Reed v. Benjamin Moore & Co.

Summary

The United States District Court for the Eastern District of California adopts a magistrate judge’s findings and recommendations and grants the plaintiff’s motion to remand. The court concludes that Benjamin Moore & Co. failed to show by a preponderance of the evidence that the amount in controversy exceeded $75,000 in this putative wage-and-hour class action. The case is remanded to Fresno County Superior Court and closed.

Holdings

1. Defendant failed to prove by a preponderance of the evidence that the amount in controversy exceeded $75,000. The court determined that approximately $39,471 was at issue, below the jurisdictional minimum, and therefore remanded the action for lack of subject matter jurisdiction.
2. When plaintiff's actual pay rate is before the court, the amount in controversy for unpaid work should be estimated using that actual rate rather than the statutory minimum wage because the actual rate is a better assumption of the potential recovery.
3. The overtime claim could be assigned a nonzero amount where defendant's records provided sufficient information to estimate hours worked over eight hours per shift, but the amount should be reduced by a reasonable 20 percent violation rate rather than assuming that all potentially overtime hours were unpaid.

Questions Presented

1. Whether defendant established by a preponderance of the evidence that the amount in controversy exceeded $75,000 so that federal subject matter jurisdiction existed after removal.
2. Whether the court should reject, modify, or replace defendant's assumptions concerning the amount in controversy for Reed's wage-and-hour claims.
3. Whether the action should be remanded to Fresno County Superior Court for lack of subject matter jurisdiction.

Disposition

remanded