1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 KEVIN DION COCROFT, an individual, Case No. 24-cv-00645-BAS-AHG on behalf of himself, and on behalf of all 12 persons similarly situated, ORDER DENYING PLAINTIFF’S 13 MOTION TO REMAND Plaintiff, PROCEEDINGS TO STATE COURT 14 v. 15 (ECF No. 11) EQUIPMENTSHARE.COM INC., 16 Defendant. 17 18 19 Defendant EquipmentShare.com Inc. (“EquipmentShare”) removed this case from 20 San Diego County Superior Court on April 4, 2024, asserting jurisdiction exists under the 21 Class Action Fairness Act of 2005 (“CAFA”),

(d). (Notice of Removal, 22 ECF No. 1.) Plaintiff Kevin Dion Cocroft filed a Motion to Remand on May 2, 2024, 23 arguing Defendant’s Notice of Removal fails to show CAFA’s amount in controversy 24 requirement is satisfied. (Mot. to Remand, ECF No. 11.) Defendant opposes (Opp’n, ECF 25 No. 16), and Plaintiff replies (Reply, ECF No. 18). The Court finds this Motion suitable 26 for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 27 78(b); Civ. L.R. 7.1(d)(1). For the reasons set forth below, the Court DENIES Plaintiff’s 28 Motion to Remand. 1 I. BACKGROUND 2 Defendant is a construction equipment rental company that employed Cocroft as a 3 non-exempt employee and paid him hourly from July to August 2023. (Compl. ¶¶ 2–3, 4 ECF No. 1-4.) Plaintiff alleges Defendant denied him and other employees the benefits 5 of the California Labor Code and the Industrial Welfare Commission (“IWC”) Wage 6 Orders. (Id. ¶ 8.) Furthermore, Plaintiff alleges Defendant failed to pay minimum and 7 overtime wages, provide meal and rest periods, furnish final wages when due, maintain 8 accurate itemized wage statements, and reimburse employees for required expenses.1 (Id. 9 ¶ 14.) Plaintiff asserts these claims on behalf of himself and “all persons who are or 10 previously were employed by Defendant . . . and classified as non-exempt employees . . . 11 at any time” from February 29, 2020, to the ending date determined by the Court. (Id. ¶ 4.) 12 II. LEGAL STANDARD 13 The court has an independent obligation to ensure jurisdiction is present. See 14 Arbaugh v. Y&H Corp.,

(2006) (holding courts maintain an obligation 15 to determine whether jurisdiction exists, “even in the absence of a challenge from any 16 party”). “It is well established that ‘lack of federal jurisdiction cannot be waived or be 17 overcome by an agreement of the parties.’” United Invs. Life Ins. Co. v. Waddell & Reed 18 Inc.,

, 966–67 (9th Cir. 2004) (quoting Mitchell v. Maurer,

, 244 19 (1934)). Thus, despite the parties filing a Joint Request to Stay (ECF No. 19) a decision 20 on Plaintiff’s Motion, the Court must determine whether jurisdiction exists before 21 continuing with this lawsuit. 22 A case is removable only if it could have originally been filed in federal court. City 23 of Chicago v. Int’l Coll. of Surgeons,

(1997) (“As a general matter, 24 defendants may remove to the appropriate federal district court ‘any civil action brought in 25 26 1 Plaintiff also brings a cause of action for unfair competition in violation of the California Business 27 and Professions Code, but Defendant’s Notice of Removal does not include this claim as part of the amount in controversy determination under CAFA. Cal. Bus. & Prof. Code §§ 17000–87. (Compl. ¶¶ 28 1 a State court of which the district courts of the United States have original jurisdiction.’” 2 (quoting

(a))). Whether removal is warranted depends on the pleadings 3 “as of the time the complaint is filed and removal is effected.” Strotek Corp. v. Air Transp. 4 Ass’n of Am.,

(9th Cir. 2002). 5 CAFA extends original jurisdiction as its “provisions should be read broadly, with a 6 strong preference that interstate class actions should be heard in a federal court if properly 7 removed by any defendant.” Jauregui v. Roadrunner Transp. Servs., Inc.,

, 8 993 (9th Cir. 2022) (citation omitted) (quoting Dart Cherokee Basin Operating Co. v. 9 Owens,

, 89 (2014)); see also Ibarra v. Manheim Invs., Inc.,

, 10 1197 (9th Cir. 2015) (“Congress intended CAFA to be interpreted expansively.”). 11 Furthermore, CAFA expands “federal jurisdiction to state-law claims in class actions under 12 relaxed diversity requirements.” Floyd v. Am. Honda Motor Co.,

(9th 13 Cir. 2020). 14 CAFA confers jurisdiction over class actions involving: (1) minimal diversity; (2) at 15 least 100 putative members; and (3) over $5 million in controversy, inclusive of attorneys’ 16 fees but exclusive of costs and interest.

(d)(2), (5). Class members’ 17 claims may be aggregated to reach the amount in controversy requirement. Ibarra, 775 18 F.3d at 1195. Furthermore, the amount in controversy “encompasses all relief a court may 19 grant on that complaint if the plaintiff is victorious.” Fritsch v. Swift Transp. Co. of Ariz., 20 LLC,

(9th Cir. 2018) (citation omitted) (quoting Chavez v. JPMorgan 21 Chase & Co.,

, 414–15 (9th Cir. 2018)). Ultimately, “no antiremoval 22 presumption attends cases invoking CAFA, which Congress enacted to facilitate 23 adjudication of certain class actions in federal court.” Dart Cherokee, 574 U.S. at 89. 24 However, “the burden of establishing removal jurisdiction remains, as before, on the 25 proponent of federal jurisdiction.” Abrego Abrego v. Dow Chem.,

(9th 26 Cir. 2006). 27 // 28 // 1 III. ANALYSIS 2 At issue is whether Defendant shows CAFA’s amount in controversy requirement is 3 met.2 The Court first reviews the short and plain statement requirement and Defendant’s 4 amount in controversy assessment. Next, the Court considers Plaintiff’s attacks on 5 Defendant’s assessment, including Defendant’s proposed violation rates and calculations. 6 A. “Short and Plain” Statement Under

(a) 7 Plaintiff asserts Defendant’s Notice of Removal fails to provide any evidence or 8 testimony in support of Defendant’s claims. (Mot. 1:12–14.) To remove a case to federal 9 court, the defendant must file a notice of removal “containing a short and plain statement 10 of the grounds for removal.”

(a). The defendant’s notice of removal 11 “need include only a plausible allegation that the amount in controversy exceeds the 12 jurisdictional threshold.” Dart Cherokee, 574 U.S. at 89. If the defendant relies on 13 assumptions to approximate the amount in controversy, they “cannot be pulled from thin 14 air but need some reasonable ground underlying them.” Ibarra,

; see also 15

(“[A] defendant cannot establish removal jurisdiction by mere speculation and 16 conjecture, with unreasonable assumptions.”). 17 Only after jurisdiction is sufficiently challenged is the removing party obligated to 18 prove by a preponderance of the evidence that the jurisdictional amount in controversy is 19 met. See Rodriguez v. AT & T Mobility Servs.,

(9th Cir. 2013); 28 U.S.C. 20 § 1446(c)(2)(B). In other words, when the defendant’s plausible estimate of the amount at 21 stake is contested, “both sides submit proof and the court decides, by a preponderance of 22 the evidence, whether the amount-in-controversy requirement has been satisfied.” Dart 23 Cherokee, 574 U.S. at 88; see Jauregui,

. This framework, which Plaintiff 24 acknowledges (Mot. 3:7–13), forecloses his argument that Defendant’s Notice of Removal 25 26 2 Minimal diversity exists under CAFA as the putative class includes California citizens, and 27 Defendant is a Missouri corporation.

(d)(2)(A). Additionally, Defendant alleges the putative class is greater than 100 members, and Plaintiff’s Opposition is limited to disputing the amount 28 1 is deficient because it does not include evidence. Hence, when Defendant filed its Notice 2 of Removal, Defendant was only required to plausibly allege the amount in controversy 3 exceeds $5 million. 4 B. Defendant’s Calculation of the Amount in Controversy 5 Defendant estimates a total amount in controversy between $5,099,510.00 and 6 $9,463,536.25. (Opp’n 1:19–20.) Thus, Defendant claims that even by more conservative 7 calculations, the amount in controversy still exceeds $5 million. (Id. 1:17–18.) 8 To determine the amount in controversy, Defendant makes assumptions based upon 9 Plaintiff’s Complaint and a declaration from a third-party statistician, Levon Massmanian. 10 (Massmanian Decl. ¶ 2, ECF No. 16-1.) Mr. Massmanian’s Declaration provides an 11 analysis of Defendant’s timekeeping data, which allows for an approximation of the 12 amount in controversy based upon the totals of 80,073 shifts worked; 79,047 eligible rest 13 breaks over four hours; 78,165 eligible meal breaks over five hours; and 9,907 pay periods. 14 (Id. ¶¶ 7–8.) Additionally, Mr. Massmanian’s review of Defendant’s timekeeping records 15 reveals that “employees worked an average of 9.28 total shifts” per pay period, with an 16 average shift length of 9.69 hours, for an average hourly rate of $30.15. (Id. ¶¶ 9–10.) 17 1. Unpaid Meal Periods 18 Plaintiff alleges Defendant provides late and shortened meal breaks or denies first 19 and second meal breaks altogether. (Compl. ¶¶ 15–16.) California Labor Code section 20 226.7, in combination with the applicable IWC Wage Order, requires employers to provide 21 employees with a thirty-minute meal break for shifts over five hours and a second thirty- 22 minute meal break for shifts over ten hours. Additionally, Plaintiff, even if provided a 23 meal period, was not fully relieved of duty because employees were required to “maintain 24 cordless communication devices in order to receive and respond to work-related 25 communications during what was supposed to be their off-duty meal breaks.” (Id. ¶ 16.) 26 Further, the Complaint states that due to a lack of “an immutable timekeeping 27 system,” Defendant unlawfully and unilaterally altered employees recorded time to avoid 28 paying employees for all hours worked. (Id. ¶ 42.) Thus, Defendant was able to create the 1 appearance that full-length meal breaks were provided when they were not. (Id. ¶ 44.) 2 Plaintiff also alleges Defendant would round employees’ hours to avoid paying overtime 3 compensation, which resulted in employees having performed work for more than five 4 hours “without receiving an off-duty meal break.” (Id. ¶ 47.) Hence, Plaintiff seeks “one 5 additional hour of compensation at each employee’s regular rate of pay for each workday 6 that a meal period was not provided.” (Id. ¶ 27.) 7 Defendant divides the potential missed meal periods into two categories: those that 8 were facially missed and those that may have been fictitiously added or altered. First, to 9 calculate the penalties for facially missed meal periods, Defendant—through Mr. 10 Massmanian—analyzes shift data from Defendant’s timekeeping records. (Decl. ¶ 13.) 11 Defendant identifies the number of shifts over five hours and thus eligible for a first meal 12 break. (Id.) Then, Defendant discerns meal breaks that are less than thirty minutes, taken 13 after the fifth hour of work, or fully denied. (Id.) Additionally, Defendant identifies the 14 number of shifts that were over ten hours and “did not have a second recorded meal break 15 in the timekeeping records.” (Id. ¶ 14.) After factoring in “each employee’s hourly rate as 16 indicated in the payroll data,” Defendant concludes the amount in controversy for this 17 category is $1,605,596.00. (Opp’n 8:12–14.) 18 Second, to calculate the penalties for meal periods that were fictitiously recorded, 19 which Defendant does not possess the necessary data to be able to distinguish from 20 legitimately recorded meal breaks, Mr. Massmanian identifies “meal break eligible shifts 21 with recorded first meal breaks that were exactly thirty minutes in duration.” (Decl. ¶ 15.) 22 As a result, shifts that may have been captured within the facially missed meal period 23 category are not double counted. (Id.) Accordingly, Defendant provides 25%, 50%, 75%, 24 and 100% violation rates for the identified meal breaks and concludes the amount in 25 controversy is between $156,263.00 and $625,050.00 for this category. (Id. ¶ 16.) 26 2. Unpaid Rest Periods 27 Plaintiff alleges he worked through his legally required rest periods during shifts 28 longer than four hours as a result of Defendant’s rigorous work schedules and inadequate 1 staffing. (Compl. ¶ 16.) Similar to Plaintiff’s meal break allegations, Plaintiff’s rest 2 breaks were also affected by Defendant’s requirement that employees “respond to work- 3 related communications” during breaks (id.), as well as Defendant’s timekeeping 4 manipulation violations (id. ¶ 42) and unlawful rounding practices (id. ¶ 46). Hence, in 5 addition to an hour of pay for meal break violations, Plaintiff seeks “one additional hour 6 of compensation at each employee’s regular rate of pay for each workday that [a] rest 7 period was not provided.” (Id. ¶ 29.) 8 To calculate unprovided rest period penalties, Mr. Massmanian identifies the number 9 of shifts in excess of four hours, assumes varying violation rates of 25%, 50%, 75%, and 10 100%, and then multiplies the resulting number by the average hourly rate of each 11 employee. (Decl. ¶ 18.) As a result, Defendant concludes the amount in controversy for 12 Plaintiff’s rest period claim is between $668,726.00 and $2,674,905.00. (Opp’n 10:1–2.) 13 3. Unpaid Minimum Wage and Overtime Compensation 14 Plaintiff alleges Defendant requires employees to work while off the clock, which 15 results in unpaid minimum wage and overtime compensation because employees “typically 16 worked over forty hours in a workweek and more than eight hours per day.” (Compl. ¶ 30.) 17 Specifically, employees are required “to perform pre-shift or post-shift work, including but 18 not limited to, time spent training, onboarding, and attending orientations.” (Id. ¶ 25.) This 19 claim is also derivative of meal and rest break violations, as Plaintiff alleges employees 20 were not accurately compensated for overtime and double time resulting from shortened or 21 missed meal and rest breaks.4 (Id. ¶ 10.) Furthermore, Plaintiff applies Defendant’s 22 timekeeping violations and unlawful rounding practices to increase the amount of time 23 employees were not paid for all hours worked. (Id. ¶¶ 42–47.) 24

25 3 “Further, for the same reasons, these employees were denied their first periods of at least ten minutes for some shifts worked of at least two to four hours, a first and second rest period of at least ten 26 minutes for some shifts worked between six and eight hours, and a first, second, and third rest period of at least ten minutes for some shifts worked of ten hours or more.” (Compl. ¶ 7.) 27 4 Plaintiff also alleges a systematic underpayment of sick time and incentive wages based on performance as part of a non-discretionary bonus program, but Defendant does not seemingly include 28 1 Defendant’s calculation of the amount in controversy addresses the “inherent nature 2 of the lack of information regarding whether putative class members performed work 3 during unrecorded hours” by basing the potential daily time owed on an assumption of five, 4 ten, fifteen, or twenty minutes of unpaid time per shift. (Opp’n 10:9–16 (citing Decl. ¶ 5 20).) Subsequently, Mr. Massmanian multiplies the result of each assumption by the 6 California state minimum wage for each relevant year or the applicable overtime factor for 7 eligible shifts. (Decl. ¶ 21.) Based upon these four assumptions of unpaid time per shift, 8 Defendant calculates the damages for this claim range between $212,244.00 and 9 $854,509.00. (Opp’n 11:3.) 10 4. Noncompliant Expense Reimbursements 11 Plaintiff alleges that, over the course of his employment, Defendant required 12 employees to “use their personal cell phones and home internet as a result of and in 13 furtherance of their job duties.” (Compl. ¶ 19.) Employers must indemnify employees 14 “for all necessary expenditures or losses incurred by the employee in direct consequence 15 of the discharge of [the employee’s] duties . . . .”

(a). As a result, 16 Plaintiff claims reimbursement for the costs employees incurred as well as their losses 17 related to the use of their personal cell phones and home internet. (Compl. ¶ 19.) 18 In calculating the amount in controversy for this claim, Defendant breaks down the 19 employees’ expenditures by cell phone and home internet. First, to calculate cell phone 20 expenditures and losses, Mr. Massmanian analyzes timekeeping data to gather the number 21 of applicable bi-weekly pay periods and then references the Bureau of Labor Statistics 22 Consumer Expenditure Survey data from 2022 to identify the average annual expenditure 23 for cellular phone services. (Decl. ¶ 26.) Defendant then concludes employees’ bi-weekly 24 cellular expenses are $49.40 and applies this at a 50% and 100% usage rate. (Opp’n 14:24– 25 26 (citing Decl. ¶ 26).) Based off these two assumptions, Defendant’s amount in 26 controversy for cellular phone services ranges from a low of $244,703.00 to a high of 27 $489,406.00. (Opp’n 15:1.) Second, to calculate home internet expenditures and losses, 28 Mr. Massmanian uses the same bi-weekly pay period data and the same survey data to 1 conclude employees’ bi-weekly home internet expenses are $26.10. (Decl. ¶ 27.) Again 2 applying a 50% and 100% usage rate, Defendant’s amount in controversy for home internet 3 expenses ranges from a low of $129,286.00 to a high of $258,573.00. (Opp’n 15:11–15.) 4 5. Noncompliant Wage Statements 5 Plaintiff alleges Defendant violated California Labor Code section 226 by not 6 providing employees with accurate itemized wage statements. (Compl. ¶ 22.) Defendant’s 7 wage statements purportedly fail to show all deductions, including “the total hours worked 8 and all applicable hourly rates in effect during the pay period and the corresponding amount 9 of time worked at each hourly rate, correct rates of pay for penalty payments, or missed 10 meal and rest periods.” (Id. ¶ 21.) As a result, Plaintiff’s noncompliant wage statement 11 claim is derivative of his meal and rest period claims as well as his failure to pay minimum 12 and overtime wages claims. (Id.) Plaintiff acknowledges the damages suffered by 13 employees who may have received inaccurate wage statements are difficult to estimate. 14 (Id. ¶ 124.) Hence, Plaintiff seeks $50.00 in liquidated damages for the initial pay period 15 violation and $100.00 for each violation in a subsequent pay period.5 (Id.) 16 Mr. Massmanian reviews Defendant’s timekeeping records to identify the exact 17 number of applicable pay periods during the statutory period (Decl. ¶ 24) and uses the 18 liquidated damages Plaintiff seeks in the Complaint (Compl. ¶ 124). Defendant then 19 estimates one violation per pay period to calculate an amount in controversy of 20 $406,050.00 for Plaintiff’s claims of noncompliant wage statements. (Opp’n 18:6.) 21 6. Noncompliant Payment of Wages When Due 22 Plaintiff also alleges the wage statements Defendant provides to terminated 23 employees do not comply with the requirements of the California Labor Code because 24 Defendant has not tendered payment of wages to the employees who missed meal and rest 25 periods and who were not compensated at the minimum wage and for overtime hours 26

27 5 Plaintiff seeks no more than $4,000.00 for himself and each member of the California Class (Compl. ¶ 124), and Defendant does not calculate more than this amount for each individual in its amount 28 1 worked. Cal. Lab. Code §§ 200–02. (Compl. ¶¶ 126–30.) As a result, Plaintiff’s claim 2 for noncompliant payment of wages when due is derivative. Plaintiff “demands up to thirty 3 days of pay as penalty” pursuant to California Labor Code section 203. (Id. ¶¶ 130–32.) 4 To calculate the amount in controversy, Mr. Massmanian identifies the employees 5 who are potentially owed waiting time penalties from Defendant’s timekeeping records. 6 (Decl. ¶ 23.) Mr. Massmanian then uses the “actual final hourly rate of each former 7 employee at termination” (id.) because “any wages of an employee who is discharged or 8 who quits . . . shall continue as a penalty from the due date thereof at the same rate . . . .” 9

. Next, Mr. Massmanian multiplies the employees’ average daily 10 hours worked by “the minimum thirty days or number of days from the termination date to 11 the Class Action Filing date, whichever is less.” (Decl. ¶ 22 (citing

).) 12 Defendant totals an estimate of $656,740.00 for Plaintiff’s waiting time penalties claim. 13 (Opp’n 14:9.) 14 7. Attorneys’ Fees 15 Plaintiff’s Complaint seeks “interest, statutory and civil penalties, attorney’s fees, 16 costs, and expenses.” (Compl. ¶ 51.) Given the amount in controversy under CAFA is 17 “inclusive of attorney’s fees but exclusive of costs and interest,” Defendant accordingly 18 limits its calculation.

(d)(2), (5). Defendant calculates attorneys’ fees as 19 25% of the damages “a plaintiff may be awarded upon successfully pursuing the underlying 20 claims.” (Opp’n 15:18.) Based upon Defendant’s use of a 25% rate to estimate attorneys’ 21 fees, the amount in controversy for this item ranges as it is applied to the lower total bound 22 ($4,079,608.00) and the upper total bound ($7,570,829.00) of Defendant’s calculation of 23 all Plaintiff’s other claims. (Id. 17:8–9.) Defendant’s assessment of the potential 24 attorneys’ fees thus ranges between $1,019,902.00 and $1,892,707.25.00. (Id.) 25 C. Whether the Amount in Controversy Is Met 26 1. General Sufficiency of Evidence 27 Plaintiff challenges the reasonableness of Defendant’s amount in controversy 28 assumptions. (Reply 1:2–8.) One way to challenge the defendant’s jurisdictional 1 allegations is to make a “factual attack.” Harris v. KM Indus., Inc.,

(9th 2 Cir. 2020). A factual attack includes “making a reasoned argument as to why any 3 assumptions on which [the allegations] are based are not supported by evidence.” Id.; see 4 also Ibarra,

(noting it may be sufficient to contest an assumption without 5 asserting alternative evidence). There is no per se rule that requires the plaintiff to produce 6 any evidence or alternative assumptions. See Ibarra

. Yet, if the defendant 7 has offered reasonable assumptions, the plaintiff may find it useful to contest an 8 assumption with alternative evidence, such as an affidavit from the plaintiff asserting how 9 often he experienced the violation, to bolster the reasonableness of his own challenge. Id.; 10 see also Harris,

. 11 Similar to the defendant in Harris, Defendant treats Plaintiff’s Motion to Remand as 12 a factual challenge.

. By submitting proof in the form of Mr. Massmanian’s 13 Declaration, Defendant provides further evidence in support of its assumptions.

Once 14 Plaintiff has contested the reasonableness of Defendant’s assumptions, Defendant “need 15 not make [Plaintiff’s] case for [him] or prove the amount in controversy.” See

. 16 However, Defendant now has “the burden of proving by a preponderance of the evidence 17 that its assumptions were reasonable.”

The Court applies this framework below when 18 addressing the merits of Plaintiff’s attacks on Mr. Massmanian’s Declaration, Defendant’s 19 proposed violation rates, and Defendant’s assessment of the potential attorneys’ fees. 20 2. Plaintiff’s Challenges to Defendant’s Showing 21 Plaintiff asserts Defendant fails to produce reliable evidence from which Defendant 22 has plausibly drawn its assumptions. (Reply 2:1–6.) Plaintiff argues Mr. Massmanian’s 23 Declaration relies on unreasonable assumptions because “despite conducting a full 24 analysis,” Defendant “has not produced any additional evidence” to support Defendant’s 25 reasoning when the timekeeping records are in Defendant’s own possession. (Id. 6:3–12.) 26 However, “a party’s access to additional information does not necessarily render the 27 assumptions made by that party unreasonable.” Shachno v. Marriott Int’l, Inc., No. 22- 28 CV-1215-TWR (JLB),

, at *8 (S.D. Cal. Jan. 19, 2023). 1 As is inescapable at this early stage of the litigation, the removing party must be able to rely “on a chain of reasoning that includes assumptions to satisfy 2 its burden to prove by a preponderance of the evidence that the amount in 3 controversy exceeds $5 million,” as long as the reasoning and underlying assumptions are reasonable. 4

5 Jauregui,

(quoting LaCross v. Knight Transp. Inc.,

, 1201 6 (9th Cir. 2015)). Defendant, in employing Mr. Massmanian, has analyzed its timekeeping 7 records and the appropriate employee payroll information to inform its calculations. (Decl. 8 ¶¶ 3–6.) 9 Moreover, Defendant has made reasonable assumptions based upon Mr. 10 Massmanian’s analysis of Defendant’s timekeeping records and the language included in 11 Plaintiff’s Complaint. See Dart Cherokee, 574 U.S. at 89; Arias v. Residence Inn by 12 Marriott,

(9th Cir. 2019) (“An assumption may be reasonable if it is 13 founded on the allegations of the complaint.”). Whether the alleged violations occur from 14 time to time, as a matter of pattern and practice, or uniformly, as alleged in the complaint, 15 has a significant impact on the amount in controversy calculation. See Arias,

925–26 (distinguishing between the varying language a plaintiff may include in the 17 complaint and the direct impact it has on the reasonableness of the assumed violation rate). 18 This frequency informs the court’s adoption of a violation rate expressed as a percentage 19 when calculating the amount in controversy. See Powell v. USI Ins. Serv., LLC, No. 2:23- 20 cv-04129-ODW (BFMx),

, at *4–5 (C.D. Cal. Sept. 25, 2023) 21 (distinguishing between allegations of a pattern and practice, which could not reasonably 22 support a 100% violation rate, and allegations resulting from a uniform policy, which could 23 plausibly support a 100% violation rate). 24 “Although the plaintiff is the master of their complaint, they cannot avoid federal 25 jurisdiction by purposefully opaque pleading.” Shachno,

, at *12 (citation 26 omitted). Here, Plaintiff’s Complaint alternates between alleging Defendant’s violations 27 occur from “time to time” and are the result of “uniform policies and practices.” (See 28 Compl. ¶¶ 14–49.) Generally, Plaintiff describes Defendant’s overall conduct as being 1 attributable to “a matter of company policy, practice, and procedure,” which was a scheme 2 perpetuated “intentionally, knowingly, and systematically” in a “uniform” manner. (Id. ¶ 3 14.) Subsequently, Plaintiff periodically uses the modifying language of “regularly” and 4 “from time to time” throughout the Complaint to describe his claims. (See

¶¶ 14–49.) 5 Furthermore, Plaintiff states that violations occur both “from time to time” and as a matter 6 of a “uniform policy and practice” within the same allegations for several claims. (E.g., 7

¶¶ 15–16.) Thus, the Court evaluates Defendant’s calculations based upon the use of 8 Defendant’s timekeeping records and the language Plaintiff offers in the Complaint. 9 The Court extends this analysis to the several challenges Plaintiff brings beyond his 10 attack on the reliability of the evidence. First, Plaintiff attacks Defendant’s violation rate 11 assumptions for fictitious meal periods, missed rest periods, unpaid minimum and overtime 12 wages, wage statement penalties, and waiting time penalties. (See Reply 1.) Second, 13 Plaintiff contests Defendant’s calculations for the facially missed meal periods and for the 14 failure to reimburse employees’ expenditures. (Id.) 15 i. Violation Rate 16 a. Fictitious Meal Periods and Missed Rest Periods 17 Defendant calculates the amount in controversy for fictitious meal breaks and missed 18 rest periods using the applicable timekeeping data and then applies violation rates of 25%, 19 50%, 75%, and 100% for each claim. (See Opp’n 9.) Thus, the Court will assess the 20 violation rates used for both claims simultaneously as Plaintiff’s Complaint states 21 Defendant’s timekeeping manipulation affects both meal and rest breaks as well. (Compl. 22 ¶ 42.) In claiming that Defendant’s timekeeping system was not immutable, Plaintiff uses 23 the language of “from time to time” while also stating that Defendant’s practice of 24 maintaining an inoperable timekeeping system was a direct result of Defendant’s “uniform 25 policy and practice.” (Id. ¶¶ 42, 45.) Additionally, while Plaintiff’s Complaint alleges 26 violations occur “from time to time,” the same paragraph simultaneously alleges they occur 27 on “many days” and “regularly” as a result of Defendant’s “uniform policy and practice 28 not to pay Plaintiff.” (Id. ¶ 15.) 1 District courts have found violation rates of 25% to 60% to be reasonably assumed 2 as a matter of law based on “pattern and practice or policy and practice allegation[s].” 3 Avila v. Rue21, Inc.,

, 1189 (E.D. Cal. 2020) (citation omitted); 4 Elizarraz v. United Rentals, Inc., No. 2:18-CV-09533-ODW (JC),

, at 5 *3–4 (C.D. Cal. Apr. 9, 2019) (using a 50% violation rate for the meal period claim and a 6 30% violation rate for the rest period claim); Bryant v. NCR Corp.,

, 7 1151 (S.D. Cal. 2018) (using a 60% violation rate for the meal period claim and a 30% 8 violation rate for the rest period claim); Alvarez v. Off. Depot, Inc., No. CV 17–7220 PSG 9 (AFMx),

, at *3 (C.D. Cal. Nov. 30, 2017) (using a 60% violation rate 10 for both the meal and rest period claims). 11 In contrast, the language in Plaintiff’s Complaint extends past “pattern and practice” 12 allegations, which give rise to the 25% to 60% range, to allegations of a “uniform policy 13 and practice” and an “inoperable timekeeping system,” which give rise to a 100% violation 14 rate.6 (See Compl. ¶¶ 14–49.) Because the amount in controversy is determined by the 15 complaint, Defendant relies on this language, and the Court finds that a 75% violation rate 16 is a plausible assumption. See Fritsch,

; Ibarra,

. While 17 the Complaint’s limiting language of “from time to time” casts doubt upon Defendant’s 18 reasonable use of a 100% violation rate, the simultaneous and conflicting use of “uniform 19 policy and practice” provides a plausible basis for Defendant to select a 75% violation rate, 20

21 6 See Alvarez,

, at *3 (“The Court . . . agrees with Defendant that it could utilize 22 an alleged 100% violation rate in calculating the amount in controversy because Plaintiff’s complaint alleges a uniform practice of meal and rest period violations.” (citation omitted)); Amaya v. Consol. 23 Container Co., LP, No. 2:15-cv-03369-SVW-PLA,

, at *2 (C.D. Cal. July 28, 2015) (“[C]ourts have generally found the amount in controversy satisfied where a defendant assumes a 100% 24 violation rate based on allegations of a uniform illegal practice (or other similar language) and where the 25 plaintiff offers no evidence rebutting this violation rate.” (citation omitted)); Powell,

, at *5 (“If a complaint alleges ‘uniform’ practice, the defendant’s amount in controversy calculus assumes 26 a 100% violation rate, and no competent evidence in rebuttal to the defendant’s evidence is shown, then ‘courts have found the defendant’s assumption to be reasonable.’” (quoting Dobbs v. Wood Grp. PSN, 27 Inc.,

(E.D. Cal. 2016)); see generally Vasquez v. Randstad US, L.P., No. 17- cv-04342-EMC,

, at *5 (N.D. Cal. Jan. 9, 2018) (finding the language of “consistently” 28 1 which is outside of the established range typically used for events that may be assumed to 2 occur less often. (See Compl. ¶¶ 14–49.) As a result, the Court finds persuasive 3 Defendant’s calculation that produces a total of $468,788.00 for fictitious meal periods and 4 $2,006,178.00 for missed rest periods. 5 b. Unpaid Minimum Wage and Overtime Compensation 6 Plaintiff challenges Defendant’s use of a 100% violation rate in applying the possible 7 assumptions of five, ten, fifteen, and twenty minutes of potential unpaid time per shift to 8 Defendant’s timekeeping data calculations. (Opp’n 10:13–15.) Plaintiff argues a 100% 9 violation rate is not reasonable given his language of “from time to time” within the 10 Complaint. (Reply 3:13–20.) However, in making this argument, Plaintiff fails to 11 acknowledge his use of “uniform policy and practice” (Compl. ¶¶ 32, 83–84, 98), 12 “systematic underpayment” (id. ¶ 36), and “perpetration of a systematic scheme” (id. ¶¶ 13 89, 105), which occur more frequently throughout these claims of Plaintiff’s Complaint. 14 Additionally, Plaintiff’s critique overlooks that the Ninth Circuit has approved of assessing 15 unpaid minimum wage and overtime pay on a weekly basis. See Jauregui,

16 (holding the defendant’s assumption that one hour of work a week went unpaid was 17 reasonable); see also Cavada v. Inter-Cont’l Hotel Grp., Inc., No. 19cv1675-GPC(BLM), 18

, at *5 (S.D. Cal. Nov. 1, 2019) (determining it was reasonable for the 19 defendant to find two hours of unpaid overtime per week based on the complaint’s policy 20 and practice language). Hence, rather than examining Defendant’s violation rate per shift, 21 the Court evaluates the violation frequency per week. Based on the language in Plaintiff’s 22 Complaint, Defendant’s assumption of 1.25 hours (fifteen minutes per shift) of potential 23 unpaid time owed per week reasonably falls between the previously used range of one to 24 two hours per week. 25 Furthermore, Mr. Massmanian states employees work an average of 9.28 total shifts 26 per pay period with an average shift length of 9.69 hours. (Decl. ¶¶ 9–10.) Plaintiff 27 supports this timekeeping data by likewise alleging in his Complaint that Defendant’s 28 policies and practices deprive employees of overtime pay because employees typically 1 work over forty hours in a workweek and more than eight hours per day. (Compl. ¶ 30.) 2 Thus, employees typically work about 4.96 hours of overtime per week, and Defendant’s 3 assumption of 1.25 hours per week (fifteen minutes per shift) would render about a 25% 4 weekly violation rate. The Court finds this assumption reasonable, and Plaintiff does not 5 submit any evidence to show how often Plaintiff himself was not properly compensated to 6 cast doubt upon the reasonableness of Defendant’s assumption. See Avila,

5677846, at *23 (“Plaintiff does not even submit her own declaration stating that she 8 experienced less frequent rates of violation than those asserted by Defendants.”). 9 Plaintiff also argues that “time spent training, onboarding, and attending 10 orientations” are examples of one-time events. (Reply 3:21–23.) Yet, this assertion 11 directly contradicts Plaintiff’s language in the Complaint, which alleges Defendant 12 maintained a “uniform pattern of unlawful wage and hour practices, [which] manifested, 13 without limitation, applicable to the California Class as a whole, as a result of 14 implementing a uniform policy and practice.” (Compl. ¶ 98.) This language creates a 15 plausible ground for Defendant’s assumption that events such as trainings and pre-shift and 16 post-shift work may occur more than once throughout the entirety of an employee’s 17 employment. (Id. ¶ 25.) Hence, Defendant’s assumed violation rate of 1.25 hours per 18 week (fifteen minutes of unpaid time per shift) is plausible based upon the language in the 19 Complaint. This claim results in $639,502.00 in potential damages. 20 c. Wage Statement and Waiting Time Penalties 21 Defendant estimates one violation per pay period for Plaintiff’s wage statement 22 penalty claims, and that every employee who has been terminated is owed waiting time 23 penalties. (See generally Opp’n 11–14.) This assumes a 100% violation rate for both 24 claims. The Court finds Defendant’s violation rate plausible based upon the allegations in 25 the Complaint as well as reasonable provided these claims are derivative of Plaintiff’s other 26 claims. (Id. 11:11–12.) Because the Court has found 25% to 75% violation rates for 27 Plaintiff’s claims for fictitious meals, rest breaks, and unpaid minimum and overtime 28 wages, one violation per pay period is reasonable. See Cavada,

, at *8– 1 9 (finding that, based upon one missed meal and rest period, defendant’s 100% violation 2 rate was reasonable for wage statement and waiting time penalties); Brumbach v. Hyatt 3 Corp., No. 20-cv-2231-WQH-KSC,

, at *9 (S.D. Cal. Mar. 11, 2021) 4 (concluding that where a plaintiff alleges a “consistent and uniform policy,” it is a 5 reasonable assumption that every single employee who separated from employment 6 suffered unpaid wages). In addition, because Plaintiff seeks the maximum statutory 7 penalty (Compl. ¶ 40), “Defendant need not produce evidence, and it is reasonable to 8 assume . . . that Plaintiff could obtain [a] statutory penalty of maximum 30 days.” See 9 Avila, 432 F. Supp. 3d at 1188 (emphasis omitted). Thus, Defendant’s 100% violation rate 10 is reasonable as it is derivatively based upon Plaintiff’s other claims and totals to 11 $406,050.00 in wage statement penalties and $656,740.00 in waiting time penalties. (See 12 Opp’n 18.) 13 ii. Calculations 14 a. Facially Missed Meal Periods 15 Mr. Massmanian utilizes Defendant’s timekeeping records and the appropriate shift 16 data to calculate facially missed meal periods, but Plaintiff argues Defendant has double 17 counted the event that an employee suffered a first meal break violation and a second meal 18 break violation in the same day. (See generally Reply 6–7.) In doing so, Defendant has 19 allowed for the possibility that an employee would be owed two meal premiums in a single 20 workday when California Labor Code section 226.7 only allows for a maximum of one 21 meal period premium per workday, regardless of how many meal periods were non- 22 compliant. United Parcel Serv. Wage & Hour Cases,

(2011) 23 (construing “the statute as permitting up to two premium payments per workday—one for 24 failure to provide one or more meal periods, and another for failure to provide one or more 25 rest periods”). Thus, based on Mr. Massmanian’s Declaration, Defendant has potentially 26 double counted these facially missed meal periods. (Opp’n 8:9–13 (citing Decl. ¶ 14).) 27 While Plaintiff shows the second meal period shifts may not reasonably be included 28 in Defendant’s calculation of the amount in controversy, this does not affect the first meal 1 eligible shifts. As the Court is not in the position to redo Defendant’s calculations, the 2 Court has removed the second meal eligible shifts from Defendant’s calculations and left 3 the remaining first meal shifts. See Jauregui,

(stating that reducing the 4 value may be more appropriate than striking out a claim in its entirety). First meal shifts 5 represent 47.95% of Defendant’s total shift data used in its calculation, and 47.95% of 6 Defendant’s total amount in controversy calculation for facially missed meal periods is 7 $769,883.28. 8 b. Failure to Reimburse 9 Plaintiff argues both that Defendant’s calculations are inaccurate and that the 10 assumed violation rates are unreasonable for Defendant’s failure to reimburse employees 11 for their personal cell phones and home internet. (Reply 8:14–23.) Yet, the Court finds 12 Defendant reasonably uses the Bureau of Labor Statistics Consumer Expenditure Survey 13 data. (Decl. ¶ 26.) E.g., Castro v. ABM Indus. Inc., No. 14-cv-05359-YGR,

1520666, at *4 (N.D. Cal. April 2, 2015) (accepting the use of this data as useful and 15 reasonable). Defendant assumes two possible violation rates of 50% and 100% for its 16 failure to reimburse employees (Decl. ¶ 26) “as a matter of corporate policy, practice, and 17 procedure, intentionally, knowingly, and systematically . . .” (Compl. ¶ 18). 18 Again, Plaintiff uses the language of “time to time” and “uniform policy, practice 19 and procedure” to describe this claim. (Id. ¶ 118.) Thus, while Defendant’s use of the 20 survey data is reasonable, Plaintiff’s limiting language of “time to time” precludes a 100% 21 violation rate. (Id.) Courts have typically found $20 to $30 a month plausible. See 22 Cavada,

, at *7 (finding $20 per employee per month reasonable); 23 Shachno,

, at *11 (accepting $20 as plausible given other courts have 24 accepted $25); Castro v. ABM Indus., Inc., No. 17-cv-3026-YGR,

, at 25 *3 (N.D. Cal. Oct. 19, 2017) (accepting $27.14 as reasonable). Although Defendant’s 26 calculations result in an estimate outside of this typical range, Defendant provides plausible 27 evidence to support its calculations, and the Court applies a conservative 30% violation 28 rate. See Powell,

, at *4 (determining the court would apply a 30% 1 violation rate to the defendant’s $30 estimate despite receiving no evidence to support the 2 assumption because the plaintiff failed to provide an alternative one). This results in 3 $146,821.80 in cell phone expenditures and $77,571.90 in home internet expenses. 4 iii. Attorneys’ Fees 5 Plaintiff argues Defendant’s attorneys’ fee calculation is flawed and inappropriate. 6 (Mot. 10:3–13:7.) As mentioned above, Defendant applies a 25% estimate of the total 7 potential damages to determine the value of any attorneys’ fees Plaintiff may be awarded 8 upon successfully pursuing his claims. (Opp’n 15:17–18.) Courts have recognized this 9 25% benchmark does not automatically apply in all cases. See Arias,

; 10 Avila, 432 F. Supp. 3d at 1192. Thus, “the defendant must prove the amount of attorneys’ 11 fees at stake by a preponderance of the evidence; [the court] may not relieve the defendant 12 of its evidentiary burden by adopting a per se rule for one element of the amount at stake 13 in the underlying litigation.” Fritsch,

. 14 Here, Defendant has met this evidentiary burden by identifying several other similar 15 cases in which Plaintiff’s lawyers have sought and received a 33% fee award. (Opp’n 16 16:15–23.) See Shachno,

, at *14 (finding “Defendant’s use of a 25% 17 attorneys’ fee is reasonable and appropriate” to meet the evidentiary burden where 18 Defendant identifies several similar cases “in which Plaintiff’s counsel sought and received 19 a 33% fee award). This Court accepts Defendant’s use of the 25% benchmark, which totals 20 to $1,292,883.75 in potential attorneys’ fees. This produces a total amount in controversy 21 of $6,464,418.73. 22 // 23 // 24 // 25 // 26 // 27 // 28 // ! :

6 Statement Penalties

8 Required Expenses

12 13 * Ok 14 Overall, Defendant persuasively shows the amount in controversy surpasses the 15 $5,000,000 required by CAFA. Because Defendant establishes subject matter jurisdiction 16 || by a preponderance of the evidence pursuant to CAFA, Plaintiff's Motion to Remand is 17 || denied. 18 CONCLUSION 19 For the reasons set forth above, the Court finds that it has subject matter jurisdiction 20 || over this action pursuant to CAFA. Accordingly, the Court DENIES Plaintiff's Motion to 21 |}Remand (ECF No. 11) and thus, DENIES the parties’ Joint Request to Stay the Decision 22 ||on the Motion (ECF No. 19). 23 IT IS SO ORDERED. 24 /\ y 25 ||DATED: August 19, 2024 (i WLAA (Appha □ % FSS Bn age 27 28 ~I0-