Ramos et al v. US Bank National Association

Filing 215

ORDER: The Court ADOPTS Magistrate Judge Papak's Findings andRecommendation # 202 and, accordingly, DENIES Defendant U.S. Bank's Motion for Partial Summary Judgment # 184 as to the class/collective aspects of the cla ims alleged by Plaintiff Ramos on behalf of the putative truncation class and GRANTS U.S. Bank's Motion as to the class/collective aspects of the claims alleged by Plaintiff Smith on behalf of the putative Sales and Service Managers employees (SSM) class. IT IS SO ORDERED. Signed on May 20, 2009 by Judge Anna J. Brown.

FlLED'09 MAY ;:'0 13:46UsllC-oo>

I N THE UNITED STATES D I S T R I C T COURT FOR THE D I S T R I C T OF OREGON

DENNIS RAMOS a n d KELLY SMITH, plaintiffs,

08-CV-1150-PK ORDER

v.
U . S . BANK NATIONAL ASSOCIATION, Defendant.

BROWN, J u d g e .

Magistrate Judge Paul Papak issued Findings and Recommendation (#202) on February 18, 2009, in which he recommended the Court deny Defendant U.S. Bank's Motion for P a r t i a l Summary Judgment (#184) as to the c l a s s / c o l l e c t i v e a s p e c t s o f t h e c l a i m s a l l e g e d by P l a i n t i f f Ramos on b e h a l f o f t h e putative truncation class' and grant U.S. Bank's Motion as to the

, The p u t a t i v e truncation c l a s s i s made up of employees required to enter their time into an electronic timekeeping software that allegedly truncated the hours entered. 1 - ORDER

class/collective a s p e c t s o f t h e c l a i m s a l l e g e d b y P l a i n t i f f K e l l y Smith on behalf of the putative Sales and Service Managers e m p l o y e e s (SSM) c l a s s . Smith and u.S. Bank f i l e d timely The matter i s now

Objections to the Findings and Recommendation. b e f o r e t h i s Court pursuant t o 28 U.S.C. Rule of Civil Procedure 72(b).
§

636(b) (1) and Federal

u.S. Bank a s s e r t s the Magistrate Judge erred when he found t h e c l a s s / c o l l e c t i v e a s p e c t s o f t h e c l a i m s a l l e g e d b y Ramos on behalf of the putative truncation class are not barred by issue preclusion. Smith a s s e r t s the Magistrate Judge erred when

he found the class/collective aspects of the claims alleged by S m i t h o n b e h a l f o f t h e SSM c l a s s a r e b a r r e d b y i s s u e p r e c l u s i o n . When a n y p a r t y o b j e c t s t o a n y p o r t i o n o f t h e M a g i s t r a t e Judge's Findings and Recommendation, the d i s t r i c t court must make a de novo determination of that portion of the Magistrate Judge's report.
Tapia,

28 U.S.C.

§

636(b) (1).

See also United States v. Reyna-

328 F.3d 1114, 1121 (9th Cir. 2003) (en banc); United

States v. Bernhardt, 840 F.2d 1441, 1444 (9th Cir. 1988).

I.

Standards for issue preclusion.
"[I]ssue preclusion prevents parties from r e l i t i g a t i n g an

issue of f a c t or law i f the same issue was determined i n p r i o r litigation.
Resolution Trust Corp. v. Keating, 186 F.3d 1110,

1116 (9th Cir. 1999).

2 - ORDER

A.

Issue preclusion under federal law.

The preclusive e f f e c t of a federal case i s governed by the federal doctrine of issue preclusion. 128 S. Ct. 2161, 2171 (2008). preclusion applies when: (1) the issue n e c e s s a r i l y decided a t the previous proceeding is identical to the one which i s sought to be r e l i t i g a t e d ; (2) the f i r s t proceeding ended with a final judgment o n t h e m e r i t s ; a n d ( 3 ) t h e p a r t y a g a i n s t whom [issue preclusion] i s asserted was a party or in privity with a party at the first proceeding.
At-Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, Taylor v. Sturgell,

Under federal law, issue

1086 (9th. Cir. 2007).

B.

Issue preclusion under Oregon law.

The preclusive effect of an Oregon case i s governed by the Oregon doctrine of issue preclusion. 136 F.3d 1219, 1225 (9th Cir. 1998). preclusion applies when: (1) The issue i n the two proceedings is identical. (2) The issue was actually l i t i g a t e d and was e s s e n t i a l to a f i n a l decision on the merits in the prior proceeding. (3) The [ p l a i n t i f f s ] had a f u l l and f a i r opportunity to be heard on that issue. (4) The [ p l a i n t i f f s were p a r t i e s in] or w[ere] in privity with a party to the prior proceeding. (5) 3 - ORDER The p r i o r proceeding was the type
Dodd v. Hood River County,

Under Oregon law, issue

of p r o c e e d i n g t o w h i c h [ O r e g o n c o u r t s ] w i l l give preclusive effect. Privity "includes. a party to the action." those whose interests are represented by

D'Amico ex rel. Tracey v. Ellinwood,

209 Or. App. 713, 718 (2006).
It i s undisputed that final judgments on the merits were

entered in the primary cases relied on by the parties.

In

addition, the elements of the state and federal tests at issue here (identity of the issues and privity of the parties) are the same under both federal and s t a t e law.

II.

U.S. Bank's Objections to the Magistrate Judge's Findings and Recommendation.
U.S. Bank a s s e r t s the Magistrate Judge erred when he

(1)

found the electronic software in this case and the paper

timesheets used by the p l a i n t i f f s in McElmurry v. U.S. Bank

N a t i o n a l A s s o c i a t i o n , No. 04-CV-642 (D. O r . O c t . 1 , 2004)
(Haggerty, J . ) , differed substantially; (2) found Ramos was not (3) found

adequately represented by the p l a i n t i f f s in McElmurry;

t h e timesheets o f Ramos and the p l a i n t i f f i n Lowdermilk v. U.S.

B a n k N a t i o n a l A s s o c i a t i o n , NO. 0 6 0 3 - 0 3 3 3 5 ( O r . C i r . C t . A u g . 4 ,
2006), d i f f e r e d s u b s t a n t i a l l y ; and (4) found Ramos was not a

c l a s s member nor i n p r i v i t y with the p l a i n t i f f s i n Lowdermilk.

A.

Ramos's issue i s not identical to the issue in McElmurzy.

U.S. Bank objects to the Magistrate Judge'S finding t h a t the

4 - ORDER

issue r a i s e d i n t h e M c E l m u r r y c a s e i s n o t i d e n t i c a l t o t h e i s s u e r a i s e d by Ramos i n t h i s c a s e .

u.s. Bank a s s e r t s the evidence in

both cases overlaps because the timesheets considered by the court i n McElmurry are i d e n t i c a l to those used by Ramos. The record r e f l e c t s the McElmurry court acknowledged the p l a i n t i f f s narrowed t h e i r p u t a t i v e c l a s s to employees who used a s p e c i f i c timesheet t h a t was completed manually using a conversion chart.

McElmurry, Findings and Recommendation a t 24.

In

c o n t r a s t , Ramos a l l e g e s h e and t h e p u t a t i v e c l a s s r e p r e s e n t e d by him used electronic timesheets that automatically truncated t h e i r hours. Thus, the Magistrate Judge found the timesheets in each

case differ substantially.

B.

Ramos a n d t h e p u t a t i v e t r u n c a t i o n c l a s s w e r e n o t a d e q u a t e l y r e p r e s e n t e d b y t h e McElmur~ p l a i n t i f f s .

u.s. Bank also objects to the Magistrate Judge'S finding
t h a t t h e i n t e r e s t s of t h e p u t a t i v e c l a s s r e p r e s e n t e d by Ramos were not adequately represented by the McElmurry p l a i n t i f f s .

u.s.

Bank a s s e r t s the putative McElmurry class encompassed

u.s.

Bank employees, including Ramos, whose hours were reduced because of

u.s.

Bank's rounding methods.

u.s.

Bank contends the

Magistrate Judge here defined the McElmurry class too narrowly when he found i t was l i m i t e d t o employees who used manual timesheets and t h a t i t d i d n o t i n c l u d e those who used t h e same e l e c t r o n i c timesheets as Ramos. As n o t e d , h o w e v e r , t h e

5 - ORDER

plaintiffs i n M c E l m u r r y n a r r o w e d t h e i r p u t a t i v e c l a s s t o employees who used a s p e c i f i c t i m e s h e e t t h a t was completed manually using a conversion chart. Thus, the Magistrate

Judge concluded the McElmurry p l a i n t i f f s did not act in a r e p r e s e n t a t i v e c a p a c i t y f o r Ramos because they only r e p r e s e n t e d p o t e n t i a l c l a s s members who used t h e same timesheets as they d i d ;

i . e . , manual timesheets.
In summary, the Court concludes on this record that the

Magistrate Judge did not e r r when he found the issue in McElmurry and t h e i s s u e r a i s e d by Ramos a r e not i d e n t i c a l and t h a t t h e i n t e r e s t s of Ramos were not adequately r e p r e s e n t e d by t h e

McElmurry p l a i n t i f f s .

Accordingly,

the Court concludes the

c l a s s / c o l l e c t i v e a s p e c t s of t h e claims a l l e g e d by Ramos on b e h a l f of the putative truncation class are not barred by issue preclusion.

c.

Ramos's issue i s not identical to the issue in Lowdermilk.

U.S. Bank objects to the Magistrate Judge's finding that the issue raised in Lowdermilk is not identical to the issue r a i s e d by Ramos i n t h i s c a s e . U.S. Bank bases i t s objection on

i t s belief that the issues are identical because the timesheets are identical. The Magistrate Judge, however, found the The record r e f l e c t s the

timesheets differed substantially.

plaintiff in Lowdermilk did not use the electronic timesheet

6 - ORDER

that a u t o m a t i c a l l y r o u n d e d h e r h o u r s d o w n w a r d . and Order at 4. In fact,

Lowdermilk, Opin.

the Lowdermilk court excluded from

consideration the electronic timesheet submitted in that case by Ramos p r e c i s e l y b e c a u s e t h e Lowdermilk p l a i n t i f f d i d n o t u s e i t .

D.

Ramos a n d t h e p u t a t i v e t r u n c a t i o n c l a s s w e r e n o t adequately represented by the Lowdermilk plaintiff.

U.S. Bank objects to the Magistrate Judge's finding t h a t the i n t e r e s t s of t h e p u t a t i v e c l a s s r e p r e s e n t e d by Ramos were not adequately represented by the Lowdermilk plaintiff. U.S. Bank

p o i n t s o u t t h a t Ramos even s u b m i t t e d d e p o s i t i o n t e s t i m o n y i n Lowdermilk regarding his electronic timesheets. The Lowdermilk court noted the p l a i n t i f f manually calculated her hours using a conversion chart and sometimes rounded up and sometimes rounded down. Opin. and Order at 4-5. Her rounding

method a c t u a l l y r e s u l t e d i n a n e t gain of hours whereas Ramos alleges the use of his electronic timesheets always results in a loss of hours. Opin. and Order a t 3-4. Thus, the Lowdermilk

court specifically found the timesheet used by the p l a i n t i f f and the timesheet used by Ramos d i f f e r e d s u b s t a n t i a l l y and t h e p l a i n t i f f had never used the same e l e c t r o n i c timesheets as Ramos. The Lowdermilk court, therefore, concluded the p l a i n t i f f could not adequately represent the i n t e r e s t s of Ramos. Opin. and Order at 4. Lowdermilk court. Lowdermilk,

The Magistrate Judge agreed with the

7 - ORDER

In s u m m a r y , t h e C o u r t c o n c l u d e s o n t h i s r e c o r d t h a t t h e Magistrate Judge did not e r r when he found the issue i n Lowdermilk and t h e i s s u e r a i s e d b y Ramos a r e n o t i d e n t i c a l and t h a t Ramos was n o t a d e q u a t e l y r e p r e s e n t e d by t h e Lowdermilk plaintiff. Accordingly, the class/collective aspects of the

c l a i m s a l l e g e d by Ramos on b e h a l f o f t h e t r u n c a t i o n c l a s s a r e n o t barred by issue preclusion.

I I I . Smith's Objections to the Magistrate Judge's Findings and Recommendation.
Smith a s s e r t s the Magistrate Judge erred when he (1) found the issue raised in McElmurry v. U.S. Bank National Association, NO. 0 4 - C V - 6 4 2 ( D . O r . D e c . 6 , 2 0 0 6 ) ( H a g g e r t y , J . ) , a s t o t h e SSMs' claims i s i d e n t i c a l t o the i s s u e r a i s e d by Smith and (2) found Smith was adequately represented by the McElmurry plaintiffs.

A.

Smith's issue i s identical to the issue in McElmurry.

To determine whether an i s s u e i s i d e n t i c a l for purposes of issue preclusion, the Court considers the following factors: (1) [I]s there a substantial overlap between the evidence or argument to be advanced in the second proceeding and that advanced in the first? (2) [D]oes the new evidence or argument involve the application of the same rule of law as that involved in the prior proceeding? (3) [C]ould pretrial preparation and discovery related to the matter presented in the f i r s t action reasonably be expected to have embraced the matter sought to be 8 - ORDER

presented i n t h e s e c o n d ? (4) [H]ow c l o s e l y r e l a t e d a r e the claims involved i n the two proceedings?
Resolution Trust Corp., 186 F.3d a t 1116.

The Magistrate Judge applied the above factors and determined the evidence in this case and in McElmurry i s s u b s t a n t i a l l y s i m i l a r , the same law governs the SSMs' claims i n the two cases, the p r e t r i a l work embraces the same subject m a t t e r , and t h e SSMs' claims a r e c l o s e l y r e l a t e d . The Magistrate

Judge, therefore, properly concluded the issue i n these two cases is identical. Nevertheless, Smith argues the Magistrate Judge erred when h e d i d n o t c e r t i f y t h e SSM c o l l e c t i v e i n t h i s c a s e b e c a u s e t h e Magistrate Judge did not consider a "recent trend" in the Ninth Circuit to require certification of Fair Labor Standards Act (FLSA) c o l l e c t i v e s w h e n t h e e m p l o y e r r e l i e s o n a g e n e r a l j o b description to implement a blanket exemption from s t a t e and federal overtime laws and regulations for certain employees despite the actual duties performed by those employees.
e.g., See,

I n r e W e l l s F a r g o Home M o r t g a g e O v e r t i m e P a y L i t i g . ,

527 F. Supp. 2d 1053 (N.D. Cal. 2007).

The Court, however, notes

the Magistrate Judge relied on the t e s t set out in Resolution
Trust, which remains the controlling rule of law, and the

Magistrate Judge properly applied that test here.

9 - ORDER

Smith a l s o a r g u e s t h e i s s u e s a r e d i f f e r e n t i n t h e t w o c a s e s because she has requested certification of a class or collective u n d e r b o t h t h e FLSA a n d F e d e r a l R u l e o f C i v i l P r o c e d u r e 2 3 whereas the McElmurry p l a i n t i f f s sought and were denied c e r t i f i c a t i o n o n l y u n d e r t h e FLSA. Smith points out the

s t a n d a r d s f o r c e r t i f i c a t i o n o f a n FLSA c o l l e c t i v e a r e n o t identical to the standards for class certification under Federal Rule of Civil Procedure 23. Smith is correct that the "similarly

s i t u a t e d " s t a n d a r d f o r FLSA c e r t i f i c a t i o n a p p l i e d i n M c E l m u r r y i s "less stringent than the requirement under [Rule] 23." See

B a l l a r i s v . w a c k e r S i l t r o n i c C o r p . . N o . 0 0 - C V - 1 6 2 7 , WL 1 3 3 5 8 0 9 , a t *2 (D. O r . A u g . 2 4 , 2 0 0 1 ) . Thus, i f a putative class of U.S.

B a n k SSMs a l l e g i n g c l a i m s f o r f a i l u r e t o p a y o v e r t i m e w a g e s b a s e d on an improper classification as exempt employees were unable in M c E l m u r r y t o m e e t t h e l e s s s t r i n g e n t b u r d e n r e q u i r e d f o r FLSA c e r t i f i c a t i o n , t h e n t h e p u t a t i v e c l a s s o f U . S . B a n k SSMs r e p r e s e n t e d by Smith, who a l l e g e t h e same claims as t h e McElmurry p l a i n t i f f s , would not be able to meet the standards for c e r t i f i c a t i o n u n d e r e i t h e r t h e FLSA o r t h e s t r i c t e r r e q u i r e m e n t s of Rule 23. On t h i s r e c o r d , the Court concludes the Magistrate Judge did

n o t e r r w h e n h e c o n c l u d e d t h e i s s u e s r a i s e d a s t o t h e SSMs i n McElmurry and the issue here are identical. Accordingly, the

1 0 - ORDER

class/collective a s p e c t s o f t h e c l a i m s a l l e g e d b y S m i t h o n b e h a l f o f t h e SSM c l a s s a r e b a r r e d b y i s s u e p r e c l u s i o n .

B.

S m i t h a n d t h e p u t a t i v e SSM c l a s s w e r e a d e q u a t e l y r e p r e s e n t e d b y t h e MCElmur~ p l a i n t i f f s .
S m i t h o b j e c t s t o t h e M a g i s t r a t e J u d g e ' s f i n d i n g t h a t t h e SSM

c l a s s represented by Smith was adequately represented by the

McElmurry p l a i n t i f f s and that Smith could have opted into the McElmurry class i f i t had been c e r t i f i e d .
The Magistrate Judge

based his finding that Smith could have opted into the McElmurry class on the erroneous assumption that Smith began working as an SSM a t U . S . B a n k i n A p r i l 2 0 0 4 a n d t h a t t h e p u t a t i v e M c E l m u r r y c l a s s c l o s e d o n May 1 1 , 2 0 0 4 . I t is undisputed, however, that The

S m i t h b e g a n w o r k i n g a t U . S . B a n k a s a n SSM i n J u n e 2 0 0 4 .

Magistrate Judge, therefore, e r r e d when he found Smith could have opted into the McElmurry class. Nevertheless, the proper question i s whether the McElmurry plaintiffs' representation of the interests of Smith and the putative class represented by her was "'adequate' for preclusion purposes."

See Taylor, 128 S. Ct. a t 2176 ( c i t a t i o n omitted).

The Magistrate Judge found the i n t e r e s t s of Smith and those of the McElmurry p l a i n t i f f s were aligned because the p l a i n t i f f s in both cases alleged the same claims with only a temporal variation and the p l a i n t i f f s in both cases "sought vindication of the same rights." In addition, the record does not reflect the job duties

1 1 - ORDER

of t h e v a r i o u s SSMs h a v e c h a n g e d f r o m w h a t t h e y w e r e w h e n t h e

McElmurry court concluded they v a r i e d too much to c e r t i f y as a
collective. Moreover, the Magistrate Judge specifically pointed

out that the McElmurry p l a i n t i f f s were aware they were acting in a r e p r e s e n t a t i v e c a p a c i t y f o r a l l U . S . B a n k SSMs a n d t h a t t h e

McElmurry p l a i n t i f f s alleged the same claims as those alleged by
the members of the p u t a t i v e c l a s s now represented by Smith. In

a d d i t i o n , a s n o t e d , S m i t h ' s p u t a t i v e SSM c l a s s o p e n e d a s e a r l y a s A p r i l 6 , 2 0 0 4 , a n d t h e p u t a t i v e SSM c l a s s i n M c E l m u r r y c l o s e d May 11, 2004, and, overlapped. On t h i s r e c o r d , t h e C o u r t c o n c l u d e s t h e M a g i s t r a t e J u d g e d i d not e r r when he concluded Smith was adequately represented by the thus, the periods in which their claims arose

McElmurry p l a i n t i f f s .

Accordingly, the class/collective aspects

of the claims alleged by Smith on behalf of the putative class of SSMs a r e b a r r e d b y i s s u e p r e c l u s i o n .

CONCLUSION

T h e C o u r t ADOPTS M a g i s t r a t e J u d g e P a p a k ' s F i n d i n g s a n d R e c o m m e n d a t i o n ( # 2 0 2 ) a n d , a c c o r d i n g l y , DENIES D e f e n d a n t U.S. Bank's Motion for P a r t i a l Summary Judgment (#184) as t o the c l a s s / c o l l e c t i v e a s p e c t s o f t h e claims a l l e g e d by P l a i n t i f f Ramos o n b e h a l f o f t h e p u t a t i v e t r u n c a t i o n c l a s s a n d GRANTS U . S . B a n k ' s Motion as to the class/collective aspects of the claims alleged 1 2 - ORDER

by P l a i n t i f f S m i t h o n b e h a l f o f t h e p u t a t i v e S a l e s a n d S e r v i c e M a n a g e r s e m p l o y e e s (SSM) c l a s s . I T I S SO ORDERED. DATED t h i s

~ay of

May, 2 0 0 9 .

A N N A J . BROWN United States District Judge

(lr'vf~~_ _

1 3 - ORDER