Adoma v. University of Phoenix, Inc.

270 F.R.D. 543, 2010 U.S. Dist. LEXIS 96388, 2010 WL 3431804
District Court, E.D. California·Decided August 31, 2010·No. No. CIV. S-10-0059 LKK/GGH·Published·Cited by 14 cases

Opinion

ORDER

LAWRENCE K. KARLTON, Senior District Judge.

Plaintiffs seek class certification on state law wage and hour claims. On August 13, 2010, the court declined to exercise jurisdiction over plaintiffs’ federal Fair Labor Standards Act claims, pursuant to the first-to-file rule and a case proceeding in the Eastern District of Pennsylvania. (Dkt. No. 70). Because that order disposed of all federal claims and the complaint only asserted supplemental jurisdiction as a basis for jurisdiction over state law claims, the court ordered supplemental briefing regarding subject matter jurisdiction.

For the reasons stated below, the court concludes that it has jurisdiction over plaintiffs’ state law claims under the Class Action Fairness Act, 28 U.S.C. § 1332(d). Plaintiffs’ motion for class certification under Fed. R.Civ.P. 23(b)(3) is granted.

I. Background1

Defendant University of Phoenix (“UOP”) is a private, for-profit educational institution that offers classes at 362 independent campuses throughout the United States, and [546]*546through online programs. Defendant Apollo Group, Inc. is the parent company of UOP and handled all of the administrative functions relating to payroll.

Plaintiffs Adoma and Abbaszadeh worked as Enrollment Counselors for one or both defendants. Plaintiffs allege that defendants maintained two computer systems regarding Enrollment Counselors’ work. One system tracked the Counselors’ availability for taking calls and another that was used to track overtime hours worked. Plaintiffs’ primary claim is that the former system may be used to demonstrate that Enrollment Counselors worked overtime not recorded by the latter system; this is therefore a claim for “off-thecloek” unpaid overtime.

Plaintiffs’ second theory of liability argues that defendants paid the wrong hourly rate for overtime. Enrollment Counselors were offered tuition waivers for University of Phoenix coursework. Plaintiffs argue that because the “time and a half’ pay they received for overtime was calculated without including the value of this benefit, they received inadequate compensation for overtime.

Plaintiffs’ third theory is that defendants caused employees to miss meal periods. It is undisputed that defendants had a written policy granting employees permission to take a 60 minute meal break on any day in which the employee worked five hours. Plaintiffs argue that despite this policy, employees were frequently obliged to miss meal periods. Finally, plaintiffs also bring state law claims for waiting time penalties and for inaccurate pay stubs.

At least two other suits have been filed claiming that the University of Phoenix failed to fully pay enrollment counselors for overtime work.

In Sabol v. The University of Phoenix, No. CV 09-03439-JCJ (E.D. Pa.) (“Sabol”), plaintiffs Erik M. Sabol and Rebecca Odom contend UOP’s counselors routinely worked overtime hours without compensation, at the direction of the supervisors. On May 12, 2010, the Eastern District of Pennsylvania certified a nationwide FLSA collective action in Sabol. 2010 U.S. Dist. LEXIS 47145. In finding that collective certification was appropriate, the Sabol court relied on the uniformity of Enrollment Counselors’ duties and allegations a pervasive policy of requiring employees to work unpaid overtime, for example, by requiring employees to attend “lunch and learn” sessions or to work on Saturdays without counting that time as hours worked. Id. at *14-15. The Sabol court also relied on the Avaya phone records as indicia of hours worked. Id. at *15. By order filed August 13, 2010, this court declined to exercise jurisdiction over the FLSA claims advanced in this case, instead transferring these claims to the Sabol court.

In Juric v. The University of Phoenix, Inc., No. 09-CV-3214 ODW (C. D.Cal.), plaintiff initially filed a putative class action University of Phoenix and Apollo solely bringing claims under California law. The complaint was filed on April 30, 2009. On January 6, 2010, the Juric court issued an Order Granting Stipulation for Leave to Amend. Juric subsequently abandoned his state law class claims, filing an amended complaint stating claims under the FLSA for unpaid overtime wages and other relief. Id. This amended complaint sought collective action certification for a class composed of enrollment and admission counselors, employed by defendants with the past three years. Id. On February 16, 2010, defendants filed a motion to dismiss, or in the alternative, stay the Juric FLSA collective action claim. Id. at 6. While that motion was pending, on April 27, 2010, the parties filed a notice of settlement. The settlement was finalized on June 18, and the case dismissed on June 21, 2010. No class or FLSA collective action was ever certified, and the settlement pertains to solely to defendants and the named plaintiff.

II. Jurisdiction

The Class Action Fairness Act, 28 U.S.C. § 1332(d), provides that

The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which ... any member of a class of plaintiffs is a citizen of a State different from any defendant;

[547]*54728 U.S.C. § 1332(d)(2). The court may exercise jurisdiction under this section over putative class actions in which no class certification order has yet been entered. § 1332(d)(8). The parties’ filings demonstrate that defendants are citizens of Arizona, that the named plaintiffs are citizens of California, and that the exceptions to jurisdiction in paragraphs (d)(4), (d)(5), and (d)(9) do not apply.

The remaining issue is whether the $5,000,000 amount in controversy requirement has been satisfied. Under CAFA, the court aggregates potential class members’ claims. § 1332(d)(6). Jurisdiction is proper unless there is a “legal certainty” that the claim is for less than this amount. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938), Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 375 (9th Cir.1997).

The potential class includes well over one thousand members. On the “off-the-cloek” overtime claim for which named plaintiff Adorna seeks class certification, she alleges individual compensatory damages in excess of $34,000 and claims that evidence already produced demonstrates $4,732.47 in liability. On plaintiffs’ claim for statutory waiting time penalties, plaintiffs seek up to the statutory maximum of $4,000 per employee (albeit only for a sub-class estimated to include 500 to 700 employees).

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Adoma v. University of Phoenix, Inc., 270 F.R.D. 543, 2010 U.S. Dist. LEXIS 96388, 2010 WL 3431804 (E.D. Cal. 2010).

270 F.R.D. 543 (Adoma v. University of Phoenix, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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