In LaCross v. Knight Transportation, ___ F.3d ___ (9th Cir. January 8, 2015), the Ninth Circuit Court of Appeals reversed the order of the U.S. District Court for the Central District of California (Judge Bernal) remanding a putative wage and hour class action to state court due to defendant’s failure to prove the $5M jurisdictional minimum under the Class Action Fairness Act (“CAFA”).
Plaintiffs were truck drivers or “owner operators” who claimed that they were improperly classified as independent contractors, rather than employees, for defendants. Accordingly, they filed a putative class action on behalf of themselves and other drivers for wage and hour violations as well as for failure to reimburse the drivers’ costs incurred while performing their duties. Defendants removed the action to federal court under CAFA on the ground that the estimated amount in controversy for reimbursing the drivers’ lease-related and fuel costs were at least $44 million. The district court, however, determined that defendants did not meet their burden of proof because their “calculations relied on a flawed assumption that all drivers worked 50 weeks a year.” Therefore, the court remanded the action to state court. Defendant appealed.
The appellate court disagreed. Applying the framework of Ibarra v. Manheim Investments, ___ F.3d ___ (9th Cir. 2015), the court concluded that defendants relied on a reasonable chain of logic and presented sufficient evidence to establish that the amount in controversy exceeded $5 million. Indeed, defendants’ method of calculation extrapolated fuel costs based on actual invoiced fuel costs and the actual number of drivers who signed the independent contractor agreements with defendants during the relevant class period, without relying on the assumption that each driver worked the entire year. Since plaintiffs were seeking reimbursement on behalf of all truck drivers, these assumptions were reasonable.