Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-01046/USCOURTS-casd-3_18-cv-01046-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity Action

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PAUL HERNANDEZ on behalf of 

himself, all others similarly situated, and 

on behalf of the general public,

Plaintiffs,

v.

DUNBAR ARMORED, INC.; and DOES 

1–100,

Defendants.

Case No.: 18-CV-1046 JLS (LL)

ORDER: (1) GRANTING

PLAINTIFF’S MOTION TO

REMAND AND, (2) REMANDING 

ACTION TO THE SUPERIOR 

COURT OF THE STATE OF 

CALIFORNIA, COUNTY OF SAN 

DIEGO

(ECF No. 6)

Presently before the Court is Plaintiff Paul Hernandez’s Motion to Remand (“Mot.,” 

ECF No. 6). Also before the Court are Defendant Dunbar Armored, Inc.’s Opposition to 

(“Opp’n,” ECF No. 9) and Plaintiff’s Reply in Support of (“Reply,” ECF No. 11) the 

Motion. The Court took this matter under submission without oral argument pursuant to 

Civil Local Rule 7.1(d)(1). Having considered the parties’ arguments and the law, the 

Court GRANTS Plaintiff’s Motion and REMANDS this action to the Superior Court of 

the State of California, County of San Diego.

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 

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State of California, County of San Diego, on April 20, 2018, alleging nine cause of action 

arising from (1) failure to pay straight, regular rate wages for all work performed; (2) failure 

to pay all overtime wages; (3) failure to provide meal periods; (4) failure to provide rest 

periods; (5) failure to pay wages due at termination; (6) failure to provide paid sick days; 

(7) knowing and intentional failure to comply with itemized employee wage statements; 

(8) failure to pay employees twice per month; and (9) failure to reimburse expenses in 

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

April 26, 2018. See Declaration of Guillermo A. Escobedo in Support of Notice of 

Removal (“Escobedo Decl.”), ECF No. 1-3, ¶ 3. 

On May 25, 2018, Defendant removed to this Court on the basis that this “is a civil 

action: (1) between ‘citizens of different States’; and (2) wherein the amount placed in 

controversy exceeds the sum of seventy-five thousand dollars ($75,000.00), exclusive of 

interest and costs.” ECF No. 1 ¶ 7 (citing 28 U.S.C. §§ 1332(a), 1441). Plaintiff filed the 

instant Motion on August 6, 2018. See generally ECF No. 6.

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 

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 

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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 the amount in 

controversy does not exceed $75,000.1

 See Mot. at 1. Plaintiff seeks PAGA penalties for 

various violations of the California Labor Code. See generally Compl. 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). 

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

individual claims for PAGA penalties, see ECF No. 1 ¶ 21, they disagree as to whether the 

amount in controversy may include the State’s 75% share. 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.2

 

See Mot. at 8–10. Defendant counters that “Plaintiff misconstrues the scope of the Ninth 

Circuit’s Urbino decision” because “[t]he sole issue before the Ninth Circuit in Urbino was 

whether PAGA penalties for the entire PAGA class could be aggregated to meet the 

jurisdictional amount for removal” and “California district courts maintain discretion to 

consider the State of California’s portion of PAGA penalties to satisfy the jurisdictional

 

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

Maryland, see Declaration of Jeffrey Lewin in Support of Removal (ECF No. 1-3) ¶ 4, while Plaintiff is 

a citizen of California. See Compl. ¶ 5.

2 Relying on Standard Fire Insurance Company v. Knowles, 568 U.S. 588, 595 (2013), Plaintiff also 

contends that his affidavit—in which he “agrees, stipulates, warrants and/or commits, on his own behalf, 

that he will not seek and/or recover in his PAGA action in an amount more than $74,999, this includes –

but is not limited to – for all PAGA damages, penalties, amounts recovered, costs, and/or attorney fees,” 

Compl. at 30 (CM/ECF pagination)—validly sets the amount in controversy below the federal 

jurisdictional threshold. Defendant urges that “the Supreme Court’s Knowles decision in no way 

authorized PAGA plaintiffs to set the amount in controversy below the jurisdictional amount in order to 

evade federal jurisdiction.” Opp’n at 8. Although inclined to agree with Defendant, the Court need not 

reach this issue.

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requirement.”3 Opp’n at 12 (citing Patel v. Nike Retail Servs., Inc., 58 F. Supp. 3d 1032 

(N.D. Cal. 2014)).

“District 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.

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 

 

3 Defendant also urges the Court to deny Plaintiff’s Motion as untimely. See Opp’n at 8. Although 

Plaintiff’s Motion is admittedly untimely under 28 U.S.C. § 1446(b), see Reply at 2–3, “federal courts are 

under an independent obligation to examine their own jurisdiction.” FW/PBS, Inc. v. City of Dallas, 493 

U.S. 215, 231 (1990).

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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 assuming a 100% violation rate,4 the parties agree that Defendant’s maximum 

PAGA exposure as to Plaintiff is $82,500. Compare ECF No. 1 ¶¶ 21–22, with Mot. at 10, 

and Reply at 8. One-quarter of $82,500 is $20,625,5 $54,375 short of the $75,000 

jurisdictional requirement.

6

 Defendant nonetheless claims, without any support, that 

Plaintiff’s attorneys’ fees themselves “will far exceed the $75,000 jurisdictional 

requirement,” see Opp’n at 18, rendering the amount-in-controversy requirement easily 

met once the fees are added to the award. See id. at 17–18. Plaintiff counters that “only 

[Plaintiff]’s pro rata share [of the attorneys’ fees] should be considered.” Reply at 9.

Again, the Court must agree with Plaintiff. Even if Defendant had proffered a value 

for the attorneys’ fees at issue,7 “[a]s is the case with the value of Plaintiff’s claims . . . , 

 

4 The assumption of a 100% violation rate itself is suspect where, as here, it “is ‘not grounded in real 

evidence.’” Richard Snow v. Watkins & Shepard Trucking, Inc., No. EDCV182206DMGSPX, 2019 WL 

1254571, at *3 (C.D. Cal. Mar. 18, 2019) (quoting Ibarra v. Mannheim Invs., Inc., 775 F.3d 1193, 1199

(9th Cir. 2015)).

5 “[C]ourts generally calculate the amount in controversy in PAGA actions by averaging the total 

potential exposure across the total number of plaintiffs,” Sloan, 2019 WL 1111191, at *3 (citing 

Urbino, 726 F.3d at 1121), but neither party has estimated the total PAGA penalties in controversy here. 

Accordingly, the Court must use the maximum possible exposure for Plaintiff.

6 Although Defendant argues that Plaintiff is entitled to an additional $41,750 in penalties under California 

Labor Code § 558, see Opp’n at 13–17, Plaintiff seeks penalties under Section 558 in the alternative to 

penalties under Section 2699(f)(2). See Compl. ¶¶ 56, 66, 85, 97, 109, 127, 137, 147, 155.

7 Because the burden is on Defendant to establish by a preponderance of the evidence that the amount in 

controversy exceeds the jurisdictional threshold, see Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 

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‘only the portion of attorney’s fees attributable to [the plaintiff’s] claims count towards 

the amount in controversy.’” Sloan, 2019 WL 1111191, at *3 (quoting Patel, 58 F. Supp. 

3d at 1049). Even assuming, as some district courts have, a benchmark fee award of 25%, 

see, e.g., id.; Olson, 2017 WL 3317811, at *5, this serves only to double the amount in 

controversy from $20,625 to $41,250. “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.

CONCLUSION

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

No. 6) and REMANDS this action to the Superior Court of the State of California, County 

of San Diego (ECF No. 1). Because this Order concludes the litigation in this matter, the 

Clerk of Court SHALL CLOSE the file.

IT IS SO ORDERED.

Dated: March 25, 2019

 

404 (9th Cir. 1996), Defendant’s failure to introduce any evidence concerning the amount of the attorneys’ 

fees at issue here means that it has failed to satisfy its burden in establishing removal jurisdiction.

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