1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ALEX ESQUEDA, Case No. 2:21-cv-03321-FLA (GJSx) 12 Plaintiff, ORDER (1) DENYING PLAINTIFF’S 13 v. MOTION TO REMAND [DKT. 8] 14 AND (2) CONSOLIDATING ACTION WITH RELATED CASE TEAM INDUSTRIAL SERVICES, INC. 15 et al., 16 Defendants. 17 18 19 20 RULING 21 Before the court is Plaintiff Alex Esqueda’s (“Esqueda” or “Plaintiff”) Motion 22 to Remand (“Motion”). Dkt. 8 (“Mot”). Defendant Team Industrial Services, Inc. 23 (“Defendant” or “Team”) opposes the Motion. Dkt. 13 (“Opp.”). On July 20, 2021, 24 the court found this matter appropriate for resolution without oral argument and 25 vacated the hearing set for July 23, 2021. Dkt. 19; see Fed. R. Civ. P. 78(b); Local 26 Rule 7-15. 27 For the reasons stated below, the court (1) DENIES Plaintiff’s Motion to 28 Remand, and (2) CONSOLIDATES this action with the related case styled Michael 1 Thai v. Team Industrial Services, Inc., et al., Case No. 2:21-cv-03319-FLA (GJSx) 2 (“Thai action”). 3 BACKGROUND 4 Plaintiff filed this action against Defendant in Los Angeles Superior Court on 5 August 26, 2020. Dkt. 1-1 (“Compl.”). In the class action Complaint, Plaintiff brings 6 the following causes of action: (1) Failure to Pay Wages Including Overtime as 7 Required by California Labor Code §§ 510 and 1194; (2) Failure to Provide Meal 8 Periods as Required by California Labor Code §§ 226. 7 and 512; (3) Failure to 9 Provide Rest Periods as Required by California Labor Code §§ 226.7 and 512; 10 (4) Failure to Pay Timely Wages as Required by California Labor Code § 203; 11 (5) Failure to Provide Accurate Itemized Wage Statements as Required by California 12 Labor Code § 226; and (6) Violation of Business & Professions Code § 17200 et seq. 13 Id. 14 Defendant removed the action to federal court on April 16, 2021. Dkt. 1. In its 15 Notice of Removal, Defendant argues the court has jurisdiction over the action under 16 the Class Action Fairness Act of 2005 (“CAFA”),

(d). See

17 Specifically, Defendant argues removal is proper because on March 17, 2021, Plaintiff 18 stated for the first time in a mediation brief in the related Thai action that the number 19 of class members includes 2,000 employees and that potential damages exceed $225 20 million.

According to Defendant, Plaintiff’s claims here are “similar, if not 21 identical, to those brought by the Thai Plaintiff,” and the mediation brief was 22 submitted on behalf of both Plaintiffs Thai and Esqueda.

. In response, 23 Plaintiff argues that reliance on the confidential mediation brief for removal purposes 24 is improper. See Mot. 2. 25 On June 25, 2021, the court ordered the parties to submit supplemental briefing 26 on three issues: (1) the reasonable estimate of Plaintiff’s total class damages, 27 including attorney’s fees, against Defendant; (2) whether any confidentiality 28 agreement between the parties and/or evidentiary privilege applies to Plaintiff’s 1 damages estimate in his mediation brief, and whether any legal authority bars the 2 court from considering that estimate for the limited purpose of determining CAFA 3 amount-in-controversy jurisdiction; and (3) whether this action should be consolidated 4 with the related Thai action. Dkt. 16. Both parties submitted supplemental briefs on 5 July 9, 2021. See Dkts. 17, 18. 6 MOTION TO REMAND 7 I. Legal Standard 8 A defendant may remove an action from state court to federal court if the 9 plaintiff could have originally filed the action in federal court. See 28 U.S.C. 10 § 1441(a). The Class Action Fairness Act of 2005 (“CAFA”) provides federal subject 11 matter jurisdiction if (1) the proposed plaintiff class is not less than 100 members, 12 (2) the parties are minimally diverse, and (3) the aggregate amount in controversy 13 exceeds $5 million.

(d)(2), (5)(B). “Congress intended CAFA to be 14 interpreted expansively.” Ibarra v. Manheim Invs., Inc.,

(9th 15 Cir. 2015). 16 The party seeking removal bears the burden of establishing federal subject 17 matter jurisdiction under CAFA. Abrego v. Dow Chem. Co.,

(9th 18 Cir. 2006). Where the amount in controversy is not apparent from the face of the 19 complaint, the removing party “must prove by a preponderance of the evidence that 20 the amount in controversy requirement [under CAFA] has been met.”

While 21 generally, “a defendant’s notice of removal need include only a plausible allegation 22 that the amount in controversy exceeds the jurisdictional threshold,” where a plaintiff 23 contests the amount in controversy put forth by the defendant, “[e]vidence 24 establishing the amount is required….” Dart Basin Operating Co. v. Owens,

81, 89 (2014). The parties, thus, “may submit evidence outside the complaint, 26 including affidavits or declarations, or other ‘summary-judgment-type evidence 27 relevant to the amount in controversy at the time of removal.’” Ibarra,

1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co.,

(9th Cir. 1 1997)). “Under this system, a defendant cannot establish removal jurisdiction by mere 2 speculation and conjecture, with unreasonable assumptions.”

3 Removal under CAFA must also be timely. A defendant must remove the case 4 to federal court “(1) during the first thirty days after the defendant receives the initial 5 pleading, or (2) during the first thirty days after the defendant receives ‘an amended 6 pleading, motion, order or other paper from which it may be first ascertained that the 7 case is one which is or has become removable.’” Reyes v. Dollar Tree Stores, Inc., 8

(9th Cir. 2015) (quoting

(b)(1) and (b)(3)) 9 (italics omitted). The first time period under § 1446(b)(1) is “triggered if the case 10 stated by the initial pleading is removable on its face,” and the second time period 11 under § 1446(b)(3) is “triggered if the initial pleading does not indicate that the case is 12 removable, and the defendant receives a copy of an amended pleading, motion, order 13 or other paper from which removability may first be ascertained.” Carvalho v. 14 Equifax Info. Servs., LLC,

(9th Cir. 2010) (internal quotation 15 marks and citations omitted). 16 II. Analysis 17 1. Timeliness 18 Defendant alleges removal is timely under

(b)(3) because the 19 notice of removal was filed on April 16, 2021, which was within thirty days of service 20 of Plaintiff’s March 17, 2021 mediation brief, in which Defendant learned for the first 21 time that jurisdiction pursuant to CAFA is proper. Dkt. 1 ¶ 7. Plaintiff argues 22 Defendant’s removal was untimely because Defendant could have ascertained the 23 potential amount in controversy from information in its possession before Plaintiff 24 served the mediation brief, and asserts it is “disingenuous” for Defendant to claim that 25 it learned the amount in controversy from Plaintiff’s brief. Mot. 11. The court 26 disagrees and finds Defendant’s removal was timely. 27 First, if the face of the Complaint does not reveal the case is removable, 28 Defendant does not have an affirmative obligation to calculate the amount in 1 controversy to determine whether CAFA jurisdiction is proper under 28 U.S.C. 2 § 1446(b)(1). Harris v. Bankers Life & Cas. Co.,

(9th Cir. 2005) 3 (“removability under § 1446(b) is determined through examination of the four corners 4 of the applicable pleadings, not through subjective knowledge or a duty to make 5 further inquiry”). Indeed, the Complaint in this action specifically alleges that the 6 amount in controversy is less than $5 million. Compl. ¶ 4. Defendant, therefore, did 7 not have any obligation to provide its own estimate of the amount in controversy and 8 remove the case to federal court within thirty days of service of the Complaint 9 pursuant to

(b)(1). 10 Second, removal was proper under

(b)(3). A mediation brief 11 constitutes “other paper” under

(b)(3) from which “it may be first 12 ascertained that the case is one which is … removable.” See, e.g., Vitale v. Celadon 13 Trucking Servs. Inc., No. 2:16-cv-08535-PSG (GJSx),

, at *3 (C.D. 14 Cal. Feb. 15, 2017). Plaintiff does not dispute the March 17, 2021 mediation brief 15 was the first time Defendant received notice that Plaintiff contended the amount-in- 16 controversy could exceed $5 million. See Mot. 11-12. Thus, Defendant had thirty 17 days to remove the case after receipt of Plaintiff’s mediation brief containing the 18 damages estimate of over $225 million. Defendant removed the action on April 16, 19 2021, which was within thirty days of being served the mediation brief. Dkt. 1 ¶ 7. 20 Accordingly, removal was timely.1 21 / / / 22

23 1 Although the court ultimately does not rely upon the damages figure in the mediation 24 brief to find the amount in controversy satisfied under CAFA, the additional evidence 25 Defendant submitted on July 9, 2021 to support its amount in controversy calculation—and upon which the court does rely—was timely submitted in response 26 to the court’s request for supplemental briefing. See Dkt. 18. As the removal was 27 timely in response to the mediation brief, the court will consider the evidence submitted with Defendant’s July 9, 2021 supplemental brief in determining whether 28 federal jurisdiction exists here. 1 2. Amount-in-Controversy 2 As the parties do not contest CAFA’s jurisdictional requirements of minimum 3 diversity and class numerosity, the sole remaining dispute is whether CAFA’s 4 requirement that the amount in controversy exceed $5 million is met. See Mot. 6; 5 Opp. 7. 6 In response to the court’s order for supplemental briefing in this action, 7 Defendant submitted evidence on July 9, 2021, independent of Plaintiff’s mediation 8 brief, demonstrating that the amount in controversy exceeds $5 million. See Dkts. 18, 9 18-1. Specifically, Defendant estimates that the amount in controversy for this 10 putative class action is at least $23,311,735.90. Dkt. 18 at 6. Defendant calculates 11 this figure based on Plaintiff’s six causes of action, the estimated class sizes for each, 12 the applicable limitation periods and statutory damages, and average hourly pay rates. 13

. 14 Plaintiff does not argue or submit evidence in his supplemental briefing to 15 establish that a reasonable estimate of his class claims amounts to $5 million or less. 16 See Dkt. 17. Instead, Plaintiff acknowledges Defendant is in possession of “all payroll 17 information to provide a reasonable damages analysis to support removal.”

. 18 Notably, Plaintiff does not affirmatively disavow damages meeting or exceeding $5 19 million, despite having alleged in the Complaint that the aggregate amount in 20 controversy is under this sum. Compare Dkt. 17 with Compl. ¶ 4. 21 After reviewing the parties’ papers, the court is satisfied that Defendant’s 22 calculation is based on reasonable assumptions, e.g., that putative class members 23 experienced 1.5 hours of unpaid overtime per workweek or were denied a meal break 24 once per workweek. See Dkt. 18 at 10-11; see also Ibarra,

(noting 25 the court is to test whether CAFA’s requirements are met by a preponderance of the 26 evidence by considering “the reality of what is at stake in the litigation, using 27 reasonable assumptions underlying the defendant’s theory of damages exposure”). 28 1 The court, therefore, concludes Defendant has met its burden to establish federal 2 subject matter jurisdiction under CAFA. 3 Plaintiff’s Motion to Remand, therefore, is DENIED. Having denied the 4 motion on this basis, the court need not address the parties’ arguments whether 5 Plaintiff’s estimate from his mediation brief supports federal jurisdiction under 6 CAFA. 7 3. Plaintiff’s Request to Strike 8 Plaintiff requests the court strike the Declaration of Michael Cross (Dkt. 1-5) 9 because the statements (1) were improperly introduced and are statutorily protected by 10 the California mediation and settlement privilege, and (2) are inadmissible hearsay. 11 Dkt. 17 at 1. As the court did not rely on the Cross Declaration in resolving the 12 instant Motion to Remand, the request is DENIED as moot. 13 CONSOLIDATION 14 Fed. R. Civ. P. 42(a) (“Rule 42(a)”) allows consolidation of “actions involving 15 a common question of law or fact.” District courts have broad discretion under Rule 16 42(a) to consolidate cases pending in the same district, Garity v. APWU Nat’l Labor 17 Org.,

(9th Cir. 2016), and may consolidate cases sua sponte, In 18 re Adams Apple, Inc.,

(9th Cir. 1987). In determining whether 19 to consolidate, “a court weighs the interest in judicial convenience against the 20 potential for delay, confusion, and prejudice caused by consolidation.” Paxonet 21 Commc’ns, Inc. v. TranSwitch Corp.,

(N.D. Cal. 2003). 22 Neither party opposes the consolidation of this action with the related Thai 23 action, Case No. 2:21-cv-03319-FLA (GJSx). Given the overlapping questions of law 24 and fact, the court CONSOLIDATES the two actions for all purposes including, but 25 not limited to, discovery, pretrial proceedings, and trial. No further filings shall be 26 made or accepted in this action, and the file shall be administratively closed. All 27 pleadings therein shall maintain their legal relevance. Any further pleadings or other 28 | | filings received by the Clerk of Court for Case No. 2:21-cv-03321-FLA (GJSx) shall 2 || be filed in the consolidated action bearing Case No. 2:21-cv-03319-FLA (GJSx). 3 4 CONCLUSION 5 For the foregoing reasons, the court (1) DENIES Plaintiff's Motion to Remand, 6 | and (2) CONSOLIDATES this action with the related case styled Michael Thai v. 7 | Team Industrial Services, Inc., et al., Case No. 2:21-cv-03319-FLA (GJSx). 8 9 IT IS SO ORDERED. 10 11 | Dated: October 1, 2021

13 FERNANDO L. AENLLE-ROCHA 4 United States District Judge

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