De Alba-Pedilla v. Wesco Distribution Inc.

Background

Joel Jose De Alba-Pedilla sued Wesco Distribution Inc. and other defendants in California state court. He brought wage-and-hour claims under California law for himself and a proposed class of California employees. Wesco removed the case to federal court under the Class Action Fairness Act, a federal law that can provide jurisdiction over certain class actions when, among other requirements, more than $5 million is in controversy.

De Alba-Pedilla moved to remand, meaning he asked the federal court to return the case to state court. He argued that Wesco had not shown that the amount in controversy exceeded the Class Action Fairness Act’s $5 million threshold.

Court’s analysis

Wesco initially estimated the amount in controversy using certain assumptions. In opposing remand, Wesco used a 20% violation rate for meal-period and rest-break claims, estimating $1,083,071 for each claim, or $2,166,142 combined.

For other claims, including unpaid wages, wage-statement penalties, and waiting-time penalties, Wesco used a 100% violation rate. For example, Wesco assumed that every proposed class member worked 30 minutes of every workweek without being paid. The Court found that assumption unreasonable because the complaint repeatedly alleged that violations occurred “at times” and affected “some” proposed class members. The complaint did not support assuming that every employee was unpaid every week, and Wesco presented no outside evidence justifying a 100% violation rate.

The Court therefore excluded $812,303 in estimated unpaid wages and $921,850 in estimated wage-statement penalties. Removing those amounts reduced Wesco’s total estimate from $5,568,738 to $3,834,585, even accepting Wesco’s other estimates. The Court also noted that adding 25% for attorney’s fees would produce only $4,793,231, still below the $5 million threshold.

Ruling

The Court held that Wesco did not meet its burden of establishing jurisdiction under the Class Action Fairness Act. The case was remanded to the Superior Court of California for the County of Contra Costa. The opinion states, “IT IS SO ORDERED.”