Argelia Arias v. Residence Inn by Marriott, No. 19-55803 (9th Cir. 2019)
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Plaintiff filed a putative class action against Marriott in state court, alleging that Marriott failed to compensate its employees for wages and missed meal breaks and failed to issue accurate itemized wage statements. Marriott then removed to federal court under the Class Action Fairness Act (CAFA).
The Ninth Circuit vacated the district court's sua sponte remand to state court, affirming three principles that apply in CAFA removal cases. First, a removing defendant's notice of removal need not contain evidentiary submissions but only plausible allegations of the jurisdictional elements. Second, when a defendant's allegations of removal jurisdiction are challenged, the defendant's showing on the amount in controversy may rely on reasonable assumptions. Third, when a statute or contract provides for the recovery of attorneys' fees, prospective attorneys' fees must be included in the assessment of the amount in controversy. Accordingly, the panel remanded for further proceedings in this case to allow the parties to present evidence and argument on the amount in controversy.
Court Description: Class Action Fairness Act / Amount in Controversy. The panel vacated the district court’s order sua sponte remanding to state court a putative class action brought by employees against Residence Inn by Marriott, which had been removed to federal court under the Class Action Fairness Act. The panel held that when a notice of removal plausibly alleges a basis for federal court jurisdiction, a district court may not remand the case back to state court without first giving the defendant an opportunity to show by a preponderance of the evidence that the jurisdictional requirements were satisfied. Marriott’s notice of removal alleged that the amount in controversy requirement was satisfied, and the district court did not conclude that Marriott’s allegations were implausible. The panel held that by remanding the case to state court sua sponte, the district court deprived Marriott of a fair opportunity to submit proof. The panel concluded that this error warranted vacatur of the remand order. The panel held that when a defendant’s allegations of removal jurisdiction are challenged, the defendant’s showing on the amount in controversy may rely on reasonable assumptions. The panel held that Marriott’s notice of removal included personnel and payroll data, and with that data, Marriott estimated the amount-in-controversy ARIAS V. RESIDENCE INN BY MARRIOTT 3 by making assumptions that were plausible and may prove to be reasonable in light of allegations in the complaint. The panel held that on remand Marriott must show that its estimated amount in controversy relied on reasonable assumptions. The panel held that when a statute or contract provides for the recovery of attorneys’ fees, prospective attorneys’ fees must be included in the assessment of the amount in controversy. The panel rejected plaintiff’s contention that the position taken by Marriott in its summary judgment motion in state court – that plaintiff’s claims are barred by a release from a prior class action settlement – defeated federal court jurisdiction. The panel remanded on an open record for the district court to permit the parties to submit evidence and arguments on the amount in controversy.
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