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Media Alerts - Yocupicio v. PAE Group, LLC; Arch Resources Group, LLC - Ninth Circuit
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October 17, 2015
  Yocupicio v. PAE Group, LLC; Arch Resources Group, LLC - Ninth Circuit
Headline: Where a plaintiff files an action containing class claims as well as non-class claims, and the class claims do not meet the CAFA amount-in-controversy requirement while the non-class claims, standing alone, do not meet diversity of citizenship jurisdiction requirements,
the amount involved in the non-class claims cannot be used to satisfy the CAFA jurisdictional amount, and the CAFA diversity provisions cannot be invoked to give the district court jurisdiction over the non-class claims.

Issue Presented: Can non-class claims joined with class action claims be used to satisfy the jurisdictional amount under the Class Action Fairness Act (CAFA), and the CAFA minimal diversity provisions be invoked to give the district court jurisdiction over the non-class claims?

Brief Summary:
Yocupicio filed suit in California superior court against PAE Group, LLC and Arch Resources Group, LLC (Arch) claiming violations of the California Labor Code. The suit contained ten causes of action, the first nine of which were brought under the California Labor Code as class actions on behalf of employees of Arch. The tenth was not brought as a class action but as a representative action under the California Labor Code Private Attorney Act (PAGA). The amount sought pursuant to the class claims was $1,654,874 and the amount sought pursuant to the PAGA claim was $3,247,950. The PAGA claim did not meet the diversity of citizenship jurisdiction requirements and the CAFA claims did not meet the amount in controversy. Arch removed the action to federal district court which denied Arch's motion to remand. Reversing the denial, the panel held that, even if one included attorneys fees to boost the amount of the class action claims to exceed $5 million, it was error for the district court to allow the PAGA representative claim to be aggregated with CAFA claim to meet the $5,000,000 CAFA requirement and to use the (minimal) diversity of the CAFA claim to meet the PAGA requirement for removal.

Significance: Where class action claims and non-class action claims are joined in one suit, the amount involved in non-class claims cannot be used to satisfy the CAFA jurisdictional amount, and the CAFA diversity provisions cannot be invoked to give the district court jurisdiction over the non-class claims.

Extended Summary:
Plaintiff, Porfiria Yocupicio (Yocupicio) filed suit in California superior court against PAE Group, LLC and Arch Resources Group, LLC (Arch) claiming violations of the California Labor Code. The suit contained nine (9) causes of action under the California Labor Code and one cause of action under Private Attorneys General Act of 2004 (PAGA). The aggregate damages of the nine class action amounted to $1,654,874. The PAGA claim totaled $3,247,950 but did not meet the complete diversity jurisdictional requirements. Arch removed the case to federal district court pursuant to the Class Action Fairness Act removal provisions which require an aggregate damage amount in excess of $5 million but requires only minimal diversity.

Yocupicio moved to remand the case on the grounds that the class action claims alone did not meet the $5 million amount in controversy requirement and the PAGA claims, alone, did not meet the complete diversity requirement. The district court denied the motion to remand determining that it had diversity jurisdiction over the action because it was a class action that came within the CAFA provisions. Plaintiff Yocupicio appealed.

Applying the plain meaning of the text of the Class Action Fairness, the panel determined that "Congress was focused on class actions rather than on all representative actions" and that "all class claims are representative in nature but not all representative claims are class claims." The panel noted that CAFA states that a "'class action'" is "any civil action filed under" class action rules "as a class action;" thus, CAFA's aggregation provision applies only to damages of individual members of a class action in determining the amount in controversy, thereby excluding claims that are not part of the class action.

The panel also rejected the argument that the district court could exercise supplemental jurisdiction over the claims, noting that "it would not have had jurisdiction over the class claims because taken together they did not exceed the $5,000,000 threshold; it would not have had jurisdiction over the PAGA claim because of a lack of complete diversity." The panel found no statutory or case law support for Arch's argument that the district court had removal jurisdiction over the class claims by using the amounts sought in the PAGA claim and jurisdiction over the PAGA claim because the court would have jurisdiction over the class claims.

The panel also held that the representative claim did not meet the requirements of diversity and thus the district court lacked removal jurisdiction over that claim as well.

The panel concluded that it was error for the district court to allow the PAGA representative claim to be aggregated with CAFA claim to meet the $5 million amount in controversy requirement or to use the minimal diversity of the CAFA claim to meet the PAGA requirement for removal.

The panel reversed the decision of the district court and remanded the case with instruction to remand to state court.

To read full opinion, please visit:
http://cdn.ca9.uscourts.gov/da...5/07/30/15-55878.pdf)

Panel: Ferdinand F. Fernandez and Richard R. Clifton, Circuit Judges and Kimberly J. Mueller, District Judge

Argument Date: July 6, 2015

Date of Issued Opinion: July 30, 2015

Docket Number: 15-55878

Decided: Reversed the district court's denial of a motion to remand the action to state court.

Case Alert Author: Lawrence J. Hudack

Counsel:
Thomas Stephen Campbell and Justin F. Marquez (argued), Rastegar Law Group, APC, Torrance, California, for Plaintiff-Appellant.

Michael E. Chase (argued) and Bruce Michael Timm, Boutin Jones Inc., Sacramento, California, for Defendants-Appellees.

Author of Majority Opinion: Ferdinand F. Fernandez, Circuit Judge

Circuit: Ninth Circuit

Case Alert Supervisor: Professor Glenn Koppel

    Posted By: Glenn Koppel @ 10/17/2015 07:31 PM     9th Circuit  

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