Unreported / Non-Citable
Background
Hugo Gallardo and Brittany Amacker filed a putative California wage-and-hour class action against Victoria’s Secret Stores and sought to return the case to state court. Under the Class Action Fairness Act, commonly called CAFA, federal jurisdiction generally requires minimal diversity, at least 100 proposed class members, and more than $5 million in controversy. The dispute focused on that monetary threshold.
Plaintiffs alleged that the aggregate amount was below $5 million. Victoria’s Secret submitted workforce and pay evidence and calculated potential waiting-time penalties for more than 10,000 former nonexempt California associates. Plaintiffs attacked the assumed violation rate and argued that their own jurisdictional allegation should control.
The Court’s Holding
The court denied remand. It held that the defendant’s assumptions reasonably followed from the complaint and that a removing defendant need prove the jurisdictional amount only by a preponderance of the evidence. Using four hours per day, the lowest identified average hourly rate of $17.87, and the statutory thirty-day waiting-time period, the potential Section 203 penalties alone exceeded $22.8 million.
Because that single category comfortably cleared CAFA’s $5 million threshold, the court did not need to rely on potential attorney fees or every other damages theory. The court also rejected a presumption based on the complaint’s statement that damages were under $5 million. That statement was not a demand for a specific sum and lacked supporting factual allegations in the face of contrary evidence.
The ruling concerns jurisdiction, not liability. Victoria’s Secret has not yet established that every putative class member suffered a violation or will recover the estimated penalties.
Key Takeaways
- CAFA amount-in-controversy calculations measure potential exposure, not the damages a plaintiff is certain to win.
- A defendant may use reasonable assumptions grounded in the complaint and competent employment data.
- Waiting-time penalties can independently push a large California wage-and-hour class action over the federal threshold.
- A bare allegation that aggregate damages are below $5 million may receive little weight without facts showing how that cap was calculated.
Why It Matters
For California employment counsel, early pleading choices can determine forum. Broad allegations of systematic final-pay violations across a large workforce invite a maximum-exposure calculation even if the complaint includes a conclusory damages disclaimer.
Defendants preparing removal should support each variable—class size, wage rate, workday length, and statutory period—with evidence. Plaintiffs seeking remand should challenge the factual inputs with their own evidence rather than rely only on uncertainty about ultimate liability.
The order is also a reminder to distinguish an interim procedural ruling from a final decision on the merits. Counsel should identify exactly what the court decided, preserve any deadlines or evidentiary burdens created by the order, and avoid overstating issues the judge expressly left open. For clients, that means updating the litigation plan now: assign responsibility for the next filing or compliance step, preserve the supporting record, and reassess settlement and business risk using the ruling’s actual scope. A focused response is usually more valuable than treating every adverse procedural development as though it finally resolved liability. The team should also circulate the order to the people responsible for discovery, payroll, regulatory compliance, or outside-counsel management, as applicable, because the practical cost of a ruling often depends on quick operational follow-through. Building that implementation record can prevent missed deadlines and make any later request for modification more credible.