On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2350-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Gilroy and Simonelli.
In this action, brought pursuant to the Fair Labor Standards Act (FLSA), 29 U.S.C.A. §§ 201-219, and the New Jersey Wage and Hour Law (NJWHL), N.J.S.A. 34:11-4.1 to -67, plaintiffs appeal from the October 9, 2007 Law Division order denying their motion for class certification pursuant to Rule 4:32-1 for the NJWHL claim; the November 27, 2007, order denying their motion for reconsideration; and the May 9, 2008 order denying without prejudice the motion of plaintiff Virginia Ortiz (Ortiz) for an award of attorneys' fees and costs. We dismiss the appeal of the May 9, 2008 order as moot, and we affirm in all other respects.
Plaintiffs are immigrant workers who were employed by defendants on an hourly basis in such positions as waiters and waitresses, busboys, cooks, bakers, kitchen workers, cleaning staff and delivery persons. They claimed that defendants paid them less than minimum wage for the hours they worked. One of the plaintiffs reported defendants to the New Jersey Department of Labor (DOL), whose Division of Wage and Hour Compliance subsequently determined that defendants had violated the NJWHL.
Plaintiffs filed their initial complaint in August 2004, individually and as representatives of other employees, alleging violations of the FLSA and NJWHL, and tortious and fraudulent conversion of their and the other employees' salaries. (Pa1-9)
In an amended complaint, plaintiffs added claims for defendants' violation of N.J.S.A. 2C:20-20; the New Jersey Racketeer Influenced and Corrupt Organizations Act, N.J.S.A. 2C:41-1 to -6.2; 18 U.S.C.A. § 1589 and § 1590; and intentional and negligent infliction of emotional distress. Plaintiffs claimed, in part, that defendants failed to (1) pay prevailing minimum wages; (2) pay time and one-half of the regular hourly wages for hours worked in excess of forty per week; (3) maintain records of the amount of hours worked; (4) maintain records of the amount of wages paid; (5) accurately report the amount of wages paid; and (6) establish a tip pool arrangement within the meaning of FLSA and the NJWHL. Plaintiffs also alleged that defendants repeatedly deducted monies from salaries for reasons not authorized by N.J.S.A. 34:11-4.1; filed false reports of wages with the Internal Revenue Service, New Jersey Department of Treasury and the DOL; engaged in human trafficking; and threatened and intimidated plaintiffs and other employees. Plaintiffs sought damages for unpaid minimum wages and one and one-half times their regular hourly wage for each hour of work over 40 hours less any amounts actually paid and for improper deductions from their salaries, compensatory damages for pain, humiliation and emotional and economic distress, punitive and treble damages, pre-judgment interest, and attorneys' fees and costs.
On September 4, 2007, plaintiffs filed a motion pursuant to Rule 4:32-1(b)(3) for class certification as to the NJWHL claim. On October 9, 2007, the trial judge entered an order denying class certification pursuant to that rule but certifying the action as a FLSA collective action. The judge noted that the court could not consider both a FLSA collective action and a state class action under Rule 4:32-1. Ultimately, however, the judge denied the motion for lack of commonality and predominance of individual issues, finding as follows:
First of all, the main, important reason is that the rule we're dealing with is [Rule] 4:32-1, [which] as I said requires a twofold analysis with respect to the class action. First, let's start with [Rule] 4:32-1, subparagraph (b), subparagraph (1), et cetera. I am dealing with wage earners. I am dealing with wage earners however within the class that may be separately treated. For example, as I understand it, some may be cooks, people who deal with cleaning, chefs, things of that nature that are based on an hourly basis, and they are treated differently by way of compensation than waiters and waitresses under the appropriate statutes. So the class that we are dealing with is all employees. It's too encompassing, and so those people who represent, purport to represent everybody factually we cannot make that determination in a class action suit. So I think initially that there is no common[ality] within all of the individual members of the purported class.
The judge also concluded that because the complaint was originally filed on August 9, 2004, and a trial had been previously scheduled, it was "too late" to certify the class in October 2007. The judge further concluded that certifying the class would require a re-opening of discovery as to the amount of each plaintiff's damages.
Plaintiffs filed a motion for reconsideration. In a written opinion rendered November 27, 2007, the judge concluded that plaintiffs violated Rule 4:32-2(a) by their delay in bringing the motion three years after the filing of the initial complaint and after the discovery end date and a scheduled trial date. The judge also concluded that the questions of law or facts common to the members of the class did not predominate over questions affecting only individual members. R. 4:32-1(b)(3). He found that (1) although the class would consist of persons who were hourly wage earners, some of the plaintiffs were waiters and waitresses who are treated differently on the hourly wage status because of the availability of tips; (2) the allegation of defendants' failure to establish a tip pool arrangement applied only to those individuals considered "wait staff;" (3) the allegations of conversion were unique to an individual and not the general class; (4) the violation of N.J.S.A. 2C:20-20 predominately involved claims by individuals; and (5) the emotional distress claims were all individual claims not common to the members of the proposed class. The judge entered an order on November 27, 2009 denying the motion.
In the interim, on December 31, 2007, Ortiz accepted defendants' offer of judgment in the amount of $6,500. She filed a motion for entry of judgment in that amount and for attorneys' fees and costs, which the judge denied without prejudice. We denied Ortiz's motion for leave to appeal. Subsequently, the judge entered judgment in Ortiz's favor for $6,500 nunc pro tunc to March 28, 2008.
On October 9, 2008, the judge entered a default judgment against defendants. On December 4, 2008, the judge entered judgment in favor of the remaining plaintiffs in amounts ranging from $8,915.36 to $76,670.76, plus attorneys' fees of $753,807.60 and costs of $35,664.30.
On appeal, appellants contend that in denying their motion for class certification pursuant to Rule 4:32-1, the trial judge erred (1) in holding that he lacked jurisdiction over conjoined FLSA and NJWHL claims; (2) in finding that plaintiffs failed to meet the commonality requirement of Rule 4:32-1(a)(2) because the proposed class includes both tipped and non-tipped hourly employees; (3) in finding that individual issues predominate over issues common to the class; and (4) in finding that it was too late to grant class certification. Plaintiffs ...