                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


PATRICK LACROSS; ROBERT LIRA;            No. 14-56780
MATTHEW LOFTON, on behalf of
themselves and all others similarly         D.C. No.
situated,                                5:14-cv-00771-
                Plaintiffs-Appellees,       JGB-JC

                 v.
                                           OPINION
KNIGHT TRANSPORTATION INC., an
Arizona Corporation; KNIGHT
TRUCK AND TRAILER SALES, LLC,
an Arizona Limited Liability
Company,
             Defendants-Appellants.


      Appeal from the United States District Court
          for the Central District of California
       Jesus G. Bernal, District Judge, Presiding

               Argued and Submitted
        December 8, 2014—Pasadena, California

                 Filed January 8, 2015

       Before: Susan P. Graber, Ronald M. Gould,
       and Consuelo M. Callahan, Circuit Judges.

                Opinion by Judge Gould
2           LACROSS V. KNIGHT TRANSPORTATION

                           SUMMARY*


    Class Action Fairness Act / Amount in Controversy

    The panel reversed the district court’s judgment
remanding the putative class action to state court, and held
that the defendants Knight Transportation, Inc., and Knight
Truck and Trailer Sales had shown that they were entitled
under the Class Action Fairness Act to proceed in federal
court because they had established the requisite $5 million
amount in controversy.

    The plaintiff putative class of truck drivers alleged that
Knight misclassified them as independent contractors and
asserted other labor law violations, and filed their action in
California state court. Knight removed the case to federal
court and estimated the amount in controversy for
reimbursing the drivers’ lease-related and fuel costs to be at
least $44 million

     In Ibarra v. Manheim Investments, Inc., __ F.3d __.
No. 14-56779 (9th Cir. Jan. 8, 2015), filed simultaneously
with this opinion, the panel held that when a defendant relies
on a chain of reasoning that includes assumptions to satisfy
its burden to prove by a preponderance of the evidence that
the amount in controversy exceeded $5 million, the chain of
reasoning and its underlying assumptions must be reasonable.

    The panel applied the framework of analysis in Ibarra to
defendants’ proof, and concluded that defendants had met

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
          LACROSS V. KNIGHT TRANSPORTATION                  3

their burden of proof because defendants relied on a
reasonable chain of logic and presented sufficient evidence to
establish that the amount in controversy exceeded $5 million.


                        COUNSEL

Richard H. Rahm (argued), James E. Hart, Carly Nese, and
Thomas J. Whiteside, Littler Mendelson, P.C., San Francisco,
California, for Defendants-Appellants.

James M. Trush (argued), Trush Law Office, Costa Mesa,
California; Ellen R. Serbin, Todd H. Harrison, and Brennan
S. Kahn, Perona, Langer, Beck, Serbin, Mendoza & Harrison,
APC, Long Beach, California, for Plaintiffs-Appellees.


                         OPINION

GOULD, Circuit Judge:

    With this appeal pending, we decided Ibarra v. Manheim
Investments, Inc., __F.3d__, No. 14-56779 (9th Cir. Jan. 8,
2015), filed simultaneously with this opinion, and addressed
what proof a defendant seeking removal must produce to
prove the amount in controversy requirement under the Class
Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d),
when the complaint does not include a facially apparent
amount in controversy or may have understated the true
amount in controversy. We held in Ibarra that when the
defendant relies on a chain of reasoning that includes
assumptions to satisfy its burden to prove by a preponderance
of the evidence that the amount in controversy exceeds $5
million, the chain of reasoning and its underlying
4          LACROSS V. KNIGHT TRANSPORTATION

assumptions must be reasonable. Ibarra, __F.3d. at __, slip
op. at 12. We apply our framework of analysis in Ibarra to
defendants’ proof here and conclude that because defendants
relied on a reasonable chain of logic and presented sufficient
evidence to establish that the amount in controversy exceeds
$5 million, defendants have met their burden of proof. We
reverse the district court’s judgment and remand for further
proceedings consistent with this opinion. Defendants have
shown that they are entitled under CAFA to proceed in
federal court.

                               I

    Defendants Knight Transportation, Inc., and Knight Truck
and Trailer Sales, LLC (collectively, “Knight”), are Arizona
corporations licensed to do business in California. The
named plaintiffs Patrick LaCross, Robert Lira, and Matthew
Lofton are truck drivers or “Owner Operators” who
performed work for Knight. Plaintiffs filed a putative class
action against Knight in California state court, alleging that
Knight misclassified them as independent contractors and
asserting other labor law violations.

    Knight removed the case to federal court and estimated
the amount in controversy for reimbursing the drivers’ lease-
related and fuel costs to be at least $44 million. The lease-
related and fuel costs are at stake because if plaintiffs prevail
on their claim that they are employees, Knight will be liable
for its employees’ expenditures related to the ownership and
operation of the trucks. See Cal. Lab. Code § 2802. Plaintiffs
filed a motion to remand the class action to state court. The
district court granted plaintiffs’ motion and remanded the
case to state court, concluding that Knight did not meet its
burden of proof to establish the amount in controversy
             LACROSS V. KNIGHT TRANSPORTATION                             5

because all of Knight’s calculations relied on a flawed
assumption that all drivers worked 50 weeks a year.1 On July
31, 2014, Knight petitioned for permission to appeal, which
we granted on November 10, 2014.2

                                    II

     The sole dispute here is whether CAFA’s requirement that
the amount in controversy exceed $5 million is met. In
Ibarra, we adhered to the rule that the defendant seeking
removal bears the burden of proof to establish by a
preponderance of the evidence that the amount-in-controversy
requirement is satisfied. Ibarra, __F.3d at __, slip op. at 8.
As the Supreme Court has held, a removing party must
initially file a notice of removal that includes “a plausible
allegation that the amount in controversy exceeds the
jurisdictional threshold.” Dart Basin Operating Co. v.
Owens, No. 13-719, 2014 WL 7010692, at *6 (U.S. Dec. 15,


 1
    The district court found that Knight’s assumption was contradicted by
its own evidence of actual fuel costs. For example, plaintiff LaCross was
counted as a class member for one year but he only paid fuel costs for 18
weeks.
     2
      Our November 10, 2014 order granting Knight’s petition for
permission to appeal contains a typographical error where it states that
“we find that the petition for permission to appeal was timely filed on July
21, 2014.” Knight’s petition for permission to appeal was filed on July
31, 2014.

    Plaintiffs contend that the district court’s remand order was entered
on July 18, 2014, so Knight’s petition for permission to appeal was
untimely filed on July 31, 2014. Although the district court’s remand
order was filed on July 18, 2014, the order was entered on July 21, 2014.
Knight’s petition for permission to appeal was timely filed. 28 U.S.C.
§ 1453(c)(1).
6         LACROSS V. KNIGHT TRANSPORTATION

2014). When, as here, “a defendant’s assertion of the amount
in controversy is challenged . . . both sides submit proof and
the court decides, by a preponderance of the evidence,
whether the amount-in-controversy requirement has been
satisfied.” Id. at *5. As we further held in Ibarra, when the
defendant relies on a chain of reasoning that includes
assumptions to satisfy its burden of proof, the chain of
reasoning and its underlying assumptions must be reasonable
ones. Ibarra, __F.3d. at __, slip op. at 12.

     We apply our framework of analysis in Ibarra to Knight’s
evidence but start by noting an important distinction in the
complaints. Unlike the complaint in Ibarra, which alleged a
“pattern and practice” of labor law violations but not
universal violations, the complaint here clearly defined the
class to include only the truck drivers, all of whom allegedly
should have been classified as employees rather than as
independent contractors. As our first source of reference in
determining the amount in controversy, plaintiffs’ complaint
claimed that the truck drivers, as employees, should be
reimbursed for their business expenses. See St. Paul Mercury
Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)
(directing courts to first look to the complaint in determining
the amount in controversy). Were plaintiffs to succeed on
their claim that they are employees, Knight will need to
reimburse them for expenditures related to the ownership and
operation of their trucks, including lease-related costs and
fuel costs. See Cal. Lab. Code § 2802; see also Rea v.
Michaels Stores, Inc., 742 F.3d 1234, 1239 (9th Cir. 2014)
(per curiam) (upholding the underlying assumption that when
all members of the putative class are alleged to have been
misclassified, the consequences of misclassification apply to
all of them).
           LACROSS V. KNIGHT TRANSPORTATION                    7

    Knight calculated its potential liability for the drivers’
fuel costs as follows. Knight provides its drivers with fuel
cards to pay for fuel at a discount. The drivers are not
required to use the cards, so the fuel costs invoiced on
Knight’s fuel cards may be less than the actual fuel costs.
The total fuel costs invoiced on Knight’s fuel cards in the first
quarter of 2014 were $2,369,628. Knight contends that if we
multiply the quarterly fuel costs of $2.3 million by 16
quarters in the four-year class period, the amount in
controversy would be $36.8 million.

    Knight further extrapolated a more conservative estimate
of total fuel costs by taking into account that the number of
drivers varied each year. For example, there were 116 drivers
in 2010 as opposed to 207 drivers in 2014, so a more accurate
calculation of the fuel costs in each quarter of 2010 should be
$1,327,907 ($2,369,628 x 116/207). Knight’s number of
drivers was the lowest in 2010, and even using the lowest
number of drivers in 2010 for all 16 quarters during the
relevant class period, the total estimated fuel costs would be
$21 million ($1,327,907 x 16 quarters).

    The district court erred in concluding that “all of Knights
calculations rely on the assumption that . . . the class . . .
worked for the entirety of the year.” Contrary to the district
court’s conclusion, the foregoing method of calculation
extrapolated fuel costs based on the actual invoiced fuel costs
in the first quarter of 2014 and the actual number of drivers
who signed the independent contractor agreements with
Knight during the relevant class period, without relying on
the assumption that each driver worked the entire year.

   Reviewing the district court’s remand order de novo,
Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 679 (9th
8         LACROSS V. KNIGHT TRANSPORTATION

Cir. 2006) (per curiam), we conclude that Knight has
produced sufficient evidence to establish by a preponderance
of the evidence that the amount in controversy exceeds $5
million. We also conclude that the chain of reasoning and its
underlying assumption to extrapolate fuel costs for the entire
class period using the actual invoiced fuel costs of one quarter
are reasonable for several reasons. First, the complaint
alleges that the class includes only truck drivers, so the fuel
costs are necessary expenses in the discharge of the drivers’
duties. See Cal. Lab. Code § 2802. Second, nothing in the
record shows that the drivers worked for another company
while working for Knight. Third, while the number of drivers
varied during the class period, even using the lowest number
of drivers in 2010 for all 16 quarters during the class period,
the fuel costs would still exceed $5 million.

    At oral argument, plaintiffs contended that the class may
not be able to prove all the elements for reimbursement under
California Labor Code § 2802, so the amount in controversy
likely will not exceed $5 million. Plaintiffs are conflating the
amount in controversy with the amount of damages ultimately
recoverable. As we explained in Ibarra, __F.3d at __, slip
op. at 9 n.1:

       Even when defendants have persuaded a court
       upon a CAFA removal that the amount in
       controversy exceeds $5 million, they are still
       free to challenge the actual amount of
       damages in subsequent proceedings and at
       trial. This is so because they are not
       stipulating to damages suffered, but only
       estimating the damages that are in
       controversy.
          LACROSS V. KNIGHT TRANSPORTATION               9

                            III

    We reverse the district court’s judgment and remand for
further proceedings consistent with this opinion.

   REVERSED and REMANDED.
