Aguilar v. Amazon.com, Inc.

Background

Six Amazon Flex delivery drivers sued Amazon in California state court. They alleged that Amazon misclassified them as independent contractors and, as a result, violated various wage-and-hour laws. In the alternative, they alleged that if they were independent contractors, Amazon violated California’s Investigative Consumer Reporting Agencies Act (ICRAA) by conducting unauthorized background checks. The drivers also sought attorney fees.

Amazon removed the case to federal court based on diversity jurisdiction. For diversity jurisdiction, Amazon had to show by a preponderance of the evidence—that is, that it was more likely than not—that at least one plaintiff had more than $75,000 in controversy.

Amount in Controversy

The parties agreed that plaintiff Stewart’s wage-and-hour claims placed $20,819 in controversy. Amazon argued that Stewart’s ICRAA claim added statutory and punitive damages. The drivers argued that the ICRAA claim should not be combined with the wage claims because the theories were mutually exclusive: if they were employees, they could recover on the wage claims, while if they were independent contractors, they could recover on the ICRAA theory, assuming that theory was legally viable.

The court concluded that the claims should not be aggregated for this jurisdictional calculation. It reasoned that courts generally do not combine claims when there can be only one recovery, and that the same logic applied to the mutually exclusive theories presented here.

Attorney Fees

The remaining question was whether possible attorney fees could raise the amount in controversy above $75,000. The court followed Ninth Circuit precedent requiring courts to include future attorney fees recoverable by statute or contract. The judge nevertheless criticized that rule, explaining that future, unbilled fees are not part of the plaintiff’s underlying claim and are difficult to estimate consistently.

Applying the Ninth Circuit’s rule, the court found Amazon’s estimates too speculative. Amazon initially estimated that Stewart’s attorneys would spend 100 hours, or $72,000, litigating the claims. In its opposition, Amazon increased the estimate to 135 hours, or $97,200, without explaining the change. The court also found that the estimates did not adequately account for cost savings because the case involved straightforward wage-and-hour claims, six drivers asserting the same claims, and counsel litigating similar claims elsewhere.

The court considered the drivers’ estimate of 36.16 hours, or $26,035.20, more reasonable, even though it might be low. It also noted that future fees may be discounted when they are too speculative because of the likelihood of an early settlement. Considering these factors, the court held that Amazon had not shown by a preponderance of the evidence that Stewart’s attorney fees would push the amount in controversy above $75,000.

Disposition

The court granted the motion to remand. It remanded the case to Alameda County Superior Court.