Angel Uribe et al v. All State Cleaning et al
Filing
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ORDER GRANTING DEFENDANT ALL STATE CLEANINGS MOTION FOR SUMMARY JUDGMENT 38 by Judge Dean D. Pregerson. (lc). Modified on 11/4/2014. (lc).
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NO JS-6
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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ANGEL URIBE and GUSTAVO
URIBE,
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Plaintiffs,
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v.
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ALL STATE CLEANING, CLASSEN
ENTERPRISES INC. and CARLOS
MUNGUIA,
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Defendants.
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Case No. CV 12-08351 DDP (PLAx)
ORDER GRANTING DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT
[Dkt. 38]
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Presently before the court is Defendant All State Cleaning
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(“All State”)’s Motion for Summary Judgment.
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submissions of the parties and heard oral argument, the court
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grants the motion and adopts the following order.
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I.
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Having considered the
Background1
Plaintiffs Angel and Gustavo Uribe are former janitorial
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employees of Defendant Classen Enterprises, Inc.
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(Defendant’s Statement of Evidence (“SOE”) Ex. 2 at 100:11-14; Ex.
(“Classen”).
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All State’s motion is based solely on the issue of successor
liability and, with respect to Angel Uribe, exhaustion of
administrative remedies. Accordingly, facts not relevant to those
issues are omitted from the following discussion.
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7 at 10:6-8.)
Classen was a franchisee of ServiceMaster Acceptance
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Company (“ServiceMaster”), from which Classen obtained equipment
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and customer lists.
(SOE Ex. B ¶ 8; Ex. C ¶ 6.)
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In September 2010, Plaintiff Gustavo Uribe (“Mr. Uribe”)
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complained to Classen manager Cecilia Cortez (“Cortez”) that he was
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having an adverse reaction to chlorine cleaning products used at a
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job site.
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Classen’s proprietary, non-chlorine product, and informed the
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client that Classen employees would not use bleach products.
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(SOE Ex. B ¶ 12.)
Cortez instructed Mr. Uribe to use
(Id.
¶ 13.)
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Later that year, Classen received reports that Mr. Uribe was
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arriving at job sites too early in the day, and began cleaning
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during the client’s business hours.
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received a warning, but continued to arrive early, and was then
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suspended.
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visit job sites while suspended, Classen terminated his employment
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on September 15, 2010.
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(Id.)
(Id. ¶ 14.)
Mr. Uribe
Following reports that Mr. Uribe continued to
(Id. ¶ 16.)
At the time of his termination, Mr. Uribe told manager Craig
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Classen that he intended to sue Classen “for discrimination, for
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hours, for mileage, for the mistreatment . . . .”
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173.)
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Disabilities Act, his issue with chlorine, or any allegations of
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racial bias during the termination meeting.
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testify that he told Craig Classen he intended to sue “because of
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my injury, the abuse, and all of that.”
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(SOE Ex. 2 at
Mr. Uribe could not recall mentioning the Americans with
(Id.)
Mr. Uribe did
(Id.)
On September 19, 2010, Plaintiff Angel Uribe (“Ms. Uribe”) was
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reprimanded for allowing Mr. Uribe to accompany her to job sites
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after he had been terminated.
(SOE Ex. C ¶ 10.)
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At the time of
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the reprimand, Ms. Uribe alleged that two other Classen employees
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had sexually harassed her.
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the two alleged harassers denied Ms. Uribe’s allegations and
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received a warning.
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Defendant Munguia, admitted one of the allegations, and was
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terminated.
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Classen’s disciplinary actions, and never returned to work.
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Ex. B ¶ 20.)
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(Id.)
(Id. ¶¶ 11-12.)
(Id. ¶ 12.)
That same day, one of
The other alleged harasser,
Ms. Uribe did not return calls regarding
(SOE
Soon after, on October 8, 2010, Plaintiffs filed suit in
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Ventura County Superior Court (the “Ventura action”), alleging wage
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claims against Classen.
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Classen managers Craig Classen and Celia Cortez (“Cortez”) as
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defendants, as well as Classen owners Ron and Claudia Classen.
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(SOE Ex. 14; Ex. 15.)
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ownership interest in Classen.
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Ventura action did not include claims for discrimination or sexual
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harassment.
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moved to be relieved as counsel, indicating that Classen would soon
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be filing for bankruptcy.
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Claudia Classen filed for bankruptcy, but Classen itself did not.
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(Dec. of H.R. Martinez Exs. 12-14.)
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on November 28, 2011.
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been no activity in the Ventura action, which remains pending.
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(Id.)
(SOE Ex. 13.)
Plaintiffs later named
Craig Classen and Cortez did not have any
(SOE Ex. 13.)
(SOE Ex. B ¶ 2; Ex. C ¶ 2.)
The
In November 2011, Classen’s counsel
(SOE Ex. 16.)
(SOE Ex. 17.)
Ultimately, Ron and
Classen’s counsel was relieved
Since that time, there has
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In early 2012, Blain Bibb (“Bibb”), a ServiceMaster franchisee
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from elsewhere in California, approached Craig Classen to discuss a
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partnership in a new ServiceMaster franchise in Ventura.
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A ¶¶ 3-4; Ex. B ¶ 4; Ex. 24 at 95:15-97:8.)
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(SOE Ex.
In April 2012, Bibb,
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Classen, and Cortez formed a limited partnership named All State
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Cleaning (“All State”).
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3-4; Ex. 19.)
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repossessed Classen’s equipment and customer lists and sold them to
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Defendant All State.
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Classen terminated all of its employees.
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9.)
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requested applications from Classen’s former employees and hired
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approximately 90% of them.
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(SOE Ex. A ¶¶ 5-7; Ex. B ¶¶ 5-6; Ex. C ¶¶
Soon after, on April 13, 2012, ServiceMaster
(SOE Ex. A ¶ 10; Ex. B ¶ 8.)
That same day,
(SOE Ex. A ¶ 13; Ex. B ¶
All State, who was in need of janitors in the Ventura area,
(Id.; Dec. of H.R. Martinez Ex. 5 at
154:9-155:21)
Immediately thereafter, All State began advertising its
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services to former Classes customers.
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10; Ex. C ¶ 6.)
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composed of the same cleaners and supervisors, and using the same
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ServiceMaster systems, as Classen.
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All State required each new customer to sign a new contract, though
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the terms of those contracts were identical to those between the
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customers and Classen.
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All State successfully obtained new contracts for 90% of the
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customers on the Service Master customer lists that had been
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repossessed from Classen.
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(SOE Ex. A ¶¶ 11-12; Ex. B ¶
All State advertised itself as a new company
(Dec. of H.R. Martinez Ex. 1.)
(Id.; Dec. of H.R. Martinez Ex. 3 at 177.)
(Id.)
Three days later, on August 16, 2012, All State became fully
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operational, and serviced Classen’s previous customers at the same
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locations without interruption.
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at 187:4-13; Ex. 4 at 49:16-20.)
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(Id.; Dec. of H.R. Martinez Ex. 3
On September 27, 2012, Plaintiffs filed suit in this court
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against All State, Classen, and Carlos Munguia.
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Amended Complaint (“FAC”) alleges nine causes of action against All
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Plaintiffs’ First
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State.
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include employment discrimination and harassment in violation of
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both Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000 et
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seq.) and California Government Code §12940.
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moves for summary judgment on all claims against it.
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II.
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Based upon a successor liability theory, Plaintiffs’ claims
(Id.)
All State now
Legal Standard
Summary judgment is appropriate where the pleadings,
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depositions, answers to interrogatories, and admissions on file,
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together with the affidavits, if any, show “that there is no
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genuine dispute as to any material fact and the movant is entitled
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to judgment as a matter of law.”
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seeking summary judgment bears the initial burden of informing the
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court of the basis for its motion and of identifying those portions
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of the pleadings and discovery responses that demonstrate the
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absence of a genuine issue of material fact.
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Catrett, 477 U.S. 317, 323 (1986).
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the evidence must be drawn in favor of the nonmoving party.
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986).
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If the moving party does not bear the burden of proof at trial, it
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is entitled to summary judgment if it can demonstrate that “there
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is an absence of evidence to support the nonmoving party’s case.”
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Celotex, 477 U.S. at 323.
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Fed. R. Civ. P. 56(a).
A party
See Celotex Corp. v.
All reasonable inferences from
See
Once the moving party meets its burden, the burden shifts to
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the nonmoving party opposing the motion, who must “set forth
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specific facts showing that there is a genuine issue for trial.”
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Anderson, 477 U.S. at 256.
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party “fails to make a showing sufficient to establish the
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existence of an element essential to that party’s case, and on
Summary judgment is warranted if a
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which that party will bear the burden of proof at trial.”
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477 U.S. at 322.
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that a reasonable jury could return a verdict for the nonmoving
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party,” and material facts are those “that might affect the outcome
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of the suit under the governing law.”
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There is no genuine issue of fact “[w]here the record taken as a
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whole could not lead a rational trier of fact to find for the non-
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moving party.”
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475 U.S. 574, 587 (1986).
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Celotex,
A genuine issue exists if “the evidence is such
Anderson, 477 U.S. at 248.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
It is not the court’s task “to scour the record in search of a
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genuine issue of triable fact.”
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1278 (9th Cir. 1996). Counsel has an obligation to lay out their
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support clearly.
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1026, 1031 (9th Cir. 2001).
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file for evidence establishing a genuine issue of fact, where the
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evidence is not set forth in the opposition papers with adequate
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references so that it could conveniently be found."
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III. Discussion
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Keenan v. Allan, 91 F.3d 1275,
Carmen v. San Francisco Sch. Dist., 237 F.3d
The court “need not examine the entire
Id.
The parties do not dispute that Plaintiffs never worked for
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All State, but rather for All State’s predecessor, Classen.
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State’s motion for summary judgment is premised upon its contention
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that the facts in the record do not support the imposition of
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successor liability on All State for Classen’s liabilities.
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employment discrimination action, the successor liability analysis,
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derived from equitable principles, turns on three principal
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factors: “(1) continuity in operations and work force of the
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successor and predecessor employers; (2) notice to the successor
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employer of its predecessor’s legal obligation; and (3) ability of
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All
In an
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the predecessor to provide adequate relief directly.”
Criswell v.
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Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir. 1989) (citing
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Bates v. Pac. Maritime Ass’n, 744 F.2d 705, 709-10 (9th Cir. 1984).
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Of these, the second and third factors are most critical.
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Criswell, 868 F.2d at 1094 (citing Musikiwamba v. Essi, Inc., 760
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F.2d 740, 750 (7th Cir. 1985).
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A.
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In most cases, it would be “grossly unfair” to impose
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successor liability on a purchaser that, for lack of notice, did
Notice
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not have the chance to protect itself against potential
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liabilities, such as by negotiating an indemnification clause or a
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lower purchase price reflecting the assumed risks.
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F.2d at 1094; Musikiwamba, 760 F.2d at 750.
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Criswell, 868
All State has submitted evidence that at the time All State
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purchased the franchise and assets from Service Master, none of All
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State’s founding partners was aware that Plaintiffs had any claims
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for sexual harassment or discrimination based on disability or
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race.
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Ex. C ¶¶ 14-15.)
(Statement of Evidence, Ex. A ¶¶ 9, 15; Ex B ¶¶ 21, 24-25;
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Plaintiffs argue that there is a triable issue of fact
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regarding All State’s notice of Plaintiffs’ discrimination claims
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for three reasons.
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Craig Classen and Celia Cortez had notice that Plaintiffs had filed
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discrimination charges with the EEOC.
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evidentiary support for this assertion is unclear.
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opposition makes no specific reference to any particular piece of
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evidence, but appears to refer to several documents that were not
First, Plaintiffs contend, All State partners
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(Opposition at 9.)
The
Plaintiffs’
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produced in discovery, which this court will not consider.2
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Fed. R. Civ. P. 37(c).
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addressed a right to sue letter to Classen in June 2012, Classen
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had ceased operations by that time, and there is no evidence that
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Cortez, Craig Classen, or anyone connected with All State ever saw
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the letter.3
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See
Though All State concedes that the EEOC
(All State SOE, Ex. B ¶ 25, Ex. A ¶ 15, Ex. C ¶ 15.)
Plaintiffs also appear to refer, without specific discussion,
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to meetings Craig Classen and Celia Cortez held with Plaintiffs
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during Plaintiffs’ employment with Classen.
Plaintiffs cite to
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various portions of deposition transcripts, not all of which are
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included in the record.
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attended a meeting at which Plaintiff Angel Uribe complained about
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being “touched by someone” and receiving a text message.
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Decl., Ex. 6 at 95:23-96:1.)
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learned of Plaintiff Angel Uribe’s allegations of inappropriate
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behavior later in 2010, when reprimanding her.
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Ex. 3 at 87:22-25.)
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discrimination claims, Mr. Uribe testified at this deposition that,
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at the time of his termination, he told Craig Classen that he
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intended to sue Classen “for discrimination, for hours, for
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mileage, for the mistreatment . . . .,” but did not specifically
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mention any race or disability-related issues.
When deposed, Cortez testified that she
(Martinez
Craig Classen testified that he
(Martinez Decl.,
With respect to Plaintiff Gustavo Uribe’s
(SOE Ex. 2 at 173.)
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Plaintiffs also move, under Federal Rule of Civil Procedure
56(d), for a continuance of the instant motion and a “relaxation of
any discovery cut-offs” to allow them to file documents that have
never been produced. Plaintiffs apparently also seek to compel the
production of additional documents, though not explicitly.
Plaintiffs’ motion and requests are DENIED.
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The letter was addressed to Classen, care of owner Ron
Classen. (All State SOE Ex. 5.)
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None of this testimony supports Plaintiffs’ contention that
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Cortez and Craig Classen knew that one or both Plaintiffs had filed
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any charges with the EEOC.
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Craig Classen, were aware that Ms. Uribe had made allegations of
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sexual harassment at one point, Classen took disciplinary measures
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against the alleged perpetrators, including termination of
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Defendant Munguia’s employment, the same day Ms. Uribe complained.
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Ms. Uribe never responded to Classen’s attempts to contact her
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regarding her complaint or returned to work, let alone intimated
Though Cortez, and to a lesser degree,
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that she would bring a claim for sexual harassment.
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Uribe’s brief reference to unspecified “discrimination,” alongside
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threats of legal action “for hours, for mileage, for the
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mistreatment,” have put Craig Classen on notice of potential claims
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for disability or race discrimination.
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intensified when Plaintiffs soon filed the Ventura action, which
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did not include any claims for harassment or discrimination.
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the time All State formed, approximately a year and a half later,
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Craig Classen and Cortez were not on notice of any extant
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discrimination claims, let alone EEOC charges.
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Nor could Mr.
That ambiguity only
At
Second, Plaintiffs contend, without any citation to authority,
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that All State need not have had notice of Plaintiffs’
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discrimination claims because Bibb did not diligently investigate
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any potential liabilities.
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assert that Bibb did not care whether he was acquiring liabilities
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because he was obtaining Classen’s former assets at a low price.
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(Opp. at 10:9-10.)
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Bibb’s testimony that “it was in [his] interest to go after the[]
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abandoned clients for no cost, as opposed to pay any money for them
(Opp. at 10.)
Plaintiffs further
Plaintiffs’ only support for this contention is
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. . . .”
(Martinez Decl., Ex. 2 at 80:3-5.)
That statement,
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however in no way suggests that Bibb was indifferent to potential
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liabilities.
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would not have purchased Classen’s former assets from Service
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Master if he had known of the discrimination claims.
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9.)
To the contrary, Bibb’s declaration states that he
(SOE, Ex. A ¶
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Lastly, Plaintiffs argue, again without any citation to
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authority or evidence, that “the knowledge of Craig [Classen] and
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Celia [Cortez] is imputed to All State under well settled agency
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principles” because Cortez and Craig Classen were managers of both
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All State and Classen.
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any notice of Plaintiffs’ EEOC charges.
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court, no reasonable trier of fact could conclude that All State
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had notice of the discrimination claims Plaintiffs filed with the
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EEOC.
As discussed above, neither individual had
On the record before the
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B.
Classen’s Ability to Provide Relief
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Classen’s ability to provide direct relief to Plaintiffs is
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also a critical factor in the successor liability analysis.
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Criswell, 868 F.2d at 1094.
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when the predecessor could have provided relief, but the successor
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cannot, as “an injured employee should not be made worse off by a
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change in the business.”
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same token, however, an employee who could not have recovered
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against a predecessor employer should not be made better off by the
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arrival of a new, deeper-pocketed successor.
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here.
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they concede that “there is no way [Classen] could provide a remedy
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to Plaintiffs,” as it was on the verge of bankruptcy and
Successor liability may be appropriate
Musikiwamba, 760 F.2d at 749.
Id.
By the
Such is the case
Though Plaintiffs do not specifically discuss this factor,
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dissolution.
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weigh against the imposition of successor liability.
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C.
(Opp. at 10.)
Policy considerations, therefore,
Id.
Continuity of Operations
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Because the notice and availability of direct relief factors
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both weigh heavily against successor liability, the court need not
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address the continuity of operations factor.
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All State did operate as a continuation of Classen’s business, that
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is not sufficient to outweigh the other, more important factors in
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the successor liability analysis.
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IV.
Even assuming that
Conclusion
For the reasons stated above, All State’s Motion for Summary
Judgment is GRANTED.
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IT IS SO ORDERED.
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Dated: November 4, 2014
DEAN D. PREGERSON
United States District Judge
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