Case 2:22-cv-04980-ODW-GJS Document 35 Filed 03/22/23 Page 1 of 8 Page ID #:520

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8 United States District Court 9 Central District of California

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11 MARIANO AGUIRRE, JR., Case № 2:22-cv-04980-ODW (GJSx)

12 Plaintiff,

ORDER GRANTING MOTION TO

13 v.

REMAND [12]; AND

14 BW PACKAGING SYSTEMS, INC. et ORDER DENYING MOTION TO 15 al., DISMISS [30]

16 Defendants.

17 18 I. INTRODUCTION 19 On October 7, 2021, Plaintiff Mariano Aguirre, Jr. filed this putative class 20 action in the Superior Court of California, County of Los Angeles against Defendants 21 BW Packing Systems, Inc.; Barry-Wehmiller Group, Inc. (“BW Group”); 22 Barry-Wehmiller Companies, Inc.; Barry-Wehmiller Design Group, Inc.; and Thiele 23 Technologies, LLC. (Notice of Removal (“NOR”) ¶ 1, ECF No. 1.) On July 20, 24 2022, BW Group removed the action to this Court pursuant to the Class Action 25 Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Id. ¶¶ 12–66.) Aguirre now moves to 26 remand the action for lack of subject matter jurisdiction. (Mot. Remand (“Motion” or 27 “Mot.”), ECF No. 12.) For the reasons discussed below, the Court finds that BW 28 Group fails to establish by a preponderance of the evidence that the amount in Case 2:22-cv-04980-ODW-GJS Document 35 Filed 03/22/23 Page 2 of 8 Page ID #:521

1 controversy exceeds $5 million. Accordingly, the Court GRANTS Aguirre’s Motion 2 and REMANDS the case.1 3 II. BACKGROUND 4 Aguirre brings this class action individually and on behalf of a putative class of 5 all current and former hourly, non-exempt employees whom Defendants employed in 6 California at any time during the applicable limitations period. (NOR Ex. B (First 7 Amended Complaint (“FAC”)) ¶ 27, ECF No. 1-2.) Aguirre asserts nine causes of 8 action against Defendants, all arising from the wage-and-hour provisions of the 9 California Labor Code: (1) failure to pay minimum wages; (2) failure to pay overtime 10 compensation; (3) failure to provide meal periods; (4) failure to authorize and permit 11 rest breaks; (5) failure to indemnify necessary business expenses; (6) failure to timely 12 pay final wages at termination (“waiting time penalties”); (7) failure to provide 13 accurate wage statements; (8) unfair competition, and (9) civil penalties under the 14 California Private Attorneys General Act. (Id. ¶¶ 34–107.) The minimum wage and 15 overtime compensation claims (and the claims that derive from these two claims) are 16 based on Defendants’ practice of requiring its employees to (1) undergo a COVID 17 screening before clocking into work and wait in a line to undergo this screening, all 18 without compensation; (2) attend pre-shift meetings with supervisors before clocking 19 into work; and (3) prepare machines before clocking into work. (Id. ¶ 17.) 20 The meal and rest break claims (and their derivative claims), unlike the 21 minimum wage and overtime claims, are not tethered to any case-specific factual 22 allegations. (See id. ¶¶ 18–19.) Aguirre alleges these claims in general terms and 23 indicates that Defendants “sometimes, but not always,” failed to provide Aguirre and 24 the putative class members with a meal break or a rest break or the associated meal or 25 rest break premium. (Id.) Aguirre does not expressly allege the specific amounts of 26 27

28 1 Having carefully considered the papers in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.

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1 any damages incurred in connection with any cause of action, either individually or on 2 a classwide basis. (See generally FAC.) 3 Shortly after Aguirre filed the operative First Amended Complaint in state 4 court, BW Group removed the case to federal court, alleging this Court’s subject 5 matter jurisdiction pursuant to CAFA. (See NOR.) In the Notice of Removal, BW 6 Group values the amount in controversy for each of Aguirre’s claims as follows: 7 Claim Amount Citation 8 Overtime Wages $1,400,186.60 (NOR ¶¶ 29, 64.) 9 Meal Periods $933,457.73 (NOR ¶ 36.) 10 Rest Periods $933,457.73 (NOR ¶ 43.) 11 Waiting Time Penalties $662,088.19 (NOR ¶ 52.) 12 Wage Statements $454,500 (NOR ¶ 57.) 13 Attorneys’ Fees $1,095,922.56 (NOR ¶ 63.) 14 (25% of above total) 15

TOTAL: $5,479,612.81 (NOR ¶ 64.)

16 17 Aguirre now moves to remand, arguing that BW Group (1) fails to establish that 18 at least $5,000,000 is in controversy as required for subject matter jurisdiction under 19 CAFA, and (2) failed to timely remove the case. (Mot. 2.) BW Group opposes the 20 Motion, arguing that (1) its amount-in-controversy calculations are based on evidence 21 and reasonable assumptions, and (2) it timely removed. (See Opp’n, ECF No. 17.) 22 III. LEGAL STANDARD 23 CAFA provides federal courts with jurisdiction over a purported class action if 24 all of the following requirements are met: (1) the amount in controversy exceeds 25 $5 million, (2) at least one putative class member is a citizen of a state different from 26 any defendant, and (3) the putative class exceeds 100 members. 28 U.S.C. 27 §§ 1332(d)(2), (5). The removing defendant bears the burden of establishing federal 28 jurisdiction, “including any applicable amount in controversy requirement.” Abrego

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1 Abrego v. Dow Chem. Co., 443 F.3d 676, 682–83 (9th Cir. 2006) (quoting Gaus v. 2 Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). However, unlike cases removed under 3 diversity jurisdiction, “no antiremoval presumption attends cases invoking CAFA.” 4 Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). 5 Although “a defendant’s notice of removal need include only a plausible 6 allegation that the amount in controversy exceeds the jurisdictional threshold,” when 7 the allegation is challenged, “[e]vidence establishing the amount is required.” Id. 8 “[B]oth sides submit proof,” and the court decides whether the defendant has 9 demonstrated, by a preponderance of the evidence, that the amount in controversy 10 requirement has been satisfied. Id. at 88. Such evidence may include “affidavits or 11 declarations, or other summary-judgment-type evidence relevant to the amount in 12 controversy at the time of removal.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 13 1197 (9th Cir. 2015) (internal quotation marks omitted) (quoting Singer v. State Farm 14 Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). 15 Whether the defendant meets its burden of demonstrating the amount in 16 controversy is “to be tested by consideration of real evidence and the reality of what is 17 at stake in the litigation, using reasonable assumptions underlying the defendant’s 18 theory of damages exposure.” Id. at 1198. “[M]ere speculation and conjecture, with 19 unreasonable assumptions” does not suffice. Id. at 1197. 20 IV. DISCUSSION 21 The Court first considers whether BW Group demonstrates that over $5 million 22 is in controversy as required by CAFA. Because BW Group fails in this burden, the 23 Court remands the action without considering Aguirre’s timeliness arguments. 24 “In determining the amount in controversy, courts first look to the complaint.” 25 Id, Here, Aguirre does not allege that either he or the class incurred any specific 26 amounts of damages. (See generally FAC.) When federal jurisdiction is challenged 27 and the amount of damages is not evident from the face of the complaint, “the 28 defendant seeking removal bears the burden to show by a preponderance of the

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1 evidence that the aggregate amount in controversy exceeds $5 million.” Id. (citing 2 Rodriguez v. AT&T Mobility Servs. LLC, 728 F.3d 975, 981 (9th Cir. 2013)). 3 “California law requires employers to provide daily meal and rest breaks to 4 most unsalaried employees.” Naranjo v. Spectrum Sec. Servs., 13 Cal. 5th 93, 101 5 (2022). “If an employer unlawfully makes an employee work during all or part of a 6 meal or rest period, the employer must pay the employee an additional hour of pay.” 7 Id. Thus, the amount placed in controversy by a putative class-action meal or rest 8 break claim is generally calculated by multiplying together (1) the total classwide 9 number of at-issue work weeks; (2) the number of required meal or rest breaks per 10 work week per employee; (3) the “violation rate,” that is, by the percentage of meal or 11 rest breaks the employer failed to provide; and (4) the average hourly pay rate across 12 the putative class. (See, e.g., NOR ¶ 36 (calculating amount placed in controversy by 13 meal break claim by multiplying 35,669 (number of at-issue work weeks) by 14 5 (number of required meal breaks per work week) by 20% (assumed violation rate) 15 by $26.17 (average hourly rate across the putative class)).) 16 “As seemingly is always the case in wage-and-hour lawsuits attempting to find 17 their way to federal court, violation rates are key to the calculations necessary to reach 18 the $5,000,001 amount-in-controversy figure CAFA requires.” Toribio v. ITT 19 Aerospace Controls LLC, No. 19-cv-5430-GW (JPRx), 2019 WL 4254935, at *2 20 (C.D. Cal. Sept. 5, 2019). Here, BW Group’s calculations of the amount placed in 21 controversy by Aguirre’s meal and rest break claims do not assist BW Group in its 22 burden because the claimed violation rates are arbitrary. In particular, BW Group 23 bases its meal and rest break calculations on a 20% violation rate for each claim, or 24 one meal break violation and one rest break violation per week for a typical full-time 25 employee. (NOR ¶¶ 35, 42.) But BW Group errs in effectively assuming a uniform 26 rate of one violation per week for the meal and rest break claims. The absence of any 27 case-specific facts or allegations regarding the meal and rest break claims makes BW 28 Group’s violation rate assumption an arbitrary one, such that BW Group’s argument

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1 “amounts to little more than plucking a violation rate out of the air and calling it 2 reasonable.” Gonzalez v. H&M Hennes Mauritz L.P., No. 8:21-cv-01611-JLS (JDE), 3 2022 WL 179292, at *4 (C.D. Cal. Jan. 20, 2022) (internal quotation marks omitted) 4 (quoting Toribio, 2019 WL 4254935, at *3). 5 BW Group’s citation to Brumbach v. Hyatt Corp, No. 20-cv-2231-WQH-KSC, 6 2021 WL 926692 (S.D. Cal. Mar. 11, 2021), does not change this conclusion. 7 (Opp’n 5.) In Brumbach, the plaintiff alleged that “[a]s a matter of Defendants’ 8 established company policy, Defendants failed to always authorize and permit all 9 required rest periods.” 2021 WL 926692, at *7 (alteration in original). Here, by 10 contrast, Aguirre appears to foreclose the idea that Defendants’ violations arose from 11 a system-wide policy, by alleging that Defendants “sometimes, but not always” failed 12 to provide meal or rest breaks. (FAC ¶¶ 18–19.) Whereas allegations of a 13 companywide policy might support the assumption that each employee was denied 14 one meal break and one rest break per week, allegations that an employer “sometimes, 15 but not always” failed to provide breaks does not support the same assumption. 16 Without the benefit of any details about the nature of the violations, BW 17 Group’s meal and rest break calculations are, as one court put it, little more than a 18 “routine . . . exercise in mathematical fantasyland.” Toribio, 2019 WL 4254935, 19 at *3; see Ryan v. Mission Treatment Servs., No. 2:22-cv-04013-ODW (MARx), 20 2022 WL 4331093, at *3 (C.D. Cal. Sept. 19, 2022) (discussing cases that 21 “demonstrate that the number of unpaid hours per week is highly dependent on the 22 facts and circumstances of each individual case”). Here, absent any case-specific 23 allegations or evidence, the Court has no way of knowing whether any average 24 number of missed meal or rest breaks (or premiums) per week—0.5, 1, 5, or more, or 25 less—is a reasonable assumption. BW Group, for its part, presents no evidence that 26 might provide factual contours to the meal and rest break claims to support its claimed 27 violation rates. (See NOR ¶¶ 31–44; Opp’n 2–6.) Accordingly, BW Group fails in its 28

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1 burden of demonstrating the amount placed in controversy by the meal and rest break 2 claims. 3 While some other courts have attempted to fix violation rates in the face of a 4 vague, mostly boilerplate pleading such as Aguirre’s, this Court respectfully diverges 5 from that approach and instead follows the approach described by the court in Toribio, 6 which observed that, when “[f]aced with a vague pleading, it seems to this Court that 7 the much-more-sensible route would be to try to pin Plaintiff down, in state 8 court . . . with respect to what the Complaint’s allegations actually mean with respect 9 to violation rates.” Toribio, 2019 WL 4254935, at *3. This Court agrees that this 10 route is the more sensible. BW Group is free to conduct discovery in state court to 11 uncover the case-specific factual basis of Aguirre’s claims and, armed with this 12 information, BW Group can then take appropriate action. 13 This conclusion is fatal to BW Group’s opposition to remand, even if the Court 14 assumes the truth of the remainder of BW Group’s assumptions and contentions. 15 Without meaningful proof of the amount placed in controversy by the meal and rest 16 break claims, the amount BW Group preponderantly demonstrates to be in 17 controversy is $1,400,186.60 (overtime) + $662,088.19 (waiting time) + $454,500 18 (wage statements) = $2,516,774.79, plus 25% of that amount for attorneys’ fees, for a 19 total of $3,145,968.49. This is well below the threshold BW Group must cross to 20 demonstrate CAFA jurisdiction. Accordingly, the Court lacks subject matter 21 jurisdiction and must remand the case.2 22 23 24 2 Even if the Court were not to “zero-out” the meal and rest break claim values and instead filled in 25 the gaps with its own reasonable assumptions, the demonstrated amount in controversy would still fall short of the required threshold. As discussed, Aguirre alleges that Defendants “sometimes, but 26 not always” failed to provide meal or rest breaks. While a certain minimum number of violations are implied by the definition of “sometimes,” the Court does not find that once-a-week is a reasonable 27 assumption based on Plaintiff’s generalized allegation. Yet even considering a more forgiving 28 violation rate of one meal break and one rest break per month, or 5%, the demonstrated amount in controversy totals only $3,729,379.56, still well below the jurisdictional threshold.

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1 Vv. CONCLUSION 2 For the reasons discussed above, the Court GRANTS Aguirre’s Motion, (ECF 3 || No. 12), and REMANDS this case to the Superior Court of California for the County 4|| of Los Angeles, 111 North Hill Street, Los Angeles, California 90012, Case 5 || No. 21STCV39617. Defendants’ pending Motion to Dismiss is DENIED AS 6 || MOOT. (ECF No. 30.) All dates and deadlines are VACATED. The Clerk of the 7 || Court shall close the case. 9 IT IS SO ORDERED. 10 11 March 22, 2023 □□ 12 FE ey 13 } SE 14 OTIS D. IGHT, II Is UNITED STATES DISTRICT JUDGE

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