Brown v. Janus of Santa Cruz

Background

Nick Brown filed a proposed class action against his employer, Janus of Santa Cruz, in Santa Cruz County Superior Court. He alleged six California-law claims involving unpaid wages, missed meal and rest breaks, unfair business practices, civil penalties under the Private Attorneys General Act, and inaccurate itemized wage statements. The proposed class covered current and former non-exempt employees who worked for Janus in California during the stated period.

Janus removed the case to federal court under the Class Action Fairness Act of 2005, a law that allows certain large class actions to be heard in federal court. Janus asserted that the case met the law’s requirements: more than 100 proposed class members, minimal diversity of citizenship, and more than $5 million in controversy. Brown asked the federal court to remand, meaning return, the case to state court.

Procedural Issues and Evidence

The court struck page 11 of Janus’s opposition brief and pages 6 through 14 of Brown’s reply brief because they exceeded the page limits in the court’s local rules and standing order.

The court overruled all of Brown’s objections to declarations submitted by Janus. It found that the declarations were timely enough for the jurisdictional issue, that the declarants showed personal knowledge through their job responsibilities and access to employment information, and that the declarations contained plausible allegations sufficient under the lower evidentiary standard applicable to Brown’s facial challenge to removal.

CAFA Jurisdiction

The court found that Janus established two of the three required jurisdictional elements. A declaration stated that Janus employed 181 non-exempt employees in California in 2019, which was enough to show that the proposed class exceeded 100 people. Janus also presented evidence that three former non-exempt employees were citizens of states other than California, establishing minimal diversity.

The court ruled, however, that Janus did not prove by a preponderance of the evidence that more than $5 million was in controversy. The court rejected Janus’s assumption that every non-exempt employee missed every meal and rest break. Although the complaint described a uniform policy, the court found that this did not reasonably imply a 100 percent violation rate. The court instead used a 50 percent violation rate and calculated $1,553,000 for the meal- and rest-period claims. It also found that Janus’s calculations improperly treated the total number of employees who worked during a year as though all of them worked throughout the entire year, thereby failing to account for employee turnover.

For the alleged unpaid wages associated with overnight and daytime double shifts, the court found that the complaint supported a reasonable inference of one such violation per employee per week, or a 25 percent violation rate. The court also found that the complaint’s allegation that Janus deducted 30 minutes of pay “at times” supported a 25 percent violation rate for those deductions. The court’s final calculation included $1,553,000 for meal and rest periods, $1,863,600 for the double-shift claim, and $388,250 for the 30-minute deductions, for a total of $3,804,850. Applying a 25 percent benchmark for attorneys’ fees added $951,212.50, producing a total amount in controversy of $4,756,062.50.

The court noted that Brown had asserted additional claims that Janus had not included in its calculations. But the court stated that Janus alone had the burden to provide evidence showing that the amount in controversy exceeded $5 million and that the court could not make that showing for Janus.

Disposition

Because Janus failed to prove that the amount in controversy exceeded CAFA’s $5 million threshold, the court concluded that it lacked jurisdiction under CAFA. Judge Beth Labson Freeman granted Brown’s motion to remand and remanded the case to the Superior Court of California. The opinion did not decide the merits of Brown’s wage-and-hour claims.