Unreported / Non-Citable
Background
Plaintiffs Anthony Rigazio and Louraine Moore filed a putative class action in Santa Clara Superior Court on February 9, 2026, alleging violations of the California Labor Code for failure to pay appropriate wages and provide meal and rest breaks, as well as a claim under the California Unfair Competition Law. The proposed class includes current and former hourly security guards, patrol officers, fire watch, and similar workers employed by the Defendants in California over a four-year period.
On March 16, 2026, Defendants removed the action to federal court under the Class Action Fairness Act (CAFA), asserting minimal diversity because Defendant PalAmerican Security, Inc. (PAS) is a citizen of Tennessee and Florida while Plaintiffs are citizens of California, and that the amount in controversy exceeds $5,000,000. Defendants subsequently moved to compel arbitration of Plaintiff Rigazio’s claims against PalAmerican Security (Bay Area) Inc. based on a collective bargaining agreement containing a mandatory arbitration provision.
The Court’s Holding
The Court remanded the action to Santa Clara Superior Court because Defendants failed to establish subject matter jurisdiction under CAFA. The Court held that Defendants’ Notice of Removal contained only a conclusory statement that the amount in controversy exceeds $5,000,000, without offering any factual explanation or calculation to support the estimate.
The Complaint alleged hourly rates for the named plaintiffs ($21 and $25.50) but provided no indication of the hours for which the class was allegedly undercompensated, making it impossible to confirm the jurisdictional threshold was plausibly met. Because the Court lacked subject matter jurisdiction, it did not reach the merits of the motion to compel arbitration, dismissing it as moot.
Key Takeaways
- A defendant removing a case under CAFA must provide a factual basis—not merely conclusory allegations—to establish the amount in controversy exceeds $5,000,000.
- Listing factors relevant to damages (class size, time period, nature of violations) is insufficient without explaining how those factors yield the jurisdictional amount.
- Where the complaint lacks data on hours worked or undercompensated, a court cannot infer the CAFA threshold is met.
- Failure to establish subject matter jurisdiction requires remand and renders any pending motions (such as a motion to compel arbitration) moot.
- The Court applied the Rule 8(a) pleading standard to the Notice of Removal, requiring a ‘short and plain statement of the grounds for the court’s jurisdiction’ supported by factual plausibility.
Why It Matters
This order reinforces the requirement that defendants bear the burden of proving federal jurisdiction upon removal and cannot rely on boilerplate assertions to satisfy CAFA’s amount-in-controversy requirement. By demanding a concrete factual nexus between the alleged violations and the $5 million threshold—particularly in wage-and-hour cases where damages depend on hours worked—the decision curbs speculative removals. The ruling also illustrates the procedural priority of jurisdiction: a court must resolve jurisdictional defects before addressing substantive defenses like arbitration, even when a motion to compel is fully briefed and pending. The jurisdictional defect was evidentiary and pleading-based.
Although the notice identified factors that might affect the amount in controversy, it did not connect those factors to a calculation. The complaint supplied hourly rates for the named plaintiffs but did not identify the number of allegedly uncompensated hours for them or the proposed class. Without those inputs, the court could not plausibly infer that more than $5 million was at stake under the Class Action Fairness Act. The order resolves only the motion and issues described above. Any claims, defenses, or later approval questions not decided by the order remain for further proceedings in the trial court.