Kevin Calderone v. Michael Scott ( 2016 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14187
________________________
D.C. Docket No. 2:14-cv-00519-JES-CM
KEVIN CALDERONE,
an individual,
GEORGE SCHWING,
an individual,
MICHAEL ZALESKI,
an individual,
SELENA LEE,
an individual,
Plaintiffs-Appellants,
versus
MICHAEL SCOTT,
as the duly elected Sheriff of Lee County, Florida,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(September 28, 2016)
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Before MARTIN and JORDAN, Circuit Judges, and COOGLER, ∗ District Judge.
MARTIN, Circuit Judge:
This interlocutory appeal asks whether employees may maintain a collective
action against their employer under § 216(b) of the Fair Labor Standards Act of
1938 (“FLSA”), 29 U.S.C. § 201 et seq., at the same time as a class action brought
based on state law and pursuant to Federal Rule of Civil Procedure 23(b)(3). The
FLSA’s § 216(b) requires plaintiffs to “opt in” to be considered class members. In
contrast, a Rule 23(b)(3) class action requires plaintiffs to “opt out” if they do not
wish to be bound by the court’s judgment. The District Court found that, under
LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975) (per
curiam), 1 these two types of actions are “mutually exclusive and irreconcilable.”
We reverse because we conclude that an FLSA collective action and a Rule
23(b)(3) state-law class action may be maintained in the same proceeding. We join
the D.C., Second, Third, Seventh, and Ninth Circuits in so holding. See Busk v.
Integrity Staffing Sols., Inc., 713 F.3d 525, 528–30 (9th Cir. 2013), rev’d on other
grounds, Integrity Staffing Sols., Inc. v. Busk, 574 U.S. __, 135 S. Ct. 513 (2014);
Knepper v. Rite Aid Corp., 675 F.3d 249, 259–62 (3d Cir. 2012); Shahriar v. Smith
∗
Honorable L. Scott Coogler, United States District Judge for the Northern District of
Alabama, sitting by designation.
1
Decisions of the former Fifth Circuit issued prior to October 1, 1981 are binding
precedent on this Court. See Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981)
(en banc).
2
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& Wollensky Rest. Grp., Inc., 659 F.3d 234, 247–49 (2d Cir. 2011); Ervin v. OS
Rest. Servs., Inc., 632 F.3d 971, 973–74 (7th Cir. 2011); Lindsay v. Gov’t Emps.
Ins. Co., 448 F.3d 416, 424 (D.C. Cir. 2006).
I.
Named plaintiffs Kevin Calderone, George Schwing, Michael Zaleski, and
Selena Lee (“employees”) sued, bringing minimum wage and overtime claims
against Michael Scott in his official capacity as the Sheriff of Lee County, Florida.
They brought their claims under the FLSA as well as the Florida Minimum Wage
Act (“FMWA”), Fla. Stat. § 448.110.2 On behalf of themselves and others
similarly situated, the employees say they performed off-the-clock work for which
they were not paid. The District Court granted conditional certification under
§ 216(b) for the employees’ FLSA claims, 3 but denied conditional Rule 23(b)(3)
certification for their FMWA claims. The employees timely asked for permission
to appeal under Rule 23(f), and this Court allowed the appeal.
2
The employees argue that the District Court has jurisdiction over their FMWA claims
under 28 U.S.C. § 1367(a), which gives district courts “supplemental jurisdiction over all []
claims that are so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy under Article III of the United States Constitution.”
3
After the collective FLSA action was certified, the District Court approved a notice
advising putative class members of the claims, and sixty-four more plaintiffs opted in. Including
the named plaintiffs, the conditionally certified FLSA collective action now totals sixty-eight
members.
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II.
We review for abuse of discretion a district court’s denial of class
certification. Little v. T-Mobile USA, Inc., 691 F.3d 1302, 1305 (11th Cir. 2012).
“A district court abuses its discretion if it applies an incorrect legal standard,
follows improper procedures in ruling on class certification, makes clearly
erroneous factfindings, or applies the law in an unreasonable or incorrect manner.”
Id. at 1305–06 (quotations omitted).
Section 216(b) of the FLSA and Rule 23(b)(3) are animated by similar
concerns about the efficient resolution of common claims. Like a Rule 23(b)(3)
class action, a collective action under § 216(b) gives “plaintiffs the advantage of
lower individual costs to vindicate rights by the pooling of resources” and allows
for “efficient resolution in one proceeding of common issues of law and fact
arising from the same alleged [unlawful] activity.” Hoffmann-La Roche, Inc. v.
Sperling, 493 U.S. 165, 170, 110 S. Ct. 482, 486 (1989). But what worried the
District Court was the fact that the procedural rules governing these two types of
actions are distinct. In an FLSA collective action, an employee must consent in
writing in order to be considered a party to the action. See 29 U.S.C. § 216(b)
(“No employee shall be a party plaintiff to [an FLSA collective action] unless he
gives his consent in writing to become such a party and such consent is filed in the
court in which such action is brought.”). Said another way, an FLSA collective
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action is “opt-in.” To maintain an opt-in collective action under § 216(b),
plaintiffs must demonstrate that they are “similarly situated.” Id. At the
certification stage, this requirement is “not particularly stringent”: opt-in plaintiffs
“need show only that their positions are similar, not identical, to the positions held
by the putative class members.” Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d
1208, 1214, 1217 (11th Cir. 2001) (per curiam) (quotation omitted).
The certification requirements for a Rule 23 class action are more
demanding. “[T]he putative class must meet each of the requirements specified in
Federal Rule of Civil Procedure 23(a), as well as at least one of the requirements
set forth in Rule 23(b).” Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1265 (11th
Cir. 2009) (quotation omitted). Rule 23(a) requires every putative class to satisfy
the prerequisites of numerosity, commonality, typicality, and adequacy of
representation. See Fed. R. Civ. P. 23(a). Here, the employees sought certification
under Rule 23(b)(3), “which additionally requires findings: (1) that common
questions of law or fact predominate over questions affecting only individual class
members (‘predominance’); and (2) that a class action is superior to other available
methods for adjudicating the controversy (‘superiority’).” Vega, 564 F.3d at 1265;
see also Fed. R. Civ. P. 23(b)(3).
In a Rule 23(b)(3) class action, all qualifying class members become
members unless they opt out of the action. See Rule 23(c)(2)(B)(v) (explaining
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that “the court will exclude from the class any member who requests exclusion”).
Class members “are bound by the judgment, whether favorable or unfavorable,
unless they affirmatively ‘opt out’ of the suit.” Cameron-Grant v. Maxim
Healthcare Servs., Inc., 347 F.3d 1240, 1248 (11th Cir. 2003) (per curiam). This
“opt-out” requirement is what makes a Rule 23(b)(3) class action a “fundamentally
different creature” than a § 216(b) collective action, which depends for its
“existence . . . on the active participation of [class members].” Id. at 1249.
III.
A.
An FLSA collective action and a Rule 23(b)(3) class action may be
fundamentally different creatures, but they are not “irreconcilable,” as the District
Court found. Our sister Circuits have ruled, and we agree, that the FLSA’s plain
text does not indicate that a collective action and a state-law class action cannot be
maintained at the same time. See, e.g., Shahriar, 659 F.3d at 247 (“[W]e do not
read the plain language of § 216(b) as . . . affecting a federal court’s ability to
obtain supplemental jurisdiction over state employment actions.”); Ervin, 632 F.3d
at 977 (“Nothing [in the text of § 216(b)] suggests that the FLSA is not amenable
to state-law claims for related relief in the same federal proceeding.”). In relevant
part, § 216(b) provides that:
Any employer who violates the provisions of section 206 or section
207 of this title shall be liable to the employee or employees affected
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in the amount of their unpaid minimum wages, or their unpaid
overtime compensation . . . . An action to recover the liability
prescribed in either of the preceding sentences may be maintained
against any employer (including a public agency) in any Federal or
State court of competent jurisdiction by any one or more employees
for and in behalf of himself or themselves and other employees
similarly situated.
29 U.S.C. § 216(b). This section explicitly authorizes employees to bring
minimum wage, overtime, and anti-retaliation claims for themselves and people
like them. At the same time, § 216(b) makes clear that a collective action cannot
coexist with an action brought by the Secretary of Labor. See id. (“The right . . . to
bring [a collective action] . . . shall terminate upon the filing of a complaint by the
Secretary . . . in which a recovery is sought of unpaid minimum wages or unpaid
overtime compensation under sections 206 and 207.”). This provision in § 216(b)
shows that Congress knew how to categorically separate an FLSA collective action
from other types of actions. Even with that knowledge, Congress included nothing
in the statute which would cause an FLSA collective action to preempt a Rule
23(b)(3) class action based on state law, or vice versa.
To the contrary, the FLSA has an express savings clause, which says: “No
provision of this chapter . . . shall excuse noncompliance with any Federal or State
law or municipal ordinance establishing [a higher minimum wage or a shorter
maximum work week].” Id. § 218(a). The savings clause therefore establishes
that the FLSA does not displace more protective state minimum wage and
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overtime laws. 4 If Congress had wanted to prevent state-law Rule 23(b)(3) class
actions from going forward together with FLSA collective actions, it would not
have included a savings clause explicitly saying that the FLSA does not preempt
state labor laws.
Even if we were to find the text of the FLSA ambiguous (which we don’t),
its legislative history reflects no congressional intent to disfavor state-law Rule
23(b)(3) class actions. As the Third Circuit explained in Knepper, the opt-in
requirement was added to § 216(b) by the Portal-to-Portal Act of 1947, Ch. 52,
§ 5(a), 61 Stat. 84, 87, in response to a huge number of FLSA suits being brought
by unions. See 675 F.3d at 254–55 (describing the “thousands of [] FLSA suits
seeking back pay for ‘portal-to-portal’ violations . . . [n]early all [] filed . . . by
unions”). By forcing putative plaintiffs to affirmatively consent to participate, the
opt-in requirement was meant to stave off “excessive litigation spawned by
plaintiffs lacking a personal interest in the outcome.” Hoffmann-La Roche, 493
U.S. at 173, 110 S. Ct. at 488; see also 93 Cong. Rec. 538, 2182 (1947) (remarks of
Sen. Donnell) (noting that the opt-in provision prevents collective actions “not
4
The FMWA is precisely the type of state law the savings clause protects. While the
FLSA has a two-year statute of limitations (three years for willful violations), the FMWA has a
four-year statute of limitations (five years for willful violations). See Fla. Stat. § 95.11(2)(d),
(3)(q); 29 U.S.C. § 255(a). Florida law also incorporates a significantly higher minimum wage
than would be available under the federal statute. Compare Florida’s Minimum Wage, Florida
Department of Economic Opportunity (October 15, 2015), goo.gl/iLRkJT (setting Florida’s
minimum wage at $8.05 per hour), with 29 U.S.C. § 206(a)(1)(C) (setting the federal minimum
wage at $7.25 per hour).
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brought in good faith, [] not brought by a party in interest, and [] not brought with
the actual consent or agency of the individuals for whom an ostensible plaintiff
filed the suit”).
Wholly absent from the discussion of the Portal-to-Portal Act was any
mention of opt-out class actions. This makes sense because the FLSA had never
been interpreted to allow such suits. And the Rule 23(b)(3) class action requiring
class members to affirmatively opt out was not even created until 1966. See
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614–15, 117 S. Ct. 2231, 2245
(1997) (“In the 1966 class-action amendments, Rule 23(b)(3) . . . was the most
adventuresome innovation[,] . . . [allowing] class actions . . . designed to secure
judgments binding all class members save those who affirmatively elected to be
excluded.” (quotation omitted)). When it created the opt-out class action, the
Advisory Committee on Civil Rules made clear that the “present provisions of 29
U.S.C. § 216(b) are not intended to be affected by Rule 23.” Fed. R. Civ. P. 23,
advisory committee’s note, reprinted in 39 F.R.D. 69, 104 (1966). This history
teaches us that Congress created the FLSA’s opt-in requirement primarily as a
check against the power of unions and not to decrease the availability of opt-out
class actions; again, opt-out class actions were not even available when the opt-in
requirement was added to the FLSA. Also, when the Advisory Committee
fashioned Rule 23(b)(3)’s opt-out requirement in 1966, it did so with special care
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not to upset the FLSA’s existing opt-in scheme. We conclude there is no
“irreconciliable” tension between these two types of actions.
B.
In arriving at its decision, the District Court looked to neither the text nor the
legislative history of § 216(b). Instead, the District Court said LaChapelle
establishes that overlapping FLSA and FMWA class actions are “mutually
exclusive and irreconcilable.” On this basis, the District Court held that “an
FMWA class action is not superior to other available methods for adjudicating [the
employees’] claims” and therefore ruled that Rule 23(b)(3) was not satisfied.
We have come to the contrary conclusion. In LaChapelle, the former Fifth
Circuit considered whether a plaintiff could bring a class action under Rule 23 for
a violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C.
§ 621 et seq. 513 F.2d at 287. That Court held that a plaintiff could not because
Congress had directed that the ADEA be enforced in accordance with § 216(b) of
the FLSA. Id. at 289; see also 29 U.S.C. § 626(b) (requiring the ADEA to be
enforced “in accordance with [§ 216(b)]”). Since § 216(b) of the FLSA authorizes
only opt-in collective actions, the former Fifth Circuit held that “only ‘opt-in’ type
class actions may be utilized in age discrimination cases [and that] Rule 23 cannot
be invoked.” LaChapelle, 513 F.2d at 289. It was the plaintiff’s attempt to bring a
Rule 23 class action based on the ADEA that LaChapelle found “irreconcilable”
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with that statute’s requirements. LaChapelle ruled on a different statute than we
have here. It did not address whether a party can pursue an FLSA collective action
along with a parallel Rule 23(b)(3) state-law class action.
Perhaps for that reason, Sheriff Scott does not defend the District Court’s
reliance on LaChapelle. Instead, he argues that the District Court denied Rule
23(b)(3) class certification based on the specific facts of this case. According to
Sheriff Scott, the District Court “specifically relied on the fact that the
[employees’] FLSA and FMWA claims were ‘overlapping’ and that the ‘putative
FLSA and FMWA classes are identical’” in denying class certification. Although
we don’t blame him for trying, Sheriff Scott’s attempt to recast the District Court’s
reasoning as a fact-based inquiry does not carry the day. The District Court clearly
“conclude[d] that an FMWA class action is not superior to other available methods
for adjudicating [the employees’] claims because overlapping FLSA and FMWA
class actions are ‘mutually exclusive and irreconcilable.’” The District Court also
explicitly said that it was “follow[ing] La Chapelle.” The District Court’s incorrect
legal ruling that an FLSA collective action and a Rule 23(b)(3) class action cannot
coexist was plainly based on a misapplication of LaChapelle. For the reasons we
have explained, LaChapelle does not control here, and we conclude that the
District Court abused its discretion. See Little, 691 F.3d at 1305 (“A district court
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abuses its discretion if it . . . applies the law in an unreasonable or incorrect
manner.”)
C.
Sheriff Scott also makes two practical arguments. First, he appeals to the
“confusion that would necessarily result [from] sending a second notice to the class
members more than six months after the initial notice was provided, and after the
expiration of the collective action deadline.” To the contrary, we conclude that the
separate notices alleviate concerns about confusion. When the first notice went
out, it informed putative plaintiffs only of the FLSA collective action claims. The
opt-in period for the FLSA action is now closed. If a second notice goes out after
the District Court reconsiders the employees’ motion for Rule 23(b)(3)
certification on remand, it will include only the FMWA claims. That means these
putative plaintiffs will never be confronted with a notice that lists both an “opt-in”
and an “opt-out” claim.
We also reject the idea that concerns about confusion render these two types
of actions “irreconcilable” even where plaintiffs might be confronted with a
combined notice listing both “opt-in” and “opt-out” claims. The Seventh Circuit
thoughtfully explained in Ervin that “confusion created by a notice is a valid case-
management consideration . . . [but] there is no indication that the problem is any
worse than countless others that district courts face with class actions.” 632 F.3d
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at 978. We agree that “[i]t does not seem like too much to require potential
participants to make two binary choices: (1) decide whether to opt in and
participate in the federal action; (2) decide whether to opt out and not participate in
the state-law claims.” Id. (emphasis omitted).
Second, Sheriff Scott argues that the FLSA collective action has progressed
before the District Court, and so it would be imprudent to reverse at this stage.
However, as Sheriff Scott himself acknowledges, the District Court can adjust the
trial schedule to accommodate the FMWA class action, minimizing confusion and
promoting efficient use of court resources. Sheriff Scott’s practical concern, while
understandable, is not a compelling reason to adhere to the District Court’s
erroneous legal decision.
IV.
A § 216(b) collective action and a state-law Rule 23(b)(3) class action may
be maintained in the same proceeding. We reverse the District Court only with
respect to its contrary conclusion on this point. On remand, the District Court must
consider whether the employees’ putative class action meets the Rule 23(a) and
(b)(3) requirements, as well as whether to exercise supplemental jurisdiction over
the class action under 28 U.S.C. § 1367(a).
REVERSED AND REMANDED.
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