Villon v. Marriott Hotel Servs., Inc.

130 Hawai'i 130

306 P.3d 175

Bert VILLON and Mark Apana, Plaintiffs,

v.MARRIOTT HOTEL SERVICES, INC., dba Wailea Marriott Resort, Defendant.

Reneldo Rodriguez and Johnson Basler, on behalf of themselves and all others similarly situated, Plaintiffs,

v.Starwood Hotels & Resorts Worldwide, Inc., dba Westin Maui Resort & Spa, Defendant.

No. SCCQ–11–0000747.

Supreme Court of Hawai‘i.

July 15, 2013.

Ashley Ikeda & Lori K. Aquino, Weinberg, Roger & Rosenfeld, Honolulu, Harold Lichten & Shannon Liss–Riordan, pro hac vice, (Lichten & Liss–Riordan, P.C.), for plaintiffs.

Barry W. Marr & Richard M. Rand, Honolulu, Marr Jones & Wang, for defendant Marriott Hotel Services, dba Wailea Marriott Resort.

Paul Alston, Anna Elento–Sneed, & Maren Calvert, Alston Hunt Floyd & Ing, Honolulu, for defendant Starwood Hotels & Resorts Worldwide dba Westin Maui Resort & Spa.

RECKTENWALD, C.J., NAKAYAMA, and McKENNA, JJ., with ACOBA, J., concurring and dissenting separately, with whom Circuit Judge CHAN, in place of DUFFY, J., recused, joins.

Opinion of the Court by McKENNA, J.

I. Introduction

The United States District Court for the District of Hawaii¹ ("District Court") certified the following question² to this court:

May food or beverage service employees of a hotel or restaurant bring a claim against their employer based on an alleged violation of Haw.Rev.Stat. § 481B–14 by invoking Haw.Rev.Stat. §§ 388–6, 388–10, and 388–11 and without invoking Haw.Rev.Stat. §§ 480–2 or 480–13 ?

The instant certified question picks up where our opinion on a related certified question in Davis v. Four Seasons Hotel, Ltd., 122 Hawai‘i 423, 428 n. 12, 228 P.3d 303, 308 n. 12 (2010) left off: "Employees also contend that Employees can enforce HRS § 481B–14 through HRS §§ 388–6, 10, and 11. However, this argument will not be addressed because it is beyond the scope of the certified question." The parties fully briefed their positions, and we also granted leave to file amicus briefs to Four Seasons Hotel, Ltd. ("Four Seasons amicus") and Raymond Gurrobat, Loretta Chong, Marti Smith, Jonalen Kelekoma, and Darren Miyasato ("Gurrobat amici"). The amici curiae have also fully briefed this court.

We now answer the certified question in the affirmative and hold that when a hotel or restaurant applying a service charge for the sale of food or beverage services allegedly violates HRS § 481B–14 (2008) (1) by not distributing the full service charge directly to its employees as "tip income" (in other words, as "wages and tips of employees"), and (2) by failing to disclose this practice to the purchaser of the services, the employees may bring an action under HRS §§ 388–6 (1993), –10 (1993 & Supp.1999), and –11 (1993 & Supp. 1999) to enforce the employees' rights and seek remedies.

II. Background

The factual background relevant to a certified question proceeding "is based primarily upon the information certified to this court by the district court, as well as the allegations contained within [the plaintiffs' complaint]." Davis, 122 Hawai‘i at 425, 228 P.3d at 305 (citing TMJ Hawaii, Inc. v. Nippon Trust Bank, 113 Hawai‘i 373, 374, 153 P.3d 444, 445 (2007) ) (relying upon the information certified to the court by the district court and the facts set forth in the plaintiff's amended complaint).

In its Certified Questions to the Hawai‘i Supreme Court from the United States District Court for the District of Hawai‘i in Civ. No. 08–00529 LEK–RLP and Civ. No. 09–0016 LEK–RLP ("Certified Questions"), the District Court stated that Bert Villon and Mark Apana's ("Villon Plaintiffs") Amended Class Action Complaint and Reneldo Rodriguez, Johnson Basler, on behalf of themselves and all others similarly situated's ("Rodriguez Plaintiffs") Second Amended Complaint were before it pursuant to diversity jurisdiction in accordance with the Class Action Fairness Act. In the Villon Plaintiffs' Amended Class Action Complaint, they alleged the following facts:

6. For banquets, events, meetings and in other instances, the defendant [Marriott Hotel Services, Inc., dba Wailea Marriott Resort ("Marriott" or "Marriott Defendant") ] adds a preset service charge to customers' bills for food and beverage provided at the hotel.

7. However, the defendant does not remit the total proceeds of the service charge as tip income to the employees who serve the food and beverages.

8. Instead, the defendant has a policy and practice of retaining for itself a portion of these service charges (or using it to pay managers or other non-tipped employees who do not serve food and beverages).

9. The defendant does not disclose to the hotel's customers that the service charges are not remitted in full to the employees who serve the food and beverages.

10. For this reason, customers are misled into believing that the entire service charge imposed by defendant is being distributed to the employees who served them food or beverage when, in fact, a smaller percentage is being remitted to the servers. As a result, customers who would otherwise be inclined to leave an additional gratuity for such servers frequently do not do so because they erroneously believe that the servers are receiving the entire service charge imposed by the hotel.

Marriott does not dispute that Plaintiffs did not receive 100% of service charges and that this fact was not disclosed to consumers.

It appears that, at the time the District Court filed its Certified Questions, the Rodriguez Plaintiffs had filed a Third Amended Complaint, which alleged the following facts, similar to those alleged in the Villon Plaintiffs' Amended Class Action Complaint:

6. For banquets, events, meetings, and in its restaurant and in other instances, the defendant [Starwood Hotels & Resorts Worldwide, Inc., dba Westin Maui Resort & Spa ("Starwood" or "Starwood Defendant") ] adds a preset service charge of approximately 20% to customers' bills for food and beverage provided at the hotel.

7. However, the defendant does not remit the total proceeds of the service charge as tip income to the employees who serve the food and beverages.

8. Instead, the defendant has a policy and practice of retaining for itself a portion of these service charges (or using it to pay managers or other non-tipped employees who do not serve food and beverages).

9. The defendant does not adequately disclose to the hotel and restaurant's customers that the service charges are not remitted in full to the employees who serve the food and beverages.

10. For this reason, customers are misled into believing that the entire service charge imposed by defendant is being distributed to the employees who served them food or beverage when, in fact, a smaller percentage is being remitted to the servers. As a result, customers who would otherwise be inclined to leave an additional gratuity for such servers frequently do not do so because they erroneously believe that the servers are receiving the entire service charge imposed by the hotel, or they believe that in light of the 20% service charge that no other gratuity should be paid.

....

13. The defendant's failure to remit the entire service charge to its employees as tip income or to disclose to its customers that the service charges [sic] is not remitted in full to its employees as tip income has resulted in the plaintiffs' loss of tip income. Plaintiffs have lost tip income both by not receiving the total proceeds of service charges that are legally their tip income, as well as by not receiving tip income that customers would otherwise likely leave if they were not led to believe that the wait staff was already receiving a generous gratuity (i.e.[,] the service charge on the bills).

Starwood does not dispute that Plaintiffs did not receive 100% of the service charges and that this fact was not disclosed to consumers.

Both the Villon Plaintiffs' Amended Class Action Complaint and the Rodriguez Plaintiffs' Third Amended Complaint allege the following as Count V:

As a result of the defendant's unlawful failure to remit the entire proceeds of food and beverage service charges to the food and beverage servers, the plaintiffs have been deprived of income which constitutes wages, which is actionable under Hawaii Revised Statutes Section[s] 388–6, 10, and 11. Pursuant to those statutes, the plaintiffs hereby bring a claim of unpaid wages, including liquidated damages, interest, and attorneys' fees.

Procedurally, the certified questions arose upon the entry of the following orders in the District Court: (1) Order Administratively Terminating, Without Prejudice, Plaintiffs' Motion for Summary Judgment and Defendant's Motion to Dismiss Amended Class Action Complaint, Filed June 28, 2010, filed September 8, 2010, in Civil No. 08–00529 LEK–RLP (Villon & Apana v. Marriott Hotel Services, Inc., DBA Wailea Marriott Hotel ); and (2) Order Granting Defendant's Motion to Certify Questions of Hawai‘i State Law to the Hawai‘i Supreme Court and Administratively Terminating, Without Prejudice, Plaintiffs' Motion for Class Certification, Plaintiffs' Motion for Partial Summary Judgment, and Defendant's Motion for Summary Judgment, filed September 8, 2010, in Civil No. 09–00016 LEK–RLP (Rodriguez & Basler v. Starwood Hotels & Resorts Worldwide, Inc., DBA Westin Maui Resort & Spa).

III. Standard of Review

A question of law presented by a certified question is reviewable de novo under the right/wrong standard of review. Francis v. Lee Enters., 89 Hawai‘i 234, 236, 971 P.2d 707, 709 (1999) (citation omitted).

IV. Discussion

A. Plain Language

Plaintiffs argue that the language of the relevant statutes, Hawai‘i Revised Statutes ("HRS") §§ 481B–14, 388–1 (1993), 388–6, 388–10, and 388–11, is plain and unambiguous. "[T]he fundamental starting point for statutory interpretation is the language of the statute itself.... And where the statutory language is plain and unambiguous, our sole duty is to give effect to its plain and obvious meaning." Richardson v. City & County of Honolulu, 76 Hawai‘i 46, 63, 868 P.2d 1193,...