JS-6

FILED

2 CLERK, U.S. DISTRICT COURT

4 CW. OF ee 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 || KYREE WILSON and RHONDA Case No.: CV 20-09075-CJC (ASx) GUERRERO, individually and on behalf of all others similarly situated, 13 14 Plaintiffs, 1s v. ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND [DKkt. 13] '6 IKEA NORTH AMERICA SERVICES, 17 |} LLC; IKEA US RETAIL LLC; IKEA ig DISTRIBUTION SERVICES, INC.; and DOES 1-100, inclusive, 19 20 Defendants. 21 )

23 24 1/1. INTRODUCTION 25 26 Plaintiffs Kyree Wilson and Rhonda Guerrero filed this putative wage-and-hour 27 ||class action against Defendants IKEA North America Services, LLC, IKEA US Retail 28 || LLC, IKEA Distribution Services, Inc. (collectively, “Ikea”), and unnamed Does in Los

1 Angeles County Superior Court. (Dkt. 1, Ex. A [Complaint, hereinafter “Compl.”].) 2 Defendants removed the action to this Court pursuant to the Class Action Fairness Act of 3 2005 (“CAFA”), 28 U.S.C. § 1332(d). (Dkt. 1 [Notice of Removal, hereinafter “NOR”].) 4 Before the Court is Plaintiffs’ motion to remand. (Dkt. 13 [hereinafter “Mot.”].) For the 5 following reasons, the motion is GRANTED.1 6 7 II. BACKGROUND 8 9 Plaintiffs, hourly non-exempt employees at Ikea, allege that Ikea failed to pay them 10 for all hours worked, including overtime and missed meal periods or rest breaks. 11 (Compl. ¶¶ 20–23, 29–31.) In this case, they assert nine claims under California’s Labor 12 Code for (1) unpaid overtime wages, (2) unpaid meal period premiums, (3) unpaid rest 13 period premiums, (4) unpaid minimum wages, (5) final wages not timely paid, (6) wages 14 not timely paid during employment, (7) non-compliant wage statements, (8) failure to 15 keep accurate payroll records, and (9) unreimbursed business expenses, as well as a tenth 16 claim for (10) violations of California’s Unfair Competition Law. (See id.) Plaintiffs 17 assert these claims on behalf of a proposed class of “[a]ll current and former hourly-paid 18 or non-exempt employees who worked for any of the Defendants within the State of 19 California at any time during the period from four years preceding the filing of this 20 Complaint to final judgment and who reside in California.” (Id. ¶ 16.) 21 22 Plaintiffs allege broadly that Ikea engaged in “a pattern and practice of wage abuse 23 against their hourly-paid or non-exempt employees” that “involved, inter alia, failing to 24 pay them for all regular and/or overtime wages earned and for missed meal periods and 25 rest breaks in violation of California law.” (Id. ¶ 29.) The boilerplate allegations in the 26

27 1 Having read and considered the papers presented by the parties, the Court finds this matter appropriate 1 complaint assert that Ikea failed to properly compensate employees, forced them to work 2 through required breaks, and failed to keep accurate records. (See id. ¶¶ 30–49.) 3 Plaintiffs have not alleged any other facts about Ikea’s policies or practices, the frequency 4 of the alleged Labor Code violations, or the resulting damages. 5 6 Ikea removed the case to this Court, contending that the Court has CAFA 7 jurisdiction because minimum diversity is met and the amount in controversy exceeds $5 8 million. The Court now considers Plaintiffs’ motion to remand to state court, in which 9 Plaintiffs argue that Ikea has failed to meet its burden to show the amount in controversy. 10 11 III. LEGAL STANDARD 12 13 A defendant may remove a civil action brought in a state court but over which a 14 federal court may exercise original jurisdiction. CAFA provides original federal 15 jurisdiction over class actions in which the amount in controversy exceeds $5 million, 16 there is minimal diversity between the parties, and the number of proposed class 17 members is at least 100. 28 U.S.C. §§ 1332(d)(2), 1332(d)(5)(B). “Congress designed 18 the terms of CAFA specifically to permit a defendant to remove certain class or mass 19 actions into federal court. . . [and] intended CAFA to be interpreted expansively.” Ibarra 20 v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). There is “no antiremoval 21 presumption” in cases invoking CAFA because CAFA was enacted to facilitate federal 22 courts’ adjudication of certain class actions. Dart Cherokee Basin Operating Co., LLC v. 23 Owens, 574 U.S. 81, 89 (2014). 24 25 “[A] defendant’s notice of removal need include only a plausible allegation that 26 the amount in controversy exceeds the jurisdictional threshold.” Id. However, if the 27 asserted amount in controversy is contested after removal, “[e]vidence establishing the 1 ||2020). “In such a case, both sides submit proof and the court decides, by a 2 || preponderance of the evidence, whether the amount-in-controversy requirement has been 3 satisfied.” Dart, 574 U.S. at 88. Ultimately, a removing defendant bears the burden of 4 || proving that the amount in controversy is met. See Rodriguez v. AT&T Mobility Servs. 5 || LLC, 728 F.3d 975, 978 (9th Cir. 2013). “Under this system, CAFA’s requirements are 6 be tested by consideration of real evidence and the reality of what is at stake in the 7 || litigation, using reasonable assumptions underlying the defendant’s theory of damages 8 |{exposure.” Ibarra v. Manheim Inys., Inc., 775 F.3d 1193, 1198 (9th Cir. 2015). 9 10 || IV. DISCUSSION

12 Plaintiffs contend that this case must be remanded because Ikea has not properly 13 established that the amount in controversy exceeds $5 million.” Ikea contends the 14 ||amount in controversy is over $22 million.* (Dkt. 14 [Ikea’s Opposition, hereinafter 15 || “Opp.” at 2-3.) Because Plaintiff contests the amount in controversy, Ikea must provide 16 ||evidence to support its calculations. Dart, 574 U.S. at 89; Harris, 980 F.3d at 701. To 17 || this end, Ikea submits a seven-paragraph declaration from Christopher Blevins, its 18 Human Resource Manager. (Dkt. 14-2 [hereinafter “Blevins Decl.”].) Based on his 19 ||review of company records, Blevins offers the following facts: (1) IKEA US RETAIL 20 employed 5,285 non-exempt employees in California between January 1, 2017 to 21 || December 31, 2019, and (2) these employees worked a total of 374,913 workweeks in 22 || those three years. (/d. {| 3-7.) To estimate the amount in controversy for Plaintiffs’ 23 ||claims, Ikea assumed that each of these employees suffered each injury alleged in the 24 complaint in each workweek. (See Opp. at 12—13.) It contends that its estimates are 25 Jp * Plaintiffs do not dispute that the other two CAFA requirements—minimal diversity and minimum class size—are met. oT This number is made up of $6,030,000 on the unpaid overtime claim, $4,020,000 on the meal break 28 || claim, $8,040,000 on the unpaid minimum wage claim, and $4,522,500 in attorney fees, for a total of $22,612,500.

1 conservative, however, because it “undercounted workweeks by only including 2 workweeks for the period 2017 through 2019,” rather than the full four-year period, and 3 “only including workweeks for the putative class members from IKEA US RETAIL,” not 4 the other Ikea entities. (Opp. at 13–14; see id. at 17.) 5 6 After reviewing the allegations in the Complaint and the evidence Ikea presents, 7 however, the Court finds that Ikea’s estimates rely on multiple layers of unreasonable, 8 unsubstantiated, and unrealistic assumptions that find no support in any evidence 9 submitted. In reaching this result, the Court finds the Ninth Circuit’s recent decision in 10 Harris v. KM Indus., Inc., 980 F.3d 694 (9th Cir. 2020), especially helpful. In that case, 11 the court reiterated that a district court need not perform “a detailed mathematical 12 calculation of the amount in controversy before determining whether the defendant has 13 satisfied its burden.” Id. at 701. Rather, courts should consider the evidence the parties 14 offer, weigh the reasonableness of the removing party’s assumptions, and then decide 15 where the preponderance lies. Id. In Harris, the defendant assumed that every type of 16 injury alleged in the complaint was suffered by each putative class member, and that each 17 injury was suffered in each workweek. The court concluded that the defendant failed to 18 carry its burden because it “failed to provide any evidence to support its assumption[s].” 19 Id. 20 21 Similarly, here, Ikea presents thin evidence to support the amount in controversy: 22 the number of employees and the number of workweeks for three calendar years. 23 (Blevins Decl. ¶¶ 3–6.) It presents no evidence that every employee suffered all of the 24 injuries alleged in the complaint. It does not present evidence (or even state) that each of 25 the employees worked full time, or enough hours to deserve meal and rest breaks or 26 overtime.4 It takes another leap of logic to assume that each employee suffered the 27 1 injuries alleged in the complaint every workweek. Again, Ikea offers no evidence to 2 support that assumption. 3 4 Instead, Ikea argues that because Plaintiff alleges a “pattern and practice” of 5 overtime and meal and rest break violations, it is reasonable to assume that every 6 employee suffered these injuries every workweek. (Opp. at 12, 13, 14, 16; Compl. ¶ 29.) 7 The Court disagrees. A removing defendant is entitled to make “reasonable 8 assumptions” about violation rates to estimate the amount in controversy. Ibarra, 9 775 F.3d at 1198. But it is not reasonable to assume that, just because a plaintiff alleges a 10 “pattern and practice” of labor law violations, each plaintiff suffered each alleged injury 11 in each workweek. A “pattern and practice” of doing something does not necessarily 12 mean always doing something. Id. at 1198–99. Nor does it mean that the alleged 13 wrongful practice “is universally followed every time the wage and hour violation could 14 arise.” Id. at 1199. “Because the complaint does not allege that [Ikea] universally, on 15 each and every shift, violates labor laws by not giving rest and meal breaks, [Ikea] bears 16 the burden to show that its estimated amount in controversy relied on reasonable 17 assumptions.” Id. It has not done so. Rather, Ikea’s assumptions are “pulled from thin 18 air” without any “reasonable ground underlying them.” Arias v. Residence Inn by 19 Marriott, 936 F.3d 920, 925 (9th Cir. 2019). Ikea therefore fails to carry its burden to 20 show that there is $5 million in controversy in this case. 21 22 While the asserted $22 million amount in controversy is far above the $5 million 23 threshold, it is not the Court’s job to perform the mathematical calculations to justify it. 24 Harris, 980 F.3d at 701. That is Ikea’s burden. Even if the Court were to assume Ikea’s 25 burden, Ikea has failed to provide any information which would enable the Court to 26 calculate more conservative estimates. Ikea’s failure to present “real evidence” to 27 1 || Support its assertions is particularly concerning because it appears some portion of 2 || Plaintiffs’ claims have recently been settled in a related class action. See Cahilig v. Ikea 3 || U.S. Retail, LLC, Case No. 2:19-cv-01182-CJC-AS, Dkt. 61; (Dkt. 5 [Notice of Related 4 ||Cases].). Given this reality, the amount in controversy is significantly less than $22 5 ||million even if Ikea’s naked assumptions are accepted as true. 6 7 CONCLUSION 8 9 10 For the foregoing reasons, Ikea has not carried its burden to show that the Court 11 subject matter jurisdiction over this action under CAFA. Accordingly, Plaintiffs 12 |] motion to remand is GRANTED, and this case is hereby REMANDED to Los Angeles 13 ||County Superior Court. 14 is || DATED: December 14, 2020 Ko Le 16 f /

19 UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28