Jimenez v. Allstate Ins. Co., No. CV 10-8486 AHM FFM, 2011 WL 65764 (C.D. Cal. Jan 07, 2011).

A District Court in California denied remand holding that if the facts relating to the number of class members, their average salary, and the amount they worked per year are within the personal knowledge of the affiant so as to prove the amount in controversy, the affiant need not produce the actual business records relied upon by her in her declaration.

The plaintiff, on behalf of himself and on behalf of other non-exempt, hourly-paid Claims Adjusters, brought a class action asserting that the defendant, Allstate Insurance Company, failed to pay the plaintiff and putative class members straight time and overtime wages, failed to pay meal and rest benefits owed, failed timely to pay wages owed to terminated employees, and provided non-compliant wage statements.  The complaint, however, did not state the amount of damages sought. (Editors’ Note: After all, the plaintiffs were claims adjustors for an insurance company. They knew how to make removal difficult).

The defendant removed the action to the federal court pursuant to CAFA, 28 U.S.C. §1332(d).  The plaintiff moved to remand, arguing that the defendant failed to prove the amount in controversy exceeded $5,000,000 for the putative class, as required for CAFA jurisdiction.

The District Court denied the plaintiff’s motion.

The defendant presented a calculation of damages, based on the plaintiff’s allegations in the complaint and evidence regarding the putative class members, and devoted more than six pages to establish the requisite amount in controversy through calculations, supported with declaration from Ms. Sheryl Lester, a human resources employee of the defendant.

Ms. Lester declared that she had personal knowledge of the facts set forth in her declaration, which included the approximate number of claims adjusters, their average salary, amount worked per year, and other relevant information.

The plaintiff argued that the defendant failed to carry its burden of proof as to the amount in controversy because it failed to produce the actual business records relied upon by Ms. Lester in her declaration. Rejecting the plaintiffs’ argument, the Court noted that Ms. Lester established a sufficient foundation for her testimony, particularly at this early stage of the litigation, by declaring that her knowledge was based on her normal business responsibilities and her personal review of the defendant’s business records.  Therefore, the Court held that, there was no need, under the circumstances presented, for the defendant to provide the business records themselves.

The Court also held that, having based their calculations on allegations provided in the complaint, the defendant’s calculations were reasonable and conservative. The Court noted, for example, that the plaintiff had alleged that he and the putative members regularly and consistently worked in excess of eight hours in a day and the defendant failed to pay for all hours they worked. Based on this allegation of “consistent” overtime work, the defendant estimated one hour of unpaid overtime compensation per week for each putative class member and arrived at a figure of $6,356,039.04 for the class period. The Court remarked that even if the defendant’s estimate was halved to one hour of unpaid overtime every two weeks, the total amount in controversy would easily exceed $5,000,000 when the plaintiff’s other claims and attorneys’ fees were included.

The Court accordingly denied the motion to remand.