Opinion
No. CV-S-93-113-PMP (LRL)
August 28, 1995.
Michael E. Langton, Langton Kilburn, Reno, NV, for plaintiffs.
Nancy Ford Angres, Chief Deputy Attorney General and Cynthia A. Pyzel, Senior Deputy Attorney General, Human Resources Division, Carson City, NV, for defendant.
ORDER
Before the Court is a Motion for Summary Judgment (#26) filed by Defendant State of Nevada, ex rel. Southern Nevada Children's Home (the "State") on June 15, 1995. Plaintiffs filed an Opposition to Defendant's Motion for Summary Judgment (#27) on July 3, 1995. The State filed its Reply in Favor of Defendants' Motion for Summary Judgment (#28) on July 12, 1995. The State also filed an Addendum to Defendant's Reply (#29) on July 31, 1995.
Also before the Court is the Plaintiffs' Cross-Motion for Summary Judgment (#27) filed on July 3, 1995. Defendant filed no Response.
I. Background
This is an action under the Fair Labor Standards Act of 1938 ("FLSA"), codified at 29 U.S.C. § 201, et seq. Plaintiffs were employees of Defendant and seek back pay and other damages for the alleged wilful failure of Defendant to pay overtime compensation to Plaintiffs.
In April 1990, former and present employees of the State brought an action similar to the one in the instant case. In that action, Haworth v. State, No. CV-N-90-162-HDM (PHA), persons employed as Cottage Parents and Cottage Parent Reliefs by the State in the Northern and Southern Nevada Children's Homes alleged the State had violated the FLSA terms with regard to overtime compensation required in a 24-hour residential program for children. Haworth went to trial in March and May of 1993, and the Honorable Howard D. McKibben entered his Findings of Fact and Conclusions of Law in that case in June 1993.
Plaintiffs filed their Complaint (#1) in this case in February 1993, just prior to the trial in Haworth. On September 21, 1993, the parties filed a Stipulation for Stay (#12), seeking to stay all further proceedings in this case until entry of a final judgment and exhaustion of appeals concluded in Haworth. This was based on the fact that some of the few Cottage Parents who had not entered the Haworth case filed suit against their employer in the instant matter, alleging the same violations, raising the same issues, and using the same counsel. The parties in this case asserted that this matter should be stayed in the interest of judicial economy, since Haworth would control this matter. The Court approved the Stipulation for Stay by Order (#11) on September 21, 1993, until a final judgment was entered and all appeals were concluded in the Haworth matter. The Court later lifted the stay in this matter by Order (#19) filed February 6, 1995, due to the unusually slow appeal process. The Court further ordered that all dispositive motions in this case be filed by June 16, 1995. The State's Motion for Summary Judgment (#26) is now properly before the Court.
In the meantime, the United States Court of Appeals for the Ninth Circuit affirmed the findings of fact and conclusions of law of the Haworth trial court in a Memorandum opinion. See Haworth v. State of Nevada, Case No. 93-16972, 1995 WL 317024 (D.C. No. CV-90-162-HDM). On July 24, 1995, the Ninth Circuit by Order denied the Plaintiff-Appellant's Petition for Rehearing.
II. Summary Judgment
Pursuant to Federal Rule of Civil Procedure 56, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
The party moving for summary judgment has the initial burden of showing the absence of a genuine issue of material fact. See Adickes v. S.H. Kress Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 883 (9th Cir. 1982), cert. denied, 460 U.S. 1085, 103 S.Ct. 1777, 76 L.Ed.2d 349 (1983). Once the movant's burden is met by presenting evidence which, if uncontroverted, would entitle the movant to a directed verdict at trial, the burden then shifts to the respondent to set forth specific facts demonstrating that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). If the factual context makes the respondent's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-2553, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); California Architectural Bldg. Prods, Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987), cert. denied, 484 U.S. 1006, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988).
If the party seeking summary judgment meets this burden, then summary judgment will be granted unless there is significant probative evidence tending to support the opponent's legal theory. First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968), reh'g denied, 393 U.S. 901, 89 S.Ct. 63, 21 L.Ed.2d 188 (1968); Commodity Futures Trading Com. v. Savage, 611 F.2d 270 (9th Cir. 1979). Parties seeking to defeat summary judgment cannot stand on their pleadings once the movant has submitted affidavits or other similar materials. Affidavits that do not affirmatively demonstrate personal knowledge are insufficient. British Airways Board v. Boeing Co., 585 F.2d 946, 952 (9th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979), reh'g denied, 441 U.S. 968, 99 S.Ct. 2420, 60 L.Ed.2d 1074 (1979). Likewise, "legal memoranda and oral argument are not evidence and do not create issues of fact capable of defeating an otherwise valid motion for summary judgment." Id.
A material issue of fact is one that affects the outcome of the litigation and requires a trial to resolve the differing versions of the truth. See Admiralty Fund v. Hugh Johnson Co., 677 F.2d 1301, 1305-06 (9th Cir. 1982); Admiralty Fund v. Jones, 677 F.2d 1289, 1293 (9th Cir. 1982).
All facts and inferences drawn must be viewed in the light most favorable to the responding party when determining whether a genuine issue of material fact exists for summary judgment purposes. Poller v. CBS, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). After drawing inferences favorable to the respondent, summary judgment will be granted only if all reasonable inferences defeat the respondent's claims. Admiralty Fund v. Tabor, 677 F.2d 1297, 1298 (9th Cir. 1982).
The trilogy of Supreme Court cases cited above establishes that "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp., 477 U.S. at 327, 106 S.Ct. at 2554 (quoting Fed.R.Civ.P. 1). See also Avia Group International, Inc. v. L.A Gear California, Inc., 853 F.2d 1557, 1560 (Fed. Cir. 1988).
III. Stipulation
Defendant asserts that the stipulation approved by the Court is a dispositive stipulation approved by all counsel in writing and acted upon by the Court pursuant to former LR 145(c), and in which the parties agreed they would be bound in this case by the outcome of Haworth.
The Ninth Circuit has not addressed the enforceability of a stipulation which would bind all parties to the judgment of an action between others. However, both the Fourth Circuit and the Second Circuit have considered this issue.
In Balkissoon v. Commissioner, 995 F.2d 525 (4th Cir. 1993), cert. denied, ___ U.S. ___, 114 S.Ct. 473, 126 L.Ed.2d 424 (1993), the Fourth Circuit considered the enforceability of a stipulation entered into by certain taxpayers with the Commissioner of Internal Revenue. Balkissoon v. Commissioner, 995 F.2d 525, 529 (4th Cir. 1993), cert. denied, ___ U.S. ___, 114 S.Ct. 473, 126 L.Ed.2d 424 (1993). Under the terms of that stipulation, the parties agreed to be bound by the outcome of a factually identical case already before the tax court. Id. at 526. The Fourth Circuit held that the tax court did not abuse its discretion in binding the taxpayers to the stipulation, when the nature and content of the evidence presented by the taxpayers was either repetitive of that presented in the earlier tax court case or irrelevant. Id. at 529 ("[t]axpayers' contentions are meritless. They are unhappy with the fact that Zimmerman lost and that they are bound by that outcome"); see id. at 529 n. 7.
Similarly, in Sampson v. Sony Corp. of America, 434 F.2d 312 (2d Cir. 1970), the Second Circuit considered the enforceability and effect of two stipulations entered into by the appellant Sampson, a patent holder, with Sony Corporation of America. Sampson v. Sony Corp. of America, 434 F.2d 312, 313-15 (2d Cir. 1970). Under the terms of the first stipulation, not filed with the district court, the parties agreed to be bound by the outcome of a pending summary judgment motion with regard to a similar patent infringement case. Id. at 313-14. When the district court judge granted summary judgment in favor of the corporate defendant, the patent holder moved for reargument, and Sampson and Sony entered into a second stipulation. Id. at 314. This second stipulation was filed with the district court, referenced the first stipulation, and indicated the parties' agreement to be bound by the decision in the other patent infringement case. Id. The district court dismissed the complaint against Sony on the basis of the initial stipulation. Id. The Second Circuit, in considering the issue, reasoned that the second stipulation specifically referenced the initial stipulation and stated that the initial stipulation was binding on the present parties. Id. at 315. The Second Circuit reasoned that it could not "distort the unambiguous language of the stipulations in order to correct appellant's failure to consider all possible contingencies when the stipulations were drafted." Id. Accordingly, the Second Circuit affirmed the dismissal of the complaint based on the enforceability of the stipulations. Id.
The Ninth Circuit has recognized the validity and enforceability of stipulations. See, e.g., In re James E. O'Connell Co., 893 F.2d 1072, 1074 (9th Cir. 1990) (stipulation between bankruptcy trustee and secured creditor which allowed trustee to receive only expenses incurred from gross sale proceeds controlled even though trustee entitled by statute to recover advances and administrative expenses associated with sale of collateral); Gilbert v. Ben-Asher, 900 F.2d 1407, 1411 (9th Cir. 1990), cert. denied, 498 U.S. 865, 111 S.Ct. 177, 112 L.Ed.2d 141 (1990) (applying Arizona law to bar plaintiff from litigating federal civil rights claim when plaintiff agreed to dismiss his state civil rights claim with prejudice in state lawsuit, noting that "it is axiomatic that a stipulation with prejudice determines the parties' rights and hence constitutes a bar to future action"). Accordingly, the Court will follow the Fourth and Second Circuits in enforcing stipulations in which the parties agree to be bound by the outcome of other actions. See Balkissoon, 995 F.2d at 529; Sampson, 434 F.2d at 315.
The fact that the two cases involve different parties does not change the result. The Restatement (Second) of Judgments, § 40, states:
A person who agrees to be bound by the determination of issues in an action between others is bound in accordance with the terms of his agreement.
Restatement (Second) of Judgments, § 40 (1982).
In the stipulation in this case, the parties agree that the issues in Haworth and the instant case are identical, and that the Complaint (#1) in this case is nearly identical. The parties further agree that Haworth controls the outcome of the instant case. The Court therefore finds that the parties are bound by the Findings of Fact entered by the district court and undisturbed by the Ninth Circuit.
At the time that Plaintiffs filed their Opposition (#27), a petition for rehearing was pending in the Haworth case in the Ninth Circuit. However, that petition for rehearing was denied, and so the Court finds Plaintiffs' assertion in their Opposition that Haworth is not final to be without merit.
The Findings of Fact and Conclusions of Law ("Findings") entered by the Honorable Howard D. McKibben state the following: (1) the 1986 employment agreement is a valid and binding agreement; (2) sleep time was excluded from compensation unless it was interrupted and actually worked; (3) sleeping facilities furnished by the State were adequate sleeping facilities as required by law; (4) the employees agreed not to be compensated for sleep time unless actually worked as implied by their failure to object to or protest those conditions; (5) the employees were salaried employees and the hourly rate was to be calculated by dividing the biweekly salary by 144 hours; (6) the State acted in good faith in its efforts to comply with the FLSA and did not wilfully violate the Act, thereby prohibiting liquidated damages and a third year of back wages; and (7) the defendants, the State of Nevada ex rel. Northern Nevada Children's Home and Southern Nevada Children's Home, were in compliance with the FLSA since December 1, 1989.
The statute of limitations under the FLSA is two years when there has not been a wilful violation of the Act. 29 U.S.C. § 255. The Findings stipulated to by the parties states that the State acted in good faith and did not wilfully violate the FLSA. Accordingly, any cause of action would have had to have accrued two years prior to the time the Complaint (#1) in this action was filed.
This action was filed in February 1993. Any recovery could only be for a cause of action accruing in February 1991. See 29 U.S.C. § 255. However, the Findings also provide that the State was in full compliance with the FLSA since December 1, 1989. Accordingly, Plaintiffs do not have a cause of action since there were no violations of the FLSA since December 1, 1989. The Court will grant Defendant's Motion for Summary Judgment (#26).
IT IS THEREFORE ORDERED THAT Defendant's Motion for Summary Judgment (#26) is GRANTED;
IT IS FURTHER ORDERED THAT Plaintiff's Cross-Motion for Summary Judgment (#27) is DENIED;
IT IS FURTHER ORDERED THAT the clerk shall enter Judgment in favor of the Defendant State of Nevada, ex rel. Southern Nevada Children's Home.