Nanavati v. Adecco USA, Inc.

Filing 27

ORDER DENYING 23 MOTION FOR CERTIFICATION FOR INTERLOCUTORY APPEAL. Signed by Hon. Beth Labson Freeman on 6/30/2015. (blflc2, COURT STAFF) (Filed on 6/30/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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RAJAN NANAVATI,

Case No. 14-cv-04145-BLF

Plaintiff,
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v.
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ADECCO USA, INC.,
Defendant.

ORDER DENYING MOTION FOR
CERTIFICATION FOR
INTERLOCUTORY APPEAL
[Re: ECF 23]

United States District Court
Northern District of California

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Plaintiff Rajan Nanavati (“Plaintiff”) requests that this Court certify its April 13, 2015

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Order Granting Motion to Compel Arbitration for interlocutory appeal pursuant to 28 U.S.C. §

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1292(b). Pl.’s Mot., ECF 23. Defendant Adecco USA, Inc. (“Defendant”) opposes this request.

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Def.’s Opp., ECF 25. The Court finds this matter suitable for submission without oral argument

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and accordingly vacates the July 23, 2015 hearing date for Plaintiff’s motion. Civ. L.R. 7-1(b).

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For the reasons stated herein, Plaintiff’s motion is DENIED.

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I.

LEGAL STANDARD

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A federal district court may certify for interlocutory review any non-dispositive order that

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meets three criteria: (1) there is a controlling question of law upon which (2) there is a substantial

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ground for difference of opinion, and (3) the immediate appeal of which will materially advance

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the ultimate termination of the litigation. 28 U.S.C. § 1292(b). “Certification under § 1292(b)

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requires the district court to expressly find in writing that all three § 1292(b) requirements are

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met.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). The purpose of the statute is to

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provide “immediate appeal of interlocutory orders deemed pivotal and debatable.” Swint v.

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Chambers Cnty. Comm’n, 514 U.S. 35, 46 (1995). However, “Section 1292(b) is a departure from

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the normal rule that only final judgments are appealable, and therefore must be construed

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narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002). In seeking

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interlocutory appeal, a movant therefore has a heavy burden to show that “exceptional

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circumstances justify a departure from the basic policy of postponing appellate review until after

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the entry of a final judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978).

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II.

DISCUSSION
Plaintiff seeks to appeal, on an interlocutory basis, the Court’s determination that

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provisions waiving class action and representation action procedures in the binding arbitration

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agreement between Plaintiff and Defendant are valid and enforceable. The Court assumes

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familiarity with the facts of this case and with the Court’s April 13, 2015 order. Order, ECF 21.
A.

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United States District Court
Northern District of California

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Plaintiff asserts that this Court’s rejection of his argument that the NLRA precludes class

Ruling on Class Action Waiver

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action waivers in employment contracts implicates a controlling question of law upon which there

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is substantial ground for difference of opinions—namely, whether federal courts should adopt the

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NLRB’s conclusions in In re D. R. Horton, Inc., 357 N.L.R.B. No. 184 (Jan. 3, 2012) (“Horton I”)

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and Murphy Oil USA, Inc., 361 N.L.R.B. No. 72 (Oct. 28, 2014) that mandatory arbitration

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agreements that bar employees from bringing joint, collective, or class action claims restrict

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substantive rights under section 7 of the NLRA and are therefore unlawful. See Pl.’s Mot. 6-8.

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In the abstract, this issue may present a controlling question of law, as the Ninth Circuit

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has never directly addressed the applicability of Horton I and Murphy Oil. However, this Court’s

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order did not rest upon the legal question of whether Section 7 of the NLRA limits the reach of the

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FAA, but rather upon the factually indistinguishable holding of the Ninth Circuit’s controlling

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opinion in Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072 (9th Cir. 2014). Order at 7-9.

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Plaintiff quibbles with the Court’s determination that the facts of this case are indistinguishable

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from those in Johnmohammadi. Pl.’s Mot. 7-8 (“the facts presented here are different enough that

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a reasonable judge could disagree with the conclusion that Johnmohammadi controls”). “That

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settled law might be applied differently does not establish a substantial ground for difference of

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opinion.” Couch, 611 F.3d at 633. Here, Plaintiff’s argument for interlocutory appeal rests upon

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his speculation that the Ninth Circuit would find the facts of this case distinguishable from
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Johnmohammadi and then choose to confront the legal question of the limitations that the NLRA

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may impose on private arbitration agreements.

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Moreover, Plaintiff has not demonstrated substantial ground for difference of opinion, as

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every court to have considered Horton I and Murphy Oil has rejected the reasoning in those

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opinions, particularly in respect to non-coercive arbitration and waiver provisions such as the ones

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at issue in this case. See D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344, 359 (5th Cir. 2013)

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(“Horton II”); Owen v. Bristol Care, Inc., 702 F.3d 1050, 1055 (8th Cir. 2013); Sutherland v.

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Ernst & Young LLP, 726 F.3d 290, 297 n.8 (2nd Cir. 2013); Iskanian v. CLS Transp. Los Angeles,

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LLC, 59 Cal. 4th 348, 367-74 (2014); Brown v. Citicorp Credit Servs., Inc., No. 1:12-CV-00062BLW, 2015 WL 1401604 (D. Idaho Mar. 25, 2015); Patterson v. Raymours Furniture Co., No.

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United States District Court
Northern District of California

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14-CV-5882 VEC, 2015 WL 1433219, at *7 (S.D.N.Y. Mar. 27, 2015); see also Richards v. Ernst

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& Young, LLP, 744 F.3d 1072, 1075 n.3 (9th Cir. 2013) (observing number of federal courts that

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have rejected Horton I). The only case that Plaintiff relies on to demonstrate a difference of

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opinion—Brady v. Nat’l Football League, 644 F.3d 661 (8th Cir. 2011)—did not adopt the entire

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rationale of Horton I, as Plaintiff asserts, but only reasoned that the filing of a good faith class

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action lawsuit could be concerted activity within the meaning of Section 7 of the NLRA. Id. at

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673. Brady pre-dated Horton I and did not concern the intersection between the NLRA and the

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FAA, a fact that the Fifth Circuit readily noted in rejecting Horton I. Horton II, 737 F.3d at 356-

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62. As such, Plaintiff has failed to satisfy his burden to demonstrate the existence of exceptional

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circumstances warranting interlocutory appeal.

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B.

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Plaintiff next asserts that the Court’s determination that California’s PAGA statute, Cal.

Ruling on PAGA Waiver

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Lab. Code § 2698, et seq., does not invalidate his waiver of representative actions implicates a

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controlling question of law upon which there is substantial ground for difference of opinion. Pl.’s

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Mot. 8-9. The truth of that assertion is abundantly clear to anyone who reads the legal news in

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California. This unsettled area of the law has also spawned numerous appeals, both to the Ninth

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Circuit and to the United States Supreme Court, as Defendant points out. See Def.’s Opp. 6 n.2, 8.

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Since this precise issue has been fully briefed and heard by the Ninth Circuit in Hopkins v. BCI
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Coca-Cola Bottling Co, Case No. 13-56126 (argued June 3, 2015), the Court perceives no material

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advancement of the ultimate termination of this litigation from certifying yet another appeal on the

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same issue.
Plaintiff’s argument in favor of interlocutory appeal rests on the faulty assumption that if

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the representative action waiver is invalid, he could proceed on his PAGA claim first and then

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arbitrate the remaining claims later (to the extent he still wants to pursue individual claims). Pl.’s

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Mot. 3-4. That sequencing of events is hardly guaranteed, nor does Plaintiff explain how reviving

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his PAGA representative claim and pursuing it first would materially advance the resolution of the

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litigation. If anything, instead of the logical progression of first arbitrating his individual claims
and then litigating representative claims in court after an initial determination of liability, Plaintiff

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United States District Court
Northern District of California

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expects to turn that process on its head and dive into a lengthy and expansive representative

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action, leaving arbitration as an afterthought. This protracts, rather than materially advances the

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litigation. See Medlock v. Taco Bell Corp., No. 1:07-CV-01314-SAB, 2014 WL 6389382, at *2

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(E.D. Cal. Nov. 14, 2014). Thus, although Plaintiff may prefer to proceed with his PAGA

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representative claims first and may even find it convenient to do so, interlocutory appeal is not

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intended to bend to a party’s preference, but rather to an objective determination that appeal before

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final judgment will materially advance the ultimate termination of the litigation.
As Defendant sensibly proposes, Plaintiff may arbitrate his individual claims now, and no

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time would be lost if the Ninth Circuit ultimately determines that representative action waivers are

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unenforceable. Def.’s Opp. 8. In such an event, Plaintiff is welcome to seek leave for

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reconsideration of this Court’s order enforcing the representative action waiver. As it stands,

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however, Plaintiff has presented no principled or persuasive argument to put arbitration on hold

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for two to three years so that he can pursue an immediate appeal on an issue that is already under

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submission with the Ninth Circuit.

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III.

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ORDER
Based on the foregoing, the Court finds that Plaintiff has failed to show the existence of a

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controlling question of law upon which there is a substantial ground for difference of opinion in

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connection with the Court’s ruling enforcing the class action waiver provision of Plaintiff’s
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arbitration agreement with Defendant. Although there is a controlling question of law in regards

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to the enforceability of the representative action waiver in that agreement, the Court finds that

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Plaintiff has failed to demonstrate that an immediate appeal on the enforceability of either the

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class action or the representative action waiver would materially advance the ultimate termination

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of this litigation. Plaintiff’s motion to certify this Court’s April 13, 2015 Order Granting Motion

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to Compel Arbitration for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) is therefore

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DENIED.

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United States District Court
Northern District of California

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IT IS SO ORDERED.
Dated: June 30, 2015
______________________________________
BETH LABSON FREEMAN
United States District Judge

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