Tag Archives: United States Supreme Court

Plaintiffs in Wage & Hour Class Action Granted Temporary Restraining Order

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In an unusual move, plaintiffs in Arrendondo v. Delano Farms Company, No. CV F 09-1247 LJO DLB, 2010 WL 3212000 (E.D. Cal. Aug. 10, 2010), sought and were granted a temporary restraining order.  Plaintiffs filed an Application pursuant to  Fed. R. Civ. P. 65 requesting a Temporary Restraining Order (“TRO”) against defendant Delano Farms Company to restrain potential retaliation and threats to witnesses and putative class members by defendant.  The Application was supported by declarations of three witnesses and potential class members who heard threats by a supervisor of Delano Farms as well as declarations from Jessica Arciniega and Thomas P. Lynch, attorneys representing plaintiffs, and Aida Sotelo, a paralegal who investigated the threats. Continue reading

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Central District Remands Class Action Based on Local Controversy Exception to CAFA

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In Coleman v. Estes Express Lines, Inc., No. CV 10-2242 ABC (AJWx), — F. Supp. 2d —-, 2010 WL 3156850 (C.D. Cal. July 19, 2010) a wage and hour plaintiff brought a motion to remand, after the case was removed pursuant to CAFA.  The Court granted Plaintiff’s remand motion.

While Defendants have demonstrated that more than $5,000,000 is in controversy under CAFA, Plaintiff has demonstrated that CAFA’s Local Controversy exception applies in this case. Therefore, the Court must decline to exercise jurisdiction. See Serrano, 478 F .3d at 1022. Plaintiff’s motion is GRANTED and this case is REMANDED to Los Angeles Superior Court.

Plaintiffs were represented by Mark P. Estrella, Miriam L. Schimmel, Robert E. Byrnes, Sue Jin Kim of Initiative Legal Group APC and Payam Shahian of Strategic Legal Practices APC.

Defendants were represented by David L. Terry, David L. Woodard of Poyner Spruill LLP and Sarah N. Drechsler and Timothy M. Freudenberger of Carlton Disante & Freudenberger LLP.

The judge is Hon. Audrey B. Collins.

By CHARLES H. JUNG

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Southern District of California Denies Remand in Case Asserting CAFA Jurisdiction

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In Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN (CAB), 2010 WL 3154847 (S.D. Cal. Aug. 9, 2010) the Southern District of California faced a remand motion in a wage and hour case that had been removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1441, 1453.

Judge Roger T. Benitez denied the motion to remand.  Defendant presented a calculation of damages, supporting its calcualtions with declaration from, among other people, the Assistant Controller, Operations, for U.S. Vision, Inc., responsible for enforcing Defendants’ payroll policies and procedures.  The declaration set forth Plaintiff’s most recent hourly rate of pay, as well as the specific number of optical managers and optechs employed during the Class Period, average hourly rates of pay for managers and optechs, number of employees who separated their employment with Defendants, and number of possible wage statements for each employee per year.

Plaintiff argued that Defendants miscalculated the amount in controversy because:

Defendants erroneously assumed “each class member was damaged to the same extent that Plaintiff Johnson was, and that every putative class member, among other things, worked off the clock and incurred a break violation every single day of the entire class period.” Mot. 6. Plaintiff emphasizes that Defendants have access to more specific figures to calculate the amount in controversy and that “each [class] member can be identified using information contained in Defendants’ payroll, scheduling and personnel records.” Compl. ¶ 39.

But the Court held that absent a “persuasive argument that Defendants are required to prove actual damages in order to remove this action, however, the Court must consider the amount put in controversy by the Complaint, not the ultimate or provable amount of damages.”  (citing Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005).)  The Court found that, having based their calculations on allegations provided in the Complaint, Defendants proved with a legal certainty that CAFA’s jurisdictional threshold is satisfied.

Despite Plaintiff’s attempt to provide supplemental information in the motion to remand, Defendants were entitled to, and did, use the factual allegations in the Complaint to calculate the amount in controversy. See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992) (holding that defendant must use specific factual allegations or provisions in the complaint to support its argument of proper removal). The Court finds that Defendants provided detailed and competent evidence supporting their calculations and showing, to a legal certainty, that the jurisdictional threshold under CAFA is met. To the extent subsequent events show that jurisdiction would not be proper, the Court can address remand at that time. 28 U.S.C. § 1447(c).

By CHARLES H. JUNG

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Judge Walker Lifts Stay

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Judge Vaughn R. Walker of the Northern District of California today lifted a stay on his decision where he ruled that Proposition 8 was unconstitutional.  Judge Walker, however, delayed implementation of the order to lift his stay until August 18.

Defendant-intervenors Dennis Hollingsworth, Gail Knight, Martin Gutierrez, Mark Jansson and ProtectMarriage.com brought a motion to stay the court’s judgment last week to ensure that Proposition 8 remains in effect as they pursue their appeal in the Ninth Circuit. In the alternative, proponents sought a brief stay to allow the court of appeals to consider the matter.

San Francisco asked the court to deny the stay and order the injunction against Proposition 8 to take effect immediately. California’s Governor and Attorney General also opposed any stay.

The Court held that “[b]ecause proponents fail to satisfy any of the factors necessary to warrant a stay, the court denies a stay except for a limited time solely in order to permit the court of appeals to consider the issue in an orderly manner.”

Federal courts look to four factors in deciding whether a stay is appropriate:

(1) whether proponents have made a strong showing that they are likely to succeed on the merits;

(2) whether proponents will be irreparably injured absent a stay;

(3) whether the stay will substantially injure other interested parties; and

(4) whether the stay is in the public interest.

See Nken v. Holder, 556 U.S. —-, 129, S. Ct. 1749, 1761 (2009) (noting overlap with Winter v. Natural Resources Defense Council, Inc., 555 U.S. —-, 129 S. Ct. 365, 374 (2008)).  The first two factors “are the most critical.”  Nken, 129 S. Ct. at 1757.

The order reads:

None of the factors the court weighs in considering a motion to stay favors granting a stay. Accordingly, proponents’ motion for a stay is DENIED. Doc #705. The clerk is DIRECTED to enter judgment forthwith. That judgment shall be STAYED until August 18, 2010 at 5 PM PDT at which time defendants and all persons under their control or supervision shall cease to apply or enforce Proposition 8.

By CHARLES H. JUNG

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Second District Holds that Federal Choice of Law Provision in Arbitration Agreement Requires Application of Vacatur Provisions of FAA

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In a 3-0 opinion, the Second District held that while California state courts do not apply the FAA vactur provisions, because of the choice of law provision in the arbitration agreement, the trial judge was required to utilize the vacatur provisions of the FAA in passing on the amended petition to vacate the partial arbitration awards.

In Countrywide Financial Corp. v. Bundy, — Cal.Rptr.3d —-, 2010 WL 3064481 (Cal. Ct. App. 2d Dist. August 06, 2010), Defendants, Thomas Bundy, Misty Sanchez, Kevin Prevost and David Godina, appealed from an order vacating partial arbitration awards against plaintiffs, Countrywide Financial Corporation and Full Spectrum Lending, Inc.

The underlying case involved two arbitrations that were ultimately consolidated. The Bundy-Sanchez-Prevost arbitration demand sought classwide arbitration of claims for unpaid wages including incentive compensation, waiting penalties, costs and attorney fees pursuant to Labor Code section 200 et seq., Business and Professions Code section 17200 et seq., and common law principles.  The Godina arbitration demand alleged many of the same matters in terms of plaintiffs’ operations.

The arbitrator issued partial arbitration awards in favor of defendant.  Judge Elizabeth A. White vacated the partial arbitration awards on the ground the arbitrator committed a number of legal errors.  The Second District concluded that because of the unambiguous choice of law language in the agreements to arbitrate, “we must apply the vacatur provisions applicable before a United States District Court in a case subject to the Federal Arbitration Act. (9 U.S.C. § 1 et seq.)”  Applying the vacatur provisions of the Federal Arbitration Act, the Court of Appeal reversed, finding “no grounds permitted the partial awards to be vacated.”

The Court expressed doubt regarding whether the “manifest disregard of the law standard” survives Hall Street Associates L.L.C., but it chose to evaluate the interim awards under both title 9 United States Code section 10(a)(4) and the manifest disregard of the law test.  ; the course chosen by the Supreme Court in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at page —- [130 S.Ct. at page 1768].”  The Court described the manifest disregard standard as follows:

The first element is the arbitrator must know the governing rule of law and refuse to apply it or ignore it. The second element is that the law ignored by the arbitrator is well-defined, explicit, and clearly applicable to the case.

Presiding Justice Paul A. Turner wrote the opinion.  Hon. Sandy R. Kriegler and Hon. Richard M. Mosk concurred.

Defendants and appellants were represented by Caryl L. Boies, Sigrid S. McCawley and Lauren E. Fleischer of Boies, Schiller & Flexner.

Plaintiffs and Respondents were represented by Andrew M. Paley, Gregg A. Fisch and Jennifer Sloane Abramowitz of Seyfarth Shaw.

By CHARLES H. JUNG

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