Castillo v. Western Range Ass’n, 2017 WL 1364584 (D. Nev. April 13, 2017).
In dismissing a wage-and-hour class action for lack of subject matter jurisdiction, the U.S. District Court for the District of Nevada held that the CAFA’s amount-in-controversy requirement cannot be aggregated when each plaintiff’s claims are wholly unrelated to the other and when the defendants are not jointly liable.
The plaintiff, Abel Cántaro Castillo (“Cántaro”), brought an action on behalf of shepherds employed through the H-2A visa program who worked for the defendant companies over six years. The special visa program authorizes agricultural employers to recruit and hire temporary workers from outside the wages that would be paid to U.S. workers. This includes paying the higher of either federal or state minimum wage. The plaintiffs alleged that they worked long hours on a daily basis, and were paid far below minimum wage. All of the plaintiffs’ claims arose under Nevada state law—failure to pay minimum wages in violation of the Minimum Wage Amendment (“MWA”) to the Nevada Constitution, failure to pay wages due upon termination under NRS Chapter 608, breach of contract, promissory estoppel, unjust enrichment, and quantum meruit.
When the defendants filed motions to dismiss, Cántaro, rather than opposing the motion, filed an amended complaint to add Alcides Inga Ramos (“Inga”) as co-plaintiff and Inga’s employers as defendants. While Cántaro alleged that he was jointly employed by defendants Western Range Association (“WRA”), El Tejon, and Gragirena, Inga was assigned to work for a particular Mountain Plains Agricultural Service (“MPAS”), defendant Estill Ranches, LLC, which was owned and managed by defendant John Estill.
The defendants moved to dismiss for lack of subject matter jurisdiction. In response, the plaintiffs asserted two bases for federal jurisdiction. First, the plaintiffs argued that federal question jurisdiction applies to the claims brought under the contracts because these claims required the court to resolve significant and serious questions of federal law. Second, the plaintiffs argued that diversity jurisdiction under the CAFA applied to the state-law claims against the defendant WRA, which in turn would support supplemental jurisdiction over the remaining defendants. In order to show that the amount in controversy exceeded $5 million, the plaintiffs alleged that at least 100 members of the class Cántaro sought to represent were underpaid at least two thousand dollars per month for—at the least—a period of over six years, for a total of over $10 million in unpaid wages. The plaintiffs also alleged that approximately 27 of the class Inga sought to represent were underpaid at least two thousand dollars per month for—at the least—a period of over six years, for a total of over $2 million in unpaid wages.
Dismissing the action, the District Court found that the action failed to meet the requirements of CAFA jurisdiction.
The District Court noted that the action essentially consisted of two parallel class actions asserting like claims under similar factual circumstances. Aside from the fact that they were employed in the same industry and their allegations were similar, each plaintiff’s claims were wholly unrelated to the claims of the other. That is, there was no relationship alleged between Cántaro and Inga, other than their common status as H-2A workers in Nevada and the general similarity of their allegations against their respective employers. And there was no relationship alleged between Cántaro’s employers and Inga’s employers, other than the nature of the allegations against them. To wit: Cántaro alleged that he was jointly employed by WRA, El Tejon, and Gragirena; Inga alleged that he was jointly employed by MPAS, Estill Ranches, and Estill. The classes Cántaro sought to represent were also entirely distinct from the classes Inga sought to represent. The District Court thus found no conceivable basis on which to assert that Cántaro’s employers were jointly liable for the claims alleged by Inga, so their claims could not be aggregated to satisfy CAFA’s amount in controversy requirement.
In order to establish CAFA jurisdiction each plaintiff must show, independently, that he and the class members he sought to represent might recover more that $5 million from his alleged employers only. The total amount in controversy with respect the classes Inga sought to represent was allegedly over $2 million in unpaid wages. Thus, Inga could not meet the $5 million threshold required for CAFA jurisdiction without improperly relying on the value of the claims against Cántaro’s employers. The District Court therefore dismissed Inga’s claims.
Cántaro calculated that the class claims against WRA totaling over $10 million in unpaid wages, based on potential damages accumulated over a period of six years, based on the statute of limitations applicable to breach-of-contract actions. The defendants argued that Cántaro’s claims for breach of contract were merely based on a failure to pay the Nevada minimum wage, and were thus duplicative of the claims arising under the MWA. The defendants therefore argued that a two-year statute of limitations for MWA violations applied to Cántaro’s claims.
The District Court agreed with the defendants. The District Court noted that Cántaro’s claims were to recover unpaid wages based on the defendants’ failure to pay the Nevada minimum wage. As such, the gravamen of the action was the alleged failure to pay the Nevada minimum wage, arising under the MWA, and it was the MWA violation that gave rise to the overwhelming majority of potential damages in this action. The District Court therefore determined that the two-year statute of limitations applicable to claims arising under the MWA was applicable to Cántaro’s contract claims for unpaid Nevada minimum wages. Applying the two-year statute of limitations, the District Court could not accept Cántaro’s allegation that “over $10 million” was in controversy because he had based his calculation on the six-year statute of limitations for breach of a written contract. After reducing the recovery period to two years, the class members’ aggregated claims against Cántaro’s employer, at best, equaled approximately $3.33 million. Cántaro thus failed to show that his claims met the CAFA jurisdiction requirement.
Accordingly, the District Court dismissed the action in its entirety.
–Barry A. McCain