Wilson v. IKEA: Thin Evidence of Amount in Controversy Requires Remand of W&H Case, Says C.D. Cal. Dist. Ct.

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In Wilson v. Ikea North America Services, LLC, C.D. Cal. Dec. 14, 2020 (slip op. available here), the district court found on a motion to remand that Ikea failed to meet its burden of proof that the amount in controversy exceeded the $5 million required for Class Action Fairness Act (“CAFA”) jurisdiction.

Ikea had removed the case to federal court alleging that the amount in controversy exceeded $22 million. Unlike a notice of removal, which need only include plausible allegations that the amount in controversy exceeds the minimal jurisdictional requirements, on a motion to remand, the removing party must submit evidence, and the court decides by a preponderance of the evidence whether the amount in controversy is met. Slip op. at 4. “Under this system, CAFA’s requirements are to be considered by real evidence and the reality of what is at stake in the litigation, using reasonable assumptions of underlying the defendant’s theory of damages exposure.” Id., quoting Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1198 (9th Cir. 2015) (emphasis added).

Ikea failed to meet this burden. It presented “thin evidence” of the amount in controversy consisting of the number of employees and the number of workweeks for three calendar years; and it presented no evidence that every employee suffered all of the injuries alleged in the complaint. Slip op. at 5 (emphasis in original). Instead, Ikea relied on the plaintiff’s “pattern and practice” allegations to establish that point. The complaint, however, did not allege that Ikea violated wage and hour laws on each and every shift, so there was no judicial admission in play to support Ikea.

In closing remarks, the district court reminded that although Ikea’s $22 million estimate is far above the $5 million CAFA threshold, “it is not the Court’s job to perform the mathematical calculations to justify it. . . .  That is Ikea’s burden.” Slip op. at 6. Something to consider from a plaintiff’s perspective—that sometimes the removing defendant should be put to the task of proving up potential damages on a motion to remand after a flimsy notice of removal.

Authored by:
Robert Friedl, Senior Counsel