Jaco v. WinCo Holdings, Inc.
Filing
43
ORDER GRANTING IN PART 35 Plaintiff's Motion to Certify Order for Interlocutory Appeal and Staying the Case Pending Appeal signed by District Judge Dale A. Drozd on 6/26/2019. (Jessen, A)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
FOR THE EASTERN DISTRICT OF CALIFORNIA
10
11
12
SHIRLEY JACO, on behalf of herself and
all others similarly situated,
Plaintiff,
13
v.
14
15
WINCO HOLDINGS, INC. and DOES 1
through 50, inclusive,
No. 1:18-cv-00301-DAD-EPG
ORDER GRANTING IN PART PLAINTIFF’S
MOTION TO CERTIFY ORDER FOR
INTERLOCUTORY APPEAL AND
STAYING THE CASE PENDING APPEAL
(Doc. No. 35)
16
Defendants.
17
This matter is before the court on plaintiff Shirley Jaco’s motion to certify this court’s
18
19
March 31, 2019 order, granting in part defendant’s motion to dismiss (Doc. No. 28), for an
20
interlocutory appeal. (Doc. No. 35.) A hearing on this motion was held on June 18, 2018.
21
Attorney Robin G. Workman appeared telephonically on behalf of plaintiff Shirley Jaco.
22
Attorney Julie G. Yap appeared telephonically on behalf of defendant Winco Holdings, Inc. For
23
the reasons set forth below, the court grants plaintiff’s motion in part and certifies the issue of
24
whether plaintiff’s claim to accrued vacation wages is capable of being waived by way of a
25
collective bargaining agreement. In addition, the court will stay this case while the interlocutory
26
appeal is pending before the United States Court of Appeals for the Ninth Circuit.
27
/////
28
/////
1
1
BACKGROUND
2
The allegations of plaintiff’s operative complaint were fully addressed in the court’s
3
March 31, 2019 order and will not be repeated here. (See Doc. No. 28 at 1–3.) In that prior
4
order, the court dismissed plaintiff’s first through fourth causes of action with prejudice; struck
5
plaintiff’s class and representative claims which were based on alleged violations of California
6
Labor Code § 227.3; and dismissed plaintiff’s fifth through ninth causes of action with leave to
7
amend. (Id. at 15–16.) This case currently proceeds on plaintiff’s May 6, 2019 third amended
8
complaint (“TAC”). (Doc. No. 34.) On May 15, 2019, plaintiff filed a motion to certify the
9
court’s March 31, 2019 order for interlocutory appeal. (Doc. No. 35.) Defendant filed an
10
opposition on June 4, 2019. (Doc. No. 39.) Plaintiff filed a reply on June 11, 2019. (Doc. No.
11
40.)
12
13
LEGAL STANDARDS
The district court may certify an interlocutory appeal to the circuit court of appeal when
14
an order that is not otherwise appealable involves “a controlling question of law as to which there
15
is substantial ground for difference of opinion” and “an immediate appeal from the order may
16
materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). If these
17
grounds are not met, the circuit court lacks jurisdiction to hear the matter. See 28 U.S.C. § 1291
18
(granting jurisdiction generally to the circuit courts only over “final decisions” of the district
19
courts); Couch v. Telescope, Inc., 611 F.3d 629, 632–33 (9th Cir. 2010) (noting that the statutory
20
restrictions of 28 U.S.C. § 1292(b) are jurisdictional). This statutory provision “was intended
21
primarily as a means of expediting litigation by permitting appellate consideration during the
22
early stages of litigation of legal questions which, if decided in favor of the appellant, would end
23
the lawsuit. . ..” United States v. Woodbury, 263 F.2d 784, 787 (9th Cir. 1959). Ultimately,
24
however, the question need not be dispositive of the lawsuit for an interlocutory appeal to be
25
appropriate. Id.
26
Certification of a question for interlocutory appeal requires the district court to find, in
27
writing, that all the following requirements under § 1292(b) are met: (1) there is a controlling
28
question of law; (2) there is substantial ground for difference of opinion about that question of
2
1
law; and (3) an immediate appeal may materially advance the ultimate termination of the
2
litigation. Couch, 611 F.3d at 633. If any of the requirements are not met, then the order
3
certifying the questions is jurisdictionally defective. Id. Certification of interlocutory appeals is
4
the exception, not the rule, and therefore § 1292(b) “must be construed narrowly.” James v. Price
5
Stern Sloan, Inc., 283 F.3d 1064, 1068 n.6 (9th Cir. 2002).
6
DISCUSSION
To the extent this court’s March 31, 2019 order granted defendant’s motion to dismiss, it
7
8
did so based upon a conclusion that plaintiff’s state law claims1 for failure to pay employees all
9
accrued vacation wages upon termination were preempted by the Labor Management Relations
10
Act (“LMRA”), 29 U.S.C. § 185(a), and that the WinCo collective bargaining agreement
11
(“CBA”) clearly and unmistakably waived WinCo’s employees’ right to receive accrued vacation
12
pay upon termination under identified circumstances. (See Doc. No. 28.) Plaintiff now argues
13
that an interlocutory appeal of both of these holdings is appropriate pursuant to 28 U.S.C. §
14
1292(b). (Doc. No. 35-1.)
15
A.
16
Controlling Question of Law
Plaintiff argues there are two separate controlling questions of law which are appropriate
17
for interlocutory appeal: (1) whether a CBA can validly waive an employee’s right to accrued
18
and unused vacation time upon termination (hereinafter “the waiver issue”); and (2) whether a
19
CBA providing for the forfeiture of accrued and unused vacation time upon termination invokes
20
the LMRA, and thus preempts state law claims (hereinafter “the preemption issue”). (Doc. No.
21
35-1 at 12–13.) Defendant advances separate arguments as to why each of these issues fails to
22
present a controlling question of law for purposes of § 1292(b). (See Doc. No. 39 at 13–18; 18–
23
21.)
24
/////
25
26
27
28
1
When faced with unresolved and dispositive issues of California law, a federal circuit court
may find that certification of a question to the California Supreme Court is warranted. See
Barnes-Wallace v. City Of San Diego, 607 F.3d 1167, 1175 (9th Cir. 2010); Int’l Soc’y for
Krishna Consciousness of Cal. Inc. v. City of Los Angeles, 530 F.3d 768, 770 (9th Cir. 2008),
certified question answered, 48 Cal. 4th 446 (2010).
3
1
A question of law is “controlling” under § 1292(b) if resolving it on appeal could
2
materially affect the outcome of the litigation in the district court. In re Cement Antitrust Litig.,
3
673 F.2d 1020, 1026 (9th Cir. 1982). Moreover, although it appears the Ninth Circuit has not had
4
occasion to address the issue, other courts have found the question of law at involved must be a
5
“pure question of law,” not a mixed question of law and fact, or an application of law to a specific
6
set of facts. See Ahrenholz v. Board of Trs., 219 F.3d 674, 675–77 (7th Cir. 2000) (observing that
7
Congress was referring to a pure question of law in § 1292(b), because “if a case turned on a pure
8
question of law, something the court of appeals could decide quickly and cleanly without having
9
to study the record, the court should be enabled to do so without having to wait till the end of the
10
case.”); Park W. Galleries, Inc. v. Hochman, 692 F.3d 539, 543 (6th Cir. 2012) (“On
11
interlocutory appeal, we do not review the district court’s findings of fact, and instead consider
12
only pure questions of law.”) (quotations omitted); Kennedy v. St. Joseph’s Ministries, Inc., 657
13
F.3d 189, 195 (4th Cir. 2011) (an interlocutory appeal is appropriate under § 1292(b) when the
14
court is “faced with a pure question of law”); McFarlin v. Conseco Servs., LLC, 381 F.3d 1251,
15
1259 (11th Cir. 2004) (“To summarize, § 1292(b) appeals were intended, and should be reserved,
16
for situations in which the court of appeals can rule on a pure, controlling question of law without
17
having to delve beyond the surface of the record in order to determine the facts.”); see also
18
Bibeau v. Pac. Nw. Research Found. Inc., 188 F.3d 1105, 1113 (9th Cir. 1999) (noting an
19
interlocutory appeal “will not lie for such claims if the district court determines that there are
20
genuine issues of fact involved”); Haw. ex rel. Louie v. JP Morgan Chase & Co., 921 F. Supp. 2d
21
1059, 1065–66 (D. Haw. 2013) (noting the pure question of law standard and deciding that,
22
despite the existence of some factual disputes, an interlocutory appeal could be certified on
23
questions of law); Rieve v. Coventry Health Care, Inc., 870 F. Supp. 2d 856, 879 (C.D. Cal. 2012)
24
(declining to certify an interlocutory appeal that did not involve a pure question of law).2
25
26
27
28
2
The Ninth Circuit has noted a narrow exception to the general rule that interlocutory appeals are
permitted only for pure questions of law; when at least one pure legal question is present, the
court may “resolve all questions material to the order.” Steering Comm. v. United States, 6 F.3d
572, 575–76 (9th Cir. 1993) (reaching both a legal issue of the standard of care and the
application of that standard to the facts of the case).
4
Waiver3
1
1.
2
First, the question of whether an employee’s right to accrued and unused vacation time
3
upon termination can be forfeited by the terms of a CBA is a pure question of law involving the
4
interpretation of California Labor Code § 227.3. Moreover, that question of law is sufficiently
5
novel because it involves the interpretation of arguably inconsistent California court decisions.
6
As indicated in the March 31, 2019 order resolving defendant’s motion to dismiss, the
7
undersigned had difficulty reconciling the California Supreme Court authority holding that vested
8
vacation time is protected from forfeiture by § 227.3, see, e.g., Suastez v. Plastic Dress-Up Co.,
9
31 Cal. 3d 774, 784 (1982), with a decision of the California Court of Appeal suggesting that an
10
employee may waive her right under § 227.3 to payment for accrued vacation time by way of a
11
CBA if the agreement is clear and unmistakable, see Choate v. Celite Corp., 215 Cal. App. 4th
12
1460, 1465 (2013). (Doc. No. 28 at 5–8.) Ultimately, the court was persuaded by the decision in
13
Choate, which concluded that although the waiver in the CBA before it was not clear and
14
unmistakable, unions could bargain away their members’ statutory right to payment under §
15
227.3. See Choate, 215 Cal. App. 4th at 1465. This question turns strictly on an interpretation of
16
the applicable California statutes. Accordingly, the court concludes that the waiver issue
17
addressed in its March 31, 2019 order is a controlling question of law for purposes of determining
18
whether an interlocutory appeal is permissible here under 28 U.S.C. § 1292.
19
2.
Preemption
20
Plaintiff also argues that the preemption question is a controlling question of law because
21
resolution of that issue will determine whether her state law claims remain viable. (Doc. No. 35-1
22
at 13.) While this is true, the question of whether a CBA providing for the forfeiture of accrued
23
but unused vacation time upon termination invokes the LMRA and preempts an employees’ state
24
law claims is, nonetheless, not a pure question of law. Instead, the answer to that question is
25
arrived at by applying established legal precedent to a novel factual situation. As such, that
26
question is not the appropriate subject for certification of an interlocutory appeal if considered
27
28
This issue was labeled as “Exemption” in the court’s March 31, 2019 order. (See Doc. No. 28
at 5.)
5
3
1
independently of the closely related waiver issue. As discussed in the court’s March 31, 2019
2
order, the Ninth Circuit has previously addressed and made clear how district courts are to
3
determine whether a state law cause of action is preempted by § 301 of the LMRA. See McCray
4
v. Marriott Hotel Servs., Inc., 902 F.3d 1005, 1011 (9th Cir. 2018) (state law claims that look to
5
the CBA are not preempted, whereas state law claims that require interpretation of a CBA are
6
preempted); Burnside v. Kiewit Pac. Corp., 491 F.3d 1053, 1059–60 (9th Cir. 2007) (identifying
7
the two-step inquiry for determining preemption). It is true that there are differences in opinion
8
as to how this standard is to be applied. See McCray, 902 F.3d at 1011 (“[T]he line between
9
reference to and interpretation of an agreement may be somewhat hazy. . ..”) (citing Ramirez v.
10
Fox Television Station, Inc., 998 F.2d 743, 749 (9th Cir. 1993)). However, such differences of
11
opinion do not call into doubt the controlling legal standard.
12
Here, in resolving the preemption issue posed by defendant’s motion to dismiss, the court
13
applied established legal precedent to the facts of this case. The court assumed arguendo that the
14
right at issue existed independently of the CBA and noted that it was still required to consider
15
whether the right was substantially dependent on the CBA. (See Doc. No. 28 at 10.) Here,
16
plaintiff was terminated after being cited for theft and “gross misconduct,” a term used in the
17
applicable CBA. (See Doc. No. 4-1 at 13) (“Vacation earned but not taken will not be paid to
18
employees terminated for gross misconduct.”). The court concluded that plaintiff’s claim for
19
payment of accrued vacation time upon her termination had been contemplated by the CBA and
20
that resolution of that claim would require interpretation of, rather than mere reference to, the
21
CBA. (Id.) This analysis was based on a review of the language of the CBA and did not involve
22
resolution of any novel question of controlling law.
23
Plaintiff argues that “[i]nterlocutory appeal of this question is appropriate not because
24
Plaintiff asserts that the Court erred in reaching this conclusion . . . but because the courts have
25
differing opinion[s] on whether to even reach preemption arguments where a waiver of 227.3
26
rights is involved.” (Doc. No. 40 at 6.) However, at the hearing on the pending motion,
27
plaintiff’s counsel agreed with the undersigned’s observation that the waiver and preemption
28
issues, although intertwined, were distinct.
6
It is the court’s view that unlike the waiver issue, the preemption issue cannot be fairly
1
2
characterized as a controlling question of law for purposes of interlocutory appeal. In any event,
3
this court’s view on this point may have little practical impact. This is because when “an order is
4
certified for appellate review, ‘appellate jurisdiction applies to the order certified . . . and is not
5
tied to the particular question formulated by the district court.’” Couch, 611 F.3d at 634 (quoting
6
Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 205 (1996)). Nonetheless, for the
7
reasons stated above, the undersigned determines that the preemption issue in this case does not
8
independently pose a controlling issue of law.4
9
B.
10
Substantial Ground for Difference of Opinion
The court has concluded that the preemption issue is not a controlling issue for the
11
purposes of interlocutory appeal. Therefore, the court need only analyze if the waiver issue—
12
whether a CBA can validly waive an employee’s right to accrued and unused vacation time upon
13
termination—is one that provides substantial ground for differences of opinion.
14
Plaintiff advances numerous arguments for why there is substantial ground for difference
15
of opinion about the waiver issue. (Doc. No. 28 at 5.) The court finds these arguments to be
16
persuasive. As noted above, the undersigned’s March 31, 2019 order struggled to reconcile
17
decisions of the California Supreme Court and the Choate decision by the California Court of
18
Appeal in resolving the waiver issue. (See Doc. No. 28 at 5–8.) Defendant argues that there is no
19
uncertainty in the law and that the decision in Johnson v. Sky Chefs, Inc., 2012 WL 4483225
20
(N.D. Cal. 2012), which concluded that payment for accrued but unused vacation time could not
21
The court is not persuaded by defendant’s assertion that the court must include both issues if it
certifies the case for interlocutory appeal. In this regard, defendant argues plaintiff must show
that both are controlling issues of law because the court’s order concluded that plaintiff’s claims
were both waived and preempted and each of those basis is independently sufficient to bar her
claims. (Doc. No. 39 at 7.) This is not necessarily the case. For instance, the Ninth Circuit could
vacate this court’s March 31, 2019 order and hold that § 227.3 does not permit unions to waive,
by way of a CBA, employees’ right to be paid for accrued but unused vacation time upon
termination. If that were the case, the section in the CBA that waives such rights where theft or
“gross misconduct” is involved would be effectively invalidated. This would impact this court’s
analysis, since there would then be nothing relevant to look to or interpret in the CBA. Such an
appellate ruling would then almost certainly cause this court to conclude that plaintiff’s claim is
not preempted by the LMRA.
7
4
22
23
24
25
26
27
28
1
be waived, was issued prior to the “binding authority” of Choate, which appears to reach the
2
opposite conclusion. (Doc. No. 39 at 14–18.) This argument does not address the undersigned’s
3
perception of the long-standing principle under California law that the right to a paid vacation
4
vests when the labor is rendered and is subject to absolute protection from forfeiture. See
5
Suastez, 31 Cal. 3d at 784 (“Once vested, the right [to a paid vacation] is protected from forfeiture
6
by section 227.3.”); Rhea v. Gen. Atomics, 227 Cal. App. 4th 1560, 1571 (2014) (“California law
7
prohibits an employer from requiring the forfeiture of vacation time . . . as a general principle.”);
8
Church v. Jamison, 143 Cal. App. 4th 1568, 1576 (2006) (“Thus, termination of employment is
9
the event that converts the employer’s obligation to allow an employee to take vacation from
10
work into the monetary obligation to pay that employee for unused vested vacation time.”);
11
Boothby v. Atlas Mechanical, Inc., 6 Cal. App. 4th 1595, 1601–02 (1992) (“[S]ection 227.3 and
12
Suastez prohibit any forfeiture of a private employee’s vested vacation time.”).
13
The court finds that there is substantial ground for differences in opinion due to a conflict
14
between long-standing principles of law stated by the California Supreme Court and authority
15
specific to this issue from a California Court of Appeal in the Choate decision. “Where there is
16
no convincing evidence that the state supreme court would decide differently, a federal court is
17
obligated to follow the decisions of the state’s intermediate appellate courts.” Beeman v. Anthem
18
Prescription Mgmt., LLC, 689 F.3d 1002, 1007–08 (9th Cir. 2012) (citing Ryman v. Sears,
19
Roebuck & Co., 505 F.3d 993, 995 (9th Cir. 2007) (quotation, alteration, and citation omitted)),
20
certified question answered, 58 Cal. 4th 329 (2013). Though this court’s March 31, 2019 order
21
ultimately followed the opinion in Choate, it may well have been reasonable to rule differently in
22
attempting “to predict how the California Supreme Court would rule were it faced with the facts
23
at issue here.” Civic Ctr. Drive Apts. Ltd. P’ship v. Sw. Bell Video Servs., 295 F. Supp. 2d 1091,
24
1106 (N.D. Cal. 2003) (citing Amfac Mortg. Corp. v. Ariz. Mall of Tempe, Inc., 583 F.2d 426, 434
25
(9th Cir. 1978)). In short, the court concludes that the waiver issue presented in this case is one
26
upon which there is substantial ground for a difference in opinion.
27
/////
28
/////
8
1
C.
Whether Certification of an Interlocutory Appeal Would Materially Advance the
2
Termination of the Litigation
3
Finally, the court analyzes whether certifying an interlocutory appeal on the waiver issue
4
would materially advance the termination of this litigation. “A Section 1292(b) certification
5
materially advances the ultimate termination of the litigation where the interlocutory appeal
6
eliminates: (1) the need for trial; (2) complex issues that would complicate trial; or (3) issues that
7
would make discovery more costly or burdensome.” FTC v. Wyndham Worldwide Corp., 10 F.
8
Supp. 3d 602, 635 (D.N.J. 2014), aff’d, 799 F.3d 236 (3d Cir. 2015); see also, e.g., Coates v.
9
Brazoria County, 919 F. Supp. 2d 863, 867 (S.D. Tex. 2013) (same).
10
Defendant argues that regardless of how the Ninth Circuit might rule on the waiver issue,
11
plaintiff’s other individual claims will remain. (Doc. No. 39 at 22.) “However, neither
12
§ 1292(b)’s literal text nor controlling precedent requires that the interlocutory appeal have a
13
final, dispositive effect on the litigation, only that it ‘may materially advance’ the litigation.”
14
Reese v. BP Expl. (Alaska) Inc., 643 F.3d 681, 688 (9th Cir. 2011) (citing 28 U.S.C. § 1292(b)).
15
Therefore, the court does not find the fact of remaining individual claims alone to be a persuasive
16
reason for denying certification of an interlocutory appeal here.
17
Despite not posing the potential of immediately terminating this action, an interlocutory
18
appeal may materially advance the litigation because it would prevent a duplicative discovery
19
process if this court’s prior order were to be vacated. “If the Court’s dismissal of [plaintiff’s] . . .
20
claim were reversed after a final judgment, the Court and the parties would be required to
21
undertake another round of discovery, more dispositive motions, and potentially another trial.”
22
Howard v. Office of Chief Admin. Officer of U.S. House of Reps., 840 F. Supp. 2d 52, 57 (D.D.C.
23
2012). Here, an interlocutory appeal would also clarify the issues at this early stage of the
24
litigation (i.e., prior to discovery) and, assuming that the case is also stayed in this court, would
25
resolve whether plaintiff could proceed with claims on behalf of a class without waiting until the
26
entire case as to plaintiff’s individual claims has concluded. Following the court’s March 31,
27
2019 order, this action would now proceed only on plaintiff’s individual disability discrimination
28
claims, since her class and representative claims based on alleged violations of § 227.3 have been
9
1
stricken. (See Doc. No. 28 at 15.) It would be a highly inefficient if this case proceeded through
2
discovery and was tried as an individual action, was then appealed to the Ninth Circuit following
3
a trial on those individual claims, and then was reversed and remanded to this court to reinitiate
4
discovery with respect to class and representative claims. This is especially true where, as here,
5
the class and representative claims may have a significant factual overlap with plaintiff’s
6
individual disability discrimination claims.
7
The court also concludes that absent the granting of a stay of these proceedings, certifying
8
an interlocutory appeal on the waiver issue would not materially advance the resolution of the
9
litigation. See Reese, 643 F.3d at 688; Northstar Fin. Advisors Inc. v. Schwab Invs., No. C 08-
10
4119 SI, 2009 WL 1126854, at *1 (N.D. Cal. Apr. 27, 2009) (certifying issue for interlocutory
11
appeal and staying the balance of the case pending the appeal, after which “the issues will be
12
significantly narrowed, thus shaping the scope of discovery and motion practice”). Without
13
staying discovery as to plaintiff’s individual claims, the court would lose any potential efficiency
14
to be gained by an interlocutory appeal. See Hanni v. Am. Airlines, Inc., No. C 08-00732 CW,
15
2008 WL 5000237, at *7 (N.D. Cal. Nov. 21, 2008) (denying motion for certification of an
16
interlocutory appeal because a reversal would result in “a second appeal, thus burdening the court
17
of appeals with two appeals in the same case.”).
18
At the hearing on the pending motion, plaintiff’s counsel indicated that although plaintiff
19
had not requested a stay of the proceedings before this court, she would nonetheless prefer to
20
pursue an interlocutory appeal even if it was accompanied by such a stay. The court therefore
21
concludes that any prejudice resulting from the imposition of a stay would be outweighed by the
22
potential benefit of an interlocutory appeal in this case.
23
CONCLUSION
24
Accordingly,
25
1.
26
27
28
Plaintiff’s motion for certification for interlocutory appeal (Doc. No. 35) is granted
in part as discussed above;
2.
The undersigned certifies for interlocutory appeal its March 31, 2019 order
denying in part and granting in part defendant’s motion to dismiss (Doc. No. 28);
10
1
3.
This case is stayed pending the interlocutory appeal; and
2
4.
If the United States Court of Appeals for the Ninth Circuit does not accept the
3
interlocutory appeal, the parties are ordered to notify the court within ten days to
4
lift the stay.
5
6
7
IT IS SO ORDERED.
Dated:
June 26, 2019
UNITED STATES DISTRICT JUDGE
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?