The opinion
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8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
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Case No. 8:25-cv-01440-SRM-KES
11 REYES ALVAREZ,
12 Plaintiff,
ORDER REGARDING PLAINTIFF’S
13 v. MOTION TO REMAND AND
14 ALBERTSONS LLC, et al., DEFENDANT’S MOTION FOR
CONSOLIDATION [11] [19]
15 Defendants.
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18 I. INTRODUCTION
19 Before the Court is Defendant Albertson’s LLC’s (“Defendant Albertsons”)
20 Motion to Consolidate Cases, Dkt. 11, and Plaintiff Reyes Alvarez’s (“Plaintiff Alvarez”)
21 Motion to Remand the action to the Superior Court of the State of California, County of
22 Orange. Dkt. 19. Having reviewed the parties’ arguments, relevant legal authority, and
23 record in this case, the Court GRANTS Plaintiff Alvarez’s Motion to Remand, Dkt. 19,
24 and DENIES Defendant Albertsons’ Motion for Consolidation AS MOOT, Dkt. 11.
25 II. BACKGROUND
26 This action arises from Plaintiff Alvarez’s employment with Defendant Albertsons
27 at Albertson’s distribution center in Brea, California. See Dkt. 1-2 at 4. Plaintiff Alvarez
28 began his employment on August 22, 2024, and states he worked more than 10 hours a
1 workday. See Dkt. 1-2 at 4. Plaintiff Alvarez alleges that throughout his employment,
2 Defendant Albertson’s committed various Labor Code violation. See generally Dkt. 1-2.
3 On April 1, 2025, Plaintiff Alvarez filed a class action complaint in the Superior Court of
4 California, County of Orange, Case No. 30-2025-01471926-CU-OE-CXC, against
5 Defendant Albertsons for alleged failure to: (1) pay minimum wages, (2) pay overtime for
6 hours worked, (3) pay wages at the agreed upon rate, (4) provide and properly record meal
7 breaks, (5) allow and pay correct premium wages for rest breaks, (6) provide accurate
8 itemized wage statements, (7) pay compensation at the time of termination, (8) comply
9 with California’s Unfair Competition Law. See Reyes Alvarez v. Albertsons LLC, et al.,
10 No. 8:25-cv-00982-SRM-KES (C. D. Cal. filed May 9, 2025) (Dkt. 1-1). On May 9, 2025,
11 Defendant Albertsons removed the putative class action to federal court pursuant to the
12 Class Action Fairness Act in Case No. 8:25-cv-00982-SRM-KES. See id. (Dkt. 1).
13 On May 30, 2025, Plaintiff Alvarez initiated this action against Defendant
14 Albertsons in the Superior Court of California, County of Orange (“Alvarez II”) in Case
15 No. 30-2025-01486816-CU-OE-CXC. See Dkt. 1-2. In Alvarez II, Plaintiff Alvarez brings
16 a single Private Attorneys General Act (“PAGA”) claim asserting underlying violations of
17 the California Labor Code. See Dkt. 1-2 at 8–10. Plaintiff Alvarez brings this action as an
18 individual and on behalf of all other Aggrieved Employees. See Dkt. 1-2 at 3. Plaintiff
19 Alvarez alleges that Defendant Albertsons violated the Labor Code in that it failed to (1)
20 pay minimum wages; (2) maintain accurate records; (3) pay all wages owed upon
21 termination; and (4) provide accurate itemized wage statements. See id. at 5–8.
22 In his Complaint, Plaintiff Alvarez alleges he regularly worked more than ten hours
23 a day while employed by Defendant Albertsons. See Dkt. 1-2 at 4. He alleges that, during
24 the relevant period, Defendant Albertsons was advised by lawyers, professionals, and
25 human resource employees with knowledge of the requirements of California wage and
26 hour laws. See id. Specifically, Plaintiff Alvarez alleges Defendant Albertsons had a policy
27 or practice of failing to pay employees for time spent in required security and bag checks,
28 walking to and from required security checkpoints, and setting up their positions prior to
1 clocking in. See Dkt. 1-2 at 5. Plaintiff Alvarez also alleges Defendant Albertsons failed to
2 pay all wages owed upon termination, maintain accurate records, and provide accurate
3 itemized wage statements in violation of California Labor Code Sections 201-203, 1174,
4 and 226. See id.
5 On July 2, 2025, Defendant Albertsons removed the state court action to this Court.
6 See Dkt. 1. Defendant Albertsons alleges removal is proper to this Court based on federal
7 question jurisdiction, diversity jurisdiction, and supplemental jurisdiction. See Dkt. 1 at 2.
8 First, Defendant Albertsons alleges federal question exists because Plaintiff Alvarez’s
9 claims are subject to a Collective Bargaining Agreement (“CBA”) subject to preemption
10 under Section 301 of the Labor Management Relations Act of 1947 (“LMRA”). See Dkt.
11 1 at 3–10. Second, Defendant Albertsons alleges diversity jurisdiction is proper because
12 “the parties are diverse and the amount in controversy exceeds $75,000 exclusive of
13 interest and costs.” See Dkt. 1 at 12. Third, Defendant Albertsons argues jurisdiction is
14 proper through supplemental jurisdiction because the state law claims, “relate to and
15 emanate from the same employment relationship between and/or the allegedly aggrieved
16 employees and Defendant, which is the subject of the federal question claims.” See id. at
17 10–11.
18 On July 10, 2025, Defendant Albertsons filed a Motion to Consolidate this case with
19 Alvarez I. See Dkt. 11. Defendant Albertsons argues that these cases arise from the same
20 factual allegations and allowing them to proceed separately “will waste judicial and party
21 resources, risk inconsistent rulings, and constitute unlawful claim splitting.” See id. at 8.
22 Plaintiff Alvarez opposes Defendant Albertsons’ Motion to Consolidate and argues the
23 following: (1) this case was improperly removed; (2) the Court lacks jurisdiction to rule on
24 the Motion to Consolidate until deciding the Motion to Remand; (3) consolidation is
25 inappropriate because the cases do not involve common legal or factual questions; (4) if
26 remand is denied, coordinating the related actions for pretrial and trial purposes, rather than
27 full consolidation, is appropriate in this case; and (5) Defendant Albertsons misconstrues
28
1 the claim-splitting doctrine and misapplies precedent. See Dkt. 17. Defendant Albertsons
2 submitted a Reply in support of its Motion to Consolidate. Dkt. 20.
3 On July 29, 2025, Plaintiff Alvarez filed a Motion to Remand this case to state court.
4 See Dkt. 19. First, Plaintiff Alvarez argues that jurisdiction is not proper in this Court
5 because the claims are not preempted by the LMRA. See id. at 12–15. Next, Plaintiff
6 Alvarez argues that Defendant Albertsons improperly aggregates PAGA penalties to meet
7 the amount in controversy threshold for diversity jurisdiction. See id. at 16. Plaintiff
8 Alvarez further argues that Defendant Albertsons cannot rely on supplemental jurisdiction
9 to justify removal. See id. at 25. In addition, Plaintiff Alvarez moves for attorney’s fees
10 incurred from removal because Defendant Albertsons’ removal lacked an objectively
11 reasonable basis. See Dkt. 19 at 27.
12 On August 6, 2025, Defendant Albertsons filed an Opposition to Plaintiff Alvarez’s
13 Motion to Remand, in which it reaffirms its basis for removal and opposes the request for
14 attorney’s fees. See Dkt. 22. On August 13, 2025, Plaintiff Alvarez filed a Reply in support
15 of his Motion to Remand. Dkt. 24.
16 At the time the Opposition was filed, Defendant Albertsons requested the Court to
17 take judicial notice of the following documents: Plaintiff Reyes Complaint in Alvarez 1,
18 Defendant Albertson’s Notice of Removal in Alvarez I, Plaintiff Reyes Complain in
19 Alvarez II, Defendant Albertson’s Notice of Removal in Alvarez II, and Defendant
20 Albertson’s Collective Bargaining Agreement. See Dkt. 23. Defendant Albertson’s request
21 for judicial notice is GRANTED. See Fed. R. Evid. 201; see also United States v. Black,
22 482 F.3d 1035, 1041 (9th Cir. 2007) (noting that a court “may take notice of proceedings
23 in other courts, both within and without the federal judicial system, if those proceedings
24 have a direct relation to matters at issue”); Vasserman v. Henry Mayo Newhall Mem’l
25 Hosp., 65 F. Supp. 3d 932, 943 (C.D. Cal. 2014) (taking judicial notice of its own files and
26 records under Rule 201 of the Federal Rule of Evidence); Lujano v. Piedmont Airlines,
27 Inc., 734 F. Supp. 3d 988, 996 (C.D. Cal. 2024) (noting that courts regularly take notice of
28 collective bargaining agreements).
1 III. LEGAL STANDARD
2 A. Subject Matter Jurisdiction
3 As a threshold matter, before determining whether consolidation is warranted, the
4 court must consider whether it has jurisdiction over plaintiff’s PAGA action such that it
5 could order consolidation. See U.S. Bank Nat’l Ass’n v. Mariano, No. 1205485, 2012 WL
6 12882054, at *1 (C.D. Cal. August 16, 2012) (“a prerequisite to consolidation is that both
7 cases be ‘pending before the court,’ and an improperly removed case does not meet this
8 criterion.” (citing United States for use of Owens-Corning Fiberglass Corp. v. Brandt
9 Constr. Co., 826 F.2d 643, 647 (7th Cir. 1987)). “Federal courts are courts of limited
10 jurisdiction.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian
11 Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Removal of a state action to federal court
12 is proper only if the district court would have had original jurisdiction over the action. See
13 28 U.S.C. § 1441(a). A district court must remand the case to state court if it appears at any
14 time before final judgment that it lacks subject matter jurisdiction. See id. § 1447(c).
15 Because the removal statute is strictly construed against removal jurisdiction, “[f]ederal
16 jurisdiction must be rejected if there is any doubt as to the right of removal in the first
17 instance.” See Gaus v. Miles, Inc., 980 F.3d 564, 566 (9th Cir. 1992).
18 There are two types of subject matter jurisdiction: federal question jurisdiction and
19 diversity jurisdiction. See 28 U.S.C. §§ 1331, 1332. Federal district courts have original
20 jurisdiction over claims arising under the Constitution, laws, or treaties of the United
21 States. See id. § 1331. This is known as federal question jurisdiction. See id. In the
22 alternative, when a party asserts diversity jurisdiction, the removing party must show that
23 (1) the parties are citizens of different states, and (2) the amount in controversy exceeds
24 $75,000. See id. § 1332(a). “The amount in controversy is simply an estimate of the total
25 amount in dispute, not a prospective assessment of defendant’s liability.” Lewis v. Verizon
26 Commc’ns, Inc., 627 F.3d 395, 400 (9th Cir. 2010). “Where it is not facially evident from
27 the complaint that more than $75,000 is in controversy, the removing party must prove, by
28 a preponderance of the evidence that the amount in controversy meets the jurisdictional
1 threshold.” Corral v. Select Portfolio Servicing, Inc., 878 F.3d 770, 774 (9th Cir. 2017)
2 (quoting Matheson v. Progressive Specialty Ins. Co., 319 F. 3d 1089, 1090 (9th Cir. 2003)).
3 B. PAGA
4 “PAGA authorizes aggrieved employees, acting as private attorneys general, to
5 recover civil penalties from their employers for violations of the Labor Code.” Baumann
6 v. Chase Inv. Servs. Corp., 747 F.3d 1117, 1119 (9th Cir. 2014). More specifically, PAGA
7 prescribes that any Labor Code provision that provides for a civil penalty to be assessed
8 and collected by the Labor and Workforce Development Agency (“LWDA”) “may, as an
9 alternative, be recovered through a civil action brought by an aggrieved employee on behalf
10 of the employee and other current or former employees.” See Cal. Lab. Code § 2699(a);
11 Johnson v. Lowe’s Home Centers, LLC, 93 F.4th 459, 462–63 (9th Cir. 2024). The
12 aggrieved employee is required to give notice to both the employer and LWDA of the
13 alleged Labor Code violation. See Cal. Lab. Code § 2699.3(a). After notice is provided, the
14 agency has the first right of refusal to file a claim. See id. 2699(a)(2). If the agency declines
15 to investigate, does not respond to the aggrieved employee’s notice within 65 days, or does
16 not issue a citation within 120 days of announcing its decision to investigate the claim, the
17 aggrieved employee may commence an action for civil penalties. See id. “In addition, to
18 address violations for which no such penalty has been established, subdivision (f) of the
19 statute created ‘a default penalty and private right of action’ for aggrieved employees.”
20 Home Depot U.S.A., Inc. v. Superior Court, 191 Cal. App. 4th 210, 216 (2010); see also
21 Mitchell v. Corelogic, Inc., No. SA CV 17-2274-DOC(DFMx), 2018 WL 6118444, at *14
22 (C.D. Cal. Aug. 7, 2018) (citing Home Depot).
23 The California Legislature reformed PAGA in June 2024, with amended provisions
24 applying to notices and civil actions brought on or after June 19, 2024. See Cal. Lab. Code
25 § 2699(v)(1)-(2); Martinez v. Sunnova Energy Corp., Case No. 2:24-cv-09960-MRA-
26 MAR, 2025 WL 732350, at *3 (C.D. Cal. Mar. 7, 2025). The reformed PAGA clarified
27 that “[a]n aggrieved employee shall not collect a civil penalty for any violation of Sections
28 201, 202, 203, of the Labor Code,” which excludes claims for failure to pay all wages upon
1 termination of employment. See Cal. Lab. Code § 2699(c)(1) (citing Cal. Civ. Proc. Code
2 § 340). Further, the PAGA reforms revised the schedule of recovered civil penalties,
3 providing that the LWDA recovers 65% of the penalties, and the aggrieved employee, the
4 remaining 35%. See id. § 2699(m); see Martinez, 2025 WL 732350, at *3.
5 IV. DISCUSSION
6 In the Notice of Removal, Defendant Albertsons alleges removal is proper because
7 this Court has subject matter jurisdiction under federal question jurisdiction, diversity
8 jurisdiction, and supplemental jurisdiction. See Dkt. 1 at 2. Plaintiff Alvarez disagrees and
9 argues that “Defendant’s removal is an overreach that seeks to manufacture federal [subject
10 matter] jurisdiction where none exists.” See Dkt. 19-1 at 8. The Court addresses each
11 assertion of subject matter jurisdiction in turn.
12 A. Federal Question Jurisdiction
13 First, the Court addresses whether it has federal question jurisdiction over the claims
14 in this action. Defendant Albertsons alleges that Plaintiff Alvarez’s claims are preempted
15 by the LMRA because (1) the Aggrieved Employees are covered under the CBA, (2) the
16 claims require substantial interpretation of the CBA, and (3) resolution of the claims will
17 require interpretation of various CBA provisions. See Dkt. 1 at 5–10. Plaintiff Alvarez
18 disagrees and states that the PAGA claims arise from state law rather than the CBA. See
19 Dkt. 19-1 at 13. Defendant Albertsons argues the Court must interpret the CBA because
20 Plaintiff’ Alvarez’s claims, such as work periods and compensation for all hours worked,
21 arise from provisions in the CBA. See Dkt. 22 at 22.
22 Under the “‘well-pleaded complaint rule,’ . . . federal question jurisdiction exists
23 only when a federal question is presented on the face of the plaintiff’s properly pleaded
24 complaint.” See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (citation omitted).
25 “[N]ormally, federal preemption is a defense that does not authorize removal to federal
26 court.” Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1152 (9th Cir. 2019). However, the
27 Ninth Circuit has held that preemption under § 301 of the LMRA is an exception to the
28 well-pleaded complaint rule. See id. Section 301 has “‘such extraordinary pre-emptive
1 power’ that it ‘converts an ordinary state common law complaint into one stating a federal
2 claim.’” See Curtis, 913 F.3d at 1152 (quoting Metro. Life Ins. v. Taylor, 481 U.S. 58, 65
3 (1987)). “In other words, a civil complaint raising claims preempted by § 301 raises a
4 federal question that can be removed to a federal court.” Curtis, 913 F.3d at 1152.
5 Section 301 of the LMRA provides that “[s]uits for violation of contracts between
6 an employer and a labor organization representing employees in an industry affecting
7 commerce . . . may be brought in any district court of the United States having jurisdiction
8 of the parties[.]” See 29 U.S.C. § 185(a). The Ninth circuit has established a two-part
9 inquiry into the nature of a plaintiff’s claims to determine if they are preempted by Section
10 301. See Renteria-Hinojosa v. Sunsweet Growers, Inc., 150 F.4th 1076, 1088–89 (9th Cir.
11 2025). Thus, Section 301 “preempts a plaintiff’s state law claim only where the claim (1)
12 ‘arises entirely from’ a collective bargaining agreement or (2) ‘requires interpretation of’
13 the agreement.” See id. at 1088 (quoting Alaska Airlines Inc. v. Schurke, 898 F.3d 904,
14 920–21 (9th Cir. 2018) (en banc)).
15 The first step requires evaluating the claim to see if it is a “right or duty of the CBA,”
16 but noting that the “collective bargaining agreement must be the ‘only source’ of the right
17 the plaintiff seeks to vindicate.” See Renteria-Hinojosa, 150 F.4th at 1088–89 (quoting
18 Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 258 (1994)). If the right does not arise
19 entirely from a CBA, then courts consider “whether litigating the state law claim
20 nonetheless requires interpretation of the CBA, such that resolving the entire claim in court
21 threatens the proper role of grievance and arbitration.” See id. (quoting Alaska Airlines,
22 898 F.3d at 921). If the claim is grounded in the provisions of the CBA or requires its
23 interpretation, then the claims are deemed to arise under federal law. See Burnside v. Kiewit
24 Pacific Corp., 491 F.3d 1053, 1059 (9th Cir. 2007). “[W]hen a plaintiff’s state law claim
25 does not arise from a collective bargaining agreement or require interpretation of that
26 agreement, a defendant cannot, by invoking the agreement as a defense, ‘transform the
27 action into one arising under federal law.’” See Renteria-Hinojosa, 150 F.4th at 1089
28 (quoting Caterpillar, 482 U.S. at 399).
1 1. Whether Plaintiff’s Claim Arises Entirely from the CBA
2 Plaintiff Alvarez alleges PAGA claims asserting that Defendant Albertsons failed to
3 “(1) pay minimum wages under Labor Code Section 1194, (2) maintain accurate records
4 under the same section, (3) pay all wages due at termination under Labor Code Section
5 203, and (4) provide accurate wage statements under Labor Code Section 226.” See Dkt.
6 1-2 at 5–9. Defendant Albertsons argues that “the CBA expressly provides for what
7 constitutes work periods and compensation for all hours worked.” See Dkt. 22 at 22.
8 Plaintiff Alvarez argues that “Defendant’s reference to ‘work periods’ and ‘compensation
9 of all hours worked’ is nothing more than an attempt to re-label statutory rights as
10 contractual rights.” See Dkt. 24 at 5.
11 Plaintiff Alvarez’s four claims specifically assert violations of rights that exist under
12 California’s Labor Code. See Dkt. 1-2 at 4–8. Therefore, Plaintiff Alvarez’s rights do not
13 arise exclusively from the CBA. See Renteria-Hinojosa, 150 F.4th at 1089. Because the
14 rights do not arise entirely from the CBA, the Court proceeds to step two to consider
15 whether the claim will require interpretation of the CBA. Id. at 1088–89 (citing Alaska
16 Airlines, 898 F.3d at 921).
17 2. Whether Plaintiff’s claim requires interpretation of the CBA
18 Plaintiff Alvarez argues removal is without merit because Defendant Albertsons fails
19 to identify a disputed provision that requires interpretation. See Dkt. 19-1 at 15. Defendant
20 Albertsons alleges that the parties will have to interpret the CBA “to determine whether
21 the time Plaintiff and the aggrieved employees allegedly spent to go through security
22 checkpoints before and after shifts is compensable time under the CBA and where it is
23 categorized, whether it was already paid under the CBA, and whether Defendant has a
24 policy of paying its union employees for off-the-clock time.” See Dkt. 22 at 22. Plaintiff
25 Alvarez argues that the CBA only provides generic provisions but does not define the
26 activities at issue here. See Dkt. 24 at 5.
27 Section 301 does not preempt a state law claim unless resolution of that claim
28 “necessarily requires the court to interpret an existing provision of a CBA that can be
1 reasonably said to be relevant to the resolution of the dispute.” See Cramer v. Consol.
2 Freightways, Inc., 255 F.3d 638, 693 (9th Cir. 2001) (en banc). Moreover, “the need to
3 interpret the CBA must inhere in the nature of plaintiff’s claim.” See Valles v. Ivy Hill
4 Corp., 410 F.3d 1071, 1076 (9th Cir. 2005) (quoting Cramer, 255 F.3d at 691). “[A] state
5 law claim will only be preempted if it is so ‘inextricably intertwined’ with the CBA that
6 resolution of the claim will require judicial interpretation of the CBA’s terms.” See Castillo
7 v. Long Beach Mem’l Med. Ctr., 132 F. Supp. 3d 1194, 1198 (C.D. Cal. 2015) (citing
8 Vasserman, 65 F. Supp. 3d at 952). “[I]f the claim is plainly based on state law, [Section]
9 301 preemption is not mandated simply because the defendant refers to the CBA in
10 mounting a defense.” See Cramer, 255 F.3d at 691 (citing Caterpillar, 482 U.S. at 398–
11 99); see also Humble v. Boeing Co., 305 F.3d 1004, 1011 (9th Cir. 2002) (“reliance on
12 CBA provisions to defend against an independent state law claim does not trigger § 301
13 preemption”).
14 To determine if the claims will substantially depend on an analysis of the CBA, the
15 Court must decide whether the case will require the Court to merely “look to” the CBA or
16 “interpret” its terms. See McCray v. Marriott Hotel Servs., Inc., 902 F.3d 1005, 1011 (9th
17 Cir. 2018). “[T]he mere need to ‘look to’ the collective-bargaining agreement . . . is no
18 reason to hold [a] state-law claim defeated by § 301.” See Lavidas v. Bradshaw, 512 U.S.
19 107, 125 (1994); see also Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 749 (9th
20 Cir. 1993) (“[T]he line between reference to and interpretation of an agreement may be
21 somewhat hazy”); Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108
22 (9th Cir. 2000) (“[T]he term ‘interpret’ is defined narrowly—it means something more than
23 ‘consider,’ ‘refer to,’ or ‘apply.’”).
24 Having reviewed the CBA, the Court finds that Plaintiff Alvarez’s claim does not
25 depend on a CBA provision subject to interpretation, nor does it require a substantial
26 interpretation of the CBA. See generally Dkt. 23-5. Defendant Albertsons states that “the
27 CBA expressly provides for what constitutes work periods and compensation for all hours
28 worked,” but argues that interpretation is necessary to determine if Plaintiff Alvarez’s
1 claim is already covered in the CBA. See Dkt. 22 at 22 (citing Dkt. 23-5 at 19–21). Here.
2 the CBA’s sections regarding “Work Periods” and “Overtime and Premium Rates,” and
3 “Wage Scale and Job Classifications” provide generic provisions defining the work week
4 length, shift lengths, basic wage rates, overtime rates, cost-of-living allowances, etc. See
5 Dkt. 23-5 at 17–20. Provisions regarding Plaintiff Alvarez’s claims of time spent in
6 required security and bag checks, walking to and from checkpoints, or time spent setting
7 up workstations are not addressed in the CBA. See id. Moreover, Defendant Albertsons
8 does not identify any interpretive disputes about a specific CBA term that must be resolved
9 to determine Plaintiff Alvarez’s PAGA claim; for example, how interpretation is necessary
10 or how a particular interpretation would affect the outcome of the claims. See Renteria-
11 Hinojosa, 150 F.4th at 1090–91 (finding that conclusory arguments fail to establish that
12 the claims are preempted). Should the Court need to “look to” the CBA further into
13 litigation, doing so would not require substantial interpretation necessary to preempt
14 Plaintiff Alvarez’s claims. See Lavidas, 512 U.S. at 125. Therefore, the claim in this case
15 does not require interpretation of a CBA provision. See Cramer, 255 F.3d at 693.
16 Accordingly, the Court concludes that Plaintiff Alvarez’s claim is neither based on,
17 nor substantially dependent upon, the CBA. Therefore, the claim is not preempted by
18 Section 301 of the LMRA, and the Court does not have federal question jurisdiction.
19 B. Diversity Jurisdiction
20 Next, the Court addresses whether it has diversity jurisdiction over Plaintiff
21 Alvarez’s PAGA claim. Defendant Albertsons asserts that “removal is proper because the
22 parties are diverse and the amount in controversy exceeds $75,000 exclusive of interest
23 and costs.” See Dkt. 1 at 12. Diversity jurisdiction is present where the amount in
24 controversy exceeds $75,000 and the adverse parties are citizens of different states. 28
25 U.S.C. §§ 1332, 1441. The Court addresses both requirements below.
26 1. Diversity of Citizenship
27 Diversity jurisdiction requires complete diversity of citizenship, meaning that “the
28 citizenship of each plaintiff [must be] different from that of each defendant.” See Hunter
1 v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir. 2009) (citing 28 U.S.C. § 1332(a)).
2 A person is a citizen of the state where he is domiciled. See Kanter v. Warner-Lambert Co.,
3 265 F.3d 853, 857 (9th Cir. 2001). A person’s domicile is his or her permanent home,
4 which is where he or she resides with the intention to remain or to which he or she intends
5 to return. See id. (citing Lew v. Moss, 797 F.3d 747, 749 (9th Cir. 1986)). Whereas a
6 corporation is a citizen of the state where it is incorporated and has its principal place of
7 business. See Breitman v. May Co. California, 37 F.3d 562, 564 (9th Cir. 1994) (citing 28
8 U.S.C. § 1332(c)).
9 In the Notice of Removal, Defendant Albertsons asserts that Plaintiff Alvarez is a
10 citizen of California. See Dkt. 1 at 13. Defendant Albertsons is incorporated in Delaware
11 and has its principal place of business in Idaho. See id. at 13. Therefore, Defendant
12 Albertsons is a citizen of Delaware and Idaho. See Breitman, 37 F.3d at 564. Because
13 Plaintiff Alvarez and Defendant Albertsons are citizens of different states, the diversity of
14 citizenship requirement is satisfied.
15 2. Amount in Controversy
16 When an action is removed based on diversity, the removing party bears the burden
17 of proving that “the matter in controversy exceeds the sum or value of $75,000, exclusive
18 of interests and costs.” See 28 U.S.C. § 1332(a). “[T]he amount in controversy includes all
19 relief claimed at the time of removal to which the plaintiff would be entitled if she
20 prevails.” Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 418 (9th Cir. 2018). Thus,
21 “[t]he amount in controversy may include ‘damages (compensatory, punitive, or otherwise)
22 and the cost of complying with an injunction, as well as attorneys’ fees awarded under
23 shifting statutes.’” Id. at 415 (quoting Gonzales v. CarMax Auto Superstores, LLC, 840
24 F.3d 644, 648–49 (9th Cir. 2016)). The amount in controversy is assessed at the time of
25 removal. See id. at 417. However, “[t]he amount in controversy is simply an estimate of
26 the total amount in dispute, not a prospective assessment of defendant’s liability.” Lewis,
27 627 F.3d at 400.
28
1 “If the plaintiff’s complaint, filed in state court, demands monetary relief of a stated
2 sum, that sum, if asserted in good faith is ‘deemed to be the amount in controversy.’” Dart
3 Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 84 (2014) (quoting 28 U.S.C.
4 § 1442(c)(2)). If the plaintiff’s complaint does not state an amount in controversy, the
5 defendant may do so within their notice of removal. See id. at 84 (citing 28 U.S.C. §
6 1446(c)(2)(A)). A defendant’s notice of removal “need only include a plausible allegation
7 that the amount in controversy exceeds the jurisdictional threshold.” See id. at 89 (citing
8 28 U.S.C. § 1446(a)). If the plaintiff contests the defendant’s allegation, then the defendant
9 must prove by a preponderance of the evidence that the amount-in-controversy exceeds
10 $75,000. See id. (citing 28 U.S.C. § 1446(c)(2)(B)).
11 Plaintiff Alvarez argues Defendant Albertsons fails to meet its burden because it
12 improperly aggregates PAGA penalties to meet the amount in controversy threshold and
13 fails to prove that the amount in controversy exceeds $75,000. See Dkt. 19-1 at 16–25.
14 Defendant Albertsons opposes and argues that the amount in controversy is met and that
15 PAGA penalties may be aggregated to include PAGA penalties pursuant to Viking River
16 Cruises, Inc. v. Morina, 596 U.S. 639, 663 (2022). See Dkt. 22 at 12–20.
17 a) Aggregation of PAGA Penalties
18 When calculating the amount in controversy, Defendant Albertsons aggregates the
19 total PAGA penalties in controversy. See Dkt. 1 at 15–18. Defendant Albertsons argues
20 that Viking River Cruises and Kim v. Reins Int’l Cal., Inc., 9 Cal. 5th 73, 81 (2020), both
21 reject the proposition in Urbino that PAGA actions involved duties owed to individual
22 employees. See id. at 15; see also Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1123
23 (9th Cir. 2013). Plaintiff Alvarez argues that neither decision alters or overturns Urbino
24 and that the Ninth Circuit, in Canela v. Costco Wholesale Corp., 971 F.3d 845, 849–850
25 (9th Cir. 2020), reaffirmed the principle that PAGA penalties cannot be aggregated for
26 amount in controversy. See Dkt. 19-1 at 16–17.
27 In Urbino, the Ninth Circuit addressed whether PAGA penalties could be aggregated
28 to meet the $75,000 threshold for diversity jurisdiction. See Urbino, 726 F.3d at 1120. The
1 Court held that PAGA penalties could not be aggregated because “[e]ach employee suffers
2 a unique injury—an injury that can be redressed without the involvement of other
3 employees.” See Urbino, 726 F.3d at 1122 (citing Troy Bank v. G.A. Whitehead & Co., 222
4 U.S. 39, 40 (1911)). This proposition was affirmed by Canela when the Ninth Circuit held
5 that the district court lacked subject matter jurisdiction because PAGA civil penalties could
6 not be aggregated. See Canela, 971 F.3d at 849–50 (citing Urbino, 726 F.3d at 1121–23).
7 By contrast, in Viking River Cruises, the Court considered whether the Federal
8 Arbitration Act “preempts a rule of California law that invalidates contractual waivers of
9 the right to assert representative claims.” See Viking River Cruises, 596 U.S. at 643. The
10 Supreme Court clarified that all PAGA actions are representative because those claims are
11 asserted in a representative capacity rather than an individual one. See id. at 648 (quoting
12 Kim, 9 Cal. 5th at 87). However, there is a difference between “individual” PAGA claims,
13 where the plaintiff was affected by the Labor Code violations, and the “representative”
14 PAGA claims, where claims arise out of events involving other employees. See id. at 648–
15 49. The Supreme Court held that PAGA actions can be divided into “individual” and
16 “representative” when considering whether to compel arbitration. See id. at 662–63. If the
17 “individual” claims are compelled to arbitration, then the named “representative” could
18 lose standing to maintain the other representative claims. See id. at 663.
19 Consequently, Viking River Cruises does not abrogate or overrule Urbino or Canela.
20 While both cases assert PAGA claims, the cases consider completely different legal issues.
21 In fact, Viking River Cruises does not address federal jurisdiction, diversity, or aggregation
22 rules. See generally Viking River Cruises, 596 U.S. at 639–63. Rather, Viking River Cruises
23 contemplates how PAGA claims are structured and adjusted for arbitration. Id. Because
24 the holding and rationale in both Urbino and Canela are unaffected by the Supreme Court’s
25 decision in Viking River Cruises, Defendant Albertsons may not aggregate PAGA penalties
26 to meet the diversity jurisdictional threshold. See Canela, 971 F.3d at 849; Urbino, 726
27 F.3d at 1120.
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1
b) Calculation of Labor Code Violations
2
3 Plaintiff argues that Defendant Albertsons “improperly includes the LWDA’s 65%
4 share of PAGA civil penalties in calculating the amount in controversy.” See Dkt. 19-1 at
5 24. In support, Plaintiff Alvarez contends that “[e]ven assuming the accuracy of [Defendant
6 Albertsons’s] highest estimate—$186,866—the required reduction brings the amount in
7 controversy down to just $65,410.10.” See id. Defendant Albertsons again argues that
Urbino was abrogated by Viking River Cruises and that the Court should consider LWDA’s
8
65% share and Plaintiff Alvarez’s 35% penalty in calculating the amount in controversy.
9
See Dkt. 22 at 16–17. Plaintiff Alvarez states that Ninth Circuit precedent affirms the
10
principle that LWDA’s 65% share of PAGA penalties must be excluded from the amount
11
in controversy. See Dkt. 24 at 10 (citing Canela, 971 F.3d at 851–53).
12
As analyzed above, the Court rejects the proposition that Urbino was abrogated by
13
Viking River Cruises. Urbino directly supports the conclusion that the LWDA’s 65% share
14
of PAGA penalties should not be aggregated with Plaintiff Alvarez’s 35% share when
15
calculating the amount in controversy. See Urbino, 726 F.3d at 1122. “The Court sees no
16
logical reason for Courts to refuse to consider one portion of an award that the plaintiff will
17
not recover (the other aggrieved employees’ shares), but take into account another portion
18
that the plaintiff will not recover (LWDA’s share).” Sloan v. IHG Mgmt. (Maryland) LLC,
19
Case No. CV 19-21-DMG (JCx), 2019 WL 1111191, at *2 (C.D. Cal. Mar. 11, 2019). This
20 principle is consistent with holdings in this district. See e.g., id. (taking into consideration
21 plaintiff’s portion of the PAGA penalty); Martinez, 2025 WL 732350, at *5 (considering
22 only Plaintiff’s 35% pro-rate share of penalties under the reformed PAGA).
23 While the Court agrees that the LWDA’s share must be excluded, the Court does not
24 agree with Plaintiff Alvarez’s calculation that the amount in controversy is $65,410.10.
25 While Plaintiff Alvarez considers the highest number proffered by Defendant Albertsons,
26 the $186,886 estimate includes both shares of PAGA penalties and Defendant Albertsons’
27 estimate of attorney’s fees. See Dkt. 22 at 18. The 65% reduction can only apply to the
28 PAGA penalties. See Urbino, 726 F.3d at 1122. For this portion of the analysis, the Court
1 hypothetically considers Defendant Albertsons’s estimate for these penalties as correct and
2 the PAGA penalties total $36,886. See Dkt. 22 at 18. Therefore, LWDA’s 65% share of
3 these penalties would amount to $23,975.90 and Plaintiff Alvarez’s 35% share would be
4 $12,910.10. Thus, the Court considers only Plaintiff’s share of $12,910.10 towards the
5 amount in controversy.
Notably, this $12,910.10 is far below the $75,000 threshold for diversity jurisdiction.
6
However, Defendant Albertsons argues that the attorney’s fees, estimated at $75,000 to
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$150,000, should be considered for the amount in controversy. See Dkt. 22 at 17. Plaintiff
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Alvarez argues that the Ninth Circuit in Urbino and Canela limits the amount in
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controversy to Plaintiff Alvarez’s pro-rata share. See Dkt. 19-1 at 22–23. In Canela, the
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Ninth Circuit included only plaintiff’s pro-rata share of civil penalties and attorney’s fees.
11
See Canela, 971 F.3d at 850 (rejecting defendant’s argument that over $1 million in
12
attorney’s fees could be included in the amount in controversy calculation). Even assuming
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Defendant Albertsons’s high-end estimate for attorney’s fees is accurate, in addition to
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considering Plaintiff Alvarez’s pro-rata share, the $150,000 must be divided between the
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815 Aggrieved Employees, which would result in Plaintiff Alvarez’s pro-rata share of
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attorney’s fees as $184.05. See Dkts. 19-1 at 23; 22 at 18. In sum, Plaintiff Alvarez’s pro-
17 rata share of attorney’s fees and PAGA penalties yields a total of $13,094.15. Accordingly,
18 the Court lacks diversity jurisdiction over this action based on the amount in controversy
19 not reaching the $75,000 threshold.
20 C. Supplemental Jurisdiction
21 Next, the Court addresses whether removal was proper based on supplemental
22 jurisdiction. In the Notice of Removal, Defendant Albertsons states that Plaintiff Alvarez’s
23 “claims are removable under 28 U.S.C. § 1441(c) and, pursuant to this Court’s
24 supplemental jurisdiction, under 28 U.S.C. § 1367.” See Dkt. 1 at 10. Additionally,
25 Defendant Albertsons argues that supplemental jurisdiction is proper because the Court has
26 subject matter jurisdiction over the claims in Alvarez I. See id. at 11. Plaintiff Alvarez
27 disagrees and asserts that “removal of this standalone PAGA action based on supplemental
28 jurisdiction was improper.” See Dkt. 19-2 at 27.
1 Removal is permitted where the federal court has original jurisdiction. See 28 U.S.C.
2 § 1441(a). Section 1367 provides that “in any civil action of which the district courts have
3 original jurisdiction, the district courts shall have supplemental jurisdiction over all other
4 claims that are so related to claims in the action within such original jurisdiction that they
5 form part of the same case or controversy.” See 28 U.S.C. § 1367. Supplemental
6 jurisdiction is meant to supplement; thus, it is not the same as original jurisdiction and
7 cannot confer a right to removal. See Sygenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34
8 (2004) (“Ancillary jurisdiction, therefore, cannot provide the original jurisdiction that
9 petitioners must show in order to qualify for removal under § 1441.”); see also Renteria-
10 Hinojosa, 150 F.4th at 1086 (“Supplemental jurisdiction ‘may only be invoked’ under [28
11 U.S.C. § 1367(a)] ‘when the district court has a hook of original jurisdiction.’” (quoting
12 Herman Fam. Revocable Tr. v. Teddy Bear, 254 F.3d 802, 805 (9th Cir. 2001))). In
13 Sygenta, the Supreme Court expressly held that a district court’s supplemental jurisdiction
14 over a claim could not support removal. See Sygenta, 537 U.S. at 34.
15 Where, as here, a plaintiff files an action in state court without federal question or
16 diversity jurisdiction, the original jurisdiction necessary to remove to federal court does
17 not exist and the action cannot be removed. See 28 U.S.C. § 1441(a). And because § 1367
18 does not provide original jurisdiction, removal is improper even if the removed action is
19 related to another action over which the federal district court has subject matter jurisdiction.
20 See Ogaz v. Honeywell International, Inc., Case No. ED CV 21-740-JFW(KKx), 2021 WL
21 2822400, at *4 (C.D. Cal. July 7, 2021) (remanding PAGA action to state court regardless
22 of the related action for which the court had subject matter jurisdiction). Accordingly,
23 because the Court does not have original jurisdiction over this action, supplemental
24 jurisdiction is not a basis for removal and this action is due to be remanded.
25 D. Attorney’s Fees for Removal
26 Plaintiff Alvarez requests just costs and attorney’s fees based on his claim that
27 Defendant Albertsons lacked an objectively reasonable basis for removal. See Dkt. 19-1 at
28 27. In response, Defendant Albertsons argues that “[e]ven if the Court grants Plaintiff’s
1 Motion to Remand, [Defendant Albertsons] removal was proper as it removed [this action]
2 on the three separate legitimate grounds.” See Dkt. 22 at 23.
3 A district court has discretion to award attorney’s fees when it remands a case. See
4 28 U.S.C. § 1447(c) (“An order remanding the case may require payment of just costs and
5 any actual expenses, including attorney fees, incurred as a result of removal.”) (emphasis
6 added). “Absent unusual circumstances, courts may award attorney’s fees under § 1447(c)
7 only where the removing party lacked an objectively reasonable basis for seeking
8 removal.” Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015) (quoting
9 Martin v. Franklin Cap. Corp., 546 U.S. 132, 141 (2005)). When considering whether a
10 reasonable basis existed for removal, courts consider whether the removing party’s
11 arguments are “clearly foreclosed” by relevant case law. See Lussier v. Dollar Tree Stores,
12 Inc., 518 F.3d 1062, 1066–67 (9th Cir. 2008). However, “removal is not objectively
13 unreasonable solely because the removing party’s arguments lack merit.” See id. at 1065.
14 Here, Defendant Albertsons removed this case claiming that jurisdiction was proper
15 on “three separate legitimate grounds: (1) diversity jurisdiction; (2) federal question; and
16 (3) supplemental jurisdiction.” See Dkt. 22 at 23. While removing an action based on
17 supplemental jurisdiction alone is unreasonable, the Court must consider whether there was
18 any objective reasonable basis for removal. See Martin, 546 U.S. at 141; see, e.g., Patel v.
19 Del Taco, Inc., 446 F.3d 996, 999–1000 (9th Cir. 2006) (holding that removal based on
20 supplemental jurisdiction is unreasonable). Plaintiff Alvarez contends that attorney’s fees
21 are appropriate because “Defendant nonetheless proceeded with removal without
22 identifying a single CBA provision.” See Dkt. 19-1 at 29. Plaintiff Alvarez’s attorney,
23 Christina A. Humphrey, declares that Plaintiff incurred $11,986.50 to file the Motion to
24 Remand. See Dkt. 19-2. Although Defendant Albertsons’ argument regarding whether
25 Viking River Cruises abrogates Urbino did not prevail, the Court concludes it was an
26 objectively reasonable argument. See Lussier, 518 F.3d at 1065.
27 Therefore, the Court exercises its discretion to decline Plaintiff’s request for just
28 costs and attorney’s fees.
1 CONCLUSION
2 Accordingly, the Court lacks subject matter jurisdiction over this action and must
3 ||remand this removed action. Thus, Plaintiff Alvarez’s Motion to Remand is GRANTED.
4 ||Dkt. 19. This action is REMANDED to the Superior Court of California, County of
5 Orange, Case No. 30-2025-01486816-CU-OE-CXC. Defendant Albertsons’ Motion for
6 || Consolidation is DENIED AS MOOT. Dkt. 11.
7 IT IS SO ORDERED.
8
9 || Dated: March 31, 2026
10 HON. SERENA R. MURILLO
UNITED STATES DISTRICT JUDGE
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