Anthony v. Service Corp. Int’l, No. 3:10CV642-RJC-DSC, 2011 WL 1343195 (W.D.N.C. March 18, 2011).

Unpaid undertakers go on a rampage like the Night of the Living Dead and want to embalm their employers in this CAFA case. While declining to remand the action to state court, a District Court in North Carolina held that examination of comparable lawsuits filed against the defendants is permissible to determine CAFA’s jurisdictional requirements.

The plaintiffs, employees, brought a class action against Service Corporation International (“SCI”), a large funeral home operator, and others seeking to recover unpaid wages.

The employees initially filed a federal class action against the defendants and their subsidiary under both the FLSA and various state laws, Prise v. Alderwoods Grp., Inc., No. 06-cv-1641 (W.D. Pa. Dec. 8, 2006).  The court in Prise declined to exercise supplemental jurisdiction over the state law claims, and heard claims only against the defendants’ subsidiary; thus, the employees filed their state law claims in California state court, Bryant v. Service Corp. Int’l., and their FLSA claims in the district court in Arizona, Stickle v. SCI Western Mkt. Support Ctr., L.P., 2009 WL 3241790 (D. Ariz. Sept. 30, 2009). The court in Bryant subsequently dismissed all state law claims other than those arising under California state law.

Accordingly, the employees re-filed their remaining state law claims in eighteen separate states, including the instant action, which was filed in North Carolina state court.  Likewise, the Virginia employees filed a class action (Walker, et al. v. Serv. Corp. Int’l, et al.) asserting federal jurisdiction under CAFA because the aggregate amount of damages exceeded $5 million.

In this action, the plaintiffs sought to represent the all of the defendants’ employees who were not paid their regular or statutorily required rate of pay for all hours worked.  The plaintiffs accordingly sought the value of the class members’ unpaid wages, liquidated damages, injunctive relief, attorneys’ fees, pre- and post-judgment interest, and other appropriate legal or equitable relief.

The defendants removed this action to the federal court relying on CAFA as the basis for federal jurisdiction.

The plaintiffs moved to remand, alleging that the defendants failed to show that the total amount in controversy exceeded $5 million.

The Magistrate Judge recommended that the plaintiffs’ motion be denied.

The defendants asserted that an examination of comparable lawsuits filed against them by employees provided sufficient evidence that they had met the requisite amount.  Specifically, the defendants pointed to the Bryant case and noted that the potential class in that action at the time it was filed was virtually identical to this case.  The plaintiffs had not specified geographical boundaries when describing the affected employees of the defendants and nothing in the complaint limited the potential class members to those living (as opposed to the dead people they worked on) and/or working within the State of North Carolina.  In the Bryant case, the plaintiffs’ counsel specifically alleged that the size of the class would approach 10,000 employees.

Additionally, in the Stickle case, the defendants provided the plaintiffs with a list of employees who worked in different states for various SCI subsidiaries.  The list contained 10,745 employees and 252 employees were identified as working in North Carolina.  However, if the limitations on the class imposed by the Stickle Court were removed, the number of North Carolina employees would increase to 501.  The plaintiffs offered nothing to suggest that these numbers were inaccurate.

The defendants asserted that the amount in controversy exceeded $5 million whether all the employees that the plaintiffs claimed worked for any subsidiary of SCI (10,745) or only those potential class members employed in North Carolina (252 to501).  All the plaintiffs in this action were the plaintiffs in Stickle and responded to interrogatories regarding the number of hours they worked without compensation.  Based on the six plaintiffs’ interrogatory answers, the average claim of the named plaintiffs was 2,837 hours of unpaid work.  Therefore, each class member may be entitled to collect wages for 2,837 hours of work.

Taking this minimum wage of $7.25 (prevailing in North Carolina during the period of liability) as a conservative estimate for wages that an employee would be owed and multiplying it by the 2,837 unpaid hours, the potential loss for each plaintiff was approximately $20,568.25.  Given that there were at least 252 potential class members in the instant matter, a conservative estimate of the potential damages would be $5,183,199, which satisfied the jurisdictional amount.

The plaintiffs took issue with the defendants’ use of pleadings from other lawsuits as evidence that they had met their burden in this case.  The plaintiffs also argued that the fact that the plaintiffs invoked federal jurisdiction in the Walker case was irrelevant and should not be considered in determining whether jurisdiction existed in this case.  Specifically, the plaintiffs argues that the Stickle interrogatory responses were not reliable estimates of the plaintiffs’ damages in this case and that the defendants had not shown that damages of the named plaintiffs were representative of the potential damages of the other class members.

Not persuaded by the plaintiffs’ arguments, the Court found that it could examine the comparable lawsuits filed against the defendants to determine the jurisdictional requirements, and accordingly recommended denying the plaintiffs’ motion to remand.