Senne et al v. Office of the Commissioner of Baseball, et al

Filing 800

ORDER by Judge Joseph C. Spero granting #783 Motion for Certificate of Appealability; granting #786 Motion to Stay; vacating motion hearing and case management conference set for May 12, 2017 at 11:00 a.m. and setting further case management conference for Friday, August 18, 2017 at 2:00 pm (jcslc1S, COURT STAFF) (Filed on 5/5/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 AARON SENNE, et al., Plaintiffs, Case No. 14-cv-00608-JCS (consolidated with Case No. 14-cv-03289-JCS) 10 KANSAS CITY ROYALS BASEBALL CORP., et al., ORDER GRANTING MOTION TO CERTIFY FOR APPEAL PURSUANT TO 28 U.S.C. § 1292(B) AND STAYING CASE 11 Defendants. 7 8 v. United States District Court Northern District of California 9 Re: Dkt. Nos. 783, 786 12 13 I. INTRODUCTION Presently before the Court are Defendants‟ Motion to Certify for Appeal Pursuant to 28 14 15 U.S.C. § 1292(b) (“Motion to Certify”) and Motion for a Stay (“Motion to Stay”). The Court 16 finds that these motions are suitable for determination without oral argument pursuant to Civil 17 Local Rule 7-1(b) and therefore vacates the motion hearing set for May 12, 2017 at 11:00 a.m. 18 The Court also continues the May 12, 2017 Case Management Conference to August 18, 2017 19 at 2:00 p.m. For the reasons set forth below, the Motions are GRANTED.1 20 II. BACKGROUND On July 21, 2016, the Court denied Plaintiffs‟ request for class certification under Rule 23 21 22 of the Federal Rules of Civil Procedure, and decertified a collective under the Fair Labor 23 Standards Act it had preliminarily certified. Docket No. 687. In the same Order, it granted 24 Defendants‟ request to exclude the testimony of Plaintiffs‟ expert, Dr. J. Michael Dennis, under 25 Rule 702 of the Federal Rules of Evidence and Daubert. Plaintiffs brought a Motion for Leave to 26 File a Motion for Reconsideration (“Motion for Leave”) on August 4, 2016. The Court granted in 27 1 28 The parties have consented to the jurisdiction of the undersigned magistrate judge pursuant to 28 U.S.C. § 636(c). 1 part and denied in part the Motion for Leave on August 19, 2016, allowing Plaintiffs to “file a 2 renewed motion . . . for class certification under Rule 23 in which Plaintiffs will propose narrower 3 classes and address the concerns articulated by the Court in its July 21 Order, including those 4 related to the survey conducted by their expert and the expert opinions that were based on the 5 survey.” Docket No. 710 (“August 19 Order”) at 1. Under the August 19 Order, Plaintiffs were 6 also permitted to “seek (re)certification of narrower FLSA classes than the ones the Court 7 decertified in its July 21 Order.” Id. Following another round of briefing, the Court granted in part and denied in part Plaintiffs‟ 8 9 renewed motion in an order dated March 7, 2017 (“the March 7, 2017 Order”). In the March 7, 2017 Order, the Court denied Plaintiffs‟ request to certify under Rule 23 the proposed Arizona and 11 United States District Court Northern District of California 10 Florida classes, granted Plaintiffs‟ request to certify the proposed California class, and certified a 12 narrower collective under the FLSA than had been proposed by Plaintiffs in their original class 13 certification motion. The Court also concluded that Dr. Dennis‟s Main Survey was admissible to 14 prove Plaintiffs‟ class claims, reversing its earlier holding. On March 21, 2017, Plaintiffs filed a Rule 23(f) petition with the Ninth Circuit seeking 15 16 permission to appeal the denial of Plaintiffs‟ proposed Arizona and Florida classes. On that same 17 date, Defendants filed with the Ninth Circuit a Rule 23(f) petition seeking permission to appeal the 18 certification of Plaintiffs‟ California class. It also filed the instant Motion to Certify in this Court, 19 asking the undersigned to certify for appeal pursuant to 28 U.S.C. § 1292(b) issues related to the 20 Court‟s certification of the FLSA collective in the March 7, 2017 Order. On March 24, 2017, 21 Defendants filed the Motion to Stay, seeking a stay of all proceedings in this Court pending 22 resolution of the parties‟ petitions and any related appeals by the Ninth Circuit. 23 III. MOTION TO CERTIFY 24 A. 25 A federal district court may certify a non-dispositive order for interlocutory review where 26 the district judge finds that: 1) “the order involves a controlling question of law” 2) “as to which 27 there is substantial ground for difference of opinion;” and 3) “an immediate appeal from the order 28 may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). Section Legal Standard 2 1 1292(b) requires the district court to expressly find in writing that all three § 1292(b) requirements 2 are met. Id. “Courts traditionally will find that a substantial ground for difference of opinion 3 exists where „the circuits are in dispute on the question and the court of appeals of the circuit has 4 not spoken on the point, if complicated questions arise under foreign law, or if novel and difficult 5 questions of first impression are presented.‟” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 6 2010) (quoting 3 Federal Procedure, Lawyers Edition § 3:212 (2010)). 7 “Section 1292(b) is a departure from the normal rule that only final judgments are 8 appealable, and therefore must be construed narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 9 1064, 1067 n.6 (9th Cir.2002). In seeking interlocutory appeal, a movant therefore has a heavy burden to show that “exceptional circumstances justify a departure from the basic policy of 11 United States District Court Northern District of California 10 postponing appellate review until after the entry of a final judgment.” Coopers & Lybrand v. 12 Livesay, 437 U.S. 463, 475 (1978). 13 B. 14 In the Motion to Certify, Defendants point to three issues that they contend satisfy the 15 requirements of Section 1292(b): 1) the Court‟s reliance on the “continuous workday” rule in 16 support of its conclusion that Plaintiffs‟ claims can be addressed on a classwide basis; 2) the 17 Court‟s conclusion that Plaintiffs‟ “Main Survey” is admissible; and 3) the Court‟s conclusion that 18 a collective may be certified under the “primary beneficiary” test. For the reasons stated below, 19 the Court concludes that the first two issues satisfy the requirements for certifying an interlocutory 20 appeal and therefore does not reach the third issue. Discussion 21 In concluding that Plaintiffs‟ FLSA claims can be handled collectively – and in drawing 22 lines with respect to the types of activities Plaintiffs can include in their class claims – the Court 23 has been guided by the principal articulated by the Supreme Court in Anderson v. Mt. Clemens 24 Pottery Co., 328 U.S. 680 (1946), namely, that “where the employer‟s records are inaccurate or 25 inadequate and the employee cannot offer convincing substitutes . . . an employee has carried out 26 his burden if he proves that he has in fact performed work for which he was improperly 27 compensated and if he produces sufficient evidence to show the amount and extent of that work as 28 a matter of just and reasonable inference.” 328 U.S. at 687-88. Variations in players‟ arrival and 3 1 departure times, work routines and activities, however, raised difficult questions about whether 2 Plaintiffs can prove the “amount and extent” of their work on a class wide basis. The Court 3 ultimately concluded that Plaintiffs would be able to do so, pointing to Plaintiffs‟ narrowing of the 4 proposed classes to exclude winter work and their reliance on the “continuous workday” rule, and 5 citing the Main Survey by Dr. Dennis (which the Court found was admissible, as discussed above) 6 and other evidence reflecting team activities. See March 7, 2017 Order at 55-56. The Mt. Clemens Pottery Co. rule is well-established, as is the continuous workday 8 doctrine. See March 7, 2017 Order at 53 (noting that the continuous workday doctrine “dates back 9 to the enactment of the Fair Labor Standards Act of 1938, as amended by the Portal-to-Portal Act 10 of 1947, and is set forth in long-standing Department of Labor regulations.”). Their application to 11 United States District Court Northern District of California 7 the question of whether Plaintiffs can pursue their FLSA claims on a collective basis in this case is 12 anything but straightforward, however. As Defendants point out, in Tyson Foods v. Bouaphakeo, 13 136 S. Ct. 1036 (2016), the defendant had not asserted a Daubert challenge to the admissibility of 14 the expert testimony that was at issue in that case. As a consequence, Tyson Foods does not offer 15 significant guidance where, as here, Defendants challenge the admissibility of the Main Survey in 16 the first instance. The Court has found little case law to guide it in deciding whether Mt. Clemens 17 Pottery Co. and Tyson Foods allow an FLSA collective to rely on a survey such as the one offered 18 here to establish the type and amount of work performed by the collective as a matter of “just and 19 reasonable inference.” The Court further finds that reasonable minds could differ as to whether the 20 Plaintiffs‟ reliance on the “continuous workday” doctrine and the Main Survey results to support 21 such an inference is permissible where players‟ arrival and departure times varied significantly, 22 and where their arrival and departure time does not necessarily coincide with the time they 23 devoted to team activities, which is the subject of Plaintiffs‟ claims. 24 Similarly, the Court concluded in its March 7, 2017 Order that many of the problems with 25 the Main Survey went to the weight of the evidence and not its admissibility. As Defendants point 26 out, however, there is some tension in the Ninth Circuit case law as to the degree of rigor that 27 should be applied in evaluating the admissibility of survey evidence in the class certification 28 context. See Dkt. No. 790 at 7-8. Under a more rigorous standard, see e.g., Sirko v. IBM, No. CV 4 1 13-03192 DMG, 2014 WL 4452699, at *6 (C.D. Cal. Sept. 3, 2014), the Main Survey might have 2 been excluded on the basis that it is not sufficiently probative of class and collective-wide liability. 3 In that case, the FLSA collective likely would not have been certified. The Court concludes that these questions involve controlling questions of law as to which 4 5 there is substantial ground for difference of opinion because of the dearth of relevant case law and 6 tension in the relevant legal standards. Because these questions have crucial implications for 7 whether a collective may be certified in this action, the Court concludes that an immediate appeal 8 from its March 7, 2017 order may materially advance the ultimate termination of the litigation. 9 IV. MOTION TO STAY A petition for permission to appeal a district court order under Rule 23(f) of the Federal 10 United States District Court Northern District of California 11 Rules of Civil Procedure does not automatically stay proceedings in the district court; rather, such 12 a stay occurs only where the district court or the court of appeals so orders. Brown v. Wal-Mart 13 Stores, Inc., No. 5:09-CV-03339-EJD, 2012 WL 5818300, at *1 (N.D. Cal. Nov. 15, 2012). 14 Similarly, a petition for certification of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) 15 “shall not stay proceedings in the district court unless the district judge or the Court of Appeals or 16 a judge thereof shall so order.” Pursuant to Federal Rule of Appellate Procedure 8, this Court 17 retains jurisdiction to stay its own order pending appeal. In determining whether a stay is warranted, the district court should consider: (1) whether 18 19 the stay applicant has made a “strong showing” that it is likely to succeed on the merits; (2) 20 whether the applicant will be irreparably injured without a stay; (3) whether the stay will 21 substantially injure the other parties in the proceedings; and (4) whether a stay is in the public 22 interest. Leiva–Perez v. Holder, 640 F.3d 962, 964 (9th Cir. 2011). Courts apply these factors 23 flexibly, taking a “sliding scale approach” akin to the approach taken with respect to preliminary 24 injunctions. Id. at 965. Here, the Court concludes that these factors, on balance, support entry of a 25 stay. 26 The Ninth Circuit has explained that the first factor, a “strong showing” on the merits, does 27 not require that a party seeking a stay must demonstrate that it is more likely than not to prevail on 28 its appeal. Leiva-Perez, 640 F.3d at 968. Instead, so long as other factors support a stay, it is 5 1 enough that there are “serious questions going to the merits.” Id. For the reasons discussed 2 above in connection with the Motion to Certify, the Court concludes that Defendants have 3 demonstrated the existence of such serious questions.2 The second and third factors, which address the relative harms to the parties of entering a 5 stay as opposed to allowing the case to move forward in the trial court, also favor entry of a stay. 6 Should the Ninth Circuit reverse this Court‟s March 7, 2017 Order on certification of the FLSA 7 collective or the Rule 23(b) California Class, Defendants will suffer substantial harm if this action 8 is not stayed pending appeal as they will have devoted very substantial time and resources on the 9 litigation, particularly with respect to the completion of discovery, dispositive motions and trial 10 preparation on class claims. See Gray v. Golden Gate Nat. Recreational Area, No. C 08-00722 11 United States District Court Northern District of California 4 EDL, 2011 WL 6934433, at *3 (N.D. Cal. Dec. 29, 2011). In addition, there is a possibility that 12 class members will be confused if class notices are issued before the Ninth Circuit has resolved the 13 pending petitions and then have to be modified or retracted as a result of rulings by the Ninth 14 Circuit, a result that will harm Plaintiffs. The Court concludes that these harms are significant and 15 outweigh any prejudice to Plaintiffs arising from the delay associated with entry of a stay. Finally, the fourth factor, judicial efficiency, favors entry of a stay. In addition to the 16 17 waste of judicial resources that would result if the Court were to go forward with class claims that 18 were later decertified, judicial resources also would be wasted if the Ninth Circuit were to find 19 that this Court erred when it declined to certify the Arizona and Florida classes. In that case, it 20 might be necessary to decide a second round of dispositive motions and conduct a second trial if 21 the Court does not grant Defendants‟ request for a stay of all proceedings. In sum, the Court concludes that entry of a stay pending the resolution of the Rule 23(f) 22 23 petitions, the request for interlocutory review under 28 U.S.C. §1292(b), and any appeal that the 24 Ninth Circuit might agree to consider is warranted. 25 26 27 28 2 The Court notes that the questions discussed above in connection with Defendants‟ request to certify an interlocutory appeal as to the Court‟s certification of the FLSA collective are inextricably intertwined with the issues raised in the Rule 23(f) petitions because the Court relied on similar reasoning with respect to whether the Rule 23(f) classes and the FLSA collective should be certified. 6 1 V. CONCLUSION 2 For the reasons stated above, the Court GRANTS the Motion to Certify and the Motion to 3 Stay. Pursuant to 28 U.S.C. § 1292(b), the Court certifies for immediate appeal its March 7, 2017 4 Order as to whether the FLSA collective was properly certified. The Court STAYS all further 5 proceedings in this Court pending the Ninth Circuit‟s rulings on the parties‟ Rule 23(f) petitions, 6 the request for interlocutory review under 28 U.S.C. § 1292(b), and determination of any appeal 7 that the Ninth Circuit agrees to consider under Rule 23(f) or 28 U.S.C. §1292(b). A further case 8 management conference is set for August 18, 2017 at 2:00 p.m. The parties are requested to 9 submit a joint status report one week in advance of the case management conference. 10 United States District Court Northern District of California 11 12 13 IT IS SO ORDERED. Dated: May 5, 2017 ______________________________________ JOSEPH C. SPERO Chief Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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