Brumbach v. Hyatt Corporation

Opinion

1 2 3 4 5 6 7 8 9 12 13 MICHAEL D. BRUMBACH, on Case No.: 20-cv-2231-WQH-KSC behalf of himself and all others 14 similarly situated, ORDER 15 Plaintiff, 16 v. 17 HYATT CORPORATION, a 18 Delaware corporation doing business as Manchester Grand 19 Hyatt San Diego; and DOES 1- 20 100, inclusive, 21 Defendants. 22 HAYES, Judge: 23 The matter before the Court is the Motion to Stay Proceedings filed by Defendant 24 Hyatt Corporation. (ECF No. 22). 26 a. Crump v. Hyatt Corp. 27 On December 6, 2019, Christine Crump filed a wage and hour class action complaint 28 against Hyatt Corporation (“Hyatt”) and Does 1 through 100 in the Alameda County 1 Superior Court (the “Crump Action”). (See Afar Decl., ECF No. 22-1 ¶ 3). Hyatt removed 2 the Crump Action to the United States District Court for the Northern District of California, 3 assigned case number 4:20-cv-00295-HSG. (Id.). On August 5, 2020, Crump filed the 4 operative first amended complaint (“FAC”). (Ex. A to Afar Decl., ECF No. 22-1 at 5). 5 Crump alleges that Hyatt failed to pay earned wages to hourly, non-exempt 6 employees throughout California. Crump brings individual and class claims against Hyatt 7 and Does 1 through 100 for violations of the California Labor Code and IWC Wage Orders 8 including: 1) failing to provide meal periods; 2) failing to provide rest periods; 3) failing 9 to pay minimum wage; 4) failing to pay timely wages upon termination; 5) failing to pay 10 timely wages; 6) failing to provide accurate itemized wage statements; and 7) failing to 11 keep accurate and complete payroll records. Crump further brings derivative claims under 12 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq., 13 and the Private Attorneys General Act of 2004 (“PAGA”). 14 On May 6, 2021, Crump filed a motion for class certification. (Ex. 1 to Lander Decl., 15 ECF No. 23-1 at 5). Crump seeks certification of the following three classes: 16 Uniform Class: all current and former hourly-paid or non-exempt uniformed colleagues who worked for Defendant [Hyatt] within the State of California 17 at any time during the period from December 6, 2015 to the present. 18 Rounding Class: all current and former hourly-paid or non-exempt 19 employees who worked for Defendant [Hyatt] within the State of California 20 at any time during the period from December 6, 2015 to June 1, 2019.

21 Meal and Rest Break Class: all current and former hourly-paid or non- 22 exempt employees who worked for Defendant [Hyatt] within the State of California at any time during the period from December 6, 2015 to the present. 23

24 (Id. at 14). A hearing on the motion for class certification is set for September 9, 2021. (See 25 Afar Decl., ECF No. 22-1 ¶ 4). 26 b. Brumbach v. Hyatt Corp. 27 On October 9, 2020, Plaintiff Michael D. Brumbach filed a wage and hour Class 28 Action Complaint against Defendants Hyatt and Does 1 through 100 in the San Diego 1 County Superior Court (the “Brumbach Action”). (Ex. A to Notice of Removal, ECF No. 2 1-2 at 6). Brumbach alleges that Hyatt failed to pay earned wages to hourly, non-exempt 3 employees at the Manchester Grand Hyatt in San Diego. Brumbach brings individual and 4 class claims against Hyatt and Does 1 through 100 for violations of the California Labor 5 Code and IWC Wage Orders including: 1) failing to pay minimum and overtime wages; 2) 6 failing to provide meal periods; 3) failing to provide rest periods; 4) failing to provide 7 accurate itemized wage statements; and 5) failing to pay timely wages upon termination. 8 Brumbach further brings derivative claims under the UCL and PAGA. Brumbach seeks to 9 represent the following classes: 10 All California citizens employed by Defendants as hourly-paid, non-exempt employees during the appropriate time period at Defendants’ Manchester 11 Grand Hyatt San Diego only, to whom Defendants applied a time rounding 12 policy and practice as specifically described herein (hereinafter, the “Rounding Class”); 13

14 All California citizens employed by Defendants as hourly-paid, non-exempt employees who worked as bartenders, barbacks, waiters, cocktail servers, 15 server assistants, food runners, bouncers, and any of Defendants’ job positions 16 with substantially similar titles and/or duties as these during the appropriate time period at Defendants’ Manchester Grand Hyatt San Diego 17 restaurants/cocktail lounges (including but not limited to Top of the Hyatt, 18 GrandEats, Sally’s Fish House & Bar, Brew30 California Taps, The Landing, Seaview, and Pool Bar & Grill) only, who were subjected to Defendants’ 19 policies and practices regarding meal periods as specifically described herein 20 (hereinafter, the “Meal Period Class”);

21 All California citizens employed by Defendants as hourly-paid, non-exempt 22 employees who worked as bartenders, barbacks, waiters, cocktail servers, 23 server assistants, food runners, bouncers, and any of Defendants’ job positions with substantially similar titles and/or duties as these during the appropriate 24 time period at Defendants’ Manchester Grand Hyatt San Diego 25 restaurants/cocktail lounges (including but not limited to Top of the Hyatt, GrandEats, Sally’s Fish House & Bar, Brew30 California Taps, The Landing, 26 Seaview, and Pool Bar & Grill) only, who were subjected to Defendants’ 27 policies and practices regarding paid rest periods as specifically described herein (hereinafter, the “Rest Period Class”); 28 1 2 All California citizens employed by Defendants as hourly-paid, non-exempt employees during the appropriate time period at Defendants’ Manchester 3 Grand Hyatt San Diego only, who were subjected to Defendants’ policies and 4 practices regarding itemized wage statements as specifically described herein (hereinafter, the “Wage Statement Class”); 5

6 All formerly-employed California citizens employed by Defendants as 7 hourly-paid, non-exempt employees during the appropriate time period at Defendants’ Manchester Grand Hyatt San Diego only, who were subjected to 8 Defendants’ policies and practices regarding Labor Code § 203 and the 9 payment of final wages as specifically described herein (hereinafter, the “LC 203 Class”); and 10

11 All California citizens employed by Defendants as hourly-paid, non-exempt 12 employees during the appropriate time period at Defendants’ Manchester Grand Hyatt San Diego only, regarding whom Defendants have engaged in 13 unlawful, unfair and/or fraudulent business acts or practices prohibited by 14 B&PC § 17200, et seq. as specifically described herein (hereinafter, the “17200 Class”). 15

16 (Id. ¶ 25). 17 On November 16, 2020, Hyatt removed the Brumbach Action to this Court. (ECF 18 No. 1). On April 22, 2021, Hyatt filed a Motion to Stay Proceedings. (ECF No. 22). On 19 May 11, 2021, Brumbach filed an Opposition to the Motion to Stay Proceedings. (ECF No. 20 23). On May 18, 2021, Hyatt filed a Reply. (ECF No. 25). 22 Defendant Hyatt contends that the Court should stay the Brumbach Action pursuant 23 to the first-to-file rule, pending a ruling on class certification in the earlier-filed Crump 24 Action. Hyatt contends that the class claims in the Brumbach Action would be “completely 25 extinguish[ed]” if the court in the Crump Action grants the motion for class certification. 26 (ECF No. 22 at 12). Hyatt contends that the first-to-file factors favor a stay, and a stay 27 would serve the interests of justice and promote judicial economy. In the alternative, Hyatt 28 1 contends that the Court should stay the Brumbach Action pursuant to the Court’s inherent 2 power. 3 Plaintiff Brumbach contends that the Court should allow the Brumbach Action to 4 proceed. Brumbach contends that the first-to-file factors do not favor a stay. Brumbach 5 contends that the putative class in the Brumbach Action constitutes less than 10% of the 6 putative class in the Crump Action, and the factual bases for the claims in each action 7 differ. Brumbach contends that class certification in the Crump Action may be denied, and 8 the delay caused by a stay would allow the claims of class members in the Brumbach 9 Action to “needlessly remain outstanding.” (ECF No. 23 at 9). 11 The first-to-file rule is “a generally recognized doctrine of federal comity which 12 permits a district court to decline jurisdiction over an action when a complaint involving 13 the same parties and issues has already been filed in another district.” Pacesetter Sys. v. 14 Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). Under the first-to-file rule, “the second 15 district court has discretion to transfer, stay, or dismiss the second case in the interest of 16 efficiency and judicial economy.” Bozic v. U.S. Dist. Court, 888 F.3d 1048, 1051-52 (9th 17 Cir. 2018) (quoting Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997)), 18 as corrected (Mar. 4, 2019). Courts analyze three factors in determining whether to apply 19 the first-to-file rule: “chronology of the lawsuits, similarity of the parties, and similarity of 20 the issues.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 1240 (9th 21 Cir. 2015). 22 “The most basic aspect of the first-to-file rule is that it is discretionary . . . .” Alltrade, 23 Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991), amended, 1991 U.S. App. 24 LEXIS 25517 (9th Cir. Oct. 31, 1991). However, the rule “serves the purpose of promoting 25 efficiency [] and should not be disregarded lightly.” Church of Scientology v. U.S. Dep’t 26 of the Army, 611 F.2d 738, 750 (9th Cir. 1979), as amended on denial of reh’g (Apr. 7, 27 1980), overruled in part on other grounds by Animal Legal Def. Fund v. U.S. FDA, 836 28 F.3d 987 (9th Cir. 2016). “When applying the first-to-file rule, courts should be driven to 1 maximize ‘economy, consistency, and comity.’” Kohn Law Grp., 787 F.3d at 1240 2 (quoting Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599, 604 (5th Cir. 1999)). The 3 court may “dispense with the first-filed principle for reasons of equity,” including if the 4 first lawsuit was filed in bad faith, was anticipatory, or involved forum shopping. See 5 Alltrade, 946 F.2d at 628. “The decision and the discretion belong to the district court.” Id. 7 The parties agree that the Crump Action is the first-filed action. The Crump Action 8 was filed on December 6, 2019. The Brumbach Action was filed on October 9, 2020. The 9 Crump Action predates the Brumbach Action and is the first-filed action. 10 Defendant Hyatt contends that the parties in the Crump Action and the Brumbach 11 Action are substantially similar because Hyatt is a defendant in both actions, and “the 12 putative class and class period in the Brumbach Action are fully encompassed by the 13 putative class and class period in the Crump Action.” (ECF No. 22 at 12). Plaintiff 14 Brumbach agrees that the putative class in the Crump Action includes the putative class in 15 the Brumbach Action. However, Brumbach contends that the parties are not substantially 16 similar because the putative class in the Brumbach Action is significantly smaller. 17 “[T]he first-to-file rule does not require exact identity of the parties.” Kohn Law 18 Grp., 787 F.3d at 1240. The second first-to-file factor “is satisfied if some [of] the parties 19 in one matter are also in the other matter, regardless of whether there are additional, 20 unmatched parties in one or both matters.” Wallerstein v. Dole Fresh Vegetables, Inc., 967 21 F. Supp. 2d 1289, 1295 (N.D. Cal. 2013) (alteration in original); see Kohn Law Grp., 787 22 F.3d at 1240 (finding substantial similarity of the defendants where the “first-filed case 23 contained a defendant not named in the second case”). 24 In class actions, the court compares the classes for substantial similarity, not the class 25 representatives. See, e.g., Fefferman v. Dr Pepper Snapple Grp., Inc., No. 3:13-CV-00160- 26 H (KSC), 2013 U.S. Dist. LEXIS 193961, at *13 (S.D. Cal. Mar. 12, 2013) (“[T]he parties 27 are substantially the same because the named plaintiff and putative class in this lawsuit are 28 all part of the putative class in the [first] lawsuit.”); but see Farrar v. Catalina Rest. Grp., 1 Inc., No. 15cv2407-L(RBB), 2016 U.S. Dist. LEXIS 60606, at *3-4 (S.D. Cal. May 2, 2 2016) (declining to apply the first-to-file rule and stating that “no class action has been 3 certified in either of the cases, [so] reliance on the scope of the plaintiff class is premature. 4 . . . [T]he Court has no basis to conclude that the parties are substantially similar”). 5 In the earlier-filed Crump Action, the pending motion for class certification seeks 6 certification of three classes: 7 Uniform Class: all current and former hourly-paid or non-exempt uniformed colleagues who worked for Defendant [Hyatt] within the State of California 8 at any time during the period from December 6, 2015 to the present. 9 Rounding Class: all current and former hourly-paid or non-exempt 10 employees who worked for Defendant [Hyatt] within the State of California 11 at any time during the period from December 6, 2015 to June 1, 2019.

12 Meal and Rest Break Class: all current and former hourly-paid or non- 13 exempt employees who worked for Defendant [Hyatt] within the State of California at any time during the period from December 6, 2015 to the present. 14

15 (Ex. 1 to Lander Decl., ECF No. 23-1 at 14). 16 In the later-filed Brumbach Action, Brumbach seeks to represent four classes of 17 “[a]ll California citizens employed by Defendants as hourly-paid, non-exempt employees 18 during the appropriate time period at Defendants’ Manchester Grand Hyatt San Diego” 19 who were subject to the allegedly unlawful rounding policy, wage statement violations, 20 failure to pay wages upon termination, or UCL violations. (Ex. A to Notice of Removal, 21 ECF No. 1-2 ¶ 25). Brumbach further seeks to represent two classes of “[a]ll California 22 citizens employed by Defendants as hourly-paid, non-exempt employees who worked as 23 bartenders, barbacks, waiters, cocktail servers, server assistants, food runners, bouncers, 24 and any of Defendants’ job positions with substantially similar titles and/or duties as these 25 during the appropriate time period at Defendants’ Manchester Grand Hyatt San Diego 26 restaurants/cocktail lounges” who were subject to the alleged meal and rest period 27 violations. (Id.). Brumbach alleges that wage and hour violations occurred from “four (4) 28 years preceding the filing of the original Complaint”—October 9, 2016—“up to and 1 through the time of trial.” (Id. ¶ 3). Brumbach further alleges that Defendants had an 2 unlawful rounding policy “until at least approximately June 1, 2019.” (Id. ¶ 40). 3 Named Plaintiff Brumbach and all of the members of the six putative classes in the 4 Brumbach Action are members of one or more of the putative classes in the Crump Action. 5 Crump seeks to represent all of the individuals that Brumbach seeks to represent. Hyatt is 6 the sole named defendant in both actions. The Court concludes that there is substantial 7 similarity of the parties. 8 Defendant Hyatt contends that the issues in the Crump Action and the Brumbach 9 Action are substantially similar because the claims are identical. Hyatt contends that the 10 factual theories in the Crump Action and the Brumbach Action are substantially similar, 11 and additional or different factual theories are not relevant. Plaintiff Brumbach contends 12 that the issues in the Crump Action and the Brumbach Action are not substantially similar 13 because the factual bases for some claims are distinct. Brumbach contends that the unpaid 14 wages claim in the Crump Action is based in part “on alleged donning and doffing of 15 uniforms,” which is not alleged in the Brumbach Action. (ECF No. 23 at 12). Brumbach 16 contends that “Crump’s meal and rest break claims are based on the alleged interruption of 17 employees’ breaks, not on a uniform policy of simply not providing breaks at all like in 18 Brumbach.” (Id.). 19 “The issues in both cases [] need not be identical, only substantially similar.” Kohn 20 Law Grp., 787 F.3d at 1241. “To determine whether two suits involve substantially similar 21 issues, [the court] look[s] at whether there is ‘substantial overlap’ between the two suits.” 22 Id. (quoting Harris County v. Carmax Auto Superstores, Inc., 177 F.3d 306, 319 (5th Cir. 23 1999), as amended (June 23, 1999)); see Dang v. Pontier, No. 19CV1519-GPC(AHG), 24 2020 U.S. Dist. LEXIS 238715, at *9 (S.D. Cal. Dec. 18, 2020) (finding substantial 25 similarity of the issues where “Pontier adds additional facts to support his claims, [but] the 26 allegations all arise from Dang’s representation of Pontier in his personal injury action”), 27 appeal filed (Jan. 13, 2021). 28 In this case, all of the claims alleged in the later-filed Brumbach Action are alleged 1 in the earlier-filed Crump Action. The claims in both cases arise from Hyatt’s alleged 2 violations of California labor laws as to hourly employees in California. The plaintiffs in 3 both actions allege that Hyatt improperly rounded time against hourly employees, failed to 4 pay at least minimum wage for all time worked, failed to provide meal and rest breaks or 5 compensate for missed meal and rest breaks, failed to keep accurate payroll records, failed 6 to provide timely and accurate wage statements, and failed to timely pay wages upon 7 termination. Plaintiff Crump further alleges that Hyatt failed to compensate employees for 8 required pre-shift activities and required employees to be on-call and to assist customers 9 during meal and rest breaks. There is substantial overlap between the Crump Action and 10 the Brumbach Action. The Court concludes that there is substantial similarity of the issues. 11 The Court concludes that all three first-to-file factors are met. 13 Defendant Hyatt contends that a stay of the Brumbach Action pending a ruling on 14 class certification in the Crump Action will serve the interests of justice and promote 15 judicial economy. Hyatt contends that the class claims in the Brumbach Action will be 16 “completely extinguish[ed]” if the court in the Crump Action grants the motion for class 17 certification, and discovery or motions in the Brumbach Action would be unnecessary and 18 duplicative. (ECF No. 22 at 12). Plaintiff Brumbach contends that a stay would 19 unnecessarily delay the Brumbach Action and the payment of earned wages to class 20 members. Brumbach contends that the Brumbach Action is proceeding more quickly than 21 the Crump Action, and delay caused by a stay could result in lost evidence. Brumbach 22 contends that Hyatt would not be harmed if the Brumbach Action proceeds, and Hyatt 23 could renew its Motion to Stay Proceedings depending on the outcome of the motion for 24 class certification in the Crump Action. 25 The purpose of the first-to-file rule is to enhance “efficiency and judicial economy.” 26 Bozic, 888 F.3d at 1052 (quoting Cedars-Sinai Med. Ctr., 125 F.3d at 769). “[D]istrict 27 judges can, in the exercise of their discretion, dispense with the first-filed principle for 28 reasons of equity.” Alltrade, 946 F.2d at 628. Equitable circumstances under which courts 1 have declined to apply the first-to-file rule include when the first lawsuit was filed in bad 2 faith, was anticipatory, or involved forum shopping, “when the later-filed action has 3 progressed further,” or where “the balance of convenience weighs in favor of the later-filed 4 action.” Guthy-Renker Fitness LLC v. Icon Health & Fitness, Inc., 179 F.R.D. 264, 270 5 (C.D. Cal. 1998); see Alltrade, 946 F.2d at 628. 6 The Court concludes that none of the exceptions to the first-to-file rule apply in this 7 case. A motion for class certification is pending in the Crump Action, and the court has set 8 a hearing date of September 9, 2-21. If the motion for class certification is granted, the 9 putative classes in the Brumbach Action will be subsumed by the classes in the Crump 10 Action, and Plaintiff Brumbach will be unable to assert the class claims alleged in the 11 Brumbach Action. Under these circumstances, any inconvenience caused by a stay is 12 outweighed by the importance of conservation of judicial resources and the comprehensive 13 disposition of litigation. The Court declines to exercise its discretion to depart from the 14 first-to-file rule. See Church of Scientology, 611 F.2d at 750 (the first-to-file rule “should 15 not be disregarded lightly”). The Court concludes that a stay of the Brumbach Action 16 pending a ruling on the motion for class certification in the Crump Action is warranted. 18 IT IS HEREBY ORDERED that the Motion to Stay Proceedings filed by Defendant 19 Hyatt Corporation (ECF No. 22) is granted. This case is stayed pending a ruling on the 20 motion for class certification in the Crump Action. 21 /// 22 23 /// 24 25 /// 26 27 /// 28 1 IT IS FURTHER ORDERED that the parties shall file a status report on the status of 2 Crump Action on September 10, 2021, and every sixty days thereafter. The parties shall 3 || further file a status report within five days of the court’s ruling on the motion for class 4 ||certification in the Crump Action. The stay will remain until further order of the Court. 5 || Any party may move to lift the stay at any time for good cause. 6 || Dated: July 8, 2021 BME: ie Z. Ma 7 Hon. William Q. Hayes g United States District Court 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28