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Case Overview: Reyes v. Dollar Tree Stores, Inc.

Certification of a Broader Class than That Originally Requested by Plaintiff Effectively Amended the Complaint, Thereby Justifying Subsequent CAFA Jurisdiction/Removal Even After Initial 30 Days

Dollar Tree store frontOn April 1, 2015,[i] the Ninth Circuit issued two decisions that further defined the scope of amount-in-controversy removal jurisdiction under the Class Action Fairness Act of 2005 (CAFA), thereby making it easier for defendant-employers to remove cases to federal court: Reyes v. Dollar Tree Stores, Inc., an appeal from a District Court ruling in the Central District of California heard in Pasadena, and Zamora Jordan v. Nationstar Mortgage, LLC, an appeal from a district court ruling in the Eastern District of Washington heard in San Francisco.

In both cases, the Ninth Circuit held that defendant-employers’ 30-day removal clock starts ticking when employers first become aware of a change in the pleading that “reveal[s] a new and different ground for removal.”[ii]

Reyes initially filed an amended complaint in state court defining the class as employees who “worked without another manager at the same time, and per Defendant policy and practice, were not authorized and permitted to take fully compliant 10-minute rest breaks.”[iii]

Because Reyes had pled that Plaintiffs “regularly” missed their rest breaks, Dollar Tree interpreted that to mean – for remand purposes – that Reyes was alleging Dollar Tree had not authorized or permitted legal rest periods 65% of the time, an assumption which resulted in an amount in controversy estimate exceeding $5.5 million.

Reyes moved to remand, pointing out that his operative complaint also pled that the rest period violations occurred because “Class Members at times worked without another manager at the same time,” and that since Class Members only worked approximately one-third of the shifts alone the amount in controversy was $2.87 million.

Upon remand, and consistent with his representations to the trial court, Reyes amended his class definition to seek certification of a class of “all current and former non-exempt employees of Defendant who worked as Assistant Store Managers in California who worked without another Assistant Store Manager on the clock according to Defendant’s time records and without another Store Manager scheduled to work according to Defendant’s schedule records, and who worked one or more work periods in excess of three and one-half (3.5) hours.”[iv]

The district court found, however, that a class of assistant managers who worked alone would not be ascertainable and instead certified a broader class of all assistant managers who did not receive legal rest periods, regardless of whether they worked alone.[v]

Dollar Tree again removed, this time on the basis that the district court’s new definition had created a class whose amount in controversy exceeded $5 million.

The Ninth Circuit held that, for removal purposes, the district court’s order certifying a broader class was “functionally indistinguishable” from an order allowing Reyes leave to amend his class definition.[vi]

Under CAFA, a defendant may remove either:

(a) within 30 days of receiving the initial pleading, OR
(b) within 30 days of receiving “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.”[vii]

Thus, Dollar Tree’s motion was timely filed, and the district court was ordered to exercise jurisdiction over the newly certified class.

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[i] One can only assume this was not an April Fool’s joke.
[ii] Kirkbride v. Cont’l Cas. Co., 933 F.2d 729, 732 (9th Cir. 1991).
[iii] Reyes v. Dollar Tree Stores, Inc. (2015) 781 F.3d 1185, 1187.
[iv] Id.
[v] The superior court noted that California law allowed it to depart from the pleading and redefine the requested class.[vi] Id. at 1188.

[vii] 28 U.S.C. § 1446(b); see also Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 392 (9th Cir. 2005).