Robinson et al v. Nestle Waters North America, Inc.
Filing
19
ORDER signed by Senior Judge Lawrence K. Karlton on 5/31/11 GRANTING 8 Motion to Dismiss. The Court does not find a stay warranted in this case. CASE CLOSED. (Meuleman, A)
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UNITED STATES DISTRICT COURT
8
FOR THE EASTERN DISTRICT OF CALIFORNIA
9
10 SHAON ROBINSON, DANIEL
CHILDS, DANTE WARD, and
11 RAYE JACKSON, on behalf
of themselves and all
12 others similarly situated,
and the general public,
13
NO. CIV. S-11-856 LKK/KJN
14
15
Plaintiffs,
v.
16 NESTLE WATERS NORTH AMERICA,
INC. dba ARROWHEAD WATERS,
17 a Delaware Corporation, and
DOES 1 through 10, inclusive,
18
Defendants.
19
/
20
O R D E R
The instant case presents the question of whether this court
21 should
decline
to
exercise
jurisdiction
over
a
case
while
a
22 substantially similar case is pending in the state court. For the
23 reasons
stated
below,
the
court
finds
24 circumstances justify dismissal of this action.
25 ////
26 ////
1
that
exceptional
I. BACKGROUND1
1
2
A.
3
On
State Court Proceedings
December
27,
2010,
named
plaintiff
Shaon
Robinson
4 (“Robinson”) filed a complaint against defendant Nestle Waters
5 North America, Inc. (“Nestle”) in the Alameda County Superior
6 Court, on behalf of “all non-exempt hourly employees who worked as
7 Route Sales Representatives in California from October 8, 2005 to
8 the date of filing.” State Complaint, 2, Doc. No. 11-1. The state
9 complaint
alleges
failure
to
pay
for
scheduled
work
days
in
10 violation of the Industrial Welfare Commission Wage Orders, failure
11 to properly compensate employees for all hours worked, failure to
12 furnish wage and hour statements, failure to maintain employee time
13 records, and failure to pay wages and other compensation due within
14 time limits upon employee discharge, in violation of the California
15 Labor Code; and unfair business practices in violation of the
16 California Business and Professions Code. Id.
17
On January 31, 2011, defendant moved to change venue to Orange
18 County, where defendant’s California records are located. See
19 Schumacher Decl., Doc. No 11-5. During the hearing on the motion to
20 transfer, Robinson’s counsel stated that Orange County was not a
21 "jurisdiction [plaintiff] want[s] to be in,” and requested that the
22 judge remove the action to the Northern District. Transcript March
23
1
24
25
The court grants defendant’s requests for judicial notice,
filed April 8, 2011, and May 2, 2011, as the exhibits are publicly
recorded documents for which judicial notice is proper, and the
federal plaintiffs have raised no objections to their use. Fed. R.
Evid. § 201.
26
2
1 11 Hearing, 1:24-28, 2:9-19, Doc. No. 11-2. The court denied
2 Robinson’s request. The court held that Alameda was an improper
3 venue because it was not the site of any of the causes of action,
4 and transferred the action to Orange County. Alameda Order, Doc.
5 No. 11-3.
6
B.
Federal Proceedings
7
On March 29, 2011, named plaintiffs Robinson, Daniel Childs,
8 Dante Ward and Raye Jackson (together “federal plaintiffs”) filed
9 a complaint in this court, seeking to represent “all non-exempt
10 hourly
employees
of
Nestle,
who
worked
as
Route
Sales
11 Representatives (“RSRs”)in California, March 24, 2007 to the date
12 of filing this complaint,” and “all current and former employees of
13 Nestle who were employed as RSRs at any time within the three years
14 prior to the filing of the initial complaint.” Federal Complaint,
15 1, Doc. No. 1. The federal complaint alleged largely the same
16 causes of action as the previously filed state complaint. It
17 differs from the state complaint in three respects. The federal
18 complaint includes an additional overtime claim under the FSLA on
19 behalf of a “nationwide class.” The federal complaint includes
20 three additional named plaintiffs, Daniel Childs, Dante Ward, and
21 Raye Jackson, who were unnamed members of the putative class in the
22 state action. Finally, the claim filed in state court sought to
23 represent RSRs employed during an earlier period, “October 8, 2005
24 to the date of filing [the state] complaint,” as opposed to March
25 24, 2007. State Complaint, 2, Doc. No. 11-1. On April 8, 2011,
26 defendant filed the instant motion to dismiss or stay, asserting as
3
1 a ground comity with the state court system and that the federal
2 plaintiffs previously filed a substantially similar case in state
3 court. Motion, Doc. No. 9.
4
C.
Subsequent State Court Proceedings
5
On April 13, 2011, Robinson moved for dismissal of class
6 claims from the Orange County action to allow all the claims to be
7 litigated in the Eastern District. Application to Dismiss, Ex. B to
8 Opp’n, Doc. No. 12-1. Robinson contended that prejudice to the
9 California class members would not result from the dismissal. Id.
10 On
the
same
day,
the
Orange
County
Superior
Court
granted
11 Robinson’s motion to dismiss without prejudice. Order, Ex. C to
12 Opp’n, Doc. No. 12-1. Defendant has moved for reconsideration of
13 that order on the grounds that, inter alia, defendant was not
14 served
with
the
motion
and,
thus,
was
not
provided
with
an
15 opportunity to oppose it and that prejudice would result to the
16 potential California class members.
Motion for Reconsideration,
17 Ex. 2 to RFJN, Doc. No. 16.
II. STANDARD FOR COLORADO RIVER ABSTENTION
18
19
“The doctrine of abstention, under which a District Court may
20 decline to exercise or postpone the exercise of its jurisdiction,
21 is an extraordinary and narrow exception” to the court’s duty to
22 adjudicate
claims
properly
before
it.
Colo.
River
Water
23 Conservation v. U.S. 424 U.S. 800, 813 (1976). Abdication of this
24 duty
is
justified
only
in
“exceptional
circumstances.”
Id.
25 Generally, the pendency of an action in state court regarding
26 similar matters will not bar a proceeding in federal court with
4
1 proper jurisdiction. Id. at 817. However, a court may justify a
2 stay or dismissal in the interest of “wise judicial administration,
3 giving
regard
to
conservation
of
judicial
resources
and
4 comprehensive disposition of litigation.” Id. at 818.
5
In Colorado River, the Supreme Court identified non-exclusive
6 factors that a district court may consider when entertaining a
7 motion to dismiss or stay an action due to a parallel state action.
8 Colo. River, 424 U.S. at 818-19. The consideration of factors is a
9 balancing test. No one factor is determinative, and the balance
10 must always tip heavily in favor of exercising jurisdiction. Id;
11 American Int’l Underwriters (Philippines), Inc. v. Cont’l Ins. Co.,
12 843 F.2d 1243, 1259-60 (9th Cir. 1988). The court must make a
13 “carefully
considered
judgment
taking
into
account
both
the
14 obligation to exercise jurisdiction and the combination of factors
15 counseling against that exercise.” Colorado River, 424 U.S. at 81816 19. When a court declines to exercise jurisdiction under the
17 Colorado River doctrine, it concludes that the concurrent state
18 court litigation is an adequate vehicle for resolution of the
19 claims. “If there is any substantial doubt as to this, it would be
20 a serious abuse of discretion to grant the stay or dismissal at
21 all.” Fed. Deposit Ins. Corp. v. Nichols, 885 F.2d 633, 638 (9th
22 Cir. 1989).
23
A federal court determining whether a stay or dismissal is
24 appropriate in the event of concurrent jurisdiction may consider
25 (1) the inconvenience of the federal forum, (2) the desirability of
26 avoiding
piecemeal
litigation,
and
5
(3)
the
order
in
which
1 jurisdiction was obtained by the concurrent forums.2 Colorado
2 River, 424 U.S. at 818-19. The court may also consider (4) whether
3 federal law provides the rule of decision on the merits, and (5)
4 whether the state court is adequate to protect the litigants’
5 rights. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
6 U.S. 1, 23 (1983). Also, the Ninth Circuit has held that (6) forum
7 shopping is “another important factor to consider.” Travelers
8 Indemnity Co. v. Madonna, 914 F.2d 1364, 1368 (9th Cir. 1990).
9 However, the Circuit has cautioned that courts should not decline
10 to exercise jurisdiction on the basis of the forum shopping factor
11 alone. Fed. Deposit Ins. Corp., 885 F.2d at 637.
12
The Ninth Circuit also applies a related doctrine applying the
13 rationale prohibiting plaintiffs from removing cases to federal
14 court under 28 U.S.C. § 1441 to prohibit such plaintiffs from
15 filing repetitive lawsuits in federal court to get around the bar.
16 Am. Int’l Underwriters, 843 F.2d at 1260. The Circuit determined
17 that, “the removal statute seem[s] to reflect a Congressional
18 intent that a plaintiff should not be permitted to alter the forum
19 that [he] selects to litigate [his] claim against a particular
20 defendant.” Id. The court, thus, concluded that a plaintiff “should
21 not be permitted to accomplish, by the refiling of [his] state
22 court complaint, what would clearly be prohibited if [plaintiff]
23 tried to remove [from] state court.” Id.
24
2
25
26
In actions relating to property, “the court first assuming
jurisdiction over property may exercise that jurisdiction to the
exclusion of other courts.” Colorado River, 424 U.S. at 818. This
factor is not relevant to this action.
6
III. ANALYSIS
1
2
The court now balances the Colorado River factors and related
3 doctrines applicable in this Circuit. For the reasons discussed
4 below, defendant’s motion to dismiss is granted.
5
A.
Inconvenience of the Federal Forum
6
When evaluating this factor, the question is not whether a
7 party can demonstrate that the federal forum is the more convenient
8 forum, but rather whether “the inconvenience of the federal forum
9 is so great that this factor points toward abstention.” Travelers
10 Indemnity Co., 914 F.2d at 1368. Defendant claims that the Eastern
11 District is not a convenient forum due to the location of its
12 business records and relevant witnesses in Orange County where the
13 state action currently is pending. Motion, 15, Doc. No. 9. The
14 federal plaintiffs point out that all the named plaintiffs and
15 defendant’s counsel are located in the Eastern District. Opp’n,
16 3,4, Doc. No. 12. Defendant has not shown that the federal forum is
17 so inconvenient as to justify the exceptional remedy of abstention.
18 Thus, this factor does not weigh in favor of abstention.
19
B.
Avoiding Piecemeal Litigation
20
“Piecemeal litigation occurs when different tribunals consider
21 the same issue, thereby duplicating efforts and possibly reaching
22 different results.” Am. Int’l Underwriters, 843 F.2d at 1258. In
23 American International Underwriters, the court determined that by
24 exercising concurrent jurisdiction, the federal court created a
25 high risk of piecemeal litigation. In that case, the state court
26 proceedings had been ongoing for over two years, and had already
7
1 decided several of the issues that would now come before the
2 federal court. American Int’l Underwriters, 843 F.2d at 1258. The
3 court determined that exercising jurisdiction over the case and
4 deciding those same issues anew would create a high possibility of
5 inconsistency. Id.
6
While the state proceedings here are not as advanced as they
7 were in American International Underwriters, the court nonetheless
8 finds that this factor weighs in favor of abstention. Specifically,
9 the action pending in Orange County is substantially similar to the
10 case before this court. The claims are nearly identical and in the
11 one instance where they are not they are premised on identical
12 alleged conduct of defendant. Prior to the dismissal of the class
13 claims on April 13, 2011, several days after defendant’s motion was
14 filed in this court, a majority of the parties were also identical.
15 Defendant has moved for reconsideration of the state court’s
16 dismissal of the class claims. Ex. 2 to RFJN, Doc. No. 16. Counsel
17 for defendant represented that the motion is set to be heard in the
18 next month. Even if the state court denies defendant’s motion,
19 however,
it
appears
that
Robinson
may
nonetheless
amend
his
20 complaint to add class allegations and add the other federal
21 plaintiffs as named plaintiffs because the dismissal was without
22 prejudice.
23
The Northern District of California considered a similar
24 question in Ross v. U.S. Bank Nat’l Ass’n, 542 F. Supp. 2d 1014
25 (N.D. Cal. 2008). In that case, the plaintiff failed to explain why
26 it did not bring the federal causes of action into the state court
8
1 action. Id. at 1022. It found that “[p]laintiffs' failure to bring
2 all available claims for the [state] class creates the kind of
3 piecemeal litigation that the Colorado River doctrine intends to
4 prevent. Therefore, this factor weighs in favor of staying the
5 current action with respect to the [state] class.” Id. Likewise,
6 the court finds that this factor weighs strongly in favor of
7 dismissal in the present case.
8
C.
Order in Which Jurisdiction was Obtained
9
When determining whether to exercise concurrent jurisdiction,
10 the court may consider the order in which jurisdiction was obtained
11 by the two forums. Colorado River, 424 U.S. at 818. This factor
12 must be applied in a “pragmatic, flexible manner, so that priority
13 is not measured exclusively in terms of which complaint was filed
14 first, but rather in terms of how much progress was actually made
15 in the state and federal actions.” American Int’l Underwriters, 843
16 F.2d at 1258. As discussed above, little progress has been made in
17 either forum in this case. The state court action has only begun
18 discovery. Motion, 12, Doc. No. 9. Therefore this factor does not
19 suggest that the district court should decline jurisdiction.
20
D.
Whether Federal Law Provides the Rule of Decision
21
The court’s task in assessing this factor is not to justify
22 the district court’s exercise of jurisdiction, but rather to
23 determine whether there are exceptional circumstances that justify
24 the surrender of that jurisdiction. Cone, 460 U.S. at 25. “The
25 presence of federal-law issues must always be a major factor
26 weighing against surrender.” Id. at 26. In Colorado River, the
9
1 court concluded that despite the presence of federal issues,
2 exceptional
circumstances
justified
the
surrender
of
federal
3 jurisdiction. Important state law concerns were more prevalent, and
4 this coincided with a federal policy of uniform adjudication of
5 water rights within the state. Colorado River, 424 U.S. at 819-20.
6
7 FSLA
In the present case, a single federal overtime claim under the
is
countered
8 Specifically,
to
by
the
eight
extent
claims
that
under
the
FLSA
California
claim
law.
applies
to
9 employees under the jurisdiction of California law, the federal
10 plaintiffs’ second state law cause of action may duplicate or
11 supplant the federal claim for overtime. Federal Complaint 1, Doc.
12 No. 1. Further, the California Labor Code claims may present
13 complex and unique questions of state law. Among these, are
14
(1)
guaranteed minimum pay requirements when employees
appear at the workplace but immediately and
voluntarily leave without performing work,
(2)
the employer’s obligation to provide a timely final
paycheck
when
employees
terminate
under
various
circumstances, and
(3)
19
the proper content of state-mandated wage statements and
whether failure to include that content results in
recoverable damages.
20
While the existence of these state law questions alone would
21 not
counsel
15
16
17
18
against
the
exercise
of
the
district
court’s
22 jurisdiction, it is clear that state law issues dominate this
23 claim, and that the state court is better situated to resolve these
24 questions. This conclusion is further supported by the fact that
25 the
federal
plaintiffs
only
recently
came
to
believe
in
the
26 “likely” existence of the FSLA claims. Hoffman Decl., Ex. B to
10
1 Opp’n, 1, Doc. No. 12-1. The federal plaintiffs’ late discovery of
2 the federal causes of action raises questions about their sincerity
3 in pursuing these claims.
4
E.
Rights
5
6
Whether State Court is Inadequate to Protect Litigants’
The
court
may
also
consider
whether
the
state
court
is
7 inadequate to protect the federal litigant’s rights. Travelers
8 Indemnity Co., 914 F.2d at 1370. Like the choice of law factor
9 discussed above, this factor is more important when it weighs in
10 favor of federal jurisdiction, not against it. Id. at 1370.
11
The state court has authority to hear all the claims alleged
12 in the federal complaint, including the outstanding FSLA claims and
13 the class claims recently dismissed from the Orange County action.
14 Although the Superior Court granted Robinson’s motion to dismiss
15 the class claims, that dismissal was granted without prejudice.
16 Order, Ex. C to Opp’n, Doc. No. 12-1. Robinson may seek to amend
17 its state complaint to include the dismissed state law claims as
18 well as the FSLA claims pled in the federal complaint. Defendant
19 has also sought reconsideration of the dismissal on the grounds
20 that it did not receive the opportunity to oppose dismissal. Motion
21 for Reconsideration, Ex. 2 to RFJN, Doc. No 16. However, this court
22 cannot predict whether defendant’s motion will be granted or
23 whether the court will grant plaintiff leave to bring class claims.
24 Therefore, this factor weighs only slightly, if at all, in favor of
25 the exercise of federal jurisdiction. However, that factor is
26 tempered a great deal by the fact that the differences between the
11
1 state and federal proceedings were created deliberately by Robinson
2 and
the
other
federal
plaintiffs.
Specifically,
any
apparent
3 inadequacy of the state forum was created intentionally by them
4 when Robinson sought a dismissal of the class claims just three
5 days after defendant filed its motion to dismiss or stay in this
6 court. Application to Dismiss, Ex. B to Opp’n, Doc. No. 12-1.
7
F.
Forum Shopping
8
Courts should not decline jurisdiction based on the forum
9 shopping factor alone. Fed. Deposit Ins. Corp., 885 F.2d at 637. In
10 Federal Deposit, the Ninth Circuit declined to issue a stay because
11 the previously filed state court action had been dismissed in its
12 entirety, prior to defendant’s motion for dismissal. Id. at 635.
13 The court concluded that a stay under the Colorado River doctrine
14 was
not
proper
because
the
threshold
requirement
of
the
15 “contemporaneous exercise of concurrent jurisdictions” was not
16 present. Id. at 638 (emphasis omitted). Although the federal
17 plaintiffs had arguably created a forum shopping problem, the
18 circumstances presented “substantial doubt” as to the adequacy of
19 the state court litigation for resolution of the issues between the
20 parties. The Ninth Circuit thus held that the court’s decision to
21 decline jurisdiction was an abuse of discretion. Id. at 638.
22
In
the
present
case,
the
“contemporaneous
exercise
of
23 concurrent jurisdictions” exists in addition to a forum shopping
24 problem. The state court action is ongoing although the class
25 related
claims
have
been
dismissed
without
prejudice.
That
26 dismissal is currently under review by the state court. Motion for
12
1 Reconsideration, Ex. 2 to RFJN, Doc. No 16. Defendant has also
2 claimed in its motion to reconsider that Robinson’s asserted
3 reasons for seeking the dismissal are pretextual and that prejudice
4 to potential class members will result from the dismissal. Id.
5
Here, the federal plaintiffs’ obvious forum shopping is so
6 extreme
that
this
factor
emerges
as
the
most
prevalent
7 consideration under the Colorado River doctrine. Specifically,
8 Robinson first filed its action in Alameda County. On motion by
9 defendant, the case was transferred to Orange County because the
10 court found insufficient contacts with Alameda County. At that
11 point, Robinson asked the Orange County court to remove the action
12 to the Northern District. The court refused, at which time Robinson
13 and the other federal plaintiffs filed a nearly identical complaint
14 in the Eastern District with an additional claim under the FSLA
15 premised by the same conduct underlying some of the state claims.
16 After defendant submitted its motion to dismiss or stay the federal
17 action, Robinson sought and received a dismissal of the class
18 claims from its state complaint. Given the obstacles such blatant
19 forum shopping creates for “wise judicial administration” this
20 factor sharply tips the balance in favor of a stay.
21
G.
Policy Behind Removal Statute
22
Where there is any doubt regarding the district court’s right
23 to decline jurisdiction under the Colorado River doctrine, the
24 Ninth Circuit’s interpretation of the removal statute reaffirms
25 that
right
in
these
circumstances.
In
American
International
26 Underwriters, 843 F.2d at 1261, the Ninth Circuit held that a
13
1 district court is justified in dismissing a complaint when the
2 plaintiff attempts to circumvent the limitations of removal in 28
3 U.S.C. § 1441. “Noting that a plaintiff in a diversity suit can
4 choose between a state and federal forum when it initiates the
5 suit, the court concluded, [h]aving elected state court, plaintiff
6 should be bound by its choice absent compelling reasons to seek
7 relief in another forum. . . . [Plaintiff] should not be permitted
8 to accomplish, by the refiling of its state court complaint, what
9 would clearly be prohibited if [plaintiff] tried to remove to state
10 court.” American Int’l Underwriters, 843 F.2d at 1261 (internal
11 quotation omitted).
12
Here, as in American International Underwriters, Robinson
13 selected a state forum at the time of initial filing. The case
14 presents no compelling reasons to permit the federal plaintiffs to
15 seek relief in another forum. Therefore, a stay of the federal
16 action is justified under American Int’l Underwriters and the
17 prohibitions against removal by a plaintiff.
IV. CONCLUSION
18
19
For the foregoing reasons, defendant’s motion to dismiss the
20 federal action (Doc. No. 9) is GRANTED.3 The clerk of court is
21 instructed to close this case.
22
IT IS SO ORDERED.
23
DATED:
May 31, 2011.
24
25
26
3
The court does not find a stay warranted in this case.
14
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