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Reddick v. Global Contact Solutions, LLC

United States District Court, D. Oregon

June 1, 2015

ROSS REDDICK, Plaintiff,
v.
GLOBAL CONTACT SOLUTIONS, LLC, Defendant.

OPINION AND ORDER AND ORDER TO SHOW CAUSE

PAUL PAPAK, Magistrate Judge.

Plaintiff Ross Reddick filed this putative class action against defendant Global Contact Solutions, LLC ("GCS"), in the Multnomah County Circuit Court on behalf of himself and all others similarly situated on January 29, 2015. By and through his state-court complaint, Reddick alleged GCS' liability under Oregon statutory law for failure to pay wages and for failure to pay all wages due and owing at the termination of employment, both such failures arising out of GCS' alleged practice of requiring all of its employees to attend mandatory training at the beginning of their employment, without compensation. GCS removed Reddick's action to this court effective March 13, 2015, on the purported basis of original federal jurisdiction under the Class Action Fairness Act of 2005 ("CAFA"). Reddick moved for remand of this action to the Multnomah County Court on April 15, 2015, and oral argument was held in connection with Reddick's motion on May 26, 2015.

It is well established that a defendant may remove to federal court any civil action filed in state court that could have been filed originally in federal court. See 28 U.S.C. § 1441. The plaintiff in such an action may thereafter seek to have the removed case remanded to state court if the district court lacks subject-matter jurisdiction over the action notwithstanding its removal, or if there was any defect in the defendant's fulfillment of the procedural requirements attending removal. See 28 U.S.C. § 1447(c). The removal statutes are generally construed restrictively, so as to limit removal jurisdiction. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-109 (1941); see also, e.g., Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) ("We strictly construe the removal statute against removal jurisdiction") (citations omitted).

If at any time prior to final judgment it appears that a federal court lacks subject-matter jurisdiction over a removed case, the court must remand the action to state court. See 28 U.S.C. § 1447(c). Cases first filed in state court and then removed to federal court are generally subject to a "strong presumption" against finding removal jurisdiction. See Gaus, 980 F.2d at 566; St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-292 (1938). However, in the context of purported federal subject-matter jurisdiction arising under CAFA, "no antiremoval presumption" applies, because CAPA was enacted specifically "to facilitate adjudication of certain class actions in federal court, " specifically large class actions that are essentially interstate or multi-state in character. Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014).

The burden of establishing federal subject-matter jurisdiction for purposes of removal is on the party seeking removal, see Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004), see also Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006), and factual questions regarding the basis for removal are generally to be resolved in favor of remanding the case to state court, see Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). Where federal subject-matter jurisdiction purportedly arises under CAFA and the elements of such jurisdiction cannot be established on the sole basis of the allegations of the plaintiff's complaint, the burden of the defendant seeking removal or resisting a challenge to removal is to establish "by a preponderance of the evidence" that the elements not established on the face of the pleading are present. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015); Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013). Once jurisdiction under CAFA is established by a preponderance of the evidence, it becomes the burden of the party challenging federal subject-matter jurisdiction to establish the applicability of any statutory exception to CAFA jurisdiction. See Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1024 (9th Cir. 2007).

In considering a post-removal challenge to federal subject-matter jurisdiction, the court assumes the truth of the allegations in the complaint and that a jury will ultimately return a verdict in the plaintiff's favor on all claims alleged therein. See, e.g., Kenneth Rothschild Trust v. Morgan Stanley Dean Witter, 199 F.Supp.2d 993, 1001 (C.D. Cal. 2002). In addition, the court may consider the contents of the defendant's removal petition, relevant "summary-judgement-type evidence" proffered at the time of removal, and supplemental evidence proffered at the time federal subject-matter jurisdiction is challenged. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004); see also Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n. 1 (9th Cir. 2002). It is well established that "[c]onclusory allegations" or allegations based on "information and belief" are insufficient to satisfy the defendant's burden. Matheson, 319 F.3d at 1090-1091; Valdez, 372 at 1117. If, after consideration of all material allegations and evidence, "doubt regarding the right to removal exists, [the] case should be remanded to state court." Matheson, 319 F.3d at 1090. Here, Reddick challenges both whether federal subject-matter jurisdiction over his action arises under CAFA in the first instance and whether his action is within the scope of either of two statutory mandatory abstention rules, pursuant to which the federal courts are required to decline to exercise jurisdiction over controversies essentially intrastate in character.

Under CAFA, the federal district courts have original jurisdiction over any class action in which: (1) the amount in controversy exceeds five million dollars exclusive of interest and costs, (2) any plaintiff class member is a citizen of a state different from any defendant, (3) the primary defendants are not states, state officials, or other government entities against whom the district court may be foreclosed from ordering relief, and (4) the number of plaintiffs in the class or classes at issue is at least 100. See 28 U.S.C. §§ 1332(d)(2), (d)(5); Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020-1021, 1021 n. 3, 1021 n.4 (9th Cir. 2007) (citations omitted).

However, the district courts are required to decline to exercise jurisdiction under Section 1332(d)(2) under both the "local controversy" abstention rule codified at 28 U.S.C. § 1332(d)(4)(A) and the "home-state controversy" abstention rule codified at 28 U.S.C. § 1332(d)(4)(B). The "local controversy" abstention rule requires the federal courts to decline to exercise CAFA jurisdiction over any class action in which:

(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;
(II) at least 1 defendant is a defendant-
(aa) from whom significant relief is sought by members of the plaintiff class;
(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and
(cc) who is a citizen of the State in which the action was originally filed; and
(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which ...

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