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Gessele v. Jack in the Box, Inc.

United States District Court, D. Oregon

March 19, 2014

JESSICA GESSELE, ASHLEY GESSELE, NICOLE GESSELE, TRICIA TETRAULT, and CHRISTINA LUCHAU, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
JACK IN THE BOX, INC., a Corporation of Delaware, Defendant

As Amended May 15, 2014.

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[Copyrighted Material Omitted]

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For Plaintiffs: JON M. EGAN, Oswego, OR.

For Defendants: DOUGLAS S. PARKER, JENNIFER NETH WARBERG, DON STAIT, Littler Mendelson, P.C., Portland, OR.

OPINION

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AMENDED OPINION AND ORDER

ANNA J. BROWN, United States District Judge.

This matter comes before the Court on Defendant's Motion (#174) for Summary Judgment and Plaintiffs' Motion (#276) to Strike. For the reasons that follow, the Court GRANTS Defendant's Motion for Summary Judgment, DENIES as moot Plaintiffs' Motion to Strike, DISMISSES Plaintiffs' claims without prejudice.

BACKGROUND

On August 13, 2010, Plaintiffs Jessica Gessele, Ashley Gessele, Nicole Gessele, and Tricia Tetrault on behalf of all those similarly situated filed a putative class-action Complaint in this Court against Defendant Jack in the Box, Inc., for violation of the minimum-wage and overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § § 201, et seq., and various Oregon wage-and-hour laws. Specifically, Plaintiffs alleged Defendant (1) failed to pay minimum wages in violation of the FLSA, (2) failed to pay overtime wages in violation of the FLSA, (3) failed to pay minimum wages in violation of Oregon Revised Statute § 653.025, (4) failed to pay overtime wages in violation of Oregon Revised Statute § 653.261, (5) failed to pay all wages due after termination of Plaintiffs' employment in violation of Oregon Revised Statute § 652.140, (6) deducted unauthorized amounts from Plaintiffs' paychecks in violation of Oregon Revised Statute § 652.610,

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(7) failed to issue wages in the form required by Oregon Revised Statute § 652.110, and (8) failed to pay all wages when due as required by Oregon Revised Statute § 652.120.

On December 15, 2010, Defendant moved to dismiss Plaintiffs' First through Fifth Claims. On January 31, 2011, Magistrate Judge Janice M. Stewart issued Findings and Recommendation in which she recommended the Court grant Defendant's Motion to Dismiss.

On April 11, 2011, Senior District Judge Ancer Haggerty issued an Order adopting the Findings and Recommendation, granting Defendant's Motion to Dismiss, and granting Plaintiffs leave to file an Amended Complaint.

On May 16, 2011, Plaintiffs filed a First Amended Complaint in which they asserted the same claims as in their initial Complaint but added Christina Luchau as a Plaintiff and included additional facts to support their claims.

On May 31, 2011, Defendant filed an Answer to Plaintiffs' First Amended Complaint in which it asserted, among other things, a statute-of-limitations defense as follows: " Plaintiffs' claims are barred in whole, or in part, by applicable statutes of limitations."

On July 18, 2011, Plaintiffs filed a Motion to Strike Defendant's Affirmative Defenses. In particular, Plaintiffs moved to strike Defendant's statute-of-limitations defense on the ground that Defendant did not " identify which claims are allegedly subject to this affirmative defense, nor in what way they are supposedly barred. . . . Plaintiffs therefore cannot substantially respond to nor pursue discovery on this issue."

On August 30, 2011, Magistrate Judge Stewart heard oral argument on Plaintiffs' Motion to Strike.

On September 2, 2011, Magistrate Judge Stewart issued an Opinion in which she concluded, among other things, that Defendant's statute-of-limitations defense was " merely a precautionary defense without a sufficient factual basis." Magistrate Judge Stewart, therefore, granted Plaintiffs' Motion to Strike as to Defendant's statute-of-limitations defense " without prejudice to defendant's right to amend its answer."

On December 14, 2011, Magistrate Judge Stewart held a status conference in which she advised the parties that she was going to enter an order tolling the statute of limitations " for absent collective class members" beginning on December 14, 2011, and continuing " until class certification." Dec. 14, 2011, Hearing Tr. 54-55 (#148). On December 14, 2011, Magistrate Judge Stewart also issued the Order (#59) tolling the statute of limitations for " absent putative class members."

On March 20, 2012, Plaintiffs filed a Second Amended Complaint in which Plaintiffs allege Defendant (1) failed to pay minimum wages in violation of the FLSA, (2) failed to pay overtime wages in violation of the FLSA, (3) failed to pay minimum wages in violation of Oregon Revised Statute § 653.025, (4) failed to pay overtime wages in violation of Oregon Revised Statute § 653.261, (5) failed to pay all wages due after termination of Plaintiffs' employment in violation of Oregon Revised Statute § 652.140, (6) deducted unauthorized amounts from Plaintiffs' paychecks in violation of Oregon Revised Statute § 652.610, and (7) failed to pay all wages when due as required by Oregon Revised Statute § 652.120.

On April 12, 2012, Defendant filed an Answer to Plaintiffs' Second Amended Complaint in which it asserted Affirmative Defenses that again included the statute of limitations. As in Defendant's Answer to

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Plaintiffs' First Amended Complaint, Defendant alleged only that " Plaintiffs' claims are barred in whole, or in part, by applicable statutes of limitations."

On May 22, 2012, Magistrate Judge Stewart heard oral argument on various Motions pending at that time. At the hearing Plaintiffs made an oral Motion to Dismiss Defendant's Affirmative Defenses. The Magistrate Judge granted Plaintiffs' Motion and dismissed Defendant's statute-of-limitations defense without prejudice and with leave to amend. The Magistrate Judge noted:

I think what is going to happen in this case is at some point, if the defendant decides that it has, for example, a valid statute of limitations defense with a particular class member with respect to a particular claim, they're going to have to seek leave of court to amend and add that affirmative defense with specific factual allegations to go forward.

Tr. (#185) at 7 (May 22, 2013). The Magistrate Judge specifically declined Plaintiffs' request to dismiss with prejudice the statute-of-limitations defense against the named Plaintiffs.

On August 13, 2012, Plaintiffs filed a Motion to Certify Oregon Rule 23(b)(3) Classes and Alternative Motions to Either Certify Hybrid FLSA Classes or Certify FLSA 216(b) Collectives.

On October 22, 2012, Defendant filed a Motion to Amend/Correct Answer in which it requested leave to file an Amended Answer to Plaintiffs' Second Amended Complaint that, among other things, did not include a statute-of-limitations Affirmative Defense.

On December 13, 2012, Plaintiffs filed a Third Motion for Leave to File Amended Complaint.

On December 20, 2012, Magistrate Judge Stewart issued an Order granting Defendant's Motion to Amend/Correct Answer. On December 27, 2012, Defendant filed its Amended Answer to Plaintiffs' Second Amended Complaint. Defendants' Amended Answer did not include a statute-of-limitations Affirmative Defense.

On January 7, 2013, Magistrate Judge Stewart denied Plaintiffs' Third Motion for Leave to File Amended Complaint on the grounds of undue delay and prejudice. Specifically, the Magistrate Judge noted:

Given the amended pleadings, extensive discovery and motion practice to date, including plaintiffs' pending motion for class certification, this case is too far advanced to add two new defendants (including a representative of a proposed defendant class), many new claims unrelated to the pending claims for wage and hour violations, additional putative class members, and over 50 new proposed classes and subclasses.

Order (#157)(Jan. 7, 2013).

On January 28, 2013, Magistrate Judge Stewart issued Findings and Recommendation in which she recommended granting in part and denying in part Plaintiffs' Motion to Certify and specifically recommended conditional certification of Plaintiffs' proposed FLSA Workers Benefit Fund and Shoe Collectives and Subcollectives under § 216(b) and certification of Plaintiffs' proposed Rule 23(b)(3) Oregon Workers Benefit Fund and Shoe Classes and Subclasses.

On April 1, 2013, Judge Haggerty entered an Order adopting the January 28, 2013, Findings and Recommendation; conditionally certifying Plaintiffs' proposed FLSA Workers' Benefit Fund and Shoe Collectives and Subcollectives under § 216(b); and certifying Plaintiffs' proposed Rule 23(b)(3) Oregon Workers Benefit Fund and Shoe Classes and Subclasses.

On May 7, 2013, Defendant filed a Motion for Leave to Amend Answer in which

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Defendant sought to include a statute-of-limitations defense. Specifically, Defendant asserted the named Plaintiffs failed to file written consent forms that are a prerequisite to commencing a collective action under § § 216(b) and 256 of the FLSA and on March 31, 2013, the FLSA's three-year limitation period expired as to the named Plaintiffs. According to Defendant, therefore, for the first time Defendant had a specific factual basis to support its statute-of-limitations defense.

Also on May 7, 2013, Defendant filed a Motion for Summary Judgment as to all of Plaintiffs' claims on the grounds that Plaintiffs' FLSA claims are barred by the statute of limitations and this Court may not exercise supplemental jurisdiction over Plaintiffs' state-law claims.

On May 31, 2013, Plaintiffs filed a Response to Defendant's Motion for Leave to Amend Answer in which they objected to Defendant's Motion on numerous grounds.

On June 18, 2013, Magistrate Judge Stewart issued an Opinion and Order in which she granted Defendant's Motion for Leave to Amend Answer. On July 1, 2013, Plaintiffs filed Objections to the Opinion and Order.

On August 27, 2013, this Court issued an Order affirming Magistrate Judge Stewart's Opinion and Order and granted Defendant's Motion for Leave to Amend Answer.

On October 16, 2013, the Court entered an Order granting Plaintiffs additional time to conduct discovery related to the statute-of-limitations issues before filing a response to Defendant's Motion for Summary Judgment. Because it was not clear to the Court how much additional time Plaintiffs were requesting or what " reasonable parameters the Court should set for the additional discovery," the Court directed counsel to confer and to submit no later than October 28, 2013, a joint statement setting forth their respective positions regarding the time necessary to complete the additional discovery as well as a proposed schedule to complete the briefing on Defendant's Motion for Summary Judgment.

On October 28, 2013, Defendant filed a Motion for Stay of Certain Proceedings and for a Status Conference instead of filing a joint statement. In its Motion Defendant sought a stay of proceedings as to Plaintiffs' Motions that were filed after Defendant's Motion (#174) for Summary Judgment; i.e., a stay as to Plaintiffs' Motion (#206) to Appoint Class Administrator and to Authorize Dissemination of Notice to Class and Collective Members, Plaintiffs' Motion (#212) for Spoliation Sanctions Re FLSA Shoe Claims and Defenses, and Plaintiffs' Alternative Motion (#214) for Partial Summary Judgment on FLSA Shoe Claims and Defenses.

On November 7, 2013, the Court held a status conference with counsel for the purpose of (1) considering and resolving the amount of time that should be permitted for additional discovery related to Defendant's pending Motion (#174) for Summary Judgment; (2) considering Defendant's Motion (#217) for Stay of Certain proceedings; and (3) managing the resolution of Plaintiffs' Motions ## 206, 212, and 214.

On November 7, 2013, the Court also issued an Order that (1) set January 3, 2014, as the date for Plaintiffs to file their response to Defendant's Motion for Summary Judgment and January 20, 2014, as the date for Defendant to file its Reply; (2) scheduled oral argument on the parties' various motions to be heard on January 30, 2014; and (3) advised the parties they would not be permitted to file any additional motions without advance leave of Court.

On November 26, 2013, the parties filed a Joint Statement of Stipulated Facts in which they noted:

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Jack in the Box asserts that the named Plaintiffs' FLSA statutes of limitations expired on the following dates:
a. Jessica Gessele: November 23, 2011 (2012 for willful damages claims)
b. Ashley Gessele: February 8, 2011 (2012 for willful damages claims)
c. Nicole Gessele: April 1, 2011 (2012 for willful damages claims)
d. Tricia Tetrault: July 22, 2010 (2011 for willful damages claims)
e. Christina Luchau: March 31, 2012 (2013 for willful damages claims)[.]
Jack in the Box received letters from Mr. Egan on behalf of Plaintiffs asserting various wage claims and citing state and federal statutes on various dates including on May 3, 2010 for Jessica Gessele and on July 26, 2010 for other plaintiffs.
Jack in the Box's in-house counsel Raymond Pepper and James Stubblefield had at all relevant times the responsible knowledge within Jack in the Box of the reasons for the decision to file the motion for summary judgment at DKT #175, including the potential availability of an FLSA defense based on a lack of filed consents.

Joint Statement (#230) at 1.

On November 27, 2013, the parties advised the Court of a discovery dispute related to defense counsel's knowledge of the availability of the FLSA statute-of-limitations defense.

On December 12, 2013, the Court held a hearing on the parties' discovery issue. On December 12, 2013, the Court also entered an Order (1) setting December 27, 2013, as the date for Defendant's responses to interrogatories and briefing on any objections to the interrogatories; (2) setting January 6, 2014, as the date for Plaintiffs to file any response; (3) scheduling a further discovery conference on January 10, 2014; (4) extending Plaintiffs' deadline to respond to Defendant's Motion for Summary Judgment (#174) to January 17, 2014, and Defendant's reply to February 3, 2014; and (5) striking oral argument set on January 30, 2014.

On January 6, 2014, Plaintiffs filed a Motion to Compel Discovery and/or Strike Affirmative Defense in which Plaintiffs sought an order compelling production of discovery from Defendant and/or striking Defendant's affirmative defense of waiver on the grounds of Defendant's " (non)responses and its (non)briefing of its objections."

On January 15, 2014, the Court heard oral argument on Plaintiffs' Motion to Compel. On that same day the Court issued an Order denying Plaintiffs' Motion to Compel; setting January 21, 2014, as the date for Plaintiffs to respond to Defendant's Motion for Summary Judgment (#174) and January 28, 2014, as the date for Defendant to file its reply; and setting oral argument on February 10, 2014, regarding Defendant's Motion.

On February 10, 2014, the Court heard oral argument on Defendant's Motion for Summary Judgment. At oral argument Plaintiffs made an oral motion to strike certain evidence that Defendant submitted in support of Defendant's Reply in support of its Motion for Summary Judgment, and the Court permitted Plaintiffs to file a written motion to strike. Accordingly, on February 11, 2014, Plaintiffs filed their Motion to Strike various Declarations and their attachments.

The Court took Motion #174 and Motion #276 under advisement on February 14, 2014.

DEFENDANT'S MOTION (#174) FOR SUMMARY JUDGMENT

I. Standards.

Summary judgment is appropriate when " there is no genuine dispute as to any

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material fact and the movant is entitled to judgment as a matter of law." Washington Mut. Ins. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed.R.Civ.P. 56(a). The moving party must show the absence of a dispute as to a material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine dispute as to a material fact for trial. Id. " This burden is not a light one. . . . The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citation omitted).

A dispute as to a material fact is genuine " if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). " Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004)(citation omitted). A " mere disagreement or bald assertion" that a genuine dispute as to a material fact exists " will not preclude the grant of summary judgment." Deering v. Lassen Cmty. Coll. Dist., No. 2:07-CV-1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20, 2011) (citing Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir. 1989)). When the nonmoving party's claims are factually implausible, that party must " come forward with more persuasive evidence than otherwise would be necessary." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)(citation omitted).

The substantive law governing a claim or a defense determines whether a fact is material. Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Id.

II. Parties' Assertions.

Defendant moves for summary judgment on the grounds that the named Plaintiffs failed to file written consent forms as required by the FLSA; more than three years have passed since the claims against Defendant accrued, and, therefore, the named Plaintiffs' claims are now barred by the FLSA statute of limitations; and the Court may not exercise supplemental jurisdiction over Plaintiffs' state-law claims because this Court never acquired jurisdiction over Plaintiffs' federal claims.

Plaintiffs, in turn, contend (1) genuine disputes of material fact exist as to when Plaintiffs' claims accrued; (2) Plaintiffs need not file written consents or, in the alternative, Plaintiffs gave written consent; (3) Plaintiffs filed this action in a dual capacity, and, therefore, their individual claims are not foreclosed by the consent issue; and (4) equitable considerations should preclude the Court from finding Plaintiffs' claims are barred as untimely.

III. FLSA Generally.

As noted, Plaintiffs brought their federal wage-and-hour claims under 29 U.S.C. § 216(b) of the FLSA.

" The FLSA regulates minimum wage, overtime pay, equal pay, and child labor, and prohibits employers from retaliating against employees who exercise their rights under the Act." Fontes v. Drywood Plus, Inc., No. CV-13-1901-PHX-LOA, 2013 WL 6228652, at *4 (D. Ariz. Dec. 2,

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2013)(citing Dellinger v. Sci. Applications Int'l Corp., 649 F.3d 226, 227-29 (4th Cir. 2011). The FLSA provides no employer " shall employ any of his employees who in a workweek is engaged in commerce . . . or is employed in an enterprise engaged in commerce . . . for a workweek longer than forty hours unless such employee receives compensation" for hours worked beyond the forty-hour floor " at a rate not less than one and one half times" the rate at which he or she is regularly employed. 29 U.S.C. § 207(a)(1).

Section 216(b) of the FLSA further provides:

Any employer who violates the provisions of section 206 or section 207 of [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may ...

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