Urbino v. Orkin Servs. of California, Inc.

Under 28 U.S.C. § 1332(a), the amount in controversy cannot be aggregated by multiple plaintiffs who “assert separate and distinct claims” unless the claims “unite to enforce a single title or right in which they have a common and undivided interest,” and the source of that interest is “derived from rights that they hold in group status.”

From 2005 to 2010, John Urbino, a California citizen, was employed by Orkin Servs of California, Inc. (“Orkin”) and Rollins, Inc. (“Rollins”), both Delaware corporations. Under California’s Private Attorneys General Act of 2004 (“PAGA”), an “aggrieved employee [may] commence civil action…on behalf of himself or herself and other current or former employees against his or her employer” for violation of California’s labor codes “if the state agency declines to investigate the claim or issue a citation.” Urbino filed a representative PAGA action in state court alleging that he and other employees suffered from various labor code violations. Orkin and Rollins removed the matter to federal court based on diversity jurisdiction claiming that, when combined, the claims of 811 other employees represented in the case exceeded the minimum amount in controversy requirement of $75,000. Urbino moved to remand the case to state court arguing that employee claims should not be aggregated. (The largest claim was under $12,000.) The district court denied his motion and stated that the claims were “common and undivided” giving the district court jurisdiction. The Ninth Circuit held that federal courts did not have jurisdiction because the claims of the employees did not “unite to enforce a single title or right in which they have a common and undivided interest” and determined that Orkin and Rollins did not owe an obligation to the employees as a collective group, but to the employees individually. VACATED AND REMANDED.