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					 1   McINERNEY & JONES
      Kelly McInerney (Nevada SBN 7443)
 2      (admitted pro hac vice)
 3    Charles A. Jones (Nevada SBN 6698)
        (admitted pro hac vice)
     18124 Wedge Parkway, Suite 503
 5   Reno, Nevada 89511
     Telephone: (775) 849-3811
 6   Facsimile: (775) 849-3866
 7   Attorneys for Plaintiffs
      Joel E. Krischer (California SBN 066489)
 9      (admitted pro hac vice)
10   633 West Fifth Street, Suite 4000
     Los Angeles, California 90071-2007
11   Telephone: (213) 485-1234
     Facsimile: (213) 891-8763
13    Joanna R. Wolfe (New York SBN 4436960)
        (admitted pro hac vice)
     885 Third Avenue, Suite 1000
15   New York, New York 10022-4802
     Telephone: (212) 906-1200
16   Facsimile: (212) 751-4864
17   Attorneys for Defendants [continued on next page]
19                              UNITED STATES DISTRICT COURT
20                              FOR THE DISTRICT OF ARIZONA
22   IN RE ALLSTATE INSURANCE CO.                  MDL NO. 1541
23   LITIGATION                                    ALL CASES
24                                                 PARTIES’ JOINT MEMORANDUM
                                                   IN RESPONSE TO COURT ORDER
25                                                 OF JANUARY 30, 2008
26                                                 Assigned To: Hon. Paul G. Rosenblatt

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      John R. Hayes (Illinois SBN 6286365)
 2      (admitted pro hac vice)
 3   233 South Wacker Drive, Suite 5800
     Chicago, Illinois 60606
 4   Telephone: (312) 876-7700
     Facsimile: (312) 993-9767
 6    Andrew M. Paley (California SBN 149699)
        (admitted pro hac vice)
     2029 Century Park East, Suite 3300
 8   Los Angeles, California 90067-3063
     Telephone: (310) 277-7200
 9   Facsimile: (310) 201-5219
10   Attorneys for Defendants

 Case 2:03-md-01541-PGR         Document 211       Filed 02/28/2008   Page 2 of 9
 1                                      I.     INTRODUCTION
 2                 Pursuant to this Court’s Order filed on January 30, 2008, that the parties
 3   file a joint memorandum discussing why the Court should not resolve Defendants’
 4   Motion to Determine Basis on Which Plaintiffs Should be Permitted to Dismiss Claims
 5   (Doc. #199) (“Motion re Dismissal”) on terms similar to those stipulated to by the parties
 6   in the dismissals of the claims of Edward Czarnecki and Dennis Day, Plaintiffs and
 7   Defendants (the latter collectively referred to as “Allstate”) have set forth their respective
 8   positions below.
 9                                II.        PLAINTIFFS’ POSITION
10                 Edward Czarnecki and Dennis Day were permitted to withdraw their
11   consent-to-join forms in the instant In re Allstate Insurance Co. Fair Labor Standards
12   Act Litigation (“MDL”) action so long as they agreed to refrain from asserting, either on
13   their own behalf or as a member of a collective action, any claim for overtime they might
14   have against Allstate under the Fair Labor Standards Act (“FLSA”). However, their
15   dismissal specifically did not affect any claim they might have under any law other than
16   the FLSA, including, but not limited to, the claims Czarnecki and Day are currently
17   litigating against Allstate in the Nettles, et al. v. Allstate Ins. Co., et al., No. 02 CH 14426
18   (Ill. Cir. Ct. Cook Cty), action brought pursuant to Illinois state law. After Czarnecki and
19   Day dismissed their claims in the instant case, they still had a forum in which to assert
20   that Allstate should have paid them overtime compensation. Their state law claims,
21   though not yet proven, are not time-barred.
22                 Plaintiffs cannot consent to the dismissal of their claims under terms similar
23   to those of Czarnecki and Day for two main reasons: (1) Plaintiffs were not a “party” to
24   those stipulated dismissals; and (2) Plaintiffs do not have existing state-law class actions
25   to fall back on, unlike Czarnecki and Day.
26                 Czarnecki and Day are already members of the class in Nettles, which is an
27   opt-out overtime class action brought under Illinois state law. The stipulated dismissals
28   of Czarnecki and Day from the instant MDL case were negotiated and entered into

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 1   between the attorneys in the Nettles case and Allstate’s defense counsel. Counsel for
 2   Rosa, Montano, Gaglione, and Wunder, Plaintiffs in the instant MDL case, did not
 3   participate in the negotiations leading to the stipulated dismissals of Czarnecki and Day
 4   and did not sign those stipulated dismissals. As such, Plaintiffs in the instant MDL action
 5   were not a “party” to those stipulated dismissals and should not be bound by those terms.
 6                 The Court’s Order of February 4, 2008, specifically directed the parties to
 7   prepare a memorandum which addresses “why the Court should not resolve Defendants’
 8   [Motion re Dismissal] on terms similar to those stipulated by the parties in the dismissals
 9   of Edward Czarnecki and Dennis Day.” The question is: How can the claims of the
10   remaining Plaintiffs be dismissed that will put them in the same or similar legal position
11   as Plaintiffs Czarnecki and Day? One solution is to permit them to dismiss their FLSA
12   claims while simultaneously providing them with a forum in which to pursue overtime
13   claims under their respective state laws with equitable tolling. To the best of our
14   knowledge, there are no Plaintiffs other than Czarnecki and Day who have currently
15   pending overtime cases against Allstate. So while Czarnecki and Day already have their
16   interests in seeking overtime against Allstate protected, the other class members do not.
17   Czarnecki and Day are able to pursue their state law claims in the Nettles action because
18   the filing of that opt-out class action automatically tolled the statute of limitations for
19   Czarnecki’s and Day’s state law claims, whereas the remaining Plaintiffs have no such
20   tolling protection.
21                 Plaintiffs, in meeting and conferring with defense counsel for this Joint
22   Memorandum, proposed an agreement to stipulate to terms similar to those of Czarnecki
23   and Day if Allstate agreed to toll the statute of limitations on the state law claims, similar
24   to Czarnecki and Day. Again, this would be the only way to put the remaining Plaintiffs
25   in this action on the same legal footing as Czarnecki and Day. Allstate refused this
26   proposal, arguing that would be a decision for the court in any newly-filed action. But,
27   without such a tolling agreement, the remaining Plaintiffs in the instant MDL action
28   would not be on equal footing with Czarnecki and Day and would, instead, be prejudiced.

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 1                 The only other alternative is dismissal without prejudice, as argued by
 2   Plaintiffs in their Opposition to Allstate’s Motion re Dismissal. The parties are seeking
 3   to determine how to permit the opt-in Plaintiffs to voluntarily dismiss their claims. The
 4   general rule pursuant to FRCP 41(a)(2) is to leave the situation the same as if the claim
 5   had never been brought. The only way to accomplish that is to permit Plaintiffs to
 6   dismiss their claims without prejudice, plain and simple. 1
 7                 If Allstate is truly desirous of allowing Plaintiffs to dismiss their claims
 8   subject to terms similar to Czarnecki and Day, then Allstate should stipulate not to raise
 9   the statute of limitations defense for any state law claims filed, so that Plaintiffs are on
10   the same footing as Czarnecki and Day. Otherwise, a dismissal without such a stipulation
11   is tantamount to a dismissal with prejudice for the FLSA and state law claims. As
12   discussed in Plaintiffs’ Opposition, Allstate reclassified its auto adjusters nationwide
13   effective January 1, 2005. Under most states’ overtime laws, the claims of the auto
14   adjusters would be time-barred absent a tolling agreement. Such a result would be
15   patently unfair. Unless Allstate stipulates not to raise a statute of limitations defense in
16   any filed state law overtime claim (thus leaving the opt-in Plaintiffs in the same position
17   as Czarnecki and Day), the claims of the opt-in Plaintiffs should be dismissed without
18   prejudice, without any conditions.
19                                III.    ALLSTATE’S POSITION
20                 Allstate already stated in its Reply Memorandum in support of the Motion
21   re Dismissal (Doc. #207) that it was willing to agree to a dismissal for every other
22   Plaintiff that wants to withdraw at this point on the same terms it agreed to for
23   Messrs. Czarnecki and Day. It explained that, because this action involves purely federal
24   claims, a dismissal without prejudice, coupled with a binding commitment never to
25          1
               Allstate pretended to be shocked in its reply papers that Plaintiffs would argue
     that the claims should be dismissed without prejudice, even though defense counsel, Joel
26   Krischer, contemplated that possibility on at least five (5) separate occasions during the
     last status conference. See Document 197, Page 6, line 14; Page 13, line 8; Page 14,
27   line 1; Page 16, line 9; and Page 23, line 25, all of which discuss the possibility of
     dismissal without prejudice.

 Case 2:03-md-01541-PGR           Document 211           Filed 02/28/2008   Page 5 of 9
 1   reassert those claims, is exactly the same thing as a dismissal with prejudice from
 2   Allstate’s perspective. It means that those claims (and only those claims) must be
 3   decided by this Court, in this case, or that they disappear forever.
 4                 Allstate’s position remains unchanged. While Allstate understands the
 5   distinction Plaintiffs seek to draw on the ground that the other Plaintiffs do not have a
 6   pending state law action to “fall back on” if they abandon these claims, that distinction
 7   has no relevance to the current issues. The relevant facts/issues regardless of the
 8   pendency of any other state law claim remain the same, namely:
 9          • This case is, and always has been, solely about federal claims.
10          • Any Plaintiff who wants to continue to pursue those claims has the
11             absolute right to do so in this Court in an action that is already pending
12             and that has already been extensively litigated. Conversely, it is only
13             fair that any Plaintiff who wants out at this stage, in exchange for
14             Allstate’s already-stated position to forego its right to recover costs
15             against that Plaintiff, should be prohibited from reasserting the same
16             federal claims in another forum.
17          • Whether any Plaintiff who has opted into this case has any similar state
18             law claim, and whether any claim such that has not yet been brought is
19             viable as a matter of substance or timeliness is a matter of state law that
20             must be decided in a separate suit under state law. But most
21             importantly, those issues are not changed in any way if Plaintiffs opt out
22             now or litigate this case to its conclusion. Certainly, the mere pendency
23             of this suit has not prevented any Plaintiff from pursuing any state law
24             remedy he or she may have chosen to pursue.
25                 One final point should be made regarding Plaintiffs’ related argument that
26   Allstate should be required to stipulate to forego any statute of limitations defense to any
27   state law claim that may be brought. In its moving papers, Allstate expressly argued that
28   any dismissal without prejudice must expressly preclude tolling regarding any new FLSA

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 1   claim and that any other result would prejudice Allstate by putting Plaintiffs in a better
 2   position than if their claim had never been brought. Plaintiffs’ proposed stipulation
 3   regarding the state law claims would be at least as unfair, if not more so. If Plaintiffs
 4   retain all existing rights to bring a state law claim, which the Court’s proposal would
 5   provide, it would be colossally unfair to restrict Allstate from asserting every available
 6   defense it currently has to any such claim. That unfairness is further heightened by the
 7   fact that this case has always been solely about federal claims, separate and distinct from
 8   any state law claims; accordingly, there is no justification for now suddenly making any
 9   party’s rights under state law contingent on their rights under federal law. Stated
10   somewhat differently, if the instant case had never been brought, Plaintiffs’ and Allstate’s
11   rights under the various state laws at this point in time would be whatever they are. The
12   fact that this case has been brought, and that it is now being dismissed is no justification
13   for leaving Plaintiffs with whatever those rights may be while diminishing Allstate’s
14   rights under the very same laws.
15                 In short, Allstate respectfully submits that it is entirely fair to the remaining
16   Plaintiffs to permit them to voluntarily dismiss their current claims at this point only if
17   they agree to the same restrictions as Messrs. Czarnecki and Day that prevents them only
18   from refiling the exact FLSA claims that they are voluntarily abandoning. And that result
19   is not in any way less fair just because they have or have not, prior to this time, brought
20   or participated in any state law claims. There is no need or justification for this Court to
21   go beyond the scope of the currently-pending FLSA claims to address state law claims
22   that were never brought anywhere and are not before the Court.
23   ///
24   ///
25   ///
26   ///
27   ///
28   ///

 Case 2:03-md-01541-PGR           Document 211          Filed 02/28/2008    Page 7 of 9
 1                 Accordingly, Allstate respectfully submits that the Court should issue an
 2   order that gives the remaining Plaintiffs the option of (a) continuing to pursue their
 3   claims in this Court; or (b) voluntarily dismissing their pending claims at this time on
 4   terms similar to those stipulated to by Edward Czarnecki and Dennis Day.
 5   DATED: February 28, 2008                   MCINERNEY & JONES
                                                 Kelly McInerney
 6                                               Charles A. Jones
 8                                              By: s/Kelly McInerney with permission
                                                     Kelly McInerney
 9                                                   MCINERNEY & JONES
                                                Attorneys for Plaintiffs
11   DATED: February 28, 2008                   LATHAM & WATKINS LLP
                                                 Joel E. Krischer
12                                               Joanne R. Wolfe
                                                 John R. Hayes
                                                SEYFARTH SHAW LLP
14                                               Andrew M. Paley
16                                              By: s/Joel E. Krischer
                                                    Joel E. Krischer
17                                                  LATHAM & WATKINS LLP
                                                Attorneys for Defendants

 Case 2:03-md-01541-PGR          Document 211           Filed 02/28/2008   Page 8 of 9
                            CERTIFICATE OF SERVICE

  I hereby certify that on February 28, 2008, I electronically transmitted the attached
  COURT ORDER OF JANUARY 30, 2008, 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.                       Mark Wintering, Esq.
McInerney & Jones                           Robert E. Sweeney Co., LPA
18124 Wedge Parkway, Suite 503              55 Public Square, Suite 1500
Reno, NV 89511                              Cleveland, OH 44113            
Attorneys for Plaintiffs                    Attorneys for Plaintiffs
in Rosa v. Allstate                         in Gaglione v. Allstate

George Sintsirmas, Esq.                     Steven M. Weiss, Esq.
George Sintsirmas, LLC                      Law Offices of Steven M. Weiss
6212 Coldstream Road                        1250 Illuminating Building
Highland Heights, OH 44143                  55 Public Square, Suite 1009                     Cleveland, OH 44113
Attorneys for Plaintiffs          
in Gaglione v. Allstate                     Attorneys for Plaintiffs
                                            in Gaglione v. Allstate

Andrea Elisabeth Watters, Esq.              James A. Jones, Esq.
Watters Law Office, PC                      Karla S. Jackson, Esq.
2807 East Broadway Boulevard                Gillespie, Rozen, Watsky, Motley & Jones
Tucson, AZ 85716                            3402 Oak Grove Avenue, Suite 200                       Dallas, TX 75204
Attorneys for Plaintiffs          
in Montano v. Allstate            
                                            Attorneys for Plaintiffs
                                            in Wunder v. Allstate

By: s/Linda M. Enriquez
    Secretary to Joel E. Krischer

    Case 2:03-md-01541-PGR          Document 211    Filed 02/28/2008    Page 9 of 9