Lamar v. Wyndham Vacation Resorts, Inc.

Background

Salinda Lamar filed a proposed class action in the Superior Court of California for the County of Lake against Wyndham Vacation Resorts, Inc.; Wyndham Destinations; Wyndham Vacation Ownership; and Wyndham Vacation Ownership Inc. She asserted 13 wage-and-hour claims under California law, including claims for unpaid minimum wages and overtime, missed meal and rest periods, unpaid vacation wages, sick-time violations, unreimbursed expenses, inaccurate wage statements, payroll-record violations, unlawful wage receipts, waiting-time penalties, and unfair competition.

The defendants removed the case to federal court based on diversity jurisdiction. Diversity jurisdiction generally requires every plaintiff to be a citizen of a different state from every defendant, and it also requires more than $75,000 to be in controversy. Lamar did not dispute that the parties were completely diverse, but she argued that the defendants had not shown that the amount-in-controversy requirement was met. She moved to remand, meaning to return the case to state court.

Amount in Controversy

The defendants initially relied on Lamar’s requested relief and estimated attorney’s fees. In their opposition to the remand motion, they estimated potential damages of $71,324.58 and attorney’s fees between $82,250 and $150,000, for a claimed total between $153,574.58 and $221,324.58.

The court could consider the material in the defendants’ opposition as an amendment to their removal notice. Even so, the court concluded that the defendants had not met their burden of showing that more than $75,000 was in controversy.

The court rejected the defendants’ attorney’s-fee calculation because it was based on a blended hourly rate and a general estimate of litigation time, without an analysis of a reasonable fee for this proposed class action. The complaint alleged more than 100 class members. Because the defendants did not provide an estimate of the number of class members, the court used 100 as a low estimate and concluded that the defendants’ $150,000 fee estimate would produce no more than $1,500 attributable to Lamar. Adding that amount to the defendants’ $71,324.58 damages estimate produced $72,824.58, below the required threshold.

The court also identified unsupported assumptions in the damages calculations. The defendants assumed that Lamar incurred $25 in unreimbursed expenses during each of 101 pay periods, worked three hours of unpaid overtime every week, and experienced one meal-period violation and one rest-period violation for every workday. The court found no support for assuming a 100% violation rate merely because the complaint alleged a company policy or practice of labor-law violations.

Disposition

The court granted Lamar’s motion to remand because the defendants had not established that more than $75,000 was in controversy. The court remanded the case to the Superior Court of California for the County of Lake and directed the clerk to close the federal file. The order did not decide whether Lamar’s wage-and-hour claims were valid.

Judge

The order was issued by United States District Judge Jon S. Tigar.