Lyon v. W.W. Grainger, Inc., No. 3:2010cv00884 - Document 45 (N.D. Cal. 2010)
Court Description: ORDER DENYING PETITION FOR CERTIFICATION PURSUANT TO 28 U.S.C. 1296(b) FOR INTERLOCUTORY APPEAL AND VACATING HEARING by Judge William Alsup [denying 33 Motion for Leave to Appeal]. (whasec, COURT STAFF) (Filed on 6/15/2010)
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Lyon v. W.W. Grainger, Inc. Doc. 45 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 ANNE MARIE LYON, individually and on behalf of others similarly situated, No. C 10-00884 WHA 11 Plaintiff, For the Northern District of California United States District Court 10 12 ORDER DENYING PETITION FOR CERTIFICATION PURSUANT TO 28 U.S.C. 1292(b) FOR INTERLOCUTORY APPEAL AND VACATING HEARING v. 13 14 15 W. W. GRAINGER INC., and Does 1 through 50, inclusive, Defendants. / 16 17 INTRODUCTION 18 In this putative employment law class action, plaintiff Anne Lyon petitions for 19 certification of three issues pursuant to 28 U.S.C. 1292(b) for interlocutory appeal to the Court 20 of Appeals for the Ninth Circuit. None of the issues involves a controlling question of law 21 whose resolution could materially affect the outcome of litigation in this Court. Because this is 22 an essential requirement for certification, plaintiff’s request is DENIED. 23 24 STATEMENT On January 29, 2010, plaintiff filed her complaint in the Superior Court of San Mateo. 25 She sought the following: (1) unpaid overtime wages, (2) penalties under California Labor Code 26 Sections 203, 210, 226.3, 558, and 1174.5, (3) attorney’s fees, (4) payment of taxes owed, and 27 (5) an injunction preventing defendant from continued violations of the California Labor Code. 28 Dockets.Justia.com 1 2 arguing that her claims did not meet the amount in controversy necessary for diversity 3 jurisdiction. The April 29 order denying the motion found that defendant had established that 4 the amount met the jurisdictional threshold. The order found that preponderance of the evidence 5 was the standard for defendant’s burden of proof, despite plaintiff’s arguments for applying the 6 legal certainty standard. The order further stated that even if the legal certainty standard were 7 extended to diversity cases, the outcome would remain. Plaintiff still did not successfully allege 8 that the total amount in controversy was less than $75,000. She did not include the financial 9 burden of taxes and injunctive relief against defendant. Penalties also should have been 10 11 For the Northern District of California United States District Court Later, defendant removed this action based on diversity. Plaintiff then moved to remand, included. Using a conservative estimate as to the overtime hours per week that plaintiff worked, the 12 order found that the pay owed for overtime and missed breaks, taxes, penalties, and attorney’s 13 fees amounted to about $89,661.69. This clearly met the jurisdictional threshold. Adding in the 14 value of the injunction, moreover, placed the amount in controversy over $100,000. The order 15 also noted that using slightly higher and less conservative estimates of overtime hours would 16 dramatically increase the amount in controversy and could possibly satisfy the threshold alone. 17 18 19 On May 7, plaintiff requested to certify one or more of the following questions for interlocutory appeal: (1) Does the “legal certainty” standard, as enunciated in Lowdermilk v. United States National Bank Association, 479 F.3d 994 (9th Cir. 2007), apply in an action removed solely under diversity jurisdiction pursuant to 28 U.S.C. 1332(a) and not removed pursuant to The Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. 1332(d), where the complaint specifically limits plaintiff’s “amount in controversy” to less than the jurisdictional minimum? (2) May a district court attribute a pro rata share of injunctive relief as part of the “amount in controversy” where injunctive relief is not the primary object of the litigation (Kanter v. Warner-Lambert Co., 265 F.3d 853 (9th Cir. 2001)) and plaintiff, as a former employee, does not have standing to seek injunctive relief under Article III of the United States Constitution? (3) May a district court include both the total amount of plaintiff’s potential wages and penalties, as well as the amount of taxes plaintiff must pay from those very same 20 21 22 23 24 25 26 27 28 2 1 wages in the form of deductions, as part of an alleged “amount in controversy?” 2 ANALYSIS 3 1. LEGAL STANDARD. 4 5 6 7 8 9 11 For the Northern District of California United States District Court 10 28 U.S.C. 1292(b) provides: When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.” 12 28 U.S.C. 1292(b). A district court must find that the certification requirements of the statute 13 have been met. These requirements are: “(1) that there be a controlling question of law, 14 (2) that there be substantial grounds for difference of opinion, and (3) that an immediate appeal 15 may materially advance the ultimate termination of the litigation.” In re Cement Antitrust Litig., 16 673 F.2d 1020, 1026 (9th Cir. 1982). Even if these three requirements are satisfied, a district 17 court still has discretion in deciding whether or not to grant a party’s motion for certification. 18 The party seeking certification for interlocutory appeal has the burden of showing that 19 “exceptional circumstances justify a departure from the basic policy of postponing appellate 20 review until after the entry of a final judgment.” Ibid. 21 A question of law is controlling if its resolution on appeal “could materially affect the 22 outcome of litigation in the district court.” Ibid. A question may be controlling even though its 23 resolution does not determine who will prevail on the merits. But it is not controlling simply 24 because its immediate resolution may promote judicial economy. 25 Material advancement of the ultimate termination of the litigation has not been expressly 26 defined. In one case, the court determined that immediate appeal would not materially advance 27 the ultimate termination of litigation where the appeal might postpone the scheduled trial date. 28 See Shurance v. Planning Control Int’l, Inc. 839 F.2d 1347, 1348 (9th Cir. 1988). 3 1 2 3 For the Northern District of California APPLICATION. A. Plaintiff’s First Question for Certification. Plaintiff requests to certify the following question for interlocutory appeal: Does the 4 legal certainty standard apply in an action removed solely under diversity jurisdiction and not 5 removed pursuant to CAFA, where the complaint specifically limits plaintiff’s amount in 6 controversy to less than the jurisdictional minimum? 7 United States District Court 2. Certification is unwarranted. The April 29 order specifically stated that whether it 8 applied the preponderance-of-the-evidence standard or the legal certainty standard, the result 9 would be the same (Dkt. No. 30). Under both standards, plaintiff did not successfully allege 10 on the face of the complaint that the total amount in controversy was less than $75,000. She did 11 not include the financial burden of taxes and injunctive relief against defendant in her 12 calculations.1 The ambiguity of her complaint necessarily called for the application of the 13 preponderance-of-the-evidence standard, regardless of whether the legal certainty standard 14 could apply to actions removed under diversity jurisdiction. The resolution of this question on 15 appeal would not materially affect the outcome of litigation and is therefore not controlling. 16 Plaintiff contends that the issue is controlling because if the Ninth Circuit were to find 17 that defendant’s burden was to show jurisdiction to a legal certainty, the action would have to be 18 remanded to state court. She cites Guglielmino v. McKee Foods Corp., 506 F.3d 696 (9th Cir. 19 2007), to assert that the Ninth Circuit has left this question open for another day. The question 20 may be open, but it is irrelevant as applied here. 21 Plaintiff also argues that a decision by the Ninth Circuit would materially advance, if not 22 end, the litigation in this forum. Given the reasoning in the April 29 order, this argument fails as 23 well. The order, again, stated that the jurisdictional threshold is met under both the legal 24 certainty and preponderance-of-the-evidence standards. Certifying this question for 25 26 27 28 1 Plaintiff refutes the April 29 order’s finding that she did not include taxes and injunctive relief in her calculation of the “amount in controversy”. The complaint, however, only states that the amount in controversy includes “damages, restitution, penalties and pro rata share of statutory attorney fees for the named Plaintiff” not exceeding $75,000 (Dkt. No. 43). 4 1 interlocutory appeal, therefore, would inevitably delay the proceedings that would take place 2 regardless of which standard is used. 3 Plaintiff further states that a substantial basis for difference of opinion exists because 4 the Ninth Circuit has not specifically ruled out the potential application of the legal certainty 5 standard to actions not removed under CAFA. Given that two-out-of-three requirements under 6 Section 1292(b) are not met, addressing this contention is unnecessary. 7 8 For the Northern District of California United States District Court 9 B. Plaintiff’s Second Question for Certification. Plaintiff also requests to certify the following question: May a district court attribute a pro rata share of injunctive relief as part of the amount in controversy where injunctive relief is 10 not the primary object of the litigation and plaintiff, as a former employee, does not have 11 standing to seek injunctive relief under Article III of the United States Constitution? 12 This is not a controlling question of law because it would not materially affect the 13 outcome of litigation. Although the April 29 order stated that the inclusion of a pro rata 14 share of injunctive relief in determining the amount in controversy would be proper, it found the 15 jurisdictional requirement satisfied without including this figure. Adding up just the amounts 16 owed for overtime ($15,908.30), missed breaks ($11,937.51), penalties ($22,800) and attorney’s 17 fees ($28,846.15) resulted in a total of $79,491.96. The threshold was thus met without factoring 18 in injunctive relief.2 19 Plaintiff contends that the inclusion of injunctive relief in determining the amount 20 in controversy is improper when injunctive relief is not the primary object of the litigation. 21 She also argues that because she lacks standing to seek injunctive relief, it has no value to her 22 and should not be included. These arguments have no bearing here. Even if found true, they 23 would have no effect. The jurisdictional threshold was met without the inclusion of injunctive 24 relief, and therefore this question is not a controlling issue of law. Consideration of whether or 25 26 27 28 2 Plaintiff argues that zero dollars, rather than $28,846.15, in attorney’s fees should have been included in the amount in controversy. She asserts that doing this would reduce the amount in controversy to under $75,000 (Dkt. No. 43). The April 29 order explicitly rejected plaintiff’s arguments against the addition of attorney’s fees, finding the $28,846.15 to be reasonable (Dkt. No. 30). 5 1 not the question has substantial grounds for difference of opinion or would materially advance 2 litigation is unnecessary, since the first requirement for certification is not met. 3 4 For the Northern District of California Plaintiff’s Third Question for Certification. Finally, plaintiff requests that a third question be certified: May a district court include 5 both the total amount of plaintiff’s potential wages and penalties, as well as the amount of taxes 6 plaintiff must pay from those very same wages in the form of deductions, as part of an alleged 7 amount in controversy? 8 United States District Court C. The same analysis applied in Part B applies here. This is not a controlling question 9 of law because its resolution would have no material effect on the outcome of litigation. 10 As calculated above, the addition of the amounts owed for overtime and missed breaks, 11 penalties, and attorney’s fees totals $79,491.96, which meets the jurisdictional threshold without 12 the inclusion of plaintiff’s taxes from her potential wages and penalties. 13 Plaintiff disputes that taxes should be included in the amount in controversy at all 14 (Br. at 11). The Ninth Circuit has ruled that taxes should be included in the amount in 15 controversy when the plaintiff requests them as a remedy, directly negating plaintiff’s point. 16 Guglielmino, 506 F.3d at 701. 17 Moreover, plaintiff argues that the taxes defendant would pay on wages should not be 18 added on top of wages to determine the amount in controversy, but rather that those taxes should 19 be deducted from the amount plaintiff would receive as damages. Plaintiff provides no authority 20 for this contention. 21 Again, the jurisdictional threshold is met without including taxes. Resolution of 22 plaintiff’s question would have no material effect on the outcome of litigation. Although 23 plaintiff asserts that both difference of opinion and potential for material advancement exist, 24 she provides no support for these claims. The absence of a controlling issue of law here is fatal 25 to her request. 26 Overall, plaintiff has failed to demonstrate exceptional circumstances justifying a 27 departure from the basic policy of postponing appellate review until after final judgment. 28 Even considered cumulatively, the questions posed do not warrant certification for interlocutory 6 1 appeal. Plaintiff’s vague statement of the amount in controversy necessitates the application of 2 the preponderance-of-the-evidence standard, and the jurisdictional threshold is met without the 3 inclusion of injunctive relief or taxes. 4 5 CONCLUSION For the foregoing reasons, plaintiff’s request for an order certifying issues pursuant to 6 28 U.S.C. 1292(b) for interlocutory appeal is DENIED. The hearing scheduled for June 24, 2010, 7 is hereby VACATED. 8 9 IT IS SO ORDERED. 11 For the Northern District of California United States District Court 10 Dated: June 15, 2010. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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