Unreported / Non-Citable
Background
Paul Martinez filed a putative wage-and-hour class action against Huttig, Inc., Huttig Building Products, Inc., Woodgrain, Inc., and Woodgrain Transportation LLC in Sacramento County Superior Court on March 25, 2026. The complaint alleges, among other things, off-the-clock work and unpaid overtime, time rounding, missed meal and rest periods, and a failure to reimburse business expenses. These are allegations, not findings. On May 13, 2026, defendants removed the case under 28 U.S.C. sections 1332, 1441, and 1446, asserting diversity jurisdiction. The parties consented to have the magistrate judge decide the case for all purposes.
Because the Class Action Fairness Act was not invoked, jurisdiction required complete diversity and at least one named plaintiff whose claims exceeded $75,000. Plaintiff moved to remand, challenging only the amount in controversy, and defendants moved to compel arbitration and stay the class action. Defendants valued plaintiff's individual claims at $104,588.22. They relied on a declaration from Douglas Loucks summarizing plaintiff's employment records, which showed 803 shifts between May 2022 and April 2026, of which 724 had recorded overtime averaging about three hours and seven minutes.
The Court’s Holding
Magistrate Judge Carolyn K. Delaney granted the motion to remand and sent the case back to Sacramento County Superior Court. Because plaintiff contested the amount, defendants had to show it was more likely than not above $75,000. The court noted the strong presumption against removal and explained that assumptions may rest on the complaint's allegations but cannot be pulled from thin air. It also explained that its role is to weigh the reasonableness of defendants' assumptions, not to supply its own.
The court rejected two large components. It found no reasonable ground for assuming two additional unrecorded hours (one straight-time, one overtime) on more than 90 percent of shifts, an assumption underlying $52,820.80. The complaint did not allege how long the unpaid work lasted on a typical day. The cases defendants cited, Arias and Banuelos, involved much smaller assumptions: six minutes of daily unpaid overtime and one hour of unpaid work weekly. The court also rejected $21,128.32 in liquidated damages under Labor Code section 1194.2. That statute does not authorize liquidated damages for unpaid overtime, defendants did not explain how shifts with recorded overtime supported minimum-wage liquidated damages, and the complaint did not allege pay below minimum wage.
The court accepted three components: $23,454.10 for meal and rest periods, based on a 50 percent violation rate supported by allegations that violations occurred often or regularly and that compliant rest periods were rarely provided; $1,400 for expense reimbursement; and $1,785 for a pro-rata share of attorney fees. The court noted that the last two did not affect its result. The accepted amounts total $26,639.10, well short of $75,000, so defendants did not carry their burden. The arbitration and stay motion was denied as moot because of the remand, and the clerk was directed to close the federal case.
Key Takeaways
- When a plaintiff contests the amount in controversy, the removing defendant must prove by a preponderance of the evidence that it exceeds $75,000, and doubts favor remand.
- Assumptions in a jurisdictional calculation may rely on the complaint's allegations, but they need reasonable grounding and cannot rest on speculation.
- Assuming two extra unrecorded hours on more than 90 percent of shifts was unsupported where the complaint alleged no typical duration of unpaid work.
- Labor Code section 1194.2 liquidated damages do not apply to unpaid overtime, and defendants could not use them without showing a basis for minimum-wage violations.
- Allegations that meal and rest violations occurred often or regularly can support a 50 percent violation-rate assumption, but that alone did not carry the amount to $75,000.
Why It Matters
This is an unpublished district court order and has no precedential weight. It is a practical example of how courts apply Ninth Circuit amount-in-controversy law, including Ibarra, Arias, and Harris, to a single-plaintiff wage-and-hour valuation outside CAFA. It shows that a defendant can win some assumptions, such as the meal and rest violation rate, and still fall short if its largest components rest on unexplained premises.
The remand is a jurisdictional ruling, not a decision on the merits of the wage claims or on arbitrability. The denial of the motion to compel arbitration as moot means that question was not decided here. The order does not say how it might be raised after remand.