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Class Action Against Dollar Tree Stores

Posted by Eric Kingsley | Apr 10, 2015 | 0 Comments

Reyes v. Dollar Tree Stores, Inc.

(Filed April 1, 2015, No. 15-55176) in the United States Court of Appeals, Ninth Circuit

Dollar tree class action

According to Court records, Defendant Dollar Tree Stores, Inc. removed this case to federal court in 2012, invoking jurisdiction under the Class Action Fairness Act of 2005 (CAFA). Plaintiff Richard Reyes moved to remand, representing that the amended complaint defined the proposed class narrowly and that the CAFA $5,000,000 amount-in-controversy requirement was therefore unsatisfied. The district court agreed and remanded.

In May 2014, a California superior court certified a broader class than the one described by Reyes during the first removal. It is uncontested that the amount in controversy for the class actually certified exceeds $5,000,000. Dollar Tree again removed after the superior court entered the class certification order, but the district court found removal untimely because the order was based on the same complaint that was the subject of the first removal.

The issue before the Ninth Circuit this year is whether the class certification order created a new occasion for removal. Circuit Court judges concluded that it did and they remanded to the district court to exercise jurisdiction under CAFA.

Background

In July 2012, Class Plaintiff, Richard Reyes, filed action in California state court alleging that Dollar Tree violated California Labor Code § 226.7 by denying proper rest breaks to its employees.

In December 2012, Reyes filed an amended complaint asserting violations of California Business and Professions Code § 17200 and seeking certification of a class of all current and former non-exempt Dollar Tree employees who worked as assistant managers in California who worked one or more work periods in excess of three and one-half (3.5) hours without receiving a paid ten (10) minute break during which they were relieved of all duties, from and after July 13, 2008. The amended complaint alleged that the “amount in controversy is less than $5,000,000.00 in the aggregate for the putative Class.”

Dollar Tree removed the matter to the Central District Court of California, asserting jurisdiction under CAFA. Reyes' motion to remand the matter to State Court was granted on the ground that defendant had to look “beyond Plaintiff's allegations” to establish the $5 million amount in controversy requirement for jurisdiction under CAFA. The matter was litigated in the California Superior Court, and the class was ultimately certified. The certified class became larger than that described in the complaint because the Superior Court, sua sponte, expanded the scope of the class.

Upon class certification, Dollar Tree filed a second notice of removal, arguing that the broadened class established an amount in controversy over $5 million. Reyes again moved to remand the matter to California Superior Court and the motion was granted. The District Court reasoned that the Notice of Removal was untimely because it was based on the same class definition contained within the complaint, despite the fact that the California Superior Court had increased the scope when it certified the class.

The Ninth Circuit reversed, reasoning that the certification of the expanded class triggered a new opportunity for Dollar Tree to remove the matter to federal court pursuant to CAFA. The Ninth Circuit noted that successive removal petitions are permitted “when subsequent pleadings or events reveal a new and different ground for removal.” (Emphasis in original) Citing Kirkbride v. Cont'l Cas. Co. (9th Cir. 1991) 933 F.2d 729, 732. The Court concluded by noting “[t]he superior court's class certification order thus altered the circumstances bearing on jurisdiction by expanding the amount in controversy.” Notably, Reyes conceded the amount in controversy exceeded $5 million after the California Superior Court expanded the scope of the class upon certification.

Conclusion

The Ninth Circuit stated in summary, “Because Dollar Tree offers an “unchallenged, plausible assertion” that the jurisdictional requirements of CAFA are met, the district court has subject-matter jurisdiction. We therefore REVERSE the district court's order remanding this case to state court, and REMAND with instructions for the district court to exercise jurisdiction.”

Experienced California Employment Lawyers

Before Reyes, a defendant who was unsuccessful in removing a class action to federal court was essentially stuck litigating in the state court. The Reyes case exemplifies a defendant's ability to remove a case to federal court, thereby, taking a “second bite at the apple”. If you have questions, or a potential claim on your behalf, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call toll-free at (888) 500-8469 or click here to contact us via email.

About the Author

Eric Kingsley

In practice since 1996, attorney and firm co-founder Eric B. Kingsley has litigated complex cases and authored numerous appellate briefs in both state and federal court on behalf of the California law firm of Kingsley & Kingsley, including over 150 class actions. Mr. Kingsley concentrates his pra...

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