Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-00213/USCOURTS-cand-3_10-cv-00213-0/pdf.json

Parties Involved:
Brinker International, Inc.
Defendant
Brinker Restaurant Corporation
Defendant
Marc Smith
Plaintiff
Ken Whelan
Plaintiff

Document Text:

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MARC SMITH; ET AL,

Plaintiffs,

 v

BRINKER INTERNATIONAL, INC; ET

AL,

Defendants.

 /

No C 10-0213 VRW

 ORDER

On December 8, 2009 plaintiffs Marc Smith and Ken Whelan

filed a class action in Contra Costa superior court against

defendants Brinker International, Inc and Brinker Restaurant

Corporation, and filed an amended complaint on January 11, 2010.

Plaintiffs purport to represent the proposed class of all current

and former “Assistant Managers” or persons with similar titles or

duties who worked for defendants in the state of California at any

time during the period from four years prior to filing of the

complaint to final judgment. Doc #1 at 66. On January 15, 2010

defendants filed a notice of removal of the action to this court

pursuant to 28 USC §§ 1441 and 1446. Doc #1. On February 12, 2010

Case 3:10-cv-00213-VRW Document 27 Filed 05/05/10 Page 1 of 13
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defendants renoticed their motion to dismiss and plaintiffs filed a

motion to remand. The court finds the matters suitable for decision

without hearing. Having considered the papers submitted by the

parties and the relevant legal authority, the court GRANTS

plaintiffs’ motion to remand (doc #17) and DENIES AS MOOT the motion

to dismiss (doc #14).

I

Plaintiffs were employed by defendants as “Assistant

Managers” at Chili’s Grill & Bar restaurants located in California;

plaintiff Smith was employed from June 2007 to February 2009, and

plaintiff Whelan from January 2006 to October 2009. FAC ¶¶ 12, 13. 

Plaintiffs allege that defendants misclassified their Assistant

Managers as exempt from overtime and other state laws. FAC ¶¶ 21,

23 (Doc #1 at 64).

The operative complaint alleges eight causes of action on

behalf of the proposed class, alleging that defendants

(1) intentionally and willfully failed to pay overtime wages (Cal

Labor Code §§ 510, 1198); (2) intentionally and willfully required

plaintiffs to work during meal periods and failed to pay the full

meal period premium for work performed during meal periods (id

§§ 226.7, 512(a)); (3) willfully required plaintiffs to work during

rest periods and failed to pay plaintiffs the full rest period

premium for work performed during rest periods (id § 226.7); (4)

intentionally and willfully failed to pay plaintiffs timely wages

(id § 204); (5) intentionally and willfully failed to pay wages

within 72 hours of termination (id §§ 201, 202); (6) intentionally

and willfully failed to provide plaintiffs with complete and

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accurate wage statements (id § 226(a)); (7) intentionally and

willfully failed to keep complete and accurate payroll records (id §

1174(d)); and (8) engaged in unlawful business practices (Cal Bus &

Prof Code § 17200). Doc #1 at 70-81.

Plaintiffs seek compensatory damages, prejudgment

interest, statutory premiums and penalties under the California

Labor Code, civil penalties under the Private Attorneys General Act,

attorney fees and injunctive relief. Doc #1 at 81-85. The

operative complaint does not state a specific amount of damages.

II

Any civil action brought in state court of which the

federal district courts have original jurisdiction may be removed. 

28 USC § 1441(a). Jurisdiction founded on 28 USC § 1332 requires

complete diversity between the parties and an amount in controversy

in excess of $75,000, exclusive of interest and costs. Removal

statutes are construed narrowly in favor of remand to protect the

jurisdiction of state courts. Harris v Bankers Life and Cas Co, 425

F3d 689, 698 (9th Cir 2005) (citing Shamrock Oil & Gas Corp v

Sheets, 313 US 100, 108-09 (1941)).

Where the complaint does not specify the amount sought as

damages, the removing party must prove by a preponderance of the

evidence that the amount in controversy meets the jurisdictional

threshold. Abrego v The Dow Chemical Co, 443 F3d 676, 683 (9th Cir

2006). To satisfy the burden to demonstrate the amount in

controversy, defendants may rely upon facts presented in the removal

petition as well as any “summary-judgment-type evidence relevant to

the amount in controversy at the time of removal.” Singer v State

Case 3:10-cv-00213-VRW Document 27 Filed 05/05/10 Page 3 of 13
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Farm Mut Auto Ins Co, 116 F3d 373, 377 (9th Cir 1997) (quotation

omitted). Conclusory allegations as to the amount in controversy

are insufficient. Gaus v Miles, Inc, 980 F2d 564, 567 (9th Cir

1992).

Plaintiffs contend that defendants have failed to

demonstrate that it is more likely than not that each plaintiff’s

damages exceed $75,000. Having reviewed the evidence offered by

defendants, the court determines that defendants have failed to meet

their burden to establish the jurisdictional requirement for

removal.

Plaintiff Marc Smith allegedly worked as an assistant

manager for a Chili’s restaurant in California from June 2007 to

February 2009, or approximately 85 weeks. Doc #1 at 63. In the

removal notice, as supplemented by the brief and supporting

declaration in opposition to the motion to remand, defendants

suggest that the amount in controversy as to plaintiff Smith is

$84,471.85. Doc #21 at 11. To arrive at an hourly rate based on Mr

Smith’s starting salary of $50,000 per year as a Chili’s Manager,

defendant calculates an hourly rate of $24.04, and $36.06 for time

and one-half overtime. Doc #1 at 4; Doc #21 at 13. Defendants

proceed on the assumption that Mr Smith worked 2.5 hours of overtime

everyday of the 85 weeks that he worked for defendants.

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Table 1: Defendants’ Estimate of Marc Smith’s Alleged Damages

Smith Damages Calculation Amount

1st COA: unpaid overtime

[assuming 2.5 hrs

overtime per day at

$36.06/hr]

5 days/wk X 2.5 hrs/day X $36.06 X 85

weeks

$38,313.75

1st COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

2d COA: missed meal

period [one hour meal

period premium per day]

5 days/wk X 85 wks X $24.04 $10,217.00

2d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

3d COA: missed rest

periods [one hour premium

per day]

5 days/wk X 85 wks X $24.04 $10,217.00

3d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

4th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

5th COA: statutory

waiting time penalties

[assuming daily wage of

$282.47, including 2.5

hrs overtime]

30 days X [($24.04 X 8 hrs/day) +

($36.06 X 2.5 hrs/day overtime)

$8,474.10

5th COA: PAGA penalties withdrawn (doc # 21 at 8 n2) $0.00

6th COA: statutory

penalties for failure to

provide itemized wage

statements

($50 for pay period #1) + ($100 X 42

(periods #2-#43)) 

[maximum statutory penalty: $4000]

$4,000.00

6th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

7th COA: statutory

penalties for failure to

keep complete payroll

records 

Civil penalty: $500 $500.00

7th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

Attorney fees for 1st and

8th COA

no estimate $0.00

Defendants’ TOTAL

estimate for Smith

$84,471.85

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6

Plaintiff Ken Whelan allegedly worked as an assistant

manager for a Chili’s restaurant from January 2006 to October 2009,

or approximately 195 weeks. Doc #1 at 63. Based on a starting

salary of $50,000 per year, and applying the assumption of 2.5

overtime hours each day, Defendants contend that the amount in

controversy is $176,998.35, calculated as shown in Table 2. Doc #21

at 12.

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Table 2: Defendants’ Estimate of Ken Whelan’s Alleged Damages

Whelan Damages Calculation Amount

1st COA: unpaid overtime

[assuming 2.5 hrs

overtime per day at

$36.06/hr]

5 days/wk X 2.5 hrs/day X $36.06 X

195 weeks

$87,896.25

1st COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

2d COA: missed meal

period [one hour meal

period premium per day]

5 days/wk X 195 wks X $24.04 $23,439.00

2d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

3d COA: missed rest

periods [one hour premium

per day]

5 days/wk X 195 wks X $24.04 $23,439.00

3d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

4th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

5th COA: statutory

waiting time penalties

[assuming daily wage of

$282.47, including 2.5

hrs overtime]

30 days X [($24.04 X 8 hrs/day) +

($36.06 X 2.5 hrs/day overtime)

$8,474.10

5th COA: PAGA penalties withdrawn (doc # 21 at 8 n2) $0.00

6th COA: statutory

penalties for failure to

provide itemized wage

statements

($50 for pay period #1) + ($100 X 97

(periods #2-#98)) 

[maximum statutory penalty: $4000]

$4,000.00

6th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

7th COA: statutory

penalties for failure to

keep complete payroll

records 

Civil penalty: $500 $500.00

7th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

Attorney fees for 1st and

8th COA

no estimate $0.00

Defendants’ TOTAL

estimate for Whelan

$176,998.35

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8

Defendants’ assumption that each plaintiff worked 2.5

hours overtime each day is not supported by the allegations in the

operative complaint. Plaintiffs allege that they “regularly and

consistently worked over eight (8) hours in a day, twelve (12) hours

in a day, or forty (40) hours in a week during their employment with

Defendants.” FAC ¶ 20. The complaint does not quantify the number

of overtime hours that are allegedly subject to compensation, nor

the number of meal and rest periods that defendants allegedly failed

to provide. Defendants provide no sufficient basis to apply its

assumption of 2.5 overtime hours each day towards calculating the

amount in controversy. The court may not base its jurisdiction on

speculation and conjecture. Lowdermilk v US Bank Nat’l Assn, 479

F3d 994, 1002 (9th Cir 2007).

To support their estimate of the amount in controversy,

defendants offer the declaration of Ms Hukill, the director of HR

compliance for Brinker International Payroll Company, LP. Ms Hukill

offers general information about the starting salary of a manager at

Chili’s restaurants, and the schedules of those managers as a

general matter, based on her firsthand knowledge in her professional

capacity and her review of business records. Doc #21 at 13-14. 

Because Ms Hukill offers general information based on her

familiarity with Chili’s restaurant employees, plaintiffs’

objections based on lack of foundation and personal knowledge and

irrelevance are overruled; rather, the limited scope of Ms Hukill’s

statements will go to the weight of her testimony. The court notes

that Ms Hukill indicates that she reviewed Messrs Smith and Whelan’s

new hire data sheets from the Brinker corporate office recruiting

department files and considers that defendants have access to and/or

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9

control over plaintiffs’ time sheets or employment records to

establish the number of hours that each plaintiff worked during each

pay period. Yet defendants have foregone the opportunity to offer

reliable information about plaintiffs’ employment records to meet

their burden to establish the amount in controversy.

Defendants have failed to provide any evidence relating to

either plaintiff’s actual earnings or number of hours worked, asking

the court to assume that each plaintiff worked an additional 2.5

hours each day in order to reach the amount in controversy

threshold. Nor do defendants offer settlement letters reflecting a

reasonable estimate of plaintiffs’ claim. Cf Cohn v Petsmart, Inc,

281 F3d 837, 840 (9th Cir 2002). Defendants suggest that plaintiffs

have not submitted evidence to dispute defendants’ estimates, but

plaintiffs do not bear the burden to demonstrate the amount in

controversy. See Abrego, 443 F3d at 683 (rejecting argument that

Class Action Fairness Act of 2005 shifted burden to plaintiffs

seeking remand to refute existence of jurisdiction).

Defendants point out that where an underlying statute

authorizes attorney fees pursuant to mandatory or discretionary

language, such fees may be included in the calculation of the

jurisdictional amount. Doc #1 at 9. If defendants were able to

demonstrate by a preponderance of the evidence what amount of fees

would be in controversy, the court would be permitted to consider

the fees toward calculating the amount in controversy. See Galt G/S

v JSS Scandinavia, 142 F3d 1150, 1156 (9th Cir 1998) (including

claimed attorney fees to reach amount in controversy). In Galt, the

claimant sought diversity jurisdiction over its $13,500 equitable

indemnity claim against a third party following settlement of an

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action for cargo damage. The claimant demonstrated that it had

spent $44,266.65 in attorney fees defending against the claim for

damages in the principal action. The court aggregated the claimed

amount of attorney fees with the amount sought on the equitable

indemnity claim to reach the then-required $50,000 amount in

controversy. 142 F3d at 1155. 

Defendants, however, have not met their burden to

demonstrate the amount of attorney fees that would be placed in

controversy here. Defendants do not offer any estimate or

calculation of fees which plaintiffs may seek, and the court

declines to speculate as to the amount of fees. 

Because defendants’ calculation of damages for alleged

overtime and missed meal and rest periods is speculative and based

on conjecture, the court limits the calculation of the amount in

controversy to the reasonably certain amount of statutory penalties

that could be claimed. As a matter of convenience, the court uses

the statutory penalties calculated by defendants in Tables 1 and 2

above, recognizing that the waiting time penalty was based on an

assumption of 2.5 overtime hours per day. The court also

acknowledges plaintiffs’ objection to defendants’ inflated PAGA

penalties without regard to the one year statute of limitations. 

Again, solely for convenience, the court refers to defendants’

calculation to determine whether the amount in controversy has been

met without the speculative estimates of compensation claimed for

overtime, meal and rest periods.

As calculated in Tables 3 and 4, below, the statutory

penalties for plaintiff Smith estimated by defendants total

$25,724.10; for plaintiff Whelan, the estimated penalties total

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$42,224.10. Because the amount in controversy for each plaintiff on

the present record does not reach the jurisdictional threshold of

$75,000, remand is appropriate and the motion to dismiss, therefore,

is moot. The court recognizes that should subsequent developments

in superior court establish an amount in controversy exceeding

$75,000, defendants may once again seek removal. That, however,

will come - if at all - on another day.

Table 3: Estimated Statutory Damages for Smith

Smith Statutory

Damages

Calculation Amount

1st COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

2d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

3d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

4th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

5th COA: statutory

waiting time penalties

[assuming 2.5 hrs

overtime]

30 days X [($24.04 X 8 hrs/day) +

($36.06 X 2.5 hrs/day overtime)

$8,474.10

5th COA: PAGA penalties withdrawn (doc # 21 at 8 n2) $0.00

6th COA: statutory

penalties for failure to

provide itemized wage

statements

($50 for pay period #1) + ($100 X 42

(periods #2-#43)) 

[maximum statutory penalty: $4000]

$4,000.00

6th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

7th COA: statutory

penalties for failure to

keep complete payroll

records 

Civil penalty: $500 $500.00

7th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 42 (periods #2 - #43))]

$2,125.00

TOTAL (Smith) $25,724.10

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Table 4: Estimated Statutory Damages for Whelan

Whelan Statutory

Damages

Calculation Amount

1st COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

2d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

3d COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

4th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

5th COA: statutory

waiting time penalties

[assuming 2.5 hrs

overtime]

30 days X [($24.04 X 8 hrs/day) +

($36.06 X 2.5 hrs/day overtime)

$8,474.10

5th COA: PAGA penalties withdrawn (doc # 21 at 8 n2) $0.00

6th COA: statutory

penalties for failure to

provide itemized wage

statements

($50 for pay period #1) + ($100 X 97

(periods #2-#98)) 

[maximum statutory penalty: $4000]

$4,000.00

6th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

7th COA: statutory

penalties for failure to

keep complete payroll

records 

Civil penalty: $500 $500.00

7th COA: PAGA penalties 25% of [($100 for pay period #1) +

($200 X 97 (periods #2 - #98))]

$4,875.00

TOTAL (Whelan) $42,224.10

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IV

For the foregoing reasons, the court GRANTS plaintiffs’

motion to remand and REMANDS the action to Contra Costa superior

court. The clerk is directed to terminate all motions and close the

file.

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

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