Meints v. Regis Corporation

Filing 18

ORDER: Defendant's Motion to Stay Proceedings (Doc. 13 ) is granted. The case is stayed until 6/14/2010. On 6/14/2010, the parties shall submit a report regarding the status of Lopez v. Regis Corp. Any request for a further stay beyond 6/14/2010 shall be filed as a new motion. Signed by Judge William Q. Hayes on 2/16/2010. (mdc) (jrl).

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 HAYES, Judge: 17 18 19 The matter before the Court is Defendant's Motion to Stay Proceedings. (Doc. # 13). BACKGROUND On September 21, 2009, Plaintiff initiated this action by filing a complaint. (Doc. # 1). JENNIFER MEINTS, vs. REGIS CORPORATION, Plaintiff, CASE NO. 09cv2061 WQH (CAB) ORDER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

Defendant.

20 The complaint is a proposed class action against Defendant for several alleged violations of 21 the California Labor Code. Id. On November 30, 2009, Defendant filed an answer to the 22 complaint. (Doc. # 7). On December 1, 2009, Defendant filed its Motion to Stay Proceedings 23 on the grounds that there is a class action with many of the same claims pending against 24 Defendant in the Central District of California. (Doc. # 13). 25 26 ALLEGATIONS OF THE COMPLAINT Plaintiff alleges claims on behalf of Defendant's employees who were underpaid in

27 violation of California law. (Doc. # 1 at ¶ 8). Plaintiff alleges claims for (1) violation of 28 California Labor Code § 510 and § 1198 for failing to pay overtime; (2) violation of California
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1 Labor Code § 226.7 and § 512(a) for failing to pay meal period premiums; (3) violation of 2 California Labor Code § 226.7 for failure to pay rest period premiums; (4) violation 3 of California Labor Code § 2800 and § 2802 for failing to pay business expenses; (5) violation 4 of California Labor Code § 1194, § 1197, and § 1197.1 for failure to pay minimum wages; 5 (6) violation of California Labor Code §§ 201-202 for failure to timely pay wages upon 6 termination; (7) violation of California Labor Code § 204 for failing to pay wages on time; 7 (8) violation of California Labor Code § 226(a) for noncompliant wage statements; and 8 (9) violation of California Labor Code § 17200. Id. at ¶ 25-91. Plaintiff proposes three 9 subclasses of plaintiffs: (1) an unpaid wages subclass of all employees who received hourly 10 or mixed hourly and commission income while working for Defendant at a store location in 11 California from four years before the complaint was filed until the date of class certification; 12 (2) a non-compliant wages subclass of all employees who received a wage statement from a 13 year before the filing of the complaint until the date of class certification; and (3) an 14 unreimbursed business expenses subclass of all employees who paid business-related expenses 15 in California from four years before the complaint was filed until the date of class certification. 16 Id. 17 Plaintiff alleges the following questions of law and fact are common to the class:

18 (1) whether Defendant willfully violated the California Labor Code by "failure to pay wages, 19 without abatement or reduction;" (2) whether Defendant required employees to work over 20 eight hours per day, over twelve hours per day, or over 40 hours per week and failed to pay 21 overtime; (3) whether Defendant required employees to work during meal periods without 22 compensation; (4) whether Defendant required employees to work during rest periods without 23 compensation; (5) whether Defendant failed to reimburse employees for business expenses 24 incurred in the scope of their employment; (6) whether Defendant failed to pay minimum 25 wages; (7) whether Defendant failed to report wages as required by California Labor Code 26 § 226; (8) whether Defendant failed to pay employees all wages earned; (9) whether 27 Defendant's conduct was willful or reckless; (10) whether Defendant engaged in unfair 28 business practices; and (11) damages.
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CONTENTIONS OF THE PARTIES Defendant contends that the case should be stayed pending the resolution of Lopez v.

3 Regis Corp., 08cv9221 RGK (Cwx) (C.D. Cal.), which was filed on December 12, 2008 and 4 is currently pending in the Central District of California. (Doc. # 13). In the alternative, 5 Defendant contends that the Court should limit Plaintiff's class discovery to her cause of 6 action for business expenses and her other claims as to the time period between September 21, 7 2005 and November 12, 2007. Id. Defendant contends that Lopez is nearly identical to 8 Plaintiff's subsequently filed action. (Doc. # 13-1 at 3). Defendant contends that the parties 9 in Lopez have reached a proposed $ 2.5 million settlement agreement which certifies a class 10 of 3,200 current and former employees and releases Defendant from further liability for all 11 claims under the Fair Labor Standards Act and the California Labor Code. Id. at 4. If the court 12 approves the settlement, Defendant contends that "not only will Plaintiff's rights be affected, 13 but so too will most of the individuals she seeks to represent in her putative class action." Id. 14 at 5. Defendant contends that a stay is therefore proper under the "first to file" doctrine, which 15 allows district courts to dismiss or stay cases where there is a previously-filed pending action 16 in another district court relating to the same issues between the same parties. Id. at 6. 17 Defendant contends that the issues and parties do not have to be identical, rather that both must 18 be "substantially similar," a requirement which is met by the similarity between the classes and 19 claims in Lopez and in this case. Id. at 7. 20 Plaintiff contends that the motion to stay is premature and that the first to file rule

21 should not be applied where the "first-filed case was filed only a relatively short time before 22 subsequent cases." (Doc. # 16 at 4). Plaintiff contends that the two cases are not identical and 23 that inadequate discovery was conducted in the first-filed case. Id. Plaintiff contends that the 24 present case alleges a claim for unreimbursed expenses pursuant to California Labor Code 25 § 2802 which was not alleged in Lopez. Id. at 5. Plaintiff contends that this case covers the 26 entire statutory period permitted by the statute of limitations, whereas the Lopez action does 27 not. Id. at 8. Plaintiff contends that there is an objection to the Lopez settlement by the named 28 plaintiff in another purported class action case, Manukyan v. Regis, 09cv4807 (C.D. Cal),
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1 seeking more discovery before the court approves the settlement agreement. Id. at 9. Plaintiff 2 contends that even if a stay is appropriate as to her claims which overlap with the claims at 3 issue in Lopez, the Court should not stay this case as to Plaintiff's unreimbursed business 4 expenses claim because the Plaintiffs in Lopez did not raise that claim. Id. at 13. 5 6 ANALYSIS Federal courts follow a well-established rule that a district court may transfer, stay, or

7 dismiss an action when another similar complaint has already been filed in another federal 8 court. Alltrade, Inc. v. Uniweld Prods. Inc., 946 F.3d 622, 623 (9th Cir. 1991). This rule 9 "serves the purpose of promoting efficiency well and should not be disregarded lightly." 10 Church of Scientology v. United States Dep't of the Army, 611 F.2d 738, 750 (9th Cir 1979). 11 District courts have significant discretion in deciding whether to apply the first to file rule. See 12 Alltrade, 946 F.3d at 627-28. "[W]ise judicial administration, giving regard to the

13 conservation of judicial resources and comprehensive disposition of litigation does not counsel 14 rigid mechanical solutions of such problems." Id. (citing Kerotest Mfg. Co. v. C-O-Two Fire 15 Equipment Co., 342 U.S. 180, 183 (1952)). However, unless a lawsuit was filed in bad faith, 16 was anticipatory, or involved forum shopping, courts should generally apply the first to file 17 rule. Id. Even if "neither action has proceeded past the pleading stage . . . permitting multiple 18 adjudication of [] identical claims could serve no purpose of judicial administration." 19 Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 96 (9th Cir 1982). Cases are 20 sufficiently similar to warrant application of the rule if the parties and the issues are the same. 21 Id. at 95. However, the cases and parties need not be completely identical. See id. at 95-95; 22 see also Nakash v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989) (holding that Colorado 23 River abstention does not require "exact parallelism," only that the two cases are "substantially 24 similar"). In applying the first to file rule, "courts are not bound by technicalities." Church 25 of Scientology, 611 F.2d at 749. The Ninth Circuit has warned that "in this day of increasingly 26 crowded federal dockets. . . . `it [is] imperative to avoid concurrent litigation in more than one 27 forum whenever consistent with the rights of the parties.'" Id. at 750 (citing Crawford v. Bell, 28 599 F.2d 890, 893 (9th Cir. 1979)).
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The Lopez action predates this action and involves substantially similar issues and

2 parties. Eight of Plaintiff's nine claims are identical to the claims in Lopez. Plaintiff alleges 3 a claim for reimbursement of business expenses not alleged in Lopez and Plaintiff's claims 4 cover a two-year period not alleged in Lopez. However, the proposed settlement in Lopez 5 would release Defendant from further liability for all claims under the Fair Labor Standards 6 Act and the California Labor Code for the entire statute of limitations period. If the Lopez 7 settlement is approved, it may prevent Plaintiff from proceeding with this case as a class action 8 as to any of her claims. Allowing Plaintiff to proceed to class discovery in this case when a 9 settlement potentially barring her class action is pending would waste judicial resources and 10 require Defendant to expend significant effort to comply with discovery requests in a case 11 which is unlikely to result in a class certification. The motion to stay is granted. 12 13 ORDER IT IS HEREBY ORDERED that Defendant's Motion to Stay Proceedings (Doc. # 13)

14 is GRANTED. The case is stayed until June 14, 2010. On June 14, 2010, the parties shall 15 submit a report regarding the status of Lopez v. Regis Corp., 08cv9221 RGK (Cwx) (C.D. 16 Cal.). Any request for a further stay beyond June 14, 2010 shall be filed as a new motion. 17 DATED: February 16, 2010 18 19 20 21 22 23 24 25 26 27 28
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WILLIAM Q. HAYES United States District Judge