Jessica Karmasek Apr. 8, 2016, 1:30pm


CAMDEN, N.J. (Legal Newsline) - A New Jersey federal court this month ruled that a notice of removal, filed by defendants in a class action over wage rates, was timely even though it was filed 128 days after service of the complaint.

The U.S. District Court for the District of New Jersey denied the plaintiffs’ motion to remand in its March 15 opinion.

Chief Judge Jerome Simandle, relying on opinions by the U.S. Court of Appeals for the Second Circuit and the U.S. Court of Appeals for the Ninth Circuit, said neither the complaint nor the plaintiffs’ briefing on the defendants’ motion to dismiss triggered the 30-day time period for removal under the Class Action Fairness Act.

Under CAFA, a federal district court has subject matter jurisdiction “over class actions involving at least 100 members and over $5 million in controversy when minimal diversity is met (between at least one defendant and one plaintiff-class member).”

“This Court joins Roth and Cutrone in concluding that if the removal periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) have not been triggered (by one of the plaintiff’s litigation documents), a defendant may remove a case when the fruits of its own independent investigation demonstrate that the case satisfies CAFA’s requirements,” Simandle wrote in the 25-page opinion.

From 2009 to 2014, plaintiffs John F. Portillo, Rafael Suarez, Martin Duran, German Bencosme, Edin Vargas, Luis A. Hernandez, Josue Paz and Alvaro Castaneda performed deliveries to Trader Joe’s stores throughout Massachusetts on behalf of defendants National Freight Inc. and NFI Interactive Logistics Inc.

During this period, the plaintiffs claim the defendants misclassified them as independent contractors rather than employees and made unlawful deductions from their wages, in violation of Massachusetts General Law.

As a result, the plaintiffs filed suit in New Jersey Superior Court on behalf of themselves and other similarly situated delivery drivers.

Upon completion of the parties’ briefing on the defendants’ motion to dismiss -- and on the eve of the state court return date -- the defendants removed the suit under the expanded diversity provisions of CAFA. The plaintiffs’ motion to remand followed.

In seeking to remand, the plaintiffs challenged the defendants’ removal on timeliness grounds, and on the basis that their removal notice fails to sufficiently demonstrate that the action meets the jurisdictional amount in controversy requirement -- of $5 million -- under CAFA.

The defendants, on the other hand, argued the plaintiffs’ submissions during the state court proceedings failed to sufficiently tip them off to federal CAFA jurisdiction.

Rather, the defendants claimed they only learned that the action satisfied the CAFA requirements through their own internal investigation into the plaintiffs’ allegations. They also argued that their removal notice, together with their supplemental declaration on damages, easily satisfies their burden of demonstrating that the amount in controversy exceeds the $5 million threshold.

The federal court sided with the defendants, denying the plaintiffs’ motion to remand to the state court.

“In the face of an indeterminate pleading, the 30-day removal clock does not begin to run until litigation documents, subsequent to the initial pleading, reveal facts supporting removal,” Simandle wrote. “As a result, a defendant may be able to remove an action under CAFA well into the course of the litigation.”

The judge continued, “Here, although the parties quibble over what a pleading must contain to trigger the 30-day removal period, neither party genuinely advances the position that the Complaint, standing alone and without the benefit of Defendants’ records, discloses a basis for removal under CAFA, nor that Plaintiffs’ dismissal briefing otherwise clarified the complexion of this litigation.”

Simandle said even a “cursory inspection” of the class action complaint reveals that it fails to describe a basis for federal jurisdiction.

“The Complaint discloses only minimal diversity, but provides no clue as the numeric composition of the proposed class, nor to the aggregate damages sought by the unquantified class,” he wrote.

The judge said because neither the plaintiffs’ complaint nor their subsequent dismissal submissions provided the defendants with facts demonstrating federal jurisdiction under CAFA, the 30-day removal clocks have not been triggered.

Removal depends on the results of the defendants’ own independent investigation, he said.

In this case, the federal court found that the defendants’ removal was timely and met the damages requirement.

“In the declaration of Peter H. Vink, Mr. Vink explains that Defendants ‘review[ed] the records of just 34 of the over 100 independent contractors’ encompassed by the proposed class, and determined that their claimed damages alone ‘resulted in potential damages in excess of $5,000,000,” Simandle wrote. “Mr. Vink then provides a lengthy spreadsheet, i.e., a factual basis, substantiating this assertion.

“Plaintiffs do not contest the facts and assumptions behind Defendants’ $5 million-plus amount in controversy computation. In that way, Defendants’ objective and factually-grounded estimates easily meet their burden of establishing the requisite amount in controversy by a preponderance of the evidence.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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