Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00050/USCOURTS-caed-2_16-cv-00050-0/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----

Plaintiff Ruben Amaya initiated this class action 

against defendants Apex Merchant Group, LLC (“Apex”) and First 

American Payment Systems (“First American”), alleging various 

violations of the California Labor and Business and Professions 

Case 2:16-cv-00050-WBS-CKD Document 12 Filed 03/08/16 Page 1 of 12
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Codes. Defendant First American removed this action from 

Sacramento County Superior Court pursuant to the Class Action 

Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Notice of Removal 

(“Notice”) (Docket No. 1).) Plaintiff now moves to remand 

pursuant to 28 U.S.C. § 1447, contending that defendant has not 

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

(Mot. to Remand (Docket No. 8).) Defendant opposes. (Opp’n 

(Docket No. 9).) 

I. Background

Plaintiff seeks to represent a class of current and 

former California-based exempt independent contractors with the 

job title “sales consultants” or those that performed similar 

duties who were employed by defendants from November 12, 2011 to 

the date of final judgment. (Notice, Nelson Decl. Ex. C

(“Compl.”) ¶¶ 14, 18-26.) Plaintiff was employed by defendants 

for approximately one month in July 2015 and alleges that he and 

the other sales consultants were misclassified as exempt 

employees. (Id. ¶ 19.) 

Plaintiff asserts nine causes of action under 

California law: (1) failure to pay overtime wages, Cal. Labor 

Code §§ 510, 1198; (2) failure to provide meal periods and pay 

the meal period premium, id. §§ 226.7, 512(a); (3) failure to 

provide rest periods and pay the rest period premium, id.

§ 226.6; (4) failure to pay minimum wage, id. §§ 1994, 1197, 

1197.1; (5) failure to pay owed wages at the time of discharge, 

id. §§ 201, 202; (6) failure to provide complete and accurate 

wage statements, id. § 226(a); (7) failure to reimburse necessary 

business-related expenses and costs, id. §§ 2800, 2802; (8) 

Case 2:16-cv-00050-WBS-CKD Document 12 Filed 03/08/16 Page 2 of 12
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Private Attorney General Act of 2004 (“PAGA”) violations

warranting a civil penalty, id. §§ 2698 et seq.; (9) unlawful 

business acts and professions, Cal. Bus. & Professions Code 

§§ 17200-17210. (Id. ¶¶ 54-128.) 

The Complaint does not allege a specific amount of 

damages. The Complaint merely states that the amount in 

controversy for the named plaintiff, including but not limited to 

claims for compensatory damages, restitution, penalties, wages, 

premium pay, and pro rata share of attorney’s fees, is less than 

$75,000. (Id. ¶ 1.) Further, the Complaint does not allege the 

frequency of the alleged violations, stating only that violations 

occurred “[a]t all material times set forth herein.” (Id. ¶¶ 19, 

26, 38-45.) 

II. Discussion

“[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 . . . 

where such action is pending.” 28 U.S.C. § 1441(a). Under the 

Class Action Fairness Act (“CAFA”), federal courts have original 

jurisdiction over civil class action cases in which the amount in 

controversy exceeds $5,000,000, the parties are minimally 

diverse, and the proposed class has at least 100 members. 28 

U.S.C. § 1332(d). There is no anti-removal presumption in CAFA 

cases. Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 

547, 554 (2014).

A defendant seeking to remove a case to federal court 

must file a notice of removal containing a “short and plain 

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statement” setting forth “a plausible allegation that the amount 

in controversy exceeds the jurisdictional threshold.” Id.; see 

also 28 U.S.C. § 1446(a). If the plaintiff’s complaint demands 

monetary relief of a stated sum, that stated sum, if asserted in 

good faith, is deemed to be the amount in controversy. Dart, 135 

S. Ct. at 551. When the plaintiff’s complaint does not state the 

amount, the defendant’s notice of removal may do so. Id.; 28 

U.S.C. § 1446(c)(2)(A). The defendant’s alleged amount in 

controversy should be accepted if it is not contested by the 

plaintiff or questioned by the court. Dart, 135 S. Ct. at 553. 

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.” Id.

at 554. Where the complaint does not specify a particular amount 

of damages, as in this case, “the removing defendant bears the 

burden of establishing, by a preponderance of the evidence, 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.” Id. 

The amount in controversy includes general and special 

damages (excluding costs and interests), attorney’s fees if 

recoverable by statute or contract, and punitive damages, if 

recoverable as a matter of law. Chambers v. Penske Truck Leasing 

Corp., Civ. No. 1:11-00381 LJO GSA, 2011 WL 1459155, at *2 (E.D. 

Cal. Apr. 15, 2011). 

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If “it appears 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).

Plaintiff does not dispute class numerosity or that he 

is a citizen of California and is therefore diverse from 

defendant First American, a limited partnership headquartered in 

Texas and incorporated in Delaware. (Mot. to Remand at 1; Notice 

¶¶ 9-11.) The sole issue is whether defendant established that 

it is more likely than not that the amount in controversy exceeds 

$5,000,000. 

A. Defendant’s Calculations of the Amount in Controversy

The only evidence defendant submitted is a declaration 

by Paul Novelli, the custodian of records at Apex. (Opp’n 

Novelli Decl. (Docket No. 9-1).) Novelli states that he reviewed 

the Apex database of business records and determined that, 

between November 11, 2011 and November 12, 2015, Apex had a 

contractual relationship with more than 1,750 sales consultants 

in California. (Id. ¶ 6.) Of the 1,750 sales consultants, 

contractual relationships with 1,737 were terminated before 

November 12, 2015. (Id. ¶ 7.) Based on this information, 

defendant calculated that the amount in controversy exceeds 

$5,000,000 based on causes of action two, four, and five alone. 

(Notice ¶¶ 21-24.) 

Under cause of action four, plaintiff seeks penalties 

under California Labor Code section 1197.1 for failure to timely 

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pay each class member 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. 

Defendant assumed that the class members were employed for a twomonth period, or 7.4 pay periods, based on the fact that 

plaintiff was employed for about a month and claims to be 

representative of the putative class members. (Opp’n at 8.) 

Defendant also assumed a 100% violation rate of the minimum wage 

requirements during those 7.4 pay periods. Thus, defendant 

concluded the amount in controversy for this claim was 

$3,412,500.1 (Notice ¶ 21.) 

Under cause of action five, plaintiff requests 

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.) Defendant 

assumed the 1,737 sales consultants whose contracts were 

terminated before November 12, 2015 were entitled to no less than 

the 2008 California minimum wage of $8 per hour for the full 

thirty day maximum. (Notice ¶ 22.) Defendant reasoned that it 

was making a “conservative assumption” by using the 2008 minimum 

wage of $8, rather than the 2014 minimum wage of $9 per hour or 

the 2016 rate of $10 per hour. (Id.) Defendant concluded that 

the amount in controversy for the unpaid wages claim was

$3,335,040.2 (Id.)

 

1 (1,750*$100)+(1,750*250*7.4)=$3,412,500

2 ($8*8 hours)*30 days*1,737=$3,335,040

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Lastly, under cause of action two, plaintiff requests 

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. (Compl. ¶ 73.) 

Defendant again assumed 1,750 class members all fell within the 

waiting time penalties statute of limitations, were paid the 2008 

minimum wage of $8 per hour, and worked a full eight hour day and 

were therefore entitled to meal and rest periods every workday 

during the two-month time period. Using these numbers, defendant 

concluded the amount in controversy for this cause of action was 

$1,212,400.3 (Notice ¶ 24.) Defendant therefore argues the 

amount in controversy is at least $7,959,940, not including the 

remaining causes of action.

B. Amount in Controversy in Class Action Fairness Act 

Cases

CAFA’s “primary objective” is to ensure “[f]ederal 

court consideration of interstate cases of national importance.” 

Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1350 (2013) 

(citation omitted). The amount in controversy requirement under 

CAFA is “to be tested by consideration of real evidence and the 

reality of what is at stake in the litigation.” Ibarra, 775 F.3d 

at 1199. “[W]hen the defendant relies on a chain of reasoning 

that includes assumptions to satisfy its burden to prove by a 

preponderance of the evidence that the amount in controversy 

 

3 ($8*43.3 work days in a two-month period)*1,750*2 for 

meal and rest breaks=$1,212,400

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exceeds $5 million, the chain of reasoning and its underlying 

assumptions must be reasonable.” LaCross v. Knight Transp. Inc., 

775 F.3d 1200, 1201 (9th Cir. 2015). 

“Courts have been skeptical of high CAFA estimates that 

rely solely on declarations with non-specific human resource 

data.” Page v. Luxottica Retail N. Am. Inc., Civ. No. 2:13-01333 

MCE KJN, 2015 WL 966201, at *11 (E.D. Cal. Mar. 4, 2015). For

example, in Ibarra, the Ninth Circuit found that the defendant’s 

assumption that the class members were denied one meal break and 

one rest break on each and every shift based on plaintiff’s 

allegation that there was a “pattern and practice” of labor law 

violations at the place of employment was unreasonable. Id. at 

1198-99. The court found that “a ‘pattern and practice’ of doing 

something does not necessarily mean always doing something” and 

since the complaint did not allege universal violations, 

defendant bore the burden of showing it relied on reasonable 

assumptions. 

Similarly, in Garibay v. Archstone Cmtys. LLC, the 

Ninth Circuit found defendants failed to meet their burden when 

the only evidence they proffered in support of their amount in 

controversy calculations was a declaration by the supervisor of 

payroll setting forth the number of employees, number of pay 

periods, and general information about hourly wages. 539 F. 

App’x 763, 764 (9th Cir. 2013). The court found that defendants 

unreasonably assumed, based on this declaration alone, wage 

statement violations for every pay period, maximum penalties for 

failure to timely pay wages for every employee, and denials of 

meal or rest periods twice each week. Id.

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In Page, the court found defendants’ calculation of the 

amount in controversy to be “based entirely on assumptions and 

speculative calculations.” 2015 WL 966201, at *7. The only 

evidence defendants submitted in support of their estimates was a 

declaration from the director of human resources with information 

on the periods of employment, rates of pay, and shift lengths 

during the alleged class period. Id. at *3. This was 

insufficient to support defendants’ assumption that each employee 

worked five shifts per work week and 100% of the meal and rest 

breaks were at issue, even though plaintiff only alleged that the 

missed breaks were a peripheral result of understaffing at 

defendants’ stores. Id. at *7-9. Because there was no 

“allegation of a widespread policy” of preventing employees from 

taking breaks, the court found defendants overestimated the 

amount in controversy. Id. at *9-10. There was also 

insufficient “underlying evidence” to assume each employee was 

entitled to recover the full thirty-day maximum penalty for 

failure to timely pay wages. Id. at *14-15. 

In contrast, in LaCross, the Ninth Circuit found the 

defendant had produced sufficient evidence to establish the 

amount in controversy for a reimbursement claim by extrapolating 

fuel costs based on the actual invoiced fuel costs in the first 

quarter and the actual number of drivers who signed the 

independent contractor agreements during the class period. 775 

F.3d at 1203. 

Defendant’s calculations in this case are largely based 

on unsupported assumptions. As discussed above, the only 

evidence defendant submitted was a declaration from Paul Novelli, 

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the custodian of records at Apex, with data on the number of 

sales consultants employed and terminated in California during 

the relevant time period. At the hearing on March 7, 2016,

defense counsel argued that defendant does not have access to

more detailed records because it is not the direct employer--its 

co-defendant, Apex, is an independent contractor and the employer 

of the sales consultants. However, even if defendant is not the 

direct employer, the court is not persuaded that more detailed 

information is unavailable to defendant. The fact that defendant

was able to secure a declaration from the custodian of records at 

Apex demonstrates that defendant does indeed have access to the 

Apex database of business records and submitted limited evidence 

only because it requested limited information.

For example, instead of consulting Apex’s records to 

determine what the actual hire and termination dates were for its 

employees, defendant assumed a two-month employment period. 

Defendant claims that it elected two months to reflect 

plaintiff’s time of employment but plaintiff was only a sales 

consultant for one month. (Opp’n at 8.) 

Further, defendant assumed a 100% violation rate of 

meal and rest periods and minimum wage requirements even though 

the Complaint makes no allegations with respect to the frequency 

of these violations and instead only alleges violations occurred 

“[a]t all material times set forth herein.” (Id. ¶¶ 19, 26, 38-

45.) Just as “pattern and practice” did not necessarily mean 

violations each and every time in Ibarra, “all material times” 

cannot be read in such a fashion without any further evidence

from defendant. Defendant also speculated that every class 

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member worked a full eight hour day, and was therefore entitled 

to these benefits, rather than consulting payroll records. 

Defendant counters that it did not assume a 100% violation rate 

because it only looked at a two-month time period rather than the 

entire period between November 2011 and November 2015. (Opp’n at 

8.) However, “the fact [defendant] could have assumed a higher 

amount does not make [its] estimate any less speculative.” Page, 

2015 WL 966201, at *13.

Lastly, defendant assumed without any explanation that 

all class members are entitled to recover the full thirty-day 

maximum penalty for failure to pay wages owed at the time of 

discharge. Plaintiff’s Complaint did not allege every employee 

was entitled to the full thirty days but rather that the “other 

class members are entitled to recover from Defendants the 

statutory penalty wages for each day they were not paid, up to a 

thirty (30) day maximum.” As in Garibay and Page, it is 

unreasonable to assume the maximum penalty without any supporting 

evidence. 

Based on the evidence submitted by defendant, the court 

cannot conclude that it is more likely than not that the amount 

in controversy exceeds $5,000,000. While plaintiff did not 

submit any evidence contradicting defendant’s calculations--such 

as information regarding the named plaintiff’s own missed meal 

and rest periods or overtime hours--the burden is on the removing 

defendant to establish the amount in controversy. Accordingly, 

the court will provide defendant with an opportunity to provide 

more specific information establishing that the amount in 

controversy exceeds $5,000,000. Plaintiff may also submit 

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additional evidence if it so desires.

IT IS THEREFORE ORDERED that the parties have thirty 

days from the date this Order is signed to submit more specific 

evidence regarding the amount in controversy in this case. The 

court will rule on plaintiff’s motion to remand after reviewing 

any submitted evidence.

Dated: March 7, 2016

 

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