Ferguson v. Smith, 3:18-cv-372-SB

CAROL FERGUSON and LYNDA FREEMAN, on behalf of themselves and others similarly situated, Plaintiffs, v. MARIA SMITH, an individual; GLADSTONE AUTO, LLC, an Oregon limited liability company; and CARROS INC., an Oregon corporation, Defendants.

No. 3:18-cv-372-SB

United States District Court, D. Oregon

September 23, 2021

Jon M Egan, Jon M. Egan, P.C., 547 Fifth Street, Lake Oswego, OR 97034. Of Attorney for Plaintiffs.

Douglas S. Parker and Bryce W. Hanks, Littler Medelson, P.C 1300 SW Fifth Avenue, Wells Fargo Tower, Suite 2050 Portland, OR 97201; Robert J. Bekken, Bekken Law Group, 668 N. Coast Hwy, Suite 514, Laguna Beach, CA 92651. Of Attorneys for Defendants.

OPINION AND ORDER

MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE

United States Magistrate Judge Stacie F. Beckerman issued Findings and Recommendation in this case on May 21, 2021. Judge Beckerman recommends that the Court deny Defendants' Motion for Leave to File Amended Answer and Affirmative Defenses, grant in part and deny in part Defendants' Motion for Summary Judgment, grant in part and deny in part Plaintiffs' Cross-Motions for Summary Judgment, and deny Defendants' Motion to Amend Class Definition. After Judge Beckerman issued her Findings and Recommendation, Plaintiffs filed an Alternative Motion to Certify Question to Oregon Supreme Court. Judge Beckerman referred resolution of that motion to the Court. For the following reasons, the Court adopts Judge Beckerman's Findings and Recommendation and denies Plaintiffs' motion to certify a question to the Oregon Supreme Court.

STANDARDS

A. Certified Question to the Oregon Supreme Court

The Oregon Supreme Court may answer a certified question of law from a United States District Court if the question “may be determinative of the cause pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court and the intermediate appellate courts of this state.” Or. Rev. Stat. (ORS) § 28.200. The Oregon Supreme Court requires that each certified question meet the following criteria:

(1) The certification must come from a designated court; (2) the question must be one of law; (3) the applicable law must be Oregon law; (4) the question must be one that “may be determinative of the cause;” and (5) it must appear to the certifying court that there is no controlling precedent in the decisions of this court or the Oregon Court of Appeals.

W. Helicopter Servs., Inc. v. Rogerson Aircraft Corp., 311 Or. 361, 364 (1991) (quoting ORS § 28.200). Even if the question meets these five criteria, the decision to certify a question to a state supreme court “rests in the ‘sound discretion' of the district court.” Freyd v. Univ. of Oregon, 990 F.3d 1211, 1223 (9th Cir. 2021) (quoting In re Complaint of McLinn, 744 F.2d 677, 681 (9th Cir. 1984)). When a district court faces an unclear question of state law, “resort to the certification process is not obligatory.” Riordan v. State Farm Mut. Auto. Ins. Co., 589 F.3d 999, 1009 (9th Cir. 2009). Federal courts “regularly decide issues of state law without certifying questions to the state's highest court.” U.S. Bank, N.A., Tr. for Banc of Am. Funding Corp. Mortgage Pass-Through Certificates, Series 2005-F v. White Horse Estates Homeowners Ass'n, 987 F.3d 858, 867 (9th Cir. 2021).

B. Review of Findings and Recommendation

Under the Federal Magistrates Act (Act), the Court may “accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C. § 636(b)(1). If a party files an objection to a magistrate judge's findings and recommendations, “the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id.; Fed.R.Civ.P. 72(b)(3).

For those portions of a magistrate judge's findings and recommendations to which neither party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474 U.S. 140, 152 (1985) (“There is no indication that Congress, in enacting [the Act], intended to require a district judge to review a magistrate's report to which no objections are filed.”); United States. v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the court must review de novo magistrate judge's findings and recommendations if objection is made, “but not otherwise”). Although in the absence of objections no review is required, the Act “does not preclude further review by the district judge[] sua sponte . . . under a de novo or any other standard.” Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b) recommend that “[w]hen no timely objection is filed, ” the Court review the magistrate judge's recommendations for “clear error on the face of the record.”

DISCUSSION

Plaintiffs bring federal and state minimum wage law claims for Defendants' occasional one-business-day delay in issuing paychecks when their regular payday fell on a weekend or near a holiday. Plaintiffs do not allege that Defendants paid them at a rate below minimum wage. Rather, Plaintiffs allege that by issuing paychecks one business day after their regular payday, Defendants failed to pay Plaintiffs a minimum wage on payday and therefore violated federal and state minimum wage law. The Ninth Circuit has implied a timeliness requirement in the section of the Fair Labor Standards Act (FLSA) that sets the minimum wage rate, 29 U.S.C. § 206. Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993). Oregon courts, however, have not addressed whether Oregon's minimum wage statute also includes an implicit time-of-payment requirement.

Oregon's wage and hour statutes provide obligations on employers penalties for failure to meet those requirements, and other remedies for aggrieved employees. Relevant here are ORS §§ 652.120, 653.025, and 653.055. Under ORS § 653.025, “no employer shall employ or agree to employ any employee at wages computed at a rate lower than” the minimum wage rates. If an employer does pay an employee below the minimum wage rate, then the employee can recover civil penalties under ORS § 653.055. Also, ORS § 652.120 sets requirements for when an employer must pay its employees.

Plaintiffs object to the portion of Judge Beckerman's Findings and Recommendation that concludes that there is no implied time-of-payment requirement in ORS § 653.055. In the alternative, Plaintiffs move to certify that question to the Oregon Supreme Court. Defendants object to the portion of the Findings and Recommendation that concludes that there are issues of fact that preclude dismissal of Plaintiffs' federal claims at summary judgment.

A. Certified Question to the Oregon Supreme Court

Plaintiffs ask the Court to certify the following question to the Oregon Supreme Court:

Does an employer who pays an employee nothing on the employee's regular payday, but later pays the full minimum wage prior to the employee's termination, “pay” that employee less than the wages to which the employee is entitled under ORS 653.025 (as the term “pay” is used in ORS 653.055(1)), thus entitling the employee to penalty wages under ORS 653.055(1)(b) and ORS 652.150?

As an initial matter, the Court disagrees that this question accurately reflects Plaintiffs' claims. Plaintiffs assert that Defendants occasionally paid Plaintiffs late by one business day when the purported regular payday fell on a weekend or near a holiday. Plaintiffs' proposed question, however, suggests that Defendants withheld payment well after Plaintiffs' regular payday but before termination of employment. A more appropriate question might be whether an employer violates ORS § 653.025 by paying its employees above-minimum wage one business day after the regular payday when the regular payday falls on a weekend or near a holiday and is thus obligated also to pay penalty wages under ORS 653.055(1)(6). Another formulation might be whether ORS § 653.025 includes an implied time-of-payment requirement. Regardless of the specific contours of a proposed certified question, the Court rejects Plaintiffs' argument that the Court should certify a question to the Oregon Supreme Court.

Oregon appellate courts have not yet directly answered whether the Oregon minimum wage law encompasses an implied penalty when wages above minimum wage are paid after the regular payday. For two reasons, the Court concludes that Oregon courts would reject this theory.

First, the specific payday timing requirements in Oregon's wage and hour statutory framework obviates the need for an additional, implied time-of-payment requirement in the section providing penalties for failure to pay the minimum wage rate. In Biggs, the Ninth Circuit implied a time-of-payment requirement in the minimum wage rate section of the FLSA only after concluding that no other section imposed any requirement for the timing of payment and that to calculate liquidated damages and the statute of limitations, minimum wages must at some point become “unpaid.” 1 F.3d at 1539-40. In other words, considering the FLSA as a whole, the Ninth Circuit concluded that Congress must have intended to make wages “due at some point.” Id. at 1539. Without explicit statutory text, the Ninth Circuit reasoned, the most “logical point” that wages are due is payday. Id. at 1540.

Unlike the FLSA, Oregon's minimum wage laws include explicit time-of-payment requirements. Under ORS § 652.120 employers must pay their employees no later than 35 days after each pay period and within three days after receiving notice that an employee did not receive at least five percent of his or her wages on payday, provided that the employer does not dispute the amount. ORS § 652.120(2...