Avery v. TEKsys.
| Decision Date | 31 August 2022 |
| Docket Number | 22-cv-02733-JSC |
| Parties | BO AVERY, et al., Plaintiffs, v. TEKSYSTEMS, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
This matter comes before the Court upon the motion to dismiss stay, or transfer filed by defendant TEKsystems, Inc. (“TEKsystems” or “Defendant”). Having carefully considered the parties' briefing and oral arguments, the Court DENIES the motion for the reasons stated below.
Defendant is a corporation organized under the laws of the State of Maryland with a corporate headquarters located in Hanover Maryland. (Dkt. No. 1 at 6.)[1] Plaintiffs Bo Avery, Phoebe Rodgers, Kristy Camilleri, and Jill Unverferth (“Plaintiffs”) worked as recruiters for Defendant in California. (Dkt. No. 1-1 ¶¶ 30-46.) Plaintiffs allege Defendant engaged in a series of violations of the California Labor Code (the “Labor Code”) and California's Unfair Competition Law (“UCL”). (Id. ¶¶ 69-101.)
On April 9, 2021, a group of TEKsystems recruiters filed a complaint in the Western District of Pennsylvania (the “Thomas action”). (Dkt. No. 21 at 6.) The Thomas plaintiffs alleged Defendant failed to pay overtime in violation of the Fair Labor Standards Act (“FLSA”) and Pennsylvania wage laws. (Dkt. 21-1 ¶ 5.) The Thomas parties issued a stipulated notice to the putative collective under the FLSA. (Id. ¶¶ 9-11.) To date, 631 former and current TEKsystems recruiters have opted into the case. Of those 631 recruiters, 69 worked in California.[2] (Id. ¶ 11.) Of the California-based plaintiffs, 17 were selected to submit written discovery in Thomas.
In January 2022, the Thomas plaintiffs filed a First Amended Complaint. (Id. ¶ 15.) The Thomas FAC added claims under the state laws of Massachusetts, New York, and Washington. (Id.) The Thomas court set a fact discovery deadline of October 27, 2022, and an expert discovery deadline of January 27, 2023. (Id. ¶ 16.) The parties have exchanged documents and have discussed the possibility of an extension of discovery deadlines. (Dkt. No. 28 at 8.)
Plaintiffs initially opted into the Thomas action. (Dkt. No. 21-1 ¶¶ 12-13.) In late January 2022, however, Plaintiffs opted out of the Thomas action and filed this action in California state court. (Dkt. No. 21 at 9-10.) The same counsel represents both the Avery and Thomas plaintiffs. (Id. at 8.) In Avery, Plaintiffs bring seven claims on behalf of themselves and a putative class of recruiters who work or worked for Defendant in California. Plaintiffs allege: (1) unpaid overtime; (2) failure to pay timely wages upon termination; (3) failure to maintain timely, accurate, itemized wage statements; (4) meal break violations; (5) rest break violations; (6) violation of California's UCL; and (7) liability for civil penalties under California's Private Attorney General Act (“PAGA”). (Dkt. No. 1-1 at 9-14.) Defendant removed the case to this court and moves to dismiss, stay, or transfer the Avery action. (Dkt. Nos. 1, 21.)
Defendant argues the Avery action should be transferred dismissed, or stayed pursuant to the “first-to-file” rule. In the alternative, Defendant argues that transfer is appropriate under 28 U.S.C. § 1404(a). Plaintiff contends (1) the “first-to-file” rule does not apply; and (2) the Court cannot transfer the Avery action to the Western District of Pennsylvania under § 1404(a) or the first-to-file rule because the Avery action could not have been initially filed in that district. The Court considers each issue in turn.
The first-to-file rule is a “generally recognized doctrine of federal comity” that allows a district court to decline jurisdiction over an action “when a complaint involving the same parties and issues has already been filed in another district.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982) (citations omitted). Pursuant to the rule, “when two identical actions are filed in courts of concurrent jurisdiction, the court which first acquired jurisdiction should try the lawsuit and no purpose would be served by proceeding with a second action.” Id. However, this rule is “not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates of sound judicial administration.” Id.
In applying the first-to-file rule, courts look to three threshold factors: (1) the chronology of the two actions; (2) the similarity of the parties; and (3) the similarity of the issues. See Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991). If the case meets these requirements, the court has the discretion to transfer, stay, or dismiss the second-filed action. See id. at 628-29. But a district court applying the first-to-file rule may only transfer an action to another federal judicial district if that transfer meets the requirements of 28 U.S.C. § 1404(a). In re Bozic, 888 F.3d 1048, 1054 (9th Cir. 2018). Moreover, even where the rule would otherwise apply, a court has discretion to “dispense” with its application “for reasons of equity.” Alltrade, 946 F.2d at 628.
There is no dispute that the Thomas action predates the Avery action. (Dkt. No. 21 at 10; Dkt. No. 28 at 8.) Thus, this first factor weighs in favor of applying the first-to-file rule. See Alltrade, 946 F.2d at 625. However, there is a dispute as to (1) the similarity of the parties and (2) the similarity of the issues between the Thomas action and the Avery action.
“The first-to-file rule requires only substantial similarity of parties,” not “exact identity[.]” Kohn L. Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc., 787 F.3d 1237, 1240 (9th Cir. 2015). In analyzing class actions, most courts compare the classes, not their representatives, even when certification has not yet taken place. Compare Hill v. Robert's Am. Gourmet Food, LLC, 2013 WL 3476801, at *3 (N.D. Cal. July 10, 2013) (); with Lac Anh Le v. Pricewaterhousecoopers LLP, 2008 WL 618938, at *1 (N.D. Cal. Mar. 4, 2008) (denying motion for stay without prejudice pending resolution of class certification motions in the first filed case). The class-similarity approach is appropriate here because it is more efficient to consider first-to-file issues now, rather than after further litigation regarding certification. See Kohn, 787 F.3d at 1240 ()
Here, because the period to join the Thomas action has closed, the proper comparators are the putative class in Avery and the opt-in collective of plaintiffs in Thomas as it stands today-not the entire putative Thomas collective. See, e.g., Gardner v. GC Services, LP, 2010 WL 2721271, *5 (S.D. Cal. July 6, 2010) () The parties agree that the putative Avery class comprises at least 482 similarly situated recruiters. (Dkt. No. 21 at 8; Dkt. No. 28 at 14.) Of those 482 recruiters, Defendant represents that 66 joined the Thomas action before the opt-in period closed. (Dkt. No. 21 at 8.) Plaintiff puts the number at 63. (Dkt. No. 28 at 14.) In either case, the overlap in potential plaintiffs between the two actions is roughly 13%. TEKsystems is the sole defendant in both actions.
Defendant relies on a series of district court cases that found similarity between classes where “some parties in one matter are also in the other matter.” (Dkt. No. 29 at 10) (quoting Intersearch Worldwide, Limited. v. Intersearch Group., Inc., 544 F.Supp.2d 949, 959, n.6 (N.D. Cal. 2008)). Based on this reasoning, Defendant urges the Court to find the 13% overlap here meets the substantial similarity standard and justifies staying or transferring the Avery action. (Dkt. No. 29 at 10.)
The Court disagrees. To be sure, there is some overlap between the putative class in Avery and the opt-in collective in Thomas. But the first-to-file rule is not to be “mechanically applied” whenever there is some overlap between parties in litigation. Pacesetter, 678 F.2d at 95. Here, 13% overlap is not “significant similarity.” Rather, 87% of the putative Avery class is not and will not be represented in the Thomas action. These putative plaintiffs represent an overwhelming majority of the Avery class and would not be precluded by any finding in the Thomas Action. Thus, pausing or transferring the Avery action would not promote efficiency.
Defendant's contrary case law is unpersuasive. For example, in Hill, the first-filed action's California sub-class entirely subsumed the proposed class in the later action. Hill, 2013 WL 3476801, at *4. Not so here. Indeed, the proposed classes in most “substantial similarity” cases vary in only minor dimensions-such as the start of the class period. See, e.g., Ruff v. Del Monte Corp., 2013 WL 1435230, at *2-3 (N.D. Cal. Apr. 9, 2013) (). Here, by contrast, there is only minimal overlap among the plaintiffs in the two actions.
In sum, “[t]here is undoubtedly some overlap between the parties in the two cases, but that overlap is not so significant as to mandate” application of the first-to-file rule here. Brice v. Plain Green, LLC, 372 F.Supp.3d 955, 976 (N.D. Cal. 2019), rev'd on other grounds sub nom. Brice v. Haynes Invs., LLC, 13 F.4th 823 (9th Cir. 2021), reh'g en banc granted, opinion Brice v. Plain Green, LLC, 35 F.4th 1219 (9th Cir. 2022).
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