Mazzucco v. Kraft Foods Global, Inc., 2011 WL 6935320 (D.N.J. Nov. 23, 2011).

In this wage and hour class action, a District Court in New Jersey while declining to remand held that to calculate the amount in controversy, the courts consider (1) the number of class members; (2) the liability period; (3) hours of overtime allegedly worked; (4) the monetary rate to be applied to the overtime hours; and (5) attorneys’ fees.

The plaintiff, Ronald Mazzucco, brought an action on behalf of all current and former employees of the defendant, Kraft Foods Global, Inc.’s (“Kraft”) facility in New Jersey, seeking damages for alleged violations of the New Jersey Wage and Hour Law (“NJWHL”). The plaintiff alleged that he was required to don and doff protective equipment, uniforms, or other equipment, and walk to and from their work location without compensation for those activities. (As avid consumers of Kraft Macaroni and Cheese, we appreciate the fact that the people who make this delicious, nutritious meal wear protective clothing while they box the uncooked macaroni and dehydrated cheese.)

Kraft removed the case to the federal court contending that the claims, inter alia were properly before the federal court under CAFA.

The plaintiff moved to remand the case.

The magistrate judge recommended that the plaintiff’s motion to remand to be denied.

The plaintiff argued that Kraft had not satisfied the threshold requirements for removal under CAFA, § 1332(d)(2). Here, it was undisputed that the plaintiff was a citizen of New Jersey and Kraft was a citizen of Delaware and Illinois. The only contention that the plaintiff raised with CAFA jurisdiction was in regard to the amount in controversy.

Kraft relied, in part, on the plaintiff’s calculation in the remand motion to establish that the amount-in-controversy exceeded the $5  million jurisdiction threshold. Additionally, Kraft argued that because the complaint was silent on the amount of monetary harm that the plaintiff suffered, the burden was on the plaintiff to prove that the threshold was not met.

The magistrate judge noted that in order to decide if a plaintiff has met his burden, courts would address the following variables: (1) the number of class members; (2) the liability period; (3) hours of overtime allegedly worked; (4) the monetary rate to be applied to the overtime hours; and (5) attorneys’ fees.

As to the first factor, the magistrate judge found that there were 540 employees who could qualify as class members for the purpose of this litigation.

As to the liability period, the magistrate judge noted that the parties’ submission used 100 weeks as a basis for their amount-in-controversy analysis. The complaint alleged that Kraft violated N.J.S.A. 34:11-56a, which permits recovery for two years preceding the filing of the complaint. The magistrate judge also noted that if the alleged violations continued throughout the course of the litigation, as in this case, it was appropriate to use the projected length of the litigation to calculate the liability period. Based on this, the magistrate judge noted that this action was filed in the state court in March 11, 2011, and Kraft removed the matter to the federal court on April 27, 2011. The magistrate judge noted that a conservative estimate of the actual liability period was two years from the notice of removal, which would take the liability period until April 27, 2013. Thus, magistrate judge concluded that the appropriate liability period should range from March 11, 2009 to April 27, 2013, which would make it approximately 206 weeks.

As to the hours of overtime sought, the magistrate judge noted that Kraft used 100 minutes a week of donning and doffing, and walking time in order to quantify the amount-in-controversy to a single number. The magistrate judge accepted this for the purpose the Court’s amount-in-controversy analysis. As to the fourth factor, Kraft stated that the average putative class member earned $23.3411 per hour. As the complaint alleged unpaid wages, which would in the form of overtime or time and half because all relevant employee worked full 40-hour week, the Court applied $35.01 for Monday through Friday as the overtime rate for the purposes of determining the amount-in-controversy.

The magistrate judge then calculated the amount-in-controversy at the rate $35.01 for 1.67 hours of work performed per week, which came to about $58.47. By multiplying this with 540 members, the weekly-unpaid rate was $31,572, and as the liability period was 206 weeks, the magistrate judge noted that the amount-in-controversy was $6,503,835. Additionally, Kraft argued that if the Saturday and Sunday workers unpaid leave were also included to this amount, the amount-in-controversy would be at least $ 7.6 million. Finally, the magistrate judge applied a 30% of the award amount as attorneys’ fees as held in Faltaous v. Johnson and Johnson, No. 07–1572, 2007 WL 3256833 *7 (D.N.J. Nov. 5, 2007), and found that the amount-in-controversy with the inclusion of attorneys’ fees was $9.87 million. Accordingly, the magistrate judge ruled that the plaintiff has failed to meet his burden that the amount-in-controversy was less the CAFA threshold. (Editors’ Note: See the CAFA Law Blog analysis of Faltaous posted on February 29, 2008).

Additionally, the plaintiff contended that even if the CAFA threshold was satisfied, as the defendant Jamey Martin (“Martin”) – an employee of Kraft – was an individual, from whom significant relief was sought, remand was apt under the local controversy exception.

In support of its contention that Martin was a defendant from whom significant relief was sought, the plaintiff stated that Martin could be held personally liable under the New Jersey’s definition of employer. The plaintiff cited to N.J.S.A. 34:11-56a1(g), which reads that employer includes any individual, partnership, association, corporation or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.

As the plaintiff failed to address the nature of the claims raised against Martin and the non-local defendant, Kraft, and also as the plaintiff failed to show that it was Martin who implemented Kraft’s overtime policies, the Court found that Martin was not a significant defendant.

Accordingly, the magistrate judge recommended that the plaintiff’s motion to remand to be denied.