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Overtime Class Action Remanded to State Court for Failure to Meet CAFA Amount in Controversy

In CAFA Jurisdiction, Class Actions, Overtime on October 14, 2010 at 3:15 pm
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The United States District Court for the Eastern District of California remanded a wage and hour class action case for failure to meet the $5,000,000 amount in controversy requirement under the Class Action Fairness Act (“CAFA”).  Rhoades v. Progressive Casualty Insurance Co., Inc., No. 2:10-cv-1788-GEB-KJM, 2010 WL 3958702 (E.D. Cal. Oct. 8, 2010).  Plaintiffs alleged that they and the members of the putative class were “employed in the State of California by the Defendant[ ] to adjust insurance claims and their positions were known as ‘Claims Adjuster,’ ‘Claims Generalist Associate,’ or similar titles” during the past four years. Id. Plaintiffs and members of the putative class were allegedly “not paid overtime wages for all hours worked” and were not “provided accurate itemized wage statements.” Id.

Apparently attempting to avoid federal court jurisdiction, Plaintiffs also alleged that “the individual members of the classes herein have sustained damages under the seventy-five thousand … jurisdictional threshold and that the aggregate claim is under the five million dollar … threshold, [and argue therefore] removal under the CAFA would be improper.” Id. Plaintiffs state in their prayer for relief: “Plaintiffs are informed and believe that the damages, back-wages, restitution, penalties, interest and attorneys’s [sic] fees do not exceed an aggregate of $4,999,999.99 and that Plaintiffs’ individual claims do not exceed $74,999.99.” Id. Read the rest of this entry »

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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
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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 Aug. 30, 2010) (unpublished).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. Read the rest of this entry »

Eastern District Holds That Plaintiffs May Rely on a “Few Representative Inquiries” and Extrapolate to the Class

In CAFA Jurisdiction, Certification, Class Actions on September 6, 2010 at 2:07 am
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The court in Adoma v. University of Phoenix, Inc., No. CIV. S-10-0059 LKK/GGH, 2010 WL 3431804 (E.D. Cal. Aug. 31, 2010 (slip op.) held that even where plaintiff’s proposed method of “reconstructing records of hours worked . . . will be imperfect”, plaintiffs may rely on “a few representative inquiries whose results will be extrapolated to the class.” Read the rest of this entry »

Morgan Stanley Wage and Hour Class Action Remanded to San Diego Superior Court for Failure to Show Diversity or Amount in Controversy

In CAFA Jurisdiction, Remand on August 16, 2010 at 11:20 am
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Judge James Lorenz faced a remand motion in Martinez v. Morgan Stanley & Co., Inc., Civil No. 09cv2937-L(JMA), 2010 WL 3123175 (S.D. Cal. Aug. 9, 2010).  The court remanded, holding that Defendants did not meet their burden of showing that it is more likely than not that the matter in controversy for the class action exceeds $5 million or that Plaintiff’s individual claims exceed $75,000.

Defendants removed this wage and hour class action from state court based on 28 U.S.C. Sections 1332 and 1441, or in the alternative, on the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332(d) and 1453.  Plaintiff filed a motion to remand arguing that Defendants failed to establish the requisite diversity of citizenship and the jurisdictional amount in controversy. Read the rest of this entry »

Central District Remands Class Action Based on Local Controversy Exception to CAFA

In CAFA Jurisdiction, Class Actions, Remand on August 13, 2010 at 6:58 pm
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In Coleman v. Estes Express Lines, Inc., No. CV 10-2242 ABC (AJWx), — F. Supp. 2d —-, 2010 WL 3156850 (C.D. Cal. July 19, 2010) a wage and hour plaintiff brought a motion to remand, after the case was removed pursuant to CAFA.  The Court granted Plaintiff’s remand motion.

While Defendants have demonstrated that more than $5,000,000 is in controversy under CAFA, Plaintiff has demonstrated that CAFA’s Local Controversy exception applies in this case. Therefore, the Court must decline to exercise jurisdiction. See Serrano, 478 F .3d at 1022. Plaintiff’s motion is GRANTED and this case is REMANDED to Los Angeles Superior Court.

Plaintiffs were represented by Mark P. Estrella, Miriam L. Schimmel, Robert E. Byrnes, Sue Jin Kim of Initiative Legal Group APC and Payam Shahian of Strategic Legal Practices APC.

Defendants were represented by David L. Terry, David L. Woodard of Poyner Spruill LLP and Sarah N. Drechsler and Timothy M. Freudenberger of Carlton Disante & Freudenberger LLP.

The judge is Hon. Audrey B. Collins.

By CHARLES H. JUNG

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Southern District of California Denies Remand in Case Asserting CAFA Jurisdiction

In CAFA Jurisdiction, Class Actions on August 13, 2010 at 5:22 pm
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In Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN (CAB), 2010 WL 3154847 (S.D. Cal. Aug. 9, 2010) the Southern District of California faced a remand motion in a wage and hour case that had been removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1441, 1453.

Judge Roger T. Benitez denied the motion to remand.  Defendant presented a calculation of damages, supporting its calcualtions with declaration from, among other people, the Assistant Controller, Operations, for U.S. Vision, Inc., responsible for enforcing Defendants’ payroll policies and procedures.  The declaration set forth Plaintiff’s most recent hourly rate of pay, as well as the specific number of optical managers and optechs employed during the Class Period, average hourly rates of pay for managers and optechs, number of employees who separated their employment with Defendants, and number of possible wage statements for each employee per year.

Plaintiff argued that Defendants miscalculated the amount in controversy because:

Defendants erroneously assumed “each class member was damaged to the same extent that Plaintiff Johnson was, and that every putative class member, among other things, worked off the clock and incurred a break violation every single day of the entire class period.” Mot. 6. Plaintiff emphasizes that Defendants have access to more specific figures to calculate the amount in controversy and that “each [class] member can be identified using information contained in Defendants’ payroll, scheduling and personnel records.” Compl. ¶ 39.

But the Court held that absent a “persuasive argument that Defendants are required to prove actual damages in order to remove this action, however, the Court must consider the amount put in controversy by the Complaint, not the ultimate or provable amount of damages.”  (citing Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005).)  The Court found that, having based their calculations on allegations provided in the Complaint, Defendants proved with a legal certainty that CAFA’s jurisdictional threshold is satisfied.

Despite Plaintiff’s attempt to provide supplemental information in the motion to remand, Defendants were entitled to, and did, use the factual allegations in the Complaint to calculate the amount in controversy. See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992) (holding that defendant must use specific factual allegations or provisions in the complaint to support its argument of proper removal). The Court finds that Defendants provided detailed and competent evidence supporting their calculations and showing, to a legal certainty, that the jurisdictional threshold under CAFA is met. To the extent subsequent events show that jurisdiction would not be proper, the Court can address remand at that time. 28 U.S.C. § 1447(c).

By CHARLES H. JUNG

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