California Employment Lawyer

Judge George H. King of the Central District denied plaintiff’s remand motion in Lara v. Trimac Transportation Services (Western) Inc., No. CV 10-4280-GHK (JCx), 2010 WL 3119366 (C.D. Cal. Aug. 6, 2010).

Plaintiff Miguel Lara’s (“Plaintiff”) brought a motion to remand on the grounds that Defendant Trimac Transportation Services (Western) Inc. (“Defendant”) failed to satisfy the amount in controversy requirement for diversity jurisdiction.  The court stated the amount in controversy requirement as follows:

28 U.S.C. § 1332(a) states: “The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs.” As a court of limited jurisdiction, see Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), we must determine the issue of subject matter jurisdiction before reaching the merits of a case. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998). We therefore must decide whether Defendant has established that the amount-in-controversy requirement is met. “If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).

Plaintiff brought six claims: (1) failure to compensate employees for missed meal periods in violation of California Labor Code §§ 226.7, 512, (2) failure to compensate employees for rest periods, (3) failure to pay wages in a timely manner, including waiting time penalties, under California Labor Code §§ 201-03, (4) failure to maintain and provide accurate itemized wage statements in violation of California Labor Code § 226; (5) failure to indemnify Plaintiff and the putative class for fuel and vehicle registration expenses in violation of California Labor Code § 2802; and (6) violation of California Business & Professions Code § 17200, the Unfair Competition Law.

The complaint allegd that “the amount in controversy with respect to Plaintiff’s individual claims and each member of the proposed class in this action does not exceed $74,999….”  Defendant removed the action on the basis of diversity.  Since Plaintiff expressly stated that the amount in controversy is less than the jurisdictional minimum under 28 U.S.C. § 1332(a), “Defendant must establish the amount-in-controversy requirement is met to a legal certainty.” Id. *1.

Defendant alleged that the amount in controversy is $83,553.15, which is calculated by adding together $59,033.15 in fuel expenses, $10,260 in missed meal break compensation, $10,260 in missed rest break compensation, and $4,000 in itemized wage statement penalties.

Fuel Expenses

Plaintiff disputed Defendant’s estimation of the fuel expenses and the missed meal break and rest break compensation.  With respect to fuel expenses, Plaintiff argues that Defendant simply added up all the line items in Plaintiff’s settlements records which were entitled “Cardlock Fuel Deduction” and/or “Fuel & Mile Tax” without factoring into its calculation the line items labeled “Fuel Rebate” and “Fuel Escalator”.  Plaintiff argues that taking the deductions into account, the total fuel expenses would constitute only approximately $10,000. Plaintiff suggested that if Defendant will not seek to offset Plaintiff’s Fuel Deductions with Plaintiff’s Fuel Earnings, then he does not dispute the total amount of fuel expenses as calculated by Defendant. But Plaintiff maintained that if Defendant persists in seeking the offset, then it should be deducted at this time for purposes of calculating the amount in controversy and result in a remand of this action.

The court held that “given Plaintiff’s unwillingness to definitively relinquish his claim to the balance between the recorded Fuel Deductions and Fuel Earnings, Defendant has demonstrated to a legal certainty that $59,033.15 is in fact in controversy with respect to Claim 5.”

Meal and Rest Breaks

The court also held that a plaintiff may recover 2 hours per day for meal and rest break violations.

Plaintiff also argues that Defendant miscalculated damages by separately calculating compensation for meal breaks and rest breaks. Specifically, Plaintiff argues that California law “imposes only a single premium pay (i.e., one additional hour of pay at the employee’s regular rate of compensation) for each work day that an employer fails to provide an employee with a meal period or rest period.” (Mot.4) (emphasis in original). Defendant does not dispute this obvious point. They have merely pointed out that Plaintiff is suing for both meal break and rest break violations, and thereby seeks two hours’ worth of premium pay “for each work day” under California Labor Code § 226.7(b). (Opp’n 5-6). Plaintiff is not asking for more than one hour of premium pay for multiple violations of the meal break requirement (or the rest break requirement) in a single work day. See Marlo v. United Parcel Serv., Inc., No. CV 03-04336 DDP, 2009 WL 1258491, at *7 (C.D. Cal. May 5, 2009) (“[The plaintiff] may recover up to two additional hours of pay on a single work day for meal period and rest break violations: one if any meal period violations occur in a work day and one if any rest break violations occur in a work day. However, if more than one rest period violation occurs in a single work day but no meal period violations occur, [the plaintiff] may only recover one additional hour of pay for all of the rest period violations combined; likewise, if more than one meal period violation occurs in a single work day but no rest period violations occur on that day, [the plaintiff] may only recover one additional hour of pay for all of the meal period violations combined.”).

Accordingly, we conclude that Defendant has established to a legal certainty that, at a minimum, $83,553.15 is in controversy in this dispute. This total does not even account for the potential recovery of attorneys’ fees, which would further increase the total amount in controversy. See Guglielmino, 506 F.3d at 700 (finding that the Section 1332(a)’s amount in controversy requirement only excludes “interests and costs” and therefore, by negative inference, includes attorney’s fees). Therefore, even applying the legal certainty standard, Defendant has conclusively demonstrated that the $75,000 amount-in-controversy requirement is satisfied. Since Defendant has satisfied Section 1332(a)’s amount-in-controversy requirement to a legal certainty, we hereby DENY Plaintiff’s Motion.

Id. *4.

By CHARLES H. JUNG