Nancy v. Hyatt Hotels Corp.

NANCY LIVI, on behalf of herself and all others similarly situated, Plaintiff, v. HYATT HOTELS CORP., et al., Defendants.

CIVIL ACTION No. 15-5371

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

November 6, 2017

Anita B. Brody, J.

MEMORANDUM

Plaintiff Nancy Livi ("Livi") brings suit on behalf of herself and a proposed class¹ of banquet servers against four defendants: Defendant Hyatt Hotels Corporation ("HHC"), Defendant Hyatt Corporation d/b/a Hyatt at the Bellevue ("Hyatt Corporation"),² Defendant Bellevue, Inc. and Defendant Bellevue Associates (all four defendants collectively referred to as "Hyatt") for violations of the Pennsylvania Minimum Wage Act, 43 PA. STAT. § 333.101, et seq. ("PMWA"), violations of Pennsylvania's Wage Payment and Collection Law, 43 PA. STAT. § 260.1, et seq. ("WPCL"), and for Unjust Enrichment. Livi also brings suit on behalf of herself and a proposed sub-class³ of banquet servers against Hyatt for violation of the PhiladelphiaAdministrative Code, § 9-614.⁴ Defendants⁵ move for summary judgment on all remaining counts⁶ of the Complaint. For the reasons set forth below, I will grant Defendants' motion for summary judgment in its entirety.

I. BACKGROUND⁷

Livi is a resident of Philadelphia, Pennsylvania and was employed as a Banquet Server at the Hyatt at the Bellevue, a hotel in Philadelphia, Pennsylvania, from 1986 to on or about October 29, 2014. Pl.'s Statement of Undisputed Material Facts in Opp'n to Defs.' Mot. for Summ. J. ¶ 8, ECF No. 45-1 ("Pl.'s Statement"); Defs.' Factual Statement in Support of its Mot. for Summ. J. 1, ECF No. 53 ("Defs.' Statement").

Hyatt Corporation manages the Hyatt at the Bellevue.⁸ Pl.'s Statement ¶ 4; Defs.' Statement 1. Hyatt Corporation is a Delaware corporation and a subsidiary of HHC, which isalso a Delaware corporation. Pl.'s Statement ¶¶ 1-2; Defs.' Statement 1; Defs.' Affidavit ¶¶ 7-8. Both HHC and Hyatt Corporation have a principal place of business in Illinois. Defs.' Affidavit ¶¶ 7-8. Although the exact relationship of Bellevue, Inc. and Bellevue Associates ("Bellevue Defendants") to HHC and Hyatt Corporation is unclear, both entities are incorporated in Pennsylvania and have a principal place of business in Pennsylvania. Pl.'s Statement ¶ 5; Defs.' Statement 1; Defs.' Affidavit ¶ 13.

A. Banquet Events

The Hyatt at the Bellevue holds banquets, wedding receptions, meetings, parties and similar events ("Banquet Events") for customers and employs servers ("Banquet Servers") who work at these events. Pl.'s Statement ¶ 6; Defs.' Statement 1. There are nine spaces at the Hyatt at the Bellevue where Banquet Events can be held, including XIX, which is a restaurant that is sometimes used as a Banquet Event space. Pl.'s Statement ¶ 7; Defs.' Statement 1.

Banquet Servers are responsible for serving food and beverages to guests at their tables at plated-service events and staffing the food stations at buffet-style events. Pl.'s Statement ¶ 13; Defs.' Statement 1. Banquet Servers greet guests, discuss menu offerings with guests, provide recommendations to guests when asked, clean and set tables, and engage in general banquet preparation and related tasks. Id. Banquet Servers do not have a sales role and do not sell or solicit Banquet Events. Pl.'s Statement ¶ 14; Defs.' Statement 1. Bartenders are also considered Banquet Servers because their roles are interchangeable. Pl.'s Statement ¶ 13; Defs.' Statement 1. Banquet Servers typically do not receive tips from guests at Banquet Events. Pl.'s Statement ¶ 22; Defs.' Statement 1. Hyatt enforces a policy prohibiting the presence of tip trays or jars for the collection of tips during events at the Hyatt at the Bellevue and has a policy discouragingBanquet Servers from receiving tips from banquet guests. Pl.'s Statement ¶ 23; Defs.' Statement 1.

B. Banquet Event Contracts

Customers enter into written contracts for Banquet Events at the Hyatt at the Bellevue in advance. Defs.' Statement ¶ B(1); Pl.'s Sur-Reply in Further Opp'n To Defs.' Mot. for Summ. J. 4, ECF No. 62 ("Pl.'s Sur-Reply"). These contracts are based on a common template supplied by HHC. Pl.'s Statement ¶ 25; Defs.' Statement 1. Each contract sets forth the equipment, room rental, food and beverage subtotals for the event, applicable taxes, and generally requires that all charges be paid at least seventy-two hours in advance. Defs.' Statement ¶ B(1); Pl.'s Sur-Reply 4. Each contract for a Banquet Event contains a service charge provision. Pl.'s Statement ¶ 26; Defs.' Statement 1. The service charge is added to the cost of food and beverage and sometimes to the cost of room rental as well. Id.; Pl.'s Statement, Ex. H, Gold Dep. 75:23-76:7, ECF No. 45-10. Between 2011 and 2012, Hyatt increased the service charge from 20% to 21% of such costs. Pl.'s Statement ¶ 28; Defs.' Statement 1; Gold Dep. 76:16-77:2.

Hyatt retains a portion of the service charge collected on food and beverage costs and remits 15% of the cost of food and beverage for each Banquet Event to Banquet Servers and other banquet staff. Pl.'s Statement ¶¶ 30-31; Defs.' Statement 1. The 15% payment is distributed by Hyatt equally among each Banquet Server/bartender and banquet captain⁹ working at each Banquet Event. Pl.'s Statement ¶ 30; Defs.' Statement 1. Hyatt retains the entirety of the service charge collected from customers on room rental and does not distribute a portion of the service charge collected for room rental to Banquet Servers. Pl.'s Statement ¶ 33; Defs.' Statement 1. Prior to 2015, these banquet contracts did not provide a breakdown of thedistribution of the service charge. Pl.'s Statement ¶ 39; Defs.' Statement 1, Gold Dep. 115:2-9; 115:16-116:6.

C. Livi's Compensation

Hyatt paid Livi for her work as a Banquet Server through a combination of hourly wages and distributions from the service charges that Hyatt collected on Banquet Events. Defs.' Statement ¶ A(1); Pl.'s Sur-Reply 4. From September 29, 2012, to the date of her separation, Livi's hourly rate ranged from $11.24 to $11.57 per hour. Defs.' Statement ¶ A(2); Pl.'s Sur-Reply 4. Throughout the course of Livi's employment, service charge distributions constituted more than 50% of Livi's total compensation. Defs.' Statement ¶ A(3); Pl.'s Sur-Reply 4. In 2013, Livi earned approximately $57,000 in total compensation, with distributions from service charges constituting approximately $37,500 of this total compensation. Defs.' Statement ¶ A(4); Pl.'s Sur-Reply 4.

Livi sometimes worked more than forty hours in a work week ("overtime hours"), and was authorized to do so, but was not paid "time-and-a-half" (a wage of 1.5 times her regular hourly wage) for overtime hours worked. Pl.'s Statement ¶¶ 15, 16, 18; Defs.' Statement 1. During the course of Livi's employment, no calculations were performed to determine whether Banquet Servers were exempt from the overtime requirements of the PMWA. Pl.'s Statement ¶ 20; Defs.' Statement 2; Pl.'s Statement, Ex. A, HHC's Answers to Pl.'s First Set of Interrogs. 11, ECF No. 45-3.

D. Additional Facts Relevant to Jurisdiction

Hyatt Corporation is the entity responsible for hiring, supervising and paying the wages of the proposed class and proposed sub-class of Banquet Servers. Defs.' Affidavit ¶¶ 9-11.¹⁰ The Bellevue Defendants do not exercise any control over the employment practices of Hyatt Corporation. Defs. Affidavit' ¶ 15. There are over 100 members of the proposed class and sub-class, of which greater than two-thirds are citizens of Pennsylvania. Defs.' Affidavit ¶¶ 3-6. The amount in controversy is at least $7,626,152. Defs.' Affidavit ¶ 30. During the three-year period preceding the filing of the Complaint, a class action has not been filed against any of the Defendants asserting the same or similar factual allegations on behalf of the same or other persons. Defs.' Affidavit ¶ 31.

II. JURISDICTION

The Complaint was originally filed in this Court pursuant to "federal question" jurisdiction, 28 U.S.C. § 1331, because Livi asserted a claim under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"). The parties later stipulated to dismissal of Livi's FLSA claim. Defendants then filed an affidavit attesting to certain facts relevant to this Court's jurisdiction over the remaining state law claims under CAFA.¹¹

"CAFA provides federal courts with jurisdiction over civil class actions if the 'matter in controversy exceeds the sum or value of $5,000,000,' the aggregate number of proposed class members is 100 or more, and any class member is a citizen of a state different from anydefendant." Vodenichar v. Halcón Energy Props., Inc., 733 F.3d 497, 503 (3d Cir. 2013) (citing 28 U.S.C. § 1332(d)(2), (d)(2)(A), (d)(5)(B)). CAFA operates as an expansion of diversity jurisdiction¹² and "authorizes federal jurisdiction over class actions even in the absence of complete diversity between the parties, except where the 'controversy is uniquely' connected to the state in which the action was originally filed." Id. (citing Kaufman v. Allstate New Jersey Ins. Co., 561 F.3d 144, 149 & n.4 (3d Cir. 2009)); Farina v. Nokia Inc., 625 F.3d 97, 110 (3d Cir. 2010). CAFA also includes two mandatory exceptions to federal subject matter jurisdiction, known as the "local controversy" and "home state" exceptions. 28 U.S.C. § 1332(d)(4)(A)-(B); Vodenichar, 733 F.3d at 503. This Court has jurisdiction over the remaining state law claims under CAFA because the threshold requirements for CAFA jurisdiction have been met and the local controversy and home state exceptions do not apply.

The threshold requirements for CAFA jurisdiction are met. The requirement that the matter in controversy exceeds the sum or value of $5,000,000 is met because the amount in controversy is at least $7,626,152. The requirement that the aggregate number of proposed class members is 100 or more is met because the aggregate number of proposed class members exceeds 100 members. Finally, the requirement...