Serrano v. Bay Bread, LLC, 2014 WL 1813300 (N.D. Cal. May 6, 2014).
A district court in California found that the presumption of continuing domicile applies only after it has been established; because the plaintiffs failed to establish the initial domicile of the class members, continued domicile cannot be presumed for the purposes of local controversy exception.
The plaintiffs brought a putative class action in the superior court for the county of San Mateo alleging that the defendants violated California Labor Code when they failed to provide meal and rest periods, failed to pay all earned wages during regular pay period, and also upon termination. The defendant Aerotek, Inc. removed this case to the the District Court pursuant to CAFA, and the plaintiffs moved to remand.
The plaintiffs sought remand under CAFA’s local controversy exception, under which a federal court must decline jurisdiction if:
- more than two-thirds of putative class members are citizens of the State in which the action was originally filed;
- at least one defendant from whom significant relief is sought is a citizen of the State in which the action was originally filed;
- and during the three-year period preceding the filing, no other class action has been filed asserting the same or similar factual allegations against any of the defendants.
In an attempt to satisfy the local controversy exception, the plaintiffs asserted that the defendant, Bay Bread L.L.C., was a citizen of California because its principal place of business was in San Francisco, California. Based upon information and belief, the plaintiffs claimed that more than two-thirds of the putative class members were California citizens because the class consists of persons who were employed at Bay Bread or Full Bloom bakeries, which were located in South San Francisco and Newark, California, respectively.
The defendant Aerotek did not dispute, and the District Court concluded that the plaintiffs had established that Bay Bread LLC was a defendant from whom significant relief was sought, and that Bay Bread LLC was a California citizen for CAFA purposes because its principal place of business is in California. Next, Aerotek cited two cases, Ascencio v. Oceaneering International Inc., 37–2011–6055, originally filed in the Superior Court of California, San Diego County, and Graehl v. Wellpoint Inc., B C526710, originally filed in the Superior Court of California, Ventura County. Aerotek contended that these two cases were wage and hour suits filed against it, which were analogous to the present action.
The District Court remarked that although both suits alleged wage and hour violations against Aerotek, the suits involved different violations for different employer policies and practices than those alleged in the instant lawsuit. Here, the plaintiffs were employed at bakeries and allegedly made to work without meal or rest breaks. The Ascencio plaintiffs were employed at an engineering firm and alleged they were denied rest and meal breaks, overtime, and itemized wage statements. In Graehl, the plaintiffs were call center employees for a health insurance company who alleged they were made to work off the clock, and that they were denied overtime, itemized wage statements, and pay for waiting time. Accordingly, the District Court concluded that Ascencio and Graehl were factually distinguishable from the instant case.
The District Court remarked that allegations alone, when challenged by the defendant, are insufficient to support remand; there must be some facts in evidence from which the district court may make findings regarding class members’ citizenship for purposes of CAFA’s local controversy exception. The District Court opined that the plaintiffs here failed to put forth any evidence, and instead rely solely on the fact that the plaintiff class was employed in California. The plaintiffs argued that the presumption of continuing domicile supports their position that if the class consists of persons employed in California within the last four years, then more than two-thirds of the class members likely remained California citizens.
The District Court remarked that the presumption of continuing domicile, however, provides that once established, a person’s state of domicile continues unless rebutted. Here, the District Court found that the plaintiffs did not establish the initial domicile of the class members, preventing the Court from presuming continued domicile. Because the plaintiffs failed to put forth any evidence to support their contention that greater than two-thirds of class members were California citizens, the District Court concluded that the plaintiffs failed to meet their burden under the local controversy exception.
Accordingly, the District Court denied the plaintiffs’ motion to remand.