Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-07538/USCOURTS-cand-4_18-cv-07538-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-(Citizenship)

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MARCO GARAY,

Plaintiff,

v.

SOUTHWEST AIRLINES CO.,

Defendant.

Case No. 18-cv-07538-PJH 

ORDER GRANTING MOTION TO 

REMAND

Re: Dkt. No. 12

Plaintiff Marco Garay’s motion to remand came on for hearing before this court on 

February 20, 2019. Plaintiff appeared through his counsel, H. Scott Leviant. Defendant 

Southwest Airlines Co. (“Southwest”) appeared through its counsel, Richard Rahm and 

C. Robert Harrington. Having read the papers filed by the parties and carefully 

considered their arguments and the relevant legal authority, and good cause appearing, 

the court hereby GRANTS plaintiff’s motion, for the following reasons.

This is a putative wage and hour class action originally filed in Alameda County 

Superior Court on October 25, 2018. Defendant employed plaintiff as a non-exempt, 

hourly employee from August 1, 2002, through September 2015. Dkt. 1, Ex. A 

(“Compl.”), ¶ 19. Plaintiff alleges that Southwest violated various California labor laws by

(i) failing to provide meal and rest periods, see id. ¶¶ 37-63 (first and second causes of 

action), (ii) failing to pay all wages and overtime due, id. ¶¶ 64-92 (third cause of action), 

(iii) failing to provide plaintiff with accurate wage statements, id. ¶¶ 93-99 (fourth cause of 

action), and (iv) failing to pay all final wages due upon termination of employment 

(“waiting time penalties”), id. ¶¶ 100-110 (fifth cause of action). Plaintiff brings this action 

on behalf of a putative class of all persons employed by Southwest who worked in 

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California beginning four years prior to the filing of plaintiff’s action. Compl. ¶ 11.1 

On December 14, 2018, defendant removed this action to federal court asserting 

that federal jurisdiction existed under the Class Action Fairness Act, 28 U.S.C. § 1453 

(“CAFA”). CAFA “gives federal courts jurisdiction over certain class actions, defined in § 

1332(d)(1), if the class has more than 100 members, the parties are minimally diverse, 

and the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co., 

LLC v. Owens, 135 S. Ct. 547, 551 (2014). The parties agree that the only issue is 

whether defendant has met its burden to show CAFA’s $5 million dollar amount-incontroversy requirement has been met. 

Though plaintiff alleges six causes of action, defendant relies on only plaintiff’s 

second through fifth causes of action to satisfy the $5 million threshold. Defendants 

contend that those four claims, plus attorneys’ fees, put over $134 million at controversy. 

Fatal to defendant’s contention, however, is the fact that defendant’s proposed 

100% violation rate is essentially speculative because it is unsupported by any evidence 

or allegation in the complaint. And speculation does not meet defendant’s burden to 

show CAFA’s amount-in-controversy requirement has been met.2

“A defendant's notice of removal need include only a plausible allegation that the 

amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee, 135 S. Ct. at 

554 (citing 28 U.S.C. § 1446(a)). But if, after removal, the plaintiff contests the 

defendant's allegations regarding the amount in controversy, both parties submit proof 

and the court must decide by a preponderance of the evidence that the amount-incontroversy requirement is met. Id. at 553-54 (citing 28 U.S.C. § 1446(c)(2)(B)). To 

determine the amount in controversy, courts first look to the complaint. Ibarra v. 

 

1 Based on the first through third causes of action, plaintiff also asserts a claim under 

California’s Unfair Competition Law, Bus. & Prof. Code § 17200. Compl. ¶¶ 111-27.

2

In an attempt to appear conservative, defendant also calculates the amount in 

controversy as about $33.6 million based on a 25% violation rate. Because that’s the 

type of arbitrary guessing that the Ninth Circuit has repeatedly prohibited, the court will 

disregard the 25% violation rate calculation. 

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Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). If no damages are stated, or 

the defendant believes the claimed damages are understated, the defendant seeking 

removal bears the burden of showing “the aggregate amount in controversy exceeds $5 

million[.]” Id. “[W]hen the defendant's assertion of the amount in controversy is 

challenged by plaintiffs in a motion to remand . . . 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. But “when the defendant relies on a chain of reasoning that includes assumptions 

to satisfy its burden of proof, the chain of reasoning and its underlying assumptions must 

be reasonable ones.” LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 

2015).

In sum, remand is unwarranted if, after reviewing the pleadings and evidence, a 

court finds it is more likely than not the plaintiff put over $5 million in controversy. But 

where, as here, the pleadings and evidence do not establish the threshold jurisdictional 

amount by a preponderance of the evidence, the case must be remanded to state court. 

The only evidence defendant submitted—a declaration from Michelle Inlow who is 

employed by Southwest as a “Senior Manager Engagement & Administration”—does not 

support any particular violation rate or amount in controversy. See Inlow Decl. ¶¶ 4-8. 

The declaration provides evidence only about the total number of putative class 

members, the average wage per hour, the general shift length and schedule, the average 

number of overtime hours worked per week, the number of wage statements per year, 

and the number of employees who separated employment from Southwest during the 

relevant time period. Id. That evidence does nothing to show how frequently the alleged 

violations occurred. For example, that putative class members may have been eligible to 

receive rest periods does not provide any evidence about whether or how often the 

defendant failed to provide rest periods. Similarly, that putative class members received 

24 wage statements per year says nothing about whether or how often those wage 

statements were inaccurate. And evidence about the average number of overtime hours 

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worked by putative class members does not show how often, if at all, Southwest failed to 

pay overtime wages due. 

To turn that insufficient evidence into support for its amount-in-controversy 

calculation, defendant argues that the complaint alleges “universal violations,” which 

supports using a 100% violation rate. Thus, according to defendant, putative class 

members never received a rest period that complied with California labor laws, never 

received an accurate wage statement, never received all wages (or overtime) due in a 

pay period, and no employee ever received all wages due upon his or her termination. 

“The Ninth Circuit [has] held that [allegations of] ‘a pattern and practice of doing 

something does not necessarily mean always doing something, and that under such 

circumstances, the defendant ‘bears the burden to show that its estimated amount in 

controversy relied on reasonable assumptions.’” Garza v. Brinderson Constructors, Inc., 

178 F. Supp. 3d 906, 911 (N.D. Cal. 2016) (quoting Ibarra). However, if the language of 

the complaint indicates that the violations occurred as the result of “policies that applied 

‘uniformly’ to all putative class members,” then that may support concluding a uniform 

class-wide impact. Branch v. PM Realty Grp., L.P., 647 F. App'x 743, 746 (9th Cir. 

2016). The distinction is whether the complaint alleges only a “pattern and practice” of 

labor law violations”—requiring additional proof of the frequency of the violation—or a

“universal violation”—allowing the reasonable assumption that the violation occurred 

100% of the time to all members of the class. LaCross v. Knight Transp. Inc., 775 F.3d 

1200, 1202 (9th Cir. 2015). For example, a claim that alleges that all putative class 

members are misclassified (e.g., as independent contractors), alleges a “universal 

violation” of the applicable labor laws. Id. (“universal violation” alleged where putative 

class members were classified as “independent contractors” instead of “employees”). 

That is because if the violation is proven as to one class member on that issue, then the 

violation also occurred as to each other putative class member.3 

 

3 While this is a prototypical example, it is by no means the only way a “universal 

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Plaintiff’s rest period, overtime, wage statement, and waiting time claims do not 

allege universal violations. With respect to plaintiff’s overtime claim, defendant relies on 

paragraphs in the complaint that allege “plaintiff and the putative [class] w[ere] not paid 

for all overtime hours worked at the correct rate of pay.” Compl. ¶ 29; see also Compl. 

¶¶ 27, 78, 84 (similar). “But an employee's alleged failure to receive ‘all’” overtime due 

“does not equate to a failure to receive ‘any’” overtime due. Tejero v. NRG Energy Servs. 

LLC, No. 18-CV-04188-PJH, 2018 WL 6009705, at *2 (N.D. Cal. Nov. 16, 2018). And it 

is the latter that defendant’s “universal violation” argument (and amount-in-controversy 

calculation) must establish. Defendant also points to plaintiff’s allegation that Southwest 

has “applied centrally devised policies and practices . . . with respect to working 

conditions and compensation arrangements.” Compl. ¶ 77; see also Compl. ¶ 80. “While 

that may be true, that alone does not support a 100 percent violation rate or, for that 

matter, any other violation rate.” Id.; Garcia v. Lifetime Brands, Inc., No. EDCV 15-1924-

JLS (SPx), 2016 WL 81473, *3 (C.D. Cal. Jan. 7, 2016) (rejecting defendant's 100% 

violation rate based on complaint's alleging a “uniform policy and systematic scheme”); 

Garcia v. Wal-Mart Stores Inc., 207 F. Supp. 3d 1114, 1124 (C.D. Cal. 2016) (same).4

While a closer call than the overtime-related allegations, the court finds, after

allowing for “reasonable assumptions” and inferences, that the complaint’s rest periodrelated allegations also do not support a 100% violation rate. The complaint alleges that 

“Defendant[ ] maintained a policy or practice of not providing members of the . . . class 

with net rest period[s] of at least ten minutes for each four hour work period[.]” Compl. 

¶ 59 (emphasis added). That implies that defendant had an affirmative policy of not

providing putative class members with rest periods that complied with California’s labor 

 

violation” may be alleged.

4 Plaintiff’s reliance on paragraph 28 of the complaint is also misplaced because that 

paragraph merely provides an “example” of a type of shift that Southwest allegedly failed 

to pay overtime for. It says nothing about whether Southwest had a uniform policy to not 

pay overtime for that type of shift and Southwest’s evidence about average overtime 

worked says nothing about the number of overtime hours tied to that specific type of shift. 

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laws. But see Compl. ¶ 61 (“Specifically, defendant[‘s] written policies do not provide that 

employees may take a [compliant] rest period for each four hours worked[.]”). The next 

paragraph, however, clarifies that plaintiff does not allege that putative class members 

never received rest periods. Compl. ¶ 60 (“Defendant[ ] failed to pay . . . additional 

premium wages when required rest periods were not provided”). Paragraph 91 also 

undermines defendant’s argument (and paragraph 59’s implication) by affirmatively 

alleging that defendant sometimes paid putative class members in lieu of providing rest 

periods. Compl. ¶ 91 (hourly wages did not include compensation paid “on the occasions 

when defendant[ ] paid [putative class members] premium wages in lieu of [providing] 

meal and/or rest periods”). In addition, while “[t]he allegation of a policy and practice may 

make the assumption of violations against all class members reasonable[,] [i]t does not 

shed light [ ] on the frequency of the violations.” Rutledge v. Healthport Techs., LLC, No. 

16-CV-06920-VC, 2017 WL 728375, at *2 (N.D. Cal. Feb. 24, 2017) (citing Ibarra).

5

Defendant also fails to show that the complaint alleges “universal violations” with 

respect to the wage statement and waiting time claims. First, defendant’s argument with 

respect to these claims largely depends on defendant establishing a 100% violation rate 

with respect to the overtime and rest period claims. For the reasons discussed above, 

defendant has not done so. Second, defendant provides no support for its argument that 

because the complaint alleges Southwest acted “intentionally,” the violation rate must be 

100%. Third, as was the case with defendant’s overtime argument, the waiting time and 

wage statement related-allegations that defendant points to establish, at best, that 

Southwest did not always comply with California’s wage statement and waiting time laws; 

not, as defendant must show, that Southwest never complied with those laws.6 

 

5 Paragraphs 33 and 35 of the complaint do not support defendant’s argument for the 

same reason plaintiff’s overtime allegations do not support a “universal violation” 

inference: Those paragraphs neither allege that putative class members never received 

rest breaks nor allege that putative class members never received rest period premiums 

due in lieu of receiving a compliant rest period. See Compl. ¶¶ 33-35.

6 Defendant’s waiting time argument fails for the additional reason that it assumes that 

each of the departing employees is entitled to the statutory maximum 30-day penalty. 

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CONCLUSION

For the foregoing reasons, the court finds that defendant has not met its burden of 

showing by a preponderance of the evidence that the amount in controversy exceeds $5 

million. Accordingly, the court GRANTS plaintiff’s motion and REMANDS the action to 

Alameda County Superior Court. 

IT IS SO ORDERED.

Dated: February 28, 2019

__________________________________

PHYLLIS J. HAMILTON

United States District Judge

 

The Ninth Circuit has rejected that assumption. See Garibay v. Archstone Communities 

LLC, 539 F. App'x 763, 764 (9th Cir. 2013) (“[Defendant] assumes that each employee 

would be entitled to the maximum [30 day waiting time] statutory penalty, but provides no 

evidence supporting that assertion.”).

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