CAFA Threshold Assumptions Must Be 'Reasonable': 9th Circ.

By Michael Lipkin (January 8, 2015, 6:02 PM EST) -- The Ninth Circuit on Thursday gave a Cox Enterprises Inc. subsidiary another chance to establish the Class Action Fairness Act's $5 million minimum for removing a putative employment class action to federal court, ruling defendants needed reasonable grounds for assumptions used in their potential damages calculations.

The Cox unit, used vehicle auction company Manheim Investments Inc., assumed that every prospective class member suffered a labor violation when deriving the amount in controversy, based on the complaint's allegations of a widespread pattern of violations. But the Ninth Circuit panel ruled that assumption wasn't based on real evidence.

"Because the complaint does not...

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