Jolene Peters v. TA Operating, LLC, 5:22-cv-01831

Background

Plaintiff Jolene Peters (hourly, non-exempt) filed a putative class action in California state court alleging seven wage-and-hour claims (unpaid minimum/straight time, unpaid overtime, missed/impermissible meal and rest breaks, untimely final wages/waiting-time penalties, inaccurate wage statements, and UCL) on Aug. 31, 2022.
Defendants removed under CAFA (Oct. 14, 2022), supported by a Kaminski declaration estimating at least 5,000 California non-exempt employees and ~200,000 workweeks during the relevant period.
Defendants’ Notice of Removal calculated an aggregate amount-in-controversy (AIC) > $5 million by applying assumed violation rates (e.g., one overtime/minimum-wage violation per month at $11/hr, one meal/rest violation per month, 66.66% waiting-time rate for separations) and included estimated attorneys’ fees.
Peters moved to remand, arguing Defendants’ AIC assumptions were speculative and unsupported; Defendants defended the assumptions as reasonable given the Complaint’s “policy and practice” allegations.
The Court found the Kaminski declaration admissible but held Defendants failed to prove by a preponderance of the evidence that the AIC exceeded CAFA’s $5,000,000 threshold because key violation-rate assumptions were speculative and unsupported; the case was remanded to state court.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Defendants met CAFA's $5M amount-in-controversy by a preponderance	Peters: Defendants' violation-rate assumptions (monthly/100% etc.) are speculative, unsupported by evidence	TA: Complaint alleges company-wide "policy and practice," so monthly/ubiquitous rates (and resulting AIC) are plausible	Held: Defendants failed to carry the burden; assumptions were "pulled from thin air" and insufficient to meet AIC by preponderance
Admissibility and sufficiency of Kaminski declaration (payroll estimates)	Peters: Challenges foundation, hearsay, authentication, best-evidence — urges Court to disregard estimates	TA: Declarant is HR SVP with access to payroll records; declaration supplies foundational personal knowledge	Held: Kaminski declaration is admissible and foundationally adequate, so evidentiary objections overruled, but it did not supply the necessary detail to justify violation-rate assumptions
Legal significance of "policy and practice" language for extrapolating violation rates	Peters: Such language does not mandate assuming universal or frequent violations; Ibarra and other authority limit extrapolation absent case-specific support	TA: "Policy and practice" language permits assuming frequent or uniform violations (supports reasonable extrapolation)	Held: Court rejects bright-line rule; "policy and practice" can imply greater frequency but does not justify speculative numeric rates without evidentiary support; context and concrete proof required
Whether remaining claims (wage statements, waiting-time penalties) plus attorney's fees would push AIC over $5M	Peters: Even accepting TA's remaining estimates, the subtotal falls short given unreliability of core claim assumptions	TA: Even if some assumptions fail, wage-statement damages and attorneys' fees still produce AIC > $5M	Held: Even accepting defendants' estimates for wage-statement damages and attorneys' fees, total AIC would remain below $5M once the unsupported core estimates are excluded; remand required

Key Cases Cited

Ibarra v. Manheim Investments, Inc., 775 F.3d 1193 (9th Cir.) (defendant bears burden to prove CAFA amount-in-controversy by a preponderance; assumptions must have reasonable evidentiary grounding)
Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (U.S. 2014) (notice of removal needs a plausible allegation of jurisdictional amount; if contested parties may submit evidence and court decides by preponderance)
Harris v. KM Indus., Inc., 980 F.3d 694 (9th Cir.) (distinguishes facial vs. factual attacks on jurisdictional allegations; factual attacks require preponderance proof)
Fritsch v. Swift Transp. Co. of Ariz., 899 F.3d 785 (9th Cir.) (future attorneys’ fees may be included in amount in controversy when authorized by statute or contract, but calculation is constrained by applicable law)
Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir.) (state court civil cover sheet "unlimited" box does not support assuming per-plaintiff damages for federal jurisdiction calculations)
Frias-Estrada v. Trek Retail Corp., 534 F. Supp. 3d 1058 (N.D. Cal.) (remand where defendant’s extrapolated violation rates were unsupported; rejects assuming 100% violation rate from "policy and practice" language)
Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741 (9th Cir.) (federal courts may take judicial notice of proceedings in other courts)