Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-03993/USCOURTS-cand-5_06-cv-03993-4/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Denial of Overtime Compensation

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1 Specifically, the court (1) granted defendant's motion to dismiss plaintiff's first,

second, third, sixth, and eighth claims for relief; (2) denied defendant's motion to dismiss plaintiff's

fourth and fifth claims for relief; (3) denied defendant's motion to dismiss plaintiff's claim under the

FLSA (seventh cause of action); and (4) granted defendant's motion for more definite statement as to

plaintiff's allegations supporting his fourth and fifth claims for relief.

ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL RECONSIDERATION

C-06-03993 RMW

SPT

E-FILED on 2/12/07

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

SCOTT MERSNICK, individually and on

behalf of all others similarly situated,

Plaintiffs,

v.

USPROTECT CORPORATION, a Maryland

corporation formerly known as HOLIDAY

INTERNATIONAL SECURITY, INC., and

DOES 1 TO 25,

Defendant.

No. C-06-03993 RMW

ORDER DENYING DEFENDANT'S

MOTION FOR LEAVE TO FILE A MOTION

FOR PARTIAL RECONSIDERATION

[Docket No. 31]

Defendant US Protect Corporation ("USP") moves for leave to file a motion for partial

reconsideration of this court's December 18, 2006 Order Denying in Part and Granting in Part

Defendant's Motion to Dismiss Plaintiff's Complaint and Granting in Part Defendant's Motion for

More Definite Statement ("December 18, 2006 Order").1

 In the alternative, USP seeks clarification

of the permissible scope of plaintiff's FLSA claim or a requirement that plaintiffs plead with more

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ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL RECONSIDERATION

C-06-03993 RMW

SPT 2

specificity facts establishing a viable FLSA claim. USP makes three arguments in support of its

motion. The court addresses each of these arguments in turn.

USP first argues that the court made a factual error in concluding that the executed WH-56

Settlement Forms ("WH-56 Forms") do not show that the settlement payments made as a result of

the Department of Labor's ("DOL") investigation were made under the Fair Labor Standards Act

("FLSA"). USP argues that the WH-56 Forms show that the payments were made under the FLSA

because the code number "1" (which represents the FLSA for purposes of the form) "is contained in

Column 4 of each of the WH-56 Forms." Def.'s Mot. at 4:10-11. USP further argues "[t]his code is

specifically contained in the only official documents evidencing and consummating the settlement

between USProtect and the Department of Labor . . . and those official documents therefore establish

that USProtect and the DOL were settling the FLSA claims, not just SCA or CWHSSA claims." Id.

at 4:12-16. 

USP's argument is without merit. The WH-56 Form indicates the particular statutes that

were the subject of the DOL's investigation in column 4. The WH-56 Form submitted by USP, and

for which this court took judicial notice, clearly shows that the code number 1 was handwritten into

column 4 of the WH-56 form. Decl. of Heather Cheyne Supp. Def.'s Mot. Dismiss, Docket No. 12

("Cheyne Decl."), Ex. B. Only codes "3," representing the Service Contract Act ("SCA"), and "5,"

representing the Contract Work Hours and Safety Standards Act ("CWHSSA") appear officially

printed in column 4. Id. Moreover, an e-mail from Robert A. Kunz, who is indicated to be the DOL

investigator on the WH-56 Form, refers to the WH-56 Form as "for SCA and CWHSSA." Cheyne

Decl., Ex. C at 1. Mr. Kunz makes no mention of the FLSA. While a letter from USP's counsel to

Mr. Kunz purports to describe the payments pursuant to the WH-56 Form as representing payments

under the SCA, CWHSSA, and the FLSA, this is insufficient to show that the DOL investigation and

resulting payments were made under the FLSA. 

Next, USP argues that two Ninth Circuit cases, Miscellaneous Service Workers v. PhilcoFord Corp., 661 F.2d 776 (9th Cir. 1981), and United States ex rel. Sutton v. Double Day Office

Services, 121 F.3d 531 (9th Cir. 1997), are broad enough to dispose of the issue of whether the

DOL's investigation and resulting payments by USP bars plaintiffs' FLSA action. In the December

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ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL RECONSIDERATION

C-06-03993 RMW

SPT 3

18, 2006 Order, the court concluded that the remedies under the FLSA and the SCA and CWHSSA 

are not mutually exclusive. 

As an initial matter, USP is simply making the same arguments it already made in its

briefings for its motion to dismiss. No proper grounds for reconsideration has been offered by USP. 

Further, the Ninth Circuit cases cited by USP do not address the issue of whether the remedies under

the FLSA are mutually exclusive of those under the SCA and CWHSSA. In Miscellaneous Service

Workers, the plaintiffs did not make any claims under the FLSA, but attempted to bring a claim

under the SCA. 661 F.2d at 777. The district court held, and the Ninth Circuit affirmed, that there

was no express nor implied private right to a cause of action under the SCA. Id. at 781. The Ninth

Circuit further held that plaintiffs' fraud claim failed to meet the requirements of Rule 9. Id. at 782. 

In addition, the court concluded that the factual allegations underlying the fraud claim essentially

assert a violation of the SCA and plaintiffs were not damaged because they did not have a private

right of action under the SCA. Id. 

In Sutton, 121 F.3d at 533, the court concluded that the plaintiff had no standing to bring a

claim alleging that his former employer violated the False Claims Act by falsely representing that

prevailing wage rates were paid to its service workers as required by its contracts with the

government. Noting that the SCA "requires government contractors to pay service employees

minimum wages and benefits determined by the Secretary of Labor," the court concluded that the

plaintiff essentially sought to enforce a claim for failure to pay "SCA-required wages." Id. Because 

the SCA "restricts employee remedies for violations of the Act to administrative channels," the court

held that plaintiffs were barred from pursuing claims that he was not paid "SCA-required wages." 

Id. Thus, Sutton stands for the proposition that SCA-required wages (or benefits) may not be

enforced by private plaintiffs in the guise of claims under other statutes. Here, plaintiffs are not

seeking to enforce payment of "SCA-required" wages or benefits, nor are they seeking any damages

derived from rights under the SCA. Unlike the plaintiff in Sutton, plaintiffs' claims are pursuant to

their rights under the FLSA, such as the right to be paid for overtime worked.

Finally, USP's argument that based on the court's citations to Masters v. Maryland

Management Co., 493 F.2d 1329 (4th Cir. 1974), Ninth Circuit law compels that plaintiffs' FLSA

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ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL RECONSIDERATION

C-06-03993 RMW

SPT 4

claims are SCA claims in disguise is also without merit. This court cited Masters, 493 F.2d at 1332-

33, for the proposition that the remedies under the FLSA, SCA, and CWHSSA do not conflict. See

Dec. 18, 2006 Order at 5:17-6:22. Contrary to USP's contentions in the present motion, the court

discussed the Fourth Circuit's reasoning in Masters regarding the similarity of the "regular rate"

under the FLSA and the basic or regular rate under the SCA. Notably, despite this similarity and

some overlaps in the statutes, "this does not mean no other parts of the other statutes may not affect

him." As noted above, plaintiffs do not seek merely to enforce payment of wages at the prevailing

rate. Plaintiffs' FLSA claim alleges USP's failure to pay overtime wages. Moreover, USP's

argument that Ninth Circuit law compels a conclusion that plaintiffs' claim for unpaid overtime

pursuant to the FLSA is essentially a claim for SCA wages because overtime is computed off of the

regular rate is unpersuasive. The cited Ninth Circuit cases stand only for the proposition that private

plaintiffs may not sue to enforce SCA-required wages. Even though "regular rate" under the FLSA

is similar to "basic rate" under the SCA, the right to overtime under the FLSA does not equate to an

SCA right merely because overtime is calculated based on the regular rate. USP provides no legal

authority that overtime pay under the FLSA constitutes "SCA-required wages" or "SCA damages." 

Because USP has advanced no grounds warranting reconsideration of the December 18, 2006

Order, its motion for leave to file a motion for reconsideration is DENIED. 

DATED: 2/12/07

RONALD M. WHYTE

United States District Judge

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ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL RECONSIDERATION

C-06-03993 RMW

SPT 5

Notice of this document has been electronically sent to:

Counsel for Plaintiff:

Michael Millen MikeMillen@aol.com 

Counsel for Defendant:

Steven R. Blackburn sblackburn@ebglaw.com 

Matthew A. Goodin mgoodin@ebglaw.com

Counsel are responsible for distributing copies of this document to co-counsel that have not registered

for e-filing under the court's CM/ECF program.

Dated: 2/12/07 SPT

Chambers of Judge Whyte

Case 5:06-cv-03993-RMW Document 42 Filed 02/12/07 Page 5 of 5