Case 5:21-cv-01538-TJH-RAO Document 23 Filed 02/17/22 Page 1 of 5 Page ID #:558

1 2 3 4 5 6 7 8 United States District Court 9 Central District of California 10 Western Division 11 12 DEAN WALTZ, EDCV 21-01538 TJH (RAOx) 13 Plaintiff, 14 v. Order 15 WAL-MART ASSOCIATES, INC., et al., 16 [JS-6] Defendants. 17 18 19 The Court has considered Plaintiff Dean Waltz’s motion to remand [dkt. # 14] 20 and Defendant Wal-Mart Associates, Inc.’s [“Wal-Mart”] motion to dismiss [dkt. # 21 16], together with the moving and opposing papers. 22 On June 11, 2021, Waltz filed this putative class action in San Bernardino 23 County Superior Court on behalf of all non-exempt Wal-Mart employees who worked 24 at its California distribution centers beginning three or four years – depending on the 25 applicable statute of limitations of each claim – prior to the filing of the complaint. 26 The following facts are as alleged in the complaint. 27 From 2020 to 2021, Waltz was a non-exempt employee of Wal-Mart. During 28 the class period, Wal-Mart, allegedly, violated various provisions of the California’s Order Page 1 of 5 Case 5:21-cv-01538-TJH-RAO Document 23 Filed 02/17/22 Page 2 of 5 Page ID #:559

1 Labor Code, including failure to provide required rest and meal breaks; rounding 2 recorded work time to deprive employees of pay; requiring employees to undergo 3 Covid-19 and security checks while off the clock; providing legally-deficient wage 4 statements; and, failing to reimburse employees for their use of their personal cell 5 phones. 6 Waltz alleged seven claims: (1) Violation of California’s Unfair Competition 7 Law,

, et seq.; (2) Failure to pay minimum wages, in 8 violation of

, 1197 and 1197.1; (3) Failure to pay overtime, 9 in violation of

, et seq.; (4) Failure to provide meal breaks, in 10 violation of

& 512; (5) Failure to provide rest breaks, in 11 violation of

& 512; (6) Failure to provide accurate wage 12 statements, in violation of

; and (7) Failure to reimburse 13 employees for expenses, in violation of

. 14 Waltz alleged that the amount in controversy was less than $5,000,000.00. 15 However, he did not allege the number of employees in the putative class, the number 16 of violations suffered by each employee, or the number of hours or shifts each 17 employee worked each pay period. 18 On September 9, 2021, Wal-Mart removed pursuant to the Class Action Fairness 19 Act [“CAFA”],

(d). A class action is removable under CAFA 20 where, inter alia, the putative class consists of at least 100 members and the amount 21 in controversy exceeds $5,000,000.00 for all claims.

(d). Wal- 22 Mart’s notice of removal asserted, inter alia, that Waltz’s proposed class consists of 23 26,886 members, and that the amount in controversy was $32,906,176.25 – based on 24 its own damage calculations for five of Waltz’s seven claims, plus attorney’s fees. 25 Waltz, now, moves to remand. 26 Initially, a defendant may rely on the assertions made in its notice of removal to 27 establish subject matter jurisdiction. Dart Cherokee Basin Operating Co., L.L.C. v. 28 Owens,

, 88 (2014). However, if the plaintiff attacks the factual basis of Order Page 2 of 5 Case 5:21-cv-01538-TJH-RAO Document 23 Filed 02/17/22 Page 3 of 5 Page ID #:560

1 those assertions, the defendant must, then, prove, by a preponderance of the evidence, 2 that the assumptions underlying its assertions were reasonable. Harris v. KM 3 Industrial, Inc.,

(9th Cir. 2020). 4 Wal-Mart’s burden, here, is to reasonably estimate its potential maximum 5 exposure, not prove the frequency of the violations that it disputes even occurred. See 6 Arias v. Residence Inn by Marriott,

(9th Cir. 2019). Wal-Mart is 7 not, necessarily, required to submit evidence to support its assumptions. See Harris, 8

. Wal-Mart may rely on its assumptions, alone, or, may show their 9 reasonableness with competent evidence. Harris,

. If Wal-Mart does 10 not provide competent evidence, it must establish that its assumptions were “founded 11 on the allegations of the complaint.” See Arias,

. Waltz bears no 12 burden, here, to introduce any evidence. Harris,

. 13 In its notice of removal, Wal-Mart relied on significant assumptions to reach its 14 asserted amount in controversy of $32,906,176.25. It assumed that, between June 11, 15 2017 and September 3, 2021, there were 26,886 employees who met the putative class 16 criteria, and, that those employees worked 727,760 pay periods. 17 As to the minimum wage claim, Wal-Mart assumed that all 26,886 putative class 18 members worked one hour without minimum pay for each of the 727,760 pay periods. 19 It later explained, in its opposition brief, that it based its one hour estimate on the 20 assumption that each employee spent two minutes each shift undergoing loss prevention 21 checks, spent two minutes undergoing Covid-19 checks, and lost two minutes due to 22 the alleged rounding practice. Wal-Mart, also, assumed that all 26,886 putative class 23 members worked 30 minutes of uncompensated overtime in each pay period. Finally, 24 with regard to the meal and rest break claims, Wal-Mart assumed that every putative 25 class member missed one meal break and one rest break per pay period. 26 Wal-Mart’s asserted amount in controversy did not account for any variation in 27 the number of shifts or hours that employees actually worked in any given pay period. 28 There were no allegations in the complaint as to whether all of the putative class Order Page 3 of 5 Case 5:21-cv-01538-TJH-RAO Document 23 Filed 02/17/22 Page 4 of 5 Page ID #:561

1 members were full time employees. That information, however, is critical. For 2 example, an employee who worked 10 eight hour shifts per two-week pay period would 3 likely have been entitled to overtime pay for all of the alleged violations, and entitled 4 to 10 meal breaks and 20 rest breaks per pay period. Meanwhile, an employee who 5 worked only 10 four hour shifts, totaling 40 hours, per two-week pay period would 6 likely have not been entitled to any overtime pay or meal breaks, and would have been 7 entitled to only 10 rest breaks. 8 Wal-Mart’s assumptions are not supported by any of the factual allegations in the 9 complaint. See Arias,

. For example, Waltz’s allegation that Wal-Mart 10 has a “uniform practice” of rounding time to its employees’ detriment does not support 11 Wal-Mart’s assumption that every employee worked 10 eight-hour shifts in every pay 12 period. Nor does Waltz’s allegation that Wal-Mart applied unlawful overtime practices 13 to employees “on the whole,” or as part of a “policy or practice” support Wal-Mart’s 14 assumptions. Notably, the period that Wal-Mart used to limit its assumptions, starting 15 on June 11, 2017, preceded the start of the class period for claims 2 through 7 by a 16 year. Consequently, Wal-Mart must provide competent evidence to show that its 17 assumptions were, indeed, reasonable. See Harris,

. 18 Wal-Mart provided a declaration from Lori Chasteen, its human resource 19 director, in its attempt to establish a factual basis for its assumptions. The declaration 20 referenced, generally, Wal-Mart’s personnel records, but that was sufficient to establish 21 that the putative class consists of over 100 members. The declaration, however, failed 22 to provide a reasonable factual basis for Wal-Mart’s other assumptions. By way of 23 examples, the declaration failed to set forth the number or length of shifts worked by 24 the putative class members during the relevant time period, or the number of days in 25 Wal-Mart’s pay periods. Wal-Mart’s opposition brief described the pay periods as 26 “bi-weekly,” but argument in a brief is not competent evidence. See Harris,

at 701. 28 Wal-Mart failed to provide competent evidence that established that it was Order Page 4 of 5 Case 5:21-cv-01538-TJH-RAO Document 23 Filed 02/17/22 Page5of5 Page ID #:562

1 || reasonable for it to assume that all 26,886 putative class members suffered the same 2 || number and degree of overtime, minimum wage, and meal and rest break violations. 3 || Further, because Wal-Mart’s wage statement and attorney’s fees calculations were 4 || derivative of its calculations regarding the other claims, those calculations suffer the 5 || same infirmity. 6 The Ninth Circuit’s decision in Harris is directly on point, here. In Harris, the 7 | defendant failed to provide any evidence to support its assumption that all of the 8 || putative class members had worked shifts long enough to qualify them for meal or rest 9 || periods. Harris,

. Accordingly, the defendant’s calculation of the 10 || amount in controversy was exaggerated, and could not support CAFA jurisdiction; 11 || therefore, remand was proper. Harris,

. 12 In sum, Wal-Mart’s assertion of the amount in controversy depends on several 13 || unreasonable assumptions which grossly exaggerated its calculation. See Harris, 980 14 || F.3d at 699. Therefore, Wal-Mart failed to establish that the Court has subject matter 15 || jurisdiction, here, based on CAFA. 16 17 Accordingly, 18 19 It is Orsered that the motion to remand be, and hereby is, ranted. 20 21 It is further Orsyered that Wal-Mart’s motion to dismiss shall be taken off 22 || calendar. 23 24 || Date: February 17, 2022 08 Ty = ticiof 26 ‘he rp J. Hatter, Jr. 57 Senior Cited States District Judge 28

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