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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 Aug. 30, 2010) (unpublished).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 »

Employees Entitled to 2 Hours Per Day for Meal & Rest Break Violations

In Meal and Rest Breaks, Remand on August 17, 2010 at 6:00 am
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Judge George H. King of the Central District denied plaintiff’s remand motion in Lara v. Trimac Transportation Services (Western) Inc., No. CV 10-4280-GHK (JCx), 2010 WL 3119366 (C.D. Cal. Aug. 6, 2010).

Plaintiff Miguel Lara’s (“Plaintiff”) brought a motion to remand on the grounds that Defendant Trimac Transportation Services (Western) Inc. (“Defendant”) failed to satisfy the amount in controversy requirement for diversity jurisdiction.  The court stated the amount in controversy requirement as follows: 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 »

Basing a UCL Claim Partially on FLSA Violation Does Not Confer Federal Question Jurisdiction

In Federal Question Jurisdiction, FLSA, Remand on August 15, 2010 at 8:00 am

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Judge Percy Anderson of the Central District of California faced the question of whether basing a UCL claim partially on a violation of the FSLA creates federal jurisdiction.  The Court held that it did not.  The case is Williams, et al. v. Wells Fargo Bank, N.A., No. CV 10-4761 PA (PJWx), 2010 WL 3184248 (C.D. Cal. Aug. 9, 2010).

Plaintiffs’ alleged that defendant Wells Fargo Bank, N.A. (“Defendant”) misclassified them as exempt from overtime and failed to pay wages for overtime compensation.

Plaintiffs were employed by Defendant as “Home Mortgage Consultants” sometime between February 10, 2001 and the present. During that time, Plaintiffs were paid on a commission sales basis and were never paid any overtime or premium pay. On May 30, 2010, Plaintiffs brought this action against Defendant in the Superior Court for the County of Los Angeles, alleging (1) violation California Labor Code §§ 510 and 1198 for unpaid overtime; (2) violation of California Labor Code §§ 2800 and 2802 for unpaid business expenses; (3) violation California Labor Code §§ 201 and 202 for wages not timely paid upon termination; (4) violation California Labor Code § 204 for wages not timely paid during employment; (5) violation California Labor Code § 226(a) for non-compliant wage statements; and (6) violation of California Business & Professions Code §§ 17200, et seq.

Defendant filed a Notice of Removal on June 28, 2010, alleging federal question jurisdiction.  Plaintiffs filed a motion to remand, maintaining that they have only alleged state law claims, and thus there is no basis for subject matter jurisdiction.

Defendant contended that Plaintiffs have effectively alleged a separate federal claim by alleging violation of the UCL based on violation of the FLSA.

Defendant is asking that this Court treat UCL claims and the violations upon which they are based as one in the same. However, Defendant has not cited, and the Court has not found, any authority which supports this position. Indeed, Defendant’s view seems to directly contradict the California Supreme Court‘s characterization of the UCL as a statute that “borrows” violations of other laws and makes them “independently actionable.” Accordingly, the Court does not find that Plaintiffs have somehow alleged a federal cause of action by basing their UCL claim in part on Defendant’s alleged violation of FLSA.

Defendant also contended that because most of Plaintiffs’ claims stem from their allegations that Defendant misclassified them as exempt from overtime compensation, and Plaintiffs’ overtime claim is entirely dependent on an interpretation of the FLSA, the resolution of Plaintiffs’ claims depends upon the resolution of whether Defendant violated the FLSA.  The court was not persuaded.

Although Defendant is correct in noting that most of Plaintiffs’ claims stem from allegations that Defendant improperly classified them as exempt, there is no indication in the complaint that this misclassification is based on exemptions set forth in federal law, as opposed to California law. . . . Where a plaintiff has alleged a UCL claim based on both the violation of state and federal law, courts have found that federal question jurisdiction does not exist. See, e.g., Holliman v. Kaiser Foundation Health Plan, 2006 U.S. Dist. LEXIS 14627 at *13 (N.D. Cal. March 14, 2006) (finding no federal question jurisdiction where UCL claim was based on violations of California Labor Code and FLSA); Roskind v. Morgan Stanley Dean Witter & Co. 165 F. Supp. 2d 1059, 1067 (N.D. Cal. April 11, 2001) (finding no federal question jurisdiction where UCL claim was based on “unfair” misrepresentations and violation of the National Association of Securities Dealers rules); Castro v. Providian Nat’l Bank, 2000 U.S. Dist. LEXIS 19062 at *8-9 (N.D. Cal. Dec. 29, 2000) (finding that even if plaintiffs were basing UCL claim on violation of federal Truth in Lending Act (“TILA”) in addition to violations of California law, claim did not depend on question of federal law because jury could find violation of section 17200 without finding violation of TILA).

Here, Plaintiffs have alleged a UCL claim based on a number of “unlawful” acts, which include two FLSA violations in addition to nine violations of the California Labor Code. Because a single unlawful business practice may give rise to liability under the UCL, a jury could very well find that Defendant violated section 17200 without also finding that it violated the FLSA. As such, Plaintiffs’ UCL claim does not depend upon the resolution of a question of federal law.

Id. **3-4.

By CHARLES H. JUNG

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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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