Not All Class Actions Are Created Equal Under CAFA, Says the Ninth Circuit

The Ninth Circuit recently delivered a setback to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”) when it interpreted the statute narrowly to exclude consideration of non-class claims in determining the jurisdictional amount in controversy in Yocupicio v. PAE Grp., LLC, No. 15-55878, 2015 WL 4568722 (9th Cir. 2015).

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United States Supreme Court Poised to Address Standard for Insider Trading Following Second Circuit’s Decision in United States v. Newman

On July 31, the Solicitor General filed a petition for a writ of certiorari in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), asking the United States Supreme Court to address the standard for insider trading in a tipper-tippee scenario.  Specifically, the Solicitor General argues that the Second Circuit’s Newman decision is in conflict with the Supreme Court’s 1983 decision in Dirks v. SEC, 463 U.S. 646 (1983), and the Ninth Circuit’s recent decision in United States v. Salman,  No. 14-10204 (9th Cir. July 6, 2015).  Because the Supreme Court grants certiorari in nearly three out of four cases filed by the Solicitor General, the likelihood of a cert grant in Newman is particularly high.

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U.S. Supreme Court Holds Security Screenings Are Not Compensable Under the FLSA

In a long awaited 9-0 decision, the U.S. Supreme Court held that employers are not required to compensate employees for time spent waiting for and undergoing security screenings (aka bag checks) under the Fair Labor Standards Act. It concluded that security screenings were noncompensable postliminary activities because they were not the “principal activities” the employees were employed to perform, nor were they “integral and indispensable” to those activities. The case is Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. ____ (2014) and a copy of the opinion can be found here.

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The Supreme Court Hears Oral Argument in Busk: Could Employers Have to Pay for Employee Time Spent Passing Through Security?

On October 8, 2014, the U.S. Supreme Court heard oral argument in Integrity Staffing Solutions, Inc. v. Busk. In Busk, plaintiffs allege that, under the FLSA, their employer should have compensated them and other warehouse employees for time spent passing through the employer’s security clearance at the end of their shifts, including their time spent waiting in line to be searched. Busk is an important case to watch because the Court may provide employers with wide-ranging guidance on what pre-work or post-work tasks are compensable.

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Federal Preemption Defense Running Out of Gas? 

Recent decisions by the Ninth Circuit Court of Appeals and the California Supreme Court have thrown a road block in the way of employers relying on a federal statute to preempt certain state wage-and-hour law claims.  At issue is whether the Federal Aviation Administration Authorization Act (“FAAAA”) precludes truck drivers from asserting claims for meal and rest break, minimum wage, and other violations under California law.  At least for now, the road is clear for such claims.

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NLRB Continues to Hold Firm on D.R. Horton Reasoning Despite Contrary Decisions in the Courts

Despite increasing rejection of the NLRB’s controversial D.R. Horton decision by almost all federal courts which have considered it, an NLRB administrative law judge recently felt there was no choice but to follow Board precedent and so applied and affirmed its holding. These cases illustrate the growing divide between the NLRB and courts over the D.R. Horton decision and the growing trend of federal courts refusing to uphold its enforcement. Read More

CAFA? Don’t mind if I do: Ninth Circuit Overturns Lowdermilk’s Legal Certainty Standard to Remove Class Actions Under CAFA

In a boon to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”), the Ninth Circuit has overturned a rule requiring defendants to show to a “legal certainty” that the jurisdictional amount in controversy is satisfied when a complaint alleges a lesser amount of damages. 

CAFA authorizes federal jurisdiction over civil class actions when the class has more than 100 members, there is minimal diversity, and the amount in controversy exceeds $5 million.  The claims of individual class members are aggregated to determine whether the jurisdictional threshold is met.  But until last week, Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007), required defendants to establish to a “legal certainty” that the amount in controversy exceeded $5 million in order to remove a case when a putative class action complaint alleged damages below that amount.  This rule allowed plaintiffs to avoid federal jurisdiction by artful pleading. Read More

Making up for Lost Time: Ninth Circuit Says Defendants May Remove to Federal Court After Traditional CAFA Removal Deadlines Have Passed

Imagine for a second that you’re watching your favorite sports team: They’re losing, time is winding down, and you’re left watching the other team run down the clock. That frustration you’re feeling is something similar to what defendants in a state court case might feel as they watch the days pass by, one by one, until they’re out of time, and it’s too late to remove their case to federal court. Read More

Ninth Circuit Holds Employees Are Not Required To Allege a Request for “Suitable Seats” For Their Claims to Proceed

Last week in Green v. Bank of America Corp., No. 11.56365 (9th Cir. Feb. 13, 2012), the Ninth Circuit held that “suitable seats” lawsuits cannot be dismissed at the pleading stage based on an employee’s failure to allege that he or she requested suitable seating. The Ninth Circuit’s reversal raises significant questions regarding one of the more common employer defenses to the recent wave of “suitable seats” litigation based upon IWC Wage Order 7-2001.

Filed in April 2011, the plaintiffs in Green raised standard “suitable seats” allegations by claiming Bank of America failed to comply with the requirement of Section 14 of IWC Wage Order 7-2001 that employees be provided with “suitable seats when the nature of the work reasonably permits use of seats.” The district court granted Bank of America’s motion to dismiss, holding that the bank only needed to provide tellers access to seats if seats were requested. On appeal, the Ninth Circuit reversed, holding that the district court mistakenly assumed a requirement that employees allege that they requested seats where the text of the Wage Order does not expressly require such a request. The Court’s brief opinion also clarified that its reversal did not present an opinion on whether any seating provided to the employees was “suitable” or whether the nature of the work “reasonably permits use of seats” because these issues would be developed at the district court upon remand.

Though Green is confined to its context and should not be read to preclude employers from raising the defense of a failure to request suitable seating, it nonetheless raises the critical question of whether employers have an affirmative obligation to provide suitable seats in the absence of any employee requests. As more “suitable seats” lawsuits reach the summary judgment and trial stages, and as state appellate courts begin to take up the issue, employers should expect more clarity. In the meantime, employers should stay tuned for further updates regarding this rapidly changing area of employment law.

Ninth Circuit Holds Statistical Evidence May Establish Prima Facie Claim of Disparate Treatment Without Accounting for Defendant’s Legitimate, Non-Discriminatory Reasons for Adverse Action

In Schechner v. KPIX-TV, No. 11–15294, 2012 WL 1922088 (9th Cir. May 29, 2012), the Ninth Circuit Court of Appeals held that a plaintiff may establish a prima facie case of disparate treatment age discrimination using statistical evidence, even where that evidence does not account for a defendant’s legitimate non-discriminatory reasons for the adverse employment action.  However, the court found the plaintiffs’ statistical evidence insufficient to demonstrate that the defendant’s proffered reasons for the adverse employment action were pretextual. Read More