Eastern District Denies First to File Transfer of Class Action

by charlesjung

[Bob Burman, race car driver] (LOC)
Image by The Library of Congress via Flickr

The United States District Court for the Eastern District of California denied defendant employer’s motion to transfer pursuant to the “first-to file” rule.  Wilkie v. Gentiva Health Services, Inc., Civ. No. 10-1451 FCD/GGH, 2010 WL 3703060 (E.D. Cal. Sept. 16, 2010) (slip op.).  Plaintiff filed a putative nation-and California-wide class action/collective action against plaintiff’s former employer Gentiva for alleged violations of the Federal Labor and Standards Act (“FLSA”) and the California Labor Code § 201 et seq. for: (1) misclassification as exempt from overtime pay and failure to pay overtime; (2) willful failure to pay wages due within the time specified by the Code; (3) violation of California Wage Order No. 4 for knowingly and intentionally failing to provide timely, accurate, itemized wage statements including request for an injunction and damages; (4) failure to give proper rest and meal breaks; and (5) violation of California’s Business & Professions Code § 17200 et seq.  Id. *1

A prior FLSA collective action and New York and North Carolina state law class action against Gentiva was filed in the United States District Court for the Eastern District of New York, entitled Rindfleisch, et al. v. Gentiva Health Services, Inc., No. CV10-2111 (E.D.N.Y.) (“Rindfleisch”). Defendant moved to transfer plaintiff’s complaint under the “first-to-file rule,” on the ground plaintiff’s claims are the subject of the Rindfleisch action. Plaintiff opposed the motion, arguing the parties and claims are not substantially similar in the two actions and other equitable factors militate against transfer under the first-to-file rule.  Id. The court denied Gentiva’s motion.  Id.

The court recited the three threshold factors in applying the first-to-file rule as follows: “(1) the chronology of the two actions; (2) the similarity of the parties, and (3) the similarity of the issues.” Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625-626 (9th Cir.1991). If this action meets the requirements of the first-to-file rule, the court has the discretion to transfer, stay, or dismiss the action. Id. at 622.

With respect to the parties, the court found dissimilarities between the plaintiffs:

While Gentiva is a defendant in both actions, plaintiff correctly points out that at this stage in the litigation, it is not apparent whether the nation-wide classes are substantially similar. On the surface, and as conceded by plaintiff, the two classes appear similar. The Rindfleisch nation-wide class consists of “Registered Nurses (“RNs”), Physical Therapists, and Occupational Therapists (collectively, ‘visiting health care providers’).” (Def.’s RJN at Ex. A, ¶ 3.) The instant action’s class includes all persons who are, or were, formerly employed by defendant as “clinical associates,” including but not limited to registered nurse case managers and similarly situated employees holding comparable positions with different titles. (Id. at Ex. B, ¶ 2.)

Plaintiff’s definition of “clinical associates” is similar to the Rindfleisch plaintiffs’ “healthcare providers;” but significantly, plaintiff’s definition, here, may be broader. However, with no discovery conducted in either case, it is yet to be seen whether the two actions substantially overlap. As plaintiff argues, some employees included in the instant action may not ultimately be included in the Rindfleisch action. For example, it is unclear whether licensed vocational nurses, physicians assistants, and monitor technicians which likely fit under plaintiff’s class definition, also fit within the Rindfleisch class. As such, the court cannot find at this juncture that substantial similarity exists between the nationwide classes in the two actions.

Id. *3.

The court also found a dissimilarity of issues between the two actions:

[P]laintiff’s California law claims are dissimilar from both the Rindfleisch action’s FSLA claim and the North Carolina and New York state law claims. First, California law is significantly different than FLSA. See e.g., Gardner v. GC Services, LP, No. 10-CV-997-IEG (CAB), 2010 WL 2721271, *6 (S.D.Cal. July 6, 2010) (comparing class certification and the calculation of overtime remedies under FLSA and the Cal. Labor Code; ultimately finding “significant differences”); Nordquist v. McGraw-Hill Broadcasting Co., 32 Cal.App. 4th 555, 562 (1995) (“California’s professional employee exemption is narrower than that in the FLSA and the administrative employee exemption is somewhat different”).

Moreover, while the Rindfleisch FLSA claim only seeks relief for defendant’s misclassification and failure to pay overtime wages, (Def.’s RJN, Ex. A, ¶¶ 3, 13), the instant action’s California law claims also seek relief for defendant’s failure to (1) pay compensation due within the time specified by California law (Count III), (2) provide timely and accurate wage statements (Count IV), (3) provide required rest and meal breaks (Count V), and (4) for violation of California Business and Professions Code § 17200 et seq. (Count VI), (Id. at Ex. B, ¶¶ 53-79.)

The Wilkie state law claims also do not overlap the Rindfleisch New York and North Carolina state law claims. Defendant contends that the instant action’s state law claims do not preclude application of the first-to-file rule because whichever federal court ultimately hears the case may exercise supplemental jurisdiction to determine any state law claims. However, this is irrelevant to the court’s inquiry. The court must consider the pleadings and the cases as they currently exist. See, Gardner v. GC Services, LP, No. 10- CV-997-IEG (CAB), 2010 WL 2721271, *5 (S.D.Cal. July 6, 2010). Whether amendments to the pleadings could later add a California class action to the Rindfleisch action is not pertinent. What is relevant is that the Rindfleisch action alleges no California state law claims, so no overlap can exist; this makes the issues dissimilar.

Id. *4-5.  The court concluded that “[o]n balance, there are more dissimilarities in the issues than similarities, and thus, this requirement for application of the rule is also not met.”

Balancing the equities, the court also found that the class may suffer due to the unsettled procedural posture of the Rindfleisch action:

Rindfleisch’s unsettled posture raises several issues. First, delay in certification of the class may cause some nationwide collective members to lose their claims. Second, at this stage in the litigation, it is not clear that the Rindfleisch nation-wide class will be certified. As such, and as plaintiff contends, class members nation-wide may be harmed by not allowing this case to at least move forward to the collective action certification. Finally, as set forth above, it seems possible that transferring this action before it is determined whether each nation-wide class includes the same employees might seriously infringe the rights of potential collective members of plaintiff’s proposed nation-wide class.

Id. *5.

Accordingly, the court concluded that the equities in this case further militated against applying the first-to-file rule, and the court denied defendant’s motion to transfer.

Judges and Attorneys

District Judge Frank C. Damrell, Jr.


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