Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-01340/USCOURTS-caed-2_19-cv-01340-0/pdf.json

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

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

MEGAN ROUGH, individually and on 

behalf of all similarly situated current 

and former employees of Defendants in 

the State of California;

Plaintiff,

v.

COSTCO WHOLESALE 

CORPORATION, a Delaware 

Corporation; and DOES 1-50, inclusive,

Defendants.

No. 2:19-cv-01340-MCE-DB

MEMORANDUM AND ORDER

Through this action, Plaintiff Megan Rough (“Plaintiff”) seeks relief from 

Defendant, Costco Wholesale Corporation (“Defendant”) for violations of the California 

Labor Code and the Industrial Welfare Commission Wage Orders. Plaintiff, individually 

and on behalf of all other similarly situated employees, filed a Class Action Complaint in 

the Superior Court of California, County of Solano, after which Defendant removed 

Plaintiff’s case to federal court pursuant to the Class Action Fairness Act (“CAFA”), 

28 U.S.C. § 1332(d). ECF No. 1. Presently before the Court is Plaintiff’s Motion to 

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Remand, which is fully briefed. ECF No. 5. For the following reasons, that Motion is 

DENIED.1 

BACKGROUND2

Plaintiff brings the present action on behalf of herself and all current and former 

non-exempt, hourly-paid employees who worked for Defendant within California and who 

worked one or more closing shifts during the period from four years preceding the filing 

of this Complaint to final judgment. Defendant employed Plaintiff as a front-end 

associate in its store warehouse located in Woodland, California, from December 2017 

to January 2018, and in another warehouse located in Vacaville, California, from March 

2018 to April 2019.

Plaintiff alleges that she and other similarly situated employees continued to work 

after business hours at Defendant’s stores. After the stores’ doors were closed to 

customers and locked, Defendant required Plaintiff and other similarly situated 

employees to clock out and then walk to a designated exit location. The employees then 

had to call and wait for a manager to meet them at the designated exit location. When

the manager arrived, he or she would inspect the employees’ bags for store 

merchandise. After checking the employees’ bags, the manager would radio the stores’

security guards to ensure the parking lot was safe before the exit doors were opened. 

Accordingly, according to Plaintiff, employees were not relieved of their duties 

until several minutes after clocking out and were not compensated for the time they were 

on-duty and required to complete the exit security procedure. Plaintiff defines two 

classes of similarly situated employees. First, Plaintiff seeks to represent the ClosingShift Class, which includes all current and former non-exempt employees who worked at 

1 Because oral argument would not be of material assistance, the Court ordered this matter 

submitted on the briefs. E.D. Local Rule 230(g).

2 The following recitation of facts is taken, sometimes verbatim, from Plaintiff’s Class Action 

Complaint. ECF No. 1-2.

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Defendant’s warehouse stores and who worked one or more closing shifts at any time 

from four years prior to the filing of the Complaint to the present. Second, Plaintiff seeks 

to represent a subclass of employees entitled the Waiting Time Penalties Subclass, 

which includes all members of the Closing Shift Class whose employment with 

Defendant ended at any time from three years prior to filing the Complaint to the present. 

The Complaint alleges the following claims under state law: (1) Failure to Pay Minimum 

and Regular Wages; (2) Failure to Pay All Overtime Wages; (3) Failure to Provide 

Accurate Wage Statements; (4) Failure to Timely Pay All Wages Due Upon Separation 

of Employment; and (5) Violation of California Business and Professions Code §§ 17200 

et seq. 

STANDARD

When a case “of which the district courts of the United States have original

jurisdiction” is initially brought in state court, the defendant may remove it to federal court 

“embracing the place where such action is pending.” 28 U.S.C. § 1441(a). There are 

two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 

28 U.S.C. § 1331, and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court 

has federal question jurisdiction in “all civil actions arising under the Constitution, laws, 

or treaties of the United States.” Id. § 1331. A district court has diversity jurisdiction 

“where the matter in controversy exceeds the sum or value of $75,000, . . . and is 

between citizens of different states, or citizens of a State and citizens or subjects of a 

foreign state . . . .” Id. § 1332(a)(1)-(2).

A defendant may remove any civil action from state court to federal district court if 

the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). “The 

party invoking the removal statute bears the burden of establishing federal jurisdiction.” 

Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. 

Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts “strictly construe the 

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removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566 

(9th Cir. 1992) (internal citations omitted). “[I]f there is any doubt as to the right of 

removal in the first instance,” the motion for remand must be granted. Id. Therefore, “[i]f 

at any time before final judgment it appears that the district court lacks subject matter 

jurisdiction, the case shall be remanded” to state court. 28 U.S.C. § 1447(c).

If the district court determines that removal was improper, then the court may also 

award the plaintiff costs and attorney fees accrued in response to the defendant’s 

removal. 28 U.S.C. § 1447(c). The court has broad discretion to award costs and fees 

whenever it finds that removal was wrong as a matter of law. Balcorta v. TwentiethCentury Fox Film Corp., 208 F.3d 1102, 1106 n.6 (9th Cir. 2000).

ANALYSIS

CAFA gives federal district courts original jurisdiction in any civil action where: 

(1) “the matter in controversy exceeds the sum or value of $5,000,000, exclusive of 

interest and costs,” (2) the action is pleaded as a class action involving more than 100 

putative class members, and (3) “any member of a class of plaintiffs is a citizen of a 

State different from any defendant.” 28 U.S.C. § 1332(d). CAFA also provides that “the 

claims of the individual class members shall be aggregated to determine whether the 

matter in controversy exceeds the sum or value of $5,000,000.” Id. § 1332(d)(6). 

The only question for this Court to resolve as to the instant Motion is whether the 

amount in controversy in this action exceeds $5,000,000. “A defendant’s notice of 

removal need include only a plausible allegation that the amount in controversy exceeds 

the jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 

574 U.S. 81, 89 (2014). When a plaintiff challenges the amount in controversy under 

CAFA, the Ninth Circuit requires the defendant opposing remand to demonstrate, by a 

preponderance of the evidence, that the amount in controversy will likely exceed 

$5,000,000. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). 

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Where damages are not stated in the complaint and plaintiff contests defendant’s 

assertion of the amount in controversy, the defendant must submit competent, summary 

judgment-type evidence relevant to the amount in controversy at the time of removal in 

order to carry its burden. Id. Although a defendant may rely on good faith calculations 

to satisfy its burden, those calculations must not be based on unreasonable or 

speculative assumptions. Ellis v. Pac. Bell Tel. Co., No. SACV 10-01141, 2011 WL 

499390, at *2 (C.D. Cal. Feb. 10, 2011); Ibarra, 775 F.3d at 1197 (“[A] damages 

assessment may require a chain of reasoning that includes assumptions. When that is 

so those assumptions cannot be pulled from thin air but need some reasonable ground 

underlying them.”).

In its notice of removal, Defendant asserts that the amount in controversy 

exceeds $5,000,000 on Plaintiff’s waiting time penalties under California Labor Code 

§ 203 alone. Notice of Removal, ECF No. 1, at 6. In support of its amount in 

controversy calculation, Defendant offers the Declaration of Sarah A. Rajski, Defendant’s 

Director of Personnel. Rajski Decl., ECF No. 7-1. The Rajski Declaration states that the 

Waiting Time Penalties Subclass comprises of 32,808 employees who worked on 

average over four hours a day at a minimum of $10 per hour. See id. ¶ 7. 

Under California Labor Code § 203, employees are entitled to continuing wages 

for up to thirty days as a penalty for an employer’s failure to provide final pay within a 

certain time following conclusion of employment. Cal. Labor Code § 203. Defendant 

calculates that the waiting time penalties place $39,369,600 into controversy by 

assuming thirty days of four-hour pay ($1,200) for each member of the Waiting Time 

Penalties Subclass (32,808 x $1,200). Def.s’ Opp. Mot. Remand, ECF No. 7, at 11. If 

true, then Plaintiff’s other claims and potential ability to recover attorneys’ fees would not 

need to be calculated for purposes of this Motion.

Plaintiff contends that Defendant failed to meet its burden to demonstrate the 

requisite jurisdictional amount because Defendant’s evidence fails to identify the number 

of class members entitled to waiting time penalties. Pl.’s Reply, ECF No. 8, at 2. 

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However, the Rajski Declaration states that there are 32,808 employees that fall within 

this subclass. Rajski Decl., ECF No. 7-1, ¶ 7. Defendant further relies on the Complaint, 

which defines the Waiting Time Penalties Subclass as all members of the Closing Shift 

Class whose employment with Defendant ended at any time during the three years 

preceding the filing of the Complaint on May 28, 2019. Compl., ECF No. 1-1, at 10; 

Def.s’ Opp. Mot. Remand, ECF No. 7, at 5. 

Additionally, Defendant assumed a 100 percent violation rate because the 

Complaint alleges that Defendant did not pay the Waiting Time Penalty Subclass

members wages for the off-the-clock closing procedures and Defendant has no practice 

of paying terminated employees after termination of employment. The Ninth Circuit has 

held that an unsupported assumption of a 100 percent violation rate is unreasonable. 

Ibarra, 775 F.3d at 1199. However, based on Plaintiff’s Complaint and the Rajski 

Declaration, the Court finds Defendant provided enough evidence to support its 

calculation for waiting time penalties. Because the Complaint alleges that none of the 

Waiting Time Penalty Subclass members were paid wages for remaining on-duty after 

hours and that Defendant does not have a practice of paying terminated employees 

following their termination, a 100 percent violation rate can be reasonably inferred. 

Finally, Defendant provided waiting time penalty calculations that were more 

conservative than the figures from the Rajski Declaration, which showed an average 

hourly rate of $12 and an average working day of 6 hours. Def.s’ Opp. Mot. Remand, 

ECF No. 7, at 11. As stated earlier, Defendant’s conservative calculations totaled 

$39,369,600, but if the more accurate figures from the Declaration were applied, the 

amount in controversy would rise to $70,865,280. The Court finds that Defendant has

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established to a legal certainty that the amount of waiting time penalties alone well 

exceeds $5,000,000, and thus the Court has jurisdiction pursuant to CAFA.

CONCLUSION

For the reasons set forth above, Plaintiff’s Motion to Remand, ECF No. 5, is 

DENIED.

IT IS SO ORDERED.

Dated: March 10, 2020

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