3 “m_CW 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA - SOUTHERN DIVISION 10 1 || STEPHEN MARANO, individually and ) Case No.: SACV 20-02215-CJC (ADSx) > behalf of all others similarly situated, 1S Plaintiff, v. ORDER DENYING PLAINTIFF’S 15 MOTION TO REMAND [DKt. 9] 6 LIBERTY MUTUAL GROUP, INC. and) DOES 1 to 50, ) 17 18 Defendants. 19 20 21

23 24 INTRODUCTION 25 26 Plaintiff Stephen Marano filed this putative wage-and-hour class action against 27 || Defendant Liberty Mutual Group, Inc., and unnamed Does in Orange County Superior 28 ||Court. (Dkt. 1-2 [Complaint, hereinafter “Compl.”].) Defendant removed the action to

1 this Court pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. 2 § 1332(d). (Dkt. 1 [Notice of Removal, hereinafter “NOR”].) Before the Court is 3 Plaintiff’s motion to remand. (Dkt. 9 [hereinafter “Mot.”].) For the following reasons, 4 the motion is DENIED.1 5 6 II. BACKGROUND 7 8 Plaintiff, a non-exempt Sales Representative employed by Defendant, alleges that 9 Defendant failed to pay him for all hours worked, including overtime and missed meal 10 periods or rest breaks. (Compl. ¶¶ 17–30.) In this case, he asserts eight claims under 11 California’s Labor Code for (1) failure to pay all wages due, (2) failure to pay overtime 12 wages, (3) failure to provide compliant rest periods or pay missed rest period premiums, 13 (4) failure to provide complaint meal periods or pay missed meal period premiums, 14 (6) unlawful deductions from wages, (7) failure to provide complete and accurate wage 15 statements, (8) failure to timely pay wages, as well as a ninth claim for (9) violations of 16 California’s Unfair Competition Law. (See id.) Plaintiff asserts these claims on behalf of 17 a proposed class of “all individuals who are or were employed by Defendant[] in 18 California as Sales Representatives and equivalent positions from four years prior to the 19 filing of this Complaint through the date of trial.” (Id. ¶ 31.) 20 21 Defendant removed the case to this Court, contending that the Court has CAFA 22 jurisdiction because minimum diversity is met, there are over 100 class members, and the 23 amount in controversy exceeds $5 million. The Court now considers Plaintiff’s motion to 24 remand to state court, in which Plaintiff argues that Defendant has failed to meet its 25 burden to show the amount in controversy. 26

27 1 Having read and considered the papers presented by the parties, the Court finds this matter appropriate l 2 || LEGAL STANDARD 3 4 A defendant may remove a civil action brought in a state court but over which a 5 ||federal court may exercise original jurisdiction. CAFA provides original federal 6 || jurisdiction over class actions in which the amount in controversy exceeds $5 million, 7 there is minimal diversity between the parties, and the number of proposed class 8 ||members is at least 100.

(d)(2), 1332(d)(5)(B). “Congress designed 9 ||the terms of CAFA specifically to permit a defendant to remove certain class or mass 10 |] actions into federal court. . . [and] intended CAFA to be interpreted expansively.” Ibarra 11 ||v. Manheim Invs., Inc.,

(9th Cir. 2015). There is “no antiremoval 12 || presumption” in cases invoking CAFA because CAFA was enacted to facilitate federal 13 ||courts’ adjudication of certain class actions. Dart Cherokee Basin Operating Co., LLC v. 14 || Owens,

, 89 (2014). 15 16 “[A] defendant’s notice of removal need include only a plausible allegation that 17 ||the amount in controversy exceeds the jurisdictional threshold.” Jd. However, if the 18 || asserted amount in controversy is contested after removal, “[e]vidence establishing the 19 |}amount 1s required.” J/d.; see Harris v. KM Indus., Inc.,

(9th Cir. 20 ||2020). “In such a case, both sides submit proof and the court decides, by a 21 || preponderance of the evidence, whether the amount-in-controversy requirement has been 22 satisfied.” Dart, 574 U.S. at 88. Ultimately, a removing defendant bears the burden of 23 || proving that the amount in controversy is met. See Rodriguez v. AT&T Mobility Servs. 24 || LLC,

(9th Cir. 2013). “Under this system, CAFA’s requirements are 25 ||to be tested by consideration of real evidence and the reality of what is at stake in the 26 || litigation, using reasonable assumptions underlying the defendant’s theory of damages 27 ||exposure.” Ibarra v. Manheim Inys., Inc.,

(9th Cir. 2015). A 28 |}removing defendant may rely on “a chain of reasoning that includes assumptions” and

1 “an assumption may be reasonable if it is founded on the allegations of the complaint.” 2 Arias v. Residence Inn by Marriott,

, at *4 (9th Cir. Sept. 3, 2019). 3 4 IV. DISCUSSION 5 6 Plaintiff contends that this case must be remanded because Defendant has not 7 properly established that the amount in controversy exceeds $5 million.2 Defendant 8 contends the amount in controversy exceeds $7 million. (Dkt. 11 [Defendant’s 9 Opposition, hereinafter “Opp.”] at 7.) Because Plaintiff contests the amount in 10 controversy, Defendant must provide evidence to support its calculations. Dart,

at 89; Harris,

. 12 13 Plaintiff alleges that Defendant engaged in “a consistent policy of failing to pay all 14 wages due, including minimum wages and overtime wages; failing to authorize or permit 15 compliant rest periods; failing to pay missed rest period premiums; failing to provide 16 compliant meal periods; failing to pay missed meal premiums; failing to reimburse 17 business expenses; failing to issue accurate and complete wage statements; failing to 18 timely pay all wages owed; engaging in unlawful, unfair, and/or fraudulent business 19 practices; and deducting unlawfully from employee wages.” (Compl. ¶ 4.) He 20 specifically alleges that (1) Defendant had a practice “of not paying employees based on 21 their actual hours worked and instead unlawfully altering employee time records to 22 reflect hours worked in half-hour intervals,” (id. ¶ 18), (2) class members “periodically 23 worked more than eight (8) hours in a workday, all seven days in a workweek, and/or 24 more than forty (40) hours in a workweek, but were not paid all appropriate overtime and 25 double time wages for such hours worked,” (id. ¶ 20), (3) class members “were required 26

27 2 Plaintiff does not dispute that the other two CAFA requirements—minimal diversity and minimum 1 || to remain on-duty and/or charged with various tasks during rest periods,” (id. 4 21), class 2 ||members “were regularly required to take late, on-duty, or interrupted meal periods or 3 ||forego them entirely,” (id. 4 23), (4) class members “were never reimbursed” for 4 ||“expenditures or losses includ[ing] the use of their personal cell phones and vehicles for 5 || work purposes,” (id. 25), and (5) Defendant’s “wage statements failed to state the 6 |}correct amount of gross wages earned” and other required information, (id. 4 28). 7 8 Based on these allegations, Defendant assumes a violation rate of four hours of 9 |}uncompensated overtime per workweek and three missed meal breaks and three missed 10 breaks per week. (Opp. at 16-17.) Defendant also assumes that 100% of pay periods 11 |}resulted in a wage statement penalty or penalties for failure to pay wages timely and $70 12 unreimbursed expenses per month. (Opp. at 19-20.) In support of its calculations, 13 || Defendant submits declarations from Serena Wannemacher, a business analyst for 14 || Defendant, and Shannon Labadie, a payroll project manager for Defendant. (Dkts. 11-1 15 || [hereinafter “Wannemacher Decl.’’], 11-4 [hereinafter “Labadie Decl.’].) Wannemacher 16 || offers the following facts based on her review of company records: (1) as of September 17 2020, 175 individuals were within the scope of the class definition in the complaint, 18 all of these employees were full-time employees, (3) these employees had an average 19 || pay rate of $15.35 an hour, (4) based on her calculation, these employees worked a total 20 || of 16,666.17 workweeks. (Wannemacher Decl. {fj 3-9.) After her review of company 21 ||records, Labadie estimates that if the putative class members worked an additional four 22 ||hours a week, they would have earned an average of $89.11 in overtime on commissions 23 ||and bonuses per workweek, in addition to overtime earned on their base salary. (Labadie 24 Decl. ¥ 10.) 25 26 Based on Wannemacher’s analysis, Defendant estimates an alleged $1,535,287.58 27 unpaid overtime on base hour wages, an alleged $1,485,122.41 in unpaid overtime on 28 || commissions and bonuses, and an alleged $1,534,954.26 in unpaid meal and rest period

1 premiums. (Opp. at 7; Wannemacher Decl. at 9.) It also estimates an alleged 2 $314,370.00 in unreimbursed expenses, an alleged $225,950.00 in § 266 penalties, and an 3 alleged $451,900.00 in § 210 penalties. (Opp. at 7.) Taken together, this suggests an 4 amount in controversy of over $5 million before considering potential attorneys’ fees.3 5 6 The Court finds Defendant’s calculations are based on reasonable assumptions 7 grounded in the allegations of the Complaint. The amount in controversy considers the 8 amount in dispute, not the amount that a plaintiff is likely to recover. Lewis v. Verizon 9 Commc’ns, Inc.,

(9th Cir. 2010). “In that sense, the amount in 10 controversy reflects the maximum recovery the plaintiff could reasonably recover.” 11 Arias,

, at *5 (quoting Lewis,

). Plaintiff could have, 12 but did not, make more specific allegations to narrow the scale or scope of this 13 controversy. See Muniz v. Pilot Travel Ctrs. LLC,

, at *4 (E.D. Cal. 14 May 1, 2007). Defendant is not “required to comb through its records to identify and 15 calculate the exact frequency of violations.” Lopez v. Aerotek, Inc.,

, 16 at *3 (C.D. Cal. May 14, 2015). Defendant’s assumed violation rates are grounded in the 17 broad allegation that these violations as part of Defendant’s “consistent policy” and the 18 specific allegations involving Defendant’s various schemes to underpay employees. (See 19 Compl. ¶¶ 4, 18–30.) Although courts have assumed 100% violation rates in other cases 20 involving sweeping allegations, Defendant makes limited and reasonable assumptions for 21 these claims. Cf. Coleman v. Estes Exp. Lines, Inc.,

(C.D.

). Furthermore, Defendant’s assumption of a wage statement penalty on 100% 23 of pay periods is supported by Plaintiff’s allegation that “Defendant[] failed to ever pay 24 Plaintiff and Class Members all wages due.” (See Compl. ¶ 94 [emphasis added].) 25 Defendant’s showing is sufficient to satisfy CAFA’s amount-in-controversy requirement. 26 27 l Finally, Plaintiff argues that the Notice of Removal must fail because it “relies 2 |}entirely on a patchwork of guesses and generalizations” and Defendant’s calculations are 3 || based on “self-serving assumptions lack[ing] adequate evidentiary support.” (Mot. at 8.) 4 Court disagrees. As explained above, Defendant has provided evidence: 5 ||declarations from knowledgeable employees based on their analysis of regularly kept and 6 ||created business records. (See generally Wannemacher Decl.; Labadie Decl.) And 7 || Defendant properly estimated violation rates based on reasonable assumptions grounded 8 the Complaint. See Arias,

, at *6. A defendant is not required to 9 || “prove it actually violated the law at the assumed rate,”

and Plaintiff has offered no 10 |}evidence of his own. At this stage, the preponderance of the evidence standard is “not 11 ||daunting.” Korn v. Polo Ralph Lauren Corp.,

(E.D. Cal. 12 ||2008) Gnternal quotations omitted). As such, the declarations submitted and Defendant’s 13 ||reasonable assumptions are sufficient to show by a preponderance of the evidence that 14 ||the amount in controversy exceeds $5 million. 15 16 || IV. CONCLUSION 17 18 For the foregoing reasons, Defendant has carried its burden to show that the Court 19 ||has subject matter jurisdiction over this action under CAFA. Accordingly, Plaintiffs 20 || motion to remand is DENIED. 21 » || DATED: January 14, 2021 Ke Le Z-/Z, 24 ee 0s HON. CORMAC J. CARNEY

UNITED STATES DISTRICT JUDGE 27 28