Reyes v. Vitas Healthcare Corporation of California

Background

Erlinda Reyes filed a class action against Vitas Healthcare Corporation of California in the California Superior Court for the County of Santa Clara. She alleged seven causes of action, including failures to pay minimum and overtime wages, rest-period violations, wage-statement violations, and waiting-time violations. She later amended the complaint to add a claim under California’s Private Attorneys General Act.

Vitas served Reyes with interrogatories asking for the total damages she sought for her wage-statement claim. Reyes responded that she sought the maximum amount allowed by California Labor Code section 226(a). The interrogatories defined “plaintiff,” “you,” and “your” as referring to Reyes and people or entities acting on her behalf; they did not include the class or class members.

Vitas removed the case to federal court on March 17, 2022. It argued that Reyes’s interrogatory response first made it reasonably clear that the amount in controversy exceeded $5 million, the threshold required for federal jurisdiction under the Class Action Fairness Act (CAFA). Reyes moved to remand the case to state court.

Analysis

When a plaintiff challenges a defendant’s assertion of the amount in controversy, the defendant must prove by a preponderance of the evidence that the amount exceeds $5 million. The defendant may use reasonable assumptions, but it may not rely on speculation or conjecture.

Vitas calculated that 1,694 class members worked an average of 29 pay periods, producing an estimated wage-statement penalty of more than $4.8 million. It also calculated $603,487 in attorneys’ fees, bringing its claimed total above $5 million. Vitas argued that Reyes’s statement seeking the statutory maximum meant that she sought at least $4,000 and that her claim could be used to estimate the class’s damages.

The court rejected that approach. It held that the interrogatory and Reyes’s response addressed only the amount Reyes sought for her own claim. Allegations that Reyes’s claims were typical of the class did not establish that every class member had the same number of violations or sought the same damages. Vitas also did not provide other evidence supporting its calculation. The court therefore held that Vitas had not proved that the amount in controversy exceeded CAFA’s $5 million requirement.

Ruling

The court granted Reyes’s motion to remand and ordered the case remanded to the California Superior Court for the County of Santa Clara. The court denied Reyes’s request for attorneys’ fees because Vitas had an objectively reasonable basis for removal, even though its arguments did not succeed. Judge William Orrick entered the order on June 1, 2022.