Perea v. FedEx Ground Package System, Inc.

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 NORA PEREA, individually and on Case No.: 20-cv-00610-DMS-AHG behalf of all others similarly situated, [12] ORDER DENYING MOTION TO Plaintiff, 13 REMAND v. [14] FEDEX GROUND PACKAGE [15] SYSTEM, INC., a Delaware Corporation; 16 and DOES 1 through 10, inclusive, 17 Defendants. [18] 19 Pending before the Court is Plaintiff Nora Perea’s motion to remand this action to 20 the San Diego Superior Court. Defendant Fedex Ground Package System, Inc. filed a 21 response in opposition to Plaintiff’s motion and a response to Plaintiff’s objection to 22 evidence. Plaintiff filed a reply. For the reasons given herein, the Court denies Plaintiff’s 23 motion. 24 I. 25 BACKGROUND 26 Plaintiff Nora Perea was formerly employed by Defendant Fedex Ground Package 27 System, Inc. as a non-exempt warehouse package sorter and handler. Plaintiff was a part28 time employee—she worked 3.5 to 4.0 hours shifts, 5 days a week. Plaintiff alleges that 1 “[t]here would be 2 or 3 occasions per week that [she], and other similarly-situated and 2 aggrieved employees, would report to work, go through security, clock into work, and work 3 about 45 minutes, only to be sent home without receiving a reporting time work shift 4 premium at the requisite rate as required by California law.” (ECF No. 1-2 (“FAC”), at 5 ¶ 9). Plaintiff further alleges that Defendant, at all relevant times, maintained a consistent 6 policy and practice of failing to provide accurate wage statements and failing to timely 7 compensate employees. 8 Based on these alleged facts, Plaintiff brought suit, on behalf of herself and others 9 similarly situated, against Defendant in San Diego Superior Court. In her First Amended 10 Complaint (“FAC”), Plaintiff asserts claims for (1) failure to pay report time wages in 11 violation of California Labor Code § 218 and § 5 of California’s Industrial Welfare 12 Commission (“IWC”) Wage Order 9-2001; (2) failure to provide accurate itemized wage 13 statements in violation of California Labor Code § 226 and § 7 of IWC Wage Order 914 2001; (3) failure to timely pay wages due upon separation of employment in violation of 15 California Labor Code §§ 201, 202, and 203; (4) violation of California’s Unfair 16 Competition Law (“UCL”), Bus. & Prof. Code § 17200, et seq.; (5) civil penalties under 17 California’s Private Attorney General Act (“PAGA”) for failure to pay reporting time 18 wages; (6) civil penalties under PAGA for failure to provide accurate itemized wage 19 statements; (7) civil penalties under PAGA for failure to timely pay wages upon 20 termination of employment; and (8) civil penalties under PAGA for violation of 21 California’s Labor Code and IWC Wage Orders. Plaintiff seeks injunctive relief, 22 restitution, disgorgement, an award of unpaid wages, statutory penalties, liquidated 23 damages, attorney’s fees and costs. 24 On March 30, 2020, Defendant removed the case to this Court pursuant to the Class 25 Action Fairness Act (“CAFA”), 28 U.S.C. § 1332 (d). Defendant included the Declarations 26 of Ms. Andrea K. Cox and Mr. Alexander Chemers to support a finding of removability. 27 In response to the Notice of Removal, Plaintiff filed the present motion, arguing Defendant [28] 1 has failed to satisfy its burden of establishing the class claims exceed the $5,000,000 2 jurisdictional minimum under CAFA. 3 II. 4 LEGAL STANDARD 5 Federal courts are courts of limited jurisdiction, having subject matter jurisdiction 6 only over matters authorized by the Constitution and Congress. See Kokkonen v. Guardian 7 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant may remove a civil action 8 from state court to federal court only if the district court could have original jurisdiction 9 over the matter. 28 U.S.C. § 1441 (a). A removed action must be remanded to state court 10 if the federal court lacks subject matter jurisdiction. See 28 U.S.C. § 1447 (c); Kelton Arms 11 Condo. Owners Ass’n, Inc. v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003) 12 (“Subject matter jurisdiction may not be waived, and, . . . the district court must remand if 13 it lacks jurisdiction.”). 14 Pursuant to CAFA, this Court has original jurisdiction over class actions in which 15 there are at least 100 class members, at least one of which is diverse in citizenship from 16 any defendant, “and for which the aggregate amount in controversy exceeds the sum of 17 $5 million, exclusive of costs and interest.” Ibarra v. Manheim Invs., Inc., 775 F. 3d 1193 , 18 1196 (9th Cir. 2015); 28 U.S.C. § 1332 (d). A “class action” is defined as “any civil action 19 filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule 20 of judicial procedure authorizing an action to be brought by 1 or more representative 21 persons as a class action.” 28 U.S.C. § 1332 (d)(1)(B). To “determine whether the matter 22 in controversy” exceeds the sum of $5 million, “the claims of the individual class members 23 shall be aggregated.” Id. § 1332(d)(6). And those “class members” include “persons 24 (named or unnamed) who fall within the definition of the proposed or certified class.” Id. 25 § 1332(d)(1)(D). 26 The Ninth Circuit has directed courts to “strictly construe the removal statute against 27 removal jurisdiction[,]” so that “any doubt as to the right of removal” is resolved in favor 28 of remanding the case to state court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 1 However, this presumption does not apply to cases removed under CAFA. See Dart 2 Cherokee Basin Operating Co., LLC. v. Owens, 574 U.S. 81 , 88 (2014) (“It suffices to 3 point out that no antiremoval presumption attends cases invoking CAFA, which Congress 4 enacted to facilitate adjudication of certain class actions in federal court.”) (internal 5 quotation marks and citations omitted). Thus, when dealing with cases arising under 6 CAFA, its provisions must be “read broadly, with a strong preference that interstate class 7 actions should be heard in a federal court if properly removed by any defendant.” See id. 8 (internal quotation marks and citations omitted). Nevertheless, “under CAFA the burden 9 of establishing removal jurisdiction remains, as before, on the proponent of federal 10 jurisdiction.” Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 695 (9th Cir. 2006) 11 (per curiam). 12 III. 13 DISCUSSION 14 There is no dispute the present action is a “class action” within CAFA, as the action 15 contains class allegations under California Code of Civil Procedure § 382. (ECF No. 1-2 16 (“FAC”) at ¶ 1). There is also no dispute that the action involves more than 100 employees 17 and that the minimal diversity exists—the citizenship of at least one of the employees is 18 different from Defendant’s citizenship. The only issue, therefore, is whether Defendant 19 has shown the amount in controversy requirement is satisfied. For the reasons explained 20 below, the Court finds Defendant has shown by a preponderance of the evidence that the 21 amount in controversy exceeds $5,000,000, and thus, remand is inappropriate. 22 “[T]he defendant seeking removal bears the burden to show by a preponderance of 23 the evidence that the aggregate amount in controversy exceeds $5 million when federal 24 jurisdiction is challenged.” Ibarra v. Manheim Inv. Inc., 775 F.3d 1193, 1197 (9th Cir. 25 2015). However, if the defendant’s “assertion of the amount in controversy is challenged 26 by [the] plaintiffs in a motion to remand, the Supreme Court has said that both sides submit 27 proof and the court then decides whether the preponderance lies.” Id. at 1198 (citing Dart, 28 574 U.S. at 82). Both parties, therefore, bear the burden of presenting a calculation or 1 analysis of the potential damages. See Horton v. NeoStrata Co. Inc., No. 16-cv-02189, [2] 2017 WL 2721977 , at *4 (S.D. Cal. June 22, 2017) (“Case law leaves little doubt that 3 Plaintiffs are wholeheartedly mistaken in arguing that they have no burden at this 4 juncture.”). 5 In support of the Notice of Removal, Defendant calculated the amount in 6 controversy based on Plaintiff’s claims for (1) failure to pay reporting time wages and (2) 7 waiting time penalties. As to the first cause of action, Defendant considered Plaintiff’s 8 allegations that two to three times per week she would report to work only to be sent home 9 after about 45 minutes and that employees are entitled to reporting time shift premium pay 10 “for half the usual or scheduled day’s work, but in no event for less than two hours nor 11 more than four hours, at the employees’ regular rate of pay.” (FAC at ¶¶ 9, 35). Defendant 12 also considered, based on its records, that the number of current and former employees 13 who held the non-exempt position of Part-Time Package Handler in California from March 14 6, 2019 to March 2020, which was 15,015 employees, the number of weeks those 15 employees worked, which was 225,964 weeks, and their hourly pay, which was at least 16 $12.00 per hour. (ECF No. 1 at 8–9). Defendant noted that per Plaintiff’s allegations, 17 employees reporting for only 45 minutes are owed at least 75 minutes of reporting time 18 pay to achieve the two-hour minimum. (Id. at 9). Defendant then calculated that a violation 19 rate of only two reporting time violations per week, multiplied by the number weeks 20 worked, the pay rate, and the amount of time owed results in a claim for $6,778,920 21 (225,964 x $12 x 2 x 1.25). (Id.). 22 As to the second cause of action, the California Labor Code § 203 penalties are 23 “equivalent to the employee’s daily wages for each day he or she remained unpaid for a 24 total of 30 days.” (Id. at 10 (quoting Mamika v. Barca, 80 Cal. Rptr. 2d 175, 178 (Cal. 25 App. Ct. 1998)). Based on Plaintiff’s first cause of action seeking reporting time wages, 26 Defendant assumed “Plaintiff’s theory is that such alleged unpaid wages still have not been 27 paid to Plaintiff and putative class members.” (Id. 10–11). Defendant, therefore, 28 calculated the amount in controversy for Plaintiff’s second cause of action based on a 301 day penalty for each former employee’s daily wage rate. (Id.). Defendant found at least 2 8,256 non-exempt Part-Time Package Handlers have separated from employment with 3 Defendant since March 5, 2019 and that a work day for the purposes of the waiting time 4 penalty constitutes four work hours. (Id. at 11). Defendant then multiplied the number of 5 former employees by the number of days without pay, the number of hours in a work day, 6 and the pay rate (8,256 x 30 x 4 x $12). This calculation results in a claim for $11,888,640. 7 Defendant concluded that the amount in controversy for Plaintiff’s first two causes 8 of action is $18,667,560. Defendant then considered the potential attorney’s fees award 9 under the California Labor Code. See Fritsch v. Swift Transp. Co. of Ariz., LLC, 899 F.3d 10 785, 794 (9th Cir. 2018) (holding that if a plaintiff is entitled under a contract or statute to 11 future attorney’s fees, then “such fees are at stake in the litigation and should be included 12 in the amount in controversy”). Defendant estimated the attorney’s fees to be 25 percent 13 of the total $18,667,560, which is $4,666,890. Defendant’s ultimate evaluation of the 14 amount in controversy—accounting only for Plaintiff’s first two causes of action and 15 attorney’s fees—was $23,334,450. Consequently, Defendant argues Plaintiff’s case easily 16 exceeds CAFA’s $5,000,000 jurisdictional minimum. 17 In support of her motion to remand, Plaintiff contends Defendant’s calculations are 18 speculative and erroneous. Specifically, Plaintiff argues that for the first cause of action, 19 instead of incorrectly assuming every employee suffered the exact same damages as 20 Plaintiff, Defendant should have analyzed its payroll and time-keeping records to find “the 21 actual number of clocked-in events where employees were sent home without more work.” 22 (ECF No. 7-1 (“Mot.”) at 6). Plaintiff argues Defendant made the same mistake with its 23 calculation of damages for Plaintiff’s second cause of action—Defendant should have used 24 “the actual number of qualifying individuals separated from employment” without pay, 25 instead of assuming “the entire universe of separated employees is owed pay.” (Id. at 6). 26 Plaintiff also objects to the Declaration of Ms. Cox, which was filed in support of 27 Defendant’s Notice of Removal, for lack of foundation and personal knowledge. Plaintiff 28 does not, however, present her own calculation of damages or any competing evidence. 1 Plaintiff cites Ibarra v. Manheim Investments Inc. in support of her argument 2 Defendant should not have assumed all employees suffered the same violation as she did. 3 In Ibarra, plaintiffs challenged a company’s “pattern and practice” of violating the 4 California Labor Code for failure to pay minimum wages and overtime, provide breaks, 5 furnish wage statements, and pay timely wages upon termination. Ibarra, 775 F.3d at 1196 . 6 The Ninth Circuit held the removing-defendant’s calculation of the amount in controversy 7 was not reasonable because the defendant assumed putative class members were deprived 8 of a break and worked overtime without compensation “on each and every shift.” Id. at 9 1199. This assumption, the court noted, contradicted the plaintiff’s complaint, which 10 alleged he worked overtime without compensation on “multiple occasions during his 11 employment . . . but not on each and every shift.” Id. (internal quotations omitted). The 12 court remanded the case to the trial court to “allow both sides to submit evidence related 13 to the contested amount.” Id. 14 Plaintiff’s argument is not persuasive. Unlike the defendant in Ibarra, Defendant 15 specifically considered Plaintiff’s FAC allegations in calculating the amount in 16 controversy. Plaintiff alleges that she was sent home without receiving a reporting time 17 work shift premium two to three times a week. (Compl. at ¶ 9). Plaintiff further alleges 18 that “Defendant had a consistent policy and practice of failing to pay Plaintiff and 19 similarly-situated and aggrieved employees all wages due” and “failing to timely 20 compensate non-exempt employees, including Plaintiff, for all wages owed upon 21 separation of employment.” (Id. at ¶¶ 14, 17). Defendant then assumed for the purposes 22 of its calculations that employees during a one-year period were sent home two times per 23 week. Defendant did not assume that every employee was sent home without receiving a 24 reporting time work shift premium on each and every shift. Defendant’s assumptions, 25 therefore, are not “pulled out of thin air but [have] some reasonable ground underlying 26 them,” specifically, Plaintiff’s allegations of her own experience and of a greater policy 27 and practice. Courts often approve similar assumptions, especially where the plaintiff fails 28 to provide her own calculations or evidence of the amount in controversy. See Feao v. 1 UFP Riverside, LLC, No. 17-3080, 2017 WL 283620 , at *4–5 (C.D. Cal. June 29, 2017) 2 (finding defendant’s assumptions reasonable where plaintiff used “no qualifying words 3 such as ‘often’ or ‘sometimes’ to suggest less than uniform violation”); Dobbs v. Wood 4 Group PSN, Inc., 201 F. Supp. 3d 1184 , 1188–89 (E.D. Cal. 2016) (finding a defendant’s 5 100 percent violation assumption reasonable “where plaintiff’s complaint specifically 6 offers a uniform practice” and “plaintiff offers no competent evidence in rebuttal to a 7 defendant’s showing”). 8 Plaintiff’s argument Defendant should have used its own time and payroll records 9 to find the exact number of California Labor Code violations is also unconvincing. It is 10 well-settled law that a defendant “need not ‘produce business records setting forth the 11 precise number of employees in [the] putative class . . . and the precise calculation of 12 damages alleged to meet its burden regarding the amount in controversy.’ ” Bryant v. NCR 13 Corp., 284 F. Supp. 3d 1147, 1150 (S.D. Cal. 2018) (quoting Long v. Destination Maternity 14 Corp., 15cv2836, 2016 WL 1604968 , at *6 (S.D. Cal. Apr. 21, 2016)). To hold otherwise 15 would place a burden too hefty and demanding on the defendant. Courts, therefore, 16 consistently allow defendants to “rely on reasonable assumptions” in calculating the 17 amount in controversy. Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 18 2019). 19 Finally, the Court turns to Plaintiff’s argument that Ms. Cox’s declaration is lacking. 20 In support of this argument, Plaintiff cites Richards v. Now, LLC, No. 2:18-cv-10152, 2019 21 WL 2026895 , at *7 (C.D. Cal. May 8, 2019). In Richards, the court found that the 22 defendant failed to establish the declarant “ha[d] personal knowledge regarding 23 employment records generally” because her “position does not naturally correlate to one 24 requiring comprehensive knowledge and familiarity with all of [the defendant’s] 25 employment records[.]” Richards, 2019 WL 2026895 , at *7. Notably, the declarant in that 26 case was “merely a ‘Staff Accountant’ at [the company].” Id. 27 Ms. Cox, unlike the declarant in Richards, is the Managing Director of Human 28 Resources Service Delivery. (ECF No. 1-5 (“Cox Decl.”), at ¶ 1). As Managing Director, 1 she is “familiar with and ha[s] access to Defendant’s records reflecting the employment 2 status and history as well as pay rate information for its employees.” (Id.). Ms. Cox is also 3 familiar with Defendant’s “business records regarding Plaintiff” and Defendant’s “data 4 regarding all active and former California non-exempt Package Handlers.” (Id. at ¶¶ 8, 9). 5 Given Ms. Cox’s position and her familiarity with Defendant’s business records and the 6 applicable data, the Court finds there is sufficient foundation for her personal knowledge 7 as to the accuracy of the information presented. It is also worth noting that Richards 8 specifically supports this finding. There, the court notes that a sufficient foundation for 9 personal knowledge exists where the declarant maintains “a managerial [role] requiring 10 authentication and oversight of voluminous business records for the entire company 11 regarding employee count, payroll, and shift information.” Richards, 2019 WL 2026895 , 12 at *8; id. (finding that declarants in other cases had sufficient knowledge because they 13 “were a Vice President of Human Resources and a Director of Compensation and HR 14 Systems”); see also Bryant, 284 F. Supp. 3d at 1150 (finding the declarant established a 15 sufficient foundation for her testimony by “declaring knowledge of the employment data 16 provided in her declaration was based on her normal business responsibilities and personal 17 review of Defendant's personnel records”). 18 Having considered the allegations in Plaintiff’s Complaint, the parties’ briefing, and 19 Defendant’s evidentiary submissions, the Court concludes Defendant has satisfied its 20 burden. Defendant has demonstrated by a preponderance of the evidence that the amount 21 in controversy exceeds CAFA’s jurisdictional minimum of $5,000,000. Accordingly, the 22 Court denies Plaintiff’s motion to remand. 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 IV. 2 CONCLUSION AND ORDER 3 For the foregoing reasons, Plaintiff’s motion for remand is denied. 4 IT IS SO ORDERED. [5] 6 Dated: July 15, 2020 J 7 pon yn. Hon. Dana M. Sabraw 8 United States District Judge [10] 1]