Brown v. Cinemark

Headline: The Ninth Circuit denied a motion to dismiss for lack of jurisdiction and concluded that appellate jurisdiction is proper under 28 U.S.C. § 1291, where plaintiffs’ voluntary settlement post denial of class certification constitutes a valid final judgment.

Areas of Law: Class action; Wage and hour claims

Issues Presented: Whether the Ninth Circuit has jurisdiction under 28 U.S.C. § 1291 to consider an appeal on the merits in light of the Supreme Court decision in Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017), because plaintiffs voluntarily settled some of their claims.

Brief Summary: The Ninth Circuit denied Defendant Cinemark USA, Inc.’s and Defendant Century Theaters, Inc.’s motion to dismiss for lack of appellate jurisdiction in a class action complaint alleging wage and hour claims. The Ninth Circuit held that under 28 U.S.C. § 1291 the court had jurisdiction to consider the appeal on the merits, since Plaintiffs had voluntarily settled some of their claims.  In support of Defendants’ motion to dismiss, the district court relied on the recent Supreme Court decision in Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017).  The Ninth Circuit, however, distinguished this case from Baker, where plaintiffs engaged in “sham tactics” and attempted to sidestep Fed. R. Civ. P. 23(f) to achieve an appealable final judgment when the Plaintiffs voluntarily settled their claims.

Significance: The Ninth Circuit held that the voluntary settlement reached in this case did not involve the same concerns raised in Microsoft Corp. v. Baker, and constituted a valid final judgment that expressly granted the Ninth Circuit jurisdiction to hear the appeal on the merits under 28 U.S.C. § 1291.  Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017).

Extended Summary: Plaintiff Silken Brown filed a Class Action Complaint against Defendants Cinemark USA, Inc. and Century Theatres, Inc., alleging numerous wage and hour claims.  Defendants removed the case and the district court subsequently consolidated the case with similar pending claims, including a claim filed by Plaintiff Mario De Le Rosa.

The district court dismissed Brown’s direct wage statement claim and denied class certification of Plaintiffs’ wage and hour claims.  The remaining individual claims were set for trial.  The Defendants then filed a motion for summary judgment which the district court tentatively granted in part and denied in part, while the parties stipulated to the tentative order and settled all remaining individual claims. As part of the settlement, Plaintiffs’ reserved the right to challenge the district court’s denial of class certification of their direct wage claims.

Brown and De La Rosa appealed the issues reserved by the settlement.  Because Plaintiffs had voluntarily settled their claims, Defendants then filed a motion to dismiss this case for lack of appellate jurisdiction under 28 U.S.C. § 1291, citing Microsoft Corp. v. Baker in support of their argument.

The Ninth Circuit distinguished this case from Baker, where plaintiffs engaged in “sham tactics” and attempted to sidestep Fed. R. Civ. P. 23(f) to achieve an appealable final judgment when they voluntarily settled their claims after the district court denied class certification. Unlike the plaintiffs in Baker, the plaintiffs in this case continued to litigate their remaining individual claims after the district court denied class certification.  Furthermore, the purpose of this settlement was not a complete dismissal of all claims; Plaintiffs explicitly reserved certain claims for appeal.

For the aforementioned reasons, the Ninth Circuit denied Defendants’ motion to dismiss for lack of jurisdiction under 28 U.S.C. § 1291.

To read the full opinion, please visit:  http://cdn.ca9.uscourts.gov/datastore/opinions/2017/12/07/16-15377.pdf

Panel: Sidney R. Thomas, Chief Judge, and Stephen Reinhardt and Kathleen M. O’Malley, Circuit Judges

Argument Date: October 12, 2017

Date of Issued Opinion: December 7, 2017

Docket Number: 16-15377

Decided: The Ninth Circuit denied defendants’ motion to dismiss and held that jurisdiction under 28 U.S.C. § 1291 was proper to consider the appeal on the merits.

Case Alert Author: Sydney McGregor

Counsel: Liana Carter (argued), Katherine Kehr, Robert Drexler, and Glenn Danas, Capstone Law APC, Los Angeles, California, for Plaintiffs-Appellants. Emily B. Vicente (argued) and M. Brett Burns, Hunton & Williams LLP, Los Angeles, California, for Defendants-Appellants.

Author of Opinion:  Kathleen M. O’Malley

Circuit: Ninth Circuit

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