Garrett v. Santa Cruz Valley Regional Hospital LLC ( 2023 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Stephanie Garrett, No. CV-22-00358-TUC-RCC 10 Plaintiff, ORDER CERTIFYING A CLASS 11 v. 12 SCVRH LLC, 13 Defendant. 14 15 Plaintiff alleges that on July 20, 2022, Defendant Santa Cruz Valley Regional 16 Hospital LLC (“SCVRH”) terminated approximately 300 employees without proper notice 17 and failed to pay earned paid time off in violation of the Worker Adjustment Retraining 18 and Notification (“WARN”) Act, 29 U.S.C. § 2101 et seq. and the Arizona Wage Act 19 (“AWA”), A.R.S. § 23-350 et seq. (Doc. 1.) The Parties agree that a class action is 20 appropriate but disagree as to the description of the Class and the content of the Notice. 21 I. CLASS DEFINITION 22 Plaintiff asks the Court to certify the class as follows: 23 Plaintiff and other similarly situated former employees, (i) who worked at or 24 reported to Defendant’s Facility and were terminated without cause on or about July 22, 2022, and within 90 days of that date, (ii) or who were 25 terminated without cause as the reasonably foreseeable consequence of the 26 mass layoff and/or plant closing ordered by Defendant on or about July 22, 2022, (iii) who are affected employees, within the meaning of 29 U.S.C. § 27 2101(a)(5), and (iv) who have not filed a timely request to opt-out of the 28 class. 1 (Doc. 18 at 8 (emphases added).) 2 SCVRH proposes the following definition for the class: 3 Plaintiff Stephanie Garrett and other former employees of SCVRH LLC dba “Santa Cruz Valley Regional Hospital,” who (i) did not retire or voluntarily 4 resign from their employment at Santa Cruz Valley Regional Hospital, and 5 (ii) were terminated without cause on July 22, 2022, or within 90 days before or after July 22, 2022, and (iii) who have not timely filed a request to opt out 6 of the class. 7 (Doc. 19 at 8.) 8 The Court addresses SCVRH’s proposed alterations in turn. 9 1) Refer to the “Hospital” rather than “Defendant’s Facility” and do not distinguish 10 between employees who “worked at” and those who “reported to” the Hospital 11 Plaintiff’s reply concedes that the terms “are equivalent” and “either will do.” (Doc. 20 12 at 3.) The Class will therefore include employees who “worked at” the “Santa Cruz Valley 13 Regional Hospital.” 14 2) Exclude employment loss due to resignation or retirement 15 Defendant claims employees who resigned or retired during the designated time 16 should be excluded from the Class under the plain language of the WARN Act. (Doc. 19 17 at 7.) Plaintiff argues exclusion is not appropriate because this is a mixed question of law 18 and fact that cannot be determined at the notice stage. (Doc. 20 at 5.) 19 Employers must calculate employment loss to “define[] those affected employees 20 to whom 60-days’ notice must be given under 29 U.S.C. § 2102(a).” Collins v. Gee W. 21 Seattle LLC, 631 F.3d 1001, 1005 (9th Cir. 2011); see 29 U.S.C. §§ 2101(a)(2)–(3). 22 “‘[E]mployment loss’ means [] an employment termination, other than a discharge for 23 cause, voluntary departure, or retirement . . . .” 29 U.S.C. § 2101(a)(6). However, "an 24 employee departing a business because that business was closing has not ‘voluntarily 25 departed’ within the meaning of the [WARN] Act." Collins, 631 F.3d at 1008. 26 The Court finds the exiting of an employee who resigned or retired after discovering 27 the hospital’s closure is not a voluntary departure or retirement and should not be excluded 28 from the Class. 1 3) Define whether the triggering event was a “mass layoff” or a “plant closing” 2 Defendant argues the Class description must define whether the triggering event 3 was a mass layoff or a plant closing. (Doc. 19 at 6.) Plaintiff agrees the event must 4 eventually be designated one or the other but claims this is more appropriately decided 5 after merits discovery. (Doc. 20 at 4.) 6 The Court agrees with Plaintiff. Plaintiff has alleged either/or occurred. (Doc. 1 at 7 4.) Whether Plaintiff has shown the terminations were due to a mass layoff or a plant 8 closing are factual and legal determinations more appropriately addressed after discovery. 9 This is particularly true since the parties disagree about the number of affected employees, 10 and a plant closing requires 50 or more affected employees, while a mass layoff requires 11 either (a) 33% of employees and at least 50 people, or (b) 500 employees. 29 U.S.C. §§ 12 2101(a)(2)–(3). The Class definition will therefore refer to both. 4) Exclude employees “who were terminated without cause as the reasonably 13 foreseeable consequence of the mass layoff and/or plant closing” and “affected 14 employees” 15 Defendant argues that “the WARN Act does not require notice in advance of 16 terminations that are purportedly the ‘reasonably foreseeable consequence’ of a covered 17 employment loss . . . .” (Doc. 19 at 6.) First, Defendant believes including “reasonably 18 foreseeable layoffs” would erroneously include “employee[s] who freely elected to resign 19 to pursue other employment opportunities or an employee who separated more than 90 20 days after the [triggering event].” (Id. at 7.) Second, Defendant claims that “affected 21 employees” only applies to prospective plant closings and mass layoffs and since the 22 Hospital closed in July 2022, “analyzing who may still reasonably be expected to 23 experience an employment loss in the future” is unnecessary. (Id. at 7–8.) 24 Plaintiff believes Defendant’s concerns are unfounded because under Ninth Circuit 25 case law those who resigned after learning of the closure should be included in the Class; 26 the Class definition is limited to employees terminated within 90 days of July 22, 2022, 27 and only “affected employees” can recover under the WARN Act. (Doc. 20 at 5–6.) 28 Under the WARN Act, employers are required to provide 60 days written notice to 1 affected employees prior to a plant closing or mass layoff. 29 U.S.C. § 2102(a)(1). “[T]he 2 term ‘affected employees’ means employees who may reasonably be expected to 3 experience an employment loss as a consequence of a proposed plant closing or mass layoff 4 by their employer.” 29 U.S.C. § 2101(a)(5). 5 As noted previously, employees who resigned or retired after learning of the 6 hospital’s closure are part of the Class. See Collins, 631 F.3d at 1008. Moreover, the Class 7 is limited to 90 days before and after the triggering event. Defendant’s first objection, 8 therefore, is unfounded. 9 Second, only affected employees can be putative Class members. Therefore, the 10 Court finds including affected employees is appropriate. However, the use of “affected 11 employees” renders inclusion of those “who were terminated as the reasonably foreseeable 12 consequence of the mass layoff and/or plant closing” a superfluous addition to the language 13 defining the Class. 14 5) Time limitation for those terminated “as the reasonably foreseeable consequence 15 of the mass layoff and/or plant closing” 16 Defendant asks that “reasonably foreseeable” layoffs include a defined date range. 17 (Doc. 19 at 5.) This concern is resolved with the elimination of employees whose 18 termination was reasonably foreseeable and the 90-day limit before and after the triggering 19 event. 20 Given the aforementioned, the Class definition will include: 21 Plaintiff and other similarly situated former employees who (i) worked at Santa Cruz Valley Regional Hospital (“SCVRH LLC” or the “Hospital”); (ii) 22 were terminated without cause on July 22, 2022, or within ninety (90) days 23 before or after July 22, 2022, as part of, or as the result of, a mass layoff or closing; (iii) are affected employees within the meaning of 29 U.S.C. § 24 2101(a)(5); and (iv) have not filed a timely request to opt-out of the class. 25 II. NOTICE OF CLASS ACTION 26 Under Federal Rule of Civil Procedure 23, a notice of class action must: 27 28 [C]learly and concisely state in plain, easily understood language: (i) the nature of the action; 1 (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; 2 (iv) that a class member may enter an appearance 3 through an attorney if the member so desires; (v) that the court will exclude from the class any 4 member who requests exclusion; 5 (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3). 6 7 Fed. R. Civ. P. 23. 8 Defendant agrees to sending the Notice of Class Action to the putative Class 9 members via U.S. Mail but objects to the content of the Notice. Defendant raises six 10 arguments against the proposed Notice. The Court has considered Defendant’s arguments 11 and concludes the following. 12 1) Number of Class Members 13 First, Defendant claims the number of potential Class members is incorrect. (Doc. 14 19 at 8.) Plaintiff says the number was “based on the information available to her at the 15 time” and believes “discovery will clarify the number of terminated employees.” (Doc. 20 16 at 6 n.6.) The Court finds the number of class members is unnecessary for proper Notice. 17 2) Defendant’s Notice Under WARN Act 18 Second, Defendant claims Plaintiff’s proposed Notice excludes the WARN Act 19 notice Defendant sent on June 20, 2022. (Doc. 19 at 8.) Plaintiff argues that the WARN 20 Act notice should not be referenced because the proposed Notice indicates that putative 21 Plaintiffs were informed on July 21, 2022 that they were to be terminated. (Doc. 20 at 6.) 22 The Federal Rules only require reference to the nature of the action and the claims, Plaintiff 23 contends, and additional alleged facts are unnecessary for the Notice. (Id.) 24 Because the earlier June 20, 2022 warning is relevant to the claims and defenses, 25 the Court has incorporated the WARN Act notice sent on June 20, 2022. 26 3) Defendant’s Defenses 27 Third, Defendant believes the Notice is biased because it does not represent 28 Defendant’s position on paid time off (“PTO”) payment or Defendant’s defenses. (Doc. 19 1 at 8.) Defendant believes there should be context to its position “that SCVRH asserts a 2 good faith defense to Plaintiff’s treble damages demand.” (Id.) Plaintiff counters that the 3 Notice includes Defendant’s defenses briefly and needs no further explanation. (Doc. 20 at 4 8.) 5 The Court will include Defendant’s language because it clearly and concisely 6 addresses Defendant’s defenses. 7 4) Legalese 8 Fourth, where the Notice does address defenses, Defendant asserts the legalese 9 creates bias and fails to be clear and concise as required by the Federal Rules. (Doc. 19 at 10 8.) 11 The Court has adjusted the Notice where legalese obscures the clarity of the Notice. 12 5) Statutory References 13 Fifth, the Notice has too many acronyms and statutory references, Defendant 14 asserts, and would prompt potential class members to inappropriately contact Plaintiff’s counsel. (Doc. 19 at 8.) Plaintiff responds that contacting Class counsel is not 15 inappropriate, and that to limit counsel’s ability to interact with putative Class members 16 requires specific reasons for the limitation, something Defendant has not provided. (Doc. 17 19 at 9 (citing Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981).) If contacted, Plaintiff states 18 counsel will observe its fiduciary duty and respond appropriately. (Id.) 19 The Court has eliminated unnecessary and repetitive acronyms or statutory 20 references. However, there is no reason to believe that the Notice will result in 21 inappropriate contact with Class Counsel. 22 6) Opt-Out 23 Sixth, Defendant objects to placing the financial burden on putative Class members 24 to mail in opt-out forms rather than allowing opt-out through text or email. (Doc. 19 at 8.) 25 Defendant proposes that Plaintiff include self-addressed, stamped envelopes to send opt- 26 out forms and also allow opt-out through email. (Id. at 10.) Defendant would like an opt- 27 out deadline of March 31, 2023. (Id.) Plaintiff states that the mail-in system is standard, 28 electronic means are unreliable, the cost is minimal, requiring a more burdensome method 1 of opting out is advisable, and Plaintiff does not expect many opt-outs. (Doc. 20 at 9–10.) 2 It is not unduly prohibitive for a putative Class member to incur the cost of a stamp 3 to opt out. However, the Court finds that email is an equally appropriate measure with no 4 associated expense. The deadline for opt-out forms will be set for thirty (30) days from the 5 mailing of the Notice. 6 III. CLASS REPRESENTATIVE AND CLASS COUNSEL 7 With no objection (Doc. 19 at 4), the Court appoints Plaintiff Stephanie Garrett as 8 Class Representative and René S. Roupinian as Class Counsel. 9 IT IS ORDERED: 10 1) GRANTING Plaintiff's Motion for Class Certification and Related Relief. (Doc. 11 18.) 12 2) A class (the “Class”) is certified comprised of Plaintiff and other similarly situated 13 former employees who (i) worked at Santa Cruz Valley Regional Hospital 14 (“SCVRH LLC” or the “Hospital”); (ii) were terminated without cause on July 22, 2022, or within 90 days before or after July 22, 2022, as part of, or as the result of, 15 a mass layoff or closing; (iii) are affected employees within the meaning of 29 16 U.S.C. § 2101(a)(5); and (iv) have not filed a timely request to opt-out of the class. 17 3) René S. Roupinian of RaisnerRoupinian LLP is APPOINTED Class Counsel. 18 4) The attached form of Notice to the Class is APPROVED. The Notice is found to 19 constitute sufficient notice to all Class members in compliance with the notice 20 requirements of Fed. R. Civ. P. 23. 21 5) Within ten (10) business days after the entry of this Order, Defendant shall provide 22 Class Counsel with the names and addresses of the Class members as noted in 23 Defendant’s records. 24 6) On or before ten (10) business days after receipt from Defendants of the names and 25 addresses of the Class members, Class Counsel shall provide notice of the pendency 26 of the class action lawsuit by mailing the attached Notice to all Class members to 27 their last known address as disclosed in Defendant’s records. 28 7) After mailing the Notice to all Class Members, Class Counsel shall serve and file a 1 sworn statement affirming compliance with this Order. 2 8) The deadline for any Class Member to opt-out of the Class shall be thirty (30) days 3 from the date of mailing of the Notice. 4 9) After the opt-out deadline has expired, Class Counsel shall serve and file a sworn 5 statement including the names of any persons who have opted out of the Class. 6 Dated this 2nd day of March, 2023. 7 8 9 (J Dp Cb — Honorable Raner ©. Collins 11 Senior United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- 1 2 NOTICE OF CLASS ACTION LAWSUIT 3 PLEASE READ THIS NOTICE CAREFULLY AS IT MAY AFFECT YOUR 4 LEGAL RIGHTS 5 WHY AM I RECEIVING THIS NOTICE? 6 This Notice is to alert you to a lawsuit that has been filed by Stephanie Garrett, RN, 7 a former hospital employee, against SCVRH LLC dba Santa Cruz Valley Regional 8 Hospital (“Hospital”). The lawsuit is pending in the United States District Court for the 9 District of Arizona, and is captioned Stephanie Garrett et al. v. SCVRH LLC, Case No. 10 4:22-cv-00358-RCC (“Lawsuit”). Ms. Garrett alleges her rights and the rights of Class 11 Members were violated under the Worker Adjustment and Retraining Notification Act 12 (“WARN Act”), 29 U.S.C. § 2101 et seq. and Arizona Wage Act (“AWA”), A.R.S. § 23- 13 350 et seq. Ms. Garrett is seeking to recover wages and benefits for each Class Member. 14 Ms. Garrett brought the Lawsuit on behalf of herself and a class of similarly situated 15 employees who were affected by terminations without cause within ninety (90) days of 16 July 22, 2022. 17 You are being notified of the Lawsuit so you can decide whether to (i) remain a 18 Class Member, in which case you will be represented by Class Counsel (defined below) 19 and be bound by the results of the Lawsuit, or (ii) opt out of the Class, in which case your 20 right to pursue legal relief remains intact. 21 WHAT IS THE LAWSUIT ABOUT? 22 Ms. Garrett asserts claims against Santa Cruz Valley Regional Hospital, alleging 23 that she and other employees of the Hospital did not receive notice sufficiently in advance 24 of their discharges as required by the WARN Act. Ms. Garrett seeks to recover back pay 25 for the period in which she alleges employees were not provided sufficient notice of 26 termination, as well as the value of benefits she alleges would have been provided during 27 the notice period. Ms. Garrett also alleges that she and other employees did not receive 28 their paid time off balances at the time of their termination as required by the AWA. She 1 therefore seeks to recover paid time off wages and related damages. The Hospital denies 2 these claims, as more specifically addressed below. 3 WHAT ARE THE CLAIMS AND DEFENSES? 4 SCVRH LLC previously operated and did business as Santa Cruz Valley Regional 5 Hospital, a full-service acute care facility at 4455 S. I-19 Frontage Road, Green Valley, 6 Arizona. On June 20, 2022, the Hospital provided written notice to its employees that it 7 expected to cease operations, and therefore would be terminating the employment of most 8 of its employees on August 20, 2022. On July 21, 2022, the Hospital notified its employees 9 that many of them would be permanently discharged without cause on July 22, 2022. 10 On August 11, 2022, Ms. Garrett filed a class action lawsuit against the Hospital, 11 alleging that the mass layoff was carried out without giving notice to the employees sixty 12 (60) days in advance and that the Hospital failed to pay its employees earned PTO. 13 On October 17, 2022, the Hospital answered the Complaint and acknowledged that 14 not all employees received sixty (60) days’ advance notice prior to their terminations; however, the Hospital asserts that it is not liable under the WARN Act because the 15 accelerated Hospital closure and employee terminations resulted from unforeseeable 16 business circumstances and that the Hospital gave as much notice as was practicable under 17 the circumstances. The Hospital also maintains that it was actively seeking to complete a 18 sale of the Hospital sixty (60) days before the terminations and that it reasonably and in 19 good faith believed that issuing notices sooner would have prevented the Hospital from 20 completing the transaction, which it reasonably believed would postpone or prevent the 21 layoffs. The Hospital also disputes the amount of paid time off damages claimed by Ms. 22 Garrett and the putative class. 23 WHO ARE THE POTENTIAL CLASS MEMBERS? 24 The Court has certified this Lawsuit as a class action. The Court defines the Class 25 as follows: 26 27 Plaintiff and other similarly situated former employees who (i) worked at Santa Cruz Valley Regional Hospital (SCVRH LLC); (ii) were terminated 28 without cause on July 22, 2022, or within ninety (90) days before or after 1 July 22, 2022, as part of, or as the result of, a mass layoff or closing; (iii) are affected employees, within the meaning of 29 U.S.C. § 2101(a)(5); and (iv) 2 have not filed a timely request to opt-out of the class. 3 WHAT TO DO NEXT? 4 1. If you DO want to be a Class Member: 5 If you wish to be a member of the class, you do not need to do anything, and you 6 will receive whatever benefits you may be entitled to if you are determined to be eligible 7 as a Class Member. If you are a Class Member, you will be bound by any judgment or 8 Court-approved settlement entered by the Parties – whether favorable or unfavorable. 9 Before Court approval, you, as a Class Member, will receive notice of any proposed 10 settlement and will be afforded an opportunity to object to the settlement. As a Class 11 Member you may choose to appear and be represented by your own counsel. 12 2. If you DO NOT want to be a Class Member: 13 If you wish to be excluded from the Class, you must sign and return the enclosed 14 opt-out form via U.S. Mail to Raisner Roupinian LLP, 270 Madison Avenue, Suite 1801, 15 New York, New York, 10016, attn: René S. Roupinian, or email the completed opt-out 16 form to René Roupinian at rr@raisnerroupinian.com. The form must be postmarked no 17 later than [DATE]. If your opt-out form is received after the deadline, it will not be 18 effective, you will be considered a Class Member, and you will be bound to the same extent 19 as other Class Members. If, however, you timely opt out, you reserve your rights under the 20 WARN Act and Arizona Wage Act, but you will not receive any relief that may be awarded 21 to Class Members in the Lawsuit. 22 WHO HAS BEEN APPOINTED AS CLASS REPRESENTATIVE AND CLASS 23 COUNSEL? 24 The Court has appointed Stephanie Garrett as the Class Representative. The Class 25 Members are represented by the law firm, Raisner Roupinian LLP, 270 Madison Avenue, 26 New York, New York 10016, (212) 221-1747. If you need additional information or have 27 questions about your participation in the Lawsuit, you may contact René Roupinian of 28 Raisner Roupinian LLP at (212) 221-1747 or email rr@raisnerroupinian.com. Please do 1 not call or contact the Court, the Hospital, or the Hospital’s legal counsel. 2 THE COURT HAS NO POSITION ON THE MERITS 3 The Court has taken no position regarding the merits of the Plaintiff’s claims or 4 Defendant’s defenses. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 OPT-OUT FORM 2 3 Garrett v. SCVRH LLC 4 United States District Court for the District of Arizona 5 Case No. 4:22-cv-00358-RCC 6 7 I have read the foregoing Notice of Class Action Lawsuit and understand its 8 contents. I DO NOT want to be a Class Member in the Lawsuit and DO NOT want to be 9 bound by the outcome of the Lawsuit. I understand that I hereby reserve my right to pursue 10 relief separate and apart from the Class certified in the Lawsuit. 11 Name (printed or type): _______________________________________ 12 Signature: __________________________________________________ 13 Address: ___________________________________________________ 14 Telephone: _________________________________________________ 15 Date: ______________________________________________________ 16 17 If you DO NOT wish to be included in the Lawsuit, send this completed form to: 18 Raisner Roupinian LLP 19 270 Madison Avenue, Suite 1801 20 New York, New York 10016 21 Attn: René S. Roupinian 22 or scan and email a copy of this form to rr@raisnerroupinian.com by [DATE]. 23 24 25 26 27 28