Takacs v. A.G. Edwards and Sons, Inc., 04 CV 1852 JAH (NLS).

• Decision Date: 02 August 2006
• Docket Number: No. 04 CV 1852 JAH (NLS).,04 CV 1852 JAH (NLS).
• Citation: 444 F.Supp.2d 1100
• Court: U.S. District Court — Southern District of California
• Parties: Drew TAKACS, et al., Plaintiffs, v. A.G. EDWARDS AND SONS, INC., Defendant.

444 F.Supp.2d 1100

Drew TAKACS, et al., Plaintiffs, v. A.G. EDWARDS AND SONS, INC., Defendant.

No. 04 CV 1852 JAH (NLS).

United States District Court, S.D. California.

August 2, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James F. Clapp, Dostart Clapp and Coveney, San Diego, CA, for Plaintiffs.

Barbara I. Antonucci, Morgan Lewis and Bockius, San Francisco, CA, Christopher A. Parlo, Morgan Lewis and Bockius, New York City, for Defendant.

ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [DOC. NO. 82]

HOUSTON, District Judge.

INTRODUCTION

On April 27, 2006, Defendant A.G. Edwards and Sons, Inc. ("Defendant") motion for summary judgment came on regularly for hearing. James Clapp, Kevin McInerney and Mark Thierman appeared on behalf of Plaintiffs Drew Takacs, Ryan Flynn and Caitlan Manoogian (collectively "Plaintiffs"). Rebecca Eisen and Daryl Landy appeared on behalf of Defendant. This Court, after hearing the oral argument of counsel, took the matter under submission. Now, after a careful consideration of the pleadings, relevant exhibits, the oral argument of counsel at the hearing, and for the reasons set forth below, this Court DENIES Defendant's motion for summary judgment in its entirety.

BACKGROUND

Plaintiffs Drew Takacs and Ryan Flynn ("Plaintiffs") are former financial consultants with Defendant. See Cplt. at 2. Plaintiffs filed their motion seeking restitution and recovery of alleged overtime pay and business expenses due to them. See Cplt. at 2-3. Plaintiffs seek to bring this action as a class action suit with the following defined classes of plaintiffs:

Class A—consists of all Financial Consultants who worked for Defendant in the State of California at any time between June 30, 2000 and the present;

Class B—consists of all Trainees who worked for Defendant in the State of California at any time between June 30, 2000 and the date Defendant reclassified the Trainees in California as non-exempt;

Class C—consists of all Financial Consultants and Trainees who worked for Defendant in the State of California at anytime during the Class Period and who, during the Class Period, incurred necessary business-related expenses that were not reimbursed by Defendant; and

Class D—consists of all members of Class A, Class B and/or Class C, who, as of the date this lawsuit was filed, were no longer employed by Defendant.

See Cplt. at 2. Plaintiffs filed a first amended complaint on December 9, 2004, adding Ryan Flynn as a plaintiff. Doc. No. 14. Plaintiff filed a motion for leave to file a second amended complaint on May 6, 2005. See Doc. No. 20. Defendant did not oppose Plaintiffs' motion. Doc. No. 27. On September 27, 2005, Magistrate Judge Nita L. Stormes granted Plaintiffs motion for leave to file a second amended complaint. See Doc. No. 59.

On August 16, 2005, Plaintiffs filed a motion to either permit Plaintiffs to file an amended complaint adding Caitlin Manoogian ("Manoogian") as class representative, or to allow Manoogian to intervene in this action. Doc. No. 33. Defendant filed an opposition on January 19, 2006. Doc. No. 68. Plaintiffs filed a reply nunc pro tunc on January 27, 2006. Doc. No. 79. This Court granted Plaintiffs' motion to add Manoogian as a class representative on March 9, 2006. See Doc. No. 119.

Defendant filed this motion for summary judgment on January 30, 2006, together with an ex parte application to extend the page limit of the motion to 42 pages. See Doc. No. 82. Plaintiffs filed an opposition on March 2, 2006, and similarly requested an extension of the opposition page limit to 42 pages. Doc. No. 112. The Court granted Defendants' ex parte application on February 24, 2006, allowing both parties to file extended briefs of 42 pages. See Doc. No. 110. Defendant filed a reply on March 9, 2006, concurrently filing an ex parte application seeking to extend their page limit to 17 pages. Doc. No. 127. Plaintiffs filed an opposition to Defendant's ex parte application, and sought in the interest of fairness to file a surreply to Defendant's reply. Doc. No. 121. Defendants filed a reply to Plaintiffs' response to Defendant's ex parte application. Doc. No. 125. This Court granted Defendant's ex parte application to extend the page limit of their reply, but denied Plaintiffs request to file a surreply. Doe. No. 125.

On March 14, 2006, Plaintiffs further filed a declaration in support of their ex parte application to file a surreply brief. Doc. No. 139. This Court issued an amended order granting Plaintiffs ex parte application to file a surreply brief, and allowing Defendant the opportunity to file a reply to Plaintiffs' surreply brief. See Doc. No. 137. Plaintiffs filed a surreply brief on March 22, 2006. Doc. No. 141. Defendant filed a reply to Plaintiffs' surreply brief on March 24, 2006. Doc. No. 145. On March 29, 2006, Defendant additionally filed with the Court a notice of newlyissued authority in support of its motion for summary judgment. Doc. No. 155. On April 9, 2006, the parties stipulated to the dismissal with prejudice of Plaintiffs' Fourth Claim for restitution of wage deductions. Doc. No. 156.

On the day of oral argument, Defendant filed with this Court a notice of newly published authorities. Doc. No. 172. Plaintiffs did not have an opportunity to review or respond to the notice prior to or at the hearing. This Court subsequently issued an Order directing Plaintiffs to respond to Defendant's notice by May 5, 2006. Doc. No. 170. Plaintiffs filed a response to Defendant's notice on May 5, 2006. Doc. No. 173.

DISCUSSION

I. Legal Standard

A. Summary Judgment Motion

Summary judgment is properly granted when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Entry of summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party moving for summary judgment bears the initial burden of establishing an absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Where the party moving for summary judgment does not bear the burden of proof at trial, it may show that no genuine issue of material fact exists by demonstrating that "there is an absence of evidence to support the non-moving party's case." Id. at 325, 106 S.Ct. 2548. The moving party is not required to produce evidence showing the absence of a genuine issue of material fact, nor is it required to offer evidence negating the moving party's claim. Lujan v. National Wildlife Fed'n, 497 U.S. 871, 885, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); United Steelworkers v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989). "Rather, the motion may, and should, be granted so long as whatever is before the District Court demonstrates that the standard for entry of judgment, as set forth in Rule 56(c), is satisfied." Lujan, 497 U.S. at 885, 110 S.Ct. 3177 (quoting Celotex, 477 U.S. at 323, 106 S.Ct. 2548).

Once the moving party meets the requirements of Rule 56, the burden shifts to the party resisting the motion, who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty. Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Without specific facts to support the conclusion, a bald assertion of the "ultimate fact" is insufficient. See Schneider v. TRW. Inc., 938 F.2d 986, 990-91 (9th Cir.1991). A material fact is one that is relevant to an element of a claim or defense and the existence of which might affect the outcome of the suit. The materiality of a fact is thus determined by the substantive law governing the claim or defense. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. T.W. Electrical Service, Inc. v. Pacific Electrical Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Anderson, 477 U.S. at 255, 106 S.Ct. 2505).

When making this determination, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, [when] ... ruling on a motion for summary judgment." Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

II. Analysis

Plaintiffs allege causes of action for: 1) Restitution under the federal Fair Labor Standards Act ("FLSA") for over time pay; 2) Restitution of overtime pay under state law; 3) Recovery of state overtime pay under California Labor Code § 1194; 4) Restitution of state law overtime pay for Trainees; 5) Recovery of state law overtime pay under California Labor Code § 1194 for Trainees; 6) Recovery of rest and meal breaks under Labor Code § 226.7; 7) Restitution of business expenses under California Labor Code § 2802; 8) Recovery of business expenses on behalf of Class C; and 9) Recovery of waiting time penalties on behalf of Class D. Defendant seeks summary judgment to dismiss all remaining causes of action.¹

A. Claim One—Restitution of Overtime Pay Under the FLSA On Behalf of Class A

Plaintiffs state that under 29 U.S.C. § 201, "an employee must be paid overtime, equal to 1.5 times the employee's regular rate of pay, for all hours worked in excess of 40 hours per week." Cplt. at ¶ 12. Plaintiffs allege that Class A members regularly worked more than 40 hours per week, but were not paid overtime. Defendant counters that Plaintiffs' first cause of action is barred because: 1) Plaintiffs were exempt from the FLSA's overtime requirements under the federal administrative...