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Fabro v. Aqua-Aston Hospitality, LLC

United States District Court, D. Hawaii

February 2, 2017

FAUSTINO FABRO, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiff,
v.
AQUA-ASTON HOSPITALITY, LLC, DOE DEFENDANTS 1-50, Defendants.

          ORDER AFFIRMING THE NOVEMBER 3, 2016 FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFF'S MOTION FOR REMAND AND DENY PLAINTIFF'S REQUEST FOR ATTORNEYS' FEES AND COSTS

          DERRICK K. WATSON United States District Judge.

         Plaintiff Faustino Fabro filed this action, on behalf of himself and an unidentified class of former co-workers, in Hawai‘i state court against his former employer, Defendant Aqua-Aston Hospitality, LLC, fka Aston Hotels & Resorts, LLC, dba Aston Waikiki Beach Hotel, and Doe Defendants 1-50 (“Aqua-Aston”). See Compl., CV 16-1-1139-06, ¶¶ 5-6, Dkt. No. 8-4 (identifying the suit as a class action where the class would include Fabro and unidentified “past and present housekeeping employees of the Aston Waikiki Beach Hotel”). Aqua-Aston subsequently removed the action to this Court (Dkt. Nos. 1, 7), and Fabro filed a motion for remand (Dkt. No. 10). On November 3, 2016, the Magistrate Judge entered his Findings and Recommendation to Grant Plaintiff's Motion for Remand and Deny Plaintiff's Request for Attorneys' Fee and Costs (“F&R”). Dkt. No. 15. Before the Court are Aqua-Aston's objections to portions of the F&R. Dkt. No. 17. For the reasons stated below, the Court ADOPTS the F&R, GRANTS Fabro's Motion for Remand, and DENIES Fabro's request for attorneys' fees and costs.

         BACKGROUND

         Fabro is a former “houseman” and “housekeeping inspector” at Aqua-Aston's Waikiki hotel. See Compl. ¶¶ 5, 13, Dkt. No. 8-4. On June 15, 2016, Fabro brought an action against Aqua-Aston in the Circuit Court for the First Circuit, State of Hawai‘i alleging, inter alia, that on “multiple occasions” since June 13, 2010, Aqua-Aston had (i) instructed Fabro and others “to report to work and to commence working at a certain time but not to clock in until after they had already commenced working, ” and (ii) altered Fabro's and others' time records, “and thereby avoided compensating said employees all wages due for the time worked as well as overtime compensation.” Compl. ¶¶ 16-17. As such, Fabro claims, Aqua-Aston willfully and deliberately violated Hawai‘i Revised Statutes (“HRS”) Sections 387-3 (maximum hours), 387-6 (employer's records), and 388-6 (withholding of wages). Compl. ¶¶ 18-19, 22-23. Aqua-Aston answered Fabro's complaint and filed a motion for summary judgment (“MSJ”) on July 1, 2016. Def.'s Answer to Compl., Dkt. No. 8-6; MSJ, Dkt. No. 8-7.

         In its MSJ, Aqua-Aston characterized the action as a suit for allegedly failing to pay wages and expenses required by the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq., as amended. Aqua-Aston also argued that Fabro and the proposed class are excluded from HRS Chapter 387's definition of “employees” because the FLSA prescribes the maximum hours that these individuals may work during any workweek, which is forty hours under both the FLSA and the HRS. See F&R at 4, Dkt. No. 15 (citing MSJ at 4). Fabro opposed Aqua-Aston's MSJ in an August 9, 2016 memorandum in opposition (“MIO”). Pl.'s Mem. in Opp'n to Def.'s MSJ, Dkt. No. 8-12 [hereinafter MIO to MSJ]. In that memorandum, Fabro questioned Aqua-Aston's threshold contention that it is an “enterprise engaged in commerce or in the production of goods for commerce” under the FLSA and argued that the FLSA is not the exclusive remedy for the alleged wage violations. MIO to MSJ at 19-20 (citing MSJ at 4-8; 29 U.S.C. §§ 203(r)(1), (s)(1)(A)). Aqua-Aston filed its reply in support of the MSJ on August 12, 2016. Reply, Dkt. No. 8-15. The Circuit Court subsequently denied Aqua-Aston's MSJ during an August 17, 2016 hearing. See Am. Notice of Removal, Ex. C, at 13, Dkt. No. 7-3 [hereinafter 8/17/16 Transcript].

         Aqua-Aston removed Fabro's action to federal court on August 23, 2016 (Dkt. No. 1) and filed an Amended Notice of Removal on August 31, 2016 (Dkt. No. 7). Aqua-Aston's removal petition is based on its assertion that this case requires the evaluation of federal questions, including the statutory construction of the FLSA. Am. Notice of Removal ¶ 5, Dkt. No. 7 (citing 28 U.S.C. § 1331)). Aqua-Aston argues that because it qualifies as an “enterprise engaged in commerce or in the production of goods for commerce” under the FLSA, Fabro is barred from seeking relief under HRS Chapter 387, and any basis for recovery would be grounded in federal law. Am. Notice of Removal ¶ 3 (citing 29 U.S.C. § 203(s)(1)(A); HRS § 387-1(12)).

         On September 21, 2016, Fabro filed his Motion to Remand to State Court (Dkt. No. 10) and argued that removal was improper under the “well-pleaded complaint rule” because no federal question appeared on the face of Fabro's complaint. See Mem. in Supp. of Mot. at 8, Dkt. No. 10-1 [hereinafter Remand Mem.]. To that end, Fabro argued that his MIO to MSJ did not “raise” the federal, FLSA issue either by arguing that Aqua-Aston is not an interstate enterprise within the meaning of the FLSA, or by citing to an unpublished decision by this Court.[1] Remand Mem. at 6-7. Aqua-Aston filed an MIO to Fabro's Motion to Remand on October 5, 2016 (Dkt. No. 12), and Fabro replied on October 18, 2016 (Dkt. No. 13).

         On November 3, 2016, the Magistrate Judge entered the F&R (Dkt. No. 15), recommending that Fabro's Motion for Remand be granted and that Fabro's included request for attorneys' fees and costs be denied. F&R at 2. Before the Court are Aqua-Aston's objections to portions of the F&R. See Def.'s Obj. to F&R, Dkt. No. 17. Fabro did not file a response to these objections. For the reasons stated below, the Court ADOPTS the F&R, GRANTS Fabro's Motion for Remand, and DENIES Fabro's request for attorneys' fees and costs.

         STANDARD OF REVIEW

         A motion to remand is a case-dispositive motion that requires the issuance of findings and recommendations if initially reviewed by a magistrate judge. See Flam v. Flam, 788 F.3d 1043, 1047 (9th Cir. 2015) (citing Williams v. Beemiller, Inc., 527 F.3d 259, 266 (2d Cir. 2008)); Keown v. Tudor Ins. Co., 621 F.Supp.2d 1025, 1029 (D. Haw. 2008). When a party objects to a magistrate judge's findings or recommendations, the district court must review de novo those portions to which the objections are made and “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc).

         Under a de novo standard, this court reviews “the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); United States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). Although the district court need not hold a de novo hearing, it is the court's obligation to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendations to which a party objects. United States v. Remsing, 874 F.2d 614, 618 (9th Cir. 1989).

         DISCUSSION

         Because Fabro's Complaint is based upon Hawai‘i state law and does not allege any federal cause of action, this Court lacks subject matter jurisdiction over the dispute. Therefore, Aqua Aston's removal to this Court was improper, and its objections to the F&R are overruled.

         Removal of an action from state to federal court is proper if the federal court would have had original jurisdiction over the action. 28 U.S.C. § 1441(a). Federal district courts “have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Aqua-Aston relies solely on federal question jurisdiction under 28 U.S.C. § 1331 as the basis for removal in this case. Am. Notice of Removal ¶ 7. The issue of whether federal question jurisdiction exists is governed by the “well-pleaded complaint rule, ” which provides that federal question jurisdiction may only be invoked when a federal question is presented on the face of a plaintiff's properly pleaded complaint. Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Generally, an action is deemed to “arise under” federal law where it is a “federal law [that] creates the cause of action” that the plaintiff has asserted. Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013). Actions asserting state-law claims may also be deemed to “arise under” federal law for purposes of federal question jurisdiction if the asserted state law: (1) “necessarily raise[s] a stated federal issue, ...


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