Sheppard v. Staffmark Investment, LLC

Background

Tracee Sheppard sued Staffmark Investment, LLC on behalf of herself and a proposed class, alleging wage-and-hour violations. She later amended the complaint to add UPS Mail Innovations, Inc. as a defendant and to add a claim under California’s Private Attorneys General Act. The claims involved meal periods, rest breaks, wage statements, wages allegedly owed when employment ended, California’s unfair-competition law, and the Private Attorneys General Act.

UPS removed the case from Santa Clara County Superior Court to federal court under the Class Action Fairness Act, which provides federal jurisdiction over qualifying class actions. UPS removed the case on August 6, 2020, about 63 days after receiving the amended complaint on June 4, 2020. Sheppard moved to send the case back to state court, arguing that the removal was untimely under 28 U.S.C. § 1446(b).

Parties’ arguments

Sheppard argued that the amended complaint contained enough information to make the case removable and therefore started the 30-day removal period. She also argued that UPS had not shown that it removed the case within 30 days after its own investigation determined that removal was possible.

UPS argued that the amended complaint was too indefinite to establish the amount in dispute. It maintained that the 30-day period had not started because the complaint did not provide enough information to calculate whether the case met the Class Action Fairness Act’s jurisdictional requirements.

Court’s analysis

The court explained that federal law generally provides two 30-day periods for removal: one after the defendant receives the initial pleading and another after receiving a later document that first shows the case is removable. The court also explained that, under Ninth Circuit precedent, a defendant may remove a Class Action Fairness Act case later based on its own information if neither 30-day period has been triggered.

The court looked at the allegations within the four corners of the amended complaint. It found that Sheppard had alleged only that the damages exceeded the state court’s $25,000 jurisdictional limit and had estimated that there might be more than 100 proposed class members. The complaint did not specify how often the alleged Labor Code violations occurred or provide other numbers that would allow UPS to calculate the amount in dispute through a simple mathematical calculation.

The court therefore concluded that the amended complaint did not start the 30-day removal period. UPS was not required to investigate whether the case was removable when it received the complaint. Instead, it could review its business records and calculate potential damages. The court noted that UPS’s investigation identified potentially 8,602 class members and potential damages exceeding $5 million, rather than relying only on the complaint’s estimate of more than 100 class members. The court found that removing the case about 60 days after service was reasonable given the detailed calculations involved.

Ruling

The court denied Sheppard’s motion to remand. It also vacated the January 28, 2021 hearing on that motion. The order addressed only whether removal was timely; it did not decide whether the alleged wage-and-hour violations occurred or whether the proposed class should be certified.