Mohammed v. American Airlines, Inc.

Background

Hasim A. Mohammed filed a proposed class action in Santa Clara County Superior Court against American Airlines, Inc. and unnamed defendants. The complaint alleged violations of California laws concerning meal periods, rest periods, hourly and overtime wages, wage statements, timely payment of final wages, and unfair business practices.

The proposed class covered people employed in hourly or non-exempt positions in California during a defined four-year period. The complaint also proposed subclasses for meal periods, rest periods, wage-statement penalties, waiting-time penalties, and unfair-business-practice claims.

American removed the case to federal court under the Class Action Fairness Act (CAFA), a federal law that permits federal jurisdiction over qualifying class actions. The parties did not dispute that the proposed class had at least 100 members or that the citizenship requirement was met. The disputed issue was whether the amount in controversy exceeded $5 million.

The Parties’ Arguments

American relied on information reviewed by its paralegal/legal-employment employee. American identified approximately 1,379 current California ramp agents and used $14.18, the lowest current hourly rate for ramp agents under an applicable collective bargaining agreement. After reducing the number of employees by approximately 30 percent to account for attrition, American assumed that 965 class members missed one meal break and one rest break every week for 208 weeks. Based on those assumptions, American calculated approximately $5,692,419.20 in potential meal- and rest-break premiums, before considering attorney fees.

Mohammed argued that American’s calculation relied on unsupported assumptions about the rate of violations and did not show how many employees fell within the proposed class and subclasses. He also argued that American incorrectly assumed that every relevant employee missed one meal break and one rest break each week for four years, and that the related attorney-fee calculation was therefore also unreliable. Mohammed alternatively sought permission to conduct discovery concerning American’s evidence.

Court’s Analysis

When a plaintiff contests a defendant’s amount-in-controversy allegation, the defendant must prove by a preponderance of the evidence—meaning that the amount is more likely than not—to establish that the jurisdictional threshold is met. The court must consider real evidence and reasonable assumptions about the potential damages.

The court concluded that American had not met that burden. American used the number of current ramp agents, but did not provide evidence showing whether that number was lower than, higher than, or equal to the number of people covered by the proposed Hourly Employee Class. American also did not explain the relationship between current ramp agents and the proposed subclasses. In particular, American did not show how many non-exempt employees worked shifts long enough to qualify for meal or rest periods.

The court also found that American had no evidentiary basis for using the current lowest ramp-agent wage of $14.18 to estimate wages for class members throughout the relevant period, which began in February 2015. The court therefore found that the calculation was not supported by real evidence or reasonable assumptions.

American offered an additional calculation concerning the claim for unpaid hourly and overtime wages in its opposition brief. The court declined to consider that calculation because it was not included in the notice of removal and the deadline to amend that notice had expired.

Disposition

The court held that American failed to show by a preponderance of the evidence that the amount in controversy satisfied CAFA’s jurisdictional requirement. It granted Mohammed’s motion to remand. The order addressed federal jurisdiction and did not decide the merits of Mohammed’s wage-and-hour claims.