1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE CENTRAL DISTRICT OF CALIFORNIA 10 11 EDUARDO DOMINGUEZ VALERO, Case No. 8:24-cv-01948-JWH-ADS

12 Plaintiff,

ORDER DENYING PLAINTIFF’S

13 v. MOTION TO REMAND [ECF No. 15] 14 MKS INSTRUMENTS, a Massachusetts Corporation; 15 NEWPORT CORPORATION, a Nevada Corporation; 16 BHAVIK PATEL, an individual; and DOES 1-100, inclusive, 17 Defendants. 18 19 20 21 22 23 24 25 26 27 1 Before the Court is the motion of Plaintiff Eduardo Dominguez Valero to remand this action to Orange County Superior Court.’ Defendants MKS Instruments, Newport Corporation, and Bhavik Patel oppose’ the Motion, and 4|| Valero filed a reply.* The Court concludes that this matter is appropriate for 5|| resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15. For the reasons 6 || detailed below, Valero’s instant Motion to remand is DENIED. 7 I. BACKGROUND 8 Valero commenced this putative class action in state court in July 2024.* 9|| Valero asserts the following 10 claims for relief against Defendants —his former employers:° 11 e failure to pay overtime wages; 12 e failure to pay minimum wages; 13 e failure to provide meal periods; 14 e failure to provide rest periods; 15 e waiting time penalties; 16 17\| 3 Pl.’s Mot. for Order Remanding Action to State Court (the Motion”) 18 || [ECF No. 15]. Plaintiff’s name is listed as “Eduardo Dominguez Valero” in the Complaint (the ““Complaint”) [ECF No. 4-1] (emphasis added). The Notice of Removal [ECF No. 1] renders Plaintiff’s name as “Eduardo Domingo Valero” 20 || (emphasis added) in the Caption (which is also reflected on the CM/ECF 1 docket), but as “Eduardo Dominguez Valero” in the background information at Paragraph 1 (emphasis added). Defendants MKS Instruments and Newport Corporation appear to have made a typographical error when they prepared the 23|| Notice of Removal. The Court will refer to Plaintiff as “Eduardo Dominguez Valero.” 24 2 Defs.’ Opp’n to the Motion (the “Opposition” [ECF No. 19]. 251s P].’s Amended Reply in Supp. of the Motion (the “Reply”) [ECF No. 23]. 27\| 4 See Complaint. ° See generally id.

1 e wage statement violations; 2 e failure to pay timely wages; 3 e failure to indemnify; 4 e violation of Cal. Lab. Code § 227.3; and 5 e unfair competition.® 6 In September 2024, Defendants MKS Instruments and Newport 7 || Corporation removed the action,’ arguing that this Court has jurisdiction under &|| the Class Action Fairness Act (“CAFA”’’), 28 U.S.C. § 1332(d)(2), because the 9|| amount in controversy exceeds $5 million exclusive of interest and costs and || minimal diversity exists.* 11 Il. LEGAL STANDARD 12 CAFA provides federal subject matter jurisdiction over a putative class || action case if (1) the proposed plaintiff class is not less than 100 members; 14|| (2) the parties are minimally diverse; and (3) the aggregate amount in controversy exceeds $5 million. See 28 U.S.C. § 1332(d)(2) & (5)(B). || “Congress intended CAFA to be interpreted expansively.” Ibarra »v. Manheim 17|| Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). 18 The party seeking removal bears the burden of establishing federal subject 19|| matter jurisdiction under CAFA. See Abrego Abrego v. Dow Chem. Co., 443 F.3d || 676, 683 (9th Cir. 2006). When the amount in controversy is not apparent from 21|| the face of the complaint, the removing party “must prove by a preponderance 22\| of the evidence that the amount in controversy requirement [under CAFA] has been met.” Jd. Generally, “a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional 25 26|| ° See generally id. 7 See Notice of Removal. ° See id. at F 9.

1 threshold.” However, when a plaintiff contests the amount in controversy put 2 forth by the defendant, “[e]vidence establishing the amount is required.” Dart 3 Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). The parties, thus, “may 4 submit evidence outside the complaint, including affidavits or declarations, or 5 other ‘summary-judgment-type evidence relevant to the amount in controversy 6 at the time of removal.’” Ibarra, 775 F.3d at 1197 (quoting Singer v. State Farm 7 Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). “Under this system, a 8 defendant cannot establish removal jurisdiction by mere speculation and 9 conjecture, with unreasonable assumptions.” Id. 10 III. ANALYSIS 11 A. CAFA Jurisdiction—Amount in Controversy 12 Under CAFA, the Court has “original jurisdiction of any civil action in 13 which the matter in controversy exceeds the sum or value of $5,000,000, 14 exclusive of interest and costs, and is a class action in which” there is minimal 15 diversity. 28 U.S.C. § 1332(d)(2). To remove a case to federal court under 16 CAFA, a defendant must demonstrate that the amount in controversy exceeds 17 $5 million, exclusive of interest and costs. See id. The general rule is that a 18 removing defendant’s well-pleaded amount-in-controversy allegations “should 19 be accepted when not contested by the plaintiff or questioned by the court.” 20 Dart Cherokee, 574 U.S. at 87; see also Ibarra, 775 F.3d at 1197 (when evaluating 21 the amount in controversy, courts first look to the complaint). 22 However, when, as is the case here, the plaintiff challenges the removing 23 defendant’s jurisdictional allegation, “removal . . . is proper on the basis of an 24 amount asserted” by the defendant only “if the district court finds, by the 25 preponderance of the evidence, that the amount in controversy exceeds” 26 $5 million. Dart Cherokee, 574 U.S. at 88; see also 28 U.S.C. § 1446(c)(2)(B). 27 “In such a case, both sides submit proof” so that the Court can decide “whether 1|| U.S. at 88 (emphasis added). The preponderance of the evidence standard means that the “defendant must provide evidence establishing it is ‘more likely 3|| than not’ that the amount in controversy” meets or exceeds the jurisdictional 4|| threshold. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996) (emphasis added). The defendant must set forth the underlying facts 6 || supporting its assertion that the amount in controversy exceeds the statutory || minimum, and the Court may consider “‘summary-judgment-type evidence & || relevant to the amount in controversy at the time of removal,” such as affidavits 9|| or declarations. barra, 775 F.3d at 1197. There is no presumption against 10 || removal in CAFA cases. See Dart Cherokee, 574 U.S. at 89. 11 Defendants estimate that the amount in controversy is at least 12|| $13,855,763.56, calculated as follows: 13 e $500,083.25 on unpaid wage claims, based upon the assumption that 14 583 putative class members who earned average salaries of $29.99 worked 15 15 minutes of overtime per week for each week that those class members 16 were employed; 17 e $4,000,666.00 on meal period claims, based upon the assumption that 18 each of the 583 putative class members experienced two meal period 19 violations per week for each week that those class members were 20 employed; 21 e $4,000,666.00 on rest period claims, based upon the assumption that each 22 of the 583 putative class members experienced two rest period violations 23 per week; 24 e $1,623,046.60 on waiting time penalties, based upon the assumption that 25 243 putative class members who earned average salaries of $27.83 per 26 hour each experienced a waiting time violation; 27 28

1 e $960,150.00 on wage statement penalties, based upon the assumption that 2 each wage statement for each of 407 class members violated California 3 law; and 4 e $2,771,152.71 on attorneys’ fees, calculated as 25% of the total class 5 recovery.” 6|| Valero does not challenge Defendants’ assertions regarding the number of || putative class members or the average salaries of those class members. ° &|| Instead, Valero argues that Defendants have grossly inflated the amount in 9|| controversy by making unreasonable assumptions regarding the rate of violations || that the class members likely experienced. In particular, Valero contends that he 11|| alleged only that “some” class members experienced violations “at times,” 12|| which requires the Court to assume much lower violation rates than those that || Defendants have proposed." Valero asserts that the Court should assign $0 in 14|| value to most or all of Valero’s claims because Defendants have not proven any amount greater than that.” 16 “(T]he amount in controversy reflects the maximum [amount] the 17|| plaintiff could reasonably recover.” Arias v. Residence Inn by Mariott, 936 F.3d 18 || 920, 927 (9th Cir. 2019) (emphasis in original). In other words, the amount in 19|| controversy reflects the maximum number of potential violations for which the || class members may recover, not the actual number of violations that occurred. 21|| Valero’s arguments appear to challenge whether Defendants’ assumptions reflect the actual rate of violations, not whether those assumptions 23 > See generally id.; see also Decl. of Kay Nishii re. Notice of Removal (the “Nishii Declaration”) [ECF No. 3]. ° See generally Motion. See generally td. See id. at 8:10-12.

1 are reasonable in view of the potential numbers of violations.13 Moreover, 2 “when the defendant’s assertion of the amount in controversy is challenged by 3 plaintiffs in a motion to remand, . . . both sides submit proof” so that the court 4 can “decide[] where the preponderance lies.” Id. at 1198. Defendants have 5 submitted evidence that supports their calculations,14 and the Court credits that 6 evidence. Valero, however, has not submitted any evidence to contradict 7 Defendants’ assumptions. Nor has Valero identified the violation rates that he 8 believes to be appropriate. 9 Valero argues that, under Ninth Circuit precedent, he is not required to 10 present any evidence because he has mounted a factual attack on Defendants’ 11 amount in controversy calculations, not a facial attack.15 Valero relies on Harris 12 v. KM Industrial, Inc., 980 F.3d 694 (9th Cir. 2020). In Harris, the Ninth Circuit 13 found a defendant’s assumptions unsupported because the defendant had not 14 justified its conclusions regarding class membership. See id. at 701. For 15 example, the defendant had not provided proof that class members “worked 16 shifts that would qualify them as members” of various sub-classes. See id. Here, 17 in contrast, Defendants have provided a declaration that establishes the number 18 of potential class members for each violation and that explains why those class 19 members may have suffered the alleged violation.16 20 Even setting aside Valero’s burden of production, though, Valero’s 21 factual challenges fail with respect to each subset of claims. 22 23 24

25 13 See generally id. 26 14 See Nishii Declaration. 27 15 See generally Reply. 1 1. Unpaid Wages 2 Defendants estimate that the amount in controversy on Valero’s first and 3 second claims for relief is $500,083.25. Valero contends that the assumptions 4 underlying Defendants’ calculations are unreasonable. 5 Valero’s first and second claims for relief are for failure to pay overtime 6 and minimum wages, respectively. Under California law, “[a]ny work in excess 7 of eight hours in one workweek and any work in excess of forty hours in one 8 workweek . . . shall be compensated at the rate of no less than one and one-half 9 times the regular rate of pay for an employee.” Cal. Lab. Code § 510. 10 Additionally, “[a]ny work in excess of 12 hours in one day shall be compensated 11 at the rate of no less than twice the regular rate of pay for an employee.” Id. 12 Pursuant to California law, all employees are also entitled to receive at least 13 minimum wage for all hours worked. See Cal. Lab. Code §§ 1197 & 1999. 14 Defendants employed at least 583 non-exempt employees during the time 15 periods relevant to those claims, and those employees worked a total of 16 66,700 workweeks over the class period.17 The average salary for those 17 employees was $29.99 per hour.18 Accordingly, if each class member worked 18 15 minutes of unpaid time per week, then the amount in controversy for those 19 claims is at least $500,082.25. 20 Valero contends that it is unreasonable to assume that each class member 21 worked 15 minutes of unpaid time per week because he has alleged that “some” 22 class members experienced violations “at times.” To the extent that Valero 23 seeks to skirt the amount in controversy by arguing that Defendants committed 24 infrequent or ad hoc violations, the Court is unpersuaded—if Valero does not 25 believe that the alleged violations were widespread or regular, then this action is 26

27 17 See id. at ¶ 8. 1 not appropriate for class-wide relief, and Valero should not have asserted his 2 claims on behalf of a putative class. 3 The Court also disagrees that Defendants’ assumptions overstate the 4 amount in controversy on the unpaid wage claims. Under California law, 5 Defendants are required to pay one-and-a-half times an employee’s hourly salary 6 for any work in excess of eight hours per day, and Defendants must pay two 7 times an employee’s hourly salary for any work in excess of 12 hours per day. 8 Defendants’ calculations do not take those penalties into account; they assume 9 instead that each class member is entitled to 15 minutes’ worth of that 10 individual’s base salary per week. Accordingly, a class member who worked 11 10 minutes per week in overtime would be entitled to at least 15 minutes’ worth 12 of his or her salary. That reasoning undermines Valero’s argument that the 15- 13 minute assumption inflates the amount in controversy with respect to the first 14 and second claims for relief. 15 2. Meal Period and Rest Break Claims 16 Defendants estimate that the amount in controversy with respect to 17 Valero’s third and fourth claims for relief is at least $8,001,332. 18 Through his third and fourth claims for relief, Valero seeks class-wide 19 recovery for meal and rest period violations, respectively. Pursuant to California 20 law and applicable wage orders, employers must provide 30-minute lunch 21 periods for every five hours worked, as well as 10-minute rest periods for every 22 four hours worked.19 See Cal. Lab. Code § 512. If an employer fails to provide a 23 full and timely rest or break period, then the employee is entitled to one 24 additional hour of pay. See Cal. Lab. Code § 226.7. An employee may recover 25 up to one hour of pay for every day that the employee experiences a rest period 26 27 1 violation, as well as one hour of pay for every day that the employee experiences 2 a meal period violation. See id. 3 Over the relevant class period, Defendants employed 583 non-exempt 4 employees, and those employees worked 66,700 workweeks at an average salary 5 of $29.99 per hour.20 Therefore, by assuming that each employee experienced 6 two rest break violations and two meal period violations per week, Defendants 7 have calculated the amount in controversy for those claims to be at least 8 $8,001,332. 9 Valero contends that Defendants have grossly inflated the amount in 10 controversy by attributing a “an extreme 100 percent violation rate” for the 11 meal period and rest break claims.21 That is not true: a 100% violation rate 12 would mean that each employee experienced a meal period and rest break 13 violation for each day that the employee worked, which would result in an 14 amount in controversy of well over $20 million. Contrary to Valero’s 15 contentions, Defendants have assumed only a 40% violation rate, and Valero has 16 not provided any reason why that rate is unreasonable. 17 Moreover, even if it is unreasonable to assume that each class member 18 experienced two meal period and two rest break violations per week, such an 19 assumption would not be fatal to the amount-in-controversy determination. 20 Indeed, the Court could ignore entirely the meal period claims and assume only 21 that each employee was denied, on average, two timely and full rest periods per 22 week. That supposition would still result in potential penalties of $4,000,666. 23 Taking into account the other claims for which the putative class may recover, 24 the jurisdictional threshold would remain satisfied. 25 26

27 20 See Nishii Declaration ¶ 8. 1 3. Waiting Time Penalties 2 Defendants estimate that the amount in controversy with respect to 3 Valero’s claim for waiting time penalties is $1,623,045. 4 Pursuant to California law, a discharged employee is generally entitled to 5 receive all wages owed to him or her immediately upon termination or within 6 72 hours of resignation. See Cal. Lab. Code §§ 201(a) & 201(b). If the employer 7 does not pay wages due immediately, then the employee is entitled to recover 8 waiting time penalties “from the due date thereof at the same rate until paid or 9 until an action therefor is commenced,” for up to 30 days. Cal. Lab. Code 10 § 203(a). 11 Waiting time clams are derivative of other claims. Accordingly, if any 12 putative class member was not paid for all hours worked at any time during his 13 or her employment, or if the employee experienced a rest break or meal period 14 violation, and if Defendants failed to remedy those violations immediately upon 15 the termination or resignation of the employee, then the class member is entitled 16 to receive up to 30 days’ worth of pay.22 See Wilcox v. Harbor UCLA Med. Ctr. 17 Guild, Inc., 2023 WL 5246264, at *4 (C.D. Cal. Aug. 14, 2023). 18 During the relevant class period, Defendants employed 243 full-time, 19 non-exempt employees whose employment ended, and those employees worked 20 an average of eight hours per day at an average salary of $27.83 per hour.23 21 Therefore, by assuming that each of those employees suffered a waiting period 22 violation, Defendants have estimated that the amount in controversy with 23 respect to those claims is $1,623,045. 24 Valero asserts that Defendants’ assumptions with respect to the waiting 25 period claim are “manifestly unreasonable” in view of Valero’s allegations that 26

27 22 See Complaint ¶¶ 68–73. 1 Defendants failed to pay “some” class members “at times.”24 As explained 2 above, that argument is both unpersuasive and troubling. To be entitled to 3 recover waiting time penalties, each putative class member need suffer only one 4 of the other injuries alleged in the complaint. And for a putative class member 5 to recover 30 days’ worth of his or her salary, the injury need only have lasted 6 for more than 30 days—which is necessarily true if, as Valero alleges, the Labor 7 Code violations remain ongoing.25 In other words, the 100% violation rate is not 8 only reasonable—it is a necessary condition of Valero’s decision to file this 9 putative class action case. 10 Accordingly, the Court finds that Defendants’ estimates regarding the 11 amount in controversy with respect to the waiting period claim are reasonable. 12 4. Wage Statement Violations 13 Defendants estimate that the amount in controversy with respect to the 14 wage statement claims is $960,150. To arrive at that number, Defendants 15 assumed that every wage statement issued to the 407 putative members of this 16 class over the class period contained some violation. Valero, however, contends 17 that it is inappropriate to assign a 100% violation rate for this claim. 18 In his Complaint, Valero alleges that Defendants “adopt[ed] policies and 19 practices that resulted in their failure, at times, to furnish Plaintiff and Class 20 Members with accurate itemized statements that accurately reflect, among other 21 things, gross wages earned; total hours worked; net wages earned; all applicable 22 hourly rates in effect during the pay period and the corresponding number of 23 hours worked at each hourly rate; among other things.”26 Like the waiting 24

25 24 See generally Complaint. 26 25 See id. at ¶¶ 15–24 (alleging that the violations “continu[e] to the 27 present”). 1 period claim, this claim appears to be derivative of the other class claims. Thus, 2 the Court finds it reasonable to assume that there was a 100% violation rate. 3 However, even if the Court attributed a $0 value to this claim, the amount in 4 controversy would exceed the jurisdictional threshold. 5 5. Attorneys’ Fees 6 Valero argues that it is improper to assume that plaintiffs will recover 25% 7 in attorneys’ fees and that attorneys’ fees should not be included in the amount 8 in controversy.27 The Ninth Circuit has held that when, as here, the 9 “underlying statute authorizes an award of attorneys’ fees, either with 10 mandatory or discretionary language, such fees may be included in the amount 11 in controversy.” Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 1156 (9th Cir. 12 1998). Courts have generally found that it is reasonable to use a 25% benchmark 13 when calculating the amount in controversy for the purpose of diversity 14 jurisdiction. See, e.g., Lopez v. Aerotek, Inc., 2015 WL 2342558, at *3 (C.D. Cal. 15 May 14, 2015); see also Greene v. Harley-Davidson, Inc., 956 F.3d 767, 774 n.4 16 (9th Cir. 2020) (finding that it was “reasonable to assume that” attorneys’ fees 17 “equal to 25 percent of the amount in controversy”). 18 Moreover, even if the Court did not consider attorneys’ fees at all, the 19 amount in controversy exceeds the jurisdictional threshold. 20 B. Equitable Jurisdiction 21 Valero argues that the Court should remand the entire action because the 22 Court lacks jurisdiction to award equitable remedies for his UCL claim.28 23 The Ninth Circuit has held that “there is original jurisdiction, and 24 therefore removal jurisdiction under 28 U.S.C. § 1441(a), over a case as long as 25 there is subject matter jurisdiction over one or more of the claims alleged.” Lee 26

27 27 Motion 17:9–18:28. 1 v. Am. Nat. Ins. Co., 260 F.3d 997, 1002 (9th Cir. 2001). And “a district court 2 may not . . . remand a case in its entirety where there is subject matter 3 jurisdiction over some portion of it.” Id. 4 It is undisputed that the Court has subject matter jurisdiction over 5 Valero’s labor claims, and it is undisputed that the Court lacks equitable 6 jurisdiction over Valero’s UCL claim.29 See Sonner v. Premier Nutrition Corp., 7 971 F.3d 834, 845 (9th Cir. 2020) (holding that a federal court may not award 8 equitable relief under the UCL “when a plain, adequate, and complete remedy 9 exists at law”). Accordingly, the Court declines to remand the entire action 10 based upon its lack of equitable jurisdiction over the UCL claim. Instead, 11 Valero’s UCL claim is DISMISSED without prejudice. Valero may attempt to 12 amend his UCL claim to fall within the Court’s jurisdiction, or he may pursue 13 that claim in state court. See Guzman v. Polaris Industries, Inc., 49 F.4th 1308, 14 1315 (9th Cir. 2022) (holding that a district court must dismiss a UCL claim over 15 which the court lacks equitable jurisdiction). 16 IV. DISPOSITION 17 For the foregoing reasons, the Court hereby ORDERS as follows: 18 1. Valero’s instant Motion to remand [ECF No. 15] is DENIED, and 19 the hearing on that Motion is VACATED. 20 2. The Scheduling Conference remains on calendar for January 10, 21 2025, at 9:00 a.m. 22 3. Valero’s claim for relief under the UCL is DISMISSED without 23 prejudice. 24 4. Valero is DIRECTED to file an amended pleading, if at all, no later 25 than January 17, 2025. If Valero chooses to file an amended pleading, then he is 26 also DIRECTED to file contemporaneously therewith a Notice of Revisions to 27 1|| Complaint that provides the Court with a redline version that shows the 2|| amendments. 3 5. Defendants are DIRECTED to file their respective responses to 4|| Valero’s operative pleading no later than February 7, 2025. 5 IT IS SO ORDERED. "| ovettmassans AM 8 {SNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28