Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions Litigating California Wage & Hour and Labor Code Class Actions
purposes, are mass actions, i.e., actions in which monetary claims by 100 or more plaintiffs are proposed to be tried jointly because they involve common questions of law or fact. 301 The CAFA is not retroactive and does not apply to class actions filed in state court before its enactment on February 18, 2005, and removed to federal court after that date. 302 C. Removal Under CAFA The burden of establishing removal jurisdiction remains on the proponent of federal jurisdiction. 303 Removal must be timely and must be done during one of two thirty-day periods for removing the case. The first thirty-day removal period is triggered “if the case stated by the initial pleading is removable on its face.” 304 The second thirty-day removal period is triggered if the initial pleading does not indicate that the case is removable, and the defendant receives “a copy of an amended pleading, motion, order or other paper” from which removability may first be ascertained. 305 If a complaint alleges damages in excess of $5 million, then the amount in controversy is ”presumptively satisfied” unless it appears to a legal certainty that the claim is actually for less than the jurisdictional minimum. 306 If the complaint fails to specify any amount in damages, the removal papers must provide the court with facts to support the jurisdictional amount. Moreover, the Ninth Circuit has held that the defendant seeking removal must prove by a “preponderance of the evidence” that the amount in controversy has been met. 307 The third, and possibly the most important, scenario is when the complaint alleges that the amount in controversy is less than $5 million. The Ninth Circuit addressed this scenario in Lowdermilk v. United States Bank. 308 When this sort of pleading occurs, the removing defendant must prove to a “legal certainty” that the CAFA amount in controversy has been met. The Ninth Circuit first noted that federal courts are courts of “limited jurisdiction” and therefore should strictly construe subject matter jurisdiction. 309 Second, the court noted that 301 302 303 304 305 306 307 308 309 Id. § 1332 (d) (11)(B)(i). See Bush v. Cheaptickets, Inc., 425 F.3d 683 (9th Cir. 2005). Lowdermilk v. United States Bank National, 479 F.3d 994, 997 (9th Cir. 2007); Lewis v. Verizon Comm’n, Inc., 2010 WL 4645465, 4 (9th Cir. 2010). Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005). Carvalho v. Equifax Info. Serv., LLC, 629 F.3d 876, 885 (9th Cir. 2010). Lowdermilk, 479 F.3d at 998; Abrego Abrego v. Dow Chem. Co., 443 F.3d 676 n.8 (9th Cir. 2006). Abrego Abrego, 443 F.3d at 683. Lowdermilk, 479 F.3d at 1000. Id. at 998. Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 68
the plaintiff is “master of her complaint” and can plead to avoid federal jurisdiction. 310 Moreover, the court raised the bar in cases where there is no evidence of bad faith, requiring the defendant to not only contradict the plaintiff’s own assessment of damages, but also overcome the presumption against federal jurisdiction. 311 1. “Other Paper” Requirement Defendants should be aware that mere verbal statements that opposing counsel or the plaintiff make regarding the amount in damages may not be enough. In fact, several courts in the Ninth Circuit have held that oral statements generally are not the “other paper” that can trigger removal. 312 These decisions considered only oral statements made in the context of mediation and settlement communications, so it is unclear whether oral statements made in other contexts can be used to satisfy the “other paper” requirement. The Ninth Circuit has established the framework for determining whether the amount in controversy meets the jurisdictional threshold. A district court “may consider whether it is ‘facially apparent’ from the complaint that the jurisdictional amount is in controversy. If not, the court may consider facts in the removal petition, and may ‘require parties to submit summary-judgment-type evidence relevant to the amount in controversy at the time of removal’.” 313 2. Premature Removal and Sanctions The Ninth Circuit has made clear that it disfavors premature removal. The seminal case, Abrego Abrego v. The Dow Chemical Co., reaffirmed the principle of “guard[ing] against premature and protective removals and minimiz[ing] the potential for a cottage industry of removal litigation.” 314 The court reminded the parties that CAFA’s legislative history agreed with such a conclusion, citing to a portion of the Senate Judiciary Committee Report: The Committee understands that in assessing the various criteria established in all these new jurisdictional provisions, a federal court may 310 311 312 313 314 Id. at 999. Id. See Molina v. Lexmark Int’l, Inc., 2008 U.S. Dist. LEXIS 22031, at *4 (C.D. Cal. 2008) (holding that oral communications during settlement do not constitute “other papers for the purposes of § 1446(b)”); see also Jiminez v. Sears, Roebuck & Co., 2010 U.S. Dist. LEXIS 22031, at *4 (C.D. Cal. 2010); see also Mendoza v. OM Fin. Life Ins. Co., 2009 U.S. Dist. LEXIS 59008 (N.D. Cal. 2009). Singer v. State Farm Mutual Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (citing Allen v. R&H Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995)). Abrego Abrego, 443 F.3d at 691. Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 69
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- Page 25 and 26: declare such a system illegal witho
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purposes, are mass actions, i.e., actions in which monetary claims by 100 or more plaintiffs<br />
are proposed to be tried jointly because they involve common questions of law or fact. 301<br />
The CAFA is not retroactive <strong>and</strong> does not apply to class actions filed in state court before<br />
its enactment on February 18, 2005, <strong>and</strong> removed to federal court after that date. 302<br />
C. Removal Under CAFA<br />
The burden of establishing removal jurisdiction remains on the proponent of federal<br />
jurisdiction. 303 Removal must be timely <strong>and</strong> must be done during one of two thirty-day<br />
periods for removing the case. The first thirty-day removal period is triggered “if the case<br />
stated by the initial pleading is removable on its face.” 304 The second thirty-day removal<br />
period is triggered if the initial pleading does not indicate that the case is removable, <strong>and</strong><br />
the defendant receives “a copy of an amended pleading, motion, order or other paper” from<br />
which removability may first be ascertained. 305<br />
If a complaint alleges damages in excess of $5 million, then the amount in controversy is<br />
”presumptively satisfied” unless it appears to a legal certainty that the claim is actually for<br />
less than the jurisdictional minimum. 306<br />
If the complaint fails to specify any amount in damages, the removal papers must provide<br />
the court with facts to support the jurisdictional amount. Moreover, the Ninth Circuit has<br />
held that the defendant seeking removal must prove by a “preponderance of the evidence”<br />
that the amount in controversy has been met. 307<br />
The third, <strong>and</strong> possibly the most important, scenario is when the complaint alleges that the<br />
amount in controversy is less than $5 million. The Ninth Circuit addressed this scenario in<br />
Lowdermilk v. United States Bank. 308 When this sort of pleading occurs, the removing<br />
defendant must prove to a “legal certainty” that the CAFA amount in controversy has been<br />
met. The Ninth Circuit first noted that federal courts are courts of “limited jurisdiction” <strong>and</strong><br />
therefore should strictly construe subject matter jurisdiction. 309 Second, the court noted that<br />
301<br />
302<br />
303<br />
304<br />
305<br />
306<br />
307<br />
308<br />
309<br />
Id. § 1332 (d) (11)(B)(i).<br />
See Bush v. Cheaptickets, Inc., 425 F.3d 683 (9th Cir. 2005).<br />
Lowdermilk v. United States Bank National, 479 F.3d 994, 997 (9th Cir. 2007); Lewis v. Verizon Comm’n, Inc., 2010 WL<br />
4645465, 4 (9th Cir. 2010).<br />
Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir. 2005).<br />
Carvalho v. Equifax Info. Serv., LLC, 629 F.3d 876, 885 (9th Cir. 2010).<br />
Lowdermilk, 479 F.3d at 998; Abrego Abrego v. Dow Chem. Co., 443 F.3d 676 n.8 (9th Cir. 2006).<br />
Abrego Abrego, 443 F.3d at 683.<br />
Lowdermilk, 479 F.3d at 1000.<br />
Id. at 998.<br />
Seyfarth Shaw LLP | www.seyfarth.com <strong>Litigating</strong> <strong>California</strong> <strong>Wage</strong> & <strong>Hour</strong> <strong>Class</strong> <strong>Actions</strong> (12th Edition) 68
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