Curtis Johnson v. Serenity Transportation, Inc. et al

Filing 185

ORDER by Magistrate Judge Jacqueline Scott Corley denying 177 Motion for Certificate of Appealability. (ahm, COURT STAFF) (Filed on 7/26/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CURTIS JOHNSON, et al.,
Plaintiffs,

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United States District Court
Northern District of California

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Case No.15-cv-02004-JSC

v.
SERENITY TRANSPORTATION, INC., et
al.,
Defendants.

ORDER DENYING DEFENDANTS’
MOTION FOR CERTIFICATION OF
INTERLOCUTORY APPEAL AND TO
STAY FURTHER PROCEEDINGS
Re: Dkt. No. 177

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Plaintiffs allege they were misclassified by Serenity Transportation, Inc. as independent

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contractors rather than employees and thus denied the benefits of California and federal wage-and-

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hour laws. Plaintiffs also sued SCI and the County of Santa Clara under a joint employer theory,

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arguing the entities are jointly and severally liable for Serenity’s wage and hour violations. On

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April 14, 2017, the Court granted summary judgment to SCI and the County on the joint employer

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common law claims, and deferred decision as to whether, as a matter of law, SCI is not subject to

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liability under California Labor Code Section 2810.3. (Dkt. No. 172 at 46:14-27.) The Court

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requested further briefing regarding the “five or fewer workers supplied by a labor contractor or

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labor contractors to the client employer at any given time” exemption under Section 2810.3. (Id.)

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On May 23, 2017, after reviewing the further briefing, the Court denied SCI’s motion for

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summary judgment of Plaintiff’s Section 2810.3 claim. (Dkt. No. 175.)

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Now pending before the Court is the motion of SCI and SCI California to certify for

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interlocutory appeal this Court’s May 23, 2017 Order denying Defendants’ motion for summary

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judgment as to Plaintiff’s Section 2810.3 claim and to stay further proceedings. After carefully

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reviewing the parties’ briefs, and having had the benefit of oral argument on July 13, 2017, the

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Court DENIES Defendants’ motion.

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DISCUSSION
One day after the Court’s Order denying Defendants’ motion for summary judgment on

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Plaintiffs’ Section 2810.3 claim, Defendants’ filed the present motion to certify the Order for

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interlocutory appeal. Defendants argue that the May 23, 2017 Order meets the three requirements

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for a 28 U.S.C. § 1292(b) interlocutory appeal: (1) the Order involves a controlling question of

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law; (2) there is substantial ground for difference of opinion; and (3) an immediate appeal would

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materially advance the litigation. See In Re Cement Antitrust Litigation (MDL No. 296), 673 F.2d

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1020, 1026 (9th Cir. 1981). 28 U.S.C. § 1292(b) is only to be used in “exceptional circumstances”

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in which allowing an interlocutory appeal would avoid protracted and expensive litigation. Id.;
see also James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002) (a district court

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United States District Court
Northern District of California

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should certify an 1292(b) interlocutory appeal “in rare circumstances.”) “The decision to certify

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an order for interlocutory appeal is committed to the sound discretion of the district court.” United

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States v. Tenet Healthcare Corp., 2004 WL 3030121, at *1 (C.D. Cal. Dec. 27, 2004) (citing Swint

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v. Chambers Cnty. Comm’n, 514 U.S. 35, 47 (1995)).

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The first factor—a controlling question of law—is not present. A question of law is

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controlling if the resolution of the issue on appeal could “materially affect the outcome of

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litigation” in the district court. In re Cement, 673 F.2d at 1027. A “mixed question of law and

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fact or the application of law to a particular set of facts” by itself is not appropriate for permissive

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interlocutory review. Chehalem Physical Therapy, Inc. v. Coventry Health Care, Inc., 2010 WL

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952273, at *3 (D. Or. March 10, 2010); see also Allen v. Conagra Foods, Inc., 2013 WL 6000456,

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at *3 (N.D. Cal. Nov. 12, 2013) (denying section 1292(b) certification because proposed appeal

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involved application of the relevant facts to a regulation); Steering Comm. v. United States, 6 F.3d

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572, 575 (9th Cir. 1993) (holding a pure legal question was identifiable and therefore the Ninth

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Circuit could resolve all the questions material to the order). The questions SCI seeks to have

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reviewed--whether SCI is exempt from Labor Code Section 2810.3 because it “supplied” five or

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fewer workers at “any given time” and whether remote removal locations of constitute

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“worksites”--are mixed questions of law and fact. The review requires not only the statutory

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analysis regarding the definitions of “supplied” and “any given time,” but also an application of
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the statute’s words to the actual facts. In such circumstances it is preferable to review the question

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on the basis of established trial facts.

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A substantial ground for a difference of opinion has also not been shown. “To determine if
a ‘substantial ground for difference of opinion’ exists under § 1292(b), courts must examine to

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what extent the controlling law is unclear.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir.

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2010). “Courts traditionally will find that a substantial ground for difference of opinion exists

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where “the circuits are in dispute on the question and the court of appeals of the circuit has not

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spoken on the point, if complicated questions arise under foreign law, or if novel and difficult

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questions of first impression are presented.” Id. (citing 3 Federal Procedure, Lawyers Edition §

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3:212 (2010)). “Just because a court is the first to rule on a particular question or just because

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United States District Court
Northern District of California

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counsel contends that one precedent rather than another is controlling does not mean there is such

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a substantial difference of opinion as will support an interlocutory appeal.” Id. “[A] party’s

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strong disagreement with the Court’s ruling is not sufficient for there to be a substantial ground for

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difference.” Id. It is well settled that “the mere presence of a disputed issue that is a question of

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first impression, standing alone, is insufficient to demonstrate a substantial ground for difference

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of opinion.” Id. at 634 (citing In re Flor, 79 F.3d 281, 284 (2nd Cir. 1996)).

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While Defendants argue that the controlling law, Labor Code Section 2810.3, has not been

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addressed by a California state court (indeed any court), the Ninth Circuit has specifically held that

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such circumstances do not create a substantial ground for a difference of opinion. Id. at 634.

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Moreover, similar to Couch, Defendants have not “provided a single case that conflicts” with this

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Court’s construction or application of Section 2810.3. Id. at 633. While Defendants strongly

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disagree with this Court’s interpretation, that disagreement does not warrant interlocutory appeal.

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Finally, an appeal will not materially advance this litigation. An appeal may materially

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advance the ultimate termination of the litigation when resolution of the controlling question of

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law “may appreciably shorten the time, effort, or expense of conducting a lawsuit.” In re Cement,

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673 F.2d at 1027. Defendants argue that a review of the Order denying summary judgment of the

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Section 2810.3 claim would conserve court resources because Defendants would be dismissed

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from the action and the case would be “streamlined” leaving only Plaintiffs’ claims against
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Serenity. Under Defendants’ reasoning, however, a party should be able to appeal every time

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summary judgment is denied even though interlocutory appeals can only be heard in exceptional

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cases. See In re Cement, 673 F.2d at 1026. Defendants must do more than just note that granting

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summary judgment in their favor would end litigation as to the claims against them as it will do

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nothing about the claims against Serenity and thus will certainly delay the litigation, especially

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since Defendants are asking the entire case to be stayed in the interim. Thus, this case does not

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involve “exceptional situations in which allowing an interlocutory appeal would avoid protracted

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and expensive litigation.” See In re Cement, 673 F.2d at 1026.
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At oral argument Defendants raised another issue: they claimed that in its Orders regarding

United States District Court
Northern District of California

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Defendants’ motion for summary judgment on Labor Code § 2810.3 the Court never addressed

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their argument that because this provision creates a new liability, the Court must construe it

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narrowly and in Defendants’ favor. Defendants’ insistence that the Court did not address the issue

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is wrong. The Court specifically held that it is required to construe the Labor Code broadly in

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favor of protecting employees, and that the cases Defendants’ cited were unpersuasive as none

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involved the Labor Code. (Dkt. No. 175 at 2:16-23.)
CONCLUSION

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For the reasons stated above, the Court DENIES Defendants’ motion for certification and
to stay further proceedings. This Order disposes of Docket No. 177.
IT IS SO ORDERED.
Dated: July 26, 2017

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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