Barajas v. CPC Logistics Solutions, LLC

Background

Oscar Barajas brought a class action alleging that CPC Logistics Solutions, LLC, CPC Logistics, Inc., and Newco Distributors, Inc. violated California wage-and-hour law. The claims involve meal and rest breaks, overtime pay, wage statements, timely payment of final wages, and reimbursement of business expenses.

The case was removed from Alameda County Superior Court to federal court on July 1, 2022. The defendants relied on declarations estimating the number of current and former employees, work schedules, wage statements, and hours worked. Barajas moved to remand, arguing that the defendants had not reasonably supported an amount in controversy exceeding $5 million, the jurisdictional threshold under the Class Action Fairness Act.

Legal Standard

When a defendant removes a class action under the Class Action Fairness Act, the defendant bears the burden of establishing federal jurisdiction. After the plaintiff challenges the amount in controversy, the defendant must show by a preponderance of the evidence—that it is more likely than not—that the amount exceeds $5 million. The court evaluates the reasonableness of the defendant’s assumptions using evidence and the actual stakes of the litigation.

Analysis

Barajas initially challenged the defendants’ use of a $27.72 average hourly wage. The defendants agreed to use Barajas’s proposed average rate of $22.75 instead.

The remaining dispute concerned the violation rates used in the defendants’ calculations. The defendants used a 100% violation rate for derivative wage-statement claims, calculated at $732,050, and a 100% violation rate for waiting-time penalties, calculated at $4,914,000. They used a 20% violation rate for missed meal and rest breaks, calculated at $833,048.80. Barajas did not challenge the meal-and-rest-break calculation or the number of current and former employees used in the calculations, and the defendants did not contest Barajas’s $1,701,114 estimate for unpaid minimum wages and overtime.

The court held that the defendants’ evidence did not support assuming that every putative class member experienced a wage-statement violation during every pay period or that the maximum waiting-time penalties applied to all eligible former employees. The defendants relied primarily on broad allegations in the complaint and did not provide evidence tying those allegations to 100% violation rates. The court concluded that using 100% rates for the wage-statement and waiting-time-penalty claims was unsupported by the allegations, the types of claims, and the evidence submitted.

Ruling

Judge William H. Orrick granted the motion to remand. The opinion also states that Barajas requested attorney fees incurred in seeking remand, and the court denied that request because removal was not objectively unreasonable under the circumstances.