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Romulus v. CVS Pharm., Inc.

United States Court of Appeals, First Circuit

October 24, 2014

DAVID ROMULUS, CASSANDRA BEALE, NICHOLAS HARRIS, ASHLEY HILARIO, AND ROBERT BOURASSA, on behalf of themselves and all other persons similarly situated, Plaintiffs, Appellees,
CVS PHARMACY, INC., Defendant, Appellant

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James Norman Boudreau, with whom John F. Farraher, Jr., and Greenberg Traurig, LLP were on brief for appellant.

Thomas V. Urmy, Jr., with whom Rachel M. Brown, Patrick J. Vallely, and Shapiro Haber & Urmy LLP were on brief for appellees.

Before Lynch, Chief Judge, Torruella and Howard, Circuit Judges.


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LYNCH, Chief Judge.

CVS Pharmacy, Inc. takes this interlocutory appeal from an order granting the plaintiffs' motion to remand a putative class action for wage and hour violations. In this case of first impression in this circuit, we clarify the removal time periods and mechanisms under the Class Action Fairness Act of 2005 (" CAFA" ).

Under CAFA, federal courts have jurisdiction over a class action if, among other requirements, the amount in controversy exceeds $5 million. Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345, 1347, 185 L.Ed.2d 439 (2013) (citing 28 U.S.C. § 1332(d)(2), (d)(5)). Section 1446(b) specifies two time periods within which a defendant must remove a class action that satisfies CAFA's jurisdictional requirements from state court to federal court. See 28 U.S.C. § 1453(b) (applying Section 1446(b)(1) and (b)(3) to class actions). If the case as stated by the initial pleading is removable, Section 1446(b)(1) requires the defendant to remove within thirty days of its receipt. See id. § 1446(b)(1). Section 1446(b)(3) requires the defendant to remove within thirty days of receiving a subsequent paper from which it may first be ascertained that the class action is or has become removable. See id. § 1446(b)(3).

The district court granted the plaintiffs' motion to remand for several reasons. Romulus v. CVS Pharmacy, Inc., No. 13-10305-RWZ, 2014 WL 1271767 (D. Mass. Mar. 27, 2014) [hereinafter Romulus II]. It held that CVS's notice of removal came too late to meet the thirty-day deadline in Section 1446(b)(1), and that the second thirty-day deadline in Section 1446(b)(3) did not apply. [WL] at *2-3. It then held that CVS had not met its burden to establish the substantive amount in controversy requirement. [WL] at *3 n.3. We reverse. We hold that CVS's second notice of removal was timely under Section 1446(b)(3), and that CVS sufficiently demonstrated that the amount in controversy exceeds $5 million. Removal was appropriate; remand was not.[1]

We resolve the previously unanswered question in this circuit as to when the two time limits in Section 1446(b) mandate removal within thirty days. In line with the other circuits that have adopted a bright-line approach, we hold that the time limits in Section 1446(b) apply when the plaintiffs' pleadings or the plaintiffs' other papers provide the defendant with a clear statement of the damages sought or with sufficient facts from which damages can be readily calculated. We also clarify the meaning of the statutory term " other paper."

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28 U.S.C. § 1446(b)(3). On the merits, we hold that CVS has adequately met its burden to show removal.

I. Procedural History

Named plaintiffs David Romulus, Cassandra Beale, Nicholas Harris, Ashley Hilario, and Robert Bourassa, all " Shift Supervisors" at CVS stores in Massachusetts, filed a First Amended Class Action Complaint against CVS in Massachusetts Superior Court on August 31, 2011.[2] The plaintiffs allege that CVS has a policy under which Shift Supervisors must remain on store premises when taking rest or meal breaks when there are no other managerial employees on duty or when there is only one other employee on duty. Despite requiring Shift Supervisors to stay on store premises, the plaintiffs allege that CVS does not pay them for these " breaks" in violation of the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148, and the Massachusetts Overtime Statute, Mass. Gen. Laws ch. 151, § § 1A, 1B.

The plaintiffs allege that " CVS has employed many hundreds, if not thousands, of Shift Supervisors in Massachusetts" since July 25, 2008. They seek unpaid wages (including overtime wages), treble damages, interest, attorneys' fees, and costs for those breaks in the class period during which they were required to stay on store premises. The plaintiffs did not provide information on the number of breaks at issue, or the total amount of damages sought in the First Amended Complaint.

CVS, perhaps in an abundance of caution, nevertheless sought to remove within thirty days of service, on September 30, 2011. To calculate the plaintiffs' damages, CVS relied on a series of estimates. Assuming that the class members lost each meal break during the class period, CVS calculated total damages of $10,396,944.[3]

The district court rejected CVS's calculation and granted the plaintiffs' motion to remand the case to Massachusetts state court. Romulus v. CVS Pharmacy, Inc., No. 11-11734-RWZ, 2012 WL 899577 (D. Mass. Mar. 16, 2012) [hereinafter Romulus I]. The court noted that " [t]he difficulty with defendant's calculation is that it assumes all shift supervisors lost their break each day of their employment during the class period while the complaint clearly states that the circumstances leading to such loss occurred 'sometimes.'" [WL] at *1. " Because defendant's assumptions are in no way rooted in the allegations of the complaint, defendant fails to meet its burden of proving the requisite jurisdictional amount." Id. The propriety of the district court's first remand order is not before us.

The parties conducted preliminary discovery upon their return to state court. CVS provided the plaintiffs with electronic time and attendance data relating to Massachusetts Shift Supervisors from August 2010 through June 2012. Analyzing this data, the plaintiffs found 116,499 meal breaks during this period when no other

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Shift Supervisor was working. They informed CVS of this number, a very important component of this damages calculation, by email on January 18, 2013.

Within thirty days of receipt of this email, CVS filed its second notice of removal on February 15, 2013. CVS extrapolated the plaintiffs' number of violations over the entire class period, and argued that there was " a reasonable probability that the amount in controversy exceeds $5,000,000." CVS argued that this second notice of removal was " timely under 28 U.S.C. § 1446(b)(3) because it was filed within 30 days of the date that CVS ascertained that this case became removable" based on the email provided by the plaintiffs.

On March 27, 2014, the district court again granted the plaintiffs' motion to remand, finding that CVS's notice of removal was untimely and concluding on the merits that CVS had " failed to 'show a reasonable probability that more than $5 million is at stake in this case.'" Romulus II, 2014 WL 1271767, at *3 & n.3 (citing Amoche v. Guar. Trust Life Ins. Co., 556 F.3d 41, 50-51 (1st Cir. 2009)).

On the question of timeliness, the district court concluded that CVS must rely on Section 1446(b)(3) since " [f]ar more than thirty days have elapsed since service of plaintiffs' amended complaint." [WL] at *2. Without the guidance of circuit precedent, the district court held that the defendant had failed to identify any paper " providing information from which it later ascertained removability for the first time." Id. Even if the January 18, 2013, email qualified as an " other paper" for the purposes of Section 1446(b)(3), it " provide[d] no 'new' information regarding removability that could not have been previously ascertained by defendant in light of the allegations in the amended complaint and its own knowledge and information." [WL] at *2-3. The district court highlighted that the estimate contained in the January 18, 2013, email came from data that CVS had possessed from the beginning of litigation and had provided to the plaintiffs. [WL] at *2. The district court found that CVS had violated a duty to make a reasonable inquiry into its own records at the time of the complaint. Id. (citing Sok v. U.S. Fid. & Guar. Co., No. 91-12028, 1992 WL 97193, at *1 (D. Mass. Apr. 27, 1992)).

On the substantive question of the amount in controversy, the district court noted the plaintiffs' objections to defendant's calculations of the amount in controversy. [WL] at *3 n.3. The district court, without further explanation, then stated that the " Plaintiffs' arguments on these points are persuasive, and I find that defendant, despite having 'better access to the relevant information,' has failed to 'show a reasonable probability that more than $5 million is at stake in this case.'" Id. (quoting Amoche, 556 F.3d at 50-51).

CVS sought leave to appeal the district court's order on an interlocutory basis under 28 U.S.C. § 1453(c)(1). This court asked the district court to clarify " whether, in its view, the removal was untimely with respect to a particular 30-day period in § 1446(b); and if so, whether the 30 days ran from a particular date." The district court explained in response:

The only possibly qualifying document [under § 1446(b)(3)] [defendant] received was the January 18, 2013, e-mail. I deemed it inadequate to serve as an " other paper" because it was based entirely on information provided by defendant. Because the information was readily available to defendant from the start, it provided no " new" information regarding removability that would allow use of the date of the e-mail as the starting date for determining timeliness. Accordingly, I deemed the proper date

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for calculating timeliness to be the date of the return of service, September 8, 2011, which necessarily followed receipt by defendant of the First Amended Complaint.

Romulus v. CVS Pharmacy, Inc., No. 13-10305-RWZ, 2014 WL 2435089, at *1 (D. Mass. May 30, 2014) [hereinafter Romulus III].

This Court granted the petition for review on September 8, 2014, and asked the parties to address a series of questions.[4] The parties submitted supplemental briefing on these issues.

We now hold that Section 1446(b)'s thirty-day clocks are triggered only when the plaintiffs' complaint or plaintiffs' subsequent paper provides the defendant with sufficient information to easily determine that the matter is removable. The district court erred in imposing too great a duty of inquiry on the defendant. In this case, the plaintiffs' January 18, 2013, email triggered Section 1446(b)(3)'s thirty-day deadline by providing sufficient information from which to easily ascertain the amount in controversy for the first time. The plaintiffs' email was not disqualified from being an " other paper" by the fact that it was based on information provided by the defendant. CVS's second notice of removal on February 15, 2013, was therefore timely.

In addition, we hold that CVS carried its substantive burden of demonstrating a reasonable probability that the amount in controversy exceeds $5 million, as required for federal jurisdiction under CAFA. We do not, as a consequence, reach the difficult questions related to the availability and mechanics of removal outside of the two thirty-day windows in Section 1446(b).

II. Appellate Justiciability

The plaintiffs mistakenly argue that this interlocutory appeal is untimely, and that this court lacks jurisdiction over the appeal. Under CAFA, " [i]f the court of appeals accepts an appeal under paragraph (1), the court shall complete all action on such appeal, including rendering judgment, not later than 60 days after the date on which such appeal was filed, unless an extension is granted under paragraph (3)." 28 U.S.C. ยง 1453(c)(2). The ...

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