SAN FRANCISCO — Former workers of Cinemark will have an opportunity once again to seek class certification of their lawsuit after the 9th Circuit Court of Appeals denied the company's motion to dismiss the certification for lack of jurisdiction and said the district court erred in denying class status.
Cinemark argued that the appellate court did not have jurisdiction and couldn’t consider the district court’s interlocutory judgment because Brown and De La Rosa voluntarily settled some of their claims, relying heavily on the Microsoft v. Baker ruling. The district court denied the request of Silken Brown and Mario De La Rosa certification Oct. 12.
Judge Kathleen M. O’Malley, sitting by designation from the U.S. Court of Appeals for the Federal Circuit, wrote in the opinion regarding Cinemark's appeal, “No facts suggest that Brown and De La Rosa engaged in sham tactics to achieve an appealable final judgment. …The settlement reached in this case does not implicate the concerns raised in Baker and constitutes a valid final judgment.”
She remanded the case to the district court for further analysis.
In March 2016, former employee Silken Brown sued Cinemark, claiming her wage statements, as well as those of other former employees, were incorrect. The suit alleged the workers were required to work off the clock and not given all of their breaks. Brown’s complaint also said the company was aware she and others worked off the clock and did not receive breaks. Brown filed an amended claim that said the wage statements also improperly listed the hourly rate. The district court denied the request for class action certification. While some employees settled claims and dismissed their suits, Brown and De La Rosa continued their cases, filing an appeal.
“This case is unlike Baker, where the plaintiffs openly intended to sidestep Rule 23(f) when they voluntarily dismissed their claims," O’Malley wrote. "Unlike the plaintiffs in Baker, Brown and De La Rosa continued litigating their remaining individual claims after the district court denied class certification. The resolution of the present case was not a unilateral dismissal of claims, but a mutual settlement for consideration reached by both parties which expressly preserved certain claims for appeal.”
The decision in Baker closed a loophole that had allowed class-action plaintiffs to voluntarily dismiss their claims when a district court denied class certification to obtain an immediate review from an appellate court but did not allow defendants the same ability. The Supreme Court ruled in the 2017 Baker case that voluntary dismissal would not qualify as a final decision, calling out the “sham tactic,” noting this practice undermines the principle of Rule 1291, which distinguishes between general and specific jurisdiction. The court furthered that the plaintiffs in Baker attempting to use their dismissal as the final decision would challenge the balanced solution Rule 23(f) put in place for immediate review of class-action orders. Rule 23(f) provides defendants and plaintiffs equal opportunity to obtain appellate review and gives the court of appeal the right to decide which interlocutory class certification decisions it will review.
Because the district court ruling constituted a final judgment without the concerns raised in Baker, the appellate court had jurisdiction to consider the appeal on the merits. The 9th Circuit held that the plaintiffs could pursue their appeal from the district court's order denying class certification because the settlement was not a sham tactic to create an appealable judgment.
The 9th Circuit ruled the district court erred in dismissing Brown’s individual Private Attorney General Act (PAGA) claim since his PAGA letter pleaded facts and theories sufficient to put the defendants and the California Labor and Workforce Development Agency on notice for potential investigation. The judges wrote the district court erred in denying class certification based on the pleadings because the pleadings put the defendants on sufficient notice of California Labor Code violations and that Brown’s pleadings justify an analysis for their direct wage claims.