California Wage and Hour Lawsuit: CAFA Amount in Controversy Requirement

In recent news, Ninth Circuit reversed the district court’s decision that defendant, Roadrunner, failed to meet the burden to establish the required $5 million minimum for the CAFA amount in controversy requirement and remanded to district court for further proceedings.

The Case: Jauregui v. Roadrunner Transportation Services, Inc.

The Court: U.S. Court of Appeals for the Ninth Circuit

The Case No.: 22-55058

The Plaintiff: Jauregui v. Roadrunner Transportation Services, Inc.

The plaintiff in the case, Griselda Jauregui, filed a putative class action against Roadrunner Transportation Services on behalf of all Roadrunner and former California hourly workers. The plaintiff alleged violations of California labor law, primarily wage and hour violations.

The Defendant: Jauregui v. Roadrunner Transportation Services, Inc.

When the Defendant, Roadrunner, removed the case to federal court, invoking jurisdiction under CAFA, the plaintiff responded with a motion to remand for lack of jurisdiction. The district court found that Roadrunner failed to meet its burden to establish the requisite $5 million minimum for the amount in controversy, and remanded the matter to state court.

The Case Continues: Jauregui v. Roadrunner Transportation Services, Inc.

Roadrunner relied heavily on their senior payroll lead’s conclusion that company payroll data and the plaintiff’s allegations held the amount in controversy to be in excess of $14.7 million. Before granting the motion to remand, the district court independently evaluated Roadrunner’s calculations for each of the seven claims/alleged violations. The district court found that Roadrunner sufficiently demonstrated the claimed amount for 2 of the seven claims, but the district court disagreed with the defendant’s calculations for the other 5 claims, and assigned each of these 5 claims with a value of $0. The Ninth Circuit court reversed the district court’s decision to remand based on what they identified as two primary errors: putting a “thumb on the scale” against removal, and assigning a $0 value to claims because they disagreed with one or more assumptions involved in the defendant’s estimates. The Ninth Circuit also held that nothing in CAFA or case law compels this type of drastic response when a district court disagrees with a single assumption underlying a claim valuation. According to the panel, Roadrunner met the CAFA amount in controversy requirements. If the lowest hourly wage rate identified by the district court is used the minimum wage claim is reasonably valued at $4.5 million. The two other claims accepted by the district court were valued at $2.1 million. These two claims’ values combined is more than enough to establish jurisdiction under CAFA without even considering the valuation of the additional claims that the district court valued at $0. Based on this, the panel remanded the matter to district court for additional proceedings.

If you have questions about California employment law or if you need to discuss wage and hour violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.