Grant Fritsch v. Swift Transportation Co. of Az
899 F.3d 785
| 9th Cir. | 2018Background
- Fritsch filed a California wage-and-hour class action alleging unpaid overtime, meal/rest premiums, wage-statement penalties, waiting-time penalties, PAGA penalties, and seeking statutory attorneys’ fees and costs under Cal. Labor Code §§ 218.5 and 1194.
- Fritsch’s October 18, 2017 mediation brief included a damages chart totaling over $5.9 million, listing $150,000 in attorneys’ fees incurred to that date and estimating additional future attorneys’ fees.
- Swift removed under CAFA, alleging the amount in controversy exceeded $5,000,000; it relied on the damages chart and included an estimate of future attorneys’ fees to exceed CAFA’s threshold.
- The district court held removal timely but ruled only attorneys’ fees incurred before removal could be counted, and remanded because the proven amount in controversy fell below $5 million.
- On appeal, the Ninth Circuit held Chavez v. JPMorgan clarified that the amount in controversy includes all relief a plaintiff could obtain if victorious, and therefore future attorneys’ fees recoverable by statute or contract are "at stake" and may be included if the defendant proves them by a preponderance of the evidence. The case was reversed and remanded for the district court to reassess jurisdiction including future fees.
Issues
| Issue | Plaintiff's Argument (Fritsch) | Defendant's Argument (Swift) | Held |
|---|---|---|---|
| Whether future attorneys’ fees recoverable by statute/contract may be included in CAFA amount-in-controversy | Future fees are speculative and should be excluded; only fees incurred by removal date count | Future recoverable fees are part of the relief at stake and may be included to meet CAFA if proven | Future attorneys’ fees recoverable by law/contract may be included; defendant must prove amount by preponderance |
| Whether Chavez is limited to future wage loss claims | Chavez should be limited to lost-wages context | Chavez’s reasoning applies broadly to any relief "at stake," including fees | Chavez applies to all categories of relief claimed at removal, not just wages |
| Whether per se percentage (e.g., 25%) of recovery should be used to estimate class action fees for jurisdiction | Per se percentage is inappropriate; fees are speculative | A 25% common-fund proxy could be used to estimate fees for jurisdictional purposes | Court rejected a per se percentage rule; fee estimates must satisfy evidentiary burden and account for statutory/contract limits |
| Whether the district court properly remanded despite amendment in law (Chavez) after initial remand and a second removal | Timeliness challenge to second removal (untimely) and remand should stand | Intervening Ninth Circuit decision (Chavez) permits counting future fees; second removal justified | Appeal not moot; reversal could avoid timeliness exposure in district court; court reversed remand and remanded for recalculation including future fees |
Key Cases Cited
- Chavez v. JPMorgan Chase & Co., 888 F.3d 413 (9th Cir. 2018) (amount-in-controversy includes all relief claimed at time of removal that plaintiff could obtain if victorious)
- Gonzales v. CarMax Auto Superstores, LLC, 840 F.3d 644 (9th Cir. 2016) (amount in controversy is the amount at stake and includes relief that entails a payment by defendant)
- Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007) (attorneys’ fees awarded under fee-shifting statutes/contracts are part of amount in controversy)
- Kroske v. U.S. Bank Corp., 432 F.3d 976 (9th Cir. 2005) (consideration of complaint and summary-judgment-type evidence when assessing amount in controversy at removal)
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014) (notice of removal need only contain a plausible allegation that amount in controversy exceeds jurisdictional threshold)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (standard for calculating reasonable attorneys’ fees: hours reasonably expended multiplied by reasonable hourly rate)