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Central District Remands Minimum Wage and Overtime Class Action for Failure to Satisfy CAFA Amount in Controversy

In CAFA Jurisdiction, Remand on September 7, 2010 at 5:52 am
Parking Lot
Image by Roger Smith via Flickr

The Central District remanded a putative minimum wage and overtime class action suit in Munoz v. Central Parking Sys., Inc., No. CV 10-6172 PA (RCx), 2010 WL 3432239 (C.D. Cal. Aug. 30, 2010) (unpublished).

Plaintiff’s complaint attempted to avoid removal, stating “[i]t is believed that the total sum owed to the Class alleged herein is less than $5 million, based upon the anticipated size of the Class and the amount in controversy for each member of the Class.”  Id. *1. Defendant Central Parking System, Inc. removed anyway, asserting jurisdiction based on diversity of citizenship pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Id. *1.  “As Defendant acknowledges, this means it has the burden to prove to a legal certainty that the amount in controversy is greater than $5,000,000.” Id. (citing Lowdermilk, 479 F.3d at 1000).

Defendant supported its notice of removal with a declaration of an employee whose daily responsibilities include reviewing the Defendant’s payroll system.  Id. *2.  The employee stated that Defendant has employed 4,698 hourly non-exempt employees in California during the four-year period alleged in the Complaint, and he calculated that approximately 44% of the employees in any given year worked the entire year.  The court found that defendant relied on “several unsupported assumptions” in calculating the amount in controversy, and were not supported by any “summary-judgment-type” evidence.

For instance, in calculating the amount on Plaintiff’s claim for failure to provide accurate itemized wage statements Defendant arbitrarily assumes that a class member will be entitled to $2,550 in penalties, even though there is no evidence showing how many times class members failed to receive such statements. [FN2] Additionally, in calculating the amount on Plaintiff’s overtime, minimum wage, and missed meal period claims Defendant assumes that a class member worked one overtime hour per week, was not paid minimum wage one time per week, and missed one meal period per week. Similarly, Defendant’s calculation on Plaintiff’s claim for failure to report time pay assumes that Defendant failed to report two hours for a class member per year. Not only does Defendant fail to provide any evidentiary support for these assumptions, but Defendant’s calculations are also doubtful because they were made using the average hourly wage for all employees, when the real amount in controversy could be much lower depending on which employees were experiencing violations and their actual hourly wage. . . .

Finally, Defendant points out that the Court must also take attorneys’ fees into account when determining the amount in controversy. See Lowdermilk, 479 F.3d at 1000. However, Defendant has not suggested what the fee might be, nor has it provided any evidence to suggest the appropriate amount of attorneys’ fees. In the absence of any evidence or argument as to what attorneys’ fees should be, the Court refuses to speculate.

Id. *2.

The court remanded, after concluding that “Because neither the ‘four corners’ of the Complaint nor the Notice of Removal contain sufficient allegations concerning the amount in controversy, Defendant has not met its burden to establish this Court’s jurisdiction.” Id. *3 (citing Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005).

By CHARLES H. JUNG

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