Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Los Angeles County JCCP No. 4412, Daniel Solis Pratt, Judge.
The Law Offices of Jon Webster, Jon Webster, Alexandra Seldin and Michael Devin for Defendants and Appellants Anthony Alvo and Daniel Fernandez.
Rockard J. DelGadillo, City Attorney, Claudia McGee Henry, Senior Assistant City Attorney, and Kim Rodgers Westhoff, Deputy City Attorney, for Plaintiff and Respondent City of Los Angeles.
OPINION
McKinster J.
This appeal presents two issues: Did the trial court abuse its discretion when it denied a petition to certify a collective action pursuant to the Fair Labor Standards Act (29 U.S.C. § 216(b))? If so, did the denial of certification violate due process? Because we conclude that the order is not appealable, however, we need not reach either issue.
FACTUAL AND PROCEDURAL HISTORY
On August 9, 2001, the City of Los Angeles (the city) filed a complaint in San Bernardino County Superior Court for breach of contract, quantum meruit and fraud against Anthony Alvo, a resident of that county, alleging that Alvo was required by the terms of a contract he signed upon his employment as a police officer with the Los Angeles Police Department (LAPD) to reimburse the city $34,000, representing a portion of the cost the city incurred in training Alvo. The contract, referred to in these proceedings as the “acknowledgment,” provides that if Alvo resigned from the LAPD less than 60 months after he completed his training at the Los Angeles Police Academy and was hired by another law enforcement agency within one year after the date of his resignation, he would be required to repay a prorated portion of the cost of his training at the police academy. Alvo answered the complaint, denying the allegations and asserting affirmative defenses, including the assertion that the acknowledgment violated the federal Fair Labor Standards Act (FLSA) (29 U.S.C. § 201 et seq.). Alvo and Daniel Fernandez filed a cross-complaint and then a first amended cross-complaint, on behalf of themselves and others similarly situated. Fernandez was also a former LAPD officer who had signed the acknowledgment, and the city had threatened him with legal action. However, as of April 30, 2002, the date of filing the first amended cross-complaint, the city had not yet filed suit against him. (The city did file suit against a Daniel Fernandez on September 27, 2004.)
The document is entitled “Acknowledgment of Los Angeles Police Department’s Intent To Seek Reimbursement Of Costs Of Basic And Lateral Training, And Agreement To Repay Pro-Rated Costs Of Training.” It is authorized by Los Angeles Administrative Code section 4.1700.
We take judicial notice of the complaints filed against various former LAPD officers who were allegedly subject to the acknowledgement. (Evid. Code, § 452, subd. (d).)
The first amended cross-complaint alleged, among other things, that the acknowledgment violates provisions of the FLSA which prohibit an employer from compelling an employee to refund any portion of his or her wages. (29 U.S.C. §§ 206, 215(a)(2); 29 C.F.R. § 531.35 (2007).) Title 29 United States Code section 216(b) (hereafter section 216(b)) authorizes the filing of a complaint on behalf of the plaintiff and others similarly situated. Alvo and Fernandez sought a declaration that the acknowledgment violated the FLSA, restitution of all back wages and/or sums seized or recovered from those similarly situated to the named cross-complainants, and for liquidated damages according to the statute. Approximately 28 other individuals filed opt-in notices to the cross-complaint.
The cross-complaint asserted additional causes of action; however, this appeal pertains solely to the cause of action for violation of the FLSA.
As it pertains to the issues in this case, section 216(b) provides as follows:
In collective actions brought pursuant to the FLSA, employees wishing to be part of the action must opt in, rather than opting out as in class action suits. (§ 216(b).)
The city filed breach of contract claims in Los Angeles County against four additional defendants. Alvo and Fernandez sought to have all of the lawsuits litigated in a coordinated proceeding in San Bernardino County. (The suit against Alvo was filed in San Bernardino County because he resides there.) The Chair of the Judicial Council authorized the presiding judge of the San Bernardino Superior Court to assign a coordination judge. Judge Shahla Sabet was assigned. Judge Sabet ordered coordination of the five cases, and recommended that the cases be tried in Los Angeles County, outside the city limits of the City of Los Angeles. Judge Sabet designated this court as the court for any writ or appellate relief. Judge Sabet also ordered that seven additional “add-on” cases, which had by then been filed, be stayed until a coordination judge had been appointed and had ruled on the appropriateness of coordinating the add-on cases.
Section 404.2 of the Code of Civil Procedure provides that the coordination motion judge shall select the reviewing court having appellate jurisdiction if the actions to be coordinated are within the jurisdiction of more than one appellate court. In contrast, the coordination motion judge merely recommends to the Chair of the Judicial Council a particular superior court for trial of the coordination proceedings. (Cal. Rules of Court, rule 3.530(a).)
Judge Daniel Solis Pratt, sitting in Norwalk, was assigned as the coordination judge. Judge Pratt ordered what was by then a total of 34 cases coordinated. However, litigation would proceed only on the original five cases. The remaining cases, and any additional cases filed thereafter, which would also be joined in the coordinated actions, would be stayed pending resolution of the five original cases.
Thereafter, Alvo and Fernandez filed a motion to certify the cross-complaint as a collective action pursuant to section 216(b). Judge Pratt denied the motion. In ruling on the motion, and on a subsequent motion for reconsideration, Judge Pratt clarified his ruling on coordination, explaining that the coordination order applied only to the complaints filed by the city and to the cross-complaint filed by Alvo and Fernandez. It did not permit the other defendants, or any other individuals who were arguably similarly situated, to join the cross-complaint. As the judge summarized it, the result of his ruling was that individuals who had not been sued by the city were not parties, and the individuals who had been sued by the city were not parties to the cross-complaint. He acknowledged that this ruling eliminated all cross-complainants except Alvo and Fernandez. However, he also acknowledged that the defendants could individually file cross-complaints.
From this point forward, references to the “cross-complaint” refer to the first amended cross-complaint.
Alvo and Fernandez (hereafter appellants) filed a timely notice of appeal from the order denying certification.
THE ORDER DENYING CERTIFICATION AS A COLLECTIVE ACTION IS NOT IMMEDIATELY APPEALABLE
Appellants assert that the order denying certification of their cross-complaint as a collective action under the FLSA is analogous to an order denying certification of a class for purposes of a class action lawsuit, and that the order is therefore immediately appealable under the “death knell” rule.
The death knell doctrine, established in Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695 (Daar), is a “tightly defined and narrow concept.” (Farwell v. Sunset Mesa Property Owners Assn., Inc. (2008) 163 Cal.App.4th 1545.) In Daar, the California Supreme Court held that an order denying class certification and allowing the suit to proceed only for the named plaintiff is immediately appealable because it is tantamount to a dismissal of the action as to all members of the class other than the plaintiff and is therefore effectively a final judgment as to them. (Daar, at p. 699.)
A collective action under the FLSA differs from a class action, primarily because members of the putative class must affirmatively opt in to the litigation, rather than opting out as in a traditional class action, and are not bound by its results unless they do opt in. (See McElmurry v. U.S. Bank Nat. Assn. (9th Cir. 2007) 495 F.3d 1136, 1139.) Nevertheless, the federal courts generally recognize a collective action under the FLSA as a type of class action. (See, e.g., Skirchak v. Dynamics Research Corp. (1st Cir. 2007) 508 F.3d 49, 58; Jonites v. Exelon Corp. (7th Cir. 2008) 522 F.3d 721, 722, 726.) It serves the same function as a class action—to lower the cost to plaintiffs of litigating what are often small claims and to benefit the judicial system by efficient resolution in one proceeding of common issues of law and fact. (Hoffmann-La Roche, Inc. v. Sperling (1989) 493 U.S. 165, 170; Skirchak v. Dynamics Research Corp., supra, 508 F.3d at p. 58; cf. Gentry v. Superior Court (2007) 42 Cal.4th 443, 457-463.) Accordingly, we will assume that an order denying certification of a collective action under the FLSA brought in a California state court may be appealable under the death knell doctrine.
The United States Supreme Court rejected the death knell doctrine in federal class action suits, holding, that, “[a]n order refusing to certify, or decertifying, a class does not of its own force terminate the entire litigation because the plaintiff is free to proceed on his individual claim.” (Coopers & Lybrand v. Livesay (1978) 437 U.S. 463, 467.)
An order denying certification constitutes a final judgment only if it effectively terminates the action as to all putative class members except the named plaintiff. (Daar, supra, 67 Cal.2d at pp. 698-699.) Appellants contend that denial of certification in this case terminated the trial court proceedings on the cross-complaint for all of the individuals who had attempted to opt in as cross-complainants. This is simply not true. As appellants acknowledge, all but two of the individuals who attempted to opt in as cross-complainants were eventually sued by the city and are therefore parties in the coordinated action as defendants. The court’s order did not preclude the defendants from filing individual cross-complaints for affirmative relief under the FLSA. On the contrary, the court expressly acknowledged that the defendants in the coordinated cases could each file an individual cross-complaint. Accordingly, as to the individuals who are currently defendants, the order had no “terminal” effect whatsoever. Moreover, because the court will try five representative cases, including appellant Alvo’s cross-complaint, while staying the rest, the common legal issues—whether the acknowledgement violates the FLSA and if so, whether the defendants have a cause of action for damages—will be decided as to all of the opt-ins in a representative action in any event. In effect, this gives the opt-ins the same benefits they would have received if the court had certified the collective action.
Appellants contend that the order is nevertheless a death knell order because some individuals may be time-barred from seeking affirmative relief under the FLSA unless they are allowed to join in the original cross-complaint. The only individuals they identify who might be so affected are Dustin Kato and Corey Austin. Kato and Austin, who filed opt-in consents, have not been sued by the city, as far as the record shows.
In their first petition for rehearing, defendants assert that any claims Kato and Austin had against the city would be time-barred unless they were allowed to join in the existing cross-complaint. 29 United States Code section 255(a) provides for a two-year statute of limitations for nonwillful violations of the FLSA and for a three-year statute of limitations for willful violations. Appellants assume that a cause of action under the FLSA accrues on the date that the former employee’s employment terminated. They argue that if Kato’s and Austin’s employment with the city terminated on the dates each signed his opt-in notice (August 11, 2004 and March 23, 2005, respectively), the two- or three-year statute of limitations would have run no later than August 12, 2008, as to Kato and no later than March 23, 2008, as to Austin. They do not cite any authority which supports their position that a cause of action for damages under the FLSA arises upon termination of employment, however, and the record is silent as to the actual dates of termination of Kato’s and Austin’s employment. We will not speculate as to the effect of the order on Kato and Austin. Moreover, even if the court’s order did leave Kato and Austin out in the cold, it did not dismiss the action as to all of the claimants except appellants. It therefore does not qualify as a death knell order. (Daar, supra, 67 Cal.2d at p. 699.)
In their second petition for rehearing, appellants assert that we have ignored the effect of the order on “unnamed parties who are similarly situated to [appellants] but who have not yet been sued.” The court’s coordination order joins all current suits and any future suits filed against former employees under the acknowledgment during the pendency of the coordinated action, and the court specifically ordered the city to ensure that all such actions are brought into the coordinated action, regardless of the county in which they are filed. The order denying certification thus has no preclusive effect on individuals who may yet be sued by the city.
This is not an issue raised by appellants in their opening brief, nor even in their first petition for rehearing. We nevertheless granted rehearing to consider this contention.
Appellants sought certification primarily because certifying the cross-complaint as a collective action under the FLSA would have permitted the court to order the city to identify other employees who were subject to the acknowledgment and thereby permit appellants to inform those individuals of their right to join the cross-complaint. This is indeed one of the functions of certification. (Hoffmann-La Roche, Inc. v. Sperling, supra, 493 U.S. at pp. 170-172.) As appellants assert, denial of certification may impede their ability to notify other individuals, who are arguably similarly situated, of the pendency of the action. Nevertheless, because the order denying certification does not dismiss the claims of all class members except appellants, it does not fall within the narrow scope of the death knell doctrine. (Daar, supra, 67 Cal.2d at p. 699.)
We emphasize that we do not hold or imply that the trial court did not err in denying certification. We merely hold that the appeal is taken from a nonappealable order and is therefore premature.
DISPOSITION
The appeal is dismissed. The parties are to bear their own costs on appeal.
We concur: Ramirez P.J., Gaut J.
“Any employer who violates the provisions of section 206 or section 207 of [title 29] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . . An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. . . .”