Ramirez v. Prospect International Airport Services Corporation

Background

Luis R. Chavarria Ramirez filed a putative class action in the Superior Court of California for San Mateo County against Prospect International Airport Services Corporation, Prospect Airport Services, Inc., and Does 1 to 100. He asserted ten causes of action under the California Labor Code and California Business and Professions Code. The claims concerned unpaid overtime and minimum wages, meal and rest period premiums, waiting-time and wage-statement penalties, unreimbursed business expenses, and attorneys’ fees.

The proposed class consisted of current and former hourly-paid or non-exempt employees who worked for any defendant in California during the period beginning four years before the complaint was filed and ending at final judgment. Prospect Airport removed the case to federal court under the Class Action Fairness Act, or CAFA.

Issue and legal standard

The only disputed issue was whether the amount in controversy exceeded CAFA’s $5 million jurisdictional threshold. CAFA provides federal jurisdiction over qualifying class actions when there are at least 100 class members, at least one plaintiff is a citizen of a different state from at least one defendant, and more than $5 million is in controversy. The opinion addressed only the amount-in-controversy requirement.

Because Ramirez challenged the defendants’ jurisdictional allegations, the defendants retained the burden to show by a preponderance of the evidence—that it was more likely than not—that the amount in controversy exceeded $5 million. The court stated that reasonable assumptions may be used, but speculation and unsupported assumptions are insufficient.

Parties’ positions and evidence

Ramirez’s state-court complaint did not identify the particular amount sought by him and the proposed class, but it stated that the amount in controversy was less than $75,000. In the removal notice, Prospect Airport argued that the amount exceeded $5 million and relied on a declaration from Vicki Strobel, its president and chief executive officer.

Strobel stated that there were approximately 825 putative class members who worked approximately 119,600 workweeks, earned an average of $17.65 per hour, and worked approximately 48 weeks per year on average. Using those figures, Prospect Airport calculated $13,109,408 in damages, excluding attorneys’ fees. The removal calculations also relied on additional estimates concerning subsets of class members for wage-statement and waiting-time penalties.

Ramirez argued that the defendants’ assumptions were unsupported by evidence. Prospect Airport responded that Strobel’s declaration should be accepted because Ramirez had not submitted competing declarations or objected to its statements.

Court’s analysis

The court rejected Prospect Airport’s argument that Ramirez’s lack of contrary evidence shifted the burden. The defendants still had to establish the amount in controversy with sufficient evidence.

The court found that Strobel’s declaration was the only evidence supporting removal and that it made conclusory statements without supporting documentation or calculations. It did not explain the underlying data, how Strobel determined the average pay rates, average hourly rate, average hours worked, number of workweeks, or class size, or whether she reviewed actual time and payroll records. The court also noted that Strobel did not claim specialized familiarity with human-resources and payroll data beyond her general experience as president and chief executive officer.

The court contrasted the declaration with evidence accepted in other cases, including payroll and human-resources declarations supported by data reports, spreadsheets, business records, or detailed explanations of the methods used. The court further found that the class-member subsets used for some wage-statement and waiting-time calculations were not identified in Strobel’s declaration.

Disposition

The court held that the evidence was insufficient to show by a preponderance of the evidence that the amount-in-controversy requirement was met. It therefore held that Prospect Airport had not established CAFA jurisdiction.

Judge Yvonne Gonzalez Rogers granted Ramirez’s motion to remand for lack of subject matter jurisdiction. The court vacated the case management conference set for November 29, 2021, directed the clerk to close the federal case and remand it to the San Mateo County Superior Court, and stated that the order terminated Docket Number 12.