Rea v. Michaels Stores, No. 14-55008 (9th Cir. 2014)
Annotate this CasePlaintiffs filed suit against Michaels on behalf of California store managers, alleging that Michaels had improperly classified the managers as exempt from overtime. After Michaels removed the case to federal district court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1453, the district court remanded back to state court. The district court concluded that the amount-in-controversy requirement was not met because plaintiffs expressly disclaimed any recovery for the class over $4,999,999.99. In Standard Fire Insurance Co. v. Knowles, the Supreme Court held that attempted damages waivers, such as plaintiffs', were ineffective, and would not defeat removal under CAFA. Michaels then removed the case again under CAFA and the district court remanded on the basis that the removal ran afoul of CAFA's 30-day time limit. In the alternative, the district court held that Michaels failed to carry its burden to demonstrate that the amount-in-controversy exceeded $5,000,000. The court concluded that the case was not moot; because the two thirty-day removal periods were nonexclusive, Michael's second CAFA removal was timely; and the district court's finding that defendant failed to prove that the amount-in-controversey requirement was met was clearly erroneous under the preponderance of the evidence standard. Accordingly, the court reversed and remanded.
Court Description: Class Action Fairness Act. The panel reversed the district court’s order remanding the case back to state court, and held that the Class Action Fairness Act’s amount-in-controversy requirement was met. The panel held that the action was not moot based on the state court’s subsequent determination to certify the class because post-remand developments do not defeat jurisdiction that was properly invoked at the time of filing. The panel also held that the second removal of the case under the Class Action Fairness Act (“CAFA”) was timely. Finally, the panel held that under the preponderance of the evidence standard, the appellant established that the potential damages could exceed CAFA’s $5 million jurisdictional amount.
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