Court Denied Request for Panel Rehearing of California Wage Suit

In March 2021, the Ninth Circuit denied KM Industrial Inc.’s request to reconsider their decision to return a wage and hour suit to state court. The decision followed the discovery that the company used assumptions that inflated the price tag associated with the suit so that it could get the case into federal court.

Details of the Case: Levone Harris v. KM Industrial Inc.

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

Case No.: 20-16767

Levone Harris v. KM Industrial Inc.: The Plaintiff

The plaintiff, Levone Harris, filed suit against KM Industrial in 2019. Harris is a former KM Industrial employee that claims KM Industrial violated state labor law. Allegations made in the suit included failing to provide required overtime pay, failing to reimburse business expenses, failing to provide meal and rest breaks, and failing to provide workers with accurate wage statements.

Levone Harris v. KM Industrial Inc.: The Defendant

KM Industrial had the case removed to federal court on the grounds that the amount in controversy exceeds $5 million. (The company estimated the amount in controversy to be close to $7.1 million). A district judge granted a motion by Harris to send the case back to state court after finding the estimate provided by KM Industrial was “grossly exaggerated.” The company appealed, claiming the decision conflicted with precedent, but the request for rehearing was denied. The denial left the panel’s prior majority decision in place to remand the proposed class action to state court.

Levone Harris v. KM Industrial Inc.: An Overview

After the panel majority in November agreed with the district court’s decision that the Defendant improperly assumed when estimating amounts in controversy and failed to show their calculations were reasonable. Without proof that the members of the hourly employee class and the two subclasses were the same (and worked that long enough work shifts to quality for meal breaks and rest periods), the assumptions presented by KMI were found unreasonable.

If you have questions regarding employment law and how it protects California employees from wage and hour violations, 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.