Gonzalez v. Corrections Corporation of America et al, No. 1:2016cv01891 - Document 47 (E.D. Cal. 2018)
Court Description: ORDER Denying 39 Motion to Intervene, signed by District Judge Dale A. Drozd on 7/31/2018. (Gaumnitz, R)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JOSE GONZALEZ, 12 Plaintiff, 13 14 15 No. 16-cv-01891-DAD-JLT v. ORDER DENYING MOTION TO INTERVENE CORECIVIC OF TENNESSEE, LLC and CORECIVIC, INC., (Doc. No. 39) Defendants. 16 17 This matter comes before the court on a motion to intervene filed on June 12, 2018, by 18 19 non-party Jose Gonzales.1 (Doc. No. 39.) Defendants filed an opposition to the motion on July 3, 20 2018, which plaintiff joined. (Doc. Nos. 42, 43.) A hearing on the motion was held on July 17, 21 2018. Attorneys Peter Dion-Kindem and Lonnie Blanchard appeared on behalf of plaintiff, 22 attorney Paul Gleason appeared on behalf of defendants, and attorneys William Sullivan and Eric 23 Yaeckel appeared on behalf of the proposed intervenor. For the reasons explained below, the 24 court will deny the motion to intervene. 25 ///// 26 ///// 27 28 1 To avoid confusion, due to plaintiff’s name, the moving party will be referred to as the “proposed intervenor” in this order. 1 1 BACKGROUND 2 This is a wage-and-hour class action filed on behalf of various prisons guards and 3 correctional staff at several private correctional facilities owned by defendants. Plaintiff claims 4 class members were not permitted to clock in until after they had undergone security screening 5 and were therefore not compensated for all of their hours worked. Plaintiff also claims class 6 members were regularly denied meal and rest breaks. 7 On April 13, 2018, plaintiff filed a motion for preliminary approval of a class action 8 settlement. (Doc. No. 30.) The court requested additional briefing on the matter by minute order 9 issued on May 16, 2018. (Doc. No. 34.) The supplemental briefing was timely submitted on 10 June 15, 2018 (Doc. No. 40), at which point the motion for preliminary approval of the settlement 11 was taken under submission. The motion for preliminary approval remains pending decision. 12 In his motion, the proposed intervenor asserts that he may intervene in this matter as of 13 right, because he—and only he—may pursue claims against the defendants for violation of 14 California’s Private Attorneys General Act (“PAGA”) relating to the alleged labor law violations. 15 (Doc. No. 39-1 at 2–5.) The proposed intervenor filed a suit alleging PAGA claims against 16 defendants, on the same basis alleged by plaintiff in this action, on July 25, 2016 in San Diego 17 County Superior Court. (Id. at 3, 5.) The proposed intervenor claims that the plaintiff in this suit 18 lacks standing to bring or settle PAGA claims, because the operative complaint before this court 19 did not allege such claims. (Id. at 3.) Additionally, the proposed intervenor asserts that Thomas 20 Richards, a plaintiff in a parallel suit that plaintiff has proposed be jointly settled and which does 21 allege PAGA claims, also lacks standing to settle those PAGA claims, because the proposed 22 intervenor’s suit was filed first. (Id. at 7–10.) The proposed intervenor also objects to the 23 inclusion of any PAGA claims in the settlement of this action.2 (Id. at 6–12.) 24 All of the proposed intervenor’s arguments and objections about the propriety of including PAGA claims in this case are considered only to the extent they inform whether the proposed intervenor may intervene as a matter of right. The court has not yet granted preliminary approval to the settlement, and therefore has not approved any settlement containing PAGA claims. It is not yet time for prospective class members to object to that settlement. The proposed intervenor will have that opportunity if and when the settlement is preliminarily approved and class notice is distributed to the prospective class members. See Cody v. SoulCycle, Inc., No. CV 15–06457– 2 2 25 26 27 28 1 The parties in this action argue that the proposed intervenor has no right to intervene, both 2 because he has no protectable interests and because any interests he may have are adequately 3 represented. (Doc. No. 42.) 4 LEGAL STANDARD 5 Intervention as a matter of right is governed by Federal Rule of Civil Procedure 24(a), 6 which provides that “[o]n timely motion, the court must permit anyone to intervene who . . . 7 claims an interest relating to the property or transaction that is the subject of the action, and is so 8 situated that disposing of the action may as a practical matter impair or impede the movant’s 9 ability to protect its interest, unless existing parties adequately represent that interest.” A party 10 seeking to intervene as a matter of right must satisfy four requirements: (1) the applicant has a 11 significant protectable interest relating to the transaction that is the subject of the suit; (2) the 12 disposition of the action may impair or impede the applicant’s ability to protect its interest; (3) the 13 application is timely; and (4) the existing parties may not adequately represent the applicant’s 14 interest. Wilderness Soc’y v. U.S. Forest Serv., 630 F.3d 1173, 1177 (9th Cir. 2011); United 15 States v. City of Los Angeles, 288 F.3d 391, 397 (9th Cir. 2002). Courts generally construe the 16 rule broadly in favor of proposed intervenors. Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 17 2006); City of Los Angeles, 288 F.3d at 397; United States v. Oregon, 839 F.2d 635, 637 (9th Cir. 18 1988). A liberal interpretation of the rule “serves both efficient resolution of issues and 19 broadened access to the courts. By allowing parties with a practical interest in the outcome of a 20 particular case to intervene, we often prevent or simplify future litigation involving related issues 21 ///// 22 ///// 23 ///// 24 ///// 25 ///// 26 27 28 MWF (JEMx), 2017 WL 8811114, at *2 (C.D. Cal. Sept. 20, 2017) (noting that, when a nonparty seeks to intervene solely for the purposes of objecting to the settlement agreement and not to actively participate in the litigation, “such objections are properly addressed through the regular objection process during final settlement approval, not through intervention”). 3 1 . . .” Forest Conservation Council v. U.S. Forest Serv., 66 F.3d 1489, 1496 n.8 (9th Cir. 1995) 2 (citations omitted).3 3 ANALYSIS 4 Here, the proposed intervenor seeks to intervene in this lawsuit because he asserts that he 5 and only he has a right to pursue PAGA claims against the defendants here. (Doc. No. 39-1 at 5– 6 7.) None of the authority cited by the proposed intervenor supports this contention. 7 In determining whether a non-party may intervene as a matter of right, “the pivotal issue 8 is whether the disposition of [the current] action, as a practical matter, may impair or impede the 9 intervenors’ ability to protect their interests.” Oregon, 839 F.2d at 638. Here, the proposed 10 intervenor argues that his interests are affected because the proposed settlement will extinguish all 11 his claims, including his PAGA claims. (Doc. No. 39-1 at 5.) This is obviously true, but goes 12 only so far. While a lawsuit might “affect the proposed intervenors’ interests, their interests 13 might not be impaired if they have ‘other means’ to protect them.” California ex rel. Lockyer v. 14 United States, 450 F.3d 436, 442 (9th Cir. 2006) (quoting United States v. Alisal Water Corp., 15 370 F.3d 915, 921 (9th Cir. 2004)). Notably, the Ninth Circuit has held that a non-party’s 16 interests are not impaired if the court “has established other means by which [the proposed 17 intervenor] may protect its interests.” Alisal Water Corp., 370 F.3d at 921. 18 The mere fact that administrative procedures are available under a class action settlement 19 does not necessarily dictate that all class members’ interests are adequately protected, depending 20 on the nature of the action and the interests involved. See Smith v. Los Angeles Unified Sch. Dist., 21 830 F.3d 843, 862–64 (9th Cir. 2016) (concluding the proposed intervenor’s interests were not 22 adequately protected even though the settlement, which provided for injunctive relief, contained 23 an administrative process to challenge children’s school placement). However, numerous district 24 courts have concluded that the ability to file objections and opt out of a class settlement, as 25 26 27 28 3 Rule 24 also allows permissive intervention. See Fed. R. Civ. P. 24(b)(2) (noting a court may permit a party to intervene who “has a claim or defense that shares with the main action a common question of law or fact”); see also Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998) (identifying requirements for permissive intervention). The proposed intervenor in this case does not seek permissive intervention. 4 1 dictated by Rule 23, are sufficient to protect the interests of class members in a typical case 2 seeking damages. See Cody v. SoulCycle, Inc., No. CV 15–06457–MWF (JEMx), 2017 WL 3 8811114, at *3–4 (C.D. Cal. Sept. 20, 2017) (noting that “[m]any district courts have similarly 4 denied intervention where putative class members can adequately protect their interests via the 5 Rule 23 mechanisms”) (collecting cases); O’Connor v. Uber Techs., Inc., No. 13-cv-03826-EMC, 6 2016 WL 4400737, at *1 (N.D. Cal. Aug. 18, 2016) (collecting cases); Embry v. Acer Am. Corp., 7 No. C 09-01808 JW, 2012 WL 13059908, *2 (N.D. Cal. Jan. 27, 2012) (“[I]n the context of class 8 actions, courts generally find that an objector to a proposed settlement who is free to opt out of 9 the class or voice objections at the final fairness hearing is adequately represented and not entitled 10 to intervene.”); Lane v. Facebook, Inc., No. C 08–3845 RS, 2009 WL 3458198, at *5 (N.D. Cal. 11 Oct. 23, 2009) (“Proposed Intervenors, however, have failed to establish that their rights to raise 12 these issues are not adequately protected through the process for submitting objections that will 13 follow upon preliminary approval of the settlement agreement.”); cf. Allen v. Bedolla, 787 F.3d 14 1218, 1222 (9th Cir. 2015) (noting that a motion to intervene was untimely, particularly 15 considering that “Objectors’ concerns could largely be addressed through the normal objection 16 process”). 17 In his briefing submitted in support of his motion, the proposed intervenor has not 18 identified any reason that the Rule 23 procedures are insufficient to protect his interests in the 19 litigation. At oral argument on the motion, counsel for the proposed intervenor asserted that, 20 pursuant to the holding of the California Supreme Court in Hernandez v. Restoration Hardware, 21 Inc., 4 Cal. 5th 260 (2018), the proposed intervenor would lose any right to appeal if he is not 22 permitted to intervene. The undersigned disagrees. In Hernandez the California Supreme Court 23 held that unnamed class members who have not intervened may not appeal under California Code 24 of Civil Procedure § 902. 4 Cal. 5th at 263. However, any appeals from this Rule 23 class action 25 must be governed by federal law, not state procedural statutes. See Liberal v. Estrada, 632 F.3d 26 1064, 1074–75 (9th Cir. 2011) (agreeing with other circuits that had held that, “[u]nder Erie . . ., 27 federal procedure governs the appealability of an order”). It is clear that unnamed class members 28 in a Rule 23 class action may appeal without first intervening. See Devlin v. Scardelletti, 536 5 1 U.S. 1, 14 (2002) (“We hold that nonnamed class members like petitioner who have objected in a 2 timely manner to approval of the settlement at the fairness hearing have the power to bring an 3 appeal without first intervening.”); Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566, 572–73 (9th 4 Cir. 2004) (extending Devlin to encompass Rule 23(b)(3) class actions). 5 More generally, the thrust of the proposed intervenor’s argument is that none of these 6 procedures will protect his interests because he—and only he—has the right to bring a PAGA 7 action concerning these claims against these defendants. (See Doc. No. 39-1 at 5) (noting the 8 parties to this lawsuit “seek to destroy (i.e. nullify) any interest [the proposed intervenor] 9 currently (and solely) possesses against Defendant”); id. at 7 (asserting the proposed intervenor 10 “as the first filed, controls the PAGA claim”)). The proposition that the proposed intervenor has 11 a proprietary interest in bringing these PAGA claims that is exclusive of any other such suits is 12 unsupported in the law. The proposed intervenor points the court to three different cases to 13 establish that only one suit alleging a PAGA cause of action may proceed at a time: (1) Brown v. 14 Ralphs Grocery Co., 197 Cal. App. 4th 489 (2011); (2) Dubee v. P.F. Chang’s China Bistro, Inc., 15 No. C 10–01937 WHA, 2010 WL 3323808, at *1 (N.D. Cal. Aug. 23, 2010);4 and (3) Nakash v. 16 Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989). 17 In Brown, the California Court of Appeals, while explaining that mandatory arbitration 18 clauses and class action waivers are unconscionable and therefore unenforceable to the extent 19 they impede PAGA, stated that PAGA “prohibits an employee action when the [Labor and 20 Workforce Development Agency (“LWDA”)] or someone else is directly pursuing enforcement 21 against the employer ‘on the same facts and theories’ under the same ‘section(s) of the Labor 22 Code.’” 197 Cal. App. 4th at 501 (emphasis added) (citing Labor Code § 2699(h)). The 23 proposed intervenor points to the language “or someone else” in the court’s opinion as indicating 24 that California’s PAGA statute contains a “first filed” rule, and that so long as one action is 25 26 27 28 Proposed intervenor actually cites to a decision in “Alltrade, Inc. v. United Products, Inc., 946 F.2d 622, 625–26 (9th Cir. 1991)” in support of this proposition. (See Doc. No. 39-1 at 7.) The text quoted in intervenor’s brief, however, does not appear in that case. Instead, the quoted language is taken from the decision in Dubee, which itself cites Alltrade, Inc.—the actual case name for which is Alltrade, Inc. v. Uniweld Products, Inc. 6 4 1 proceeding on PAGA claims, no other PAGA claims based on the same facts or legal theories 2 may be alleged in other suits. However, reviewing the Labor Code section cited reveals that the 3 phrase “or someone else” used in this context actually means a specific list of agents of the 4 LWDA. See Cal. Labor Code § 2699(h) (“No action may be brought under this section by an 5 aggrieved employee if the agency or any of its departments, divisions, commissions, boards, 6 agencies, or employees, on the same facts and theories, cites a person . . . for a violation of the 7 same section or sections of the Labor Code under which the aggrieved employee is attempting to 8 recover a civil penalty.”) (emphasis added). In other words, if the LWDA or some entity under 9 its control has already cited a person, no PAGA claim may be brought against them. The decision 10 in Brown provides no support for the proposed intervenor’s purported “first filed” rule. 11 The other two cases cited by the proposed intervenor concern the Colorado River doctrine 12 and have no application to this case. In Colorado River Water Conservation District v. United 13 States, 424 U.S. 800 (1976), the Supreme Court held that certain prudential principles related to 14 the conservation of judicial resources may permit federal courts to decline to exercise concurrent 15 jurisdiction over a dispute that is already pending in another court. 424 U.S. at 817–20. 16 However, this doctrine is narrow and discretionary, and a federal court may only refuse to 17 exercise its jurisdiction in exceptional circumstances. See R.R. Street & Co., Inc. v. Transport 18 Ins. Co., 656 F.3d 966, 973 (9th Cir. 2011) (describing a federal court’s discretion under the 19 Colorado River doctrine as exercisable only within “narrow and specific limits”); Holder v. 20 Holder, 305 F.3d 854, 867 (9th Cir. 2002) (“[T]he Colorado River doctrine is a narrow exception 21 to ‘the virtually unflagging obligation of the federal courts to exercise the jurisdiction given 22 them.’”) (quoting Colorado River, 424 U.S. at 817). Here, the proposed intervenor does not seek 23 to have this court stay5 this action pursuant to Colorado River to allow his state court lawsuit to 24 proceed. Even if he had, this court would conclude he has not demonstrated the existence of such 25 exceptional circumstances to warrant this court refusing to exercise its jurisdiction. The 26 5 27 28 While the language of Colorado River initially suggested that a federal court could dismiss a suit under the doctrine, the Ninth Circuit has since clarified that the district court should stay, not dismiss, an action when it finds the doctrine applicable. See Attwood v. Mendocino Coast Dist. Hosp., 886 F.2d 241, 243–44 (9th Cir. 1989). 7 1 Colorado River doctrine is inapplicable to this case and provides no support for the proposed 2 intervenor’s “first-to-file” argument under California’s PAGA statute. The California Supreme Court has noted that a PAGA suit is “a type of qui tam action.” 3 4 Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 382 (2014). Other types of qui tam actions, 5 such as the federal False Claims Act (“FCA”), are subject to a “first-to-file” limitation. See 6 Kellogg Brown & Root Servs., Inc. v. U.S. ex rel. Carter, __ U.S. __, ___, 135 S. Ct. 1970, 1973– 7 74 (2015); Campbell v. Redding Med. Ctr., 421 F.3d 817, 821 (9th Cir. 2005). However, the 8 limitation in those contexts is imposed by statute. See 31 U.S.C. § 3730(b)(5) (“When a person 9 brings an action under this subsection, no person other than the Government may intervene or 10 bring a related action based on the facts underlying the pending action.”); id. § 3730(c)(3) (“If the 11 Government elects not to proceed with the action, the person who initiated the action shall have 12 the right to conduct the action.”). The proposed intervenor has not pointed to any provision of 13 California’s PAGA statute that confers a similar right, nor has the court located any. Indeed, at 14 least one other court has explicitly rejected the argument that there is a first-to-file rule under 15 PAGA. See Tan v. GrubHub, Inc., 171 F. Supp. 3d 998, 1011–13 (N.D. Cal. 2016) (“Defendants 16 do not cite a single case in which the court held that two PAGA representatives cannot pursue the 17 same PAGA claims at the same time. The Court declines to be the first to so hold.”). In short, the 18 court is unpersuaded that California’s PAGA statute contains a first-to-file rule.6 19 CONCLUSION 20 The proposed intervenor has no right to intervene in this lawsuit. To the extent the motion 21 to intervene registers objections to the proposed settlement of this action, the objections are 22 premature as no settlement has yet been preliminarily approved. If this court preliminarily 23 24 25 26 27 28 6 This conclusion finds additional support in Ninth Circuit precedent. In discussing the ability to aggregate PAGA claims in order to meet the amount in controversy threshold for diversity purposes, the Ninth Circuit observed: “[A] PAGA plaintiff stands in a position comparable to a plaintiff in a shareholder derivative suit, who likewise lacks a direct proprietary interest in the subject of the litigation and sues as a proxy for the injured corporation.” Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1124 (9th Cir. 2013) (emphasis added). The absence of a proprietary interest in the litigation weighs against allowing a PAGA plaintiff to litigate her action to the exclusion of those brought by other aggrieved employees. 8 1 approves the parties’ settlement, notice will be sent to all class members, who will have an 2 opportunity to both object to and opt-out of the settlement. 3 4 5 For the reasons given above, the motion to intervene (Doc. No. 39) is denied. IT IS SO ORDERED. Dated: July 31, 2018 UNITED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9
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