United States District Court, D. Oregon
MCKENZIE LAW FIRM, P.A., AND OLIVER LAW OFFICES, INC., on behalf of themselves and all others similarly situated, Plaintiffs,
RUBY RECEPTIONISTS, INC., Defendant.
S. Dubanevich and Cody Berne, Stoll Stoll Berne Lokting &
Schlachter, pc, 209 SW Oak Street, Suite 500, Portland OR
97204. Of Attorneys for Plaintiffs.
R. Escobar and Austin Rainwater, DLA Piper llp, 701 Fifth
Avenue, Suite 6900, Seattle, WA 98104. Of Attorneys for
OPINION AND ORDER
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE
Law Firm, P.A. (“McKenzie”) and Oliver Law
Offices, Inc. (“Oliver”) bring this putative
class action against Ruby Receptionists, Inc.
(“Ruby”), alleging breach of contract, breach of
the implied covenant of good faith and fair dealing, unjust
enrichment, and money had and received. Ruby has moved to
dismiss or stay this action, pending resolution of an
earlier- filed putative class action in state court brought
by a different plaintiff alleging substantially similar
claims against Ruby. For the following reasons, Ruby's
motion is DENIED.
Colorado River Water Conservation Dist. v. United
States, 424 U.S. 800 (1976), the United States Supreme
Court upheld the fundamental principle that absent
exceptional circumstances, federal courts have a
“virtually unflagging obligation” to exercise
their jurisdiction concurrently with other courts.
Id. at 817. Under an exception now known as the
“Colorado River doctrine, ” there may be
rare circumstances in which “a federal district court
may decline to exercise or postpone the exercise of its
jurisdiction when there are concurrent state and federal
suits and when doing so would promote wise and sound judicial
administration.” In re Galena Biopharma, Inc.
Derivative Litig., 83 F.Supp.3d 1033, 1039 (D. Or. 2015)
(citing Colorado River, 424 U.S. at 817).
“Only in rare cases will ‘the presence of a
concurrent state proceeding' permit the district court to
dismiss a concurrent federal suit ‘for reasons of wise
judicial administration'” R.R. Street &
Co., Inc. v. Transp. Ins. Co., 656 F.3d 966, 977-78 (9th
Cir. 2011) (quoting Colorado River, 424 U.S. at
818). The Supreme Court has carefully circumscribed the
Colorado River doctrine, emphasizing that
“[a]bdication of the obligation to decide cases can be
justified” only in “exceptional
circumstances.” Moses H. Cone Mem'l Hosp., v.
Mercury Constr. Corp., 460 U.S. 1, 14 (1983) (quoting
Colorado River, 424 U.S. at 813)).
parallel suits are filed in state and federal court, the
Ninth Circuit has recognized the following eight factors to
be considered in determining whether a stay or dismissal
under Colorado River is appropriate:
(1) which court first assumed jurisdiction over any property
at stake; (2) the inconvenience of the federal forum; (3) the
desire to avoid piecemeal litigation; (4) the order in which
the forums obtained jurisdiction; (5) whether federal law or
state law provides the rule of decision on the merits; (6)
whether the state court proceedings can adequately protect
the rights of the federal litigants; (7) the desire to avoid
forum shopping; and (8) whether the state court proceedings
will resolve all issues before the federal court.
St. & Co., 656 F.3d at 978-79.
factors are not a “mechanical checklist, ” and
courts “examine them in ‘a pragmatic, flexible
manner with a view to the realities of the case at
hand.'” Seneca Ins. Co., Inc. v. Strange Land,
Inc., 862 F.3d 835, 842 (9th Cir. 2017) (quoting
Moses H. Cone, 460 U.S. at 16, 21). Courts must
carefully balance these factors, “with the balance
heavily weighted in favor of the exercise of
jurisdiction.” Moses H. Cone, 460 U.S. at 16.
“Any doubt as to whether a factor exists should be
resolved against a stay, not in favor of one.”
Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369
(9th Cir. 1990).
a business based in Portland, Oregon that provides
receptionist services to small businesses throughout North
America. Many of its clients are small law firms and solo
practitioners. Ruby's clients enter into contracts with
Ruby to purchase receptionist services and are billed based
on the quantity of “receptionist minutes” used or
contracted for per month.
October of 2017, Shapiro Law Group (“Shapiro”),
one of Ruby's law firm clients, filed a putative class
action in Multnomah County Circuit Court in Oregon
(“the State Court Action”). The putative class in
that action consists of all of Ruby's clients nationwide
for call answering and messaging services. Shapiro alleges
that Ruby failed properly to disclose to its clients its
practice of rounding up to the nearest increment of 30
seconds when calculating a “minute” billed to its
clients and that Ruby also failed to disclose to its clients
that Ruby includes in its client billings time that callers
are placed on hold.
State Court Action, Ruby moved to dismiss the First Amended
Complaint under Rule 32 I of the Oregon Rules of Civil
Procedure, which is a state court rule that may be unique to
Oregon. That rule prohibits the maintenance of a class action
for damages if all class members have been identified and
notified that, upon request, the defendant will appropriately
compensate each requesting class member for the harm
suffered, the defendant actually compensates the requesting
class members (or will do so within a reasonable time), and
the defendant has ceased engaging in the allegedly wrongful
conduct. On September 27, 2018, the court in the
State Court Action issued a letter ruling allowing Ruby to
file an amended motion under Rule 32 I. The letter ruling
also found that Shapiro had established a claim for damages
for Defendant's rounding practices. On October 31, 2018,
Ruby filed its amended motion under Rule 32 I, which is
pending in the State Court Action. A class has not yet been
certified in the State Court Action.
November 2, 2018, after the state court issued its letter
ruling in the State Court Action on September 27, 2018,
McKenzie and Oliver filed this putative class action lawsuit
in federal court under the Class Action Fairness Act of 2005.
See 28 U.S.C. § 1332(d)(2)(A). McKenzie and
Oliver are or were clients of Ruby and allege that Ruby
failed properly disclose how it bills clients for time spent
handling incoming calls. Because the claims alleged by
McKenzie and Oliver are substantially the same as the claims
alleged by ...