Wilson v. Best Buy Co., Inc., No. 2:10-CV-3136-GEB-KJN, 2011 WL 445848 (E.D. Cal. Feb. 08, 2011).

In this case, while declining to remand the action to state court, a District Court in California held that if the averments in the payroll manager’s declaration were based on her personal knowledge, she need not produce the payroll records she relied on to establish the amount in controversy.

The plaintiff brought a class action alleging that he and other Geek Squad Installers, who were employed by Best Buy, worked over eight hours per day and/or forty hours per week and did not receive overtime compensation.

The plaintiff alleged six claims: 1) failure to pay overtime wages; 2) failure to timely pay wages due at termination; 3) failure to provide accurate wage statements; 4) civil penalties, all under California Labor Code; 5) failure to pay wages to an employee who was required to report for work but who was not put to work under the Industrial Welfare Commission Wage Order; and 6) unfair business practices under California Business and Professions Code §17200.  The plaintiff defined the proposed class as, “all current and former ‘Geek Squad Installers,’ or persons with similar titles and/or similar job duties, who worked for Best Buy Co., Inc. in the State of California at any time from October 13, 2006 to final judgment.”

Best Buy removed the action to the federal court under CAFA. The plaintiff moved to remand this action to state court arguing that Best Buy had failed to satisfy the $5 million amount in controversy under CAFA. The District Court, however, denied the motion.

At the onset, the Court stated that because the complaint did not allege a specific amount in controversy, Best Buy, being the removing party, must prove by a “preponderance of the evidence” that the amount in controversy requirement has been met. Under this burden, Best Buy must provide evidence that it is “more likely than not” that the amount in controversy satisfied the jurisdictional amount requirement.

In support of its position that the amount in controversy in the plaintiff’s putative class action exceeded $5 million, Best Buy presented the declaration of its payroll manager.  This declaration was based on the payroll manager’s personal knowledge and review of the business records of Best Buy.

The plaintiff, however, countered that because Best Buy had not presented admissible employee records reflecting hours worked, shifts worked, weeks worked, etc., Best Buy had not sustained its burden of showing that the total amount in controversy exceeded $5 million. Specifically, the plaintiff argued that the declaration failed to identify the records the payroll manager reviewed, what information was compiled, how the records were maintained, or when the information was recorded.  The plaintiff also argued the declaration violated the “best evidence rule” because the payroll manager testified about the purported contents of the unidentified records. But Best Buy countered that it was not required to produce extensive company records to support its amount in controversy calculations.

The Court observed that although it was unclear how the payroll manager used the records she reviewed; she also declared her averments were based on her personal knowledge.  Thus, this evidence, combined with the allegations in the complaint, established that it was more likely than not that the amount in controversy exceeded $5 million.

Second, the Court found that because the plaintiff had alleged that during the relevant time period, the plaintiff and the other class members worked in excess of eight hours in a day and in excess of forty hours in a week, Best Buy’s evidence concerning the plaintiff’s unpaid overtime claim was not as a result of overestimation.

Third, the plaintiff argued that Best Buy miscalculated the amount in controversy in the plaintiff’s waiting time penalty claim by assuming that all former employees were entitled to damages for the entire 30 day period recoverable under the statute. The Court, however, found that the plaintiff’s allegations supported Best Buy’s waiting time penalty calculation because the plaintiff alleged “the defendants intentionally and willfully failed to pay the plaintiff and the other class members their wages within 72 hours of the employees leaving the defendant’s employ and therefore, the plaintiff and the other class members are entitled to recover the statutory penalty for each day they were not paid, at their regular hourly rate of pay, up to 30 days maximum pursuant to California Labor Code § 203.”

Finally, the plaintiff also argued that Best Buy’s calculation of the reporting time pay was flawed because it speculated that the entire class was sent home without work at least once per week.  The Court found that because the plaintiff alleged in his complaint that “the defendants intentionally and willfully failed to compensate the plaintiff and the other class members for show up pay as described in IWC Wage Order §(5), Best Buy had provided plausible evidence supporting its position on the amount in controversy concerning this claim.

Accordingly, the Court denied the plaintiff’s motion to remand.