Stevenson v. Dollar Tree Stores, Inc., No. CIV S–11–1433 KJM DAD, 2011 WL 4928753 (E.D. Cal. Oct. 17, 2011).
It makes sense that if you work at the dollar store, you are only going to get paid an dollar. Am I right? In this action, a District Court in California held that where there is little evidentiary basis provided in a complaint, courts must be persuaded that the defendant’s estimates are made in good faith and are reasonable to rely on.
The plaintiff brought a wage and hour action on behalf of all non-exempt assistant managers employed at Dollar Tree retail stores in California, alleging that the defendant failed to provide meal periods, to compensate for hours worked, and to pay overtime compensation. (And the wage and hour claims in California march on and on).
The defendant removed the action to the federal court pursuant to CAFA, and the plaintiff filed a motion to remand contending that the defendant failed to establish that the amount in controversy had been met.
The District Court denied the plaintiff’s motion.
The Court observed that although the plaintiff contended in his motion to remand that the complaint “expressly limits the universe of potential meal periods at issue to instances where the assistant-manager worked as the sole managerial employee in the store,” the defendant was correct in its assessment that the complaint was ambiguous. Moreover, while the complaint at one point vaguely stated there were certain tasks that could only be performed by assistant managers when working as the sole managerial employees and that, as a result, assistant managers worked through their unpaid meal periods, this allegation was not repeated with more clarity elsewhere in the complaint. Rather, the first cause of action alleged that assistant managers routinely worked in excess of five hours and were not provided with off-duty meal periods or compensated for missed meal periods, but did not state that this only happened when an assistant manager was the sole managerial employee.
The Court remarked that although the courts resolve all ambiguity in favor of remand to state court, the ambiguous nature of plaintiff’s complaint does not prevent the court from determining the amount in controversy issue in defendant’s favor when the defendant has met its burden. The Court found that the defendant here had met its burden by providing sufficient evidence that “it is more likely than not” that the amount in controversy requirement was satisfied.
Specifically, the defendant presented the calculations of a purported expert, who reviewed data from the defendant’s COMPASS timekeeping system, finding that between April 2007 and May 2011 approximately 60% of the shifts worked by assistant managers at defendant’s 337 California stores had a period of five or more hours where another assistant manager was not present during the same five or more hour period. By multiplying the number of total shifts worked by lone assistant managers by the average hourly rates earned by assistant managers, plaintiff’s total claim for meal period premium wages would be $5,780,135.
In the notice of removal, the defendant, however, had used a different analysis: it divided in half the number of earned meal periods by all assistant managers, not just when the lone managerial employee was present, assuming that 50% of meal periods were missed per week, and then multiplied this number by the average hourly rate, to determine that the amount in controversy for plaintiff’s first cause of action was $4,629,234.
The Court recognized that neither of defendant’s calculations was perfect or final, but also recognized that plaintiff’s complaint did not lend itself to precise calculations. Given the plaintiff’s allegations that members of the class were “routinely” denied meal periods or not compensated for missed meal periods, combined with his allegations regarding defendant’s “policy and practice,” it followed that plaintiff was alleging each class member more often than not was the sole managerial employee on duty and regularly uncompensated for missed meal periods. Thus, the Court concluded that the defendant’s estimates were reasonable.
Next, in determining waiting time penalties, the defendant multiplied the number of assistant managers terminated between April 22, 2007 and April 2011—approximately 1,421—by the managers’ average hourly rate, and then multiplied again by the average hours worked per day multiplied by 30, which is the maximum number of days for which waiting time penalties are allowable in accordance with Cal. Labor Code § 203(a). Thus, the defendant determined that the amount in controversy for the waiting time penalty claim was $3,210,799. Although the complaint, with respect to this cause of action, was indeed specific to meal break violations, the Court found that this did not defeat the defendant’s calculation.
The Court pointed that the defendant was reasonable in estimating, based on plaintiff’s allegations, that all members of the proposed class—all assistant managers—would have missed a meal period as described in the complaint at least once and were thus entitled to the waiting time penalty. The Court maintained that where there is little evidentiary basis provided in a complaint, “courts must be persuaded that the estimates are made in good faith and are reasonable” to rely on.
Finally, the defendant estimated that attorneys’ fees would come out to 25% of plaintiff’s missed meal period and waiting time penalty claims, which would be approximately $1,960,008. The Court found that this calculation was reasonable because the courts in California have awarded 25% to 30% of the settlement amount in attorneys’ fee where wage and hour class actions have settled prior to trial for millions of dollars.
Therefore, without determining a definitive amount in controversy as related to the meal period claim, the Court concluded that it was more likely than not the amount in controversy in plaintiff’s action, in the aggregate, was greater than $5 million.
Accordingly, the Court denied the plaintiff’s motion to remand.