{"id":1806,"date":"2024-10-14T13:07:01","date_gmt":"2024-10-14T17:07:01","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1806"},"modified":"2024-10-14T13:09:44","modified_gmt":"2024-10-14T17:09:44","slug":"missed-opportunity-tenth-circuit-rules-wendys-missed-the-removal-deadline-for-a-colorado-wage-hour-class-action-under-the-cafa","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/10\/14\/missed-opportunity-tenth-circuit-rules-wendys-missed-the-removal-deadline-for-a-colorado-wage-hour-class-action-under-the-cafa\/","title":{"rendered":"Missed Opportunity: Tenth Circuit Rules Wendy\u2019s Missed The Removal Deadline For A Colorado Wage & Hour Class Action Under The CAFA"},"content":{"rendered":"\n

By Gerald L. Maatman, Jr., Tiffany E. Alberti, and Bernadette Coyle<\/strong><\/p>\n\n\n

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Duane Morris Takeaways:<\/strong> On October 10, 2024, the Tenth Circuit declined to overturn <\/a>a district court order that remanded a Colorado wage & hour class action back to state court after it found that Wendy\u2019s International (\u201cWendy\u2019s\u201d) failed to file its removal request within the 30-day removal provision of the Class Action Fairness Act (\u201cCAFA\u201d) after Plaintiffs provided a demand that triggered the CAFA factors. The ruling in Little v. Wendy\u2019s International, LLC, Case No. 24-1232, 2024 WL 4455858 (10th Cir. Oct. 10, 2024), is a lesson for corporate defendants on fundamental time deadlines for removals of class actions under the CAFA.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

The CAFA expands federal subject-matter jurisdiction over class action lawsuits in the United States by providing a way for defendants to remove these cases from state courts to federal courts. To bring remove a case to federal court through the CAFA, there must be: (1) minimal diversity; (2) 100 or more putative class members; and (3) more than $5 million in controversy. 28 U.S.C \u00a7 1332(d)(2). A defendant must generally remove the case either within 30 days of receipt of the initial complaint showing that the CAFA\u2019s jurisdictional requirements are met or within 30 days of receipt of \u201ca copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.\u201d Id. at \u00a7 1446(b)(3) (emphasis added).<\/p>\n\n\n\n

In October 2020, Jeffrey Little (\u201cPlaintiff\u201d) filed a putative class against Wendy\u2019s in Colorado state court, accusing the fast food chain of violating the Colorado Wage Claim Act, Colo. Rev. Stat. \u00a7\u00a7 8-4-101\u2013125, and the Colorado Minimum Wage Act, Colo. Rev. Stat. \u00a7\u00a7 8-6-101\u2013120, by failing to ensure workers took meal and rest breaks.<\/p>\n\n\n\n

In January 2023, as the state court considered certifying a class of Wendy\u2019s workers in Colorado, Plaintiff\u2019s counsel sent two demand letters to Wendy\u2019s. The first letter stated in part, \u201cPursuant to C.R.S. \u00a7 8-4-109, demand is made for payment of wages in the amount of $5,930,118.70.\u201d 2024 WL 4455858, at *1. The second letter, sent one and a half weeks later, stated in part, \u201cPursuant to C.R.S. \u00a7 8-4-109, Jeffrey Little, and designated representative attorneys Alexander Hood and Brian D. Gonzales, hereby demand payment of wages in the amount of $5,100,000.00.\u201d Id.<\/p>\n\n\n\n

The state court granted the Plaintiff\u2019s class certification motion on October 31, 2023. Relying on the removal provisions of the CAFA, under \u00a7\u00a7 1332(d), 1453(b), 1446, Wendy\u2019s removed the action to federal court in November 2023, arguing that the 30-day deadline was not triggered by the Plaintiff\u2019s original and amended state court complaints because the complaints did not address the size of the proposed class and the amount of damages. Wendy\u2019s also contended that the demand letters did not trigger the 30-day deadline because there was no explanation for the amount sought and the demand letters did not claim to be settlement offers. The district court disagreed and granted Little\u2019s motion to remand the action to state court after finding that Wendy\u2019s removal motion was untimely.<\/p>\n\n\n\n

Wendy\u2019s appealed the remand order to the Tenth Circuit.<\/p>\n\n\n\n

The Tenth Circuit\u2019s Ruling<\/strong><\/p>\n\n\n\n

On appeal, Wendy\u2019s made three arguments. First, Wendy\u2019s argued that the figures in the demand letters merely stated an amount without adequately explaining the basis for the amount sought, and thus did not trigger the 30-day removal period under \u00a7 1446 of the CAFA. Second, Wendy\u2019s claimed that the demand did not reflect a reasonable estimate of the claims because they did not purport to be settlement offers. Finally, Wendy\u2019s contended that the district court\u2019s remand order incorrectly went beyond the four corners of the Plaintiff\u2019s initial complaints and the demand letters in determining that Wendy\u2019s was late in filing its removal request.<\/p>\n\n\n\n

On the issue regarding whether the demand letters provided Wendy\u2019s with adequate notice of the amount of monetary damages sought, the Tenth Circuit explained that in invoking C.R.S. \u00a7 8-4-109, which is intended to supply notice to a potential defendant of an employee\u2019s intention to seek unpaid wages, the demand letters went beyond an ambiguous statement by making \u201cspecific demands that had statutory significance.\u201d Id<\/em>. at *6. It noted that while other circuits (specifically the Eighth Circuit) have required more than unproven statements to trigger the 30-day deadline, the Tenth Circuit had previously ruled that a Colorado state court civil cover sheet (that indicates a box stating the amount in controversy) provided adequate notice to the defendant. Thus, the Tenth Circuit held that each of the demand letters was sufficient to put Wendy\u2019s on notice that the amount in controversy exceeded $5 million, thereby triggering the third CAFA factor, and ultimately determining Wendy\u2019s filing of the removal untimely.<\/p>\n\n\n\n

On the issue regarding whether the district erred in relying on \u201cother paper\u201d received through discovery to adequately put Wendy\u2019s on notice of the $5 million in controversy, the Tenth Circuit held that the district court was allowed to rely on limited discovery that revealed extent of Wendy\u2019s workforce and operations in Colorado that would support the amount in controversy. It explained that, \u201c[t]he evidence developed in discovery helped to show that the demand letters at least appeared to reflect a reasonable estimate of the plaintiff\u2019s claim, even if they did not provide a precise mathematical calculation underlying the estimate.\u201d Id.<\/em> For this reason, the Tenth Circuit concluded that the district court did not err in its evaluation of \u201cother paper\u201d for the purposes of the CAFA.<\/p>\n\n\n\n

Implications For Corporations<\/strong><\/p>\n\n\n\n

The Tenth Circuit\u2019s ruling underscores the importance of a global consideration of all documents exchanged throughout litigation that can effectively determine the best strategy for corporations facing potential class action lawsuits. Because the CAFA is a powerful tool to combat against state court class actions, where federal courts are less attractive forums for plaintiffs, it is crucial for employers to prioritize initial complaints, demand letters, and other papers (such as discovery documents) to recognize whether they are put on notice of the CAFA factors ensuring they meet the 30-day deadline for removal to federal court.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Tiffany E. Alberti, and Bernadette Coyle Duane Morris Takeaways: On October 10, 2024, the Tenth Circuit declined to overturn a district court order that remanded a Colorado wage & hour class action back to state court after it found that Wendy\u2019s International (\u201cWendy\u2019s\u201d) failed to file its removal request within … <\/p>\n

Continue reading “Missed Opportunity: Tenth Circuit Rules Wendy\u2019s Missed The Removal Deadline For A Colorado Wage & Hour Class Action Under The CAFA”<\/span><\/a><\/p>\n","protected":false},"author":583,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[30],"class_list":["post-1806","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":30,"user_id":583,"is_guest":0,"slug":"classactiondefense","display_name":"Class Action Defense","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2020\/10\/dmlogo.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/583"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=1806"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1806\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=1806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=1806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=1806"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=1806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}