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Tagged California, California Supreme Court, Fair Labor Standard Act, FLSA, Law, Morgan Stanley, United States, University College London

Waiting Time Penalties

Waiting Time Penalty Under Labor Code Section 203(a) Should Be Calculated Based on Actual Hours Worked

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The Fourth District issued an unpublished opinion discussing the proper means of calculating the waiting time penalty under Labor Code section 203. In Riley v. Valencia, 2010 WL 3195816 (Cal. Ct. App. 4th Dist. Aug. 13, 2010), the trial court utilized the actual hours the employee worked to calculate the penalty. The employee, Ashley Riley, contended the trial court improperly calculated the section 203 waiting time penalty, arguing that the court should have multiplied her hourly rate ($6.75) for 30 days at eight hours per day for a total penalty of $1,620, as opposed to multiplying her hourly rate ($6.75) by her average daily hours worked (3.5 hours) for 30 days for a total penalty of $708.75. Riley contends that section 203 required the trial court to use eight hours per day in its calculations, even though Riley actually worked only three to four hours per day.

The Fourth District concluded the trial court properly calculated the penalty and affirmed the judgment.

Facts

Riley bused tables for employer Valencia (doing business as La Carreta Mexican Restaurant). Eventually, Riley left or was discharged from her employment and filed suit against Valencia for waiting time penalties for unpaid wages due, among other employment-related causes of action. The trial court found in favor of Riley pursuant to section 203 and made the following calculations: “a. Penalty for failure to pay all wages due upon discharge: 6.75 x 3.5 = 23.625 x 30 = $708.75.”

Issue

The sole issue facing the Fourth District was whether the trial court properly calculated the waiting time penalty pursuant to section 203 where it used Riley’s actual hours worked, instead of a generic eight-hour work day, to calculate the “wages” of the employee at the “same rate” pursuant to Labor Code § 203(a).

Because section 203 does not explicitly define “same rate,” Riley contends the waiting time penalty calculus should rely on section 510, subdivision (a)’s definition of a day’s work: “Eight hours of labor constitutes a day’s work.” We conclude the trial court properly calculated the waiting time penalty because the trial court averaged Riley’s daily pay rate ($6.75 x 3.5 hours) and applied that number ($23.625) to reach the correct penalty result of $708.75.

Section 203(a) states:

If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.”

The court concluded that “same rate” as used in Section 203(a) means the “employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday.” Id. *2.

Following the plain meaning of section 203, California courts have consistently construed the “same rate” variable of the waiting time penalty calculus to consist of the ratio of dollars per hours actually worked. (Mamika v. Barca (1998) 68 Cal.App.4th 487, 490; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7-8; Oppenheimer v. Sunkist Growers, Inc. (1957) 153 Cal.App.2d Supp. 897, 898-899.) Courts take this “daily wage” and multiply it by up to 30 days, thereby yielding the waiting time penalty. (Mamika, at p. 490; Barnhill, at pp. 7-8; Oppenheimer, at pp. Supp. 898-899.)

Following this authority, we also conclude that section 203, subdivision (a) means exactly what it says that “the wages of the employee shall continue … at the same rate” for up to 30 days. Here, the trial court correctly calculated the waiting time penalty because the employee’s “same rate” plainly refers to the employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday. (Mamika v. Barca, supra, 68 Cal.App.4th at pp. 492-493.) This interpretation has been utilized by California courts since at least 1957, and as early as 1909 in other state courts interpreting similar statutes. (Oppenheimer v. Sunkist Growers, Inc., supra, 153 Cal.App.2d at pp. Supp. 898-899; St. Louis, I.M. & S.R. Co. v. Bryant (1909) 92 Ark. 425 [122 S.W. 996].) Riley does not cite, nor have we found, any case law supporting her contention that section 203 requires trial courts to calculate the waiting time penalty with a fixed eight-hour workday.

Plaintiff contended that the court should import section 510(a) statement that eight hours of labor constitutes a “day’s work” into section 203’s waiting time penalty calculation. But the court concluded that section 510(a) “applies to overtime pay rates and thus is not applicable to section 203’s waiting time penalty calculation”. The court noted that “neither a ‘day’s work,’ nor ‘an 8 hour workday,’ nor any reference to section 510 appears in section 203.” Id. *2. The court found that section 203(a) requires “employee-specific calculations because it refers to ‘the wages of an employee’ or the employee’s wage per the employee’s hours worked.”

Judges and Attorneys

The appeal was taken from a judgment of Hon. Eddie C. Sturgeon, the Superior Court of San Diego County.

Justice Gilbert Nares wrote the opinion, with Justices Patricia D. Benke and Cynthia Aaron concurring.

Scott A. McMillan of The McMillan Law Firm, APC in La Mesa, CA represented Plaintiff and Appellant.

Marc Howard Mandelblatt of the Law Offices of Marc Mandelblatt in San Diego, CA represented Defendant and Respondent.

Tagged Capital punishment, Crime and Justice, Death Penalty, Robert Saunders, Superior court, The Hindu Group, Trial court, United States

Preemption

Eastern District of California Rejects UTSA Preemption of Contractual Nondisclosure Claim

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Since the opinion in Court of Appeal decision in K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc., 171 Cal. App. 4th 939, 954 (2009), defendants have successfully demurred to common law-based causes of action, arguing that the UTSA preempts them. In this next case, Removable Media Solutions v. AAR Mobility Systems, 2010 WL 3034219 (E.D. Cal. July 28, 2010) (slip op.), defense counsel takes it one step further, arguing that the statute preempts a contract claim. This is despite the language of the statute that expressly excludes preemption of “contractual remedies, whether or not based upon misappropriation of a trade secret“.

Plaintiff Removable Media Solutions, Inc. (“RMSI”) previously sought to sell a telecommunications device to the California National Guard. RMSI sought the assistance of defendant AAR Manufacturing, Inc., (“AAR”) in this endeavor. The California National Guard eventually elected to retain the services of AAR but not RMSI in producing the device, and AAR subsequently sold similar devices to other states.

RMSI’s claims alleged that AAR breached a non-disclosure agreement. AAR sought summary judgment on both. The court denied the motion as to the non-disclosure agreement.

AAR’s sole argument for summary judgment on this claim was that it was preempted by the Uniform Trade Secrets Act, as by California, and in particular by Cal. Civ. Code § 3426.7. In pertinent part, this statute provides that:

(a) Except as otherwise expressly provided, this title does not supersede any statute relating to misappropriation of a trade secret, or any statute otherwise regulating trade secrets.

(b) This title does not affect

(1) contractual remedies, whether or not based upon misappropriation of a trade secret,

(2) other civil remedies that are not based upon misappropriation of a trade secret, or

(3) criminal remedies, whether or not based upon misappropriation of a trade secret.

“Undaunted by the statute’s explicit statement that it does not affect contractual remedies, AAR argues that the statute preempts for breach of the non-disclosure agreement. This assault on the plain language of the statute fails.”

The Court wrote:

Courts have held that except for the three exemptions noted in subsection (b), the statute implicitly “preempts common law claims that are based on misappropriation of a trade secret.” Ali v. Fasteners for Retail, Inc., 544 F.Supp.2d 1064, 1070 (E.D.Cal.2008) (internal quotation marks omitted); see also K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc., 171 Cal.App. 4th 939, 954 (2009), Accuimage Diagnostics Corp. v. Terarecon, Inc., 260 F.Supp.2d 941, 954 (N.D.Cal.2003) (holding that this interpretation was implied by Cadence Design Systems, Inc. v. Avant! Corp., 29 Cal.4th 215, 224 (2002)).

AAR’s argument that this implicit preemption extends to contract claims invokes a gross misreading of the caselaw. AAR quotes the statement from Digital Envoy, Inc. v. Google, Inc., 370 F.Supp.2d 1025 (N.D.Cal.2005) that “all state law claims based on the same nucleus of facts as the trade secrets claim are preempted under California’s UTSA.” Id. at 1034.FN4 AAR argues that notwithstanding the statute’s explicit saving of contract claims, courts have stated that “common law claims” arising out of the same operative facts as a trade secret claims are preempted, and that contract claims are common law claims, so contract claims must be preempted.

To the extent that Digital Envoy held that “all claims” are preempted, it plainly referred to “all claims” argued to be preempted in that case, i.e., claims for unfair competition and unjust enrichment. Id. at 1035 (“California’s statute. preempts Digital’s claims for unfair competition and unjust enrichment.”). Digital Envoy and other cases have explicitly recognized that § 3426.7 does not preempt contract claims. Id. (§ 3426.7 “explicitly states that claims based upon breach of contract … are not preempted by the statute.”); see also First Advantage Background Servs. Corp. v. Private Eyes, Inc., 569 F.Supp.2d 929, 936 (N.D.Cal.2008), HiRel Connectors, Inc. v. United States, No. CV 01-11069, 2006 U.S. Dist. LEXIS 93332 (C.D.Cal. July 18, 2006) (“Plaintiff’s claim for breach of contract is not preempted by California’s Uniform Trade Secrets Act.”). While few California courts have spoken to the scope of this statute, at least one state court has allowed a claim for breach of a non-disclosure agreement to proceed in parallel with a claim for misappropriation of trade secrets. Glue-Fold, Inc. v. Slautterback Corp., 82 Cal.App. 4th 1018, 1021 (2000). Although Glue-Fold did not discuss possible preemption of the contract claim, this may well be because the issue was so clear as to require no discussion.

Although this conclusion should be obvious, the court has exhaustively searched cases citing § 3426.7, finding no cases providing even implicit support for AAR’s theory. AAR’s motion is therefore denied as to this claim.

Id. **4-5.

Senior District Judge Lawrence K. Karlton wrote the opinion.

Tagged California, California National Guard, Cause of action, Food and Drug Administration, Lawrence K. Karlton, Non-disclosure agreement, Uniform Trade Secrets Act, United States

News

Chicago Sued Over BlackBerry Overtime

A Chicago police sergeant has brought an FLSA collective action against the city for overtime pay related to the off-hours use of his BlackBerry PDA device. The complaint in Allen v. City of Chicago, No. 10-CV-03183, was filed in U.S. District Court for the Northern District of Illinois. You can view the complaint here.

Photo by Cheon Fong Liew

The complaint alleges that it is brought by a Chicago Police Sergeant on behalf of himself and other similarly situated members of the Chicago Police Department for purposes of obtaining relief under the federal Fair Labor Standards Act of 1938 as amended, 29 U.S.C. §201, et. seq. (hereinafter “FLSA”) for unpaid overtime compensation, liquidated damages, costs, attorneys’ fees, declaratory and/or injunctive relief, and/or any such other relief the Court may deem appropriate.

Defendant has willfully violated the FLSA by intentionally failing and refusing to pay Plaintiff and other similarly situated employees all compensation due them under the FLSA and its implementing regulations over the course of the last three years. Defendant administered an unlawful compensation system that failed to provide hourly compensation and premium overtime compensation to employees that work overtime hours “off the clock.” Plaintiff and similarly situated employees were issued personal data assistants (“PDA’s”), such as BlackBerry devices, that they are required to use outside their normal working hours without receiving any compensation for such hours. Defendant’s deliberate failure to compensate its Chicago Police Department employees for these hours worked violates federal law as set forth in FSLA.

The plaintiff’s attorneys are MaryAnn Pohl and Paul D. Geiger.

Tagged Chicago, Chicago Police Department, Fair Labor Standards Act, Law, Overtime, Police, United States, Working time

23(b)(3) Class, Attorneys' Fees, Class Actions, Settlement

Northern District Approves 28.9% Fee Award in Wage and Hour Class Action Settlement

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Judge Jeffrey S. White approved a wage and hour class action settlement of a non-reversionary $1.8 million, inclusive of $520,000 in attorneys fees, in Ozga v. U.S. Remodelers, Inc., No. C 09-05112 JSW, 2010 WL 3186971 (N.D. Cal. Aug. 9, 2010).

Plaintiff filed a class action in the Alameda Superior Court on February 17, 2009, alleging that Defendant U.S. Remodelers Inc. violated the California Labor Code and violated California Industrial Welfare Commission Wage Orders by: (1) requiring its Installer employees to work substantial amounts of time without compensation; (2) regularly failing to provide Installers with meal and rest periods; and (3) refusing to reimburse expenses that Installers incurred in the performance of their work duties, including travel expenses and equipment costs.

Defendant removed the action to this Court, and Plaintiff subsequently moved to remand. But before the hearing on the motion to remand, the parties reached a settlement, which was facilitated, in part, by a mediation that occurred on October 1, 2009, before Michael Loeb. The parties also engaged in some discovery, and Class Counsel interviewed a number of Settlement Class members.

The Court finds that the terms of the Settlement are fair, adequate and reasonable. As noted, the settlement was reached after the parties engaged in discovery, conducted a meditation, and continued to engage in arms-length negotiations. The parties agreed to a Settlement payment of $1,800,000.00, none of which will revert to the Defendant. The overall reaction to the settlement has been positive. The Claims Administrator has received 156 claim forms from the 270 Class Members. (Id., ¶¶ 20-21.) Neither the Claims Administrator nor the Court received any objections to the Settlement. No Class Member appeared at the final approval hearing to object. According to the Claims Administrator, assuming the Court were to grant in full Plaintiff’s motion for attorneys’ fees and costs and service awards, approximately $1,108,917.72 would be available to distribute Class Members who submitted timely claim forms, for an average award of just over $7,000. (Id. ¶¶ 16-18.)

The Court approved costs to be paid to the Claims Administrator of $10,000.00 from the Settlement Fund.

Attorneys Fees, Costs, and Service Awards

Plaintiff brought an unopposed fee application, seeking $600,000.00 in attorneys’ fees, $11,274.89 in costs, and $10,000.00 in service awards to him and to class member Boris Moskovich.

Plaintiff’s counsel sought an award of attorneys’ fees based on the percentage method, asking for 33 1/3% of the Settlement Fund. The court agreed to depart from the 25% benchmark. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (noting that 25% is benchmark and “usual” range of awards is 20-30%); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998) (stating that 25% is benchmark). But the court would not vary from the benchmark to the degree requested by counsel.

The Court concludes that counsel did achieve an excellent result for the class, that the reaction to the settlement has been overwhelmingly positive, and that Plaintiff faced significant risk in prosecuting this case given the uncertain state of California law in similar wage and hour cases. The Court also recognizes that other courts have awarded settlement fees of up to 33 1/3% in such cases. However, the parties reached this settlement quickly and did not engage in any motion practice. See, e.g., Navarro v. Servisair, 2010 WL 1729538 (N.D. Cal. Apr. 27, 2010) (finding that proposed award of 30% of settlement fund unjustifiably departed from benchmark based in part on speed with which parties reached a settlement). Moreover, the requested percentage would amount to award that is more than double the fees actually incurred by counsel. Compare Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010) (awarding 33 1/3% of settlement fund which was “significantly less” than asserted lodestar).

Thus the court found that an award of $520,000.00 was reasonable.

The court found counsels’ requests for costs in the amount of $11,274.89 reasonable.

The court also approved service awards in the amount of $10,000.00 for the lead plaintiff and for a class member.

Tagged Attorney's fee, California, California Labor Code, Class action, Google, Lawsuit, Settlement, United States District Court for the Northern District of California

Verdicts

Morrison & Foerster Wins $9.36 Million in Compensatory Damages and $1.525 Million in Punitive Damages in Trade Secrets Trial

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A San Francisco Superior Court jury granted $1.525 million in punitive damages Friday to Technology Information Group, adding to the $9.36 million in compensatory damages it awarded to the company a day earlier in a trade secrets dispute with its former employees and a competitor. As reported in law360.com, the “jury found San Francisco-based FusionStorm, three of its executive officers and three former TIG employees who were hired by FusionStorm liable for breach of fiduciary duty, breach of loyalty, misappropriation of trade secrets and other causes of action . . . .”

The complaint alleged that the improper conduct began while the former employees still worked at TIG’s Tampa, Fla., offices. The former employees were accused of trying to lure away other of TIG’s employees and customers to FusionStorm, which was then setting up in the area. TIG filed its lawsuit in 2007 and won a temporary restraining order that enjoined FusionStorm from soliciting additional TIG employees and from conducting business with certain customers, MoFo said.

The jury verdict comes after a five-week trial. FusionStorm was represented by Orrick Herrington & Sutcliffe LLP. TIG was represented by Morrison & Foerster LLP. The docket may be viewed here.

Tagged Boston, Damages, Employment, FusionStorm, Jury, Punitive damages, San Francisco, United States

Affirmative Defenses, CAFA Jurisdiction, Class Actions, Remand

Central District Remands Class Action Based on Local Controversy Exception to CAFA

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In Coleman v. Estes Express Lines, Inc., No. CV 10-2242 ABC (AJWx), — F. Supp. 2d —-, 2010 WL 3156850 (C.D. Cal. July 19, 2010) a wage and hour plaintiff brought a motion to remand, after the case was removed pursuant to CAFA. The Court granted Plaintiff’s remand motion.

While Defendants have demonstrated that more than $5,000,000 is in controversy under CAFA, Plaintiff has demonstrated that CAFA’s Local Controversy exception applies in this case. Therefore, the Court must decline to exercise jurisdiction. See Serrano, 478 F .3d at 1022. Plaintiff’s motion is GRANTED and this case is REMANDED to Los Angeles Superior Court.

Plaintiffs were represented by Mark P. Estrella, Miriam L. Schimmel, Robert E. Byrnes, Sue Jin Kim of Initiative Legal Group APC and Payam Shahian of Strategic Legal Practices APC.

Defendants were represented by David L. Terry, David L. Woodard of Poyner Spruill LLP and Sarah N. Drechsler and Timothy M. Freudenberger of Carlton Disante & Freudenberger LLP.

The judge is Hon. Audrey B. Collins.

Tagged Audrey B. Collins, Defendant, Estes Express Lines, Los Angeles, Plaintiff, Remand (court procedure), United States, United States Supreme Court

Attorneys' Fees, Class Actions, Expense Reimbursement, Settlement

Northern District Approves $4.5 Million Settlement Against RadioShack in Expense Reimbursement Case, With $1.5 Million in Fees, and $5,000 Incentive Payments to Each Lead Plaintiff

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Magistrate Judge Edward M. Chen (whose confirmation to the Northern District of California bench has unfortunately been stalled for far too long) approved the class settlement and attorney fee application in Stuart v. RadioShack Corp., 2010 WL 3155645, No. C-07-4499 EMC (N.D. Cal. Aug. 9, 2010).

This class action was initiated in state court in June 2007, alleging that RadioShack had improperly failed to reimburse its employees for expenses they incurred in using their personal vehicles to perform inter-company transfers (“ICSTs”). Plaintiffs claimed for reimbursement pursuant to California Labor Code § 2802 and for a violation of California Business & Professions Code. Subsequently Plaintiffs added a claim for recovery of penalties under the California Labor Code Private Attorneys General Act (“PAGA”). The case was removed in August 2007. And in February 2009, Judge Chen granted the motion for class certification, certifying a class consisting of “all persons employed by RadioShack within the State of California, at any time from June 3, 2003, to the present, who drove their personal vehicles to and from RadioShack stores to carry out ICSTs and who were not reimbursed for mileage.” On October 1, 2009–nine days before trial was scheduled to begin–the parties reached a settlement.

Under the Settlement Agreement, RadioShack will pay a total of $4.5 million for the release by the class, as an all-inclusive sum (proceeds to be distributed to the class, attorney’s fees and litigation expenses, costs of claim administration, incentive payments to the class representatives, and the PAGA award to the state), without reversion of any of the $4.5 million to RadioShack.

After attorney’s fees, litigation expenses, costs of claim administration, incentive payments, and the PAGA award to the state have been deducted from the $4.5 million, the remainder for distribution to the class members and/or donation to charity is $2,796,563.31.

Each class member’s award “depends on the number of weeks that the class member worked.”

The Court found that, importantly, “the amount available to the class after deductions for, e.g., fees and costs–i.e., $2,796,563.31–is not far off what the class might be awarded if it were to prevail on the merits after a trial.” Id. *4.

Plaintiffs’ counsel asked for an award of $1.5 million (i.e., one-third of the total settlement amount), plus litigation expenses which total $78,436.69.

The Court has reviewed the expenses and determined that they are reasonable. The Court notes that the sum is not excessive given that this litigation has been ongoing for more than three years.

Attorneys Fees Application

The attorneys presented a fee application claiming $1.5 million as a lodestar for fees–excluding work performed in preparing for final approval and any post-judgment work that may be needed. The $1.5 million sum represents 2,116.69 hours of work over a period of more than three years, at hourly rates of the billing attorneys ranging from $600 to $1,000.

After reviewing the billing records submitted by counsel as well as the declarations regarding the hourly rates of counsel, the court found that the number of hours was reasonable given the length of the lawsuit and the vigorous disputes over the course of the litigation (e.g., regarding RadioShack’s defense that it had no duty to reimburse until an employee made a request for reimbursement).

The court did express some “concerns about the $1,000 hourly rate” claimed by one of the attorneys. “Based on the Court’s experience, this is an inordinately large hourly rate, even if the Court were to assume that [the attorney] has fifty years of experience.” But the Court concluded that “given the 2,116.69 hours incurred, the average hourly rate for a fee award of $1.5 million total is $708, an amount that the Court deems appropriate, particularly when no multiplier is being sought on top of the lodestar.”

Compared to the percentage of the fund, the court noted that “the total settlement amount to be paid by RadioShack (with no possibility of reversion), the fee award represents one-third of the settlement amount.” The court found that this was “well within the range of percentages which courts have upheld as reasonable in other class action lawsuits.”

The court also approved an incentive award of $5,000 for each of the two class representatives, for a total of $10,000. The Court concluded that the incentive payments were appropriate and reasonable. “Although the class representatives did not enter this litigation until late in the proceedings, due consideration must be given to the fact that they were willing and ready to go to trial.” The court noted that if the “class representatives had asked for a larger sum, the Court might well have reached a different conclusion, but the $5,000 sought for each representative was viewed as “relatively modest.”

Tagged Attorney's fee, California, Class action, Edward M. Chen, RadioShack, Settlement, Settlement Agreement, United States District Court for the Northern District of California

CAFA Jurisdiction, Class Actions

Southern District of California Denies Remand in Case Asserting CAFA Jurisdiction

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In Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN (CAB), 2010 WL 3154847 (S.D. Cal. Aug. 9, 2010) the Southern District of California faced a remand motion in a wage and hour case that had been removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1441, 1453.

Judge Roger T. Benitez denied the motion to remand. Defendant presented a calculation of damages, supporting its calcualtions with declaration from, among other people, the Assistant Controller, Operations, for U.S. Vision, Inc., responsible for enforcing Defendants’ payroll policies and procedures. The declaration set forth Plaintiff’s most recent hourly rate of pay, as well as the specific number of optical managers and optechs employed during the Class Period, average hourly rates of pay for managers and optechs, number of employees who separated their employment with Defendants, and number of possible wage statements for each employee per year.

Plaintiff argued that Defendants miscalculated the amount in controversy because:

Defendants erroneously assumed “each class member was damaged to the same extent that Plaintiff Johnson was, and that every putative class member, among other things, worked off the clock and incurred a break violation every single day of the entire class period.” Mot. 6. Plaintiff emphasizes that Defendants have access to more specific figures to calculate the amount in controversy and that “each [class] member can be identified using information contained in Defendants’ payroll, scheduling and personnel records.” Compl. ¶ 39.

But the Court held that absent a “persuasive argument that Defendants are required to prove actual damages in order to remove this action, however, the Court must consider the amount put in controversy by the Complaint, not the ultimate or provable amount of damages.” (citing Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005).) The Court found that, having based their calculations on allegations provided in the Complaint, Defendants proved with a legal certainty that CAFA’s jurisdictional threshold is satisfied.

Despite Plaintiff’s attempt to provide supplemental information in the motion to remand, Defendants were entitled to, and did, use the factual allegations in the Complaint to calculate the amount in controversy. See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992) (holding that defendant must use specific factual allegations or provisions in the complaint to support its argument of proper removal). The Court finds that Defendants provided detailed and competent evidence supporting their calculations and showing, to a legal certainty, that the jurisdictional threshold under CAFA is met. To the extent subsequent events show that jurisdiction would not be proper, the Court can address remand at that time. 28 U.S.C. § 1447(c).

Tagged Class Action Fairness Act of 2005, Complaint, Defendant, Plaintiff, Roger T. Benitez, United States, United States District Court for the Southern District of California, United States Supreme Court

Dept. of Labor, Exemptions

Obama Administration Weighs in on Pharmaceutical Representatives Case, Arguing that Reps Are Not Exempt

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Following its stated policy of aggressively prosecuting wage and hour violations, the Obama administration‘s Department of Labor has filed an amicus brief in the Ninth Circuit case of Buchanan v. SmithKline Beecham Corp., 10-1525, arguing that pharmaceutical representatives are not exempt under the outside sales exemption or the administrative exemption of the FLSA. You can read more here.

The Second Circuit considered the same issue and found that reps were not exempt under either the outside sales exemption nor the administrative exemption.