Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN CAB, 2010 WL 3154847 (S.D. Cal. Aug 09, 2010).
The plaintiff was blind-sided by the decision to remand when a District Court in California denied the plaintiff’s motion to remand to state court holding that the defendants were entitled to use the general factual allegations in the complaint to calculate the amount in controversy. (Didn’t see that coming, huh?)
Debra M. Johnson, a manager and optech, brought a putative class action in state court on behalf of herself and a class of non-exempt employees employed by the defendants, U.S. Vision, Inc. and USV Optical, Inc., during the four-year period before the complaint was filed. Johnson alleged that the defendants, inter alia, failed to pay all wages and overtime pay, failed to provide required meal periods and rest periods, and failed to furnish timely, proper, and accurate wage statements in violations of the California Labor Code and California Bus. & Prof. Code. (How many of these same type of cases have we seen from California this year?)
The defendants filed a notice of removal to federal court under CAFA. Johnson, not surprisingly, moved to remand, which the District Court denied.
The Court noted that because Johnson alleged in her complaint that all claims on behalf of herself and the putative class did not exceed $5 million, the defendants had a burden to prove “to a legal certainty” that the amount in controversy exceeded the statutory minimum. The Court maintained that to determine the amount in controversy, the courts 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.
Johnson argued that the defendants miscalculated the amount in controversy because the defendants erroneously assumed “each class member was damaged to the same extent that Johnson was, and that every putative class member worked off the clock and incurred a break violation every single day of the entire class period.” The Court found that, having based their calculations on allegations provided in the complaint, the defendants had proved with a legal certainty that CAFA’s jurisdictional threshold was satisfied.
The Court noted that throughout the complaint and in all causes of actions, Johnson generally referred to the defendants’ employees as a whole, without using language to suggest that any less than all employees were injured for each cause of action. For example, the first cause of action generally alleged that the defendants violated California’s wage and hour laws with respect to “all wages owed to its non-exempt employees.” In addition, Johnson alleged that the defendants “routinely and systematically required employees to report to work 15 to 30 minutes before their scheduled shift or to stay at work 15 to 30 minutes after their scheduled shift.” The defendants accordingly used an average time of 23 minutes for off-the-clock time to calculate the amount in controversy under this claim.
To support their calculations, the defendants submitted a declaration of their Assistant Controller, Operations, who was responsible for enforcing the defendants’ payroll policies and procedures. The declaration set forth Johnson’s most recent hourly rate of pay, as well as the specific number of optical managers and optechs employed during the class period, average hourly rates of pay for managers and optechs, number of employees who separated their employment with the defendants, and number of possible wage statements for each employee per year. The defendants accurately used these figures to calculate the amount in controversy based on the allegations in the complaint. The Court observed that the defendants were entitled to, and did, use the factual allegations in the complaint to calculate the amount in controversy.
Accordingly, the Court found that the defendants provided detailed and competent evidence supporting their calculations and showing, to a legal certainty, that the jurisdictional threshold under CAFA was met.