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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Defendant’s Speculations Will Not Suffice for CAFA Jurisdiction

Posted in Case Summaries, Jurisdictional Amount

Woods v. CVS Pharmacy, Inc., 2014 WL 360185 (C.D. Cal. Jan. 30, 2014).

A District Court in California remanded an action for failure to establish the amount in controversy holding that a defendant seeking removal of a putative class action must demonstrate, by a preponderance of evidence, that the aggregate amount in controversy exceeded the jurisdictional minimum.

Plaintiffs are pharmacists who worked as “floater” pharmacist in Region 60 of defendants’ California retail stores.  A “floater” pharmacist is one who travels to different locations.  The plaintiffs filed this action in Los Angeles County Superior Court alleging numerous violations of the California Labor Code, conversion under the California Civil Code, and unfair business practices under the California Business and Professional code.

The defendants removed the action under CAFA asserting, among other things, that the amount-in-controversy exceeded $5 million.

The defendants maintained that there were at least 1,087 putative class members because there were at least 1,087 pharmacist who were floater pharmacists or pharmacists who had at least one shift where they were paid at more than one store any calendar year in the class period.

The court found the defendants calculation to be speculative because it included pharmacists who transferred from one home store to another during the time period.  It also included pharmacists who had a home store and only covered once at another store.  Because defendants failed to meet their burden as to the number of putative class members, defendants’ other calculations of the amount in controversy also failed to establish that the amount exceeded $5 million.

For example, the defendants estimated that the amount in controversy for the plaintiffs’ waiting time penalties claim was $3,889,798.  The District Court explained that this number was partly based on the defendants’ speculative estimate of 1,087 putative class members, so the defendants failed to prove this amount by a preponderance of evidence.

The court also stated that the defendants neither explained nor provided any evidence in support of using the maximum penalty of 30 days as a basis for their calculations of the amount in controversy.  Similarly, the defendants also failed to provide evidence to support their assumptions regarding the 47,457 instances where pharmacists potentially worked a shift at more than one store or a store other than their home store used to calculate the plaintiffs’ unpaid overtime claim.

Plaintiffs’ representation that their class definition covered all individuals who worked as pharmacists at multiple CVS locations did not establish that the definition of “floater” incorporated those pharmacists who had a home store and only worked at another store once.

Accordingly, the District Court held that the defendants failed to demonstrate by a preponderance of evidence that the aggregate amount in controversy exceeded the jurisdictional minimum, and the case was remanded to state court.