Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01622/USCOURTS-casd-3_09-cv-01622-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARTHA CASTILLO, individually and

on behalf of the class; VIVIANA ROMO,

individually and on behalf of the class;

ABBY SANCHEZ, individually and on

behalf of the class,

Plaintiff,

CASE NO. 09-CV-1622 H (RBB)

ORDER GRANTING

PLAINTIFFS’ MOTION TO

REMAND

vs.

APPLE CORE ENTERPRISES, INC., a

North Dakota Corporation d/b/a

Applebee’s Neighborhood Grill and Bar;

DOES 1-10, inclusive,

Defendant.

On August 3, 2009, Plaintiffs filed a motion to remand this action to state court. (Doc.

No. 7.) On August 17, 2009, Defendant filed a response in opposition to Plaintiffs’ motion to

remand. (Doc. No. 8.) On August 24, 2009, Plaintiffs filed a response in support of their

motion to remand. (Doc. No. 10.) On August 25, 2009, the Court submitted Plaintiffs’ motion

to remand on the papers. (Doc. No. 11.) For the following reasons, the Court grants Plaintiffs’

motion and remands this action to state court.

Background

Plaintiffs’ claims are brought on behalf of a putative class of current and former

employees of Defendant Apple Core. (Compl. ¶¶ 8-10.) Specifically, Plaintiffs allege that

Defendants manipulated the hours of the class members in order to avoid paying them their

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statutorily-mandated wages. (Compl. ¶ 12.) Plaintiffs further allege that the class members

were forced to incur improper penalties when cashing their paychecks and were not provided

itemized wage statements. (Id.) The Complaint alleges that the class members’ were not

provided an appropriate meal or rest period during work, were not provided adequate personal

time off or vacation, and were not reimbursed for uniform costs. (Id.) Plaintiffs’ third cause

of action alleges that Defendant Luis Aguilar sexually harassed female members of the class

while employed by Apple Core. (Compl. ¶¶ 40-43.)

On or about June 25, 2009, Plaintiffs filed a Complaint against Defendants in California

State Superior Court. (Doc. No. 1., Ex. A. [“Compl.”].) The Complaint alleges causes of

action against Defendants for violations of the California Labor Code, violation of the

California Business and Professions Code, and violation of the California Fair Employment

and Housing Act. (Id.) In its first paragraph, the Complaint states that “the amount in

controversy exceeds the statutory minimum limit of this [state] Court. However, the amount

in controversy does not reach or exceed Five Million Dollars.” (Compl. ¶ 1.)

On July 27, 2009, Defendant Apple Core removed this action to this Court, alleging that

the amount in controversy exceeds $5,000,000. (Notice of Removal ¶¶ 3, 5.) Plaintiff now

moves to remand to state court on the ground that this case does not meet the jurisdictional

amount in controversy requirement.

Discussion

I. Jurisdiction Under CAFA

A civil action in state court may be removed to federal court if the federal court had

“original jurisdiction” over the matter. See 28 U.S.C. § 1441(a). Under the Class Action

Fairness Act (“CAFA”), district courts are vested with “‘original jurisdiction of any civil

action in which . . . the amount in controversy exceeds the sum or value of $5,000,000,

exclusive of interest and costs,’ and in which the aggregate number of proposed plaintiffs is

100 or greater, and any member of the plaintiff class is a citizen of a state different from any

defendant.” Lowdermilk v. United States Bank Nat'l Ass'n, 479 F.3d 994, 997 (9th Cir. 2007)

(quoting 28 U.S.C. § 1332(d)). “[U]nder CAFA the burden of establishing removal

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jurisdiction remains, as before, on the proponent of federal jurisdiction.” Abrego Abrego v.

Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006). The removal statute is strictly

construed against removal jurisdiction, and “[f]ederal jurisdiction must be rejected if there is

any doubt as to the right of removal in the first instance.” Gaus v. Miles, 980 F.2d 564, 566

(9th Cir.1992). The Court may consider facts in the notice of removal as well as any

“summary-judgment-type evidence” in determining whether CAFA jurisdiction exists at the

time of removal. See Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004).

Here, Plaintiff contests CAFA jurisdiction on the ground that the amount in controversy

does not exceed the jurisdictional minimum of $5,000,000. In this regard, the Ninth Circuit

has identified “at least three different burdens of proof which might be placed on a removing

defendant under varying circumstances.” Guglielmino v. McKee Foods Corp., 506 F.3d 696,

699 (9th Cir. 2007). When a state court complaint alleges on its face an amount in controversy

sufficient to meet the federal jurisdictional threshold, the requirement is “presumptively

satisfied unless it appears to a legal certainty that the plaintiff cannot actually recover that

amount.” Id. (quotation omitted). When the state court complaint is unclear or ambiguous as

to amount in controversy, the removing defendant must establish by a preponderance of the

evidence that the jurisdictional amount is pled. Id. Finally, “when a state court complaint

affirmatively alleges that the amount in controversy is less than the jurisdictional threshold,

the party seeking removal must prove with legal certainty that CAFA's jurisdictional amount

is met.” Id. (quotation omitted). Because Plaintiffs’ Complaint expressly states that “the

amount in controversy does not reach or exceed Five Million Dollars,” the legal certainty

standard applies in this case. (Compl. ¶ 1.)

The “legal certainty” standard is consistent with the limited jurisdiction of federal courts

and the principle that the plaintiff is “master of her complaint.” Guglielmino, 506 F.3d at 699-

700. Accordingly, “subject to a good faith requirement in pleading, a plaintiff may sue for less

than the amount she may be entitled to if she wishes to avoid federal jurisdiction and remain

in state court.” Lowdermilk, 479 F.3d at 999 (citing St. Paul Mercury Indem. Co. v. Red Cab

Co., 303 U.S. 283, 288-89 (1938)). Here, Plaintiffs have exercised that option by limiting their

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recovery to an amount under $5,000,000. Defendant has failed to show to a legal certainty that

the amount in controversy exceeds the jurisdictional amount or that Plaintiff has pled in bad

faith.

In support of its argument, Defendant researched published verdicts and settlements in

actions for sexual harassment. (Glaser Decl. ¶ 6, Ex. 1, 2.) Defendant calculates that, among

its selected surveyed cases, the average verdict or settlement amount is over $2,000,000. (Id.)

Based on that figure, Defendant estimates that Plaintiffs’ two hundred sexual harassment

claims could result in a verdict of over $400 million. (Opp. at 3; Glaser Decl. ¶ 7.) Defendant

also calculates that Plaintiffs’ wage and hour class may be owed more than $3.1 million. (Opp.

at 5-6.) The Court cannot base its jurisdiction on Defendant’s “speculation and conjecture.”

Lowdermilk, 479 F.3d at 1002. At most, Defendant’s arguments support an inference that

Plaintiffs may be entitled to more than $5,000,000. However, such an inference does not

satisfy Defendant’s burden, because Plaintiffs may avoid federal jurisdiction by suing for less

than they are entitled to. Lowdermilk, 479 F.3d at 999. Additionally, the Ninth Circuit holds

that a court “need not look beyond the four corners of the complaint to determine whether the

CAFA jurisdictional amount is met” when the plaintiff “avers damages (‘less than five million

dollars’) that do not reach the threshold for federal jurisdiction.” Lowdermilk, 479 F.3d at 998.

The evidence does not show that Plaintiffs have alleged the disputed amount in bad

faith. Plaintiffs justify the limit on their potential recovery by explaining that counsel

evaluated each claim and the potential penalties and concluded that the recovered amount fell

“well short of the $5,000,000 figure.” (Nienberg Decl. ¶ 5.) Plaintiffs explain that Defendant

limits the class members’ daily work, limiting the overtime claims. (Id. ¶ 6.) Further,

Plaintiffs state that many class members have worked for Defendant for less than the full

limitations period. (Id.) Finally, Plaintiffs allege that Defendant has manipulated work time

such that class members were underpaid by as little as five to seven cents per shift. (Id.) Thus,

Plaintiffs have adequately explained their decision to limit recovery in this matter. It is

“plaintiff's prerogative, subject to the good faith requirement, to forgo a potentially larger

recovery to remain in state court.” Lowdermilk, 479 F.3d at 999.

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Accordingly, the Court concludes that Defendant has not met its burden of establishing

that the amount in controversy exceeds $5,000,000 to a legal certainty. Accordingly, the Court

lacks jurisdiction over this matter under CAFA. The Court notes Plaintiffs’ evidentiary

objections and disregards evidence to the extent warranted.

II. Attorney Fees Under 28 U.S.C. § 1447(c)

Plaintiffs’ motion to remand requests that the Court order Defendant to pay their

expenses. The Court interprets this request as a motion for attorney fees under 28 U.S.C.

§ 1447(c). Pursuant to that statute, “[a]n order remanding the case may require payment of just

costs and any actual expenses, including attorney fees, incurred as a result of the removal.”

“Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where

the removing party lacked an objectively reasonable basis for seeking removal. Conversely,

when an objectively reasonable basis exists, fees should be denied.” Lussier v. Dollar Tree

Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008) (quoting Martin v. Franklin Capital Corp.,

546 U.S. 132 (2005)). “[R]emoval is not objectively unreasonable solely because the

removing party’s arguments lack merit, or else attorney’s fees would always be awarded

whenever remand is granted.” Id.

Here, the Court exercises its discretion to decline an award of attorney fees. Based on

the putative class size and the nature of the claims, it was objectively reasonable for Defendant

to seek to invoke federal jurisdiction.

Conclusion

Accordingly, the Court grants Plaintiffs’ motion to remand and remands this action to

state court. The Court denies Plaintiffs’ request for fees and expenses.

IT IS SO ORDERED.

DATED: September 1, 2009 

________________________________

MARILYN L. HUFF, District Judge

UNITED STATES DISTRICT COURT

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