Free Answer to Amended Complaint - District Court of Arizona - Arizona

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LATHAM & WATKINS LLP Joel E. Krischer (California SBN 066489) (admitted pro hac vice) [email protected] Joanna R. Wolfe (California SBN 217409) (admitted pro hac vice) [email protected] 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 SEYFARTH SHAW LLP Andrew M. Paley (California SBN 149699) (admitted pro hac vice) [email protected] 2029 Century Park East, Suite 3300 Los Angeles, California 90067-3063 Telephone: (310) 277-7200 Facsimile: (310) 201-5219 Attorneys for Defendants Allstate Insurance Company, Allstate New Jersey Insurance Company, Karl Meckert and Kim Lowe

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

IN RE ALLSTATE INSURANCE CO. FAIR LABOR STANDARDS ACT LITIGATION

MDL NO. 1541

LEONARD GAGLIONE, et al., 21 Plaintiffs, 22 vs. 23 24 25 26 27 28
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No. CIV-04-15-PHX-PGR DEFENDANTS' ANSWER AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT Assigned to the Hon. Paul G. Rosenblatt

ALLSTATE INSURANCE COMPANY, ALLSTATE NEW JERSEY INSURANCE COMPANY, KARL MECKERT, and KIM LOWE, Defendants.

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Defendants Allstate Insurance Company, Allstate New Jersey Insurance Company, Karl Meckert, and Kim Lowe ("Allstate" or "Defendants"), for their answer to the Amended Complaint (the "Complaint"), filed herein by Plaintiffs Leonard Gaglione, et al. (collectively "Plaintiffs") on behalf of themselves and alleged similarly situated employees, in In re Allstate Insurance Co. Fair Labor Standards Litigation, MDL No. 1541, respond and allege as follows: 1. Defendants, and each of them, deny, generally and specifically, in

the conjunctive and disjunctive, each and every cause of action and allegation contained within the Complaint including but not limited to Paragraph l of the Complaint and the Complaint as a whole, and further deny that Plaintiffs have suffered damages as alleged in the Complaint, or at all, and that Defendants, or any of them, have any liability whatsoever to Plaintiffs, or any of them, as alleged in the Complaint, or at all. Defendants further answering state that the Plaintiffs are currently employed or have been employed by Defendants since 1999 at all times purportedly relevant to this lawsuit. 2. Paragraph 2 contains Plaintiffs Request for Relief as opposed to

allegations of fact, and as such no answer is required. To the extent that Paragraph 2 purports to contain any allegations of fact, Allstate denies these allegations. JURISDICTION AND VENUE 3. Paragraph 3 contains conclusion of law as opposed to allegations of

fact, and as such, no answer is required. To the extent that paragraph 3 purports to contain any allegations of facts, Allstate incorporates its answers to Paragraphs 1 and 2 as and for its answer to Paragraph 3. 4. Allstate lacks sufficient knowledge and information to form a belief

as to the truth or falsity of the allegations of Paragraph 4, and therefore denies same. Allstate further answering states on information and belief Plaintiff Gaglione is a resident of the State of Ohio. 5. Allstate lacks sufficient knowledge and information to form a belief

as to the truth or falsity of the truth or falsity of the allegation of Paragraph 5, and
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therefore denies same. Allstate further answering states on information and belief Plaintiff Aiken is a resident of the State of Ohio. 6. Allstate lacks sufficient knowledge and information to form a belief

as to truth or falsity of the allegations of Paragraph 6, and therefore denies same. Allstate further answering states on information and belief Plaintiff Slappy is a resident of the State of Georgia. PARTIES 7. Allstate incorporates its answers to Paragraphs 1 through 6 as and

for its answer to Paragraph 7 and further answering states that Allstate admits that Plaintiff Leonard Gaglione was employed by Allstate in its Hudson, Ohio office from approximately September, 1985 to October, 2002, handling primarily property claims. The remainder of Paragraph 7 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 7 purports to contain any other allegations of fact, Allstate denies these allegations. 8. Allstate admits that Plaintiff Michael Aiken was employed by

Allstate in its Hudson, Ohio office from approximately September, 1996 to August, 2002. The remainder of Paragraph 8 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 8 purports to contain any other allegations of fact, Allstate denies these allegations. 9. Allstate admits that Plaintiff Maxine Slappy was employed by

Allstate in its Hudson, Ohio office from approximately June 30, 1996 to June 26, 2003. The remainder of Paragraph 9 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 9 purports to contain any other allegations of fact, Allstate denies these allegations. 10. Allstate denies the allegations contained in Paragraph 10 of the

Complaint. Further answering Allstate admits Plaintiffs are seeking to bring this suit on their behalf as well as on behalf of an alleged purported class. 11. Allstate does not dispute that venue is appropriate in the Northern
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District of Ohio or that the District Court for the Northern District of Ohio has jurisdiction over the matter. Allstate admits that it operates as an Illinois corporation and is engaged in the insurance business in the State of Ohio. Allstate further admits that it maintains offices in or around Hudson, Ohio. Allstate denies any remaining allegations contained in Paragraph 11 of Plaintiffs' Complaint. 12. Allstate admits that Allstate New Jersey Insurance Company is

headquartered in Bridgewater, New Jersey. Allstate denies any remaining allegations contained in Paragraph 12 of Plaintiff's Complaint. 13. Allstate admits that Defendants Meckert and Lowe were and/or are

employed by Allstate as Market Claim Managers. The remainder of Paragraph 13 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that the Paragraph 13 purports to contain any other allegations of fact, Allstate denies those allegations. 14. Paragraph 14 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that the Paragraph 14 purports to contain any allegations of fact, Allstate denies those allegations. FACTUAL ALLEGATIONS 15. Allstate incorporates its answers to Paragraphs 1 through 14 as and

for its answer to Paragraph 15. Allstate denies the allegations contained in Paragraph 15 of Complaint. 16. Paragraph 16 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 16 purports to contain any allegations of fact, Allstate denies those allegations. 17. Paragraph 17 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 17 purports to contain any allegations of fact, Allstate denies those allegations. 18. Paragraph 18 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 18 purports to
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contain any allegations of fact, Allstate denies those allegations. 19. Paragraph 19 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 19 purports to contain any allegations of fact, Allstate denies those allegations. 20. Allstate admits that because certain claims representatives have been

classified as exempt employees, Allstate does not maintain formal time records for those employees. Allstate admits that it may nonetheless possess some evidence generally reflecting the number of hours worked by these employees. Allstate denies the remaining allegations contained in Paragraph 20 of the Complaint. REPRESENTATIVE ACTION ALLEGATIONS 21. Allstate incorporates its answer to Paragraphs 1 through 20 as and

for its answer to Paragraph 21. Allstate denies each and every allegation contained in Paragraph 21 of the Complaint. 22. Paragraph 22 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 22 purports to contain any allegations of fact, Allstate denies those allegations. FIRST CAUSE OF ACTION (FAILURE TO PAY OVERTIME WAGES AS REQUIRED BY THE FLSA) 23. Allstate incorporates its answers to Paragraph 1 through 22 as and

for its answer to Paragraph 23. Paragraph 23 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 23 purports to contain any allegations of fact, Allstate denies those allegations. 24. Paragraph 24 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 24 purports to contain any allegations of fact, Allstate denies those allegations. 25. 26. Allstate denies the allegations contained in Paragraph 25. Paragraph 26 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 26 purports to
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contain any allegations of fact, Allstate denies those allegations. 27. Paragraph 27 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 27 purports to contain any allegations of fact, Allstate denies those allegations. 28. Paragraph 28 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 28 purports to contain any allegations of fact, Allstate denies those allegations. SECOND CAUSE OF ACTION (REQUEST FOR INJUNCTIVE RELIEF) 29. Allstate incorporates its answers to Paragraph 1 through 28 as and

for its answer to Paragraph 29. Allstate further answering states that Paragraph 29 contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 29 purports to contain any allegations of fact, Allstate denies those allegations. 30. Complaint. 31. Paragraph 31 contains conclusions of law as opposed to allegations Allstate denies the allegations contained in Paragraph 30 of the

of fact, and as such, no answer is required and Allstate further answering states specifically that individual Plaintiffs do not have standing to request injunctive relief pursuant to 29 U.S.C. §217. To the extent that Paragraph 31 purports to contain any allegations of fact, Allstate denies those allegations. 32. Paragraph 32 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 32 purports to contain any allegations of fact, Allstate denies those allegations. THIRD CAUSE OF ACTION (WILLFUL VIOLATIONS) 33. Allstate incorporates its answers to Paragraph 1 through 32 as and

for its answer to Paragraph 33. Allstate further answering states that Paragraph 33
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contains conclusions of law as opposed to allegations of fact, and as such, no answer is required. To the extent that Paragraph 33 purports to contain any allegations of fact, Allstate denies those allegations. 34. Paragraph 34 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 34 purports to contain any allegations of fact, Allstate denies those allegations. 35. Paragraph 35 contains conclusions of law as opposed to allegations

of fact, and as such, no answer is required. To the extent that Paragraph 35 purports to contain any allegations of fact, Allstate denies those allegations.

AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE (Failure to State A Claim for Relief) Plaintiffs' Complaint fails to state a claim upon which relief can be granted under 29 U.S. C. §201 et seq Fair Labor Standards Act ("FLSA"). SECOND AFFIRMATIVE DEFENSE (Statute of Limitations) Plaintiffs' alleged claims are barred, in whole or in part, by the applicable two-year statute of limitations under the FLSA. THIRD AFFIRMATIVE DEFENSE (Exempt Employees) Plaintiffs' alleged claims are barred, in whole or in part, because Plaintiffs are salaried exempt employees. Claims Adjusters whose primary duty is performing claims adjusting functions that is the performance of office work directly related to Allstate core business of insurance are exempt employees not entitled to overtime under the FLSA, 29 U.S.C. §201 et. seq and 29 C.F.R. Part 541. Spence v. Grange Mutual Casualty Company, 1981 WL 3378 (Ohio App. 10 Dist) 1981.

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FOURTH AFFIRMATIVE DEFENSE (Good Faith) Plaintiffs' alleged claims are barred, in whole or in part, because Allstate has at all times acted in good faith in conformity with and in reliance on the applicable administrative regulations, orders, rulings, approvals and interpretations and on the applicable administrative practices and enforcement policies. Therefore, any violation of the FLSA was not willful, precluding Plaintiffs from recovery of liquidated damages. FIFTH AFFIRMATIVE DEFENSE (Collective Actions) This action is not properly brought as a collective action in that, among other things, Plaintiffs, and each of them, are not proper class representatives, common questions of fact and law do not predominate, Plaintiffs' claims are not typical of the claims of the purported class, the class is not so numerous that joinder of all members is impracticable, a class action is not superior to other available methods for the fair and efficient adjudication of this controversy and counsel for the purported class is not suitable. SIXTH AFFIRMATIVE DEFENSE (Damages) Plaintiffs are precluded from recovery to the extent they seek relief for periods outside of the relevant statute of limitations and to the extent they have already been compensated for hours worked. SEVENTH AFFIRMATIVE DEFENSE (Estoppel) Plaintiffs' alleged claims are barred, in whole or in part, by the doctrine of estoppel. EIGHTH AFFIRMATIVE DEFENSE (Laches) Plaintiffs' alleged claims are barred, in whole or in part, by the doctrine of
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laches. NINTH AFFIRMATIVE DEFENSE (To Plaintiffs' Second Cause of Action) The Complaint's Second Cause of Action (Request for Injunctive Relief) and Plaintiffs Prayer for Injunctive Relief (c) are barred as courts have uniformly held the right to bring an action for injunctive relief under the Fair Labor Standards Act rests exclusively with the United States Secretary of Labor. United Food & Commercial Workers Union, Local 1564 v. Albertson's Inc., 207 F.3d 1193 (10th Cir. 2000). TENTH AFFIRMATIVE DEFENSE (Managers are not Employers) Plaintiffs' claims as to the individual named Defendants Meckert and Lowe are barred. While some individual managers who qualify as an "Employer" under the FLSA may be sued, Congress did not intend to make each and every individual manager within a business liable for FLSA alleged violations unless the plaintiff pleads and proves the manager(s) control the very things that may lead to the alleged violations under the FLSA; such as control of the money that supports plaintiffs' job, significant ownership interest in the business, and operational control of the corporations day-to-day functions. Montgomery v. Maryland, 266 F.3d 334, 340 (4th Cir. 2001), vacated on other grounds, 122 S. Ct. 1958 (2002); Donovan v. Agnew, 712 F.2d 1509, 1511-14 (1st Cir. 1983); Baird v. Kessler, 172 F. Supp. 2d 1305 (E.D. Cal. 2001).

RESPECTFULLY SUBMITTED this 30th day of May, 2006. By: s/Joel E. Krischer Joel E. Krischer LATHAM & WATKINS LLP 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telephone: (213) 891-7939 Facsimile: (213) 891-8763

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By: s/Andrew M. Paley______________________ SEYFARTH SHAW LLP 2029 Century Park East, Suite 3300 Los Angeles, California 90067-3063 Telephone: (310) 277-7200 Facsimile: (310) 201-5219 Attorneys for Defendants Allstate Insurance Company, Allstate New Jersey Insurance Company, Karl Meckert and Kim Lowe

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CERTIFICATE OF SERVICE I hereby certify that on May 30, 2006, I electronically transmitted the attached document described as DEFENDANTS' ANSWER AND AFFIRMATIVE DEFENSES TO AMENDED COMPLAINT to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Clerk, United States District Court Sandra Day O'Connor U.S. Courthouse 401 West Washington Street, Suite 130, SPC 1 Phoenix, AZ 85003-2118 Kelly McInerney, Esq. McInerney & Jones 18124 Wedge Parkway, Suite 503 Reno, NV 89511 [email protected] Attorneys for Plaintiffs George Sintsirmas, Esq. George Sintsirmas, LLC 6212 Coldstream Road Highland Heights, OH 44143 [email protected] Attorneys for Plaintiffs Mark Wintering, Esq. Robert E. Sweeney Co., LPA 55 Public Square, Suite 1500 Cleveland, OH 44113 [email protected] Attorneys for Plaintiffs Steven M. Weiss, Esq. Law Offices of Steven M. Weiss 1250 Illuminating Building 55 Public Square, Suite 1009 Cleveland, OH 44113 [email protected] Attorneys for Plaintiffs James A. Jones, Esq. Karla S. Jackson, Esq. Gillespie, Rozen & Watsky 3402 Oak Grove Avenue, #200 Dallas, TX 75204 [email protected] [email protected] Attorneys for Plaintiffs

Andrea Elisabeth Watters, Esq. Watters Law Office, PC 2807 East Broadway Boulevard Tucson, AZ 85716 [email protected] Attorneys for Plaintiffs

By: s/Joel R. Shields

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