Citizens Bank, N.A. v.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 19-3046
_____________
In re: CITIZENS BANK, N.A.,
Petitioner
On Petition for a Writ of Mandamus from the
United States District Court for the
Western District of Pennsylvania
Related to District Court No. 2-15-cv-01541
District Judge: The Honorable Arthur J. Schwab
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
________________
Before: SMITH, Chief Judge, SHWARTZ and
SCIRICA, Circuit Judges
(Filed: October 5, 2021)
Thomas E. Hill
Holland & Knight
400 South Hope Street
8th Floor
Los Angeles, CA 90071
Brian A. Sutherland
Reed Smith
101 Second Street
Suite 1800
San Francisco, CA 94105
Christina Tellado
Holland & Knight
400 South Hope Street
8th Floor
Los Angeles, CA 90071
Kim M. Watterson
Reed Smith
225 Fifth Avenue
Suite 1200
Pittsburgh, PA 15222
Counsel for Petitioner
Justin L. Swidler
Joshua S. Boyette
Swartz Swidler
2
1101 Kings Highway North
Suite 402
Cherry Hill, NJ 08034
Daniel A. Horowitz
O’Brien Belland & Bushinsky
509 South Lenola Road
Building 6
Moorestown, NJ 08057
Robert D. Soloff
7805 Southwest 6th Court
Plantation, FL 33324
Counsel for Respondents
_____________________
OPINION OF THE COURT
_____________________
SMITH, Chief Judge.
Twelve current and former mortgage loan officers
(MLOs) claim that Citizens Bank forced them—and more
than a thousand of their colleagues—to work over forty
hours a week without paying them the overtime they were
due under state and federal law. They filed a single
complaint bringing a collective action under the Fair
3
Labor Standards Act (FLSA), 29 U.S.C. §§ 207, 216, and
parallel state-law claims that they wished to pursue as a
class action under Rule 23 of the Federal Rules of Civil
Procedure. 1
The District Court scheduled a trial on the primary
factual issue in the FLSA opt-in collective action but left
unresolved whether it would certify a class for the state-
law opt-out Rule 23 action. Because the FLSA collective
action and the Rule 23 class action turn on the same facts,
Citizens strongly objected to that procedural order of
business. Yet the District Court essentially ignored
Citizens’ objections.
With a trial date looming, Citizens filed a petition in
our Court for a writ of mandamus. We stayed the case to
decide that petition. This opinion explains our decision to
issue the stay.
1
The District Court had jurisdiction over the FLSA claims
under 28 U.S.C. § 1331 and had supplemental jurisdiction
over the state-law claims under 28 U.S.C. § 1367.
Because Plaintiffs styled this as a putative class action for
over $5 million in damages, and because at least one MLO
is a citizen of a state different from Citizens Bank, the
District Court also had jurisdiction over the state law
claims under 28 U.S.C. § 1332(d)(2)(A).
4
I.
Before discussing the specifics of the parties’
dispute, we will first compare and contrast the two types
of aggregate litigation that Plaintiffs are simultaneously
pursuing: an FLSA opt-in collective action and a Rule
23(b)(3) opt-out class action.
We begin with the FLSA, which provides a private
cause of action against an employer for failing to pay
overtime for a workweek of more than forty hours. 29
U.S.C. § 207(a). An FLSA action may be brought “by any
one or more employees for and [on] behalf of himself or
themselves and other employees similarly situated.” 29
U.S.C. § 216(b). The FLSA thus “provides a vehicle for
managing claims of multiple employees against a single
employer.” Halle v. W. Penn Allegheny Health Sys., Inc.,
842 F.3d 215, 223 (3d Cir. 2016). However, “[n]o
employee shall be a party plaintiff to any such 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.” 29 U.S.C. § 216(b).
Accordingly, after a “modest factual showing” by
the named plaintiffs, a district court must first
conditionally certify that the proposed collective action
5
plaintiffs are “similarly situated.” 2 Halle, 842 F.3d at 224
(citation omitted); 29 U.S.C. § 216(b). Conditional
certification permits the dissemination of a court-approved
notice to all potential plaintiffs, who are then given the
opportunity to affirmatively opt in as plaintiffs to the
lawsuit. Halle, 842 F.3d at 224.
Once the FLSA plaintiffs provide written notice that
they have opted in to the collective, the parties conduct
certification-related discovery and, eventually, the group
of plaintiffs moves for final certification. Id. at 225. The
group then bears the burden of demonstrating by a
preponderance of the evidence that they are all “similarly
situated” under the FLSA. Id. at 226. If the District Court
finally certifies the FLSA collective action, the matter
goes forward with the participation of all plaintiffs who
have opted in. Id. If, on the other hand, final certification
is denied, the opt-in plaintiffs are dismissed as plaintiffs
and only the original named plaintiffs proceed to trial. Id.
2
As we observed in Halle, the procedures for determining
whether employees are “similarly situated” for purposes
of an FLSA collective action have been fashioned by
courts, as Congress has not promulgated any framework
nor are there any specifically applicable procedural rules.
842 F.3d at 223.
6
Turning to the class action device, Rule 23(a)
provides that a matter may proceed as a class action only
if: the class is so numerous that joinder of all members is
impracticable; there are questions of law or fact common
to the class; the claims or defenses of the representative
parties are typical of the claims or defenses of the class;
and the representative parties will fairly and adequately
protect the interests of the class. Further, under Rule
23(b)(3), the District Court must find that questions of law
or fact common to class members predominate over any
questions affecting only individual members, and that a
class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.
These issues must be resolved when a District Court
decides whether or not to certify a class. Certification
requires a two-step analysis in which the District Court
must first determine whether the putative class satisfies the
numerosity, commonality, typicality, and adequacy of
representation provisions of Rule 23(a), and then proceeds
to analyze the predominance and superiority provisions of
Rule 23(b)(3). Reinig v. RBS Citizens, 912 F.3d 115, 124–
25 (3d Cir. 2018). Class certification is appropriate only
if, after “rigorous analysis,” the District Court concludes
that plaintiffs satisfy each and every element by a
preponderance of the evidence. Id. at 125 (quoting
Marcus v. BMW of N. Am., 687 F.3d 583, 591 (3d Cir.
2012)); see also Gen. Tel. Co. of the Sw. v. Falcon, 457
U.S. 147, 161 (1982). The class certification decision
7
must happen “at an early practicable time.” Fed. R. Civ.
P. 23(c)(1)(A). And such a decision—unlike a
certification in the FLSA context—may be immediately
appealed under Rule 23(f).
Certification of a class means that all individuals
falling within the class definition will be bound by the
judgment unless they affirmatively request to be excluded.
Fed. R. Civ. P. 23(c)(2)(B). Accordingly, after a class is
certified, court-approved notice is provided to all class
members to advise them, inter alia, of the binding effect
of a judgment and to permit them an opportunity to opt out
of the class. Fed. R. Civ. P. 23(c)(2). This opt-out
opportunity under Rule 23 stands in sharp contrast to the
FLSA’s opt-in requirement, and “is the most conspicuous
difference between the FLSA collective action device and
a class action under Rule 23.” Halle, 842 F.3d at 225; see
also Reinig, 912 F.3d at 132.
Despite these marked differences, we have held that
an FLSA opt-in collective action is not, by its nature,
incompatible with a parallel state law Rule 23 opt-out class
action. Knepper v. Rite Aid Corp., 675 F.3d 249, 261 (3d
Cir. 2012). Yet the present mandamus petition brings into
sharp relief some of the potential challenges of trying a
case that simultaneously includes both forms of aggregate
litigation.
8
II.
With these differences between the FLSA opt-in
collective action and the Rule 23 opt-out class action
firmly in mind, we return to the procedural history of the
parties’ dispute.
In November 2015, three current and former MLOs,
Alex Reinig, Ken Gritz, and Bob Soda, filed a complaint
alleging that Citizens maintains an unofficial policy or
practice requiring MLOs to work off the clock in excess
of forty hours per week without paying overtime wages
due in accordance with the FLSA, 29 U.S.C. § 207, and
Pennsylvania law, 43 Pa. Stat. Ann. § 260.1 et seq., and
§ 333.101 et seq. 3
Plaintiffs moved for conditional certification of an
FLSA opt-in collective action, which the District Court
granted in May 2016. Mem. Order May 3, 2016. The
District Court concluded that, for FLSA certification
purposes, Plaintiffs “established that the ‘off the clock’
3
Plaintiffs also claim that Citizens structures payment of
commissions and bonuses to recapture overtime payments
in violation of the FLSA and analogous state law. Because
the District Court granted summary judgment to Citizens
on the “recapture” claims, they are not relevant to the
issues before us and will not be discussed in this opinion.
9
claims are related to Citizens’ policy. . . .” Id. at 5.
Shortly thereafter, the District Court scheduled a trial for
September 25, 2017.
After granting conditional FLSA certification, the
District Court ordered Plaintiffs to notify the potential
members of the collective that they would have 100 days
to opt in to the FLSA action. In accordance with the
District Court’s order, Plaintiffs sent notice to over 1,000
current and former MLOs. Of those, 351 provided the
requisite consent forms allowing them to opt in.
After the 100-day period expired, Plaintiffs filed an
amended complaint adding nine named plaintiffs to the
lawsuit, alleging state law claims arising from the laws of
Connecticut, Illinois, Massachusetts, Michigan, New
Hampshire, New York, North Carolina, Ohio, and Rhode
Island as well as Pennsylvania. 4 Shortly after filing the
amended complaint, Plaintiffs filed a motion for class
certification under Rule 23, seeking certification of ten
classes, each of which would pursue claims under the
overtime laws of a particular state. Citizens responded
with two related submissions: one opposing the class
4
In August 2017, with the District Court’s leave, Plaintiffs
filed a second amended complaint to add two additional
named plaintiffs. It is, for our purposes, the operative
complaint.
10
certification motion and the other seeking decertification
of the FLSA collective action. The parties also filed cross-
motions for summary judgment.
By stipulation, the parties agreed to the appointment
of a Special Master, who recommended, inter alia,
certifying a class for Plaintiffs’ state law claims under
Rule 23, denying Citizens’ motion for decertification of
the FLSA collective action, and granting final FLSA
certification. In its objections to the Special Master’s
recommendations, and central to the matter before us,
Citizens argued that the scheduled FLSA trial date must
be postponed because the putative class had not yet been
notified of the Rule 23 certification decision, and therefore
had not been given a chance to opt out.
The District Court adopted the Special Master’s
report and recommendations in full. In addition to
certifying the Rule 23 state law classes, the District Court
granted final FLSA collective action certification,
concluding that the FLSA opt-in plaintiffs are similarly
situated because “the MLOs share the same job
description with similar (if not identical) job duties, are
paid pursuant to the same compensation plan(s), are
subject to the same policies, and assert the same claims for
unpaid off-the-clock overtime wages in this lawsuit.”
Reinig v. RBS Citizens, 2017 WL 3599489, at *3 (W.D.
Pa. Aug. 22, 2017).
11
The District Court also rejected Citizens’ objection
to proceeding with the previously scheduled FLSA trial:
The remainder of Defendant’s arguments are
procedural and regard matters within the
sound discretion of the District Court to
manage litigation before it. Trial of a single
issue regarding Plaintiffs’ FLSA off-the-
clock claims is scheduled to commence, and
will commence, on September 25, 2017.
This in no way interferes with the state
subclasses[’] right to receive notice of the
pending state-law claims and to opt-out of the
action if they so choose.
Id. (citation omitted). The scheduled FLSA trial would
address whether “Citizens Bank had a policy or practice
that caused [MLOs] to not report all of the hours they
worked.” JA 255.
Citizens timely filed a Rule 23(f) petition objecting
to class certification, and we granted that petition. 5 In
5
Citizens also filed a petition for a writ of mandamus,
arguing that the District Court’s planned trial on the main
factual issue presented in both the collective and class
actions, without first providing notice to the Rule 23 class
members and giving them an opportunity to opt out, would
violate both Rule 23 and due process. That petition
12
resolving the petition, we discerned numerous flaws in the
District Court’s consideration of the Rule 23 class
certification issues. For instance, we concluded that the
District Court had not adequately defined any class or sub-
classes as required by Rule 23(c)(1)(B), leaving us “to
comb through and cross-reference multiple documents in
an attempt to cobble together the parameters defining the
class and a complete list of the claims, issues, and defenses
to be treated on a class basis.” Reinig, 912 F.3d at 126.
In addition, we could not determine what evidence
the District Court relied on to conclude that Plaintiffs had
satisfied Rule 23(b)’s predominance and commonality
requirements. Its “barebones” analysis was insufficient to
allow us to conclude that it had conducted the “rigorous”
review that Rule 23 requires, particularly because it did
not reconcile “contradictory testimony and other
evidence” undermining Plaintiffs’ claim of the existence
of a company-wide policy to discourage or underpay
overtime. Id. at 129. Accordingly, we reversed and
remanded the District Court’s Rule 23 class certification
order, expressing “serious doubts whether” Plaintiffs’
evidence was “sufficiently representative of the class as a
whole,” and instructing the District Court to “conduct a
ultimately was dismissed as moot because, in resolving the
Rule 23(f) petition, our Court vacated the underlying class
certification decision.
13
‘rigorous’ examination of the factual and legal allegations
underpinning [the] claims before deciding . . . class
certification.” Id. at 130.
In its Rule 23(f) petition, Citizens also asked us to
exercise pendent appellate jurisdiction to consider the
District Court’s FLSA collective action certification. We
declined to do so. Although we acknowledged “that some
of the factors and evidence necessary to satisfy the
prerequisites of Rule 23 and § 216(b) may overlap,” id. at
132, we determined that “Rule 23 class certification and
FLSA collective action certification are fundamentally
different creatures.” Id. at 131. Each is governed by its
own legal standard—for the class action, Rule 23 applies,
while for the FLSA collective action, § 216(b)’s “similarly
situated” language controls. So the two certification
decisions, while related and potentially resting upon the
same evidence, were not “inextricably intertwined” for
purposes of the narrow doctrine of pendent appellate
jurisdiction. See id. at 131–32. Because we lacked
jurisdiction to review it in the interlocutory Rule 23(f)
proceeding, the FLSA certification remained in place. See
id. at 133.
On remand, despite our express instruction to the
District Court to “conduct a rigorous examination of the
factual and legal allegations underpinning Plaintiffs’
claims,” id. at 130, the District Court chose not to return
to the question of class certification. Instead, it pressed on
14
with Plaintiffs’ FLSA collective action, reiterating its plan
to proceed with a single-issue FLSA trial without first
deciding whether to certify a Rule 23 class. The issue to
be placed before the jury was to be: “Did Plaintiffs prove
by a preponderance of the evidence that Citizens Bank had
a policy or practice that caused mortgage loan officers to
not report all of the hours they worked (i.e., to work ‘off
the clock’)?” Reinig v. RBS Citizens, 386 F. Supp. 3d 602,
608 (W.D. Pa. June 25, 2019).
Citizens raised numerous objections to the District
Court’s planned FLSA trial, moving to stay it until after a
Rule 23 class certification decision had been made. The
District Court declined to stay the trial and failed to
meaningfully address the merits of the objections. Instead,
it characterized Citizens’ position as a delay tactic and an
effort to undermine the District Court’s ability to manage
its own docket.
Citizens then came to us seeking a writ of
mandamus. Specifically, Citizens asked us (1) to direct
the District Court to refrain from proceeding with the
FLSA collective action trial until the Rule 23 class
certification motion is decided; (2) if a Rule 23 class is
certified, to direct the District Court to refrain from
proceeding with trial until after class members have been
notified and given an opportunity to opt out; and (3) to
reassign the case to a new District Judge. Citizens also
sought a stay pending our decision, which we granted.
15
The day we issued our stay, the District Judge filed
a supplemental response to the mandamus petition, joining
Citizen Bank’s request that the case be reassigned. 6
Because the District Judge joined Citizens’ request for
relief, we will now dissolve our stay so that the Chief
Judge of the United States District Court for the Western
District of Pennsylvania may reassign this case. We will
dismiss the mandamus petition in part as moot insofar as
it requests reassignment. And given that pending
reassignment, we expect that the District Judge who will
assume management of this litigation will take into
account our ensuing discussion of the interests at stake
here and the factors that motivated our grant of a stay in
the first place. We are confident that the District Court
will heed our prior direction to “conduct a ‘rigorous’
examination of the factual and legal allegations
underpinning [the] claims before deciding . . . class
certification.” Reinig, 912 F.3d at 130. Such analysis is
at the heart of Rule 23 practice and procedure. See In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 316 (3d
Cir. 2008). Accordingly, we will deny the remainder of
6
The District Judge indicated that he had taken senior
status under 28 U.S.C. § 371 and favored a “generational-
shift to another trial judge to manage the case in the
future.” Supp. Response 1. He reiterated his view that
Citizens’ mandamus petition is meritless.
16
the petition without prejudice because it is unnecessary for
us to consider at this time.
III.
The parties agree that the standard framework for a
stay pending appeal governs Citizens’ application for a
stay pending resolution of its mandamus petition. We
therefore considered:
(1) whether Citizens was sufficiently likely to obtain
mandamus relief;
(2) whether Citizens would suffer irreparable injury
absent a stay;
(3) whether a stay would substantially injure
Plaintiffs; and
(4) where the public interest lies.
See Nken v. Holder, 556 U.S. 418, 434 (2009) (treating this
test as the standard inquiry “whenever a court order may
allow or disallow anticipated action before the legality of
that action has been conclusively determined”). 7 “The
7
We had jurisdiction over the stay application under the
All Writs Act, 28 U.S.C. § 1651. See Nken, 556 U.S. at
426.
17
first two factors of th[is] traditional standard are the most
critical.” Id. Here, both of those factors supported a stay,
and the third factor did as well. The fourth did not, at the
time we entered our order, impact our weighing process.
Because the balance of the factors preponderated strongly
in favor of relief, we granted the stay.
1. Citizens Had a Sufficient Likelihood of
Success on its Mandamus Petition, and
Mandamus Is the Only Relief Available
To prevail on the merits of a mandamus petition, the
petitioner must show that the district court clearly and
indisputably erred, and that no other adequate alternative
remedy exists. 8 See In re Howmedica Osteonics Corp.,
867 F.3d 390, 401 (3d Cir. 2017). Although “the remedy
of mandamus is a drastic one, to be invoked only in
extraordinary situations,” Allied Chem. Corp. v. Daiflon,
Inc., 449 U.S. 33, 34 (1980), the bar is set lower when we
consider whether to grant a stay pending resolution of a
petition. The stay applicant need show only “a reasonable
chance, or probability, of winning” mandamus relief in
8
Mandamus also requires a showing of irreparable injury.
See In re Howmedica Osteonics Corp., 867 F.3d 390, 401
(3d Cir. 2017). But because the test for a stay already
accounts for irreparable injury, we address it within that
framework. See infra Section III.2.
18
order to prevail. In re Revel AC, Inc., 802 F.3d 558, 568
(3d Cir. 2015). In other words, we may grant a stay even
if the ultimate likelihood of granting the mandamus
petition is below 50 percent, so long as it is “significantly
better than negligible.” Id. at 571.
Here, for the reasons we will describe below,
Citizens cleared that hurdle. In this hybrid wage-and-hour
suit, the District Court refused to meaningfully engage
with Citizens’ objections to the Court’s proceeding with
trial in the FLSA opt-in collective action without first
considering whether to certify the related state-law Rule
23 opt-out class action—even though the planned trial
would resolve a fact issue that is central to all the claims,
and even though our Court had remanded the case
specifically to require the District Court to conduct a
rigorous analysis on Rule 23 class certification.
Furthermore, mandamus is the only relief available to
Citizens that can resolve that error.
A. Likelihood of Success
Even if this case had been filed as a Rule 23(b)(3)
opt-out class action without the presence of an FLSA
collective action, we would view a trial-before-
certification approach with the utmost skepticism. Such a
procedural sequence would be ignoring Rule 23’s text and
history, flouting Supreme Court precedent, and departing
from the case law of seven circuits while undercutting four
19
others. Yet the District Court’s plan to try the main factual
question in the FLSA collective action—that is, whether
“Citizens Bank had a policy or practice that caused
[MLOs] to not report all of the hours they worked,” JA
255—would inevitably encroach on the merits of a Rule
23 class action that, thus far, is without a certified class.
Such a course of action triggers all of the same weighty
concerns as a trial-before-certification approach.
Moreover, complexities unique to hybrid wage-and-hour
actions like this one compound the potential pitfalls.
Given the various red flags raised by Citizens in response
to the District Court’s planned approach, as well as the
District Court’s decision to plow ahead without
acknowledging or engaging with any of them, we
concluded without hesitation that Citizens had a
reasonable probability of prevailing on the merits of its
mandamus petition.
We begin, of course, with the text of Rule 23 which
obliges district courts to decide certification “[a]t an early
practicable time after a person sues or is sued as a class
representative.” Fed. R. Civ. P. 23(c)(1)(A). When used
as a modifier, “early” means “absolutely or relatively near
to the beginning of a period of time”; it “designat[es] the
first part or stage” of something. Early, Oxford English
Dictionary (3d ed. 2015).
True enough, “practicable” means “feasible,” so a
district court has discretion in its choice of timing.
20
Practicable, Oxford English Dictionary (3d ed. 2015).
But the District Court’s plan to conduct a full trial cannot
satisfy any definition of “early.” The District Court’s
planned FLSA trial on whether “Citizens Bank had a
policy or practice that caused [MLOs] to not report all of
the hours they worked,” JA 255, would resolve many, if
not all, of the factual issues pertaining to the Rule 23 class.
Yet under the District Court’s approach, Rule 23 class
certification vel non would remain unresolved until after
trial. The period after a trial on the parties’ core factual
dispute hardly comprises a case’s “first part or stage.” See
Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 547 (1974).
Rule 23’s history confirms that a post-trial
certification decision is strongly disfavored. Originally,
Rule 23 was essentially “an invitation to joinder”; it lacked
a mechanism for adjudicating absent class members’
claims. Id. at 546 (internal quotation marks omitted). And
that invited a very particular form of abuse:
[M]embers of the claimed class could in
some situations await developments in the
trial or even final judgment on the merits in
order to determine whether participation
would be favorable to their interests. If the
evidence at the trial made their prospective
position as actual class members appear
weak, or if a judgment precluded the
possibility of a favorable determination, such
21
putative members of the class who chose not
to intervene or join as parties would not be
bound by the judgment.
Id. at 547. The “unfair” upshot allowed class members “to
benefit from a favorable judgment without subjecting
themselves to the binding effect of an unfavorable one.”
Id.To end the unfairness of what came to be known as
“one-way intervention,” Rule 23 was amended to require
that courts must determine certification “[a]s soon as
practicable after the commencement of [the] action.” Fed.
R. Civ. P. 23(c)(1) (amended 2003). The point could not
have been more clear: The “amendment[] w[as] designed,
in part, specifically to mend this perceived defect in the
former Rule and to assure that members of the class would
be identified before trial on the merits and would be bound
by all subsequent orders and judgments.” Am. Pipe &
Constr. Co., 414 U.S. at 547.
In 2003, the language was altered to require
certification “at an early practicable time.” Fed. R. Civ. P.
23(c)(1)(A). But the change was meant to better “reflect[]
prevailing practice,” Fed. R. Civ. P. 23(c)(1) advisory
committee’s note to 2003 amendment, and guide judges to
“consider carefully all relevant evidence . . . before
certifying a class,” In re Hydrogen Peroxide, 522 F.3d at
320, not to encourage unjustified delay of a certification
22
decision. 9 And it definitely did not “restore the practice of
‘one-way intervention’ that was rejected by the 1966
revision.” Fed. R. Civ. P. 23(c)(1) advisory committee’s
note to 2003 amendment.
In the 1970s, the Supreme Court indicated a
preference for early-in-the proceeding class certification
in Eisen v. Carlisle & Jacquelin. 417 U.S. 156, 178
(1974). Eisen concerned a plaintiff who wished to “obtain
a determination on the merits of the claims advanced on
behalf of the class without any assurance that a class action
may be maintained.” Id. at 177–78. The Eisen court
observed, with disapproval, that addressing the merits
prior to certification “allow[s] a representative plaintiff to
secure the benefits of a class action without first satisfying
9
The advisory committee recognized that “[t]ime may be
needed to gather information necessary to make the
certification decision” on an “informed basis” and to take
into account other considerations, such as the designation
of class counsel. Fed. R. Civ. P. 23(c)(1) advisory
committee’s note to 2003 amendment. Accordingly, the
amendment reflects a delicate balance: a certification
decision must be careful and well-informed, yet it also
must not be unjustifiably delayed. See id.
23the requirements for it.” Id. at 177. 10 And, in another case
decided that same term, the Supreme Court succinctly
reiterated: judges must decide certification questions early
“to assure that members of the class [are] identified before
trial on the merits and [] bound by all subsequent orders
and judgments.” Am. Pipe & Constr. Co., 414 U.S. at 547.
Admittedly, the necessary “rigorous” certification
analysis may “entail some overlap with the merits of the
plaintiff’s underlying claim.” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 351 (2011); see also In re Hydrogen
Peroxide, 552 F.3d at 316–18. But “[m]erits questions
may be considered to the extent—[and] only to the
extent—that they are relevant to determining whether the
Rule 23 prerequisites for class certification are satisfied.”
Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455,
466 (2013).
Seven Courts of Appeals have gone further and held
that, for Rule 23(b)(3) actions, “Rule 23 requires class
certification prior to a trial on the merits.” Peritz v. Liberty
Loan Corp., 523 F.2d 349, 353 (7th Cir. 1975) (emphasis
10
Although Eisen and other cases cited below predate
Rule 23(c)(1)(A)’s 2003 amendment, that amendment did
not mean “to alter the standard itself[,] so . . . prior caselaw
remains instructive.” Mary Kay Kane, 7AA Federal
Practice and Procedure § 1785.3 (3d ed. 2019).
24
added). 11 Although our Court and three other Circuits
have not gone quite that far, and have occasionally blessed
11
See also Danny B. ex rel. Elliot v. Raimondo, 784 F.3d
825, 838 (1st Cir. 2015) (“[W]e are aware of no precedent
authorizing a district court, over objection, to conduct a
full-blown trial on the merits without pausing to take up a
timely motion for class certification. . . . The bottom line
is that staging a case in this manner puts the cart before the
mule.”); Philip Morris v. Nat’l Asbestos Workers Med.
Fund, 214 F.3d 132, 135 (2d Cir. 2000) (declining to
“foreclose the possibility of a post-trial class certification
in another case,” but noting “it is difficult to imagine cases
in which it is appropriate to defer class certification until
after decision on the merits,” especially for (b)(3) classes
like that one, which “certainly” required pretrial
certification); Nance v. Union Carbide Corp., 540 F.2d
718, 723 n.9 (4th Cir. 1976) (noting “[t]he language of
Rule 23(c) makes it quite clear that the determination of
class status is to be made ‘before the decision on the
merits’” (quoting Peritz, 523 F.2d at 354)), vacated on
other grounds by 431 U.S. 952 (1977); Paxton v. Union
Nat’l Bank, 688 F.2d 552, 558 (8th Cir. 1982) (“The
subsequent decision to delay certification until after the
trial was completed, notwithstanding the apparent
acquiescence of the parties, ‘is directly contrary to the
command of subdivision (23)(c)(1) . . . .’” (footnote
omitted) (quoting Eisen, 417 U.S. at 178)); Horn v.
25
a trial-before-certification approach, we have cabined it to
cases in which the defendant consents. See Katz v. Carte
Blanche Corp., 496 F.2d 747, 762 (3d Cir. 1974) (en banc)
(“[W]e are dealing only with the defendant who declines
the protection against one-way intervention . . . which
[R]ule 23(b)(3) was designed to afford.”). 12 We have
consistently spurned a forced trial-before-certification
Associated Wholesale Grocers, Inc., 555 F.2d 270, 273
(10th Cir. 1977) (“[D]elay in making a decision on
certification of the class until after the trial on the merits
appears to be a procedure which is not in harmony with
the literal terms of Rule 23(c)(1) or with many of the
cases.”); Cohen v. Off. Depot, Inc., 204 F.3d 1069, 1078
(11th Cir. 2000) (“Certification under Rule 23(b)(3) would
require that the class members receive notice of the suit
‘well before the merits of [it] are adjudicated.’” (quoting
Schwarzschild v. Tse, 69 F.3d 293, 295 (9th Cir. 1995)
(alteration in original))). See generally William B.
Rubenstein, 3 Newberg on Class Actions § 7:11 (5th ed.
2013) (“[C]ourts have generally held that class
certification is inappropriate following a trial on the
merits, at least in cases adjudicated under Rule 23(b)(3).”).
12
See also Floyd v Bowen, 833 F.2d 529, 534–35 (5th Cir.
1987); Wright v. Shock, 742 F.2d 541, 544 (9th Cir. 1984);
Postow v. OBA Fed. Sav. & Loan Ass’n, 627 F.2d 1370,
1383 (D.C. Cir. 1980).
26
procedure: “If a class action defendant insists upon early
class action determination and notice, he is, under the rule,
entitled to it.” Id.At all events, no Court of Appeals has approved
foisting trial-before-certification on an unwilling Rule
23(b)(3) defendant. Yet that is precisely what the District
Court’s planned FLSA trial threatened to do to Citizens. 13
Failure to rule on class certification creates “an
atmosphere of confusion.” Philip Morris, 214 F.3d at 134.
And we think any confusion is compounded when what is
13
The District Court conceivably could have determined
that the planned FLSA collective action trial on whether
“Citizens Bank had a policy or practice that caused
[MLOs] to not report all of the hours they worked,” JA
255, somehow would not impinge on the factual issues in
the Rule 23 class action. But the District Court failed to
do so. That court did not provide us with any reasoning to
consider, and we discern no basis for it to have reached
such a conclusion. Rather, it appears that the planned
FLSA collective action trial would have addressed the
primary merits issue pertaining to both the FLSA and the
state-law class action claims. See Mand. Pet. 1–2 (“The
federal and state-law claims are substantively identical;
the only difference is procedural.”).
27
scheduled for trial is a hybrid wage-and-hour case like this
one. 14
14
The District Court appears to have interpreted our
decision to decline the exercise of pendent appellate
jurisdiction as somehow blessing its decision to proceed
with an FLSA trial before deciding Rule 23 class
certification. See Dkt #283 at 5–6 (Mem. Op., June 25,
2019) (denying reconsideration of certification of the
FLSA collective action). But that was hardly the case.
Our decision on pendent appellate jurisdiction concerned
only the limited issue of whether the District Court’s
certification of the FLSA collective was “inextricably
intertwined” with the certification of the Rule 23 class.
See Reinig, 912 F.3d at 131 (“[T]he question of whether
the potential plaintiffs had met the FLSA’s less
burdensome ‘similarly situated’ standard was ‘quite
distinct from the question whether plaintiffs had satisfied
the much higher Rule 23 predominance threshold.’”
(quoting Myers v. Hertz Corp., 624 F.3d 537, 555–56 (2d
Cir. 2010) (cleaned up))). We did not—and indeed, given
our limited jurisdiction over only the specific question of
class certification, could not—consider whether trial on
the FLSA collective action should proceed prior to class
certification. Moreover, to be clear, a decision that the two
certification decisions are not inextricably intertwined
because the legal standards differ does not address
28
If the jury in the FLSA collective action trial had
gone on to find that Citizens in fact had “a policy or
practice that caused [MLOs] to not report all of the hours
they worked,” JA 255, as plaintiffs allege, Citizens’ FLSA
trial loss on this issue would have greatly enhanced the
probability of its being liable under both the FLSA and the
state wage-and-hour laws. The 350 successful FLSA
plaintiffs would have proceeded to a trial on their damages
claims. And by then, a jury’s finding that was favorable
to the FLSA plaintiffs would have aired all the evidence
about the existence of a common policy of underpaying all
MLOs. 15 The existence of such a common underpayment
whether the two proceedings turn on a common issue of
fact.
15
We assume that the jury’s factfinding in the FLSA trial
would preclude a second trial on the identical factual issue
in the Rule 23 class action. And we further assume that is
what the District Court had in mind in its “case
management” rulings. But because we do not have the
benefit of the District Court’s reasoning, we can only
speculate about how the District Court envisioned the Rule
23 class action trial would play out. Did the District Court
intend that a second, class-action-specific trial would be
held? If so, holding a second trial for the class action
creates tension with the Seventh Amendment, which
“requires that, when a court bifurcates a case, it must
29
policy may well have satisfied Rule 23(b)(3)’s
requirement that “questions of law or fact common to class
members predominate.” Thus, an FLSA trial reaching the
conclusion that Citizens did have a policy of underpaying
all MLOs would, effectively, both identify and determine
the merits of the class members’ common factual
question. 16
‘divide issues between separate trials in such a way that
the same issue is not reexamined by different juries.’” In
re Paoli R.R. Yard PCB Litig., 113 F.3d 444, 452 n.5 (3d
Cir. 1997) (quoting In re Rhone-Poulenc Rorer, Inc., 51
F.3d 1293, 1303 (7th Cir. 1995)); see also Katz, 496 F.2d
at 762 (observing that a defendant who elects a
certification-after-trial procedure would be deemed to
have waived the Seventh Amendment guarantee of a
unitary trial before a single jury on all issues).
16
One serious impediment to certifying a class after an
FLSA trial is Rule 23(b)(3)’s requirement of superiority.
How can a district court conclude that “a class action is
superior to other available methods for fairly and
efficiently adjudicating the controversy” if an FLSA
collective action trial has already decided the central
question posed by the class action? As a practical matter,
what work is left for the class action device to do?
30
If a Rule 23 class were then certified after a
plaintiffs’ verdict in an FLSA trial, wouldn’t the most
likely result be that the remaining 700 or so MLOs would
decline to opt out of the class? See Fed. R. Civ. P.
23(c)(2)(B). What would be their incentive to do
otherwise? An FLSA trial win would essentially
guarantee class certification, given that the same evidence
of Citizens’ policies would be offered to support the state
law claims. It would seem that, with little left to be
resolved factually, the 700 remaining class members
would quickly seek to recover damages as well.
On the other side of the coin, a victory for Citizens
in the FLSA collective action would bind only the 350 or
so MLOs who opted into the FLSA collective action, not
the 700 or so who chose not to participate. See Collins v.
E.I. DuPont de Nemours & Co., 34 F.3d 172, 180 (3d Cir.
1994). Those roughly 700 remaining MLOs would be free
to opt out of a (b)(3) class and pursue individual lawsuits.
In other words, an FLSA trial victory could thwart
Citizens’ hope for global peace via a class action, leave
Citizens with a substantial amount of litigation remaining
on its plate, and greatly increase Citizens’ litigation costs
and potential liability exposure. As Citizens puts it, the
planned FLSA trial before a class certification ruling
“would arbitrarily deprive Citizens of the benefits of the
class action device to which it is entitled under Rule 23—
namely, the full preclusive effect of the class action
judgment.” Mand. Pet. 33.
31
All of this leads us to consider: if the practice of
holding an FLSA trial before determining Rule 23 class
certification were to become the norm in hybrid wage-and-
hour suits, most employees likely would never opt in to an
FLSA action. Why should they? The federal and state
remedies overlap, and we disfavor double recovery. Cf.
Rana v. Islam, 887 F.3d 118, 123 (2d Cir. 2018). There
would be no incentive for plaintiffs to opt in to the FLSA
collective action. They would be better off remaining on
the sidelines while the FLSA trial proceeds. If a handful
of participating plaintiffs then succeed at the FLSA trial,
the potential plaintiffs who are looking on could simply
wait for a state-law class to be certified under Rule 23.
And, by waiting, those plaintiffs would avoid any risk of
being bound by an unfavorable judgment in the FLSA
action. That scenario, in short, is a win-win for the
employees and disadvantages Citizens at every turn.
Because we are addressing the reasons behind our
grant of a stay motion, we need not definitively resolve the
various difficulties that arise from the District Court’s
chosen approach, including whether its “order of battle”
violates Rule 23 or creates a substantial danger of unfair
one-way intervention. Nor must we determine whether
class certification is even possible after a trial on the merits
has already taken place. Moreover, we need not decide
whether there could be circumstances under which an
FLSA trial might reasonably proceed prior to class
certification in a parallel Rule 23 action. What we do
32
conclude here is that, by compelling the FLSA opt-in
collective action trial before deciding Rule 23 class
certification—in contravention of our clear instruction to
conduct a rigorous examination of the class certification
issue and without assessing any of the procedural
complexities we have discussed—the District Court
elected to forge ahead, thereby creating a predicament for
others to unravel. We thus conclude that Citizens had a
reasonable probability of successfully showing that the
District Court clearly and indisputably erred.
B. Mandamus is the only available
remedy
Given the reasonable probability that Citizens could
successfully show that the District Court erred, mandamus
was the only avenue with the remedial force to address the
District Court’s error. Citizens could not pursue an
immediate appeal of the District Court’s order scheduling
the FLSA collective action trial because that order is not a
final decision under 28 U.S.C. § 1291. See Morton Int’l,
Inc. v. A.E. Staley Mfg. Co., 460 F.3d 470, 476 (3d Cir.
2006) (“The classic definition of a ‘final decision’ is one
that ‘ends the litigation on the merits and leaves nothing
for the court to do but execute the judgment.’” (quoting
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712
(1996))). The collateral order doctrine also does not
permit an immediate appeal, as the District Court’s
procedural approach did not conclusively resolve a
33
disputed issue that is completely separate from the merits.
See Cipollone v. Liggett Grp., Inc., 785 F.2d 1108, 1117–
18 (3d Cir. 1986).
Waiting to review the issues presented in Citizens’
mandamus petition until the proceedings became final as
to all causes of action and all parties for purposes of § 1291
simply would not protect the interests at stake. Allowing
the District Court to conduct its planned FLSA collective
action trial would publicly preview the evidence common
to the FLSA and state-law claims. That would give
potential Rule 23 class members an enormous
informational advantage in any subsequent “do-over,”
even if we were to ultimately vacate the FLSA verdict and
remand for a pretrial Rule 23 class certification decision.
In short, an appeal that comes too late can almost never
unscramble the egg. 17
17
Although Citizens could have pursued a permissive
interlocutory appeal under 28 U.S.C. § 1292(b), we do not
fault it for not going that route. Parties need not attempt
to proceed under § 1292(b) if it is “sufficiently clear that
the District Court would have refused.” In re Briscoe, 448
F.3d 201, 212 n.7 (3d Cir. 2006). Here, the District Court
ruled that a stay of trial pending a decision on the Rule 23
certification would have unduly delayed trial. That
decision suggests that the District Court would not be
34
2. Citizens Would Have Suffered Irreparable
Injury Absent a Stay
Citizens petitioned for mandamus relief less than
three weeks before the FLSA collective action trial was to
begin. As already discussed, the trial would have
irreparably injured Citizens by airing evidence pertaining
to Citizens’ liability. So if we were to intervene at all, we
had to do so before trial commenced. Yet we needed more
than three weeks to consider the petition. A stay preserved
the status quo and avoided the impending harm to
Citizens.
3. A Stay Did Not Substantially Injure
Plaintiffs
The stay did not substantially injure the MLOs. If
they ultimately prevail and recover damages in the form of
unpaid overtime, their damages either held constant during
the stay period (for former employees) or kept growing
(for current employees), and they may seek prejudgment
interest as well. And if Plaintiffs are ultimately
persuaded that resolution of the issue would “materially
advance the ultimate determination of the litigation,” as
required by § 1292. See In re Sch. Asbestos Litig., 977
F.2d 764, 793 (3d Cir. 1992).
35
unsuccessful, the delay makes no difference at all. From
a damages perspective, Plaintiffs emerge no worse off.
4. The Public Interest Did Not Weigh
Against a Stay
The public interest did not weigh against a stay. If
anything, because we have now had the opportunity to
address the difficulties of prosecuting both an FLSA opt-
in collective action and a Rule 23 opt-out class action, the
public, including potential litigants, and the practicing bar
benefit from the foregoing discussion of the pitfalls
created by the District Court’s decision to proceed with an
FLSA trial before ruling on a Rule 23 motion for class
certification.
IV.
Having explained our decision to stay the case
pending resolution of the mandamus petition, a stay is no
longer necessary. Accordingly, we will dissolve the stay,
dismiss Citizens’ mandamus petition in part as moot given
the District Judge’s withdrawal, and refer the matter to the
Chief Judge of the Western District of Pennsylvania for
reassignment.
Given the impending reassignment, we will deny
the remainder of the petition as unnecessary at this time.
We expect both parties to work with the newly assigned
District Judge to resolve this case fairly and expeditiously,
36
including by carefully considering the numerous
procedural complexities of this hybrid action.
37