Cruz v. MM 879, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 ANGELA CRUZ; MARIA MADRIGAL; No. 1:15-cv-01563-TLN-EPG LOURDES BAIZ; and CHRISTIE 12 GOODMAN, individually, residing in California, 13 ORDER DENYING PLAINTIFFS’ Plaintiffs, MOTION FOR RECONSIDERATION 14 v. 15 MM 879, INC.; BARRETT BUSINESS 16 SERVICES, INC.; THE SERVICEMASTER COMPANY, LLC; 17 MERRY MAIDS LP; and MM MAIDS 18 LLC. 19 Defendants. 20 This matter is before the Court on Plaintiffs Angela Cruz, Maria Madrigal, Lourdes Baiz, 21 and Christie Goodman’s (collectively, “Plaintiffs”) Motion for Reconsideration. (ECF No. 183.) 22 Defendants The ServiceMaster Company, LLC (“ServiceMaster”), Merry Maids, LP (“Merry 23 Maids”), MM Maids, LLC (“MM Maids”) (collectively, “Defendants”) filed an opposition. (ECF 24 No. 188.) Plaintiffs did not file a reply. For the reasons set forth below, the Court DENIES 25 Plaintiffs’ motion. 26 /// 27 /// 28 1 I. FACTUAL AND PROCEDURAL BACKGROUND

2 All parties are aware of the factual background as set forth in the Court’s previous orders

3 (ECF Nos. 162, 161), and that factual background is adopted herein. In summary, the instant

4 action arises from Plaintiffs’ certified class action lawsuit alleging violations of various California 5 wage and hour laws. (See generally ECF No. 94.) The case was removed to this Court on 6 October 14, 2015. (ECF No. 1.) 7 On August 26, 2016, Plaintiffs filed a motion for class certification. (ECF No. 99.) On 8 September 8, 2016, Defendants filed a motion for summary judgment, arguing they could not be 9 held liable for the employment-related practices of a franchisee (Defendant MM 879, Inc.) based 10 on the undisputed facts, and were therefore entitled to judgment dismissing all claims against 11 them as a matter of law. (ECF No. 112 at 6.) 12 On January 18, 2019, the Court entered an order granting Plaintiffs’ motion for class 13 certification and appointing the named Plaintiffs as class representatives. (ECF No. 161 at 14.) 14 On the same day, the Court also entered an order granting Defendants’ motion for summary 15 judgment as to Plaintiffs’ joint employment theory of liability and denying the motion as to 16 Plaintiffs’ ostensible agency of liability. (ECF No. 162 at 16.) 17 Defendants filed a motion for reconsideration of those orders on February 1, 2019. (ECF 18 No. 163.) In support of their motion, Defendants cited the Ninth Circuit’s intervening decision in 19 Salazar v. McDonald’s Corp., 944 F.3d 1024, 1033 (9th Cir. 2019) (“Salazar III”), wherein the 20 court held that a franchisor could not be held liable for wage and hour violations under an 21 ostensible agency theory pursuant to Wage Order 5-2001. On January 31, 2020, the Court — 22 now bound by Salazar III — granted Defendants’ motion for reconsideration and dismissed 23 ServiceMaster, Merry Maids, and MM Maids from the action. (ECF No. 182.) Plaintiffs filed the 24 instant motion for reconsideration on February 28, 2020. (ECF No. 183.) 25 /// 26 /// 27 /// 28 /// 1 II. STANDARD OF LAW

2 The Court may grant reconsideration under Federal Rule of Civil Procedure (“Rule”)

3 59(e) or Rule 60. See Schroeder v. McDonald, 55 F.3d 454, 458–59 (9th Cir. 1995). Plaintiffs

4 bring the instant motion purs uant to both Rules, as well as Local Rule 230. (ECF No. 183-1 at 2.) 5 Rule 59(e) does not list specific grounds for a motion to amend or alter, therefore the 6 district court enjoys considerable discretion in granting or denying the motion. Allstate Ins. Co. v. 7 Herron, 634 F.3d 1101, 1111 (9th Cir. 2011) (citing McDowell v. Calderon, 197 F.3d 1253, 1255 8 n.1 (9th Cir. 1999)). Nevertheless, a motion for reconsideration under Rule 59(e) “should not be 9 granted, absent highly unusual circumstances, unless the district court is presented with newly 10 discovered evidence, committed clear error, or if there is an intervening change in the controlling 11 law.” McDowell, 197 F.3d at 1255. 12 Under Rule 60(b), the Court may relieve Plaintiffs from a final judgment, order, or 13 proceeding “for any of the following reasons: (1) mistake, inadvertence, surprise, or excusable 14 neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been 15 discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called 16 intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is 17 void; (5) the judgment has been satisfied, released, or discharged; it is based on an earlier 18 judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or 19 (6) any other reason that justifies relief.” Fed. R. Civ. P. 60(b). 20 Under Local Rule 230(j), a party seeking reconsideration must set forth the material facts 21 and circumstances surrounding the relief requested, including “what new or different facts or 22 circumstances claimed to exist which did not exist or were not shown upon such prior motion, or 23 what other grounds exist for the motion.” Motions for reconsideration are addressed to the sound 24 discretion of the court. Turner v. Burlington N. Santa Fe R.R., 338 F.3d 1058, 1063 (9th Cir. 25 2003). 26 /// 27 /// 28 /// 1 III. ANALYSIS

2 On February 28, 2020, Plaintiffs moved for reconsideration due to the possibility that a

3 change in controlling law was forthcoming. (ECF No. 183-1 at 7–8.) Plaintiffs cited Vazquez v.

4 Jan-Pro Franchising Int’l, In c., 939 F.3d 1045, 1049 (9th Cir. 2019), wherein the Ninth Circuit 5 certified the following question to the California Supreme Court: “Does Dynamex Operations 6 West Inc. v. Superior Court, 4 Cal. 5th 903, 232 (2018), apply retroactively?”1 (Id.) Plaintiffs 7 emphasized that on October 25, 2019, the parties in Vazquez requested the California Supreme 8 Court answer three additional questions of California law, one of which asked the Court to 9 determine whether Dynamex is applicable in determining whether an entity is a joint employer. 10 (Id.) Plaintiffs argued that if the California Supreme Court agreed to answer the question and 11 subsequently determined that Dynamex applies to the joint employer inquiry, there would be a 12 genuine dispute of fact making summary judgment inappropriate on the question of joint 13 employment. (Id. at 12.) Plaintiffs therefore moved the Court to reconsider its grant of summary 14 judgment to allow the California Supreme Court to issue its opinion in Vazquez. (Id.) 15 On March 3, 2020, Plaintiffs filed a Notice of Correction, informing the Court that 16 Plaintiffs’ counsel failed to notice that the California Supreme Court had already declined to 17 answer the additional questions in Vazquez two days before Plaintiffs filed their motion for 18 reconsideration. (ECF No. 186.) Plaintiffs state, “Due to the California Supreme Court’s refusal 19 to address the joint employment question in Vazquez, the arguments raised in Plaintiffs’ Motion 20 for Reconsideration that are premised on the California Supreme Court’s anticipated ruling on 21 this question are no longer currently viable and are therefore withdrawn.” (Id. at 2.) However, 22 Plaintiffs maintain their underlying argument that Dynamex applies to the joint employment 23 inquiry. (Id. at 2–3.) 24 1 In Dynamex, the California Supreme Court considered “what standard applies, under 25 California law, in determining whether workers should be classified as employees or as 26 independent contractors for purposes of California wage orders” dealing with minimum wages, maximum hours, and other basic working conditions of California employees. 4 Cal. 5th at 913 27 (emphasis in original). The Dynamex court ultimately adopted what is “commonly referred to as the ‘ABC’ test” to distinguish employees from independent contractors. Id. at 916. 28 1 In opposition, Defendants argue there are no remaining grounds for reconsideration

2 because Dynamex is not “new law.” (ECF No. 188 at 2.) The Court agrees. Plaintiffs initially

3 hinged their motion on the intervening change in controlling law that might have occurred had the

4 California Supreme Court ch osen to address the question of whether Dynamex applied to joint 5 employment claims in Vazquez. (ECF No. 183-1 at 5 (“Plaintiffs assert that recent and ongoing 6 litigation regarding the correct interpretation and application of Dynamex constitutes an 7 intervening development in controlling case law, which warrants reconsideration of the Court’s 8 prior order granting summary judgment in favor of the Merry Maids Defendants.”).) As 9 discussed, the California Supreme Court declined to address the relevant question and therefore 10 left the law unchanged. 11 Although Plaintiffs now argue that Dynamex applies to the joint employer inquiry, 12 Plaintiffs concede that Dynamex — decided in 2018 — is “not, at this point, ‘new’ law.” (Id. at 13 4.) As Defendants point out, the Dynamex decision was issued on April 30, 2018, which was 14 eight months before the Court issued its initial order granting in part and denying in part 15 Defendants’ motion for summary judgment and twenty months before the Court issued its order 16 granting Defendants’ motion for reconsideration. (See ECF Nos. 162, 182.) Plaintiffs do not 17 explain why they failed to raise any arguments related to Dynamex during that time. Thus, 18 Dynamex cannot be the basis for Plaintiffs’ motion for reconsideration. See Exxon Shipping Co. 19 v. Baker, 554 U.S. 471, 485 n.5 (explaining that a motion for reconsideration “may not be used to 20 relitigate old matters, or to raise arguments or present evidence that could have been raised prior 21 to the entry of judgment”) (citation omitted); see also Marlyn Nutraceuticals, Inc. v. Mucos 22 Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (“A motion for reconsideration may not 23 be used to raise arguments or present evidence for the first time when they could reasonably have 24 been raised earlier in the litigation.”) (citation and internal quotation marks omitted); Garcia v. 25 Biter, 195 F. Supp. 3d 1131, 1133 (E.D. Cal. 2016) (“A motion for reconsideration may not be 26 used to get a second bite at the apple.”) (citation and quotation marks omitted). 27 Even if the Court were to reach the merits of Plaintiffs’ motion, several courts have 28 determined that Dynamex does not apply to joint employment claims. In Salazar III, for example, 1 the Ninth Circuit found that Dynamex was irrelevant to the question of whether a franchisor was a

2 joint employer of its franchisee’s employees. 944 F.3d at 1032 (“[Dynamex] has no bearing here,

3 because no party argues that Plaintiffs are independent contractors.”). Similarly, no parties in the

4 instant case argue that Plaint iffs were independent contractors. More importantly, at least two 5 California appellate courts have already rejected Plaintiffs’ argument in well-reasoned decisions. 6 See Curry v. Equilon Enterprises, LLC, 23 Cal. App. 5th 289, 314 (2018), as modified on denial 7 of reh’g (May 18, 2018), review denied (July 11, 2018) (“[T]he ‘ABC’ test set forth in Dynamex 8 is directed toward the issue of whether employees were misclassified as independent contractors . 9 . . it does not appear that the Supreme Court intended for the ‘ABC’ test to be applied in joint 10 employment cases.”); Henderson v. Equilon Enterprises, LLC, 40 Cal. App. 5th 1111, 1125 11 (2019), review denied (Feb. 11, 2020) (“[W]e conclude that the ABC test in Dynamex does not fit 12 analytically with and was not intended to apply to claims of joint employer liability.”). In the 13 absence of a ruling from the California Supreme Court or convincing evidence that the state’s 14 highest court would rule differently, this Court is “obligated to follow the decisions of the state’s 15 intermediate appellate courts.” In re Kirkland, 915 F.2d 1236, 1239 (9th Cir. 1990). 16 IV. CONCLUSION 17 For the foregoing reasons, the Court DENIES Plaintiffs’ Motion for Reconsideration. 18 (ECF No. 183.) 19 IT IS SO ORDERED. 20 DATE: November 24, 2020 21 22 23 24 25 26 27 28