1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 FELIX GUNAWAN, et al., Case No. 22-cv-04141-HSG

8 Plaintiffs, ORDER GRANTING PLAINTIFFS'

MOTION TO REMAND

9 v. Re: Dkt. Nos. 18, 25 10 TRANSDEV ALTERNATIVE SERVICES,

INC.,

11 Defendant. 12 13 Pending before the Court is Plaintiffs’ motion to remand, Dkt. No. 18 (“Mot.”). The 14 motion has been fully briefed. See Dkt. Nos. 23 (“Opp.”), 24 (“Reply”). The Court finds this 15 matter appropriate for disposition without oral argument and the matter is deemed submitted. See 16 Civil L.R. 7-1(b). For the reasons discussed below, the Court GRANTS Plaintiffs’ motion for 17 remand.1 18 1 Both parties submitted requests for judicial notice. Plaintiffs first request that the Court take 19 judicial notice of several orders in a Southern District of California case. See Dkt. No. 18-1. Courts “may take notice of proceedings in other courts, both within and without the federal 20 judicial system, if those proceedings have a direct relation to matters at issue.” U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (emphasis 21 added) (quotations omitted). The Court declines to take judicial notice of these orders because the case does not have a direct relation to the matters at issue. However, the Court does not need to 22 take judicial notice of the orders to consider them as it would any other caselaw presented by the parties. 23

Defendant requests that the Court take judicial notice of two CBAs. See Dkt. No. 23-2. The 24 Court finds that the CBAs are “not subject to reasonable dispute” because they can be “accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. 25 Evid. 201(b)(2). The Court takes judicial notice of the content of the CBAs, but not of the truth of any statement within them. 26

Plaintiffs also ask the Court to take notice of two State of California Department of Industrial 27 Relations websites which provide information about the historical and current California minimum

I. LEGAL STANDARD

1 A. Federal Question Jurisdiction 2 “Except as otherwise expressly provided by Act of Congress, any civil action brought in a 3 State court of which the district courts of the United States have original jurisdiction, may be 4 removed” to federal court. 28 U.S.C. § 1441(a). 5 Under § 301 of the Labor Management Relations Act of 1974 (“LMRA”), “[s]uits for 6 violation of contracts between an employer and a labor organization ... may be brought in any 7 district court of the United States.” 29 U.S.C. § 185(a). As reaffirmed by the Ninth Circuit, the 8 Supreme Court has interpreted the LMRA to authorize federal courts “to create a uniform body of 9 federal common law to adjudicate disputes that arise out of labor contracts.” Curtis v. Irwin 10 Indus., Inc., 913 F.3d 1146, 1155 (9th Cir. 2019) (citations omitted). “A state rule that purports to 11 define the meaning or scope of a term in a contract suit therefore is pre-empted by federal labor 12 law.” Id. at 1152 (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985)). Although 13 federal preemption is a defense that does not generally authorize removal to federal court, the 14 Supreme Court has held that § 301 has such “extraordinary pre-emptive power” that it “converts 15 an ordinary state common law complaint into one stating a federal claim for purposes of the well- 16 pleaded complaint rule.” Metro. Life Ins. v. Taylor, 481 U.S. 58, 65 (1987). 17 However, § 301 “cannot be read broadly to pre-empt nonnegotiable rights conferred on 18 individual employees as a matter of state law.” Curtis, 913 F.3d at 1152 (quoting Livadas v. 19 Bradshaw, 512 U.S. 107, 123 (1994)). Further, “not every dispute concerning employment, or 20 tangentially involving a provision of a collective-bargaining agreement, is preempted by § 301 or 21 other provisions of federal labor law.” McCray v. Marriott Hotel Servs., Inc., 902 F.3d 1005, 22 1009 (9th Cir. 2018) (quoting Lueck, 471 U.S. at 211). Claims which have no relationship to a 23 collective-bargaining agreement “beyond the fact that they are asserted by an individual covered 24 by such an agreement are simply not pre-empted by § 301.” Id. (citation and quotations omitted). 25 The Ninth Circuit has employed a two-step test to ensure that § 301 preemption “extends only as 26 far as necessary to protect the role of labor arbitration in resolving CBA disputes.” Curtis, 913 27 1 F.3d at 1152 (citation and quotations omitted). First, the court asks whether the asserted cause of 2 action involves a “right [that] exists solely as a result of the CBA.” Burnside v. Kiewit Pac. Corp., 3 491 F.3d 1053, 1059 (9th Cir. 2007). “If the right exists solely as a result of the CBA, then the 4 claim is preempted, and our analysis ends there.” Id. (citing Lueck, 471 U.S. at 212). If not, the 5 court proceeds to the second step and asks “whether a plaintiff's state law right is substantially 6 dependent on analysis of [the CBA], which turns on whether the claim cannot be resolved by 7 simply ‘look[ing] to’ versus ‘interpreting’ the CBA.” Curtis, 913 F.3d at 1153 (citations and 8 quotations omitted and alterations in original). Interpretation is construed narrowly in this 9 context. Id. If claims are dependent on interpretation of the CBA, then the claim is preempted by 10 § 301; if not, the claim may proceed under state law. Burnside, 491 F.3d at 1059–60. 11 B. Diversity Jurisdiction 12 “[D]istrict courts shall have original jurisdiction of all civil actions where the matter in 13 controversy exceeds the sum or value of $75,000” and is between citizens of different states. 28 14 U.S.C. § 1332(a). 15 II. DISCUSSION 16 Plaintiffs’ complaint brings one cause of action: Violation of the Private Attorney Generals 17 Act (“PAGA”): Cal. Lab. Code §§ 2698 et. seq. See generally Dkt. No. 1, Ex. A (“Compl.”). 18 Plaintiffs allege that Defendant:

19 (a) failed to provide PLAINTIFFS and the other AGGRIEVED EMPLOYEES accurate itemized wage statements, (b) failed to 20 properly record and provide legally required meal and rest periods, (c) failed to pay minimum wages, (d) failed to pay overtime and sick 21 pay wages, (e) failed to reimburse employees for required expenses, and (f) failed to provide wages when due, all in violation [of several 22 state statutes]. 23 See Compl. ¶ 34. 24 Plaintiffs argue that the case should be remanded because Defendant has failed to establish 25 federal subject matter or diversity jurisdiction. See generally Mot. 26 C. Federal Question Jurisdiction 27 i. Burnside Step One 1 California Labor Code section 510 because [section 514] expressly exempts overtime claims for 2 an employee working under a qualifying CBA.” Opp. at 18 (citations omitted). Plaintiffs counter 3 that “Defendant offers no argument that the CBAs expressly provide for hours of work or working 4 conditions” and that “the wages outlined in the CBAs do not guarantee a regular hourly rate of pay 5 of not less than 30 percent more than the state minimum wage” as required by section 514. 6 Reply at 16–17. 7 The second point is dispositive of this issue. Labor Code § 514 only precludes application 8 of §§ 510 and 511 if the CBA “provides premium wage rates for all overtime hours worked and a 9 regular hourly rate of pay for those employees of not less than 30 percent more than the state 10 minimum wage.” Labor Code § 514. The cited CBAs, however, provide for wages that fail to 11 meet § 514’s threshold. See Dkt. No. 23-1 (“Kim Decl.”), Ex. A, (“Local 853 CBA”), Article 22 12 (providing for a $12.66 training wage for drivers and aides when the state minimum wage in 2017 13 for employers with 25 employees or less (the lowest minimum wage) was $10.00/hour, see 14 Plaintiffs’ Supp. RJN, Exhibit B, at 2); Kim Decl., Ex. B (“Local No. 137 CBA”), Appendix A 15 (providing for an $11.00 wage for employees in training in 2017).2 16 As Plaintiffs point out, “[t]his district has interpreted § 514 to require that a CBA must 17 satisfy the section’s requirements with respect to all employees covered by the CBA.” See Reply 18 at 17 (emphasis omitted) (quoting Gunther v. N. Coast Coop., Inc., No. 20-CV-02325-RMI, 2020 19 WL 3394547, at *4 (N.D. Cal. June 19, 2020)). “Because the . . . CBA plainly failed to provide a 20 regular hourly rate of pay of not less than 30 percent more than the state minimum wage for at 21 least some employees, Section 514 does not bar Section 510 from applying to plaintiff. As such, 22 plaintiff’s asserted cause of action involves a right conferred upon an employee by virtue of state 23 law, not by a CBA.” Huffman v. Pac. Gateway Concessions LLC, No. 19-CV-01791-PJH, 2019 24

25 2 The Opposition represents that each of these CBAs is “one of (many) CBAs applicable to the action.” Opp. at 19. But the declaration attaching the CBAs does not actually say this, or even 26 explain the basis for the conclusion that Plaintiffs are covered by the CBAs. See Dkt. No. 23-1 (referring to each of the CBAs as “a CBA” without any elaboration). While the Court rejects 27 Defendant’s preemption argument even if these are the relevant CBAs, counsel’s representation in 1 WL 2563133, at *6 (N.D. Cal. June 21, 2019). 2 ii. Burnside Step Two 3 If none of Plaintiffs’ rights exist solely as a result of the CBA, courts then assess whether 4 resolving Plaintiffs’ claims will require the Court to interpret the CBA. See Curtis, 913 F.3d at 5 1153. Defendant argues that the Court will need to interpret the applicable CBAs because “the 6 broad scope of Plaintiffs’ PAGA claims and definition of ‘Aggrieved Employees’ and 7 ‘Defendants’ necessarily include all non-exempt Union and non-union employees.” Opp. at 19 8 (emphasis omitted). Defendant goes on to excerpt sections from two CBAs that address overtime. 9 See id. But Defendant does not explain what terms the Court will need to interpret or why 10 interpretation (rather than merely “looking to” the CBAs) would be necessary. See Cramer v. 11 Consol. Freightways, Inc., 255 F.3d 683, 691–92 (9th Cir. 2001), as amended (Aug. 27, 2001) 12 (explaining that “alleging a hypothetical connection between the claim and the terms of the CBA 13 is not enough to preempt the claim: adjudication of the claim must require interpretation of a 14 provision of the CBA”). Defendant’s Notice of Removal also only asserts in a conclusory manner 15 that the Court will need to interpret the CBAs to adjudicate the claims. See Dkt. No. 1 (“Notice of 16 Removal”) ¶ 13 (“Section 301 of the LMRA preempts Plaintiffs’ theories because the resolution 17 of Plaintiffs’ claims, specifically the alleged Aggrieved Employees’ claims, will require 18 interpretation of the CBAs in place during the relevant period, which are governed under the 19 LMRA and the NLRA.”). On the record presented, Defendant has not shown that the Court would 20 need to interpret any provision of any CBA to adjudicate Plaintiffs’ claims. 21 The Court therefore finds that Plaintiffs’ claims are not preempted by Section 301 of the 22 LMRA. 23 D. Diversity Jurisdiction 24 Defendant also argues that this Court has diversity jurisdiction. See Opp. at 9. The Court 25 finds that it does not, because Defendant fails to establish that the amount in controversy is greater 26 than $75,000. 27 Defendant has the burden of proving, by a preponderance of the evidence, that the amount 1 (9th Cir. 2013). As the Court understands Defendant’s argument, if it were to aggregate the 2 recoveries at issue across the named plaintiffs, they would total to $48,900 ($4,350 + $4,350 + 3 $8,700 + $10, 800.00 + $12,000 + $8,700). See Opp. at 11–15.3 Defendant nonetheless argues 4 that “[w]hen aggregating the statutory penalties and attorney’s fees Plaintiffs could obtain if they 5 prevail, the amount in controversy more likely than not far exceeds $75,000.” Opp. at 15. In 6 support of this argument, Defendant states that “assuming Plaintiffs’ attorneys bill at a flat rate of 7 $350.00 per hour . . . and the attorneys spend a conservative estimate of 200 hours on the case 8 through trial, Plaintiffs would be entitled to substantial attorneys’ fees, far beyond $75,000.” Id. 9 Defendant cites to employment cases in support of its estimates for the number of hours Plaintiffs’ 10 attorneys might bill, the number of hours they might spend on the case, and even what the total 11 might be. Id. But in “PAGA actions, only the named plaintiff-employees’ pro rata share of 12 attorneys’ fees is considered.” See Higginbotham v. S. E. Emp. Leasing Servs., Inc, No. 2:20-CV- 13 00575-KJM-DB, 2020 WL 5535421, at *4 (collecting cases) (E.D. Cal. Sept. 15, 2020). 14 Defendant provides no estimate whatsoever as to what the named plaintiffs’ pro rata share of 15 attorneys’ fees would be. Logic suggests that this representative PAGA lawsuit brought on behalf 16 of “all individuals who are or previously were employed by Defendant in California and who were 17 classified as non-exempt employees” starting in January 2021, Dkt. No. 1 at ¶ 7, would cover a 18 significant number of people. Defendants thus present no basis for concluding (or even assuming) 19 that the named plaintiffs’ pro rata share of fees would be large enough to clear the $75,000 20 jurisdictional threshold when added to their penalties (estimated to total $48,900). See Patel v. 21 Nike Retail Servs., Inc., 58 F. Supp. 3d 1032, 1049 (N.D. Cal. 2014). 22 III. CONCLUSION 23 Because Defendant has not met its burden of showing that the requirements for diversity 24 jurisdiction are met, the Court GRANTS Plaintiffs’ motion and REMANDS the case to San 25 Francisco Superior Court. 26 3 The Court notes that Defendant’s calculations in the Opposition are different than its calculations 27 in the Notice of Removal. Compare Opp. at 11-15 with Notice of Removal at 7-9. Regardless, 1 This order TERMINATES AS MOOT Defendant’s administrative motion to have its 2 || opposition to Plaintiffs’ motion to remand considered timely. The Court considered Defendant’s 3 opposition as if it had been timely filed. 4 The Clerk is directed to close the case. 5 IT IS SO ORDERED. 6 || Dated: 3/17/2023 ’

HAYWOOD S. GILLIAM, JR.

8 United States District Judge 9 10 11 12

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