Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 1 of 18 Page ID #:791

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No.: SACV 22-00392-FWS-JDE 11 MICHELLE MCCOLLUM, individually

and on behalf of all others similarly 12 ORDER DENYING PLAINTIFF’S situated,

MOTION TO REMAND ACTION TO

13 Plaintiff, STATE COURT [15] 14 17 TGI FRIDAY’S, INC.; and DOES 1 18 through 20, inclusive, 19 Defendants.

20 Before the court is Plaintiff Michelle McCollum’s (“Plaintiff”) Motion to 21 Remand this action to Superior Court. (Dkt. 15 (“Motion” or “Mot.”).) Defendant 22 TGI Friday’s, Inc. (“Defendant”) opposes the Motion. (Dkt. 16 (“Opposition” or 23 “Opp.”).) 24 The court finds this matter appropriate for resolution without oral argument. 25 See Fed. R. Civ. P. 78(b) (“By rule or order, the court may provide for submitting and 26 determining motions on briefs, without oral hearings.”); L.R. 7-15 (authorizing courts 27 to “dispense with oral argument on any motion except where an oral hearing is 28

-1- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 2 of 18 Page ID #:792

1 required by statute”). Based on the state of the record, as applied to the applicable 2 law, the court DENIES the Motion. 3 I. Background 4 A. Summary of Allegations 5 On February 4, 2022, Plaintiff filed a class action Complaint in California 6 Superior Court, County of Orange, alleging violations of California’s wage and hour 7 laws based on Defendant’s “systematic pattern of wage and hour violations.” (See 8 Dkt. 1-3, Exh. A ¶ 3 (“Complaint” or “Compl.”).) Specifically, Plaintiff alleges 9 Defendant (1) failed to provide first and/or second meal periods in violation of Cal. 10 Labor Code §§ 226.7 and 512, and Industrial Welfare Commission (“IWC”) Wage 11 Order § 11, (id. ¶¶ 37-45); (2) failed to permit rest breaks in violation of Cal. Labor 12 Code § 226.7 and IWC Wage Order § 12, (id. ¶¶ 46-52); (3) failed to provide accurate 13 itemized wage statements in violation of Cal. Labor Code § 226, (id. ¶¶ 53-59); (4) 14 failed to pay all wages due on separation of employment in violation of Cal. Labor 15 Code §§ 201, 202, and 203, (id. ¶¶ 60-65); (5) failed to timely pay all wages due upon 16 during employment in violation of Cal. Labor Code §§ 204 and 210, (id. ¶¶ 66-70); 17 (6) failed to reimburse necessary business expenses in violation of Cal. Labor Code 18 §§ 2800 and 2802, (id. ¶¶ 71-77); and (7) violated California’s Unfair Competition 19 Law, Cal. Bus. & Prof. Code §§ 17200, et seq., (id. ¶¶ 78-90). 20 Plaintiff brings her first, second, third, fifth, sixth, and seventh claims on behalf 21 of the class identified in the Complaint as “[a]ll California citizens currently or 22 formerly employed by Defendants as non-exempt employees in the State of California 23 at any time between August 10, 2017 and the date of class certification.” (Id. ¶ 20; 24 see generally id ¶¶ 37-90.) Plaintiff brings her fourth claim, failure to pay all wages 25 due on separation of employment, on behalf of the “Waiting Time Subclass,” which 26 assertedly consists of “[a]ll Class Members who separated their employment with 27 Defendants at any time between August 10, 2018 and the date of class certification.” 28 (Id. ¶ 20; see generally id. ¶¶ 60-65.)

-2- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 3 of 18 Page ID #:793

1 B. Procedural Background 2 Defendant filed a Notice of Removal (“NOR”) alleging federal jurisdiction 3 under the Class Action Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”), on March 14, 4 2022. (Dkt. 1.) Plaintiff filed the Motion shortly thereafter on March 22, 2022, (Dkt. 5 15), and briefing concluded on April 15, 2022, (see Dkts. 16-18). While the Motion 6 was pending, the parties submitted Supplemental Briefing on the import of the 7 California Supreme Court’s recent decision in Naranjo v. Spectrum Sec. Servs., Inc., 8 509 P.3d 956 (2022), in response to the court’s order on Defendant’s related ex parte 9 Application. (Dkts. 26-27, 32-33.) Defendant’s motion to consolidate this action with 10 Gragnano v. TGI Fridays Inc., 8:22-cv-00392-FWS-JDE, is currently pending before 11 the court. (Dkts. 28-30, 33, 35.) 12 II. Legal Standards 13 A. Class Action Fairness Act (“CAFA”) Diversity Jurisdiction 14 “To remove a case from a state court to a federal court, a defendant must file in 15 the federal forum a notice of removal ‘containing a short and plain statement of the 16 grounds for removal.’” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 17 81, 83 (2014) (quoting 28 U.S.C. § 1446(a)). CAFA generally permits a federal 18 district court to exercise subject matter jurisdiction over a putative class action in 19 which: (1) the amount in controversy exceeds $5,000,000; (2) the number of members 20 of all purported classes of plaintiffs totals 100 or more persons; and (3) any member 21 of a proposed class of plaintiffs differs in citizenship from any defendant. 28 U.S.C. 22 § 1332(d); Dart Cherokee, 574 U.S. at 84-85. Congress intended courts to read 23 CAFA’s provisions broadly; accordingly, “no antiremoval presumption attends cases 24 invoking CAFA.” Dart Cherokee, 574 U.S. at 89. 25 1. Amount in Controversy 26 To determine the amount in controversy, “courts first look to the complaint” 27 and generally find the “sum claimed by the plaintiff controls if the claim is apparently 28 made in good faith.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir.

-3- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 4 of 18 Page ID #:794

1 2015) (citation and internal quotation marks omitted). In the absence of an amount in 2 controversy alleged in a complaint, “a defendant’s amount in controversy allegation is 3 normally accepted when invoking CAFA jurisdiction, unless it is ‘contested by the 4 plaintiff or questioned by the court.’” See Jauregui v. Roadrunner Transportation 5 Servs., Inc., 28 F.4th 989, 992 (9th Cir. 2022) (quoting Dart Cherokee, 574 U.S. at 6 87). “When a plaintiff contests the amount in controversy allegation, ‘both sides 7 submit proof and the court decides, by a preponderance of the evidence, whether the 8 amount-in-controversy requirement has been satisfied.’” Jauregui, 28 F.4th at 992 9 (quoting Dart Cherokee, 574 U.S. at 88). “[T]he removing party must be able to rely 10 ‘on a chain of reasoning that includes assumptions to satisfy its burden to prove by a 11 preponderance of the evidence that the amount in controversy exceeds $5 million,’ as 12 long as the reasoning and underlying assumptions are reasonable.” Jauregui, 28 F.4th 13 at 993 (quoting LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1201 (9th Cir. 2015)). 14 Assumptions must have “some reasonable ground underlying them,” and “may be 15 reasonable if [they are] founded on the allegations of the complaint. Arias v. 16 Residence Inn by Marriott, 936 F.3d 920, 925 (9th Cir. 2019) (citations and internal 17 quotation marks omitted). 18 In summary, the Ninth Circuit has set forth “three principles that apply in 19 CAFA removal cases.” Id. at 922. “First, a removing defendant’s notice of removal 20 ‘need not contain evidentiary submissions’ but only plausible allegations of the 21 jurisdictional elements.” Id. (quoting Ibarra, 775 F.3d at 1197). “Second, when a 22 defendant’s allegations of removal jurisdiction are challenged, the defendant’s 23 showing on the amount in controversy may rely on reasonable assumptions.” Id. 24 (citing Ibarra, 775 F.3d at 1197-99). “Third, when a statute or contract provides for 25 the recovery of attorneys’ fees, prospective attorneys’ fees must be included in the 26 assessment of the amount in controversy.” Id. (citing Fritsch v. Swift Transp. Co. of 27 Ariz., LLC, 899 F.3d 785, 794 (9th Cir. 2018). 28 2. “Facial” and “Factual” Challenges to the Amount in Controversy

-4- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 5 of 18 Page ID #:795

1 After a removing defendant alleges the amount in controversy requirement is 2 met, “the plaintiff can contest the amount in controversy by making either a ‘facial’ or 3 a ‘factual’ attack on the defendant’s jurisdictional allegations.” Harris v. KM Indus., 4 Inc., 980 F.3d 694, 699 (9th Cir. 2020) (citing Salter v. Quality Carriers, Inc., 974 5 F.3d 959, 964 (9th Cir. 2020)). “A ‘facial’ attack accepts the truth of the 6 [defendant’s] allegations but asserts that they ‘are insufficient on their face to invoke 7 federal jurisdiction.’” Salter, 974 F.3d at 964 (9th Cir. 2020) (quoting Leite v. Crane 8 Co., 749 F.3d 1117, 1121 (9th Cir. 2014)). In evaluating a facial attack, “the court, 9 accepting the allegations as true and drawing all reasonable inferences in the 10 defendant’s favor, ‘determines whether the allegations are sufficient as a legal matter 11 to invoke the court’s jurisdiction.’” Salter, 974 F.3d at 964 (quoting Leite, 749 F.3d at 12 1121). 13 In contrast, “[a] factual attack ‘contests the truth of the … allegations’ 14 themselves. Harris, 980 F.3d at 699 (alteration in original). Here, “the burden is on 15 the defendant to show, by a preponderance of the evidence, that the amount in 16 controversy exceeds the $5 million jurisdictional threshold.” Id. (citing Ibarra, 775 17 F.3d at 1197). “Both parties may submit evidence supporting the amount in 18 controversy before the district court rules.” Harris, 980 F.3d at 699 (citations 19 omitted). 20 III. DISCUSSION 21 A. Requests for Judicial Notice 22 The court may take judicial notice of facts that are either “generally known 23 within the trial court’s territorial jurisdiction” or “can be accurately and readily 24 determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. 25 Evid. 201(b). It cannot take judicial notice of facts that are subject to reasonable 26 dispute. Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), overruled on 27 other grounds by Galbraith v. Cty. Of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). 28 For example, “courts routinely take judicial notice of letters published by the

-5- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 6 of 18 Page ID #:796

1 government . . . as well as records and reports of administrative bodies.” Smith v. Los 2 Angeles Unified Sch. Dist., 830 F.3d 843, 851 n.10 (9th Cir. 2016) (internal citations 3 and quotation marks omitted). 4 Attached to Plaintiff’s Reply is a request for the court to take judicial notice of 5 the “Declaration of Camisha Washington in Support of Defendant Roadrunner 6 Transportation Services, Inc.’s Opposition to Plaintiff’s Notice of Motion and Motion 7 to Remand Pursuant to 28 U.S.C. § 1447, filed in Jauregui v. Roadrunner 8 Transportation Services, Inc., Case No. 2:21-cv-04657-RGK-PD, on July 19, 2021.” 9 (Dkt. 17-1 ¶ 1.) Preliminarily, Plaintiff’s “request for the [c]ourt to take judicial 10 notice of the [Declaration], presented for the first time in its reply brief, is 11 inappropriate.” Hsu v. Puma Biotechnology, Inc., 213 F. Supp. 3d 1275, 1284 (C.D. 12 Cal. 2016). Additionally, as a declaration submitted in an unrelated action, “the 13 [Washington] [D]eclaration is a court filing and a matter of public record, [but] its 14 contents are not beyond reasonable dispute,” and thus the court “cannot properly 15 notice its contents.” Urrutia v. Chipotle Mexican Grill, Inc., 2017 WL 2901717, at *3 16 (C.D. Cal. June 16, 2017); see also id. at *3 n.1 (collecting cases ruling similarly). 17 Accordingly, the court DENIES Plaintiff’s request for judicial notice. 18 B. CAFA Jurisdiction 19 1. Whether Plaintiff’s Challenges to Defendant’s Asserted Amount in 20 Controversy are “Facial” or “Factual” 21 Plaintiff argues that (1) Defendant improperly assumes the violation rates used 22 to calculate the amount in controversy for each of Plaintiff’s claims; (2) Defendant 23 improperly bases the amount in controversy calculations on “derivative” penalties for 24 waiting time and wage statements; (3) Defendant’s calculations for wage statement 25 and waiting time penalties do not take into account the one-year statute of limitations 26 applicable to statutory penalties under Cal. Labor Code §§ 204, 226; and 27 28

-6- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 7 of 18 Page ID #:797

1 (4) Defendant’s assumption of a 25% “benchmark rate” for attorneys’ fees is not 2 supported by law.1 3 Although a plaintiff may rely on evidence to mount a factual attack, “[a] factual 4 attack . . . need only challenge the truth of the defendant’s jurisdictional allegations by 5 making a reasoned argument as to why any assumptions on which they are based are 6 not supported by evidence.” Harris, 980 F.3d at 700. Conversely, where a plaintiff 7 “d[oes] not challenge the rationality, or the factual basis, of [a defendant’s] assertions” 8 and “argue[s] only that [defendant] ‘must support its assertion with competent proof,’” 9 that challenge is a “facial attack, rather than a factual attack.” See Salter, 974 F.3d at 10 964. 11 Here, Plaintiff argues that Defendant’s assumptions are unsupported by 12 evidence or the Complaint’s allegations, but does not offer alternative assumptions or 13 calculations. (See Mot. at 4-6; Reply at 2-6.) However, Plaintiff does raise arguments 14 that certain of Defendant’s assumptions improperly assume that “every single class 15 member experienced a meal period and [] rest period violations every pay period.” 16 (See Mot. at 5 (emphasis removed)). Plaintiff also argues that Defendant’s 17 calculations, which take into account “derivative claims” and a “25% benchmark rate” 18 for attorneys’ fees, are not supported by law, and that Defendant’s calculations 19 regarding statutory penalties include violations occurring outside the applicable statute 20 of limitations. (See Reply at 3-6.) Accordingly, the court finds Plaintiff brings a 21 “factual attack” and, as such, “the burden of demonstrating the reasonableness of the 22 assumptions on which the calculation of the amount in controversy was based 23 remain[s]” with Defendant. See Harris, 980 F.3d at 701. 24 25 26 27 1 The court observes that Plaintiff’s second, third, and fourth arguments were first raised in her Reply to the Opposition despite Plaintiff having access the bases of 28 Defendant’s calculations in the Notice of Removal.

-7- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 8 of 18 Page ID #:798

1 Still, the court notes the Ninth Circuit in Harris cautioned that “the 2 preponderance standard does not require a district court to perform a detailed 3 mathematical calculation of the amount in controversy before determining whether the 4 defendant has satisfied its burden” and the court “should weigh the reasonableness of 5 the removing party’s assumptions, not supply further assumptions of its own.” Id. at 6 701. To that end, the court will “consider[] any evidence put forth by the parties, and 7 assess[] the reasonableness of the defendant’s assumptions . . . , ‘then decide[] where 8 the preponderance lies.’” Id. at 701 (quoting Ibarra, 775 F.3d at 1198); but see 9 Jauregui, 28 F.4th 989, 994 (9th Cir. 2022) (holding court erred by “assigning $0 to 10 five out of seven of [p]laintiff’s claims” where defendant “offered substantial 11 evidence and identified assumptions to support its valuation of each of the various 12 claims” but “the court disagreed with some of [defendant’s] assumptions”). 13 Considering the parties’ submissions, Plaintiff’s challenge to Defendant’s calculations 14 concerns Defendant’s assumptions rather than a demonstration by affirmative 15 evidence. (See Reply at 2.) 16 2. Reasonableness of Defendant’s Calculations 17 i. Defendant’s Asserted Violation Rate 18 In its calculations, Defendant assumes one violation occurred per pay period 19 with respect to Plaintiff’s first, second, third, and fifth claims. (See Opp. at 11-15, 18- 20 19; NOR at 15-17, 19-20.) Based on the record before the court, the court finds (1) 21 Plaintiff alleges Defendant engaged in a “systematic pattern of wage and hour 22 violations,” (Compl. ¶ 3); (2) contrary to Plaintiff’s assertions, Defendant’s 23 assumption of one violation per pay period is not a “100% violation rate,” e.g., one 24 that assumes a violation occurred on every applicable shift with respect to every class 25 member; (3) Plaintiff’s allegations do not allege a more precise frequency of 26 violations; and (4) Plaintiff has declined to offer any other evidence demonstrating the 27 frequency with which the alleged violations occurred. Accordingly, the court finds 28 Defendant’s assumptions of one violation per claim per pay period reasonable. See

-8- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 9 of 18 Page ID #:799

1 Hamilton v. Wal-Mart Stores, Inc., 2017 WL 4355903, at *3 (C.D. Cal. Sept. 29, 2 2017) (finding assumption of “a weekly violation rate to be reasonable” under the 3 same four considerations). 4 Plaintiff cites two pre-Dart Cherokee cases to argue that Defendant’s 5 assumptions are unreasonable. However, both cases applied “the strong presumption 6 against removal jurisdiction” that the Supreme Court later held does not apply in 7 CAFA cases. Compare Martinez v. Morgan Stanley & Co. Inc., 2010 WL 3123175, 8 at *1 (S.D. Cal. Aug. 9, 2010) (applying “[t]he strong presumption against removal 9 jurisdiction”) (citations and internal quotation marks omitted) and Roth v. Comerica 10 Bank, 799 F. Supp. 2d 1107, 1129 (C.D. Cal. 2010) (same), with Dart Cherokee, 574 11 U.S. at 89 (“[T]here is “no antiremoval presumption attends cases invoking CAFA.”). 12 Even if these cases are applicable, Defendants’ assumptions here are distinguishable 13 from those in Martinez and Roth. In Martinez, the court found defendants’ 14 assumptions were not supported where plaintiffs alleged “that [p]laintiff worked four 15 hours of unpaid overtime per workday for the entire class period”; “every assistant 16 who worked for them during the class period worked overtime”; and “assistants were 17 not provided three rest or meal breaks per week,” during an average 20 pay periods 18 over the course of a year. 2010 WL 3123175, at *5-6. Similarly, in Roth, the court 19 found defendants’ assumptions of “one to three” rest period violations per week and 20 “3 to 5 hours of overtime each week” were not supported based on plaintiff’s 21 allegations of “‘regularly and/or consistently’ work[ing] overtime, [and] ‘often’ 22 miss[ing] meal or rest periods” during the 26 pay periods over the course of one year. 23 799 F. Supp. 2d at 1120 1121, 1224-25. Here, Plaintiff alleges violations occurred 24 pursuant to Defendant’s “systematic pattern of wage and hour violations,” allegations 25 of greater breadth than those in Roth. Defendant also assumes violation rates of once 26 per pay period, less than in Martinez and the upper bound in Roth. 27 28

-9- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 10 of 18 Page ID #:800

1 ii. Plaintiff’s Other General Challenges to Defendant’s 2 Calculations 3 As noted above, Plaintiff also advances three general challenges to Defendant’s 4 asserted amount in controversy: (1) Defendant improperly bases the amount in 5 controversy calculations on Plaintiff’s “derivative” penalties for waiting time and 6 wage statements; and (2) Defendant’s calculations for wage statement and waiting 7 time penalties do not take into account the one-year statute of limitations applicable to 8 statutory penalties under Cal. Labor Code §§ 204, 226. 9 While this Motion was pending, the court ordered the parties to submit 10 Supplemental Briefing on Naranjo v. Spectrum Sec. Servs., Inc., 509 P.3d 956 (2022). 11 (Dkt. 27; see also Dkts. 31, 32.) In Naranjo, the California Supreme Court held that 12 “missed-break premium pay constitutes wages for purposes of Cal. Labor Code 13 section 203, and so waiting time penalties are available under that statue if the 14 premium pay is not timely paid,” and “disapprove[d]” of Court of Appeal precedent 15 on which Plaintiff relies in arguing to the contrary. See id. at 966, 969. (See also 16 Reply at 3-4.) Similarly, the Supreme Court held that, “provided the conditions 17 specified in the statute are otherwise met, failure to report premium pay for missed 18 breaks can support monetary liability under [Cal. Labor Code] section 226 for failure 19 to supply an accurate itemized statement reflecting an employee’s gross wages earned, 20 net wages earned, and credited hours worked.” Naranjo, 509 P.3d at 972. In light of 21 Naranjo, Plaintiff’s argument that Defendant improperly takes into account 22 “derivative” penalties for waiting time and wage statements no longer legally viable. 23 As to Plaintiff’s argument that Defendant fails to take into account the 24 applicable statute of limitations, the Ninth Circuit recently noted that its definition of 25 the ‘amount in controversy’ in an action “undermine[d]” a plaintiff’s “reliance on 26 various statutes of limitation to challenge” a defendant’s calculations because the 27 “‘strength of any defenses indicates the likelihood of the plaintiff prevailing; it is 28 irrelevant to determining the amount that is at stake in the litigation.’” Jauregui, 28

-10- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 11 of 18 Page ID #:801

1 F.4th at 994 n.6 (quoting Arias, 936 F.3d at 928). Rather, “the amount in controversy 2 reflects the maximum recovery the plaintiff could reasonably recover.” Arias, 936 3 F.3d at 927. “Where a removing defendant has shown potential recovery could 4 exceed $5 million” and the plaintiff “has neither acknowledged nor sought to establish 5 that the class recovery is potentially any less, the defendant has borne its burden to 6 show the amount in controversy exceeds $5 million.” Id. (citation and internal 7 quotation marks omitted). With this understanding in mind, the court turns to 8 Defendant’s calculations of the amount in controversy as to Plaintiff’s individual 9 claims. 10 iii. Meal Period Premiums 11 Defendant contends that the amount placed in controversy for Plaintiff’s claim 12 for failure to provide meal periods under Cal. Labor Code §§ 226.7 and 512, and IWC 13 Wage Order § 11, is $901,309.50. (Opp. at 11; NOR at 15.) Defendant’s calculations 14 are based on figures provided in the Declaration of Jennifer Rote, Defendant’s “Senior 15 Vice President, General Counsel” attached to Defendant’s Notice of Removal.2 (Dkt. 16 No. 1-4 (“Rote Declaration” or “Rote Decl.”) ¶ 2.) These calculations are based on 17 Defendant’s “approximately 2,325 non-exempt, hourly paid workers [employed] at 18 Defendant’s restaurant locations in the State of California” from January 7, 2020, to 19 March 9, 2022. (Id. ¶ 10 & n.1.) Defendant then multiplied this number of potential 20 class members by an assumed single violation per each of the average 26 pay periods 21 worked by Defendant’s non-exempt, hourly paid workers in California from January 22 7, 2020, to March 9, 2022, and one hour’s pay at the average hourly rate of $14.91 per 23 hour. (Id. ¶¶ 11, 14; Opp. at 11; NOR at 15.) 24

25 2 The Rote Declaration submits that Ms. Rote has reviewed “information and data 26 related to Defendant’s business and personnel operations” including “payroll records 27 of current and former employees of Defendant in the State of California”; “employment and compensation information” for Plaintiff and “other current and 28 former employees.” (Rote Decl. ¶¶ 3-4.)

-11- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 12 of 18 Page ID #:802

1 The court finds Defendant has sufficiently placed $901,309.50 in controversy 2 for this claim. Plaintiff alleges, as part of the “systematic pattern” of violations by 3 Defendant, (Compl. ¶ 3), that “[a]t all relevant times, Defendant failed to pay Plaintiff 4 and Class Members meal period premiums for missed, late, and/or short meal 5 periods,” (Compl. ¶ 44), and “Plaintiff and Class Members did not receive compliant 6 meal periods for working more than five (5) and/or ten (10) hours per day because 7 their meal periods were missed, late, short, and/or they were not permitted to take 8 meal periods,” (Compl. ¶ 42). Based on these allegations, the court concludes 9 Defendant’s assumption of a violation rate of once per pay period is reasonable. See 10 Hamilton, 2017 WL 4355903, at *4 (“[B]ecause Plaintiff claims that the violations 11 occurred regularly, as a pattern and practice, the Court finds Defendant’s estimation of 12 one violation per work week reasonable and conservative.”) (citations omitted); 13 Coleman v. Estes Express Lines, Inc., 730 F. Supp. 2d 1141, 1149 (C.D. Cal. 2010), 14 aff’d sub nom. Coleman v. Estes Exp. Lines, Inc., 631 F.3d 1010 (9th Cir. 2011) 15 (noting “courts have assumed a 100% violation rate in calculating the amount in 16 controversy when the complaint does not allege a more precise calculation”). 17 iv. Rest Break Violations 18 Defendant contends that the amount placed in controversy for Plaintiff’s claim 19 for failure to permit rest breaks under Cal. Labor Code § 226.7 and IWC Wage Order 20 § 12 is $901,309.50. (Opp. at 13; NOR at 16.) Using the same figures as detailed 21 above, Defendant multiplied the number of Defendant’s non-exempt, hourly paid 22 workers in California (2,325) by an assumed single violation pay per each of the 23 average 26 pay periods and one hour’s pay at the average hourly rate of $14.91 per 24 hour. (Rote Decl. ¶¶ 11, 14; Opp. at 13; NOR at 16.) 25 The court finds Defendant has placed $901,309.50 in controversy for this claim. 26 The court’s analysis, and the parties’ arguments, are materially similar to that 27 discussed above in relation to Plaintiff’s claim for failure to provide meal periods. As 28 noted above, Plaintiff alleges, as part of the “systematic pattern” of violations by

-12- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 13 of 18 Page ID #:803

1 Defendant, (Compl. ¶ 3), that “[d]uring the relevant time period, Plaintiff and Class 2 Members did not receive a ten (10) minute rest period for every four (4) hours or 3 major fraction thereof worked because they were required to work through their daily 4 rest periods and/or were not authorized to take their rest periods,” (Compl. ¶ 49), and 5 “[a]t all relevant times, Defendants failed to pay Plaintiff and Class Members rest 6 period premiums for missed, late, and/or interrupted rest periods,” (Compl. ¶ 51). 7 Accordingly, the court finds it is reasonable for Defendant to assume a violation rate 8 of once per pay period. See Hamilton, 2017 WL 4355903, at *4; Coleman 730 F. 9 Supp. 2d at 1149. 10 v. Wage Statement Penalties 11 Defendant contends that the amount placed in controversy for Plaintiff’s claim 12 for failure to provide accurate itemized wage statements under Cal. Labor Code § 226 13 is $5,928,750. (Opp. at 13-15; NOR at 17.) To calculate this number, Defendant 14 assumed each of the 26 pay periods in which one rest break and one meal period 15 violation occurred resulted in each of Defendant’s 2,325 non-exempt, hourly paid 16 workers in California who suffered a violation receiving an inaccurate wage 17 statement. (Opp. at 14-15; NOR at 17.) Starting with Cal. Labor Code § 226(e)’s 18 initial payment of $50 and $100 for each subsequent violation, Defendant estimated 19 that the total payments would amount to $2,550, short of the $4,000 statutory 20 maximum. (Opp. at 14-15; NOR at 17.) Multiplying the number of Defendant’s non- 21 exempt, hourly paid workers in California (2,325) by the penalty per worker ($2,550), 22 Defendant arrived at the estimated amount of $5,928,750. (Opp. at 14-15; NOR at 23 17.) 24 The court finds Defendant’s calculations sufficiently reasonable to place 25 $5,928,750 in controversy for this claim. Plaintiff’s allegations with respect to this 26 claim include, as part of the “systematic pattern” of violations by Defendant, (Compl. 27 ¶ 3), that “[t]he deficiencies [in wage statements] include, among other things, the 28 failure to correctly state the gross and net wages earned, total hours worked, all

-13- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 14 of 18 Page ID #:804

1 applicable hourly rates in effect, and the numbers worked at each hourly rate by the 2 Class Members,” (Compl. ¶ 55). The court finds it reasonable for Defendant to 3 assume, in light of (1) these allegations suggesting widespread “facial violations”; (2) 4 the court’s findings above; and (3) the absence of evidence to the contrary; that the 26 5 pay periods in which a rest or meal break violation occurred resulted in the inaccurate 6 recording of an itemized wage statement to that effect. See Ramirez v. Carefusion 7 Res., LLC, 2019 WL 2897902, at *4 (S.D. Cal. July 5, 2019) (finding reasonable 8 assumption that “every wage statement” violated § 226(e) where “Plaintiff provide[d] 9 no evidence supporting her contention that there were ever any wage statements that 10 included the requisite ‘accurate itemization’ of overtime, missed meal breaks, and rest 11 breaks” and alleged “defendant failed to list ‘all the requirements under Cal. Labor 12 Code § 226’ on its wage statements”); Vikram v. First Student Mgmt., LLC, 2017 WL 13 4457575, at *4 (N.D. Cal. October 6, 2017) (finding reasonable assumption that 14 “every wage statement would be in violation” where Plaintiff “d[id] not assert that the 15 wage statements ever included” alleged “off the clock work” and did not provide “any 16 evidence that Defendant issued any accurate wage statements”) (alteration in original). 17 vi. Waiting Time Penalties 18 Defendant contends that the amount placed in controversy for Plaintiff’s claim 19 for failure to pay all wages due on separation of employment under Cal. Labor Code 20 §§ 201, 202, and 203 is $5,453,059.65. (Opp. at 19; NOR at 17-19.) In the Rote 21 Declaration, Defendant estimates that “during the time-period of January 7, 2020 22 through [March 9, 2022], Defendant has separated from 1,522 non-exempt, hourly 23 paid workers at Defendant’s restaurant locations in the State of California.” (Rote 24 Decl. ¶ 12.) Defendant notes Cal. Labor Code § 203(a)3 entitles a discharged 25 26 3 Cal. Labor Code § 203(a) provides, in pertinent part: “If an employer willfully fails 27 to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, 202, and 205.5, any wages of an employee who is discharged or 28

-14- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 15 of 18 Page ID #:805

1 employee up to 30 days’ pay at the employee’s regular pay rate for each day 2 separation payment is delayed. (Opp. at 15; NOR at 18.) Here, Defendant assumed 3 each of the 1,522 non-exempt, hourly employees that separated from Defendant 4 during the asserted class period waited at least 30 days to receive their wages owed 5 after termination. (Opp. at 15-17; NOR at 18-19.) See also Cal. Labor Code § 203(a). 6 Multiplying the number of separated employees (1,522) by the average hourly rate of 7 those employees ($15.41), the average number of hours these employees worked per 8 week (7.75 hours), and the 30-day delay, Defendant arrived at the estimated amount of 9 $5,453,059.65. (Rote Decl. ¶ 13; Opp. at 17; NOR at 19.) 10 The court finds Defendant’s assumptions are reasonable, and, as such, 11 Defendant has placed $5,453,059.65 in controversy for this claim. Defendant’s 12 calculations are based on the Waiting Time Subclass, which Plaintiff alleges are “[a]ll 13 Class Members who separated their employment with Defendants at any time between 14 August 10, 2018 and the date of class certification.” Again, Plaintiff’s allegations 15 under this claim are based on the “systematic pattern” of violations by Defendant, 16 (Compl. ¶ 3), and concern Defendant’s “fail[ure] to pay the Waiting Time Subclass all 17 their earned wages upon termination, including, but not limited to, meal period 18 premiums, and rest period premiums.” (Compl. ¶ 62). 19 Under analogous circumstances, the Ninth Circuit has noted it would not be 20 unreasonable for a defendant to assume that a class of terminated plaintiffs would be 21 entitled to the maximum 30-day penalty. See Jauregui, 28 F.4th at 994 (holding “it 22 was not unreasonable for [defendant] to assume that the vast majority (if not all) of the 23 alleged violations over the four years at issue in this case would have happened more 24 than 30 days before the suit was filed, which would entitle the employees to the 30- 25 26 27 who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the 28 wages shall not continue for more than 30 days.”

-15- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 16 of 18 Page ID #:806

1 day penalty” where “a very small percentage of employees might possibly [have] not 2 be[en] entitled to the maximum penalty”). 3 vii. Failure to Pay Wages During Employment 4 Defendant contends that the amount placed in controversy for Plaintiff’s claim 5 for failure to timely pay all wages due upon during employment under Cal. Labor 6 Code §§ 204 and 210 is $11,857,500. (Opp. at 18-19; NOR at 19-20.) Defendant’s 7 calculations take into account the statutory penalties of $100 for an initial violation 8 and $200 for each subsequent violation, but omit the “25% of the amount unlawfully 9 withheld” sought by Plaintiff. (See Opp. at 18; NOR at 20; Compl. ¶ 70 (citing Cal. 10 Labor Code § 210).) Accordingly, Defendant assumed each of the 26 pay periods in 11 which one rest break and one meal period violation occurred resulted in each of 12 Defendant’s 2,325 non-exempt, hourly paid workers in California not receiving all 13 wages due for that period. (Opp. at 15-17; NOR at 19-20.) For the first pay period, 14 Defendant multiplied its non-exempt, hourly paid workers in California (2,325) by the 15 initial violation amount ($100). (Opp. at 19; NOR at 20.) Defendant then added that 16 amount to the multiplicative sum of the same number of workers (2,325), remaining 17 average pay periods (25), and the amount of each subsequent violation ($200), to 18 arrive at the estimated amount of $11,857,500. (Opp. at 19; NOR at 20.) 19 The court finds Defendant’s calculations adequately reasonable to place 20 $11,857,500 in controversy for this claim. Again, as part of Defendant’s “systematic 21 pattern” of violations, (Compl. ¶ 3), Plaintiff alleges that “Defendants willfully failed 22 to pay wages to Plaintiff and Class Members within the required time periods,” 23 (Compl. ¶ 68). In light of these allegations the court’s findings above that Defendant 24 has reasonably assumed one meal and rest break violation per pay periods, and the 25 lack of evidence to the contrary, the court finds it reasonable for Defendant to assume 26 that the 26 pay periods in which a rest or meal break violation occurred resulted in the 27 failure to pay wages owed on account of those alleged violations. See Lopez v. Bio- 28 Reference Lab’ys, Inc., 2022 WL 1744993, at *4 (E.D. Cal. May 31, 2022) (“The

-16- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page 17 of 18 Page ID #:807

1 assumed frequency with which class members did unpaid work and were denied 2 breaks therefore logically supports defendants’ assumptions here.”); cf. id. (adopting 3 defendants’ “reasonable” assumptions where “plaintiff offer[ed] no alternatives for 4 comparison”). 5 viii. Attorneys’ Fees 6 Prior to adding in attorneys’ fees, the aggregate of Defendant’s asserted amount 7 in controversy is $25,041,928.65. (NOR at 20.) From this, Defendant argues that 8 25% of this number—e.g., the amount in controversy with respect to Plaintiff’s 9 claims—yields an amount in controversy for attorneys’ fees of $4,446,562.49. (NOR 10 at 22-25; Opp. at 19-21.) 11 The court concludes Defendant has properly included attorneys’ fees in their 12 calculations. See Arias, 936 F.3d at 928 (district court erred in excluding prospective 13 attorneys’ fees from the amount in controversy where plaintiff sought attorneys’ fees 14 and “there w[as] no dispute that at least some of the California wage and hour laws 15 that form the basis of the complaint entitle[d] a prevailing plaintiff to an award of 16 attorneys’ fees”). However, as Plaintiff notes, the Ninth Circuit declined to adopt a 17 “per se” rule that “the amount of attorneys’ fees in controversy in class actions is 25 18 percent of all other alleged recovery.” Fritsch, 899 F.3d at 796. Still, the Ninth 19 Circuit in Fritsch did “not hold that a percentage-based method is never relevant when 20 estimating the amount of attorneys’ fees included in the amount in controversy, only 21 that a per se rule is inappropriate.” Id. n.6. 22 Here, apart from Defendant’s asserted 25% benchmark rate for attorneys’ fees, 23 neither Plaintiff nor Defendant offers an alternative calculation for the court to 24 consider. Though Defendant cites some district court cases decided after Fritsch 25 holding 25% is a reasonable rate to use in similar class actions, (see NOR at 22 26 (citing, e.g., Wheatley v. MasterBrand Cabinets, LLC, 2019 WL 688209, at *7 n.15 27 (C.D. Cal. Feb. 19, 2019); Ramos v. Schenker, Inc., 2018 WL 5779978, at *3 (C.D. 28 Cal. Nov. 1, 2018)), the Ninth Circuit reaffirmed in Arias that “[a]lthough such an

-17- Case 8:22-cv-00392-FWS-JDE Document 36 Filed 07/11/22 Page18of18 Page ID #:808

I | estimate might be reasonable, we have declined to adopt a per se rule that ‘the amount 2 || of attorneys’ fees in controversy in class actions is 25 percent of all other alleged 3 || recovery.’” Arias, 936 F.3d at 928 (quoting Frisch, 899 F.3d at 796); cf. id. (“As we 4 || did in Frisch, we leave the calculation of the amount of the attorneys’ fees at stake to 5 | the district court on remand.”) (citation omitted). Regardless, because the court has 6 | found the amount in controversy to this point exceeds the jurisdictional threshold of 7 || $5,000,000, it need not consider potential attorneys’ fees at this stage. See Arias, 936 8 | F.3d at 928 n.5 (noting on remand “there would be no need to calculate attorneys’ fees 9 | [if] the damages in controversy would exceed the jurisdictional threshold”). 10 ix. Aggregate Amount in Controversy 1] Adding the amounts above, Defendant has demonstrated, by a preponderance of 12 | the evidence, an amount of controversy in this action of $25,041,928.65.4 13 14 | Iv. DISPOSITION 1S For the foregoing reasons, the court DENIES the Motion. 16 17 18 IT IS SO ORDERED. 19 1 pS /}-—~ 21 | DATED: July 11, 2022 DA 22 Hon. Fred W. Slaughter 73 UNITED STATES DISTRICT JUDGE 24 25 26 | 4 Defendant does not include in its calculations of the amount in controversy any 27 || estimates of monetary relief based on Plaintiffs claims for (1) failure to reimburse necessary business expenses under Cal. Labor Code §§ 2800, 2802; and (2) violations 28 | of California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et. seq.

-18-