Smith v. Advanced Clinical Employment Staffing, LLC

Background

Ashley Smith and Donna Chang filed a class-action complaint in Santa Clara County Superior Court against Advanced Clinical Employment Staffing, LLC. The complaint alleged that the company failed to pay all hours worked, minimum wages, overtime, required meal and rest breaks, business expenses, accurate wage statements, and waiting-time penalties, and engaged in unfair business practices.

The complaint also alleged that Advanced Clinical failed to include travel stipends—such as housing, meals, and incidental payments—in employees’ regular pay rates when calculating overtime. It separately alleged that the company did not pay employees for time spent commuting on company-provided shuttles. The proposed class covered the company’s non-exempt employees assigned to facilities in California.

Advanced Clinical removed the case to federal court under the Class Action Fairness Act, which permits federal jurisdiction over certain class actions when, among other requirements, the parties are citizens of different states, the proposed class has more than 100 members, and the amount in controversy exceeds $5 million. The parties did not dispute the first two requirements. The dispute concerned only the amount in controversy.

The parties’ arguments

The plaintiffs argued that Advanced Clinical had not provided reliable evidence and had improperly calculated the amount at stake. Advanced Clinical relied on the complaint and a declaration stating that all 363 nurses who worked for the company in California in 2019 and all 265 nurses who worked there in 2020 received travel stipends and were scheduled for shifts that included overtime hours.

Court’s analysis

The court distinguished between allegations of a general “pattern and practice” of violations and allegations of a uniform violation. Although the plaintiffs used “policy and/or practice” language, the court found that their overtime allegations concerning housing stipends effectively applied to the entire proposed class. It therefore found that Advanced Clinical could reasonably use a 100% violation rate for that portion of the amount-in-controversy calculation.

Using the assumptions before it, the court calculated potential unpaid overtime related to housing stipends of $4,022,415.36 for 2019 and 2020. The court also approved Advanced Clinical’s inclusion of attorney fees. Applying a 25% benchmark to the potential damages produced an additional $1,005,603.84. Together, those amounts resulted in a potential amount in controversy of at least $5,028,019.20.

Ruling

The court held that Advanced Clinical met its burden of showing by a preponderance of the evidence that the amount in controversy exceeded the Class Action Fairness Act’s $5 million threshold. Judge Edward J. Davila therefore denied the plaintiffs’ motion to remand. The order addressed federal jurisdiction and the request for remand; it did not resolve the merits of the wage-and-hour claims.

Disposition

Plaintiffs’ motion to remand: Denied.