Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-01190/USCOURTS-caed-2_15-cv-01190-1/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Petition for Removal

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

KYLE RICKWALT; BENJAMIN 

CHAVEZ; KAMERON CIERI; 

MAURILIO GONZALES, III; XAVIER 

GONZALEZ; ANGELO NAVARRO; 

ANDREW PINZON; SERGIO ESCOBAR

on behalf of themselves and similarly 

situated employees,

Plaintiffs,

v.

DIRECT RECONDITIONING, LLC, a 

Georgia Limited Liability Corporation; 

DIRECT RECONDITIONING; ADESA, 

INC., a Delaware Corporation; ADESA 

California, LLC; a California Limited 

Liability Company, and DOES 1 to 100 

inclusive,

Defendants.

No. 15-cv-01190-TLN-AC

ORDER GRANTING PLAINTIFFS’ 

MOTION TO REMAND 

This matter is before the Court pursuant to Plaintiffs Kyle Rickwalt, Benjamin Chavez, 

Kameron Cieri, Maurilio Gonzales, III, Xavier Gonzalez, Angelo Navarro, Andrew Pinzon, and 

Sergio Escobar’s (collectively “Plaintiffs”) motion to remand. (ECF No. 8.) Defendants Direct 

Reconditioning, LLC, Direct Reconditioning, ADESA, Inc., and ADESA California, LLC 

(collectively “Defendants”) have filed an opposition to Plaintiffs’ motion, in addition to their 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 1 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

initial notice of removal.1(ECF Nos. 1, 16.) Plaintiffs have filed a reply. (ECF No. 17.) The 

Court has carefully considered the arguments raised in Plaintiffs’ motion to remand and reply, as 

well as Defendants’ opposition. For the reasons set forth below, Plaintiffs’ motion to remand is 

GRANTED. 

FACTUAL ALLEGATIONS AND PROCEDURAL HISTORY

Plaintiffs were employed as detailing employees by Direct Reconditioning.2 (First 

Amended Complaint, “FAC”, ECF No. 1-3 ¶ 16.) 

Direct Reconditioning “paid Plaintiffs and the rest of the detailing employees 

approximately $1.25 per car that was vacuumed and washed only and approximately $3.00 per 

car detailed in the interior and exterior. Plaintiffs worked with approximately five (5) other 

employees, detailing used cars, and splitting the earnings equally.” (FAC ¶ 18.)

Direct Reconditioning did not track the time that Plaintiffs worked or keep records of the 

hours Plaintiffs worked. (FAC ¶ 20.)

Plaintiffs were “required to work without pay at least once per month while detailing 

BMWS or waiting for new cars to arrive from ADESA.” (FAC ¶ 21.)

Direct Reconditioning “scheduled Plaintiffs to work nine (9) to (12) hour workdays once 

per month to work on BMW cars for ADESA, a company that provides and regulates auctions for 

vehicles. On these days, approximately 100 to 200 BMW cars were brought to Direct 

Reconditioning to be detailed for auction. After the auction, Direct Reconditioning and/or 

ADESA instructed the detailing crew, including Plaintiffs, to ‘re-touch’ the vehicles without 

receiving pay for the time spent doing so.” (FAC ¶ 22.)

“Plaintiffs worked approximately four (4) to five (5) days per week. Plaintiffs estimate 

they worked over eight (8) hours per day during the week, and during the summer months, 

including June to mid-August, Plaintiffs worked approximately five (5) to six (6) days per week

and more than forty (40) hours per week, without receiving overtime compensation. Direct 

 

1 The removal notice is made by Defendants Direct Reconditioning, LLC and Direct Reconditioning; the ADESA 

Defendants consent to removal. (ECF No. 1 at 1, n. 1.)

2 The lower end of the relevant time period for employment is February 25, 2011. (FAC ¶ 12.) 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 2 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

Reconditioning did not pay Plaintiffs overtime wages or overtime premiums earned.” (FAC ¶ 

23.)

“Plaintiffs took home paychecks [of] between $500 to $600 per month while working 

upwards of 100 to 150 hours per month. Plaintiffs were not paid the minimum wages of this 

State. Defendants failed to ensure that Plaintiffs were paid minimum wages for every hour that 

they worked. There were times that Plaintiffs has to perform follow-up cleaning or wait for work 

and were not compensated at all for their time.” (FAC ¶ 24.)

Direct Reconditioning “provided Plaintiffs with a check that stated ‘hours worked.’ 

However, Plaintiffs do not know how Direct Reconditioning calculated said ‘hours worked’ nor 

do they know how the amount of pay was calculated.” Accordingly, Plaintiffs’ paystubs were not 

accurate and Plaintiffs were unable to determine the correct amount of wages owed. (FAC ¶ 25.)

“Direct Reconditioning did not schedule or authorize rest breaks for every four (4) hours 

worked. Direct Reconditioning directed Plaintiffs and other employees to take only one (1) 

break, a meal break, and nothing else. As of today, Plaintiffs have not received full compensation 

for all hours worked on an additional one (1) hour’s worth of wages for each legally required rest 

period not authorized.” (FAC ¶ 26.)

On February 25, 2015, Plaintiffs filed their complaint in the Superior Court of the State of 

California for the County of Sacramento. (ECF No. 1-1.) The complaint alleged a total of seven

causes of action: 

 (1) Failure to Pay Overtime Compensation (Cal. Lab. Code §§ 510, 1194); 

 (2) Failure to Pay Minimum Wages (Cal. Lab. Code §§ 510, 1194);

 (3) Failure to Provide Rest Periods (Cal. Lab. Code § 226.7);

 (4) Wage Statement Violations (Cal. Lab. Code § 226(a)); 

 (5) Waiting Time Penalties (Cal. Lab. Code § 203); 

 (6) Violations of California’s Unfair Competition Law (Cal. Bus. & Prof. Code §

17200 et seq.); 

 (7) Violations of California’s Private Attorney General Act (Cal. Lab. Code § 2698 et 

seq.)

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 3 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Defendants subsequently filed an Answer alleging defenses. (ECF No. 1-2.) On April 10, 2015, 

Plaintiffs filed the FAC, adding an eighth cause of action: Violations of California Labor Code §

558. (ECF No. 1-3.) On May 29, 2015, Defendants ADESA, Inc. and ADESA California, LLC

filed an Answer to Plaintiffs’ Amended Complaint. (ECF No. 1-6.) 

On June 2, 2015, Defendants filed a notice of removal of the case alleging this Court has 

jurisdiction over the case pursuant to the Class Action Fairness Act (“CAFA”). (ECF No. 1.) 

Currently, Plaintiffs have filed a motion to remand the case on the basis that the requirements of 

CAFA are not met. (ECF No. 8.) Defendants have filed an opposition, and Plaintiffs have filed a 

reply. (ECF Nos. 16 & 17.) 

LEGAL STANDARD

“[A]ny civil action brought in a State court of which the district courts of the United 

States have original jurisdiction, may be removed by the defendant or the defendants, to the 

district court of the United States for the district and division embracing the place where such 

action is pending.” 28 U.S.C. § 1441(a). However, “[i]f at any time before final judgment it 

appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 

U.S.C. § 1447(c). 

Relevant to this action, CAFA gives federal district courts jurisdiction where: (1) the 

matter in controversy exceeds the sum or value of $5,000,000; (2) the number of members of all 

proposed plaintiff classes in the aggregate is 100 or greater; (3) and there is minimal diversity 

between the defendants and plaintiffs. 28 U.S.C. § 1332(d). (See ECF No. 1 at 4.) “[N]o 

antiremoval presumption attends cases invoking CAFA, a statute Congress enacted to facilitate 

adjudication of certain class actions in federal court.” Dart Cherokee Basin Operating Co., LLC 

v. Owens, 135 S. Ct. 547, 550 (2014). “A defendant’s notice of removal need include only a 

plausible allegation that the amount in controversy exceeds the jurisdictional threshold,” and does 

not need to contain evidentiary submissions. Id. 554. However, when the controversy is 

contested by plaintiffs, evidence establishing the amount is required, and the court must decide 

where the preponderance lies. Id. The defendant can present his own estimate of the damages 

and is not bound by plaintiff’s estimates in the complaint. Frederick v. Hartford Underwriters 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 4 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Ins. Co., 683 F.3d 1242, 1247 (10th Cir. 2012). “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.” Ibarra v. Manheim 

Investments, Inc., 775 F.3d 1193, 1198 (9th Cir. 2015).

ANALYSIS

Plaintiffs argue that Defendants do not meet the requirements of CAFA for the following 

reasons: (1) the amount in controversy is not in excess of $5,000,000; (2) there are not more than 

100 class members; and (3) Defendants did not file their notice of removal on a timely basis. 

Plaintiffs also allege that even if Defendants met the requirements of CAFA, the Court should not 

exercise jurisdiction under the “Local Controversy and Home State” exceptions of CAFA. 

As discussed below, with respect to the amount in controversy requirement, the Court

finds the arguments and evidence presented by the parties places the preponderance below the 

$5,000,000.00 threshold. Therefore, the jurisdictional requirements are not met and the case must 

be remanded. The Court does not address the parties’ arguments pertaining to the other 

requirements under CAFA. 

I. Relevant Period for Calculation of Damages

The parties dispute the period in which damages may be calculated for jurisdictional 

purposes. The FAC states the class shall be composed of: “All non-exempt employees who 

performed car detailing, cleaning, and body shop services who continue to be employed by 

Defendants and paid by Defendants within four (4) years prior to the filing of this Complaint and 

up to the present date.” (FAC ¶ 12.)

Defendants, in their opposition, argue that damages may be calculated for a period that 

includes the time up to the filing of the notice of removal. They argue the above-cited language 

from the FAC intends to include damages up to the time the class is certified. On this point, 

Defendants reference Mejia v. DHL Express (USA), Inc., 2015 WL 2452755, at *3 (C.D. Cal. 

May 21, 2015) (“Plaintiff suggests that there was something inappropriate about Defendant 

including in its estimate time after the date of the filing of the FAC. But Plaintiff chose to define 

the class period in the FAC as running up ‘until the date of certification,’ not the date of filing. [] 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 5 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

Including post-filing time is not inconsistent with the allegations in the FAC.”)

Plaintiffs argue that the proper time period for jurisdictional purposes is the time the initial 

complaint was filed in state court, which would be February 25, 2015. See Std. Fire Ins. Co. v. 

Knowles, 133 S. Ct. 1345, 1349 (2013) (citing Wisconsin Dept. of Corrections v. Schacht, 524 

U.S. 381, 390 (1998)) (“For jurisdictional purposes, our inquiry is limited to examining the case 

‘as of the time it was filed in state court’”). Plaintiffs also allege as follows in their reply 

briefing: “Defendants corrected their unlawful practices on or around March 30, 2015. Thus, 

Defendants misrepresent to the Court that the amount in controversy has increased during the 

period between the filing of the Complaint (February 25, 2015) and the date of the filing of the 

Notice of Removal (June 2, 2015) because they insist on calculating the amount in controversy, as 

if this correction did not occur.” (ECF No. 17 at 2.) Plaintiffs attach declarations from two of the 

named Plaintiffs, representing that as of March 30, 2015 (approximately one month after the 

initial complaint was filed in state court) Defendants began paying for all hours worked, including 

overtime hours worked and at legal rates. Plaintiffs also provide paystubs for the period from 

March 30, 2015, through April 12, 2015, which they state shows that the alleged illegal payment 

practices stopped. (Rickwalt Decl. & Cieri Decl., ECF Nos. 18 & 19; ECF No. 17 at 6–8.) 

The Court follows the plain language from Std. Fire Ins. Co. v. Knowles, 133 S. Ct. at 

1349: “For jurisdictional purposes, our inquiry is limited to examining the case ‘as of the time it 

was filed in state court,’” and so uses the date of the filing of the complaint in state court, on 

February 25, 2015, as the cut-off period for calculating damages for jurisdictional purposes. 

Assuming arguendo that the liability period can extend beyond that point, the Court considers the

damages calculation for the period between February 25, 2015, and March 30, 2015; however, as 

stated more fully below, it is highly unlikely that adding damages for this short period would 

cause the amount in controversy to go above $5,000,000.00. While Defendants do not refute the 

allegation that said illegal practices stopped as of March 30, 2015, the Court notes that Plaintiffs 

made said allegation in their reply briefing so Defendants could not respond. However, 

Defendants’ notice of removal itself uses the February 25, 2015 date when they could have used 

the date of the removal itself or on or about June 2, 2015. For those reasons, the Court notes but 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 6 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

does not address Defendants’ arguments (in their opposition) that the amount in controversy 

should be increased from the amount stated in their notice of removal, based on the interval 

between February 25, 2015, and the date removal occurred on June 2, 2015. 

II. Count 1: Overtime Wages

A. The FAC

In sum, Plaintiffs allege that Defendants failed to pay Plaintiffs all overtime wages due. 

The FAC states:

“Direct Reconditioning scheduled Plaintiffs to work nine (9) to (12) hour workdays once 

per month to work on BMW cars for ADESA, a company that provides and regulates auctions for 

vehicles. On these days, approximately 100 to 200 BMW cars were brought to Direct 

Reconditioning to be detailed for auction. After the auction, Direct Reconditioning and/or 

ADESA instructed the detailing crew, including Plaintiffs, to ‘re-touch’ the vehicles without 

receiving pay for the time spent doing so.” (FAC ¶ 22.)

“Plaintiffs worked approximately four (4) to five (5) days per week. Plaintiffs estimate 

they worked over eight (8) hours per day during the week, and during the summer months, 

including June to mid-August, Plaintiffs worked approximately five (5) to six (6) days per week 

and more than forty (40) hours per week, without receiving overtime compensation. Direct 

Reconditioning did not pay Plaintiffs overtime wages or overtime premiums earned.” (FAC ¶ 

23.)

“Plaintiffs took home paychecks [of] between $500 to $600 per month while working 

upwards of 100 to 150 hours per month. Plaintiffs were not paid the minimum wages of this State 

... There were times that Plaintiffs had to perform follow-up cleaning or wait for work and were 

not compensated at all for their time.” (FAC ¶ 24.)

B. Defendants’ Arguments

Defendants, in their Notice of Removal, state the amount of damages for Count 1 to be 

$934,117.50. (ECF No. 1 at 9.) Defendants reasoned as follows: Plaintiffs state they seek wages 

for three years prior to the filing of the complaint. (FAC ¶¶ 28–32.) However, Plaintiffs’ sixth 

cause of action, under California’s UCL, seeks to extend the period of liability to four years. See 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 7 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

Cal. Bus. & Prof. Code § 17208. Therefore, Defendants use a four-year period of liability, from 

February 25, 2011, through February 25, 2015.3

Plaintiffs seek overtime calculated at 1.5 times the rate of their regular pay. See e.g. Cal. 

Lab. Code § 510(a): “Eight hours of labor constitutes a day’s work. Any work in excess of eight 

hours in one workday and any work in excess of 40 hours in any one workweek and the first eight 

hours worked on the seventh day of work in any one workweek shall be compensated at the rate 

of no less than one and one-half times the regular rate of pay for an employee.” Cal. Lab. Code § 

510 (West).

Regular pay in this case is minimum wage. For part of the four year period, up to June 30, 

2014, minimum wage in California was $8.00 per hour. For the rest of the period, minimum 

wage was $9.00 per hour. (ECF No. 1 at 8.) Therefore, the rate of overtime pay (1.5 times 

minimum wage) would be $12.00 and $13.50 respectively. 

The number of plaintiffs in the class also varied at intervals within the four year period. 

Based on payroll records, Defendants determined the class to be composed of groups of eight 

employees through August 31, 2011, then groups of 45 employees through the remainder of the 

four-year period. (ECF No. 1 at 9.) 

Defendants also assumed for jurisdictional purposes that Plaintiffs worked an average of 

two overtime hours per day. (ECF No. 1 at 8.)

Essentially, Defendants’ calculations considered the number of employees in the class

(ranging from 8 to 45 at any given interval), the number of overtime hours per week they worked

(2 overtime hours per day, where Plaintiffs are working 4 to 5 days per week during the Summer 

months and 5 to 6 days per week during non-Summer months), the rate of pay per overtime hour

(1.5 times minimum wage), and the approximate number of weeks in the seasonal period 

(Summer months vs. non-Summer months).

For example, for the period “Summer Months, June 1, 2011 through August 31, 2011”, 

 

3

Plaintiffs do not appear to object to the extension of four years of liability for the counts related to overtime wages, 

minimum wage, and rest periods (Counts 1, 2, and 3). See FAC ¶ 58. As a separate matter, it does not appear that 

the parties identify a calculation error in each other’s various equations stated in the filings. 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 8 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

the calculation is: 8 (employees in class) x 11 (hours per week) x $12/hr x 13 (total approximate 

weeks in 3 month period) = $13,728.00. (ECF No. 1 at 9.) 

Most importantly, Defendants interpret the allegations in the FAC to be that Plaintiffs 

received no overtime pay all. Essentially, Defendants seize upon the FAC ¶ 23 (“Defendants 

failed to compensate Plaintiffs for all overtime work”) and the FAC ¶ 24 (“Direct Reconditioning 

did not pay Plaintiffs overtime wages or overtime premiums earned”). Thus, Defendants’

interpretation of the FAC would be as follows: the employees were underpaid for normal hours 

worked, and then once the overtime hours for the day were reached, employees were not paid at 

all. This interpretation is simply unreasonable and is inconsistent with Plaintiff’s position. 

C. Plaintiffs’ Arguments

As stated in Plaintiffs’ motion to remand, under California’s Department of Industrial 

Relations, Division of Labor Standards Enforcement Policies and Interpretation Manual (the 

“DLSE Manual”), section 49.2.1.2, two methods are proper for calculating overtime wages for 

piece-rate employees:

1. Compute the regular rate [of] pay by diving the total earnings 

for the week, including earnings during overtime hours, by the 

total hours worked during the week, including the overtime 

hours. For each overtime hour worked, the employee is entitled 

to an additional one-half (1/2) the regular rate for hours 

requiring time and one-half ... This is the most commonly used 

method calculation.

2. Using the piece or commission rate as the regular rate and 

paying one and one-half this rate for production during overtime 

hours. This method is rarely used. 

(ECF No. 8 at 12.)

The parties’ briefing uses method one, because the parties base their overtime rate on 

minimum wage, not the piece or commission rate. The Court accepts that method for calculation 

purposes. 

As an example, as set forth in the DLSE Manual, consider employees working five extra 

overtime hours – for instance, two extra hours on Monday, one extra hour on Tuesday, and two 

extra hours on Friday – for a total of 42 workweek hours. At a rate of ten dollars per hour, the 

employee would receive $420, absent overtime wages. Adding in an additional one-half (1/2) of 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 9 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

wages per hour (five dollars), for each of the five extra hours, would cause $25 to be added to the 

amount owed, resulting in an amount of $445. (ECF No. 8 at 13.) 

Plaintiffs point out, and the Court agrees, that Defendants did not follow this method. 

Defendants calculated overtime wages by adding the full 1.5 times regular wages amount, rather 

than adding the .5 times regular wages amount stated in the DLSE manual. This was because 

Defendants assumed that Plaintiffs allege receiving no wages at all for overtime work, as opposed 

to no overtime premium. Plaintiffs attempt to clarify in their reply: “Plaintiffs are simply 

following accepted principles of law in calculating overtime ‘wages’ or ‘premiums’ owed. 

Plaintiffs used both terms in their FAC when they alleged they were not paid ‘overtime 

compensation,’ ‘overtime wages,’ or ‘overtime premiums.’” (ECF No. 17 at 6.) The Court 

agrees that a more reasonable interpretation of the FAC is simply that Plaintiffs are attempting to 

receive compensation based on the correct overtime rate. Defendants do not dispute that the 

method proposed by Plaintiffs is, in fact, what is set forth in the DLSE manual. 

Following the method set out in the DLSE Manual, the correct factor would be $4.00 per 

overtime hour when regular pay is $8.00 per hour, and $4.50 per hour when regular pay is $9.00 

per hour. Using that factor, and assuming all other factors in Defendants’ calculations are correct,

Plaintiffs arrive at a damages amount in their motion to remand of $311,372.50.

4

The parties also dispute whether Defendants properly assumed Plaintiffs worked two extra 

overtime hours per day. The Court agrees that the FAC is unclear as to how many overtime hours 

Plaintiffs worked per day. (See FAC at ¶¶ 22–24.) Plaintiffs dispute that they worked an average 

of two overtime hours per day. (ECF No. 17 at 3–5.) However, regardless, in their motion to 

remand, Plaintiffs accepted (it appears for argument’s sake) Defendants’ assumption of two 

overtime hours per day. Doing so, Plaintiffs arrive at a damages amount for Count 1 of 

$311,372.50. For the reasons stated, the Court accepts that damages amount for Count 1.

//

 

4

For example, for Defendants’ calculation stated supra, for “Summer Months, June 1, 2011 through August 31, 

2011”, the calculation becomes: 8(employees in class) x 11 (hours per week) x $4/hr x 13 (total approximate weeks 

in 3 month period) = $4,576.00 (ECF No. 8 at 15.) 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 10 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

III. Count 2: Minimum Wages

A. The FAC

The relevant allegations in the FAC are: 

“Direct Reconditioning scheduled Plaintiffs to work nine (9) to (12) hour workdays once 

per month to work on BMW cars for ADESA, a company that provides and regulates auctions for 

vehicles. On these days, approximately 100 to 200 BMW cars were brought to Direct 

Reconditioning to be detailed for auction. After the auction, Direct Reconditioning and/or 

ADESA instructed the detailing crew, including Plaintiffs, to ‘re-touch’ the vehicles without 

receiving pay for the time spent doing so.” (FAC at ¶ 22.)

“Plaintiffs worked approximately four (4) to five (5) days per week. Plaintiffs estimate 

they worked over eight (8) hours per day during the week, and during the summer months, 

including June to mid-August, Plaintiffs worked approximately five (5) to six (6) days per week 

and more than forty (40) hours per week, without receiving overtime compensation. Direct 

Reconditioning did not pay Plaintiffs overtime wages or overtime premiums earned.” (FAC ¶ 

23.)

“Plaintiffs took home paychecks [of] between $500 to $600 per month while working 

upwards of 100 to 150 hours per month. Plaintiffs were not paid the minimum wages of this State 

... There were times that Plaintiffs had to perform follow-up cleaning or wait for work and were 

not compensated at all for their time.” (FAC ¶ 24.)

B. Defendants’ Arguments

Defendants, in their Notice of Removal, state the amount of damages to be $2,531,200.00. 

(ECF No. 1 at 20.) Defendants, when making this calculation, base their damages on the average 

payment per month of $550.00 and 150 hours as the hours worked per month. They calculate 

what Plaintiffs should have been paid by multiplying the hours per month, 150 hours, by the rate 

of pay, $8 or $9. They subtract the average paycheck of $550.000 from what they should have 

been paid, $1,200.00 (based on a rate of $8 per hour) or $1,350.00 (based on a rate of $9 per 

hour). The deficit amount, or underpayment, $650.00 or $800.00, respectively, is then multiplied 

by the number of employees for the given interval and the number of months in the interval. The 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 11 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

resulting amount is $1,265,600.00; that amount is doubled per the liquidated damages provision 

in Cal. Labor Code § 1194.2, to arrive at the final amount of $2,531,200.00. 

For example, for the period February 25, 2011 – November 9, 2011, Defendants’

calculations are: ((150 x $8.00) - $550) x 8 employees x 8 months = $41,600.00 (ECF No. 1 at 

10.) 

In so doing, Defendants essentially rely upon the allegation in paragraph 24 of the FAC –

that Plaintiffs worked upwards of 100 to 150 hours per month, while using the high number of 

150 hours. Defendants also argue that this number is actually low “if Plaintiffs’ allegations in the 

previous paragraph, ¶23, are credited. If, during the non-summer months, Plaintiffs worked four 

to five days a week and worked over eight hours each day, Plaintiffs had to have worked, at a 

minimum, over 156 hours per month. There are 4.33 weeks in a month on average. If Plaintiffs 

worked during the non-summer months 4–5 days a week, they worked 19.5 days in a month on 

average. If they worked only eight hours a day (Plaintiffs, again, allege to have worked in excess 

of eight hours in a day), they necessarily worked, on average 156 hours a month ... For the 

summer months, the minimum number, with no overtime hours, increases to over 190 hours [4.33 

weeks x 5.5 days per week x 8 hours]. Using 150 hours as the average number worked per 

month, based on Plaintiffs’ allegations, is therefore very conservative.” (ECF No. 16 at 12–13.)

C. Plaintiffs’ Arguments

Plaintiffs argue, in their motion to remand, that Defendants incorrectly calculated this 

amount because Defendants assumed Plaintiffs worked the highest number of hours alleged (150 

hours in a range of 100 to 150) rather than the average number of hours (125). Using 125 as the 

number of hours worked, and otherwise accepting Defendants’ calculations, Plaintiffs arrive at an 

amount of $1,767,600.00.

The Court finds that Defendants offer the more appropriate number because in the FAC ¶ 

23, Plaintiffs indeed allege: “Plaintiffs worked approximately four (4) to five (5) days per week. 

Plaintiffs estimate they worked over eight (8) hours per day during the week, and during the 

summer months, including June to mid-August, Plaintiffs worked approximately five (5) to six 

(6) days per week and more than forty (40) hours per week, without receiving overtime 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 12 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13

compensation.” Simply put, it’s not clear how many hours Plaintiffs are alleging they worked per 

week, or how this allegation (FAC ¶ 23) fits with the allegation in the FAC ¶ 24 that Plaintiffs 

worked upwards of 100 to 150 hours per month. Based on the allegations in ¶ 23, as Defendants 

point out, the number of hours worked per month could be quite a bit higher than 150 hours. In 

their reply, Plaintiffs themselves propose that the maximum number of damages could be 

Defendants’ number – $2,531,200.00 – with the possibility of an increase for the period between 

February 25, 2015, and March 30, 2015. (ECF No. 17 at 7.)

For those reasons, the Court accepts the proposed amount for Count 2 which Defendants 

state in their notice of removal: $2,531,200.00.

IV. Remaining Counts & Attorney’s Fees

For Count 3: Failure to Provide Rest Breaks, Plaintiffs do not dispute Defendants’

proposed amount. Therefore, the Court accepts Defendants’ proposed amount from their notice 

of removal for Count 3: $311,372.50. 

For Count 4: Failure to Provided Itemized Wage Statements, Defendants’ proposed 

amount in their Notice of Removal is: $112,400. Plaintiffs argue only: “Defendants summarily 

stated Plaintiffs and the putative class are owed $112,400 in wage statement violations without 

providing the number of pay periods or violations that occurred during the one-year statute of 

limitations.” (ECF No. 8 at 11.) Defendants have attached payroll records showing the number 

of employees for the relevant period and the penalties claimed for each. (ECF No. 16, Ex. A-1.) 

The Court accepts Defendants’ proposed amount from their notice of removal, for Count 4: 

$112,400.00.

For Count 5: Waiting Time Penalties, Defendants’ proposed amount in their Notice of 

Removal is $156,240.00. Plaintiffs again argue that Defendants summarily stated the amount of 

waiting time penalties without providing the factual basis underlying their calculation. (ECF No. 

8 at 18.) For argument’s sake, the Court will accept Defendants’ proposed amount from their 

notice of removal for Count 5: $156,240.00. 

The parties do not provide an independent proposed amount for Count 6: California’s 

UCL, presumably because the amount for that claim is incorporated into the other counts in the 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 13 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14

FAC. The parties do not provide proposed amounts for Counts 7 and 8, on the basis that claims 

brought under the Private Attorneys General Act are generally not included in the removal 

inquiry. (ECF No. 1 at 14, n. 4.) See Baumann v. Chase Inv. Serv. Corp., 747 F.3d 1117, 1122 

(9th Cir. 2014); Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal. App. 4th 1112, 1148 (2012).

Added together, the amounts for Counts 1 through 6 are: $3,422,585.00. 

Both parties agree that the attorney’s fees, if they are awarded, would be 25% of the total 

amount of damages. (ECF No. 8 at 19; ECF No. 16 at 17.) For jurisdictional purposes, 

attorney’s fees are taken into consideration. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 

701 (9th Cir. 2007); Sanchez v. Wal-Mart Stores, Inc., 2007 WL 1345706, at *2 (E.D. Cal. May 

8, 2007). Adding 25% for attorney’s fees, the final amount is: $4,278,231.25. 

As discussed above, Plaintiffs proffer that, if the amount in controversy at the time the 

complaint was filed is not used, the latest date used should be March 30, 2015. The Court 

declines to undertake an analysis of what damages would accrue for roughly that month-long 

period between February 25, 2015, and March 30, 2015. However, with an amount in 

controversy before attorney’s fees of $3,422,585.00, an additional amount of $577,415.00 would 

have to be added for that period, to reach $5,000,000 including attorney’s fees. It does not appear 

that amount (or more) could accrue between February 25, 2015 and March 30, 2015. 

In any event, the strongest point to draw from the above discussion is that the parties are 

engineering amounts based on speculation. The amounts proposed by the parties are 

unsubstantiated. There is little to no evidence before the Court of how many hours, either regular 

or overtime, Plaintiffs worked during the four-year period. One obvious inconsistency is in the

Defendants’ calculations for Counts 1 and 2. Based on Defendants’ calculations, if Plaintiffs 

work two hours of overtime each day (Count 1), Plaintiffs must work ten hours for each of those 

days. However, Defendants’ calculations for Count 2 relying on 150 hours of work per month, 

are not consistent with an estimate of ten hours per work each day. 

So on the one hand, the Court could increase the average number of hours worked per 

month, to well above 150, to make that number fit with an assumption that Plaintiffs worked two 

overtime hours per day. On the other hand, there is no evidentiary support for the fact that

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 14 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

15

Plaintiffs actually worked two overtime hours each day, or that Plaintiffs worked an average of 

150 hours per month. “In the event that the plaintiff does contest the defendant’s allegations, 

both sides submit proof and the court decides, by a preponderance of the evidence, whether the 

amount-in-controversy requirement has been satisfied.” Owens, 135 S. Ct. at 550.

The only evidence submitted by Defendants is the declarations of the treasurer of Direct 

Reconditioning, LLC, Donald K. Cameron, which state the number of employees employed at 

various intervals in the four-year period prior to the filing of the complaint, on February 25, 2011. 

(ECF No. 1, Ex. 7; ECF No. 16, Ex. A.) Attached to the later-filed declaration (ECF No. 16, Ex. 

A) are payroll records showing employees for whom Cal. Labor Code § 226 penalties are 

requested, for the period February 25, 2014, through February 25, 2015. (ECF No. 16, Ex. A-1.) 

Those records do not show either how many overtime hours are worked per day, or how many 

hours are worked per month during the four-year period. 

The evidence submitted by Plaintiffs is declarations from two former employees, Mr. 

Cieri and Mr. Rickwalt, with attached production records and paychecks. (ECF Nos. 11 & 12; 18 

& 19.) Mr. Cieri’s supplemental declaration states, among other things, that he “typically worked 

four (4) to eight (8) hours per day. [He] did not work ten (10) hours per day, or two overtime 

hours per day, on a daily basis during [his] employment at Direct Reconditioning ... For instance, 

during the two week pay period of August 18, 2014 through August 29, 2014, [he] worked 

approximately four (4) to seven (7) hours per day. For the pay period of September 1, 2014 

through September 11, 2014, [he] worked between four (4) to six (6) hours per day, with the 

exception of one day when [he] worked eleven (11) hours. There were times near Adesa’s 

auction day that [he] and other employees had to work longer than eight (8) hours to get all the 

work. In 2014 and 2015, [he] generally worked four to eight hours per day worked.” (ECF No. 

18 ¶ 3.) That declaration also attaches production records and paychecks, though it’s not clear 

that these attachments confirm the hours stated in Mr. Cieri’s supplemental declaration. 

The supplemental declaration from Mr. Rickwalt, which also attaches production records 

and paychecks, states roughly the same as Mr. Cieri, including that he “typically worked four (4) 

to eight (8) hours per day. [He] did not work ten (10) hours per day, or two overtime hours per 

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 15 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

16

day, on a daily basis during [his] employment at Direct Reconditioning.” (ECF No. 19 ¶ 3.)

The figures proposed by Defendants, in their removal notice (roughly $5.1 million) and 

opposition (roughly $5.5 million), are just slightly over the required amount in controversy. 

Though the submitted evidence from both parties is minimal, what has been submitted

substantiates Plaintiffs’ position that Defendants’ proposed amounts are too high. The submitted 

evidence, albeit minimal, preponderates toward an amount below $5,000,000. 

CONCLUSION

For the reasons set forth above, Plaintiffs’ Motion to Remand (ECF No. 8) is GRANTED. 

Plaintiffs also request an order granting costs, including attorney’s fees, associated with 

removal. (ECF No. 8 at 8.) Such costs may be granted when a defendant lacked an objectively 

reasonable basis for removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). The 

Court does not find Defendants lacked an objectively reasonable basis for removal, and so the 

request for costs is DENIED. 

Dated: December 1, 2015

Case 2:15-cv-01190-TLN-AC Document 25 Filed 12/02/15 Page 16 of 16