UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW ... v Kraft Foods Global Inc .pdf · Mazzucco v. Kraft Foods Global, Inc., No. 11-2430 (D.N.J. 2011), ECF No. 7 [hereinafter “Remand

UNITED STATES DISTRICT COURTFOR THE DISTRICT OF NEW JERSEY

NOT FOR PUBLICATION____________________________________

:RONALD MAZZUCCO :

:Plaintiff, : Honorable Cathy L. Waldor

:v. : Civil Action No. 11-2430 (ES)

:KRAFT FOODS GLOBAL, INC., et al., : REPORT AND RECOMMENDATIONJAMEY MARTIN, :

:Defendants. :

:____________________________________

This matter comes before the Court upon the motion of Ronald Mazzucco

(“Plaintiff”) to remand the pending matter to the Superior Court of New Jersey. Brief for Plaintiff,

Mazzucco v. Kraft Foods Global, Inc., No. 11-2430 (D.N.J. 2011), ECF No. 7 [hereinafter “Remand

Motion”]. Defendant Kraft Foods Global, Inc., (“Kraft”) oppose the Remand Motion on the grounds

that Plaintiff’s claims raises a federal question and are subject to Class Action Fairness Act

jurisdiction. Brief for Defendant, Mazzucco v. Kraft Foods Global, Inc., No. 11-2430 (D.N.J. 2011),

ECF No. 11 [hereinafter “Kraft’s Opposition”]. Plaintiff filed his reply on June 28, 2011. Brief for

Plaintiff, Mazzucco v. Kraft Foods Global, Inc., No. 11-2430 (D.N.J. 2011), ECF No. 15 [hereinafter

“Plaintiff’s Reply”]. United States District Judge Esther Salas referred Plaintiff’s Motion to me for

a Report and Recommendation. This Court held oral argument on October 19, 2011, requested

supplemental briefing, and reserved ruling from the bench. For the reasons set forth below, it is

respectfully recommended that Plaintiff’s Remand Motion be DENIED.

Case 2:11-cv-02430-ES-CLW Document 22 Filed 11/23/11 Page 1 of 24 PageID: 498

I. Background

On March 11, 2011, Plaintiff filed this action in the Superior Court of New Jersey,1

Bergen County, seeking damages for alleged violations of the New Jersey Wage and Hour Law

(“NJWHL”), N.J.S.A. 34:11-56a et seq., on his behalf and on the behalf of all current and former

employees of Kraft who worked in its New Jersey facility. Remand Motion at 3-4. Specifically, the

complaint alleges Plaintiff was required to don and doff protective equipment, uniforms, or other

equipment, and walk to and from their work location without compensation for these activities. Id.

at 4.

On April 27, 2011, Kraft removed the matter to federal court. Kraft argues that

Plaintiff’s claims are: (1) properly before this Court under the Class Action Fairness Act (“CAFA”);

and (2) otherwise preempted by Section 301 of the Labor Management Relations Act (“LMRA”).

Id. On May 24, 2011, Plaintiff filed its Remand Motion, which Kraft opposed. Id.

Plaintiff argues that remand is appropriate because: (1) there is no federal question

jurisdiction because Plaintiff’s claims are not preempted by the LMRA; and (2) Kraft cannot

establish jurisdiction under CAFA, or alternatively, that if CAFA jurisdiction exists then remand is

still appropriate because the local controversy exception applies. Kraft, on the other hand, contends

that Plaintiff’s Remand Motion should be denied because: (1) this Court has jurisdiction under the

CAFA; (2) Plaintiff has failed to show that the local controversy exception applies; and (3) this

Court has jurisdiction under preemption because resolution of the dispute requires the Court to

Plaintiff moves on his behalf and on the behalf of all putative class members. For ease1

of reference, the Court will refer to Plaintiff and all those whom he moves on behalf of as“Plaintiff”. At times the Court may refer to Plaintiff’s burden as “his” or “their”. In order toavoid confusion, all holdings herein will be as to all moving parties.

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interpret the underlying collective bargaining agreement (“CBA”).

II. Legal Standard

A. CAFA Legal Standard and Background

As a preliminary matter, under 28 U.S.C. § 1332(d)(2), a district court has original

subject matter jurisdiction over any civil action where minimal diversity is established and the

aggregated amount in controversy exceeds $5,000,000, exclusive of interests and costs. Specifically,

section 1332(d)(2)(A)-(C) provides that minimal diversity of citizenship is demonstrated in a class

action in which:

(A) any member of a class of plaintiffs is a citizen of a State different from anydefendant;(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of aforeign state and any defendant is a citizen of a State; or(C) any member of a class of plaintiffs is a citizen of a State and any defendant is aforeign state or a citizen or subject of a foreign state.

The CAFA generally “permits defendants to remove certain class actions to federal

court if minimal diversity of citizenship exists.” Knudsen v. Liberty Mut. Ins. Co., 411 F.3d 805 (7th

Cir. 2005). The removing party must demonstrate federal subject matter jurisdiction exists and

removal is proper, which includes establishing diversity of citizenship and the amount in controversy

requirement. Morgan v. Gay, 471 F.3d 469, 473 (3d Cir. 2006). Even where the parties do not

dispute all elements of CAFA jurisdiction, the Court has an obligation to satisfy itself that it has

subject matter jurisdiction over the case. See Kaufman v. Allstate New Jersey Ins. Co., 561 F.3d

144, 151 (3d Cir.2009). The Court is to evaluate “jurisdiction by reviewing the allegations in the

complaint and in the notice of removal”. Frederico v. Home Depot, 507 F. 3d 188, 197 (3d Cir.

2007).

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Plaintiff argues that Kraft has not satisfied the threshold requirements for removal

under Section 1332(d)(2). Here, it is undisputed that Plaintiff is a citizen of New Jersey and Kraft

is a citizen of Delaware and Illinois. The only contention Plaintiff raises with CAFA jurisdiction is

in regard to the amount in controversy.

Kraft relies, in part, on Plaintiff’s calculation in the Remand Motion to establish that

the amount in controversy exceeds the $5,000,000 jurisdictional threshold amount. Additionally,

Kraft notes that Plaintiff has the burden to prove the amount of controversy is not satisfied.

Specifically, because Plaintiff’s complaint is silent on the amount of monetary harm Plaintiff has

suffered, Kraft argues that the burden shifts to Plaintiff to prove the threshold amount is not met.

Further, Plaintiff must prove that the threshold amount is not meet to a “legal certainty”. See

Frederico, 507 F.3d at 196; See also, Zanger v. Bank of America, N.A., No. 10-2480, 2010 U.S. Dist.

LEXIS 105028, at *5-6 (D.N.J. Oct. 1, 2010) (Where jurisdiction is disputed “the party challenging

federal jurisdiction bears the burden of proving necessary facts by a preponderance of the evidence”).

Courts in this District review the complaint to see if the amount in controversy is

satisfied. See Salce v. First Student, Inc., 2009 WL 3260643 (D.N.J., October 09, 2009). Here, the

complaint seeks the following categories of damages: unpaid overtime, penalties under applicable

law and attorneys' fees. (Compl. ¶ 22, attached as Ex. 1 to Kraft’s Notice of Removal). Courts in

this District have enumerated several factors to consider when attempting to compute the amount

in controversy. Notably, this Court should address the “following variables: (i) the number of class

members; (ii) the liability period; (iii) hours of overtime allegedly worked; (iv) the monetary rate to

be applied to the overtime hours; (v) statutory penalties and (vi) attorneys' fees.” Faltaous v. Johnson

and Johnson, No. 07-1572, 2007 WL 3256833 *7 (D.N.J. Nov. 5, 2007).

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Under the time-of-filing rule, “federal diversity jurisdiction is generally determined

based on the circumstances prevailing at the time the suit was filed” and once vested, cannot be

ousted by subsequent events. Kaufman, 561 F.3d 144, 152 (citing Mullan v. Torrance, 9 Wheat. 537,

22 U.S. 537, 539, 6 L.Ed. 154 (1824)). In the context of a motion to remand, “the Court looks to the

circumstances as of the time the Notice of Removal was filed.” Salce, 2009 WL 3260643 at *2. 2

However, limiting the amount in controversy analysis to the date upon which the removal was filed

is too restrictive. See Faltaous 2007 WL 3256833 at *9. Instead, an appropriate amount in

controversy analysis considers the pleading as well as damages accruing in the future. Specifically,

where the right to future payments will be judged in the present suit or where the right to back pay3

accruing after the filing of the complaint are recoverable, they should be considered during the4

Court’s jurisdictional analysis.

Even if the Court finds that the CAFA jurisdiction elements are satisfied, it must

decline to exercise jurisdiction where one of the CAFA exceptions apply. The CAFA provides three

exceptions to the general diversity of citizenship rule. Under the “local controversy” exception, 28

U.S.C. § 1332(d)(4)(A)(i), the sole exception raised here, the district court must decline to exercise

The Salce matter addressed, in part, the impact of a plaintiff willingness to accept a2

settlement under the prevailing amount in controversy requirement. The Court held that thefederal diversity jurisdiction is considered at the time of removal and once vested cannot besubsequently undone. The Salce Court relied on the Third Circuit’s holding in Kaufman, thatstated “[t]he rule serves to increase certainty and minimize repeated challenges to federaljurisdiction that might undermine efficiency”. Kaufman, 561 F.3d at 152 (citing Wright, A.Miller, & E. Cooper, 13E Federal Practice and Procedure § 3608 (2009)).

See Brogile v. MacKay-Smith, 541 F.2d 453, 455 (4 Cir.1976); See also, Dardovitch v.3 th

Haltzman, 190 F.3d 125, 135 (3d Cir. 1997).

See Chabal v. Regan, 822 F.2d 349, 356 (3d Cir.1987).4

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jurisdiction where four circumstances are satisfied:

(I) greater than two thirds of the members of the proposed plaintiff classes in the aggregateare citizens of the state in which the action was originally filed; (II) at least one defendant is a defendant -

(aa) from whom significant relief is sought by members of theplaintiff class; (bb) whose alleged conduct forms a significant basis for the claimsasserted by the proposed plaintiff class; and (cc) who is a citizen of the state in which the action was originallyfiled; and

(III) principal injuries resulting from the alleged conduct or any related conduct ofeach defendant were incurred in the state in which the action was originally filed; and (ii) no other class action asserting the same or similar factual allegations has beenfiled against any of the same defendants within the three years preceding the filingof the instant class action.

See Evans v. Walter Industries, Inc., 449 F.3d 1159 (11th Cir. 2006) (analyzing local controversy

exception); Schwartz v. Comcast Corp., 2006 WL 487915 *2-4 (E.D. Pa. Feb. 28, 2006) (analyzing

all three CAFA exceptions).

Plaintiff contends that Jamey Martin (“Martin”), an employee of Kraft, is an

individual from whom significant relief is sought. Kraft argues that Plaintiff has failed to meet his

burden of establishing application of the local controversy exception. The Third Circuit has

provided significant guidance regarding the local controversy analysis. See Kaufman, 561 F.3d at

157. The Kaufman court held that “[t]he local defendant’s alleged conduct must be an important

ground for the asserted claims in view of the alleged conduct of all the [d]efendants.” Id. The Court

provided guidance in suggesting nine non-exclusive areas of inquiry for determining if the alleged

conduct of the local defendant provided a significant basis for the asserted claims. Specifically, the

Court stated:

By way of example, the District Court could, on remand, inform itscomparison of the local defendant's alleged conduct to the alleged

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conduct of all the Defendants by considering such possible areas ofinquiry as: 1) the relative importance of each of the claims to theaction; 2) the nature of the claims and issues raised against the localdefendant; 3) the nature of the claims and issues raised against all theDefendants; 4) the number of claims that rely on the local defendant'salleged conduct; 5) the number of claims asserted; 6) the identity ofthe Defendants; 7) whether the Defendants are related; 8) the numberof members of the putative classes asserting claims that rely on thelocal defendant's alleged conduct; and 9) the approximate number ofmembers in the putative classes. Whether the District Court considersany or all of these factors, it must in every case still provide areasoned analysis that focuses on the conduct of the Defendants-localand non-local-as alleged in the complaint.

Id. at 157 n. 13.

The Court must take an intensive factual inquiry into the claims asserted against the

local defendant as compared to all defendants. The quantity of claims against the local defendant

as compared to those against the other defendants is not dispositive in this analysis. Id. at 155-56.

B. Preemption Under 301 of the LMRA Legal Standard and Background

For the reason stated below this Court will be recommending that Plaintiff’s Remand

Motion be denied on the basis of CAFA jurisdiction. In light of that fact, this Court does not reach

the issue of preemption. In the spirt of efficiency and in order to fully develop this record, this Court

will address the applicable legal standard for preemption immediately below.

A district court has subject matter jurisdiction to hear claims “arising under the

Constitution, laws, or treaties of the United States,” pursuant to 28 U.S.C. § 1331. A claim brought

in state court may be removed to federal court under 28 U.S.C. § 1441. A party may seek to remand

a civil action back to state court based on an alleged defect in the removal procedure, or lack of

subject matter jurisdiction. 28 U.S.C. § 1447(c). A party opposing remand must show that removal

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was proper. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498

U.S. 1085 (1991). The Third Circuit has held that “the party asserting federal jurisdiction in a

removal case bears the burden of showing, at all stages of the litigation, that the case is properly

before the federal court.” Frederico v. Kraft, 507 F.3d 188, 193 (3d Cir. 2007) (citing Samuel-

Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004)). Thus, the Court must analyze

whether the action was removable as pending in the state court. See 28 U.S.C. §§ 1441(a), 1446;

see also United States Express Lines, Ltd. v. Higgins, 281 F.3d 383, 389 (3d Cir. 2002). Courts must

narrowly construe section 1441 against removal. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

100, 108-09 (1941).

Typically, the pleading determines whether a complaint is subject to federal law. The

Supreme Court has stated: “It is long settled law that a cause of action arises under federal law only

when plaintiff’s well-pleaded complaint raises issues of federal law.” Metropolitan Life Insurance

Co. v. Taylor, 481 U.S. 58, 63 (1987). The fact that plaintiff’s state law claims may be preempted

by federal law is insufficient to confer federal question jurisdiction. Dawson v. Ciba-Geigy Corp.,

145 F. Supp. 2d 565, 568 (D.N.J. 2001). Thus, “removal is not proper if based on a defense or an

anticipated defense which is federal in nature, even if both parties admit that the federal defense is

the only real question in the case.” Id.

At the outset, it is important to distinguish between “complete preemption” and

“ordinary preemption.” Although normally federal preemption does not permit removal, “in certain

circumstances the preemptive force of federal law is so powerful that it completely displaces any

state law cause of action, and leaves room only for federal law for purposes of the ‘well-pleaded

complaint’ rule.” Id. Thus, the doctrine of complete preemption permits removal of an action to

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federal court when: (1) a federal statute wholly displaces a state law cause of action and creates a

superseding cause of action, and (2) there is a “clear indication of a Congressional intention to permit

removal despite the plaintiff’s exclusive reliance on state law.” Railroad Labor Executives Ass’n

v. Pittsburg & Lake Erie R.R., 858 F. 2d 936, 942 (3d Cir. 1988). Thus, unless there is “complete

preemption,” a court must determine whether a case “arises under” federal law sufficient to warrant

removal.

Here, Kraft argues that federal jurisdiction is created by the complete preemption of

Plaintiff’s NJWHL claim; specifically, Section 301 of the LMRA preempts the solely state based

claims from relief requested in Plaintiff’s complaint. Section 301 of the LMRA provides:

Suits for violation of contracts between an employer and a labororganization representing employees in an industry affectingcommerce as defined in this chapter, or between any such labororganizations, may be brought in any district court of the UnitedStates having jurisdiction of the parties, without respect to the amountin controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a).

Section 301 “mandate[s] resort to federal rules of law in order to ensure uniform

interpretation of collective-bargaining agreements, and thus to promote the peaceable consistent

resolution of case management disputes.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399,

404 (1988). Any Plaintiff that seeks to challenge an aspect of a collective-bargaining agreement

must be brought under Section 301. See Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210 (1985).

Section 301 preempts claims “founded directly on rights created by collective bargaining agreements,

and also claims substantially dependent upon an analysis of a collective bargaining agreement.” See

Lingle, 486 U.S. at 410 n. 10. However, preemption should not be lightly inferred, and does not

arise simply because a collective-bargaining agreement may be involved. See Id. at 412; See also

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e.g., Bonilla v. Starwood Hotels Resorts Worldwide, Inc., 407 F.Supp.2d 1107, 1111 (C.D.Cal.2005)

(“If the claim is plainly based on state law, Section 301 preemption is not mandated simply because

the defendant refers to the CBA in mounting a defense.” (citing Cramer v. Consol. Freightways, Inc.,

255 F.3d 683, 692 (9th Cir.2001) (en banc))). The complete preemption doctrine does not abrogate

the general rule that a defense of preemption does not create federal question jurisdiction. Caterpillar,

Inc., 482 U.S. at 398-99, 107 S.Ct. 2425; See also Ben. Nat'l Bank v. Anderson, 539 U.S. 1, 9, 123

S.Ct. 2058, 156 L.Ed.2d 1 (2003) (federal defense raised by defendant in preemption case does not

justify removal).

III. Discussion

A. CAFA Analysis

In order for this Court to have jurisdiction under 28 U.S.C. § 1332(d)(2), minimal

diversity must be established and the aggregated amount in controversy must exceed $5,000,000,

exclusive of interests and costs. Kraft must establish that minimal diversity of citizenship is

demonstrated. Specifically, Kraft must show that:

(A) any member of a class of plaintiffs is a citizen of a State different from anydefendant;(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of aforeign state and any defendant is a citizen of a State; or(C) any member of a class of plaintiffs is a citizen of a State and any defendant is aforeign state or a citizen or subject of a foreign state.

Here, minimal diversity is met because Kraft is a citizen of Delaware and Illinois

while Plaintiff is a citizen of New Jersey. Additionally, there are over 100 members in the putative

class therefore, Kraft has shown that the numerosity requirement is satisfied. See 28 U.S.C.

1332(d)(5)(B). Here, Plaintiff only disputes that the amount in controversy does not exceed

$5,000,000.

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It is well settled law in this District that where a Plaintiff’s complaint is silent on the

amount of damages sought, it is Plaintiff’s burden to prove the amount in controversy threshold is

not satisfied. See Frederico, 507 F.3d at 196. Courts in this District rely on the Frederico case as

a “roadmap” in analyzing the varying burdens with regard to establishing amount in controversy. See

Zanger v. Bank of America, N.A., No. 10-2480, 2010 U.S. Dist. LEXIS 105028, at * 5(D.N.J. Oct.

1, 2010). Where a complaint is silent on damages sought, the Third Circuit held remand was only

proper if the plaintiff could prove to a “legal certainty” that the plaintiff “cannot recover the

jurisdictional amount”. See 507 F.3d at 196.

Courts in this District have throughly addressed the requirements of CAFA

jurisdiction and the legal certainty standard. See Faltaous v. Johnson and Johnson, No. 07-1572,

2007 WL 3256833 (D.N.J. Nov. 5, 2007). The Falatous Court spent a considerable portion of its

discussion defining the legal certainty standard. See Faltaous, 2007 WL 3256833 *3-6. In its

discussion, the Court cited the Hon. Robert B. Kugler, U.S.D.J., holding in Faracchao v. Harrah’s

Entertainment, Inc., No. 06-1364, 2006 WL 2096076, at *2 n. 1 (D.N.J. July 27, 2006). Judge

Kugler stated that “[a]lthough the precise meaning of legal certainty is not immediately apparent, it

is something less than absolute certainty and more stringent than a preponderance of the evidence.”

Id.

Plaintiff must prove to a legal certainty that the amount in controversy is not satisfied.

In order to decide if Plaintiff has met his burden, this Court will address the “following variables:

(i) the number of class members; (ii) the liability period; (iii) hours of overtime allegedly worked;

(iv) the monetary rate to be applied to the overtime hours; ... and (vi) attorneys' fees.” Faltaous, 2007

WL 3256833 at *7.

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1. The Number of Class Members

Here, the parties dispute the number of employees that are or have been employed by

Kraft for the purpose of this litigation. The Plaintiff asserts that there are 531 employees who could

qualify as class members for the purpose of this litigation. In its opposition, Kraft argues that

Plaintiff has failed to include 9 class members, thus there are 540 potential class members. Kraft’s

Opposition at 9.

In his reply, Plaintiff contends Kraft has not submitted any documents in support of

its contention that there are 540 potential class members. However, the burden to prove the amount

in controversy requirement is not satsified, including all elements of that analysis, is on Plaintiff.

Plaintiff has submitted letters from the two unions showing a collective group of 531 employees.

Plaintiff’s Reply at 9-10. Kraft contends that after a review of its internal records there are 540

current or former hourly employees who have worked at the facility since March 16, 2009. Plaintiff

refutes Kraft’s contention by stating that Kraft “invent[s] numbers with no proof whatsoever

supporting.” Plaintiff’s Reply at 10.

This Court disagrees, Plaintiff has failed to address the fact that Kraft supported this

contention with Martin’s Declaration. See (Sec. Dec. of Martin ¶ 6-7, attached as Ex. B to Kraft’s

Opposition). While the union may have an accurate record of its current members, Plaintiff does not

mention whether the letters it submits includes all current and former employees. As such, this

Court finds it reasonable to rely on Kraft’s internal records in order to avoid artificially limiting the

potential class size. Plaintiff has failed to prove to a legal certainty that there are 531 potential class

members rather than the 540 Kraft’s submits. Therefore, for the purpose of the amount in

controversy analysis, this Court will apply the 540 employees Kraft submits.

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Kraft has supported its basis for CAFA jurisdiction by breaking employees in three

categories:(1) employees that worked overtime by donning and doffing protective equipment

Monday through Friday (employees entitled to time and half for their overtime); (2) Saturday day

employees who were obligated to don and doff protective equipment (employees entitled to time and

half for their overtime); and (3) Sunday day employees who were obligated to don and doff

protective equipment (employees entitled to double time for their overtime). This Court finds this

distinction to be relevant because Sunday day employees are entitled to a higher rate of pay than the

Monday through Friday overtime rate. Further, the Court finds it proper to include the Saturday and

Sunday day employees damages, originally excluded from Plaintiff’s calculations, in the amount in

controversy analysis, as they are recoverable in this litigation.

2. The Liability Period

The parties’ submissions use 100 weeks as a basis for their amount in controversy

analysis. The complaint alleges Kraft has violated N.J.S.A 34:11-56a. This statute permits recovery

for two years preceding the filing of the complaint. As noted above, the Court should not limit its

amount in controversy liability period analysis to the filing of the complaint. Specifically, the

Faltatous Court held:

While the amount in controversy is determined through considerationof the good faith allegations of the complaint at the time it was filed,see State Farm Mut. Auto. Ins. Co. v. Powell, 87 F.3d 93, 97 (3dCir.1996); Spectacor Mgt. Group v. Brown, 131 F.3d 120, 122 (3dCir.1977), damages accruing in the future are properly countedagainst the jurisdictional amount if “the right to future payments ...will be adjudged in the present suit.” Broglie v. MacKay-Smith, 541F.2d 453, 455 (4th Cir.1976); see also Dardovitch v. Haltzman, 190F.3d 125, 135 (3d Cir.1997) (“Where ... a suit is brought to establishdirectly the right to receive any payments because the ... defendanthas repudiated that right entirely ... the amount in controversy is theentire amount that may ever come due.”); Chabal v. Regan, 822 F.2d

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349, 356 (3d Cir.1987) (considering back pay accruing after the filingof complaint to determine whether district court had jurisdiction);Foley v. Devaney, 528 F.2d 888, 889 n. 1 (3d Cir.1976).

Falatous, 2007 WL 3256833, at *9.

This Court finds Kraft made its most persuasive point during oral argument, noting

that the alleged violations continue to this day. Tr. of Oral Argument, 7:17-24, Oct. 19, 2011.

Plaintiff would be able to recover damages from the beginning of the statute of limitation period to

the point where the allegedly improper conduct was discontinued. As the Plaintiff is still not paid

for donning, doffing, and walking, their potential recovery increases daily. An accurate reflection

of damages would include the unpaid wages during the course of the litigation. Falatous, 2007 WL

3256833, at *10. The right to collect damages accruing subsequent to the filing of the complaint will

be adjudicated in this matter. Therefore, it is proper for this Court to include those damages in its

amount in controversy analysis.

In order to include damages accruing subsequent to the filing of the complaint in the

Court’s analysis, the Court must first define the relevant period. If the alleged violations continue

throughout the course of the present litigation, as it does in this case, it is appropriate to use the

projected length of this litigation to calculate the liability period. Courts in this District have held,

in a similar litigation, that an additional two year period is appropriate. Id. 5

Plaintiff filed this action in State Court on March 11, 2011 and Kraft removed the

matter to this Court on April 27, 2011. A conservative estimate of the actual liability period is two

The Faltaous Court referred to the Administrative Office of the United States Courts in5

order to support adding two years to the liability period for the purpose of the Court’s amount incontroversy analysis. See Faltaous, 2007 WL 3256833, at *10.

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years from the notice of removal. As such, Plaintiff’s calculation only reflects part of the time6

period where damages are calculated for the purpose of amount in controversy analysis. Two years

from the April 27, 2011 date of removal would be April 27, 2013. Applying the two year statute of

limitation period to the March 11, 2011 filing of the complaint, the liability period should start from

March 11, 2009. Thus, the appropriate liability period should range from March 11, 2009 to April

27, 2013 or otherwise approximately 206 weeks. 7

3. Hours of Overtime Sought

Kraft used 100 minutes a week of donning, doffing, and walking time in order to

quantify the amount in controversy to a single number. In light of the fact that discovery has not8

produced an exact amount of time Plaintiff spends donning, doffing, and walking, Kraft has cited

several cases showing its 20 minute per day estimate is conservative. See Lugo v. Farmer’s Pride,

Inc., 737 F.Supp 2d 291, 313 (E.D. Pa. 2010) (60-80 minutes); Parker v. Smithfield Packing Co., No.

07-176, 2010 U.S. Dist. LEXIS 102441, at *27(E.D.N.C. Aug. 26, 2010) (approximately 29

minutes); Farris v. County of Riverside, 667 F. Supp. 2d 1151, 1154(C.D. Cal. 2009) (20 Minutes);

See Salce v. First Student Inc., 2009 WL 3260643 at*2 (D.N.J., October 09, 2009) (the6

court looks to the date of removal for the purpose of its jurisdictional analysis.)

The 206 week liability period calculation is a product of the two year (100 weeks)7

statute of limitations period, the six weeks from the filing of the complaint to the date ofremoval, and the two additional years (100 weeks) as a conservative projection of the length ofthis litigation. The parties have excluded two weeks each year (52 weeks in one year) from thedamages calculation to provide for paid leave where no donning, doffing, and walking wouldtake place.

The 100 minutes per week calculation is a product of a ten minute donning/walking or8

walking/doffing period before and after each shift on a regular five day work week. In otherwords, the additional time spent donning, doffing, and walking was approximately 20 minutesper day.

15


Anderson v. Perdue Farms, Inc., 604 F.Supp. 1339, 1360 (M.D. Ala. 2009) (18-41 minutes).

Plaintiff has merely addressed Kraft’s estimated 100 minute donning, doffing, and

walking time per week as “speculative” in nature. Remand Motion at 19. This Court disagrees with

the Plaintiff’s contention and finds that Kraft has supported its 100 minute estimate with significant

case law. As Plaintiff has failed to offer any opposing case law, he has likewise failed to meet his

burden of disproving this element to a legal certainty. Thus, the Court will use Kraft’s proposed 100

minutes a week for the purpose of the Court’s amount in controversy analysis.

4. Average Monetary Rate to be Applied

Kraft stated that the average putative class member earned $23.3411 per hour. Kraft

relies on the declaration of Martin to support this contention. See (Dec. of Martin ¶ 11, attached as

Ex. 4 to Kraft’s Notice of Removal). The complaint alleges the unpaid wages will be in the form

of overtime or time and half because all relevant employees worked the full forty hour work week

while not being compensated for time spent donning, doffing, and walking. (Compl. at ¶ 9-11)

Thus, the applicable wage rate should be adjusted accordingly to reflect an accurate recoverable

wage. The Court will apply $35.01 as the overtime rate for the purpose of its amount in controversy

analysis for all Monday to Friday workers. 9

5. Calculation of Amount in Controversy Before Attorney’s Fees

i. Method of Calculation

There is no dispute as to the actual formula used to calculate the amount in

controversy. That is, Plaintiff and Kraft agree to the variables this Court is to consider when

Saturday overtime employees are entitled to time and half or a wage rate of $35.01. 9

Sunday overtime employees are entitled to double time or a wage rate of $46.68.

16


addressing the amount in controversy. The simple arithmetic is a product of the hourly rate

multiplied by the hours per week of allegedly unpaid overtime. This results in a weekly amount of

unpaid overtime per employee. The weekly rate per employee must be multiplied by the amount of

employees who qualify as potential class members. This calculation results in the amount of

allegedly unpaid wages for the entirety of the class per week. Finally, unpaid weekly wages for the

entire class must be multiplied by the weeks in the liability period.

The only dispute raised are as to the Saturday and Sunday employees. Kraft has

presented evidence that several employees worked Saturday and Sunday shifts and have

consequently been excluded from Plaintiff’s calculations. As discussed below, these employees

would be entitled to relief in this matter and their damages should be included in the amount in

controversy calculation. The Court will provide a separate analysis for the Saturday and Sunday

employees in advance of adjusting for attorney’s fees.

ii. Calculation of Amount in Controversy

The amount in controversy for the purpose of CAFA jurisdiction in the present matter

is calculated as follows. The Monday through Friday overtime wage rate is $35.01 and the hours10

of overtime allegedly worked is 1.67 per week. Thus, the weekly unpaid rate per employee would11

be approximately $58.47. The weekly unpaid rate per employee must be multiplied by the number

Kraft’s original calculations were limited to the statute of limitations period, including10

forty percent (40%) attorney’s fees, and nevertheless resulted in an amount in controversy of$5,082,207. Kraft’s Opposition at 10.

This Court noted earlier that a conservative estimate of unpaid hours allegedly worked11

was, in the form of minutes, 100. 100 minutes is approximately 1.67 hours or one and two-thirdshours.

17


of class members (540). Therefore, the weekly unpaid rate for the entirety of the class is $31,572. 12

Finally, the weekly unpaid rate for the entirety of the class should be multiplied by the liability

period. As discussed above, the liability period for the present action is 206 weeks. Thus, the

amount in controversy for all Monday through Friday employees is $6,503,835. 13

Additionally, Kraft argues that the Saturday and Sunday employees will be able to

recover an additional $267,243 for their Saturday work and $264,520 for their Sunday work.14 15

These numbers only reflect a two year liability period and need to be adjusted to reflect the full 206

week liability period. Therefore, the Saturday workers would be entitled to $550,520 and the16

Sunday workers would be entitled to $544,911 . The total for Saturday and Sunday unpaid wages17

must be added to the Monday through Friday unpaid wages in the amount of $6,503,835. Therefore,

the Plaintiff’s claims reach at least $7,599,266 in advance of applying attorney’s fees.

$58.4667 multiplied by the 540 class members equals $31,572. 12

$31,572 multiplied by 206 weeks equals $6,503,835. 13

Kraft Opposition at 10 n.414

Kraft Opposition at 10 n. 515

The weekly unpaid Saturday rate for all workers is $2,672.43. Adjusting Kraft’s16

original estimate to the new liability period would add 106 more weeks to the analysis. $2,672.43 multiplied by 106 weeks equals $283,277. This amount should be added to theoriginal liability period estimate to result in a total potential recovery of $550,520 for all unpaidSaturday work.

The weekly unpaid Sunday rate for all workers is $2,645.20. Adjusting Kraft’s original17

estimate to the new liability period would add 106 more weeks to the analysis. $2,645.20 multiplied by 106 weeks equals $280,391. This amount should be added to the original liabilityperiod estimate to result in a total potential recovery of $544,911 for all unpaid Sunday work.

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6. Attorney’s Fees

Courts in this District have held that “[a]ttorney's fees are appropriately counted

toward the amount in controversy if they are available to a successful plaintiff pursuant to the

underlying statute.” Faltaous, 2007 WL 3256833 at *10 (citing Suber v. Chrysler Corp., 104 F.3d

578, 585 (3d Cir. 1997)). This applies to cases removed under the CAFA. Id. (See Lowdermilk v.

U.S. Bank National Assoc., 479 F.3d 994,1000 (9th Cir.2007); Frazier v. Pioneer Americas, LLC,

455 F.3d 542, 545 (5th Cir.2006). Here, N.J. S.A. 34:11-56a allows for the recovery of reasonable

attorney's fees.

Similar to the challenges in analyzing the amount in controversy, it is difficult to

obtain a precise formula to determine the amount of attorneys' fees Plaintiff may recover. The

Faltaous Court highlighted a reasonable approach in looking to cases from this District arising under

similar facts. Faltaous 2007 WL 3256833 at *10. The Faltaous Court “noted in Lenahan, ‘attorneys'

fees of approximately 30 percent of the common fund are also regularly awarded in labor and

employment law class actions.’” Id. Plaintiff and Kraft offer estimates of thirty (30%) and Forty

percent (40%). The median in the Third Circuit is roughly thirty percent (30%) of a common fund.18

Id. For the purpose of the amount in controversy analysis, this Court will apply a thirty percent

(30%) rate.

Adjusting for attorney’s fee, Plaintiff’s damages of $7,599,266 would result in a total

amount in controversy of $9,879,045.

See, e. g., Lenahan v. Sears, Roebuck & Co., No. 02-45, 2006 WL 2085282, at *2118

(D.N.J. July 24, 2006) (attorneys' fee awards regularly account for thirty percent of the commonfund); In re General Motors Corp. Pick Up Truck Fuel Tank Products Liab. Litig., 55 F.3d 768,822 (3d Cir.1995) (noting attorney fee awards ranging from nineteen percent to forty-fivepercent); In re Safety Components, Inc., Sec. Litig., 166 F.Supp.2d 72, 101-02 (D.N.J.2001).

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7. Plaintiff Has Not Met Its Burden

Plaintiff has failed to prove to a legal certainty that the amount in controversy fails

to exceed $5,000,000. In fact, Kraft has provided significant evidence in support of the conclusion

that Plaintiff’s claims do exceed the $5,000,000 minimum threshold amount. See Reibstein v.

Continental Tire North America, No. 07-302, 2007 WL 1030486, at *2 (E.D. Pa. April 2, 2007)

(quoting Morgan, 471 F.3d at 475). As the above calculation shows, the amount in controversy well

exceeds the $5,000,000 threshold amount.

Plaintiff has argued that the amount of class members are 531 and not 540, has not

included the Saturday and Sunday employees overtime rate, and has not addressed the continuing

harm for the purpose of the liability period. These are all facts relevant to the Plaintiff for the

purpose of damages. Morevoer, Plaintiff has not provided an affidavit to contest CAFA jurisdiction.

Most notably, Plaintiff has not stipulated against seeking damages in excess of $5,000,000. See

Oshana v, Coca-Cola Co., 472 F.3d 506, 511-12 (7th Cir. 2006); Hayes v. Equitable Energy

Resources Co., 266 F.3d 560, 573 (6th Cir. 2001); Eatinger v. BP America Prod. Co., 524 F. Supp.

2d 1342, 1348. (D. Kan. 2007). Instead, Plaintiff disagrees with Kraft’s calculation with regard to

the weekday employees. Plaintiff arrived at a total damages of $4,337,739 but has not included any

additional calculation regarding the continuing violation. The continuing violation, to this date,

extends over one half of the period for which the statute of limitations permits recovery. If Plaintiff

is successful on their underlying claims they will be entitled to damages that accrued since the filing

the complaint. Thus, relying on the Plaintiff formula and adjusting the variables based on the

amount in controversy analysis taken by Courts in this district, Plaintiff’s damages are likely over

$9,879,045. Because the Plaintiff has offered no evidence to support the contention that the

20


minimum amount in controversy is not met and has not stipulated to damages being less than

$5,000,000, he has not met his burden. Plaintiff must prove that it is legally certain that the amount

in controversy is not satisfied in order to avoid jurisdiction under the CAFA. Plaintiff has failed to

make such a showing.

B. Local Controversy Exception Analysis.

Plaintiff argues if the CAFA requirements are satisfied, this Court should

nevertheless remand this matter because the Local Controversy exception applies. This Court finds

that the Plaintiff has failed to show that the application of the local controversy exception is

appropriate. Congress intended that the CAFA be interpreted liberally to expand federal jurisdiction.

In turn, the local controversy exception must be interpreted narrowly. See Westerfeld v. Independent

Processing, LLC., 621 F.3d 819, 822 (8th Cir.2010); See also Evans, 449 F.3d at 1164. Plaintiff

bears the burden to prove the exception applies. See Kaufman v. Allstate New Jersey Ins. Co., 561

F.3d 144, 153 (3d Cir. 2009).

Under the “local controversy” exception, 28 U.S.C. § 1332(d)(4)(A)(i), the district

court must decline to exercise jurisdiction where four circumstances are satisfied:

(I) greater than two thirds of the members of the proposed plaintiff classes in the aggregateare citizens of the state in which the action was originally filed; (II) at least one defendant is a defendant -

(aa) from whom significant relief is sought by members of theplaintiff class; (bb) whose alleged conduct forms a significant basis for the claimsasserted by the proposed plaintiff class; and (cc) who is a citizen of the state in which the action was originallyfiled; and

(III) principal injuries resulting from the alleged conduct or any related conduct ofeach defendant were incurred in the state in which the action was originally filed; and (ii) no other class action asserting the same or similar factual allegations has beenfiled against any of the same defendants within the three years preceding the filingof the instant class action.

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In order to assert the local controversy exception, the Plaintiff must show that at least

one defendant is a defendant: (1) from whom significant relief is sought; (2) whose alleged conduct

forms a significant basis for the claims asserted by the proposed plaintiff class; and (3) who is a

citizen of the state in which the action was originally filed. Here, Plaintiff has named Martin, the

facilities human resources representative, as a local defendant. Martin currently resides in New

Jersey and has for the relevant purpose of this litigation.

In support of the contention that Martin is a defendant from whom significant relief

is sought, Plaintiff states that Martin can be held personally liable under New Jersey’s definition of

employer. Plaintiff cites N.J.S.A. 34:11-56a1(g) which reads:

‘Employer’ includes any individual, partnership, association,corporation or any person or group of persons acting directly orindirectly in the interest of an employer in relation to an employee.

However, Plaintiff offers conclusory statements that significant relief is sought from

Martin. Plaintiff has provided no case law to support the contention that a human resource employee

can be held personally liable for implementing an illegal work policy or procedure. Instead, Plaintiff

solely relies on New Jersey’s broad definition of an employer and asserts that all people falling under

the definition of employer can be held joint and severally liable for implementing the policies of their

employer. Thus, this Court finds that Plaintiff has failed to meet his burden of proving Martin is a

defendant from whom significant relief is sought.

This Court also finds that Plaintiff has failed to meet his burden of proving that

Martin’s conduct formed a significant basis for the claims asserted by Plaintiff. Plaintiff has failed

to address the nine non-exclusive areas of inquiry for determining if the alleged conduct of a local

defendant provided a significant basis for the claims asserted. See Kaufman, 561 f.3d at 157 n.13.

22


Plaintiff has not addressed the nature of the claims raised against Martin and the

non-local defendant, Kraft. Nor has Plaintiff indicated the number of claims that rely on Martin’s

conduct. Plaintiff has offered no evidence that Martin implemented any of these procedures.

Instead, Plaintiff relies solely on Martin’s declaration, where Martin states her duties include

compensation matters, specifically customs and practices regarding compensation. (Dec. of Martin

¶ 5, attached as Ex. 4 to Kraft’s Notice of Removal). Additionally, Plaintiff has not contended that

the present policy of non-payment for donning, doffing, and walking was implemented well before

Martin’s arrival.

Further, Plaintiff has not addressed the identity of the defendants or how they are

related. Specifically, Plaintiff has failed to address the fact that Martin is an employee of Kraft.

Instead, Plaintiff relies on Martin’s declaration, submitted on behalf of Kraft as an employee, and

then contends that statements made in said declaration qualify Martin as an employer under N.J.S.A.

34:11-56a1(g). This showing is insufficient to meet Plaintiff’s burden of proving that Martin is a

defendant from whom significant relief is sought. Most notably, the conduct of Martin in the present

matter in no way relates to the conduct of local defendants in cases where the local controversy

exception is applied. See e.g., Kaufman, 561 F.3d 144, 156-57 (the Court found that Allstate was

a local defendant satisfying the significant basis provision because it represented 13% of all the

automobile insurance policies sold in New Jersey and that only one other insurer had more

automobile insurance policies in force in New Jersey on that date). In conclusion, the Court finds

that Plaintiff has failed to meet his burden of proving that the local controversy exception applies.

Therefore, this Court has jurisdiction under CAFA and the local controversy exception does not

apply.

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IV. Conclusion

For the forgoing reasons, this Court respectfully recommends that Plaintiff’s Remand

Motion be DENIED.

Pursuant to L. Civ. R. 72.1(c)(2), the parties have fourteen (14) days from receipt

hereof to file and serve objections.

s/Cathy L. Waldor CATHY L. WALDORUnited States Magistrate Judge

Dated: November 23, 2011Original: Clerkcc: Hon. Esther Salas, U.S.D.J.

File

24


Documents

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW ... v Kraft Foods Global Inc .pdf · Mazzucco v. Kraft Foods Global, Inc., No. 11-2430 (D.N.J. 2011), ECF No. 7 [hereinafter “Remand