Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The case involves a whistleblower-retaliation action brought by Tayo Daramola, a Canadian citizen, under the Sarbanes-Oxley and Dodd-Frank Acts. Daramola was employed by Oracle Canada, a subsidiary of Oracle America, and worked remotely from Canada. He alleged that Oracle America and its employees retaliated against him for reporting suspected fraud related to one of Oracle's software products.The United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal of Daramola's action. The court held that the whistleblower anti-retaliation provisions in the Sarbanes-Oxley and Dodd-Frank Acts do not apply outside the United States. The court applied a presumption against extraterritoriality and concluded that the presumption was not overcome because Congress did not affirmatively and unmistakably instruct that the provisions should apply to foreign conduct.The court further held that this case did not involve a permissible domestic application of the statutes, given that Daramaola was a Canadian working out of Canada for a Canadian subsidiary of a U.S. parent company. The court agreed with other circuits that the focus of the Sarbanes-Oxley anti-retaliation provision is on protecting employees from employment-related retaliation, and the locus of Daramola's employment relationship was in Canada. The court also concluded that Daramola did not allege sufficient domestic conduct in the United States in connection with his Dodd-Frank claim. The same reasoning disposed of Daramola’s California state law claims. View "DARAMOLA V. ORACLE AMERICA, INC." on Justia Law

In this case, the United States Court of Appeals for the Ninth Circuit reversed the district court's dismissal of an ERISA action brought by South Coast Specialty Surgery Center, Inc. against Blue Cross of California, d/b/a Anthem Blue Cross.South Coast, a healthcare provider, sought reimbursement from Blue Cross for the costs of medical services provided to its patients. South Coast argued that although it was not a plan participant or a beneficiary under ERISA, it had the right to enforce ERISA's protections directly because its patients had assigned it the right to sue for the non-payment of plan benefits via an "Assignment of Benefits" form. The district court disagreed and dismissed South Coast's suit, concluding that the form only conveyed the right to receive direct payment from Anthem, and not the right to sue for non-payment of plan benefits.The Ninth Circuit held that a healthcare provider can enforce ERISA's protections if it has received a valid assignment of rights. The court determined that South Coast's patients had effectuated a valid assignment through the "Assignment of Benefits" form. Therefore, South Coast had the right to seek payment of benefits and to sue for non-payment. The court reversed the lower court's decision and remanded the case for further proceedings. View "SOUTH COAST SPECIALTY SURGERY CENTER, INC. V. BLUE CROSS OF CALIFORNIA" on Justia Law

The case concerned a lawsuit brought by Ariana Miles against her former employer, Kirkland's Stores Inc., alleging that two of the company's employee policies violated California law. The first policy required employees to take rest breaks on store property, while the second necessitated employees to undergo bag checks when they finished their shifts. Miles sought class certification for subclasses of employees affected by these two policies from May 2014 to the present. The United States Court of Appeals for the Ninth Circuit reversed the district court's denial of class certification for subclasses related to the Rest Break Claim due to the inaccuracy of the district court's finding that the rest break policy was inconsistently applied. The court held that overwhelming record evidence indicated that the company consistently enforced its rest break policy across all employees. However, the court upheld the district court's denial of class certification for the Bag Check Claim, as the evidence suggested that the bag check policy was sporadically enforced, which would require individualized inquiries. The case was thus remanded for further proceedings concerning the Rest Break Claim. View "MILES V. KIRKLAND'S STORES, INC." on Justia Law

The United States Court of Appeals for the Ninth Circuit affirmed the decision of the District Court, which denied attorneys' fees and nontaxable costs under the Equal Access to Justice Act (EAJA) to the defendants-appellants, Brian Bowers, Dexter Kubota, and Bowers + Kubota Consulting, Inc. The Department of Labor had alleged that the defendants sold their company to an employee stock ownership plan (ESOP) at an inflated value. The government's case relied on a single valuation expert, whose opinion was ultimately rejected by the District Court, resulting in the government losing the case. Nonetheless, the District Court found that the government's litigation position was "substantially justified." On appeal, the Ninth Circuit held that the District Court did not abuse its discretion in concluding that the government's position at trial was substantially justified, and thus, in denying attorneys' fees and nontaxable costs under EAJA. The Court also held that the District Court abused its discretion in reducing the award of taxable costs, as it was based on a clearly erroneous finding of fact. Therefore, the case was remanded for reconsideration of the award of taxable costs. View "SU V. BOWERS" on Justia Law

In this case, the plaintiff, Lorenzo Dominguez, who was a former employee of Better Mortgage Corporation, alleged that the company violated federal and state wage-and-hour laws, primarily by failing to pay overtime to him and other mortgage underwriters. Upon being sued, Better Mortgage attempted to reduce the size of the potential class and collective action by persuading employees to agree not to join any collective or class action and to settle their claims individually. The district court found that Better Mortgage's communications were misleading and coercive. As such, the court nullified the new employment agreements, release agreements, and ordered the company to communicate with current and former employees about wage-and-hour issues only in writing and with prior approval.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s order imposing a communication restriction on Better Mortgage, considering the company's appeal timely due to a motion to reconsider the restriction, thus tolling the time to file the notice of appeal. The appellate court held that it had jurisdiction to review the communication restriction and found it both justified and tailored to the situation created by the employer’s misleading and coercive communications. However, the appellate court dismissed for lack of jurisdiction the employer’s appeal from the district court’s order nullifying agreements between the employer and current and former employees. The appellate court found that it lacked jurisdiction to consider the merits of the nullification order because the issue was raised in an interlocutory appeal and did not fit any exception that would allow for review. View "DOMINGUEZ V. BETTER MORTGAGE CORPORATION" on Justia Law

Plaintiff employees who opted out of their union and employer-sponsored health plans received a monetary credit, part of which was deducted as a fee that was then used to fund the plans from which plaintiffs had opted out. Plaintiffs argue that this opt-out fee should be treated as part of their “regular rate” of pay for calculating overtime compensation under the Fair Labor Standards Act (FLSA).   The Ninth Circuit affirmed the district court’s grant of summary judgment. The panel held that the opt-out fees were not part of the employees’ “regular rate” of pay, but rather were exempted as “contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing” health insurance under 29 U.S.C. Section 207(e)(4). View "ANTHONY SANDERS, ET AL V. COUNTY OF VENTURA" on Justia Law

The U.S. Department of Labor brought the underlying lawsuit under the Employee Retirement Income Security Act, alleging that Appellants Brian Bowers and Dexter Kubota sold their company to an employee stock ownership plan (ESOP) at an allegedly inflated value. The government’s case hinged on a single valuation expert, who opined that the plan overpaid for that company. The district court rejected the opinion, and the government lost a bench trial. The district court denied Appellants’ request for attorneys’ fees and nontaxable costs under EAJA, finding that the government’s litigation position was “substantially justified” and that it did not act in bad faith.   The Ninth Circuit affirmed the district court’s denial of attorneys’ fees and nontaxable costs. The panel held that the district court did not abuse its discretion in concluding that the government’s position at trial was substantially justified, and in denying attorneys’ fees and nontaxable costs under EAJA. The panel noted that the government could not rely on red flags alone, such as the “suspicious” circumstances of the ESOP transaction, to defend its litigation position as “substantially justified.” The panel held that the district court abused its discretion in reducing the award of taxable costs because it relied on a clearly erroneous finding of fact in reducing the magistrate judge’s recommended award of taxable costs. View "JULIE SU V. BRIAN BOWERS, ET AL" on Justia Law

Three private contractors providing war-zone security services to the Department of Defense (DOD) appealed a district court order remanding to Nevada state court this suit brought by a group of their employees who guarded DOD bases, equipment, and personnel in Iraq. The guards alleged that their working conditions violated the contractors’ recruiting representations, their employment contracts, and the Theater Wide Internal Security Services II (TWISS II) contract between the contractors and the Department of Defense.The Ninth Circuit reversed. The panel held that the contractors met the limited burden imposed by the federal officer removal statute, 28 U.S.C. Section 1442(a)(1), which permits removal of a civil action against “any officer (or any person acting under that officer) of the United States or of any agency thereof . . . for or relating to any act under color of such office.” To satisfy this requirement, a removing private entity must show that (a) it is a “person” within the meaning of the statute; (b) there is a causal nexus between its actions, taken pursuant to a federal officer’s directions, and the plaintiff’s claims; and (c) it can assert a colorable federal defense. There was no dispute that the contractors, as corporations, were “persons” for purposes of Section 1442(a)(1). The panel held that the contractors sufficiently pleaded that there was a causal nexus between their actions and the guards’ claims. View "NICHOLAS DEFIORE, ET AL V. SOC LLC, ET AL" on Justia Law

Intervenor UNITE HERE Local 11 (Union) was the exclusive collective bargaining representative for a unit of employees whom Kava Holdings LLC employed at the Hotel Bel-Air. Kava temporarily closed the Hotel for extensive renovations and laid off all the unit employees. As Kava prepared to reopen the Hotel, Kava conducted a job fair to fill about 306 unit positions. Approximately 176 union-affiliated former employees applied for those positions. Kava refused to rehire 152 of them. The National Labor Relations Board found that Kava committed unfair labor practices. The Board ordered various remedies, including reinstatement of the former employee applicants who were affected by Kava’s discriminatory conduct. Kava petitioned for review of the Board’s order and a supplemental remedial order, and the Board cross-applied for enforcement.   The Ninth Circuit denied in part and dismissed in part Kava Holdings, LLC’s petition for review and granted the National Labor Relations Board’s cross-petition for enforcement of its order, which found that Kava committed unfair labor practices in violation of Sections 8(a). The panel held that substantial evidence supported the Board’s finding that Kava committed an unfair labor practice by refusing to rehire union-affiliated former employees so that Kava could avoid its statutory duty to bargain with the Union. The panel held that substantial evidence supported the Board’s finding that Kava committed an unfair labor practice by refusing to recognize and bargain with the Union as it reopened the Hotel and by unilaterally changing the bargaining unit’s established pre-closure terms and conditions of employment. View "KAVA HOLDINGS, LLC V. NLRB" on Justia Law

Plaintiffs, members of a certified class, are former California employees of Hyatt Corporation who were laid off after the COVID-19 pandemic struck in March 2020. Plaintiffs were laid off in March 2020 and then terminated in June 2020. Plaintiffs contend that Hyatt violated California law by failing to pay them immediately for their accrued vacation time and by failing to compensate them for the value of free hotel rooms employees received each year. The district court granted summary judgment in favor of Hyatt and dismissed the case with prejudice.   The Ninth Circuit affirmed in part and reversed in part the district court’s summary judgment. The panel concluded that the prompt payment provisions of the California Labor Code required Hyatt to pay Plaintiffs their accrued vacation pay in March 2020. The California Division of Labor Standards Enforcement (“DLSE”) opinion letter and its Policies and Interpretations Manual establish that a temporary layoff without a specific return date within the normal pay period is a discharge that triggers the prompt payment provisions of Cal. Labor Code Section 201. Hyatt, thus, should have paid the accrued vacation pay at the initial layoff in March 2020 because the temporary layoff was longer than the normal pay period, and there was no specific return date. The panel reversed the district court’s grant of summary judgment to Hyatt as to the vacation pay claim and remanded for the district court to consider whether Hyatt acted willfully in failing to comply with the prompt payment provisions. View "KAREN HARTSTEIN V. HYATT CORPORATION" on Justia Law