Cadriel v. Wolfspeed, Inc.

Background

Ricky Cadriel brought a putative class action against his former employers, Wolfspeed, Inc. and Edgar Bustamante, alleging ten California wage-and-hour violations. The claims included unpaid overtime and minimum wages, missed meal and rest periods, unpaid wages at separation, inaccurate wage statements, untimely wage payments, unreimbursed business expenses, unpaid vested vacation pay, and violation of California’s Unfair Competition Law.

Cadriel filed the case in Santa Clara County Superior Court. Defendants removed it to federal court under the Class Action Fairness Act of 2005, or CAFA. CAFA permits federal jurisdiction over certain class actions when, among other requirements, the class has more than 100 members and the amount in controversy exceeds $5 million. Cadriel did not dispute the class-size or minimal-diversity requirements. He challenged only whether defendants had shown that more than $5 million was at stake.

Legal Standard

Because Cadriel made a factual challenge to defendants’ jurisdictional calculations, defendants had to prove by a preponderance of the evidence that the amount in controversy exceeded $5 million and that the assumptions underlying their calculations were reasonable. The amount in controversy measures the possible amount at stake, not the amount the plaintiff is likely to recover.

Court’s Analysis

Defendants calculated a total amount in controversy of $6,863,567.65, including estimated attorney fees. For the overtime, minimum-wage, rest-period, meal-period, and expense-reimbursement claims, they assumed a 40% violation rate. They relied primarily on the complaint’s statement that violations occurred “at times,” along with employment data and other declarations.

The court found the 40% assumption speculative. The phrase “at times” did not distinguish a 40% violation rate from 20%, 10%, or another rate. Defendants’ additional arguments—that employees worked average shifts long enough to trigger certain wage and break rights, and that breaks could be violated in several ways—did not show how frequently violations actually occurred. The court concluded that defendants had not provided evidence supporting the assumed frequency of those violations.

The court stated that it could assign zero value to those claims because defendants provided no evidence about their frequency. It also explained that, even if it applied a 20% violation rate instead of 40%, and otherwise accepted defendants’ calculations, the total amount in controversy would be $4,141,160.65, including attorney fees. That amount was below CAFA’s $5 million threshold.

The court did not address Cadriel’s argument that it lacked equitable jurisdiction over the Unfair Competition Law claim because it granted the motion to remand on other grounds.

Disposition

The court found that defendants failed to prove by a preponderance of the evidence that the amount in controversy exceeded $5 million. It therefore granted Plaintiff’s motion to remand. The opinion does not state any additional disposition of the underlying wage-and-hour claims.