Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-02834/USCOURTS-casd-3_18-cv-02834-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332nr Diversity-Notice of Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JORGE PROCTOR, as an aggrieved 

employee on behalf of himself and other 

current and former aggrieved employees,

Plaintiff,

v.

HELENA AGRI-ENTERPRISES, LLC, a 

Delaware company doing business as 

HELENA CHEMICAL COMPANY; and 

DOES 1 through 100, inclusive,

Defendants.

Case No.: 18-CV-2834 JLS (NLS)

ORDER: (1) GRANTING MOTION 

TO REMAND; 

(2) REMANDING ACTION TO THE 

SUPERIOR COURT OF THE STATE 

OF CALIFORNIA, COUNTY OF 

SAN DIEGO; AND 

(3) DENYING AS MOOT MOTIONS 

TO DISMISS FOR FAILURE TO 

STATE A CLAIM AND TO 

CONSOLIDATE CASES

(ECF Nos. 8, 9, 12)

Presently before the Court are Defendant Helena Agri-Enterprises, LLC’s Motions 

to Dismiss PAGA Action Pursuant to Fed. R. Civ. P. 12(b)(6) (“Mot. to Dismiss,” ECF 

No. 8) and to Consolidate (“Mot. to Consolidate,” ECF No. 9), as well as Plaintiff Jorge 

Proctor’s Motion to Remand Pursuant to 28 U.S.C. § 1447 (“Mot. to Remand,” ECF No. 

12) (together, the “Motions”). Also before the Court are Plaintiff’s Opposition to (ECF 

No. 13) and Defendant’s Reply in Support of (ECF No. 15) the Motion to Consolidate; 

Plaintiff’s Opposition to (ECF No. 14) and Defendant’s Reply in Support of (ECF No. 16) 

the Motion to Dismiss; and Defendant’s Opposition to (“Remand Opp’n,” ECF No. 19), 

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Plaintiff’s Reply in Support of (“Remand Reply,” ECF No. 20), and Defendant’s Surreply 

in Opposition to (“Remand Surreply,” ECF No. 22) the Motion to Remand. The Court 

took the Motions under submission without oral argument pursuant to Civil Local Rule 

7.1(d)(1). See ECF Nos. 17, 21. Having considered the Parties’ arguments, the evidence, 

and the law, the Court GRANTS Plaintiff’s Motion to Remand; REMANDS this action to 

the Superior Court of the State of California, County of San Diego; and DENIES AS 

MOOT Defendant’s Motions to Dismiss and to Consolidate.

BACKGROUND

Plaintiff filed this representative action pursuant to the Private Attorney General Act 

of 2004 (“PAGA”), California Labor Code §§ 2698 et seq., in the Superior Court of the 

State of California, County of San Diego, on November 15, 2018, for civil penalties, 

interest, and attorneys’ fees and costs for violations of the California Labor Code for failure 

to (1) pay minimum and overtime wages, (2) provide meal periods and rest breaks, 

(3) timely pay wages during employment, (4) timely pay wages upon termination, 

(5) provide complete and accurate wage statements, and (6) reimburse business 

expenses. See generally ECF No. 1-2 (“Compl.”). Plaintiff served Defendant on 

November 16, 2018. See ECF No. 1 (“Not. of Removal”) ¶ 31.

On December 17, 2018, Defendant removed to this Court on the basis that “[t]his 

Court has original jurisdiction over this action pursuant to 28 U.S.C. §§ 1441(a) and 1332, 

which vests the District Court with original jurisdiction over civil actions between citizens 

of different states, where the amount in controversy exceeds $75,000.” Not. of Removal 

¶ 7. Defendants filed their Motions to Dismiss and to Consolidate on December 21, 2018, 

see generally ECF Nos. 8–9, and Plaintiff filed the instant Motion to Remand on January 

17, 2019. See generally ECF No. 12.

LEGAL STANDARD

In cases “brought in a State court of which the district courts of the United States 

have original jurisdiction,” defendants may remove the action to federal court. 28 U.S.C. 

§ 1441(a). Section 1441 provides two bases for removal: diversity jurisdiction and federal 

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question jurisdiction. Federal courts have diversity jurisdiction “where the amount in 

controversy” exceeds $75,000, and the parties are of “diverse” state citizenship. 28 U.S.C. 

§ 1332. Federal courts have federal question jurisdiction over “all civil actions arising 

under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. 

The party invoking the removal statute bears the burden of establishing that federal 

subject-matter jurisdiction exists. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th 

Cir. 1988). Moreover, courts “strictly construe the removal statute against removal 

jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citing Boggs v. Lewis, 

863 F.2d 662, 663 (9th Cir. 1988)); Takeda v. Nw. Nat’l Life Ins. Co., 765 F.2d 815, 818 

(9th Cir. 1985)). Therefore, “[f]ederal jurisdiction must be rejected if there is any doubt as

to the right of removal in the first instance.” Gaus, 980 F.2d at 566 (citing Libhart v. Santa 

Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979)).

ANALYSIS

Plaintiff contends that Defendant’s removal was improper because “Defendant 

failed to prove by a preponderance of the evidence that the amount in controversy exceeds 

$75,000.”1

 Mot. to Remand at 1. Plaintiff seeks PAGA penalties for various violations of 

the California Labor Code. See generally Compl. 

Although the Parties agree that the amount in controversy is based only on Plaintiff’s 

individual claims for PAGA penalties, see, e.g., Not. of Removal ¶ 20, they disagree as to 

(1) the number of pay periods in dispute, (2) whether the amount in controversy may 

include the State’s 75% share, and (3) whether Defendant may aggregate default civil 

penalties under California Labor Code section 2699(a) with the civil penalties under 

California Labor Code section 226.3 for purposes of calculating the amount in controversy 

for its alleged failure to provide complete and accurate wage statements. 

/ / /

 

1 The Parties do not contest that there is complete diversity of citizenship: Defendant is a citizen of New 

York, see Not. of Removal ¶ 10, while Plaintiff is a citizen of California. See Compl. ¶ 9.

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Regarding the amount of PAGA penalties, PAGA requires that any penalties 

assessed against a defendant “be distributed as follows: 75 percent to the Labor and 

Workforce Development Agency [(“LWDA”)] . . . and 25 percent to the aggrieved 

employees.” Cal. Lab. Code § 2699(i). Relying on Urbino v. Orkin Services of California, 

Inc., 726 F.3d 1118 (9th Cir. 2013), Plaintiff asserts that Defendant cannot establish 

jurisdiction based on the State’s 75% share of Plaintiff’s PAGA penalties. See Remand 

Reply at 2–4. Defendant counters that “‘[t]here are conflicting district court cases’ on this 

issue,” Remand Surreply at 2 (quoting Adame v. Comtrak Logistics, Inc., No. EDCV 15-

02232 DDP, 2016 WL 1389754, at *6 (C.D. Cal. Apr. 7, 2016)), and that “[t]he betterreasoned line of cases . . . holds that the entire amount is properly considered in determining 

the amount in controversy.” Id.

Defendant is correct that “[d]istrict courts are split over Urbino’s meaning with 

respect to th[is] . . . question.” Sloan v. IHG Mgmt. (Md.) LLC, No. CV 19-21-DMG (JCX), 

2019 WL 1111191, at *2 (C.D. Cal. Mar. 11, 2019). “One school of thought is that courts

should consider only the plaintiff’s stake in the 25% share distributed to aggrieved 

employees.” Id. (citing Van Steenhuyse v. UBS Fin. Servs., Inc., 317 F. Supp. 3d 1062, 

1069 (N.D. Cal. 2018)). “The other is that courts should take into account 100% of the 

penalties stemming from the plaintiff’s claims, even though 75% goes to LWDA.” Id.

(citing Patel, 58 F. Supp. 3d 1032).

In line with a majority of districts, “[a]fter reviewing the case law, the Court 

concludes that the reasoning in [the former line of cases] is more persuasive.” See id.

(citing Rael v. Intercontinental Hotels Grp. Res., Inc., No. 2:18-cv-05922-ODW(SSx), 

2019 WL 990432, at *2 (C.D. Cal. Mar. 1, 2019); Moberly v. FedEx Corp., No. 2:18-cv00393-KJM-AC, 2019 WL 927295, at *3 (E.D. Cal. Feb. 26, 2019); Olson v. Michaels 

Stores, Inc., No. CV 17-03403-AB (GJSx), 2017 WL 3317811 at *4 n.2 (C.D. Cal. Aug. 

2, 2017); Adame v. Comtrak Logistics, Inc., No. EDCV 15-02232 DDP (KKx), 2016 WL 

1389754 at *5 (C.D. Cal. Apr. 7, 2016); Lopez v. Ace Cash Exp., Inc., No. LA CV11-07116 

JAK (JCx), 2015 WL 1383535, at *4–5 (C.D. Cal. Mar. 24, 2015); Willis v. Xerox Bus.

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Servs., LLC, No. 1:13-cv-01353-LJO-JLT, 2013 WL 6053831 (E.D. Cal. Nov. 15, 2013)). 

“The Court sees no logical reason for [c]ourts to refuse to consider one portion of an award 

that the plaintiff will not recover (the other aggrieved employees’ shares), but take into 

account another portion that the plaintiff will not recover (LWDA’s share).” See id. 

“Including LWDA’s share in the calculation would come into tension with Urbino’s 

language that California is not a ‘citizen’ for diversity purposes.” See id. “It would also 

greatly increase the number of cases that defendants could remove to federal court,” which 

“runs counter to the congressional intent to restrict federal jurisdiction . . . , the general 

presumption against removal jurisdiction . . . , and Urbino’s description of PAGA actions 

as ‘quintessential California dispute[s].’” Id. (quoting Urbino, 726 F.3d at 1123) (citing 

St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938); Gaus, 980 F.2d at 

566). “The Court shall therefore only take into account Plaintiff’s portion of the 25% that 

aggrieved employees may recover.” See id.

Even accepting Defendant’s other contested assumptions, including the number of 

pay periods in dispute and aggregating damages for failure to provide complete and 

accurate wage statements, Defendant’s maximum PAGA exposure as to Plaintiff is 

$45,784.50.

2

 “Accordingly, the Court lacks subject matter jurisdiction over the case 

because Plaintiff has put less than $75,000 in controversy.” See Sloan, 2019 WL 1111191, 

at *3.

 

2 Failure to Pay Minimum Wage under California Labor Code sections 1194, 1197, and 1197.1 = $1275

Failure to Pay Minimum Wage under California Labor Code section 558 = $932.50

Failure to Pay Overtime Wages under California Labor Code sections 510 and 1198 = $1025

Failure to Pay Overtime Wages under California Labor Code section 558 = $8775

Failure to Provide Meal Periods under California Labor Code sections 226.7 and 512(a) = $1025

Failure to Provide Rest Periods under California Labor Code sections 226.7 and 512(a) = $1025

Failure Timely to Pay Wages During Employment under California Labor Code sections 204 and 210 = 

$1572.25

Failure Timely to Pay Wages at Termination under California Labor Code sections 210 to 203 = $25

Failure to Provide Complete and Accurate Wage Statements under California Labor Code sections 226, 

226(a), and 1174 = $6212.50

Failure to Reimburse Business Expenses under California Labor Code sections 2800 and 2802 = $1025

Attorneys’ Fees at 25% Benchmark = $22,892.25

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CONCLUSION

In light of the foregoing, the Court GRANTS Plaintiff’s Motion to Remand (ECF 

No. 12) and REMANDS this action to the Superior Court of the State of California, County 

of San Diego (ECF No. 1). The Court also DENIES AS MOOT Defendant’s Motions to 

Dismiss (ECF No. 8) and to Consolidate (ECF No. 9). Because this Order concludes the 

litigation in this matter, the Clerk of Court SHALL CLOSE the file.

IT IS SO ORDERED.

Dated: April 30, 2019

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