Valenzuela v. CalEnergy Operating Corporation et al, No. 3:2023cv01204 - Document 27 (S.D. Cal. 2023)
Court Description: ORDER Granting Plaintiff's Motion To Remand [ECF No. 13 ] (Certified copy sent to State Court via US Mail Service.). Signed by Judge Roger T. Benitez on 11/17/2023. (ddf)
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Valenzuela v. CalEnergy Operating Corporation et al Doc. 27 1 2 3 4 NOV 2 0 2023 5 CLERK, U.S. DISTRICT COURT SOU DISTRICT OF CALIFORNIA 6 p 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 11 12 JOSE VALENZUELA, as an individual and on behalf of all others similarly situated, 13 14 15 16 17 Plaintiff, Case No.: 3:23-cv-01204-BEN-LR CLASS ACTION ORDER GRANTING PLAINTIFF'S MOTION TO REMAND V. CALENERGY OPERATING CORPORATION, a Delaware corporation; and DOES 1 through 100, inclusive, 18 [ECF No. 13] Defendants. 19 20 On April 12, 2023, Plaintiff Jose Valenzuela ("Plaintiff') filed a civil class action 21 complaint in the Imperial County Superior Court against Defendant CalEnergy Operating 22 Corporation ("Defendant") and one hundred "Doe" Defendants alleging eight state law 23 claims for various wage and hour violations. ECF No. 1. On June 29, 2023, Defendant 24 removed the action to this Court based on diversity jurisdiction pursuant to 28 U.S.C. § 25 1332(a). Id. 26 Before the Court is Plaintiff's Motion to Remand. ECF No. 13. Defendant filed 27 an opposition to this motion and Plaintiff replied. ECF No. 15, 17. The briefing was 28 submitted on the papers without oral argument pursuant to Civil Local Rule 7.1 (d)( 1) and 23-cv-0 1204-BEN-LR Dockets.Justia.com 1 Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 18. After considering the 2 applicable law and the parties' arguments, the Court GRANTS Plaintiffs Motion to 3 Remand. 4 I.LEGAL STANDARDS 5 A defendant in state court may remove a civil action to federal court so long as that 6 case could originally have been filed in federal court. 28 U.S.C. § 1441(1); City of Chiv. 7 Int'l Coll. of Surgeons, 522 U.S. 156, 163 (1997). Removal of a state action may be 8 based on either diversity or federal question jurisdiction. City of Chi, 522 U.S. at 163; 9 Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). The removal statutes are strictly 10 construed, and removal jurisdiction is to be rejected in favor of remand if there are doubts 11 as to the right of removal. Nev. v. Bank ofAm. Corp., 672 F.3d 661,667 (9th Cir. 2012). 12 Relevant here, where a "plaintiffs state court complaint does not specify a 13 particular amount of damages, the removing party bears the burden of establishing, by a 14 preponderance of the evidence, that the amount in controversy exceeds the threshold at 15 the time of removal." Canela v. Costco Wholesale Corp., 971 F.3d 845, 849 (9th Cir. 16 2020) (quoting Sanchez v. Monumental Life Ins. Co., 102 F.3d 398,404 (9th Cir. 1996) 17 (cleaned up)). If the amount in controversy is challenged, the parties "may submit 18 evidence outside of the complaint, including affidavits or declarations, or other 19 'summary-judgment-type evidence relevant to the amount in controversy at the time of 20 removal."' Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) 21 (citing Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). The 22 amount in controversy includes "damages (compensatory, punitive, or otherwise), the 23 costs of complying with an injunction, and attorneys' fees awarded under fee-shifting 24 statutes or contract." Fritsch v. Swift Transp. Co. of Arizona, LLC, 899 F.3d 785, 793 (9th 25 Cir. 2018). 26 27 28 III. DISCUSSION Plaintiff was employed by Defendant as a senior power plant operator between August 16, 2010 and February 7, 2023. ECF No. 1-2, Complaint ("Compl.") ,r 9. During 2 23-cv-0 1204-BEN-LR 1 his employment, Plaintiff alleges Defendant failed to comply with numerous California 2 labor law requirements surrounding time keeping, meal and rest periods, overtime pay, 3 and accurate wage statements. Id. 4 proposed class members. Id. 5 6 ,r 10-20. The Complaint estimates approximately 250 ,r 23. In the Motion to Remand, Plaintiff argues Defendant failed to establish the amount in controversy ("AIC") required for removal. ECF No. 13 ("Mot.") at 2. Plaintiff notes 7 that Defendant removed the action based on traditional diversity jurisdiction and not the 8 Class Action Fairness Act ("CAFA"). Mot. at 6; ECF No. 1 at 1. This distinction is 9 important. To establish the AIC under CAFA, the potential awards of all class members 10 may be aggregated. See Ibarra, 775 F.3d at 1197 ("the defendant seeking removal bears 11 the burden to show ... that the aggregate amount in controversy exceeds[]" the 12 jurisdictional requirement under CAF A) (citation omitted). However, the potential 13 awards of class members may not be aggregated for cases removed on traditional 14 diversity grounds. See Canela, 971 F.3d at 850; see also Gibson v. Chrysler Corp., 261 15 F.3d 927, 941 (9th Cir. 2001) (only claims of named class plaintiffs may be used to 16 calculate AIC); Snyder v. Harris, 394 U.S. 332,335 (1969) (long standing "anti- 17 aggregation rule" applies such that two or more plaintiffs' claims cannot be aggregated to 18 satisfy jurisdictional AIC). 19 Defendant's sole basis for establishing the AIC in the Notice of Removal is 20 Plaintiff's expected attorneys' fees. ECF No. 1 at 6-7. Plaintiff argues this is insufficient 21 for two reasons. First, Plaintiff argues Defendant's estimation of Plaintiff's attorneys' 22 fees is not supported by evidence. Mot. at 8-9. Defendant responds by arguing the 23 Notice of Removal need not contain evidence and is only required to provide a "short, 24 plain statement" of the basis for removal. ECF No. 15 ("Oppo.") at 5. Notice of 25 Removal aside, the Court notes Defendant did not submit any evidence to support its AIC 26 calculations with its Opposition, despite the opportunity to do so in light of Plaintiff's 27 challenge. 28 3 23-cv-0 1204-BEN-LR 1 Second, Plaintiff argues Defendant's calculations are legally unsound because 2 attorneys' fees must be apportioned across the entire class for the purpose of calculating 3 the AIC in class actions. Mot. at 10-11 (citing Gibson, 261 F.3d at 941-43). Defendant 4 does not substantively respond to this point. Instead, Defendant argues first that Gibson 5 is factually distinct from the case at hand and second, that attorneys' fees may be 6 calculated "based on the amount of billable hours needed to prosecute an action[,]" which 7 would make Defendant's calculation reasonable. Oppo at 14. However, Defendant does 8 not adequately explain how the factual distinctions between Gibson and the present case 9 invalidate the Ninth Circuit's holding that attorneys' fees must be apportioned across the 10 class to calculate the AIC. 1 Nor does Defendant point to any authority which contradicts 11 or distinguishes Gibson's holding. Of the three cases cited by Defendant, Sanchez v. 12 Russell Sigler, Inc., appears closest to the point based on Defendant's description of the 13 court's holding. No. CV 15-01350-AB, 2015 WL 12765359 at *2-4 (C.D. Cal. Apr. 28, 14 2015). However, Sanchez involved a case removed under CAFA. Given CAFA allows 15 for aggregation of plaintiffs' claims (which would include attorneys' fees) to meet the 16 AIC, the court' s holding in Sanchez is inapposite here. 2 The lack of alternative authority 17 to Gibson is fatal to Defendant's second argument, because even fees "based on the 18 amount of billable hours needed to prosecute an action" would still need to be 19 20 21 22 23 24 25 26 27 28 Additionally, at least one district court found that the attorney fee provision in the Song Beverly Warranty Act is analogous to the relevant California Labor Code sections for wage and hour lawsuits. See Guerrero v. Nwestco, LLC, No. 22-cv-01620-WBS-JDP, 2022 WL 16961124 at *3-4 (E.D. Cal. Nov. 16, 2022). 2 Defendant also cites Swans v. Fieldworks, LLC, No. 22-cv-07250-SPG-MRW, 2023 WL 196918 at *2-3 (C.D. Cal. Jan. 17, 2023); and Bockrath v. Apt. Inv. & Mgmt. Co ., No. CV-20-04179-CJC-PJW, 2020 WL 3469265 at *2-3 (C.D. Cal. Jun. 25 , 2020). However, the question of allocating attorneys ' fees was not addressed in either case. Moreover, the court in Bockrath was skeptical of the defendant's estimate of attorneys' fees which extended through trial, stating, "Defendant's approach would give this Court diversity jurisdiction over any case removed ... where the parties are completely diverse." Id. 4 23-cv-0 1204-BEN-LR 1 apportioned among the class. See also Arceo v. Ardent Mills, LLC, No. 23-cv-01146-AB2 E, 2023 WL 5096332 at *4 (C.D. Cal. Aug. 8, 2023) ("This is not a CAFA case; 3 Defendant removed based on traditional diversity .... Accordingly, the Court will divide 4 the $55,000 estimated attorneys ' fee by [the number of estimated class members] , and 5 attribute that amount [] to Plaintiff for purposes of calculating the amount in 6 controversy."). Accordingly, Defendant's estimation of $75,000 of attorneys ' fees, when 7 correctly divided among the class of 250 individuals, would only amount to $300 8 assigned to Plaintiff. By itself, this certainly fails to establish the jurisdictional threshold. 9 Defendant attempts to salvage its removal by providing a calculation of the 10 potential awards across all claims. Oppo. at 9-16. However, Defendant impermissibly 11 aggregates the potential awards of the entire class to reach the AIC instead of calculating 12 Plaintiffs individual award. Id.; Reply at 7-8. As noted above, when a case is removed 13 on traditional diversity grounds, the potential awards of multiple plaintiffs may not be 14 aggregated to establish the AIC. Gibson, 261 F.3d at 941; see also Urbino v. Orkin 15 Servs. of California, Inc. , 726 F.3d 1118, 1122 (9th Cir. 2013). Even assuming 16 Defendant's calculations are accurate, when correctly apportioned among class members 17 Plaintiffs share of the total award across all claims (including attorneys' fees) would 18 only amount to roughly $54,300. See Oppo. at 9-16. 19 In sum, for this wage and hour case, Plaintiff has not claimed damages in any 20 particular amount. He has not said that his damages are less than the jurisdictional 21 amount of $75,000, only that Defendant's speculation as to the likely size of an attorney 22 fee award is an insufficient basis for diversity jurisdiction on removal. Because the 23 burden to prove removal jurisdiction is on the Defendant, and that burden has not been 24 carried, the case will be remanded. However, should Plaintiff assert on remand that he 25 has been damaged in an amount in excess of $75,000, sanctions under F.R.C.P. 11 may 26 be entertained by this Court. Kloberdanz v. Martin , 1999 U.S. App. LEXIS 38084, *4-5 27 (9th Cir. 1999) (citing Willy v. Coastal Corp., 503 U.S. 131 , 137-38 (1992)) ("A district 28 court has the power to award sanctions sua sponte pursuant to Rule 11 and its inherent 5 23-cv-0 1204-B EN-LR 1 powers. It also has the power to impose sanctions after it has determined that it has no 2 subject matter jurisdiction."). 3 The Court finds Defendant has not met its burden to prove the amount in 4 controversy required to establish this Court' s jurisdiction. Accordingly, the Court 5 GRANTS Plaintiffs Motion to Remand. 28 U.S.C. § 1447(c). 6 7 IV. CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiffs Motion and REMANDS 8 Plaintiffs claims to the Superior Court of California 9 10 County of Imperial. '-- IT IS SO ORDERED. Dated: November 17, 2023 EZ 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 23 -cv-0 1204-BEN-LR
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