Kyne v. Ritz-Carlton Hotel Company, LLC, The

Filing 109

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT 78 . Signed by JUDGE ALAN C KAY on 12/2/11. (eps) -- Plaintiffs' Motion for Partial Summary Judgment is GRANTED with respect to Defe ndant's liability from November 24, 2002, until May 7, 2010, for banquet events, and from November 24, 2002, until March 17, 2010, for in-room dining services. The Court's ruling will not go into effect until after the Hawaii Supreme Court rules on the question of law certified to it in Villon and Rodriguez. 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
ELIZABETH VALDEZ KYNE, CHAD
KRUZIC, and ADAM BOROWIEC, on
behalf of themselves and all
others similarly situated,

)
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
THE RITZ-CARLTON HOTEL COMPANY, )
L.L.C., dba THE RITZ-CARLTON,
)
KAPALUA,
)
)
Defendant.
)
)

Civ. No. 08-00530 ACK-RLP

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION FOR
PARTIAL SUMMARY JUDGMENT
FACTUAL BACKGROUND1/
Plaintiffs Elizabeth Valdez Kyne, Chad Kruzic, and Adam
Borowiec (“Plaintiffs”), brought suit on behalf of a similarly
situated class against the Ritz-Carlton Hotel Company, L.L.C.,
d/b/a the Ritz-Carlton, Kapalua (“Defendant” or “Hotel”).
Compl. ¶¶ 3-6.

Am.

Plaintiffs have all worked as food and beverage

servers for at the Ritz-Carlton, Kapalua, in Maui, Hawaii.

Id.

¶ 3.
Plaintiffs’ Amended Complaint alleges that the Ritz-

1/

The facts as recited in this Order are for the purpose of
disposing of the current motion and are not to be construed as
findings of fact that the parties may rely on in future
proceedings.

Carlton provides food and beverage services throughout the Hotel,
including in its banquet department, its restaurants, and through
room service.

Id. ¶ 5.

Plaintiffs allege that Defendant has

added a preset service charge to customers’ bills for food and
beverage served at the Hotel, but that Defendant has not remitted
the total proceeds of the service charge as tip income to the
employees who serve the food and beverages.

Id. ¶¶ 6–9.

Instead, Plaintiffs allege that Defendant has had a policy and
practice of retaining for themselves a portion of these service
charges (or using it to pay managers or other non-tipped
employees who do not serve food and beverages), without
disclosing to the Hotel’s customers that the services charges are
not remitted in full to the employees who serve the food and
beverages.2/

Id. ¶¶ 8-9.

Plaintiffs assert that therefore

customers are misled into believing the entire service charge is
distributed to the employees that serve them, and as a result,
customers who would otherwise leave an additional gratuity do not
do so.

Id. ¶ 10.
Plaintiffs’ Amended Complaint asserts five counts.

In

Count I, Plaintiffs allege that Defendant’s conduct violates
Hawaii Revised Statutes (“H.R.S.”) § 481B-14, and that pursuant

2/

The Collective Bargaining Agreement (“CBA”) between the
Hotel and its employees provided that employees shall receive at
least 93% of the guaranteed service charge. Def.’s Response to
Pls.’ CSF Ex. A, § 7.h. There does not appear to be a dispute
that Defendant kept 7% of service charges it imposed.
2

to § 481B-4, such violation constitutes an unfair method of
competition or unfair and deceptive act or practice within the
meaning of H.R.S. § 480-2.

In Count II, Plaintiffs allege that

Defendant’s conduct constitutes unlawful intentional interference
with contractual and/or advantageous relations.

In Count III,

Plaintiffs allege that Defendant’s conduct constitutes a breach
of two implied contracts.

In Count IV, Plaintiffs allege that

Defendant has been unjustly enriched at Plaintiffs’ expense under
state common law.

In Count V, Plaintiffs allege that as a result

of Defendant’s conduct, they have been deprived of income that
constitutes wages, which is actionable under H.R.S. §§ 388–6,
388–10, and 388–11.
PROCEDURAL BACKGROUND
On November 24, 2008, Plaintiffs filed a Class Action
Complaint.

Doc. No. 1.

There were a number of similar cases

filed in this Court, and on February 11, 2009, Plaintiffs moved
to consolidate or alternatively for assignment of all the related
cases to one judge pursuant to Local Rule 40.2.3/
3/

Doc. No. 25.

There are at least seven other similar cases that food and
beverage service employees have filed against their employers in
this District Court between November 21, 2008, and May 13, 2010.
These actions are: Davis v. Four Seasons Hotel, Ltd.,
Civ. No. 08-00525 HG-BMK (D. Haw. Nov. 21, 2008) (hereafter
“Davis I”); Apana v. Fairmont Hotels & Resorts (U.S.) Inc., Civ.
No. 08-00528 JMS-LEK (D. Haw. Nov. 24, 2008); Villon v. Marriott
Hotel Servs., Inc., Civ. No. 08-00529 LEK-RLP (D. Haw. Nov. 24,
2008); Wadsworth v. KSL Grand Wailea Resort, Inc., Civ. No. 0800527 ACK-RLP (D. Haw. Nov. 24, 2008); Lara v. Renaissance Hotel
Operating Co., Civ. No. 08-00560 LEK-RLP (D. Haw. Dec. 10, 2008);
Rodriguez v. Starwood Hotels & Resorts Worldwide, Inc., 09-00016
3

On April 8, 2009, this Court adopted the Magistrate Judge’s
Findings and Recommendation that the similar cases not be
consolidated.

2009 WL 975753 (Doc. No. 31).4/

On July 9, 2009, the Court stayed this case in light of
Judge Gillmor’s certification to the Hawaii Supreme Court of a
question of law that was also important to the instant case.5/
See Doc. No. 42.

The Hawaii Supreme Court answered the certified

question on March 29, 2010.

See Davis v. Four Seasons Hotel

Ltd., 228 P.3d 303 (Haw. 2010) (hereafter “Davis II”).
Accordingly, on April 19, 2010, Plaintiffs filed a motion to lift
the stay and a motion to file an amended complaint.

Doc. Nos. 44

& 45.

The Magistrate Judge granted both motions on June 22,

2010.

Doc. No. 54.

Plaintiffs filed their Amended Complaint on

LEK-RLP (D. Haw. Jan. 9, 2009); and Flynn v. Fairmont Hotels &
Resorts, Inc., Civ. No. 10-00285 DAE-LEK (D. Haw. May 13, 2010).
4/

In that Findings and Recommendation, the magistrate judge
found that reassignment to the same district judge was not
warranted, but that the cases should be reassigned to one
magistrate judge for more efficient case management. See Doc.
No. 29.
5/

Judge Gillmor certified the following question:

Where plaintiff banquet server employees allege that
their employer violated the notice provision 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 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?
See Davis I, Civ. No. 08–00525 HG–LEK, Doc. No. 75.
4

June 28, 2010.

Doc. No. 56.

Meanwhile, on May 11, 2011, Plaintiffs filed a Motion
to Certify Class.

Doc. No. 76.

On July 18, 2011, the Court

adopted the Magistrate Judge’s Findings and Recommendation that
the Court grant Plaintiffs’ motion and certify the class as “all
non-managerial food and beverage service employees who, since
November 24, 2002, have worked at banquets, functions, small
parties, room service, and other events at the Ritz-Carlton,
Kapalua, where a service charge was imposed and where a part of
that service charge was kept by the Defendant without adequate
disclosure to customers.”

Doc. No. 91; 2011 WL 2940444 (Doc. No.

93).
On May 11, 2011, Defendant filed a Motion to Dismiss
Plaintiffs’ Amended Class Action Complaint (“Defendant’s Motion
to Dismiss”).

Doc. No. 81.

The Motion was accompanied by a

supporting memorandum (“Def.’s MTD Mem.”).

Id.

Plaintiffs filed

an opposition on October 26, 2011 (“Pls.’ Opp’n”).

Doc. No. 100.

On November 2, 2011, Defendant filed a reply (“Def.’s Reply”).
Doc. No. 104.
Plaintiffs filed a Motion for Partial Summary Judgment
on May 11, 2011 (“Plaintiffs’ Motion for Summary Judgment”).
Doc. No. 78.

The Motion was accompanied by a supporting

memorandum (“Pls.’ MSJ Mem.”) and a concise statement of facts
(“Pls.’ CSF”).

Doc. Nos. 79 & 80.
5

On October 26, 2011,

Defendant filed an opposition (“Def.’s Opp’n”) and a response to
Plaintiffs’ CSF (“Def.’s Response to Pls.’ CSF”).
& 102.

Doc. Nos. 101

Plaintiffs filed a reply on November 2, 2011 (“Pls.’

Reply”).

Doc. No. 103.
On November 9, 2011, Defendant filed a supplement to

its Motion to Dismiss, attaching a copy of the Hawaii Supreme
Court’s order on the question certified to it by Judge Kobayashi
in Villon v. Marriot Hotel Services, Inc., CV-08-00529 LEK-RLP,
Doc. No. 130 (Oct. 12, 2011), and Rodriguez v. Starwood Hotels &
Resorts Worldwide, Inc., CV-09-00016 LEK-RLP, Doc. No. 139 (Oct.
12, 2011).

Doc. No. 105 Ex. A.
On November 16, 2011, the Court held a hearing on

Defendant’s request to stay proceedings, Plaintiffs’ Motion for
Partial Summary Judgment, and Defendant’s Motion to Dismiss.6/
The Court has addressed Defendant’s motions in a separate order.
In that order, the Court granted Defendant’s Motion to Dismiss
with respect to Counts I, II, and III, to the extent Count III
seeks to recover for an implied contract between Plaintiffs and
Defendant.

The Court also granted Defendant’s request to stay

6/

Plaintiffs’ counsel, who reside in Boston, requested that
the Court continue the hearing from October until November 14,
2011, to allow the case to be heard on the same day as Wadsworth,
Civ. No. 08-00527 ACK-RLP, a case in which the parties are
represented by the same counsel as in this case. See Doc. No.
96. The Court found it advisable to hold the hearings on
different days, but rescheduled the hearing for November 16,
2011, to accommodate Plaintiffs’ counsel and their travel needs.
See Doc. No. 95.
6

proceedings as modified until the Hawaii Supreme Court rules on a
question of law certified to it by Judge Kobayashi in Villon and
Rodriguez.

Thus, the instant order will go into effect after the

stay is dissolved.
Plaintiffs seek summary judgment on Count V, in which
Plaintiffs allege that as a result of Defendant’s conduct, they
have been deprived of income that constitutes wages, which is
actionable under H.R.S. §§ 388–6, 388–10, and 388–11.
STANDARD
The purpose of summary judgment is to identify and
dispose of factually unsupported claims and defenses.

See

Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

Summary

judgment is therefore appropriate if “the movant shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a).

“A party asserting that a fact cannot be or is genuinely disputed
must support the assertion,” and can do so in either of two ways:
by “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including
those made for purposes of the motion only), admissions,
interrogatory answers, or other materials”; or by “showing that
the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce

7

admissible evidence to support the fact.”

Fed. R. Civ. P.

56(c)(1).
“A fact is ‘material’ when, under the governing
substantive law, it could affect the outcome of the case.

A

‘genuine issue’ of material fact arises if ‘the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party.’”

Thrifty Oil Co. v. Bank of Am. Nat’l Trust & Sav.

Ass’n, 322 F.3d 1039, 1046 (9th Cir. 2003) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).7/

Conversely,

where the evidence could not lead a rational trier of fact to
find for the nonmoving party, no genuine issue exists for trial.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986) (citing First Nat’l Bank v. Cities Serv. Co., 391
U.S. 253, 289 (1968)).
The moving party has the burden of persuading the court
as to the absence of a genuine issue of material fact.

Celotex,

477 U.S. at 323; Miller v. Glenn Miller Prods., 454 F.3d 975, 987
(9th Cir. 2006).

The moving party may do so with affirmative

evidence or by “‘showing’—that is, pointing out to the district
court—that there is an absence of evidence to support the

7/

Disputes as to immaterial facts do “not preclude summary
judgment.” Lynn v. Sheet Metal Workers’ Int’l Ass’n, 804 F.2d
1472, 1483 (9th Cir. 1986).
8

nonmoving party’s case.”

Celotex, 477 U.S. at 325.8/

Once the

moving party satisfies its burden, the nonmoving party cannot
simply rest on the pleadings or argue that any disagreement or
“metaphysical doubt” about a material issue of fact precludes
summary judgment.

See Celotex, 477 U.S. at 324; Matsushita

Elec., 475 U.S. at 586; Cal. Architectural Bldg. Prods., Inc. v.
Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987).9/
The nonmoving party must instead set forth “significant probative
evidence” in support of its position.

T.W. Elec. Serv., Inc. v.

Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987)

8/

When the moving party would bear the burden of proof at
trial, that party must satisfy its burden with respect to the
motion for summary judgment by coming forward with affirmative
evidence that would entitle it to a directed verdict if the
evidence were to go uncontroverted at trial. See Miller, 454
F.3d at 987 (quoting C.A.R. Transp. Brokerage Co. v. Darden
Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000)). When the
nonmoving party would bear the burden of proof at trial, the
party moving for summary judgment may satisfy its burden with
respect to the motion for summary judgment by pointing out to the
court an absence of evidence from the nonmoving party. See id.
(citing Celotex, 477 U.S. at 325).
9/

Nor will uncorroborated allegations and “self-serving
testimony” create a genuine issue of material fact. Villiarimo
v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002);
see also T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n,
809 F.2d 626, 630 (9th Cir. 1987); Johnson v. Wash. Metro. Area
Transit Auth., 883 F.2d 125, 128 (D.C. Cir. 1989) (“The removal
of a factual question from the jury is most likely when a
plaintiff’s claim is supported solely by the plaintiff’s own
self-serving testimony, unsupported by corroborating evidence,
and undermined either by other credible evidence, physical
impossibility or other persuasive evidence that the plaintiff has
deliberately committed perjury.”), cited in Villiarimo, 281 F.3d
at 1061.
9

(quoting First Nat’l, 391 U.S. at 290).

Summary judgment will

thus be granted against a party who fails to demonstrate facts
sufficient to establish an element essential to his case when
that party will ultimately bear the burden of proof at trial.
See Celotex, 477 U.S. at 322.
When evaluating a motion for summary judgment, the
court must construe all evidence and reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party.
See T.W. Elec. Serv., 809 F.2d at 630–31.10/

Accordingly, if

“reasonable minds could differ as to the import of the evidence,”
summary judgment will be denied.

Anderson, 477 U.S. at 250–51.

DISCUSSION
In Count V, Plaintiffs assert that as a result of
Defendant’s unlawful failure to remit the entire proceeds of food
and beverage service charges to the food and beverage servers,
Defendant is liable to Plaintiffs under Chapter 388.
Count V.

Am. Compl.

The Court has already concluded that Count V states a

plausible claim, i.e., an employee may recover under H.R.S.
§§ 388-6, 388-10, and 388-11, for the failure of a hotel to
distribute service charges to employees when the hotel did not
disclose that the service charges were being used to pay for

10/

At the summary judgment stage, the court may not make
credibility assessments or weigh conflicting evidence. See
Anderson, 477 U.S. at 249; Bator v. Hawaii, 39 F.3d 1021, 1026
(9th Cir. 1994).
10

costs or expenses other than wages and tips of employees, as
required by H.R.S. § 481B-14.

H.R.S. § 481B-14 provides that:

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.
H.R.S. § 388-6 provides that:

“No employer may deduct,

retain, or otherwise require to be paid, any part or portion of
any compensation earned by any employee except where required by
federal or state statute or by court process or when such
deductions or retentions are authorized in writing by the
employee.”

Section 388-11 provides an employee or class of

employees with a cause of action to recover unpaid wages.
Pursuant to § 388-10(a), an employer who fails to pay wages in
violation of any provision of Chapter 388 without equitable
justification is liable to the employee for double damages.
Plaintiffs assert that Defendant withheld compensation they
earned in violation of § 388-6 by failing to distribute the full
amount of service charges that Defendant imposed without making
the requisite disclosure under § 481B-14.
For Plaintiffs to succeed on their claim that Defendant
is liable for unpaid wages under Chapter 388 based on a violation
of § 481B-14, Plaintiffs must present sufficient evidence to

11

establish that Defendant: “(1) employed Plaintiffs as food and
beverage servers; (2) retained portions of food and beverage
service charges while employing Plaintiffs; and (3) failed to
clearly disclose to customers that the service charges would not
be remitted in full to Plaintiffs.”

Davis I, 2011 WL 3841075, at

*11; see H.R.S. §§ 388-1, 388-6, 388-10, 388-11, and 481B-14.
The employer bears the burden to establish that an equitable
justification existed.

Arimizu v. Fin. Sec. Ins. Co., 679 P.2d

627, 631-32 (Haw. App. 1984).
At the hearing, Defendant asserted that the CBA
provided Defendant with an equitable justification for retaining
a portion of the service charges.

Defendant asserted that to

comply with § 481B-14, it would have had to violate the CBA,
which would in turn violate federal labor law.

This premise is

erroneous; Defendant could have complied with both the CBA and
state law.

First, the CBA provides that “[o]n all special

functions, the bargaining unit employees involved shall receive
at least ninety-three percent (93%) of the guaranteed service
charge less employment taxes.”
A, § 7.h (emphasis added).

Def.’s Response to Pls.’ CSF Ex.

Thus, Defendant could have paid 100%

of the service charges to employees without violating the CBA.
Second, Defendant could comply with both the CBA and § 481B-14 by
paying employees 93% of the service charge and making the
requisite disclosure.

Thus, Defendant has not meet its burden to

establish equitable justification for violating § 388-6.

12

Defendant does not dispute that it employed Plaintiffs.
See e.g., Def.’s Opp’n at 3 (“Plaintiffs’ employment at the Hotel
was governed by a collective bargaining agreement (‘CBA’).”).11/
Thus Plaintiffs have sufficiently established the first element
of their claim.
Defendant also does not dispute that it does not pay
Compare Pls.’ CSF ¶ 3,

the entire service charges to employees.
with Def.’s Response to Pls.’ CSF ¶ 3.

Accordingly, Plaintiffs

have established the second element of their claim.
With respect to the third element, Plaintiffs assert,
and Defendant does not dispute, that prior to the filing of this
suit, “Defendant did not provide any disclosure to customers that
the entire amount of the service charge was not used as tip
income to compensate food and beverage servers.”

Compare Pls.’

CSF ¶¶ 1-4, with Def.’s Response to Pls.’ CSF ¶¶ 1-4.

Defendant

also does not dispute that “no disclosure was provided to
customers on any documents that a portion of the service charge
was not distributed to service employees until sometime in 2010.”
Compare Pls.’ CSF ¶ 5, with Def.’s Response to Pls.’ CSF ¶ 5.
At some point in 2010, Defendant began to provide a
disclosure on some of its documents.

Compare Pls.’ CSF ¶¶ 6-8,

with Def.’s Response to Pls.’ CSF ¶¶ 6-8.

11/

In their CSF,

The Court notes that the relevant dates each plaintiff was
employed will go to damages, not liability.
13

Plaintiffs assert that “[a]lthough Defendant’s attorneys have
stated that disclosures were added in March 2010 for room service
and May 2010 for banquets, Defendant has not provided any
documents confirming these disclosures were added at these
times.”

Pls.’ CSF at 3 n.2.

On summary judgment, however, the

moving party bears the burden of coming forward with affirmative
evidence to establish that there is no genuine dispute as to any
material fact.

See Fed. R. Civ. P. 56(a); Celotex, 477 U.S. at

325.
In a response to Plaintiffs’ request for documents,
Defendant provided an accounting of the service charges collected
by Defendant for the sale of food and beverages and set forth how
the service charges were distributed.

See Pls.’ CSF Ex. 2.

In

this document, for the year 2010, Defendant provided banquet
service charge figures from January 1, 2010, through May 6, 2010,
and stated that “[a]dditional disclosure language regarding
banquet service charges was added to Defendant’s documents on or
before May 7, 2010.”12/

Id.

Defendant does not assert that the

banquet contracts contained a disclosure prior to this date.
Compare Pls.’ CSF ¶ 5-6, with Def.’s Response to Pls.’ CSF ¶ 5-6.
Defendant does not dispute that banquet checks did not contain

12/

It is unclear what Defendant meant by “additional,” but
Defendant has not asserted that it made an adequate disclosure
prior to this date. Plaintiffs’ sample documents prior to this
date establish that the requisite disclosure was not made on
banquet event documents.
14

the requisite disclosure.
Response to Pls.’ CSF ¶ 7.

Compare Pls.’ CSF ¶ 7, with Def.’s
Defendant also does not dispute that

prior to May 2010, the banquet event orders (which are the
documents listing all menu items, pricing, etc.) did not contain
the requisite disclosure.

Compare Pls.’ CSF ¶ 8, with Def.’s

Response to Pls.’ CSF ¶ 8.
Plaintiffs submitted a sample banquet check, which
assessed a service charge but contained no statement about the
charge; a sample group sales contract dated March 3, 2010, which
stated “there is a twenty percent (20%) taxable service charge,”
but contained no statement regarding how the charge was
distributed; and a sample banquet event order from 2005, which
stated that “[a]ll food and beverage is subject to 20% service
fee,” but contained no other information regarding the service
fee.

Pls.’ CSF Exs. 1, 3, & 4.

Plaintiffs also submitted a

sample banquet event order for an event held on May 10, 2010, to
show the change made in May 2010, which stated: “[A] Service
charge of 20% will be Applied to the Cost for Food and Beverage
Service.

A Portion of the Service Charge is being used to Pay

for Costs or Expenses other than Wage and Tips for Employees: a
Minimum of 18% is Allocated toward Wage and Tips for
Employees.”13/

Id. Ex. 5.

These documents, along with

13/

It is not clear from the exhibit what date the document
was created or when it was presented to the customer. See Pls.’
CSF Ex. 5.
15

Defendant’s admissions, are sufficient to establish Defendant’s
liability with respect to banquet events until May 7, 2010.
Plaintiffs do not challenge the language used by
Defendant in its documents that do contain a disclosure, but
assert that summary judgment is also proper for Defendant’s
liability after May 7, 2010, because “[u]nless the disclosure is
made on all documents given to customers, . . . Defendant has not
clearly disclosed to customers that the full service charge is
not being remitted to employees as required by § 481B-14.”
MSJ Mem. at 12 n.7.

Pls.’

The Court disagrees that disclosure must be

made on every document given to a customer, such as event orders
and banquet checks.

It is unclear from the record what

disclosures were added to which documents at what time, and
Plaintiffs have failed to meet their burden to establish
Defendant’s liability for banquet events after May 7, 2010.
Similarly, in the accounting Defendant submitted to
Plaintiffs, for the year 2010, Defendant provided in-room dining
service charge figures for January 1, 2010, through March 16,
2010, stating “[a]dditional disclosure language regarding in-room
dining service charges was added to Defendant’s documents on or
before March 17, 2010.”

Pls.’ CSF ¶ 9.

Defendant does not

assert that it made an adequate disclosure on in-room dining
documents prior to March 17, 2010.

Defendant does not dispute

that its room service menus did not contain a disclosure that a

16

portion of the service charge would not be distributed to service
employees.

Compare Pls.’ CSF ¶ 10, with, Def.’s Response to

Pls.’s CSF ¶ 10.

Plaintiffs submitted a sample in-room dining

bill from December 2009, which includes a service charge without
any disclosure regarding the distribution of the charge.
CSF Ex. 6.

Pls.’

Plaintiffs also submitted sample in-room dining bills

from September 2010, which Plaintiffs purport are the only inroom dining checks Defendant produced with a disclosure.
¶ 9, Ex. 7.

Id.

This bill states: “All Room Service orders are

subject to a . . . 18% Service Charge. . . . A portion of the 18%
service charge added to the food and beverage check is allocated
to pay for various costs and expenses other than the wages and
tips of employees.

A minimum of 16% is allocated toward wage and

tips for employees.”

Id. Ex. 6.

adequacy of this disclosure.

Plaintiffs do not contest the

Based on Defendant’s admission and

the sample bills produced by Plaintiffs, Plaintiffs have
sufficiently established Defendant’s liability with respect to
in-room dining until March 17, 2010.

Plaintiffs have not met

their burden with respect to Defendant’s liability from March 17,
2010, forward.
Defendant also asserts that Plaintiffs do not address
what the applicable statute of limitations is for Plaintiffs’
claim, stating Plaintiffs “offer the court absolutely no guidance
on this important issue,” and that “[c]learly if the Plaintiffs

17

are claiming they are entitled to judgment as a matter of law on
their §[]388-6 claim they should have also argued what the
applicable limitations period is and when the alleged liability
would commence.”

Def.’s Opp’n at 7.

Defendant is mistaken;

Plaintiffs stated in their motion “the beginning date for damages
should be six years prior to the filing of the complaint, or
November 24, 2002, based on the six year statute of limitations
for wage claims.”
1).

Pls.’ MSJ Mem. at 13 n.8 (citing H.R.S. § 657-

The statute of limitations is an affirmative defense, and

thus the defendant bears the burden of proof on this issue.
Payan v. Aramark Mgmt. Servs. Ltd. P’ship, 495 F.3d 1119, 1123
(9th Cir. 2007).

Here, Defendant did not make any affirmative

argument regarding the statute of limitations until the hearing.
At the hearing, Defendant asserted that the four year statute of
limitations applicable to § 481B-14 should govern.
Pursuant to H.R.S. § 480-24(a), “[a]ny action to
enforce a cause of action arising under this chapter shall be
barred unless commenced within four years after the cause of
action accrues.”

Pursuant to § 481B-4, any person who violates

Chapter 481B is “deemed to have engaged in an unfair method of
competition . . . within the meaning of section 480-2.”

Section

480-2(e) provides that “any person may bring an action based on
unfair methods of competition declared unlawful by this section.”
Thus, for an action to recover for a violation of § 481B-14
through 480-2(e), a four-year statute of limitation applies.
18

Sections 388-6, 388-10, and 388-11 do not contain an
express limitations period.

Because there is no express limit,

actions arising under § 388-6, are governed by the general sixyear limitation for “[a]ctions for the recovery of any debt
founded upon any contract, obligation, or liability.”
§ 657-1(1).

H.R.S.

Alternatively, six years is the catch-all statute of

limitations for “[p]ersonal actions of any nature whatsoever not
specifically covered by the laws of the State.”
1(4).

H.R.S. § 657-

Because Plaintiffs’ cause of action arises under Chapter

388, not Chapter 480 and § 481B-14, the six-year limitations
period applicable to Chapter 388 applies.

Plaintiffs filed suit

on November 24, 2008, and thus Defendant’s liability begins on
November 24, 2002.14/
The amount Defendant is liable for is an issue of
damages, which Plaintiffs will have the burden of establishing at
trial.

Plaintiffs have not met their burden to establish

Defendant’s liability after May 7, 2010, for banquet events, and
after March 17, 2010, for in-room dining events.

14/

Accordingly,

The Court notes that if Plaintiffs had brought an action
pursuant to Chapter 480 and § 481B-14 and prevailed, they could
recover treble damages for four years. See H.R.S. § 48013(a)(1). Under Chapter 388, Plaintiffs can recover double
damages for six years. See id. § 388-10(a). Thus, depending on
the amount of damages for each year, the amount Plaintiffs are
able to recover pursuant to each Chapter varies. Thus, contrary
to Defendant’s assertion, an employee’s recovery under Chapter
480 for a violation of § 481B-14 for four years, would not
necessarily be the same as that employee’s recovery under § 388-6
for six years.
19

Plaintiffs’ Motion for Partial Summary Judgment is GRANTED with
respect to Defendant’s liability from November 24, 2002, until
May 7, 2010, for banquet events, and from November 24, 2002,
until March 17, 2010, for in-room dining services.
CONCLUSION
For the foregoing reasons the Court (1) GRANTS in part
and DENIES in part Plaintiffs’ Motion for Partial Summary
Judgment.

The Court’s ruling will not go into effect until after

the Hawaii Supreme Court rules on the question of law certified
to it in Villon and Rodriguez.
The Court has ordered a stay of all proceedings pending
a decision by the Hawaii Supreme Court on the question of law
certified to it by Judge Kobayashi in Villon v. Marriot Hotel
Services, Inc., CV-08-00529 LEK-RLP, Doc. No. 130 (Oct. 12,
2011), and Rodriguez v. Starwood Hotels & Resorts Worldwide,
Inc., CV-09-00016 LEK-RLP, Doc. No. 139 (Oct. 12, 2011).

The

closing is administrative only and thus has no effect on the
procedural or substantive rights of any party or any limitations
period.

Any party may move to reopen the case after the Hawaii

Supreme Court rules, and the parties shall promptly inform this
court in writing of the disposition in Judge Kobayashi’s case, at
which time the stay will be automatically dissolved if not
earlier.

20

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 2, 2011.

________________________________
Alan C. Kay
Sr. United States District Judge

Kyne, et al. v. The Ritz-Carlton Hotel Company, L.L.C. , Civ. No. 08-00530 ACKRLP: Order Granting in Part and Denying in Part Plaintiffs’ Motion for Partial
Summary Judgment.

21