Adoma v. University of Phoenix, Inc., No. CIV.S-10-0059 LKK/GG, 2010 WL 3431804 (E.D. Cal. Aug 31, 2010).
In this case, although a District Court in California disposed of all the federal claims, it exercised supplemental jurisdiction over the remaining state law claims because the plaintiffs established that the amount in controversy exceeded the threshold requirements of CAFA.
The plaintiffs, Adoma and Abbaszadeh, who worked as Enrollment Counselors for University of Phoenix and its parent company, brought an action under the FLSA and California Labor Code.
The plaintiffs alleged that the defendants maintained two computer systems regarding Enrollment Counselors’ work–one system tracked the Counselors’ availability for taking enrollment calls and another was used to track overtime hours worked. The overtime work recorded by the former system was not recorded by the latter system; thus, the plaintiffs claimed they were not paid for “off-the-clock” overtime. The plaintiffs also asserted that the defendants paid them the wrong hourly rate for overtime, and that the defendants caused employees to miss meal periods. In addition, the plaintiffs brought state law claims for waiting time penalties and for inaccurate pay stubs.
Other suits for overtime pay were pending against the defendants–one of which was–Sabol v. The University of Phoenix, No. CV 09-03439-JCJ (E.D. Pa.). Because, the Sabol court certified a nationwide FLSA collective action; under first filed rule, this Court transferred the FLSA claims to the Sabol court, and thus declined to exercise jurisdiction over the FLSA claims advanced in this case.
Because the order transferring the FLSA claims to Sabol court disposed of all federal claims and the complaint only asserted supplemental jurisdiction as a basis for jurisdiction over state law claims, the Court ordered supplemental briefing regarding subject matter jurisdiction. After the parties briefed the Court, it concluded that it had jurisdiction over the plaintiffs’ state law claims under CAFA, 28 U.S.C. §1332(d).
While holding so, the Court noted that the defendants were citizens of Arizona and the named plaintiffs were citizens of California. Besides, the Court found that the aggregation of potential class members’ claims established that the amount in controversy exceeded §5 million.
The Court stated that the potential class included well over 1,000 members. On the “off-the-clock” overtime claim for which named plaintiff Adoma sought class certification, she alleged individual compensatory damages in excess of $34,000 and claims that evidence already produced demonstrated $4,732.47 in liability. On the plaintiffs’ claim for statutory waiting time penalties, the plaintiffs sought up to the statutory maximum of $4,000 per employee (albeit only for a sub-class estimated to include 500 to 700 employees). The defendants argued that Adoma was entitled to no more than $1,750 in waiting time penalties. The Court remarked that even the reduced figures, if aggregated, exceeded the jurisdictional amount. (E.g., 1,000 class members x $4,700 + $1,750 x 500 = $5,575,000.) Because the amount “in controversy” for these claims exceeded the statutory threshold, the Court found that the jurisdiction over class claims was proper under §1332(d).
Accordingly, the Court exercised supplemental jurisdiction over the plaintiffs state law claims pursuant to 28 U.S.C. §1367.