Trina Ray v. County of Los Angeles , 935 F.3d 703 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRINA RAY, individually, and on No. 17-56581
behalf of others similarly situated,
Plaintiff-Appellee, D.C. No.
2:17-cv-04239-
v. PA-SK
COUNTY OF LOS ANGELES,
Defendant-Appellant.
TRINA RAY; SASHA WALKER, No. 18-55276
individually, and on behalf of all
others similarly situated, D.C. No.
Plaintiffs-Appellants, 2:17-cv-04239-
PA-SK
v.
LOS ANGELES COUNTY DEPARTMENT OPINION
OF PUBLIC SOCIAL SERVICES,
Erroneously Sued As County of Los
Angeles,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
2 RAY V. COUNTY OF LOS ANGELES
Argued and Submitted March 7, 2019
Pasadena, California
Filed August 22, 2019
Before: Kim McLane Wardlaw and Mark J. Bennett,
Circuit Judges, and Kathleen Cardone, * District Judge.
Opinion by Judge Bennett
SUMMARY **
Labor Law / Eleventh Amendment Immunity
The panel affirmed the district court’s order denying a
defendant county’s motion to dismiss, on Eleventh
Amendment immunity grounds, a putative collective action
under the Fair Labor Standards Act; reversed the district
court’s order regarding the putative collective period; and
remanded.
Plaintiff homecare providers were employed through
California’s In-Home Supportive Services program, which
is implemented and run by the State and its counties. In
October 2013, the Department of Labor promulgated a new
rule providing that homecare providers would be entitled to
overtime pay under the FLSA. The final rule had an
*
The Honorable Kathleen Cardone, United States District Judge for
the Western District of Texas, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
RAY V. COUNTY OF LOS ANGELES 3
effective date of January 1, 2015. In 2014, the District Court
for the District of Columbia vacated the rule. On August 21,
2015, the D.C. Circuit reversed and ordered the district court
to enter summary judgment for the Department of Labor. On
September 14, 2015, the Department of Labor announced
that it would not bring enforcement actions against any
employer for violations of the new rule for 30 days after
issuance of the mandate of the D.C. Circuit. On October 27,
2015, the Department of Labor said it would not begin
enforcing the new rule until November 12, 2015. The State
began paying overtime wages on February 1, 2016.
Affirming in part, the panel held that the County of Los
Angeles was not entitled to Eleventh Amendment immunity.
The panel assumed without deciding that a county might be
entitled to immunity if acting as an arm of the state. The
panel held that, under the five-part Mitchell test, the County
was not an arm of the State when it administered the IHSS
program because the state-treasury factor, which is the most
important, and all but one of the other Mitchell factors
weighed against immunity. The panel held that a later
Supreme Court case, Hess v. Port Auth. Trans-Hudson
Corp., 513 U.S. 30 (1994), did not undermine Mitchell such
that it should be overruled.
Reversing in part, the panel held that the effective date
of the Department of Labor’s rule was January 1, 2015,
because the legal effect of the D.C. Circuit’s vacatur was to
reinstate the original effective date. The panel held that the
Department of Labor’s choice against enforcing the rule
until November 12, 2015, did not eliminate the availability
of private rights of action until that date. Accordingly, the
beginning of the putative collective period was January 1,
2015.
4 RAY V. COUNTY OF LOS ANGELES
COUNSEL
Jennifer Mira Hashmall (argued) and Jeffrey B. White,
Miller Barondess LLP, Los Angeles, California, for
Defendant-Appellant/Cross-Appellee.
Matthew C. Helland (argued) and Daniel S. Brome, Nichols
Kaster LLP, San Francisco, California; Philip Bohrer,
Bohrer Brady LLC, Baton Rouge, Louisiana; for Plaintiff-
Appellee/Cross-Appellants.
OPINION
BENNETT, Circuit Judge:
This case concerns whether a county is an arm of the
state and thus entitled to Eleventh Amendment immunity
when it shares responsibility with the state for implementing
a state-wide homecare program. We also consider the
effective date of regulations that (1) a district court vacated
before their original effective date; (2) an appellate court
upheld, reversing the district court; and (3) the agency then
decided not to enforce until a date after the original effective
date. We agree with the district court that the County of Los
Angeles is not entitled to Eleventh Amendment immunity
but disagree as to the effective date of the regulations, which
we hold is the original effective date of January 1, 2015. We
thus affirm in part, reverse in part, and remand.
FACTS
California’s In-Home Supportive Services program
(“IHSS program” or “the program”) provides in-home
supportive services to eligible low-income elderly, blind, or
disabled persons. Homecare providers help recipients with
RAY V. COUNTY OF LOS ANGELES 5
daily activities like housework, meal preparation, and
personal care. The program serves hundreds of thousands of
recipients. In the County of Los Angeles alone there are
about 170,000 homecare providers and more than 200,000
recipients. California implements the program through
regulations promulgated by the California Department of
Social Services (CDSS), and the program is administered in
part by California counties. Plaintiffs are current or former
Los Angeles IHSS homecare providers.
The State and its counties share responsibility for
implementing and running the IHSS program. The CDSS
ensures that “in-home supportive services [are] provided in
a uniform manner in every county,” Cal. Welf. & Inst. Code
§ 12301(a), and it must “adopt regulations establishing a
uniform range of services available to all eligible recipients
based upon individual needs,” id. § 12301.1(a). The State
also procures and implements a “Case Management
Information and Payroll System.” Id. § 12317(b).
But counties have some oversight of the IHSS program
as well. They, like the State, may terminate homecare
providers. See id. § 12300.4(b)(5). And counties evaluate
recipients and ensure quality compliance. See id. § 12301.1.
Counties also “ensure that services are provided to all
eligible recipients.” Id. § 12302. Plaintiffs claim that
although they receive paychecks from the State, the County
is responsible for a “share” of their wages. For example, if
a county imposes “any increase in provider wages or benefits
[that] is locally negotiated,” then “the county shall use
county-only funds” to fund that increase. Id. § 12306.1(a).
Each county also determines whether its providers may
exceed the maximum number of hours set by the CDSS. See
id. § 12300.4(d)(3).
6 RAY V. COUNTY OF LOS ANGELES
As employers of the homecare providers, the State and
County must comply with the Fair Labor Standards Act’s
(FLSA) overtime wage requirements. See 29 U.S.C.
§ 207(a)(1). But that wasn’t always the case.
In 1974, Congress created a “companionship exemption”
to the FLSA for employees “employed in domestic service
employment to provide companionship services for
individuals who (because of age or infirmity) are unable to
care for themselves.” See id. § 213 (a)(15); Fair Labor
Standards Amendments of 1974, Pub. L. No. 93-259,
88 Stat. 55. This exemption applied to homecare providers
like Plaintiffs.
In October 2013, however, the Department of Labor
(DOL) promulgated a new rule that changed the definition
of “companionship services” so that homecare providers like
Plaintiffs would be entitled to overtime pay under the FLSA.
See Application of the Fair Labor Standards Act to Domestic
Service, 78 Fed. Reg. 60,454, 60,454 (Oct. 1, 2013)
(codified at 29 C.F.R. pt. 552). The final rule had an
effective date of January 1, 2015. See id.
Before the rule’s effective date, a group of “trade
associations that represent businesses employing workers”
subject to the FLSA exemption filed a lawsuit in the District
Court for the District of Columbia. See Home Care Ass’n of
Am. v. Weil, 76 F. Supp. 3d 138, 142 (D.D.C. 2014) (Weil I).
The plaintiffs claimed that the rule was arbitrary and
capricious and thus sought to enjoin its implementation. Id.
at 139. At step one of its Chevron analysis, the district court
found that Congress had “clearly spoken” on the issue. Id.
at 146. The district court then vacated the rule, id. at 148,
and the DOL appealed.
RAY V. COUNTY OF LOS ANGELES 7
On August 21, 2015, the D.C. Circuit reversed and
ordered the district court to enter summary judgment for the
DOL. Home Care Ass’n of Am. v. Weil, 799 F.3d 1084, 1087
(D.C. Cir. 2015) (Weil II). Although the DOL prevailed, on
September 14, 2015 it announced that it would “not bring
enforcement actions against any employer for violations of
FLSA obligations resulting from the amended domestic
service regulations for 30 days after the date the mandate
issues.” 1 Application of the Fair Labor Standards Act to
Domestic Service; Announcement of 30-Day Period of Non-
Enforcement, 80 Fed. Reg. 55,029, 55,029 (Sept. 14, 2015)
(codified at 29 C.F.R. pt. 552). The Weil II mandate issued
on October 13, 2015.
On October 27, 2015, the DOL said that it would not
begin enforcing the final rule until November 12, 2015.
1
The DOL also stated:
This 30-day non-enforcement policy does not replace
or affect the timeline of the Department’s existing
time-limited non-enforcement policy announced in
October 2014. 79 FR 60974. Under that policy,
through December 31, 2015, the Department will
exercise prosecutorial discretion in determining
whether to bring enforcement actions, with particular
consideration given to the extent to which States and
other entities have made good faith efforts to bring
their home care programs into compliance with the
FLSA since the promulgation of the Final Rule. The
Department will also continue to provide intensive
technical assistance to the regulated community, as it
has since promulgation of the Final Rule.
Application of the Fair Labor Standards Act to Domestic Service;
Announcement of 30-Day Period of Non-Enforcement, 80 Fed. Reg. at
55,029.
8 RAY V. COUNTY OF LOS ANGELES
And, echoing its September 14, 2015 statement, the DOL
again said that
from November 12, 2015 through December
31, 2015, [it would] exercise prosecutorial
discretion in determining whether to bring
enforcement actions, with particular
consideration given to the extent to which
States and other entities have made good faith
efforts to bring their home care programs into
compliance with the FLSA since the
promulgation of the Final Rule.
Application of the Fair Labor Standards Act to Domestic
Service; Dates of Previously Announced 30-Day Period of
Non-Enforcement, 80 Fed. Reg. 65,646, 65,646 (Oct. 27,
2015) (codified at 29 C.F.R. pt. 552).
Before the Weil I decision, California (through the
CDSS) began taking steps to “meet the January 1, 2015,
implementation date,” including modifying its systems to
“process and calculate overtime compensation.” But after
the Weil I decision, the CDSS decided that it would not
implement overtime payments “until further notice.” After
Weil II, the CDSS again said that it would comply with the
overtime requirements—but not until February 1, 2016.
In June 2017, Ray filed a putative collective action, 2
under Section 216(b) of the FLSA, against the State of
California and the County of Los Angeles. Ray’s complaint
sought relief for herself and the putative collective for
2
Collective actions are provided for in the FLSA and are different
from class actions, see Campbell v. City of L.A., 903 F.3d 1090, 1101
(9th Cir. 2018), but the differences are not relevant to this appeal.
RAY V. COUNTY OF LOS ANGELES 9
unpaid overtime wages between January 1, 2015—the rule’s
original effective date—and February 1, 2016, the date on
which the State began paying overtime wages.
As relevant here, the County moved to dismiss the
complaint on Eleventh Amendment immunity grounds. 3 In
the alternative, the County moved to strike all references in
the complaint to overtime wages allegedly earned before
October 13, 2015—the date on which the mandate issued in
Weil II.
The district court first held that the County had no
Eleventh Amendment immunity. The district court noted
that the Supreme Court has long refused to grant Eleventh
Amendment immunity to counties and that the Court has
already held that California counties are not arms of the
State. The district court then assumed arguendo that a
county could be an arm of the State under the five-factor test
that we set out in Mitchell v. Los Angeles Community
College District, 861 F.2d 198 (9th Cir. 1988) for
determining whether an entity is an arm of the state for
purposes of Eleventh Amendment immunity. The district
court found that only one of the five factors favored the
County, and thus it held that the County enjoyed no Eleventh
Amendment immunity.
The district court then “reject[ed] Plaintiffs’ efforts to
enforce the FLSA companionship exemption regulations
retroactively to January 1, 2015.” Instead, it held “that the
putative collective period extends from November 12, 2015,
through January 31, 2016,” and not before. The court said
3
Early on, Ray voluntarily dismissed the CDSS as a defendant, and
Plaintiffs did not name the State as a defendant in the now-operative
complaint.
10 RAY V. COUNTY OF LOS ANGELES
that although the Weil II decision applied retroactively, that
decision was merely that the DOL could amend the FLSA
and that those amendments were not arbitrary and
capricious. This, the district court held, differed from “the
retroactive application of the amended regulations
themselves.” The district court reasoned:
The rule of law announced by the D.C.
Circuit is given retroactive effect by allowing
DOL to reinstate those regulations without
having to begin a new rule-making process.
That is not the same thing as reinstating an
earlier and judicially vacated effective date
and retroactively creating liability for
violations of the reinstated regulations as if
the District Court’s vacation of the
regulations had never occurred.
The district court also found it “compelling” that both the
D.C. Circuit and the DOL “intended” that the regulation
become effective “no earlier than November 12, 2015.” As
evidence of this intent, the district court pointed to the
DOL’s decision not to enforce the new regulations before
that date.
Finally, the district court found that its holding was
consistent “with the general rule that a private right of action
should ordinarily not exist when the applicable rule could
not be enforced by the relevant enforcement agency.”
The County filed an interlocutory appeal as to the denial
of Eleventh Amendment immunity. The district court
granted Plaintiffs’ motion to certify for interlocutory appeal
the district court’s holding that the putative collective period
began on November 12, 2015, and we granted Plaintiffs’
request to appeal that holding.
RAY V. COUNTY OF LOS ANGELES 11
DISCUSSION
We review de novo the denial of Eleventh Amendment
immunity. Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d
831, 843 n.12 (9th Cir. 2004). We construe the motion to
strike as a motion to dismiss in part, and thus we review the
effective date holding de novo because it essentially
dismissed Plaintiffs’ overtime claims for the period between
January 1, 2015 and November 12, 2015. See Yamaguchi v.
U.S. Dep’t of the Air Force, 109 F.3d 1475, 1482 (9th Cir.
1997).
The County is not entitled to Eleventh Amendment
immunity.
Plaintiffs first argue that Eleventh Amendment
immunity is never available to counties. The County argues
that it enjoys Eleventh Amendment immunity when acting
as an “arm of the State.”
Federal courts have long declined to extend Eleventh
Amendment immunity to counties. 4 Indeed, the Supreme
4
See, e.g., Lake Country Estates, Inc. v. Tahoe Reg’l Planning
Agency, 440 U.S. 391, 401 (1979) (“[T]he Court has consistently refused
to construe the Amendment to afford protection to political subdivisions
such as counties and municipalities, even though such entities exercise a
slice of state power.” (internal quotation marks omitted)); Lincoln Cty.
v. Luning, 133 U.S. 529, 530 (1890) (holding that the Eleventh
Amendment does not bar a suit against a county, though the principle
advanced has changed over time); Del Campo v. Kennedy, 517 F.3d
1070, 1075–76 (9th Cir. 2008) (“State sovereign immunity . . . does not
extend to counties and similar municipal corporations, even though they
share some portion of state power.” (internal quotation marks omitted)
(quoting Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274,
280 (1977))).
12 RAY V. COUNTY OF LOS ANGELES
Court once said that Eleventh Amendment immunity does
not extend to municipal corporations. Mt. Healthy, 429 U.S.
at 280. But thirty years later, the Supreme Court suggested
that it was at least possible for a county to receive Eleventh
Amendment immunity. In Northern Insurance Company of
New York v. Chatham County, 547 U.S. 189, 190 (2006),
which involved a county-operated drawbridge, the Court
stated that a county might be entitled to Eleventh
Amendment immunity if it were “acting as an arm of the
State, as delineated by this Court’s precedents, in operating
the drawbridge.” 5
The Court cited several cases for this proposition. First,
Alden v. Maine: “The second important limit to the principle
of sovereign immunity is that it bars suits against States but
not lesser entities. The immunity does not extend to suits
prosecuted against a municipal corporation or other
governmental entity which is not an arm of the State.”
527 U.S. 706, 756 (1999). This sentence means one of two
things: either (1) that Eleventh Amendment immunity does
not extend to municipal corporations because they are not
arms of the state or (2) that Eleventh Amendment immunity
does not extend to a municipal corporation unless it is acting,
in a particular circumstance, as an arm of the state. Alden in
turn cites Mt. Healthy, in which the Court considered
whether “the Mt. Healthy Board of Education is to be treated
as an arm of the State partaking of the State’s Eleventh
5
At least one circuit has relied on this language and held that
counties might be entitled to Eleventh Amendment immunity. See
Fuesting v. Lafayette Par. Bayou Vermilion Dist., 470 F.3d 576, 579 (5th
Cir. 2006) (“[A] municipality can be immune from suit if it was ‘acting
as an arm of the State, as delineated by [the Supreme] Court’s
precedent’” (alteration in original) (quoting Chatham, 547 U.S. at 194)).
But, to our knowledge, no court has ever actually extended Eleventh
Amendment immunity to a county.
RAY V. COUNTY OF LOS ANGELES 13
Amendment immunity, or is instead to be treated as a
municipal corporation or other political subdivision to which
the Eleventh Amendment does not extend.” Mt. Healthy,
429 U.S. at 280. That citation suggests the former reading.
The Chatham Court also cited Lake Country Estates, but
while that case noted that “some agencies exercising state
power have been permitted to invoke the [Eleventh]
Amendment in order to protect the state treasury from
liability that would have had essentially the same practical
consequences as a judgment against the State itself,” it also
stated that “the Court has consistently refused to construe the
Amendment to afford protection to political subdivisions
such as counties and municipalities, even though such
entities exercise a ‘slice of state power.’” Lake Country
Estates, 440 U.S. at 400–01. Although these passages seem
to support Plaintiffs’ argument that counties never enjoy
Eleventh Amendment immunity, it is not for us to clarify
Chatham’s apparently contrary statement.
The Chatham Court ultimately found it dispositive that
the County there had conceded below that it had no Eleventh
Amendment immunity and that the question on which
certiorari was granted assumed that conclusion. Given that
the Supreme Court appears to have left open the possibility
that a county could be entitled to Eleventh Amendment
immunity in some cases, we decline to hold to the contrary.
We therefore assume without deciding that, consistent with
the Court’s language in Chatham, a county might be entitled
to Eleventh Amendment immunity if acting as an arm of the
state.
The County is not an arm of the State here.
In Mitchell, we set out five factors for determining
whether a government entity is an arm of its state for
14 RAY V. COUNTY OF LOS ANGELES
Eleventh Amendment immunity purposes: (1) “whether a
money judgment would be satisfied out of state funds”;
(2) “whether the entity performs central governmental
functions”; (3) “whether the entity may sue or be sued”;
(4) “whether the entity has the power to take property in its
own name or only the name of the state”; and (5) “the
corporate status of the entity.” 861 F.2d at 201. “To
determine these factors, the court looks to the way state law
treats the entity.” Id.
a. First Mitchell factor
“The first Mitchell factor—whether a money judgment
. . . would be satisfied out of state funds—is the most
important.” Sato v. Orange Cty. Dep’t of Educ., 861 F.3d
923, 929 (9th Cir. 2017); see also Beentjes v. Placer Cty. Air
Pollution Control Dist., 397 F.3d 775, 785 (9th Cir. 2005)
(noting that the first Mitchell factor is “the one given the
most weight”). The County conceded, both below and on
appeal, that it cannot show that a money judgment would be
paid directly with State funds. 6 Thus, this factor weighs
against Eleventh Amendment immunity.
b. Second Mitchell factor
As to the second Mitchell factor—whether the County
performs central governmental functions—we must
determine whether the County addresses “a matter of
statewide rather than local or municipal concern, and the
extent to which the state exercises centralized governmental
control over the entity.” Beentjes, 397 F.3d at 782 (internal
6
The parties discuss at length how the County and the State allocate
the costs of the program, but that is not relevant—what matters is who
would be responsible for satisfying a money judgment against the
County, not who pays for the program.
RAY V. COUNTY OF LOS ANGELES 15
quotation marks omitted) (first quoting Belanger v. Madera
Unified Sch. Dist., 963 F.2d 248, 253 (9th Cir. 1992); then
quoting Savage v. Glendale Union High Sch., Dist. No. 205,
Maricopa Cty., 343 F.3d 1036, 1044 (9th Cir. 2003)).
To begin, it is unclear whether the second Mitchell factor
concerns whether the County performs central government
functions in general or whether the County performs central
government functions in carrying out the particular function
at issue—here implementing the IHSS program.
As the district court correctly noted, the closest analogue
in our case law is Streit v. County of Los Angeles, 236 F.3d
552 (9th Cir. 2001). There, the Los Angeles County
Sheriff’s Department (LASD) would check its systems,
before releasing a prisoner, to see if the prisoner was wanted
by another law enforcement agency. Id. at 556. This
extended the period of incarceration one or two days past the
prisoners’ release dates. Id. The plaintiffs alleged that the
County delayed their release during these checks, in
violation of their civil rights. Id. The LASD argued that
because it was an arm of the state, it was not a “person” that
could be liable for damages under § 1983. Id. at 557.
We looked at the LASD’s performance of the particular
function at issue—implementing the pre-release policy—not
the LASD’s general function as a sheriff’s department. See
id. at 567. We held that “conducting the AJIS checks is not
a central government function.” Id. (emphasis added).
Thus, it appears from Streit that we look to whether the
County, in performing the particular function at issue,
performs a central government function. This fits with the
Court’s statement in Chatham that the county there might
have been entitled to Eleventh Amendment immunity if it
were “acting as an arm of the State, as delineated by this
16 RAY V. COUNTY OF LOS ANGELES
Court’s precedents, in operating [a] drawbridge.”
Chatham, 547 U.S. at 194 (emphasis added).
i. A matter of statewide rather than local or
municipal concern
The in-home care of the elderly and disabled is a matter
of both statewide and local concern. Plaintiffs are residents
of California, and the IHSS program is a statewide program
implemented through State legislation that provides care to
hundreds of thousands of California residents. But Plaintiffs
are also, of course, residents of Los Angeles County, and the
County has an interest in the program and the care provided
in Los Angeles.
ii. The extent to which the state exercises
centralized governmental control over the
entity
Here we consider the extent to which the County, in
implementing the program, has “discretionary powers” and
“substantial autonomy in carrying out [its] duties.” Beentjes,
397 F.3d at 783.
The County may negotiate, implement, and pay for pay
raises. See Cal. Welf. & Inst. Code § 12306.1. The County
may also allow its providers to exceed the maximum number
of hours that the CDSS has set. See id. § 12300.4(d)(3).
Thus, the County has discretion to make some important
choices on its own.
But the County contends—and Plaintiffs do not
dispute—that it has no discretion over the action (or
inaction) that subjected it to potential liability here: payment
of overtime wages under the FLSA. In taking the actions
that have subjected it to potential liability, the County had
RAY V. COUNTY OF LOS ANGELES 17
neither “discretionary powers” nor “substantial autonomy”
in carrying out its duties.
We think this clearly tips the scales in the County’s favor
as to this factor. The County had no choice in the matter of
the overtime wages, as the State mandated the payment start
date. We therefore hold that the second Mitchell factor
favors Eleventh Amendment immunity.
c. Third, fourth, and fifth Mitchell factors
The County does not dispute that it can sue and be sued
(third Mitchell factor), that it has the power to take property
in its own name (fourth Mitchell factor), or that it has an
independent corporate status 7 separate from the State (fifth
Mitchell factor). Thus, these three Mitchell factors weigh
against Eleventh Amendment immunity.
* * *
In sum, the first Mitchell factor is the most important,
and it weighs against Eleventh Amendment immunity. So
do the third, fourth, and fifth Mitchell factors. Only the
second factor favors immunity. We therefore hold that,
under Mitchell, the County is not an arm of the State when it
7
The fifth Mitchell factor asks whether the entity has “independent
corporate status,” Holz v. Nenana City Pub. Sch. Dist., 347 F.3d 1176,
1188 (9th Cir. 2003), or is, instead, merely an agency of the state without
an identity that is separate from the state, Beentjes, 397 F.3d at 785. Here
the County does not dispute its independent corporate status, as the
Supreme Court has already held that California counties have
independent corporate status and are not agents of the State of California.
See Moor v. Alameda Cty., 411 U.S. 693, 719 (1973).
18 RAY V. COUNTY OF LOS ANGELES
administers the IHSS program, and thus it has no Eleventh
Amendment immunity barring this action.
The Supreme Court has not overruled or
undermined Mitchell.
The County argues that we should overrule Mitchell
because a later Supreme Court case, Hess v. Port Authority
Trans-Hudson Corporation, 513 U.S. 30 (1994),
undermined it. As a three-judge panel, if we find that
intervening Supreme Court authority is clearly
irreconcilable with our own precedent, we must consider
ourselves bound by the intervening higher authority and
consider our precedent effectively overruled. See Miller v.
Gammie, 335 F.3d 889, 900 (9th Cir. 2003). Because Hess
is not clearly irreconcilable with Mitchell, we reject the
County’s argument.
In Hess, the Court held that a Congressionally approved
bistate entity—the Port Authority Trans-Hudson
Corporation (PATH), created to improve coordination of the
“terminal, transportation and other facilities of commerce in,
about and through the port of New York”—did not have
Eleventh Amendment immunity. 513 U.S at 35, 52–53
(citation omitted). The County argues that Hess established
“indicators of immunity” that undermine the Mitchell test.
We disagree.
The Hess Court noted that “current Eleventh
Amendment jurisprudence emphasizes the integrity retained
by each State in our federal system.” Id. at 39. The Court
then emphasized the difference between PATH and the
States of the Union: “The States, as separate sovereigns, are
the constituent elements of the Union. Bistate entities, in
contrast, typically are creations of three discrete sovereigns:
two States and the Federal Government.” Id. at 40.
 RAY V. COUNTY OF LOS ANGELES 19
The Court stated that “[p]ointing away from Eleventh
Amendment immunity, the States lack financial
responsibility” for the bistate entity. Id. at 45. Here,
California similarly lacks financial responsibility for the
County generally, but Plaintiffs allege that although
California writes their checks, the County pays a share of
their wages and sets their hours of work.
In Hess, “indicators of immunity point[ed] in different
directions.” Id. at 47. Perhaps they do here as well. Los
Angeles is not a constituent member of the Union, but it
acted at the direction of the State and had no authority over
the payments at issue. But when faced with a different
dichotomy in Hess, the Court emphasized that the most
important factor was whether judgments against PATH
would be paid by the State: “the vulnerability of the State’s
purse [is] the most salient factor in Eleventh Amendment
determinations.” Id. at 48; see also id. at 48–49 (citing cases
for the “prevailing view” that the state-treasury factor is
“generally accorded . . . dispositive weight”); id. at 51
(stating that “the Eleventh Amendment’s core concern is not
implicated” if the State is not “in fact obligated to bear and
pay the . . . indebtedness of the enterprise”). 8
8
The dissent read the holding even more broadly:
In place of the various factors recognized in Lake
Country Estates, Inc. v. Tahoe Regional Planning
Agency, 440 U.S. 391, 99 S. Ct. 1171, 59 L. Ed. 2d 401
(1979), for determining arm-of-the-state status, we
may now substitute a single overriding criterion,
vulnerability of the state treasury. If a State does not
fund judgments against an entity, that entity is not
20 RAY V. COUNTY OF LOS ANGELES
After noting that the bistate entity “was financially self-
sufficient,” generated “its own revenues,” and paid “its own
debts,” the Court held that “[r]equiring the [bistate entity] to
answer in federal court to injured railroad workers who
assert a federal statutory right, under the FELA, to recover
damages does not touch the concerns—the States’ solvency
and dignity—that underpin the Eleventh Amendment.” Id.
at 52. The same is true here. Mitchell and Hess both
emphasize the state-treasury factor. Hess thus fully supports
and does not undermine Mitchell. 9
The County argues that Hess emphasized the amount of
control that a state maintains over an entity, a factor
supposedly not mentioned in Mitchell and one that,
according to the County, favors Eleventh Amendment
immunity here. First, as we mentioned above, the second
Mitchell factor does include a “control” inquiry—it just
doesn’t make that factor dispositive. In addition, Hess
pointed out that “[g]auging actual control . . . can be a
‘perilous inquiry,’ [and] ‘an uncertain and unreliable
exercise.’” 513 U.S. at 47 (quoting Note, 92 Colum. L. Rev.
1243, 1284 (1992)). The Court therefore doubted not only
the efficacy but also the utility of a “control” analysis, and it
within the ambit of the Eleventh Amendment, and
suits in federal court may proceed unimpeded.
Id. at 55 (O’Connor, J., dissenting).
9
Los Angeles makes a legitimate point about the unfairness of the
result here. But that unfairness springs from the State and its
implementing legislation, not the Eleventh Amendment. Los Angeles
must air its grievance, if at all, in Sacramento.
RAY V. COUNTY OF LOS ANGELES 21
did not suggest that control was a favored, much less
dispositive, factor in the Eleventh Amendment analysis. 10
Hess clearly stated that “rendering control dispositive
does not home in on the impetus for the Eleventh
Amendment: the prevention of federal-court judgments that
must be paid out of a State’s treasury.” Id. at 48. And, in
specifically discussing the control factor, the Court noted
that even though “‘political subdivisions exist solely at the
whim and behest of their State,’ . . . cities and counties do
not enjoy Eleventh Amendment immunity.” Id. at 47
(quoting Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S.
299, 313 (1990)).
Finally, the County insists that Hess compels us to
consider the State’s dignity, a factor not mentioned in
Mitchell. Hess noted that the State’s “solvency and dignity
. . . underpin the Eleventh Amendment.” 513 U.S. at 52.
That is undoubtedly true. But the State is no longer a party
to this action, and it will not be responsible for an adverse
judgment against the County. Allowing this action against
Los Angeles does not injure California’s dignity. 11
10
The control discussed in Hess seems to have gone to overall
control over the entity, not just control within the context of the particular
function at issue: “PATH urges that we find good reason to classify the
Port Authority as a state agency for Eleventh Amendment purposes
based on the control New York and New Jersey wield over the
Authority. . . . But ultimate control of every state-created entity resides
with the State, for the State may destroy or reshape any unit it creates.”
Id. at 47. Thus, looking at the State’s overall control over the County as
a county would not help the County’s position here.
11
And, although it would not have altered our analysis, we note that
California has not sought to file an amicus brief (below or on appeal)
22 RAY V. COUNTY OF LOS ANGELES
The Supreme Court decided Hess about five years after
we decided Mitchell. And although Hess arose in a different
context than Mitchell-Hess addressed a bistate entity, not a
county—nothing in Hess so undermines Mitchell that we
have the power to overrule it. More importantly, even if we
used Hess rather than Mitchell to guide our analysis, we
would reach the same result.
When a non-state entity invokes Eleventh Amendment
immunity, the most important factor for determining
whether the entity is an arm of the state remains the state-
treasury factor—that is, whether the state will be liable for a
money judgment against the non-state entity. That factor,
and all but one of the other Mitchell factors, dictates the
result here. The Eleventh Amendment does not bar
Plaintiffs’ suit against Los Angeles.
The effective date of the rule is January 1, 2015.
We next consider whether the effective date of the rule
is the original effective date of January 1, 2015 or some date
after the D.C. Circuit reversed the district court’s vacatur.
The County argues that the rule cannot have an effective date
that is earlier than the date on which the D.C. Circuit
reversed the district court’s vacatur. Plaintiffs argue that the
legal effect of the vacatur is to reinstate the original January
1, 2015 effective date. We agree with Plaintiffs and hold
that the effective date of the rule is January 1, 2015.
arguing either that the County is entitled to Eleventh Amendment
immunity or that this case threatens California’s dignity.
RAY V. COUNTY OF LOS ANGELES 23
A January 1, 2015 effective date is not
impermissibly retroactive.
The County argues that a January 1, 2015 effective date
is impermissibly retroactive. Plaintiffs argue that the D.C.
Circuit’s decision, not the rule, applies retroactively, because
the D.C. Circuit was “explaining what the law always was,”
and thus reinstating the original effective date is merely a
return to the status quo ante.
When an appellate court applies “a rule of federal law to
the parties before it,” that interpretation “must be given full
retroactive effect in all cases still open on direct review and
as to all events, regardless of whether such events predate or
postdate [the] announcement of the rule.” Harper v. Va.
Dep’t of Taxation, 509 U.S. 86, 97 (1993). That is because
“when a court delivers a ruling, even if it is unforeseen, the
law has not changed. Rather, the court is explaining what
the law always was.” Jones Stevedoring Co. v. Dir., Office
of Workers’ Comp. Programs, 133 F.3d 683, 688 (9th Cir.
1997).
When the D.C. Circuit held that the DOL had the
rulemaking authority to promulgate the new rule and that its
new rule was a reasonable exercise of that authority, see Weil
II, 799 F.3d at 1090, it did not change the law but merely
explained what the law always was—the district court’s
erroneous contrary holding notwithstanding.
Two cases support our holding. In GTE South, Inc. v.
Morrison, 199 F.3d 733, 738, 740 (4th Cir. 1999), the Fourth
Circuit addressed an issue much like the one we face:
determining the effective date of certain pricing rules,
promulgated by the FCC, that the Eighth Circuit stayed and
then vacated before their effective date. The Supreme Court
later reversed the Eighth Circuit. See AT & T Corp. v. Iowa
24 RAY V. COUNTY OF LOS ANGELES
Utilities Bd., 525 U.S. 366, 385 (1999). The Morrison panel
held that “the Supreme Court’s determination that the FCC
has jurisdiction to issue pricing rules would appear to
compel the conclusion that the FCC always had such
jurisdiction and that the rules apply as of the effective date
originally scheduled.” 199 F.3d at 740 (emphasis added).
The Fourth Circuit emphasized that its holding was not
unfair to the parties who argued for a later effective date
because they had “ample notice” of the original effective
date and “surely knew that the FCC’s authority to issue
pricing rules might ultimately be upheld by the Supreme
Court.” Id. at 741.
In US West Communication, Inc. v. Jennings, 304 F.3d
950, 955 (9th Cir. 2002), we considered a similar question:
whether the regulations that the Fourth Circuit considered in
Morrison applied to conduct that occurred during the period
of vacatur. Finding the Fourth Circuit’s reasoning in
Morrison persuasive and applicable, we noted that the
Supreme Court’s determination that the regulations were
valid meant that we should apply them “to all . . . agreements
arbitrated under the Act, including agreements arbitrated
before the rules were reinstated.” Id. at 957 (emphasis
added). Relying on Morrison, we held that applying the
reinstated regulations to conduct that occurred during the
period of vacatur would not give the regulations an
impermissible retroactive effect. Id. at 958.
Morrison and Jennings are analogous to this case
because both involved determining how to apply rules or
regulations that were vacated but ultimately reinstated on
appeal. Indeed, Morrison commented not only on the
retroactivity of the Supreme Court’s reversal but also on the
effective date of the regulations, holding that the intervening
RAY V. COUNTY OF LOS ANGELES 25
vacatur did not alter the original effective date of the pricing
rules. 199 F.3d at 740.
Thus, Morrison and Jennings guide our analysis here.
The D.C. Circuit’s holding that the DOL had the authority to
promulgate the new rule and that the rule was reasonable
applies retroactively. As in Jennings, the regulations apply
as of the original effective date. To hold otherwise could
encourage dilatory appellate litigation. If an erroneously
vacated rule or regulation were not effective until sometime
after the mandate issued in a later appeal, then a party might
drag out the appellate process to avoid compliance for as
long as possible. Put differently, an erroneous vacatur
cannot postpone a rule’s effective date until an appellate
court corrects the error sometime in the future. And, as the
Fourth Circuit noted in Morrison, in a case like this everyone
knows that the lower court decision might be reversed on
appeal.
The State and its counties knew from October 13, 2013,
when the DOL first announced its final rule, that January 1,
2015 was the rule’s effective date. See Application of the
Fair Labor Standards Act to Domestic Service, 78 Fed. Reg.
at 60,454. The State and its counties had a full fifteen
months to comply with the final rule—indeed the State
initially said that it would comply with the original effective
date, but it changed course after the Weil I court vacated the
rule. That decision may have been reasonable, but it created
a monetary risk, as the State and its counties were well aware
that an appellate court might uphold the regulations on
appeal.
The district court held that to apply the Weil II decision
retroactively would be to “reinstate[] an earlier and judicially
vacated effective date and retroactively creat[e] liability for
violations of the reinstated regulations as if the District
26 RAY V. COUNTY OF LOS ANGELES
Court’s vacation of the regulations had never occurred.”
That is exactly correct. And although the district court found
that to be unfair, it would be equally unfair to hold that a
putative collective of homecare providers is not entitled to
nearly a year’s worth of overtime wages just because a single
district court issued an erroneous decision that another court
reversed on appeal. The State gambled that Weil I would be
affirmed. The effect of that gamble might be unfair to the
County, but the County must seek any recourse from the
State. It is not fair for the homecare providers to bear the
financial consequences of the State’s calculated risk.
The DOL’s decision not to enforce a new rule does
not obviate private rights of action.
According to the County, the DOL’s choice against
enforcing the rule until November 12, 2015 eliminated the
availability of private rights of action until that date because
a private right of action cannot precede an agency’s
enforcement of a rule or regulation. We disagree.
“An agency’s informal assurance that it will not pursue
enforcement cannot preclude a citizen’s suit to do so.” Ohio
Valley Envtl. Coal. v. Fola Coal Co., LLC, 845 F.3d 133,
145 (4th Cir. 2017) (emphasis added). Congress created a
private right of action under the FLSA for unpaid overtime:
“Any employer who violates the provisions of section 206
or section 207 of this title shall be liable to the employee or
employees affected in the amount of their . . . unpaid
overtime compensation . . . .” 29 U.S.C. § 216(b). An
agency’s discretionary decision to hold off enforcement does
not and cannot strip private parties of their rights to do so.
See Ohio Valley, 845 F.3d at 145 (“Congress enacted the
citizen suit provision of the Clean Water Act to address
situations, like the one at hand, in which the traditional
enforcement agency declines to act.”).
RAY V. COUNTY OF LOS ANGELES 27
The district court’s hypothesis that the D.C. Circuit and
DOL “intended” that the regulation become effective “no
earlier than November 12, 2015” is tenuous and, in any
event, irrelevant. First, the D.C. Circuit said nothing at all
on the issue. Second, there is nothing in the several
statements of the DOL, which the district court relied on, that
suggest that it intended its discretionary enforcement choices
to preclude private enforcement. Indeed, other than by
amending the rule, the DOL could not have precluded
private enforcement even if it wanted to.
The rule’s original effective date remains January 1,
2015. If the DOL “intended” for the effective date be
something other than January 1, 2015, the DOL could have
sought to change that effective date through the procedures
set out in the Administrative Procedure Act. Were we to
hold to the contrary and impose our view that the DOL’s
exercise of discretion amended the effective date sub
silentio, we would in fact be usurping the rulemaking
authority of the DOL. See Nat. Res. Def. Council, Inc. v.
U.S. E.P.A., 683 F.2d 752, 762 (3d Cir. 1982) (holding that
a final rule’s effective date is an “essential part” of that rule
and is thus subject to the rulemaking procedures of the
APA).
The effective date of the rule is January 1, 2015. 12
12
Although some district courts have reached a different
conclusion—see, e.g., Bangoy v. Total Homecare Solutions, LLC, No.
1:15-CV-573, 2015 WL 12672727, at *3 (S.D. Ohio Dec. 21, 2015)
(holding that the plaintiffs failed to state a claim for a violation of the
FLSA between January 1, 2015 and “late August 2015”)—nearly all of
them have reached the same result we reach here, see, e.g., Kinkead v.
Humana, Inc., 206 F. Supp. 3d 751, 752 (D. Conn. 2016) (holding that
the effective date of the rule is January 1, 2015, “the effective date set
28 RAY V. COUNTY OF LOS ANGELES
CONCLUSION
We AFFIRM the district court’s holding that the County
is not entitled to Eleventh Amendment immunity and
REVERSE the district court’s holding that the putative
collective period began on November 12, 2015, holding
instead that the rule’s effective date—and thus the beginning
of the putative collective period—is January 1, 2015. We
REMAND for proceedings consistent with this opinion.
Costs shall be awarded to Plaintiffs-Appellants.
forth by the agency”); Collins v. DKL Ventures, LLC, 215 F. Supp. 3d
1059 (D. Colo. 2016) (same); Lewis-Ramsey v. Evangelical Lutheran
Good Samaritan Soc’y, 215 F. Supp. 3d 805 (S.D. Iowa 2016) (same).