Patrick Lacross v. Knight Transportation Inc, 775 F.3d 1200

Plaintiffs (LaCross, Lira, Lofton) are truck drivers/owner-operators who sued Knight (Knight Transportation, Inc. and Knight Truck and Trailer Sales, LLC) in California state court, alleging misclassification as independent contractors and related labor-law claims, including reimbursement under Cal. Lab. Code § 2802.
Knight removed under CAFA, asserting the amount in controversy exceeds $5 million and estimating lease-related and fuel reimbursement liability at least $44 million for the four-year putative class period.
Knight computed fuel-cost exposure by annualizing actual invoiced fuel-card charges observed in Q1 2014 across the 16 quarters of the class period, and also produced a conservative extrapolation adjusting for lower driver counts in earlier years.
The district court granted plaintiffs’ motion to remand, concluding Knight’s calculations improperly assumed all drivers worked the entirety of each year (i.e., flawed assumptions), and thus Knight failed to prove the amount in controversy by a preponderance.
On appeal the Ninth Circuit applied its framework from Ibarra v. Manheim Investments (chain-of-reasoning with reasonable assumptions), reviewed the remand de novo, and concluded Knight’s extrapolation and assumptions were reasonable and sufficient to establish over $5 million in controversy.
The Ninth Circuit reversed the remand order and remanded for further proceedings, holding Knight met its CAFA burden to remove to federal court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Knight proved CAFA amount-in-controversy > $5M by preponderance	Knight’s calculations assume each driver worked full years; thus estimates are unreliable and inflated	Actual invoiced fuel-card data and conservative extrapolations (including adjustment for lower driver counts) reasonably estimate class-wide fuel costs exceeding $5M	Held: Knight met its burden; extrapolation from Q1 2014 invoices and driver-count adjustments were reasonable and show > $5M in controversy
Whether assumptions in removal-chain-of-reasoning must be reasonable	Assumptions here are contradicted by record (e.g., some drivers had less-than-year fuel charges) so chain is unreasonable	Where complaint alleges all class members were misclassified employees, it is reasonable to extrapolate necessary work-related expenses across the class absent evidence to the contrary	Held: Applying the Ibarra framework, the Court required and found the chain of reasoning and assumptions to be reasonable; district court erred in remanding

St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (courts first look to the complaint when determining amount in controversy)
Rea v. Michaels Stores, Inc., 742 F.3d 1234 (9th Cir. 2014) (when all putative class members are alleged to be misclassified, consequences apply to all)
Abrego Abrego v. Dow Chem. Co., 443 F.3d 676 (9th Cir. 2006) (remand orders reviewed de novo)