Carranza v. Field Asset Services, Inc.

Background

Remberto Carranza filed this case in California Superior Court in San Francisco against Field Asset Services, Inc., Field Asset Services, LLC, Xome Field Services LLC, Cyprexx Services, LLC, and ten Doe defendants. He alleged that he was an employee of Field Asset Services, was misclassified as an independent contractor, and was not paid proper wages under California law.

The complaint asserted four California-law claims: failure to pay overtime wages, failure to reimburse work-related expenses, waiting-time penalties, and violation of California’s Unfair Competition Law. The defendants removed the case to federal court, asserting jurisdiction under the Class Action Fairness Act, or CAFA. Carranza moved to remand, meaning he asked the federal court to return the case to state court.

Subject-Matter Jurisdiction

The court first concluded that there was no federal-question jurisdiction because the complaint asserted only state-law claims. There also was no ordinary diversity jurisdiction because Carranza and Field Asset Services, Inc. were both citizens of Texas, so complete diversity was absent.

The defendants argued that CAFA supplied jurisdiction. CAFA generally allows federal jurisdiction over certain class actions when the proposed class has at least 100 members, the parties have minimal diversity, and more than $5 million is in controversy. The court found that minimal diversity existed, but Carranza was the only plaintiff in this case. Because he worked for the defendants for less than one year, the court found it implausible that his individual claims sought more than $5 million. The CAFA requirements therefore were not met on the face of his complaint.

The defendants also argued that CAFA jurisdiction from the earlier Bowerman class action extended to Carranza because he had been an unnamed, nonparticipating class member. The court rejected that argument. It explained that cases holding federal jurisdiction continues after later changes to a class action involved existing named plaintiffs or other plaintiffs who had actually filed claims. They did not establish federal jurisdiction over an unnamed class member’s separately filed individual claims. The court concluded that Carranza’s participation as an unnamed class member in the earlier litigation did not require him to litigate his individual state-law claims in federal court.

Attorney Fees and Disposition

Carranza requested attorney fees under 28 U.S.C. § 1447(c), which permits fees in some cases after remand. The court denied that request. Although the defendants were wrong about CAFA jurisdiction, the court found that their removal theory had an objectively reasonable basis because no binding appellate decision addressed these specific circumstances.

Judge William Orrick granted the motion to remand and ordered the case remanded to the California Superior Court for the County of San Francisco. The court denied Carranza’s request for attorney fees.