Kalaveras v. NCR Corporation

Background

Angelo Kalaveras filed the action in the Superior Court of California for Contra Costa County. He asserted claims for himself, proposed class claims, and representative claims under California’s Private Attorneys General Act (PAGA). NCR Corporation removed the case to federal court, relying on the Class Action Fairness Act (CAFA), a federal law that can allow removal of certain class actions.

Kalaveras later represented that he would submit all of his individual claims to final and binding arbitration under a mandatory arbitration agreement. The parties entered a stipulation, approved by the court, submitting those individual claims to arbitration and leaving individual and representative PAGA claims in the amended complaint. NCR indicated that it would seek a stay while the individual claims proceeded through arbitration, and Kalaveras moved to remand the action to state court.

Jurisdiction and the parties’ arguments

The parties disputed whether the federal court could continue exercising jurisdiction over the remaining representative PAGA claim after the class allegations and other individual claims were no longer being litigated in federal court. Kalaveras argued that the court had, at most, supplemental jurisdiction—the authority to hear a related state-law claim—and should decline to exercise it under 28 U.S.C. § 1367(c). NCR argued that CAFA jurisdiction continued despite the later changes to the case and, alternatively, that the court should retain supplemental jurisdiction.

The court explained that the law was unsettled on whether a case removed under CAFA could be remanded after amendments eliminated the individual and class claims and left only a representative PAGA claim. It noted that PAGA claims alone generally are not removable under CAFA because they are neither class actions nor mass actions. The court adopted the reasoning of several other district court decisions and concluded that, if jurisdiction remained, it existed only through supplemental jurisdiction.

Ruling

The court declined to exercise supplemental jurisdiction over the remaining PAGA claim. It emphasized that PAGA raises complex issues of California law, that the state court was the better forum in the interests of comity, and that the federal case was still at an early stage. The court also found that retaining the case would not promote efficiency and rejected NCR’s argument that Kalaveras had unfairly manipulated the forum, noting that NCR had chosen to remove the action while knowing the other claims would be arbitrated.

The court granted the motion to remand and directed the clerk to remand the action to the California Superior Court for Contra Costa County. It denied the motion to stay as moot. The opinion’s concluding text also refers to granting “the motion to dismiss,” but the order’s title and earlier ruling identify the granted motion as the motion to remand; the opinion does not clearly explain a separate dismissal ruling.