Petersen v. Gold Bond Building Products, LLC

Background

Michael Petersen filed a putative class action in Contra Costa County Superior Court on December 19, 2023. He alleged that Gold Bond Building Products, LLC failed to pay overtime wages, provide required meal and rest periods, pay all sick time, provide accurate wage statements, pay waiting-time penalties, reimburse necessary business expenses, and comply with California’s unfair-competition law.

Gold Bond removed the case to federal court under the Class Action Fairness Act, a federal law that permits certain class actions to proceed in federal court. Gold Bond asserted that the total amount in controversy exceeded the Act’s $5 million jurisdictional threshold. Petersen moved to remand, arguing that Gold Bond had not shown by a preponderance of the evidence—a more-likely-than-not standard—that the threshold was met.

Court’s analysis

Because Petersen challenged the amount in controversy, Gold Bond had to support its jurisdictional estimate with evidence and reasonable assumptions rather than speculation. Gold Bond initially estimated at least $6,272,355 and later submitted an estimate of at least $6,209,467. Its estimates included unpaid overtime, meal-period and rest-period penalties, wage-statement penalties, waiting-time penalties, and attorney fees.

The court rejected Gold Bond’s overtime estimate because Gold Bond assumed one entirely unpaid overtime hour per employee per week, while Petersen’s complaint alleged that Gold Bond used an incorrect regular rate of pay to calculate overtime—not that it failed to pay for overtime hours altogether.

For meal and rest periods, the court found that Gold Bond adequately supported the number of workweeks but not its assumed 60% violation rate. The complaint’s allegations that employees were often unable to take required breaks did not establish that violations occurred at the assumed frequency. The court also found that meal and rest-period violations could overlap on the same workday and therefore could not simply be added together. Gold Bond showed at least $1,442,899 for these claims combined but did not establish a greater amount.

The court also found Gold Bond’s $640,000 wage-statement estimate unsupported. Gold Bond assumed that each proposed class member worked enough pay periods to receive the maximum statutory penalty, but it provided no evidence that the class members worked at least 41 pay periods.

The court accepted Gold Bond’s estimate of $723,614 in waiting-time penalties. Petersen’s complaint expressly alleged that members of the waiting-time subclass were owed 30 days of wages, and Gold Bond provided evidence about the number of former employees and their average pay.

Gold Bond did not provide a separate estimate for the sick-time and expense-reimbursement claims. The court therefore did not calculate an amount in controversy for those claims. The court included $541,628 in attorney fees based on the amounts it found supported and a 25% fee calculation.

Disposition

The court found that Gold Bond had shown a total amount in controversy of $2,708,141, including attorney fees. Because that amount was below the $5 million threshold, the court concluded that it lacked federal jurisdiction under the Class Action Fairness Act.

Judge Thomas S. Hixson granted Petersen’s motion to remand the action to the Contra Costa County Superior Court and ordered the Clerk of Court to remand the case promptly. The order addressed federal jurisdiction and remand; it did not decide the merits of Petersen’s wage-and-hour claims.