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Chase Investment Services Corp. v. Baumann

In this case, Joseph Baumann, a former employee of Chase Investment Services, brought an action against Chase under California’s Private Attorneys General Act (PAGA), claiming that Chase had violated California wage laws by treating him and other employees as “exempt” salaried employees and thus not paying overtime or providing meal and rest breaks. Under PAGA, an employee can bring suit on behalf of the state to collect civil penalties for labor code violations. Most of the penalties go to the state, but some goes to the employee who brings suit and other employees who are found to have been victims of violations. Chase tried to remove the suit to federal court, arguing that it was a class action subject to removal under the Class Action Fairness Act or that conventional diversity jurisdiction applied because the amount in controversy exceeded $75,000, even though it was undisputed that Baumann’s share of any recovery would be less than that. The U.S. Court of Appeals for the Ninth Circuit eventually rejected both of Chase’s jurisdictional arguments, and Chase filed a petition for certiorari seeking review by the Supreme Court. Public Citizen, as co-counsel for Baumann, filed a brief in opposition explaining that certiorari should be denied because there is no disagreement among the lower courts and the court of appeals properly applied both CAFA and precedents concerning diversity jurisdiction. The Supreme Court denied review.