LOVELL v. UNITED AIRLINES, INC. (Hawaii 7-26-2010)

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First, Maria Lovell is a charging party in the Seattle Action. This means that the EEOC is pursuing a charge that she made against her employer (referred to as the respondent under the statute). Under 42 U.S.C. § 2000e-5(f)(1) (Title VII, § 706(f)(1)), the Commission is empowered to bring a civil action against any respondent if the Commission has been unable to secure from the respondent a conciliation agreement acceptable to the EEOC. Accordingly, even disregarding Maria Lovell and Kimberly Sullivan's intervention in the Seattle Action, while they are not named plaintiffs there, the EEOC is pursuing their claims. The EEOC is permitted to bring a suit in "its own name for the purpose, among others, of securing relief for a group of aggrieved individuals." EEOC v. Waffle House, Inc., 534 U.S. 279, 324 (2002). Indeed, as Plaintiffs acknowledge, charging parties are prevented from pursuing their own individual lawsuits if the EEOC has filed a civil action based upon their charges. See Plaintiffs' Appeal at 17 (noting that the "Supreme Court has further explained that an ADA plaintiff-employee has no independent cause of action in the circumstance where EEOC initiates suit after investigation and conciliation, but the employee may intervene in the EEOC's suit") (citing EEOC v. Waffle House, Inc., 534 U.S. 279, 291 (2001)). In EEOC v. Waffle House, the Supreme Court explained:

Once a charge is filed. . . . [t]he EEOC has exclusive jurisdiction over the claim for 180 days. During that time, the employee must obtain a right-to-sue letter from the agency before prosecuting the claim. If, however, the EEOC files suit on its own, the employee has no independent cause of action, although the employee may intervene in the EEOC's suit.

Id. at 291 (citing 42 U.S.C. § 2000e-5(f)(1) (1994 ed.) In its conclusion in EEOC v. Waffle House, the Supreme Court reiterated "the statute specifically grants the EEOC exclusive authority over the choice of forum and the prayer for relief once a charge has been filed." Id. at 298. Thus, given the EEOC's statutory authority to pursue Plaintiffs' federal discrimination claims, the Court finds Plaintiffs' argument that they are not plaintiffs in the Seattle Action not as persuasive as it would be in the absence of such a statutory and regulatory framework.

The Court further rejects Plaintiffs' argument that the EEOC is only interested in injunctive and declaratory relief. Plaintiffs' Appeal at 4-5. In the Seattle Action, the EEOC seeks both injunctive and declaratory relief as well as relief "to make whole Charging Parties and similarly situated individuals." Seattle Compl. Prayer for Relief ¶¶ C-E. Thus, the EEOC is seeking compensatory, victim-specific relief.

The Court is similarly unpersuaded by Plaintiffs' assertions that the EEOC is hostile to individual employees' claims, that the EEOC is not vigorously representing the interests of employees affected by a policy it asserts is illegal, that the "EEOC is working directly to limit the scope of relief available to disabled [United] employees affected by [United's] unlawful policy," and that the EEOC and United have been discussing settlement of the case without the individual employees' participation. Plaintiffs' Appeal at 4-5, 15-17.

As Plaintiffs' themselves cited, the Supreme Court has explained that:

The EEOC is authorized to proceed in a unified action and to obtain the most satisfactory overall relief even though competing interests are involved and particular groups may appear to be disadvantaged. The individual victim is given his right to intervene for this very reason. The EEOC exists to advance the public interest in preventing and remedying employment discrimination, and it does so in part by making the hard choices where conflicts of interest exist.

See Plaintiffs' Appeal at 17 (citing General Tel. Co. v. EEOC, 446 U.S 318, 331 (1980)). Accordingly, the EEOC is permitted to discuss settlement and relief independently. See also General Tel., 446 U.S. at 326 ("the aggrieved person may bring his own action at the expiration of the 180-day period of exclusive EEOC administrative jurisdiction if the agency has failed to move the case along to the party's satisfaction [i.e. by filing suit], has reached a determination not to sue, or has reached a conciliation or settlement agreement with the respondent that the party finds unsatisfactory.")

Although General Tel. involved a lawsuit under a provision of Title VII of the 1964 Civil Rights Act, as the Supreme Court has noted, "Congress has directed the EEOC to exercise the same enforcement powers, remedies, and procedures that are set forth in Title VII of the Civil Rights Act of 1964 when it is enforcing the ADA's prohibitions against employment discrimination on the basis of disability." Waffle House, 534 U.S. at 285.

2. Maria Lovell and Kimberly Sullivan were permitted to intervene in the Seattle Action

Second, Maria Lovell and Kimberly Sullivan were permitted to intervene in the Seattle Action, but only as individuals — their request to intervene as putative class members was denied. See Seattle Action Doc. No. 100 (July 16, 2008 Minute Order granting in part and denying in part motion to intervene); Seattle Action Doc. No. 136. The Seattle Court's July 16, 2008 Minute Order indicated that Ms. Lovell and Ms. Sullivan were to electronically file and serve any complaint in intervention within ten (10) days of the date of that order. See Seattle Action Doc. No. 100.

Plaintiffs did not file an intervenor complaint within ten days as directed, but rather sought reconsideration in various ways and then appealed the denial of Jeanna Dela Cruz's motion for intervention. On June 5, 2009, Maria Lovell and Kimberly Sullivan finally filed a complaint in intervention. Seattle Action Doc. No. 173. On July 6, 2009, the Seattle Court

reconsidered its earlier ruling with respect to Ms. Dela Cruz and granted her leave to intervene. Seattle Action Doc. No. 200 ("July 6, 2009 Seattle Order"). In that order, the Seattle Court also struck Ms. Lovell and Ms. Sullivan's motion for class certification as improper and admonished them that "inclusion of the phrase `on behalf of themselves and all similarly situated class members,' following their names, in the captions placed on pleadings, briefs, or other documents filed in this case, is inappropriate." July 6, 2009 Seattle Order at 5.

On December 7, 2009, the Seattle Court set February 4, 2010, as a deadline for motions to intervene. Seattle Action Doc. No. 200. On February 4, 2010, Plaintiffs' counsel filed a Second Motion for Leave to File a Complaint In Intervention, on behalf of twenty-two (22) plaintiff-intervenors. Seattle Action Doc. 219. On February 26, 2010, the Seattle Court set the hearing on that motion for March 12, 2010, and requested that plaintiff-intervenors' reply brief address whether the proposed plaintiff-intervenors satisfied the definition of "claimant," which was set forth in that order. Seattle Action Doc. No. 249 at 10. On March 6, 2010, plaintiff-intervenors Maria Lovell, Kimberly Sullivan, and Jeanna Dela Cruz filed a notice of voluntary dismissal.

Accordingly, Plaintiffs in this action were, for a time, plaintiff-intervenors in the Seattle lawsuit. Their notice of dismissal, filed in the Seattle Action on March 6, 2010, was filed just two weeks after Defendant filed its Motion to Stay in this case. In light of the foregoing procedural history, the Court finds that Plaintiffs' argument that they are not plaintiffs in the Seattle Action unpersuasive. It appears the only reason that they are no longer plaintiffs in that action is because they filed a voluntary notice of dismissal after the Defendant moved for a stay in this case.

3. The narrow class of persons who are part of this proposed class but who would not be covered by the Seattle Action does not differentiate the parties sufficiently to warrant disregarding the first-to-file rule

The Court is also not persuaded by Plaintiffs' argument that "it is unclear how, when EEOC acknowledges it is seeking relief for only 10 of 28 potential claimants, the parties are `similar enough' to warrant treating the cases as the same and staying the instant action." Plaintiffs' Appeal at 12. Plaintiffs do not provide any citation to support this argument. Plaintiffs do make the same argument earlier in their brief and cite to the Declaration of Carl M. Varaday ¶ 11; however, there is no ¶ 11 included in the Declaration of Carl M. Varaday dated March 16, 2010, that was submitted in support of Plaintiffs' Appeal.

Although Plaintiffs did not provide this Court with a copy of any of the moving papers submitted to Magistrate Judge Kobayashi, the Court has reviewed the Supplemental Declaration of Carl M. Varaday, which was submitted to Magistrate Judge Kobayashi on April 1, 2010 (doc. no. 57). This declaration also does not have a ¶ 11, however, the e-mail attached to that declaration indicates that at least 17 EEOC Claimants are located in Hawai'i and the Court concludes, based on Mr. Varaday's declaration, up to 23 members of the proposed class here may be covered by the Seattle Action. Mr. Varaday declares that United disputes that 23 proposed class members are proper claimants in the Seattle Action. Supplemental Declaration ¶ 7. However, as discussed supra, and as Magistrate Judge Kobayashi explained, just because United disputes they are proper claimants does not mean that their claims will not be at issue. See 4/28/10 Order at 15-16. United appears to dispute Ms. Sullivan's claim, yet she was permitted to intervene and thus her claim would clearly have been at issue. Accordingly, because 17-23 of 28 putative class members may have claims at issue in the Seattle Action, the Court finds that there is sufficient identity of the parties to warrant application of the first-to-file rule.

The Court observes that Local Rule 74.1 directs that the "party appealing a magistrate judge's non-dispositive order shall provide the district judge with two courtesy copies of all briefs, exhibits, and orders relevant to the appeal." Local Rule 74.1.

4. Plaintiffs' arguments regarding discovery are not relevant to application of the first-to-file rule

Finally, this Court also rejects Plaintiffs' arguments regarding their alleged inability to conduct discovery in the Seattle Action. Plaintiffs' Appeal at 8-9. As Judge Kobayashi explained, "a full and fair opportunity to conduct discovery in the Seattle Action is not a prerequisite to a stay in the instant case." 4/28/10 Order at 16-17. Moreover, had Plaintiffs not voluntarily withdrawn from the Seattle Action they would have had the opportunity to participate in discovery.

5. Summary regarding identity of the parties

In light of the foregoing, the Court finds that there is sufficient identity of the parties to warrant application of the first-to-file rule.

C. Identity of the Issues

Although the claims in the Seattle Action are primarily based on the ADA, and claims in this action are primarily based on Haw. Rev. Stat. § 378-1, Magistrate Judge Kobayashi examined these claims and concluded that similarity of the issues favors application of the first-to-file rule. 4/28/10 Order at 23, 17. The Court finds Magistrate Judge Kobayashi's examination of the similarities between ADA and Hawai'i disability law to be thorough and well-reasoned. The Hawai'i courts have recognized that the ADA and Hawai'i disability discrimination laws are similar, and the Hawai'i Supreme Court has expressly adopted the ADA elements of a prima facie case as the elements of a prima facie case under H.R.S. § 378-2. See French v. Hawaii Pizza Hut, Inc., 105 Hawai'i 462, 467, 99 P.3d 1046, 1053 (2004). In French, the Hawai'i Supreme Court explained:

The Hawai'i statutes and HAR prohibiting discrimination based on disability are textually similar to the Americans With Disabilities Act of 1990 (ADA), 42 U.S.C. § 12101. Because of the similarities between the ADA and our own HRS chapter 378, we adopt the analysis for establishing a prima facie case of disability discrimination under HRS § 378-2 that was established in Sutton v. United Air Lines, Inc., 527 U.S. 471, 119 S.Ct. 2139, 144 L.Ed.2d 450 (1999). In Sutton, to establish a prima facie case of disability discrimination under the ADA, a plaintiff has the burden of establishing that: (1) he or she is an individual with a "disability" within the meaning of the statute; (2) he or she is otherwise qualified to perform the essential duties of his or her job with or without reasonable accommodation; and (3) he or she suffered an adverse employment decision because of his or her disability. Id. at 477-78, 481, 119 S.Ct. 2139.

As to the determination of "disability," HRS § 378-1, similar to the ADA, defines disability as "the state of having a physical or mental impairment, which substantially limits one or more major life activities." See 42 U.S.C. § 12102(2) (defining disability as "a physical or mental impairment that substantially limits one or more of the major life activities of such individual"). Hence, a "physical or mental impairment" is a disability if the impairment "substantially limits" a "major life activity." HRS § 378-1.

French, 105 Hawai'i at 467, 99 P.3d at 1051 (footnotes omitted). The Hawai'i Supreme Court further explained that the three-part test developed to determine whether a Plaintiff meets the disability requirement under the ADA was relevant in a § 378-3 case because "HRS § 378-1 contains similar language found in the ADA. Id. Accordingly, Hawai'i courts have looked to interpretations of analogous federal laws by the federal courts for guidance when deciding discrimination claims under H.R.S. § 378-1 and § 378-2. Id.; see also Suzuki v. State, 119 Hawai'i 288, 297-98, 196 P.3d 290, 299-300 (App. 2008) (citing French).

As Judge Kobayashi explained, the ADA Amendments Act of 2008 ("ADAAA") rejected some of the requirements and standards inSutton and Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002). See 4/28/10 Order at 18 n. 3. The ADAAA, although altering what qualifies as a "disability" under the ADA, did not disturb the three elements of a prima facie case for disability discrimination set forth in Sutton. See Pub.L. No. 110-325, § 2(b)92)-(5), 122 Stat. 3553, 3554. Additionally, the ADAAA did not take effect until January 1, 2009, see id., § 8, 122 Stat. at 3559, and does not apply retroactively. See Becerril v. Pima County Assessor's Office, 587 F.3d 1162, 1164 (9th Cir. 2009) (per curiam). Furthermore, Magistrate Judge Kobayashi did not find any Hawai'i case law addressing the ADA Amendments Act, neither party cited any in their papers appealing the Magistrate Judge's Order, and this Court has not found any.

Plaintiffs acknowledge that "Hawai'i courts can look to federal case law for guidance in cases of first impression interpreting Hawaii civil rights statutes." Plaintiffs' Appeal at 13 (citingShoppe v. Gucci Am., 94 Haw. 368, 377, 14 P.3d 1049, 1058 (Haw. 2000)). However, they further argue "a federal court's interpretation of federal law `is not binding on this court's interpretation of civil rights laws adopted by the Hawai'i legislature.'" Plaintiffs' Appeal at 13 (citing Furukawa v. Honolulu Zoological Soc'y, 85 Haw. 7, 13, 936 P.2d 643, 649 (Haw. 1997))). Magistrate Judge Kobayashi rejected this argument finding that French and Suzuki establish that the Hawai'i courts take significant guidance from federal ADA cases. 4/28/10 Order at 20. Judge Kobayashi further observed that this district has examined ADA and H.R.S. § 378-2 claims together. Id. (citingThorn v. BAE Sys. Hawaii Shipyards, Inc., 586 F. Supp. 2d 1213, 1219 n. 5 (D. Haw. 2008) ("The Court therefore outlines a single framework for Plaintiff's claims pursuant to the ADA and HRS § 378-2"); Beaulieu v. Northrop Grumman Corp., 161 F. Supp. 2d 1135, 1142 n. 1 (D. Haw. 2000) ("The Court will consider the claims under the ADA and HRS § 378-2 together, as the Hawaii Supreme Court looks to Federal Law to interpret state employment discrimination law." (citations omitted)). Thus, Judge Kobayashi held that the fact that federal ADA case law is not binding in H.R.S. § 378-2 cases does not preclude application of the first-to-file rule. Id. at 21. This Court agrees.

Plaintiffs have not been able to distinguish eitherThorn or Beaulieu in which courts considered both federal ADA claims and state H.R.S. § 378-2 claims under a single framework. Further, Plaintiffs attempt to rely on Furukawa v. Honolulu Zoological Soc'y is unsuccessful. 85 Haw. 7, 13, 936 P.2d 643, 649 (Haw. 1997). In Furukawa, the Hawai'i Supreme Court again reiterated that it looks to federal decisions for guidance and indicated only that federal employment discrimination authority

is not necessarily persuasive where a state's statutory provision differs in relevant detail. For example, in Furukawa, the Hawai'i Supreme Court noted that employment discrimination law in Hawai'i applies to all employers no matter how small, whereas federal law applies only to employers with 15 or more employees. Id. The Hawai'i Supreme Court then considered a Sixth Circuit case in determining that a plaintiff had to prove that all of the relevant aspects of his employment situation were similar to those employees with whom he seeks to compare his treatment.

Plaintiffs also argue that French "must be considered as a clear attempt to keep Hawai'i law distinct from the ADA. Whether the distinctions are major or minor is less important than that the Hawai'i court refuses to adopt federal civil rights law wholesale." Plaintiffs' Appeal at 14. Judge Kobayashi found that Plaintiffs' reliance on French is misplaced and this Court agrees.

The Hawai'i Supreme Court's holding in French was not a rejection of federal case law interpreting the ADA. First, the Hawai'i Supreme Court noted that the federal circuits were split over the issue of whether, as a matter of law, a twenty-five-pound lifting restriction constituted a disability under the ADA. See French, 105 Hawai'i at 467-68, 99 P.3d at 1052-53. Furthermore, in holding that the determination of whether there is a substantial limitation on a major life activity must be made on a case-by-case basis, the Hawai'i Supreme Court cited several federal ADA cases and one Hawai'i case applying an ADA analysis to a § 378-2 claim. See id. at 468-69, 99 P.3d at 1053-54 citingLeicht v. Hawaiian Airlines, Inc., 77 F. Supp. 2d 1134, 1148 (D. Haw. 1999), rev'd on other grounds, 15 Fed. Appx. 552, 2001 WL 884708 (9th Cir. 2001); Sutton, 527 U.S. at 473; Toyota Motor Mfg., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002); Bitney v. Honolulu Police Dep't, 96 Hawai'i 243, 253, 30 P.3d 257, 267 (2001). Accordingly, the Court does not find that French demonstrates a clear attempt to keep Hawai'i law distinct from the ADA such that a claim under the Hawai'i discrimination law raises issues sufficiently distinct from an ADA claim so as to prevent application of the first-to-file rule.

Plaintiffs also argue that other case law involving an application of the first-to-file rule demonstrates that these actions are sufficiently dissimilar such that the first-to-file rule should not apply. The Court is not persuaded by Plaintiffs' reliance on Cedars-Sinai Medical Center v. Shalala, 125 F.3d 765 (9th Cir. 1997). Plaintiffs argue that Cedars-Sinai "is instructive as it permitted two closely parallel actions, one a False Claims Act case against a hospital for false billing and one filed [against] the hospital for a declaration that [certain] claims were legitimate, both to proceed." Plaintiffs' Appeal at 10. As the Ninth Circuit in Cedars-Sinai explained, "the issue in this declaratory action is whether the HCFA's 1986 rule was validly promulgated. The issue in the Seattle qui tam case is whether any of the Hospitals knowingly submitted false claims for payment." Cedars-Sinai, 125 F.3d at 769. Thus, the two cases inCedars-Sinai required resolution of differing legal issues. Here, both lawsuits involve the issue of whether the same United policy was discriminatory.

Furthermore, because these cases address very similar issues, and because Hawai'i takes guidance from federal discrimination law, the Seattle Action may have preclusive effects in this litigation and, in any event, will certainly help guide this litigation and potential settlement of this litigation. One example is that the resolution of whether any claims are barred by United's bankruptcy discharge may have collateral estoppel effects here.

Finally, Plaintiffs also assert that Magistrate Judge Kobayashi "downplayed the significance of the remedies available in the present case, from those in the ADA." Plaintiffs' Appeal at 14. Plaintiffs argue that in Hawai'i there are no limitations on general and punitive damages and that Plaintiffs can recover on punitive damages on proof of gross negligence. Id. (citing H.R.S. § 372-2 368-17, Ditto v. McCurdy, 98 Haw. 123, 131, 44 P.3d 274, 282 (Haw. 2002), Kang v. Harrington, 59 Haw. 652, 664, 587 P.2d 285, 293 (1978)). In contrast, Plaintiffs argue that remedies under the ADA are limited to non-economic damages of $300,000 and punitive damages only in cases in which the employer has engaged in intentional discrimination and has done so "with malice or with reckless indifference to federally protected rights of an aggrieved individual." Id. (citing 42 U.S.C. § 1981a(b), Kolstad v. ADA, 527 U.S. 526, 529-530 (1999)).

Judge Kobayashi found:

As noted in the reply, insofar as Defendants only seek to stay the action, not to dismiss it, Plaintiffs will still have the opportunity to pursue the unique aspects of their Hawai'i law claims after resolution of the Seattle Action. This Court therefore FINDS that the similarity of the issues in the instant case and in the Seattle Action favors application of the first to file rule.

4/28/10 Order at 22-23. The Court agrees. Further, the first-to-file rule may be applicable even where the remedy sought is different, provided that the underlying legal issues are the same or substantially similar. See Adoma v. University of Phoenix, Inc., No. Civ. S-10-0059 LKK/GGH, 2010 WL 1797263, *4 (E.D. Cal. May 3, 2010) at *5 (citing Pacesetter as "finding that the first-to-file rule [was] applicable where `two actions differ only as to the remedy sought,' but the underlying legal issues were the same"); see also Isle Capital Corp. v. Koch Carbon, Inc., No. 06-00525 MMC, 2006 WL 823186, *3 (N.D. Cal. Mar. 28, 2006) (holding "the form of relief sought does not determine the `similitude' of the issues."). In any event, as Judge Kobayashi and Defendant noted, "insofar as Defendants only seek to stay the action, not to dismiss it, Plaintiffs will still have the opportunity to pursue the unique aspects of their Hawai'i law claims after resolution of the Seattle Action." 4/28/10 Order at 23.

Furthermore, while Plaintiffs argue that the remedies under Hawai'i law are more generous, the Court observes that both Hawai'i courts and others have compared "reckless indifference" and "gross negligence." Cf. Pancakes of Haw., Inc. v. Pomare Props. Corp., 85 Hawai'i 286, 293, 944 P.2d 83, 90 (Haw. App. 1997) (noting that gross negligence has been defined as "[i]ndifference to a present legal duty and utter forgetfulness of legal obligations so far as other persons may be affected" (internal citation and quotation omitted)); Royal Ins. Co. of Am. v. Southwest Marine, 194 F.3d 1009, 1015 (9th Cir. 1999) (internal citation and quotation omitted) (explaining gross negligence "is simply a point on a continuum or probability, and its presence depends on the particular circumstances of each case"); see also Apache Bohai Corp. LDC v. Texaco China BV, 480 F.3d 397, 406 (5th Cir. 2007) (explaining "public policy precludes enforcement of contract clauses exonerating a party from its reckless indifference to the rights or others, whether or not termed gross negligence") (internal citation omitted);Abney v. Coe, 493 F.3d 412, 421 n. 2 (4th Cir. 2007) (noting that under North Carolina law "gross negligence requires, at a minimum, `reckless indifference to the rights of others.'") Accordingly, Plaintiffs have not clearly established that Hawai'i law is more generous regarding punitive damages.

Accordingly, the Court finds that the issues in the Seattle Action and in this action are sufficiently similar to warrant application of the first-to-file rule.

CONCLUSION

Plaintiffs' Appeal is denied. The Magistrate Judge's Order Granting Defendants' Motion to Stay Proceedings Pending Resolution of Earlier-Filed Federal Class Action is affirmed. This case shall remain stayed until resolution of the Seattle Action.

IT IS SO ORDERED.