Ramirez v. HV Glob. Mgmt. Corp.

NELSON RAMIREZ, Plaintiff, v. HV GLOBAL MANAGEMENT CORPORATION, et al., Defendants.

No. 21-cv-09955-BLF

United States District Court, N.D. California, San Jose Division

April 25, 2022

ORDER DENYING MOTION TO REMAND

[RE: ECF NO. 13]

Plaintiff Nelson Ramirez filed this action against Defendants HV Global Management Corporation and HV Global Group, Inc., alleging ten causes of action for violation of the California Labor Code and Business & Professions Code. See ECF No. 1 (Notice of Removal and Complaint). Now before the Court is Ramirez's motion to remand for lack of subject matter jurisdiction. ECF No. 13 (“Mot.”). Ramirez argues that Defendants have not demonstrated that the amount-in-controversy exceeds $5 million under the jurisdictional requirements of the Class Action Fairness Ac 28 U.S.C. § 1332(d). Defendants oppose the motion. ECF No. 19 (“Opp.”). The Court found the motion suitable for disposition without oral argument and vacated the May 5, 2022 hearing. See ECF No. 31. For the following reasons, the Court DENIES the motion to remand.

I. BACKGROUND

As alleged in the operative complaint, Defendants employed Ramirez as a non-exempt employee from September 2010 to September 2019 and during that time failed to compensate him for hours he worked and missed meal periods and rest breaks. Compl. ¶ 20. Ramirez seeks to represent a class of all current and former hourly-paid and non-exempt employees who worked for Defendants in California in the last four years. Id. ¶ 14. Ramirez brings nine claims under the California Labor Code and one claim under California's Unfair Competition Law. See id. ¶¶ 48118. Ramirez specifies in his complaint that his individual claim is less than $75, 000. Id. ¶ 1.

II. LEGAL STANDARD

Removal is proper where the federal courts have original jurisdiction over an action brought in state court. 28 U.S.C. § 1441(a). Pursuant to the Class Action Fairness Act of 2005 (“CAFA”), federal courts have original jurisdiction over state law actions where (1) the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs; (2) the number of members of all proposed plaintiff classes in the aggregate is more than 100; and (3) where any member of a class of plaintiffs is a citizen of a State different from any defendant. 28 U.S.C. § 1332(d). Typically, courts strictly construe the removal statute against removal jurisdiction. See, e.g., Provicial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009); Luther v. Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008). However, “‘no antiremoval presumption attends cases invoking CAFA,' in part because the statute was enacted ‘to facilitate adjudication of certain class actions in federal court.'” Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 992-93 (9th Cir. 2022) (quoting Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014)).

In seeking removal under CAFA, the removing party bears the burden of establishing federal jurisdiction. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). The removing party must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional threshold. Dart Cherokee, 574 U.S. at 88 (citing 28 U.S.C. § 1446(c)(2)(B)). The removing party must also establish that the number of class members exceeds 100 and minimal diversity exists between the parties. See Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006).

When a party moves to remand under CAFA, they present either a “facial” attack or a “factual” attack on the removing party's showing of jurisdictional elements. “A ‘facial' attack accepts the truth of the [defendant's] allegations but asserts that they ‘are insufficient on their face to invoke federal jurisdiction.'” Harris v. KM Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020) (quoting Salter v. Quality Carriers, 974 F.3d 959, 964 (9th Cir. 2020)). In contrast, a factual attack “contests the truth of the . . . allegations, usually by introducing evidence outside the pleadings.” Id. (citing Salter, 974 F.3d at 964). When the removing party is presented with a facial attack, the Court applies a weaker evidentiary standard; in those cases, a removal “need not contain evidentiary submissions but only plausible allegations of jurisdictional elements.” Salter, 974 F.3d at 963 (quoting Arias v. Residence Inn by Marriott, 936 F.3d 920, 922 (9th Cir. 2019)) (internal quotation marks omitted). When faced with a factual attack, the Court applies a stronger evidentiary standard. The removing party “must support her jurisdictional allegations with ‘competent proof' . . . under the same evidentiary standard that governs in the summary judgment context.” Id. at 963 (citing Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014)); Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th Cir. 2010) (en banc); Trentacosta v. Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1559 (9th Cir. 1987); Fed .R. Civ. P. 56(c)).

III. DISCUSSION

At issue in this motion to remand is whether this Court has removal jurisdiction pursuant to CAFA.^[1] Plaintiff challenges only Defendants' showing on CAFA's $5 million amount-in-controversy requirement. In their notice of removal, Defendants allege that the total amount-in-controversy is $14, 964, 207.25. NOR ¶ 45. In their opposition brief, Defendants say that even with much lower assumed violation rates, the amount in controversy is still at least $6, 138, 726.71, “well in excess of CAFA's $5 million jurisdictional minimum.” Opp. at 10. Plaintiff disputes each category of calculations underlying these alleged amounts-in-controversy. The Court evaluates each in turn, but first confronts the impact of a recent Ninth Circuit decision in this area.

A. Jauregui

After briefing had concluded, the Ninth Circuit issued a published decision in Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989 (9th Cir. 2022). The Court requested supplemental briefing from the parties on the impact of Jauregui on this case, including specifically whether Plaintiff should be required to refile his motion to remand to “make[] arguments consistent with Jauregui.” ECF No. 26. While the parties disagree about the impact of Jauregui, they agree that Plaintiff's motion should not be revised and refiled. See ECF Nos. 29 at 1, 30 at 1. The Court will accordingly evaluate Plaintiff's motion as-filed with the benefit of additional guidance from Jauregui.

In Jauregui, the Ninth Circuit confronted an appeal from a district court's order remanding a wage-and-hour class action to state court. Defendant Roadrunner Transportation Services had originally removed the case to federal court under CAFA, and plaintiff Jauregui had responded with a motion to remand arguing that the $5 million amount-in-controversy requirement was not met. Jauregui, 28 F.4th at 991. Roadrunner responded with a declaration from its senior payroll lead “who concluded that, based on the company's payroll data and [Jauregui's] allegations, the amount in controversy was $14, 780, 377.06.” Id. The district court granted the motion to remand, finding that Roadrunner did not meet its burden. Id. The district court evaluated the calculations for each of the seven alleged violations, finding the claimed amount-in-controversy substantiated for only two of the claims. Id. at 992. For the remaining five claims, the district court disagreed with assumptions and variables underlying Roadrunner's calculations, and thus “assigned a $0 value” to those claims for amount-in-controversy purposes. Id. The district court thus concluded that the amount-in-controversy was only $2.1 million, below the $5 million CAFA threshold. Id.

The Ninth Circuit reversed, finding two problems with the district court's analysis. First, the Ninth Circuit found that the district court improperly imposed “a presumption against CAFA's jurisdiction.” Jauregui, 28 F.4th at 993. Because “no antiremoval presumption attends cases invoking CAFA, ” Dart Cherokee, 574 U.S. at 89, the district court's different standard resulted in “an inappropriate demand of certitude from Roadrunner over its assumptions used in calculating the amount in controversy.” Jauregui, 28 F.4th at 993. This caused the district court to improperly reject or discount some of Roadrunner's assumptions and dismiss its estimates for certain claims. Id. Second, the district court erred by assigning a $0 value to five of the seven claims in the lawsuit simply because it disagreed with some of the assumptions underlying the calculations. Id. at 994. “[I]f a defendant provided no evidence or clearly inadequate evidence supporting its valuation for a claim, then it might be appropriate for a district court to assign that claim a $0 value.” Id. Instead, the district court assigned a $0 value to a claim where the court “identified other assumptions that it concluded were better.” Id. “[A]t most, ” the court should have “reduce[d] the claim to the amount resulting from the alternative assumption.” Id. A district court may be justified in zeroing out a claim “[w]here a defendant's assumption is unreasonable on its face without comparison to a better alternative.” Id. at 996. Otherwise, where an alternative assumption is available and reasonable, “the district court should consider the claim under the better assumption.” Id. Jauregui informs the Court's analysis of several threshold issues raised by the parties. First, and contrary to Plaintiff's argument otherwise, there is no presumption against removal in a CAFA case. Jauregui, 28 F.4th at 993; contra Mot. at 2. Second, and again contrary to Plaintiff's argument otherwise, a declaration submitted by a company employee attesting to...