# Gonzalez v. Barnard Construction Company Incorporated

> District Court, S.D. California · November 17, 2022

URL: https://www.frixlaw.com/law-library/cases/10086753

## Case

- **Court:** District Court, S.D. California
- **Decided:** November 17, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
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11 FRANK GONZALEZ, FRANCISCO Case No.: 22-cv-00534-AJB-KSC
GONZALEZ RIOS, and PABLO
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GONZALEZ RIOS, individually, and on ORDER DENYING PLAINTIFFS’
13 behalf of all others similarly situated, MOTION TO REMAND

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Plaintiffs,
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v.
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17 BARNARD CONSTRUCTION
COMPANY, INC., a corporation; BFBC,
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LLC, a Limited Liability Company; and
19 DOES 1 through 10, inclusive,

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Defendants.
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24 Before the Court is Frank Gonzalez, Francisco Gonzalez Rios, and Pablo Gonzalez
25 Rios’ (“Plaintiffs”) motion to remand. (Doc. No. 11.) Barnard Construction Company, Inc.
26 and BFBC (“Defendants”) filed an opposition, to which Plaintiffs replied. (Doc. Nos. 14,
27 15.) Having considered the parties’ moving papers and for the reasons set forth below, the
28 Court DENIES the motion to remand.
1 I. BACKGROUND
2 Plaintiffs were hourly-paid, non-exempt employees of Defendants, who separated
3 from the company in January 2021. (Doc. No. 1-2 at 40.)1 On October 27, 2021, Plaintiffs
4 filed suit against Defendants in San Diego County Superior Court, asserting claims on
5 behalf of themselves and putative class members of similarly situated employees employed
6 by Defendant in California. (Id., Compl. at 6.)
7 On January 5, 2022, Plaintiffs filed a First Amended Complaint (“FAC”). (Id., FAC
8 at 37.) The FAC contains nine causes of action under California law: (1) failure to pay
9 minimum and straight time wages; (2) failure to pay overtime wages; (3) failure to provide
10 meal periods; (4) failure to provide rest periods; (5) failure to pay all wages due upon
11 termination; (6) failure to provide accurate wage statements; (7) failure to indemnify
12 employees for expenditures; (8) unfair business practices; and (9) civil penalties under the
13 Private Attorneys General Act for violations of the California Labor Code. (Id.)
14 Defendants filed an Answer to the FAC on February 18, 2022 and removed the
15 action to federal court on April 18, 2022, asserting diversity jurisdiction over this case
16 pursuant to the Class Action Fairness Act (“CAFA”). (Doc. Nos. 1, 2.) Plaintiffs thereafter
17 filed the instant motion to remand, arguing that removal was untimely, and that Defendants
18 failed to establish that the amount-in-controversy requirement under CAFA is met. (Doc.
19 No. 11-1 at 2.) This Order follows.
20 II. LEGAL STANDARD
21 CAFA gives federal courts jurisdiction over certain class actions if the class has (1)
22 at least 100 members, (2) the parties are minimally diverse, and (3) the
23 amount-in-controversy exceeds $5 million. See 28 U.S.C. § 1332(d)(2), (5)(B); Standard
24 Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013). An action that meets CAFA standards
25 may be removed to federal court. See 28 U.S.C. § 1441(a). Unlike the general presumption
26 against removal, “no antiremoval presumption attends cases invoking CAFA.” Dart
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1 Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). Even in CAFA
2 cases, however, the burden of establishing removal jurisdiction, remains on the defendant
3 seeking removal. See Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir.
4 2011).
5 If the defendant’s notice of removal was untimely, a plaintiff may move to remand
6 the case back to state court. Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 885 (9th
7 Cir. 2010). The timeliness of removal is governed by 28 U.S.C. Section 1446(b), which
8 identifies two thirty-day periods for removing a case. Id. The first is triggered “if the case
9 stated by the initial pleading is removable on its face.” Harris v. Bankers Life & Cas. Co.,
10 425 F.3d 689, 694 (9th Cir. 2005). The second is triggered “if the initial pleading does not
11 indicate that the case is removable, and the defendant receives ‘a copy of an amended
12 pleading, motion, order, or other paper’ from which removability may first be ascertained.”
13 Carvalho, 629 F.3d at 885 (quoting 28 U.S.C. § 1446(b)(3)). “[D]efendants need not make
14 extrapolations or engage in guesswork; yet the statute requires a defendant to apply a
15 reasonable amount of intelligence in ascertaining removability.” Kuxhausen v. BMW Fin.
16 Servs. NA LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (internal quotations omitted). A
17 defendant may remove a case “outside the two thirty-day periods on the basis of
18 [defendant’s] own information, provided that it has not run afoul of either of the thirty-day
19 deadlines.” Roth v. CHA Hollywood Med. Ctr, L.P., 720 F.3d 1121, 1124–25 (9th Cir.
20 2013).
21 III. DISCUSSION
22 As previously noted, Plaintiffs seek remand of their case to state court, arguing that
23 removal was untimely and that Defendants have not shown that CAFA’s
24 amount-in-controversy requirement is met. Defendants maintain that removal was timely,
25 and that Plaintiffs’ claim for waiting time penalties alone satisfies CAFA’s monetary
26 threshold. The Court discusses the parties’ arguments in turn.2
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2 Plaintiffs do not dispute Defendants’ showing of CAFA’s other requirements (minimum diversity and
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1 A. Timeliness
2 First, the Court considers whether Defendants’ removal was timely. Plaintiffs
3 contend that removal was untimely because both thirty-day periods for removal had passed
4 by the time Defendants filed their Notice of Removal on April 18, 2022. Defendants argue
5 that removal was timely because neither removal period was ever triggered.
6 As earlier mentioned, the first thirty-day period for removal is triggered “if the case
7 stated by the initial pleading is removable on its face.” Harris, 425 F.3d at 694. The second
8 thirty-day period for removal is triggered when the defendant receives “a copy of an
9 amended pleading, motion, order, or other paper’ from which removability may first be
10 ascertained.” Carvalho, 629 F.3d at 885 (quoting 28 U.S.C. § 1446(b)(3)).
11 The Court agrees with Defendants that neither removal period was triggered in this
12 case. Neither the Complaint nor the FAC allege Plaintiffs’ states of citizenship or specify
13 an amount in controversy. Because the pleadings did not affirmatively reveal information
14 that would allow Defendants to ascertain that the parties were minimally diverse and that
15 the amount in controversy exceeds $5 million, the Court does not find the Complaint or
16 FAC removable on its face. Accordingly, Plaintiffs’ pleadings did not trigger the thirty-day
17 removal periods. See Harris, 425 F.3d at 695. (“The face of Harris’s initial pleading did
18 not affirmatively reveal information to trigger removal based on diversity jurisdiction
19 because the initial pleading only stated Brown’s 1972 residency, not his citizenship, and
20 certainly not his citizenship as of the filing of the complaint.”); Roth, 720 F.3d at 1125
21 (“The FAC in this case was at best indeterminate. It did not reveal on its face that there
22 was diversity of citizenship or that there was sufficient amount in controversy to support
23 jurisdiction under CAFA.”) (internal quotations and citation omitted).
24 Where, as here, neither of the thirty-day removal deadlines has been triggered, a
25 defendant may remove a case “outside the two thirty-day periods on the basis of its own
26 information.” Roth, 720 F.3d at 1124–25. Defendants did just that. They consulted their
27 employment files and determined that there are approximately 500 individuals who meet
28 Plaintiffs’ proposed class definition, that Plaintiffs were citizens of Arizona, and that
1 Plaintiffs’ claims amount to more than $5 million. (Doc. No. 1 at 8–11.) As neither
2 thirty-day removal period was triggered, Defendants were permitted to remove this case
3 “at any time.” Roth, 720 F.3d at 1126. Consequently, the Court does not find Defendants’
4 removal untimely.3
5 B. Amount in Controversy
6 Second, the parties dispute whether CAFA’s amount-in-controversy requirement is
7 met. The Court thus considers whether Defendants have demonstrated, by a preponderance
8 of evidence, that the amount in controversy exceeds $5 million.
9 “[A] defendant’s notice of removal need include only a plausible allegation that the
10 amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee, 574 U.S. at
11 89. “[T]he amount-in-controversy allegation should be accepted when not contested by the
12 plaintiff or questioned by the court.” Id. at 87. If, however, the plaintiff challenges the
13 defendant’s allegations, “both sides submit proof and the court decides, by a preponderance
14 of the evidence whether the amount-in-controversy requirement has been satisfied.” Id. at
15 88. A removing defendant cannot satisfy its burden “by mere speculation and conjecture,
16 with unreasonable assumptions.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th
17 Cir. 2015). “The parties may submit evidence outside the complaint, including affidavits
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3 Plaintiffs’ brief raises objections similar to those previously considered and rejected by the Ninth Circuit
21 as set forth below. The Court rejects them here for the same reasons.

22 It may be that in some diversity cases, defendants will be able to take advantage of the fact
that neither the “initial pleading” nor any later document received from plaintiff triggers
23 one of the two thirty-day periods. In such cases, defendants may sometimes be able to delay
filing a notice of removal until it is strategically advantageous to do so.
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. . .
25 Our best answer—and a likely sufficient answer—is that plaintiffs are in a position to
protect themselves. If plaintiffs think that their action may be removable and think, further,
26 that the defendant might delay filing a notice of removal until a strategically advantageous
moment, they need only provide to the defendant a document from which removability
27 may be ascertained.

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1 or declarations, or other summary-judgment-type evidence relevant to the amount in
2 controversy at the time of removal.” Id. (internal quotations and citation omitted).
3 As earlier mentioned, Defendants argue that the amount in controversy exceeds $5
4 million based on Plaintiffs’ claim for waiting time penalties alone. With respect to these
5 claims, Plaintiffs allege that Defendants violated California Labor Code §§ 201 and 202 by
6 failing to pay Plaintiffs and “many other members of the Class. . . their wages earned and
7 unpaid at the time of discharge, or within seventy-two (72) hours of their leaving
8 Defendants’ employ[.]” (Doc. No. 1-2 at 54.) An employer’s failure to timely pay wages
9 owed pursuant to California Labor Code §§ 201 or 202 results in a penalty of the
10 employee’s wages for every day it is late, up to a maximum of thirty days’ wages. See Cal.
11 Labor Code § 203.
12 Defendants approximate that Plaintiffs’ claim for waiting time penalties amount to
13 over $6 million and submitted declarations from their counsel and Vice President (“VP”)
14 of Finance in support of their calculation. (Doc. Nos. 14-1, 14-2.) Defendants arrived at
15 their estimate by assuming at least one wage and hour violation giving rise to waiting time
16 penalties. (Doc. No. 14-1 at 2.) The VP of Finance analyzed the company’s business
17 records, and based thereon, estimated the number of class members who separated from
18 employment during the limitations period for waiting time penalties (511) and the average
19 daily wage for class members ($414.07). (Doc. No. 14-2 at 3–4.) Defendants multiplied
20 those figures by the thirty-day maximum for waiting time penalties for a total of
21 $6,347,693.10 (511 class members x $414.07 average daily wage x 30 maximum days).
22 Plaintiffs assert three problems with Defendants’ calculations: (1) Defendants
23 impermissibly assume a 100% violation rate; (2) Defendants’ identification of the number
24 of separated employees is mere speculation; and (3) Defendants improperly push onto
25 Plaintiffs their burden to prove the amount in controversy. (Doc. No. 11 at 6, 8–10.) The
26 Court disagrees.
27 First, Defendants did not assume a 100% violation in calculating the waiting time
28 penalties above. The VP of Finance identified the full class size to be 573 employees. (Doc.
1 14-2 at 3.) Defendants calculated the waiting time penalties using only the number of class
2 members the VP of Finance determined to have been separated from employment, which
3 was 525 employees. (Id. at 3–4.) This is not the full class size, and thus, not a 100%
4 violation rate. Even if Defendants did use a 100% violation rate, other district courts have
5 concluded that allegations of the willful failure to timely pay final wages (based on alleged
6 overtime and meal and rest break violations) were sufficient to support estimations of
7 waiting time penalties at a 100% rate. See, e.g., Ford v. CEC Entm’t, Inc., No. CV 14-01420
8 RS, 2014 WL 3377990 (N.D. Cal. July 10, 2014) (“Assuming a 100% violation rate is thus
9 reasonably grounded in the complaint . . . Because no averment in the complaint supports
10 an inference that these sums were ever paid, Ford cannot now claim class members may
11 be awarded less than the statutory maximum.”).
12 Second, with respect to Plaintiffs’ challenge to Defendants’ method of identifying
13 the number of terminated employees, the Court notes that a defendant may make
14 assumptions in its calculations so long as they are reasonably grounded. Ibarra, 775 F.3d
15 at 1197. Here, the VP of Finance detailed in his declaration the basis for his calculation.
16 (Doc. No. 14-2 at 3–4.) He explained that because the employee data he reviewed did not
17 include termination dates for the class members, he set a 42-day threshold to determine the
18 number of terminated employees. (Id. at 4.) In other words, he assumed that “[a]ny
19 employee who did not receive a paycheck in the last 42 days of data (March 7, 2022 – April
20 18, 2022)” was terminated. (Id. at 4.) To account for his use of a 42-day threshold, the VP
21 of Finance explained that based on his experience, “it is extremely likely (~95% or more)
22 that an employee who does not receive a paycheck for a six-week period has separated
23 employment.” (Id.) As Defendants’ calculations are based on its VP of Finance’s
24 experience with and analysis of employee records, the Court finds them reasonably
25 grounded. See Ibarra, 775 F.3d at 1199 (“A damages assessment may require a chain of
26 reasoning that includes assumptions. When that is so, those assumptions cannot be pulled
27 from thin air, but need some reasonable ground underlying them.”).
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1 Finally, Plaintiffs do not offer any alternative calculation for waiting time penalties.
2 || While the burden of proof rests with Defendants, “if [the] defendant’s asserted amount in
3 ||controversy is challenged, ‘both sides submit proof and the court decides, by a
4 || preponderance of the evidence, whether the amount-in-controversy requirement has been
5 || satisfied.’” Ibarra, 775 F.3d at 1197. Plaintiffs’ attempt to discount the VP of Finance’s
6 ||declaration with mere argument is not enough. Counsel’s argument is not evidence.
7 Plaintiffs have not rebutted Defendants’ evidence nor have Plaintiffs provided any
8 ||evidence to suggest that payments were provided. Thus, the Court finds Defendants’
9 asserted amount in controversy of $6,347,693.10 for waiting time penalties proper here.
10 CONCLUSION
11 Based on the foregoing, the Court finds that removal was timely, and Defendants
12 ||have satisfied their burden to demonstrate the amount-in-controversy requirement under
13 || CAFA is met. Accordingly, the Court DENIES Plaintiffs’ motion to remand. (Doc. No.
14 11.)
15 IT IS SO ORDERED.
16 || Dated: November 17, 2022 © ¢
7 Hon. Anthony J.Battaglia
18 United States District Judge
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10086753. Public record. Not legal advice.