Coppernoll v. Hamcor, Inc.

Filing 58

ORDER GRANTING MOTION FOR EQUITABLE TOLLING by Judge William Alsup [granting 51 Motion]. (whasec, COURT STAFF) (Filed on 4/27/2017)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 WYATT COPPERNOLL, 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 Plaintiff, No. C 16-05936 WHA v. HAMCOR, INC., ORDER GRANTING MOTION FOR EQUITABLE TOLLING Defendant. / INTRODUCTION In this putative wage-and-hour class action, plaintiff moves for equitable tolling of his 18 putative Fair Labor Standards Act collective claims that were stayed by a previous order. 19 For the reasons stated below, plaintiff’s motion is GRANTED. 20 21 STATEMENT In October 2016, Plaintiff Wyatt Coppernoll filed this putative wage-and-hour class 22 action asserting claims under the Fair Labor Standards Act, the California Labor Code, and the 23 California Business and Professions Code. 24 Defendant Hamcor, Inc., moved to stay the action and compel arbitration pursuant to the 25 arbitration sections of Coppernoll’s job application agreement and employment agreement with 26 Hamcor. A January 2017 order denied that motion, finding both parties agreed the arbitration 27 terms were unenforceable under Morris v. Ernst & Young, 834 F.3d 975 (9th Cir. 2016), and the 28 fact that our Supreme Court granted a writ of certiorari did not change the law of our court of 1 appeals for the time being (Dkt. No. 41). The order limited the parties, however, to individual 2 discovery as to Coppernoll’s claims, rather than the putative class, pending the upcoming 3 review of Morris. 4 In February 2017, the parties stipulated request to stay all class and collective claims in 5 the action was granted. The order staying the claims required the parties to update the 6 undersigned on Morris by August 16, or when briefing was completed, whichever came sooner. 7 Coppernoll now requests equitable tolling of the FLSA claims as of the order staying 8 class discovery, January 12, 2017, and until the stay is lifted (Dkt. No. 56 at 2). Such an order 9 would preserve claims of putative class members whose claims would otherwise be 11 For the Northern District of California United States District Court 10 extinguished by the FLSA statute of limitations while the stay is in place. This order follows full briefing and oral argument. 12 13 ANALYSIS For purposes of calculating the timeliness of a FLSA claim, the statute of limitations is 14 tolled for each putative class member individually upon filing a written consent to become a 15 party plaintiff. 29 U.S.C. 256(b). This opt-in standard differs from the opt-out standard in a 16 Rule 23 class action, where the statute of limitations is tolled for all putative class members 17 when the complaint is filed. Thus, without equitable tolling, the statute of limitations on a 18 putative class member’s FLSA claim continues to run in the time between the filing of the 19 collective action complaint and the filing of their written consent opting-in. See 29 U.S.C. 20 256; Woodard v. FedEx Freight East, Inc., 250 F.R.D. 178, 194 (M.D. Pa. Feb. 19, 2008) 21 (Judge Thomas Vanaskie). 22 The legal issue presented is whether a court-issued stay pending our Supreme Court’s 23 review of controlling precedent justifies equitably tolling the statute of limitations on FLSA 24 collective action claims. Our court of appeals has not addressed the issue squarely, but it has 25 provided guidance on equitably tolling FLSA claims generally.* 26 27 28 * As noted in a previous order, both parties agree that Morris is controlling here (Dkt. No. 32). Neither that order, nor this one, rules on the merits of that issue. 2 1 The FLSA statute of limitations is a procedural limitation that may be tolled when 2 equity warrants. See Partlow v. Jewish Orphan’s Home of Southern California, Inc., 645 F.2d 3 757, 761 (9th Cir. 1981) (abrogated on other grounds). “Equitable tolling applies when the 4 plaintiff is prevented from asserting a claim by wrongful conduct on the part of the defendant, 5 or when extraordinary circumstances beyond the plaintiff’s control ma[ke] it impossible to file a 6 claim on time.” Stoll v. Runyon, 165 F.3d 1238, 1242 (9th Cir. 1999). 7 Coppernoll does not make this motion under the first standard, expressly disclaiming not outright acknowledge the second standard — that an extraordinary circumstance beyond 10 putative plaintiffs’ control prevents them from making a timely claim. Rather, he bases this 11 For the Northern District of California making this motion based on wrongful conduct by Hamcor (Dkt. No. 56 at 2). Coppernoll does 9 United States District Court 8 motion on the stay of FLSA proceedings in this action pending our Supreme Court’s disposition 12 of Morris and provides similar district court decisions that equitably tolled FLSA claims 13 pending California Supreme Court review of relevant decisions. See Castle v. Wells Fargo 14 Financial, Inc., 2007 WL 1105118, at *2 (N.D. Cal. Apr. 10, 2007) (Judge Susan Illston); 15 and Lew v. Countrywide Financial Corp., 2009 WL 1384975, at *3 (N.D. Cal. Feb. 24, 2009) 16 (Judge Samuel Conti). 17 Our court of appeals, however, has provided further guidance on the extraordinary 18 circumstances route to equitable tolling. The rule from Stoll traces back to Forti v. 19 Suarez-Mason, 672 F. Supp. 1531, 1549 (N.D. Cal. Oct. 6, 1987) (Judge D. Lowell Jensen), 20 and its adoption by our court of appeals in Seattle Audubon Society v. Robertson, 931 F.2d 590, 21 596 (9th Cir. 1991). In Seattle Audubon Society, plaintiffs’ claims were equitably tolled when 22 they were prevented from pursuing their claims due to an unconstitutional statutory enactment 23 and the district court’s enforcement of such. Ibid. The decision relied on the following 24 explanation in Osbourne v. United States, 164 F.2d 767, 769 (2d Cir. 1947): 25 26 27 All statutes of limitations are based on the assumption that one with a good cause of action will not delay in bringing it for an unreasonable period of time; but, when a plaintiff has been denied access to the courts, the basis of the assumption has been destroyed. 28 3 1 Seattle Audubon Society, 931 F.2d at 596. The decision further recognized that “[e]ven when 2 physical access to a functioning court is possible, equitable tolling may nevertheless be proper 3 if there is no real possibility of gaining relief in court.” Ibid. 4 Here, there is a stay in place on Coppernoll’s collective action claims preventing him 5 from engaging in class discovery, filing a motion for class certification, or receiving approval 6 to notice this action to putative class members. As such, putative members of the class are 7 unlikely to receive notice of the pendency of this collective action until class proceedings 8 resume — at which point, their claims may be extinguished. Moreover, these putative class 9 members are presumably subject to the same or similar employment agreement Coppernoll signed. As explained in a previous order, the collective action waiver in Coppernoll’s 11 For the Northern District of California United States District Court 10 employment agreement forced all claims to arbitration, at which point they were only permitted 12 to proceed individually (Dkt. No. 41). Under Morris, our court of appeals holds similar waivers 13 unenforceable (ibid.). While Morris awaits review, however, the enforceability of Hamcor’s 14 collective action waiver will not be ruled on, and the waiver may impede or dissuade potential 15 claimants from seeking relief in court. Equity thus urges the tolling of the statute of limitations. 16 Hamcor’s attempt to distinguish Castle and Lew goes no further than highlighting the 17 fact that the decisions are not precedential and the precedent of our court of appeals allegedly 18 provides reason for denying Coppernoll’s motion. Hamcor relies on a recitation of the Seattle 19 Audubon Society standards in Alvarez-Machain v. United States, 107 F.3d 696, 701 (9th Cir. 20 1996) (overruled on other grounds), and cites to three decisions denying equitable tolling based 21 on those standards. See Bonilla v. Las Vegas Cigar Co., 61 F. Supp. 2d 1129, 1140 (D. Nev. 22 Aug 18, 1999) (Judge Philip Pro); Veliz v. Cintas Corp, 2007 WL 841776, at *4 (N.D. Cal. 23 Mar. 20, 2007) (Judge Saundra Armstrong); and Fichtner v. American Family Mutual Insurance 24 Company, 2004 WL 3106753, at *10 (D. Or. Mar. 1, 2004) (Judge Michael Hogan). Each is 25 distinguishable. 26 Bonilla found that plaintiffs’ scattered locations around the country and inability to 27 speak English did not constitute an extraordinary circumstance justifying tolling. The Veliz 28 plaintiffs relied on the defendant’s wrongful conduct and presented no extraordinary 4 1 circumstances in their attempt to justify tolling. Fichtner found that the defendant’s refusal to 2 provide information on other employees was not the sort of exceptional circumstance justifying 3 equitable tolling and further indicated that the asserted discovery violation lacked merit because 4 plaintiff failed to file a motion to compel. None of these decisions present a situation where an 5 unenforceable contract and a court-ordered stay effectively shut putative class members out of 6 court. 7 Alvarez-Machain did find equitable tolling justified. There, Alvarez-Machain’s “life 8 was at stake, and his case involved numerous, complex issues of first impression — several 9 of which were ultimately decided by the United States Supreme Court.” Alvarez-Machain, 107 F.3d at 701. The decision further noted that “had he filed an administrative claim prior to 11 For the Northern District of California United States District Court 10 obtaining an acquittal, many of his claims would have been dismissed because they necessarily 12 implicated the validity of his criminal charges.” Ibid. Similar to the instant order, our court of 13 appeals justified equitable tolling based on considerations of our Supreme Court’s review and 14 the futility of filing claims in the meantime. 15 Next, Hamcor spent a portion of its brief arguing it did not engage in wrongful conduct 16 that would justify equitable tolling. As noted above, Coppernoll did not claim as much. 17 Nevertheless, Hamcor asserts that it should not be penalized for trying to protect its interests, 18 citing Owens v. Bethlehem Mines Corp., 630 F. Supp. 309, 312 (S.D. W.Va. 1986) 19 (Judge Charles Haden). In the event any damages do result from the stay, they will be minor, 20 as review of Morris is slated for our Supreme Court’s October 2017 term and a decision is 21 likely to be rendered by December. 22 Hamcor also argues there is no requirement in the FLSA that a defendant provide 23 contact information for potential plaintiffs until after a collective action is certified and thus, 24 Coppernoll could be prevented from obtaining class discovery regardless. This proposition is 25 supported by Adedapoidle-Tyehinba v. Crunch LLC, 2013 WL 4082137, at *7 (N.D. Cal. Aug. 26 9, 2013) (Judge William Orrick); Gilberd v. Citigroup, Inc., 2009 WL 424320, at *5 (N.D. Cal. 27 Feb. 18, 2009) (Judge Samuel Conti); and Prentice v. Fund for Public Interest Res– Inc., 2007 28 WL 2729187, at *3 (N.D. Cal. Sep. 18, 2007) (Judge Samuel Conti). Prentice recognized that 5 1 this is not a settled proposition. Gilberd and Adedapoidle-Tyehinba rely on Prentice. As this 2 order does not rely on any such argument, it will not wade further into the issue. 3 Hamcor additionally argues Coppernoll cannot represent a putative class member’s 4 interests until the putative class member files a valid consent, asserting an individual employee 5 cannot become a party to an action under the FLSA unless he or she does so. In support, 6 Hamcor cites State of Nevada Employees’ Association v. Bryan, 916 F.2d 1384, 1391 7 (9th Cir. 1990). SNEA is inapplicable here — the decision has nothing to do with equitable 8 tolling. Rather, SNEA concerns whether an organization may bring FLSA claims on behalf 9 of its members. Our court of appeals held the plaintiff did not have standing under the FLSA, even if its members alleged personal injuries. Ibid. 11 For the Northern District of California United States District Court 10 In the same vein, Hamcor argues there is no Article III power to prospectively suspend 12 the statute of limitations for putative collective action members. Presumably because it could 13 not find support in decisions of our court of appeals, Hamcor turns to United States v. Cook, 14 795 F.2d 987, 994 (Fed. Cir. 1986). As Coppernoll points out, our court of appeals has never 15 applied Hamcor’s proposed rule that FLSA claims cannot be prospectively tolled. The clear 16 weight of decisions on the issue from courts in our circuit is in favor of prospectively tolling 17 the statute of limitations for putative class members as equity demands. Koval v. Pacific Bell 18 Telephone Co., 2012 WL 3283428, at *7 (N.D. Cal. Aug. 10, 2012) (Judge Claudia Wilken). 19 See also Beaupherty v. 24 Hour Fitness USA, Inc., 2007 WL 707475, at *8 (N.D. Cal. Mar. 6, 20 2007) (Judge Samuel Conti); and Helton v. Factor 5, Inc., 2011 WL 5925078, at *2 (N.D. Cal. 21 Nov. 28, 2011) (Judge Saundra Armstrong). 22 Here, absent tolling, putative class members with claims on the verge of being 23 extinguished may have no other option but to give up their day in court and arbitrate 24 individually instead. It is imprudent to encourage this result. It is also impractical to encourage 25 the filing of numerous individual claims destined to be drawn through the same motion practice 26 as Coppernoll, only to be stayed, as well, while we wait for a decision on Morris. This order, 27 instead, GRANTS Coppernoll’s motion and equitably tolls the FLSA collective claims until the 28 stay is lifted. 6 1 2 * * * It bears stating hat the Court would never have granted the stay requested by Hamcor 3 if it had realized Hamcor would then use the stay to run out the statute of limitations as to 4 potential opt-ins. This maneuver is too slick and too unfair. 5 6 CONCLUSION For the reasons stated above, Coppernoll’s motion for equitable tolling is GRANTED. 7 The FLSA collective claims are tolled as of FEBRUARY 16, pursuant to the order granting their 8 stay. Upon lifting the stay, the statue of limitations will resume. 9 IT IS SO ORDERED. 11 For the Northern District of California United States District Court 10 12 13 Dated: April 27, 2017. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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