Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Livi v. Hyatt Hotels Corp.

United States District Court, E.D. Pennsylvania

November 6, 2017

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

          MEMORANDUM

          ANITA B. BRODY, JUDGE

         Plaintiff Nancy Livi (“Livi”) brings suit on behalf of herself and a proposed class[1] 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-class[3] of banquet servers against Hyatt for violation of the Philadelphia Administrative Code, § 9-614.[4] Defendants[5] move for summary judgment on all remaining counts[6] of the Complaint. For the reasons set forth below, I will grant Defendants' motion for summary judgment in its entirety.

         I. BACKGROUND[7]

         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 is also 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 discouraging Banquet 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 captain[9] 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 the distribution 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 subclass, 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 any defendant.” 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 jurisdiction[12] 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 that any class member is a citizen of a state different from any defendant is met because Livi is a Pennsylvania citizen and thus from a different state than Hyatt Corporation and HHC (“Hyatt Defendants”), which are citizens of Delaware and Illinois.[13] The only outstanding issue is whether either of the two mandatory exceptions, the local controversy exception and the home state exception, is applicable.

         A. Local Controversy Exception

         The local controversy exception requires courts to decline to exercise jurisdiction over class actions that otherwise meet CAFA's jurisdictional requirements where all of the following elements are met:

(1) greater than two-thirds of the putative class are citizens of the state in which the action was originally filed; (2) at least one defendant is a citizen of the state in which the action was originally filed (the “local defendant”); (3) the local defendant's conduct forms a significant basis for the claims asserted; (4) plaintiffs are seeking significant relief from the local defendant; (5) the principal injuries occurred in the state in which the action was originally filed; and (6) no other class action asserting the same or similar allegations against any of the defendants had been filed in the preceding three years.

Vodenichar, 733 F.3d 497, 506-07 (summarizing 28 U.S.C. § 1332(d)(4)(A)).

         It seems obvious that the first, second, fourth, fifth and sixth elements of this exception are met. The third element, that the local defendant's[14] conduct forms a significant basis for the claims asserted, requires further analysis. Therefore, it must next be determined, pursuant to the third element, whether either of the Bellevue Defendants' conduct forms a “significant basis for the claims asserted.”

         Under the “significant basis” provision, “[t]he focus is on the conduct in which the local defendant allegedly engaged and the alleged number of people impacted by it.” Vodenichar, 733 F.3d at 507 n.8. This provision also requires comparing the local defendant's alleged conduct to the conduct of all of the defendants. Kaufman, 561 F.3d at 156. “If the local defendant's alleged conduct is a significant part of the alleged conduct of all the Defendants, then the significant basis provision is satisfied.” Id. Furthermore, the local defendant's purported conduct “must be an important ground for the asserted claims in view of the alleged conduct of all the Defendants.” Id. at 157 (emphasis in original).

         Livi alleges in the Complaint that the Defendants violate the PMWA, the WPCL, the Philadelphia Administrative Code, and are unjustly enriched by purportedly not paying the Banquet Servers a proper overtime wage and by not distributing the entirety of the collected service charges to the Banquet Servers. Hyatt Corporation is the entity that hires, supervises and pays the Banquet Servers, and therefore is the defendant that allegedly does not pay the proper overtime wage to the Banquet Servers and does not distribute the entirety of the collected service charges to the Banquet Servers. Thus, the entity whose alleged conduct forms the basis of the asserted claims is Hyatt Corporation, an out-of-state defendant. The Bellevue Defendants, the Pennsylvania corporations, are therefore not the entities responsible for hiring, supervising and paying the Banquet Servers, and their actions are thus not a significant part of the alleged conduct of all Defendants nor an important ground for the asserted claims. Therefore, because an element of the local controversy exception fails, the local controversy exception has not been met.

         B. Home State Exception

         Under the home state exception, a district court must decline to exercise jurisdiction over a class action that otherwise meets the CAFA jurisdictional requirements, if two-thirds or more members of all proposed plaintiff classes and the “primary defendants” are citizens of the State in which the action was originally filed. 28 U.S.C. § 1332(d)(4)(B).

         The first part of this exception is met here because, as described above, over two-thirds of the members of all proposed plaintiff classes are Pennsylvania residents, and therefore citizens of the state in which the action was originally filed. The applicability of this exception hinges on a determination of which entity or entities are the primary defendants. The home state exception only applies if all of the primary defendants are citizens of the state in which the action was filed, and therefore a determination that a non-local defendant is a primary defendant renders the home state exception inapplicable. Vodenichar, 733 F.3d at 506. Thus, if one or both of the Bellevue Defendants are the only primary defendants, then the requirements of this exception have been met and the Court must decline jurisdiction. If however, either of the Hyatt Defendants, the out-of-state defendants, is a primary defendant, then the requirements of the home state exception have not been met, and the Court may accept jurisdiction under CAFA.

         The Third Circuit has stated that:

courts tasked with determining whether a defendant is a “primary defendant” under CAFA should assume liability will be found and determine whether the defendant is the “real target” of the plaintiffs' accusations. In doing so, they should also determine if the plaintiffs seek to hold the defendant responsible for its own actions, as opposed to seeking to have it pay for the actions of others. Also, courts should ask whether, given the claims asserted against the defendant, it has potential exposure to a significant portion of the class and would sustain a substantial loss as compared to other defendants if found liable.

Id. at 505-06.

         Pursuant to Vodenichar, a court must consider “whether the defendant: (1) is the ‘real target' of the plaintiff's allegations; (2) has potential exposure to a significant portion of the class; and (3) would sustain a substantial loss as compared to other defendants if found liable.” Torres v. CleanNet, U.S.A., Inc., No. 14-2818, 2014 WL 5591037, at *5 (E.D. Pa. Nov. 4, 2014) (citing Vodenichar, 733 F.3d at 505-06). As to the first factor, the “real target” is the defendants that plaintiffs allege are the real wrongdoers, as opposed to defendants who may have to pay because of the actions of others. Id. Regarding the second and third factors, “the Third Circuit has explained that a district court should ‘focus on the number of class members purportedly impacted by defendant's alleged actions and the amount the defendant may lose if found liable' in determining whether a defendant has potential exposure to a significant portion of the class and would sustain a substantial loss.” Id. In doing so, the court must assume liability will be established. Vodenichar, 733 F.3d 497 at 505. As noted above, because the home state exception only applies if all of the primary defendants are citizens of the state in which the action was filed, a determination that a non-local defendant is a primary defendant renders the home state exception inapplicable. Id. at 506.

         Here, Hyatt Corporation is clearly a “primary defendant, ” and therefore the home state exception is inapplicable. Applying the first factor, Hyatt Corporation is the “real target” of Livi's allegations because, as described above, it is the entity whose alleged conduct forms the bases of the allegations in the Complaint, and is therefore directly liable to the proposed class and sub-class of Banquet Servers. Applying the second and third factors, Hyatt Corporation has potential exposure to the entire class, as the entity responsible for hiring, supervising, and paying all of the members of the proposed class and sub-class of Banquet Servers. Hyatt Corporation would also sustain the greatest loss if found liable, as the entity responsible for the hiring, supervising and paying of all of the members of the proposed class and sub-class of Banquet Servers and as the entity directly responsible for actions underlying the claims in the Complaint. Because Hyatt Corporation is a non-local defendant and a primary defendant, the home state exception does not apply. The Court therefore has jurisdiction to decide Hyatt's motion for summary judgment.

         III. LEGAL STANDARD

         Summary judgment is granted “if the movant shows 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). A fact is “material” if it “might affect the outcome of the suit under the governing law . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “genuine” if the evidence would permit a reasonable jury to return a verdict for the nonmoving party. Id. In ruling on a motion for summary judgment, the court must draw all inferences from the facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         The moving party “always bears the initial responsibility of informing the district court of the basis for its motion.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After the moving party has met its initial burden, the nonmoving party must then “make a showing sufficient to establish the existence of [every] element essential to that party's case, and on which that party will bear the burden of proof at trial.” Id. at 322. Both parties must support their factual positions by: “(A) citing to particular parts of materials in the record . . .; 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)(1). The materials in the record that parties may rely on include “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). In opposing a motion for summary judgment, the nonmoving party may not “rely merely upon bare assertions, conclusory allegations or suspicions.” Fireman's Ins. Co. of Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982).

         In essence, the inquiry at summary judgment is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.

         IV. DISCUSSION

         Four counts[15] of the Complaint remain before the Court:

(1) Count II: Violation of the PMWA for failure to pay Livi and the proposed class a rate of 1.5 times their regular hourly wage for overtime hours worked;
(2) Count III: Violation of the PMWA for the retention of a portion of the service charges ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.