Geoffrey Desrosiers,, Respondents,v.Perry Ellis Menswear, LLC, et al., Appellants.

Brief

N.Y.November 14, 2017

APL-2016-00188 To Be Argued By: FRANK H. HENRY (admitted pro hac vice) Time Requested 15 Mirrutes New York County Clerk's Index No. 151414/15 Olnurt nf J\pp.eals STATE OF NEW YORK ..... GEOFFREY DESROSIERS, individually and on behalf of other persons similady situated who were employed by PERRY ELLIS MENSWEAR, LLC, PEl LICENSING, INc., or any other related entities, Plaintiffs-Respondents, -against- PERRY ELLIS MENSWEAR, LLC, PEl LICENSING, INC., and/or any other related entities, Defendants-Appellants. BRIEF FOR DEFENDANTS-APPELLANTS STEVEN DEPALMA NICOLL DAVIS & SPINELLA, LLP 450 Seventh Avenue, Suite 2205 New York, New York 10123 Telephone: (212) 972-0786 Facsimile: (201) 712-9444 FRANK H. HENRY (admitted pro hac vice) BLUEROCK LEGAL, P.A. 10800 Biscayne BoulevaTd, Suite 410 Miami, Florida 33161 Telephone: (3 05) 981-43 00 Facsimile: (3 05) 981-43 04 Attorneys for Defendants-Appellants i APL-2016-00188 New York County Clerk's Index No. 151414/2015 ND&S NICOLL DAVIS & SPINELLA LLP 450 Seventh Avenue, Suite 2205 New York, New York 10123 Tele: (212) 972-0786 Fax: (201) 712-9444 Attorneys for Defendants-Appellants Perry Ellis Menswear LLC and PEI Licensing, Inc. STATE OF NEW YORK COURT OF APPEALS GEOFFREY DESROSIERS, et al. Plaintiff-Respondent, v. PERRY ELLIS MENSWEAR, LLC; and PEI LICENSING, INC., Defendants-Appellants. New York County Index No. 151414/2015 CORPORATE DISCLOSURE STATEMENT OF DEFENDANTS PERRY ELLIS MENSWEAR, LLC; and PEI LICENSING, INC. Pursuant to Section 500.1(f) of the Rules of Practice for this Court, the undersigned counsel for Perry Ellis Menswear LLC and PEI Licensing, Inc. certifies as follows: 1. That Perry Ellis Menswear LLC's parent is Perry Ellis International, Inc. that is traded on the NASDAQ under symbol "PERY" ii 2. That PEI Licensing, Inc.'s parent is Perry Ellis International, Inc. that is traded on the NASDAQ under symbol "PERY" Dated: New York, New York November 22, 2016 NICOLL DAVIS & SPINELLA LLP ____________________________ Steven C. DePalma /s/ Steven C. DePalma iii APL-2016-00188 New York County Clerk's Index No. 151414/2015 ND&S NICOLL DAVIS & SPINELLA LLP 450 Seventh Avenue, Suite 2205 New York, New York 10123 Tele: (212) 972-0786 Fax: (201) 712-9444 Attorneys for Defendants-Appellants Perry Ellis Menswear LLC and PEI Licensing, Inc. STATE OF NEW YORK COURT OF APPEALS GEOFFREY DESROSIERS, et al. Plaintiff-Respondent, v. PERRY ELLIS MENSWEAR, LLC; and PEI LICENSING, INC., Defendants-Appellants. APL-2016-00188 New York County Index No. 151414/2015 STATEMENT PURSUANT TO RULE 500.13(a) Upon information and belief, as of the date of the completion of this Brief, there is no related litigation pending before any court. Dated: New York, New York November 22, 2016 Respectfully submitted, __________________________ Steven C. DePalma /s/ Steven C. DePalma iv TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT .......................................................... i RULE 500.13(a) STATEMENT .............................................................................. iii TABLE OF AUTHORITIES ..................................................................................... v QUESTION PRESENTED ........................................................................................ 1 STATEMENT OF JURISDICTION.......................................................................... 2 NATURE OF THE CASE ......................................................................................... 2 ARGUMENT ............................................................................................................. 5 POINT I THE LAWSUIT THAT WAS DISMISSED BY THE SUPREME COURT WAS NOT A CLASS ACTION ......................... 6 POINT II THE SUPREME COURT WAS CORRECT IN DENYING DESROSIERS’ MOTION SEEKING CLASS RELIEF.................................................................................................. 8 POINT III THE SUPREME COURT WAS CORRECT BECAUSE THE RIGHTS OF POTENTIAL CLASS MEMBERS WERE NOT IMPACTED BY THE DISMISSAL OF THIS LAWSUIT AND THE APPELLATE DIVISION SHOULD BE REVERSED. ................................................................ 14 CONCLUSION ........................................................................................................ 16 v TABLE OF AUTHORITIES Cases Page Avena v. Ford Motor Co., 85 A.D.2d 149, 447 N.Y.S.2d 278 (1st Dep't 1982) .......................................... 13-14 Avena v. Ford Motor Co., 107 Misc. 2d 444, 434 N.Y.S.2d 860 (Sup. Ct., New York County 1980) ............. 13 Meraner v. Albany Med. Ctr., 211 A.D.2d 867, 621 N.Y.S.2d 208 (3d Dep't 1995) ................................................ 9 O’Hara v. Del Bello, 47 N.Y.2d 363 (1979) ...................................................................................... 6-9, 11 Powlowski v. Wullich, 102 A.D.2d 575, 479 N.Y.S.2d 89 (4th Dep't 1984) .............................................. 11 Shah v. Wilco Sys., Inc., 27 A.D.3d 169, 806 N.Y.S.2d 553 (1st Dep't 2005) ............................................. 7-9 Vasquez v. Nat’l Sec. Corp., 48 Misc. 3d 597, 9 N.Y.S.3d 836 (Sup. Ct., New York County 2015) ................... 14 State Statutes CPLR § 901 (2015) .................................................................................................... 7 CPLR § 902 (2015) .............................................................................. 1, 3, 5, 7-9, 12 CPLR § 903 (2015) .................................................................................................... 7 CPLR § 904 (2015) ............................................................................................ 12, 15 CPLR § 905 (2015) .................................................................................................... 7 CPLR § 908 (2015) ...........................................................................................passim CPLR § 5602(b)(1) (2015) ......................................................................................... 2 1 QUESTION PRESENTED Is a plaintiff who has filed a complaint alleging class relief and who (1) accepted an offer of compromise, and (2) failed to move for class certification prior to the expiration of the sixty-day deadline under CPLR § 902, entitled under CPLR § 908 to notify the members of the alleged class of the dismissal of his case? Lower Court’s Answer: The Supreme Court answered in the negative, reasoning that the case could no longer be considered a class action after Desrosiers failed to timely move for class certification. The Supreme Court also reasoned that notice was not necessary to protect the rights of the alleged class members. The Supreme Court, Appellate Division, First Department, reversed finding that the “putative class retains an interest in the action, and CPLR 908 is not rendered inoperable simply because the time for the individual plaintiff to move for class certification has expired.” 2 STATEMENT OF JURISDICTION This Court has subject matter jurisdiction over this appeal because all of the requirements of CPLR 5602(b)(1) are satisfied. This appeal is taken from a non- final Decision and Order entered May 10, 2016 (the “Order”) by the Appellate Division, First Department. R. at 65-67. The First Department granted Defendants-Appellants’ motion for leave to appeal the Order to this Court on September 29, 2016. R. at 64. NATURE OF THE CASE This case arises out of an internship held by the Respondent, Geoffrey Desrosiers (“Desrosiers”), with the Appellant, Perry Ellis International Corp. (“Perry Ellis”). R. at 17–18. Desrosiers participated in the Perry Ellis internship program for one semester from September 2009 to December 2009. R. at 17–18. On February 10, 2015, Desrosiers filed a lawsuit against Perry Ellis in the Supreme Court of New York County. R. at 25. Although Desrosiers was an intern at Perry Ellis, he alleged in his complaint that he was an “employee” under various New York statutes. R. at 26, 33. He alleged that he was entitled to minimum wage for his participation in the internship. R. at 31–34. He also alleged relief on behalf of others, styling his complaint as a class action. He claimed to represent other former interns of Perry Ellis. R. at 27–29. Because he alleged that his case was a 3 class action, under Civil Practice Law and Rules § 902, Desrosiers had sixty days after the time to serve a responsive pleading expired to move for class certification. That placed the expiration date to move for class certification at May 12, 2015. R. at 19. On March 18, 2015, Perry Ellis served an offer of compromise to Desrosiers. R. at 38. Desrosiers accepted the offer of compromise on March 28, 2015. R. at 40. Desrosiers took no other action in this case during the statutory time period to move for class certification. The statutory time period to move for class certification expired on May 13, 2015, and Desrosiers failed to move for class certification within that time period or at any time during this case. R. at 9–10. On May 18, 2015, Perry Ellis filed a motion to dismiss the complaint. R. at 17. Perry Ellis asserted in its motion to dismiss that the case could no longer be maintained as a class action because the time limit for class certification had expired. R. at 18–19. Desrosiers did not oppose the motion to dismiss his claim. R. at 50. However, on May 27, 2015, he filed a cross-motion to send notice to the alleged class members of the compromise of his claim under CPLR § 908. R. at 50. 4 On October 21, 2015, the Supreme Court held a hearing on Perry Ellis’ motion to dismiss and Desrosiers’ cross-motion. R. at 8. Following oral argument, the court granted Perry Ellis’ motion to dismiss and denied Derosiers’ cross- motion. R. at 7, 14. The court dismissed the case without prejudice to the alleged class members. R. at 14. In denying the cross-motion, the Supreme Court reasoned that that the case ceased being a class action after Desrosiers had failed to timely move for class certification, and notice was unnecessary to protect the rights of the alleged class members. R. at 7, 10–13. On November 13, 2015, Desrosiers appealed that order to the New York Supreme Court, Appellate Division, First Department. R. at 5. The First Department entered an Order dated May 10, 2016, reversing the trial court. R. at 65-67. The First Department held that the “putative class retains an interest in the action, and CPLR 908 is not rendered inoperable simply because the time for the individual plaintiff to move for class certification has expired.” R. at 66. 5 ARGUMENT Desrosiers did not seek any form of class relief until his response to the motion to dismiss that is on appeal. He did not move for class certification or take any other action related to his class claims. Now, despite his total failure to follow those procedures, Desrosiers argues that his lawsuit should be treated as a class claim even though under CPLR § 902 the lawsuit could not have been treated as a class action after the deadline to move for class certification. There is a deadline under New York law for seeking class relief, beyond which class relief is barred. CPLR § 902 requires a plaintiff alleging a class action to move for class certification within sixty days after the time for a responsive pleading has expired. See CPLR § 902. Desrosiers did not do that. Instead, he allowed the deadline to expire, and now argues error in the trial court’s refusal to treat his claim as a class action. The Supreme Court was correct in its order dismissing this case. No form of class relief would have been appropriate under the CPLR and as interpreted in binding precedent. Desrosiers is inviting this Court to revitalize his class allegations and, on the dismissal of his case, send notices to an unidentified, uncertified, and time-barred class of individuals who would never have the opportunity to join this litigation as class members or otherwise. In order to 6 comply with the Appellate Division’s Order, a hearing would be necessary at the trial court to determine the propriety of the class, identify class members, and construct an appropriate notice. None of that would have been required had the case proceeded forward insofar as the claim could not have been certified as a class action after the applicable deadline. We respectfully request that this Court decline that invitation and reverse the Order of the First Department and affirm the decision of the Supreme Court. POINT I THE LAWSUIT THAT WAS DISMISSED BY THE SUPREME COURT WAS NOT A CLASS ACTION. Desrosiers’ entire argument to the Appellate Division was that the lawsuit below was a “class action” and, therefore, that the Supreme Court was required to provide notice to “class members” before entering an order of dismissal. That premise is legally incorrect because the lawsuit below, at the time it was dismissed, was not a class action. Desrosiers failed to timely move for class certification. Desrosiers’ lawsuit was for all purposes an individual claim when the deadline for moving for class certification had passed. For an action to be considered a “class action”, the plaintiff must properly follow the statutory procedures for maintaining a class action. O’Hara v. Del Bello, 47 N.Y.2d 363, 366 (1979). That includes moving for class certification 7 under CPLR § 902 within the “mandatory” sixty day deadline. Shah v. Wilco Sys., Inc., 27 A.D.3d 169, 173 (1st Dep't 2005) (citing O’Hara, 47 N.Y.2d at 368–69). In O’Hara, the plaintiff filed a complaint requesting class relief. Id. at 366. The supreme court granted class relief, even though “no hearing had been held to determine the applicability of class relief, no order had ever been issued permitting the class action and no definitive description of the class had ever been made, either during the pendency of the proceeding or in the judgment, all as required by CPLR 901, 902, 903, and 905.” Id. at 367. This Court reversed, finding that “when there has been a failure to comply with the procedures and requirements of CPLR article 9 (the class action article) for determination of class action status for litigation, however, there is no basis for granting relief other than to the individual party who brought the proceeding.” Id. at 368 (emphasis added). This Court limited any relief available only to the named plaintiff. Id. It is undisputed in the present case that Desrosiers did not timely file a motion to certify a class in this lawsuit. Indeed, Desrosiers has never filed such a motion at all, timely or otherwise. Had the Supreme Court granted class relief in the absence of a timely motion by Desrosiers, this Court’s holding in O’Hara would have required reversal. Plaintiff was proceeding individually at the moment 8 the deadline to file a motion for class relief expired. There can be no doubt that, at the time this case was dismissed, it was certainly not a “class action” under O’Hara. POINT II THE SUPREME COURT WAS CORRECT IN DENYING DESROSIERS’ MOTION SEEKING CLASS RELIEF. Desrosiers accepted an offer of compromise, completely disposing of his individual claim. Desrosiers claims that the Supreme Court should have sent notices of the disposition of Desrosiers’ claim to members of the “class” in this case. It is certainly true that CPLR § 908 provides that “a class action shall not be dismissed, discontinued, or compromised without approval of the court . . . .” CPLR § 908 (emphasis added). It impossible logic, however, to reconcile Desrosiers’ position with O’Hara under the facts of this case. The holding in O’Hara was applied by the First Department in Shah v. Wilco Systems, Inc., 27 A.D.3d 169 (1st Dep't 2005). In Shah, the plaintiffs filed a complaint that purported to be a class action. Id. at 171. Similar to the instant case, the plaintiffs in Shah failed to file a motion for class certification within the sixty day time period under CPLR § 902. Id. at 173. The Appellate Division held that class relief was not available to the plaintiffs after the deadline, stating 9 “plaintiff’s motion for class certification should have been denied with prejudice since the motion was untimely.” Id. (emphasis added). The action ceased being a class action after the plaintiffs failed to timely move for class certification. Id.; see also Meraner v. Albany Med. Ctr., 211 A.D.2d 867, 868 (3d Dep't 1995) (affirming order denying class certification because motion was untimely). Desrosiers argued that the Supreme Court should have granted class relief after his client accepted an offer of compromise but before dismissing this case. No class had even been identified at that point, and the deadline to do so had expired. Had the Supreme Court accepted that position, the parties would undoubtedly have been called upon to litigate the identity of an appropriate class and, after a hearing, the court would have entered an order certifying the class for the purposes of sending notices that this lawsuit was being dismissed. Thus, a class would have been certified after the mandatory deadline under Rule 902. Desrosiers had the opportunity to seek such relief at the beginning of this case, in the first sixty days, and neglected to do so or chose not to do so. In accordance with O’Hara and Shah, this case ceased being a “class action” after the deadline passed. The Appellate Division implicitly held that CPLR § 908 must be strictly applied to any case where the plaintiff has alleged class relief in his/her initial 10 filing. Taking Desrosiers’ argument and the Appellate Division’s Order to its logical conclusion, § 908 would require notice in every case where a class action is alleged in the complaint. Such an outcome would be contrary to the purposes of Section 908 and, in any event, impossible to administer. For example, we can hypothesize that Desrosiers filed a timely motion for class certification and the motion was denied. Had Desrosiers continued forward on his individual claims, a strict reading of Section 908 would have required notice to “class members” at any point that the individual claim was dismissed, discontinued or compromised. Thus, even if Desrosiers had filed a timely motion for class certification that was denied, the Appellate Division’s Order would require a notice to class members if the claim was compromised, settled, or discontinued in any way, presumably even after a verdict. Suppose further that the lawsuit had been dismissed on initial motion for failure to state a claim upon which relief can be granted. The class would be entitled to notice under the rationale of the Appellate Division if it was pleaded in the complaint as a class action. Thus, the trial court would be required to determine an appropriate class and construct a notice of the dismissal of a case that had never been properly pleaded in the first instance. 11 Suppose further that Desrosiers had decided himself to withdraw his claim for class relief via an amendment to his pleading, having found some defect in the class’ viability. The holding of the Appellate Division would require that the class claim move forward toward certification, if only for the purpose of sending notices to potential class members. Suppose further that the class claims were time-barred and the lawsuit was dismissed via a motion to dismiss or for summary judgment for the defendant. The trial court would be left in the position of certifying a class for the purpose of notifying the class of their time-barred claims. These examples would lead to absurd results, where a trial court would be effectively certifying a class to receive notices, but where the underlying lawsuit had terminated or been withdrawn on its merits. There is no analytical distinction between these examples and the Appellate Division’s holding in the present case. The rationale and holding of the Appellate Division would effectively guarantee class action status in every case alleged to be a class claim in the initial pleading. Of course there is no other precedent for such absurd results. Compare Powlowski v. Wullich, 102 A.D.2d 89 (4th Dep't 1984) (dismissing substantively insufficient class action challenging prison medical care). The O’Hara decision stands for the proposition that a lawsuit is not a class action unless the parties 12 comply with the procedural requirements of the CPLR. The sixty-day rule under CPLR § 902 is one of those mandatory requirements. The effect of the Appellate Division’s Order would be to ignore § 902 or any other procedural or substantive defect in a lawsuit and hold a certification hearing irrespective of the merits, timing or procedural defects surrounding the claim. The problem with such a result is amplified by the facts of Desrosiers’ claim in the present case. Desrosiers did not dispute that he failed to move for class certification or that he waived the right to do so. He also did not oppose the motion to dismiss his lawsuit. If the Order of the Appellate Division is allowed to stand and this case is remanded to the trial court for further proceedings, the task of the Supreme Court will be to receive submissions by the parties on what might be an appropriate class, if any. The Supreme Court would presumably then be sending notices to class members that a lawsuit has been dismissed. That notice will be the first communication they have received regarding this lawsuit, insofar as Desrosiers had never applied for certification and then sent the notice required by CPLR § 904. Notice pursuant to CPLR § 904 was never sent in the first instance, because the case had never first been certified as a class action under CPLR § 902. The notice sought by Desrosiers will be to people who had no knowledge of a case that they will never have an opportunity to join. 13 There is no question that Desrosiers had the opportunity to move to certify a class. Had Desrosiers timely moved for certification, the Appellate Division’s holding in Avena v. Ford Motor Co., 85 A.D.2d 149 (1st Dep't 1982) would have applied. In Avena, the First Department held that notice of a compromise or settlement under CPLR § 908 is required if the settlement or compromise occurred prior to class certification. Id. at 152–55. Notably, the plaintiffs in Avena had moved to extend their time to move for class certification. Avena v. Ford Motor Co., 107 Misc. 2d 444, 444–45 (Sup. Ct., New York County 1980). Avena holds that notice of a settlement or dismissal applies to an alleged class action “before certification.” Id. at 152–54. Unlike Avena, the case before this Court is not “before certification” because certification was no longer available to Desrosiers. The Supreme Court denied Desrosiers’ motion to send notices to class members because, stated simply, there was no class or any legally cognizable procedure for identifying one. The order of the Supreme Court was correct and the Appellate Division should be reversed. 14 POINT III THE SUPREME COURT WAS CORRECT BECAUSE THE RIGHTS OF POTENTIAL CLASS MEMBERS WERE NOT IMPACTED BY THE DISMISSAL OF THIS LAWSUIT AND THE APPELLATE DIVISION SHOULD BE REVERSED. Assuming a class had been identified and certified (which it was not), the Supreme Court was correct in its order below because notice was not necessary to protect the rights of the alleged class members. The dismissal of Desrosiers’ lawsuit had no impact on the rights of any potential class member. It is well-established that the dismissal of an alleged class action prior to class certification or without class certification has no res judicata effect on the unnamed members of the alleged class. Such dismissals are without prejudice to unnamed class members. E.g., Avena v. Ford Motor Co., 85 A.D.2d 149, 152 (1st Dep't 1982); Vasquez v. Nat’l Sec. Corp., 48 Misc. 3d 597, 599 (Sup. Ct., New York County 2015). It follows that unnamed class members are free to file their own claims after the dismissal of a case like this one. In the instant case, the Supreme Court properly dismissed the action for the unnamed class members without prejudice. The notice requested by Desrosiers would have done nothing to protect the rights of class members, particularly insofar as they had no opportunity to join in the litigation as it had never been 15 certified as a class action – and it was being dismissed. And Desrosiers had stipulated to the dismissal of the case. The notice proposed by Desrosiers (R. at 47-49) amplifies this issue. Desrosiers’ proposed notice would have invited former “interns” to contact Desrosiers’ lawyer for information about the lawsuit and states: “This action was started as a class action, but no application for class certification was made.” R. at 48. In other words, Desrosiers proposed class members to contact his lawyer regarding their own individual claims that were not, and could not, be part of Desrosiers’ own lawsuit. It is also worth noting that Desrosiers never moved the court to provide the initial notice allowed under CPLR § 904 to the alleged class.1 Without such initial notice, there is no evidence that any alleged class members may have relied on the pendency of Desrosiers’ action and delayed filing their own individual claims. There is no evidence that would warrant notice of the dismissal in order to protect their rights against the statute of limitations. 1 CPLR § 904 requires that the plaintiff provide initial notice of a class action to the alleged class. CPLR § 904 (2015). 16 CONCLUSION The order of the Appellate Division, First Department, should be reversed because notice under CPLR § 908 was not required. Any form of class relief was inappropriate after Desrosiers failed to timely move for class certification. For these reasons, Perry Ellis respectfully requests that this Court reverse the decision of the Appellate Division and affirm the Supreme Court's order dismissing this case. Dated: New York, New York November 22, 2016 Respectfully submitted, NICOLL DAVIS & SPINELLA LLP Attorneys for Defendants 450 Seventh Ave., Suite 2205 New York, N.Y. 10123 Steven C. DePalma /s/ Steven C. DePalma 17 PRINTING SPECIFICATION STATEMENT This computer generated brief was prepared using a proportionally spaced typeface. Name of typeface: Times New Roman Point Size: 14 Line spacing: 2 The total number of words in the brief, inclusive of point headings and footnotes and exclusive of pages containing the table of contents and table of authorities is 3,400.