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Verner v. Swiss II, LLC, Not Reported in F.Supp.2d, 2010 WL 99084 (C.D. Cal., Jan 06, 2010) (No. CV 09-5701 PA CTX).

Time is of the Essence! You were taught this maxim in law school for a reason. Follow it, and you shall succeed; Ignore it, and you can notify your malpractice carrier.

Because the defendant had not established that the District Court had diversity jurisdiction over the plaintiff’s individual claims, and the Court no longer had CAFA jurisdiction as a result of the class action allegations having been stricken, the District Court determined that it lacked jurisdiction, and remanded the action to state court.

Manuel Valentin Verner filed a putative class action in state court asserting that his employer, Swiss II, LLC, failed to provide meal and rest breaks in violation of California law. (Editors’ Note: I don’t get meal and rest breaks either; just saying). 

Swiss filed a notice of removal alleging jurisdiction based on CAFA, 28 U.S.C. § 1332(d)(2) and diversity pursuant to 28 U.S.C. § 1332(a).  Because the notice of removal alleged Verner’s residence rather than citizenship, the District Court remanded the action for failing to adequately allege a basis for the Court’s jurisdiction.  After conducting discovery concerning Verner’s citizenship, Swiss filed a second notice of removal in August 2009. The Swiss are so precise, you’d think that they would have known how to allege the proper basis for removal.

Verner did not file a motion for class certification within 90 days from the date of service of notice of removal pursuant to Local Rule 23-3. Thus, the District Court struck the class allegations in the complaint, and then ordered the parties to show cause whether the Court still had jurisdiction. Swiss responded that even without CAFA jurisdiction, the Court would still have diversity jurisdiction over Verner’s claims because the parties were citizens of different states and the amount in controversy exceeded $ 75,000. Clearly, this court did not want to keep this case.

The Court noted that as the complaint did not allege an amount in controversy, Swiss had to prove, by a preponderance of the evidence, facts demonstrating that the amount in controversy was satisfied.  In its notice of removal, Swiss alleged that because the complaint alleged that Swiss ‘consistently’ failed to provide meal and rest periods, the amount in controversy was the plaintiff’s hourly wage times 250 work days per year times three meal and rest break premiums per day times four years.  But the Court remarked that nothing in the complaint or the notice of removal supported a conclusion that the amount in controversy was three premiums for each day worked for the last four years.  

The Court observed that contrary to California Labor Code § 226.7, Swiss had calculated the premium based on each meal or rest period missed, rather than ‘one additional hour of pay’ ‘for each work day that the meal or rest period is not provided.’ As a result, the Court opined that the amount in controversy alleged in the notice of removal for unpaid meal and rest periods, which accounted for 75% of the amount Swiss relied on to satisfy the amount in controversy, was overstated by at least a multiple of three. 

Thus, the Court concluded that Swiss’ calculations did not constitute affirmative evidence of the amount in controversy.

Posted By McGlinchey Stafford at 05:30 AM | Comments / Questions (0)