Mirasol Reyes v. Checksmart Financial
701 F. App'x 655
| 9th Cir. | 2017Background
- Reyes worked for Checksmart and alleges she was required to train tellers to offer a “Manager’s Special,” a transaction she contends violates California’s Deferred Deposit Transactions Law (CDDTL).
- She resigned, claiming stress from being complicit in Checksmart’s alleged illegal lending practices and sought damages for CDDTL violations and related employment claims.
- Defendants removed the case to federal court; the district court dismissed the CDDTL claim for lack of statutory standing and granted summary judgment for defendants on meal/rest-break and constructive-discharge claims.
- The Ninth Circuit reviewed de novo and affirmed the district court’s dismissal of the CDDTL claim for lack of statutory standing and its grants of summary judgment on the other claims.
- The majority held Reyes nonetheless had Article III standing, so the CDDTL dismissal could be affirmed in federal court rather than remanding to state court.
- A concurring judge agreed on the employment claims and statutory-standing conclusion but dissented on Article III standing, arguing the CDDTL claim was not fairly traceable to any injury and should have been severed and remanded to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statutory standing under CDDTL | Reyes argued she was harmed by being forced to promote loans that violate the CDDTL and thus may sue under the statute. | Defendants argued Reyes did not enter into CDDTL-proscribed transactions and thus is outside the statute's zone of interests. | Court: Reyes lacks statutory standing because she did not engage in the protected transactions; claim dismissed. |
| Article III standing for CDDTL claim | Reyes claimed her resignation (loss of employment) was injury fairly traceable to Checksmart’s alleged CDDTL violations. | Defendants contended any injury stems from employment conditions, not from CDDTL violations against customers, so not traceable. | Majority: Reyes has Article III standing (injury, traceability, redressability); concurrence: disagrees—injury not traceable to CDDTL; would remand that claim. |
| Meal and rest-break claims (Cal. law) | Reyes alleged Checksmart failed to provide lawful meal and rest periods. | Defendants produced evidence they provided bona fide relief from duty and relinquished control; employer not required to police employee use of breaks. | Court: Summary judgment for defendants—Reyes offered no evidence that breaks were not provided. |
| Constructive discharge (public policy) | Reyes asserted she was forced to resign because of employer misconduct, constituting constructive discharge. | Defendants argued conditions were not intolerable and no reasonable person would have no option but to quit. | Court: Summary judgment for defendants—Reyes did not show intolerable conditions or that a reasonable person would be forced to resign. |
Key Cases Cited
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) (scope of statutory “zone of interests” for private causes of action)
- Brinker Rest. Corp. v. Superior Court, 273 P.3d 513 (Cal. 2012) (employer need not police employees’ use of meal breaks; bona fide relief satisfies obligations)
- Turner v. Anheuser-Busch, Inc., 876 P.2d 1022 (Cal. 1994) (elements and standards for constructive discharge)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III standing requirements and statutory cannot override them)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (three-part irreducible constitutional minimum for standing)