Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_07-cv-05243/USCOURTS-cand-5_07-cv-05243-5/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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 This disposition is not designated for publication in the official reports. 1

Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

**E-Filed 8/3/10**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

VLADIMIR A. BALAREZO, individually and on

behalf of others similarly situated,

 Plaintiff,

 v.

NTH CONNECT TELECOM, INC., AND

STEVEN CHEN,

 Defendants.

Case Number 5:07-cv-05243-JF (PVT)

ORDER (1) VACATING ORDER OF 1

FEBRUARY 18, 2010, (2) GRANTING

PLAINTIFFS’ COUNSEL’S MOTION

TO WITHDRAW, (3) DENYING

DEFENDANTS’ MOTION TO

DISMISS, AND (4) DIRECTING

CERTAIN PLAINTIFFS TO SHOW

CAUSE WHY THEIR CLAIMS

SHOULD NOT BE DISMISSED FOR

LACK OF PROSECUTION

[re: document nos. 129, 133]

Both parties move to vacate this Court’s order dated February 18, 2010, dismissing the

instant case in light of a tentative settlement agreement. Plaintiffs’ counsel moves to withdraw

from representation of Plaintiff James Morgan. Defendants move pursuant to Federal Rule of

Civil Procedure 41(b) to dismiss the action with prejudice as to certain individual Plaintiffs

because those Plaintiffs have failed to comply with court orders. The Court has considered the

moving and responding papers and the oral argument of counsel presented at the hearing on July

Case 5:07-cv-05243-HRL Document 144 Filed 08/03/10 Page 1 of 8
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28 It is not clear who, if anyone, represents these opt-in Plaintiffs. Balarezo is represented

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by Adam Wang (“Wang”) and Tomas Eduardo Margain (“Margain”). Wang states that

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

23, 2010. For the reasons discussed below, the order dated February 18, 2010 will be vacated,

the motion to withdraw will be granted, and the motion to dismiss will be denied without

prejudice. Plaintiffs Cabrera, Guerrero, Lee, Morgan, Pierre, Tran, and Webb will be ordered to

show cause why their claims should not be dismissed for lack of prosecution.

I. BACKGROUND

On October 12, 2007, Plaintiff Vladimir Balarezo (“Balarezo”) filed the instant putative

class action, alleging that Defendants Nth Connection Telecom, Inc. (“Nth Connect”) and Steven

Chen (“Chen”) (collectively, “Defendants”) violated the Fair Labor Standards Act (“FLSA”), 29

U.S.C. § 201, et seq., and a number of state laws by failing to pay overtime wages and to provide

rest and meal breaks to Nth Connect’s employees. Balarezo alleges that Nth Connect is a

contractor hired by non-party Comcast Corporation to install cable equipment. Chen is the

owner and CEO of Nth Connect. Balarezo was employed as a “technician” on a piece rate basis,

meaning that he was paid a flat rate for each installation. He alleges that his time cards did not

reflect the different rates obtained for different residences or that he was paid per piece

(installation). He also alleges that he and similarly situated employees were not paid overtime

wages despite typically working six days and more than forty hours per week. 

On May 2, 2008, pursuant to 29 U.S.C. § 216(b) and Does I thru XXIII v. Advanced

Textile Corp., 214 F.3d 1058, 1064 (9th Cir. 2000), the Court granted Balarezo’s motion for precertification of the FLSA class claim and provided a period of sixty days in which employees

who wished to join the suit could opt in. In addition to Balarezo, the following individuals opted

into the instant action: Osmin Avila (“Avila”), Luis Chiarella (“Chiarella”), Luis Cabrera

(“Cabrera”), Jason Dollins (“Dollins”),Victor Funez (“Funez”), Abelardo Guerrero (“Guerrero”),

Jose Luis Hernandez (“Hernandez”), Xay Lee (“Lee”), Derek Menze (“Menze”), Anibal Merino

(“Merino”), James Morgan (“Morgan”), Jean Marie Pierre (“Pierre”), James Russell (“Russell”),

Richard Tran (“Tran”), Henry L. Webb (“Webb”), and Frank Zepeda III (“Zepeda”) (collectively,

“Plaintiffs”).2

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Plaintiffs’ counsel never have had a written retainer agreement with the opt-in Plaintiffs. (Wang

Decl. ISO Opp’n to MTD ¶ 4.) However, Wong and Margain oppose the instant motion to

dismiss on behalf of all Plaintiffs, and they also seek to withdraw from representation of Morgan.

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

On October 17, 2008, after Plaintiffs filed a series of motions to compel discovery, the

Court referred the parties to mediation through the Court’s alternative dispute resolution

(“ADR”) program. The first mediation session occurred on February 18, 2009. The record is

unclear as to which Plaintiffs attended that first mediation session. At the pretrial conference on

September 4, 2009, the Court referred the parties to a settlement conference with Magistrate

Judge Patricia V. Trumbull. The settlement conference was held on November 18, 2009, and it

is undisputed that some but not all of the opt-in Plaintiffs participated in the conference. The

parties agree that Guerrero, Lee, Morgan, Pierre, Tran, and Webb did not attend. (Wang Decl.

ISO Opp’n to MTD, ¶ 20.) Defendants claim that Cabrera also did not attend the conference.

On December 3, 2009, the Court again referred the parties to mediation. The second

mediation session was held on February 5, 2010. The same Plaintiffs who failed to participate in

the earlier settlement conference also failed to participate in the second mediation session,

although the parties again disagree as to whether Cabrera participated. On February 8, 2009, the

mediator filed a certification that the entire case had settled. On February 18, 2009, the Court

conditionally dismissed the entire action with prejudice, subject to the agreed consideration for

the settlement being delivered within ninety days. On April 18, 2010, Plaintiffs requested that

the Court vacate the dismissal because the parties had failed to affirm the tentative settlement

agreement. (Docket No. 126.)

After the second mediation session, Wang sent letters to the non-participating Plaintiffs,

informing them that Defendants had extended a settlement offer to the participating Plaintiffs and

requesting that the non-participating Plaintiffs contact him if they still wished to pursue their

claims. (Wang Dec. ISO Opp’n to MTD, ¶ 21.) All of the non-participating Plaintiffs except for

Morgan contacted Wang, indicating that they did wish to pursue their claims. (Id. at ¶ 22.)

On April 27, 2010, Defendants moved to dismiss with prejudice the claims of the

Plaintiffs who did not participate in either the settlement conference or the second mediation

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

session. According to Defendants, dismissal of the claims of the non-participating class

members was a condition of the tentative settlement. (See also Wang Decl. ISO Opp’n to MTD

¶ 12.) In response, Plaintiffs allege that Defendants would not agree to the tentative settlement

agreement even if the non-participating Plaintiffs were dismissed because of the failure of a

second condition precedent to the settlement agreement. 

Plaintiff Hernandez also is the class representative in a separate action against Nth

Connect which is pending in the San Francisco Superior Court, CGC-08-482659 (the “San

Francisco Action”). (Wang Decl. ISO Opp’n to MTD ¶ 13.) Daniel Berko (“Berko”) represents

the plaintiffs in the San Francisco action. (Id.) As a second condition precedent to the tentative

settlement in the instant case, Nth Connect was to be dismissed from the San Francisco action. 

(Id.) At least as of June 25, 2010, Nth Connect remains a defendant in that action, and Wang

asserted at oral argument that Berko is unwilling to dismiss Nth Connect from that action. 

II. DISCUSSION

A. Motions to vacate

Because both parties have notified the Court within ninety days that they have failed to

affirm the tentative settlement agreement, the order of dismissal will be vacated.

B. Plaintiffs’ counsel’s motion to withdraw

Counsel may not withdraw from representation unless they are relieved by order of the

Court after reasonable advance written notice has been given to the client and to all other parties

who have appeared in the case. Civil L.R. 11-5(a). Wang represents that he wrote to Morgan,

requesting that Morgan contact either him or Margain if he desires to pursue the instant action,

and that Morgan has not responded to that communication. (Wang Decl. ISO Mot. to Withdraw,

¶¶ 8, 10.) This lack of communication is sufficient cause to grant the motion to withdraw. 

Civil L.R. 11-5(b) provides that when withdrawal by an attorney is not accompanied by

simultaneous appearance of substitute counsel or agreement of the party to appear pro se, leave

to withdraw may be subject to the condition that papers may continue to be served on counsel for

forwarding purposes, unless and until the client appears by other counsel or pro se. Accordingly,

the Court will direct that Wang and Margain accept service for forwarding purposes until Morgan

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

appears by other counsel or pro se.

C. Defendants’ motion to dismiss

Defendants move pursuant to Federal Rule of Civil Procedure 41(b) to dismiss with

prejudice the non-participating Plaintiffs, arguing that the non-participating Plaintiffs failed to

comply with the Court’s referrals of the parties to the ADR program. When determining whether

to dismiss a claim or action under Rule 41(b), the Court must balance five factors: (1) the

public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its docket;

(3) the risk of prejudice to the defendants; (4) the public policy favoring disposition of cases on

their merits; and (5) the availability of less drastic alternatives. Yourish v. California Amplifier,

191 F.3d 983, 990 (9th Cir. 1999).

With respect to the first factor, “[t]he public’s interest in expeditious resolution of

litigation always favors dismissal.” Yourish, 191 F.3d at 990. Because the non-participating

Plaintiffs have failed to pursue their claims at least since November 18, 2009, when they failed to

attend the settlement conference, this factor favors dismissal. With respect to the second factor,

“[t]he trial judge is in the best position to determine whether the delay in a particular case

interferes with docket management and the public interest.” Id. While the Court’s docket is

heavy, it appears that even if the non-participating Plaintiffs were dismissed, the instant action

would continue to proceed with respect to the participating Plaintiffs and Defendants. 

Defendants do not dispute that Nth Connect’s dismissal from the San Francisco action is a

condition precedent to the tentative settlement agreement. Nth Connect has not been dismissed

from that action, and it appears that neither party has the ability to compel that result. Thus, this

factor weighs against dismissal. 

With respect to the third factor, Defendants point out that:

failure to prosecute diligently is sufficient by itself to justify a dismissal, even in the 

absence of a showing of actual prejudice to the defendant from the failure. . . . The law

presumes injury from unreasonable delay. 

In re Eisen, 31 F.3d 1447, 1452-53 (9th Cir. 1994) (citing Anderson v. Air West, Inc., 542 F.2d

522, 524 (9th Cir. 1976)). “However, this presumption of prejudice is a rebuttable one and if

there is a showing that no actual prejudice occurred, that factor should be considered . . . .Where

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

a plaintiff has come forth with an excuse for his delay that is anything but frivolous, the burden

of production shifts to the defendant to show at least some actual prejudice.” Id. Three of the

non-participating Plaintiffs have offered excuses for their delay. Lee states that he did not attend

the ADR sessions because of his work and because he was told that one of the sessions was

canceled. (Wong’s Suppl. Decl. ISO Opp’n to MTD, Ex. 1.) Pierre claims that she “had no

knowledge of the claim until [she] received [the letter from Wong after the second mediation

session].” (Id., Ex. 2.) Finally, Tran states that he did not have time to appear and that he “did

not receive any notice letter at all.” (Id., Ex. 3.) None of the other non-participating Plaintiffs

have offered any explanation for their delay. At the same time, Defendants do not argue that they

have suffered actual prejudice as a result of the delay, e.g., they do not argue that the delay

caused the loss of evidence or memory of a witness. See In re Eisen, 31 F.3d at 1453 (quoting

Nealey v. Transportacion Maritima Mexicana, S. A., 662 F.2d 1275, 1281 (9th Cir. 1981)). 

Moreover, because it appears that the parties would not execute the tentative settlement

agreement even if the non-participating Plaintiffs were dismissed, it is not clear how the absence

of the non-participating Plaintiffs could have prejudiced Defendants’ position with respect to the

action as a whole. On balance, this factor neither favors nor disfavors dismissal.

With respect to the fourth factor, public policy favors disposition of cases on their merits,

implying that this factor weighs against dismissal. In fact, the parties cannot agree even with

respect to whether one of the Plaintiffs – Cabrera – participated in the ADR sessions. This factor

weighs strongly against dismissal at least until it is clear which Plaintiffs did and did not

participate. 

Finally, with respect to the fifth factor, Plaintiffs contend that it would be improper to

dismiss the non-participating Plaintiffs without first warning them of the possibility of casedispositive sanctions. The Ninth Circuit “expressly rejected the argument that an express

warning regarding the possibility of dismissal is a prerequisite to a Rule 41(b) dismissal when

dismissal follows a noticed motion under Rule 41(b).” In re Eisen, 31 F.3d at 1455 (citing

Morris v. Morgan Stanley & Co., 942 F.2d 648, 652 (9th Cir. 1991)). Nonetheless, the Court

concludes that less drastic alternatives are available, such as ordering the non-participating

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28 In an abundance of caution, Cabrera will be included within this group, along with 3

Guerrero, Lee, Morgan, Pierre, Tran, and Webb. 

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

Plaintiffs to show cause why their claims should not be dismissed. The delay has not resulted in

actual prejudice to Defendants, and an order to show cause would facilitate the parties’ future

settlement discussions by clarifying the number of claims still at issue. This factor strongly

weighs against dismissal.

Accordingly, the non-participating Plaintiffs will be ordered to show cause why their

claims should not be dismissed for lack of prosecution. A hearing and case management 3

conference will be set for September 10, 2010 at 10:30 a.m. At the hearing, Plaintiffs Cabrera,

Guerrero, Lee, Morgan, Pierre, Tran, and Webb should be prepared to explain their lack of

participation in the instant action and to confirm their intent to prosecute their claims diligently. 

Plaintiffs are warned that their failure to do so may result in the dismissal of their claims with

prejudice. The parties also are encouraged to continue settlement discussions and, to the extent

possible, to join formally Berko in those discussions.

III. CONCLUSION

Good cause therefor appearing: 

(1) The order dated February 18, 2010 will be vacated;

(2) The motion to withdraw will be granted; 

(3) Defendants’ motion to dismiss will be denied without prejudice;

(4) Plaintiffs Cabrera, Guerrero, Lee, Morgan, Pierre, Tran, and Webb, in writing and

on or before September 10, 2010, shall show cause why their claims should not be

dismissed for lack of prosecution; and 

(5) A hearing and case management conference is set for September 10, 2010 at

10:30 a.m.

IT IS SO ORDERED.

DATED: 7/26/10 __________________________________

JEREMY FOGEL

United States District Judge

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Case No. C 07-5243 JF (PVT)

ORDER (1) VACATING ORDER OF FEBRUARY 18, 2010, ETC.

(JFEX1)

This Order was served on the following persons:

Luis Cabrera

1501 California Avenue

San Pablo, CA 94806

Grant Carlson

Friedman, Enriquez & Carlson, LLP

433 North Camden Drive

Suit 965

Beverly Hills, CA 90210

Xay Lee

286 Judy Dr.

Atwater, CA 95301

Tomas E. Margain

Law Offices of Tomas E. Margain

1550 Bryant Street

Suit 725

San Francisco, CA 94103

James Morgan

5744 Owens Dr. #207

Pleasanton, CA 94588

Jean-Marie Pierre

888 Davis Street #209

San Leandro, CA 94577

Richard Tran

3343 Trebol Lane

San Jose, CA 95148

Adam Wang

Law Offices of Adam Wang

12 South First Street

Suite 613

San Jose, CA 95113

Henry L. Webb

1184 53rd St.

Oakland, CA 94608

Case 5:07-cv-05243-HRL Document 144 Filed 08/03/10 Page 8 of 8