Carroll v. Wells Fargo & Company et al

Filing 128

ORDER Re Severance and Consolidation. Signed by Judge Edward M. Chen on 10/7/2016. (emcsec, COURT STAFF) (Filed on 10/7/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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Plaintiff,

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For the Northern District of California

United States District Court

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Case No. 16-cv-02011-EMC

WELLS FARGO & COMPANY, et al.,
Defendants.

ORDER RE SEVERANCE AND
CONSOLIDATION

CHRYSTIANE LAYOG,
Plaintiff,

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RELATED CASE

v.

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Case No. 15-cv-02321-EMC

KELLY CARROLL,

v.
WELLS FARGO & COMPANY, et al.,
Defendants.

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On October 6, 2016, the Court held a conference to address how the above-referenced

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cases should proceed, given the overlap between (1) Carroll and Layog and between (2) Layog

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and Koenig, No. 15-6472 (PGS) (TJB), a case being litigated in the District of New Jersey. This

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order memorializes the rulings made by the Court at the conference and provides further analysis,

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as necessary.

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I.

SEVERANCE AND TRANSFER

Under Federal Rule of Civil Procedure 21, a court has discretion to “sever any claim

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against a party.” Fed. R. Civ. P. 21. This rule allows a court “to structure a case for the efficient

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administration of justice.” 4-21 Moore‟s Fed. Prac. – Civ. § 21.02[1]. This includes “sever[ing] a

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claim to facilitate its transfer to another venue.” Id.

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In the instant case, the Court concludes that it is appropriate to sever the claims in Layog –

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more specifically, to sever the FLSA claim from the state law claims. The FLSA claim – for

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failure to pay overtime for, e.g., pre- and post-shift time – shall then be transferred to the District

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of New Jersey because the Koenig case already involves a FLSA claim for unpaid overtime for

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such shift time and it was filed more than six months before Layog. See Carefusion 202, Inc. v.

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Tres Tech Corp., No. C-13-2194 EMC, 2013 U.S. Dist. LEXIS 109146, at *1 (N.D. Cal. Aug. 2,

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2013) (noting that, “[u]nder the „first-to-file‟ rule, „when cases involving the same parties and

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issues have been filed in two different districts, the second district court has discretion to transfer,

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stay, or dismiss the second case in the interest of efficiency and judicial economy‟”).

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The Court acknowledges that the Layog FLSA claim is more limited than the Koenig

nationwide collective. That point, however, does not detract from the fact that the putative

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For the Northern District of California

FLSA claim – i.e., Layog is limited to California employees while Koenig covers a putative

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United States District Court

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collective in Layog is subsumed within the putative collective in Koenig. The Court also notes

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that a transfer to the District of New Jersey will not necessarily prejudice Ms. Layog and her

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putative collective. Even if Ms. Koenig is subject to a three-year statute of limitations and Ms.

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Layog is subject to only a two-year statute of limitations, this transfer order does not preclude Ms.

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Layog from proceeding with her two-year limitations case before the district court in New Jersey.

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How her case will be managed is a matter for the transferee court to decide. Ms. Layog has also

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suggested prejudice on the theory that Koenig is not proceeding quickly enough (a concern

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because the statute of limitations continues to run until an individual opts in) but that concern does

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not preclude transfer. The Court is not in a position to say how the New Jersey district judge shall

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manage Koenig and Layog, and Ms. Layog may raise any concerns she has with the New Jersey

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district judge. Moreover, the Court notes that the pleadings in Koenig are already settled whereas

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they are not in Layog, and at the hearing, Ms. Layog actually expressed concern that Koenig was

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moving too fast because certification discovery was closing soon.

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II.

CONSOLIDATION

The Court is now left with the state claims in Layog, as well as Carroll. Ms. Carroll has

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indicated willingness to limit her case to service employees only, leaving the rights of platform

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employees to be litigated in state court. Then, citing the first-to-file rule, Ms. Carroll argues that
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the Layog state claims should be dismissed or stayed in favor of her case, but the Court is not

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persuaded. A dismissal or a stay makes little sense, particularly because Layog includes a claim

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(based on California Labor Code § 204) that has not been raised in Carroll and that claim is

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related to the other claims raised in both Carroll and Layog. While Ms. Carroll indicates that she

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is amenable to amending her complaint to include a § 204 claim, Ms. Layog was the first to raise

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that claim. Taking into account all the circumstances, the Court concludes that consolidation of

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the state law claims in Layog (including the § 204 claim) with Carroll, with the cases being

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limited to service employees, is the most sensible approach. See Fed. R. Civ. P. 42(a)(2)

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(providing that, “[i]f actions before the Court involve a common question of law or fact, the court

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may . . . consolidate the actions”).
Because the Court is consolidating the actions, a consolidated amended complaint is

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For the Northern District of California

United States District Court

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necessary. However, before that pleading is filed, the Court must first select lead counsel to

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determine who will litigate this case on behalf of the putative class. See Fed. R. Civ. P. 23(g)(2)-

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(3) (providing that, “[i]f more than one adequate applicant [for appointment as class counsel]

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seeks appointment, the court must appoint the applicant best able to represent the interests of the

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class” and that “[t]he court may designate interim counsel to act on behalf of a putative class

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before determining whether to certify the action as a class action”).

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Motions for appointment of lead counsel shall be filed by October 13, 2016. The motions
shall be heard on October 27, 2016, at 9:30 a.m. (not 1:30 p.m.).

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IT IS SO ORDERED.

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Dated: October 7, 2016
______________________________________
EDWARD M. CHEN
United States District Judge

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