Barfield v. Madison County, MS , 212 F.3d 269 ( 2000 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
Nos. 98-60636 & 98-60610
TERRY BARFIELD, ET AL,
Plaintiffs,
versus
MADISON COUNTY, MISSISSIPPI;
KARL BANKS; J.L. MCCULLOUGH;
DAVID RICHARDSON; LOUISE SPIVEY;
LUTHER WALDROP,
Defendants-Third Party Plaintiffs,
Counter Defendants-Appellees;
versus
JESSIE HOPKINS, In His Individual Capacity,
Third Party Defendant,
Counter Claimant-Appellant.
Appeals from the United States District Court for the
Southern District of Mississippi
May 10, 2000
Before POLITZ, GARWOOD, and DAVIS, Circuit Judges.
GARWOOD, Circuit Judge:
Present and former employees of the Sheriff’s Department in Madison
County, Mississippi (collectively, Sheriff’s Employees), brought this
suit against defendants-appellees Madison County, Mississippi,
individual members of Madison County’s Board of Supervisors, and Jessie
Hopkins, in his official capacity as Madison County Sheriff
(collectively, Madison County). The Sheriff’s Employees alleged, inter
alia, that Madison County violated the Fair Labor Standards Act (FLSA),
29 U.S.C. § 201 et seq., by refusing to pay them owed overtime
compensation. In response, Madison County asserted a third-party claim
for indemnity against appellant Jessie Hopkins, in his individual
capacity (Hopkins). Following a bench trial, the district court entered
judgment in favor of the Sheriff’s Employees on their FLSA claims and
in favor of Madison County on its indemnification claim against Hopkins.
Madison County then settled with the Sheriff’s Employees, and, pursuant
to its earlier ruling, the district court ordered Hopkins to indemnify
Madison County for the amount of the settlement and for its attorneys’
fees and expenses. Hopkins appeals. We reverse.
Factual and Procedural History
In December 1995, the Department of Labor began investigating
reports of unpaid overtime accrued by employees of the Madison County
Sheriff’s Department. On September 5, 1996, before the Department of
Labor completed its investigation, the Sheriff’s Employees filed suit
in federal district court against Madison County, Mississippi, and the
individual members of Madison County’s Board of Supervisors,1 alleging
they were owed unpaid overtime compensation under the FLSA. The
Sheriff’s Employees later amended their complaint to include, inter
1
The Sheriff’s Employees later voluntarily dismissed their claims
against the individual board members.
2
alia, claims under 42 U.S.C. § 1983 for deprivations of property rights
in wages for work performed and for violations of the Equal Protection
Clause of the Fourteenth Amendment, and to name Jessie Hopkins, in his
official capacity as Madison County Sheriff, as a defendant in the
action. In its answer, Madison County filed a third-party claim seeking
indemnification from Hopkins individually on the basis that he was an
employer or joint employer of the Sheriff’s Employees and individually
responsible for any unpaid overtime owed to them. Hopkins then
counterclaimed against Madison County, alleging that Madison County’s
third-party claim against him was brought in retaliation for his
cooperation with the Sheriff’s Employees in their attempts to obtain
unpaid overtime.
After the Sheriff’s Employees named Sheriff Hopkins in his official
capacity as a defendant, Hopkins’s attorney filed an answer on behalf
of Sheriff Hopkins in his official capacity, admitting all of the
substantive allegations made by the Sheriff’s Employees. Madison County
subsequently filed a motion to strike this answer and submitted its own
answer on behalf of Sheriff Hopkins in his official capacity, denying
the Sheriff’s Employees’ claims. In response, Hopkins moved to
disqualify Madison County’s counsel, for allegedly filing responses
without consulting with him and that were directly inconsistent with
earlier positions he espoused. The district court entered an order
striking Hopkins’s answer and denying the motion to disqualify. The
same counsel continued to represent both Madison County and Sheriff
3
Hopkins in his official capacity throughout the litigation, including
this appeal.
Following discovery, all parties moved for partial summary
judgment. The district court granted the motions in part, dismissing
Hopkins’s retaliation claim against Madison County and all of the
Sheriff’s Employees’ claims, except those under the FLSA. Additionally,
the district court ruled that Madison County and Hopkins individually
were both “employers” under the FLSA.
A bifurcated bench trial proceeded. Beginning on March 23, 1998,
the district court conducted the first half of the trial to determine
liability under the FLSA and Madison County’s third-party
indemnification action. On March 25, 1998, the district court found
Madison County violated the FLSA by refusing to pay the Sheriff’s
Employees overtime. In addition, the district court concluded that
Madison County’s refusal to pay overtime was willful and not in good
faith, thereby extending the statute of limitations to three years
(instead of two), 29 U.S.C. § 255, and permitting an award of liquidated
damages, 29 U.S.C. § 260. Applying Mississippi common law to Madison
County’s third-party claim against Hopkins, the district court
determined that Hopkins was primarily responsible for the unpaid
overtime and ordered Hopkins to indemnify Madison County for any
judgment Madison County would pay to the Sheriff’s Employees for the
FLSA violations.
Pending the damages phase of the trial, Madison County settled with
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the Sheriff’s Employees for $750,000. Pursuant to its previous ruling
on the indemnification claim, the district court then entered judgment
in favor of Madison County against Hopkins for $750,000. Madison County
subsequently filed a motion to recover attorneys’ fees and expenses from
Hopkins. Relying again on Mississippi common law, the district court
granted Madison County its attorneys’ fees and expenses, which totaled
$264,430.32. Hopkins appeals.
Discussion
On appeal, Hopkins asserts the following claims of error: (1) he
was not an “employer” under the FLSA, 29 U.S.C. § 203(d); (2) the FLSA
preempts the application of Mississippi common law indemnification; (3)
the district court misapplied Mississippi indemnity law; and (4) the
district court should have disqualified Madison County’s counsel from
representing any party in the suit. We agree that the district court
erred in its application of Mississippi law. Because this conclusion
relieves Hopkins of the judgment entered against him, we need not
address the other issues presented in this appeal.
In this appeal from a bench trial, we review the district court’s
factual findings for clear error. See Odom v. Frank, 3 F.3d 839, 843
(5th Cir. 1993). We review de novo the district court’s determination
of law, whether federal or state. See Gardes Directional Drilling v.
U.S. Turnkey Exploration Co., 98 F.3d 860, 864 (5th Cir. 1996); see also
Salva Regina College v. Russell, 111 S. Ct. 1217, 1225 (1991) (“The
obligation of responsible appellate review and the principles of a
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cooperative judicial federalism underlying Erie [R. Co. v. Tompkins, 58
S. Ct. 817 (1938)] require that courts of appeals review the state-law
determinations of district courts de novo.”).
Madison County does not contend that the FLSA, federal common law,
or Mississippi statutory law provide for its indemnification claim.
Therefore, the only remaining basis for indemnification lies in
Mississippi common law. Accordingly, Mississippi substantive law
governs Madison County’s common law indemnification claim against
Hopkins. When adjudicating claims for which state law provides the
rules of decision, we are bound to apply the law as interpreted by the
state’s highest court. See Transcontinental Gas v. Transportation Ins.
Co., 953 F.2d 985, 988 (5th Cir. 1992). If the state’s highest court
has not spoken on the particular issue, “it is the duty of the federal
court to determine as best it can, what the highest court of the state
would decide.” Id. When making such an Erie guess, we are bound by an
intermediate state appellate court decision unless “convinced by other
persuasive data that the highest court of the state would decide
otherwise.” First Nat’l Bank of Durant v. Trans Terr Corp., 142 F.3d
802, 809 (5th Cir. 1998) (internal quotations and footnote omitted).
However, “we will not expand state law beyond its presently existing
boundaries.” Rubinstein v. Collins, 20 F.3d 160, 172 (5th Cir. 1994)
(footnote omitted); see also Johnson v. Sawyer, 47 F.3d 716, 729 (5th
Cir. 1995) (en banc) (“We have long followed the principle that we will
not create ‘innovative theories of recovery or defense’ under local law,
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but will rather merely apply it ‘as it currently exists.’”) (quoting
Galindo v. Precision American Corp., 754 F.2d 1212, 1217 (5th Cir. 1985)
and citing several other decisions of this Court); 19 CHARLES ALAN WRIGHT
ET AL., FEDERAL PRACTICE AND PROCEDURE § 4507, at 207 (2d ed. 1996) (“Nor is
it the function of the federal court to expand the existing scope of
state law.”). By seeking indemnification from Hopkins, Madison County
has petitioned the federal court to do just that—expand the existing
scope of Mississippi law; we decline the invitation.
The district court ordered Hopkins to indemnify Madison County for
the judgment entered in favor of the Sheriff’s Employees, as per the
settlement agreement, and for its attorneys’ fees and costs. The
district court considered Madison County and Hopkins to be joint
tortfeasors, based on its conclusions that each was an employer of the
Sheriff’s Employees and that each violated the FLSA by causing the
accrual of unpaid overtime–Hopkins by scheduling the Sheriff’s
Employees’ shifts and duties and by maintaining their personnel records,
and Madison County by willfully refusing to appropriate funds to pay
overtime once accrued. The district court then applied the principles
of non-contractual implied indemnity between joint tortfeasors as set
forth by the Mississippi Supreme Court:
“The general rule governing implied indemnity for tort
liability is that a joint tort feasor, whose liability is
secondary as opposed to primary, or is based upon imputed or
passive negligence, as opposed to active negligence or is
negative negligence as opposed to positive negligence, may
be entitled, upon an equitable consideration, to shift his
responsibility to another joint tort feasor. However, where
the fault of each is equal in grade and similar in character,
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the doctrine of implied indemnity is not available since no
one should be permitted to base a cause of action on his own
wrong. Thus, the determination of whether or not indemnity
should be allowed must of necessity depend upon the facts of
each case. . . .
Two critical prerequisites are generally necessary for
the invocation of non-contractual implied indemnity in
Mississippi: (1) The damages which the claimant seeks to
shift are imposed upon him as a result of some legal
obligation to the injured person; and (2) it must appear that
the claimant did not actively or affirmatively participate
in the wrong.” Homes Ins. Co. of N.Y. v. Atlas Tank Mfg.
Co., Inc., 230 So. 2d 549, 551 (Miss. 1970) (citing Bush v.
City of Laurel, 215 So. 2d 256 (Miss. 1968); Southwest Miss.
Elec. Power Ass’n v. Harragill, 182 So. 2d 220 (Miss. 1966)).
With these principles in mind, the district court concluded that Madison
County engaged in secondary negligence, while Hopkins’s actions
constituted primary negligence. These findings provided the basis for
ordering Hopkins to indemnify Madison County.2
In its findings of fact and conclusions of law, the district court
stated:
“While there are no judicial precedents directly
addressing the issue of whether a county board of supervisors
may recover indemnification from a sheriff for violation of
the FLSA, the Court is persuaded by the logic of Mississippi
cases in which defendants have sought indemnification from
joint tortfeasors.”
However, as the Mississippi Supreme Court cautioned in Atlas Tank, “the
determination of whether or not indemnity should be allowed must of
necessity depend upon the facts of each case.” Id. Madison County
2
We need not and do not resolve whether the district court
properly determined Madison County to be a secondary tortfeasor, and
Hopkins a primary one, despite the district court’s parallel conclusion
that Madison County “willfully failed to pay [the Sheriff’s Employees]
overtime as required under the FLSA.”
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fails to cite, and our independent research fails to disclose, any
Mississippi case in which an employee of a Mississippi governmental
entity has been held liable in tort type indemnity or contribution to
his governmental entity employer.3 Because no authority supports the
extension of such non-contractual implied indemnity to this context, we
will not either, particularly given the countervailing considerations
suggested by Mississippi statutory law and the substantial questions of
federal preemption, as noted in the margin.4 See Johnson v. Sawyer, 47
3
No case cited to us by Madison County addressed the prospect of
a public employee indemnifying a public entity. See Home Ins. Co. of
N.Y., 230 So. 2d at 554-55 (affirming a trial court’s determination not
to order an employer to indemnify a utility company); Bush, 215 So. 2d
at 260 (permitting indemnity in favor of a municipality against its
independent contractor); Southwest Miss. Elec. Power Ass’n, 182 So. 2d
at 468 (addressing a company’s claim for indemnity against a truck
dealership and a break repair shop).
4
Although we need not and do not ultimately resolve the issue,
Mississippi law, as Hopkins argues, may in any event immunize him from
Madison County’s state common law indemnification claim or may indicate
a public policy against imposition of tort liability on governmental
employees for actions in the course and scope of their employment. See
MISS. CODE ANN. § 11-46-9; Mississippi Transp. Comm’n v. Jenkins, 699
So. 2d 597, 599-600 (Miss. 1997) (indicating that Mississippi’s Sovereign
Immunity–Tort Claims--Act’s provisions apply to indemnity and
contribution actions). Additionally, although we do not decide the
matter, there is a bona fide question whether the FLSA permits the
application of a state-law based indemnity remedy benefitting employers.
See LeCompte v. Chrysler Credit Corp., 780 F.2d 1260, 1264 (5th Cir.
1986) (refusing to apply a state-law cause of action for indemnity, in
context of defendant employer’s counterclaim against two of plaintiff-
employees suing for FLSA overtime, because it would conflict with goals
of FLSA and “would deprive them [counter-defendants] of overtime
compensation to which the federal statute otherwise entitles them”); see
also Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 144 (2d Cir. 1999)
(“[T]he FLSA’s remedial scheme is sufficiently comprehensive as to
preempt state law” with respect to contribution or indemnification
claims by employers.).
9
F.3d at 729 & n.28.
Conclusion
Finding no authority recognizing under Mississippi law a tort type
indemnification claim by a public entity against a public employee for
acts in the course and scope of employment, we reverse the district
court’s judgment for Madison County and render judgment for Hopkins on
Madison County’s third-party indemnification claim, and on its claim for
attorneys’ fees and expenses, against him. Accordingly, we do not reach
the remaining points raised by Hopkins. For the reasons stated, the
judgment below is
REVERSED AND RENDERED.
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