Larell Epps v. National Distribution Centers, LLC

UNITED STATES DISTRICT COURT JS -6

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES—GENERAL

Case No. EDCV 24-1915 JGB (SPx) Date July 23, 2025

Title Larell Epps v. National Distribution Centers, LLC, et al.

Present: The Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

MAYNOR GALVEZ Not Reported

Deputy Clerk Court Reporter

Attorney(s) Present for Plaintiff(s): Attorney(s) Present for Defendant(s):

None Present None Present

Proceedings: Order (1) GRANTING Plaintiff’s Motion to Remand (Dkt. No. 27);

(2) DENYING-AS-MOOT Defendant’s Motion to Compel Arbitration,

Strike Class Claims, and Stay Proceedings (Dkt. No. 26);

(3) VACATING the July 28, 2025 Hearing; and (4) DIRECTING the

Clerk to Close the Case (IN CHAMBERS)

Before the Court are two motions—a motion to remand filed by Plaintiff Larell Epps

(“Epps” or “Plaintiff”) (“MTR,” Dkt. No. 27) and a motion to compel arbitration, strike class

claims, and stay proceedings filed by Defendant National Distribution Centers, LLC (“NDC” or

“Defendant”) (“MTC,” Dkt. No. 26) (collectively, “Motions”). The Court finds these matters

appropriate for resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15. After considering

the papers filed in support of and in opposition to the Motions, the Court GRANTS the MTR

and DENIES-AS-MOOT the MTC. The Court VACATES the hearing set for July 28, 2025.

I. BACKGROUND

On July 18, 2024, Epps, individually and on behalf of similarly situated individuals, filed a

putative class action complaint in the Superior Court of the County of San Bernardino against

NDC and Does 1 through 100. (“Complaint,” Dkt. No. 1-2.) On September 5, 2024, NDC

answered the Complaint. (“Answer,” Dkt. No. 1-3.) On September 6, 2024, Defendant

removed the action pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §

1332(d), and 28 U.S.C. §§ 1441 and 1446. (“NOR,” Dkt. No. 1.) In support of its NOR, NDC

filed the following documents: (1) declaration of attorney Allison S. Wallin (“Wallin NOR

Decl.,” Dkt. No. 1-1); (2) declaration of Michelle Montesano, HRIS Analyst for NFI

Management Services, LLC (“NFI”) (“Montesano NOR Decl.,” Dkt. No. 1-4); and (3)

declaration of Sarah Pontoski, Vice President and Assistant General Counsel for NFI (“Pontoski

NOR Decl.,” Dkt. No. 1-5).

The Complaint alleges five causes of action against NDC under the California Labor

Code and California Business and Professions Code: (1) failure to provide meal periods, Cal. Lab.

Code §§ 226 and 512; (2) failure to provide rest periods, Cal. Lab. Code § 226; (3) failure to

provide accurate itemized wage statements, Cal. Lab. Code § 226; (4) failure to timely pay final

wages at termination, Cal. Lab. Code §§ 201-203; and (5) unfair business practices, Cal. Bus. &

Prof. Code §§ 17200, et seq. (hereinafter referred to as “UCL”). (See Complaint.)

On March 28, 2025, Plaintiff filed the Motion to Remand. (MTR.) In support of the

MTR, Plaintiff filed a declaration of attorney J. Jason Hill. (“Hill MTR Decl.,” Dkt. No. 27-2.)

On April 7, 2025, NDC opposed the MTR. (“MTR Opposition,” Dkt. No. 32.) Plaintiff replied

on April 14, 2025. (“MTR Reply,” Dkt. No. 36.)

On March 21, 2025, Defendant filed the Motion to Compel Arbitration. (MTC.) In

support of its MTC, NDC filed the following documents:

• Declaration of attorney Allison S. Wallin (“Wallin MTC Decl.,” Dkt. No. 26-2)

alongside two exhibits (“Wallin, Exhibit A-B,” Dkt. No. 26-2 at 4-62);

• Declaration of Michelle Montesano (“Montesano MTC Decl.,” Dkt. No. 26-3)

alongside two exhibits (“Montesano, Exhibit A-B,” Dkt. No. 26-3 at 8-27); and

• Declaration of Sarah Pontoski (“Pontoski MTC Decl.,” Dkt. No. 26-4).

On April 3, 2025, Plaintiff opposed the MTC.1 (“MTC Opposition,” Dkt. No. 28). In

support of the MTC Opposition, Plaintiff filed the following documents:

• Declaration of attorney J. Jason Hill (“Hill MTC Decl.,” Dkt. No. 28-1);

• Declaration of attorney Brett Szmanda (“Szmanda MTC Decl.,” Dkt. No. 28-2)

alongside two exhibits (“Szmanda, Exhibit 1-2,” Dkt. No. 28-2 at 3-10); and

1 Pursuant to this Court’s Local Rules, Plaintiff should have filed an opposition or a notice

of non-opposition to the MTC on or before March 31, 2025. See L.R. 7-9 (“Each opposing party

shall, . . . not later than twenty-one (21) days before the date designated for the hearing of the

motion . . . , serve upon all other parties and file with the Clerk either (a) the evidence upon

which the opposing party will rely in opposition to the motion and a brief but complete

memorandum which shall contain a statement of all the reasons in opposition thereto and the

points and authorities upon which the opposing party will rely, or (b) a written statement that

that party will not oppose the motion.”). Plaintiff’s Counsel explains that the MTC Opposition

was filed late, per this Court’s Local Rules, due to a calendaring error. (See Hill MTC Decl. ¶¶

4-6.) The Court admonishes Plaintiff and warns that “the failure to file any required document,

or the failure to file it within the deadline, may be deemed consent to the granting or denial of the

(continued . . . )

• Declaration of Plaintiff Epps (“Epps MTC Decl.,” Dkt. No. 28-3).

On April 7, 2025, Defendant replied. (“MTC Reply,” Dkt. No. 33.) On June 17, 2025,

Plaintiff submitted a request for judicial notice in support of his MTC Opposition.2 (“RJN,”

Dkt. No. 49.)

II. FACTUAL ALLEGATIONS

Plaintiff worked as an hourly non-exempt employee of Defendant from approximately

August 2023 through on or about May 24, 2024. (Complaint ¶¶ 4-5.) Plaintiff brings this action

on behalf of himself and all other current, former, and/or future hourly-paid, non-exempt, direct

and temporary, California employees of Defendant. (Id. ¶ 3.) The proposed class is defined as

the “California Class” which is made up of the following sub-classes:

Meal Period Class: All current and former hourly non-exempt

employees . . . in California at any time from four [] years prior to

the filing of the initial Complaint in this matter through the date

notice is mailed to a certified class who worked shifts more than

five [] hours yet Defendant[] failed to authorize or permit all

required duty-free meal periods of not less than thirty [] minutes.

Meal Period Premium Wages Class: All current and former

hourly non-exempt employees . . . in California at any time from

four [] years prior to the filing of the initial Complaint in this

matter through the date notice is mailed to a certified class who

received additional remuneration during pay periods in which they

were paid meal period premium wages and whose regular rate of

pay did not include such additional remuneration when

Defendant[] calculated those employees’ meal period premium

wages.

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motion . . . .” L.R. 7-12. However, because Defendant was not overly prejudiced by Plaintiff’s

failure to comply with this Court’s Local Rules—as evidenced by its timely filed MTC Reply—

the Court will not “disregard” the MTC Opposition and “issue sanctions” as requested by

Defendant. (See MTC Reply at 7-8.)

2 A minute order filed in a related state court proceeding is the subject of Plaintiff’s RJN.

(See RJN.) Courts may take judicial notice of undisputed matters of public record, including

documents on file in courts. See Harris v. Cnty. of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012);

United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007). Accordingly, the Court GRANTS

Plaintiff’s RJN.

Rest Period Class: All current and former hourly non-exempt

employees . . . in California at any time from four [] years prior to

the filing of the initial Complaint in this matter through the date

notice is mailed to a certified class who worked shifts of at least

three-and-a-half [] hours who did not receive all required duty-free

rest periods of a net ten [] minutes for every four [] hours worked

or major fraction thereof.

Rest Period Premium Wages Class: All current and former

hourly nonexempt employees . . . in California at any time from

four [] years prior to the filing of the initial Complaint in this

matter through the date notice is mailed to a certified class who

received additional remuneration during pay periods in which they

were paid rest period premium wages and whose regular rate of pay

did not include such additional remuneration when Defendant[]

calculated those employees’ rest period premium wages.

Wage Statement Class: All current and former hourly non-exempt

employees . . . in California at any time from one [] year prior to the

filing of the initial Complaint in this action through the date notice

is mailed to a certified class who received inaccurate

or incomplete wage and hour statements.

Waiting Time Class: All current and former hourly non-exempt

employees . . . in California at anytime from three [] years prior to

the filing of the initial Complaint in this action through the date

notice is mailed to a certified class who did not receive payment of

all unpaid wages upon separation of employment within the

statutory time period.

(Id. ¶ 29.)

The Complaint alleges that Defendant failed to (1) authorize or permit legally compliant

meal periods and/or pay meal period premium wages; (2) authorize and permit rest periods

and/or pay rest period premiums; (3) furnish accurate wage statements; and (4) timely pay final

wages. (Id. ¶¶ 12-28, 31-68.) Plaintiff also alleges that Defendant’s unlawful conduct constitutes

unfair competition. (Id. ¶¶ 69-72.)

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III. LEGAL STANDARD

A. Remand

“CAFA gives federal district courts original jurisdiction over class actions in which the

class members number at least 100, at least one plaintiff is diverse in citizenship from any

defendant, and the aggregate amount in controversy exceeds $5 million, exclusive of interests and

costs.” Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015). “In

determining the amount in controversy, courts first look to the complaint. Generally, the sum

claimed by the plaintiff controls if the claim is apparently made in good faith.” Id. at 1197

(quotations omitted). “Whether damages are unstated in a complaint, or, in the defendant’s

view are understated, the defendant seeking removal bears the burden to show by a

preponderance of the evidence that the aggregate amount in controversy exceeds $5 million when

federal jurisdiction is challenged.” Id.

Where a plaintiff makes a factual attack in the context of CAFA jurisdictional

requirements, defendants are required to support their jurisdictional allegations with proof

typically considered at summary judgment. A factual attack “contests the truth of the . . .

allegations” themselves. Id. (citation omitted). “When a plaintiff mounts a factual attack, the

burden is on the defendant to show, by a preponderance of the evidence, that the amount in

controversy exceeds the $5 million jurisdictional threshold.” Id. (quoting Ibarra, 775 F.3d at

1197). A factual attack “need only challenge the truth of the defendant’s jurisdictional

allegations by making a reasoned argument as to why any assumptions on which they are based

are not supported by evidence.” Harris v. KM Indus., Inc., 980 F.3d 694, 700 (9th Cir. 2020)

(citing Ibarra, 775 F.3 at 1199 (finding that it is sufficient to “contest[ an] assumption” without

“assert[ing] an alternative [assumption] grounded in real evidence”)).

A defendant is required to file a notice of removal that includes only “a plausible allegation

that the amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin

Operating Co. v. Owens, 574 U.S. 81, 88 (2014). However, if a plaintiff contests these

allegations, “both sides submit proof and the court decides, by a preponderance of the evidence,

whether the amount-in-controversy requirement has been satisfied.” Id. The preponderance of

the evidence standard requires that “the defendant must provide evidence establishing that it is

more likely than not that the amount in controversy exceeds that amount.” Sanchez v.

Monumental Life. Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (internal quotations omitted). The

parties “may submit evidence outside the complaint, including affidavits or declarations, or other

summary-judgment-type evidence relevant to the amount in controversy at the time of the

removal.” Ibarra, 775 F.3d at 1197 (internal quotations and citation omitted). “[A] defendant

cannot establish removal jurisdiction by mere speculation and conjecture, with unreasonable

assumptions.” Id.

“CAFA’s requirements are to be tested by consideration of real evidence and the reality of

what is at stake in the litigation, using reasonable assumptions underlying the defendant’s theory

of damages exposure.” Id. at 1198. “As with other important areas of our law, evidence may be

direct or circumstantial. In either event, a damages assessment may require a chain of reasoning

that includes assumptions. When that is so, those assumptions cannot be pulled from thin air but

need some reasonable ground underlying them.” Id. at 1199. “Under the preponderance of the

evidence standard, if the evidence submitted by both sides is balanced, in equipoise, the scales tip

against federal-court jurisdiction.” Id.

B. Arbitration

The Federal Arbitration Act (“FAA”) provides that contractual arbitration agreements

“shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity

for the revocation of any contract.” 9 U.S.C. § 2. The FAA establishes a general policy favoring

arbitration agreements. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011); Cox

v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (“Section 2 of the FAA creates a

policy favoring enforcement of agreements to arbitrate.”). Its principal purpose is to “ensure

that private arbitration agreements are enforced according to their terms.” Concepcion, 563 U.S.

at 334 (citing Volt Info. Sciences, Inc. v. Bd. of Tr. of Leland Stanford Jr. Univ., 489 U.S. 468

(1989) (internal quotation marks omitted)). “Arbitration is a matter of contract, and the [FAA]

requires courts to honor parties’ expectations.” Id. at 351.

Under the FAA, “[a] party aggrieved by the alleged failure, neglect, or refusal of another

to arbitrate under a written agreement for arbitration may petition any United States district

court . . . for an order directing that such an arbitration proceed in the manner provided for in

[the arbitration] agreement.” 9 U.S.C. § 4. Upon a showing that a party has failed to comply

with a valid arbitration agreement, the district court must issue an order compelling arbitration.

Id. If such a showing is made, the district court shall also stay the proceedings pending resolution

of the arbitration at the request of one of the parties bound to arbitrate. Id. § 3. On a motion to

compel arbitration, a district court’s involvement is limited to “determining (1) whether a valid

agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute

at issue.” Cox, 533 F.3d at 1119 (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d

1126, 1130 (9th Cir. 2000)). A party seeking to compel arbitration under the FAA bears the

burden of making this showing. Id.

IV. DISCUSSION

A. Motion to Remand

Plaintiff moves to remand on the grounds that Defendant failed to prove by a

preponderance of the evidence that the amount in controversy (“AIC”) for the putative class

exceeds the $5,000,000 CAFA jurisdictional minimum. (See MTR at 4-8.)

1. Amount in Controversy

In its NOR, Defendant asserts that the AIC requirement under CAFA is independently

satisfied by the Complaint’s waiting time penalties and claims related to unpaid premiums, which

totals to an aggregate AIC of $7,845,258.24 excluding attorneys’ fees. (See NOR at 6-9.)

Because the Complaint does not state the amount of damages sought, Defendant must prove that

the AIC exceeds $5 million. See Ibarra, 775 F.3d at 1197. “[T]he Court must decide, based upon

evidence submitted, whether the amount in controversy requirement has been satisfied by a

preponderance of the evidence.” Torrez v. Freedom Mortg., Corp., 2017 WL 2713400, at *3

(C.D. Cal. June 22, 2017). “[A] defendant may establish the amount in controversy by relying on

admissible statistical evidence taken from a representative sample and extrapolated to calculate

the potential liability for the full class.” Duberry v. J. Crew Grp., Inc., 2015 WL 4575018, at *2

(C.D. Cal. July 28, 2015) (citing LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202–09 (9th

Cir. 2015)). However, a defendant is “not required to comb through the records to identify and

calculate the exact frequency of violations.” Salcido v. Evolution Fresh, Inc., 2016 WL 79381, at

*6 (C.D. Cal. Jan. 6, 2016). “Defendant has no obligation . . . to support removal with

production of extensive business records to prove or disprove liability and/or damages with

respect to plaintiff or the putative class members at this premature (pre-certification) stage of the

litigation.” Ray v. Wells Fargo Bank, N.A., 2011 WL 1790123, at *6 (C.D. Cal. May 9, 2011).

Where “a defendant must prove the amount in controversy by a preponderance of the evidence,

a declaration or affidavit may satisfy the burden.” Id.

In calculating the AIC for the purposes of the NOR, Defendant relies on the Montesano

NOR Declaration. (See NOR.) Montesano declares that she reviewed NDC’s employment data,

and based on that review, there are “4,539 non-exempt employees in California who have

separated employment from NDC” between July 18, 2020 to present day (hereafter, the

“Terminated Class”). (See Montesano NOR Decl. ¶¶ 2, 4.) Montesano further declares that

the putative class (1) were paid an average hourly rate of at least $19.20; (2) worked at least

476,838 workweeks; and (3) worked an average 8 hours per shift. (Id. ¶¶ 5-6, 8.)

Based on Plaintiff’s allegations of failure to pay meal and rest period premiums, if even a

conservative estimate of 20% of employees in the Terminated Class were not paid all wages due

upon termination, Defendant estimates that the waiting time penalties amount to at least

$4,183,142.40.3 (See NOR at 8.) Further, assuming one meal and one rest period violation per

20% of the total weeks worked by the putative class, Defendant estimates that the premiums

owed would amount to at least $3,662,115.84.4 (Id.)

Here, Epps “make[s] a factual attack on [NDC’s] estimates of the amount in controversy

by contesting its evidence and reasoning, and without introducing extrinsic evidence of [his]

own.” See Anderson v. Starbucks Corp., 556 F. Supp. 3d 1132, 1136 (N.D. Cal. 2020); see also

Harris, 980 F.3d at 700 (when a plaintiff makes a factual attack they may submit evidence, but is

not required to proffer “an alternative [assumption] grounded in real evidence” and may rely

instead on “a reasoned argument as to why any assumptions on which [defendant’s numbers] are

3 907.8 employees (20% of 4,539 separated employees) x $19.20 x 8 hours per shift x 30

days = $4,183,142.40.

4 95,367.6 workweeks (476,838 workweeks x 20%) x $19.20 hourly rate x 2 = $3,662,115.84

for meal period premiums and rest period premiums.

based are not supported by evidence”) (citing and quoting Ibarra, 775 F.3d at 1199). For

instance, Plaintiff contends that Defendant’s “valuation . . . is not evidentiary and is not []

supported by a Declaration.” (See MTR at 7.) Plaintiff further asserts the NOR “relies on faulty

and improper calculations of Defendant’s alleged violation rates.” (See id.) The Court

addresses these arguments in turn.

a. Evidentiary Support

Plaintiff argues that Defendant provided “no supporting evidence . . . that could justify

the use of any violation rate, even though Defendant is in a unique and exclusive position to

establish a foundation.” (Id.) The Court disagrees because NDC offers sufficient evidence via

the Montesano NOR Declaration.

Montesano declares that she is a HRIS Analyst for NFI and is “familiar with UltiPro,

NDC’s system of record for employee data.” (See Montesano NOR Decl. ¶ 2.) Montesano

further asserts that within the course and scope of her duties, she reviewed NDC’s employment

data and records kept in the ordinary course of business pertaining to the putative class defined in

the Complaint. (See id.) Based on that review, she determined how many non-exempt

employees were terminated in California during the relevant time as well as these employees’

average hourly rate, and hours and weeks worked. (See id. ¶¶ 4-6, 8-9.) Moreover, Pontoski

declares that as the Vice President and Assistant General Counsel for NFI, she is familiar with

the corporate structure and relationship between NDC and NFI. (See Pontoski Decl. ¶ 1.)

Specifically, NDC is wholly owned by NFI. (See id. ¶ 5.)

Accordingly, the Montesano NOR Declaration is competent evidence because it does not

reveal any “statement, other than one made by the declarant . . ., offered in evidence to prove the

truth of the matter asserted.” Deleon v. Time Warner Cable LLC, 2010 WL 11515279, at *2

(C.D. Cal. Apr. 12, 2010) (internal citations omitted). The Montesano NOR Declaration relies

on Montesano’s personal knowledge learned from her position and her review of employee

rosters and payroll records. See Torrez v. Freedom Mortg., Corp., 2017 WL 2713400, at *3

(C.D. Cal. June 22, 2017) (finding that a declaration provided an adequate foundation because

the declarant specified his position in the company and stated that he has access to certain

employee-related information, which he accesses through his regular course of business

activities). Further, any doubts associated with the Montesano NOR Declaration related to

foundation, personal knowledge, and authentication is addressed by the Pontoski NOR

Declaration. (See Pontoski NOR Decl.; Montesano NOR Decl.)

Nonetheless, the Court finds that NDC fails to meet its burden of establishing by a

preponderance of the evidence that CAFA’s AIC requirement is met because its calculations rely

on unreasonable assumptions.

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b. Waiting Time Penalties

NDC estimates that the waiting time penalties associated with 20% of the Terminated

Class during the relevant time adds $4,183,142.40 to the AIC. (See NOR at 8; MTR Opposition

at 12.) However, Defendant’s calculation for this claim uses the total number of terminated

employees for the entire class period—i.e., July 18, 2020 to present day—whereas the statute of

limitations for waiting time penalties is only three years. (See Montesano Decl. ¶ 4 (“Based on

my review of NDC’s records . . ., I determined that NDC has employed at least 4,539 non-

exempt employees in California who have separated employment from NDC between July 18,

2020 to the present.”) (emphasis added)); see also Pineda v. Bank of Am., N.A., 50 Cal. 4th 1389,

1395 (2010) (“Actions for final wages not paid as required by sections 201 and 202 are governed

by Code of Civil Procedure section 338, subdivision (a), which provides that a three-year statute

of limitations applies to ‘[a]n action upon a liability created by statute, other than a penalty or

forfeiture.’”).

Consequently, the Court cannot rely on the Montesano NOR Declaration to determine

the estimated AIC for this claim because the Terminated Class includes former employees whose

waiting time penalties are barred by the statute of limitations pursuant to California Labor Code §

203. (See MTR Opposition at 12; MTR at 8); see also Lopez v. Advanced Drainage Sys., Inc.,

2025 WL 1088199, at *5 (N.D. Cal. Apr. 11, 2025) (finding a defendant’s waiting time penalties’

calculation unreasonable because the “calculation used the total number of terminated

employees for the entire class period, which consists of the four years prior to the filing of the

complaint,” when the statute of limitations is only three years). Even if “Defendant took a

conservative estimate of assuming that only 20% of employees were not paid wages due upon

termination,” this miscalculation inflates the estimated AIC for this claim and is one the Court

cannot accurately correct without “assuming that the putative class members terminated over

the four-year class period were equally distributed across those four years.” (See MTR

Opposition at 12; MTR at 8); Lopez, 2025 WL 1088199, at *5; cf Roth v. Comerica Bank, 799 F.

Supp. 2d 1107, 1118 (C.D. Cal. 2010) (finding AIC estimates reasonable when “defendants[, in

part,] calculated possible waiting time penalties for the [] putative class members who left their

employ in the past three years, effectively applying the three-year limitations period for actions

upon a liability created by statute . . .”). The actual number of putative class members

terminated in the three years prior to the filing of the Complaint is information easily and reliably

determined from NDC’s own records, rendering its reliance on entirely unsupported

assumptions unreasonable.

c. Unpaid Premiums

The Court need not decide the AIC for Plaintiff’s remaining claims at issue—unpaid

premiums—because even if the Court found that NDC met its burden to demonstrate by a

preponderance of the evidence that its calculations for unpaid premiums are reasonable, the AIC

would total less than $5,000,000, which does not meet CAFA’s jurisdictional threshold.

Regardless, the Court finds that NDC also relies on unreasonable assumptions when calculating

the estimated AIC for unpaid premiums.

NDC estimates that meal and rest period premiums total to at least $3,662,115.84. (See

NOR at 8; MTR Opposition at 12.) Based on the Complaint’s allegation that NDC “sometimes

employed policies, practices, and/or procedures that sometimes resulted in their failure to

authorize or permit meal [and/or rest] periods to Plaintiff and similarly situated employees,”

NDC assumes one meal and one rest period violation per putative class member per week. (See

Complaint ¶¶ 15, 18, 21, 24; NOR.) It then calculates the AIC on these claims by multiplying the

average wage during the relevant time by 20% of the total number of weeks worked by the

putative class. (See NOR at 7-10; MTR Opposition at 10-12.)

Defendant contends that the one meal and one rest period violation rate is a “modest”

assumption. (See MTR Opposition at 12.) Defendant also cites to cases in which courts have

found the same assumed violation rates reasonable where plaintiffs allege a “pattern and

practice” or “regular or consistent practice” of meal and rest period violations. (See id. at 10

(citing Feao v. UFP Riverside, LLC, 2017 WL 2836207, at *5 (C.D. Cal. June 29, 2017)

(assumption of 60% violation rate for meal and rest period claims was “sufficiently supported”

where allegations in complaint could support 100% violation rate); Cavada v. Inter-Continental

Hotels Group., Inc., 2019 WL 5677846 *7 (S.D. Cal. Nov. 1, 2019) (assumed violation rates as

high as 60% are reasonable based upon “pattern and practice” allegations)).)

The Court finds that NDC’s assumptions “lack factual support.” Salazar v. Johnson &

Johnson Consumer Inc., 2018 WL 4560683, at *3 (C.D. Cal. Sept. 19, 2018). “It would be just as

consistent with the [Complaint] to assume a frequency of . . . once-per-quarter” violation based

on the Complaint’s allegations of “sporadic and intermitted practices.” Duran v. Allegis Glob.

Sols., Inc., 2021 WL 3281073, at *3 (N.D. Cal. Aug. 2, 2021); see also Ibarra, 775 F.3d at 1199

(“As with other important areas of our law, evidence may be direct or circumstantial. In either

event, a damages assessment may require a chain of reasoning that includes assumptions. When

that is so, those assumptions cannot be pulled from thin air but need some reasonable ground

underlying them.”). Notably, nothing in the Montesano NOR Declaration “purports to provide

evidence that would assist the Court in making a reasonable assumption as to the applicable

violation rate.” Gonzalez v. H&M Hennes & Mauritz L.P., 2022 WL 179292, at *3 (C.D. Cal.

Jan. 20, 2022). Thus, Defendant does “not provide any extrinsic evidence to tip the analysis in

its direction, or point to anything in the [Complaint] that might do so.” Duran, 2021 WL

3281073, at *3.

Moreover, the Court disagrees that the Complaint “clearly allege[s] a common policy and

practice of failure to pay all wages earned at the time of separation as to all formerly employed

putative class members.” (See MTR Opposition at 11 (emphasis added).) Unlike the cases

Defendant relies on which involve complaints that allege more facts to support a “pattern and

practice” of California Labor Code violations, the facts in the Complaint associated with unpaid

premiums include limiting language that renders Defendant’s assumed violation rate

unreasonable. (See, e.g., Complaint ¶¶ 15, 18, 21, 24; MTR at 5; MTR Opposition at 11); see

also Smith v. Angelica Corp., 2021 WL 4987951, at *2 (N.D. Cal. Oct. 27, 2021) (“Plaintiff’s

complaint does not expressly allege or infer that every class member would qualify for every

subclass or would qualify for every claim within a subclass.”); cf. Garza v. Brinderson

Constructors, Inc., 178 F. Supp. 3d 906, 911-12 (N.D. Cal. 2016) (finding a defendant’s

“assumption that each putative class member missed one meal break and one rest period per

workweek [was] reasonable” because the plaintiff alleged “that he ‘regularly’ missed meal breaks

and that defendants maintained a ‘policy or practice’ of both meal and rest break violations”).

“[NDC] does not set forth any facts supporting its assumptions regarding the frequency

of meal and rest period violations . . . [therefore,] the Court finds that [NDC] has failed to

establish by the preponderance of the evidence the amount in controversy for these claims.”

Salazar, 2018 WL 4560683, at *3 (finding that defendant presented no facts supporting its

violation rate and thus defendant did not establish by a preponderance of the evidence the AIC

for plaintiffs’ meal and rest period claims); see also Garibay v. Archstone Communities LLC, 539

F. App’x 763, 764 (9th Cir. 2013) (affirming district court’s decision that defendant’s evidence

was insufficient to support removal jurisdiction because defendant failed to provide any evidence

regarding why the assumption that each employee missed two rest periods per week was more

appropriate than one missed rest period per paycheck or month). Accordingly, because NDC

failed to prove by a preponderance of the evidence that the estimated AIC for the putative class

exceeds the $5,000,000 CAFA jurisdictional minimum, the Court GRANTS the MTR.

B. Motion to Compel Arbitration

Because the Court remands this action to the Superior Court of the County of San

Bernardino, the Court lacks jurisdiction to rule on the MTC. Accordingly, the MTC is

DENIED-AS-MOOT.

V. CONCLUSION

For the reasons above, the Court GRANTS the MTR and DENIES-AS-MOOT the

MTC. The July 28, 2025 hearing is VACATED and the parties’ requests to appear remotely at

the hearing (Dkt. Nos. 34-35, 38) are DENIED-AS-MOOT. The case is REMANDED to the

Superior Court of California for the County of San Bernardino and the Clerk of the Court is

DIRECTED to close the case.

IT IS SO ORDERED.