Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00997/USCOURTS-casd-3_10-cv-00997-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1331 Fed. Question: Fair Labor Standards

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- 1 - 10cv997-IEG (CAB)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BROOKE GARDNER, individually, and on

behalf of a class of others similarly situated,

Plaintiff,

CASE NO. 10-CV-997 - IEG (CAB)

ORDER:

(1) DENYING PLAINTIFF’S

MOTION TO REMAND [Doc. No. 4];

and

(2) DENYING DEFENDANT’S

MOTION TO DISMISS, TRANSFER,

OR STAY [Doc. No. 2].

vs.

GC SERVICES, LP,

Defendant.

This is a putative class action alleging various claims for unpaid wages under California state

law. Currently before the Court are Defendant’s Motion to Dismiss for Lack of Jurisdiction, to

Transfer to the Eastern District of Missouri, or to Stay Plaintiff’s Claims, [Doc. No. 2], and Plaintiff’s

Motion to Remand to State Court, [Doc. No. 4]. Having considered the parties’ arguments, and for the

reasons set forth below, the Court DENIES both motions.

BACKGROUND

I. Multiple actions

The present action is brought by Plaintiff Brooke Gardner (“Gardner”), individually and on

behalf of others similarly situated, against Defendant GC Services LP (hereinafter, the “Gardner

action”). Two earlier-filed actions are also relevant to the disposition of the motions currently pending

before the Court. The first one is an action brought by Darryl Easley, individually and on behalf of

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others similarly situated, against GC Services LP and GC Services Corp. (hereinafter, the “Easley

action”). The second one is an action brought by Lora Meyers, Sherry Clere, Patricia Glass, Nota Jean

Barnes, Debra Davis, Cecilia Koster, Johnna Parker, Steven Christy, and Peggy Spurlock, on behalf

of themselves and others similarly situated, against GC Services LP (hereinafter, the “Meyers action”).

Each of these is discussed in turn below.

A. The Easley action

On October 20, 2009, Darryl Easley, a Missouri resident and former employee at one of GC

Services’ Missouri call centers, filed a complaint in the United States District Court for the Eastern

District of Missouri alleging that he and other similarly situated employees of GC Services and GC

Services Corp. were required to work “off the clock” without compensation and were not paid timeand-a-half for overtime hours worked. The Easley complaint alleged causes of actions under the

Federal Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201-262, as well as under Missouri’s

wage and hour laws. (Def. Motion, Ex. C, ¶¶ 31-52.)

B. The Meyers action

On November 13, 2009, the Meyers Plaintiffs filed an action in the United States District Court

for the Southern District of West Virginia similarly alleging that they were required to perform “off

the clock” work without compensation and were not paid appropriate overtime wages. The Meyers

complaint alleged only a cause of action pursuant to the FLSA. (Id., Ex. D, ¶¶ 44-53.) While the case

at first appeared to include only employees in West Virginia, it was later amended–in cooperation with

the Easley attorneys–to seek a nationwide collective action involving the exact class of employees

making the same claims as in the Easley lawsuit. (See id., Ex. E.) The Meyers lawsuit also included

opt-in Plaintiffs from California. (See id., Ex. E, ¶ 18; id., Ex. F.)

Just like in the present case, defendant GC Services in the Meyers lawsuit moved to dismiss

or, in the alternative, to transfer or stay the action in the Southern District of West Virginia in favor

of the action then-pending in the Eastern District of Missouri. On March 18, 2010, the district court

granted defendant’s motion, finding that the first-to-file rule should apply, and transferred the action

to the Eastern District of Missouri. (Id., Ex. B.)

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C. The Beasely action

Thereafter, plaintiffs in the Easley and Meyers actions moved to have them consolidated in the

Eastern District of Missouri, and on April 26, 2010, the combined plaintiffs filed an Amended

Consolidated Complaint (hereinafter, the “Beasely action”). (Id., Ex. A.) The Beasely complaint

alleged a single claim for violation of the FLSA, (id., Ex. A, ¶¶ 21-29), and specifically excluded GC

Services’ California employees from the putative plaintiff class, (id., Ex. A, ¶ 19). Plaintiffs also filed

the opt-in consent forms for all those who previously opted into the Meyers case, except for the two

California employees. (See id., Ex. H.)

D. The Gardner action

Finally, on March 24, 2010, Gardner–represented by the same attorneys as the plaintiffs in the

Beasely lawsuit–filed the present action in the Superior Court for the County of San Diego, alleging

five cause of action: (1) failure to pay straight-time wages in violation of California state law; (2)

failure to pay overtime wages in violation of California state law; (3) failure to pay all compensation

due and owing at termination in violation of California state law; (4) violation of the California

Business and Professions Code § 17200 et seq.; and (5) quantum meruit. (Id., Ex. I.) On May 10,

2010, GC Services removed the action to this Court. [Doc. No. 1].

II. Procedural history

After the Gardner action was removed to this Court, Defendant moved to dismiss the action

for lack of jurisdiction or, in the alternative, to transfer it to the Eastern District of Missouri or stay

it pending the resolution of the Beasely lawsuit. [Doc. No. 2]. Plaintiff filed an opposition, and

Defendant replied. [Doc. Nos. 6, 9]. At the same time, Plaintiff also filed a motion to remand this

action to state court. [Doc. No. 4]. Defendant filed an opposition, and Plaintiff replied. [Doc. Nos. 7,

8]. The Court heard oral argument on both motions on July 6, 2010.

DISCUSSION

I. Plaintiff’s motion to remand

Plaintiff’s motion to remand alleges Defendant failed to meet its burden of showing that the

jurisdictional amount is met in this case. When a case is removed from state court, the removing

defendant bears the burden of establishing federal jurisdiction, including any applicable amount in

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controversy. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006) (per curiam).

“Where the complaint does not specify the amount of damages sought, the removing defendant must

prove by a preponderance of the evidence that the amount in controversy requirement has been met.”

Id. (citing Gaus v. Miles, Inc., 980 F.2d 564, 566-67 (9th Cir. 1992)). Thus, the defendant must

provide evidence that it is “more likely than not” that the amount in controversy satisfies the

jurisdictional requirement. Sanchez v. Monumental Life Ins. Co., 102 F.2d 398, 404 (9th Cir. 1996).

This burden is unchanged where, as in this case, the removal is based on the Class Action Fairness Act

of 2005 (“CAFA”). See Abrego, 443 F.3d at 685-86.

As the Ninth Circuit has explained, CAFA “vests the district court with ‘original jurisdiction

of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000,

exclusive of interest and costs, and is a class action in which’ the parties satisfy, among other

requirements, minimal diversity.” Id. at 680 (quoting 28 U.S.C. § 1332(d)). In the present case,

Plaintiff argues the remand is appropriate because Defendant has failed to meet its burden of

establishing by preponderance of the evidence that the amount in controversy exceeds $5,000,000.

Contrary to Plaintiff’s contentions, however, there is no obligation on Defendant to submit any

declarations or “summary-judgment-type evidence” in support of its assertion that the jurisdictional

amount is met in the present case. Rather, the Ninth Circuit has explained that:

“The district court may consider whether it is ‘facially apparent’ from the complaint

that the jurisdictional amount is in controversy. If not, the court may consider facts in

the removal petition, and may ‘require parties to submit summary-judgment-type

evidence relevant to the amount in controversy at the time of removal.’”

Abrego, 443 F.3d at 690 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th

Cir. 1997)) (emphasis added). Accordingly, Defendant can meet its burden as long as the jurisdictional

amount is either “facially apparent” from the complaint or is shown to be “more likely than not” by

the facts alleged in the removal petition. See id.; see also Valdez v. Allstate Ins. Co., 372 F.3d 1115,

1117 (9th Cir. 2004) (noting that the Ninth Circuit has “endorsed the Fifth Circuit’s practice of

considering facts presented in the removal petition as well as any summary-judgement-type evidence

relevant to the amount in controversy at the time of removal” (citation and internal quotation marks

omitted)); Bosinger v. Phillips Plastics Corp., 57 F. Supp. 2d 986, 989 (S.D. Cal. 1999) (noting that

where the complaint does not specify an amount of damages, “the underlying facts supporting removal

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1

 0.5 hours * 1.5 * $14.50 (hourly rate) * 235 per year * 4 years * 303 full-time employees =

$3,097,417.50.

2

 $14.50 (hourly rate) * 8 hours per day * 30 days * 1,385 separated employees = $4,819,800.

3

 Contrary to Plaintiff’s arguments, Defendant’s allegations in the Notice of Removal are more

than “magical incantations,” see Abrego, 443 F.3d at 689, “mere averment[s],” see Gaus, 980 F.2d

at 567, or “conclusory allegations,” see Singer, 116 F.3d at 377, that the Ninth Circuit held are

insufficient to meet the defendant’s burden of showing that the amount in controversy “more likely

than not” exceeds the jurisdictional requirement. Moreover, precise certainty is not required for

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must be stated in the removal notice itself”).

In this case, Defendant’s Notice of Removal adequately alleges the underlying facts to show

it is “more likely than not” that the amount “in controversy” exceeds $5,000,000. See Korn v. Polo

Ralph Lauren Corp., 536 F. Supp. 2d 1199, 1205 (E.D. Cal. 2008) (“The ultimate inquiry is what

amount is put ‘in controversy’ by the plaintiff’s complaint, not what a defendant will actually owe.”

(citations omitted)). First, Defendant points to Plaintiff’s claim for violation of California Labor Code

§ 510, which requires the payment of overtime premium for hours worked in excess of eight in a given

workday. (Notice of Removal, at 3.) Defendant notes that it currently employs 303 full-time

employees who meet the proposed class definition. (Id. at 3; see also Jackson Decl., ¶ 4.) According

to Defendant, if those employees, earning on average $14.50 per hour, worked 30 minutes of overtime

per day over four years, the unpaid overtime owed on the overtime claim would exceed $3,000,000.1

(Notice of Removal, at 3.) Second, Defendant points to Plaintiff’s claim for failure to timely pay

termination wages under California Labor Code § 203, for which the penalty is 30 days of wages. (Id.)

Defendant notes that it has employed approximately 1,385 account representatives and employees in

equivalent positions since April 2006. who had their employment with GC Services terminated. (Id.;

see also Jackson Decl., ¶ 5.) According to Defendant, the potential recovery by those employees

would be approximately $4,800,000.2 (Notice of Removal, at 3.) Together, the recovery on just these

two claims would be approximately $7,800,000. Accordingly, Defendant provided sufficient

underlying facts to demonstrate that the combined amount “in controversy” exceeds $5,000,000. See

Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005) (concluding that “an

estimate of the amount of unpaid overtime in controversy can be calculated using information from

Defendant's own records”).3

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Defendant to meet its burden. See Korn, 536 F. Supp. 2d at 1204-05 (“[A] removing defendant is not

obligated to ‘research, state, and prove the plaintiff's claims for damages.’” (quoting McCraw v.

Lyons, 863 F. Supp. 430, 434 (W.D. Ky. 1994)).

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For the foregoing reasons, because the underlying facts alleged in the Notice of Removal

demonstrate that it is “more likely that not” the amount in controversy exceeds $5,000,000 as required

by CAFA, see 28 U.S.C. § 1332(d)(2), the Court DENIES Plaintiff’s motion to remand.

II. Defendant’s motion to dismiss, transfer, or stay

Defendant argues that in light of the duplicative nature of the claims and of the putative classes

in the Gardner and Beasely actions, dismissal of the later-filed Gardner lawsuit is warranted under

the first-to-file rule. The “first to file” rule is a “generally recognized doctrine of federal comity” that

allows a district court to decline jurisdiction over an action “when a complaint involving the same

parties and issues has already been filed in another district.” Pacesetter Sys., Inc. v. Medtronic, Inc.,

678 F.2d 93, 94-95 (9th Cir. 1982) (citations omitted). Pursuant to the rule, “when two identical

actions are filed in courts of concurrent jurisdiction, the court which first acquired jurisdiction should

try the lawsuit and no purpose would be served by proceeding with a second action.” Id. However,

this rule is “not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with

a view to the dictates of sound judicial administration.” Id.

In applying the “first to file” rule, the court looks to three threshold factors: (1) the chronology

of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. See Alltrade,

Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991). If the case meets the requirements

of the “first to file” rule, the court has the discretion to transfer, stay, or dismiss the action. See id. at

628-29. However, even where the rule would otherwise apply, the court also has the discretion to

“dispense” with its application “for reasons of equity.” Id. at 628.

A. Chronology of the two actions

In this case, the first factor is clearly satisfied because the Gardner action was filed after both

the Easley and Meyers complaints were filed, and after they were consolidated in the Eastern District

of Missouri in the form of the Beasely action.

B. Similarity of the parties

Defendant, however, failed to establish there is a similarity of the parties such that would

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warrant the application of the “first to file” rule. For the rule to apply, the actions need not be

identical. Byerson v. Equifax Info. Servs., LLC, 467 F. Supp. 2d 627, 635-36 (E.D. Va. 2006);

Inherent.com v. Martindale-Hubbell, 420 F. Supp. 2d 1093, 1097 (N.D. Cal. 2006). Thus, the rule only

requires the parties be “substantially similar.” Inherent.com, 420 F. Supp. 2d at 1097; accord Byerson,

467 F. Supp. 2d at 635-36 (requiring a “substantial overlap” with respect to the parties). Moreover,

in the context of a class action, “the classes, and not the class representatives, are compared.” Adoma

v. Univ. of Phoenix, Inc., — F. Supp. 2d —, 2010 WL 1797263, at *5 (E.D. Cal. 2010) (citing Ross

v. U.S. Nat’l Ass’n, 542 F. Supp. 2d 1014, 1020 (N.D. Cal. 2008)).

In the present case, as Plaintiff correctly notes, the only identical party between the two actions

is Defendant GC Services. As for the putative classes, there is no overlap at all, much less “substantial

overlap.” See Byerson, 467 F. Supp. 2d at 635-36. Plaintiff’s complaint here seeks to represent a

putative class of employees who worked in Defendant’s two call centers in California. (Def. Motion,

Ex. I, ¶ 17.) The Beasely action in the Eastern District of Missouri, on the other hand, specifically

excludes all California employees from the putative class. (Id., Ex. A, ¶ 7.)

Defendant’s arguments to the contrary are not persuasive. Although Defendant argues the

actions were brought by the same attorneys against the same defendant, it fails to cite any case law

as to why this would be relevant in this context. Similarly, the fact that the actions before amendment

might have involved a “substantial overlap” between the parties is not dispositive. See, e.g., Ross, 542

F. Supp. at 1020 (denying defendant’s motion to dismiss despite the fact that both actions were

“brought against the same defendant by the same counsel, and both initially alleged putative classes

of U.S. Bank employees in California, Oregon, and Washington” (emphasis added)). Rather, the focus

is on the composition of the two classes at this point. See, e.g., Walker v. Progressive Cas. Ins. Co.,

No. C03-656R, 2003 WL 21056704, at *2 (W.D. Wash. May 9, 2003) (“Whatever plaintiffs’ stated

intentions, the fact remains that they are currently parties in the Camp action, and it is this fact, not

plaintiffs’ future plans, that the court finds controlling.”). Accordingly, in this case, the second factor

of the “first to file” rule is not met because there is no longer any substantial similarity of parties

between the two actions. See Inherent.com, 420 F. Supp. 2d at 1097.

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C. Similarity of the issues

Defendant also failed to establish there is a similarity of the issues between these two actions.

As with the parties, the issues in the two actions need not be identical, as long as they are

“substantially similar.” Adoma, 2010 WL 1797263, at *5; Inherent.com, 420 F. Supp. at 1097.

Defendant argues the issues in the Gardner and Beasely actions are substantially similar

because “[b]oth lawsuits allege that GC Service’s call center employees performed various tasks offthe-clock, such as logging into computer applications before and after their scheduled shift and

working during meal breaks.” (Def. Motion, at 7 (internal citations omitted).) However, this is a false

similarity. As Plaintiff correctly notes, while the Beasely complaint alleges only a violation of the

FLSA, (see Def. Motion, Ex. A, ¶¶ 21-29), the complaint in this case only alleges five causes of action

under California state law, (see id., Ex. I, ¶¶ 27-52). This distinction results in significant differences

between the claims asserted and remedies requested in the two actions.

First, while the Beasely action only seeks relief for Defendant’s failure to pay overtime wages,

(see Def. Motion, Ex. A, ¶¶ 11-12), the present action also seeks relief for Defendant’s failure to pay

straight-time wages (Count I), Defendant’s failure to pay compensation due and owing at termination

(Count III), and Defendant’s violation of California Business and Professions Code § 17200 et seq.

(Count IV), (see id., Ex. I, ¶¶ 27-30, 37-52).

Second, the certification process is different for the two actions. Under Rule 23 of Federal

Rules of Civil Procedure, once the Court conditionally certifies a class, all the prospective class

members are a part of the class unless they affirmatively opt-out of the action. See FED. R. CIV. P.

23(c)(2), (c)(3). On the other hand, collective actions brought under the FLSA require that individual

members opt in by filing a written consent. See 29 U.S.C. § 216(b) (“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.”). 

Finally, the remedies available in two actions are different. By way of example only, while the

FLSA mandates overtime to be calculated on a weekly basis at one and one-half of the regular pay

rate, California law mandates overtime to be paid for more than eight hours worked in any workday

or for any time worked on the seventh day in a workweek, and provides for double rate whenever an

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employee works more than twelve hours in one workday or more than eight hours on the seventh day.

Compare 29 U.S.C. § 207(a)(1) with CAL. LABOR CODE § 510(a).

The cases cited by Defendant do not mandate a different conclusion. Thus, in Jumapao v.

Washington Mutual Bank, F.A., No. 06-CV-2285 W (RBB), 2007 WL 4258636 (S.D. Cal. Nov. 30,

2007), the court granted the motion to transfer where both actions alleged claims under the FLSA and

California state law, and where the first action involved 249 individuals from California. Similarly,

in Walker, 2003 WL 21056704, the court granted a motion to dismiss based on prior action where the

two named plaintiffs in the second action were also parties to the first action, there were 39 other class

members from the first action that qualified as members of the plaintiffs’ proposed class in the second

action, and the FLSA and the Washington Minimum Wage Act contained “materially identical

definitions of the administrative capacity exemption.” Finally, in Adoma, 2010 WL 1797263, the court

found the “first to file” rule to apply where the proposed classes in both actions sought to represent

at least some of the same individuals and both actions raised FLSA claims, although the second action

also alleged an additional unpaid overtime theory.

Accordingly, in this case, because the claims alleged in the two actions are not “substantially

similar,” the third factor also weighs against the application of the “first to file” rule.

D. Exception

Even if the factors somehow favored the application of the “first to file” rule, the Court could

still exercise its discretion to “disregard it in the interests of equity.” Adoma, 2010 WL 1797263, at

*6. The Ninth Circuit has explained that the application of the “first to file” should not be

“mechanical.” See Alltrade, 946 F.2d at 627-28. According to the court, “district court judges can, in

the exercise of their discretion, dispense with the first-filed principle for reasons of equity.” Id. at 628.

Thus, in Adoma, although the district court found all three factors to be satisfied, the court exercised

its discretion not to apply the rule where the second action involved additional claims and different

relief under California law. 2010 WL 1797263, at **6-7. According to the court:

Further, plaintiff brings additional theories of recovery. Moreover, the fact that

plaintiff also seeks relief under California state law, which requires entirely different

calculations for overtime compensation, demonstrates that judicial resources will not

be significantly conserved. California courts will, if plaintiff is successful, notice a

class action concerning overtime pay, and these class members will be required to

participate in two separate claims for overtime compensation.

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Id. at *7. The same is true here. Even if all of the “first to file” factors weighed in favor of its

application (which they do not), in light of the distinct California state claims raised and relief

requested in the Gardner action, the application of the “first to file” rule would not result in any

significant conservation of judicial resources.

For the foregoing reasons, the Court DENIES Defendant’s motion to dismiss or, in the

alternative, transfer or stay the present action based on the “first to file” rule.

CONCLUSION

Accordingly, the Court DENIES Plaintiff’s motion to remand and DENIES Defendant’s

motion to dismiss, transfer, or stay.

IT IS SO ORDERED.

DATED: July 6, 2010

IRMA E. GONZALEZ, Chief Judge

United States District Court

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