Salonga v. Aegis Senior Communities, LLC

Background

Andrea Salonga filed a wage-and-hour class action in Alameda County Superior Court against Aegis Senior Communities, LLC and Does 1 through 20. Aegis removed the case to federal court under the Class Action Fairness Act (CAFA). Salonga moved to remand, meaning she asked the federal court to return the case to state court.

The complaint alleges violations of California wage laws involving minimum wages, overtime, meal periods, rest breaks, business-expense reimbursement, wage statements, wages owed at separation, and unfair business practices. The parties did not dispute that the proposed class included at least 100 members or that minimal diversity existed. The only issue was whether the potential amount at stake exceeded CAFA’s $5 million jurisdictional threshold.

Parties’ Positions

Salonga argued that Aegis had not adequately supported its estimate of the amount in controversy and challenged several assumptions, including the number of affected employees, average wages, and violation rates. Aegis submitted declarations from its chief financial officer and a consultant who analyzed payroll and timekeeping data. Aegis estimated possible damages between $13,847,446 and $30,124,183.

Court’s Analysis

The court explained that the amount in controversy concerns possible liability, not the amount the plaintiff will probably recover. Because Salonga contested Aegis’s estimate, Aegis had to prove by a preponderance of the evidence—meaning more likely than not—that the threshold was met. The court could consider declarations and other evidence similar to evidence used on a summary-judgment motion.

The court first considered waiting-time penalties for wages allegedly unpaid when employees left their jobs. Aegis identified 2,087 potentially affected former employees and estimated $7,152,420 in possible penalties. After accounting for employees who may not have been eligible for the full 30-day penalty period, the court used a reduced estimate of $5,266,800. The court also concluded that using the California minimum wage and a reduced class size still produced possible penalties above $5 million.

The court next considered wage-statement penalties. Aegis identified 44,369 pay periods involving 1,920 employees and calculated possible damages of $3,958,850. The court found that calculation reasonable because it applied the statutory penalties to the actual number of employees and pay periods rather than simply applying the $4,000 maximum penalty to every employee.

For meal-and-rest-period claims, Aegis calculated $682,145 in possible meal-break damages and $3,220,683 in possible rest-break damages using a 20-percent violation rate. The court found that assumption reasonable because the complaint alleged a systematic pattern of wage-and-hour violations. Together, the possible meal-and-rest-period damages totaled $3,902,828.

The court stated that even if the waiting-time and wage-statement estimates were reduced by 75 percent, the combined amount with the meal-and-rest-period damages would still be $6,209,240.50. The court therefore did not need to evaluate the potential damages for the other claims or possible attorney’s fees.

Disposition

Judge Laurel Beeler denied Salonga’s motion to remand and stated that the ruling disposed of ECF No. 19. The decision established federal jurisdiction for purposes of keeping the case in federal court; it did not resolve the merits of Salonga’s wage-and-hour allegations.