Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-05462/USCOURTS-cand-4_15-cv-05462-1/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

RUSSELL TAYLOR,

Plaintiff, 

v. 

INTERSTATE GROUP, LLC,

Defendant. 

Case No. 15-cv-05462-YGR 

ORDER GRANTING MOTION TO REMAND

Re: Dkt. No. 10 

Plaintiff Russell Taylor filed the instant action in the Superior Court for the State of 

California, County of Sonoma, on behalf of himself and a putative class of similarly situated 

employees alleging violations of California Labor Code sections for, inter alia, unpaid overtime, 

unpaid meal and rest period premiums, unpaid vacation wages, waiting time penalties, incorrect 

wage statements, and unfair business practices. Plaintiff also seeks civil penalties pursuant to 

California’s Labor Code Private Attorney Generals Act (“PAGA”) and Labor Code section 558. 

On November 30, 2015, Defendant Interstate Group, LLC removed the action based on diversity 

jurisdiction, 28 U.S.C. § 1332(a)(1). (Dkt. No. 1, Notice of Removal, “NOR.”) 

Currently pending before the Court is Plaintiff’s motion to remand the case, arguing that 

Defendant has not established the amount in controversy exceeds $75,000. (Dkt. No. 10, “Mtn.”) 

Having read and carefully considered the papers submitted, the admissible evidence, the pleadings 

in this action, oral argument held on February 2, 2016, and the parties’ supplemental briefing, the 

Court hereby GRANTS the motion. 

I. BACKGROUND

Defendant owns and operates eight TrailersPlus stores in California, which specialize in 

the sale of recreational trailers. (NOR, Exh. A., “Compl.” ¶ 26.) Plaintiff was employed by 

Defendant at a TrailersPlus store, first as a sales representative and then as store manager, until he 

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was terminated in November 2014. (Dkt. No. 12, Exh. 1, “Snow Oppo. Decl.” ¶ 2; Compl. ¶ 27.) 

Throughout his employment, Defendant was paid every other Thursday, or on a two-week pay 

period. (NOR, Exh. E., “Snow Decl.” ¶ 4.) 

 On August 31, 2015, Plaintiff provided written notice of alleged Labor Code violations in 

connection with his employment with Defendant to the Labor and Work Force Development 

Agency (“LWDA”) via certified mail. (Compl. ¶ 24.) Plaintiff brought this action in state court 

against Defendant on October 28, 2015, asserting nine separate claims. (Id.) Plaintiff alleges that 

Defendant violated the Labor Code by failing to: (i) pay overtime to store managers in violation of 

Cal. Labor Code sections 510, 1194, and 1198; (ii) pay overtime to nonexempt employees in 

violation of Cal. Labor Code sections 510, 1194, and 1198; (iii) provide meal periods in violation 

of Cal. Labor Code sections 226.7 and 512; (iv) provide rest periods in violation of Cal. Labor 

Code section 226.7; (v) pay vested vacation wages in violation of Cal. Labor Code section 227.3; 

(vi) pay wages in a timely manner upon termination in violation of Cal. Labor Code sections 201, 

202, and 203; and (vii) provide compliant wage statements in violation of Cal. Labor Code section 

226(a). Plaintiff also asserts claims under California’s Unfair Competition Law, Cal. Bus. & Prof. 

Code sections 17200, et seq., and a cause of action pursuant to PAGA, Cal. Labor Code section 

2698, et seq. Finally, Plaintiff asserts that he has satisfied the administrative pre-requisites to 

recover civil penalties under Cal. Labor Code section 558. (Compl. ¶¶ 25, 124.) In his complaint, 

Plaintiff seeks to represent a class of similarly situated employees, which Defendant claims would 

have 115 members. (Snow Decl. ¶ 6.) 

On November 30, 2015, Defendant timely removed the action to this Court. (See NOR.) 

Plaintiff now moves to remand the case to Sonoma County Superior Court. Plaintiff contends that 

the amount in controversy falls far below the $75,000.01 threshold. See 28 U.S.C. § 1332(a)(1) 

(“the matter in controversy exceeds the sum or value of $75,000...”) (emphasis supplied). 

II. LEGAL STANDARD

Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of 

America, 511 U.S. 375, 377 (1994) (federal courts “possess only that power authorized by 

Constitution and statute”). A defendant may remove a civil action from state court if the action 

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could have originally been filed in federal court. 28 U.S.C. § 1441. A plaintiff may seek to have a 

case remanded to the state court from which it was removed if the district court lacks jurisdiction 

or if there is a defect in the removal procedure. 28 U.S.C. § 1447(c). The removal statutes are 

strictly construed, so as to limit removal jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 

U.S. 100, 108-09 (1941). 

A district court must remand a case if it appears before final judgment that the court lacks 

subject matter jurisdiction. 28 U.S.C. § 1447(c). There is typically a strong presumption against 

finding removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The burden 

of establishing federal jurisdiction for purposes of removal is on the party seeking removal. See 

Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). The party seeking removal “has 

the burden to prove, by a preponderance of the evidence, that removal is proper.” Geographic 

Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1007 (9th Cir. 2010). “Federal 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; accord Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 

2003). The court “resolves all ambiguity in favor of remand to state court.” Hunter v. Philip 

Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). 

III. DISCUSSION

The parties dispute the amount in controversy for all but one of the claims.1 However, the 

Court need not reach the amount in controversy for all claims. Resolution of the amount in 

controversy with respect to PAGA penalties, Section 558 penalties, and attorney’s fees shows that 

Defendant has not met its burden, irrespective of the remaining claims. Thus, for the purposes of 

argument and this decision only, the Court assumes the validity of Defendant’s remaining 

estimates. Adopting Defendant’s estimates with respect to unpaid meal and rest periods,2

 unpaid 

 1

 The sole exception is Plaintiff’s wage statement claim, which both parties agree is 

$4,000. 

2

 For the unpaid meal and rest period claims, the Court adopts the estimate Defendant put 

forth in its initial opposition (Dkt. No. 12), rather than the amount proffered in its supplemental 

brief (Dkt. No. 18, “Suppl. Oppo.”), as Defendant provided no legal basis for the Court to adopt 

the latter. Without any authority supporting Defendant’s supplemental estimate, the Court 

declines to adopt it for purposes of the instant motion. 

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overtime, unpaid vacation wages, wage statement penalties, and waiting time penalties, this places 

the amount in controversy at $46,877.48 as follows: 

Claim Amount in Controversy 

Meal and Rest Period $22,816.37 

Overtime $15,310.52 

Vacation $701.79 

Wage Statement $4,000 

Waiting Penalties $4,048.80 

TOTAL $46,877.48 

AMOUNT NEEDED TO 

EXCEED $75,000 $28,122.53 

As shown above, for the amount in controversy to exceed the threshold of $75,000, 

Defendant must establish the amount in controversy for these claims totals a minimum of 

$28,122.53. The Court thus addresses PAGA penalties, Section 558 penalties, and attorney’s fees 

only. The Court will then turn to Defendant’s argument that Plaintiff’s failure to stipulate to an 

amount in controversy less than $75,000 should weigh against remand. 

A. Penalties Recoverable Under PAGA & Labor Code Section 558 

The parties principally dispute the impact of the statute of limitations on the amount that 

Plaintiff may recover for penalties under both PAGA and Section 558. Additionally, with respect 

to PAGA penalties only, Defendant raised in its supplemental brief that penalties for subsequent 

violations may be recoverable daily instead of per pay period, as previously agreed by the parties. 

The Court addresses the amount in controversy for each civil penalty in turn. 

 1. PAGA Penalties 

There are two disagreements between the parties with respect to PAGA penalties. First, 

Defendant argues for the first time in its supplemental brief that, as a matter of law, it is unsettled 

whether PAGA subsequent violation penalties are authorized per day or per pay period. Given 

this “open question,” Defendant urges the Court to assume PAGA penalties could be awarded 

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daily for the purpose of determining the amount in controversy. (Suppl. Oppo. at 1:16-19, n.2.) 

By contrast, Plaintiff contends he has not sought daily PAGA penalties, the statute does not 

authorize such, and even states he is willing to stipulate to seek PAGA penalties per pay period. 

The Court agrees with Plaintiff’s interpretation of his complaint and the statute, and finds the 

proffer to stipulate especially persuasive. 

PAGA clearly provides, “If, at the time of the alleged violation, the person employs one or 

more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per 

pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee 

per pay period for each subsequent violation.” Cal. Lab. Code § 2699(f)(2) (emphasis supplied). 

Defendant provides no indication that a court could interpret this clear statutory language to allow 

PAGA penalties per day, rather than per pay period. Put simply, Defendant’s assertion that 

Plaintiff could claim daily penalties fails as a matter of law. Accordingly, the Court turns to the 

dispute over the number of pay periods to which PAGA penalties apply. 

Second, the parties dispute the impact of the statute of limitations on the PAGA penalty 

calculation. Defendant correctly assumes a one-year statute of limitations and a two-week pay 

period. In that regard, the parties agree that Plaintiff was paid on a two-week pay period, and that 

a one-year statute of limitation applies to PAGA civil penalties is well settled. See Martinez v. 

Antique & Salvage Liquidators, Inc., 2011 WL 500029, at *7 (N.D.Cal. Feb. 8, 2011) (holding 

that PAGA penalties are subject to one-year statute of limitation and listing the “many courts” that 

have found the same). Thus, the parties agree on the underlying assumptions in Defendant’s 

calculation. Where they disagree, however, is the impact of the statute of limitations, and tolling, 

in the context of the facts of this case. 

The one-year limitations period for PAGA civil penalties begins to toll upon filing notice 

to the LWDA for a PAGA investigation. See Ramirez v. Ghilotti Bros, Inc., 941 F.Supp.2d 1197, 

1209 (N.D.Cal. 2013) (“PAGA itself provides that the statute of limitations is tolled while a 

plaintiff exhausts his administrative remedies with [LWDA] prior to suit, which is required by the 

statute”). Here, PAGA’s one-year statute of limitation began tolling on August 31, 2015, when 

Plaintiff provided notice to the LWDA. Therefore, based on the complaint and Defendant’s 

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declaration, Plaintiff contends that his individual claim for PAGA penalties may only go back to 

August 31, 2014, i.e. one year prior to notice on LWDA. Plaintiff further contends he cannot 

recover penalties past November 2014, the date of his termination. (Snow Oppo. Decl. ¶ 2; 

Compl. ¶ 27.) Plaintiff’s position that he cannot recover PAGA penalties for the pay periods 

following November 2014, when he was not in Defendant’s employ, comports with both logic and 

the law. See Cal. Labor Code § 2699.3(d); Ramirez, 941 F.Supp.2d at 1209; Thomas v. Home 

Depot USA Inc., 527 F.Supp.2d 1003, 1009 (N.D.Cal. 2007) (granting defendant’s motion to 

dismiss because plaintiff’s claim was time-barred by PAGA’s one-year statute of limitations); 

Moreno v. Autozone, Inc., 2007 WL 1650942, at *4 (N.D.Cal. June 5, 2007) (twenty months 

expired between employee’s termination and delivery of statutory notice to LWDA, proving “fatal 

to the [PAGA] claim under the one-year limitations period”). Whereas Defendant assumes that 

Plaintiff may seek a year’s worth of PAGA penalties—26 pay periods—it appears that only five 

pay periods can conceivably be in dispute. 

In response, Defendant does not deny that PAGA has a one-year statute of limitations and 

that the tolling period commences upon providing notice, nor does Defendant dispute the accuracy 

of the dates supplied by Plaintiff. Rather, Defendant contends that the existence of a statute of 

limitations constitutes a potential defense and, in Defendant’s view, potential defenses do not 

affect the amount in controversy calculation. In that regard, Defendant points to Plaintiff’s own 

words and calculations in his August 31, 2015 settlement letter, (NOR, Exh. G), and his December 

16, 2015 meet and confer letter, (Mtn., Exh. A), in which Plaintiff sought a full year’s worth of 

PAGA penalties. Defendant asserts that these letters should control with regard to the amount in 

controversy. The Court declines Defendant’s invitation to adopt overstatements of potential 

recovery found in demand letters and to ignore the unambiguous application of PAGA’s statute of 

limitations on Plaintiff’s individual claim. 

Defendant relies on cases where, unlike here, plaintiffs alleged specific sums in their 

original state court complaints that were in excess of the jurisdictional threshold, and then sought 

to invoke defenses to escape federal jurisdiction. St. Paul Mercury Indem. Co. v. Red Cab Co.,

303 U.S. 283, 294 (1938) (holding that plaintiff cannot “reduce the amount of his demand” of 

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$4,000 in his original state court complaint to defeat the $3,000 jurisdictional threshold); Riggins 

v. Riggins, 415 F.2d 1259, 1260 (9th Cir. 1969) (plaintiff not entitled to remand on theory of 

potential statute of limitations defense where she pled $30,750 in her original state court 

complaint, which exceeded the $10,000 jurisdictional threshold). Courts regularly distinguish the 

former type of case, where the original complaint clearly claims a specific sum that exceeds the 

jurisdictional threshold, from those like this one in which “it is unclear or ambiguous from the face 

of a state-court complaint whether the requisite amount in controversy is pled.” Guglielmino v. 

McKee Foods Corp., 506 F.3d 696, 699-700 (9th Cir. 2007). Importantly, these two types of cases 

are subject to different burdens of proof. Id. Where a plaintiff has alleged an amount in 

controversy over the jurisdictional threshold in his original complaint, “[i]t must appear to a legal 

certainty that the claim is really for less than the jurisdictional amount to justify dismissal.” St. 

Paul Mercury, 303 U.S. at 288-89. In such a case, the existence of a potential defense does not 

justify remand unless it is “obvious” from the face of the complaint that the suit “cannot involve 

the necessary amount.” Id. at 291-92. By contrast, here, the amount Plaintiff pled in the 

complaint is ambiguous, and so the “legal certainty” test does not apply. Instead, Defendant 

carries a preponderance of the evidence burden of proof for jurisdictional purposes. Guglielmino, 

506 F.3d at 699-700; Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 

Plaintiff’s demand letters seeking a full year of PAGA penalties, while proper evidence, do 

not alter the burden of proof for Defendant. See Cohn v. Pestsmart, Inc., 281 F.3d 837, 840 (9th 

Cir. 2002) (demand letters constitute “relevant evidence of the amount in controversy”). 

Defendant provides no case law to the contrary. Moreover, even if the legal certainty standard did 

apply, the Court finds that Plaintiff’s statute of limitations defense would still prevail. It is 

“obvious” from the face of the complaint – and Defendant does not even dispute – that Plaintiff 

only worked two months (approximately five pay periods) within the limitations period. See St. 

Paul Mercury, 303 U.S. at 291-92. 

Defendant primarily relies on Riggins to support its argument that the Court should 

consider a full year, rather than only two months, of PAGA penalties for purposes of the amount 

in controversy. Unlike in Riggins, the applicable limitations period here is known. In Riggins, the 

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extent to which Nevada’s six-year statute of limitations would reduce the amount in controversy 

was unclear because the applicability of the statute itself was uncertain. 415 F.2d at 1262. There, 

important jurisdictional facts were not disclosed by the complaint. Id. Without disclosing facts 

like “when the decedent first made his home in the state,” the defense under Nevada’s statute of 

limitations was a mere possibility because the court could not discern its applicability on the face 

of the complaint. Id. Furthermore, the Riggins’ parties’ briefing was unclear as to “why it is that 

the six-year statute of limitations must be measured from the date that the action was filed rather 

than from the date of death.” Id. 

Here, the parties do not dispute that the complaint contains the facts necessary to conclude 

to a legal certainty that the statute of limitations not only applies, but also that it limits Plaintiff’s 

recovery of PAGA penalties to – at most – five pay periods. Defendant does not contest 

Plaintiff’s dates of employment or the date Plaintiff provided notice to LWDA. In addition, the 

method of measuring the statute of limitations is clear; Defendant has not raised any opposition 

with respect to how Plaintiff calculates the tolling period. 

In sum, the Court finds no support for Defendant’s argument that the Court should ignore 

the statute of limitations, tolling, and Plaintiff’s dates of employment. Accordingly, the Court 

finds that PAGA penalties for only the five pay periods Plaintiff actually worked between August 

31, 2014 and November 2014 are in controversy. PAGA provides for a civil penalty of $100 for 

any initial violation, and $200 for each subsequent violation per pay period. Cal. Labor Code § 

2699(f)(2). Here, Plaintiff asserts five statutory violations per pay period (“5 Claims”). Thus, the 

calculations are as follows: 

1st Pay Period: 5 Claims x $100 = $500, plus 

4 Subsequent Pay Periods: 5 Claims x $200 x 4 = $4,000 

The total PAGA penalties at issue are therefore $4,500. 

 2. Labor Code Section 558 Penalties 

Labor Code section 558 applies to violations of provisions regulating “hours and days of 

work in any order of the Industrial Welfare Commission.” Cal. Labor Code § 558(a). Similar to 

PAGA penalties, a one-year statute of limitations applies to penalties recoverable under section 

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558. Yadira v. Fernandez, 2011 WL 2434043, at *5 (N.D.Cal. June 14, 2011). Claims for civil 

penalties under Section 558 require the same exhaustion of administrative remedies (notice to 

LWDA) and follow the same tolling procedures as PAGA. Chang v. Biosuccess Biotech Co., Ltd., 

76 F.Supp.3d 1022, 1050 (C.D.Cal. 2014); Caliber Bodyworks, Inc. v. Superior Court, 134 

Cal.App.4th 365, 383 (Cal. Ct. App. 2005) (holding that plaintiffs could not pursue civil penalties 

for a Section 558 violation without complying with the pre-filing notice and exhaustion 

requirements of PAGA); Kamar v. RadioShack Corp., 2008 WL 2229166, at *14 (C.D.Cal. May 

15, 2008) (“Because section 558 authorizes recovery of civil penalties and provides for LWDA 

enforcement, the private right of action authorized in section 2699(a) reaches section 558”). 

Accordingly, Defendant’s estimate of an additional $12,750 in Section 558 penalties, 

based on a full year’s worth of violations (26 pay periods), must be reduced to account for the 

dates of Plaintiff’s employment and the limitations period, as with the PAGA penalties. Section 

558 provides for a civil penalty of $50 for any initial violation, and $100 for each subsequent 

violation per pay period. Cal. Labor Code § 558(a)(1). The calculations are as follows: 

1st Pay Period: 5 Claims x $50 = $250, plus 

4 Subsequent Pay Periods: 5 Claims x $100 x 4 = $2,000 

The Court therefore finds that the Section 558 penalties in controversy total $2,250.3 

* * * 

For the reasons discussed above, Plaintiff is only entitled to recover civil penalties for five 

pay periods under both PAGA and Section 558. Consequently, the total PAGA penalties in 

controversy for Plaintiff are $4,500, and the total Section 558 penalties in controversy for Plaintiff 

are $2,250. As shown below, the amount in controversy now stands at $53,627.48: 

Claim Amount in Controversy 

Meal and Rest Period $22,816.37 

 3

 Plaintiff contends that PAGA and Section 558 penalties may not both be recovered. 

Because the Court concludes that Defendant has not met is burden even with full PAGA and 

Section 558 recovery, it need not reach this issue of so-called “double recovery.” 

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Overtime $15,310.52 

Vacation $701.79 

Wage Statement $4,000 

Waiting Penalties $4,048.80 

PAGA $4,500 

§ 558 $2,250 

TOTAL $53,627.48 

AMOUNT NEEDED TO 

EXCEED $75,000 $21,372.53 

 B. Attorney’s Fees 

 Absent attorney’s fees, the amount in controversy stands at $53,627.48. All that remains 

to be determined is whether Defendant has met its burden to establish that attorney’s fees of at 

least $21,372.53 can also be considered in controversy. 

“The amount in controversy includes... attorney’s fees, if authorized by statute or 

contract.” Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2006). Plaintiff’s prayer for 

relief specifically seeks attorney’s fees. (Compl. ¶¶ 8, 23, 33, 38, 42). Irrespective of whether 

Plaintiff specifically requests attorney’s fees, PAGA authorizes such an award. “Any employee 

who prevails in any [PAGA] action shall be entitled to an award of reasonable attorney’s fees and 

costs.” Cal. Labor Code § 2699(g)(1); see also Patel v. Nike Retail Services, Inc., 58 F.Supp.3d 

1032, 1048 (N.D.Cal. 2014) (prevailing plaintiff in PAGA action may recover attorney fees). 

Defendant offers four estimates of attorney’s fees for the Court’s consideration. First, in 

the Notice of Removal, Defendant references, “for the sake of argument” an “extraordinarily 

conservative estimate” that attorney’s fees would be at least $8,977.50. (NOR at ¶ 19; Suppl. 

Oppo. at 16:19.) This is based on an order approving a class action settlement removed under 

CAFA on which Plaintiff’s counsel worked. (NOR, Exh. H.) However, that amount is not 

sufficient on its face to meet the amount in controversy. Accordingly, the Court considers 

Defendant’s other three proffers, all of which rely upon the premise that attorney’s fees in single 

plaintiff cases serve as useful benchmarks for representative class actions. 

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For Defendant’s second estimate of $47,500, Defendant relies on Lippold v. Godiva 

Chocolatier, Inc., a PAGA class action. 2010 WL 1526441 at *1 (N.D.Cal. Apr. 15, 2010). In 

Lippold, the court stated that “attorneys handling wage-and-hour cases typically spend more than 

100 hours on the case.” Id. at 4. The court also found persuasive defendant’s evidence that “a 

typical individual wage and hour case generates fees in excess of $100,000.” Id. Using Lippold

as a guide, Defendant reasons that if Plaintiff’s attorney’s hourly rate is $475, then at a minimum, 

Plaintiff could accrue $47,500 in attorney’s fees. 

However, since Lippold, several district courts have recognized that the Ninth Circuit’s 

holding in Urbino v. Orkin Servs. of California, Inc., 726 F.3d 1118 (9th Cir. 2013), has 

undermined Lippold’s reasoning and have declined to extend Lippold to PAGA class actions in 

light of Urbino. In Urbino, the Ninth Circuit held that civil penalties under PAGA cannot be 

aggregated among class members to determine to meet the amount in controversy requirement for 

federal diversity jurisdiction. 726 F.3d at 1122. Following Urbino, the growing consensus among 

district courts in California is that attorney’s fees similarly cannot be aggregated, but rather they 

must be pro-rated among putative class members when determining the amount in controversy. 

Patel, 58 F.Supp.3d at 1049 (“When the rule is that claims are not aggregated...(as it is now for 

PAGA actions under Urbino), it would seriously undermine the anti-aggregation rule to allow 

attorney’s fees to be allocated solely to a named plaintiff in determining the amount in 

controversy”) (internal alterations omitted); Mitchell v. Grubhub Inc., 2015 WL 5096420 at *7 

(C.D.Cal. Aug. 28, 2015) (noting that, following Urbino, “several district courts in this Circuit 

have determined that the amount in controversy in PAGA actions should only include a plaintiff’s 

pro-rated attorneys’ fees”); Perez v. WinnCompanies, Inc., 2014 WL 5823064 at *10-11 (E.D.Cal. 

Nov. 10, 2014) (“in a putative class action, attributing attorneys’ fees solely to a named plaintiff 

for purposes of determining the amount in controversy would be improper, because the plaintiff 

would not ultimately be entitled to the entirety of that award upon a favorable disposition of the 

case”). 

The Court finds the reasoning in these cases persuasive, and concludes that post-Urbino,

“only the portion of attorney’s fees attributable to [Plaintiff’s] claims count towards the amount in 

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controversy.” Patel, 58 F.Supp.3d at 1049. Thus, even if the Court were to accept Defendant’s 

estimate of $47,500 as appropriate, that entire amount cannot be attributed to Plaintiff’s claims. 

Instead, the “amount must be distributed pro rata” to all putative class members whom Plaintiff 

seeks to represent. Id. Pro-rating Defendant’s estimate of attorney’s fees for each of the 115 class 

members only amounts to $413.04 per person. This is far below the $21,372.53 required to clear 

the jurisdictional hurdle. Using this estimate, the delta to exceed $75,000 remains nearly $21,000. 

Third, Defendant urges the Court to consider Cagle v. C&S Wholesale Grocers, in which 

the district court held that $30,000 was a reasonable, good faith estimate of attorney’s fees in a 

single plaintiff PAGA case. 2014 WL 651923, at *11 (E.D.Cal. Feb. 19, 2014). Defendant’s 

reliance on this single plaintiff PAGA case does not persuade. Unlike in Cagle, here Plaintiff 

seeks to represent a putative class of 115 members. Consequently, attorney’s fees must be prorated, and the Court cannot accept $30,000 as a reasonable estimate of fees to allow Defendant to 

meet the jurisdictional threshold. 

Finally, Defendant proffers $600,000 in attorney’s fees based on the holding in McClease 

v. Home Depot U.S.A., Inc., No. A072070 slip op. (Cal. Ct. App. Aug 8, 1997).4 There are three 

reasons McClease cannot carry Defendant’s evidentiary burden. First, the award of attorney’s fees 

in that case was $290,223.05, not $600,000, as Defendant erroneously posits. Id. at 6. Second, 

McClease is a single plaintiff sex and pregnancy discrimination case, not a wage and hour class 

action. Third, McClease makes no mention of PAGA. It is thus difficult to conceive the 

applicability of McClease in the instant matter. McClease is inapposite.5

 4

 Defense counsel referenced McClease v. Home Depot in her supplemental declaration 

without any citation, providing only the name of the case, that it was upheld by the First District 

Court of Appeal, “handled by [Defense counsel’s] firm several (20) years ago . . . in Alameda 

County,” and that there was a “jury award of approximately $69,000” in that case. (Dkt. No. 19, 

“Gitt Decl.” ¶ 10.) The Court located the above-referenced First District Court of Appeal’s 

decision in McClease v. Home Depot USA, Inc., filed August 8, 1997, where plaintiff McClease 

was awarded $67,000 in damages. The similarity in name, date, and damages strongly suggests it 

is the same case. There, as noted above, the fee award was less than half the amount Defense 

counsel represented to the Court. Given the Court’s Order here, it will not issue an order to show 

cause why counsel should not be sanctioned for misleading the Court. 

5

 If the Court were to adopt the figure actually awarded in McClease, $290,223.05, it must 

be pro-rated among the 115 putative class members. The resulting amount, $2,523.68, does not 

push the amount in controversy over the threshold. 

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In addition to the four estimates Defendant’s provided in its briefing, Defense counsel 

submitted a lengthy supplemental declaration focusing on her “personal knowledge” and “long 

history as a practicing attorney and litigator.” (Gitt Decl ¶ 1.) For example, Defense counsel 

details her experience working on a wage and hour case in the Central District of California that 

recently settled for $3,500,000. (Gitt. Decl. ¶¶ 16, 17.) However, Defendant does not reveal the 

amount the plaintiff’s attorney in that case ultimately recovered, only that “[p]laintiffs’ counsel 

stated that he had expended approximately $1,600,000” in attorney’s fees over the course of three 

years of litigation on behalf of a class of approximately 400 employees. (Id.) Defense counsel 

does not provide any documentation of the settlement agreement or attorney’s fees, or any other 

means of verifying her summary of the case. Apart from this settlement, and the misrepresented 

fee award in McClease, Defendant offers no evidence to support its new estimate of $600,000 as 

recoverable attorney’s fees in this PAGA class action. (Suppl. Oppo. at n.2; Gitt Decl. ¶ 9.) 

The fundamental problem with all of Defendant’s estimates is that attorney’s fees must be 

apportioned among potential class members for jurisdictional purposes. See Patel, 58 F.Supp.3d 

at 1049. If each of the 115 putative class members’ pro-rata share of the total attorney’s fees were 

$21,372.53, then the total recovery of attorney’s fees alone would have to be 115 times the 

amount, or at least $2,457,840.95. See Millar v. Bank of Am., N.A., 2015 WL 5698744, at *5 

(N.D.Cal. Sept. 29, 2015) (applying the same formula and concluding “[t]hat result is not 

possible”). There is no evidence of attorney fees anywhere approaching $2.4 million. 

To be sure, Defendant’s attempt to appeal to common sense based on the realities of fee 

recoveries in these types of cases is not lost on the Court. However, Defendant provides no 

authority—much less evidence—that would allow the Court to impute a collective fee recovery to 

a single plaintiff. Defendant does not even attempt to offer a pro-rated estimate. Defendant has a 

burden which it failed to meet, even when given an additional opportunity to supply the Court 

with evidence sufficient to exercise jurisdiction over the claim. 

In lieu of another suitable estimate, the Court uses Defendant’s conservative estimate of 

$8,977.50. The resulting sum of $62,604.98 conclusively demonstrates Defendant has not 

exceeded the amount in controversy threshold to establish diversity jurisdiction. In fact, even 

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doubling that estimate would be insufficient. 

Claim Amount in Controversy 

Meal and Rest Period $22,816.37 

Overtime $15,310.52 

Vacation $701.79 

Wage Statement $4,000 

Waiting Penalties $4,048.80 

PAGA $4,500 

§ 558 $2,250 

Attorney’s Fees $8,977.50 

TOTAL $62,604.98 

C. Plaintiff’s Supposed Refusal to Stipulate to Remand 

Plaintiff agreed to stipulate to methods of calculation for meal & rest period and PAGA 

penalties, but declines to make a legally binding commitment to recover less than $75,000 in this 

matter. Defendant contends that Plaintiff’s refusal to so stipulate is a persuasive factor against 

remand. The Court disagrees. Given the record in this case, and Defendant’s failure to establish 

the amount in controversy even when granted an extra opportunity, Plaintiff’s failure to stipulate 

does not persuade. 

 “[F]ederal courts permit individual plaintiffs, who are the masters of their complaints, to 

avoid removal to federal court, and to obtain a remand to state court, by stipulating to amounts at 

issue that fall below the federal jurisdictional requirement.” Standard Fire Ins. Co. v. Knowles, 

133 S.Ct. 1345, 1349 (2013) (citing St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 

283, 294 (1938)). After removal, however, a stipulation alone does not necessarily defeat 

jurisdiction. St. Paul, 303 U.S. at 292; Mitchell v. Maurer, 293 U.S. 237, 244 (1934) (“lack of 

federal jurisdiction cannot be waived or be overcome by an agreement of the parties”). It is the 

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district court’s duty to determine the actual amount in controversy, irrespective of affirmative 

stipulations or agreements between the parties. United Investors Life Ins. Co. v. Waddell & Reed 

Inc., 360 F.3d 960, 966-67 (9th Cir. 2004) (“a district court’s duty to establish subject matter 

jurisdiction is not contingent upon the parties’ arguments”). Similarly, a plaintiff’s failure to 

stipulate does not “conclusively establish” the amount in controversy exceeds the jurisdictional 

requirement. Patel, 58 F.Supp.3d. at 1039 (citing Conrad Associates v. Hartford Acc. & Indem. 

Co., 994 F.Supp. 1196, 1199 (N.D.Cal. 1998)). 

Courts in this circuit have consistently rejected the notion that a plaintiff’s refusal to 

stipulate conclusively demonstrates that the amount in controversy exceeds the threshold. See, 

e.g., Schiller v. David’s Bridal, Inc., 2010 WL 2793650 at *4 (E.D.Cal. July 14, 2010) (holding 

that refusal to stipulate “alone” is not sufficient to establish the amount in controversy, and noting 

that “district courts in this circuit have persuasively rejected the proposition that the amount in 

controversy can be established by a plaintiff’s refusal to stipulate to the amount in controversy”); 

Rindels v. Tyco Integrated Sec., LLC, 2015 WL 469013 at *4 (C.D.Cal. Feb. 4, 2015) (“Evidence 

of failure to stipulate to the amount in controversy requirement is at best a factor in determining 

the amount, and at worst irrelevant to the determination”); Conrad Associates, 994 F.Supp. at 

1199 (“since a defect in subject matter jurisdiction cannot be stipulated to or waived, attempting to 

force the plaintiff to enter a stipulation regarding the potential amount of damages would serve no 

effect in determining the actual amount in controversy at the time of removal”). While some 

courts are willing to consider a refusal to stipulate as evidence against a motion to remand, others 

decline to do so entirely. See Conrad Associates, 994 F. Supp. at 1199 (citing cases in which 

failure to stipulate is not “even persuasive”). 

While Defendant concedes that a refusal to stipulate “is not dispositive” on the question of 

remand, it nonetheless argues that Plaintiff’s failure to do so here should in and of itself persuade 

the Court to deny remand. (Suppl. Oppo. at 2:4-5.) However, Defendant proffers no case in 

which a plaintiff’s refusal to stipulate, without more, persuaded a court to deny a motion to 

remand. All of the cases on which Defendant relies involve a defendant’s unrebutted affidavit, 

declaration, or other compelling showing that concluded the matter irrespective of plaintiff’s 

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refusal to stipulate. See Yaralian v. Home Depot U.S.A., Inc., 2015 WL 8374911, at *3 (C.D.Cal. 

Dec. 9, 2015) (defendant presented evidence of plaintiff’s pre-litigation settlement demand of 

$196,000 and plaintiff’s refusal to reduce the demand); Lewis v. Verizon Comm., Inc., 627 F.3d 

395 (9th Cir. 2010) (defendant submitted an affidavit showing that total billings exceeded $5 

million); Heejin Lim v. Helio, LLC, 2012 WL 359304, at *3 (C.D.Cal. Feb. 2, 2012) (noting that, 

where a defendant provided a declaration that more than $5 million in deposits were collected, 

they “effectively would be required to concede liability were the Court to require a stronger 

showing”); Sawyer v. Retail Data, LLC, 2015 WL 3929695, at *2 (C.D.Cal. Apr. 29, 2015) 

(refusal to stipulate “weigh[ed] in favor” of denial of motion to remand, but was “not 

determinative” where defendant presented evidence of plaintiff’s past earnings and similar cases 

where recovery exceeded $75,000). Here, Defendant’s proffer does not rise to the level that would 

allow the Court to find jurisdiction simply because Plaintiff failed to stipulate. 

The Court notes that had Plaintiff stipulated to seek to recover no more than $75,000, it 

would constitute “the best possible evidence” on the question presently before the Court. Patel, 

58 F.Supp.3d. at 1039. Plaintiff’s choice to not so stipulate, however, left the Court to resolve the 

amount in controversy for itself. Id. It has done so, and found that the amount in controversy is at 

most $62,604.98 – well below the jurisdictional threshold. 

IV. CONCLUSION

Based upon the foregoing, the Court finds that Defendant has not met its burden of 

establishing that the amount in controversy in this litigation exceeds the jurisdictional threshold 

under 28 U.S.C. § 1332. Therefore, the motion for remand is GRANTED. The clerk is directed to 

REMAND this action to the Superior Court for the State of California, County of Sonoma. 

IT IS SO ORDERED.

Dated: March 7, 2016 

______________________________________ 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

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