiction as to this claim. 16 Lacking more evidence, Defendant has not proved the amount 17 in controversy for Plaintiff’s claim for unpaid overtime and the 18 Court declines to credit Defendant’s estimate of $428, 189.79. 19 b. Remaining Claims 20 Plaintiff contends that Defendant’s arguments about the 21 remaining claims fail for the same reason as above, namely that 22 the damages calculated are entirely speculative and based on 23 insufficient evidence in light of Defendant’s burden to prove 24 jurisdiction. Reply at 5. The Court agrees to the extent that 25 Defendant’s calculations are based on the class size, number of 26 workweeks, or the average rate of pay put forth in Tenconi’s 27 unsupported declaration. This applies to Defendant’s 28 calculations for claim two (meal period premiums), claim three eee em REI RO III III EEO II RO IEE III GEO III EDS eee eee 1 (rest period premiums), claim four (unpaid minimum wages}, and 2 claim five (waiting time penalties). Opp’n at 9, 11-14. 3 This leaves only Plaintiff’s sixth claim for inaccurate 4 wage statements and statutory attorney’s fees. The Court need 5 not address the parties’ arguments about the sixth claim 6 because, even if the Court accepts Defendant’s estimate, the 7 aggregate amount in controversy is at most $1,488,500.00 based 8 on: $1,190,800.00 (inaccurate pay statement penalties) + 9 $297,700.00 (statutory attorney’s fees, 25% of $1,190,800.00, 10 which is the total remaining damages). Opp’n at 12-13, 14. 11 Because Defendant has not shown by a preponderance of the 12 evidence the amount in controversy exceeds five million dollars, 13 removal was improper. Accordingly, the Court GRANTS Plaintiff's 14 motion to remand. [15] 16 Til. ORDER 17 For the reasons set forth above, the Court GRANTS 18 Plaintiff’s Motion to Remand. This action is hereby remanded 19 | back to the Superior Court of Sacramento County, California. The 20 Court orders the clerk to close this case. 21 IT IS SO ORDERED. 22 Dated: April 20, 2022 23 kA 24 teiren staves odermacr 7008