Court Opinion

ID: 2818550
Source: CourtListenerOpinion
Date Created: 2015-07-20 20:32:26.396089+00
Date Added: 2024-06-11T12:26:11.594744
License: Public Domain

FILED
                               NOT FOR PUBLICATION                                        JUL 20 2015

                                                                                     MOLLY C. DWYER, CLERK
                       UNITED STATES COURT OF APPEALS                                  U.S. COURT OF APPEALS

                                FOR THE NINTH CIRCUIT

 CORA BUCKLIN, an individual on behalf                  No. 13-56085
 of herself and on behalf of all persons
 similarly situated and VIRGINIA L.                     D.C. No. 2:11-cv-05519-SVW-
 BURTON, an individual on behalf of                     MRW
 herself and on behalf of all persons
 similarly situated,
                                                        MEMORANDUM*
                Plaintiffs - Appellants,

   v.

 ZURICH AMERICAN INSURANCE
 COMPANY,

                Defendant - Appellee.

                      Appeal from the United States District Court
                          for the Central District of California
                      Stephen V. Wilson, District Judge, Presiding

                           Argued and Submitted June 4, 2015
                                  Pasadena, California

Before: M. SMITH and N.R. SMITH, Circuit Judges and LEFKOW,** Senior
District Judge.

        *
              This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
        **
             The Honorable Joan H. Lefkow, Senior United States District Judge
for the Northern District of Illinois, sitting by designation.
I.    Appellants Are Exempt Administrative Employees

      Appellants Cora Bucklin and Virginia Burton appeal the district court’s

grant of summary judgment to appellee Zurich American Insurance Company

(“Zurich”). The district court found that appellants were properly classified as

exempt administrative employees. We have jurisdiction under 28 U.S.C. § 1291

and affirm.

      “We review a district court’s decision to grant summary judgment de novo.”

Carver v. Holder, 606 F.3d 690, 695 (9th Cir. 2010) (citation omitted). We

therefore view the evidence in the light most favorable to the nonmoving party and

determine “whether there are any genuine issues of material fact and whether the

district court correctly applied the relevant substantive law.” Suzuki Motor Corp.

v. Consumers Union of U.S., Inc., 330 F.3d 1110, 1131–32 (9th Cir. 2003) (citation

omitted).

      To classify an employee under the administrative exemption, an employer

must establish the following five elements:

              1.   The employee performs work directly related to
                   management policies or general business operations
                   of either the employer or the employer’s clients;

              2.   The employee customarily and regularly exercises
                   discretion and independent judgment;

                                         2
             3.    The employee works under only general supervision
                   while performing work along specialized or technical
                   lines requiring special training, experience, or
                   knowledge;

             4.    The employee is primarily engaged in exempt work
                   meeting the above requirements; and

             5.    The employee meets a minimum salary requirement.

See Campbell v. PricewaterhouseCoopers, LLP, 642 F.3d 820, 831 (9th Cir. 2011)

(citing Cal. Code Regs. tit. 8, § 11040(1)(A)(2)).

      Unlike the facts in Campbell, there are no genuine issues of material fact as

to what appellants actually do and what Zurich expects them to do. See id. at 832.

Thus, whether appellants’ duties satisfy the elements of the exemption is a question

of law properly decided by the district court. See Cleveland v. City of L.A., 420
F.3d 981, 988 (9th Cir. 2005) (“A district court’s determinations regarding

exemptions to the FLSA are questions of law that we review de novo.” (citation

omitted)).

      Undisputed facts demonstrate that appellants primarily performed work

directly related to Zurich’s management policies or general business operations.

Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(a)(I). Appellants developed a plan of

action for resolving each claim and represented Zurich while investigating claims,

setting reserves, directing litigation, and negotiating settlements. They also made

                                          3
recommendations to their supervisors when necessary, and those recommendations

were frequently accepted. These duties qualify as servicing a business, 29 C.F.R. §

541.205(b) (2001),1 and were therefore qualitatively administrative.2 Harris v.

Superior Court, 266 P.3d 953, 959 (Cal. 2011).

       Further, appellants’ authority to set reserves and to settle claims up to

specified amounts indicates that their duties were substantially important to

Zurich’s business operations. See 29 C.F.R. § 541.205(a). Accordingly,

appellants’ duties were quantitatively administrative as well. Harris, 266 P.3d at

959; see also 29 C.F.R. § 541.205(c)(5) (identifying claim agents and adjusters as

an example of the kind of employee who meets the quantitative component). The

mere fact that appellants performed some clerical duties and described their duties

as routine does not create a triable issue on the quantitative component of the

directly related requirement.

       1
         In construing the administrative exemption, we apply the 2001 version of the federal
regulations. See Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(f) (“The activities constituting exempt
work and non-exempt work shall be construed in the same manner as such terms are construed in
the following regulations under the Fair Labor Standards Act effective as of the date of this
order: 29 C.F.R. Sections 541.201–205, 541.207–208, 541.210, and 541.215.”).
       2
         Appellants argue that the California Court of Appeal’s decision in Harris v. Superior
Court, 144 Cal. Rptr. 3d 289 (Ct. App. 2012), compels the conclusion that an issue of fact
remains on the qualitative component. That decision, however, was ordered depublished by the
California Supreme Court and thus has no precedential value. See Farmers Ins. Exch. v.
Superior Court, 159 Cal. Rptr. 3d 580, 591–92 (Ct. App. 2013).

                                               4
      Appellants customarily and regularly exercised discretion and independent

judgment. Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(b). In setting reserve amounts,

appellants considered a number of factors such as the nature and extent of the

injury and the likelihood of permanent disability. When litigation became

necessary, appellants retained an attorney on behalf of Zurich, developed a

litigation strategy, and, when appropriate, settled the case. Thus, appellants’ duties

entailed “the comparison and the evaluation of possible courses of conduct and

acting or making a decision after the various possibilities have been considered.”

29 C.F.R. § 541.207(a).

      An obligation to utilize specific computer programs or to refer to reference

manuals and guidelines does not necessarily prevent an employee from exercising

independent discretion or judgment. In re Farmers Ins. Exch., Claims

Representatives’ Overtime Pay Litig., 481 F.3d 1119, 1130–31 (9th Cir. 2007).

That appellants’ discretion was restricted by Zurich’s best practices manual does

not negate the undisputed fact that appellants regularly exercised discretion and

independent judgment in setting reserves and directing litigation.

      Appellants made recommendations to their supervisors that were frequently

accepted, supporting the conclusion that appellants exercised discretion and

judgment. See 29 C.F.R. § 541.207(e)(1) (“The decisions made as a result of the

                                          5
exercise of discretion and independent judgment may consist of recommendations

for action rather than the actual taking of action.”). And supervisory review of

appellants’ discretionary decisions does not change the fact that appellants

exercised independent judgment in the first instance. Indeed, appellants had

substantial discretion when acting within their settlement authority.

      Appellants performed under only general supervision work along specialized

or technical lines requiring special training, experience, or knowledge. Cal. Code

Regs. tit. 8, § 11040(1)(A)(2)(d). Appellants acknowledge that they engaged in

work along specialized or technical lines, and appellants rarely operated under

direct supervision. At most, appellants’ supervisors reviewed their discretionary

decisions after the fact. Thus, this case is readily distinguishable from our decision

in Campbell where the record contained “a wealth of . . . extensive conflicting

evidence” about the scope of PwC’s supervision over the plaintiffs. 642 F.3d at

832. Here, disputed facts do not bear heavily on whether appellants are exempt;

instead, the undisputed facts establish that there is no triable issue on this element.

      Finally, appellants do not dispute that they were primarily engaged in duties

that meet the test of the exemption, Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(f), or

that they earned more than twice the state minimum wage, id. § 11040(1)(A)(2)(g).

                                           6
Because there are no genuine issues of material fact as to any elements of the

administrative exemption, we affirm the grant of summary judgment to Zurich.

II.      The District Court Did Not Abuse Its Discretion in Striking Appellants’
         Expert Report

         We review the grant of a motion to strike for an abuse of discretion.

Hambleton Bros. Lumber Co. v. Balkin Enters., Inc., 397 F.3d 1217, 1224 n.4 (9th

Cir. 2005) (citations omitted). Although the schedule for expert witness

disclosures postdated briefing on the motion for summary judgment, appellants did

not request under Fed. R. Civ. P. 56(d) an order allowing expert discovery before

responding to the motion, leaving Zurich without the opportunity to investigate or

depose the witness. Moreover, a trial court can only consider admissible evidence

in ruling on a motion for summary judgment. Beyene v. Coleman Sec. Servs., Inc.,

854 F.2d 1179, 1181 (9th Cir. 1988). Because appellants’ expert’s report was not

sworn when filed, the district court did not abuse its discretion in declining to

consider it. See Fed. R. Civ. P. 56(c)(4), (e); Fed. R. Evid. 901, 902. Finally, the

report is merely the expert’s opinion as to the proper classification of appellants

under governing law, which, as indicated, is a question of law reserved for the

court.

         AFFIRMED.

                                            7