Stella v. Hertz Corp, 2013 WL 2456042 (S.D. Cal. June 5, 2013).
Establishing that the named plaintiff's individual claims exceeds $75,000 is immaterial to CAFA jurisdiction. What is important under CAFA is that the claim of the class should exceed $5 million. Because the defendant here did not establish CAFA requirements, a District Court in California remanded the action to state court.
The plaintiff, former non-exempt employee, brought an action in Alameda Superior Court, alleging failure to provide timely off-duty meal period to the defendant's California non-exempt employees who were the sole employees on duty, failure to provide and/or on duty meal periods, and failure to pay full wages due upon separation of employment.
The defendant removed the action to the District Court asserting diversity jurisdiction under CAFA, 28 U.S.C. §§ 1332(d). The District Court sua sponte remanded the action holding that the defendant's notice of removal was facially deficient.
The District Court observed that federal courts possess only that power authorized by the Constitution or a statute, which is not to be expanded by judicial decree. Also, the District Court noted that the removal statute is strictly construed against removal jurisdiction, and that federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance. The District Court stated that a district court's duty to establish subject matter jurisdiction is not contingent upon the parties' arguments.
CAFA applies to class action lawsuits where the aggregate number of members of all proposed plaintiff classes is 100 or more persons and where the primary defendants are not States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief. Further, under 28 U.S.C. § 1332(d)(2), CAFA vests federal courts with original diversity jurisdiction over class actions if the aggregate amount in controversy exceeds $5 million, and any class member is a citizen of a state different from any defendant.
The District Court stated that after a plaintiff files an action in state court, the defendant must allege and bear the burden of proof that the amount in controversy exceeds $5 million, and the defendant must set forth, in the removal petition itself, the underlying facts supporting its assertion that the amount in controversy exceeds $5 million. (Editor's Note: See the CAFA Law Blog analysis of Abrego Abrego posted on May 25, 2006).
Here, the plaintiff alleged that there were more than 2,000 current and former employees in the Class, thereby satisfying the threshold matter requiring that the class action include an aggregate number of members of all proposed plaintiff classes be 100 or more persons.
The District Court, however, observed that the defendant failed to address whether the amount in controversy satisfied the CAFA's $5 million jurisdictional threshold; rather the defendant only addressed the $75,000 jurisdictional limit that was inapplicable here. The District Court held that the defendant failed to provide any explanation whatsoever to justify finding that it had satisfied the $5 million amount-in-controversy requirement under CAFA, and accordingly, remanded the action for lack of subject matter jurisdiction.
CAFA jurisdiction is different than diversity jurisdiction. Always remember who has the burden of proof.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
