Posted August 15th, 2018.
By Cara Bayles
Law360, San Francisco (August 15, 2018, 9:53 PM EDT) — A California federal judge said Wednesday that he will need to see Ogletree Deakins Nash Smoak & Stewart PC’s contract with a former nonequity shareholder before deciding whether to transfer her proposed gender bias class action, send it to arbitration or keep it in his court.
Ogletree has sought to transfer the case from California’s Northern District to the Central District, saying an arbitration provision in named plaintiff Dawn Knepper’s contract mandates her claims be hashed out in arbitration in Orange County. Knepper has sought a finding the arbitration provision is invalid.
Wednesday’s hearing in San Francisco was supposed to determine whether Knepper could add three individual defendants, four named plaintiffs and new breach of contract and breach of fiduciary duty claims in an amended complaint. But U.S. District Judge William Orrick said he couldn’t decide that or the transfer question until he decided whether a valid agreement exists, adding, “The briefing on this issue is scant.”
“You need to figure out and brief for me what this agreement is all about,” he said. “Otherwise, I’ve got a class action that’s up here with women all over the country, and who knows what I might do.”
Knepper, a former nonequity shareholder in the firm’s Orange County office, hit the labor law powerhouse with a proposed class action in January, alleging the firm routinely underpaid female attorneys and that its leadership amounted to a boys’ club.
When she brought her initial suit, Knepper filed a parallel complaint seeking a declaratory judgment invalidating her contract’s arbitration agreement, a provision that waives her rights to pursue a class action and obligates both parties to arbitrate her claims in the Central District.
Ogletree asked to have the suit transferred to Orange County in April, saying the Central District makes more sense under all of the factors federal courts usually take into account for venue selection because it is home to most members of the proposed classes and both sides’ potential witnesses. The law firm also said the arbitration provision in Knepper’s contract covered the dispute and required that all such proceedings be arbitrated in the Central District.
During Wednesday’s hearing, Ogletree attorney Nancy L. Abell of Paul Hastings LLP accused Knepper of bringing the suit in San Francisco knowing it wasn’t the most convenient forum.
“By filing up here, she made it impossible for us to file for arbitration in the forum where it should take place,” she said.
Judge Orrick said if he found the case was ripe for arbitration he would send it to Orange County and that he wouldn’t preclude discovery there. But, he added, “It’s not going down there until I know more about what this agreement is.”
Knepper’s attorneys asked on Wednesday for limited discovery about the contract, saying it wasn’t clear whether their client had ever agreed to to the arbitration provision or opted out of it via email.
“There’s not a signed arbitration agreement here,” said Knepper’s attorney Leigh Anne St. Charles of Sanford Heisler Sharp LLP. “So far, there’s only circumstantial evidence of emails back and forth. We have no idea if this is a complete record of correspondence. So far, there’s nothing to an HR representative or attorney saying, ‘I’ll get this in today.’”
Abell countered that the arbitration provision didn’t require a signature and partners had to opt out of it for the contract to be invalid.
In a statement, Ogletree said it was disappointed that no conclusions were reached at the hearing and that it looks forward to “resolving this dispute in the appropriate venue and forum as soon as possible.” It also noted the firm has gotten top marks in Law360’s Glass Ceiling Report.
“Equal opportunity has been a core principle of Ogletree Deakins since the firm’s founding, and we do not tolerate discrimination of any kind — gender or otherwise,” the firm said in a statement. “We will confidently defend the firm against these allegations as we remain steadfast in our commitment to equal opportunity for all.”
Attorneys for Knepper could not be reached for additional comment Wednesday.
Knepper is represented by David Sanford, Danielle A. Fuschetti and Leigh Anne St. Charles of Sanford Heisler Sharp LLP.
Ogletree is represented by Nancy L. Abell of Paul Hastings LLP.
The case is Knepper v. Ogletree Deakins Nash Smoak & Stewart PC, case number 3:18-cv-00303, in the U.S. District Court for the Northern District of California.
–Additional reporting by Dorothy Atkins, Emma Cueto, Ryan Boysen and Vin Gurrieri. Editing by Jill Coffey.