Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) 97 represent.584 These individuals thus might seek more damages if, for example, Knowles was replaced as the named plaintiff or another class member intervened in the case. Because the named plaintiffs’ stipulation was thus not effective, the district court’s original finding that the total potential damages in the case exceeded $5,000,000 was controlling and the requirements for CAFA jurisdiction were met.585 Although Standard Fire is incompatible with Lowdermilk, it did not expressly overrule it. Because of this, some courts in California clung to the notion that removing defendants must prove to a “legal certainty“ that the CAFA amount in controversy has been met. The Ninth Circuit corrected this situation in Rodriguez v. AT&T Mobility Servs. LLC.,586 holding that the Supreme Court’s ruling in Standard Fire effectively overturned Lowdermilk. In Rodriguez, the Ninth Circuit found that the lead plaintiff’s asserted waiver of any claim in excess of the $5 million amount-in-controversy requirement was ineffective in light of Standard Fire.587 Accordingly, the Ninth Circuit held that the proper burden of proof imposed upon a defendant to establish the jurisdictional amount is the “preponderance of the evidence“ standard, and not the “legal certainty” standard set forth in Lowdermilk.588 Under the “preponderance of the evidence standard,” evidence related to the contested amount in controversy may be “direct or circumstantial,” and “a damages assessment may require a chain of reasoning that includes assumptions.” The Ninth Circuit stressed that “those assumptions cannot be pulled from thin air but need some reasonable ground underlying them.”589 4. The Amount In Controversy Does Not Include Non-Class Action Claims Under CAFA, the amount in controversy cannot be inflated by including potential recovery on non-class claims. In Yocupicio v. PAE Grp., LLC,590 the Ninth Circuit held that “[w]here a plaintiff files an action containing class claims as well as non-class claims [such as a representative claim under PAGA], 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.” 584 Id. at 1348-49. 585 Id. at 1350. 586 728 F.3d 975 (9th Cir. 2013). 587 Id. at 982. 588 Id. at 981; see also Dart Cherokee Basin Operating Co., LLC, 135 S. Ct. at 554 (2014) (“when a defendant’s assertion of the amount in controversy is challenged … both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied”); Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (“Whether damages are unstated in a complaint, or, in the defendant’s view are understated, the defendant seeking removal bears the burden to show by a preponderance of the evidence that the aggregate amount in controversy exceeds $5 million when federal jurisdiction is challenged.”). 589 Ibarra, 775 F.3d at 1199; see also LaCross v. Knight Transp. Inc., 775 F.3d 1200, 1202 (9th Cir. 2015) (“when the defendant relies on a chain of reasoning that includes assumptions to satisfy its burden of proof, the chain of reasoning and its underlying assumptions must be reasonable ones”). 590 795 F.3d 1057, 1062 (9th Cir. 2015).
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