United States District Court, D. Arizona
Honorable G. Murray Snow United States District Judge
Pending before the Court are Plaintiff Judy Plotts’ motion for partial summary judgment (Doc. 175), Defendant Chester Cycles LLC’s motion to disqualify Burch & Cracchiolo, P.A. (“Plaintiff’s Counsel”) (Doc. 161), E.B. Chester’s (“Mr. Chester”) motion to intervene (Doc. 157), Defendant’s motion for leave to file a second, limited, motion for partial summary judgment (Doc. 176), Plaintiff’s motion to strike Defendant’s motion for leave (Doc. 177), Defendant’s cross-motion for partial summary judgment (Doc. 188), Defendant’s motion to strike Plaintiff’s motion for partial summary judgment (Doc. 190), Plaintiff’s motion to strike Defendant’s cross-motion for partial summary judgment (Doc. 196), Defendant’s cross-motion for sanctions (Doc. 200), and both parties’ motions to seal (Docs. 159, 183). For the following reasons Plaintiff’s motion for partial summary judgment is denied, Defendant’s motion to disqualify Plaintiff’s Counsel is granted, Defendant’s motion for leave and cross-motion for sanctions are denied, Mr. Chester’s motion to intervene is denied, all motions to strike as well as Defendant’s cross-motion for partial summary judgment are vacated, and the motions to seal are granted.
Plaintiff’s allegations regarding Defendant’s culpable conduct under 42 U.S.C. § 2000e-2(a)(1) (“Title VII”) have been summarized in the Court’s previous orders. Pertinent to the instant motion, Plaintiff alleges that Defendant Chester Cycles, LLC (“Chester Cycles”) is a Nevada limited liability company doing business in Maricopa County, Arizona and which formerly owned and operated the Chester’s Harley-Davidson Mesa dealership in Mesa, Arizona (“Chester Mesa”). Pl.’s Statement of Facts Supp. Mot. Part. Summ. J. (“PSOF”) ¶ 11. Chester Cycles was one of a group of Harley-Davidson dealerships operating under the Chester name-the other dealerships are located in Nevada, Idaho, Wyoming, and Florida (collectively referred to as the “Chester Dealerships”). PSOF ¶¶ 15 (citing Doc. 158, Ex. 2 ¶ 6), 17. The other Chester Dealerships are not parties to this lawsuit. Non-party Chester Group, LLC is the 100% owner of non-party Chester PowerSports. PSOF ¶ 16, Ex. O at 153:1-12. Chester PowerSports, in turn, owns four subsidiaries that each own and operate one of the Chester Dealerships. DSOF ¶ 16, Ex. 9 ¶ 4. Thus, because Chester Group owns Chester PowerSports, and Chester PowerSports owns the subsidiaries that own the Chester Dealerships, Chester Group is the “ultimate parent and 100% owner of three subsidiaries and the majority owner of a fourth subsidiary” that each own and operate one of the Chester Dealerships. PSOF ¶ 16 (citing Doc. 158, Ex. 2 ¶ 6); DSOF ¶ 18, Ex. 9 ¶ 4. The Chester Dealerships share the common Chester name, but they are each structured as independent businesses. DSOF ¶ 17, Ex. 5 at 13:8-18. The Nevada, Wyoming, and Idaho dealerships also each operate retail clothing stores located separately from the dealerships. PSOF ¶ 19, Ex. O at 61:15-62:2. Chester Group’s office is located adjacent to the Chester Mesa dealership. PSOF ¶ 23, Ex. P at 16; DSOF ¶ 20, Ex. 10 at 28:2-29:16.
Chester Group possessed the payroll records for each of the Chester Dealerships. PSOF ¶ 21, Ex. P at 16:14-17:2. Chester Group’s director of operations controlled the operations of all Chester Dealerships. PSOF ¶ 26, Ex. O at 70:8-13. Decisions about the hiring or firing of an employee, however, were never made singly by the director of operations but also included the input of the general manager of the particular dealership making the personnel decision. DSOF ¶ 26, Ex. 2 at 21:5-12. Plaintiff alleges that Chester Group owners and employees were responsible for authorizing wages, wage increases, and bonuses. PSOF ¶ 29, Exs. V, U, W. Defendant argues to the contrary that the general managers of the dealerships acted autonomously from the owners when it came to decisions regarding subjects like wages, wage increases, and bonuses. DSOF ¶ 29, Ex. 4 at 48:3-13.
Vickie Freeman provided limited advisory human resources services for Chester Group and the Chester Dealerships. PSOF ¶ 30, Ex. O at 27:13-21; DSOF ¶ 30, Ex. 5 at 162:13-163:1. Ms. Freeman’s primary role included taking care of administrative tasks like organizing paperwork and maintaining employment files for Chester Group and all of the Chester Dealerships. PSOF ¶¶ 31, 33, 35, Ex. O at 101:16-22; DSOF¶ 34, Ex. 2 at 22:15-20. Freeman maintained and updated the employee handbook distributed to all of the dealerships. PSOF ¶ 36, Ex. O at 101:23-102:2; DSOF ¶¶ 35, 36. Plaintiff alleges that Freeman also handled the health and auto insurance needs for all of the Chester Dealerships. PSOF ¶ 37, Ex. O at 127:4-6. Freeman further dealt with reporting, new hires, workers compensation claims, customer issues, and third-party contract disputes for all of the Chester Dealerships. PSOF ¶ 40, Ex. C at 19-23.
Plaintiff posits that certain Chester Group owners served in integrated managerial roles over all of the Chester Dealerships. See, e.g., PSOF ¶¶ 54, Ex. O at 53:12-54:1. The owners acted as Dealer Operators and assisted with some personnel decisions. PSOF ¶ 73, Ex. O at 30:6-31:3; DSOF ¶ 73, Ex. 5 at 31:11-23. And at least as to the Chester Mesa dealership, an owner acting as a Dealer Operator assisted with tactical decisions related to marketing and expansion. PSOF ¶ 81, Ex. Q at 65. Otherwise, general managers handled the day-to-day business of the Chester Dealerships. PSOF ¶ 107, Ex. O at 40:17-41:15, 55:5-10.
All Chester Dealerships share the same employee handbook. PSOF ¶ 82, Ex. O at 24:10-22, 25:10-25. On rare occasions employees were transferred from one Chester Dealership to another. PSOF ¶ 93, Ex. O at 29:2-5; DSOF ¶ 93, Ex. 5 at 28:9-29:16. The Chester Dealerships’ websites advertise the ability for employees to transfer between Chester Dealership locations. PSOF ¶ 94, Ex. R. All Chester Dealerships utilized the same management software as well as other software programs. PSOF ¶¶ 97, Ex. P at 12, 100, Ex. Q.
I. Plaintiff’s Motion for Partial Summary Judgment
A. Legal Standard
Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates “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). Substantive law determines which facts are material and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A fact issue is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. at 248). Thus, the nonmoving party must show that the genuine factual issues “‘can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.’” Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 477 U.S. at 250).
Although “[t]he evidence of [the non-moving party] is to be believed, and all justifiable inferences are to be drawn in [its] favor, ” the non-moving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations unsupported by facts. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). “A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . . or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c). “A trial court can only consider admissible evidence in ruling on a motion for summary judgment, ” and evidence must be authenticated before it can be considered. Orr v. Bank of Am., 285 F.3d 764, 773-74 (9th Cir. 2002).
42 U.S.C. § 1981a governs the damages available to a plaintiff bringing a claim under Title VII. In addition to outlining criteria relevant to the calculation of compensatory and punitive damages, the statute “sets a cap on certain types of compensatory damages, combined with punitive damages.” Ariz. v. ASARCO LLC, 773 F.3d 1050, 1056 (9th Cir. 2014). The cap differs depending on the number of employees employed by the relevant employer. Id. (citing § 1981a). At the high end, the cap allows for $300, 000 in certain designated damages for an employer with more than 500 employees; and at the low end, the cap limits employers with more than 14, but fewer than 101, employees to $50, 000 in possible damages. §§ 1981a(b)(3)(A), (D); see also § 1981a(b)(3) (delineating the available damages as the “sum of the amount of compensatory damages awarded under this section for pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, ” along with punitive damages). Thus, determining which entity or entities constitute the relevant employer is central to determining a plaintiff’s possible recovery. Here, Plaintiff argues that the Court should determine the following: first, that as a matter of law, the four factor single employer test typically used for determining statutory coverage under Title VII also applies to determining the number of employees relevant to § 1981a(b)’s damages cap; and second, that Defendant and its other allegedly related non-party entities, including Chester Group and all of the Chester Dealerships across the country, do in fact constitute a single employer for purposes of calculating the damages cap.
1. The Four Factor Single Employer Test
The Ninth Circuit applies a four factor test to determine whether distinct entities constitute a single employer for purposes of Title VII. See, e.g., Herman v. United Bhd. of Carpenters & Joiners of Am., Local Union No. 971, 60 F.3d 1375, 1383 (9th Cir. 1995). The factors considered are: “1) inter-relation of operations; 2) common management; 3) centralized control of labor relations; and 4) common ownership or financial control” (“four factor single employer test”). Id. (citation omitted); see also Anderson v. Pac. Mar. Ass'n, 336 F.3d 924, 929 (9th Cir. 2003). Plaintiff contends that the four factor single employer test is applicable to determining the scope of the employer used in calculating the number of employees relevant to establishing § 1981a(b)’s damages cap.
In Caudle v. Bristow Optical Co., 224 F.3d 1014 (9th Cir. 2000), the Ninth Circuit held that the district court did not abuse its discretion when it denied plaintiff’s post-trial motion to have the defendant and “its non-party corporate relative . . . declared a ‘single employer’ for purposes of applying the liability cap imposed by . . . § 1981a(b)(3).” Id. at 1021. The district court determined that the record as developed at trial provided an “insufficient [basis] to support an informed judgment on the issue of [the non-party’s] relationship to [defendant].” Id. at 1022. The post-trial motion, according to the district court, did not provide the defendant or the related non-party entity a chance to present evidence at trial refuting their relationship in order to limit the damages cap to the lowest possible amount. Id. Without first granting the parties the ability to present such evidence, the court could not enter an informed judgment on the issue. Id. Accordingly, the Ninth Circuit held that the district court’s ruling did not amount to an abuse of discretion. Id. In so doing, the Caudle court also tacitly acknowledged the applicability of the four factor single employer test in the context of § 1981a(b)’s damages cap calculation when it acknowledged that “in Greenway v. Buffalo Hilton Hotel, 951 F.Supp. 1039 (W.D.N.Y. 1997), a plaintiff who sought to evade the $200, 000 cap on damages for employers with fewer than 501 employees under . . . § 1981a(b)(3)(D) successfully moved after trial to have the defendant and several non-party hotels owned by the same person to be declared a single employer.” Caudle, 224 F.3d at 1022 n.5. The court in Greenway applied the same four factor single employer test analyzed in Herman. Greenway, 951 F.Supp. At 1056.
Defendant counters that while courts apply the four factor single employer test to determine whether an employer falls within the statutory grasp of Title VII’s fifteen employee requirement, see § 2000e(a), the rule cannot be extended to determine the number of employees applicable to § 1981a(b)’s damages cap. The Defendant cites no case for this proposition, which as Caudle’s citation of Greenway demonstrates, Caudle tacitly rejects. And notwithstanding the Caudle court’s tacit adoption of the four factor single employer test, when the question arises as to whether multiple entities constitute a single employer in the general context of Title VII cases, the Ninth Circuit has consistently applied the four factor single employer test cited by Plaintiff and originally applied in Childs. See, e.g., Childs v. Elec. Workers, et al., 719 F.2d 1379, 1382 (9th Cir. 1983) abrogated on other grounds by Swift v. Realty Execs. Nev.’s Choice, 211 F. App’x 571, 572 (9th Cir. 2006); Anderson, 336 F.3d at 929; Kang v. U. Lim Am., Inc., 296 F.3d 810, 815 (9th Cir. 2002); N.L.R.B. v. Don Burgess Const. Corp., 596 F.2d 378, 384 (9th Cir. 1979).
Further support for applying the four factor single employer test in this context comes from other Circuits, where “a number of courts . . . have determined that the inquiry into the identity of an employer for liability purposes is equivalent to the inquiry for determining the relevant employer when applying the statutory cap on punitive damages.” Parrish v. Sollecito, 280 F.Supp.2d 145, 156 (S.D.N.Y. 2003) (quoting Campbell v. Int’l Bhd. of Teamsters, 69 F.Supp.2d 380, 384 (E.D.N.Y. 1999) (citing Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1240 (2d Cir. 1995))); see also Vance v. Union Planters Corp., 209 F.3d 438, 447 (5th Cir. 2000); Goodwin v. Seven-Up Bottling Co. of Phil., 1998 WL 438488, at *8 (E.D. Pa. July 31, 1998) (citing NLRB v. Browning-Feris Indus. of Pa., Inc., 691 F.2d 1117, 1122 (3d Cir. 1982)); E.E.O.C. v. 704 HTL Operating, LLC, 2013 WL 5273219, at *5 (D.N.M. Aug. 16, 2013) (quoting Bristol v. Bd. of Cnty. Comm’rs, 312 F.3d 1213, 1218 (10th Cir. 2002 (en banc)); MacGregor v. Mallinckrodt, Inc., 2003 WL 23335194, at *9 n.9 (D. Minn. July 21, 2003) (citing Baker v. Stuart Broad. Co., 560 F.2d 389, 392 (8th Cir. 1977)); Story v. Vae Nortrak, Inc., 214 F.Supp.2d 1209, 1210 (N.D. Ala. 2001) (specifying that the ‘law of the case’ as determined by the Eleventh Circuit is that the single entity inquiry is applied in determining the size of the employer); cf. U.S. E.E.O.C. v. Custom Cos., Inc., 2007 WL 734395, at *4-5 (N.D. Ill. Mar. 8, 2007) (citing Papa v. Katy Indus., Inc., 166 F.3d 937 (7th Cir. 1999)) (applying a similar but not duplicate single employer test in the context of § 1981a(b)’s damages cap).
Defendant argues that this Court’s previous order on summary judgment controls and precludes Plaintiff’s attempt to consolidate Defendant and its separate entities into one employer. (See Doc. 147.) In the context of refusing to allow Plaintiff leave to conduct additional discovery pursuant to Federal Rule of Civil Procedure 56(d), and in turn postponing a ruling on the Defendant’s pending motion for summary judgment, the Order observed that the “appropriate count of employees, upon which the determination of the proper damages cap is based, should ...