JS-6 1 UNITED STATES DISTRICT COURT 2 CENTRAL DISTRICT OF CALIFORNIA

3 4 5 Maria Guijarro, 6 5:20-cv-00324-VAP-AFMx Plaintiff,

7 v. Order GRANTING Plaintiff’s 8 Motion to Remand Healthcare Services Group, Inc. et (Dkt. 11) 9 al., 10 Defendants 11

12 Before the Court is Plaintiff Maria Guijarro’s Motion to Remand Action to 13 Superior Court, filed March 20, 2020. (“Motion,” Dkt. 11). Defendants 14 opposed the Motion on April 10, 2020, (Dkt. 14), and Plaintiff replied on April 15 16, 2020 (Dkt. 16). 16

17 After considering all papers filed in support of, and in opposition to, 18 the Motion, the Court deems this matter appropriate for resolution without a 19 hearing pursuant to Local Rule 7-15. The Court GRANTS the Motion and 20 REMANDS the action to the California Superior Court for the County of San 21 Bernardino. 22

23 I. BACKGROUND 24 On December 10, 2019, Plaintiff Guijarro (“Plaintiff”) filed her initial 25 complaint against Defendants Healthcare Services Group, Inc., HCSG West 26 1 1 LLC, and Yolocare Inc., dba Terracina Post Acute (together, “Defendants”) in 2 San Bernardino Superior Court, alleging violations of various California 3 Labor Codes. (See generally “Compl.,” Dkt. 1-1, Ex. B). 4 5 In the Complaint, Plaintiff identifies as the putative class “[a]ll current 6 and former non-exempt employees of Defendants who worked at any of 7 Defendants’ locations in the State of California at any time within the period 8 beginning four (4) years prior to the filing of the this [sic] action, and ending 9 at the time this action settles or proceeds to final judgment.” (Compl. ¶ 5). 10 Plaintiff alleges in the Complaint that Defendants engaged in various 11 unlawful practices, including (1) failure to provide meal periods, (2) failure to 12 provide rest periods, (3) failure to pay overtime wages, (4) failure to pay 13 minimum wages, (5) failure to timely pay wages during employment, (6) 14 failure to pay all wages due at termination, (7) failure to maintain payroll 15 records, (8) failure to furnish accurate wage statements, (9) failure to 16 indemnify employees for business expenses, and unfair business practices. 17 (See generally id.). Plaintiff also seeks penalties under the Private 18 Attorneys General Act (“PAGA”). (Id. ¶¶ 62-66). 19 20 Based on these alleged violations, Plaintiff brought (1) a class action on 21 behalf of those similarly situated, and (2) a representative action under the 22 Private Attorneys General Act (“PAGA”). (See id. at ¶¶ 14-66). Plaintiff 23 served Defendants with the Complaint on December 12, 2019, (see “Notice 24 of Removal,” Dkt. 1 ¶ 1; Dkt. 1-1, Ex. B), and Defendants answered the 25 Complaint on January 13, 2020. (Dkt. 1-1, Ex. G). On February 19, 2020, 26 Defendants removed the instant action to this Court, claiming the Court had 2 1 jurisdiction under the Class Action Fairness Act (CAFA). (See generally 2 Notice of Removal). 3 4 II. LEGAL STANDARD 5 Removal jurisdiction is governed by statute. See

et 6 seq.; Libhart v. Santa Monica Dairy Co.,

(9th Cir. 1979) 7 (“The removal jurisdiction of the federal courts is derived entirely from the 8 statutory authorization of Congress” (citations omitted)). Defendants may 9 remove a case to a federal court when a case originally filed in state court 10 presents a federal question or is between citizens of different states. See 11

(a)-(b), 1446, 1453. Only those state court actions that 12 originally could have been filed in federal court may be removed. 28 U.S.C. 13 § 1441(a); Caterpillar Inc. v. Williams,

(1987). 14 15 Although CAFA gives district courts diversity jurisdiction to hear class 16 actions, defendants must show that “any member of a class of plaintiffs is a 17 citizen of a State different from any defendant” (minimum diversity); the 18 number of members of the proposed plaintiff class exceeds 100 in the 19 aggregate (numerosity); and “the matter in controversy exceeds the sum or 20 value of $5,000,000, exclusive of interest and costs” (amount in 21 controversy).

(d); see also Luther v. Countrywide Home 22 Loans Servicing LP,

(9th Cir. 2008); Serrano v. 180 23 Connect, Inc.,

(9th Cir. 2007). 24 25 A defendant's notice of removal need include only a plausible allegation 26 that the amount in controversy exceeds the jurisdictional threshold. 3 1 Evidence establishing the amount is required by § 1446(c)(2)(B) only when 2 the plaintiff contests, or the court questions, the defendant's allegation. Dart 3 Cherokee Basin Operating Co., LLC v. Owens,

, 88-89 (2014). 4 When the removed complaint fails to allege a specific amount in 5 controversy, or when the complaint alleges an amount in controversy less 6 than the jurisdictional threshold, the removing defendant must prove by a 7 preponderance of the evidence that the amount in controversy is greater 8 than $5,000,000. Rodriguez v. AT&T Mobility Servs., No. 13-56149, 2013

, at *6-7 (9th Cir. Aug. 27, 2013) (citing Standard Fire Ins. Co. v. 10 Knowles,

(2013)); Lewis v. Verizon Commc'ns, Inc., 11

(9th Cir. 2010) (citing Guglielmino v. McKee Foods Corp., 12

(9th Cir. 2007)). If a defendant fails to meet the requisite 13 burden of proof, a court must remand for lack of subject matter jurisdiction. 14 15 In determining the amount in controversy, the Court considers not only 16 the facts alleged in the complaint, taken as true for purposes of calculating 17 the amount, but also “summary-judgment-type evidence relevant to the 18 amount in controversy at the time of removal.” Singer v. State Farm Mut. 19 Auto. Ins. Co.,

(9th Cir. 1997). “[T]he amount in 20 controversy is simply an estimate of the total amount in dispute, not a 21 prospective assessment of defendant's liability.” Lewis,

. 22 23 III. DISCUSSION 24 A defendant removing a case from state to federal court under CAFA 25 faces a strong presumption against removal. See Abrego Abrego v. Dow 26 Chem. Co.,

(9th Cir. 2006) (listing cases); Harris v. 4 1 Bankers Life & Cas. Co.,

(9th Cir. 2005) (“removal 2 statutes should be construed narrowly in favor of remand to protect the 3 jurisdiction of state courts.”). 4 5 Here, Plaintiff contends removal is improper because (1) it was untimely, 6 (2) even if the diversity requirement is satisfied, exceptions to CAFA’s 7 diversity requirement apply, and (3) Defendants failed to satisfy the amount- 8 in-controversy requirement. (See Motion at 8, 9, 12). As the removed 9 complaint does not allege a specific amount in controversy, Defendant must 10 prove by a preponderance of the evidence that the amount in controversy is 11 greater than $5,000,000. Rodriguez v. AT&T Mobility Servs.,

4516757, at *6-7. Below, the Court reviews each argument in turn. 13 14 A. Timeliness 15 Plaintiff argues that removal was untimely because Defendants were 16 served on December 12, 2019, and did not file a notice of removal until 17 February 21, 2020, 71 days later. (Dkt. 11 at 7). Although “[t]he removal 18 statutes generally require a party to remove a case within 30 days of 19 receiving the complaint, . . . the two 30–day periods are not the exclusive 20 periods for removal.” Rea v. Michaels Stores Inc.,

, 1237-38 21 (9th Cir. 2014) (citing

, 1453(b). “[A]s long as the 22 complaint or ‘an amended pleading, motion, order or other paper’ does not 23 reveal that the case is removable, the 30–day time period never starts to run 24 and the defendant may remove at any time.”

. 25 26 5 1 Although Plaintiff argues that “[i]t is clear from the face of the Complaint 2 that removal would have been proper,” and “no information was obtained by 3 Defendant from Plaintiff that let them know removal is appropriate after they 4 were served,” Plaintiff provides little support for this statement. (Dkt. 11 at 5 8). Indeed, Plaintiff included no information in her Complaint regarding the 6 size of the putative class, nor did she specify the damages at issue. (See 7 Dkt. 11 at 12 (conceding that “the Complaint does not plead a specific 8 amount of damages”)). Instead, as Defendants argue, “[t]he Complaint 9 does not allege an amount in controversy, an estimated number of putative 10 class members, or other facts from which it can be ascertained from the 11 face of the pleadings that this case is one which is removable.” (Dkt. 1-1, 12 “Scholl Decl.,” ¶ 4). The 30-day window for removal, therefore, does not 13 apply, and the Court concludes that removal was timely. 14 15 B. Diversity and Exceptions 16 CAFA requires minimal diversity and that requirement is satisfied here. 17 See

(d)(2) (“The district courts shall have original 18 jurisdiction of any civil action in which the matter in controversy exceeds the 19 sum or value of $5,000,000, exclusive of interest and costs, and is a class 20 action in which any member of a class of plaintiffs is a citizen of a State 21 different from any defendant[.]”). Plaintiff argues, however, that the local 22 controversy exception to CAFA’s diversity provision applies.1 The Court 23 disagrees. 24 1 Plaintiff states “that both the local controversy and home-state controversy 25 exceptions apply,” but discusses only the local controversy exceptions. (Dkt. 11 at 9). The Court therefore does not address the home-state con- 26 troversy exception. 6 1 In the Ninth Circuit, it is “well-established . . . that the party seeking 2 remand must prove the applicability of such exception[.]” Serrano v. 180 3 Connect, Inc.,

(9th Cir. 2007). Plaintiff has failed to 4 carry that burden. Plaintiff states that, under the local controversy 5 exception, there is no CAFA jurisdiction here because (1) “greater than two- 6 thirds of the members of all proposed” Plaintiff class members are California 7 residents; (2) at least one Defendant “from whom significant relief is sought 8 by members of the plaintiff class” is a California citizen, (3) the alleged 9 injuries caused by Defendants occurred in California; and (4) no similar 10 class actions have been filed within the past three years against any of the 11 defendants “asserting the same or similar factual allegations against any of 12 the defendants on behalf of the same or other persons.”

1332(d)(4)(A) (emphasis added). 14 15 A Plaintiff must show all four elements to establish the local controversy 16 exception applies, and Plaintiff here provides little to no support that any of 17 the elements are satisfied. As Defendants argue, for example, “Plaintiff does 18 not even attempt to establish that no other similar actions have been filed 19 against Defendants during the three years prior to the filing of this action.” 20 (Motion at 6). The Court concludes, therefore, that the exception does not 21 apply here. 22 23 C. Amount-in-Controversy 24 Defendants argue that “even when excluding the theoretical value of 25 Plaintiff’s claims for failure to pay overtime wages, failure to timely pay 26 wages during employment, payroll penalties, unreimbursed business 7 1 expenses, interest, costs, and PAGA penalties, and assuming only minimal 2 violations as to Plaintiff’s remaining claims, the amount in controversy in this 3 lawsuit is at least $46,289,875.50[.]” (Dkt. 1 ¶ 18) (emphasis omitted). 4 Defendants' calculations are based solely on a Declaration made by Tami 5 Ford, the Human Resources Director at Healthcare Services Group, Inc., 6 the parent company of HCSG West (together, “HCSG”). (Declaration of 7 Tami Ford (“Ford Decl.”), Dkt 1-2 ¶ 1). Without more, however, Defendants’ 8 calculations are mere speculation. 9 10 The only concrete evidence provided in the Ford Declaration addresses 11 (1) the number of employees who worked for Defendants during the 12 proposed period; (2) how many total weeks were worked; (3) the average 13 hourly wage for those employees; and (4) the number of employees who left 14 HCSG during the relevant period. (“Ford Decl.”, Dkt 1-2, ¶ 7-9). Defendants 15 rely on this sparse data to make a series of assumptions regarding Plaintiff’s 16 claims. As numerous other courts in this Circuit have found, such 17 assumptions do not suffice to calculate the amount-in-controversy 18 requirement for CAFA jurisdiction. See, e.g., Weston v. Helmerich & Payne 19 Inter. Drilling Co.,

, at *6; (E.D. Cal. Sept. 17, 2013) 20 (“Defendant provides no factual underpinning for the assumption that a meal 21 and rest break violation occurred one time per week or why an overtime 22 violation should be presumed to occur for four hours every week.”); 23 Emmons v. Quest Diagnostics Clinical Labs., Inc.,

, at *6 24 (E.D. Cal. Feb. 12, 2014) (“Defendants conclude that because Plaintiffs 25 allege that all class members were not provided with complete and accurate 26 wage statements, Defendants are entitled to assume the maximum statutory 8 1 penalty applies. This, however, is an improper assumption.”); Marshall v. G2 2 Secure Staff, LLC,

, at *2 (C.D. Cal. July 14, 2014) 3 (“[P]arties may not rely on the assumption that the 100–percent violation 4 rule applies without supporting the assumption with evidence.”). 5 6 In assessing the amount in controversy, the Ninth Circuit considers 7 “facts presented in the removal petition as well as any ‘summary-judgement- 8 type evidence relevant to the amount in controversy at the time of removal.’” 9 Matheson v. Progressive Specialty Ins. Co.,

(9th Cir. 10 2003) (quoting Singer v. State Farm Mut. Auto. Ins. Co.,

, 377 11 (9th Cir. 1997)). As Plaintiff points out, “[a]lthough Defendants have 12 unfettered access to every putative class member's employment records, 13 which contain the data necessary to make calculations, Defendants' Notice 14 of Removal does not use any of the evidence within their control to plead a 15 specific amount of damages.” (Dkt. 11 at 12-13). 16 17 Defendants need not rebut Plaintiff’s argument that Defendants’ removal 18 is supported by conjecture by proving the putative class members' damages 19 for them. Korn v. Polo Ralph Lauren Corp.,

, 1204–05 20 (E.D. Cal. 2008) (quoting McCraw v. Lyons,

(W.D. Ky. 21 1994)). On the other hand, Defendants cannot meet their own burden in 22 removing the case with only “speculation and conjecture.” Dupre v. Gen. 23 Motors, No. CV–10–00955RG K(Ex),

, at *4 (C.D. Cal. 24 Aug.27, 2010) (quoting Lowdermilk, 479 F.3d at 1002). Here, Defendants’ 25 supporting declarations do not support their jurisdictional allegations 26 9 1 factually; the allegations therefore are speculation and conjecture, 2 insufficient to meet Defendants’ burden in removing the action. 3 4 1. Wage Statement Penalties 5 Plaintiff seeks to recover penalties for allegedly non-compliant itemized 6 wage statements. (See Compl. ¶¶ 48-51). Defendants, assuming a 100% 7 violation rate, claim these alleged violations put $8,094,900 in controversy. 8 (Dkt. 1 ¶ 41). As explained above, Plaintiff made no such allegation. 9 Instead, Plaintiff pled that “HCSG knowingly and intentionally failed to 10 provide Plaintiff and Class Members with timely, accurate, and itemized 11 wage statements in accordance with California Labor Code § 226(a).” 12 (Compl. ¶ 50). Plaintiff simply stated that Defendants engaged in a 13 “systematic course of illegal payroll practices and policies[.]” (Compl. ¶ 14). 14 Defendants justify basing their calculation on 100% violation rate because 15 “[n]one of Plaintiff’s broad allegations regarding the ‘systematic’ wage and 16 hour violations alleged in the Complaint are qualified by any modifying 17 language, such as ‘sometimes,’ ‘occasionally,’ ‘from time to time,’ 18 ‘intermittently,’ or ‘on certain days’ that would suggest anything less than a 19 uniform 100% violation rate for all employees.” (Dkt. 14 at 11). Defendants, 20 in other words, assume a 100% violation rate because Plaintiff did not 21 explicitly say there was not a 100% violation rate. 22 23 This reasoning is unpersuasive, and Defendants provide no 24 independent evidence to support such an assumption. Defendants' 25 calculation is based solely on the Ford Declaration, which includes 26 information addressing (1) the number of employees who worked for 10 1 Defendants during the proposed period; (2) how many total weeks were 2 worked; (3) the average hourly wage for those employees; and (4) the 3 number of employees who left HCSG during the relevant period. (Ford Decl. 4 ¶ 7-9). The declaration provides no evidence of a 100% violation rate. 5 6 As the Ninth Circuit explained in Garibay v. Archstone Communities 7 LLC,

(9th Cir. 2013), such a declaration standing alone is 8 insufficient to make assumptions about other aspects of the amount-in- 9 controversy calculation, for example, the possible number of wage 10 statement violations. In Garibay, defendants submitted a “declaration by 11 their supervisor of payroll, which set[ ] forth only the number of employees 12 during the relevant period, the number of pay periods, and general 13 information about hourly employee wages. Beyond this, the defendants 14 rel[ied] on speculative and self-serving assumptions about key unknown 15 variables.”

. For example, nothing in the declaration explained 16 why each member of the class would be entitled to recovery for every pay 17 period for inaccurate wage statements. See

As Defendants have 18 submitted a similar declaration, the Court finds their “evidence [is] 19 insufficient to support removal jurisdiction under CAFA.” See

20 21 2. Meal and Rest Period Penalties 22 Plaintiffs also seek to recover for missed meal and rest periods pursuant 23 to California Labor Codes § 226.7, § 512, and § 512(a). (See Compl. ¶¶ 15- 24 23). Defendants claim such allegations, combined, put $17,899,608.5 in 25 controversy, assuming one meal period and one rest break violation per 26 week. (See Dkt. 14 at 14). Defendants' assumption regarding meal and 11 1 rest period violations, however, is once again unsupported by any evidence. 2 Defendants assert their assumption is “extremely conservative” because 3 Plaintiff alleges Defendants employed a uniform policy of wage abuse and 4 thus denied class members their meal and rest periods in violation of 5 California law. (See Dkt. 14 at 13). The Court finds this insufficient to 6 support Defendants' assumption of one meal period and one rest break 7 violation per week. 8 9 Even assuming each class member was denied a rest period and a 10 meal period for every shift lasting the requisite length, it is still unclear how 11 many of the total shifts in question were of sufficient length to mandate the 12 provision of meal and rest periods, as “Defendants fail to provide any 13 evidence that is specific to the class members.” (Motion at 14). As 14 Defendants “provide[ ] no factual underpinning for the assumption that a 15 meal and rest break violation occurred one time per week,” the Court finds 16 they have failed to sustain their evidentiary burden for purposes of removal. 17 See Weston v. Helmerich & Payne Inter. Drilling Co., No. 1:13-cv-01092- 18 LJO-JLT,

, at *6 (E.D. Cal. Sept. 17, 2013); see also 19 Munoz v. Central Parking Sys., Inc.,

, at *2 (C.D. Cal. 20 Aug. 30, 2010) (dismissing Defendant's assumption of one meal period 21 violation per week because Defendant “fail[ed] to provide ... evidentiary 22 support”). 23 24 3. Failure to Pay Minimum Wages 25 Defendants argue that Plaintiff’s claims regarding Defendants’ failure to 26 pay minimum wages adds $4,474,703 to the amount in controversy, 12 1 assuming half an hour of unpaid wages per workweek. (Dkt 14 at 14). This 2 calculation is premised, however, on an assumption that defendants failed 3 to pay proper wages to every class member employee during every pay 4 period of the year. Once again, defendants adduce no evidence that would 5 permit the court to draw such an inference, and the Court concludes that 6 Defendants have failed to carry their burden to establish the amount in 7 controversy with respect to the minimum wage claims. 8 9 4. Waiting Time Penalties 10 Plaintiff seeks statutory penalty wages, alleging that class members did 11 not receive all wages, earned and unpaid, within seventy-two hours of their 12 leaving Defendants' employ because Defendants “willfully fail[ed] to pay, in 13 accordance with California Labor Code §§ 201 and 202, any wages of an 14 employee who is discharged or who quit[.]” (See Compl. ¶¶ 38-44). 15 Defendants contend these alleged violations put $12,678,262 in 16 controversy, assuming a 100% violation rate. (Notice of Removal ¶¶ 37-38.) 17 Even assuming a 100% violation rate is appropriate, the Court has already 18 called into question Defendants' calculations for Meal and Rest Period 19 Penalties, as well as Wage Statement Penalties. Defendants, therefore, 20 have failed to carry their burden to establish the amount in controversy 21 regarding waiting time penalties. 22 23 5. Remaining Employment Claims 24 Defendants have not addressed Plaintiff’s remaining substantive claims 25 in detail, instead assuming Plaintiff’s claims regarding Defendants’ failure to 26 pay overtime wages, failure to timely pay wages during employment, payroll 13 1 penalties, unreimbursed business expenses, interest, costs, and PAGA 2 penalties contribute $0 to the amount in controversy. 3 4 6. Attorneys' Fees 5 Finally, Defendants calculated an amount in controversy for attorneys' 6 fees as 25% of Plaintiff's projected damages. (Dkt. 1 ¶ 44). While courts in 7 the Ninth Circuit have considered potential attorneys' fees in calculating the 8 amount in controversy in wage-and-hour cases, Defendants' fees estimate 9 is based on a conjectural damages calculation and should be disregarded. 10 See Campbell v. Vitran Express, Inc., No. CV-10-04442-RGK(SHx), 2010

, at *4 (C.D. Cal. Aug. 16, 2010) (“[B]ecause such uncertainty 12 surrounds Defendant's calculation of damages and penalties, the Court 13 cannot find that the inclusion of a 25% attorneys' fee, which Defendant 14 recommends, would necessarily place the amount in controversy over the 15 $5,000,000 CAFA threshold.”). 16 17 IV. CONCLUSION 18 Plaintiffs in class actions “may plead conservatively to secure a state 19 forum,” as long as those pleadings are made in good faith. Lowdermilk, 479 20 F.3d at 1003; Id. at 998–99. Plaintiffs are, after all, masters of their own 21 complaints. Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535

(2002). The Ninth Circuit therefore cautions that courts 23 should “assur[e] that removal occurs once the jurisdictional facts supporting 24 removal are evident,” so as to “guard [ ] against premature and protective 25 removals[.]” Harris,

. Rather than moving ahead, relying 26 largely upon conjecture, Defendants could have waited for evidence that it is 14 1 | more likely than not that the amount in controversy requirement in this case 2 | is satisfied. See Abrego Abrego,

. Alternatively, as 3 | Defendants are in possession of detailed information regarding their 4 | employees, Defendants could have reviewed their own records and 5 | marshaled more detailed evidence to support their claims regarding the 6 | amount in controversy. At this time, however, the Court finds Defendants fail 7 | to satisfy its burden in invoking the Court's jurisdiction. 8 9 The Court therefore GRANTS Plaintiff's Motion to Remand and ~ 10 | REMANDS the action to the California Superior Court for the County of San 11 | Bernardino. 12 43 14 15 | ITIS SO ORDERED. 16 Dated: 4/24/20 A - Q., Pls □ 18 OO ! Virginia A. Phillips 19 Chief United States District Judge 20 21 22 23 24 25 26

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