Jessica Montoya v. Sights on Service, Inc.
5:19-cv-02334
C.D. Cal.Feb 4, 2020Background
- Plaintiff Jessica Montoya, a California resident and former app-based "secret shopper," filed a putative class action alleging she and other secret shoppers were misclassified as independent contractors and asserting multiple California wage-and-hour claims (minimum wages, meal/rest premiums, waiting-time penalties, wage statements, unreimbursed expenses, and UCL).
- Montoya filed the action in San Bernardino County Superior Court on October 30, 2019 and filed a First Amended Complaint on November 27, 2019 seeking class treatment for secret shoppers in California since October 30, 2015.
- Defendant Sights on Service removed to federal court under CAFA, asserting an amount in controversy exceeding $5 million; its removal relied chiefly on a $6,512,112 figure for waiting-time penalties under Cal. Lab. Code § 203.
- Sights submitted a CEO declaration showing 1,103 California workers completed an average of 4.23 client opportunities since October 30, 2016 and were paid an average of $24.60 per opportunity.
- Sights converted $24.60 per opportunity into an hourly wage, then assumed an 8-hour workday and 30 days of unpaid wages to compute waiting-time penalties; the district court found those assumptions implausible given the CEO data showing sporadic, minimal earnings per worker.
- The court concluded Sights failed to meet its burden to show CAFA’s $5 million jurisdictional threshold by a preponderance of the evidence, and remanded the case to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA's $5M amount-in-controversy is satisfied | Montoya: amount not plausibly alleged; waiting-time penalty calc is inflated | Sights: aggregate claims (including waiting-time penalties, other penalties, and attorney fees) exceed $5M | Court: Not satisfied—remand; waiting-time penalty calc implausible and drives the asserted amount |
| Proper method to compute § 203 waiting-time penalties (daily wage basis) | Montoya: daily wage must reflect actual earnings/time worked (sporadic, low earnings) | Sights: may reasonably extrapolate using $24.60 as hourly and 8-hour days to compute daily wage | Court: Use realistic evidence of work/time; cannot assume full-time 8‑hour days given Sights’ own data showing ~4.23 opportunities over years; Sights’ assumptions are "pulled from thin air" |
| Applicability of Melendez to increase waiting-time exposure | Montoya: Melendez inapplicable—no allegation of "temporary layoff" or discharge each time assignment ends | Sights: cites Melendez to argue potentially larger exposure | Court: Melendez is inapposite here because plaintiff made no such allegations; cannot rely on it to inflate the amount-in-controversy |
Key Cases Cited
- Pineda v. Bank of Am., N.A., 50 Cal.4th 1389 (California Supreme Court decision on statute of limitations for § 203 waiting-time penalties)
- Mamika v. Barca, 68 Cal.App.4th 487 (defines § 203 waiting-time penalty as employee’s daily wages for each day unpaid up to 30 days)
- Drumm v. Morningstar, Inc., 695 F. Supp. 2d 1014 (example of deriving daily wage from annual/weekly hours and using 8-hour day for full-time employees)
- Ibarra v. Manheim Investments, Inc., 775 F.3d 1193 (CAFA removal: notice must plausibly allege amount; court decides by preponderance and parties may submit evidence)
- Dart Basin Operating Co. v. Owens, 574 U.S. 81 (removal notice requirement: plausible allegation of amount in controversy)
- United Inv'rs Life Ins. Co. v. Waddell & Reed Inc., 360 F.3d 960 (district court has duty to independently confirm subject-matter jurisdiction)
- California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831 (burden on removing party to establish federal jurisdiction)
- Melendez v. San Francisco Baseball Assocs. LLC, 7 Cal.5th 1 (addressed waiting-time exposure where plaintiffs alleged repeated "temporary layoffs"; held inapplicable to facts here)