holding that a court must include future 24 attorneys’ fees recoverable by statute or contract when assessing whether the 25 26 31 Reply 10:13-14. 32 McAtee Declaration ¶¶ 10(b)(i), 11(b)(i), & 12(b)(i
How later courts described this case
- holding that a court must include future 24 attorneys’ fees recoverable by statute or contract when assessing whether the 25 26 31 Reply 10:13-14. 32 McAtee Declaration ¶¶ 10(b)(i), 11(b)(i), & 12(b)(i
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE CENTRAL DISTRICT OF CALIFORNIA
10
11 JOSE ORDAZ, on behalf of himself, all Case No. 5:21-cv-01591-JWH-SPx
others similarly situated, and the
12 general public,
ORDER DENYING MOTION OF
13 Plaintiff, PLAINTIFF TO REMAND
PURSUANT TO 28 U.S.C. § 1447
14 v. [ECF No. 11]
15 MCLANE/SUNEAST, INC., a Texas
corporation;
16 MCLANE COMPANY, INC., a Texas
corporation;
17 MCLANE FOODSERVICE, INC., a
Texas corporation;
18 MCLANE FOODSERVICE
DISTRIBUTION, INC., a North
19 Carolina corporation;
MCLANE BEVERAGE
20 DISTRIBUTION, INC., a Texas
corporation; and
21 DOES 1–50, inclusive,
22 Defendants.
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1 Before the Court is the motion of Plaintiff Jose Ordaz to remand this case
2 to San Bernardino County Superior Court.1 The Court finds this matter
3 appropriate for resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15.
4 After considering the papers filed in support and in opposition,2 the Court
5 orders that the Motion is DENIED, for the reasons set forth herein.
6 I. BACKGROUND
7 Ordaz worked for Defendants McLane/Suneast, Inc. (“MSE”); McLane
8 Foodservice, Inc.; McLane Foodservice Distribution, Inc.; and McLane
9 Beverage Distribution, Inc. as a non-exempt hourly maintenance mechanic from
10 July 2019 through January 2021.3 On March 29, 2021,4 Ordaz filed a putative
11 class action Complaint on behalf of himself and putative class members
12 (“PCMs”) against Defendants5 in which he asserted six claims for relief:
13 (1) violation of Cal. Lab. Code §§ 226.7, 512, and 1198 (unpaid meal and rest
14 period premiums); (2) violation of Cal. Lab. Code §§ 510, 1194, 1197, and 1198
15 (failure to pay all wages earned for all hours worked at the correct rates of pay);
16 (3) violation of Cal. Lab. Code §§ 1198 and 2802 (unreimbursed business
17 expenses); (4) violation of Cal. Lab. Code § 226 (non-compliant wage
18
19
20
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22 1 Pl.’s Mot. to Remand Pursuant to 28 U.S.C. § 1447 (the “Motion”)
[ECF No. 11].
23
2 The Court considered the following papers: (1) Compl. (the
24 “Complaint”) [ECF No. 1-1]; (2) the Notice of Removal (the “Removal
Notice”) [ECF No. 1]; (3) the Motion (including its attachments); (4) Defs.’
25 Opp’n to the Motion (the “Opposition”) [ECF No. 16]; (4) First Am. Compl.
(the “Amended Complaint”) [ECF No. 21]; and (5) Pl.’s Reply in Supp. of the
26 Motion (the “Reply”) [ECF No. 26].
3 Complaint ¶ 22.
27
4 Hereinafter, all dates are in the year 2021 unless otherwise noted.
1 statements); (5) violation of Cal. Lab. Code §§ 201, 202, and 203 (final wages
2 not timely paid); and (6) violation of Cal. Bus. & Prof. Code §§ 17200, et seq.6
3 On September 17, Defendants removed this action to this Court.7 Ordaz
4 filed the instant Motion on October 15.8 Defendants opposed on November 1,9
5 and Ordaz replied on November 18.10
6 II. LEGAL STANDARD
7 A defendant may remove an action from state court to federal court if the
8 plaintiff could have originally filed the action in federal court. See 28 U.S.C.
9 § 1441(a). CAFA provides federal subject matter jurisdiction if (1) the proposed
10 plaintiff class is not less than 100 members; (2) the parties are minimally
11 diverse; and (3) the aggregate amount in controversy exceeds $5 million. 28
12 U.S.C. § 1332(d)(2) & (5)(B). “Congress intended CAFA to be interpreted
13 expansively.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015).
14 The party seeking removal bears the burden of establishing federal subject
15 matter jurisdiction under CAFA. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676,
16 683 (9th Cir. 2006). When the amount in controversy is not apparent from the
17 face of the complaint, the removing party “must prove by a preponderance of
18 the evidence that the amount in controversy requirement [under CAFA] has
19 been met.” Id. Generally, “a defendant’s notice of removal need include only a
20 plausible allegation that the amount in controversy exceeds the jurisdictional
21 threshold.” However, when a plaintiff contests the amount in controversy put
22 forth by the defendant, “[e]vidence establishing the amount is required. . . .”
23
24 6 Complaint ¶¶ 29-92. Ordaz has since amended his Complaint by adding a
seventh claim for relief for civil penalties under Cal. Lab. Code §§ 2698, et seq.
25 See Amended Complaint ¶¶ 94-102.
26 7 See generally Removal Notice.
8 See generally Motion.
27
9 See generally Opposition.
1 Dart Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). The parties, thus,
2 “may submit evidence outside the complaint, including affidavits or
3 declarations, or other ‘summary-judgment-type evidence relevant to the amount
4 in controversy at the time of removal.’” Ibarra, 775 F.3d at 1197 (quoting Singer
5 v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). “Under this
6 system, a defendant cannot establish removal jurisdiction by mere speculation
7 and conjecture, with unreasonable assumptions.” Id.
8 Removal under CAFA must also be timely. A defendant must remove the
9 case to federal court “(1) during the first thirty days after the defendant receives
10 the initial pleading, or (2) during the first thirty days after the defendant receives
11 ‘an amended pleading, motion, order or other paper from which it may be first
12 ascertained that the case is one which is or has become removable.’” Reyes v.
13 Dollar Tree Stores, Inc., 781 F.3d 1185, 1189 (9th Cir. 2015) (quoting 28 U.S.C.
14 § 1446(b)(1) & (b)(3)) (italics omitted). The first time period under 28 U.S.C.
15 § 1446(b)(1) is “triggered if the case stated by the initial pleading is removable
16 on its face,” and the second time period under 28 U.S.C. § 1446(b)(3) is
17 “triggered if the initial pleading does not indicate that the case is removable, and
18 the defendant receives a copy of an amended pleading, motion, order or other
19 paper from which removability may first be ascertained.” Carvalho v. Equifax
20 Info. Servs., LLC, 629 F. 3d 876, 885 (9th Cir. 2010) (internal quotation marks
21 and citations omitted).
22 III. DISCUSSION
23 Ordaz challenges Defendants’ removal on two grounds: (1) the removal
24 was untimely; and (2) Defendants have failed to prove, by the preponderance of
25 the evidence, that the amount in controversy exceeds $5 million. The Court
26 evaluates each challenge in turn.
27
1 A. Timely Removal
2 Ordaz argues that Defendants failed to remove on a timely basis.11 He
3 notes that he served the initial Complaint and summons on Defendants on or
4 around May 7.12 However, Defendants did not remove until “134 days” later.13
5 The procedures for removal of an action from state court to federal court
6 are set forth in 28 U.S.C. § 1446. Subsection (a) of that statute provides
7 generally that a defendant seeking to remove a civil action shall file a notice of
8 removal in the district court. Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d
9 1121, 1124 (9th Cir. 2013). That statue also imposes restrictions on removal,
10 including a requirement that the defendant must file its notice of removal within
11 30 days of its receipt from the plaintiff of an initial pleading or other document
12 from which it is ascertainable that the case is removable. Id. (quoting 28 U.S.C.
13 § 1446(b)(1) & (3)).
14 The first question is whether it was clear from the face of the Complaint
15 that the case could be removed. The Court finds it was not. Even though Ordaz
16 stresses that there was facially complete diversity of citizenship,14 the amount in
17 controversy was indeterminate.15 Courts in the Ninth Circuit have held that
18 “indeterminate” pleadings do not trigger the 30-day clock under 28 U.S.C.
19 § 1446(b) unless the grounds for removal are “revealed affirmatively in the
20 initial pleading.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139
21 (9th Cir. 2013). Courts take this approach to “avoid saddling defendants with
22 the burden of investigating jurisdictional facts . . .” Id. Because the Complaint
23 did not readily demonstrate removability, Ordaz cannot claim that the clock
24
25 11 Motion 5:18-8:13.
26 12 Id. at 5:25-26.
13 Reply 2:7.
27
14 See, e.g., Motion 6:2-3 & 7:18-19.
1 began to run unless there was some “amended pleading, motion, order or other
2 paper” that demonstrated the case was—or had become—removable. 28
3 U.S.C. § 1446(b)(3).
4 Under this exception, Ordaz contends that “other papers” provided
5 Defendants with notice of removability.16 Specifically, Ordaz points to papers
6 filed in the related case Murdock v. McLane Suneast, Inc., Case
7 No. 5:21-cv-01591-JWH-SP, including: “McLane/Suneast, Inc.’s Notice of
8 Removal (filed on April 7, 2021), McLane/Suneast, Inc.’s Opposition to
9 Plaintiff’s Motion to Remand (filed on May 28, 2021), the Declaration of
10 Stephanie McAtee In Support of McLane East’s Opposition to Plaintiff’s
11 Motion to Remand (filed on May 28, 2021), and McLane/Suneast, Inc.’s
12 Objections To and Request to Strike Portions of Plaintiff’s Reply (filed on
13 June 8, 2021)” (collectively, the “Murdock Papers”).17
14 There are three flaws with this argument. First, as Defendants point out,
15 they did not receive those papers from Ordaz.18 As the Ninth Circuit has noted,
16 “28 U.S.C. § 1446(b) requires the receipt by the defendants of a paper in the
17 action from which removability may be ascertained.” Eyak Native Vill. v. Exxon
18 Corp., 25 F.3d 773, 779 (9th Cir. 1994) (italics omitted). Since Defendants did
19 not receive any of these papers from Ordaz, Ordaz simply cannot rely on this
20 exception. In view of that infirmity, the Court need not consider whether the
21 Murdock Papers would otherwise qualify as “other papers” under 28 U.S.C.
22 § 1446(b)(3).
23 Second, even if Ordaz had delivered those papers to Defendants, Ordaz
24 cites no case law directly on point suggesting that notice of removal in a related
25 case (with different plaintiffs but a common defendant) falls within the “other
26
16 Motion 6:26.
27
17 Id. at 6:21-26.
1 papers” exception.19 Indeed, the Court is not aware of any authority from this
2 circuit or any others that currently supports such an interpretation, even if the
3 idea carries some persuasive force. Cf. 14C Charles Alan Wright & Arthur
4 Miller, Federal Practice and Procedure § 3731 (Rev. 4th ed. 2021) (collecting cases
5 on “other papers”).
6 Third, even if the Murdock Papers qualified as eligible materials for the
7 Court’s consideration, the Court is skeptical that they would establish
8 unequivocally that the case was removable. The Ninth Circuit recently held that
9 “an amended pleading, motion, order, or other paper must make a ground for
10 removal unequivocally clear and certain before the removal clock begins under
11 the second pathway of [28 U.S.C.] § 1446(b)(3).” Dietrich v. Boeing Co., 14
12 F.4th 1089, 1095 (9th Cir. 2021). Under this revised articulation, it is unlikely
13 that the Murdock Papers would meet such an exacting standard because the
14 factual predicates and the parties involved are not identical, even if many
15 similarities exist. Therefore, the Court rejects Ordaz’s argument that
16 Defendants’ removal was untimely.
17 B. Amount in Controversy
18 Ordaz mounts a factual challenge to Defendants’ estimated amount in
19 controversy.20 A plaintiff may contest the amount in controversy by making
20 either a “facial” or “factual” attack on the defendant’s jurisdictional
21 allegations. See Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 2020). “A
22 ‘facial’ attack accepts the truth of the [defendant’s] allegations but asserts that
23 they ‘are insufficient on their face to invoke federal jurisdiction.’” Id. (quoting
24 Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). In contrast, a factual
25 attack “contests the truth of the . . . allegations” themselves. Id. (citation
26
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19 See generally Motion.
1 omitted). “When a plaintiff mounts a factual attack, the burden is on the
2 defendant to show, by a preponderance of the evidence, that the amount in
3 controversy exceeds the $5 million jurisdictional threshold.” Harris v. KM
4 Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020).
5 Defendants calculate an amount in controversy of $32,478,110.78, merely
6 for PCMs who worked for MSE based upon Ordaz’s first, second, fourth, and
7 fifth claims for relief (before attorneys’ fees).21 The Court need not validate
8 each of those figures to find that removal was proper. If the Court finds that
9 Defendants have proven—by a preponderance of the evidence—that even a
10 subtotal of these claims exceeds $5 million, then it must deny Ordaz’s motion.
11 Defendants begin their Opposition with a discussion of waiting time
12 penalties pursuant to Cal. Lab. Code § 203—Ordaz’s fifth claim for relief.
13 Defendants estimate that the amount in controversy is $7,508,246.40.22 To
14 calculate this sum, several assumptions and datapoints are required; e.g., the
15 hourly rate, the numbers of hours worked per day, the penalty length,23 and the
16 number of fully separated PCMs.24
17 Regarding the hourly rate, Defendants offer a declaration from MCI’s
18 Director of Payroll, who testifies that the weighted average of the effective
19 hourly rate was $20.94.25 Ordaz does not contest this fact.
20 Next, Defendants use eight hours of work per employee per workday in
21 their calculations. The Court finds that assumption to be reasonable because
22
21 Opposition 25:20.
23
22 Id. at 13:13. The Court calculated this figure based upon the assumptions
24 described in the Opposition.
23 When an employer willfully fails to pay wages in a timely manner upon an
25 employee’s separation, the employee is entitled to receive her normal wages for
every day that the wages are late, up to a maximum of 30 days. See
26 Cal. Lab. Code § 203.
27 24 Opposition 13:11-16.
25 Decl. of Stephanie McAtee in Supp. of the Opposition (the “McAtee
1 Ordaz alleges that he and other PCMs worked more than eight hours a day,26 and
2 Defendants’ records appear consistent with that figure.27 Despite Ordaz’s
3 challenge,28 the eight-hour-per-workday figure is reasonable for waiting time
4 penalty calculations. See Calderon v. BKB Constr., LP, 2017 WL 2618094, at *6
5 (N.D. Cal. June 16, 2017) (finding it reasonable for a defendant to assume that
6 the plaintiff worked a minimum of eight hours per day when the plaintiff’s
7 complaint alleged that he worked in excess of eight hours per day); see also
8 Ruano v. Sears Roebuck & Co., 2015 WL 6758130, at *4 (C.D. Cal. Nov. 5, 2015)
9 (noting that a “declaration from a person with knowledge of the relevant data is
10 clearly an appropriate form of evidence”).
11 The Court also finds it reasonable for Defendants to assume the
12 maximum 30-day penalty because Ordaz neither qualifies nor tempers his
13 allegations in this respect.29 Indeed, Ordaz asserts that it was part of
14 Defendants’ “policies and practices” to fail to pay Ordaz and PCMs all of their
15 earned and unpaid wages on a timely basis.30 Those allegations matter, because
16 Ordaz is ultimately “the master of [his] claim.” Caterpillar Inc. v. Williams, 482
17 U.S. 386, 392 (1987) (internal quotations omitted). If Ordaz wanted to avoid
18 removal, then he “could have alleged facts specific to [his] claims which would
19 narrow the scope of the putative class or the damages sought.” Muniz v. Pilot
20 Travel Centers LLC, 2007 WL 1302504, at *4 (E.D. Cal. May 1, 2007) (citing
21 Caterpillar, 482 U.S. at 392); see also Vasquez v. RSI Home Prod., Inc., 2020 WL
22 6778772, at *9 (C.D. Cal. Nov. 12, 2020) (“In the absence of any such limiting
23
24 26 Complaint ¶ 24.
25 27 See McAtee Declaration ¶ 10(b)(ii)(3) (noting an average of 8.01 recorded
hours per workday, which excludes of any recorded non-working hours, such as
26 sick time or paid time off).
28 Motion 12:1-7.
27
29 See, e.g., Complaint ¶¶ 25, 26, 53-55, & 82-84.
1 allegation, coupled with the allegations regarding [defendant’s] “pattern and
2 practice” of wage violations and the number of hours worked by [plaintiff] and
3 the PCMs, [the defendant] reasonably assumes a universal violation rate”).
4 Furthermore, other courts in this district generally find allegations of unpaid
5 wages to be “implicit allegations of maximum damages for waiting time
6 penalties.” Ramos v. Schenker, Inc., 2018 WL 5779978, at *2 (C.D. Cal. Nov. 1,
7 2018) (collecting cases).
8 Finally, Ordaz challenges the assumption that all former employees are
9 owed waiting time penalties for the statutory maximum of 30 days to be
10 “unrealistic and unreasonable.”31 Defendants have provided evidence that
11 1,494 PCMs separated from employment with Defendants during the relevant
12 period.32 In view of Ordaz’s unqualified allegations,33 it is reasonable to
13 extrapolate that each employee leaving Defendants’ employment would have
14 experienced at least one incident resulting in underpayment during the course of
15 his or her employment. Tellingly, Ordaz neither walks back his allegations nor
16 offers any contrary evidence in his Reply to suggest that Defendants’
17 assumption is incorrect;34 the Court finds it to be reasonable. Accord Altamirano
18 v. Shaw Indus., Inc., 2013 WL 2950600, at *12 (N.D. Cal. June 14, 2013).
19 Defendants have therefore met their burden; further calculation is
20 unnecessary. Indeed, in view of Ordaz’s other claims and his request for
21 attorneys’ fees, it becomes a near certainty that the amount in controversy
22 exceeds $5 million. See Fritsch v. Swift Transportation Co. of Arizona, LLC, 899
23 F.3d 785, 794 (9th Cir. 2018) (holding that a court must include future
24 attorneys’ fees recoverable by statute or contract when assessing whether the
25
26 31 Reply 10:13-14.
32 McAtee Declaration ¶¶ 10(b)(i), 11(b)(i), & 12(b)(i).
27
33 Complaint ¶¶ 23-26, 55, & 85.
1 amount in controversy requirement is met). “The preponderance standard does
2 not require a district court to perform a detailed mathematical calculation of the
3 amount in controversy before determining whether the defendant has satisfied
4 its burden.” Harris, 980 F.3d at 701. Rather, “CAFA’s requirements are to be
5 tested by consideration of real evidence and the reality of what is at stake in the
6 litigation, using reasonable assumptions underlying the defendant’s theory of
7 damages exposure.” Ibarra, 775 F.3d at 1198.
8 Ordaz invokes Harris for the proposition that the McAtee Declaration is
9 insufficient.35 However, the Court finds that Ordaz misapplies Harris because
10 the facts are distinguishable. In Harris, the plaintiff sought to represent two sub-
11 classes of PCMs who suffered meal and rest break violations. Id. at 701. The
12 defendant then assumed, without any evidence, that those sub-classes operated
13 in the same manner. In contrast here, Ordaz has not identified any sub-classes,
14 and Defendants have provided credible evidence from their Human Resources
15 department regarding the class that Ordaz has putatively defined. See Ruano,
16 2015 WL 6758130, at *4.
17 In the absence of a stipulation that the amount in controversy does not
18 exceed $5 million, Defendants have met their burden to show that it is more
19 likely than not that the statutory minimum is met.
20 IV. CONCLUSION
21 For the foregoing reasons, the Court hereby ORDERS as follows:
22 1. The Court DENIES the Motion of the Plaintiff to Remand.
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1 2. The Court VACATES the hearing on the Motion on December 17,
2021, at 11:00 a.m., but the Status Conference scheduled at that time remains on
3|| calendar.
4 IT IS SO ORDERED.
: Ma
6 || Dated: December 17, 2021 °
7 SNITED STATES DISTRICT JUDGE
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