A federal court has denied a former employee’s bid to return a proposed wage-and-hour class action to California state court, ruling that Ricoh USA, Inc. successfully established federal jurisdiction under the Class Action Fairness Act (CAFA).
In the complaint, S.B., a former service technician for Ricoh, alleges that the company failed to pay overtime wages and reimburse business-related vehicle expenses for himself and other similarly situated technicians. He asserts that technicians were required to use personal vehicles to transport tools and equipment to customer sites without being fully compensated for travel time or mileage. The suit also seeks penalties under California’s Private Attorneys General Act (PAGA) and alleges violations of the state’s wage statement and unfair competition laws.
The case was originally filed in Los Angeles County Superior Court on November 5, 2024. Ricoh removed it to federal court on December 13, 2024, invoking CAFA jurisdiction. The company alleged that the amount in controversy exceeded the $5 million threshold, the putative class included more than 100 members, and minimal diversity was satisfied. S.B. moved to remand the case, arguing that Ricoh had failed to prove the jurisdictional requirements.
Court finds diversity and amount in controversy met
The U.S. District Court for the Central District of California rejected the plaintiff’s arguments, finding both minimal diversity and the amount in controversy requirements were met.
S.B., a California resident, did not dispute that Ricoh is incorporated in Delaware. However, he challenged the company’s claim that its principal place of business is in Pennsylvania. The court found that Ricoh’s declaration, which stated that its CEO, general counsel, and senior human resources executive are based in Pennsylvania, sufficiently demonstrated that its “nerve center” is there. The court concluded that Ricoh is a citizen of Delaware and Pennsylvania and that CAFA’s minimal diversity requirement was satisfied.
Turning to the amount in controversy, the court accepted Ricoh’s estimate that the claims involved more than $6 million in damages. Ricoh based its estimate on data showing that 258 service technicians in California collectively worked 41,406 full-time workweeks during the relevant period. Using an average hourly wage of $32.87, the company calculated potential damages for:
- Unpaid overtime wages: Assuming one hour of unpaid overtime per week at an overtime rate of $45, Ricoh calculated $1.86 million in exposure.
- Unreimbursed mileage: Assuming 150 unreimbursed miles per week at the IRS mileage rate of $0.67 per mile, the exposure was estimated at $4.16 million.
The court concluded these estimates were reasonable given the allegations in the complaint, which stated that technicians regularly worked beyond 40 hours per week and were not reimbursed for significant mileage.
“The Court is convinced that the amount in controversy more likely than not exceeds $5 million,” it ruled.
Assumptions based on complaint deemed reasonable
In evaluating the evidence, the court applied guidance from the Ninth Circuit’s March 2025 decision in Perez v. Rose Hills Co., which held that violation-rate assumptions in CAFA cases do not necessarily require supporting evidence if they are based on a reasonable interpretation of the complaint.
Here, Ricoh assumed uniform violations across the class based on the complaint’s allegations that all technicians were subject to the same mileage reimbursement and pay policies. The court accepted these assumptions, noting the complaint did not allege the practices were sporadic or limited to specific employees.
“While equally valid assumptions could be made that would lower the amount in controversy,” the court wrote, “Defendant’s assumptions are sufficiently tethered to the systemic allegations of the Complaint.”
The court also noted that plaintiff could have constrained the analysis by including more specific facts about the technicians’ commutes or variation in assignments, but did not.
Because the amount in controversy exceeded the $5 million CAFA threshold and the other jurisdictional elements were satisfied, the court denied the plaintiff’s motion to remand.
For more information, see Saranay Sonny Ballungay v. Ricoh USA, Inc. et al, No. 2:2024cv10785 – Document 17 (C.D. Cal. 2025).
