In Campbell, et al. v. Vitran Exp., Inc., 2012 WL 746276 (9th Cir., March 8, 2012), a three-judge panel of the Ninth Circuit Court of Appeals issued a decision finding that an employer proved with “legal certainty” that the putative class claims brought by the plaintiffs placed an amount in controversy that exceeded the requirement for federal court jurisdiction under the Class Action Fairness Act.

In 2005, Congress passed the Class Action Fairness Act (CAFA), which amended the procedures that apply to large class actions impacting interstate commerce. Congress found that class action abuses had undermined the national judicial system, the free flow of interstate commerce, and the concept of diversity jurisdiction as intended by the framers of the U.S. Constitution. Congress also determined that state and local courts had been keeping cases of national importance out of the federal courts and occasionally acted in ways that demonstrated bias against out-of-state defendants.

As a result, Congress enacted CAFA to provide fairer outcomes for class members and defendants. To meet this goal, CAFA changed diversity requirements, prerequisites to removal, and removal procedures for class actions that include more than 100 putative class members and involve claims that place more than $5 million in controversy. Thus, CAFA provided more removal opportunities for defendants of large class actions, and granted defendants the right to immediately appeal a district court’s decision to remand to state court after removal.

Factual Background

The plaintiffs in this case are California residents and former employees of Vitran Express, Inc. who worked as city and local truck drivers. Vitran is in the business of transporting and delivering merchandise in its trucks. The plaintiffs alleged that Vitran failed to provide them with state law required meal and rest breaks, accurate wage statements, and other derivative claims.

The proposed class includes all current and former city drivers or local drivers who worked for Vitran within the state of California and were not paid premium wages for allegedly working through rest and meal breaks at any time during the period of four years before the filing of the complaint. The plaintiffs also alleged that there are over 100 members of the putative class.

The plaintiffs also alleged in their complaint that the amount in controversy was less than $5 million in order to retain the case in state court. Therefore, the Ninth Circuit, citing to its prior decision in Lowdermilk v. United States Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir.2007), stated that in order for Vitran to remove the case to federal court, Vitran’s burden was to prove “with legal certainty” that the amount in controversy actually exceeds $5 million, assuming the truth of the allegations in the complaint.

Vitran removed the case to federal court on the basis of the complaint, deposition testimony from the two named plaintiffs, and a declaration from Vitran’s Vice President of Human Resources and Safety. The plaintiffs brought a motion to remand the case to state court, which the federal district court granted. The district court concluded that Vitran had failed “to affirmatively demonstrate that enough members of the class did not receive meal and rest breaks so as to provide with legal certainty” that damages will exceed the CAFA minimum. The Ninth Circuit granted Vitran’s appeal, reversing the district court’s decision and maintaining the case in federal court.

Legal Analysis

The Ninth Circuit recognized that the “legal certainty” standard does not require Vitran to “prove the plaintiffs’ case; rather, it must produce sufficient evidence to allow a court to estimate with certainty the actual amount in controversy.” The court concluded that Vitran proved with legal certainty that more than the CAFA minimum is in dispute. The court noted that the complaint alleges that Vitran “regularly and consistently failed” to provide uninterrupted meal and rest periods to the plaintiffs and the other putative class members, and that these claims asserted by the named plaintiffs are “typical” of all other putative class members. The court also recognized that the named plaintiffs claimed to “never” get their meal and rest breaks, and that their claims were shared by all of the other employees they knew.

Moreover, the Ninth Circuit emphasized that the plaintiffs’ refusal to make any judicially binding admission that they are not seeking damages in excess of the CAFA requirement further demonstrated that they are actually seeking more than the amount required for federal jurisdiction to apply. As such, the Ninth Circuit panel concluded that Vitran had established, with legal certainty, that the “amount in controversy” exceeded the CAFA minimum, and thus the case belonged in federal court.

Practical Impact

According to Michael Nader, who is Of Counsel in Ogletree Deakins’ San Francisco office, and who represented Vitran in this appeal: “This decision clarifies that class action plaintiffs will need to do more than just allege that they are seeking an amount less than the CAFA minimum to maintain their case in state court. They will also need to at least make a judicially binding admission that they are not seeking damages in excess of the CAFA minimum, and that the allegations and facts support such an admission. This decision also underscores the unique requirements for removing class actions under CAFA in the Ninth Circuit.”

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