Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00050/USCOURTS-caed-2_16-cv-00050-1/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1446 Petition for Removal

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

RUBEN AMAYA, individually, and 

on behalf of other members of 

the general public similarly 

situated, and on behalf of 

aggrieved employees pursuant to 

the Private Attorneys General 

Act,

Plaintiff,

v.

APEX MERCHANT GROUP, LLC, dba 

EXPRESS PROCESSING, an unknown 

entity; FIRST AMERICAN PAYMENT 

SYSTEMS, an unknown entity; and 

DOES 1-100, inclusive,

Defendants.

CIV. NO. 2:16-00050 WBS CKD 

MEMORANDUM AND ORDER RE:

MOTION TO REMAND

----oo0oo----

The court has considered the supplemental evidence 

submitted by defendant First American Payment Systems (“First 

American”) and plaintiff Ruben Amaya regarding the amount in 

controversy in this class action for wage and hour violations. 

Case 2:16-cv-00050-WBS-CKD Document 20 Filed 04/26/16 Page 1 of 10
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(Docket Nos. 15, 16.) First American removed this action from 

Sacramento County Superior Court pursuant to the Class Action 

Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Docket No. 1.) 

Plaintiff moved to remand pursuant to 28 U.S.C. § 1447, 

contending that First American had not established that the 

amount in controversy exceeds $5,000,000. (Docket No. 8.) On 

March 7, 2016, this court granted the parties thirty days to 

submit more specific evidence regarding the amount in controversy 

in this case.

1 (March 7, 2016 Order at 12 (Docket No. 12).) 

Where the plaintiff contests the amount in controversy 

alleged by the removing defendant, “both sides submit proof and 

the court decides, by a preponderance of the evidence, whether 

the amount-in-controversy requirement has been satisfied.” Dart 

Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 

(2014). The party seeking removal bears the burden of 

establishing that the amount in controversy exceeds $5,000,000. 

Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 

1996). “Under this burden, the defendant must provide evidence 

establishing that it is ‘more likely than not’ that the amount in 

controversy exceeds that amount.” Sanchez, 102 F.3d at 404. 

Courts strictly construe the removal statute against 

removal jurisdiction. See Gaus v. Miles, Inc., 980 F.2d 564, 566 

(9th Cir. 1992); Nolan v. Kayo Oil Co., Civ. No. 11-00707 MEJ, 

2011 WL 2650973, at *2 (N.D. Cal. July 6, 2011). If “it appears 

 

1 Plaintiff submitted its supplemental evidence thirty 

days from the date the court’s Order was docketed instead of

thirty days from the date the March 7, 2016 Order was signed. 

The Order specified that the parties would be given thirty days 

from the date the Order was signed. While plaintiff therefore 

submitted its evidence one day late, the court will not strike 

plaintiff’s evidence on such a technicality. 

Case 2:16-cv-00050-WBS-CKD Document 20 Filed 04/26/16 Page 2 of 10
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that the district court lacks subject matter jurisdiction, the 

case shall be remanded.” 28 U.S.C. § 1447(c). If, under the 

preponderance of evidence standard, the evidence submitted by 

both sides is balanced, “the scales tips against federal-court 

jurisdiction.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 

1199 (9th Cir. 2015).

In an effort to bolster its claim that the amount in 

controversy in this case exceeds $5,000,000, First American

submitted a supplemental declaration by Paul Novelli, the 

custodian of records at Apex, and an attached excel sheet with

the start dates, end dates, and total business days worked by 

sales consultants employed by Apex in California between November 

11, 2011 and November 12, 2015. (Suppl. Novelli Decl. (Docket 

No. 15-1).) Novelli states that the Apex database of business 

records indicates that Apex had a contractual relationship with 

more than 1,767 sales consultants in California between November 

11, 2011 and November 12, 2015, contractual relationships with 

1,737 of the 1,767 were terminated before November 12, 2015, and 

the “collective tenure” of the sales consultants was 47,582 

business days. (Id. ¶¶ 6-9.) Novelli also reports that sales 

consultants were paid not less than once a week. (Id. ¶ 10.) 

Only the information regarding the total business days worked and

the weekly pay periods is new evidence that was not already 

submitted to this court. 

Based on this limited evidence, First American

estimates that the amount in controversy totals $11,274,056. 

(Def.’s Suppl. Evid. at 4 (Docket No. 15).) In contrast, 

plaintiff contends that only $3,525,889.85 is at stake. (Pl.’s 

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Suppl. Evid. at 9 (Docket No. 16).) As will be discussed in more 

detail below, the court finds that despite being provided an 

opportunity to submit more specific evidence, First American has 

failed to establish that it is more likely than not that the 

amount in controversy exceeds $5,000,000.

A. Unpaid Overtime

Under plaintiff’s first cause of action, plaintiff 

seeks to recover unpaid overtime compensation, Cal. Labor Code 

§§ 510, 1194, 1198. (Compl. ¶¶ 61-62 (Docket No. 1-1).) While 

the Complaint does not allege the frequency of overtime

violations, it states that “[a]t all material times set forth 

herein, Defendants failed to pay overtime wages to plaintiff and 

the other class members for all hours worked. Plaintiff and the 

other class members were required to work more than eight (8) 

hours per day and/or forty (40) hours per week without overtime 

compensation.” (Id. ¶ 38.) Based on this allegation, First 

American conservatively assumed that each of the 1,767 sales 

consultants worked one hour of overtime, was paid the 2008 

minimum wage of $8 per hour, and the amount in controversy is 

therefore $21,204.2 (Def.’s Suppl. Evid. at 2.) 

Plaintiff argues for the first time that class members 

are entitled to only thirty minutes each of overtime pay for 

uncompensated time spent on training. (Pl.’s Suppl. Evid. at 1.) 

He contends that he and “the putative class members are only 

entitled to overtime wages for the time they spent in training, 

for they were outside salespersons in the remaining time.” (Id.

 

2 $12 (one hour of pay at one-and-one-half times the 

regular minimum wage rate)*1,767*1=$21,204.

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at 2.) This directly contradicts plaintiff’s allegation in his 

Complaint that he and the other sales consultants were 

misclassified as independent contractors. (See Compl. ¶ 26 

(“Defendants engaged in a uniform policy and systematic scheme of 

wage abuse against their exempt independent contractors with the 

job title ‘Sales Consultants’ or those that performed similar 

duties within the State of California. This scheme involved, 

inter alia, misclassifying them as independent contractors.”).) 

Because First American could not have anticipated plaintiff’s 

departure from his original theory of the case and First American

conservatively assumed only one hour of overtime per employee 

based on plaintiff’s allegations that each employee suffered an 

overtime violation, First American has met its burden under this 

cause of action. 

B. Unpaid Meal and Rest Period Premiums

Under causes of action two and three plaintiff seeks 

penalties under California Labor Code section 226.7, which 

provides that if an employer fails to provide meal or rest 

periods it shall pay the employee one additional hour of pay at 

the employee’s regular rate of compensation for each workday that 

the meal or rest period is not provided. (Id. ¶ 73); Cal. Labor 

Code § 226.7(c). First American assumed, without any supporting 

evidence, that there was one missed rest period and one missed 

meal period on each of the 47,582 work days, creating an amount 

in controversy of $761,312.

3 (Def.’s Suppl. Evid. at 3.) 

Plaintiff instead argues that each class member is entitled only 

 

3 $8 (one additional hour of pay)*47,582 (work days)*2 

(for meal and rest periods)=$761,312.

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to meal and rest periods for the non-outside sales related work 

they performed while attending two days of online training 

sessions, creating an amount in controversy of $63,612.4 (Pl.’s 

Suppl. Evid. at 3.) In contrast to the specific evidence offered 

by plaintiff, First American provides no justification for its 

estimation of one missed meal and rest break per day. 

Accordingly, the court must find First American failed to meet 

its burden and assume that plaintiff is correct that only $63,612 

is at stake on plaintiff’s second and third claims.

C. Penalties for Failure to Timely Pay Minimum Wages

Under cause of action four, plaintiff seeks to recover 

the unpaid balance of minimum wage compensation and penalties for 

failure to timely pay minimum wages. (Compl. ¶ 86.) Section 

1197.1 provides penalties of $100 for the initial violation and 

$250 for each subsequent violation. Cal. Labor Code § 1197.1. 

First American argues that $2,104,450 is at stake but yet again 

fails to provide factual support for its assumption that each 

class member not only suffered an initial violation but also four 

subsequent violations. Accordingly, the court will again rely on 

plaintiff’s assertion that each class member is owed thirteen 

hours and thirty minutes of minimum wage compensation for the 

time they spent preparing for and attending the two training 

sessions and that there were no subsequent violations, putting 

$391,390.60 at stake on this claim. 

D. Penalties for Failure to Pay Wages When Terminated

Under cause of action five, plaintiff requests 

 

4 1,767*$9 (the 2014 minimum wage in effect during 

plaintiff’s employment)*2 (work days)*2 (for meal and rest 

periods)=$63,612

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penalties under California Labor Code section 203, which provides 

that if an employer willfully fails to pay wages owed at the time 

of discharge, the wages of the employee shall continue as a 

penalty from the due date until paid or an action is commenced, 

but for no more than thirty days. (Compl. ¶ 92); Cal. Labor Code 

§ 203(a). As in its original opposition, First American assumed 

the 1,737 sales consultants whose contracts were terminated 

before November 12, 2015 were entitled to the 2008 California 

minimum wage of $8 per hour, for an eight-hour-day, for the full 

thirty day maximum, putting $3,335,040 in controversy.

5 (Id.) 

First American, however, fails to take into account the threeyear statute of limitations period for waiting time penalties. 

In consulting the Apex records, plaintiff determined that only 

1,230 employees were terminated within the limitations period. 

(Pl.’s Suppl. Evid. at 7.) Thus, even assuming an eight-hour-day 

and the full thirty day penalty period, this brings the amount in 

controversy down to $2,361,600. 

E. Non-Compliant Wage Statements

Under cause of action six, plaintiff seeks penalties 

for non-compliant wage statements pursuant to California Labor 

Code section 226(a), which provides $50 for the initial pay 

period in which a violation occurs and $100 per employee for each 

subsequent violation, not to exceed an aggregate of $4,000. 

(Compl. ¶ 97); Cal. Labor Code § 226(a). First American argues 

that all 1,767 class members received inaccurate wage statements 

on a weekly basis and concludes that $401,400 is at stake.6

 

5 ($8*8 hours)*30 days*1,737=$3,335,040

6 (1,767*50) + ((1,720 putative class members whose 

tenure was 39 weeks or less*100*the number of subsequent pay 

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Again, First American failed to take into the account the oneyear statute of limitations. According to plaintiff, only 200 

class members were employed during the statute of limitations--

between November 12, 2014 and the present. (Pl.’s Suppl. Evid. 

at 7.) Plaintiff therefore argues 200 class members received 

inaccurate statements twice a month, or for 528 pay periods, 

making this claim worth $62,800. Even if First American is 

correct that class members received inaccurate wage statements on 

a weekly basis, First American clearly failed to take into 

account the statute of limitations and overestimated the amount 

in controversy for this claim.

F. Reimbursement for Business Expenses

Under plaintiff’s seventh cause of action, he seeks 

reimbursement for business expenses. (Compl. ¶ 105); Cal. Labor 

Code §§ 2800, 2802. The Complaint alleges only that plaintiff 

and other class members were not fully reimbursed for “personal 

cellular phones, internet service fees, mileage on personal 

vehicles, computers, paper, ink, and other office supplies” but 

provides no specific dollar amount. (Compl. ¶ 103.) First 

American therefore estimates that each class member would seek 

$200 in business expenses, for a total of $353,400. (Def.’s 

Suppl. Evid. at 6.) Plaintiff specifically outlines the $380.20 

of business expenses he is allegedly owed for mileage, gas, 

cellular phone, internet, and office supplies and multiplies this 

number by the total number of class members for a total of 

$671,460. (Pl.’s Suppl. Evid at 8.) The court will rely on 

 

periods)+(47 putative class members whose tenure was more than 39 

weeks*3,950))=$401,400.

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plaintiff’s higher estimation as it is grounded in more specific 

facts. 

G. Private Attorney General Act

Lastly, under cause of action eight, plaintiff seeks 

statutory penalties under the Private Attorney General Act 

(“PAGA”), Cal. Labor Code §§ 2698 et seq. (Compl. ¶¶ 106-109.) 

First American contends that $4,297,250 is in controversy under 

this claim. (Def.’s Suppl. Evid. at 6.) The Ninth Circuit has 

made clear, however, that PAGA claims are not representative 

claims that go towards the amount in controversy in a class 

action under CAFA. Yocupicio v. PAE Group, LLC, 795 F.3d 1057, 

1060-61 (9th Cir. 2015); see also Baumann v. Chase Inv. Servs. 

Corp., 747 F.3d 1117, 1121 (9th Cir. 2014) (finding that PAGA 

actions are “not sufficiently similar to Rule 23 class actions to 

trigger CAFA jurisdiction”). PAGA actions are “fundamentally 

different from class actions, chiefly because the statutory suits 

are essentially law enforcement actions” and “the bulk of any 

recovery goes to the LWDA, not to aggrieved employees.” Baumann, 

747 F.3d at 1121, 1123. As a result, the court will not count 

plaintiff’s PAGA claims towards the amount in controversy. 

H. Conclusion

Despite the opportunity to provide supplemental 

evidence, First American’s calculations in this case are still

largely based on unsupported assumptions. Plaintiff submitted 

detailed evidence supporting his assertion that the case is worth 

less than $5,000,000--such as information regarding his own 

missed meal and rest periods, overtime hours, and owed business 

expenses--while First American failed to take into account 

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statutes of limitations and relied solely on the number of sales 

consultants employed, the number terminated before November 12, 

2015, and their “collective tenure.” Accordingly, the court must 

find that First American relied on speculative and self-serving 

assumptions and failed to establish that it is more likely than 

not that the amount in controversy exceeds $5,000,000. Given 

that courts must strictly construe the removal statute against 

removal jurisdiction, the court must grant plaintiff’s motion to 

remand. See Gaus, 980 F.2d at 566. 

IT IS THEREFORE ORDERED that plaintiff’s motion to 

remand (Docket No. 8) be, and the same hereby is, GRANTED. This 

matter is hereby REMANDED to the Superior Court for the State of 

California, in and for the County of Sacramento.

Dated: April 25, 2016

Case 2:16-cv-00050-WBS-CKD Document 20 Filed 04/26/16 Page 10 of 10