Desrosiers v. Perry Ellis Menswear, LLC
| Decision Date | 12 December 2017 |
| Docket Number | No. 121,No. 122,121,122 |
| Citation | 90 N.E.3d 1262,68 N.Y.S.3d 391,30 N.Y.3d 488 |
| Court | New York Court of Appeals Court of Appeals |
| Parties | Geoffrey DESROSIERS, & c., Respondents, v. PERRY ELLIS MENSWEAR, LLC, et al., Appellants. Christopher Vasquez, & c., Respondent, v. National Securities Corporation, Appellant, Mark Goldwasser, Defendant. |
Bluerock Legal, P.A., Miami, Florida (Frank H. Henry, of the Florida bar, admitted pro hac vice, of counsel), and Nicoll Davis & Spinella, LLP, New York City (Steven C. DePalma of counsel), for appellants in the first above-entitled action.
Virginia & Ambinder, LLP, New York City (LaDonna M. Lusher and Jack L. Newhouse of counsel), and Leeds Brown Law, P.C., Carle Place (Jeffrey K. Brown of counsel), for respondent in the first above-entitled action.
Baker & Hostetler LLP, New York City (Daniel J. Buzzetta, Amy J. Traub and Erica Barrow of counsel), for appellant in the second above-entitled action.
Virginia Ambinder, LLP, New York City (LaDonna M. Lusher, Lloyd R. Ambinder and Jack L. Newhouse of counsel), and Leeds Brown Law, P.C., Carle Place (Jeffrey K. Brown, Daniel Markowitz and Michael A. Tompkins of counsel), for respondent in the second above-entitled action.
CPLR 908 provides that "[a] class action shall not be dismissed, discontinued, or compromised without the approval of the court," and that "[n]otice of the proposed dismissal, discontinuance, or compromise shall be given to all members of the class in such manner as the court directs." On this appeal, we must determine whether CPLR 908 applies only to certified class actions, or also to class actions that are settled or dismissed before the class has been certified. We conclude that CPLR 908 applies in the pre-certification context. As a result, notice to putative class members of a proposed dismissal, discontinuance, or compromise must be given.
Plaintiff Geoffrey Desrosiers worked as an unpaid intern for Perry Ellis Menswear, LLC in 2012. In February 2015, he commenced a class action against defendants Perry Ellis Menswear and an affiliated entity (collectively, Perry Ellis), alleging that Perry Ellis improperly classified employees as interns. He sought wages on behalf of himself and similarly-situated individuals.
In March 2015, Perry Ellis sent an offer of compromise to Desrosiers, which he accepted. On May 18, 2015, Perry Ellis moved to dismiss the complaint. By that date, the time within which Desrosiers was required to move for class certification pursuant to CPLR 902 had expired. Desrosiers did not oppose dismissal of the complaint, but he filed a cross motion seeking leave to provide notice of the proposed dismissal to putative class members pursuant to CPLR 908. Perry Ellis opposed the cross motion, arguing that notice to putative class members was inappropriate because Desrosiers had not moved for class certification within the required time. Supreme Court dismissed the complaint but denied the cross motion to provide notice to putative class members.
On appeal, the Appellate Division reversed the order insofar as appealed from by Desrosiers (Desrosiers v. Perry Ellis Menswear, LLC, 139 A.D.3d 473, 30 N.Y.S.3d 630 [1st Dept. 2016] ). The court concluded that CPLR 908"is not rendered inoperable simply because the time for the individual plaintiff to move for class certification has expired," and that notice to putative class members is "particularly important under the present circumstances, where the limitations period could run on the putative class members' cases following discontinuance of the individual plaintiff's action" ( id. at 474, 30 N.Y.S.3d 630 ).
Plaintiff Christopher Vasquez was employed by defendant National Securities Corporation (NSC) as a financial products salesperson in 2007 and 2008. In June 2014, he filed a class action against NSC on behalf of himself and all similarly-situated individuals who worked for NSC after June 2008. Vasquez alleged that the compensation paid by NSC fell below the required minimum wage, and he sought wage and overtime compensation for himself and similarly-situated individuals.
The parties agreed to postpone a motion for class certification in order to complete pre-certification discovery. In February 2015, before Vasquez had moved for class certification, NSC made a settlement offer, which Vasquez accepted the following month. NSC thereafter moved to dismiss the complaint. Vasquez cross-moved to provide notice of the proposed dismissal to putative class members pursuant to CPLR 908. NSC opposed the cross motion, asserting that CPLR 908 applies only to certified class actions.
Supreme Court granted the cross motion to provide notice to putative class members and granted NSC's motion to dismiss the complaint, but directed that the action would not be marked disposed until after notice had been issued ( Vasquez v. National Sec. Corp., 48 Misc.3d 597, 601-602, 9 N.Y.S.3d 836 [Sup. Ct., N.Y. County 2015] ). On appeal, the Appellate Division affirmed ( Vasquez v. National Sec. Corp., 139 A.D.3d 503, 32 N.Y.S.3d 92 [1st Dept. 2016] ). Adhering to its 1982 decision in Avena v. Ford Motor Co., 85 A.D.2d 149, 447 N.Y.S.2d 278 (1st Dept. 1982), the First Department reasoned that "[t]he legislature, presumably aware of the law as stated in Avena, has not amended CPLR 908" ( Vasquez, 139 A.D.3d at 503, 32 N.Y.S.3d 92 ).
In each case, the Appellate Division granted the defendant leave to appeal to this Court, certifying the question whether its order was properly made. We now affirm in both cases.
"In matters of statutory interpretation, our primary consideration is to discern and give effect to the Legislature's intention" (Matter of Albany Law School v. New York State Off. of Mental Retardation & Dev. Disabilities, 19 N.Y.3d 106, 120, 945 N.Y.S.2d 613, 968 N.E.2d 967 [2012] ). "The statutory text is the clearest indicator of legislative intent and courts should construe unambiguous language to give effect to its plain meaning" ( Matter of DaimlerChrysler Corp. v. Spitzer, 7 N.Y.3d 653, 660, 827 N.Y.S.2d 88, 860 N.E.2d 705 [2006];see Majewski v. Broadalbin–Perth Cent. School Dist., 91 N.Y.2d 577, 583, 673 N.Y.S.2d 966, 696 N.E.2d 978 [1998] ).
The text of CPLR 908 is ambiguous with respect to this issue. Defendants argue that the statute's reference to a "class action" means a "certified class action," but the legislature did not use those words, or a phrase such as "maintained as a class action," which appears in CPLR 905 and 909. Plaintiffs assert that an action is a "class action" within the meaning of the statute from the moment the complaint containing class allegations is filed, but the statutory text does not make that clear.
Similarly, the statute's instruction that notice of a proposed dismissal, discontinuance, or compromise must be provided to "all members of the class" is inconclusive. Defendants contend that there are no "members of the class" until class certification is granted pursuant to CPLR 902 and the class is defined pursuant to CPLR 903. Yet the legislature did not state that notice should be provided to "all members of the certified class," or "all members of the class who would be bound" by the proposed termination, or some other phrase that would have made the legislature's intent clear. In the context of these ambi guities, we turn to other principles of statutory interpretation and sources beyond the statutory text itself to discern the intent of the legislature (see Albany Law School, 19 N.Y.3d at 120, 945 N.Y.S.2d 613, 968 N.E.2d 967 ; Matter of Shannon, 25 N.Y.3d 345, 351, 12 N.Y.S.3d 600, 34 N.E.3d 351 [2015] ).
CPLR article 9 was enacted in 1975, replacing former CPLR 1005. The Governor's Approval Memorandum stated that the legislation would "enable individuals injured by the same pattern of conduct by another to pool their resources and collectively seek relief" where their individual damages "may not be sufficient to justify the costs of litigation" (Governor's Approval Mem, Bill Jacket, L 1975, ch 207, 1975 N.Y. Legis Ann at 426, 1975 McKinney's Session Laws of N.Y. at 1748). With respect to CPLR 908, which the legislature has not amended since it was originally enacted in 1975, the State Consumer Protection Board observed that the purpose of that statute "is to safeguard the class against a ‘quickie’ settlement that primarily benefits the named plaintiff or his or her attorney, without substantially aiding the class" (Mem from State Consumer Protection Board, May 29, 1975 at 7, Bill Jacket, L 1975, ch 207).
The New York State Bar Association's Banking Law, Business Law, and CPLR Committees, which opposed the bill, recommended that CPLR 908 be amended such that its notice provisions would apply only to certified class actions (see Letter from N.Y. State Bar Association Banking Law, Business Law, and CPLR Committees, at 5, Bill Jacket, L 1975, ch 207). Those committees "agree[d] that any settlement or withdrawal of an action commenced as a class action should be subject to court approval," but expressed the view that "if the dismissal, discontinuance or compromise is effected prior to the determination that a class action is proper, the court should be permitted to dispense with notice to class members" (id. ).
In addition, CPLR article 9 was "modeled on similar federal law," specifically, Federal Rules of Civil Procedure rule 23 (). At the time, rule 23(e) was virtually indistinguishable from the current text of CPLR 908 ; it provided that "[a] class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs" (former Fed Rules Civ Pro rule 23 [e] ).
The majority of federal circuit courts of appeal to address the issue concluded that the prior version of rule 23(e) also applied in the...
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