623 F.3d 743 (9th Cir. 2010), 08-55483, Wang v. Chinese Daily News, Inc.
|Docket Nº:||08-55483, 08-56740.|
|Citation:||623 F.3d 743|
|Opinion Judge:||W. FLETCHER, Circuit Judge:|
|Party Name:||Lynne WANG; Yu Fang Ines Kai; Hui Jung Pao, on behalf of themselves and all others similarly situated; Lien Yi Jung; Yu Fang Kai; Chang Chingfang; Jeffrey Sun; Shieh-Sheng Wei; Yun Min Pao; Hui Jung Lee; Chengyang Yan; Shiang Huang; Chih-Ming Sheu; Minh Vi-Huynh; Jenny Liu Hung, Plaintiffs-Appellees, v. CHINESE DAILY NEWS, INC., Defendant-Appellant|
|Attorney:||Della Bahan, Berkeley, CA, Christy Virginia Keeny, Cornelia Dai, Randy Renick, Hadsell Stormer Keeny Richardson & Renick, LLP, Pasadena, CA, for the appellees. Michael M. Berger, Benjamin G. Shatz, Yi-Chin Ho, Andrew L. Satenberg, Manatt, Phelps & Phillips, LLP, Los Angeles, CA, for the appellant.|
|Judge Panel:||Before: STEPHEN S. TROTT and WILLIAM A. FLETCHER, Circuit Judges, and CHARLES R. BREYER,[*] District Judge.|
|Case Date:||September 27, 2010|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted June 7, 2010.
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Appeal from the United States District Court for the Central District of California, Consuelo B. Marshall, District Judge, Presiding. D.C. No. 2:04-cv-01498-CBM-JWJ.
Chinese Daily News, Inc. (" CDN" ), a Chinese-language newspaper, appeals the district court's judgment in an action brought by some of its California-based employees under the federal Fair Labor Standards Act (" FLSA" ) and under California law. The district court certified the FLSA claim as a collective action. It certified
the state-law claims as a class action under Rule 23(b)(2) and, alternatively, under Rule 23(b)(3). In the state-law class action, it provided for notice and opt out, but subsequently invalidated the opt outs. It granted partial summary judgment to plaintiffs; held jury and bench trials; entered judgment for plaintiffs; awarded attorney's fees to plaintiffs; and conducted a new opt-out process. CDN appeals, challenging aspects of each of these rulings, as well as the jury's verdict. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.
On March 5, 2004, three employees of CDN, Lynne Wang, Yu Fang Ines Kai, and Hui Jung Pao, filed suit against CDN on behalf of current, former, and future CDN employees based in CDN's San Francisco and Monterey Park (Los Angeles), California locations. They alleged violations of the FLSA, California's Labor Code, and California's Unfair Competition Law, Cal. Bus. & Prof.Code § 17200. They alleged that employees were made to work in excess of eight hours per day and forty hours per week. They further alleged that they were wrongfully denied overtime compensation, meal and rest breaks, accurate and itemized wage statements, and penalties for wages due but not promptly paid at termination. They sought monetary damages, restitution, attorney's fees, and injunctive relief.
After plaintiffs narrowed the class definition to include only non-exempt employees at the Monterey Park facility, the district court certified the FLSA claim as a collective action. As we discuss in greater detail later in this opinion, group claims for violations of FLSA are typically maintained as an opt-in " collective action" to which each participant must individually consent.
The district court certified the state-law claims as a class action under Rule 23(b)(2). Wang v. Chinese Daily News, Inc., 231 F.R.D. 602 (C.D.Cal.2005). Recognizing that Rule 23(b)(2) certification is not appropriate where claims for monetary relief predominate, the district court held that Rule 23(b)(2) certification was appropriate because plaintiffs' claims for monetary and injunctive relief were on " equal footing," and because future compliance by CDN was potentially the remedy of greatest value to plaintiffs. In light of the substantial claims for monetary relief, the district court exercised its discretion to provide class members notice and an opportunity to opt out. The district court later " clarified" that the opportunity to opt out was restricted to the claims for monetary relief. When it certified the class, the court also concluded, in the alternative, that certification was appropriate under Rule 23(b)(3).
After the court approved the form of notice, putative class members were given a three-month period, ending October 15, 2005, to opt in to the FLSA action and to opt out of the state-law claims. Forms were mailed to 187 individuals, and notice was posted and forms made available at CDN's Monterey Park facility. Plaintiffs received back about 155 opt-out forms, including 18 from individuals not on the original list of class members. Plaintiffs filed a motion to invalidate the opt outs, for curative notice, and to restrict CDN's communication with class members. On June 7, 2006, the court granted the motion, finding that " the opt out period was rife with instances of coercive conduct, including threats to employees' jobs, termination of an employee supporting the litigation, the posting of signs urging individuals not to tear the company apart, and the abnormally high rate of opt outs."
Wang v. Chinese Daily News, Inc., 236 F.R.D. 485, 491 (C.D.Cal.2006). The district court deferred any future opt-out procedure until after the trial on the merits.
Both sides sought summary judgment on the question whether CDN's reporters were exempt or non-exempt employees. Non-exempt employees are entitled to overtime; exempt employees are not. The court granted summary judgment to plaintiffs, holding that CDN's reporters did not qualify for the " creative professional exemption." Wang v. Chinese Daily News, Inc., 435 F.Supp.2d 1042 (C.D.Cal.2006); see 29 C.F.R. § 541.302(d). Plaintiffs were also granted summary judgment on other issues, from which CDN has not appealed.
CDN contended that the district court should adjudicate only the FLSA claim and should decline to exercise supplemental jurisdiction over the state-law claims. The court disagreed, exercising its discretion to retain supplemental jurisdiction. CDN twice more objected to the exercise of supplemental jurisdiction, and objected, further, that the § 17200 claim was preempted by FLSA. The district court rejected these objections.
The court held a 16-day jury trial starting in November 2006, and the jury returned a special verdict on January 10, 2007. On appeal, CDN challenges the jury's finding that CDN did not provide reporters with meal breaks. CDN also challenges the amount of damages awarded on all class claims, contending that the award was based on a class that was too large.
From July 31, 2007 to August 2, 2007, the court held a bench trial on the remaining issues of injunctive relief, penalties, prejudgment interest, and restitution pursuant to the § 17200 claim. The court concluded, inter alia, that a cause of action under § 17200 based on violations of FLSA was not preempted. It denied an injunction after concluding that CDN had abandoned its unlawful business practices and had taken substantial steps toward compliance, and that plaintiffs' remaining injuries could be remedied by money damages. On appeal, CDN contends that the district court erred in permitting salespersons who had not opted in to the FLSA collective action to pursue claims for relief under § 17200 based on FLSA violations.
The district court entered judgment, denied CDN's post-trial motions, and granted plaintiffs' motion for attorney's fees. On May 15, 2008, the court issued an order establishing a new 30-day window to opt out of the class action and appointing a special master to oversee the opt-out process and distribution of the award. Out of 273 class members to whom notice was sent, 116 opted in, 61 opted out, and 96 did not respond. On June 25, 2008, the district court issued an order providing that distribution of unclaimed shares of the award from class members who had opted in, and the share of the award attributable to those who had opted out, would await the running of the statute of limitations on the filing of individual suits against CDN.
CDN timely appealed.
A. Reporters' Exemption Status
CDN argues that the district court erred in holding on summary judgment that CDN's reporters were non-exempt employees entitled to overtime. Specifically, CDN argues that its reporters were subject to the " creative professional exemption" and were therefore exempt employees not subject to FLSA and state-law overtime pay and break requirements. We review the district court's grant of summary judgment de novo. Bamonte v. City of Mesa, 598 F.3d 1217, 1220 (9th Cir.2010).
Federal law exempts employers from paying overtime to " any employee employed in a bona fide ... professional capacity." 29 U.S.C. § 213(a)(1). To qualify as an exempt professional under federal law, an employee must be compensated " at a rate of not less than $455 per week," and his or her " primary duty" must be the performance of exempt work. 29 C.F.R. §§ 541.300, 541.700. " [A]n employee's primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor as opposed to routine mental, manual, mechanical or physical work." 29 C.F.R....
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