Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 Case No.: 26cv1412DMS(BJW) JOSH MONTES, an individual, on behalf 11 of Plaintiff, and on behalf of all persons ORDER DENYING PLAINTIFF’S similarly situated, 12 MOTION TO REMAND ACTION TO Plaintiff, STATE COURT 13 v. 14 HYATT CORPORATION dba THE 15 SEABIRD – A DESTINATION HOTEL, a Delaware corporation; OCEANSIDE 16 BEACH RESORT OWNER, LLC, a 17 Delaware limited liability company; S.D. MALKIN PROPERTIES, INC., a 18 Delaware corporation; S.D. MALKIN 19 OCEANSIDE, LLC, a Delaware limited liability company; DH2 HOLDING LLC 20 dba MISSION PACIFIC HOTEL, a 21 Delaware limited liability company; and DOES 1-50, Inclusive, 22 Defendants. 23 24 25 This case comes before the Court on Plaintiff Josh Montes’s motion to remand this 26 case to state court. Defendant Hyatt Corporation dba The Seabird – A Destination Hotel 27 filed an opposition, and Plaintiff filed a reply. For the reasons set out below, the motion is 28 denied. 1 I. 2 BACKGROUND 3 Plaintiff was a non-exempt, hourly employee of Defendant Hyatt Corporation’s The 4 Seabird Hotel from May 2022 through December 2024. (Compl. ¶ 8; Decl. of Daniel 5 Strittmatter in Supp. of Not. of Removal ¶ 5.) On behalf of himself and a class of similarly 6 situated employees, Plaintiff filed the present case against Defendant in San Diego Superior 7 Court on December 5, 2025, asserting ten causes of action. (FAC ¶ 10.) He alleges 8 individual and class claims for violations of California Business & Professions Code § 9 17200, et seq., California Labor Code §§ 1194, 1197, and 1197.1 (failure to pay minimum 10 wages), California Labor Code §§ 510 and 1198 (failure to pay overtime compensation), 11 California Labor Code §§ 226.7 and 512 (failure to provide required meal periods), 12 California Labor Code §§ 226.7 and 512 (failure to provide rest periods), California Labor 13 Code § 226 (failure to provide accurate itemized statements), California Labor Code §§ 14 201, 202, and 203 (failure to pay wages when due), California Labor Code § 2802 (failure 15 to reimburse necessary business expenses), California Labor Code §§ 226, 432, and 1198.5 16 (failure to permit inspection of employee records), and California Labor Code § 351 17 (failure to provide gratuities). (FAC ¶¶ 77–156.) 18 Defendant removed the case to this Court, alleging jurisdiction under the Class 19 Action Fairness Act (“CAFA”). Plaintiff filed a Motion to Remand shortly after, arguing 20 Defendant failed to satisfy its burden of establishing that the class claims satisfy the 21 jurisdictional minimum of $5,000,000 under CAFA. The Court took the Motion under 22 submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (See ECF No. 23 13.) 24 II. 25 LEGAL STANDARD 26 CAFA permits a defendant to remove a class action to federal court if there is 27 minimal diversity between the parties, the class contains at least 100 members, and the 28 amount in controversy exceeds $5,000,000. See 28 U.S.C. § 1332(d). Here, the parties do 1 not dispute CAFA’s jurisdictional requirements of minimal diversity and class numerosity. 2 The only issue is whether the amount in controversy requirement is satisfied. 3 To remove a class action to federal court pursuant to CAFA, “a defendant’s notice 4 of removal need include only a plausible allegation that the amount in controversy exceeds 5 the jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 6 81, 89 (2014). “Evidence establishing the amount is required…only when the plaintiff 7 contests, or the court questions, the defendant’s allegation.” Id. In that case, as here, “both 8 sides submit proof and the court decides, by a preponderance of the evidence, whether the 9 amount-in-controversy requirement has been satisfied.” Id. at 88. 10 Congress enacted CAFA to “facilitate adjudication of certain class actions in federal 11 court.” Id. at 89. Therefore, “no antiremoval presumption attends cases invoking CAFA.” 12 Id. However, “if the evidence submitted by both sides is balanced, in equipoise, the scales 13 tip against federal-court jurisdiction.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1199 14 (9th Cir. 2015). 15 In identifying the amount in controversy, Defendant may rely on “a chain of 16 reasoning that includes assumptions.” Id. These assumptions must be “founded on the 17 allegations of the complaint.” Arias v. Residence Inn by Marriott, 936 F.3d 920, 925 (9th 18 Cir. 2019) (citation omitted). To support their assumptions, parties may also submit 19 “affidavits or declarations, or other ‘summary-judgment-type evidence.’” Ibarra, 775 F.3d 20 at 1197 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 21 1997)). 22 III. 23 DISCUSSION 24 In its notice of removal, Defendant goes through each of Plaintiff’s claims and 25 argues the total amount in controversy is $14,532,346, well above the jurisdictional 26 requirement of $5,000,000. In support, Defendant submitted a declaration from Daniel 27 Strittmatter, a Senior Analyst in Human Resources Information Technology for Defendant 28 who asserts to be familiar with information and data related to Defendant’s business and 1 personnel operations. (See Decl. of Daniel Strittmatter in Supp. of Not. of Removal ¶¶ 2– 2 3.) In his motion, Plaintiff argues “Defendant’s [Notice of Removal] relies heavily on 3 unreasonable assumptions not adequately supported by concrete admissible evidence, 4 which has repeatedly been a basis for this Court – as well as other California District Courts 5 – to remand matters.” (Mot. at 3–4.) 6 Although Plaintiff asserts ten claims for relief in his Complaint, the Court need not 7 determine whether every category in Defendant’s Notice of Removal is properly valued. 8 See Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 995 n.8 (9th Cir. 2022). 9 The Court focuses its analysis on Plaintiff’s fourth and fifth claims for alleged meal period 10 and rest period violations, respectively, as these claims alone exceed the $5,000,000 11 jurisdictional threshold. For the reasons set forth below, the Court finds Defendant has 12 shown by the preponderance of evidence that the amount in controversy exceeds 13 $5,000,000 and thus remand is inappropriate. 14 When a complaint alleges violations occur as a matter of “policy and practice,” 15 courts in this district have found assumed violation rates up to 60% to be reasonable. See 16 Bryant v. NCR Corp., 284 F. Supp. 3d 1147, 1151 (S.D. Cal. Feb. 22, 2018) (finding a “60 17 percent violation rate for the meal period claim and a 30 percent violation rate for the rest 18 period claim” reasonable when the complaint’s only “guidance as to frequency” is the 19 phrase “a policy and practice”); see also Stanley v. Distrib. Alts., Inc., No. 20 EDCV172173AGKKX, 2017 WL 6209822, at *2 (C.D. Cal. Dec. 7, 2017) (finding three 21 missed meal periods and three missed rest breaks per week reasonable when complaint is 22 indeterminate as to frequency). In his complaint, Plaintiff asserts that “as a matter of 23 company policy, practice, and procedure,” Defendant “intentionally, knowingly, and 24 systematically failed to provide legally compliant meal and rest periods.” (Compl. ¶ 20.) 25 Defendant therefore assumes that Plaintiff and other class members missed one meal period 26 and two rest periods per week. (Not. of Removal ¶ 42, 48.) In his reply, Plaintiff argues 27 that Defendant miscalculates the assumed violation rates. (See Reply at 2–3) (stating “the 28 payment of one meal period premium per work week… is a 20% violation rate, not a 10% 1 violation rate” and “the payment of two rest period premiums per week… is a 40% 2 violation rate, not a 20% violation rate.”) However, whether Defendant miscalculated does 3 not affect the Court’s findings because, even at the high end, a 40% violation rate is a 4 reasonable assumption based on the allegations and Mr. Strittmatter's declaration. See 5 Bryant, 284 F. Supp. 3d at 1151. 6 Regarding meal period violations, Plaintiff alleges he and other California class 7 members were “from time to time unable to take thirty (30) minute off-duty meal breaks 8 and were not fully relieved of duty for their meal periods.” (Compl. ¶ 22.) Plaintiff also 9 asserts Defendant “often” did not fully relieve Plaintiff and other class members of duty 10 for their meal periods. (Id. ¶ 122.) Plaintiff alleges “there were many days where Plaintiff 11 did not even receive a partial lunch,” and Plaintiff “regularly” worked without 12 compensation. (Id. ¶ 21.) This was in accordance with Defendant’s “strict corporate policy 13 and practice.” (Id. ¶ 22.) Therefore, Defendant “conservatively assume[s] that putative 14 class members were not provided just one meal period each workweek.” (Not. of Removal 15 ¶ 42.) Based on the 1,470 non-exempt hourly employees who worked approximately 16 87,765 workweeks during the relevant period and the average hourly rate of $19.31, 17 Defendant calculates that the amount in controversy on this claim is $1,694,742. (Id. ¶ 44; 18 see also Decl. of Daniel Strittmatter in Supp. of Not. of Removal ¶ 6.) 19 The Court finds Defendant’s assumption of one missed meal period per workweek 20 to be reasonable. This case is similar to Cavada v. Inter-Continental Hotels Group, Inc., 21 No. 19cv1675-GPC (BLM), 2019 WL 5677846 (S.D. Cal. Nov. 1, 2019). The complaint 22 in Cavada “utilize[d] both language supporting more frequent violations such as ‘as a 23 matter of company policy, practice and procedure…’ and ‘uniform policy and practice’ 24 with words that limit[ed] the scope of [the] allegations, such as ‘from time to time’, 25 ‘periodically…’ and ‘some workdays.’” Id. at *6. Based on this language, the district court 26 in Cavada found that a 20% violation rate of one missed meal period per week was a 27 reasonable assumption. Id. at *7. 28 / / / 1 So, too, here. Plaintiff’s complaint also uses both broad and limited language to 2 describe its allegations of meal period violations, without identifying a specific frequency. 3 (See generally Compl.) Accordingly, the Court finds a violation rate of one missed meal 4 period per week is reasonable. 5 Regarding the rest period violations, Plaintiff asserts that “Plaintiff and other 6 California class members were from time to time denied their proper rest periods” by 7 Defendant. (Id. ¶ 23.) Relying on Plaintiff’s use of broad language in his Complaint such 8 as “company policy, practice and procedure,” and “intentionally, knowingly, and 9 systematically failed to provide,” Defendant assumes “at least two rest period violations 10 per week for each potential class member.” (Not. of Removal ¶¶ 47, 51.) Based on the 11 1,470 non-exempt hourly employees who worked approximately 87,765 workweeks 12 during the relevant period and the average hourly rate of $19.31, Defendant calculates the 13 amount in controversy to be $3,389,484 for rest period violations. (Id.; see also Decl. of 14 Daniel Strittmatter in Supp. of Not. of Removal ¶ 6.) 15 Like the assumed meal period violation rate, Defendant’s assumed rest period 16 violation rate is within the parameters that courts in the Ninth Circuit have found 17 reasonable. See Bryant, 284 F. Supp. 3d at 1151; see also Stanley, 2017 WL 6209822, at 18 *2. Therefore, the Court finds Defendant’s assumption of two rest period violations per 19 week reasonable. 20 Plaintiff asserts three main arguments as to why Defendant’s assumptions of 21 violation rates for meal period and rest period violations should be disregarded. First, 22 Plaintiff argues that his assertion that the amount in controversy is less than $5,000,000 “is 23 presumed to be correct.” (Mot. at 1.) However, Plaintiff’s bare assertion is insufficient. 24 See Dart, 574 U.S. at 87. In Gonzalez v. Officia Imaging, Inc., No. 22cv1982 DMS (MDD), 25 2023 WL 12257750, at *3 (S.D. Cal. Mar. 14, 2023), this Court found that “simply 26 [asserting], without any factual allegations, that the value of [Plaintiff’s] individual claims 27 does not exceed $75,000” did not constitute a good faith allegation. Accordingly, Plaintiff’s 28 “conclusory allegation [was] insufficient to rebut Defendants’ showing” that the 1 jurisdictional threshold was exceeded. Id. Like the plaintiff in Gonzalez, Plaintiff here 2 simply concludes that the value of his claims does not exceed $5,000,000, without any 3 factual allegations. Therefore, Plaintiff’s conclusory allegation is insufficient to rebut 4 Defendant’s showing that the amount in controversy on Plaintiff’s claims exceeds 5 $5,000,000. 6 Second, Plaintiff argues Defendant’s meal and rest period violation rate assumptions 7 are unreasonable because “Defendant’s assumptions fail to take shift length into account.” 8 (Mot. at 4.) The Ninth Circuit has rejected a defendant’s assumption that every class 9 member in an action worked sufficient shift lengths to qualify for meal and rest breaks 10 when the defendant “failed to provide any evidence to support its assumption.” Harris v. 11 KM Indus., Inc., 980 F.3d 694, 701 (9th Cir. 2020). In Harris, the defendant did not address 12 shift length in either their motion to remove or opposition to remand. Id. In contrast to the 13 defendant in Harris, Defendant here does address shift length in its opposition to remand. 14 Defendant gestures to Plaintiff’s Complaint, which describes the putative class members’ 15 shift length as “typically” eight hours or more. (Compl. ¶ 36; see Opp’n at 10.) 16 (“PLAINTIFF and the other members of the CALIFORNIA CLASS typically worked over 17 forty (40) hours in a workweek, and more than eight (8) hours per day.”) Therefore, 18 Defendant assumed that each putative class member was entitled to one meal and rest break 19 per day. (Opp’n at 10.) As the Ninth Circuit has clarified, “violation rates drawn from 20 reasonable interpretations of the complaint” do not need to be “supported by competent 21 evidence.” Perez v. Rose Hills Co., 131 F.4th 804, 809 (9th Cir. 2025). Accordingly, based 22 on the language in the Complaint, the Court finds Defendant’s assumption reasonable that 23 every class member worked a sufficient length to qualify for meal and rest breaks. 24 Third, Plaintiff argues it is unreasonable for Defendant to rely on assumptions in 25 determining violation rates, as Defendant had already investigated the claim and produced 26 actual violation rates in a prior suit. (Mot. at 5–6.) However, a defendant’s prior review 27 of information in estimating the amount in controversy “does not heighten Defendant’s 28 burden in establishing removal jurisdiction under CAFA.” Campbell v. SkyWest Airlines, 1 No. 24-CV-2141 TWR (SBC), 2025 WL 720188, at *8 (S.D. Cal. Mar. 6, 2025). 2 || Defendant does not need to “prove it actually violated the law at the assumed rate.” Arias, 3 F.3d at 927. Here, Defendant is not required to provide actual violation rates and may 4 ||instead utilize reasonable assumptions. 5 IV. 6 CONCLUSION 7 There being no dispute that there is minimal diversity between Plaintiff and 8 || Defendant, and that the class is sufficiently numerous, and in light of Defendant’s showing 9 || that the amount in controversy requirement is met, this Court has subject matter jurisdiction 10 || over this case pursuant to 28 U.S.C. § 1332(d). Accordingly, Plaintiff's motion to remand 11 |/is denied. 12 IT IS SO ORDERED. 13 ||Dated: July 13, 2026 am Sebo 14 an Yn. 5 Hon. Dana M. Sabraw United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28