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Trawick v. Tri-Star Restaurant Group, LLC

United States District Court, D. Hawaii

May 23, 2018

ELLESAR M. TRAWICK, individually and on behalf of all others similarly situated, Plaintiffs,
v.
TRI-STAR RESTAURANT GROUP, LLC; TRI-STAR RESTAURANT GROUP III, LLC d/b/a/ SARENTO'S TOP OF THE ‘I'; TRI-STAR RESTAURANT GROUP III, LIMITED LIABILITY COMPANY; TRI-STAR RESTAURANT GROUP IV, LLC d/b/a NICK'S FISHMARKET MAUI; and JOHN DOES 1-10; JANE DOES 1-10, DOE LIMITED LIABILITY CORPORATIONS 1-10, AND DOE OTHER ENTITIES 1-10, Defendants.

          ORDER DENYING PLAINTIFFS' MOTION TO REMAND

          Leslie E. Kobayashi United States District Judge

         Before the Court is Plaintiffs Elessar M. Trawick and Nathan Stroetz's (“Plaintiffs”) Motion to Remand (“Motion”), filed on October 12, 2017. [Dkt. no. 11.] Defendants Tri-Star Restaurant Group, LLC (“TSG”); Tristar Restaurant Group III, LLC d/b/a Sarento's Top of the “I”; Tri-Star Restaurant Group III, Limited Liability Company (“TSG3”); Tri-Star Restaurant Group IV, LLC d/b/a Nick's Fishmarket, Maui (“TSG4, ” collectively “Defendants” or “Tri-Star”)[1] filed their memorandum in opposition on March 12, 2018, and Plaintiffs filed their reply on March 19, 2018. [Dkt. nos. 18, 19.] This matter came on for hearing on April 2, 2018. On April 30, 2018, this Court issued an entering order ruling on the Motion. [Dkt. no. 28.] The instant Order supersedes that entering order. Plaintiffs' Motion is hereby denied for the reasons set forth below.

         BACKGROUND

         Trawick filed the original Complaint on July 25, 2017 in state court. [Notice of Removal of State Court Action to Federal Court (“Notice of Removal”), filed 9/12/17 (dkt. no. 1), Exh. A.] On August 21, 2017, the First Amended Complaint was filed, adding Stroetz as a plaintiff. [Id., Exh. B.] On August 25, 2017, Defendants filed an answer to the original Complaint. [Id., Exh. C.]

         Trawick was employed by Defendants as a waiter from approximately February 2015 to December 2016. Stroetz was employed by Defendants as a server from December 2010 until he became a captain in 2014. As of the filing of the First Amended Complaint, he was still employed as a captain. [First Amended Complaint at ¶¶ 1-2.] Defendants are a restaurant group that operates five restaurants on O`ahu and Maui. [Id. at ¶ 3.] However, only Sarento's and the Nick's Fishmarket Maui restaurant (“Nick's”) are referred to in the substantive allegations of the First Amended Complaint.[2] Plaintiffs bring this action as class action, [id. at ¶¶ 10-11, ] but the issue of class certification is not before the Court at this time.

         Plaintiffs allege Defendants “employ[] individuals engaged in commerce or in the production of goods for commerce and/or handling, selling, or otherwise working on goods or materials that have been moved in or produced in commerce by any person, as required by 29 U.S.C. § 206.” [Id. at ¶ 6.] Further, their “annual gross volume of business exceeds $500, 000, ” and they are “not an independently owned and controlled local enterprise within the meaning of 29 U.S.C. § 207(b)(3).” [Id. at ¶¶ 7-8.]

         Plaintiffs are among Defendants' tipped employees, which includes waiters, bussers, and bartenders. Defendants' tipped employees are paid hourly and participate in a tip pooling system. [Id. at ¶ 14.] Plaintiffs participated in the tip pool, which also includes management employees who do not usually receive tips, such as roving captains. [Id. at ¶¶ 17, 21.] According to Plaintiffs, “roving captains are actually assistant and general managers whose interactions with customers are de minimus” and who “are responsible for overseeing all of the restaurant's operations, the hiring and firing staff, purchasing food, supplies and equipment, and dealing with suppliers and vendors.” [Id. at ¶ 23.] Plaintiffs describe the tip pool protocol as follows:

18. During the relevant time period, Tri-Star takes a tip credit from every tipped employee for every hour a tipped employee works, including Plaintiffs.
19. For example, Tri-Star took a tip credit of $0.75 per hour from Plaintiff Trawick for the pay periods between August 16, 2016 and August 31, 2016, and between September 1, 2016 and September 15, 2016. During those pay periods, Plaintiff Trawick was paid below the minimum wage per hour less the tip credit.

[Id. at pg. 5.] Plaintiffs allege Defendants do not maintain accurate records of the hours Plaintiffs worked on a daily and weekly basis, and Defendants' operations at all of their restaurants are similar. [Id. at ¶¶ 25-26.] Plaintiffs contend Defendants' tip pool practices are illegal because it deprives the tipped employees of the “the full amounts of tips owed to them.” [Id. at ¶ 20.]

         According to Plaintiffs, Defendants: knowingly allowed roving captains to participate in the tip pool; [id. at ¶ 24;] willfully and/or recklessly failed to properly compensate Plaintiffs, in violation of Hawai`i law; [id. at ¶ 28;] and knew Plaintiffs were being under-compensated because they were splitting their tips with non-tipped employees and their hourly rates fell below minimum wage, [id. at ¶ 29]. Further, Defendants add a pre-set service charge to food and beverage bills “[f]or banquets, events, meetings, room service, and in other instances, ” without “clearly disclosing to Plaintiffs, . . . and Tri-Star's customers that a portion of the service charge was not distributed to the employees” who provided the food and beverage services to the customers. [Id. at ¶¶ 56-58.] The establishments also retained a portion of the service charges. [Id. at ¶ 59.]

         Plaintiffs allege the following claims: violation of the Hawai`i Wage and Hour Law, Haw. Rev. Stat. Chapter 387 (“Count I”); [id. at ¶¶ 39-46;] violation of the Hawai`i Payment of Wages and Other Compensation Law, Haw. Rev. Stat. Chapter 388 (“Count II”); [id. at ¶¶ 47-55;] and violation of Haw. Rev. Stat. § 481B-14, which also constitutes an unfair method of competition (“UMOC”), in violation of Haw. Rev. Stat. § 480-2 (“Count III”), [id. at ¶¶ 56-69]. Plaintiffs pray for the following relief: damages, including unpaid wages; liquidated damages; double or treble damages; prejudgment interest; attorney's fees and litigation costs/expenses; and any other appropriate relief. [Id. at pg. 13.]

         On September 12, 2017, Defendants removed this action based on federal question jurisdiction because either: 1) Plaintiffs' claims under Chapters 387 and 388 “are wholly dependent on and require an interpretation of the Fair Labor Standards Act (‘FLSA') and the federal tip pooling law (29 [U.S.C.] § 203(m)) and regulations”; or 2) Plaintiffs' claims under Chapters 387 and 388 “are baseless because there is only a federal remedy for the alleged tip pooling infractions.” [Notice of Removal at ¶ 4.] Defendants also assert there is supplemental jurisdiction over Count III. [Id. at ¶ 8.]

         The instant Motion followed. Plaintiffs argue the removal was improper because they assert claims under Hawai`i law, not federal law. Even if their claims require the interpretation of the FLSA, the federal issues are not so substantial as to create federal question jurisdiction.

         STANDARD

         28 U.S.C. § 1441(a) states, in pertinent part:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the ...

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