Wage and Hour Case Notes

• Jurisdiction: California,United States
• Author: By Leonard H. Sansanowicz
• Publication year: 2020
• Citation: Vol. 34 No. 4

WAGE AND HOUR CASE NOTES

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is the principal of Sansanowicz Law Group, P.C. and represents employees in all aspects of employment law. He is a member of the Executive Board of the California Lawyers Association, as well as the Executive Committee of the Labor and Employment Section of the Los Angeles County Bar Association. He can be contacted at: leonard@law-slg.com.

DISTRICT COURT PROPERLY DENIED CAFA JURISDICTION BASED ON HOME STATE EXCEPTION

Adams v. West Marine Prods., Inc., 958 F.3d 1216 (9th Cir. 2020)

Plaintiff brought a wage and hour class action under California law in California state court. Defendant removed based on the Class Action Fairness Act of 2005 (CAFA). CAFA was enacted primarily to favor federal jurisdiction over interstate class actions, but provides several exceptions to allow intrastate class actions to be heard in state court, one of which is the home state exception.¹ This exception provides two bases for remand: one mandatory, one discretionary. If two-thirds or more of the aggregate putative class members, as well as the primary defendants, are citizens of the state in which the action was filed, the district court "shall" decline to exercise jurisdiction (28 U.SC.§ 1332(d)(4)(B)); whereas, if only one-third of the putative class, as well as the primary defendants, are citizens of the state in which the action was filed, the district court "may, in the interests of justice and looking at the totality of the circumstances, decline to exercise jurisdiction" (28 U.SC. § 1332(d)(3)). The exception itself is not jurisdictional; rather, it is treated as a form of abstention, and a district court may raise abstention—including an exception to CAFA jurisdiction—on its own. Plaintiff timely moved to remand the matter back to state court and Defendant opposed.

The district court ordered supplemental briefing on the home state exception and granted Plaintiff's request for leave to take jurisdictional discovery, as the evidentiary standard for proving citizenship is merely preponderance of evidence. In response to Plaintiff's discovery requests, Defendant produced a list of class member contact information which showed that of 1,810 putative class members, 1,714 had a last-known address in California.² Further, in support of her supplemental briefing, Plaintiff submitted a declaration representing that she (1) as part of her job duties had to ask job applicants if they were U.S. citizens; (2) certified her own citizenship upon hire; (3) never hired a worker on an employment-related visa; and (4) never heard of anyone in Defendant's employ hiring a worker on an employment-related visa.

CAFA outlines six factors a court should consider in deciding whether to apply the home state exception,³ including "whether the claims asserted involve matters of national or interstate interest," "whether the claims asserted will be governed by the laws of the State in which the action was originally filed or by the laws of other States," and "whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants," and the district court performed that analysis here, too. Thus, the three-judge panel concluded the district court, based on the totality of the evidence, had not abused its discretion in concluding that at least one-third of the putative class were more likely than not California citizens and had therefore properly remanded the matter to state court.

TRIAL COURT PROPERLY DISMISSED CONSOLIDATED APPEAL OF DLSE AWARD

Cardinal Care Mgmt., LLC v. Afable, 47 Cal. App. 5th 1011 (2020)

Respondents, seven former employees who worked at Plaintiffs-Appellants' residential care facilities for the elderly, brought wage claims through the Labor Commissioner (DLSE) against Appellants and took their complaint through a Berman hearing, where the DLSE awarded them $2.5 million. Appellants (two LLCs, and one individual, Steve Chou, the sole member of both LLCs) sought de novo review in superior court, which required them to post an undertaking (bond) in the amount of the award or obtain a waiver.⁴ The court clerk allowed Appellants to file petitions for relief from the undertaking, and the trial court allowed them to file their appeals...