In re Wal-Mart Wage and Hour Employment Practices, No. 2:06-CV-00225-PMP-PAL.

• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
• Writing for the Court: Pro
• Citation: 490 F.Supp.2d 1091
• Parties: In re WAL-MART WAGE AND HOUR EMPLOYMENT PRACTICES Litigation. And All Related Cases.
• Docket Number: No. 2:06-CV-00225-PMP-PAL.
• Decision Date: 23 May 2007

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490 F.Supp.2d 1091 In re WAL-MART WAGE AND HOUR EMPLOYMENT PRACTICES Litigation.
And All Related Cases. No. 2:06-CV-00225-PMP-PAL. United States District Court, D. Nevada. May 23, 2007.

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Carolyn Burton, The Law Offices of Carolyn Beasley Burton, Walnut Creek, CA, Dirk A. Ravenholt, Las Vegas, NV, Robert J. Bonsignore, Nathan R. Long, Paul C. Echohawk, Echohawk Law Offices, Pocatello, ID, Carol P. Laplant, Mark C. Choate, Choate Law Firm, Juneau, AK, Arthur Y. Park, Don V. Huynh, John C. McLaren, Laurent J. Remillard, Jr., Park Park Yu & Remillard, Wayne D. Parsons, Honolulu, HI, Brendan V. Johnson, Matthew T. Tobin, Johnson Heidepriem Miner Marlow & Janklow, Sioux Falls, SD, Gary S. Nitsche, Wilmington, DE, Ivy L. Frignoca, Samuel K. Rudman, Lambert Coffin, Portland, ME, Cynthia K. Smith, Smith Jewell, Missoula, MT, Royce Deryl Edwards, Jr., R. Deryl Edwards, Jr., Joplin, MO, Christopher P. Welsh, James R. Welsh, Welsh Welsh Law Firm, Omaha, NE, Glen W. Neeley, Burdett Neeley & Davis, PLLC, Ogden, UT, Bradley D. Bonner, Laurence William Stinson, Bonner Stinson, Powell, WY, Fred Schultz, Greene & Schultz, Bloomington, IN, Richard P. Batesky, Jr., Indianapolis, IN, Daniel D. Ambrose, Ambrose, Ambrose, Walled Lake, MI, Craig O. Asbill, Charles G. Monnett, III & Associates, Charlotte, NC, Maria B. Glorioso, Vincent J. Glorioso, III, Vincent J. Glorioso, Jr., Glorioso Law Firm, New Orleans, LA, Gregory F. Greiner, Greiner Law Office P.C., Des Moines, IA, John Jay Rausch, Rausch Law Firm, Waterloo, IA, J. Thomas Henretta, Henretta Law Offices, Akron, OH, Mike J. Miller, Stacey Elizabeth Tjon, Solberg Stewart Miller & Tjon Ltd., Fargo, ND, Franklin D. Azar, Rodney P. Bridgers, Tonya L. Melnichenko, Franklin D. Azar & Associates, P.C., Aurora, CO, Gerald L. Bader, Jr., Bader & Associates, LLC, Denver, CO, Pamela R. Mullis, Mullis Law Firm, J. Marvin Mullis, Columbia, SC, Mark A. Tate, Carter & Tate, P.C., Savannah, GA, Donald S. Goldbloom, Grantsville, MD, Troy Giatras, Charleston, WV, Jeremy Cave, Aurora, CO, Frederick P. Furth, Jessica L. Grant, Michael P. Lehmann, Furth Lehmann & Grant, LLP, San Francisco, CA, Jill P. Telfer, Law Offices of Jill P. Telfer, Sacramento, CA, for Plaintiffs.

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Barbara A. Petrus, Carolyn K. Gugelyk, Edmund K. Saffery, Goodsill Anderson Quinn & Stifel, LLP, Honolulu, HI, Barry M. Klayman, Wolf Block Schorr & Solis-Cohen LLP, Wilmington, DE, Brian W. Boschee, James E. Whitmire, III, Santoro, Driggs, Walch, Kearney, Johnston & Thompson, Las Vegas, NV, Brian C. Buescher, Marcia A. Washkuhn, Thomas J. Kenny, Kutak Rock Law Firm, Christopher R. Hedican, Baird Holm, Omaha, NE, Brian Duffy, Naomi Beer, Greenberg Traurig, Denver, CO, Daniel J. Mitchell, Bernstein Shur Sawyer & Nelson, Portland, ME, David L. Young, Rudy A. Englund, Mary K. Schug, Lane Powell, Michael J. Killeen, Michael " Reiss, Davis Wright Tremaine LLP, Seattle, WA, Jim Odell Stuckey, II, Littler Mendelson, P.C., Colombia, SC, Kathleen W. Toth, Manning Curtis Bradshaw & Bednar LLC, Salt Lake City, UT, Kurt D. Williams, Berkowitz Oliver Williams Shaw & Eisenbrandt LLP, Kansas City, MO, Lawrence Joseph Sorohan, II, Fisher & Phillips, LLP, New Orleans, LA, Lee Bruner, Poore Roth & Robinson, Butte, MT, Melissa Carol Hinton, Davenport Evans Hurwitz & Smith, Sioux Falls, SD, Michael Drury, Greenberg Traurig, LLP, Costa Mesa, CA, Robert K. McCalla, Fisher & Phillips, LLC, New Orleans, LA, Roberto Antonio Lange, Susan Brunick Simons, Davenport Evans Hurwitz & Smith, Sioux Falls, SD, Sammi V. Anderson, Manning Curtis Bradshaw & Bednar LLC, Salt Lake City, UT, Thomas A. Nicholas, III, Robert Carl Jarosh, Lindsay Ann Eckes, Gary R. Scott, Hirst & Applegate, Cheyenne, WY, William A. Earnhart, Lane Powell, Anchorage, AK, Ellen E. Boshkoff, Jeffrey S. Beck, Baker and Daniels, LLP, Indianapolis, IN, Eric J. Pelton, Kienbaum Opperwall Hardy & Pelton, P.L.C., Birmingham, MI, Bradd N. Siegel, Porter Wright Morris & Arthur, Columbus, OH, for Defendants.

ORDER

PRO, District Judge.

Presently before the Court is Defendants' Motion to Dismiss or Motion for Judgment on the Pleadings With Respect to Plaintiffs' Claims for Conversion, Unjust Enrichment, Statutory Wages, and Memorandum of Law in Support Thereof (Doc. # 57), filed on June 30, 2006, with supplements (Doc. # 63, # 64). On August 17, 2006, Plaintiffs filed an Opposition to Defendants' Motion to Dismiss or Motion for Judgment on the Pleadings With Respect to Plaintiffs' Claims for Conversion, Unjust Enrichment and Statutory Wages (Doc. # 66). Defendants filed a Reply (Doc. # 74) on September 11, 2006. This Court held a hearing on the motion on April 30, 2007.

I. BACKGROUND

This multi-district litigation arises out of allegations that Defendants Wal-Mart Stores, Inc., Wal-Mart Associates, Inc., Sam's West, Inc., and Sam's East, Inc. systematically failed to pay their hourly employees for all time worked, including overtime hours. Plaintiffs brought suit in various districts and the actions have been transferred to this Court for coordinated and consolidated pre-trial proceedings. Generally, Plaintiffs allege Defendants altered employees' time records by "shaving" time off employees' hours worked through several techniques, including altering the employees' time records to make it appear the employees' workdays ended one minute after their meal period concluded, deleting overtime hours the employees worked in excess of forty hours per work week, deleting employee time clock punches so employees would not be paid for hours worked, altering employee records to make it appear they took breaks or meal periods when they did not, and failing to pay employees for all reported

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time. Plaintiffs bring a variety of claims, including breach of contract, breach of the covenant of good faith and fair dealing, conversion, unjust enrichment, and violation of state statutory wage, hour, and record keeping provisions.

Defendants now move to dismiss claims for conversion, unjust enrichment, and statutory wage, hour, and record keeping violations in eleven of the transferred cases.¹ Defendants argue that ten of the eleven relevant jurisdictions do not recognize a cause of action for conversion of money and Plaintiffs have no possessory interest in Defendants' payroll records to support a conversion claim.² Defendants argue Plaintiffs fail to state a claim for unjust enrichment because that is an equitable remedy available only when no adequate remedy at law exists, and Plaintiffs have adequate remedies at law to recover the allegedly unpaid wages. Finally, Defendants move to dismiss Plaintiffs' claims based on certain state statutory wage, hour, and record keeping provisions.

Plaintiffs respond that Defendants converted Plaintiffs' property interest in compensation for hours worked as reflected in electronic payroll records when Defendants intentionally altered those records by deleting employees' hours worked. Plaintiffs argue this states a conversion claim in the relevant jurisdictions. Plaintiffs also argue their unjust enrichment claims may lie because they do not have an adequate remedy at law. Plaintiffs argue only disgorgement will prevent Defendants from retaining profits they generated through pilfering their employees' time and lowering their payroll expenses. Finally, Plaintiffs assert they adequately state claims under the various state wage, hour, and record keeping statutes.

II. LEGAL STANDARD

In considering a motion to dismiss, "all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party." Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir.1998) (citation omitted). However, the Court does not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir.1994). There is a strong presumption against dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir.1997) (citation omitted). The issue is not whether the plaintiff ultimately will prevail, but whether he may

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offer evidence in support of his claims. See id. (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). Consequently, the Court may not grant a motion to dismiss for failure to state a claim "unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Hicks v. Small, 69 F.3d 967, 969 (9th Cir.1995).

The parties agree that in each of these cases, the substantive law of the state where the transferor court sits applies. See In re Nucorp Energy Sec. Litig., 772 F.2d 1486, 1492 (9th Cir.1985) (where the central question is a substantive question of state law, the transferee court in multidistrict litigation applies the law of the state in which the transferor court sits). Where a state has not addressed a particular issue, a federal court must use its best judgment to predict how the highest state court would resolve it "using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance." Strother v. S. Cal. Permanente Med. Group, 79 F.3d 859, 865 (9th Cir.1996) (quotation omitted); Med. Lab. Mgmt. Consultants v. Am. Broad. Cos., Inc., 306 F.3d 806, 812 (9th Cir.2002). In making that prediction, federal courts look to existing state law without predicting potential changes in that law. Moore v. R.G. Indus., Inc., 789...