Melton v. Universal Cable Holdings, Inc.
- William Alsup
- 3:19-cv-07360
- U.S. District Court · Northern District of California
- 7
In Melton v. Universal Cable Holdings, Judge Alsup denied the parties’ stipulation to remand the wage-and-hour action because federal jurisdiction properly attached at removal.
Kim Melton and Universal Cable Holdings, Inc.; the requested remand was denied, so the case was not sent back to California state court by this order.
What happened
Kim Melton sued Universal Cable Holdings, doing business as Suddenlink Communications, in California state court over alleged wage-and-hour violations and sought civil penalties under California’s Private Attorneys General Act. Universal Cable Holdings removed the case to federal court based on alleged diversity jurisdiction.
The parties later jointly asked the federal court to send the case back to state court, arguing that the amount in controversy was below $75,000. They submitted a new calculation estimating a maximum amount of $18,105.28, along with personnel records and declarations from their lawyers.
Judge William Alsup denied the parties’ stipulation to remand. He ruled that Universal Cable Holdings had shown at the time of removal that the amount in controversy was more likely than not above $75,000, and that later attempts to reduce the claimed amount or omit claims could not remove jurisdiction that had already attached.
The detailed version
- Melton v. Universal Cable Holdings, Inc. · No. 3:19-cv-07360
- William Alsup
- July 2, 2020
Background
Kim Melton sued Universal Cable Holdings, Inc., doing business as Suddenlink Communications, in California state court. She brought the action individually and on behalf of all allegedly aggrieved employees. The complaint alleged several wage-and-hour violations, including failure to pay for all hours worked, missed meal breaks, improper wage statements, and failure to pay compensation upon discharge.
The complaint also sought civil penalties under California’s Private Attorneys General Act on behalf of the Labor Commissioner and other allegedly aggrieved employees. In addition, Melton alleged violations of California’s Unfair Competition Law and sought restitution, an injunction, and attorney’s fees.
Universal Cable Holdings removed the case to federal court in November 2019, relying on diversity jurisdiction. The parties later stated in joint case-management filings that the PAGA allegations made the amount in controversy exceed $75,000 and that Melton’s attorney’s fees were increasing.
The request to remand
After several months of litigation, the parties jointly asked the court to remand the case to California state court for lack of subject-matter jurisdiction. They later submitted a joint brief projecting a maximum amount in controversy of $18,105.28, personnel-file documents, and sworn declarations from counsel.
The court explained that diversity jurisdiction requires the parties to be diverse and the amount in controversy to exceed $75,000, excluding interest and costs. Only the amount-in-controversy requirement was disputed. When the complaint does not state a specific amount, the removing defendant must show that it is more likely than not that the amount exceeds the jurisdictional minimum.
Court’s analysis
The court held that Universal Cable Holdings had met that burden when it removed the case. Its notice of removal estimated more than $40,000 in compensatory damages and penalties and included attorney’s fees. The court found the initial calculation reasonable and concluded that the amount in controversy was more likely than not above $75,000.
The court also held that jurisdiction is generally determined when the case is removed. Later events that reduce the potential recovery do not eliminate jurisdiction after it has attached. The parties’ revised calculation improperly omitted claims from the original complaint, including claims involving wage statements, compensation upon discharge, and the Unfair Competition Law. The court also noted that the parties’ revised calculation appeared to use fewer work shifts than the complaint alleged and used an unsupported method to estimate attorney’s fees.
Disposition
The court denied the parties’ joint stipulation to remand motion. It ruled that the parties could not rework the original pleadings to avoid federal jurisdiction that had properly attached at removal. Judge William Alsup signed the order.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.