Victor Garibay v. Archstone Communities LLC

*764 MEMORANDUM ***

Archstone Communities, LLC and Arch-stone Property Management California, Inc. appeal the district court’s order granting Victor Gariba/s motion to remand his class action complaint, which alleges violations of various California wage and employment laws, to state court. We have jurisdiction under 28 U.S.C. § 1453(c), and we affirm.

The district court correctly held that the defendants did not meet their burden to prove by a preponderance of the evidence that the amount in controversy exceeds $5 million as required for federal jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d). See Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 685 (9th Cir.2006) (per curiam). The only evidence the defendants proffer to support their calculation of the amount in controversy is a declaration by their supervisor of payroll, which sets forth only the number of employees during the relevant period, the number of pay periods, and general information about hourly employee wages. Beyond this, the defendants rely on speculative and self-serving assumptions about key unknown variables. The district court correctly concluded that Archstone’s evidence was insufficient to support removal jurisdiction under CAFA.

For example, Garibay alleged violations of Cal. Labor Code § 226, which provides that employers who fail to provide employees with “an accurate itemized [wage] statement” are subject to fines. Arch-stone’s calculations assume that every single member of the class would be entitled to recover penalties for every single pay period. Garibay also alleges violations of Cal. Labor Code § 203, which provides that employers who fail to timely pay all earned wages upon termination are subject to a fine equal to the employee’s normal wages for each day the wages are late, up to a maximum of 30 days. Archstone assumes that each employee would be entitled to the maximum statutory penalty, but provides no evidence supporting that assertion. Along the same lines, Garibay alleged violations of Cal. Labor Code § 226.7, which provides that employers who fail to provide adequate meal or rest breaks must compensate the employee for an additional hour of pay. Archstone assumes that each class member was wrongly denied a break twice each week. As the district court correctly explained, Arch-stone failed to provide any evidence regarding why the assumption that each employee missed two rest periods per week was more appropriate than “one missed rest period per paycheck or one missed rest period per month.” Although Arch-stone correctly notes that 25% recovery is the “benchmark” level for reasonable attorney’s fees in class action cases, see Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir.1998), and that such fees are properly included in calculations of the amount in controversy, see Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 1000 (9th Cir.2007); Cal. Labor Code § 218.5, Archstone has not established by a preponderance of the evidence that the underlying amount upon which those fees would be based is at least $4 million, as would be required to meet the $5 million minimum.

Finally, although the district court cited to Lowdermilk, 479 F.3d at 1002, which applied the heightened “legal certainty” standard, it relied on that case for the general proposition that we may not base our jurisdiction on mere speculation. Con *765 trary to Archstone’s assertions, the district court correctly identified and applied the preponderance of the evidence standard.

When it initially sought removal, Arch-stone did not have the benefit of our decision in Roth v. CHA Hollywood Med. Ctr., 720 F.3d 1121 (9th Cir.2013). Under Roth, if Archstone later discovers evidence that the jurisdictional bar is met, it may once again attempt to remove this case to federal court.

AFFIRMED.