Villon et al v. Mariott Hotel Services, Inc.
Filing
105
ORDER GRANTING PLAINTIFFS' 77 MOTION FOR CLASS CERTIFICATION. Signed by District JUDGE LESLIE E. KOBAYASHI on May 31, 2011. (bbb, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
BERT VILLON and MARK APANA,
)
)
Plaintiffs,
)
)
vs.
)
)
MARRIOTT HOTEL SERVICES,
)
INC., DBA WAILEA MARRIOTT
)
RESORT,
)
)
)
Defendant.
_____________________________ )
CIVIL NO. 08-00529 LEK-RLP
ORDER GRANTING PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
On February 18, 2011, Plaintiffs Bert Villon and
Mark Apana, on behalf of themselves and all others similarly
situated (collectively “Plaintiffs”), filed the instant Motion
for Class Certification (“Motion”).
Defendant Marriott Hotel
Services, Inc., doing business as Wailea Marriott Resort
(“Defendant”), filed its memorandum in opposition on March 28,
2011, and Plaintiffs filed their reply on April 4, 2011.
matter came on for hearing on April 19, 2011.
This
Appearing on
behalf of Plaintiffs were Shannon Liss-Riordan, Esq., and
Ashley Ikeda, Esq., and appearing on behalf of Defendant was
Richard Rand, Esq.
After careful consideration of the Motion,
supporting and opposing memoranda, and the arguments of counsel,
Plaintiffs’ Motion is HEREBY GRANTED for the reasons set forth
below.
BACKGROUND
Plaintiffs have each worked as food and beverage
servers for the Wailea Marriott Resort (“the Resort”), which
Defendant owns and/or operates.
Plaintiffs filed the instant
Class Action Complaint (“Complaint”) on November 24, 2008.
The
Complaint alleges that the Resort imposes a service charge on the
sale of food and beverages at its banquets and other events, but
the Resort does not distribute the total proceeds of these
service charges to its food and beverage servers as tip income.
Further, the Resort allegedly does not disclose this fact to the
customers.
Plaintiffs claim that this practice results in a loss
of tip income for Defendant’s food and beverage servers.
Plaintiffs argue that this is a violation of Hawai`i Revised
Statutes § 481B-14, and it is actionable under §§ 481B-4, 480-2,
and 480-13, as well as under state wage statutes, Hawai`i Revised
Statutes §§ 388-6, 388-10, and 388-11, and under Hawai`i common
law.
On June 2, 2009, in a related case, Davis, et al. v.
Four Seasons Hotel Ltd., et al., CV 08-00525 HG-LEK, then Chief
United States District Judge Helen Gillmor certified the
following question to the Hawai`i Supreme Court:
Where plaintiff banquet server employees allege
that their employer violated the notice provisions
of H.R.S. § 481B-14 by not clearly disclosing to
purchasers that a portion of a service charge was
used to pay expenses other than wages and tips of
employees, and where the plaintiff banquet server
2
employees do not plead the existence of
competition or an effect thereon, do the plaintiff
banquet server employees have standing under
H.R.S. § 480-2(e) to bring a claim for damages
against their employer?
[Davis, Certified Question to the Hawaii Supreme Court from the
United States Dist. Ct. for the Dist. of Hawaii in Civil No.
08-00525 HG-LEK, filed 6/2/09 (dkt. no. 75), at 6.]
The certified question was also applicable to the
instant case and, therefore, Senior United States District Judge
Samuel P. King issued an order staying the instant case pending a
decision by the Hawaii`i Supreme Court on the certified question
in Davis.
[Minute Order, filed 7/17/09 (dkt. no. 43).]
The Hawai`i Supreme Court issued its opinion on
March 29, 2010.
It answered the certified question as follows:
“Employees are ‘any persons’ within the meaning of HRS §§ 480-1
and 480-2(e) and are within the category of plaintiffs who have
standing to bring a claim under HRS § 480-2(e) for a violation of
HRS § 481B-14.”
Davis v. Four Seasons Hotel Ltd., 122 Hawai`i
423, 446, 228 P.3d 303, 326 (Hawai`i 2010).
The Hawai`i Supreme
Court, however, also held that, “based on the allegations
contained in Employees’ Amended Complaint, Employees have not
sufficiently alleged the ‘nature of the competition’ to bring a
claim for damages against Four Seasons under HRS §§ 480-2(e) and
480-13(a) for a violation of HRS § 481B-14.”
Id.
On June 22, 2010, this Court issued an order granting
3
Plaintiffs’ motion to lift the stay and Plaintiffs’ motion to
amend their Complaint.
[Dkt. no. 58.]
Plaintiffs filed their
Amended Class Action Complaint (“Amended Complaint”) on June 28,
2010.
[Dkt. no. 60.]
The Amended Complaint alleges that the Resort charges a
service charge in addition to each function’s food and beverage
total.
The Resort allegedly has a policy and practice of either
retaining a portion of the service charge for itself or using
that portion to pay managers and other non-tipped employees.
The
Amended Complaint alleges the following claims: Count I violation of Hawai`i Revised Statutes §§ 481B-14, 481B-4, and
480-2; Count II - intentional interference with contractual
and/or advantageous relations; Count III - breach of implied
contract; Count IV - unjust enrichment; Count V - violation of
Hawai`i Revised Statutes §§ 388-6, 388-10, and 388-11.
I.
Plaintiffs’ Motion
In the instant Motion, Plaintiffs seek certification of
the proposed class pursuant to Fed. R. Civ. P. 23(a), and they
argue that the proposed class meets the requirements of at least
one of the subsections in Rule 23(b).
Plaintiffs propose the
following class: “all non-managerial food and beverage service
employees who, [from July 30, 2004 to the present], have worked
at banquets, functions, events, and small parties, or provided
room service, where a service charge was imposed and where a part
4
of that service charge was kept by the Defendant or management
without adequate disclosure to customers.”
[Mem. in Supp. of
Motion at 22-23 (footnotes omitted); Stip. to Class Period, filed
4/26/11 (dkt. no. 91), at 3.]
Plaintiffs note that Defendant may
claim that it made some form of disclosure for a period of time.
Plaintiffs assert that the adequacy of that disclosure goes to
the merits of the case and does not bear upon class
certification.
[Mem. in Supp. of Motion at 23 n.7.]
Plaintiffs
argue that the class should be restricted to employees who
receive tip income because Haw. Rev. Stat. § 481B-14 addresses
the distribution of service charges as “tip income” and therefore
it does not apply to employees who do not receive tip income.
Plaintiffs allege that the instant case is appropriate
for class certification because the merits of the claims do not
rely on any individual class member’s conduct.
The claims are
based solely on Defendant’s policies and practices and therefore
the factual issues are common to all members of the potential
class.
Plaintiffs argue that the proposed class meets all of
Rule 23(a)’s requirements: commonality, typicality, numerosity,
and adequacy of representation.
Further, Plaintiffs allege that,
under Rule 23(b)(3), common questions of law or fact predominate
over any issues affecting individual members, and a class action
is the superior method of pursuing these claims.
Plaintiffs
acknowledge that they bear the burden of establishing these
5
elements, but they emphasize that whether they have stated a
claim or whether they will ultimately prevail on the merits of
their claims is not relevant to the class certification inquiry.
Plaintiffs argue that a number of courts in similar
cases have granted class certification in actions by servers for
failure to properly distribute service charges or other similar
funds: Gurrobat, et al. v. HTH Corp., et al., Civil No. 08-12528-12, State of Hawai`i First Circuit Court;1 Tuquero v. Maui
Prince Hotel, LLC, Civ. A. No. 08-1-0705(1), State of Hawai`i
Second Circuit Court; Moran, et al. v. Bay Tower, Inc., Civ. A.
No. 97-6049A (Mass. Super. 2002);2 Calcagno, et al. v. High
Country Investor, Inc., Civ. A. No. 03-0707 (Mass. Super. 2006);3
Benoit v. The Federalist, Inc., Civ. A. No. 04-3516 (Mass. Super.
1
The Order Granting Plaintiff Raymond Gurrobat’s Motion for
Class Certification and for Approval of Class Notice and
Dissemination Plan (“Gurrobat Certification Order”), filed
March 25, 2010, together with the Gurrobat Order Granting
Plaintiff’s Motion for Partial Summary Judgment as to Defendants’
Violation of HRS Chapter 388, Filed October 4, 2010 (“Gurrobat
Summary Judgment Order”), filed December 6, 2010, is attached to
the Memorandum in Support of Motion as Exhibit 4. The Gurrobat
Summary Judgment Order is also part of Exhibit 2 to Plaintiffs’
Reply.
2
An excerpt from the Moran plaintiffs’ Motion to Certify
Class Action and the court’s decision on that motion are attached
to the Memorandum in Support of Motion as Exhibit 5.
3
The order allowing Calcagno to proceed as a class action
is attached to the Memorandum in Support of Motion as Exhibit 6.
6
2007);4 Shea v. Weston Golf Club, Middlesex Civ. A. No. 02-1826
(Mass. Super. 2008);5 Black v. Cranwell Management Corp.,
Berkshire Civ. A. NO. 07-0122 (Mass Super. 2010);6 Overka v.
American Airlines, Inc., 265 F.R.D. 14 (D. Mass. 2010); and
Spicer v. Pier Sixty LLC, 269 F.R.D. 321 (S.D.N.Y. 2010).
[Id.
at 3-4 & n.1.]
II.
Defendant’s Memorandum in Opposition
In its memorandum in opposition to the Motion,
Defendant first notes that Plaintiffs’ claims are all based on
Haw. Rev. Stat. § 481B-14, even the purported common law claims
and the claim under Haw. Rev. Stat. Chapter 388.
at 2-3 & n.1.]
[Mem. in Opp.
Defendant argues that Plaintiffs’ limitation of
the proposed class to non-managerial employees is improper
because § 481B-14 refers generally to “employees”.
Defendant argues that nothing in § 481B-14 limits or
qualifies the term “employees”.
If the legislature wanted to
distinguish between classes of employees, like management
employees and non-managerial employees or tipped employees and
4
An excerpt from the Benoit plaintiffs’ Motion for Class
Certification and the court’s decision on that motion are
attached to the Memorandum in Support of Motion as Exhibit 7.
5
The order granting the Shea plaintiffs’ motion for class
certification in part is attached to the Memorandum in Support of
Motion as Exhibit 8.
6
The order regarding the Black plaintiffs’ Motion for Class
Certification is attached to the Memorandum in Support of Motion
as Exhibit 9.
7
non-tipped employees, the legislature could have easily done so.
Defendant argues that the term “employees” by itself is not
susceptible to different interpretations.
Under the plain
language of § 481B-14 and the Hawai`i Supreme Court’s decision in
Davis, the scope of “persons” who are entitled to bring claims
for alleged violations of § 481B-14 pursuant to Haw. Rev. Stat.
§ 480-2 is very broad.
Defendant also argues that, although the
plaintiffs in Davis were banquet servers, nothing in the Hawai`i
Supreme Court’s Davis opinion supports the proposition that
banquet servers are the only employees who have standing to sue
for alleged violations of § 481B-14.
Defendant therefore argues that limiting the class in
this case to non-managerial employees would open the door to
inconsistent and/or varying adjudications for management and nonmanagement employees.
Defendant argues that the central concern
in class certification is the protection of the due process
rights of the parties and non-parties.
Defendant contends that
it would be inefficient for Defendant to litigate the same type
of claims multiple times, and multiple litigations could expose
Defendant to the risk of paying the same damages for the same
events multiple times.
Defendant therefore argues that class
adjudication would not be fair or efficient.
Further, the
exclusion of management employees from the class could
effectively extinguish the claims of the management employees.
8
Plaintiffs’ proposed class in this case could assert that they
are entitled to the entire amount of the service charges.
Hypothetically, a class of management employees could also
subsequently assert entitlement to the entire amount of the
service charges, but the management class would not be able to
recover its share of the service charges if this Court finds that
the class of non-management employees is entitled to the entire
amount of the service charges.
Defendant argues that all but one of the cases that
Plaintiffs rely on to support the exclusion of management
employees are based on Massachusetts law.
Massachusetts law is
distinguishable from Hawai`i law and federal law in that
Massachusetts prohibits employees other than wait staff, service
employees, and bartenders from receiving tips.
[Id. at 12
(citing Mass Gen. L. c. 149 §§ 152A(b), 152A(c) (some citations
omitted)).]
Further, § 152A(d) specifically requires that the
service charge be remitted only to the wait staff, service
employees, and bartenders.
Defendant therefore argues that the
Massachusetts case law which Plaintiffs rely on is neither
precedential nor persuasive.
Defendant also emphasizes that, in
some of the cases which Plaintiffs cited, the court only
certified the class as to the § 152A claims and denied
certification as to the other claims.
Benoit, Shea).]
9
[Id. at 14 n.14 (citing
Defendant therefore asks the Court to deny the Motion
and to decline to certify a class consisting of solely nonmanagement employees.
III. Plaintiffs’ Reply
In their reply, Plaintiffs point out that Defendant’s
sole point of opposition is that Plaintiffs’ proposed class
improperly excludes management employees.
Plaintiffs acknowledge that § 481B-14 does not define
the “employees” who the statute protects, but Plaintiffs argue
that the statute is clearly intended to protect employees who
receive tips.
Plaintiffs point out that both United States
District Judge David Alan Ezra and a state First Circuit Court
judge have found that the legislative history of § 481B-4
establishes that the legislature intended the statute to protect
direct service employees who would otherwise receive tips.
[Reply at 3 (citing Rodriguez, et al. v. Starwood Hotels &
Resorts Worldwide, Inc., CV 09-00016 DAE-BMK, Order: (1) Granting
in Part & Denying in Part Def.’s Motion to Dismiss; (2)
Dismissing Counts I & II of the Complaint Without Prejudice,
filed 2/4/09 (dkt. no. 93), at 54-55;7 Gurrobat Summary Judgment
Order; Excerpts of Gurrobat 11/17/10 Hrg. Trans. (“Gurrobat Hrg.
7
The Rodriguez order is attached to the Reply as Exhibit 1.
10
Trans.”) at 15).8]
Plaintiffs also note that, in Apana, et al. v. Fairmont
Hotels & Resorts (U.S.) Inc., CV 08-00528 JMS-LK, United States
District Judge J. Michael Seabright recently approved a class
action settlement, and that class did not include management
employees.
[Apana, Order Granting Final Approval of Class Action
Settlement, filed 3/3/11 (dkt. no. 97).]
In addition, a state
Second Circuit Court judge also “certified a class for settlement
purposes, and that settlement did not include management
employees.”
[Reply at 4 (citing Tuquero v. Maui Prince Hotel,
LLC, Civ. A. No. 08-1-0705(1)).]
Finally, Plaintiffs argue that, even if management
employees could pursue a claim for a portion of Defendant’s
service charges, that claim would not require the denial of the
instant Motion.
The Court could alter the proposed class
definition to include management employees in the class.
Plaintiffs therefore urge the Court to grant the Motion.
STANDARD
A plaintiff moving to certify a class has the burden of
showing that the proposed class satisfies the requirements of
Rule 23.
(1997).
See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614
The proposed class must meet each of the following
8
The Gurrobat Summary Judgment Order, followed by excerpts
from the transcript of the hearing on the motion, are attached to
the Reply as Exhibit 2.
11
requirements:
(1) the class is so numerous that joinder of all
members is impracticable;
(2) there are questions of law or fact common to
the class;
(3) the claims or defenses of the representative
parties are typical of the claims or defenses of
the class; and
(4) the representative parties will fairly and
adequately protect the interests of the class.
Fed. R. Civ. P. 23(a).
These requirements are known as:
numerosity, commonality, typicality, and adequacy of
representation.
See, e.g., Poulos v. Caesars World, Inc., 379
F.3d 654, 664 (9th Cir. 2004).
In addition to meeting all of the Rule 23(a)
requirements, a class must meet one of the following criteria:
(1) prosecuting separate actions by or against
individual class members would create a risk of:
(A) inconsistent or varying adjudications
with respect to individual class members that
would establish incompatible standards of
conduct for the party opposing the class; or
(B) adjudications with respect to individual
class members that, as a practical matter,
would be dispositive of the interests of the
other members not parties to the individual
adjudications or would substantially impair
or impede their ability to protect their
interests;
(2) the party opposing the class has acted or
refused to act on grounds that apply generally to
the class, so that final injunctive relief or
corresponding declaratory relief is appropriate
respecting the class as a whole; or
12
(3) the court finds that the questions of law or
fact common to class members predominate over any
questions affecting only individual members, and
that a class action is superior to other available
methods for fairly and efficiently adjudicating
the controversy. . . .
Fed. R. Civ. P. 23(b).
Plaintiffs argue that the proposed class
meets the requirements of Rule 23(b)(3).
Rule 23(b)(3) presents
two additional requirements for certification: predominance and
superiority.
See Poulos, 379 F.3d at 664.
DISCUSSION
Before the Court can analyze the Rule 23 requirements,
the Court must address the threshold issue in this Motion:
whether the proposed class should include the Resort’s managerial
personnel who also worked at banquets, functions, events, and
small parties, or provided room service.
I.
Other Haw. Rev. Stat. § 481B-14 Cases
Although § 481B-14 does not define the “employees” who
the statute protects, Plaintiffs urge the Court to follow the
lead of the parallel cases in state and federal court.
Plaintiffs point to the analysis of § 481B-14’s legislative
history in Rodriguez, et al. v. Starwood Hotels & Resorts
Worldwide, Inc., CV 09-00016 DAE-BMK, Order: (1) Granting in Part
& Denying in Part Defendant’s Motion to Dismiss; (2) Dismissing
Counts I & II of the Complaint Without Prejudice, filed
December 29, 2010 (dkt. no. 93) (“Rodriguez Dismissal Order”),
and in the Gurrobat Summary Judgement Order, as well as the
13
approval of settlements for classes of non-management employees
in Apana, et al. v. Fairmont Hotels & Resorts (U.S.) Inc., CV 0800528 JMS-LK, and Tuquero v. Maui Prince Hotel, LLC, Civ. A. No.
08-1-0705(1).
A.
Analysis of Legislative History
In Rodriguez, Judge Ezra stated:
As Defendant suggests, however, the statute
does not make clear to which employees the service
charge should be distributed. To interpret
ambiguous language in statutes, Hawai`i courts
look to the context as well as the “reason and
spirit of the law, and the cause which induced the
legislature to enact it.” Haw. Rev. Stat. § 1-15.
To this end courts may consider the legislative
history of the statute. Coon v. City & County of
Honolulu, 47 P.3d 348, 360 (Haw. 2002).
Applying these principles to the language of
§ 481B-14 it is clear that the Hawai`i Legislature
intended for the statute to cover serving
employees who would otherwise be tipped.
According to the report of the House Committee on
Labor & Public Employment, which was the first
committee to consider the bill, it was originally
intended “to protect employees who receive or may
receive tips or gratuities.” H. Stand. Comm. Rep.
No. 479-00, in 2000 House Journal, at 1155; see
also, Davis v. Four Seasons Hotel Ltd, 228 P.3d
303, 313 (Haw. 2010). The Senate Committee on
Commerce & Consumer Protection described the
scenario that § 481B-14 remedies, stating:
Your Committee finds that . . . moneys
collected as service charges are not always
distributed to the employees as gratuities
and are sometimes used to pay the employer’s
administrative costs. Therefore the employee
does not receive the money intended as
gratuity by the customer, and the customer is
misled into believing that the employee has
been rewarded for providing good service.”
S. Stand. Comm. Rep. No. 3077, in 2000 Senate
14
Journal, at 1287 (emphasis added). The
legislature’s focus on protecting employees who
would otherwise be tipped clearly demonstrates
that § 481B-14 was intended to provide protection
for those specific employees. Thus Defendant’s
argument that a minimum labor standard was not
created because specific minimum protections are
not explicitly created by § 481B-14 fails.
[Rodriguez Dismissal Order at 21-23 (alteration in Rodriguez).]
The legislative history that Judge Ezra cited in
Rodriguez is relevant to the issue whether the Court should limit
the class in the instant case to non-managerial food and beverage
service employees.
This Court, however, notes that the Rodriguez
analysis is not controlling because Judge Ezra did not examine
§ 481B-14 in the context of class certification.
The Rodriguez
Dismissal Order addressed the legislative history of § 481B-14 in
the context of the defendant’s argument that the plaintiffs’
claims were “barred by Machinists preemption, which protects the
policies implicated by the structure of the [National Labor
Relations Act] by prohibiting states from regulating conduct that
Congress intended to be ‘controlled by the free play of economic
forces.’”
[Id. at 15 (quoting Lodge 76, Int’l Ass’n of
Machinists & Aerospace Workers, v. Wisconsin Employment Relations
Comm’n (Machinists), 427 U.S. 132, 140 (1976)).]
Judge Ezra’s
ultimate ruling on this issue, that Machinists preemption did not
apply because, inter alia, § 481B-14 creates a specific minimum
labor standard, does not necessarily require a finding that a
class action alleging violations of § 481B-14 must be limited to
15
service employees who receive tips or gratuities.
Plaintiffs also rely on Gurrobat, et al. v. HTH Corp.,
et al., Civil No. 08-1-2528-12, State of Hawai`i First Circuit
Court.
It is true that the state court in Gurrobat granted the
plaintiffs’ motion for class certification and it certified class
a class of:
All past and present non-management employees of
the Hotels who, on and after December 8, 2004, who
provided services in connection with the sales of
food and/or beverage at the Hotels for which a
service charge or gratuity charge was (a) imposed
by the Hotels and (b) not distributed 100% to said
non-management employees.
[Gurrobat Certification Order at 3 (emphases added).]
The
Gurrobat Certification Order, however, does not include the state
court’s analysis of the factors enumerated in Hawai`i Rule of
Civil Procedure 23,9 and the order does not indicate whether the
Gurrobat defendants argued that the class should include
management employees.
The Gurrobat Certification Order therefore
has limited persuasive value in this Court’s consideration of
Plaintiffs’ Motion.
Plaintiffs also point out that, in Gurrobat, the state
court found that the legislative intent behind § 481B-14 and Haw.
9
The requirements in Hawai`i Rule of Civil Procedure 23(a)
and (b) are substantively identical to the requirements in
Federal Rule of Civil Procedure 23(a) and (b). The Hawai`i
Supreme Court recently amended Hawai`i Rule of Civil Procedure
23, but the amendment, which will take effect July 1, 2011, does
not affect sections (a) and (b). See Order Amending Rule 23 of
the Hawai`i Rules of Civil Procedure (Jan. 27, 2011).
16
Rev. Stat. § 388-6 indicates that the legislature intended both
statutes to protect service employees and not managerial
employees.
[Reply at 3, Exh. 2 (Gurrobat Summary Judgment Order
& Gurrobat Hrg. Trans.).10]
The state court reached this
conclusion by reasoning that:
The legislative history of HRS 481B-14
indicates it was intended to protect service
workers and not managerial employees.
Act 1 of Act 16 (sic) clearly states, “The
legislature finds that Hawaii’s hotel and
restaurant employees may not be receiving tips or
gratuities during the course of their employment
from patrons because patrons believe their tips or
gratuities are being included in the service
charge and being passed on to the employees.”
“The purpose of the act was to require hotels
and restaurants that apply a service charge for
food and beverages, not distributed to employees
as tip income, to advise customers that the
service charge is being used to pay for costs or
expenses other than wages and tips of employees.”
The Standing Committee Report No. 479
regarding House Bill 2123 indicates that the
“Committee concluded that the problem lies with
consumers who may not leave tips for service
employees, mistakenly thinking that the service
charges they paid were tips so they did not leave
additional tips for the service employees.”
Accordingly, the Court finds the legislative
history behind HRS 481B-14 demonstrates [the]
legislature’s intent to protect service employees
who provide direct service to customers and not
managerial employees.
Additionally, because 481B-14 was originally
drafted as an amendment to HRS 388-6, and is read
10
The Gurrobat Summary Judgment Order contains no legal
analysis. It grants the plaintiff and the certified class
summary judgment on the issue of liability for the Chapter 388
claim for the reasons stated at the hearing on the motion, “which
statement is adopted and incorporated herein by reference.”
[Gurrobat Summary Judgment Order at 2.]
17
in pari materia with 481B-14, the Court finds that
there is similar legislative intent behind 388-6,
in that it was intended to protect service
employees and not managerial employees.
[Gurrobat Hrg. Trans. at 14-15.]
As with Rodriguez, the state court’s discussion of
§ 481B-14’s legislative history is relevant to the issue whether
this Court should limit the class in the instant case to nonmanagerial food and beverage service employees.
The Gurrobat
analysis, however, is not controlling because the state court did
not examine § 481B-14 and § 388-6 in the context of class
certification.
[Gurrobat Summary Judgment Order at 2 (granting
summary judgment in favor of the plaintiff on the Chapter 388
claim for reasons stated at the hearing); Gurrobat Hrg. Trans. at
15-16.]
Further, this Court disagrees with the state court’s
assumption that, because the legislature drafted § 481B-14 as an
amendment to § 388-6, the legislative intent behind § 481B-14 can
be imputed to § 388-6.
In this Court’s view, the fact that the
legislature originally drafted § 481B-14 as an amendment to §
388-6 but ultimately chose to incorporate the amendment into a
separate statue suggests that the legislature intentionally
separated the two statutes and purposely excluded the subject
matter in § 481B-14 from § 388-6.
Cf. In re Water Use Permit
Applications, 94 Hawai‘i 97, 151, 9 P.3d 409, 463 (2000) (noting
general rule of statutory interpretation that “‘[w]here [the
legislature] includes particular language in one section of a
18
statute but omits it in another section of the same Act, it is
generally presumed that [the legislature] acts intentionally and
purposely in the disparate inclusion or exclusion.’” (quoting
Gozlon–Peretz v. United States, 498 U.S. 395, 404, 111 S. Ct.
840, 112 L. Ed. 2d 919 (1991)) (some citations omitted)
(alterations in Water Use Permits)).
This Court therefore gives
the Gurrobat Summary Judgment Order limited persuasive value in
considering Plaintiffs’ Motion.
B.
Approval of Settlements Involving Tipped Employees
In support of their argument that the Court should
limit the class to all non-managerial food and beverage service
employees, Plaintiffs also cite the Order Granting Final Approval
of Class Action Settlement, filed March 3, 2011 in Apana, et al.
v. Fairmont Hotels & Resorts (U.S.) Inc.
[Apana, dkt. no. 97.]
In Apana, United States District Judge J. Michael Seabright
treated the action as a class action.
His order approving the
class action settlement, however, did not address the factors in
Fed. R. Civ. P. 23.
Judge Seabright also issued an Order: (1)
Preliminarily Approving Class Action Settlement Agreement, (2)
Approving Form of Notice, (3) Establishing Objection Deadline,
(4) Directing Dissemination of Notice, and (5) Scheduling “Final
Fairness Hearing” (“Preliminary Approval Order”) on October 25,
2010, [Apana, dkt. no. 85,] but this order also did not address
the Rule 23 factors.
Further, the district judge’s approval of
19
the Apana parties’ agreed upon limitation of the class to food
and beverage service employees11 does not necessarily require
this Court to accept Plaintiffs’ argument that the class in the
instant case must exclude management personnel.
Similarly, Plaintiffs have not submitted supporting
evidence for their statement that the state court in Tuquero v.
Maui Prince Hotel, LLC, Civ. A. No. 08-1-0705(1), also certified
a class for settlement purposes that did not include management
employees.
This Court therefore cannot determine whether the
state court considered the factors enumerated in Hawai`i Rule of
Civil Procedure 23 and, if so, what persuasive value that
analysis should have, if any.
Even if the state court in Tuquero
considered the Rule 23 factors, as with Apana, the approval of
the parties’ agreed upon exclusion of management employees from
the class does not necessarily compel this Court to certify the
class that Plaintiffs proposed in the Motion.
Thus, while the Court recognizes the general relevance
of these parallel cases concerning § 481B-14 and § 388-6, none of
them are directly on point as to the issues currently before the
11
The Preliminary Approval Order adopted the parties’
definitions used in their settlement agreement. [Apana, dkt. no.
85, at 3.] The parties defined the class as follows: “All past
and present individuals who worked as banquet or room service
food and beverage service employees at the Fairmont Kea Lani
Hotel & Resort between November 24, 2004 and December 31, 2008.”
[Apana, Stipulation Regarding Entry of Order . . ., filed
10/21/10 (dkt. no. 83), Exh. 1 (Settlement and Release Agreement)
at ¶ 1.]
20
Court in the instant Motion.
The Court will only consider those
cases to the extent that their orders contain relevant discussion
of §481B-14’s legislative history.
The Court also notes that Judge Ezra recently ruled
upon a motion for class certification in another case alleging
claims similar to those in the instant case.
Flynn v. Fairmont
Hotels & Resorts, Inc., Cv. No. 10-00285 DAE-LEK, 2010 WL 5462475
(D. Hawai`i Dec. 29, 2010).
Judge Ezra, however, denied the
plaintiffs’ motion for class certification without prejudice on
the ground that the plaintiffs did not have standing to seek the
injunctive relief sought in their complaint, and therefore they
could not represent a class seeking injunctive relief.
*2, *5.
Id. at
In light of this ruling, Judge Ezra did not address
whether the proposed class, which excluded the hotel’s management
employees, id. at *1, met the requirements of Fed. R. Civ. P. 23.
Id. at *5 n.4.
The parties in Flynn subsequently reached a
settlement and submitted various proposed orders and settlement
documents to Judge Ezra.
[Flynn, Stip. Regarding Entry of Order,
filed 4/27/11 (dkt. no. 81).]
Thus, Flynn does not provide any
guidance on the issues currently before this Court.
II.
Similar Actions in Other Jurisdictions
Plaintiffs also urge the Court to consider the fact
that “the courts have regularly certified classes where groups of
waitstaff or service employees have claimed that the employer
21
failed to distribute all service charges to the waitstaff or that
certain categories of employees should not have participated in a
gratuity pool.”
[Mem. in Supp. of Motion at 22 (citing Gurrobat
Certification Order; Spicer v. Pier Sixty LLC, 269 F.R.D. 321
(S.D.N.Y. 2010); Benoit v. The Federalist, Inc., Civ. A. No. 043516 (Mass. Super. 2007); Calcagno, et al. v. High Country
Investor, Inc., Civ. A. No. 03-0707 (Mass. Super. 2006); Moran,
et al. v. Bay Tower, Inc., Civ. A. No. 97-6049A (Mass. Super.
2002)).]
A.
Massachusetts State Law
Defendant notes that the majority of the cases that
Plaintiffs cited are based on the Massachusetts Tips Law, Mass.
Gen. L. c. 149 § 152A (“§ 152A”).
Defendant argues that the
Court should not consider these cases because § 152A is
drastically different from Haw. Rev. Stat. § 481B-14.
[Mem. in
Opp. at 12-14.]
Defendant is correct that § 481B-14 and the current
version of § 152A have significant differences.
Haw. Rev. Stat.
§ 481B-14 states:
Any hotel or restaurant that applies a service
charge for the sale of food or beverage services
shall distribute the service charge directly to
its employees as tip income or clearly disclose to
the purchaser of the services that the service
charge is being used to pay for costs or expenses
other than wages and tips of employees.
(Emphasis added.)
Neither § 481B-14 or other related statutes
22
define “employees”.
In contrast, § 152A(d) states:
If an employer or person submits a bill, invoice
or charge to a patron or other person that imposes
a service charge or tip, the total proceeds of
that service charge or tip shall be remitted only
to the wait staff employees, service employees, or
service bartenders in proportion to the service
provided by those employees.
Nothing in this section shall prohibit an employer
from imposing on a patron any house or
administrative fee in addition to or instead of a
service charge or tip, if the employer provides a
designation or written description of that house
or administrative fee, which informs the patron
that the fee does not represent a tip or service
charge for wait staff employees, service
employees, or service bartenders.
(Emphasis added.)
Section 152A(a) also provides specific
definitions of the three classes of employees who receive the
service charge or tip:
“Wait staff employee”, a person, including a
waiter, waitress, bus person, and counter staff,
who: (1) serves beverages or prepared food
directly to patrons, or who clears patrons’
tables; (2) works in a restaurant, banquet
facility, or other place where prepared food or
beverages are served; and (3) who has no
managerial responsibility.
“Service employee”, a person who works in an
occupation in which employees customarily receive
tips or gratuities, and who provides service
directly to customers or consumers, but who works
in an occupation other than in food or beverage
service, and who has no managerial responsibility.
“Service bartender”, a person who prepares
alcoholic or nonalcoholic beverages for patrons to
be served by another employee, such as a wait
staff employee.
23
In light of the clear statutory language in § 152A(d) limiting
the distribution of service charges and tips to wait staff
employees, service employees, and service bartenders, case law
applying § 152A(d) is not relevant to the question of how this
Court should interpret the general term “employees” in § 481B-14.
As Plaintiffs’ counsel pointed out at the hearing on
the Motion, however, the current version of § 152A(d) did not
take effect until September 8, 2004.
Prior to that date, § 152A
read:
No employer or other person shall solicit, demand,
request or accept from any employee engaged in the
serving of food or beverage any payment of any
nature from tips or gratuities received by such
employee during the course of his employment, or
from wages earned by such employee or retain for
himself any tips or gratuities given directly to
the employer for the benefit of the employee, as a
condition of employment; and no contract or
agreement between an employer or other person and
an employee providing for either of such payments
shall afford any basis for the granting of legal
or equitable relief by any court against a party
to such contract or agreement. If an employer or
other person submits a bill or invoice indicating
a service charge, the total proceeds of such
charge shall be remitted to the employees in
proportion to the service provided by them. . . .
Mass. Gen. L. c. 149 § 152A (2003) (“pre-2004 § 152A”).
The pre-
2004 § 152A contains the same general term as § 481B-14 “employees” - and therefore case law addressing class
certification in cases asserting claims under the pre-2004 § 152A
are persuasive in this Court’s interpretation of § 481B-14.
Plaintiffs rely upon the following cases applying
24
§ 152A: Moran, et al. v. Bay Tower, Inc., Civ. A. No. 97-6049A,
Memorandum of Decision and Order on Plaintiffs’ Motion to Certify
Class Action (Mass. Super. Dec. 31, 200112) (“Moran Certification
Order”); Calcagno, et al. v. High Country Investor, Inc., Civ. A.
No. 03-0707C, Memorandum of Decision and Order on Plaintiffs’
Motion for Reconsideration of Class Certification Under Mass. R.
Civ. P. 23 (Mass. Super. June 8, 200613) (“Calcagno Certification
Order”); Benoit v. The Federalist, Inc., Civ. A. No. 04-03516,
Memorandum of Decision and Order on Plaintiff’s Motion to Certify
a Class (Mass. Super. Nov. 5, 200714) (“Benoit Certification
Order”); Shea, et al. v. Weston Golf Club, Civ. A. No. 2002-1826,
Order on Plaintiffs’ Motion for Reconsideration of Class
Certification (Mass Super. Jan. 18, 200815) (“Shea Certification
Order”); and Black, et al. v. Cranwell Management Corp., Civ. A.
NO. 07-0122, Memorandum of Decision and Order on the Plaintiffs’
Motion for Class Certification (Mass Super. Feb. 24, 2010)
12
Plaintiffs’ copy of the Moran Certification Order does
not indicate its filing date, but the date following the court’s
signature on the order is December 31, 2001.
13
Plaintiffs’ copy of the Calcagno Certification Order does
not indicate the filing date of the order, but the date following
the court’s signature on the order is June 8, 2006.
14
Plaintiffs’ copy of the Benoit Certification Order does
not indicate its filing date, but the date following the court’s
signature on the order is November 5, 2007.
15
Plaintiffs’ copy of the Shea Certification Order does not
indicate its filing date, but the date following the court’s
signature on the order is January 18, 2008.
25
(“Black Certification Order”).16
Black apparently addressed both the pre-2004 § 152A and
the current version of § 152A.
The class certification in Black,
however, is not relevant to the issue before this Court because
the Black plaintiffs’ § 152A claims were apparently resolved
prior to class certification.
2/24/10, at 2-3.17]
[Black Certification Order, filed
Thus, in granting the plaintiffs’ motion to
16
The Court notes that not all courts considering § 152A
claims have granted class certification. See, e.g., DiFiore v.
American Airlines, Inc., 561 F. Supp. 2d 131, 132 (D. Mass. 2008)
(noting prior denial of class action status); Cooney v. Compass
Group Foodservice, 870 N.E.2d 668, 668 n.1 (Mass. Ct. App. 2007)
(same).
17
The court in Black stated:
The plaintiffs have brought statutory claims
for relief under the Tips Act, G. L. c. 149, §
152A . . . . In its decision on the parties’
motion and cross-motion for summary judgment, this
court ruled that the plaintiff Riccio-Major was
entitled to summary judgment as to liability on
the statutory claims. The court granted summary
judgment to the defendants on the statutory claims
as to the remaining plaintiffs - Libardi,
Marshall, and Black.
The plaintiffs advanced common law claims . .
. . In its decision on summary judgment, the
court ruled that, to the extent that the claims
for breach of contract and breach of good faith
and fair dealing are duplicative of claims of
violations of the Tips Act, the defendants were
entitled to summary judgment on claims for
services performed after the enactment of the Tips
Act, i.e., from September 8, 2004, to the present.
The court granted summary judgment to the
defendants on the claims of conversion, except
with respect to spa services performed between
April 23, 2004, and September 8, 2004, by
plaintiffs Riccio-Major and Marshall.
(continued...)
26
certify “a class of all employees of Cranwell[18] who ‘are or
were Service Employees within the meaning of the Tip Act and
provided Spa Services in connection with which Cranwell collected
a service charge[,]’” [id. at 3,] the court was not required to
address the issue whether the terms of the pre-2004 § 152A
required the court to include managerial employees in the class.
It is not clear whether the certified classes in Benoit
and Shea were governed by the pre-2004 § 152A or the current
version of § 152A.
Both orders granting class certification were
filed long after the current version of § 152A took effect.
[Benoit Certification Order, dated 11/5/07; Shea Certification
Order, dated 1/18/08.]
The complaint in Shea, however, was
originally filed in 2002, and the complaint in Benoit was
originally filed in 2004.
Thus, it is possible that at least a
portion of each certified class was governed by the pre-2004
§ 152A.
Nothing in the analysis in either certification order,
however, suggests that the court granting certification had to
consider whether management personnel should be included with the
wait staff in the proposed classes.
Although the certified
classes in Black, Benoit, and Shea did not include management
17
(...continued)
[Black Certification Order at 2-3 (footnotes omitted).]
18
Cranwell is a resort that provides various luxury
services, including spa services. [Black Certification Order at
1-2.]
27
personnel, those certification orders are not persuasive in this
Court’s consideration of the proposed composition of the class in
the instant case under § 481B-14.
Moran clearly addressed the pre-2004 § 152A because the
court issued its order granting the plaintiffs’ motion for class
certification long before the current version of § 152A took
effect.
[Moran Certification Order, dated 12/31/01.]
Calcagno
also addressed the pre-2004 § 152A because the court certified
“the class consisting of all function services (sic) of food and
beverages, including bartenders, who serviced [Steak House and
Marketplace (“Hilltop”)] functions in the three (3) year period
from March 9, 2000 through April 8, 2003[.]”
Certification Order at 3.]
[Calcagno
These rulings are therefore
persuasive in this Court’s consideration of the proposed
composition of the class under § 481B-14.
In Moran, the defendant asserted that, in order to
recover under the § 152A claim, the putative class would have to
establish whether supervisory personnel ever served, or assisted
in serving, food and beverages at banquets.
The defendant argued
that, if supervisors participated in service, the putative class
could not recover the serving supervisors’ share of the service
fees.
[Moran Certification Order at 9.]
The court in Moran
found that this issue did not warrant denial of the plaintiffs’
motion for class certification because the issue could be easily
28
resolved through testimony by supervisory employees or other
evidence, such as the employee handbook.
Further, the issue
whether supervisors engaged in service did not predominate over
other issues in the case.
[Id. at 9-10.]
The court in Moran
ultimately granted the plaintiffs’ motion to certify the class of
function department waitstaff.
[Id. at 1.]
The Calcagno Certification Order did not squarely
address the issue of supervisory employees’ competing claims to
the disputed service fees.
Nevertheless, it was clear that the
putative class of servers claimed to be entitled to the entire
service fee governed under the pre-2004 § 152, and therefore they
also necessarily claimed that supervisory employees were not
entitled to any portion of the service fee.
[Calcagno
Certification Order at 2 (“The principal issue in this case is
whether the function servers at the Hilltop were entitled to
receive the entire amount of service charges assessed for
functions.”).]
The Calcagno court ultimately certified a class
of food and beverages servers, including bartenders, who worked
at Hilltop functions during a three-year period.
B.
[Id. at 3.]
Other Cases
In addition to the Massachusetts state court cases
involving § 152A claims, Plaintiffs cite Overka v. American
Airlines, Inc., 265 F.R.D. 14 (D. Mass. 2010), and Spicer v. Pier
Sixty LLC, 269 F.R.D. 321 (S.D.N.Y. 2010), in support of their
29
position that the Court should certify a class that is limited to
non-managerial food and beverage service employees.
Overka,
however, involved only common law claims, 265 F.R.D. at 17, and
therefore the class certification in Overka is not persuasive on
the issue of the proper composition of a class of plaintiffs
prosecuting a claim under Haw. Rev. Stat. § 481B-14.
Spicer involved claims under the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. § 207, and the New York Labor Law
(“NYLL”) § 196-d.
269 F.R.D. at 328.
The district court, inter
alia, certified the class for purposes of the NYLL claim pursuant
to Fed. R. Civ. P. 23.
Id. at 339.
Section 196-d states, in
pertinent part:
No employer or his agent or an officer or agent of
any corporation, or any other person shall demand
or accept, directly or indirectly, any part of the
gratuities, received by an employee, or retain any
part of a gratuity or of any charge purported to
be a gratuity for an employee. This provision
shall not apply to the checking of hats, coats or
other apparel. Nothing in this subdivision shall
be construed as affecting . . . practices in
connection with banquets and other special
functions where a fixed percentage of the patron’s
bill is added for gratuities which are distributed
to employees, nor to the sharing of tips by a
waiter with a busboy or similar employee.
(Emphasis added.)
Thus, it appears that § 196-d does not address
a significant portion of the proposed class in the instant case food and beverage servers at banquets, functions, events, and
small parties.
In light of this apparent conflict, the Court
30
declines to consider Spicer in connection with the instant
Motion.
But see Krebs v. Canyon Club, Inc., No. 10431/08, 2009
WL 440903, at *21 (N.Y. Sup. Ct. Jan. 2, 2009) (certifying a
class of “special event food servers, special event bartenders
and special event busers”).19
Besides other cases in the jurisdictions previously
discussed, this Court did not find any other similar cases which
addressed the issue currently before this Court.
For example,
Garcia v. Four Points Sheraton LAX was brought as a class action
by hotel banquet captains and servers who alleged that the hotels
failed to pay them the entire amount of service charges, as
required by a Los Angeles ordinance.
(Ct. App. 2010).
115 Cal. Rptr. 3d 685, 691
The published decision, however, addressed the
lower court’s decision sustaining demurrers without leave to
amend; there does not appear to be an available decision
addressing class certification during further proceedings after
the court of appeals reversed the decision sustaining the
demurrers.
III. The Proposed Class in the Instant Case
Having considered the relevant analyses in the cases
discussed supra, this Court is persuaded that, under Haw. Rev.
19
The facility involved in Krebs was “a private golf and
country club which is available to the general public as a site
for catered events, such as weddings, bar/bat mitzvahs and other
functions.” 2009 WL 440903, at *1 (citation omitted).
31
Stat. § 481B-14, the putative class of employees alleging
violations of § 481B-14 in the instant case should be limited to
non-managerial food and beverage service employees.
The Court
has given particular weight to the discussion of § 481B-14’s
legislative history in the Rodriguez Dismissal Order and the
Gurrobat Hearing Transcript.
See supra Section I.A.
Further,
this Court agrees with the Massachusetts state court in Moran
that, to extent that managerial personnel may have a competing
claim to the service charges at issue in this case, 1) the
parties can raise that issue by presenting evidence in this case,
and 2) that issue does not predominate over the issues currently
presented in Plaintiffs’ Complaint such that certification of
Plaintiffs’ proposed class would be inappropriate.
Thus, insofar
as Defendant requests that, if the Court is inclined to grant
class certification, the Court expand the class to include
management personnel, Defendant’s request is DENIED.
In addition, the Court’s discussion regarding class
certification as to the § 481B-14 claim also applies to
Plaintiffs’ other claims.
Defendant acknowledges that all of
Plaintiffs’ claims are related to the alleged violation of
§ 481B-14.
[Mem. in Opp. 2-3 & n.1.]
The instant case is
therefore distinguishable from Shea, in which the Massachusetts
state court only granted certification as to the § 152A claim and
denied certification as to the common law and other claims
32
because they had “no commonality” with the § 152A claim.
Certification Order at 1.]
[Shea
Similarly, in Benoit, the
Massachusetts state court only granted certification as to the
§ 152A claim and denied certification as to the common law
claims.
The court noted that the common law claims were
primarily contract based, and the court found that those claims
involved issues “unique to each individual employee.”
Certification Order at 8.]
[Benoit
In the present case, however,
assuming that the proposed class satisfies the Fed. R. Civ. P. 23
requirements, there is no indication that there are any
significant issues unique to individual class members which would
preclude certification of the class as to the common law, or
other statutory, claims, in addition to certification as to the
§ 481B-14 claim.
The Court now turns to the application of Rule 23 to
Plaintiffs’ proposed class of “all non-managerial food and
beverage service employees who, [from July 30, 2004 to the
present], have worked at banquets, functions, events, and small
parties, or provided room service, where a service charge was
imposed and where a part of that service charge was kept by the
Defendant or management without adequate disclosure to
customers.”
[Mem. in Supp. of Motion at 22-23 (footnotes
omitted); Stip. to Class Period, filed 4/26/11 (dkt. no. 91), at
3.]
33
A.
Rule 23(a) Requirements
1.
Numerosity
Plaintiffs state that they have worked at the Resort
from the 1990’s to the present.
[Mem. in Supp. of Motion, Exh.
10, Aff. of Mark Apana (“Apana Aff.”), at ¶ 2; Exh. 11, Aff. of
Bert Villon (“Villon Aff.”), at ¶ 2.]
They estimate that, since
2005, the Resort had approximately fifty to sixty different
banquet servers and ten bartenders.
Aff. at ¶ 3.]
[Apana Aff. at ¶ 3; Villon
In addition, Plaintiffs’ Amended Complaint alleges
that “there are more than 100 putative class members[.]”
[Amended Complaint at ¶ 2.]
The United States Supreme Court has stated that “[t]he
numerosity requirement requires examination of the specific facts
of each case and imposes no absolute limitations.”
Gen. Tel. Co.
of the Nw., Inc. v. E.E.O.C., 446 U.S. 318, 330 (1980).
Further,
the Ninth Circuit has recently noted that “[i]n general, courts
find the numerosity requirement satisfied when a class includes
at least 40 members.”
Rannis v. Recchia, 380 Fed. Appx. 646, 651
(9th Cir. 2010) (citation omitted).
The Court therefore FINDS
that the proposed class meets the numerosity requirement.
2.
Commonality
A proposed class meets the commonality requirement if
the members’ claims have a common question of law or fact.
See
Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001) (citation
34
omitted), abrogated on other grounds, as noted in, Harris v.
Alvarado, 402 Fed. Appx. 180 (9th Cir. 2010).
Rule 23(a)(2) does
not require that these common issues be predominant in the
action.
See Local Joint Exec. Bd. of Culinary/Bartender Trust
Fund v. Las Vegas Sands, Inc. (“Las Vegas Sands”), 244 F.3d 1152,
1162 (9th Cir. 2001) (quoting Hanlon v. Chrysler Corp., 150 F.3d
1011, 1022 (9th Cir. 1998) (comparing Rule 23(a)(2) with Rule
23(b)(3))).
In the present case, the proposed class members’ claims
have common questions of law and fact because all of their claims
arise from the Resort’s collection of service charges without the
required disclosures to the customers.
The Court therefore FINDS
that the proposed class meets the commonality requirement.
3.
Typicality
The commonality and typicality requirements tend to
merge, but they are stated differently.
See Staton v. Boeing
Co., 327 F.3d 938, 957 (9th Cir. 2003); Armstrong, 275 F.3d at
868.
“[R]epresentative claims are ‘typical’ if they are
reasonably coextensive with those of absent class members; they
need not be substantially identical.
Typicality ‘does not mean
that the claims of the class representative[s] must be identical
or substantially identical to those of the absent class
members.’”
Staton, 327 F.3d at 957 (quoting 5 Herbert B. Newberg
& Alba Conte, Newberg on Class Actions, § 24.25 at 24-105 (3d ed.
35
1992) (some citations and quotation marks omitted)).
The named
plaintiffs’ claims are typical of the class members’ claims if
they all arise from the same series of events and they all rely
on similar arguments to establish the defendant’s liability.
Armstrong, 275 F.3d at 868.
The named plaintiffs’ injuries do
not have to be identical to the injuries of the class members.
Id. at 869.
In the present case, the named Plaintiffs’ claims and
the claims of the proposed class members all arise from the
Resort’s alleged collection of service charges without the
required disclosures to the customers, and all the claims will
rely on similar arguments to establish Defendant’s liability.
The Court recognizes that the named Plaintiffs both worked for
the Resort as banquet servers; there is no named Plaintiff who
worked for the Resort as a bartender.
Aff. at ¶ 2.]
[Apana Aff. at ¶ 2; Villon
This does not defeat typicality because the named
Plaintiffs’ claims do not have to be identical to the claims of
all of the class members.
Further, the servers’ and the
bartenders’ claims arise from the same general fact pattern and
rely on the same legal theories.
The Court therefore FINDS that
the typicality requirement is satisfied.
4.
Adequacy of Representation
In determining whether the named plaintiffs will
adequately represent a proposed class, courts in the Ninth
36
Circuit consider two questions: “(1) Do the representative
plaintiffs and their counsel have any conflicts of interest with
other class members, and (2) will the representative plaintiffs
and their counsel prosecute the action vigorously on behalf of
the class?”
Staton, 327 F.3d at 957 (citations omitted); see
also Las Vegas Sands, 244 F.3d at 1162 (“Adequate representation
depends on the qualifications of counsel for the representatives,
an absence of antagonism, a sharing of interests between
representatives and absentees, and the unlikelihood that the suit
is collusive.” (citations and quotation marks omitted)).
This
requirement is satisfied as long as at least one named plaintiff
adequately represents the class.
See Las Vegas Sands, 244 F.3d
at 1162 n.2.
For the reasons addressed in the discussion of the
typicality requirement, and because the named Plaintiffs have
diligently litigated this action thus far, the Court finds that
the named Plaintiffs will adequately represent the proposed
class.
Further, Plaintiffs’ counsel has extensive experience
with these types of cases and counsel has no apparent conflict
that would preclude them from representing the class.
There is
no question that counsel will adequately represent the proposed
class.
The Court therefore FINDS that the adequacy requirement
is met.
B.
Rule 23(b) Certification
37
Plaintiffs argue that the proposed class meets the
requirements of Rule 23(b)(3).
Rule 23(b)(3) presents two
additional requirements for certification: predominance and
superiority.
Poulos v. Caesars World, Inc., 379 F.3d 654, 664
(9th Cir. 2004).
1.
Predominance
“The Rule 23(b)(3) predominance inquiry tests whether
proposed classes are sufficiently cohesive to warrant
adjudication by representation.”
Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 623 (1997) (citation omitted).
Unlike Rule
23(a)(2), the predominance requirement does not look at the mere
existence of common issues.
The common issues must be “a
significant aspect of the case and they can be resolved for all
members of the class in a single adjudication[.]”
Las Vegas
Sands, 244 F.3d at 1162 (citation and block quote format
omitted).
The significant factual issues in this case involve
Defendant’s policies and regular conduct: whether and when the
Resort imposed service charges; who the Resort distributed those
service charges to and in what proportion; and what disclosures
the Resort made to customers about the service charges.
These
issues are common to the members of the proposed class; the
conduct or circumstances of individual members will not be
significant.
Further, the key legal issues, primarily concerning
38
the application of § 481B-14, are also common to the members of
the proposed class.
The Court can resolve these key factual and
legal issues for all class members in one action.
The Court
therefore FINDS that the predominance factor is satisfied.
2.
Superiority
Rule 23(b)(3) sets out a non-exhaustive list of factors
that courts should consider in reviewing the superiority factor.
Las Vegas Sands, 244 F.3d at 1163.
These factors are:
(A) the class members’ interests in individually
controlling the prosecution or defense of separate
actions;
(B) the extent and nature of any litigation
concerning the controversy already begun by or
against class members;
(C) the desirability or undesirability of
concentrating the litigation of the claims in the
particular forum; and
(D) the likely difficulties in managing a class
action.
Fed. R. Civ. P. 23(b)(3).
First, in light of the common issues of fact and law in
this case and the minor nature of any issues specific to the
individual class members, the class members have a minimal
interest in individually controlling the prosecution of this
case.
Second, although there are several other similar cases
pending in state and federal court and a number of the named
plaintiffs in these cases overlap, the instant case is apparently
the only pending case by servers and bartenders employed by
39
Defendant at the Resort.
Third, maintaining Plaintiffs’ claims in a class action
is desirable because it is unlikely that individual Resort
servers and bartenders would be able to retain counsel and
litigate separate actions in light of the relatively small
amounts allegedly due to each person from the service charges.
See, e.g., Moran Certification Order at 5 (“It would be fruitless
for these types of employees, who at most worked at only a few
functions, to pursue their claims individually since the amount
of tips and gratuities allegedly owed them would be greatly
exceeded by the cost of litigating the matter.”).
Fourth, there does not appear to be any issues that
would create undo difficulties in managing the instant case as a
class action.
The class members should be readily identifiable
from Defendant’s personnel records, which are also likely to
include a last known address for class members who are no longer
employed by the Resort.
The Court has not identified any other factors relevant
to the superiority inquiry.
Insofar as all the applicable
factors weigh in favor of class certification, the Court FINDS
that the superiority requirement is satisfied.
C.
Summary of Rule 23 Requirements
The Court FINDS that the proposed class meets all of
applicable requirements of Fed. R. Civ. P. 23.
40
The Court
therefore FINDS that class certification is appropriate and
GRANTS Plaintiffs’ Motion.
CONCLUSION
On the basis of the foregoing, Plaintiffs’ Motion for
Class Certification, filed February 18, 2011, is HEREBY GRANTED.
The Court HEREBY ORDERS as follows:
1)
the Court CERTIFIES the instant case as a class action;
2)
the Court CERTIFIES the following Class: all non-
managerial food and beverage service employees who, from
July 30, 2004 to the present, have worked at banquets, functions,
events, and small parties, or provided room service, where a
service charge was imposed and where a part of that service
charge was kept by the Defendant or management without adequate
disclosure to customers;
3)
the Court APPOINTS Bert Villon and Mark Apana as the
Class Representatives;
4)
the Court APPOINTS Ashley Ikeda, Esq., Lori Aquino,
Esq., David Rosenfeld, Esq., Harold Lichten, Esq.,
Shannon Liss-Riordan, Esq., and Hillary Schwab, Esq., as Class
Counsel; and
5)
the Court ORDERS the parties to meet and confer by
June 21, 2010 to agree on: the proposed notice to potential class
members pursuant to Fed. R. Civ. P. 23(d)(2); a method for
ascertaining the identity of class members; the most practicable
41
procedure under the circumstances to provide notice of the
instant case to those class members.
The proposed notice to the
Class and the proposed distribution plan shall be submitted for
the Court’s approval by July 12, 2011.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, May 31, 2011.
/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge
BERT VILLON AND MARK APANA V. MARRIOTT HOTEL SERVICES, INC., ETC;
CIVIL NO. 08-00529 LEK-RLP; ORDER GRANTING PLAINTIFFS’ MOTION FOR
CLASS CERTIFICATION
42
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