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Tyus v. Wendy's of Las Vegas, Inc.

United States District Court, D. Nevada

September 26, 2019

LATONYA TYUS, an individual, on behalf of herself and all similarly situated individuals, et al., Plaintiffs,
v.
WENDY’S OF LAS VEGAS, INC.; CEDAR ENTERPRISES, INC. Defendants.

          ORDER

          Gloria M. Navarro, District Judge United States District Court

         Pending before the Court is the Second Renewed Motion for Summary Judgment, (ECF No. 110), filed by Defendants Wendy’s of Las Vegas, Inc. and Cedar Enterprises, Inc. (collectively “Defendants”). Plaintiffs Latonya Tyus, Raissa Burton, Florence Edjeou, David Hunsicker, Lee Jones, Collins Kwayisi, Jeremy McKinney, Terron Sharp, and Linda Davis (collectively “Plaintiffs”) filed a Response, (ECF No. 119), and Defendants filed a Reply, (ECF No. 122). Also pending before the Court is Plaintiffs’ Renewed Motion to Certify Class, (ECF No. 108), to which Defendants filed a Response, (ECF No. 117), and Plaintiffs filed a Reply, (ECF No. 118).

         For the reasons discussed herein, Defendants’ Motion for Summary Judgment is DENIED and Plaintiffs’ Motion to Certify Class is GRANTED.

         I. BACKGROUND

         This case arises out of Defendants’ alleged violations of Nevada’s Minimum Wage Amendment, Nev. Const. art. XV, § 16 (the “MWA”). During all relevant times, Defendants owned and operated approximately thirty Wendy’s Restaurants (collectively “Restaurants”) in Nevada; and Plaintiffs are either current or former employees of Defendants’ Restaurants. (Mot. to Certify 4:22-5:12, ECF No. 108). Plaintiffs bring this action in their individual capacities and on behalf of other similarly situated employees of the Restaurants whom Defendants allegedly failed to offer MWA-compliant health benefits plans. (Id); (Am. Compl. ¶¶ 2-23, 79-105, ECF No. 3).

         On September 2017, the Court granted summary judgment in favor of Defendants for Plaintiffs’ wage-violation claim, reasoning that Defendants’ health plan was consistent with the MWA and its corresponding regulations. (See Order 12:1-3, ECF No. 92). The Court based its conclusion on two decisions in which the Nevada Supreme Court stated the MWA is governed by the standards set forth in Nevada Administrative Code (“NAC”) 608.102. (Id. 7:1-11) (citing MDC Rests., LLC v. Eighth Judicial Dist. Court, 383 P.3d 262, 268 (Nev. 2016) (“MDC I); W. Cab Co. v. Eighth Judicial Dist. Court, 390 P.3d 662, 670 (Nev. 2017) (“ Western Cab”)). Applying NAC 608.102, this Court found that Defendants’ health-benefits plan met the four-factor test for defining health insurance. (Id. 7:22-12:3). Consequently, the Court denied as moot Plaintiffs motion to certify class and instructed the clerk of court to enter judgment in favor of Defendant. (Id. 12:4-9); (see also Clerk’s J., ECF No. 93).

         Plaintiff appealed the Court’s decision, (ECF No. 94), and during the appeal’s pendency, the Nevada Supreme Court issued its decision in MDC Rests., LLC v. Eighth Jud. Dist. Court, 419 P.3d 148 (Nev. 2018) (“MDC II). In MDC II, the Supreme Court addressed “whether there is some minimum quality or substance of health insurance that an employer must provide for the employer to pay the lower-tier minimum wage under the MWA.” See MDC II, 419 P.3d at 154. To answer this question, the MDC II Court looked to the “text, history, and purpose of the MWA, ” and stated that “NAC 608.102 is an unworkable standard for making such a determination.” Id. Declining to stray from the “simple meaning found within the text and purpose of the MWA, ” the Nevada Supreme Court held:

[A]n employer is qualified to pay the lower-tier minimum wage to an employee if the employer offers a benefit to the employee in the form of health insurance of a value greater than or equal to the wage of an additional dollar per hour, and covers “the employee and the employee’s dependents at a total cost to the employee for premiums of not more than 10 percent of the employee's gross taxable income from the employer.” Nev. Const. art. 15, § 16. An employer who pays the lower-tier minimum wage will have the burden of showing that it provided the employee with a benefit in the form of health insurance equal to a value of at least an additional dollar per hour in wages. If an employer cannot offer such insurance to an employee, the employer must pay the employee the upper-tier minimum wage.

Id. at 155–56. In light of this holding, the Ninth Circuit Court of Appeals remanded this case for consideration. (Mem. Op., ECF No. 102). Shortly thereafter, Plaintiffs filed the instant renewed Motion to Certify, and Defendants filed its second renewed Motion for Summary Judgment.

         The Court begins with Defendants’ Motion for Summary Judgment, followed by Plaintiff’s Motion to Certify.

         II. MOTION FOR SUMMARY JUDGMENT

         A. Legal Standard

         The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party’s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

         In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party’s case on which that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 323–24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. Celotex Corp., 477 U.S. at 324.

         At summary judgment, a court’s function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. Id. at 249–50.

         B. Discussion

         Defendants’ Motion for Summary Judgment presents a purely legal issue: whether the MDC II decision applies retroactively. (Defs.’ MSJ 3:23–4:2, ECF No. 110). Defendants argue that, because MDC II overruled Western Cab-a decision which Defendants claim they modeled their health benefits practices after-the Nevada Supreme Court would hold that equitable considerations dictate MDC II applies only prospectively. (Id. 5:17–6:24). Therefore, Defendants contend that Western Cab supplies the relevant legal standard, and the Court’s prior Order remains on solid ground. (Id.).

         As a threshold matter, the Court notes that whether MDC II is limited to prospective application is a question of first impression. Because there is no controlling law on point, “this Court must predict how the Nevada Supreme Court would decide the question.” Brown v. Kinross Gold U.S.A., Inc., 531 F.Supp.2d 1234, 1245 (D. Nev. 2008); see also Gravquick A/S v. Trimble Navigation Int’l Ltd., 323 F.3d 1219, 1222 (9th Cir. 2003).

         The Court predicts that the Nevada Supreme Court would apply MDC II retroactively. The Court is persuaded by the Nevada Supreme Court’s handling of retroactivity in a pair of cases construing the Nevada Minimum Wage Amendment (“MWA”). See Nevada Yellow Cab Corp. v. Eighth Jud. Dist. Court, 383 P.3d 246 (Nev. 2016) (“Yellow Cab”); Thomas v. Nevada Yellow Cab Corp., 327 P.3d 518 (Nev. 2014) (“Thomas”).

         In Thomas, the Supreme Court held that the MWA superseded a Nevada statute exempting taxicab drivers from state minimum wage laws. Thomas, 327 P.3d at 520–22. The legislature’s exemption of taxicab drivers, according to Thomas, was impliedly repealed upon the subsequent enactment of the MWA, which defines employees broadly and carves out specific ...


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