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finding that claims under the FLSA and the Washington Minimum Wage Act are substantially similar for purposes of the first-to-file rule
Summary of this case from Sanders v. W. Express, Inc.Opinion
NO. C03-656R
May 9, 2003
ORDER GRANTING PROGRESSIVE'S MOTION TO DISMISS IN FAVOR OF PRIOR ACTION
THIS MATTER comes before the court on defendant Progressive Casualty Insurance Company's ("Progressive") motion to dismiss in favor of a prior action. The prior action to which Progressive refers is a class action for overtime pay now pending against Progressive in the Eastern District of Louisiana. Plaintiffs, a putative class of former Progressive employees who allege they are owed overtime wages, oppose the motion, arguing that the parties and legal claims in the two actions are dissimilar and thus the first-to-file rule is inapplicable. Having reviewed the documents filed in support of and in opposition to this motion, the court finds and rules as follows:
I. BACKGROUND
This is one of two cases seeking relief against Progressive for its alleged failure to pay overtime to its insurance adjusters. On August 31, 2001, a class action was initiated against Progressive in the Eastern District of Louisiana, alleging that Progressive owed some of its insurance adjusters unpaid overtime wages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et. seq. Camp v. The Progressive Corp. et al., Case No. 01-CV-2680 (E.D. La) (hereinafter "Camp"). In that action, the plaintiffs allege that defendants misclassified their claims adjusters as "administrative employees," who are otherwise exempt from the provisions of the FLSA. The plaintiffs in this case, John Walker and Kevin Krieg, have joined that class action along with several other insurance adjusters from Washington.
In spite of their presence in the Camp action, plaintiffs filed the present case against Progressive. The instant case, in fact, is the plaintiffs' second action initiated in Washington. Plaintiffs originally filed suit in federal court, asserting overtime claims under both the FLSA and parallel Washington state statutes. Walker v. Progressive Casualty Insurance Company, CV02-0318P ("Walker"). Walker I was assigned to United States District Judge Marsha J. Pechman. Judge Pechman found that the earlier-filed Camp action involved the same parties and claims and dismissed the action without prejudice on June 25, 2002.
Following Judge Pechman's dismissal, on August 8, 2002, plaintiffs filed the present case ("Walker II") in Pierce County Superior Court. The sole difference between Walker I and the present case is that plaintiffs have now omitted their FLSA claims, presumably in an attempt to elude dismissal in favor of Camp. Walker II involves factual allegations identical to those stated in Walker I but asserts claims only under the Washington Minimum Wage Act, RCW 49.46 et seq. ("MWA"). Plaintiffs allege that the work they performed was non-exempt work within the meaning of the MWA and that Progressive's failure to compensate them for their overtime work violates the MWA. Plaintiffs define their putative class as "All persons who . . . have been employed as a claims representative or claims adjuster (or any other job title whose duties are substantially similar in scope) by Progressive. . . ." Compl. ¶ 18.
Progressive removed the case to federal court in Seattle, claiming diversity of citizenship. Progressive has now again moved to dismiss this action in favor of the earlier-filed Camp action.
A number of procedural issues then arose, as a result of which Judge Pechman transferred the case to Tacoma. United States District Judge Franklin Burgess, to whom the case was assigned, remanded the case to state court because the amount in controversy was not yet proven to exceed the jurisdictional minimum. On remand to the state court, Progressive established that the amount in controversy did exceed $75,000, and subsequently removed the case to this court. On April 9, 2003, following Progressive's motion to determine propriety of venue, this court determined that the case is properly in the federal district court, Seattle division.
II. DISCUSSION
The first-to-file rule is a generally recognized doctrine of federal comity that permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district. Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). The rule was developed to "serve the purpose of promoting efficiency well and should not be disregarded lightly." Church of Scientology v. United States Dep't of the Army, 611 F.2d 738, 750 (9th Cir. 1979). Exact parallelism between the two actions need not exist; it is enough if the parties and issues in the two actions are "substantially similar." Nakash v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989).
1. Similarity of Parties
The parties in the two actions need not be identical for purposes of the first-to-file rule, but there must be similarity or substantial overlap. Dumas v. Major League Baseball Props., Inc., 52 F. Supp.2d 1183, 1189 (S.D. Cal. 1999), vacated on other grounds, 104 F. Supp.2d 1220 (S.D. Cal. 2000). Here, there is clearly substantial overlap between the parties in the two actions. Both actions seek recovery from Progressive, and, furthermore, the two named plaintiffs in the present case, John Walker and Kevin Krieg, are parties in the Camp action. In addition, at least thirty-nine other Progressive employees with Washington addresses, who potentially qualify as members of plaintiffs' proposed class, have joined the Camp action.
The Camp class represents "all current and former salaried employees of [Progressive] located in the 50 states, who are/were employed as claim adjusters or otherwise performed claims adjusting services," which, of course, includes Washington state claims adjusters.
Despite this similarity of the parties, plaintiffs advance two arguments for why this similarity does not weigh in favor of dismissal. First, plaintiffs argue that they intend to withdraw from the Camp action if this case is allowed to proceed and the court certifies a class action. This argument does not carry the day. Whatever plaintiffs' stated intentions, the fact remains that they are currently parties in the Camp action, and it is this fact, not plaintiffs' future plans, that the court finds controlling.
Next, plaintiffs point out that the deadline for opting in to the Camp action passed on March 10, 2003 and that the Camp class only includes those persons who opted in to the class by the cut-off date. There are, plaintiffs aver, several Washington insurance adjusters who did not opt into Camp but who could be parties in this action. If the court were to dismiss this action, plaintiffs argue, then those insurance adjusters would have no remedy. According to plaintiffs, the statute of limitations has expired for bringing a separate action, and, as noted above, the deadline for opting into Camp has passed. These facts do not change the outcome. The adjusters who elected not to opt in to Camp received notice of that action, and, for whatever reason, elected not to opt in. They could have filed a timely independent action but likewise did not do so. Plaintiffs here cannot use other adjusters' legal predicament to demonstrate that this case should proceed on their behalf.
2. Similarity of Issues
The issues in the two actions need not be identical for purposes of the first-to-file rule but must only be substantially similar. Dumas, 52 F. Supp.2d at 1193; Ward v. Follett Corp., 158 F.R.D. 645, 648-49 (N.D. Cal. 1994). Accordingly, slight differences in the claims asserted do not prevent application of the rule where the underlying complained-of conduct is almost identical. See Dumas, 52 F. Supp.2d at 1193.
Both Camp and the instant case allege that Progressive failed to compensate its claims adjusters for overtime pay and both seek compensation for that alleged injury. The legal issue in both cases is whether Progressive's claims adjusters are employed in a bona fide administrative capacity and are therefore exempt from overtime pay. See Palacio v. Progressive Ins. Co., 8 Wage Hour Cas.2d (BNA) 914, 2002 U.S. Dist. LEXIS 17021 (C.D. Cal. 2002) (dismissing an FLSA overtime claim against Progressive because the claims adjuster was an exempt administrative employee).
Plaintiffs here argue that, while the claims in the two cases are similar, the FLSA and the MWA are materially different and, thus, they should be allowed to proceed with their state-law based claims. Whatever the minor differences between those two statutes, these differences do not warrant maintaining this action. The FLSA and the MWA contain materially identical definitions of the administrative capacity exemption. Cf. 28 C.F.R. § 541.2 (FLSA) with WAC 296-128-520 (MWA). In addition, both the FLSA and Washington law require that an employee meet both a "duties test" and a "salary basis test" to qualify as an exempt administrative employee. Webster v. Pub. Sch. Employees of Wash., Inc., 148 Wn.2d 383, 386, 60 P.3d 1183 (2003). The only potential difference between the laws is that, while the duties test receives the same treatment under state and federal law, the Washington Supreme Court has held that the state salary basis test is slightly broader than the federal test. Id. at 401 (noting that "MWA's test for exemption considers not only the federal `salary basis' test, but also allows the court to consider policies and practices that do not affect base pay" (citing Drinkwitz v. Alliant Techsystems, Inc., 140 Wn.2d 291, 996 P.2d 582 (2000)).
Specifically, the Court has departed from the federal standard in asserting that deductions from accrued leave could destroy exempt status, and refusing to allow employers a window of correction to correct improper practices. Webster, 148 Wn.2d at 401; Drinkwitz, 140 Wn.2d at 301-05.
The continued validity of Drinkwitz and Webster is questionable in light of recent amendments to the MWA. On January 21, 2003, shortly afterWebster's publication, the Washington Department of Labor and Industries (DLI) amended the MWA "to clarify and develop requirements associated with paying exempt employees on a salary." The changes were "a result of [Drinkwitz]," and were effectuated, among other reasons, to "issue similar provisions that exist in federal regulations."
Given that the first-to-file rule requires only a substantial similarity between the claims, this slight difference between federal and state law does not prevent application of the rule. In any event, plaintiffs have failed to demonstrate how any broader standard under the MWA would affect adjudication of their claims.
III. CONCLUSION
For the foregoing reasons, the court hereby GRANTS defendant's motion to dismiss based on prior action [doc. no. 5-1], on the grounds that the earlier filed Camp action involves substantially similar parties and claims.