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Henry v. Warner Music Group Corp.

United States District Court, S.D. New York

March 24, 2014

JUSTIN HENRY, individually and on behalf of other persons similarly situated who were employed by WARNER MUSIC GROUP CORP. and ATLANTIC RECORDING CORPORATION, Plaintiffs,
v.
WARNER MUSIC GROUP CORP. and ATLANTIC RECORDING CORPORATION, Defendants.

MEMORANDUM OPINION & ORDER

PAUL G. GARDEPHE, District Judge.

Plaintiff Justin Henry filed this putative class action in the Supreme Court of the State of New York, New York County, against Warner Music Group ("WMG") and Atlantic Recording Corporation (collectively, "Defendants"). Plaintiff alleges that Defendants violated various provisions of the New York Labor Law, § 650 et seq., by misclassifying him and other similarly situated persons as unpaid interns. On July 19, 2013, Defendants removed this suit to this Court, pursuant to the Class Action Fairness Act (the "CAFA"), 28 U.S.C. § 1332. Plaintiff now moves to remand, arguing that Defendants have not met their burden of demonstrating that the amount in controversy satisfies the CAFA's jurisdictional requirements. In the event that this Court concludes that this requirement has been met, Plaintiff argues that at least one of three statutory exceptions to the CAFA applies. For the reasons set forth below, Plaintiff's motion to remand will be denied.

BACKGROUND

On June 17, 2013, Plaintiff filed this putative class action in Supreme Court of the State of New York, New York County. (Notice of Removal (Dkt. No. 1), Ex. A. ("Cmplt.") ¶ 14). Plaintiff alleges that Defendants violated the New York Labor Law by misclassifying him and other putative class members as unpaid interns, thus improperly exempting them from minimum wage and overtime pay requirements. (Id. ¶¶ 1-3, 9, 15)

The Complaint asserts claims on behalf a class consisting of all persons who worked as unpaid interns in Defendants' New York offices. (Id. ¶ 12, 15) Plaintiff Justin Henry alleges that he worked as an unpaid intern from October 2007 to May 2008. (Id. ¶¶ 8-9) Notwithstanding his title, Plaintiff contends that he is a covered employee under the New York Labor Law and is entitled to a minimum wage and overtime pay. (Id. ¶ 3)

The Complaint alleges that Plaintiff performed various clerical duties for Defendants including, inter alia, answering telephones, making photocopies, making deliveries, preparing coffee, and obtaining lunch for paid employees. (Id. ¶ 24) The Complaint further alleges that Plaintiff regularly worked from 10:00 a.m. to 5:00 p.m. or later, and that he sometimes worked more than 40 hours per week. (Id. ¶ 34, 36) Plaintiff states that he received no pay or academic credit for his work, and alleges that - absent his labor and that of the other putative class members - Defendants would have been forced to hire additional paid employees. (Id. ¶¶ 25-28)

On July 19, 2013, Defendants removed this action to this Court pursuant to the CAFA, which is codified at 28 U.S.C. § 1332(d). (Notice of Removal (Dkt. No. 1)) Shortly thereafter, Plaintiff moved to remand the action, arguing that Defendants have not demonstrated that the amount in controversy satisfies the CAFA's jurisdictional minimum. (Pltf. Mot. (Dkt. No. 9) ¶ 3) In the alternative, Plaintiff argues that remand is appropriate under the CAFA's mandatory "local controversy" or "home state" exceptions, see 28 U.S.C. § 1332(d)(4)(A), (d)(4)(B), or its discretionary "interests of justice" exception, see id. § 1332(d)(3). (Id. ¶¶ 4-5)

DISCUSSION

I. STANDARD OF REVIEW

"Under 28 U.S.C. § 1441, a civil action filed in state court may be removed by the defendant to federal district court if the district court has original subject matter jurisdiction over the plaintiff's claim." Lupo v. Human Affairs Int'l , 28 F.3d 269, 271 (2d Cir. 1994). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447.

"On a motion to remand, the party seeking removal bears the burden of establishing to a reasonable probability' that removal is proper." Anwar v. Fairfield Greenwich Ltd. , 676 F.Supp.2d 285, 292 (S.D.N.Y. 2009). "Any doubts regarding the propriety of removal are resolved in favor of remand, and federal courts construe the removal statute narrowly.'" Id . (quoting Lupo , 28 F.3d at 274).

Defendants assert that this Court has subject matter jurisdiction under 28 U.S.C. § 1441 and the CAFA. (Notice of Removal (Dkt. No. 1) ¶ 4). The CAFA provides for federal jurisdiction over class actions where (1) there is minimal diversity, i.e., at least one member of the putative class and one defendant are citizens of different states; (2) the number of putative class members exceeds 100 people; and (3) the amount in controversy is greater than $5 million. 28 U.S.C. § 1332(d)(2)(A), (d)(5)(B). A party may aggregate the claims of individual class members to reach this jurisdictional amount. 28 U.S.C. § 1332(d)(6) ("In any class action, the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs.").

"Under [the] CAFA, as under the traditional rule, the party asserting subject matter jurisdiction has the burden of proving it" by a preponderance of the evidence. Blockbuster, Inc. v. Galeno , 472 F.3d 53, 59 (2d Cir. 2006); see also United States v. Makarova , 201 F.3d 110, 113 (2d Cir. 2000) ("A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists."). To satisfy the jurisdictional amount requirement under the CAFA, Defendants must demonstrate "to a reasonable probability' that the aggregate claims of the plaintiff class are in excess of $5 million." Blockbuster , 472 F.3d at 58 (citing Mehlenbacher v. Akzo Nobel Salt, Inc. , 216 F.3d 291, 296 (2d Cir. 2000); 28 U.S.C. § 1332(d)(2), (6)). Plaintiff argues that Defendants have not met their burden as to jurisdictional amount.[1] (Pltf. Br. (Dkt. No. 10) at 4 (citing Sorrentino v. ASN Roosevelt Center, LLC , 588 F.Supp.2d 350, 355 (E.D.N.Y. 2008)).

II. ...


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