Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-01254/USCOURTS-cand-4_06-cv-01254-3/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

WOODFIN SUITE HOTELS, LLC; and

PACIFIC HOTEL MANAGEMENT, LLC

Plaintiffs,

 v.

CITY OF EMERYVILLE

Defendant. /

No. C 06-1254 SBA

ORDER

[Docket No. 68]

This matter comes before the Court on Defendant's Motion to Dismiss or for Judgment on

the Pleadings, and Motion for Summary Judgment or Partial Summary Judgment. 

BACKGROUND

Measure C

On November 8, 2005, residents of the City of Emeryville passed Measure C ("Measure C"

or "Ordinance"). On December 6, 2005, Measure C went into effect. Measure C applies to the

hotels in the City which have more than 50 rooms (the "Hotels"). Measure C provides for, inter

alia:

• Minimum compensation of $9 per hour and average minimum compensation of $11

per hour for all employees.

• Annual cost of living increases, calculated by the Consumer Price Index.

• Paid leave at the employees' regular rate of pay for jury duty.

• Protection against discharge for 90 days following a change in ownership of the

Hotels or another employer within the Hotels, absent good cause.

• Payment of time-and-a-half for the room cleaners who clean more than 5,000 square

feet in an 8 hour work day.

• Maintenance by Hotels of employee compensation records, including names, pay

rates, and benefit payments (if the Hotels want to credit benefit payments toward total

compensation).

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• "Reasonable access" to Hotels by city representatives and organizations assisting

employees in the hospitality industry for the purpose of monitoring compliance with

Measure C and investigating complaints of non-compliance.

Measure C includes the following findings: “[I]t is proper to regulate employment conditions

at large hotels first rather than trying to regulate all employers because [the People] believe that (1)

large hotels are better able to afford the proposed conditions than other kinds of employers; (2)

many large hotels in the Bay Area are already meeting the employment conditions required by this

Ordinance, unlike the situation in other industries; (3) large hotels provide jobs similar to the

janitorial jobs already protected by a similar state law on worker retention, Labor Code sections

1060-65; and (4) large hotels are generally less likely to respond to such regulations by closing or

reducing employment than other kinds of businesses which can more readily move jobs offshore or

to other locations, as large hotels wish to be here because of our city’s location.” Ordinance, § V.

Procedural Background

On February 21, 2006, Plaintiffs filed a Complaint seeking declaratory and injunctive relief. 

The Complaint alleges that Measure C is unconstitutional and preempted by state and federal law. 

The same day, Plaintiffs filed a Motion for Preliminary Injunction. On August 23, 2006, after

receiving supplemental briefing on the issue of Plaintiffs' standing to pursue their claims, this Court

denied the Motion for Preliminary Injunction.

The Court held that Plaintiffs did have standing to challenge the minimum wage provision of

the Ordinance (section I.A), the provision requiring room cleaners to be paid time-and-a-half if

required to clean rooms larger than 5,000 square feet (section I.C), the provision making compliance

with enforcement provisions a condition for issuance of a permit (section I.E), the provision

requiring hotels subject to the Ordinance to pay an annual fee to cover its share of the City's

enforcement costs (section II), and the annual reporting requirement (section IV.E). The Court held

that Plaintiffs lacked standing to challenge all other provisions of Measure C.

The Court also held that Plaintiffs had not demonstrated a likelihood of success on the merits

of their claims. Specifically, the Court held that Measure C was not likely to be preempted by the

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National Labor Relations Act under either the Machinists doctrine or the Garmon doctrine. The

Court also held that Measure C was not likely to be preempted by ERISA, or by California laws. 

Finally, the Court held that Plaintiffs lacked standing to challenge Measure C as unconstitutionally

vague, and that Plaintiffs were unlikely to succeed in their Equal Protection challenge to Measure C.

On September 22, 2006, Defendant filed the instant Motion to Dismiss or for Judgment on

the Pleadings and Motion for Summary Judgment. In their opposition, Plaintiffs asserted that they

wished to voluntarily dismiss the action without prejudice. Accordingly, on December 20, 2006,

this Court issued an Order directing Defendant to show cause why that request should not be granted

pursuant to Federal Rule of Civil Procedure 41(a)(2) [Docket No. 84]. Defendant filed a response to

the Order on December 26, 2006.

In its response to the Order to Show Cause, Defendant provided information about the

parties' interactions since the Motion for Preliminary Injunction was denied. Defendant contacted

Plaintiffs' counsel on or about August 25, 2006, in an effort to negotiate dismissal of this action. 

Siegel Decl. at ¶ 3. Plaintiffs rejected this proposal. Id. Defendant sent a letter dated September 11,

2006 to Plaintiffs indicating that, because Plaintiffs refused to stipulate to dismissal, Defendant

would file a dispositive motion, and requested that Plaintiffs reconsider their refusal. Id. at ¶ 4. 

Plaintiffs' counsel first informed Defendant that they were interested in dismissing the action without

prejudice on December 18, 2006. Id. at ¶ 7. At that point, Defendant was not amenable to dismissal

without prejudice. Id. at ¶ 8.

ANALYSIS

1. Judicial Notice

Defendant requests that the Court take judicial notice of the following: (1) a copy of Measure

C; (2) a printout from the Department of Labor website showing the Consumer Price Index for 2005

for the San Francisco-Oakland-San Jose region; and (3) several other local ordinances limiting

employers' rights to terminate employees following a change in the employer (with web links to the

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text of these ordinances). 

Under Federal Rule of Evidence 201(b), the Court may take judicial notice of documents

"capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably

be questioned." These documents are public records, and are judicially noticeable. See

Manufactured Home Communities, Inc. v. City of San Jose, 358 F. Supp. 2d 896, 904 (N.D. Cal.

2003) (taking judicial notice of municipal ordinances), rev'd in part on other grounds, 420 F.3d

1022 (9th Cir. 2005). Accordingly, Defendant's Request for Judicial Notice is GRANTED.

2. Amici

A group of legal services and community organizations has filed a Motion for Leave to File

Brief Amici Curiae. These organizations are: the Brennan Center for Justice at New York

University School of Law ("Brennan Center"), the Legal Aid Society – Employment Law Center

("LAS-ELC"), the East Bay Community Law Center, and the East Bay Alliance for a Sustainable

Economy ("EBASE"). They state that they are "united by a common interest in ensuring that cities

such as Emeryville retain the authority to promote family-supporting jobs for low-income residents

through policies such as living wage laws." Memorandum in Support of Motion for Leave to File

Brief Amici Curiae at 2. Amici state that they will bring to the Court's attention additional legal

authorities on the arguments made by the City of Emeryville, "such as several decisions rejecting

similar challenges to laws similar to Measure C." Id. at 1.

Whether to allow Amici to file a brief is solely within the Court's discretion, and generally

courts have "exercised great liberality . . . [t]here are no strict prerequisites that must be established

prior to qualifying for amicus status; an individual seeking to appear as amicus must merely make a

showing that his participation is useful or otherwise desirable to the court." In re Roxford Foods

Litigation, 790 F. Supp. 987, 997 (E.D. Cal. 1991) (quoting United States v. Louisiana, 751 F. Supp.

608, 620 (E.D. La. 1990)). In ruling on the Motion for Preliminary Injunction, the Court allowed

EBASE and several individuals to file an Amicus brief. Now, it appears that the Amici can be of

use to the Court by offering additional authorities. Thus, the Motion for Leave to File Brief Amici

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Curiae is GRANTED.

Amici have also filed a Request for Judicial Notice. They request judicial notice of the

following: (1) a printout from the State of California's Employment Development Department's

website, as well as data from the United States Department of Labor's Bureau of Labor Statistics,

showing wages in the hotel industry compared to other industries, and (2) copies of two articles

about hotel industry revenues, printed off of the internet. With respect to the latter, amici are only

requesting judicial notice of the fact that these articles were published, not of the truth of their

content. See Heliotrope General, Inc. v. Ford Motor Co., 189 F.3d 971, 981 n.18 (9th Cir. 1999).

Again, under Federal Rule of Evidence 201(b), the Court may take judicial notice of

documents "capable of accurate and ready determination by resort to sources whose accuracy cannot

reasonably be questioned." These documents are government publications, whose accuracy is not in

question, and articles which appear to be readily accessible via the internet. Thus, Amici's Request

for Judicial Notice is GRANTED. 

3. Dismissal

Federal Rule of Civil Procedure 41(a)(2) states that an action may be dismissed without

prejudice by order of the court "upon such terms and conditions as the court deems proper." The

decision whether to grant a voluntary dismissal under Rule 41(a)(2) is within the sound discretion of

this Court, and the Court must "consider whether the defendant will suffer some plain legal

prejudice as a result of the dismissal." Hamilton v. Firestone Tire & Rubber Co., 679 F.2d 143, 145

(9th Cir. 1982). The Court will consider whether significant discovery or pretrial preparations have

taken place; prejudice does not result "simply when defendant faces the prospect of a second lawsuit

or when plaintiff merely gains some tactical advantage." Id. See also Wiesen v. Astrazeneca

Pharmaceuticals, L.P. et al., 2006 WL 2529472 (N.D. Cal. Aug. 31, 2006). 

In response to this Court's Order to Show Cause, Defendant argues that dismissal of this

matter without prejudice would prejudice Defendant. Specifically, Defendant argues that this Court

should decline to dismiss this action without prejudice because Plaintiffs are "engaged in blatant

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forum shopping." Def.s' Response at 5:23. Plaintiff Woodfin is a defendant in a state action which

concerns the validity of Measure C. Defendant submits a copy of Plaintiff Woodfin's answer to the

complaint in the state action, in which Plaintiff Woodfin argues that Measure C is unconstitutional

and unenforceable. Def.s' Response at 6:2; Siegal Decl., Exh. E at 7:21-24. Defendants argue that

although Plaintiffs' Opposition concedes that Plaintiffs have no basis for pressing their claims in

federal court, Plaintiffs' refusal to dismiss with prejudice and Plaintiff Woodfin's state court answer

indicates that Plaintiffs "hope the California judiciary will find otherwise." Def.s' Response at 6:6-7. 

Defendant asserts it will be significantly prejudiced by a dismissal without prejudice because

Defendant has already demonstrated the facial validity of Measure C, and it should have the benefits

of res judicata or collateral estoppel in the state courts. Def.s' Response at 6:18-20. 

Defendant has not sufficiently demonstrated that it will suffer prejudice in the event this

Court dismisses this action without prejudice. First, the fact that Plaintiff Woodfin is a defendant in

a state action, and raises the argument that Measure C is unconstitutional as one affirmative defense

out of twenty-nine in that action, does not support Defendant's assertion that Plaintiffs are engaged

in "blatant forum shopping." Second, Defendant's reliance on Roybal v. Equifax in support of its

argument is misplaced. In that case, the plaintiffs filed their action in state court, only to have it

properly removed to federal court under diversity jurisdiction, and subsequently dismissed by the

district court pursuant to Rule 12(b)(6). 2006 U.S. Dist. LEXIS 22380, **4-5 (E.D. Cal., April 14,

2006). The plaintiffs in that matter chose not to seek remand, but instead proceeded to file a second

action in state court, within a week after the district court granted a motion to dismiss, alleging

almost identical claims to those involved in the federal action, and then simultaneously requested

that the district court dismiss its federal action under Rule 41(a)(2). Id. Here, Plaintiffs have not

sought to raise "almost identical claims" in another action in state court, but instead one of the

Plaintiffs in this action has been named as a defendant in a state action, and has raised the

constitutionality of Measure C as one of several affirmative defenses. Thus, the reasoning applied in

Roybal is inapplicable here.

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Third, the Ninth Circuit has made it clear that legal prejudice does not result merely because

a defendant will be inconvenienced by having to defend in another forum, and that "uncertainty

because a dispute remains unresolved is not legal prejudice." Westlands Water District v. United

States, 100 F.3d 94, 96 (9th Cir. 1996); see also Hamilton, 679 F.2d at 145. Defendant has chosen

to file a motion to intervene in the pending state action in which Plaintiff Woodfin is a defendant. 

Def.'s Response at 8:7-9. Defendant argues that it should have an opportunity to demonstrate that

Plaintiff Woodfin is "barred from re-litigating" the constitutionality of Measure C, but none of these

facts demonstrate that Defendant will suffer legal prejudice based on the standard articulated by the

Ninth Circuit. 

Thus, as Defendant fails to demonstrate that it would suffer legal prejudice, this Court

GRANTS Plaintiff's request for voluntary dismissal under Rule 41(a)(2). See Waller v. Fin. Corp. of

Am., 828 F.2d 579, 583 (9th Cir. 1987) (a district court should grant a motion for voluntary

dismissal unless a defendant can show that it will suffer some plain legal prejudice as a result). 

Defendant argues that, in the event this Court decides to dismiss without prejudice, Plaintiffs

should be ordered to pay Defendant's attorneys fees. In Stevedoring Services of America v. Armilla

Intern. B.V., 889 F.2d 919, 921 (9th Cir. 1989), the court noted that:

Although costs and attorney fees are often imposed upon a plaintiff who

is granted a voluntary dismissal under Fed.R.Civ.P. 41(a)(2), no circuit

court has held that payment of the defendant's costs and attorney fees is a

prerequisite to an order granting voluntary dismissal. Moreover, several

courts have specifically held that such payment is not required. In Puerto

Rico Maritime Shipping Auth. v. Leith, 668 F.2d 46 (1st Cir.1981), as in

the present case, the defendants-appellants argued that the district court

abused its discretion by granting the plaintiff's motion for voluntary

dismissal without prejudice while refusing to impose the defendants'

costs and attorney fees on the plaintiff. The court stated, “We do not read

Rule 41(a)(2) as always requiring the imposition of costs as a condition

to a voluntary dismissal, although it is usually considered necessary for

the protection of the defendant.” Id. at 51; see also 9 C. Wright & A.

Miller, Federal Practice and Procedure § 2366 (1971).

Thus, it is clearly within the district court's discretion to award attorney's fees and costs as a

condition of granting voluntary dismissal pursuant to Rule 41(a)(2), and doing so is commonplace

and serves the purpose of protecting the defendant. See also Westlands Water District, 100 F.3d at

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97 (holding that the expense incurred in defending a lawsuit does not constitute legal prejudice,

because the defendant's interests "can be protected by conditioning the dismissal without prejudice

upon the payment of appropriate costs and attorney fees"). 

In this case, Defendant would not have expended time on bringing the instant Motion for

Summary Judgment or Motion to Dismiss had Plaintiff agreed to a voluntary dismissal months ago,

after this Court issued its Order on the Motion for Preliminary Injunction. It is an equitable and

appropriate exercise of this Court's discretion to award Defendant the amount of attorney's fees

incurred since September 11, 2006 (the date on which Defendant notified Plaintiff that they would

file a dispositive motion in this case, due to Plaintiff's refusal to stipulate to voluntary dismissal). 

See Siegel Decl. Ex. B. Accordingly, the Court GRANTS Defendant $10,000 in attorney's fees as a

condition of the voluntary dismissal of the action. See Siegel Decl. ¶ 11 (documenting the $10,000

fee amount). 

CONCLUSION

As the parties agree that this case should be dismissed, and only disagree as to whether the

case should be dismissed with or without prejudice, Defendant's Motion for Summary Judgment is

DENIED. 

IT IS HEREBY ORDERED THAT this action is DISMISSED WITHOUT PREJUDICE

pursuant to Rule 41(a)(2). IT IS FURTHER ORDERED THAT Defendant is awarded $10,000.00 in

attorney's fees as a condition of dismissal.

IT IS SO ORDERED.

Dated: 1/8/07 

 SAUNDRA BROWN ARMSTRONG

United States District Judge

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