Tolosa v. Kensington Redwood City LLC

Background

Emily Tolosa filed the action in California state court on behalf of herself and a proposed class of employees. She alleged that Kensington Senior Living, LLC (KSL) and Kensington Redwood City LLC (KRC) used two unwritten employment policies or practices: requiring employees to work off the clock without pay, and requiring employees to carry communication devices during their shifts, including meal and rest breaks. The complaint asserted eight state-law claims.

KSL removed the action to federal court under the Class Action Fairness Act (CAFA), a federal statute that permits federal jurisdiction over certain class actions. KSL argued that the amount in controversy exceeded $5 million. The court found that Tolosa was a California citizen, KSL was a Virginia citizen, and the proposed class contained 330 people. The parties therefore met the citizenship and class-size requirements identified in the opinion. The remaining issue was the amount in controversy.

Amount-in-Controversy Analysis

The removing defendant had to prove by a preponderance of the evidence—that is, show that it was more likely than not—that the amount in controversy exceeded $5 million.

The court accepted KSL’s estimates for several claims:

- $1,509,321.24 for alleged missed meal breaks. - $1,674,914.82 for alleged missed rest breaks. - $846,823 for waiting-time penalties allegedly owed to former full-time and part-time employees. - $237,000 for allegedly inaccurate wage statements.

Together, those claims totaled $4,268,059.06.

The court did not accept KSL’s remaining calculations as sufficient to reach the jurisdictional threshold. For overtime, KSL calculated damages based on recorded hours worked beyond eight hours per shift. The court found that this misread the complaint, which sought payment for off-the-clock time that was not recorded. The complaint also did not state how often employees performed off-the-clock work, and KSL submitted no evidence establishing that frequency.

For the minimum-wage claim, KSL assumed that each employee worked one unpaid hour every two weeks. The court found that this assumption was not supported by factual allegations or evidence. The court also noted that the calculation used the regular average hourly rate rather than the applicable minimum wage.

For attorney’s fees, KSL sought 25 percent of the amount claimed on the substantive claims. The court assumed, solely for purposes of the motion, that attorney’s fees could be recovered for the waiting-time and inaccurate-paycheck claims. But it excluded the meal- and rest-break claims from that calculation because California generally did not allow attorney’s fees for legal work concerning those claims. The court calculated $270,955.75 in potential attorney’s fees, producing a total amount in controversy of $4,539,014.81—below CAFA’s $5 million requirement.

Ruling

The court held that KSL failed to show that federal jurisdiction existed under CAFA. It therefore granted Tolosa’s motion to remand and remanded the action to the Superior Court of California for San Mateo County. The court also vacated the scheduled hearing. The order addressed federal jurisdiction and did not decide the merits of Tolosa’s employment claims.