Schedler v. Fieldturf USA, Inc. et al

Filing 94

Opinion and Order - The Court ADOPTS IN PART the Findings and Recommendation (ECF 82 ), as discussed and supplemented herein. Defendants' Motion to Certify Order for Interlocutory Appeal or in Alternative Certify Questions or in the Alternative Certify Questions of Law to the Oregon Supreme Court (ECF 70 ) is DENIED. Signed on 1/17/2018 by Judge Michael H. Simon. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

JOHN SCHEDLER, an individual,
Plaintiff,

Case No. 3:16-cv-0344-PK
OPINION AND ORDER

v.
FIELDTURF USA, INC., a foreign
corporation, et al.,
Defendants.
Michael H. Simon, District Judge.
David A. Schuck and Leslie E. Baze, SCHUCK LAW, LLC, 9208 NE Highway 99, #107-84,
Vancouver, WA 98665. Of Attorneys for Plaintiff.
Paul E. Loving and Jeremy N. Pyle, THE CONSUL GROUP, 1706 NW 24th Avenue, Portland OR
97210. Of Attorneys for Defendants.
United States Magistrate Judge Paul Papak issued Findings and Recommendation in this
case on October 16, 2017. ECF 82. Judge Papak recommended that Defendants’ motion to
certify this Court’s Order relating to choice of law for interlocutory appeal or, in the alternative,
to certify the underlying questions of law to the Oregon Supreme Court be denied.
Under the Federal Magistrates Act (“Act”), the Court may “accept, reject, or modify, in
whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C.

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§ 636(b)(1). If a party files objections to a magistrate’s findings and recommendations, “the court
shall make a de novo determination of those portions of the report or specified proposed findings
or recommendations to which objection is made.” Id.; Fed. R. Civ. P. 72(b)(3).
For those portions of a magistrate’s findings and recommendations to which neither party
has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S.
140, 152 (1985) (“There is no indication that Congress, in enacting [the Act], intended to require
a district judge to review a magistrate’s report to which no objections are filed.”); United States.
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the court must
review de novo magistrate’s findings and recommendations if objection is made, “but not
otherwise”). Although in the absence of objections no review is required, the Act “does not
preclude further review by the district judge[] sua sponte . . . under a de novo or any other
standard.” Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed. R. Civ. P.
72(b) recommend that “[w]hen no timely objection is filed,” the Court review the magistrate’s
recommendations for “clear error on the face of the record.”
Defendants filed an objection to the Findings and Recommendation. ECF 86. Plaintiff
responded to Defendants’ objections. ECF 88. Defendants argue that the Court should review the
Findings and Recommendation de novo and Plaintiff argues that the Court should review it for
clear error. Because the Court’s conclusion would be the same under either review, the Court
will review the issues de novo. The Court adopts the Legal Standards and Material Facts section
of the Findings and Recommendation.
DISCUSSION
A. Interlocutory Appeal
A court may certify an issue for interlocutory appeal if three requirements are met: (1) “a
controlling question of law” must be present; (2) there must be a “substantial ground for
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difference of opinion” as to the controlling question; and (3) “an immediate appeal from the
order may materially advance the ultimate termination of the litigation.” See 28 U.S.C.
§ 1292(b). Such certification should only be granted “in extraordinary cases where decision of an
interlocutory appeal might avoid protracted and expensive litigation.” U.S. Rubber Co. v.
Wright, 359 F.2d 784, 785 (9th Cir. 1966). Defendants argue that all three elements are met in
this case and that the Findings and Recommendation erred in finding that all three elements are
not met.
1. Controlling question of law
Defendants argue that choice of law is a controlling question of law in this case.
Defendants primarily rely on United States v. Woodbury, which noted that a controlling question
of law must involve a “fundamental” determination. 263 F.2d 784, 787 (9th Cir. 1959). The court
in Woodbury gave as one of several examples of such fundamental determinations a case holding
that the rights of the United States would be determined by state instead of federal law and that
choice-of-law determination resulted in the denial of an application for receivership that would
otherwise have been granted and “might also have led to other results seriously affecting the
relief otherwise available to the government.” Id.
Defendants also cite to Hoffman v. Citibank (South Dakota) N.A., in which the Ninth
Circuit granted interlocutory appeal on the district court’s choice-of-law determination to apply
South Dakota law instead of California law, when that determination resulted in the district court
compelling arbitration. 546 F.3d 1078 (9th Cir. 2008). They also cite to Phillips v. Amoco
Trinidad Oil Co., in which the Ninth Circuit reviewed on interlocutory appeal the district court’s
choice-of-law determination to apply the law of Trinidad instead of the United States (the Jones
Act) for the tort claims of Trinidad citizens who were injured while working on an American
vessel. 632 F.2d 82 (9th Cir. 1980). Finally, Defendants cite to Schoenberg v. Exportadora de
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Sal, SA de CV, 930 F.2d 777 (9th Cir. 1991). In this case the Ninth Circuit reviewed on
interlocutory appeal (consolidated with an interlocutory appeal of the denial of a motion to
dismiss brought on grounds of foreign sovereign immunity) the district court’s determination that
California law applied instead of Mexican law for personal injury claims arising out of a plane
crash. Mexico law would limit damages and California law did not limit damages. Id. at 782.
None of these cases expressly analyzed whether or under what circumstances choice-of-law was
a controlling issue of law for purposes of an interlocutory appeal, but by considering choice of
law on interlocutory appeal, implicitly so found.
Although there are circumstances, such as in the cases cited by Defendants, where a
choice of law determination is so fundamental that it is considered controlling for purposes of
§ 1292(b), this case does not involve one of those situations. Unlike where choice of law results
in arbitration being compelled, the appointment or denial of a receiver, or other major
substantive rights being altered (such as the ability to bring personal injury tort claims or to
assert unlimited damages versus capped damages), here the differences between Washington and
Oregon wage and hour laws are not substantial enough to make the choice of law determination
“fundamental” and thus controlling. See, e.g., ECF 88 at 10 (citing cases). The Court also agrees
with Judge Papak that the choice of law issue does not involve a question of “pure law” but
instead requires a detailed analysis of the factual record.
2. Substantial ground for difference of opinion
Defendants assert that the choice of law question in this case is a novel and difficult
question of first impression and thus there is substantial ground for a difference of opinion. This
argument is partially based on a misunderstanding of the Court’s Opinion and Order.
Defendants argue that the Court “relied” on pre-codification cases in determining that
Oregon law governs this case. The Court, however, followed Oregon Revised Statutes § 15.445.
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Step one of the statute is to identify states with relevant contacts, and the Court identified
Washington and Oregon. Schedler v. FieldTurf USA, Inc., 2017 WL 3412205, at *3 (D. Or.
Aug. 9, 2017). Step two is to identify the policies embodied in those states on the disputed
issues, and step three is to “evaluate the relative strength and pertinence” of each state’s policies.
Or. Rev. Stat. § 15.445(2)-(3). The Court performed a combined analysis of steps two and three.
Schedler, 2017 WL 3412205, at *3-4. The Court identified Oregon’s wage-and-hour policies and
emphasized that Plaintiff meets Oregon’s definition of an “employee.” Id. The Court noted that
although Defendants assert that Washington has relevant policies protecting employees,
Defendants provide no authority that Plaintiff qualifies as an employee under Washington law
(whereas Plaintiff does qualify as an employee under Oregon law). Id. at *4. The Court then
stated: “Regardless, assuming, arguendo, that Plaintiff would qualify as a Washington employee
and that Washington does have a substantial interest in this case, Oregon’s interest is not clearly
less than Washington’s.” Id. (emphasis in original). To support this conclusion under these
alternative factual assumptions, the Court cited several pre-codification cases, which Defendants
assert was erroneous.
The Court’s choice-of-law determination was not novel or an issue of first impression.
The Court followed the statutory steps. Without authority that Plaintiff was an employee under
Washington law, there was no legitimate question regarding choice of law. It was only under the
Court’s alternative assumption that Plaintiff could be considered an employee under Washington
law that the § 15.445(3) analysis of evaluating the relative strength of Washington and Oregon’s
policies, and the Court’s citation to pre-codification case law, became relevant.
Even for this aspect of the Court’s Opinion and Order, however, the Court does not find
grounds for a substantial difference of opinion. Defendants try to frame the question broadly as

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whether pre-codification case law is at all relevant to post-codification choice of law analysis.
But the issue for which these cases were cited is much narrower. Section 15.445(3) instructs
courts to evaluate the relative strength of the policies of the relevant states. Although the term
has changed from “interest” to “relative strength,” the underlying principle from the cited precodification cases is the same—courts must still weigh one state against the other. There is no
indication (and Defendants point to no authority so indicating) that where, all other factors being
the same, both states have an equal interest (or equal “strength”) in the case, Oregon’s policy of
having its interest (or strength) prevail has changed. Nor do Defendants posit a different method
for determining which state’s choice of law should prevail when both states’ interests are equal.1
Moreover, even if no court has yet to specifically address how to weigh competing state’s
interests for noncontractual claims under Section 15.445(3), that would not necessarily make the
case appropriate for interlocutory appeal. Couch v. Telescope, Inc., 611 F.3d 629, 634 (9th
Cir. 2010) (“It is well settled that ‘the mere presence of a disputed issue that is a question of first
impression, standing alone, is insufficient to demonstrate a substantial ground for difference of
opinion.’” (quoting In re Flor, 79 F.3d 281, 284 (2d Cir. 1996))); 3 Fed. Proc., Lawyers
Ed. 3:218 (2010) (noting that “just because a court is the first to rule on a particular question . . .
does not mean there is such a substantial difference of opinion as will support an interlocutory
appeal”). Interlocutory appeal is for “extraordinary cases,” not “merely to provide review of
difficult rulings in hard cases.” U.S. Rubber, 359 F.2d at 785; see also James v. Price Stern
Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002) (noting that certification is appropriate only
1

Regardless, the Court did not conclude that Washington and Oregon’s interests were
equal and thus Defendants’ concerns are an academic exercise. See Schedler, 2017 WL 3412205,
at *4 (reiterating in the choice-of-law holding that Plaintiff is an employee under Oregon law,
that Oregon has substantial policies relating to the disputed issues in the case, and that those
policies are strong and directly relevant).
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in “rare circumstances”). “Section 1292(b) is a departure from the normal rule that only final
judgments are appealable, and therefore must be construed narrowly.” James, 283 F.3d at 1068
n.6.
3. Materially advance the litigation
The Court agrees with Judge Papak that certification for interlocutory appeal will not
materially advance the litigation and adopts this portion of the Findings and Recommendation.
See also ECF 88 at 18-20 (citing cases).
B. Certification to Oregon Supreme Court
Defendants also object that the Findings and Recommendation erroneously concluded
that the questions proposed to be certified to the Oregon Supreme Court would not be
determinative of any of Plaintiff’s claims in their entirety. Defendants argue that Judge Papak
placed a higher burden than is required by the Oregon Supreme Court. Defendants assert that the
Oregon Supreme Court only requires that the questions proposed may be determinative of the
cause or have the potential to be determinative of a claim. Defendants argue that the
“determinative” element of the certification test is substantively similar to the first element of
§ 1292(b) certification , and thus for the same reasons this case meets that prong, it meets this
element.
As discussed above, the Court (and Judge Papak) has found that this case does not meet
the first element of the § 1292(b) test (that the issue is a controlling issue of law, meaning that it
involves a determination that is fundamental to the outcome of the case). Similarly, as
Judge Papak found, the questions presented do not have the potential to be determinative of any
claim asserted by Plaintiff. Plaintiff asserts one claim for relief—that he was not timely paid all
he was owed upon discharge. He claims that Defendants owe him more than $100,000 in unpaid
wages. Plaintiff also seeks statutory penalties, interest, and attorney’s fees. If Defendants were to
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have their questions certified and the answers to the certified questions were to result in
Washington law being applied, that might result in Plaintiff not being able to claim certain
statutory penalties. This is because Plaintiff’s final paycheck would not be considered as “paid
late” under Washington law, but is considered “paid late” under Oregon law. Whether Plaintiff is
entitled to those specific statutory penalties, however, does not resolve Plaintiff’s basic claim for
relief. Plaintiff’s claim that he was not timely paid all of the amounts owed to him upon
discharge would still remain because the more than $100,000 that he claims he was owed is
unrelated to Oregon’s statutory requirement that final checks be paid within one day of
termination.
CONCLUSION
The Court ADOPTS IN PART the Findings and Recommendation (ECF 82), as discussed
and supplemented herein. Defendants’ Motion to Certify Order for Interlocutory Appeal or in
Alternative Certify Questions or in the Alternative Certify Questions of Law to the Oregon
Supreme Court (ECF 70) is DENIED.
IT IS SO ORDERED.
DATED this 17th day of January, 2018.

/s/ Michael H. Simon
Michael H. Simon
United States District Judge

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