Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-00047/USCOURTS-cand-4_05-cv-00047-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

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 [Proposed] Order Granting Plaintiffs’ Motion to Remand Case No. C-05-000047 SBA

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JAMES F. CLAPP (145814)

J. KIRK DONNELLY (179401)

MARITA M. LAUINGER (199242)

DOSTART CLAPP & COVENEY, LLP

4370 La Jolla Village Dr. Ste. 970

San Diego, CA 92122

Tel. (858) 623-4200

Fax. (858) 623-4299

Attorneys for Plaintiffs 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ELAINE TIFFANY, and SHANNON

WHITEHEAD, individually, and on behalf

of all others similarly situated, 

Plaintiffs,

vs.

HOMETOWN BUFFET, INC., and DOES 1

through 50, inclusive, 

Defendants. ____________________________________

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CASE NO. C-05-00047 SBA

ORDER GRANTING PLAINTIFFS’

MOTION TO REMAND

Date: May 3, 2005

Time: 1:00 p.m.

Ctrm: 3

Hon. Saundra B. Armstrong

The motion by plaintiffs Elaine Tiffany (“Tiffany”) and Shannon Whitehead (“Whitehead”) to

remand their lawsuit to the San Francisco Superior Court came on regularly for hearing 

before the Hon. Saundra B. Armstrong, United States District Judge. The parties were represented by

their respective counsel of record. The Court, having reviewed and considered the evidence and

arguments of the parties, hereby GRANTS plaintiffs’ motion.

I. FACTUAL BACKGROUND.

This is a putative class action lawsuit for unpaid overtime and other wages brought on behalf of

California salaried managers of defendant Hometown Buffet, Inc. Plaintiffs allege that defendant

misclassified its California salaried managers as “exempt” employees, thereby denying them overtime

pay in violation of California law. The lawsuit alleges seven causes of action, all of which are based

on state law: (1) recovery of overtime pay under Labor Code section 1194; (2) restitution of overtime

Case 4:05-cv-00047-SBA Document 28 Filed 04/28/05 Page 1 of 5
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1 Defendant does not assert that the claims of the other named plaintiff, Elaine Tiffany,

exceed $75,000.

 [Proposed] Order Granting Plaintiffs’ Motion to Remand Case No. C-05-000047 SBA

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pay; (3) violation of Labor Code section 3751; (4) violation of Bus. & Prof. Code section17200 et seq.;

(5) penalties under Labor Code section 203; (6) penalties under Labor Code section 226; and (7)

damages under Labor Code section 226.7. The complaint does not allege or demand any specific

amount of damages.

Plaintiffs originally filed their complaint in the San Francisco Superior Court on November 12,

2004. After answering in the Superior Court, defendant removed the case to this Court on

January 4, 2005. In its Notice of Removal, defendant argued that diversity jurisdiction exists because:

(1) the parties are citizens of different states (a fact that plaintiffs do not dispute); and (2) the claims of

plaintiff Whitehead exceed $75,000, exclusive of interests and costs.1 

On February 3, 2005, plaintiffs filed a timely motion to remand. In their motion, plaintiffs

contend that defendant has overstated the value of Whitehead’s claims. Under plaintiffs’ calculations,

Whitehead’s claims are worth no more than $58,180.10, so diversity jurisdiction does not exist.

II. LEGAL STANDARD

In a motion to remand, the burden of proving the propriety of removal rests with the removing

party. United Computer Systems v. AT&T Corp., 298 F.3d 756, 763 (9th Cir. 2002). Because

defendant has removed based on diversity jurisdiction, defendant must prove by a preponderance of the

evidence that the amount-in-controversy exceeds $75,000. 28 U.S.C. section 1332. In class action

cases, the amount-in-controversy requirement is met if the claims of at least one of the named plaintiffs

exceed $75,000; if so, the Court may assert supplemental jurisdiction over the claims of all other

putative class members. 28 U.S.C. section 1367; Gibson v. Chrysler Corp., 261 F.3d 927, 933-39 (9th

Cir. 2001).

In ruling on this motion, the Court is guided by the principle that the removal statutes are strictly

construed against removal, and if there is any doubt as to the propriety of removal, the lawsuit must be

remanded to state court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 

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2

 The Court also notes that defendant overstated both the number of weeks Whitehead

worked as well as his overtime rate of pay, which further inflated defendant’s

calculations.

 [Proposed] Order Granting Plaintiffs’ Motion to Remand Case No. C-05-000047 SBA

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III. ANALYSIS

Defendant contends the value of Whitehead’s claim for unpaid overtime wages is $51,597, and

when combined with his other claims for various penalties, unpaid bonus wages, and attorney’s fees,

the total value of his claims exceeds $75,000. Plaintiffs, on the other hand, argue that the value of

Whitehead’s claims is less than $60,000. On balance, the Court finds that defendant has not met its

burden of proof that the value of Whitehead’s claims exceeds $75,000. 

A. Overtime Claim. Defendant contends Whitehead’s overtime claim is worth $51,597.

See Notice of Removal, para. 14(a). However, defendant premises this argument on the assumption that

Whitehead will claim he worked at least 15 hours of overtime each week he was employed by defendant.

Defendant offers no evidence on this point, and instead bases its assumption on information and belief.

Notice of Removal, para. 14(a), page 5, line 10. By contrast, Whitehead has offered the Court concrete

evidence, in the form of a sworn declaration, that he worked an average of 10 overtime hours per week.

Declaration of Shannon Whitehead, para. 2. Based on this testimony, plaintiffs calculate that

Whitehead’s overtime claim is worth $30,629.60. The Court is persuaded by Whitehead’s argument and

finds that Whitehead’s overtime claim is worth $30,629.60.2

B. Labor Code section 203 Penalties. Defendant contends that Whitehead’s claim for

penalties under California Labor Code section 203 is worth $6,825. Notice of Removal, para. 14(b).

Defendant’s calculation is based on an assumption that Whitehead worked 15 overtime hours per week,

or 3 overtime hours per day. However, plaintiffs argue that since Whitehead declared that he worked

only 10 overtime hours per week, or 2 overtime hours per day, his Labor Code section 203 claim is

worth only $6,096. The Court is persuaded by Whitehead’s argument and finds that Whitehead’s

Section 203 claim is worth $6,096.

C. Labor Code section 226 Penalties. The parties do not dispute that Whitehead’s claim

under California Labor Code section 226 is worth $4,000, so the Court adopts this valuation.

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 [Proposed] Order Granting Plaintiffs’ Motion to Remand Case No. C-05-000047 SBA

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D. Additional Bonus Wages. Similarly, the parties do not dispute that Whitehead’s claim

for additional bonus wages under California Labor Code section 3751 and Bus. & Prof. Code section

17200 et seq. is worth $3,000, so the Court adopts this valuation.

E. Attorney’s Fees. In class action cases, attorney’s fees cannot be aggregated or attributed

solely to the named class representatives in order to meet the jurisdictional threshold. Gibson v.

Chrysler, supra, 261 F.3d at 942. Instead, any potential attorney’s fee award must be apportioned pro

rata among the entire class. Id. 

Plaintiff estimates that Whitehead’s pro rata share of attorney’s fees would not exceed

$2,000. On the other hand, defendant contends that Whitehead’s share of attorney’s fees could be

$10,000 or more. However, based on defendant’s estimate that there are at least 500 class members, this

$10,000 figure assumes that the Court would award attorney’s fees of at least $5,000,000. This seems

excessive to the Court. Instead, plaintiffs have offered the Court a concrete example from a similar

overtime class action of similar size in which the pro rata attorney’s fees amounted to $1,706 per class

member. (Declaration of J. Kirk Donnelly, para. 5.) In attempting to determine the value of a claim,

the Court is entitled to consider awards in similar cases. See Simmons v. PCR Technology, 209

F.Supp.2d 1029, 1031 (N.D. Cal. 2002). The Court accepts plaintiffs’ estimate that the value of

Whitehead’s share of attorney’s fees is worth no more than $2,000.

F. Potential Incentive Payment. In its opposition to plaintiffs’ motion, defendant raises for

the first time its argument that the value of a potential class representative incentive payment should be

included in amount-in-controversy calculation. The Court rejects this argument for three reasons. First,

it is incumbent upon the removing party to specify all bases for removal in its removal petition. Johnson

v. America Online, 280 F.Supp.2d 1018, 1026 (N.D. Cal. 2003); Sonoma Falls Developers, LLC v.

Nevada Gold & Casinos, Inc., 272 F.Supp.2d 919, 926 (N.D. Cal. 2003). Defendant’s argument about

including an incentive payment appears nowhere in its removal petition. Second, defendant has failed

to cite a single case that allows a potential incentive payment to be included in the amount-incontroversy calculation. Third, incentive payments are not properly viewed as a component of the

named plaintiffs’ potential recovery which, for purposes of determining diversity jurisdiction, includes

only claims for special and general damages, attorneys’ fees and punitive damages. Simmons, supra,

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 [Proposed] Order Granting Plaintiffs’ Motion to Remand Case No. C-05-000047 SBA

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209 F.Supp.2d at 1031. Incentive payments do not fall within any of these four categories. Rather,

incentive payments are more analogous to costs, which are excluded from the calculation of the amount

in controversy under 28 U.S.C. section 1332(a). Continental Illinois Sec. Lit., 962 F.2d 566, 571 (7th

Cir. 2002) (incentive payments to the class representative “could be thought the equivalent of the

lawyers’ nonlegal but essential case-specific expenses, such as long-distance phone calls, which are

reimbursable”). Accordingly, the Court finds that the value of a potential incentive payment to

Whitehead should not be included in the calculation of the amount-in-controversy.

G. Rest and Meal Breaks. Finally, the parties dispute the value of Whitehead’s claim for

rest and meal breaks under California Labor Code section 226.7. Plaintiffs contend that the claim is

worth no more than $12,545.50, based on a three-year statute of limitations as provided under California

Code of Civil Procedure section 338(a). Defendant contends that Whitehead’s claim is worth

$20,469.62, based on a four-year statute of limitations under California Bus. & Prof. Code section 17200

et seq. The Court notes that it is an unsettled question whether the one-hour-of-pay remedy under

Section 226.7 is a “penalty” or a “wage,” and whether the limitations period is one, three, or four years.

However, the Court finds it unnecessary to resolve this issue, since even if the Court were to accept

defendant’s figure, the value of Whitehead’s claims remains well under $75,000.

IV. CONCLUSION

The Court finds that defendant has failed to meet its burden of proof that the value of

Whitehead’s claims exceeds $75,000. Accordingly, plaintiffs’ motion is GRANTED, and the lawsuit

is remanded to the Superior Court of California for San Francisco County. All matters calendared in

this action are VACATED.

IT IS SO ORDERED.

Dated: __________________, 2005 _____________________________________

HON. SAUNDRA B. ARMSTRONG

United States District Judge

April 28 /s/ Saundra Brown Armstrong

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