Baumann v. Chase Investment Services

Plaintiff filed suit in California state court under the California Labor Code Private Attorneys General Act of 2004 (PAGA), Cal. Lab. Code 2698-2699.5, and then removed to district court. The issue presented on appeal was whether the district court had subject matter jurisdiction over the removed action. In Urbino v. Orkin Services, the court held that potential PAGA penalties against an employer may not be aggregated to meet the minimum amount in controversy requirement of 28 U.S.C. 1332(a). The remaining issue was whether a district court may instead exercise original jurisdiction over a PAGA action under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. 1332(d), 1453, 1711-15. The court held that PAGA was not sufficiently similar to Rule 23 to establish the original jurisdiction of a federal court under CAFA. Accordingly, the district court could not exercise jurisdiction over this removed PAGA action under CAFA. And because, in light of Urbino, there was no federal subject matter jurisdiction under section 1332(a), plaintiff's motion to remand should have been granted. The court reversed and remanded with instructions to grant the motion. View "Baumann v. Chase Investment Services" on Justia Law