Linehaul Logistics, Inc., moves for summary judgment on Arlene Joseph's claim that Linehaul wrongfully terminated her employment because it retaliated against her for reporting unpaid overtime. Linehaul argues that the claim is barred by res judicata. Linehaul also moves for sanctions under Rule 11. Both motions are well taken for the reasons set forth below.
Linehaul terminated Joseph's employment on April 27, 2011, immediately after she had complained about unpaid overtime. Joseph sued Linehaul in state court alleging, among other things, that "[i]n response to [Joseph's] reports of a hostile work environment and state and federal wage and hour violations . . .
[Linehaul] immediately terminated [Joseph]." (Doc. 9-4 at 2.) In her complaint, Joseph didn't identify any specific statutes that Linehaul allegedly violated. Instead, she generically claimed that she was wrongfully discharged without good cause (Count One), that she was wrongfully discharged on account of retaliation (Count Two), and that Linehaul violated wage and hour laws (Count Three). Linehaul then removed the case to this Court.
While not pleaded specifically, the first two counts were presumably brought under Montana's Wrongful Discharge from Employment Act, Mont. Code Ann. §§ 39--2--901 to 39--2--915, and the third count was presumably brought under § 207 of the Fair Labor Standards Act. The final pretrial order and the jury instructions clarified the statutory bases of Joseph's claims-showing that (1) her wrongful discharge claims were, in fact, based on alleged violations of Montana's Wrongful Discharge from Employment Act (see docs. 9-6 at 2--3, 9-8, 9-9, 9-10) and (2) her wage and hour claim was brought under the Fair Labor Standards Act (see docs. 9-6 at 3.)
Joseph's case went to trial, and the jury returned a verdict in her favor on the wrongful discharge claim but not on the wage and hour claim. (doc. 9-11).
After trial, but before judgment was entered, Joseph moved to amend her complaint to add a new claim-a wrongful termination claim under § 215(a)(3) of the Fair Labor Standards Act, which makes it unlawful for an employer to terminate an employee for reporting or complaining about unpaid wages (including overtime). (See doc. 9-12; 20-1, 20-2.) Joseph's counsel, Stacey Weldele-Wade never explained why she couldn't have timely pleaded this claim in her complaint or otherwise raised it before trial. (Doc. 9-12 at 45--46.) And she expressly recognized that if she was to raise her § 215(a)(3) claim in a separate lawsuit (like this one), she would run into some problems with res judicata. (Doc. 9-12 at 51--52.)
Magistrate Judge Lynch, who presided over the case and trial, denied Joseph's motion to amend. Joseph cross-appealed that decision to the Ninth Circuit but then filed a new lawsuit in Montana state court, alleging the § 215(a)(3) claim and a tortious interference claim against Linehaul. Once again, Linehaul removed the new case to this Court.
The court shall grant summary judgment 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] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Linehaul's motions raise two questions: (1) Is Joseph's § 215(a)(3) claim barred by res judicata? and (2) should the Court impose sanctions under Rule 11 on Joseph because Joseph's claim is frivolous and was made for an improper purpose? Joseph's claim is barred by res judicata. No reasonable attorney could conclude otherwise. The § 215(a)(3) claim is frivolous in light of the prior litigation and, for that reason, Rule 11 sanctions are appropriate. Even so, the Court can't conclude that Joseph made her § 215(a)(3) claim for an improper purpose.
I. Motion for summary judgment
There are two components of res judicata: claim preclusion and issue preclusion (or collateral estoppel).*fn1 Both are squarely at issue here.
"Claim preclusion treats a judgment once rendered, as the full measure of relief to be accorded between the same parties on the same claim or cause of action." Robi v. Five Platters, Inc., 838 F.2d 318, 321 (9th Cir. 1988). "It is immaterial whether the claims asserted subsequent to the judgment were actually pursued in the action that led to the judgment; rather, the relevant inquiry is whether they could have been brought." Tahoe Sierra Preservation Council Inc. v. Tahoe Regional Planning Agency, 322 F.3d 1064, 1078 (9th Cir. 2003). In other words, the doctrine "'prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding.'" Robi, 838 F.3d at 321--22 (quoting Brown v. Felsen, 442 U.S. 127, 1331 (1979)).
Claim preclusion applies under federal law ...