Wadsworth v. KSL Grant Wailea Resort, Inc.
| Decision Date | 10 December 2010 |
| Docket Number | Civ. No. 08–00527 ACK–LEK. |
| Parties | Nan WADSWORTH, Mark Apana, Elizabeth Valdez Kyne, Bert Villon and Stephen West, on behalf of themselves and all others similarly situated, Plaintiffs, v. KSL GRANT WAILEA RESORT, INC.; CNL Resort Lodging Tenant Corp.; CNL Grand Wailea Resort, L.P.; MSR Resort Lodging Tenant, LLC; Hilton Hotels Corporation; Waldorf–Astoria Management, LLC; and BRE/Wailea LLC dba Grand Wailea Resort Hotel & Spa, Defendants. |
| Court | U.S. District Court — District of Hawaii |
OPINION TEXT STARTS HERE
Ashley K. Ikeda, Lori K. Aquino, Weinberg Roger & Rosenfeld, Honolulu, HI, David A. Rosenfeld, Weinberg Roger & Rosenfeld, Alameda, CA, Harold L. Lichten, Hillary Schwab, Shannon Liss–Riordan, Lichten & Liss–Riordan, P.C., Boston, MA, for Plaintiffs.
Barry W. Marr, Melanie M. May, Richard M. Rand, Marr Jones & Wang LLLP, Honolulu, HI, Michael Kun, Epstein Becker & Green P.C., Los Angeles, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
Plaintiffs Nan Wadsworth, Elizabeth Valdez Kyne, Bert Villion, and Stephen West (“Plaintiffs”) have all worked as food and beverage servers at the Grand Wailea Resort Hotel & Spa in Maui. Second Am. Compl. ¶ 3. Plaintiffs bring this action on behalf of themselves and a class of individuals similarly situated. Id. ¶ 4. Plaintiffs assert the class of individuals similarly situated consists of “all individuals who are, or who have, worked as food and beverage servers [for] the defendants during the period of time in which the defendants have imposed a service charge on food and beverage, but have not remitted the entire services charge as tip income to these employees.” Id. Plaintiffs' Second Amended Complaint alleges that the Grand Wailea Resort Hotel & Spa (“Grand Wailea Resort” or “Hotel”) provides food and beverage service throughout the hotel, including in its banquet department, its restaurants, and through room service. Id. ¶ 5.
Plaintiffs allege that the Grand Wailea Resort has been owned and operated by a number of different entities during the applicable statute of limitations period, including its current owner, Defendant MSR Resort Lodging Tenant, LLC, and operator, Defendant BRE/Wailea, LLC, as well as prior owners and operators, Defendants KSL Grant Wailea Resort, Inc., Waldorf-Astoria Management, LLC, CNL Grand Wailea Resort, LP, and CNL Lodging Tenant Corp. (together, “Defendants”). Id. ¶¶ 6–8.
Plaintiffs allege that Defendants have added a preset service charge to customers' bills for food and beverage served at the Hotel, but that Defendants have not remitted the total proceeds of the service charge as tip income to the employees who serve the food and beverages. Id. ¶¶ 9–10. Instead, Plaintiffs allege that the Defendants have had a policy and practice of retaining for themselves a portion of these service charges (or using it to pay managers or other non-tipped employees who do not serve food and beverages), without disclosing to the Hotel's customers that the services charges are not remitted in full to the employees who serve the food and beverages. Id. ¶¶ 11–12.
Plaintiffs assert five counts. In Count I, Plaintiffs allege that Defendants' actions violate Hawai'i Revised Statutes (“H.R.S.”) § 481B–14. Plaintiffs allege that pursuant to H.R.S. § 481B–4, such violation constitutes an unfair method of competition or unfair and deceptive act or practice within the meaning of H.R.S. § 480–2. In Count II, Plaintiffs allege that Defendants' conduct constitutes unlawful intentional interference with contractual and/or advantageous relations. In Count III, Plaintiffs allege that Defendants' conduct constitutes a breach of implied contract. In Count IV, Plaintiffs allege that Defendants have been unjustly enriched at Plaintiffs' expense under state common law. Finally, in Count V, Plaintiffs allege that as a result of Defendants' conduct, they have been deprived of income that constitutes wages, which is actionable under H.R.S. §§ 388–6, 388–10, and 388–11.
On November 24, 2008, a class action complaint was filed in this case. Doc. No. 1. On January 29, 2009, an Amended Class Action Complaint was filed (“Amended Complaint”). Doc. No. 19. There are a number of similar cases pending in this Court and on January 23, 2009, Plaintiffs moved to consolidate or alternatively for assignment of all the related cases to one judge pursuant to Local Rule 40.2. Doc. No. 16. The motion to consolidate was denied on March 19, 2009, 2009 WL 792724 (Doc. No. 37) and Magistrate Judge Kobayashi's Findings and Recommendation Regarding Assignment Pursuant to Local Rule 40.2. were adopted on April 8, 2009, 2009 WL 975769 (Doc. No. 56). 2
On July 9, 2009, this case was stayed in light of Judge Gillmor's certification to the Hawai'i Supreme Court of a question of law that was also important to the instant case.3 See Doc. No. 71. The Hawai'i Supreme Court answered the certified question on March 29, 2010, in Davis v. Four Seasons Hotel Ltd., 122 Hawai'i 423, 228 P.3d 303 (2010). Accordingly, on April 16, 2010, Plaintiffs filed a motion to lift the stay and a motion to file a second amended complaint. Doc. Nos. 73 & 74. The Magistrate Judge granted both motions on June 22, 2010. Doc. No. 89. Plaintiffs then filed their Second Amended Complaint (“Second Amended Complaint”) on June 28, 2010. 4 Doc. No. 93.
On July 20, 2010, Defendants filed a Motion to Dismiss Second Amended Complaint. Defendants also filed a Memorandum in Support of their Motion to Dismiss (the “Motion” or “Motion to Dismiss”) as well as a Declaration of Matthew Bailey and Exhibits A and B. Doc. No. 95. On September 3, 2010, Plaintiffs moved to continue the hearing on Defendants' Motion to Dismiss, which had been scheduled for October 12, 2010. Doc. No. 102. On September 8, 2010, the Court granted Plaintiffs' motion and continued the hearing to November 16, 2010, at 10 a.m.
On October 28, 2010, Plaintiffs filed a Memorandum in Opposition to Defendants' Motion to Dismiss (“Opposition”). Doc. No. 107. Although Plaintiffs' Opposition was untimely pursuant to the Local Rules which require any opposition to be filed not later than twenty-one days prior to a hearing on a motion (D. Haw. Local Rule 7.4), the Court accepted Plaintiffs' tardy filing. Doc. No. 111. The Court also granted Defendants additional time to respond to Plaintiffs' Opposition in light of its tardiness. Defendant's Reply was filed on November 8, 2010. Doc. No. 112.
A hearing on Defendants' Motion to Dismiss was held on November 17, 2010. 5
A court's subject matter jurisdiction may be challenged under Federal Rule of Civil Procedure 12(b)(1) (“Rule 12(b)(1)”). “A party invoking the federal court's jurisdiction has the burden of proving the actual existence of subject matter jurisdiction.” See Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir.1996).
On a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the court is not “restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir.1988). “Once the moving party [converts] the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 1040 n. 2 (9th Cir.2003).
“The requirement that the nonmoving party present evidence outside his pleadings in opposition to a motion to dismiss for lack of subject matter jurisdiction is the same as that required under Rule 56(e) that the nonmoving party to a motion for summary judgment must set forth specific facts, beyond his pleadings, to show that a genuine issue of material fact exists.” Trentacosta v. Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1559 (9th Cir.1987). When ruling on a jurisdictional motion involving factual issues which also go to the merits, the moving party “should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Casumpang v. Int'l Longshoremen's & Warehousemen's Union, 269 F.3d 1042, 1060–61 (9th Cir.2001).
Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”) permits dismissal of a complaint that fails “to state a claim upon which relief can be granted.” Under Rule 12(b)(6), review is generally limited to the contents of the complaint. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir.2001); Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir.1996). Courts may also “consider certain materials—documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice—without converting the motion to dismiss into a motion for summary judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). Documents whose contents are alleged in a complaint and whose authenticity are not questioned by any party may also be considered in ruling on a Rule 12(b)(6) motion to dismiss. See Branch v. Tunnell, 14 F.3d 449, 453–54 (9th Cir.1994).
On a Rule 12(b)(6) motion to dismiss, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Fed'n of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.1996). However, conclusory allegations of law, unwarranted deductions of fact, and unreasonable inferences are insufficient to defeat a motion to dismiss. See Sprewell, 266 F.3d at 988; Nat'l Assoc. for the Advancement of Psychoanalysis v. Cal....
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