Unreported / Non-Citable
Background
The plaintiff, Sandra Becerra Arana, was employed by Land O’Lakes, Inc. and Kozy Shack Enterprises as an hourly, non-exempt worker from approximately February 2008 to December 2022. She filed a putative class action in Stanislaus County Superior Court on behalf of all current and former hourly non-exempt employees of the defendants in California (including those staffed through temporary agencies) for the four-year period before the complaint was filed.
The complaint asserted five California Labor Code-based causes of action: failure to pay minimum wages for all hours worked (including off-the-clock COVID-19 screening time and travel time to designated meal-break areas); failure to pay overtime; failure to provide timely, uninterrupted, duty-free 30-minute meal breaks; failure to timely pay all wages on termination (so-called ‘waiting time’ penalties); and a derivative claim under California’s Unfair Competition Law (Business & Professions Code section 17200).
The defendants removed the action to federal court under the Class Action Fairness Act of 2005 (CAFA), which gives federal courts original jurisdiction over qualifying class actions where the parties are minimally diverse and the amount in controversy exceeds $5 million. The plaintiff moved to remand, contending that the defendants had failed to submit competent evidence to support removal — particularly on the amount-in-controversy element.
The Court’s Holding
The court denied the motion to remand. The defendants supplied revised amount-in-controversy calculations through an expert (Ariel Kumpinsky) along with their opposition. Applying the Ninth Circuit’s framework for CAFA removal, the court found the defendants had carried their burden by a preponderance of the evidence to show that the amount in controversy plausibly exceeds $5 million.
The court walked through the major buckets of potential recovery the expert’s calculations addressed. For minimum wage violations, the calculations assumed certain off-the-clock time per shift for COVID-19 screening and meal-break travel — a reasonable assumption given the complaint’s allegations of ‘mandatory’ off-the-clock activities. For meal break premiums, the calculations assumed a meaningful violation rate consistent with the allegation that the defendants’ ‘policies, practices, and/or procedures’ caused these violations. For waiting time penalties, the calculations applied the statutory maximum 30 days of penalties to a fraction of separated employees.
The court rejected the plaintiff’s challenges to these assumptions. The complaint’s allegations of company-wide policies supported a higher violation rate than the plaintiff later argued was appropriate. The court was unpersuaded that the universe of waiting-time-eligible employees should be restricted to those separated within 30 days before the complaint was filed, finding that the broader four-year class period was the proper denominator. With the corrected assumptions, the expert’s calculations easily cleared the $5 million threshold, often by an order of magnitude.
Because CAFA jurisdiction was established, the court denied remand. The case will continue in federal court.
Key Takeaways
- Defendants seeking CAFA removal of California wage-and-hour class actions should support their amount-in-controversy calculations with detailed expert declarations tied to the plaintiff’s own allegations about company-wide policies.
- Allegations of ‘mandatory’ off-the-clock activities (like COVID-19 screening or meal-break travel) and ‘policies, practices, and/or procedures’ generally support reasonable violation-rate assumptions favorable to removing defendants.
- The CAFA $5 million threshold is calculated against the full four-year class period, not just narrow subsets like the 30-day waiting-time-eligible window before filing.
- Plaintiffs cannot defeat removal by criticizing isolated assumptions in the defendant’s calculations — they must show the calculations are unreasonable as a whole.
- The court will deny remand without conducting an evidentiary hearing if the defendants’ supporting calculations are otherwise reasonable and the plaintiff offers no contrary expert evidence.
Why It Matters
For California employers facing wage-and-hour class actions, this opinion provides a template for defeating a remand motion under CAFA. The key is to use updated expert calculations (often after seeing the plaintiff’s remand brief) that engage carefully with the complaint’s own allegations of company-wide policies and mandatory off-the-clock activities. The decision also illustrates how California’s strong substantive wage-and-hour protections — particularly waiting-time penalties — quickly inflate the amount in controversy.
For plaintiffs and their counsel, the takeaway is that broad allegations of policy-based violations cut both ways: they can support class certification, but they also help defendants meet the CAFA threshold. Plaintiffs who want to keep their cases in state court may need to plead more narrowly than they otherwise would.