Opinion
Case No. 05cv1680-LAB (RBB).
February 23, 2006
ORDER GRANTING MOTION TO DISMISS [Dkt No. 13]
This putative class action alleging, among other things, defendant Staples, Inc. violated various fair labor standards, is before the court on Staples' motion to dismiss or, in the alternative to stay this action ("Motion"). Staples contends this case is duplicative of a class action that has been pending for over six years in the California Superior Court, County of Orange, Civil Complex Center, entitled Staples Overtime Cases. Dkt No. 13. After the Motion was filed, the parties submitted a stipulation requesting this action be stayed pending resolution of the Staples Overtime Cases. Dkt No. 17. By Order entered January 31, 2006, the court denied the parties' request on grounds the duration of the requested stay was too indefinite to justify holding this case in abeyance. Dkt No. 18. The Motion is now fully briefed. The court finds the issues presented are appropriate for decision on the papers and without oral argument, pursuant to Civil Local Rule 7.1(d)(1). For the reasons discussed below, the Motion is GRANTED.
Plaintiff Jennifer E. Jodar alleges that she is a former Sales Manager and Operations Manager employee of Staples who was "improperly classified as an exempt, managerial employee for purposes of state and federal wage and hour law." Opp. 1:20-23. She "contends that she was not paid earned overtime compensation to which she would have been entitled had she been properly classified, nor did she receive meal and rest breaks as required under California law for non-exempt employees." Opp. 1:23-26. She filed her federal putative class action on August 25, 2005, predicated on diversity jurisdiction, asserting claims for unpaid overtime, failure to provide meal and rest breaks, and unfair business practices, all under California law.
Ms. Jodar acknowledges that a Second Amended Coordinated Complaint had been filed in the Staples Overtime Cases state action on January 26, 2004, asserting claims for unpaid overtime, unfair business practices, and conversion. See Porcaro Decl. Exh. B. Three subclasses have already been certified in that consolidated state action, by Order entered November 10, 2005.Id., Exh. D. The state action encompasses an assistant general manager class, of which Jodar does not dispute she is a member, and alleges three causes of action for Staples' alleged failure to pay overtime wages in violation of: California Labor Code §§ 201, 204, 106, 216, 218, 500 et seq., 1194, and 1198; Business and Professions Code §§ 17200, 17203; and Conversion. Porcaro Decl. Exh. B. Ms. Jodar's federal action alleges three causes of action for violations of: obligations to pay overtime wages (California Labor Code §§ 203, 218, 510, 1198, 2698); obligations to provide meal and/or rest breaks (Labor Code § 512, 226.7); and Business and Professions Code §§ 17200, 17203.
Staples moves to dismiss this case in reliance on the abstention doctrine elaborated in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 815 (1976) ("Colorado River doctrine"), arguing the federal case is entirely duplicative of the consolidated state action. Ms. Jodar opposes dismissal on grounds the "parallel state action will not completely and promptly resolve all the issues between the parties." Opp. PA 2:20-21. She disputes that "the `extraordinary circumstances' justifying an application ofColorado are present in this matter." Id. 2:17-19; see Colorado River, 43 U.S. at 813 (abdication of the court's "obligation to decide cases can be justified only in the exceptional circumstance where the order to the parties to repair to the State court would clearly serve an important countervailing interest") (citation omitted).
Although Staples also alludes to Federal Rule of Civil Procedure 12(b)(6) in its Notice of Motion, its Points and Authorities do not elaborate the standards nor demonstrate entitlement to dismissal for failure to state a claim upon which relief can be granted, relying instead only on the abstention ground.
The Colorado River doctrine arises from "considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of the litigation." Colorado River, 424 U.S. at 817 (internal quotation marks and alteration omitted). "[T]he court first assuming jurisdiction over property may exercise that jurisdiction to the exclusion of other courts. . . . [A] federal court may also consider such factors as the inconvenience of the federal forum; the desirability of avoiding piecemeal litigation; and the order in which jurisdiction was obtained by the concurrent forums." Id. at 818-819 (internal citations omitted). Two additional factors were recognized in Moses H. Cone Memorial Hosp. v. Mercury Const. Corp, 460 U.S. 1, 23, 26 (1983): whether "federal law provides the rule of decision on the merits" and whether the state court proceedings are inadequate to protect the federal litigant's rights. In addition, the Ninth Circuit considers prevention of forum shopping as a factor.American Int'l. Underwriters (Philippines), Inc. v. Continental Ins. Co., 843 F.2d 1253, 1259 (9th Cir. 1988) ("prevention of forum shopping would promote wise judicial administration").
[T]he decision whether to dismiss a federal action because of parallel state-court litigation does not rest on a mechanical checklist, but on a careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction. The weight to be given to any one factor may vary greatly from case to case, depending on the particular setting of the case.Moses, 460 U.S. at 16.
The analytical approach is flexible, and the factors need not be given equal weight, nor is the list of factors exclusive: "No one factor is necessarily determinative; a carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counseling against that exercise is required." Colorado River, 424 U.S. at 818-819 (citations omitted); see Nakash v. Marciano, 882 F.2d 1411, 1415-16 (9th Cir. 1989) (upholding Colorado River abstention in circumstances where "the state case has progressed far beyond this case, indicating that it would be highly inefficient to allow the federal litigation to proceed," allowing the federal suit to continue "would undeniably result in piecemeal litigation," and plaintiff "has not suggested any reason why the state court cannot adequately protect his rights"); see also Amer. Int'l. Underwriters, 843 F.2d at 1258 ("Piecemeal litigation occurs when different tribunals consider the same issue, thereby duplicating efforts and possibly reaching different results"). Any doubt as to whether a factor exists "should be resolved against a stay [or dismissal]. . . ."Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369 (9th Cir. 1990) (reversing an abstention order based in part on a finding it was uncertain whether there would be a duplication of efforts and risk of inconsistent results because, because as of the time of the abstention order, the state court had not made any rulings regarding the disputed issues pending in the federal court, and "whichever court were to first reach judgment on the merits, that judgment would most likely have conclusive effect on the other court," avoiding inconsistent results).
Ms. Jodar emphasizes: "it is well-established that `theColorado River doctrine is a narrow exception to the virtually unflagging obligation of the federal courts to exercise the jurisdiction given to them,' and that circumstances justifying the application of the doctrine `are . . . exceedingly rare.'" Opp. 3:22-26, quoting Smith v. Central Arizona Water Conservation Dist., 418 F.3d 1028, 1033 (9th Cir. 2005). She concedes that the Colorado River doctrine does not require that the federal and state actions be identical before federal abstention is appropriate. Rather, "it will suffice if the actions are substantially similar." Opp. 5:9-11, citing Nakash, 882 F.2d at 1416 (to warrant abstention, "exact parallelism . . . is not required. It is enough if the two proceedings are `substantially similar'"). In exercisingColorado River abstention, a district court:
. . . presumably concludes that the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties. If there is any substantial doubt as to this, it would be a serious abuse of discretion to grant the stay or dismissal at all.Moses, 460 U.S. at 28.
Ms. Jodar attempts to distinguish her lawsuit from the Staples Overtime Cases on the primary ground "the present action and the Staples Overtime Cases differ in one very significant respect: Jodar asserts an additional cause of action for failure to provide Jodar and the putative class members with meal and rest breaks, as prescribed by California law," whereas the "consolidated cases contain no such cause of action, and seek only remedies for unpaid overtime and unfair business practices." Opp. 4:20-25 (emphasis added). She argues the absence of such a "claim" in the Staples Overtime Cases substantiates the state court action "will not adequately protect the federal litigants' rights, as the issue of meal and rest breaks will not arise in the consolidated action," so that "an entire category of wage and hour violations will go unresolved" if the federal case is dismissed and she is forced thereby to file "another state court class action." Id. 4:26-5:4. She insists that circumstance "effectively refutes Staples' claim that dismissal of this action will conserve judicial resources and avoid duplicative litigation," and contends dismissal of this case "will merely delay to another day, and move to another forum, the resolution of the meal and rest break claim" alleged in this complaint. Id. 5:4-8.
Contrary to Ms. Jodar's representations, irrespective of the absence of a separately stated cause of action, the alleged conduct forming the subject matter of her meals and rest breaks claim in this case is conduct also expressly alleged into the Staples Overtime Cases. As Staples notes, this case and the Staples Overtime Cases are "nearly identical . . . except for the named class representative." Mot. PA 6:27-7:2. Staples persuasively refutes Ms. Jodar's contention that her claims for missed meals and rest breaks are not being litigated in the state action in reliance on the text of the operative state Complaint detailing the "common issues" in support of class treatment of the claims. See, e.g., Porcaro Decl. Ex. B (Second Amended Coordinated Complaint in the Staples Overtime Cases action), ¶ 35(q) (emphasis added) ("Whether Staples failed and continues to fail to provide meal periods to the Class Members in violation of Section 11 of the applicable Wage Orders"); ¶ 35(r) (emphasis added) ("Whether Staples failed and continues to fail to authorize and permit Class Members to take rest periods in violation of Section 12 of the applicable Wage Order"); ¶ 36 (emphasis added) (alleging "Class Members were and are improperly and illegally denied rest breaks and meal breaks required by law" due to the "misclassif[ication of] Assistant Managers as exempt employees").
In addition, the Supplemental Porcaro Declaration, Exhibit A, is an undisputed copy of the approved Notice Of Class Action in the Staples Overtime Cases. Dkt No. 22. The description of the lawsuit in that Notice provides, in pertinent part:
The case seeks recovery of overtime pay which plaintiffs contend is owed to all present and former salaried store employees from October 21, 1995, up to and including the date a judgment is rendered. Plaintiffs also seek recovery for unpaid meal and rest periods. . . .
Supp. Porcaro Decl., Exh. A ¶ 2; see also Exh. A ¶ 4 ("In addition to unpaid overtime and injunctive relief, plaintiffs also seek recovery for unpaid meal and rest periods. . . .")
Staples characterizes the state court action as having been "vigorously litigated for more than six years [and] that significant progress has been made in that action." Reply 2:24-26. The parties there have "engaged in multiple rounds of written discovery and took 51 depositions in multiple cities." Reply 5:1-2; Supp. Porcaro Decl. ¶ 2. Staples argues from these circumstances that litigating the two actions in different jurisdictions would be duplicative, piecemeal, and an inefficient use of judicial resources. Moreover, as both cases involve only state law issues and seek relief available in either forum, no federal question figures into the balance. Ms. Jodar's and the putative class' rights alleged in this action appear from the face of the pleadings to be adequately protected in the Staples Overtime Cases. Mot. PA p. 7.
The court finds Ms. Jodar's characterization of the state action as "languishing" for the six years it has been pending there (Opp. PA 4:12-13) and her assertion she could perhaps obtain quicker relief by initiating a new class action in federal court takes too little account of the types of developments chronicled in Staples' papers, such as the approval of subclasses, and of the Notice To The Class of the pendency of the Staples Overtime Cases class action, and the discovery already conducted in that action.
Applying the Colorado River doctrine factors to this case, the court finds abstention under that theory and dismissal of this duplicative federal action is warranted. As to the first factor (jurisdiction over the res), this case involves no res, so the factor is irrelevant. See Travelers, 914 F.2d at 1368 ("money . . . is not the sort of tangible physical property referred to in Colorado River"). The second factor (inconvenience of the federal forum) carries no weight in this instance, as the state action is proceeding in Southern California. Id. Third, the state court acquired jurisdiction over substantially the same class action issues years before Ms. Jodar filed this action. Although "[p]riority should not be measured exclusively by which complaint was filed first," considering "how much progress has been made in the two actions," this factor favors federal court abstention. Moses, 460 U.S. at 21. Although it was not the determinative factor in Colorado River, the Court weighed in favor of abstention the fact that the only proceeding in the federal action following the filing of the complaint was a motion to dismiss. Colorado River, 424 U.S. at 820. In this case, Staples has filed an Answer and this Motion. The docket reveals only telephonic Early Neutral Evaluation conferences were held.
Fourth, the desirability of avoiding piecemeal litigation weighs heavily in favor of deferring to the Staples Overtime Cases litigation to resolve the issues raised by the putative class here. Whereas "[g]enerally, as between state and federal courts, the rule is that the pendency of an action in the state court is no bar to proceedings concerning the same matter in the federal court having jurisdiction" (Colorado River, 424 U.S. at 817 (internal quotation marks and citations omitted)), "piecemeal litigation is a factor that can support a stay [or dismissal] under the exceptional circumstances test."Travelers, 914 F.2d at 1368-69. The state court is procedurally much closer to resolving the substantive merits of the issues presented in both cases than is this court.
Fifth, the rule of decision in both the federal and state cases arises from state, not federal law, so this factor does not tip the scale. By the same token, no issues are presented that implicate the adequacy of state court proceedings to protect the federal litigant's rights, a sixth factor affecting the abstention decision. See Travelers, 914 F.2d at 1370 ("this factor involves the state court's adequacy to protect federal rights"). Considering the operative complaint allegations and class notice in the state court action, this court entertains no doubt that the parties have an adequate vehicle in the Staples Overtime Cases for the complete resolution of the issues presented in this federal putative class action.
Finally, forum shopping concerns "weigh in favor of a stay" when "the party opposing the stay seeks to avoid adverse rulings made by the state court or to gain a tactical advantage from the application of federal court rules." Travelers, 914 F.2d at 1371. In this case, the parties stipulated to stay the action, although the court declined a stay in favor of deciding whether to dismiss this case as duplicative of the Staples Overtime Cases. The court perceives no loss of any substantive right Ms. Jodar asserts in this action by relegating her to participate in the state court action where she would qualify as a class member and where her only purportedly distinguishing claims — i.e., recovery for purported meals and rest period deprivations — are actually expressly asserted as grounds for relief.
In summary, the Colorado River doctrine allows a federal court to dismiss or stay a federal action to avoid duplicative litigation when a parallel action is pending in state court.Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716-17 (1996) (federal courts have the power to refrain from hearing cases "which are duplicative of a pending state court proceeding"). The court finds this case warrants federal abstention. Applying and balancing the factors in the required "pragmatic and flexible way" (American Int'l Underwriters, 843 F.2d at 1257), this court has no "substantial doubt" that the parallel "state court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties." Smith, 418 F.3d at 1033.
For all the foregoing reason, IT IS HEREBY ORDERED defendant's Motion To Dismiss this duplicative putative class action is GRANTED, with prejudice, and the parties are referred to the state court's adjudication of the Staples Overtime Cases to resolve the issues presented here.
IT IS SO ORDERED.