d/b/a - winebrake & santillo · 2018-08-02 · services, no. 2:16-cv-10128, 2016 u.s. dist....

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

___________________________________ LAURA HICKS, on behalf of herself and similarly situated employees, Plaintiff, v. GREAT LAKES HOME HEALTH SERVICES, INC. and GREAT LAKES ACQUISITION CORP., d/b/a GREAT LAKES CARING, Defendants. _________________________________

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2:17-cv-12674-GCS-DRG Honorable George Caram Steeh Magistrate Judge David R. Grand

PLAINTIFF’S MOTION FOR AN EXTENSION OF

TOLLING OF THE RUNNING OF PUTATIVE COLLECTIVE MEMBERS’ STATUTES OF LIMITATIONS

As discussed during the October 30, 2017 Scheduling Conference, the

parties agreed to tolling of the FLSA collective members’ FLSA claims until after

the Court ruled on summary judgment motions pertaining to Plaintiff’s individual

claim. See Doc. 19. The parties subsequently entered a stipulation reflecting this

agreement and tolling the running of putative collective members’ statute of

limitations from October 30, 2017 until the Court decided any summary judgment

motions concerning Plaintiff’s individual claim. See Doc. 21. The stipulation

entered into between the parties specifically noted that Plaintiff was “not precluded

Case 2:17-cv-12674-GCS-DRG ECF No. 40 filed 06/05/18 PageID.1315 of 20

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from filing a future motion requesting the Court extend the tolling period beyond

the dispositive motion resolution date.” Id.

Now that the Court has resolved the parties’ summary judgment motions, the

tolling has been lifted. For the reasons discussed in the accompanying brief,

Plaintiff respectfully requests that the Court extend the tolling of the running of

putative collective members’ statutes of limitations until sixty days after the Court

resolves Plaintiff’s pending conditional certification motion. See Doc. 38.

Pursuant to Local Rule 7.1(a), on May 30, 2018, Plaintiffs’ counsel asked

Great Lakes’ counsel if it would concur in this motion. On June 1, 2018, Great

Lakes’ counsel stated that they would not.

WHEREFORE, Plaintiff respectfully requests that the Court grant this

motion and extend tolling of the running of putative collective members’ statute of

limitations.

Dated: June 5, 2018 Respectfully, s/ Mark J. Gottesfeld Peter Winebrake R. Andrew Santillo Mark J. Gottesfeld WINEBRAKE & SANTILLO, LLC 715 Twining Road, Suite 211 Dresher, PA 19025 (215) 884-2491 [email protected] [email protected] [email protected]


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Jerry E. Martin David Garrison Joshua A. Frank BARRETT JOHNSTON MARTIN & GARRISON LLC 414 Union Street, Suite 900 Nashville, TN 37219 (615) 244-2202 [email protected] [email protected]

Kevin J. Stoops SOMMERS SCHWARTZ, P.C. One Town Square 17th Floor Southfield, MI 48076 Phone: (248) 746-4027 Facsimile: (248) 936-2138 [email protected] Attorneys for Plaintiff




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Peter Winebrake Jerry E. Martin R. Andrew Santillo David Garrison Mark J. Gottesfeld Joshua A. Frank Winebrake & Santillo, LLC Barrett Johnston Martin & Garrison LLC 715 Twining Road, Suite 211 414 Union Street, Suite 900 Dresher, PA 19025 Nashville, TN 37219 Kevin J. Stoops, Esq. Sommers Schwartz, P.C. One Town Square 17th Floor Southfield, MI 48076

BRIEF IN SUPPORT OF PLAINTIFF’S MOTION FOR AN

EXTENSION OF TOLLING OF THE RUNNING OF PUTATIVE COLLECTIVE MEMBERS’ STATUTES OF LIMITATIONS


TABLE OF CONTENTS A. Background…………………………………………………………..…….1

B. Opt-in plaintiffs in an FLSA collective action must file their written consent to join the litigation to toll their statute of limitations….…4

C. District courts frequently toll the FLSA’s statute of limitations when

the issuance of notice is delayed……………………………………………5 D. The Court should extend the tolling period in this action………………….9

E. Conclusion…………………………………………………………………11


ii

CONCISE STATEMENT OF ISSUE PRESENTED

Whether the Court should extend tolling of putative collective members’

statute of limitations where Plaintiff has been precluded from moving for

conditional certification early in the litigation due to Great Lakes’ request to

engage in individual discovery and dispositive motions concerning Plaintiff’s

individual FLSA claim and where putative collective members’ statute of

limitations will continue to run during the pendency of the briefing of conditional

certification and the time it takes for this Court to rule on Plaintiff’s motion for

conditional certification.


iii

CONTROLLING OR MOST APPROPRIATE AUTHORITY

Abadeer v. Tyson Foods, Inc., 2010 U.S. Dist. LEXIS 1366978 (M.D. Tenn. Dec. 14, 2010) Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822 (S.D. Ohio 2007) Biggs v. Quicken Loans, Inc., 2014 U.S. Dist. LEXIS 26542 (E.D. Mich. Feb. 19, 2014) Bolletino v. Cellular Sales of Knoxville, Inc., 2012 U.S. Dist. LEXIS 112132 (E.D. Tenn. Aug. 9, 2012) Engel v. Burlington Coat Factory Direct Corp., 2013 U.S. Dist. LEXIS 130513 (S.D. Ohio Sept. 12, 2013) Gaffers v. Kelly Services, 2016 U.S. Dist. LEXIS 182057 (E.D. Mich. Oct. 13, 2016) Kampfer v. Fifth Third Bank, 2016 U.S. Dist. LEXIS 37056 (N.D. Ohio March 22, 2016) Struck v. PNC Bank N.A. 931 F. Supp. 2d 842 (S.D. Ohio 2013)

29 U.S.C. § 256(b)


Plaintiff Laura Hicks (“Plaintiff”) submits this brief in support of her motion

to extend tolling of the running of the Fair Labor Standards Act (“FLSA”)

limitations period for putative collective members. Such relief – which Defendants

Great Lakes Home Health Services, Inc. and Great Lakes Acquisition Corp., d/b/a/

Great Lakes Caring (collectively “Great Lakes”) oppose – is warranted below.

A. Background.

Plaintiff filed this Fair Labor Standards Act (“FLSA”) collective action

lawsuit on August 15, 2017. See Doc. 1. From the outset of this litigation,

Plaintiff has diligently sought to issue notice to putative members of the FLSA

collective due to the running of their statute of limitations.

In fact, Plaintiff has diligently sought to band together with similarly

situated employees of Great Lakes to recover unpaid overtime wages even before

filing this lawsuit, when she filed a consent form on May 25, 2017 to join Hutchins

v. Great Lakes Home Health Services, Inc., et al., No. 2:17-cv-10210-GCS-DRG at

Doc. 19. After that case was dismissed on August 2, 2017, see id. at Docs. 27-28,

Plaintiff promptly filed this collective action less than two weeks later.

As reflected in the parties’ Joint Discovery Plan, Plaintiff originally sought

to move for conditional certification on or before November 30, 2017:

In FLSA collective litigation, early resolution of conditional certification is necessary and appropriate because the limitations period continues to run against the FLSA claims of putative collective members until


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they “opt-in” to the collective. Thus, seeking to toll the running limitations period, Plaintiff intends to move for conditional certification of the FLSA collective by November 30, 2017.

Doc. 18, p. 2.

However, Great Lakes requested that the parties initially address the merits

of Plaintiff’s individual FLSA claim through limited discovery and dispositive

motion practice. Plaintiff took the position that she would agree to this request

only if the putative collective members’ claims were tolled during this period:

Defendant’s proposal for the early resolution of dispositive motions would be fine with Plaintiff if Defendant would agree to toll the running of the limitations period until after the dispositive motions are resolved. Such tolling agreements are common in FLSA collective actions. However, Defendant will not agree to tolling.

Id.

During the October 30, 2017 Scheduling Conference, the parties agreed to

tolling of the FLSA collective members’ FLSA claims until after the Court ruled

on summary judgment motions pertaining to Plaintiff’s individual claim. See Doc.

19 at p. 1. A subsequent stipulation was entered into by the parties further

reflecting this agreement:

The parties hereby STIPULATE, on this 13th day of November, 2017, that the running of the statute of limitations against the Fair Labor Standards Act claims of putative collective members as defined in paragraph 19 of Plaintiff’s Complaint is tolled during the time


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period from October 30, 2017 until the date on which the Court resolves the parties’ anticipated dispositive motions pursuant to the current Scheduling Order. See Doc. 19.

Doc. 21 (emphasis supplied). Significantly, the stipulation specifically noted that

“Plaintiff is not precluded from filing a future motion requesting that the Court

extend the tolling period beyond the dispositive motion resolution date [ . . . ].”

Id. (emphasis supplied).

The Court ordered that individual discovery of Plaintiff’s FLSA claim be

completed by December 14, 2017 and that dispositive motions be filed by January

8, 2018. See Doc. 19, p. 1.

For approximately six months, the issuance of notice was delayed to putative

collective members while the parties exchanged written discovery, conducted

depositions, filed dispositive motions, and awaited the Court’s rulings. See Docs.

25 & 27. As a result, Plaintiff was unable to seek conditional certification of the

FLSA collective and issue notice to putative collective members informing them of

this lawsuit.

The parties’ dispositive motions were decided by the Court on May 24,

2018. See Doc. 36. The Court denied Great Lakes’ motion for summary

judgment, finding a genuine issue of material fact exists as to whether Plaintiff

worked over 40 hours per week, and granted Plaintiff’s motion for partial summary


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judgment, holding that Plaintiff was not exempt under the FLSA because she was

compensated on a hybrid fee and hourly basis. See id. at pp. 2 and 14.

Under the terms of the tolling stipulation, putative collective members’

statute of limitations started running again when the Court issued its May 24, 2018

decision. See Doc. 21. Plaintiff filed her motion for conditional certification

today. See Doc. 38.

B. Opt-in plaintiffs in an FLSA collective action must file their written consent to join the litigation to toll their statute of limitations.

In FLSA collective actions―unlike Rule 23 class actions―the statute of

limitations for the FLSA claims of potential opt-in plaintiffs is not tolled by a

plaintiff’s initial filing of the complaint. See 29 U.S.C. § 256(b); Gaffers v. Kelly

Services, No. 2:16-cv-10128, 2016 U.S. Dist. LEXIS 182057, *6-7 (E.D. Mich.

Oct. 13, 2016). The certification of a collective action is the mechanism by which

putative collective members learn about their right to join an FLSA lawsuit. See

Hoffmann-La Roche v. Sperling, 493 U.S. 165, 170-71 (1989); accord Jesiek v.

Fire Pros, Inc., 275 F.R.D. 242, 245 (W.D. Mich. 2011); Atkinson v. TeleTech

Holdings, Inc., No. 3:14-cv-253, 2015 U.S. Dist. LEXIS 23630, *5 (S.D. Ohio

Feb. 26, 2015). Because the “statute of limitations period continues to run against

each potential class member . . . it is widely accepted that, at the notice stage [ . . . ]


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the plaintiff’s burden [ . . . ] is extremely light.” Smith v. Lowe’s Companies, Inc.,

No. 2:04-cv-774, 2005 U.S. Dist. LEXIS 9763, *13-14 (S.D. Ohio May 11, 2005).

C. District courts frequently toll the FLSA’s statute of limitations when the issuance of notice is delayed.

District courts in the Sixth Circuit and elsewhere frequently toll the statute

of limitations when the distribution of notice is delayed by circumstances outside

of the plaintiffs’ control. Thus, “[e]quitable tolling of FLSA cases due to extended

periods of delay due to Court action or order is common.” Biggs v. Quicken Loans,

Inc., No. 2:10-cv-11928, 2014 U.S. Dist. LEXIS 26542, *16 (E.D. Mich. Feb. 19,

2014); see also Stickle v. SCI Western Mkt. Support Ctr., No. 08-083, 2008 U.S.

Dist. LEXIS 83315, *63 (D. Ariz. Sept. 30, 2008) (district courts regularly toll the

FLSA’s statutes of limitations “when doing so is in the interest of justice.”).

Specifically, district courts within the Sixth Circuit have repeatedly found

that delays in issuing notice to potential opt-in plaintiffs warrant equitable tolling

in FLSA actions. See Kampfer v. Fifth Third Bank, No. 3:14-cv-2849, 2016 U.S.

Dist. LEXIS 37056, *20-21 (N.D. Ohio March 22, 2016) (granting tolling where

court did not rule on conditional certification motion until approximately 10

months after motion was filed); Biggs, 2014 U.S. Dist. LEXIS 26542 at *16-17

(granting tolling from date of stay up until issuance of court notice); Struck v. PNC

Bank N.A., 931 F. Supp. 2d 842, 844-48 (S.D. Ohio 2013) (granting tolling where

over a year had passed since plaintiff moved for conditional certification); Engel v.


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Burlington Coat Factory Direct Corp., No. 1:11-cv-759, 2013 U.S. Dist. LEXIS

130513, *2-6 (S.D. Ohio Sept. 12, 2013) (granting tolling for period of time

between motion for conditional certification filed and 60 days after opt-ins receive

notice); Abadeer v. Tyson Foods, Inc., No. 3:09-cv-0125, 2010 U.S. Dist. LEXIS

136978, *11(M.D. Tenn. Dec. 14, 2010) (granting tolling due to inter alia “the

necessity of time for the Court’s rulings”); Bolletino v. Cellular Sales of Knoxville,

Inc., No. 3:12-cv-138, 2012 U.S. Dist. LEXIS 112132, *11-12 (E.D. Tenn. Aug. 9,

2012) (granting tolling because discovery was stayed pending motion to dismiss);

Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 822, 825-26, 829 (S.D.

Ohio 2007) (granting tolling due to six month period of delay caused by

disagreement over the language of the consent form).

For example, in Biggs, the Eastern District of Michigan held that equitable

tolling was warranted where the issuance of notice was delayed due to a stay that

had been entered by the court. See 2014 U.S. Dist. LEXIS 36542, at *16. The

court found it significant that during the stay, the court was not able to issue notice

to putative collective members informing them of their right to joint the lawsuit.

See id. Further, the court found that the defendants were fully aware that the

lawsuit had been brought as a collective action and that the plaintiffs were not at

fault for the delay in issuing notice to putative collective members. See id. Citing

to multiple cases, the court noted that “[e]quitable tolling of FLSA cases due to


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extended periods of delay due to Court action or order is common.” Id.

Accordingly, the court granted tolling for the period from when the stay was

entered until the date consent forms were distributed to putative collective

members. See id.

Likewise, in Struck, tolling was granted based on the court’s delay in issuing

its conditional certification decision. See 931 F. Supp. 2d at 848. The court found

that while plaintiff’s motion for conditional certification was pending, “potential

opt-in plaintiffs almost certainly lacked actual notice of this case” and that the

delay attributable to deciding conditional certification has the potential to

extinguish the claims of a substantial portion of the putative class.” Id. at 847.

Moreover, the court noted that putative collective members’ “failure to opt into the

suit does not indicate a lack of diligence.” Id. at 847-848. As a result, tolling was

granted from the date the conditional certification motion was filed until 60 days

after notice was mailed to putative collective members. See id.

Again, in Kampfer, the court granted tolling because it did not rule on the

conditional certification motion until approximately ten months after it was filed.

See 2016 U.S. Dist. LEXIS 37056, at *20. The plaintiffs filed their motion for

conditional certification approximately a month after the initial case management

conference and moved for tolling six months thereafter. See id. The court noted

that “[t]his situation represents a delay beyond the movant’s control and exhibits


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the Plaintiffs’ diligence.” Id. As in Struck, tolling was granted from the date

conditional certification was filed until 60 days after notice was mailed to putative

collective members. See id.

Outside of the Sixth Circuit, district courts have also tolled the FLSA’s

statute of limitations when the distribution of notice to potential collective

members was delayed through no fault of the plaintiffs.1

1 See also DePalma v. Scotts Co. LLC, No. 2:13-cv-7740, 2017 U.S. Dist. LEXIS 8884, *9-10, n.5 (D.N.J. Jan. 20, 2017) (tolling granted because the court took approximately one year to rule on conditional certification motion); McGlone v. Contract Callers, Inc., 867 F. Supp. 2d 438, 445 (S.D.N.Y. 2012) (tolling granted where court took almost three months to rule on conditional certification); Ruffin v. Entertainment of the Eastern Panhandle, No. 3:11-cv-19, 2012 U.S. Dist. LEXIS 1511, *2-9 (N.D.W.V. Jan. 5, 2012) (tolling granted where delay in dissemination of notice to potential opt-in plaintiffs could result in their claims being time-barred and constituted “a circumstance beyond those individuals’ control.”); Helton v. Factor 5, Inc., No. 10-04927, 2011 U.S. Dist. LEXIS 136170, *6-8 (N.D. Cal. Nov. 28, 2011) (tolling granted from date conditional certification motion was filed until the court issued its decision); Yahraes v. Restaurant Associates Events Corp., No. 10-cv-935, 2011 U.S. Dist. LEXIS 23115, *5-9 (E.D.N.Y. March 8, 2011) (tolling granted during three month time period during which conditional certification motions were pending); Stickle, 2008 U.S. Dist. LEXIS 83315, at *61-67 (tolling where conditional certification decision delayed by defendant’s motion to dismiss); Adams v. Inter-Con Security Systems, Inc., 242 F.R.D. 530, 542-43, (N.D. Cal. 2007) (tolling where collective FLSA notice delayed by defendant’s failure to provide list of collective members).

See Jackson v.

Bloomberg, L.P., 298 F.R.D. 152, 170 (S.D.N.Y. 2014) (tolling FLSA statute of

limitations for the seven months required to adjudicate plaintiffs’ conditional

certification motion because “[a]bsent tolling of the limitations period, a

substantial number of class members may now be time-barred through no fault of


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counsel or the class representative.”); Bergman v. Kindred Healthcare, Inc., 949 F.

Supp. 2d 852, 861 (N.D. Ill. 2013) (length of delay in deciding conditional

certification warranted tolling); Stransky v. HealthOne of Denver, Inc., 868 F.

Supp. 2d 1178, 1181-82 (D. Colo. 2012) (tolling from conditional certification

motion until 90 days after putative collective members received notice).

The common theme in all of these cases is that the claims of putative

collective members should be tolled when the collective notice is delayed by

circumstances beyond plaintiffs’ control, such as by dispositive motions or

congested dockets. As a result, these courts each held that tolling of putative

collective members’ statute of limitations was warranted to avoid prejudice.

D. The Court should extend the tolling period in this action.

As summarized in section C, supra, tolling is appropriate when the issuance

of notice to putative collective members is delayed by factors beyond the

plaintiffs’ control. Similar to the cases cited above, the extension of tolling is

warranted in the instant lawsuit because the claims of putative collective members

continue to erode, or will even be extinguished by, the running of statute of

limitations due to no fault of their own. It is because of the unique procedural

posture of this case – where Great Lakes was allowed to litigate the merits of

Plaintiff’s individual FLSA claim first – that Plaintiff was prevented from moving

for conditional certification at an earlier date.


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The extension of tolling is warranted because putative collective members

lack notice of this lawsuit.2 Indeed, this is not surprising since potential opt-ins

reside in several states across the country including, Michigan, Ohio, Indiana,

Illinois, Kansas, Missouri, Massachusetts, and Maine. See Miller Dep. at 5:25-6:6

(attached as Ex. A). Moreover, to date, Great Lakes has refused to not only

provide Plaintiff with a list of the putative collective members, but during a phone

call with Plaintiff’s counsel on May 30, 2018, Great Lakes’ counsel would not

even give an estimate of the potential size of the collective.3

Plaintiff has been diligent from the outset in seeking to prevent the running

of the statute of limitations on behalf of putative collective members. When it

became clear that she would not be able to band together with similarly situated

employees in the Hutchins litigation, Plaintiff promptly filed this collective action

See Defs.’ Interrog.

Resps. at Nos. 6-7 (attached as Ex. B); see also Miller Dep. at 7:20-8:18 (Ex. A);

30(b)(6) Dep. at 25:7-26:20, 63:5-63:13 (attached as Ex. C).

2 Prior to court-approved notice being issued, most putative opt-ins not only lack actual notice of the requirement that they must affirmatively opt-in to a lawsuit by signing a consent form, but also lack knowledge that their FLSA rights have allegedly been violated. See Bolletino, 2012 U.S. Dist. LEXIS 112132 at *11 (“The Court finds the potential opt-in plaintiffs almost certainly lack notice of the filing requirement and lack knowledge of the FLSA or their potential claim.”); Struck, 931 F. Supp. 2d at 846 (“[T]his Court finds that potential opt-in plaintiffs almost certainly lacked actual notice of this case.”). 3 During a phone call with Defendants’ counsel on May 30, 2018, Defendants’ counsel stated that he was not able to provide an estimate as to approximately how many individuals might be covered by the collective action.


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to afford similarly situated employees the opportunity to assert their FLSA claims

in a single case.

Moreover, although Plaintiff initially sought to file her conditional

certification motion over six months ago, see Doc. 18, p. 2, she was unable to do so

due to the unique procedural posture that Great Lakes insisted upon. If Plaintff had

been able to move for conditional certification as originally anticipated in 2017,

that motion would now be fully-briefed and ripe for this Court’s consideration.

Now that Great Lakes has had the opportunity to challenge the merits of Plaintiff’s

claim, putative collective members should not have to be prejudiced by the delay

resulting from this maneuver.

Finally, Great Lakes has been on notice since at least August 15, 2017 that

Plaintiff was asserting collective claims on behalf of other employees paid under

its hybrid pay policy. As a result, Plaintiff’s request to extend the tolling

agreement to prevent further erosion of the FLSA claims of putative collective

members cannot be said to prejudice Great Lakes.

E. Conclusion.

WHEREFORE, Plaintiff respectfully requests that the Court grant her

motion for equitable tolling and toll the statute of limitations from May 24, 2018

until 60 days after the Court resolves Plaintiff’s pending conditional certification

motion.


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Dated: June 5, 2018 Respectfully submitted,

s/ Mark J. Gottesfeld Peter Winebrake R. Andrew Santillo Mark J. Gottesfeld WINEBRAKE & SANTILLO, LLC 715 Twining Road, Suite 211 Dresher, PA 19025 Jerry E. Martin

David Garrison Joshua A. Frank

BARRETT JOHNSTON MARTIN & GARRISON LLC

414 Union Street, Suite 900 Nashville, TN 37219 Kevin J. Stoops SOMMERS SCHWARTZ, P.C. One Town Square 17th Floor Southfield, MI 48076 Phone: (248) 746-4027 Facsimile: (248) 936-2138 [email protected]

Attorneys for Plaintiff


CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on June 5, 2018, I electronically filed the foregoing documents with the Clerk of Court which caused the following counsel for Defendants to be served by electronic means:

Eric J. Pelton at [email protected] Thomas J. Davis at [email protected]

Date: June 5, 2018 Respectfully submitted,

s/ Mark J. Gottesfeld Mark J. Gottesfeld WINEBRAKE & SANTILLO, LLC 715 Twining Road, Suite 211 Dresher, PA 19025 Phone: (215) 884-2491 Attorneys for Plaintiffs


mailto:[email protected]�

mailto:[email protected]�



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INDEX OF EXHIBITS Exhibit A – Excerpts from Miller Deposition Exhibit B – Great Lakes’ Interrogatory Responses Exhibit C – Excerpts from 30(b)(6) Deposition Exhibit D – Unpublished Cases

Case 2:17-cv-12674-GCS-DRG ECF No. 40-1 filed 06/05/18 PageID.1335 Page 1 of 1

Exhibit A


Marcy Miller12/13/2017


Page 1

1 UNITED STATES DISTRICT COURT

2 EASTERN DISTRICT OF MICHIGAN

3 SOUTHERN DIVISION

4

5 LAURA BETH HICKS, on behalf of

6 herself and similarly situated

7 employees,

8 Plaintiff,

9 -vs- No. 2:17-cv-12674-GCS-DRG

10 Magistrate Judge R. Steven Whalen

11 GREAT LAKES HOME HEALTH

12 SERVICES, INC., and GREAT LAKES

13 ACQUISITION CORP., d/b/a GREAT

14 LAKES CARING,

15 Defendants.

16 __________________________________/

17

18 PAGE 1 to 14

19

20 The Deposition of MARCY MILLER,

21 Taken at One Town Square; 17th Floor,

22 Southfield, Michigan,

23 Commencing at 2:00 p.m.,

24 Wednesday, December 13, 2017

25 Before Bethany Lee Robinson, CSR-3244.



2 (Pages 2 to 5)


2 (Pages 2 to 5)

Page 2

1 APPEARANCES:2

3 MARK J. GOTTESFELD, ESQ.4 Winebrake & Santillo, LLC5 715 Twining Road; Suite 2116 Dresher, Pennsylvania 190257 215.884.24918 [email protected] Appearing on behalf of the Plaintiffs.

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11 ERIC PELTON, ESQ.12 Kienbaum, Opperwall, Hardy & Pelton, PLC13 280 N. Old Woodward Avenue; Suite 40014 Birmingham, Michigan 4800915 248.645.00016 [email protected] Appearing on behalf of the Defendants.18

19 ALSO PRESENT:20 Ms. Carry Vandemaagdenberg21

22 * * *23

24

25

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1 TABLE OF CONTENTS2 Witness Page3

4 MARCY MILLER5 EXAMINATION BY MR. GOTTESFELD 46

7

8 INDEX TO EXHIBITS9

10 Exhibits 11 None were offered12

13

14

15

16

17

18

19

20

21

22

23

24

25

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1 Southfield, Michigan2 Wednesday, December 13, 20173 About 2:00 p.m.4 MARCY MILLER,5 having first been duly sworn, was examined and6 testified on her oath as follows:7 EXAMINATION BY MR. GOTTESFELD:8 Q. You are under the same instructions as before. You9 understand you are under oath?

10 A. Yes.11 Q. I just want to get into a little bit more about your12 job duties and the job title you had during the time13 period that Ms. Hicks was working from October 2015 to14 December of 2015, so you said you were vice president15 of Home Health?16 A. Yes.17 Q. And you said you oversaw health operations, clinical18 financial responsibilities, and what else did you do in19 that job position?20 A. That role oversees just any care provided to Home21 Health patients, making sure we are regulatory22 compliant, making sure processes meet the patient23 needs.24 Q. Anything else?25 A. I don't know how deep you want me to go. I created

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1 quality assurance for home improvement programs,2 created performance evaluations. I could go on and on.3 Q. Were those your main job duties?4 A. Yes.5 Q. Who did you report to during that time period?6 A. That time frame, I reported to the CEO.7 Q. And who was that?8 A. William Deary.9 Q. Now you say you oversaw health operations in your

10 position of vice president of Home Health?11 A. Yes.12 Q. What area was that over. In other words, was that just13 Michigan or was it Michigan and Illinois?14 A. Yes. It would have been all states.15 Q. What states did you oversee operations for?16 A. 2015, Michigan, Ohio, Indiana, Illinois.17 Q. And you are presently the chief clinical officer?18 A. Correct.19 Q. And what are your job duties in that position?20 A. I also now oversee hospice as well as home health.21 Q. So you have an additional division?22 A. Yes.23 Q. Prior you were just dealing with home health?24 A. Correct.25 Q. And what areas of hospice and home health, in what



3 (Pages 6 to 9)


3 (Pages 6 to 9)

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1 states are you covering?2 A. Michigan, Ohio, Indiana, Illinois -- is this in that3 same time frame or no?4 Q. I think you became chief clinical officer after that5 time frame so talk about the current time frame.6 A. Kansas, Missouri, Massachusetts, and Maine.7 Q. Who do you report to now?8 A. The CEO, the new CEO.9 Q. And what is that individual's name?

10 A. Adam Nielsen.11 Q. Is First Care Healthcare still operating today?12 A. Yes.13 Q. But it's doing business as Great Lakes?14 A. Correct, Great Lakes Caring.15 Q. And does First Care Healthcare just operate in16 Illinois?17 A. Correct.18 Q. Do you know how many RNs are employed by First Care19 Healthcare currently?20 A. I do not know the exact number.21 Q. Do you have an estimates?22 A. Yes. I can guess maybe 10.23 Q. Do you know what the answer was during the October to24 December 2015 time frame?25 A. Again, I don't know the exact number but an estimate,

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1 three or four.2 Q. And do you know how many RNs are -- strike that.3 Do you know how many companies are doing4 business under Great Lakes right now similar to First5 Care Healthcare?6 A. Again, not the exact number, I would say eight home7 health companies -- no, probably six, and you want me8 to also --9 Q. Yes, and including hospice.

10 A. Three or four.11 Q. Do you know what the answer was as of October-December12 2015?13 MR. PELTON: I will object, we are again14 getting beyond I think the scope of the current15 discovery plan in the lawsuit but go ahead and answer16 if you can.17 A. Again, an estimates, for home health, six, and hospice,18 two or three.19 BY MR. GOTTESFELD:20 Q. Do you know as of today whether Great Lakes pays any21 RNs for the combination of a fee shift and hourly22 component basis?23 MR. PELTON: I will object. Again, it's24 beyond the scope of the agreed discovery and instruct25 her not to answer.

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1 MR. GOTTESFELD: Eric, just because of that2 instruction, we are going to have to hold the3 deposition open and the 30(b)(6) too.4 MR. PELTON: We are beyond the 30(b)(6).5 MR. GOTTESFELD: I am saying you did the same6 instruction to the 30(b)(6). Do we have to have7 another deposition one day? It just seems a waste of8 time and money.9 MR. PELTON: This is what was contemplated in

10 the status conference; that we would focus on Hicks,11 and put the tolling agreement in place, which was the12 quid pro quo and then once we get through the summary13 judgment stage on Hicks, we would reopen discovery and14 focus on the class issues leading up to conditional15 certification and thereafter, and so it is contemplated16 that Ms. Miller or the corporate dep would come back at17 that time so we don't need to spend a lot of time on18 this today, and I appreciate some context but --19 BY MR. GOTTESFELD:20 Q. Ms. Miller, you talked about it before about21 documentation that Ms. Hicks would complete, remember22 that testimony in the 30(b)(6)?23 A. Yes.24 Q. Was the documentation that RNs, such as Ms. Hicks would25 complete, would someone at Great Lakes review that on

Page 9

1 occasion?2 A. Yes.3 Q. What sort of employees would review the documentation4 submitted by an RN such as Ms. Hicks?5 A. It could be the education department, their6 supervisors, Q/A, compliance, those are probably the7 main areas.8 Q. This may seem like a silly question but what is purpose9 of an RN, such as Ms. Hicks, completing documentation

10 for a visit?11 A. To document the care provided to the patient.12 Q. And is that company policy?13 A. Yes.14 Q. And that is just as important to provide good and15 proper care to the patient?16 A. Yes.17 Q. Let me ask you, did you ever provide a type of analysis18 as to how many hours Ms. Hicks worked in a typical19 week?20 A. I have not.21 Q. Do you know -- strike that. We are almost done here.22 We talked about training at length before.23 Just tell me what happens during a training. What24 information is an RN receiving?25 A. Well, it depends on the type of training but we train



4 (Pages 10 to 13)


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Page 10

1 them on OASIS, how to complete an OASIS. We train them2 on what is called the Home Health Conditions of3 Participation, which are the rules that the government4 puts in place to be a home health provider. Train them5 on wound care, procedures, bag technique as they take6 bags into patients' homes, hand washing. It could be7 lots of -- IVs.8 Q. Are those examples of types of training that Ms. Hicks9 might have received during the period of 2015, October

10 to December?11 A. Yes.12 Q. And where did such trainings take place for Ms. Hicks?13 A. I do not know during that time frame.14 Q. Who conducts these types of trainings. There is a15 certain job title, a certain type of employee?16 A. It could be different people. Education does a lot of17 our training, our nurse preceptors. It could be the18 clinical supervisor doing training. We may bring in an19 external vendor who is going to teach on a particular20 IV product. They may do that training.21 Q. Is it fair to say such trainings are mandatory for the22 RN to attend?23 A. Yes.24 Q. Tell me, we talked about office meetings before. What25 kind of topics are covered in an in-office meeting?

Page 11

1 A. It might be topics about how we are doing on our QAPI2 plan, which is a performance improvement project, maybe3 talking about a particular patient outcome that needs4 improvement in that market or just office staffing or,5 you know, anything to do with that location could be6 talked about.7 Q. Were such in-office meetings mandatory for RNs?8 A. Not all. The team meetings, we are not necessarily9 mandatory, it's encouraged but not mandatory.

10 Q. Were there some meetings that were mandatory?11 A. Yes.12 Q. Which ones would they be?13 A. Depended on the topic honestly. It's not like set by14 meeting title. It's more based on the topic content.15 Q. Can you give me a example of topic that might be16 mandatory for RN to attend?17 A. Sure. OASIS training. That's a big part of their role18 so they need to know how to do it.19 Q. But regardless whether or not it was mandatory, if an20 RN such as Ms. Hicks attended a team meeting from21 October to December 2015, would she have been22 compensated for that meeting?23 A. Correct.24 Q. Just tell me about on-call, what that would entail;25 just what is that exactly?

Page 12

1 A. On-call is after-hours nursing coverage so the nurses2 that do on-call don't have assignments scheduled to3 them. They are just available if an unexpected patient4 need arises.5 Q. So they have to be available to answer or pick up a6 phone?7 A. Correct. And potentially go see a patient.8 Q. To travel or go see the patient for a visit?9 A. Correct.

10 Q. And we see that Ms. Hicks was paid for on-call at the11 time, correct, from that October to December 2015?12 A. What I can see in those payroll records is she was not13 paid to be on-call. I can't tell exactly how much time14 she spent doing any visits during that call.15 Q. Understood. Was it mandatory Ms. Hicks be on-call at16 certain points during that time period?17 A. I do not know.18 Q. Does Great Lakes have a policy that RNs have to be19 on-call?20 A. We have a policy that we have to have RN coverage but21 it's not a requirement for every RN to take on-call.22 Q. If an RN is on-call, though, is it Great Lakes' policy23 that the RN be paid for that?24 A. They are paid a stipend to be available at night, yes.25 MR. GOTTESFELD: That's all the questions I

Page 13

1 have for you. Thank you, Ms. Miller.2 MR. PELTON: Thank you.3 (Deposition concluded 2:15 p.m.)4

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1 CERTIFICATE OF REPORTER2

3

4 STATE OF MICHIGAN )5 ) SS6 COUNTY OF OAKLAND )7

8 I HEREBY CERTIFY that I reported9 stenographically the foregoing proceedings and

10 testimony under oath at the time and place hereinbefore11 set forth; that thereafter the same was reduced to12 computer transcription under my supervision; and that13 this is a full, true, complete and correct14 transcription of said proceedings.15

16

17 ______________________________18 Bethany Lee Robinson, CSR 3244,19 Notary Public,20 Oakland County, Michigan21 My Commission expires: July 5, 201822

23

24

25


Exhibit B


Exhibit C


Carry Vandemaagdenberg Marcy Miller12/13/2017


Page 1

1 UNITED STATES DISTRICT COURT

2 EASTERN DISTRICT OF MICHIGAN

3 SOUTHERN DIVISION

4

5 LAURA BETH HICKS, on behalf of

6 herself and similarly situated

7 employees,

8 Plaintiff,

9 -vs- No. 2:17-cv-12674-GCS-DRG

10 Magistrate Judge R. Steven Whalen

11 GREAT LAKES HOME HEALTH

12 SERVICES, INC., and GREAT LAKES

13 ACQUISITION CORP., d/b/a GREAT

14 LAKES CARING,

15 Defendants.

16 __________________________________/

17 PAGE 1 to 144

18

19 The 30(b)(6) Depositions of MARCY MILLER

20 and CARRY VANDEMAAGDENBERG,

21 Taken at One Town Square; 17th Floor,

22 Southfield, Michigan,

23 Commencing at 10:10 a.m.,

24 Wednesday, December 13, 2017,

25 Before Bethany Lee Robinson, CSR-3244.



2 (Pages 2 to 5)


2 (Pages 2 to 5)

Page 2

1 APPEARANCES:2

3 MARK J. GOTTESFELD, ESQ.4 Winebrake & Santillo, LLC5 715 Twining Road; Suite 2116 Dresher, Pennsylvania 190257 215.884.24918 [email protected] Appearing on behalf of the Plaintiff.

10

11 ERIC PELTON, ESQ.12 Kienbaum, Opperwall, Hardy & Pelton, PLC13 280 N. Old Woodward Avenue; Suite 40014 Birmingham, Michigan 4800915 248.645.00016 [email protected] Appearing on behalf of the Defendants.18

19 ALSO PRESENT:20 Ms. Carry Vandemaagdenberg21 (For Marcy Miller deposition)22 Ms. Marcy Miller23 (For Carry Vandemaagdenberg deposition)24

25 * * *

Page 3

1 TABLE OF CONTENTS2 Witness Page3

4 MARCY MILLER5 EXAMINATION BY MR. GOTTESFELD 56 CARRY VANDEMAAGDENBERG7 EXAMINATION BY MR. GOTTESFELD 1258

9 INDEX TO EXHIBITS10 (Exhibits are attached to transcript)11 Exhibits Page12 GLC EXHIBIT 1 713 Plaintiff's Amended Notice of Deposition14 Pursuant to Federal Rule of Civil Procedure15 30(b)(6)16 GLC EXHIBIT 2 4217 Laura Beth Hicks Payroll18 GLC EXHIBIT 3 7719 Confidential - Task20 Details/Kinnser Software OASIS-C121 Discharge (Non-Billable)22 GLC EXHIBIT 4 7923 Confidential - Task24 Details/Kinnser Software OASIS-C125 Start of Care

Page 4

1 GLC EXHIBIT 5 922 Great Lakes Caring Chapter 43 Homecare Resources4 GLC EXHIBIT 6 965 Mileage Reimbursement Rate Summary6 GLC EXHIBIT 7 987 Great Lakes Caring Mileage Policy8 GLC EXHIBIT 8 1029 Confidential - Kinnser printout

10 GLC EXHIBIT 9 10711 Confidential - Agent Visit Time Report12 GLC EXHIBIT 10 11213 Defendants' Objections and Responses14 to Plaintiff's First Interrogatories15

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1 Southfield, Michigan2 Wednesday, December 13, 20173 About 10:10 a.m.4 MARCY MILLER,5 having first been duly sworn, was examined and6 testified on her oath as follows:7 MR. GOTTESFELD: Good morning, Ms. Miller.8 My name is Mark Gottesfeld and I am the attorney for9 Laura Hicks in this lawsuit, which is pending in the

10 Eastern District of Michigan, and it's against Great11 Lakes Home Health Services, Inc. and Great Lakes12 Acquisition Corporation, doing business as Great Lakes13 Caring. Do you understand that?14 THE WITNESS: Yes.15 EXAMINATION BY MR. GOTTESFELD:16 Q. Could you state your name for the record so it's17 formally on there.18 A. Sure. It's Marcy Miller.19 Q. Ms. Miller, you understand you are here for a20 deposition today?21 A. Yes.22 Q. Have you ever taken a deposition prior to today?23 A. I have not.24 Q. I will go over some ground rules with you. I will be25 asking you some questions and I just ask that you



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1 Q. How do you spell his last name?2 A. W-H-O-O-L-E-Y. Lori Brewis (phonetic) was involved in3 this integration. She was our VP of HR. There is like4 Nakesha Edmonds was a coordinator-type body who would5 answer phones and things like that.6 Sherilyn Deary was our chief integration7 officer at the time. I don't know how involved she was8 with this particular one. There was also a director of9 integration, Roslyn Pryor. Again, I'm not sure if she

10 was very involved in this, and that's it.11 Q. Do you have any knowledge as to when Great Lakes12 decided that RNs should be considered overtime-exempt?13 A. I do not.14 MR. PELTON: Objection. It goes beyond the15 scope of the topics but you can answer.16 A. I don't. It's been like that since I started here in17 2001.18 BY MR. GOTTESFELD:19 Q. Do you have knowledge as to whether anyone from Great20 Lakes consulted with an attorney regarding the21 classification of RNs as overtime-exempt?22 MR. PELTON: Same objection. It goes beyond23 the topics listed that are limited to Ms. Hicks.24 A. I do not have any knowledge of that.25

Page 23

1 BY MR. GOTTESFELD:2 Q. Do you know whether there are any documents concerning3 the reasoning behind why RNs are overtime-exempt?4 MR. PELTON: Same objection.5 A. I do not.6 BY MR. GOTTESFELD:7 Q. You mentioned a job description before for RNs. During8 the time period from October 2015 to December 2015, was9 there just one version or do you know how many there

10 were?11 A. I think there was just one.12 Q. Has that version changed since then?13 A. I would say not substantially. We may change something14 related to a new outcome or new regulation the15 government puts in play regarding patient care but16 substantially, no.17 Q. Has Great Lakes ever done an individual analysis of18 Ms. Hicks' job duties to see whether she is properly19 overtime-exempt?20 A. I don't know.21 MR. PELTON: Object to the extent you're22 asking for a legal conclusion and attorney work product23 in this case.24 BY MR. GOTTESFELD:25 Q. Do you have any understanding as to whether RNs need to

Page 24

1 be paid a certain way in order to be overtime-exempt?2 A. I do not.3 Q. Do you have any understanding as to whether RNs can be4 paid in part on an hourly basis and still be5 overtime-exempt?6 MR. PELTON: Again, I am going to object to7 the extent you are calling for a legal conclusion.8 A. I really do not.9 BY MR. GOTTESFELD:

10 Q. So you don't have an understanding one way or the11 other?12 MR. PELTON: Again, I am going to object.13 You're asking for a legal conclusion that is in dispute14 in the case.15 MR. GOTTESFELD: I am still entitled to ask16 it in my opinion.17 A. I really don't know legally what constitutes exempt and18 not exempt in a pay model.19 BY MR. GOTTESFELD:20 Q. As you sit here today do you know whether Great Lakes21 has any knowledge as to whether paying an employee in22 part on an hourly basis prohibits them from being23 classified as an exempt employee?24 MR. PELTON: Again, I am going to object.25 You're asking for a legal conclusion or else going

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1 outside the scope of the deposition topics listed in2 the Notice.3 A. Still answer it?4 BY MR. GOTTESFELD:5 Q. Yes.6 A. Can you repeat the question?7 Q. Sure. So as of today, do you know whether Great Lakes8 is aware as to whether paying an employee, specifically9 an RN, in part on an hourly basis prohibits Great Lakes

10 from then classifying that RN as an exempt employee?11 MR. PELTON: I will restate my objection,12 it's going outside the deposition topics and calling13 for a legal conclusion which would be an inappropriate14 topic anyway and on that basis she can't bind the15 corporation with her testimony.16 You can answer the question based on your17 personal knowledge.18 A. I don't know legally, but I think we have a general19 understanding that paying people on a fee per visit20 basis and then hourly is under scrutiny, but I don't21 know that I can say that we know it makes someone22 nonexempt, I think that was the question.23 BY MR. GOTTESFELD:24 Q. And when you say you know that's under scrutiny, what25 do you mean by that?



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1 A. Just industry articles talk about the pay per visit2 model and our Home Health model and there is3 questioning whether or not we can pay people that way.4 Q. Does Great Lakes pay any employees that way?5 MR. PELTON: Objection. I am going to6 instruct her not to answer at this point. It's going7 beyond the scope of the deposition topics listed and8 going beyond the agreement of the parties with the9 court that this will be limited to the six.

10 MR. GOTTESFELD: I'm not sure there is a11 Court Order to that effect.12 MR. PELTON: I didn't say there was an Order,13 but it was discussed with the court and that was the14 discussion we were headed. I would have to look at the15 scheduling order but that was the agreement and that's16 why the deposition Notice was changed the way it was17 when it was amended.18 MR. GOTTESFELD: So you are instructing her19 not to answer that question?20 MR. PELTON: Yes.21 BY MR. GOTTESFELD:22 Q. So, Ms. Miller, let's move then to topic number 1 in23 your Amended Notice of Deposition and that 1 says:24 The process by which Defendants determined25 that Ms. Hicks is exempt from the mandatory overtime

Page 27

1 pay provisions of the federal Fair Labor Standards Act.2 What information do you have regarding this3 topic?4 A. Sure. So I wouldn't say there is a formal process.5 She is an RN. She was considered exempt as an RN due6 to her job duties so that's how I would qualify them.7 Q. Do you have any more information regarding the process8 or deliberations that Great Lakes made in coming to the9 conclusion that RNs are overtime-exempt?

10 A. I do not. It's been like that since I started here.11 Q. Fair enough. Just going back again to the fee per12 visit basis. So if I understand your testimony --13 sorry, strike that.14 Do you have an understanding as to whether15 RNs can be paid on a fee per visit basis and be16 considered overtime-exempt?17 MR. PELTON: Object, calling for a legal18 conclusion and one that goes beyond the scope of the19 deposition topics.20 You can answer in your personal capacity, if21 you can.22 A. So if I heard the question right, do I have an23 understanding if they can be paid on a fee per visit24 basis and still be considered overtime-exempt?25

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1 BY MR. GOTTESFELD:2 Q. Right.3 A. I can speak to our practice. I don't know legally,4 but, yes, I believe if they are paid strictly on a fee5 per visit and not an hourly basis they are considered6 exempt.7 Q. What about if someone, an RN, is paid on a fee per8 visit basis and also an hourly component, do you have9 an understanding as to whether that individual can

10 still be considered overtime-exempt?11 MR. PELTON: Same objection stated in the12 previous question.13 A. I think that goes back to the answer I had which is I14 don't know that makes them nonexempt but I know there15 is a lot of scrutiny on that pay structure.16 BY MR. GOTTESFELD:17 Q. Let's move on, Ms. Miller. I want to make this as18 organized as I can for all of us, and I think it would19 be good if we moved to number 6:20 The matter in which Ms. Hicks' pay was21 determined from October 27, 2015 to December 31, 2015.22 So are you able to tell me how was she paid23 during that time period? I think you hit on that24 before but I just want to go there right now.25 A. Yes. So she, during that time frame was paid on a per

Page 29

1 visit basis so we took visit information out of that2 software system and calculated the type of visit she3 did so she was paid $30 for routine visits and $50 for4 what we call an OASIS. She also received bonus pay for5 when she was on-call, in-service, education-type work.6 She also received mileage reimbursement and a phone7 stipend.8 Q. I want to make sure I heard you right there. You said9 $30 for what type of visits?

10 A. What we call routine, or revisit some people call it.11 Q. And then you said there were OASIS visits?12 A. Yes.13 Q. How much?14 A. $50 for an OASIS.15 Q. And what does OASIS mean?16 A. OASIS is a standard government form we have to fill out17 when we do a Home Health admission, discharge,18 resumption of care.19 Q. So does it fall under one particular visit or are there20 multiple visits that fall under the OASIS category?21 A. There can be different types of visits that require an22 OASIS; start of care, agency discharge, resumption of23 care, recertification and a follow-up, also.24 Q. Why are the OASIS visits paid at $50 versus the other25 visits at $30?



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1 A. I believe so, yes.2 Q. After like in January 2016, how was Ms. Hicks paid?3 A. She was paid on a salary basis.4 Q. And prior to that she was not paid on salary basis, was5 she?6 A. Correct.7 Q. And because you testified previously she was paid on a8 -- how was it you described her being paid prior to9 January 2016?

10 A. Per visit.11 Q. What about then when we take into account the fact she12 is paid for her in-service and time spent being paid13 for in meetings and non-visit time. How do you square14 that with her being paid on a per visit basis?15 A. Per visit means for patient care so the other things we16 bonused her for were non-patient care related.17 Q. So you are making the distinction that the Other18 category is non-patient care related?19 A. I guess there were non -- I don't know -- no. The20 other category was accumulation of non-routine and21 non-regular OASIS visits.22 Q. And there was a time component to that payment, was23 there not?24 A. Yes.25 Q. So the more time that Ms. Hicks spent either in the

Page 63

1 office or in-service training or at a team meeting the2 more money she would have been paid under that other3 category?4 A. Correct.5 Q. Were other RNs paid on the same basis during that same6 time period from October 2015 to December 2015?7 MR. PELTON: I'm going to object. You are8 going beyond the scope of the other dep topics and also9 going beyond the agreement that this is a single plan

10 case at this point related to Ms. Hicks only.11 MR. GOTTESFELD: Is that instruction not to12 answer?13 MR. PELTON: Yes.14 BY MR. GOTTESFELD:15 Q. Ms. Miller, we are done with the payroll documents that16 were attached to your Exhibit. There were some more17 documents, though, in GLC 00002.18 A. Okay.19 Q. So we looked at the payroll period for November 16 to20 the 30th already that were on G-8 and G-9, right?21 A. We did, yes.22 Q. It looks like is the next payroll period then from23 GLC-10 November 29 to December 12?24 A. Yes.25 Q. What kind of documents do you call these. Did they

Page 64

1 have a certain name that Great Lakes used to call2 these?3 A. This spreadsheet, this GLC --4 Q. Yes.5 A. No, this was just something in place during this6 transition time.7 Q. Have you seen them before today?8 A. I have seen them before today.9 Q. So let's look quickly at GLC-10, Ms. Miller. We see

10 for Ms. Hicks the first row there under Visits/Hours,11 it says 32.12 A. Correct.13 Q. Again is that for visits and revisits?14 A. Correct. That's the number of visits -- number of15 routine/revisits she did.16 Q. And then that was at the rate of $32, right?17 A. $30.18 Q. Sorry.19 A. That's okay.20 Q. And then that comes out to a total of $960?21 A. Correct.22 Q. To the right of that, we see office hours and then23 below that is 3?24 A. Correct.25 Q. What does that represent?

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1 A. That would be in-servicing, team conference, those2 types of things.3 Q. And what does the 3 represent?4 A. The amount of time she spent on those items.5 Q. And then the rate to the right of that says 20?6 A. Correct.7 Q. And what does that mean?8 A. That is what she was paid in a bonus format for those9 non-visit patient time items.

10 Q. And was Great Lakes required to pay her for that11 non-visit patient time items?12 MR. PELTON: Object, the question is vague13 and calls for a legal conclusion.14 A. Required? I'm not sure I understand what you mean by15 required.16 BY MR. GOTTESFELD:17 Q. Sure. So Ms. Hicks was paid for the three hours that18 she spent in non-visit patient items for this payroll19 period?20 A. Correct.21 Q. At $20 times three?22 A. Correct.23 Q. That comes out to $60, right?24 A. Correct.25 Q. Did Great Lakes have discretion to not pay her for that



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1 about, the process by which the office received hours,2 so again talking about the 2015 time frame, how would3 an RN such as Ms. Hicks submit the hours that she4 worked performing, for example, time spent in a5 meeting?6 A. She verbally communicated those hours to her then7 supervisor-director Mary Kay Reed, who communicated8 with Andrew Whooley, he created the spreadsheets. The9 spreadsheets were populated from his information into

10 the spreadsheet that is attached, I think sections of11 it is attached to the pay stubs, which was then12 processed through the Paycor system and the paycheck13 was generated.14 Q. And was that true for the entire portion of Ms. Hicks'15 employment during that 2015 time period?16 A. Correct. I assume you were talking about after17 acquisition --18 MR. PELTON: Yes.19 THE WITNESS: So post-acquisition.20 BY MR. GOTTESFELD:21 Q. Good point. I was talking the October to December22 2015.23 MR. PELTON: We set that ground rule earlier24 on and it's good to be clear, thank you.25

Page 143

1 BY MR. GOTTESFELD:2 Q. So is that the same process that Ms. Hicks would do if3 it was regarding training as well the amount of time4 she spent in training?5 A. Correct.6 Q. And would that hold true with the same process for the7 amount of time that she spent performing work in the8 office?9 A. Correct.

10 MR. GOTTESFELD: I don't think I have any11 more questions for you. Thank you.12 That ends the corporate deposition and we13 will reserve the right to read it and make any14 corrections.15 (Deposition concluded at 2:00 p.m. of the16 30(b)(6) corporate deposition of Carry17 Vandemaagdenberg)18

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1 CERTIFICATE OF REPORTER2

3

4 STATE OF MICHIGAN )5 ) SS6 COUNTY OF OAKLAND )7

8 I HEREBY CERTIFY that I reported9 stenographically the foregoing proceedings and

10 testimony under oath at the time and place hereinbefore11 set forth; that thereafter the same was reduced to12 computer transcription under my supervision; and that13 this is a full, true, complete and correct14 transcription of said proceedings.15

16

17 ______________________________18 Bethany Lee Robinson, CSR 3244,19 Notary Public,20 Oakland County, Michigan21 My Commission expires: July 5, 201822

23

24

25


Exhibit D

Unpublished Cases


Abadeer v. Tyson Foods, Inc.

United States District Court for the Middle District of Tennessee, Nashville Division

December 14, 2010, Decided; December 14, 2010, Filed

NO. 3:09-0125

Reporter2010 U.S. Dist. LEXIS 136978 *; 2010 WL 5158873

HANAA B. ABADEER, et al, Plaintiffs, v. TYSON FOODS, INC., and TYSON FRESH MEATS, INC., Defendants.

Subsequent History: Partial summary judgment granted by, in part, Partial summary judgment denied by, Motion denied by Abadeer v. Tyson Foods, Inc., 2013 U.S. Dist. LEXIS 145918 (M.D. Tenn., Oct. 3, 2013)

Prior History: Abadeer v. Tyson Foods, Inc., 2009 U.S. Dist. LEXIS 110685 (M.D. Tenn., Nov. 25, 2009)

Counsel: [*1] For Hanaa B. Abadeer, Plaintiff: Charles P. Yezbak, III, LEAD ATTORNEY, Yezbak Law Offices, Nashville, TN; Molly A. Elkin, LEAD ATTORNEY, Woodley & McGillivary, Washington, DC; Sara L. Faulman, LEAD ATTORNEY, PRO HAC VICE, Gregory K. McGillivary, Woodley & McGillivary, Washington, DC.

For Latif S. Abdelsayed, Yare Abdirahman, Abdirahman (Mursal) M. Abdullahi, Wal M. Abiyam, Dirie A. Abshir, Wuilian Aguila, Halimo A. Ahmed, Akuol M. Akot, Abdirizak Alas, Rosa Aleman De Majano, Ana R. Alvarado, Sofia Alvarado, Jose G. Amaya, Emir A. Angel, Jeronimo Anguiano, Gaalow Annimar, Alizabeth Z. Aona, Amalia Arbelaez, Ricardo Arbelaez, Everardo Aspera, Magdy Attalla, Nagla A. Attalla, Raquel Ayala, Janice S. Bagwell, Jerry E. Barlow, Mauricio D. Batres, Roxana Batres, Betty J. Baxter, Antonio Benitez, Garang D. Bol, Maria Bonilla, Sandy J. Branch, Michael W. Breece, Joyce A. Brent, Ronald Brewer, Jr., Briceida M. Brizuela, Darrell M. Brule', Madison, TN, (615) 512-5493, Khoa T. Bui, Andria W. Butler, Joel Carapia, Nereyda Carmona, Garry C. Carter, Buford Cartwright, Justo Carvajal, David Cespedes, Jorge Cespedes, Juan Carlos Chavez, Ronald D. Chowning, Terrance K. Churchwell, Brandon Clawson, [*2] Florin Constantinescu, Margie B. Cooksey, Jose R. Corea, Rosa Corpeno De Umana, Mileidys Crespo, Francisco A. Cruz, Delmy D. Cruz Menjivar, Israel Cuevas, Richard W. Daenell, Oanh Dang, Elvira De Leon, Wandy O. De Mota, Felipe Del Rio, Duoth J. Deng, Thayel Deng, Adut D. Dhol, Arturo H. Diaz, Jose' A.

Diaz, Jose M. Diaz, Maria D. Diaz, Gok D. Dup, Mutwakel H. Elballa, Linda M. Ellis, Miguel Espino-Garcia, Amal Farag, Attiet S. Farag, Antonio Figueroa, Severiano M. Flores, Antonio Forero, Adilia I. Funes, Franciso J. Gallardo, Erika Garcia, Jose A. Garcia, Dritom Gashi, Faton Gashi, Gani Gashi, Jeton Gashi, Caridad L. Ge Martinez, Victor Geiculescu, Mary Nan Georgey, Elizabeth Gonzalez, Lorena Y. Gonzalez, Raquel Gonzalez, Lucas Gonzalez Ayala, Annie C. Goodwin, Felix Gutierrez, Afaf H. Hanna, Linda Heatherly, Jose Juan Carlos Henriquez, Dani Hernandez Carcano, Francisca N. Hernandez, Mercedes Hernandez, Rita Hernandez, William F. High, George H. Hill, Phoung Hoang, Edward E. Hobson, Tonya R. Holt, Diemle T. Huynh, Mikhael R. Iskander, Dixan Jaime, Dixangel Jaime, Darren Johnston, Edward W. Jones, Ethel M. Jones, Johnny Jones, Lola D. Jones, John M. Kak, Nasreldin M. Kaladia, Reba F. [*3] Kelly, Sandy Keopanya, Thao X. Kittle, Malush Kolshi, Nixhare Kolshi, Gadwal Kori, Abdu Kuwa, Diem N. Lam, Hong Thi Lam, Nyayien Lear, David W. Lir, Bernardo N. Lopez, Jose A. Lorenzo, Julio Lorenzo, Maduk Lual, Tiaura S. Lucas, Dwight Marlow, Gladis E. Marroquin, Liset Martin, Jonathan J. Martinez, Jennifer Martinez De Osaba, Abdullah I. Mason, Sally J. Mason, Sarah Mayberry, Ernest D. McClain, Barbara J. McGregor, Francisca G. Medina Aquino, Rosember Mejia, Santos E. Melgar, Idalmis Mesa, Shenouda Mikhaeil, Asad Mohamed, Kiin S. Mohamed, Zahro Mohamed, Cirilo Molina, Rosa Molina, Berta Morales, Miguel R. Morejon, Miguel Morejon-Ollero, Gomez C. Morey, Alicia Murguia, Abdelseed E. Murran, Johnson A. Nader, Amerika Nava, Calin Neculcea, Lan Nguyen, Le T. Nguyen, Loc T. Nguyen, Ngan B. Nguyen, Phuc B. Nguyen, Xem Nguyen, Monira F. Nosir, Abdisalan M. Omar, Jose M. Orellana, Norma G. Ortez, Maria Ortiz, Rocio M. Ortiz, Michael Othur, Rosalind A. Owens, Noe A. Padilla, Jorge L. Pardo, Juan Pedroza, Maria D. Pedroza, Maria J. Pedroza, Ion Pele, Fulgencio H. Penate, Phyllis Pendleton, Daraphone Phimmachack, Intha Phimmachack, Pouthasone Phimmachack, Somphou Phimmachack, Ana D. Portillo, [*4] Aliuska Prieto, Amina Qalib, Nasteha Qalib, Suado Qalib,


of 5

Lorena I. Quezada, Maritza Ramos, Shirley Ray, Paula J. Redfern, Deborah J. Reffegee, Surelys Rego, Maria L. Reyes, Laureano A. Rivas Lopez, Bacilia Rivas Morales, Anibal Rodas, Domitilia T. Rodriguez, Felix A. Rodriguez, Francisco Rodriguez, Yesenia A. Rodriguez, Vilma Ruiz, Kham Saengsauang, Manuel D. Salvador Hernandez, Cristian Sandu, Sylvia Santana, Jeff Santillan, Khamphay Satham, Michael Scales, Angela Scharkley, Mursal Serar, Adly K. Shahat, Phaiboon Sirithai, Vanny Sisongkham, Danny Smith, Welai Smith, Idelmis Soca, Luz Maria Solis, Stella L. Spillers, Costel Stoian, Dan I. Stoiculescu, Dana I. Stoiculescu, Brigido Suarez Nunez, Tuyen Q. Ta, John J. Tay, Roger D. Taylor, Thomas W. Terry, Concepcion Ticas, Yen Chi T. To, Gabriel Tong, Luis Torres Lugo, Maria Torres Gonzalez, Duc N. Tran, Roilan Ulloa, Olga L. Ulloa-Hernandez, Santos Urias Argueta, Cecilio Valle, Consuelo Vasquez, Daniel Vasquez, Idania Vazquez, Luis R. Villegas, Valentin Vinca, George C. Viveros, Thoai Vy, Nadia Wasef, Lolita D. White, Tyson C. White, Denise J. Williams, James R. Williams, Vernon Williams, Anthony Woodard, Myranda C. Woodard, Khamphan [*5] Xayyasith, Thongkham Xayyasith, Orbelina Yanes, Yoeun Yi, Peter P. Yiech, Yoeuth Yoeun, Adel K. Youssef, Corina Zavala, Rigoberto Zavala-Jovel, Mengistu Zerihun, Mohamed Abdi, Plaintiff: Charles P. Yezbak, III, LEAD ATTORNEY, Yezbak Law Offices, Nashville, TN; Molly A. Elkin, LEAD ATTORNEY, Woodley & McGillivary, Washington, DC; Sara L. Faulman, LEAD ATTORNEY, PRO HAC VICE, Woodley & McGillivary, Washington, DC.

For Tyson Foods, Inc., Tyson Fresh Meats, Inc., Defendants: Evangeline G. Paschal, Michael J. Mueller, LEAD ATTORNEYS, Hunton & Williams LLP, Washington, DC; Kenneth A. Weber, LEAD ATTORNEY, Emily H. Plotkin, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC-Nashville, Nashville, TN.

Judges: WILLIAM J. HAYNES, JR., United States District Judge.

Opinion by: WILLIAM J. HAYNES, JR.

Opinion

MEMORANDUM

Plaintiffs filed this collective action under the Fair Labor

Standards Act ("FLSA") 29 U.S.C. § 216(b) against the Defendants: Tyson Foods, Inc., and Tyson Fresh Meats, Inc., Plaintiffs' current or former employers. Plaintiffs allege that the Defendants failed to pay them their agreed wages for all hours of their work in violation of the FLSA, including nonpayment for work that is required to be performed on the [*6] Defendants' work site. In addition to their FLSA claims, Plaintiffs also assert state common law claims for breach of contract and state statutory claims under Tennessee Wage Regulations, Term. Code Ann. § 50-2-101(b).

Before the Court is the Plaintiffs' motion to extend equitable tolling of the putative Plaintiffs' statute of limitations (Docket Entry No. 136). Plaintiffs seek tolling of the FLSA limitation period until the date of the Court's Order on the form of collective action notice (the "Notice"). In response, Defendants contend that equitable tolling is limited to unfair unjust circumstances beyond Plaintiffs' control. In their motion, Defendants argue that Plaintiffs failed to provide evidence that the putative plaintiffs have diligently pursued their rights or were prevented from joining this action because of "extraordinary circumstances." Defendants note that over 500 employees have joined this action since the filing of the original complaint and fourteen (14) individuals joined after the Court granted conditional certification of the collective action.

A. Review of the Record

On February 6, 2009, 278 named Plaintiffs filed this action with consent forms seeking to represent [*7] a nationwide collective action for unpaid compensation on behalf of all current and former non-exempt employees at Defendants' Goodlettsville, Tennessee facility. (Docket Entry No. 1). On March 13, 2009, in Plaintiffs' first amended complaint, 217 additional named Plaintiffs joined with executed consent forms. (Docket Entry No. 13, Exhibit A). On April 28, 2009, an additional 49 individuals joined. (Docket Entry No. 33). Plaintiffs moved to file a second amended complaint (Docket Entry No. 34) that the Court granted on April 30, 2009. (Docket Entry No. 36).

On May 1, 2009, the day before the initial case management conference, Plaintiffs filed a motion for expedited court-supervised notice and conditional certification of their Fair Labor Standards Act ("FLSA") claims under § 216(b) of the FLSA. (Docket Entry No. 39). At the initial case management conference, the Court denied Plaintiffs' motion to conditionally certify

2010 U.S. Dist. LEXIS 136978, *4


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their FLSA claims as a collective action and granted Defendants' request to conduct limited discovery on Plaintiffs' motion to conditionally certify. The Court, however, tolled the statute of limitations for putative plaintiffs from May 6, 2009 until the Court's ruling [*8] on the Plaintiffs' motion to certify the collective action. (Docket Entry No. 45 at 13). The Court stated that Plaintiffs could re-file their motion for notice and conditional certification of their FLSA claims after limited discovery. Id. at 11. Before the Court's ruling on Plaintiffs' motion to proceed as a collective action, an additional 53 opted-in as plaintiffs. (Docket Entry No. 47, May 21, 2009; Docket Entry No. 54, July 22, 2009; and Docket Entry No. 70, September 1, 2009).

On November 25, 2009, the Court issued its Order granting Plaintiffs' motion for certification of a collective action under section 216(b) of the FLSA and ending the tolling period on the statute of limitations. (Docket Entry No. 120). As directed by the Court, on December 8, 2009 Plaintiffs filed a proposed form of notice for potential collective action members (Docket Entry No. 121) and on December 11, 2009, Defendants filed a response to Plaintiffs' proposed notice that objected to portions of that proposed notice, (Docket Entry No. 122) yielding Plaintiffs' reply on January 4, 2010. (Docket Entry No. 125). In the interim, Defendants filed a petition with the Sixth Circuit seeking permission to appeal [*9] the Court's November 25, 2009 Order that the Sixth Circuit denied on March 24, 2010. (Docket Entry No. 132). The Court approved Plaintiffs' proposed notice form.

B. Conclusions of Law

"[E]quitable tolling relief should be granted only sparingly." Irwin v. Dep't. of Veterans Affairs, 498 U.S. 89, 90, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990); Amini v. Oberlin Coll., 259 F.3d 493, 500 (6th Cir. 2001). "Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently; and (2) that some extraordinary circumstance stood in his way." Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S. Ct. 1807, 161 L. Ed. 2d 669 (2005).

In Roslies-Perez v. Superior Forestry Service, Inc., 652 F. Supp. 2d 887 (M.D. Term. 2009) this Court found as follows:

In a FLSA collective action, the statute of limitations continues to run for each Plaintiff until her or she files written consent to join the action. 29 U.S.C. §

256(b); Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822, 826 (S.D. Ohio 2007). Yet, this statute "establishes only a procedural limitations period." Ott v. Midland-Ross Corp., 523 F.2d 1367, 1370 (6th Cir. 1975), that is subject to equitable tolling, waiver and estoppel. Id., accord E.E.O.C v. Kentucky State Police Dep't., 80 F.3d 1086, 1095 (6th Cir. 1996) [*10] (the doctrine of equitable tolling is read into every federal statute). The equitable tolling doctrine "permits courts to extend the statute of limitations on a case-by-cases basis to prevent inequity." Baden-Winterwood, 484 F. Supp. 2d at 826 (citing Truitt v. County of Wayne, 148 F.3d 644, 648 (6th Cir. 1998)).

The Sixth Circuit lists five factors to consider on equitable tolling: (1) whether the plaintiffs lack actual notice of their rights and obligations; (2) whether they lacked constructive notice; (3) the diligence with which they pursued their rights; (4) whether the defendant would be prejudiced if the statute were tolled; and (5) the reasonableness of the plaintiffs remaining ignorant of their rights. Kentucky State Police, 80 F.3d at 1094; Baden-Winterwood, 484 F. Supp. 2d at 826-27 (equitably tolling FLSA statute of limitations). This list is neither exclusive nor mandatory. Dixon v. Gonzales, 481 F.3d 324, 331 (6th Cir. 2007); see Hasken v. City of Louisville, 234 F. Supp. 2d 688, 692 (2002) (list not "comprehensive"). Equitable tolling has been found where three of the five factors were not satisfied. See Dixon, 481 F.3d at 331.

Id. at 898, 899. Here, given that the members [*11] of this collective action are low wage workers, members of this group who opted in had the assistance of counsel, and the necessity of time for the Court's rulings, the Court deems tolling appropriate. The Defendants are not prejudiced given their opposition to certification and the Defendants' disputes about the appropriate notice form as well as the Defendants' appeal of the Order certifying this action.

Moreover, as to whether the period of time for approval of an appropriate notice is subject to tolling, in Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822 (S.D. Ohio, 2007) the district court found:

The text of FLSA demonstrates that Congress chose to provide an opt-in mechanism which necessarily involves some lapse of time between the date a collective action is commenced and the

2010 U.S. Dist. LEXIS 136978, *7


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date that each opt-in plaintiff files his or her consent form. The fact that a potential opt-in plaintiff first has to be notified of his or her eligibility to participate before he or she can file a consent form explains the lapsed time. While the language of the statute may not consider equitable tolling, Congress did not explicitly remove from this Court, its equitable power to toll the FLSA's [*12] statute of limitations. Rather, the equitable tolling doctrine is read into every federal statute.* * *

The Sixth Circuit has emphasized that the "[a]bsence of prejudice [to defendant] is a factor to be considered only after a factor that might justify tolling is identified." Allen 366 F.3d at 401 (quoting Vroman, 346 F.3d at 605).* * *. . . Defendant advised its current employees at that time "that in the not-too-distinct future, you'll be receiving a notice informing you of the lawsuit and your eligibility to participate in it." (Doc # 46 at 16.) Thus, Defendant contends that Plaintiffs should have started to inquire at that point about their legal rights. . . .In other words, Defendant induced Plaintiffs into reasonably believing that they could and should wait until they received notice of their eligibility before they inquired about and potentially pursued their legal FLSA rights. Thus, as a result of Defendant's instructions, it was entirely reasonable for Plaintiffs to remain ignorant of the fact that the viability of their claims hinged upon filing their consent forms.* * *

. . . [T]he Sixth Circuit in an unpublished decision has recognized that the mere existence of the FLSA [*13] statute provides plaintiffs with constructive notice of their rights under the FLSA and the filing deadlines. Archer v. Sullivan County Term., 129 F.3d 1263 [published in full-text format at 1997 U.S. App. LEXIS 33052] 1997 WL 720406 at *4 (6th Cir. 1997). Moreover, Black's Law Dictionary (8th ed. 2004) defines constructive knowledge "as knowledge that one using reasonable care or diligence should have." At the March 1, 2006 meeting, the then current employees were only informed of the FLSA lawsuit, and were also told, "in the not-too-distant future, you'll be receiving a notice informing you of the lawsuit and your eligibility to participate in it." (Doc. # 46 at 16.) In light of Defendant's actions at this meeting, it could be reasonable, even with knowledge of the

FLSA, for Plaintiffs to have waited for notice before they investigated the procedural requirements of participation.* * *

.... Plaintiffs lost time in pursuing their rights because both parties' inability to reach an agreement on how to best provide notice to potential plaintiffs. This dispute caused this Court to become involved in drafting the notice provision. (Doc. # 44-1 at 1.) Thus, the time that plaintiffs lost pursuing their rights was not a result of a lack of diligence [*14] on their part. Rather, Plaintiffs' action indicate that they were diligent.* * *

[T]he statute of limitations [shall] be tolled from February 24, 2006, the date on which discussions regarding the notice provision began, until August 2, 2006, when this Court ruled on the notice motion.

Id. at 826, 827, 828, 829 (emphasis added).

In Summa v. Hofstra University, 715 F. Supp. 2d 378 (E.D.N.Y. 2010), in a FLS A collective action, the district court found tolling appropriate for the time necessary to decide upon the requisite notice provisions for opt ins.

Unlike a class action brought pursuant to Federal Rule of Civil Procedure 23 ("Rule 23"), the FLSA requires that after receiving such notice, potential plaintiffs who seek to join the collective action must affirmatively opt-in by filing a written consent in order "to be bound by the judgment (and to benefit from it)."... (citations omitted).

Id. at 385. In Lee v. ABC Carpet & Home, 236 F.R.D. 193, 200 (S.D.N.Y. 2006), the district court allowed tolling for the time necessary to decide pretrial motions, including a certification motion under the FLSA.

Here, based upon the authorities cited, the Court concludes that the equitable tolling should [*15] extend here 120 days from the date of the Court's approval of Plaintiffs' requested notice for opting in. To this extent, Plaintiffs' motion should be granted.

An appropriate Order is filed herewith.

ENTERED this the 14th day of December, 2010.

/s/ William J. Haynes, Jr.

WILLIAM J. HAYNES, JR.

2010 U.S. Dist. LEXIS 136978, *11


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United States District Judge

ORDER

In accordance with the Memorandum filed herewith, Plaintiffs' motion to extend equitable tolling (Docket Entry No. 136) is GRANTED to extend tolling of the limitation period for 120 days from the date of the Court's Order approving Plaintiffs' notice.

It is so ORDERED.





ORDER

Upon review of Plaintiffs' proposed notice, (Docket Entry No. 121) and Defendants' objections and the parties' related submissions, (Docket Elentry No. 122 through 125), the Court APPROVES Plaintiffs' proposal notice, (Docket Entry No. 125-1). Plaintiffs' counsel shall cause publication of the approved notice forthwith.

It is so ORDERED.





End of Document

2010 U.S. Dist. LEXIS 136978, *15


Atkinson v. TeleTech Holdings, Inc.

United States District Court for the Southern District of Ohio, Western Division

February 26, 2015, Decided; February 26, 2015, Filed

Case No. 3:14-cv-253


TINA ATKINSON, et al., Plaintiffs, v. TELETECH HOLDINGS, INC., et al., Defendants.

Counsel: [*1] For Tina Atkinson, Richard Hall, Shelly Primus, Plaintiffs: Jason T Brown, Nicholas R Conlon, PRO HAC VICE, Jersey City, NJ; Jesse L Young, Matthew L Turner, PRO HAC VICE, Southfield, MI; Robi J Baishnab, Columbus, OH; Robert E DeRose, II, Barkan Meizlish Handelman Goodin DeRose Wentz, LLP, Columbus, OH.

For Teletech, L.L.C., Teletech@Home, Inc., Kenneth Tuchman, Defendants: Joseph Edward Conley, Jr., LEAD ATTORNEY, Raines, Buechel, Conley & Dusing, PLLC, Florence, KY; Arthur Rooney, Noah A Finkel, PRO HAC VICE, Seyfarth Shaw LLP, Chicago, IL.

Judges: WALTER H. RICE, UNITED STATES DISTRICT JUDGE.

Opinion by: WALTER H. RICE

Opinion

DECISION AND ENTRY SUSTAINING IN PART PLAINTIFFS' PRE-DISCOVERY MOTION FOR CONDITIONAL CLASS CERTIFICATION AND COURT-SUPERVISED NOTICE TO POTENTIAL OPT-IN PLAINTIFFS PURSUANT TO 29 U.S.C. § 216(b) (DOC. #25); OVERRULING WITHOUT PREJUDICE PLAINTIFFS' MOTION FOR EQUITABLE TOLLING (DOC. #28); FURTHER INSTRUCTIONS CONCERNING COURT-SUPERVISED NOTICE

Plaintiffs Tina Atkinson, Grace Bonnie, Jessica Frazier, Florence Gianforte, Richard Hall, Rachel Marshall, Shelly Primus and Karen Stout filed suit, individually and on behalf of all others similarly situated, against TeleTech Holdings, Inc., Teletech@Home, Inc., and [*2] Kenneth Tuchman, alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., and numerous state wage-and-hour statutes. Plaintiffs also assert claims of breach of contract and

unjust enrichment.

This matter is currently before the Court on two pending motions: (1) Plaintiffs' Pre-Discovery Motion for Conditional Certification and Court-Supervised Notice to Potential Opt-In Plaintiffs Pursuant to 29 U.S.C. § 216(b) (Doc. #25); and (2) Plaintiffs' Motion for Equitable Tolling (Doc. #28).

I. Background and Procedural History

Defendants TeleTech Holdings, Inc. and TeleTech@Home, Inc. (collectively "TeleTech") provide customer management services for a wide variety of large corporations. Defendant Kenneth Tuchman is an owner, Chairman and Chief Executive Officer of Teletech. Plaintiffs are, or were, employed by TeleTech as Customer Service Agents ("CSAs"). CSAs work from home and are hourly, non-exempt employees.

In this collective action, filed on August 1, 2014, Plaintiffs allege that Defendants have violated federal and state wage-and-hour laws by failing to compensate them for "off the clock" time spent booting up their computers, completing reports, and logging in and out of software programs, [*3] an average of 25-40 minutes per shift. Plaintiffs further allege that Defendants violated the law by failing to compensate them for mid-shift time spent disconnected from the various software programs, an average of 45 minutes per shift. Plaintiffs seek recovery, on behalf of themselves and others similarly situated, of all unpaid regular and overtime compensation to which they are entitled, along with liquidated damages. They also assert claims for unjust enrichment and breach of contract.

On December 4, 2014, Plaintiffs filed a Pre-Discovery Motion for Conditional Certification and Court-Supervised Notice to Potential Opt-In Plaintiffs Pursuant to 29 U.S.C. § 216(b). Doc. #25. They asked the Court to conditionally certify a proposed class consisting of "[a]ll current and former hourly home-based Customer Service Agents who worked for Defendants at any time


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during the three years preceding the filing of the complaint."1

During a December 8, 2014, conference call, Defendants requested additional time to file a response brief so that they could first take several depositions. Fearing that the ensuing delay would [*4] prejudice potential opt-in plaintiffs, for whom the statute of limitations continues to run until they file their opt-in notices, the Court suggested that the parties consider drafting a tolling agreement. The Court also asked Defendants to furnish a list of what discovery was needed to respond to Plaintiffs' motion.

During a follow-up conference call, held on December 16, 2004, the parties informed the Court that they had been unable to reach any agreement concerning equitable tolling or the appropriate scope of discovery. Thereafter, the Court issued a Case Management Order, Doc. #26, denying Defendants' request for discovery, and setting a briefing schedule. The Court indicated its willingness to entertain a motion for equitable tolling, which Plaintiffs filed on January 5, 2015, Doc. #28.

II. Plaintiffs' Motion for Conditional Certification and Court-Supervised Notice to Potential Opt-In Plaintiffs Pursuant to 29 U.S.C. § 216(b) (Doc. #25)

A. Conditional Certification

The FLSA requires covered employers to pay non-exempt employees not less than minimum wage for each hour worked, and one and one-half times the employee's regular rate of pay for each hour worked in excess of forty hours per week. 29 U.S.C. §§ 206-207. Employers [*5] who violate these provisions are liable for the unpaid wages, plus an additional amount as liquidated damages, reasonable attorneys' fees and costs. 29 U.S.C. § 216(b).

Under the FLSA, a collective action may be filed by one or more employees on behalf of themselves and other "similarly situated" employees. Id. However, unlike a typical class action lawsuit, "[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

1 Plaintiffs estimate that Defendants have employed approximately 1500 CSAs during the past three years.

brought." Id.

The certification process in an FLSA collective action typically proceeds in two phases. Because the statute of limitations on an FLSA claim continues to run until written consent is filed with the court, it is important that notice of the collective action be given to all potential opt-in plaintiffs as soon as practicable so they can decide whether to participate in the lawsuit. Lewis v. Huntington Nat'l Bank, 789 F. Supp. 2d 863, 867 (S.D. Ohio 2011).

Before authorizing the plaintiffs to send the notice, however, the court must first determine whether they have shown "that the employees to be notified are, in fact 'similarly situated.'" Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006). Because this determination is generally made before discovery is conducted, plaintiffs need [*6] make only a "modest showing" at this initial stage of the litigation. Lewis, 789 F. Supp. 2d at 867. Employees are considered to be "similarly situated" if their "causes of action accrued in approximately the same manner as those of the named plaintiffs." Id. at 868. As the court noted in Comer, application of this "fairly lenient standard . . . typically results in conditional certification." 454 F.3d at 547. Factors to be considered include: "whether potential plaintiffs were identified; whether affidavits of potential plaintiffs were submitted; whether evidence of a widespread discriminatory plan was submitted, and whether as a matter of sound class management, a manageable class exists." Lewis, 789 F. Supp. 2d at 868 (quotations and citations omitted).

Once a court determines that the potential opt-in plaintiffs are "similarly situated" to the named plaintiffs, notice is sent, opt-in forms are filed and discovery takes place. At the second stage of the certification process, the defendant may file a motion to decertify the class. At this point, the court revisits, with greater scrutiny, the question of whether the class members are, in fact, similarly situated. Comer, 454 F.3d at 547.

Defendants concede that Plaintiffs have satisfied their modest burden at the initial stage of the [*7] inquiry. Plaintiffs have submitted declarations from twelve current and former CSAs, from ten different states, to show that they were all subject to the same company-wide policies and practices as the named Plaintiffs. Doc. #25-3 through Doc. #25-14. Like the named Plaintiffs, the declarants spent an average of 70-90 minutes per shift booting up their computers, logging in and logging out, and attempting to reconnect to various software

2015 U.S. Dist. LEXIS 23630, *3


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programs when they were disconnected in the middle of a shift. All maintain that, even though these tasks were essential parts of their job duties and primarily benefited Defendants, Defendants failed to compensate them for these hours worked. These allegations give rise to a common theory of liability.

Based on the evidence presented at this initial stage of the proceedings, the Court finds that Plaintiffs have shown that the employees to be notified are "similarly situated," and it appears to the Court that a manageable class exists.

Defendants argue, however, that the scope of the proposed class should be limited in two ways. First, Defendants argue that the class should be limited to those employees who worked for TeleTech three years prior to the [*8] date of this Decision and Entry, not three years prior to the filing of the August 1, 2014, Complaint. This will help ensure that notice of the collective action is not sent to former employees whose statutes of limitations may have already expired. Plaintiffs concede that Defendants' request is proper, and the Court agrees.2

Second, Defendants argue that the proposed class should be limited to those employees who worked 35 hours or more during at least one workweek in the last three years, because the FLSA is not violated "unless the hourly wage falls below the federal minimum wage." Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 115 (2d Cir. 2013). The federal minimum wage is $7.25 per hour, but the potential opt-in plaintiffs were all paid at least $8.00 per hour. Defendants argue that, even assuming that the employees were paid for 30 hours of work, and worked an additional 3 [*9] hours for which they were not compensated, their weekly wage still exceeds the minimum hourly wage of $7.25 per hour ($240.00 for 33 hours of work = $7.27 per hour).

The Court agrees with Plaintiffs that it would be unwieldy and unfair to limit the class in this manner at this stage of the proceedings. Not only would it be time-consuming, but the accuracy of the individual time records is likely to be disputed, given the nature of

2 In the alternative, Plaintiffs argue that, if the Court agrees to equitably toll the claims of the potential opt-in plaintiffs, the notice should be sent to all CSAs who worked for Defendants at any time since December 4, 2014, the date of the tolling request. For the reasons set forth below, however, the Court finds that equitable tolling is not appropriate at this time.

Plaintiffs' claims. Moreover, because many potential opt-in plaintiffs allegedly worked more than 3 hours per week "off the clock," Defendants' proposed limitation could prevent some individuals with viable claims from receiving notice of this collective action. The Court therefore rejects Defendants' request to limit the proposed class to those employees who worked 35 hours or more during at least one workweek in the last three years. The viability of individual claims is a matter best left for a later date.

For the reasons set forth above, the Court SUSTAINS Plaintiffs' Motion for Conditional Class Certification, Doc. #25, and conditionally certifies a collective FLSA class consisting of "all current and former hourly home-based Customer Service Agents who [*10] worked for Defendants at any time during the three years preceding the date of this Decision and Entry."

B. Court-Supervised Notice/Opt-in Period

Plaintiffs also ask the Court to approve the form and method of their proposed Notice of Right to Join Lawsuit ("Notice"), Doc. #25-1, PageID##257-61. Plaintiffs would like to send this Notice, along with the "Consent to Join" form, to all potential opt-in plaintiffs via regular United States mail and e-mail.

To facilitate this, Plaintiffs ask the Court to require Defendants, within 14 days of the date of this Decision and Entry, to "identify all potential opt-in plaintiffs by providing a list in electronic and importable format, of the names, addresses, and e-mail addresses of all current and former hourly home-based Customer Service Agents who worked for Defendants at any time during the three years preceding the [date of this Decision and Entry.]" Doc. #25, PageID##230-31. Citing the high rate of turnover among Defendants' employees, Plaintiffs ask that potential opt-in plaintiffs be given 120 days to file their consent. This will allow Plaintiffs ample time to track down employees who may have relocated.

Defendants have raised several objections [*11] to the form and method of the proposed Notice. The Court discusses each in turn.

1. Method of Notice

Defendants first object to having to disclose telephone numbers and email addresses of each potential opt-in plaintiff, arguing that disclosure of this information would violate the privacy rights of their former and current

2015 U.S. Dist. LEXIS 23630, *7


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employees. On a related note, Defendants object to requiring that the Notice be sent by both regular U.S. mail and by email. They maintain that notice by regular U.S. mail is sufficient.

Because Plaintiffs have not requested disclosure of telephone numbers, this portion of Defendants' objection is overruled as moot. As evidenced by the cases cited by the parties, district courts across the country are split on the questions of whether it is appropriate to order disclosure of employees' email addresses, and whether notice should be sent to all potential opt-in plaintiffs via U.S. mail and email.

Within the Southern District of Ohio, several judges have found notification by U.S. mail to be sufficient for all current employees in FLSA collective actions, but ordered additional email notification for former employees in order to better ensure delivery. See, e.g., Swigart v. Fifth Third Bank, 276 F.R.D. 210, 215 (S.D. Ohio 2011); Wolfram v. PHH Corp., No. 1:12-cv-599, 2012 U.S. Dist. LEXIS 181073, 2012 WL 6676778, at *4 (S.D. Ohio Dec. 21, 2012); [*12] Lutz v. Huntington Bancshares Inc., No. 2:12-cv-1091, 2013 U.S. Dist. LEXIS 56477, 2013 WL 1703361, at *7 (S.D. Ohio Apr. 19, 2013); O'Neal v. Emery Fed. Credit Union, No. 1:13-cv-22, 2014 U.S. Dist. LEXIS 27408, 2014 WL 842948, at *7 (S.D. Ohio Mar. 4, 2014).

Judge Graham, however, has recently ordered that notice be sent via regular U.S. mail and email to all potential opt-in plaintiffs in an FLSA case. See Petty v. Russell Cellular, Inc., No. 2:13-cv-1110, 2014 U.S. Dist. LEXIS 42185, 2014 WL 1308692, at *6 (S.D. Ohio Mar. 28, 2014). This appears to be in line with the current nationwide trend. Moreover, it advances the remedial purpose of the FLSA, because service of the notice by two separate methods increases the likelihood that all potential opt-in plaintiffs will receive notice of the lawsuit, and of their opportunity to participate. In the Court's view, this outweighs any privacy concerns associated with the disclosure of the email addresses.

Therefore, Defendants, within 14 days of the date of this Decision and Entry, shall identify all potential opt-in plaintiffs by providing a list in electronic and importable format, of the names, addresses, and e-mail addresses of all current and former hourly home-based Customer Service Agents who worked for Defendants at any time during the three years preceding the date of this Decision and Entry.

2. Communication with Potential [*13] Opt-in

Plaintiffs During Opt-In Period

Defendants next urge the Court to prohibit the parties and their attorneys from communicating with potential opt-in plaintiffs during the opt-in period. However, as the Supreme Court held in Gulf Oil Co. v. Bernard, 452 U.S. 89, 101, 101 S. Ct. 2193, 68 L. Ed. 2d 693 (1981), any such limits "should be based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties." Future limitations may be appropriate if the parties are found to be making misrepresentations, or threatening potential plaintiffs to discourage them from opting into the suit. See Zwerin v. 533 Short North, LLC, No. 2:10-cv-488, 2011 U.S. Dist. LEXIS 65880, 2011 WL 2446622, at *2 (S.D. Ohio June 15, 2011). However, a blanket protective order prohibiting all communication with potential opt-in plaintiffs is not warranted at this time.

3. Duration of Opt-in Period

Defendants next urge the Court to limit the opt-in period to 60 days instead of the 120 days requested by Plaintiffs. Plaintiffs have indicated their willingness to compromise, and limit the opt-in period to 90 days. The Court finds that 60 days may be insufficient in light of the high turnover rate of employees in this industry. Ninety days, however, should be sufficient. All opt-in notices [*14] must therefore be filed with the Court within 90 days after the Notice is sent.

4. Warning Concerning Liability for Defendants' Costs

Citing Knispel v. Chrysler Group LLC, No. 11-11886, 2012 U.S. Dist. LEXIS 21188, 2012 WL 553722, at *7 (E.D. Mich. Feb. 21, 2012), and other cases, Defendants also argue that the Notice should warn potential opt-in plaintiffs that if they choose to opt in and Defendants prevail, the plaintiffs may be responsible for Defendants' costs of litigation. Plaintiffs argue that Defendants seek only to chill participation in the lawsuit, and that the in terrorem effect of such language is disproportionate to the possibility that any one plaintiff would be responsible for anything other than a de minimis amount.

The Court, however, agrees that "potential plaintiffs, in order to make an informed decision about whether to opt-in, should be made aware that there is a possibility that they may be liable for a defendant's costs of

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litigation." Snide v. Discount Drug Mart, Inc., No. 1:11cv0244, 2011 U.S. Dist. LEXIS 133736, 2011 WL 5434016, at *6 (N.D. Ohio Oct. 7, 2011). Accordingly, the proposed Notice must be revised to include a statement to that effect.

5. Scope of Consent

Defendants further argue that the "Consent to Join" form should clarify that the consent is not a general consent, but is limited to consent to pursue the claims identified in the Notice. In [*15] the Court's view, any reasonable person reading the "Consent to Join" form in conjunction with the Notice of Right to Join Lawsuit would understand the limited nature of the consent. The Court therefore overrules this objection.

6. Nature of Claim

Finally, Defendants argue that subsection 2 ("Description of the Lawsuit") of the proposed Notice needs clarification. It states that "Plaintiffs allege that they are entitled to recover all unpaid wages for such work . . ." Defendants maintain that this suggests that Plaintiffs have already proven that Defendants failed to pay the employees all compensation to which they were entitled. They ask that this language be revised to make it clear that Plaintiffs have alleged, but not yet established, that they are entitled to such funds. The Court overrules this objection as well. The very next paragraph of the proposed Notice clearly states that Defendants deny that they have failed to properly pay their employees for wages and overtime.

C. Further Instructions to Counsel

To summarize, the Court anticipates that it will approve the proposed Notice of Right to Join Lawsuit, Doc. #25-1, subject to the following revisions:

1. The class definition set [*16] forth in subsection 3 ("Persons Eligible to Receive This Notice") shall be amended to read: "All current and former hourly home-based Customer Service Agents who worked for TeleTech Holdings, Inc. and/or Teletech@Home, Inc. at any time since February 26, 2015.2. The second paragraph of subsection 5 ("Effect of Joining This Lawsuit") shall be amended to read "United States federal courthouse in Dayton, Ohio" rather than "Cincinnati, Ohio."

3. A third paragraph shall be added to subsection 5 ("Effect of Joining This Lawsuit"), warning potential opt-in plaintiffs that, if they choose to join the lawsuit and Defendants prevail, there is a possibility that they could be held liable for Defendants' litigation costs.4. A telephone number for Plaintiffs' counsel shall be inserted in subsection 12 ("Further Information").

Within 7 days of the date of this Decision and Entry, the parties shall make these revisions, and email a jointly-approved revised draft of the Notice of Right to Join Lawsuit, in Microsoft Word format, to rice [email protected].

The Court will promptly review the revised Notice. If it approves the revisions, the Court will establish the filing deadline for all "Consent [*17] to Join" forms. The Court will insert that deadline in each blank in subsections 8 ("How to Join This Lawsuit") and 9 ("Deadline") of the Notice. The Court will then issue an Order: (1) directing the Clerk to make the Notice part of the record in this action; and (2) directing Plaintiffs' counsel to send the Notice to all potential opt-in plaintiffs, via regular U.S. mail and email, on a date 90 days prior to the filing deadline established by the Court.

III. Plaintiffs' Motion for Equitable Tolling (Doc. #28)

FLSA claims for unpaid compensation must be filed within two years after the cause of action accrues, unless there was a willful violation of the statute, in which case the statute of limitations is extended to three years. 29 U.S.C. § 255(a). A cause of action under the FLSA accrues on the date that payment is owed. Each paycheck that fails to include wages that are owed constitutes a separate violation. "Thus, a new cause of action accrues with the receipt of each paycheck." Viciedo v. New Horizons Computer Learning Ctr. of Columbus, Ltd., 246 F. Supp. 2d 886, 902 (S.D. Ohio 2003).

In a collective action, a named plaintiff's claim is considered to be filed on the date the complaint is filed and he or she files a written consent to join the collective action. However, if a party is not named in the complaint, [*18] the claim is not considered to be filed until he or she files notice of written consent to become a party plaintiff. 29 U.S.C. § 256.

As explained in Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822, 826 (S.D. Ohio 2007), the opt-in mechanism of the FLSA "necessarily involves some

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lapse of time between the date a collective action is commenced and the date that each opt-in plaintiff files his or her consent form." Congress chose not to automatically toll the statute of limitations from the date the collective action was filed. See Woodard v. FedEx Freight East, Inc., 250 F.R.D. 178, 194 (M.D. Pa. 2008); Grayson v. K Mart Corp., 79 F.3d 1086, 1106 (11th Cir. 1996) ("In [amending § 216(b)], Congress expressed the concern that an opt-in plaintiff should not be able to escape the statute of limitations bearing on his cause of action by claiming that the limitations period was tolled by the filing of the original complaint.") (citing 93 Cong. Rec. 2, 182 (1947)).

In certain instances, however, the doctrine of equitable tolling may apply to FLSA claims. See, e.g., Hughes v. Region VII Area Agency on Aging, 542 F.3d 169, 187-88 (6th Cir. 2008). Plaintiffs have filed a Motion for Equitable Tolling, Doc. #28, asking the Court to toll the statute of limitations governing the FLSA claims of the potential opt-in plaintiffs from December 4, 2014, when the Motion for Conditional Class Certification was filed, until the end of the opt-in period, in order to prevent the claims of those potential opt-in [*19] plaintiffs from eroding in scope or being extinguished altogether.

Plaintiffs have the burden of proving that equitable tolling is justified. Allen v. Yukins, 366 F.3d 396, 401 (6th Cir. 2004). Equitable tolling is to be used sparingly, and generally "only when a litigant's failure to meet a legally-mandated deadline unavoidably arose from circumstances beyond that litigant's control." Graham-Humphreys v. Memphis Brooks Museum of Art, Inc., 209 F.3d 552, 560-61 (6th Cir. 2000). See also Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S. Ct. 1807, 161 L. Ed. 2d 669 (2005) ("Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.").

During the conference call held on December 8, 2014, Defendants indicated a desire to take several depositions before responding to the motion for conditional certification. Because this would delay a ruling on the motion, Defendants agreed to voluntarily toll the limitations period for potential opt-ins during the period of delay resulting from that limited discovery. The parties were to draft a tolling agreement to that effect. During the December 16, 2014, conference call, however, the parties indicated that they had been unable to reach an agreement. Plaintiffs now wanted to take a 30(b)(6) deposition, and then file an

amended [*20] motion for conditional certification. Because this would cause additional delay that was attributable to Plaintiffs, Defendants were no longer willing to toll the limitations period as originally agreed.

In opposing Plaintiffs' Motion for Equitable Tolling, Defendants argue that: (1) any claim for equitable tolling on behalf of potential opt-in plaintiffs is premature since those individuals are not yet before the Court, and the named plaintiffs lack authority to seek equitable tolling on their behalf; and (2) Plaintiffs have failed to show that equitable tolling is warranted in the circumstances presented here. After reading the cases cited in Defendants' brief, the Court agrees on both accounts.

In contrast to a class action lawsuit brought under Federal Rule of Civil Procedure 23, the named plaintiffs in an FLSA collective action do not represent anyone other than themselves. Accordingly, the named plaintiffs have no authority to move to equitably toll the claims of the potential opt-in plaintiffs. See Jesiek v. Fire Pros, Inc., No. 1:09-cv-123, 2011 U.S. Dist. LEXIS 64181, 2011 WL 2457311, at **1-2 (W.D. Mich. June 16, 2011) (holding that a motion for equitable tolling, purporting to seek relief on behalf of plaintiffs who had not yet appeared, was premature, given that named plaintiffs had no [*21] need for equitable tolling of their own claims, and had no personal interest in the outcome of the motion).

Moreover, because the potential opt-in plaintiffs do not become parties to the lawsuit until they file their consent forms with the court, the court lacks jurisdiction to grant them equitable relief. See United States v. Cook, 795 F.2d 987, 994 (Fed. Cir. 1986) (holding that because potential opt-in plaintiffs in FLSA case were not yet before the court, the order purporting to toll the statute of limitations on their claims was an impermissible advisory opinion and must be vacated as prematurely issued).

Even setting aside these procedural and jurisdictional obstacles, Plaintiffs have not established that equitable tolling of the claims of the potential opt-in plaintiffs is warranted at this juncture. In Allen, the court set forth the factors to be considered in deciding whether equitable tolling should apply:

(1) the petitioner's lack of notice of the filing requirement; (2) the petitioner's lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to the respondent; and (5) the petitioner's reasonableness in remaining ignorant of the legal

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requirement for filing his claim. [*22]

366 F.3d at 401 (quoting Dunlap v. United States, 250 F.3d 1001, 1008 (6th Cir. 2001)). "This list of factors is not necessarily comprehensive, and not all factors are relevant in all cases." Vroman v. Brigano, 346 F.3d 598, 605 (6th Cir. 2003). "Absence of prejudice is a factor to be considered only after a factor that might justify tolling is identified." Id.

Application of these five factors to a group of potential opt-in plaintiffs, who have not yet received notice of the collective action and are not yet parties to the lawsuit, is convoluted at best. As one district court has cogently explained:

Because Noble seeks to have the limitations period tolled as to plaintiffs who have not yet joined the suit, the five-factor inquiry is not relevant here. It would be inappropriate to attempt to apply the factors at this stage in the litigation because the Court does not yet know who the opt-in plaintiffs will be. The first, second, and fifth factors, which relate to a plaintiff's awareness of the filing requirement, cannot be analyzed with regard to plaintiffs whose identities are not yet known. The third factor is not relevant because, as Noble notes, "diligence is measured by whether Plaintiffs opted-in when given the opportunity," and "[t]he potential putative class has not yet been given the opportunity to opt-in [*23] to this lawsuit." . . . The fourth factor, absence of prejudice to the defendant, is not relevant unless at least one other factor militates in favor of tolling. . . . The five-factor test simply is not "suitable for preemptive, one-size-fits-all application to a group of as-yet-unidentified potential plaintiffs." . . . Although the factors will not all be relevant in all cases, the fact that none is applicable here suggests that equitable tolling would be inappropriate.

Noble v. Serco, Inc., No. 3:08-76-DCR, 2009 U.S. Dist. LEXIS 93816, 2009 WL 3254143, at *3 (E.D. Ky. Oct. 7, 2009) (footnote and citations omitted).

Moreover, as several courts have concluded, the doctrine of equitable tolling is an individualized inquiry, inappropriate for group consideration in the context of an FLSA collective action. See Heibel v. U.S. Bank N.A., No. 2:11-cv-593, 2012 U.S. Dist. LEXIS 139510, 2012 WL 4463771, at *7 (S.D. Ohio Sept. 27, 2012) (reserving ruling on equitable tolling issue because it is "fact-specific and is applied on a case-by-case basis"); Mathews v. ALC Partner, Inc., No. 2:08-cv-10636, 2009

U.S. Dist. LEXIS 75097, 2009 WL 2591497, at *8 (E.D. Mich. Aug. 24, 2009) (declining to equitably toll the claims of potential opt-in plaintiffs, and holding that "[i]f and when potential plaintiffs whose claims would otherwise be time-barred choose to opt in to the class, they may apprise the Court of their circumstances and individually [*24] move for equitable tolling."); Beetler v. Trans-Foam, Inc., No. 5:11cv132, 2011 U.S. Dist. LEXIS 141349, 2011 WL 6130805, at **4-5 (N.D. Ohio Dec. 8, 2011) (finding motion for equitable tolling to be premature, and noting that the burden is on each individual opt-in plaintiff "to demonstrate facts satisfying the Sixth Circuit's requirements for the application of the doctrine of equitable tolling.").

Admittedly, some courts have granted motions to equitably toll the statutes of limitations for potential opt-in plaintiffs in FLSA collective actions. In fact, Plaintiffs cite to three cases within this District which have done so. See Baden-Winterwood, 484 F. Supp. 2d at 826; Struck v. PNC Bank N.A., 931 F. Supp. 2d 842, 846-48 (S.D. Ohio 2013); Engel v. Burlington Coat Factory Direct Corp., No. 1:11-cv-759, 2013 U.S. Dist. LEXIS 130513, 2013 WL 5177184, at *2 (S.D. Ohio Sept. 12, 2013).

These courts, in attempting to apply the five-factor test for equitable tolling, have generally reasoned that: (1) until notice of the collective action is given, potential opt-in plaintiffs lack actual notice of the filing requirement; (2) although the FLSA itself provides constructive notice of the filing deadlines, this factor should be given little weight since it applies in every case; (3) failure to file an earlier claim does not demonstrate a lack of diligence, because diligence is measured by whether potential plaintiffs opted in once given notice and the opportunity [*25] to do so; (4) because the lawsuit was filed as a collective action, defendant is not prejudiced by equitable tolling; and (5) potential opt-in plaintiffs reasonably remained ignorant of the filing deadline, given their lack of notice of the collective action. See e.g., Struck, 931 F. Supp. 2d 846-48.

With all due respect to my colleagues, the undersigned believes this analysis to be faulty.3 It ignores the fact

3 Even if this Court believed that Baden-Winterwood, Struck and Engel were correctly decided, those cases are factually distinguishable. Each involved a lengthy delay between the date the plaintiffs moved for conditional certification or asked that notice be sent to potential opt-in plaintiffs and the date that the notice was actually sent. In this case, however, Plaintiffs did not move for conditional certification [*26] until

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that, regardless of whether the potential opt-in plaintiffs have notice of the collective action, they also had the option of filing their own lawsuit alleging violations of the FLSA. Viewed in this light, it cannot necessarily be said that they lacked actual or constructive knowledge of their claims, that they diligently pursued their rights, or that they remained reasonably ignorant of the filing deadlines.

As previously noted, Congress chose not to automatically toll the statute of limitations upon the filing of a collective action. Although equitable tolling may be justified in rare instances, it is an extraordinary remedy to be applied sparingly. To equitably toll the claims of all potential plaintiffs from the date the collective action is filed (or even from the date plaintiffs seek approval of the proposed Notice) until the end of the opt-in period would "transform[] this extraordinary remedy into a routine, automatic one." Longcrier v. HL-A Co., Inc., 595 F. Supp. 2d 1218, 1244 (S.D. Ala. 2008).

Based on the above cited case law, the Court finds that Plaintiffs' motion, seeking to equitably toll the FLSA claims of the potential opt-in plaintiffs, [*27] is premature, and the Court lacks jurisdiction to grant the requested equitable relief at this time. Moreover, Plaintiffs have failed to show that equitable tolling is warranted at this juncture. Regardless of their knowledge of this collective action, each potential opt-in plaintiff presumably had actual notice that he or she was not being paid for the "off the clock" work, and there is no evidence that some "extraordinary circumstance" prevented them from asserting their own rights in a timely manner.

Based on the above, the Court OVERRULES Plaintiffs' Motion for Equitable Tolling, Doc. #28, WITHOUT PREJUDICE. Once the Notice has been sent and the opt-in period is closed, individual opt-in plaintiffs may file motions to equitably toll their claims, if circumstances so justify.

IV. Conclusion

December 4, 2014. Although the Court is still somewhat concerned about prejudice caused to the potential opt-in plaintiffs as a result of the delay in ruling on the motion (which, in turn, was partially caused by the parties' failure to reach agreements on the scope of discovery and the period of equitable tolling), the delay in this case is substantially shorter than in the cases cited. Barring any unforeseen difficulties, it appears that notice of the collective action will be given within the next few weeks.

Plaintiffs' Pre-Discovery Motion for Conditional Class Certification and Court-Supervised Notice to Potential Opt-in Plaintiffs Pursuant to 29 U.S.C. § 216(b), Doc. #25, is SUSTAINED IN PART. The Court conditionally certifies a class consisting of "all current and former hourly home-based Customer Service Agents who worked for Defendants at any time during the three years preceding the date of this Decision and Entry." [*28]

Within 14 days of the date of this Decision and Entry, Defendants shall identify all potential opt-in plaintiffs by providing a list in electronic and importable format, of the names, addresses, and e-mail addresses of all current and former employees who fall within this class definition. Within 7 days of the date of this Decision and Entry, the parties shall email a jointly-approved, revised draft of the Notice of Right to Join Lawsuit, in Microsoft Word format, to rice [email protected], for the Court's final approval.

Plaintiffs' Motion for Equitable Tolling, Doc. #28, is OVERRULED WITHOUT PREJUDICE as set forth above.

Date: February 26, 2015

/s/ Walter H. Rice

WALTER H. RICE

UNITED STATES DISTRICT JUDGE

End of Document

2015 U.S. Dist. LEXIS 23630, *26


Biggs v. Quicken Loans, Inc.

United States District Court for the Eastern District of Michigan, Southern Division

February 19, 2014, Decided; February 19, 2014, Filed

Case No. 10-cv-11928

Reporter2014 U.S. Dist. LEXIS 26542 *

ERIK W. BIGGS, individually and on behalf of all other similarly situated employees, Plaintiffs, v. QUICKEN LOANS, INC., DAVID CARROLL, and DANIEL GILBERT, Defendants.

Prior History: Biggs v. Quicken Loans, Inc., 2011 U.S. Dist. LEXIS 128552 ( E.D. Mich., Mar. 21, 2011)

Counsel: [*1] For Erik W. Biggs, Plaintiff: Adam W. Hansen, Nichols Kaster, LLP, San Francisco, CA; Curtis P. Zaun, Paul J. Lukas, Rachhana T. Srey, Nichols Kaster, PLLP, Minneapolis, MN; James H. Kaster, Nichols Kaster, Attorney at Law, Minneapolis, MN; Robert L. Schug, Nichols Kaster, San Francisco, CA.

For Quicken Loans Inc., Daniel B. Gilbert, David Carroll, Defendants: Jeffrey B. Morganroth, Morganroth & Morganroth, Birmingham, MI; Mayer Morganroth, Morganroth & Morganroth, PLLC, Birmingham, MI; Robert J. Muchnick, William D. Sargent, Honigman, Miller, Detroit, MI.

Judges: HONORABLE STEPHEN J. MURPHY, III, United States District Judge.

Opinion by: STEPHEN J. MURPHY, III

Opinion

ORDER GRANTING IN PART MOTION FOR CONDITIONAL CLASS CERTIFICATION, EQUITABLE TOLLING, AND JUDICIAL NOTICE (document no. 134)

This is the fourth of four separate actions under the Fair Labor Standards Act ("FLSA") challenging Defendant Quicken Loans' failure to pay allegedly required overtime benefits to Plaintiffs Erik Biggs and several dozen other current and former employees. Plaintiffs move to conditionally certify this lawsuit as a "collective action" under Section 216(b) of the FLSA, equitably toll the statute of limitations, and for the issuance [*2] of

judicial notice of the action to permit others to opt-in as plaintiffs. The Court, having reviewed the papers, concludes that a hearing is not necessary to resolve the motion. See E.D. Mich. LR 7.1(f)(2). For the reasons stated below, the Court will grant Plaintiffs' motion, conditionally certify the action, grant the request for equitable tolling of the statute of limitations, and order briefing on the structure and language of the opt-in notification for judicial notice.

BACKGROUND

Plaintiffs are current and former mortgage bankers employed by Quicken Loans, who assert that Quicken Loans owes them back overtime payments for hours worked in excess of forty per week, as required by the FLSA. Quicken Loans' business model includes two types of mortgage bankers: "web loan consultants," who work out of Quicken Loans' centralized web call center, and "branch loan consultants," who work out of Rock Financial's traditional branch offices. Defendants assert Plaintiffs were not entitled to overtime compensation because they fell under the "administrative exemption" to the FLSA due to the nature of their jobs as mortgage bankers.

The first of these cases, Henry v. Quicken Loans, No. 04-40346 [*3] (E.D. Mich.), was brought on behalf of a set of web loan consultants, and conditionally certified by the Court as a collective action on September 28, 2006. The Court, adopting without objection a Report and Recommendation, considered evidence that the web loan consultant plaintiffs shared a single job description, incentive plan, common training, entry as "junior loan consultants," and that they were subject to common policies and plans, and concluded the plaintiffs should be conditionally certified.1 See Henry v. Quicken Loans, Report and Recommendation ("Report"), 6-8, ECF No. 278 (Sept. 28, 2006), adopted ECF No. 289.

1 The Report also discussed judicial notice, whereas Plaintiffs here seek only to certify the already opted-in plaintiffs.


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The case proceeded to trial, resulting in a jury verdict for Quicken Loans, which was affirmed on appeal. See Henry v. Quicken Loans, 698 F.3d 897 (6th Cir. 2012).

Here, Plaintiffs are web loan consultants working for Quicken Loans, who argue they were denied overtime pay as required by the FLSA for the period between the U.S. Department of Labor's promulgation of Administrator's Interpretation No. 2010-1 ("AI 2010-1") and the date Quicken Loans [*4] reclassified the mortgage bankers and began paying them overtime — between March 24, 2010 and May 31, 2010. After the Henry v. Quicken Loans decision by the Court of Appeals, Plaintiffs filed this motion for conditional collective action certification on March 7, 2013.

LEGAL STANDARDS

Section 216(b) of the FLSA permits employees to file a "collective action" lawsuit against their employer for alleged violations of the Act. To proceed under this section, "1) the plaintiffs must [] be 'similarly situated,' and 2) all plaintiffs must signal in writing their affirmative consent to participate in the action." Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006) (citing 29 U.S.C. § 216(b); Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 167-68, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989)). Unlike in a class action lawsuit under Civil Rule 23, plaintiffs must affirmatively "opt in" to the lawsuit in writing. Consequently, every opt in plaintiff has party status. See O'Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 583 (6th Cir. 2009).

There is no definitive test in the Sixth Circuit to determine whether plaintiffs are "similarly situated" to each other, but Civil Rule 23's more stringent standards for certifying [*5] a class action do not apply. See Sims v. Parke Davis, 334 F. Supp. 774, 780-81 (E.D. Mich. 1971), aff'd 453 F.2d 1259 (6th Cir. 1971), cert. denied, 405 U.S. 978, 92 S. Ct. 1196, 31 L. Ed. 2d 254; see also Frye v. Baptist Mem'l Hosp., Inc., 495 F. App'x 669, 672 (6th Cir. 2012). The Sixth Circuit Court of Appeals, in O'Brien v. Ed Donnelly Enterprises, Inc., did list several factors courts typically examine to make a "similarly situated" determination, including the "factual and employment settings of the individual[] plaintiffs, the different defenses to which the plaintiffs may be subject on an individual basis, [and] the degree of fairness and procedural impact of certifying the action as a collective action." Id. at 584 (quoting 7B Wright, Miller, & Kane, Federal Practice and Procedure § 1807 at 497 n.65 (3d ed. 2005); citing Anderson v. Cagle's, Inc., 488 F.3d

945, 953 (11th Cir. 2007)). "The lead plaintiffs bear the burden of showing that the opt-in plaintiffs are similarly situated to the lead plaintiffs." Id.

District courts often, although not necessarily, use a two-step process to determine whether plaintiffs are similarly situated. First, the district court will use a "fairly lenient standard" to examine [*6] the proposed collective, which "typically results in conditional certification of a representative class when determining whether plaintiffs are similarly situated during the first stage of the class certification process." White v. Baptist Mem'l Health Care Corp., 699 F.3d 869, 877 (6th Cir. 2012) cert. denied, 134 S. Ct. 296, 187 L. Ed. 2d 153 (U.S. 2013) (citing Comer, 454 F.3d at 547). Second, after discovery has closed, the district court will apply a "stricter standard" to answer "the question of whether particular members of the class are, in fact, similarly situated." Id. (quoting Comer, 454 F.3d at 547).

DISCUSSION

I. Conditional Certification

In contrast with a typical case, when the Court is presented with the particular facts and circumstances as a matter of first impression, the Court has the benefit here of extensive findings of fact, motion practice, and prior rulings in Henry and the parallel Chasteen and Mathis cases. Although the Court previously ruled that Henry was not binding on the remaining cases, this was a legal conclusion about the preclusive effect of Henry's judgment, and "does not mean that the Court's prior rulings ought to be ignored in subsequent cases where the same classification [*7] decision is under scrutiny. Principles of stare decisis dictate that '[o]nce [a] court decides questions of law presented in a dispute, a nearly identical case ought to yield a similar outcome.'" See Order Granting Mot. for Summ. J. 4, ECF No. 113 (quoting Rutherford v. Columbia Gas, 575 F.3d 616, 617 (6th Cir. 2009); citing Tate v. Showboat Marina Casino P'ship, 431 F.3d 580, 582-84 (7th Cir. 2005) (affirming dismissal of FLSA claims on stare decisis grounds)) (internal citations omitted).

Plaintiffs suggest that under the principles of stare decisis and judicial estoppel, the Court may, or is required to, conclude that the instant Plaintiffs are indistinguishable from the collective-action certified plaintiffs in Henry. They point to the Court's earlier statement that "[a]lthough these cases [Mathis, Biggs] involve different Plaintiffs who worked for the company at slightly different times, Plaintiffs performed the same

2014 U.S. Dist. LEXIS 26542, *3


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job at Quicken as the Henry plaintiffs, and the decision to categorize Plaintiffs as exempt from overtime protections is the same decision the Court scrutinized in Henry." Id. at 8-9. While the Court is not merely adopting a prior sentence written in a slightly different [*8] context, the Court ultimately agrees that the instant Plaintiffs are materially identical for the purposes of this motion to the Henry plaintiffs. As nothing has factually changed since the previous findings of fact and procedural postures, the Biggs Plaintiffs here should be conditionally certified.

Here, Plaintiffs are web loan consultants who worked for Quicken Loans, worked in the call center, shared job descriptions and day-to-day duties as mortgage bankers, and shared employee policies and supervisors. See generally Henry, July 16, 2009 Report and Recommendation, 4-16, ECF No. 555. Importantly, Plaintiffs were also subject to, and bring a common allegation against, Quicken Loans' compensation plan and policy decision to classify them as "exempt" from FLSA overtime requirements. Id. at 16-22; see Order Granting Mot. for Summ. J. at 3 (examining Quicken Loans' decision to classify web loan consultants as "exempt" under FLSA 2006-31); see generally Compl. at ¶ ¶ 9-11. The presence of a common employer's policy alone strongly suggests Plaintiffs are similarly situated. See Frye, 495 F. App'x at 672 ("We further opined that plaintiffs could demonstrate 'similarly situated' circumstances [*9] by showing a common theory of FLSA violation," and noting the FLSA does not require such a theory.) (citing O'Brien, 575 F.3d at 585).

Although Quicken Loans points to cases holding that mere pleadings and affidavits, without more detailed evidence, are insufficient grounds for conditional certification, see Resp. to Mot. for Conditional Cert., ECF No. 135, at 6 (citing Shipes v. Amurcon Corp., No. 10-14943, 2012 U.S. Dist. LEXIS 49449, 2012 WL 995362 (E.D. Mich. Apr. 9, 2012)), the Court finds the cases distinguishable by virtue of the procedural posture of the instant litigation.2 The Court is not relying on Plaintiffs' bare allegations. The Court engaged in

2 The Court also concludes that Espenscheid v. DirectSat USA, LLC, 705 F.3d 770 (7th Cir. 2013), does not compel a different result. Espenscheid relies on the Seventh Circuit's rule that certification of a Civil Rule 23 class action and § 216 collective action [*10] have identical standards. The Sixth Circuit has held the opposite. Frye, 495 F. App'x at 672. Espenscheid merges a Civil Rule 23 class action with a § 216 collective action, and proceeds to analysis — a situation clearly distinguishable from the facts here.

extensive fact-finding in Henry, has previously noted the instant Plaintiffs are more or less "identical" to the Henry collective action, and concludes independently and based on the extensive record already developed that the facts point to an identity between the Henry class and the instant Plaintiffs.

While Plaintiffs are not "identical" in the sense they comprise a different set of people, Plaintiffs are similarly situated to both Henry's plaintiffs and to each other sufficient to warrant conditional certification under § 216(b) at this initial stage.3 Nothing has changed since the initial motion for conditional certification. All the Plaintiffs held the same job as the Henry class members, subject to the same incentive plan, sales process, and work location; and crucially, the same overall policy of no overtime. Accordingly, based on the extensive factual record already compiled in Henry, the Court's previous rulings on the nature of the plaintiffs, and the common allegation of a uniform policy promulgated by Quicken Loans constituting the FLSA violation, the Court concludes that conditional certification of a class is appropriate. See generally Swigart v. Fifth Third Bank, 276 F.R.D. 210, 213 (S.D. Ohio 2011) (certifying a [*11] similar set of mortgage banker plaintiffs).

A. Scheduling Order on Certification

The Court will order the parties to meet and confer regarding the issuance of a scheduling order that proposes a timeline for, and scope of, discovery, and a deadline for the filing of a motion to de-certify.4

3 Quicken Loans' arguments against certification based on the idea that because plaintiffs set their own schedules, spoke on the phone for different lengths of time, and may have worked differing levels of overtime, is unavailing; "similarly situated" does not have to meet Civil Rule 23's rigorous standard. For example, the fact that overtime hours worked may differ is no bar to similarly situated status, particularly in light of the fact that Quicken Loans did not keep records of overtime hours worked. See Kautsch v. Premier Commc'ns, 504 F. Supp. 2d 685, 687 (W.D. Mo. 2007) (conditional certification despite the fact that plaintiffs did not work exactly identical overtime hours). This was also true of the Henry plaintiffs, whose case proceeded as a collective action.

4 In light of the fact that no motion to de-certify was filed in Henry, the parties are encouraged to contemplate proceeding past the second phase and directly to discovery in anticipation of trial and dispositive motions. The Court would then elicit proposals for discovery scheduling orders after preliminarily deciding the questions of representative proofs and

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Accordingly, the parties shall, within twenty-eight (28) days of the entry of this order, either (a) file a joint proposed scheduling [*12] order for the Court to review and adopt or (b) file a joint report with their proposals for a scheduling order and a statement of resolved and unresolved issues, such report not to exceed ten (10) pages.

II. Equitable Tolling

Next, Plaintiffs seek equitable tolling of the statute of limitations in light of the fact the Court previously stayed this action. They argue that equitable tolling of an action subject to a judicial stay is a routine action and should be done to avoid unnecessary prejudice, and ask the Court consider the statute of limitations stayed beginning on February 29, 2012, and expiring on the date the court-authorized notice is sent. Defendants argue both that the stay did not prevent potential plaintiffs from opting-in to the suit, and, therefore, they are not entitled to equitable tolling. They also [*13] argue that the Court has previously concluded that equitable tolling is inappropriate in cases like this. Resp. to Mot. for Class Cert. 16, ECF No. 135 ("Despite the named plaintiffs' urgings, the Court does not regard this test as suitable for preemptive, one-size-fits-all application to a group of as-yet-unidentified potential plaintiffs.") (quoting Laurie Mathews, et al. v. ALC Partner, Inc., et al., No. 08-10636, 2009 U.S. Dist. LEXIS 75097, 2009 WL 2591497, at *8 (E.D. Mich. Aug. 24, 2009)).5

A court may invoke the doctrine of equitable tolling in FLSA actions as a general matter. Hughes v. Reg. VII Area Agency on Aging, 542 F.3d 169, 187-88 (6th Cir. 2008). In deciding whether equitable tolling is warranted, a court should consider "(1) the petitioner's lack of notice of the filing requirement; (2) the petitioner's lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to the respondent; and (5) the petitioner's reasonableness [*14] in remaining ignorant of the legal requirement for filing his claim." Allen v. Yukins, 366 F.3d 396, 401 (6th Cir. 2004). But this list is not comprehensive, nor are all factors required to be met. The preferred approach is a case-by-case evaluation of the facts. Graham-Humphreys v. Memphis

bifurcation.

5 This point is easily dispensed with, as the case in Matthews did not involve a Court-ordered stay of proceedings as here. Nor is the fact the Court did not invoke equitable tolling in Henry dispositive for the same reason.

Brooks Museum of Art, Inc., 209 F.3d 552, 561 (6th Cir. 2000).

Here, the Court's judicial stay of the action tilts heavily, if not conclusively, in favor of equitable tolling. Although true that most of the statutes of limitation had run when the Court stayed the case, it had not yet expired. And while this set of lawsuits was well-publicized, the stay of this case was also publicized. Notably, the order of stay specifically prevented the filing of a motion for conditional notification, or any other new motion. Generally, potential plaintiffs, who are not lawyers, may have believed that the "class action" lawsuit, as so widely reported, was the only mechanism to bring suit, and reasonably believed they could take no action as long as the case was stayed. Although Defendants point to the fact that certain Quicken Loans' executives discussed the general pendency of the Henry lawsuit with employees, [*15] that action is not the same as giving actual notice of the lawsuit through judicial notice and the ability to opt-in to the lawsuit as was done in Henry that would give potential plaintiffs an informed opportunity to join this lawsuit, or proceed on their own. See Struck v. PNC Bank, N.A., 931 F. Supp. 2d 842, 2013 WL 1142708 (S.D. Ohio 2013) (citing Bolletino v. Cellular Sales of Knoxville, Inc., 3:12-cv-138, 2012 U.S. Dist. LEXIS 112132, 2012 WL 3263941, at *4 (E.D. Tenn. Aug. 9, 2012) (concluding that "potential opt-in plaintiffs almost certainly lacked actual notice" in the absence of judicial opt-in notifications)). And specifically, the Court, during the stay, did not and could not rule on whether to issue opt-in notifications to potential plaintiffs sufficient to give such particularized notice. See Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822, 828 (S.D. Ohio 2007) ("[i]n the context of an opt-in collective action, diligence is measured by whether Plaintiffs opted-in when given the opportunity, not by whether Plaintiffs chose to initially bring a lawsuit.") (citing Owens v. Bethlehem Mines Corp., 630 F.Supp. 309, 312-13 (S.D. W.Va.1986)).

In sum, the primary reason that Plaintiffs were unable [*16] to proceed was the stay the Court entered. The Court's reasons for issuing the stay were sound, and Plaintiffs bear no fault for the delay.6 Equitable tolling of

6 Given the history of Henry and the companion lawsuits, the Court also concludes that Defendants "had full knowledge that the named Plaintiff brought the suit as a collective action on the date of the filing" and "was fully aware of its scope of potential liability" with respect to the prejudice prong; this does not weigh against equitable tolling. Struck, 931 F. Supp. 2d at 848 (quoting Baden—Winterwood, 484 F. Supp. 2d at 828-

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FLSA cases due to extended periods of delay due to Court action or order is common. See, e.g., Stickle v. SCI Western Mkt. Support Ctr., L.P., 2008 U.S. Dist. LEXIS 83315, 2008 WL 4446539, CV 08-083-PHX-MHM (D. Ariz. Sept. 30, 2008); Beauperthuy v. 24 Hour Fitness USA, Inc., 06-0715SC, 2007 U.S. Dist. LEXIS 21315, 2007 WL 707475 (N.D. Cal. Mar. 6, 2007); see also Yahraes v. Rest. Ass'n Events Corp., 2011 U.S. Dist. LEXIS 23115, 2011 WL 844963, at *2 (E.D.N.Y. Mar. 8, 2011) (equitable tolling warranted by delays made by the Court). The Court concludes that, in light of the stay, it is appropriate to invoke the doctrine of equitable tolling.

The Court will equitably toll the statute [*17] of limitations for a period between the date of the stay, February 29, 2012, and the date the opt-in notices have issued to potential collective action members. The Court will then "restart the clock" on the statute of limitations. Because time "remains on the clock" under this ruling, the Court does not need to toll the statute of limitations for a specific set of days for opt-in notification. Cf. Struck, 931 F. Supp. 2d at 848 (setting time for tolling as fixed set of days in relation to the mailing of the opt-in notifications.).

III. Judicial Notice

Plaintiffs move for the Court to issue judicial notice and opt-in forms to potential plaintiffs. The Court may issue judicial notice to potential opt-in plaintiffs in an FLSA action in "appropriate cases." Hoffmann-La Roche, 493 U.S. at 169. The Court must first determine whether potential plaintiffs would be similarly situated to the lead plaintiffs. Comer, 454 F.3d at 546. Then, in deciding whether judicial notice is appropriate, the Court may consider both the fact that under § 216(b), tolling of the statute of limitations does not occur until an individual files an opt-in with the Court, and the general goals of judicial economy. See [*18] Wlotkowski v. Michigan Bell Tel. Co., 267 F.R.D. 213, 219 (E.D. Mich. 2010).

Key to the Court's conclusion that the instant Plaintiffs are similarly situated to each other for the purposes of conditional certification is the extensive fact-finding showing such plaintiffs shared jobs and were subject to a single employer policy at Quicken Loans. This will also be true of any potential plaintiff who held the same web loan consultant job at Quicken Loans during the relevant time period (assuming, of course, he or she worked in excess of forty hours per week). The Court concludes the class of potential plaintiffs would be similarly

29).

situated to the instant Plaintiffs.

The Court also concludes that judicial notice of the potential plaintiffs is appropriate. Although the Court has tolled the statute of limitations, the Court will "restart the clock," and potential plaintiffs will no longer be able to recover when the statute of limitations expires. See Fisher v. Michigan Bell Tel. Co., 665 F. Supp. 2d 819, 829 (E.D. Mich. 2009). Furthermore, given the fact that this is the fourth of four separate lawsuits against Quicken Loans for FLSA violations, the Court finds the goal of judicial economy [*19] highly relevant. As the proposed class exists within a known and certain range of employment dates, notice to the full set of the class is administratively feasible, making the consolidation of all potential plaintiffs into a single action more likely. See generally Wlotkowski, 267 F.R.D. at 219 (judicial notice helps avoid "multiplicity of duplicative suits").

Accordingly, the Court will preliminarily order judicial notice to issue to the proposed class:

those individuals who (1) have been employed by Quicken Loans as a loan consultant between March 24, 2010 and May 31, 2010; (2) worked for Quicken Loans, Inc., more than forty (40) hours per week during this time; (3) did not receive overtime compensation for hours worked in excess of forty (40) per week; and (4) allege that they should receive overtime for hours worked in excess of forty (40) per week.

The proposed class definition is based on the Court's original definition in Henry, modified for the current set of plaintiffs.

Turning to the administration of the judicial notice, the Court will order the parties to meet and confer and, within twenty-eight (28) days of the entry of this order, file either (a) a joint brief, if the parties [*20] are able to agree and stipulate to all aspects of judicial notice, or (b) separate briefs discussing their positions on, and any areas of agreement, the following topics related to the administration of judicial notice. Either way, such briefs are not to exceed fifteen (15) pages.7 The parties should also discuss the proposed class definition in their briefs, specifically whether this is the final set of potential plaintiffs to which notice should issue

A. Judicial Notice and Consent Form

In their motion, Plaintiffs submitted a proposed judicial

7 To be clear, this is to be a separate set of briefs from the conditional certification discovery briefing.

2014 U.S. Dist. LEXIS 26542, *16


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notification form. ECF No. 134-1. Plaintiffs note their form is modeled closely on the one the Court previously authorized. See Henry, ECF No. 315. Now that the Court has determined judicial notice is appropriate, the Court will entertain suggestions as to the proper language of the form. The Court has, based on the notice and form authorized in Henry, prepared its own proposed draft notice and consent form, attached as Appendix A. See generally Lewis v. Huntington Nat. Bank, 789 F. Supp. 2d 863, 870 (S.D. Ohio 2011) (Court "has the authority [*21] to supervise notice to potential plaintiffs"). The parties should discuss whether this form is appropriate (accounting for the specific changes in the proposed set and definition of loan consultants employed between March 24, 2010 and May 31, 2010) or what alternative form and language should be submitted.8 In particular, Defendants should consider the most efficient and accurate formulation of the summary of their position on the case. The parties should also consider the best method, if necessary, of handling notice problems arising from the equitable tolling of the statute of limitations.

B. Distribution

In Henry, the Court approved a method of distribution using Rust Consulting, Inc., as the administrator, with a cut-off of sixty days, and the mailing of a single reminder. See Henry, Order on Judicial Notice, ECF No. 315. The Court preliminarily concludes that this remains the most appropriate method and timeline to distribute the opt-in [*22] notices. The parties should discuss whether they approve of this formulation and timeline, whether retention of Rust Consulting, Inc., is appropriate, and any other matter related to the logistics of distribution they believe is appropriate for the Court's consideration.

C. Production List

Plaintiffs also move to compel Quicken Loans to disclose the list of web loan consultants working for them between March 24, 2010 and May 31, 2010. Plaintiffs state the list is necessary to provide judicial notice. It is not immediately clear from the record whether Quicken Loans disclosed such a list in Henry directly to the Plaintiffs, or only to the Court for the purposes of providing the information to the third-party

8 The parties should consider whether Daniel Gilbert should be listed as a Defendant in light of the Court's related order to consider his dismissal considering the previous rulings in Henry regarding Gilbert's status as an "employer" under the FLSA.

distributor. Preliminarily, the Court concludes that Plaintiffs' request is unnecessary at this time, given the intention to use a third-party distributor, and the fact the information is not yet required. See generally Swigart, 276 F.R.D. at 215 (Denying in part motion to compel contact information for potential FLSA putative collective action plaintiffs).9 The Court will deny the request without prejudice at this stage.

CONCLUSION

The Court will conditionally certify the class here in Biggs. In light of the stay entered in this case, the Court will equitably toll the statute of limitations. The Court will also issue judicial notice, and invites the parties to brief the appropriate period of discovery for certification and de-certification, as well as the appropriate administrative method and language for issuing judicial notice, as discussed above.

ORDER

WHEREFORE, it is hereby ORDERED that Plaintiffs' motion for conditional certification (document no. 134) is GRANTED.

IT IS FURTHER ORDERED that the parties shall FILE, within twenty-eight (28) days of the entry of this order, a new joint proposed scheduling order or a joint report with their proposals and a statement of resolved and unresolved issues (with respect to the decision to conditionally certify the class), not to exceed ten pages.

IT IS FURTHER ORDERED that the parties shall FILE, within twenty-eight days (28) of the entry of this order, a joint brief, or if necessary separate briefs, discussing the above topics related to the administration of judicial notice, [*24] not to exceed fifteen pages.

SO ORDERED.

/s/ Stephen J. Murphy, III

STEPHEN J. MURPHY, III


Dated: February 19, 2014

9 The parties should state what procedure for the compilation [*23] of contact information was actually followed in Henry if it differs from this method.

2014 U.S. Dist. LEXIS 26542, *20


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APPENDIX A

Proposed Opt-In Judicial Notice and Consent Form

UNITED STATES DISTRICT

COURT EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

ERIK W. BIGGS, individually and on behalf of all other similarly situated employees,

Plaintiffs,

v.

QUICKEN LOANS, INC., DAVID CARROLL, personally and individually, and DANIEL B. GILBERT, personally and individually.

Defendants.

NOTICE OF PENDENCY OF LAWSUIT

TO: ALL PRESENT AND FORMER LOAN CONSULTANTS WHO WORKED FOR QUICKEN LOANS, INC., AT ANY TIME BETWEEN MARCH 24, 2010 AND MAY 31, 2010

RE: FAIR LABOR STANDARDS ACT OVERTIME LAWSUIT FILED AGAINST QUICKEN LOANS, INC., DAVID CARROLL, AND DANIEL B. GILBERT, PERSONALLY AND INDIVIDUALLY.

INTRODUCTION

The purpose of this Notice is to inform you of a collective action lawsuit in which you are potentially "similarly situated" to the named Plaintiff, to inform you of how your rights may be affected by this action, to inform you of the procedure to join this lawsuit as a Plaintiff if you choose to do so, and to inform you of the effect of your decision.

THIS IS A NOTICE ONLY THAT A LAWSUIT [*25] HAS BEEN FILED, AND IS NOT NOTICE AS TO THE CERTIFICATION OF ANY COLLECTIVE ACTION, AND IS NOT NOTICE OF ANY PROPOSED OR PENDING FUTURE SETTLEMENT. JOINING THIS

LAWSUIT DOES NOT MEAN THAT YOU ARE OR WILL BE ENTITLED TO ANY MONEY, NOW OR IN THE FUTURE. THIS NOTICE IS NOT AN EXPRESSION OF ANY OPINION BY THE COURT AS TO THE MERITS OF ANY CLAIMS OR DEFENSES ASSERTED BY EITHER SIDE IN THIS LITIGATION. THE SOLE PURPOSE OF THIS NOTICE IS TO INFORM YOU OF THE LAWSUIT SO THAT YOU CAN DECIDE WHETHER TO JOIN THE LAWSUIT AS A PLAINTIFF.

DESCRIPTION OF THE ACTION

On May 12, 2010, an action was filed against Defendant Quicken Loans, Inc., a Michigan corporation, David Carroll, personally and individually, and Daniel Gilbert, personally and individually (collectively "Defendants") on behalf of the named Plaintiff and all other similarly situated individuals who worked as loan consultants during the past three years, and between the dates of March 24, 2010 and May 31, 2010 (collectively "potentially similarly situated group"). If you join this action, you will be suing Quicken Loans, Inc., David Carroll, personally and individually, and Daniel Gilbert, personally and individually.

The named Plaintiff [*26] alleges that he and members of the potentially similarly situated group are owed overtime pay under the federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207, for hours worked in excess of forty (40) per week. The named Plaintiff also seeks an additional amount as liquidated damages, and attorneys' fees and costs.

(modified original court version)

Defendant Quicken Loans, Inc., alleges that loan consultants were properly classified as exempt from the FLSA's overtime provisions and are not entitled to additional compensation for hours worked in excess of forty (40) per week. Defendant David Carroll and Daniel B. Gilbert alleges that he should not be held personally liable because he is not an "employer" under the FLSA, and that any members of the potentially similarly situated group were properly classified as exempt from the FLSA's provisions and are not entitled to any additional compensation for hours worked in excess of forty (40) per week.

(Plaintiffs' proposal)

Defendant Quicken Loans, Inc., deny any wrongdoing or liability and contest all claims that have been asserted.

2014 U.S. Dist. LEXIS 26542, *23


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While generally the FLSA requires that employees receive overtime pay for all hours of work in excess of forty [*27] (40) hours per week, the FLSA also provides that certain employees are exempt from its overtime requirements. Defendants maintain that Plaintiff and the potentially similarly situated group are exempt employees under the FLSA during the time in question.

COMPOSITION OF THE POTENTIALLY SIMILARLY SITUATED GROUP

The named Plaintiff was employed by Quicken Loans, Inc., as a loan consultant. He seeks to sue on behalf of himself and other employees with whom he is similarly situated. Specifically, he seeks to sue on behalf of any and all individuals who meet the following requirements:

(1) have been employed by Quicken Loans as a loan consultant between March 24, 2010 and May 31, 2010.(2) worked for Quicken Loans, Inc., more than forty (40) hours per week during this time;(3) did not receive overtime compensation for hours worked in excess of forty (40) per week; and(4) allege that they should receive overtime for hours worked in excess of forty (40) per week.

YOU MAY DECIDE TO PARTICIPATE, OR NOT TO PARTICIPATE, IN THIS ACTION

If you fit the definition above, you may choose to join this action by mailing or faxing the attached Consent Form to Rust Consulting, Inc., which is an administrator [*28] solely handing the mailing of this Notice and the collection of Consent forms in this case:

Rust Consulting, Inc.

625 Marquette Avenue, Suite 880

Minneapolis, MN 55402

Fax: (612) 359-2050

Rust Consulting, Inc., will forward your Consent Form to Plaintiffs' Counsel, Nicholas Kastor, PLLP, for filing with the Court. The Consent form must be received by Acme Consulting on or before 31, 2014 (30 days after mailing) for you to participate in this case. If your Consent Form is not postmarked by 31, 2014, you may not participate in this lawsuit.

If you elect not to participate in this action, you need not

take any further action.

EFFECT OF JOINING OR NOT JOINING THIS ACTION

If you join this action, you will be bound by any ruling, judgment, award, or settlement, whether favorable or unfavorable. By joining this action, you are agreeing to participate in it. Participation may include answering written discovery, producing documents, testifying in a deposition, and testifying in court should the case go to trial.

If you do not join this action, you will not be bound by any ruling, judgment, award, or settlement entered in this case, favorable or unfavorable. If you choose not to join this action, [*29] you are free to take action on your own, including filing your own lawsuit, or doing nothing at all.

If you file a Consent Form, your continued right to participate in this action will depend upon a later decision by the Court that you and the named Plaintiff are "similarly situated" in accordance with applicable laws, and that it is appropriate for this case to proceed as a collective action.

STATUTE OF LIMITATIONS

The FLSA has a statute of limitations of two years in some cases, and three years in other cases, depending on certain circumstances. If you choose to join this action, and a final determination is rendered that determines that overtime is owed, you may be able to recover damages for only some of the overtime hours worked, depending on the date your Consent Form is filed. If you choose not to join this action, some or all of your rights to such overtime pay (if any) may be barred by the applicable statute of limitations.

NO RETALIATION PERMITTED

The law prohibits retaliation against employees for exercising their rights under the FLSA. Therefore, Quicken Loans, Inc., is prohibited from discharging you or retaliating against you in any other manner because you choose to participate [*30] in this action.

YOUR LEGAL REPRESENTATION IF YOU JOIN

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The Court has not, and will not, appoint counsel to represent you. If you choose to join this case by filing a Consent Form, you may obtain your own counsel to represent you, or you may have your interest represented by named Plaintiff's counsel:

Nicholas Kaster, PLLP

Adam W. Hansen

4600 IDS Center, 80 S. 8th Street

Minneapolis, MN 55402

Toll Free Number: (877) 448-0492

Fax Number: (612) 215-6870

www.nka.com

Named Plaintiff's Counsel's law firm's services are offered on a contingency basis. You will have to enter into a contingency agreement directly with this law firm if you retain them as counsel. Further information about this lawsuit may be obtained by contacting named Plaintiff's counsel directly. DO NOT CONTACT THE COURT.

AUTHORIZATION

THIS NOTICE AND ITS CONTENTS HAS BEEN AUTHORIZED BY THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN, THE HONORABLE STEPHEN J. MURPHY, III, UNITED STATES DISTRICT JUDGE. THE COURT HAS MADE NO DECISION IN THIS CASE ABOUT THE MERITS OF THE PLAINTIFFS' CLAIMS OR DEFENDANTS' DEFENSES.

PLAINTIFF CONSENT FORM

I hereby consent to join the lawsuit against Quicken Loans, Inc., David Carroll, and [*31] Daniel Gilbert, personally and individually, as a Plaintiff to assert claims against Defendants for alleged violations of the overtime requirements of the Fair Labor Standards Act, 29 U.S.C. § 207 et seq. Between the dates of March 24, 2010 and May 31, 2010, there were occasions when I worked over 40 hours per week for Defendants as a web loan consultant when I did not receive overtime compensation.

Print Name

Address

City, State, Zip Code

Telephone Number

E-Mail Address

Approximate Employment Dates (mm/yyyy - mm/yyy

Social Security Number

Signature

Date

Fax or Mail to:

Notice Administrator

c/o Rust Consulting, Inc.

P.O. Box 151

Minneapolis, MN 55440-0151

Fax: (612) 359-2050

End of Document

2014 U.S. Dist. LEXIS 26542, *30


Bolletino v. Cellular Sales of Knoxville, Inc.

United States District Court for the Eastern District of Tennessee

August 9, 2012, Filed

No. 3:12-CV-138


NICHOLA BOLLETINO, et al., Plaintiff, v. CELLULAR SALES OF KNOXVILLE, INC., et al., Defendants.

Counsel: [*1] For Nicholas Bolletino, William Love, III, Plaintiffs: David Wilson Garrison, George E Barrett, Scott Patton Tift, LEAD ATTORNEYS, Barrett Johnston, LLC, Nashville, TN; Katherine Stone, Robert DeRose, PRO HAC VICE, Barkan Meizlish Handelman Goodin DeRose Wentz, LLP, Columbus, OH; Mark Justin Gottesfeld, Peter Winebrake, R Andrew Santillo, PRO HAC VICE, The Winebrake Law Firm, LLC, Dresher, PA.

For Cellular Sales of Knoxville, Inc., Cellular Sales of Pennsylvania, LLC, Cellular Sales of New Jersey, LLC, Cellular Sales of Louisiana, LLC, Cellular Sales of Tennessee, LLC, Cellular Sales of Texas, LLC, Cellular Sales of Northern Florida, LLC, Cellular Sales of Birmingham, LLC, Cellular Sales of Mississippi, LLC, Cellular Sales of North Carolina, LLC, Cellular Sales of Georgia, LLC, Cellular Sales of Kentucky, LLC, Cellular Sales of Missouri, LLC, Cellular Sales of Indiana, LLC, Cellular Sales of Ohio, LLC, Cellular Sales of New York, LLC, Cellular Sales of Delaware, LLC, Cellular Sales of Maryland, LLC, Cellular Sales of South Carolina, LLC, Defendants: Charles Larry Carbo, III, Ryan Oliver Cantrell, LEAD ATTORNEYS, PRO HAC VICE, Chamberlain, Hrdlicka, White, Williams & Aughtry, Houston, [*2] TX; Daniel F McGehee, LEAD ATTORNEY, R. Deno Cole, McGehee & Cole P.C., Knoxville, TN.

Judges: H. Bruce Guyton, United States Magistrate Judge.

Opinion by: H. Bruce Guyton

Opinion

MEMORANDUM AND ORDER

This case is before the undersigned pursuant to 28

U.S.C. § 636, the Rules of this Court, and the orders of the District Judge [Docs. 50, 58] referring Defendants' Motion for Stay of Discovery and Rule 26 Disclosures and Memorandum of Law in Support Thereof [Doc. 49] and Plaintiffs' Motion for Equitable Tolling on Behalf of Potential Opt-in Plaintiffs [Doc. 58] to the undersigned for disposition or report and recommendation as may be appropriate.

The parties appeared before the Court on July 25, 2012. Attorney David Wilson Garrison was present representing the Plaintiffs, and Attorneys R. Deno Cole and Larry Carbo were present representing the Defendants. At the conclusion of the hearing, the Court took the matters before it under advisement to allow time for briefing on both motions to be completed. The motions are now ripe for adjudication. For the reasons stated below, the Motion for Stay of Discovery and Rule 26 Disclosures and Memorandum of Law in Support Thereof [Doc. 49] will be GRANTED IN PART and DENIED IN PART, [*3] and Plaintiffs' Motion for Equitable Tolling on Behalf of Potential Opt-in Plaintiffs [Doc. 58] will be GRANTED IN PART and DENIED IN PART.

A. Defendants' Motion for Stay of Discovery and Rule 26 Disclosures and Memorandum of Law in Support Thereof

In the Motion to Stay and its supporting memorandum, the Defendants move the Court to stay all discovery in this case, including disclosures under Rule 26 of the Federal Rules of Civil Procedure pending the Court's ruling on their motions to dismiss. [Doc. 49 at 1]. In support of this request, the Defendants note that fifteen defendants named in this suit have moved to dismiss the suit for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure, and all of the defendants have moved to dismiss the case pursuant to both Rule 12(b)(1) for lack of subject matter jurisdiction and Rule 12(b)(6) for failure to state a claim. [Doc. 49 at 1]. The Defendants argue that staying discovery will promote judicial economy and will not


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prejudice the Plaintiffs. [Doc. 49 at 5-6].

The Plaintiffs respond that the Court should deny the Defendants' Motion to Stay, because denying the motion will ensure judicial economy and will [*4] avoid substantial prejudice to the potential opt-in plaintiffs. [Doc. 55 at1]. The Plaintiffs submit that a stay of discovery will indefinitely delay the filing of Plaintiff's motion for conditional certification of a collective action. [Doc. 55 at 2]. Plaintiffs argue that this delay will prejudice potential opt-in plaintiffs because their statutes of limitations will continue to run until they file consents to join the suit. [Id.].

A stay of discovery for any reason is a matter ordinarily committed to the sound discretion of the trial court. Chrysler Corp. v. Fedders Corp., 643 F.2d 1229 (6th Cir. 1981). "In ruling upon a motion for stay, the Court is required to weigh the burden of proceeding with discovery upon the party from whom discovery is sought against the hardship which would be worked by a denial of discovery." Osman v. Mission Essential Personnel, LLC, 2012 U.S. Dist. LEXIS 69563, 2012 WL 1831706, at *1 (S.D. Ohio 2012) (citing Marrese v. Amer. Academy of Orthopaedic Surgeons, 706 F.2d 1488, 1493 (7th Cir. 1983)). "Additionally, the Court is required to take into account any societal interests which are implicated by either proceeding or postponing discovery." Id.

In this case the Defendants have moved [*5] to dismiss this case on a number of grounds. First, the Defendants argue that this Court lacks personal jurisdiction over many of the entities named as defendants. [Doc. 30]. Courts in the Sixth Circuit have found that such motions do not support staying discovery. Charvat v. NMP, LLC, 2009 U.S. Dist. LEXIS 96083, 2009 WL 3210379, at *2 (S.D. Ohio Sept. 30, 2009) (declining to stay discovery pending resolution of a motion to dismiss for lack of personal jurisdiction because such motions go only to the forum in which a case proceeds and any discovery taken while such a motion is pending would be available for the parties to use if the case refiled in another district). The Court finds that the pending motion to dismiss based on lack of personal jurisdiction does not support staying discovery in this case.

The Defendants next argue that the Court should stay discovery pending a decision on its motion to dismiss based upon an alleged agreement amongst the parties to arbitrate these claims. The Court finds that this position is not a persuasive basis for staying discovery in this matter, because the arbitration agreement, which

the Defendants allege applies to these claims, allows for limited discovery in the form [*6] of an "exchange of documents that the parties intend to use to support their claims and defend against the other parties' claims . . . ." [Doc. 29-1 at 2]. Thus, at least the preliminary discovery sought by Plaintiffs would be required either in this case or in the arbitration forum if the case is referred to arbitration.

Finally, the Defendants have moved the Court to dismiss the Plaintiffs' claims because the Complaint does not sufficiently identify Plaintiff Nicholas Bolletino's employer or the market in which he worked. The Defendants move the Court to dismiss the Complaint because Mr. Bolletino has not identified an employer or sufficiently alleged facts demonstrating the existence of an integrated enterprise to establish that the nineteen entities named as defendants constitute a single employer. [Doc. 29 at 3]. This alleged lack of a prima facie claim, if true, may support dismissing this matter in whole, rather than transferring it to another venue or jurisdiction. The Court finds that this motion to dismiss will support staying discovery until the Court rules on Defendants' Motion to Dismiss, Compel Arbitration, and Dismiss Class Collective Action Allegations Under Rule 12(b)(1) [*7] and Sections 3 and 4 of the FAA, or, in the Alternative, Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim [Doc. 29].

The undersigned would note that in making this decision, the Court has considered that the Motion to Dismiss is set for arguments before the District Judge on October 9, 2012. The Court has further considered that relief from the statute of limitations will be afforded to the Plaintiffs as stated below. 1 With all of this in mind, the Court finds that the burden of proceeding with discovery upon the party from whom discovery is sought outweighs the hardship which will be worked by a denial of discovery.

Accordingly, the Defendants' Motion for Stay of Discovery and Rule 26 Disclosures [Doc. 49] is GRANTED IN PART and DENIED IN PART. The motion is granted and discovery in this matter is STAYED, pending disposition of the Defendants' Motion to Dismiss, Compel Arbitration, and Dismiss Class Collective [*8] Action Allegations Under Rule 12(b)(1)

1 The Plaintiffs have stated that if the Plaintiffs' Motion for Equitable Tolling is granted, the Plaintiff will no longer oppose the Defendant's Motion to Stay Discovery. [Doc. 62]. Defendants have filed a response disputing the effect of this concession. [Doc. 65].

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and Sections 3 and 4 of the FAA, or, in the Alternative, Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim [Doc. 29]. All other relief sought therein — including the request for a stay pending resolution of the requests for dismissal based upon personal jurisdiction or an arbitration agreement — is denied.

B. Motion for Equitable Tolling on Behalf of Potential Opt-In Plaintiffs

At the hearing, the Court also addressed the Plaintiffs' Motion for Equitable Tolling on Behalf of Potential Opt-In Plaintiffs [Doc. 58]. 2 In the Motion for Equitable Tolling, the Plaintiff moves the Court to toll the statute of limitations for potential opt-in plaintiffs starting from either: (1) March 21, 2012, the date on which this case was filed, or (2) April 16, 2012, the date on which the Defendants moved to dismiss this action. [Doc. 58]. In support of the requested relief, the Plaintiffs argue, inter alia, that the delay in discovery in this matter will prevent the named Plaintiffs from sending notice of this suit to potential opt-in plaintiffs. [Doc. 59 at 12]. Assuming a collective action is authorized in this case, the statutes of limitations [*9] for these opt-in plaintiffs will continue to run until they receive notice of the suit and file a consent to join the suit. [Id.]. Thus, the Plaintiffs argue that the delay caused by staying discovery and the disposition of the motions to dismiss "will be extremely prejudicial to potential opt-in plaintiffs who, through no fault of their own, will have their FLSA claims extinguished through the passage of time." [Doc. 59 at 12].

The Defendants respond that equitable tolling is not warranted in this case, because the time lapse that is likely to occur will not be exceptional. [Doc. 64 at 1-2]. Defendants rely heavily on case law from the Eleventh Circuit [Doc. 64 at 3, 4, 5], but they also cite the Court to the well-established rule that equitable tolling be used only sparingly. The Defendants argue that if equitable tolling is allowed in this case it will lead to widespread use of equitable tolling, [*10] and eventually, a scenario in which the exceptional remedy of tolling is the rule. [Doc. 64 at 7].

It is well-established that equitable tolling should be

2 The motion had not yet been referred to the undersigned at the time of the hearing. The parties, however, presented their positions in anticipation of its being referred, and shortly after the hearing, the Motion for Equitable Tolling was referred to the undersigned by the District Judge.

granted only sparingly. Irwin v. Dep't. of Veterans Affairs, 498 U.S. 89, 90, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990); Amini v. Oberlin College, 259 F.3d 493, 500 (6th Cir. 2001). The Supreme Court of the United States has explained, "Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently; and (2) that some extraordinary circumstance stood in his way." Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S. Ct. 1807, 161 L. Ed. 2d 669 (2005).

The Court of Appeals for the Sixth Circuit has identified five factors for trial courts to consider in evaluating requests for equitable tolling, which include: (1) the petitioner's lack of notice of the filing requirement; (2) the petitioner's lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to the respondent; and (5) the petitioner's reasonableness in remaining ignorant of the legal requirement for filing his claim. Allen v. Yukins, 366 F.3d 396, 401 -402 (6th Cir. 2004).

Courts within this Circuit have applied these [*11] factors to requests for equitable tolling in FLSA claims and concluded that the relief requested should be granted. In Abadeer v. Tyson Foods, Inc., 2010 U.S. Dist. LEXIS 136978, 2010 WL 5158873 (M.D. Tenn. Dec. 14, 2010), the court found that equitable tolling of the FLSA action was appropriate to allow the court time to rule on pending motions and so as not to prejudice the workers involved in the suit, 2010 U.S. Dist. LEXIS 136978, [WL] at *3. The court in Baden-Winterwood v. Life Time Fitness, 484 F.Supp.2d 822, 826 (S.D. Ohio 2007), also found that tolling the statute of limitations for the FLSA claims was appropriate.

In this case, the Court finds that the request for equitable tolling is well-taken. The Court finds the potential opt-in plaintiffs almost certainly lack notice or constructive knowledge of the filing requirement and lack knowledge of the FLSA or their potential claim. The Court further finds that the named Plaintiffs have been diligent in pursuing their rights. There will be essentially no prejudice to the Defendants because discovery has been stayed at their request, and the equitable tolling will not increase the number of persons who had claims against the Defendants. It will simply prevent preclusion of claims based upon [*12] the delay in discovery and any collective action certification.

Based upon the foregoing, the Court will grant the Plaintiffs' requested relief, except that the Court finds that the tolling of the statute of limitations should begin

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on the date the Motion to Stay Discovery was filed by the Defendants. The Court has considered the Defendants' argument that the delay in this case is not exceptional, and the Court finds that the delay became exceptional when the Defendants moved to stay the discovery in this matter. The Motion to Stay Discovery was filed June 6, 2012, and at that point, the Court finds that this case deviated from the usual timeline for a FLSA action. Thus, the Court will allow equitable tolling from June 6, 2012, until such time as the stay of discovery in this case is lifted.

Accordingly, the Court finds that the Plaintiffs' Motion for Equitable Tolling on Behalf of Potential Opt-In Plaintiffs [Doc. 58] is well-taken and it is GRANTED IN PART and DENIED IN PART, as stated above.

C. Conclusion

The Motion for Stay of Discovery and Rule 26 Disclosures and Memorandum of Law in Support Thereof [Doc. 49] and Plaintiffs' Motion for Equitable Tolling on Behalf of Potential Opt-in [*13] Plaintiffs [Doc. 58] are GRANTED IN PART and DENIED IN PART.

Discovery in this matter is STAYED pending disposition of the Defendants' Motion to Dismiss, Compel Arbitration, and Dismiss Class Collective Action Allegations Under Rule 12(b)(1) and Sections 3 and 4 of the FAA, or, in the Alternative, Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim [Doc. 29]. The Defendants are ORDERED to move for the stay of discovery to be lifted within three (3) days of the District Judge issuing a ruling on the Motion to Dismiss, unless the ruling supports dismissing this case in its entirety.

In addition, the statutes of limitations applicable to the FLSA claims that Plaintiffs seek to litigate on behalf of themselves and any opt-in plaintiffs are TOLLED from June 6, 2012, until the stay of discovery is lifted.

IT IS SO ORDERED.

/s/ H. Bruce Guyton

United States Magistrate Judge

End of Document

2012 U.S. Dist. LEXIS 112132, *12


DePalma v. Scotts Co. LLC

United States District Court for the District of New Jersey

January 20, 2017, Decided; January 20, 2017, Filed

Civ. No. 13-7740 (KM) (JAD)


DOMINICK DEPALMA and JOSEPH LESZCZYNSKI, Individually and on Behalf of All Other Similarly Situated Current and Former Employees, Plaintiffs, v. THE SCOTTS COMPANY LLC, Defendants.

Prior History: Depalma v. Scotts Co., LLC, 2016 U.S. Dist. LEXIS 102981 (D.N.J., Aug. 4, 2016)

Counsel: [*1] For DOMINICK DEPALMA, JOSEPH LESZCZYNSKI, Individually and on Behalf of All other Similarly Situated Current and Former Employees, Plaintiffs: HARRIS L. POGUST, LEAD ATTORNEY, ANDREW J. SCIOLLA, POGUST, BRASLOW & MILLROOD, LLC, CONSHOHOCKEN, PA; SETH RICHARD LESSER, LEAD ATTORNEY, KLAFTER OLSEN & LESSER, LLP, RYE BROOK, NY.

For THE SCOTTS COMPANY, LLC, Defendant: JUSTIN TAYLOR QUINN, KEITH J. MILLER, ROBINSON MILLER LLC, NEWARK, NJ.

Judges: KEVIN MCNULTY, United States District Judge.

Opinion by: KEVIN MCNULTY

Opinion

KEVIN MCNULTY, U.S.D.J.:

This matter comes before the Court on the objection of defendant The Scotts Company LLC ("Scotts") to Magistrate Judge Dickson's August 4, 2016 Opinion and Order (ECF Nos. 107, 109, hereinafter "Dickson Op." and "Dickson Order") granting the motion brought by plaintiffs Dominick DePalma and Joseph Leszczynski individually and on behalf of all other similarly situated current and former employees to equitably toll the statute of limitations of the Fair Labor Standards Act ("FLSA") for a putative class of opt-in plaintiffs. Because tolling is an appropriate equitable remedy under the circumstances of this case, I will affirm Judge Dickson's

Order and adopt his well-reasoned Opinion. [*2]

I. BACKGROUND

I write for the parties and so assume familiarity with my March 31, 2016 Opinion granting conditional collective action certification, which discussed plaintiffs' allegations and the procedural history as it then existed. (ECF No. 66) I highlight here the facts that are pertinent to the resolution of this appeal.

Plaintiffs brought their complaint on December 20, 2013. (ECF No. 1) It was initially assigned to Judge Dennis M. Cavanaugh and Magistrate Judge James B. Clark. An initial scheduling conference was set for May 5, 2014, but was rescheduled to August 14, 2014 at the request of Scotts. (ECF Nos. 22, 24). In April 2014, upon Judge Cavanaugh's retirement, the case was reassigned to me, and to Magistrate Judge Michael Hammer. (ECF No. 25). The case was reassigned from Judge Hammer to Magistrate Judge Dickson, before whom the initial conference was held as planned in August 2014. (ECF' No. 31)

Litigation began in earnest, starting with discovery conducted for purposes of conditional certification. (ECF No. 30) On March 20, 2015, plaintiffs filed a motion for conditional certification and notice (ECF No. 43). The motion was fully briefed by May 11, 2015. (ECF No. 52) Because [*3] the Court could not access a number of the exhibits plaintiffs had filed under seal, that motion, its accompanying declarations, and a number of exhibits were refiled on August 28, 2015. (ECF Nos. 53-56)

On January 13, 2016, nine months after the motion for conditional certification and notice had filed, and four months since the refiling of plaintiffs' papers, plaintiffs filed a motion to equitably toll the statute of limitations for the putative class of potential opt-in plaintiffs. (ECF No. 62) On March 31, 2016, I granted the conditional certification motion (ECF' Nos. 66-67). About two weeks later, I approved the form of the parties' proposed FLSA notice. (ECF No. 70)


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On August 4, 2016, Judge Dickson granted plaintiffs' equitable tolling motion and ordered that the statute of limitations for the collective action opt-ins be tolled from March 20, 2015, to April 11, 2016—i.e., from the date the conditional certification motion was filed until ten days after I granted it. (ECF No. 109)1 Scotts timely appealed the Dickson Order on August 18, 2016. (ECF No. 110).

Since notice was sent to members of the putative class of opt-in plaintiffs, 101 individuals have joined this case. (ECF [*4] No. 116)

II. THE FLSA

An FLSA claim must be commenced within two years after accrual (three years in the case of a willful violation). 29 U.S.C. § 255(a).2 A claim for unpaid overtime accrues each and every time the employer fails to pay the required compensation for any workweek at the regular pay day for the period in which the workweek ends. 29 C.F.R. § 790.21(b); Henchy v. City of Absecon, 148 F. Supp. 2d 435, 437 (D.N.J. 2001). A named plaintiff's claim is deemed commenced on the date that the collective action complaint is filed. An opt-in plaintiff's claim, by contrast, is commenced only later, when her written consent is filed. Id. § 256(a)-(b). That delay potentially creates a trap for opt-in plaintiffs: an opt-in's FLSA claim may become untimely prior to her having received court-authorized notice, because the filing of the collective action complaint has no tolling effect as to her claims.3 Opt-in plaintiffs' FLSA claims

1 The tenth day fell on a Sunday, so the period carried over to Monday. See Fed. R. Civ. P. 6(a).

2 "Any action commenced. . . under the Fair Labor Standards Act. . . may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued."

3 As I explained in my conditional certification opinion, courts in the Third Circuit use a two-step certification process to determine whether employees are "similarly-situated" for purposes of a collective action. At the first stage—in which the decision to certify and the decision to notify potential collective action members are one and the same, see Symczyk v. Genesis Healthcare Corp., 656 F.3d 189, 193 (3d Cir. 2011)—a plaintiff need only meet the "fairly lenient standard" of a "modest factual showing" that the employees in the proposed

are therefore particularly vulnerable to the running of the statute of limitations while motions for conditional certification and notice remain undecided. Hence the application here for equitable tolling of opt-ins' claims.

III. DISCUSSION

A. Equitable Tolling: Standards

Ordinarily, the statute of limitations begins to run "once [the] events satisfying all elements of a [*5] cause of action have taken place." William A. Graham Co. v. Haughey, 646 F.3d 138, 147 (3d Cir. 2011). "There exist, however, various statutory and judge-made rules that operate to toll the limitations period—that is, 'to stop its running'; 'to abate it'; or '[t]o suspend or interrupt' it." Id. (internal citations omitted). Id. One of those judge-made rules, equitable tolling, "can rescue a claim otherwise barred as untimely by a statute of limitations when a plaintiff has 'been prevented from filing in a timely manner due to sufficiently inequitable circumstances.'" Santos v. United States, 559 F.3d 189, 198 (3d Cir. 2009) (citing Seitzinger v. Reading Hosp. & Med. Ctr. 165 F.3d 236, 240 (3d Cir. 1999).

Under the usual rules of equitable tolling, a plaintiff must establish two elements: (1) "that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way." Pace v. DiGuglielmo, 544 U.S. 408, 418, 125 S. Ct. 1807, 161 L. Ed. 2d 669 (2005). While equitable tolling is an "extraordinary" remedy to be used "only sparingly," Santos, at 197, tolling relief has been found proper in a number of situations. See, e.g., Seitzinger, 165 F.3d at 242 (tolling may be appropriate in some instances of attorney neglect, "when a claimant received inadequate notice of her right to file suit, [or] where a motion for appointment of counsel is pending").

There are three classic, but nonexclusive, scenarios in which the inequity of enforcing a statute of limitations against an [*6] unwary plaintiff is so obvious that tolling may be appropriate: "(1) where the defendant has actively misled the plaintiff respecting the plaintiff's cause of action; (2) where the plaintiff in some extraordinary way has been prevented from asserting

putative class are similarly situated. Camesi v. Univ. of Pittsburgh Med. Cntr., 729 F. 3d 239, 243 (3d Cir. 2013). After notice has been sent to all the potential opt-in plaintiffs, plaintiffs carry a heavier burden at the second (and final) certification stage. (ECF No. 66, p. 3-4)

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his or her rights; or (3) where the plaintiff has timely asserted his or her rights mistakenly in the wrong forum." Id. (quoting Hedges v. United, 404 F.3d 744, 751 (3d Cir. 2005)); see also Santos, 559 F.3d at 197; Jones v. Morton, 195 F.3d 153, 159 (3d Cir. 1999). Equity, however, is flexible, and the list is therefore not exhaustive. Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1387 (3d Cir. 1994) ("We have instructed that there are three principal, though not exclusive, situations in which equitable tolling may be appropriate: [reciting the three situations].") (emphasis added). Whether a statute of limitations should be tolled requires a case-specific inquiry into what is fair and in the interests of justice. See Miller v. New Jersey State Dep't of Corr., 145 F.3d 616, 618 (3d Cir. 1988) (equitable tolling is proper when "the principles of equity would make [the] rigid application [of a limitation period] unfair") (alterations in original); Jones, 195 F.3d at 159 ("In the final analysis . . . 'a statute of limitations should be tolled in the rare situation where equitable tolling is demanded by sound legal principles as well as the interests of justice."') (quoting United States v. Midgley, 142 F.3d 174, 179 (3d Cir. 1998).

B. Analysis

The District Court will reverse [*7] a Magistrate Judge's decision on a non-dispositive motion only if it is "clearly erroneous or contrary to law." Fed. R. Civ. P. 72(a); L. Civ. R. 72.1(c)(1)(A). Scotts asserts that Judge Dickson's opinion is erroneous for three reasons: (1) it fails to account for the FLSA's statutory scheme; (2) improperly relies on Ornelas v. Hooper Holmes, No. 12-cv-3 106, 2014 U.S. Dist. LEXIS 172162, 2014 WL 7051868 (D.N.J. Dec. 12, 2014), both substantively and as to the issue of due diligence; and (3) tolled the statute of limitations for an arbitrary period of time. On all scores, I disagree.

1. FLSA's Statutory Scheme

Scotts' principal argument appears to be that tolling the statute of limitations for potential opt-in plaintiffs is not permitted at all, because it is contrary to the text and policy of the FLSA. In Scotts' view, the gap between when a named plaintiff and an opt-in plaintiff's claims commence is not a bug but a feature: "Congress unambiguously chose to afford FLSA defendants... the benefit of elapsing time in the routine progression of litigation." (Def. Br. 5)

There is no doubt that Congress did not want the claims of potential opt-ins to be automatically tolled upon the filing of a collective action complaint. But the question here is different: did Congress intend to foreclose courts from [*8] equitably tolling the statute of limitations where the circumstances warrant it? The answer to that question is not provided by the FLSA's text, and Scotts cites no authority for the proposition that the answer might be 'yes.' The sole case on which it relies, Woodard v. FedEx Freight E., Inc., indicates only that Congress created the opt-in structure to end an '"unwholesome' practice" that had developed following a 1946 interpretation of "working time" by the Supreme Court, 250 F.R.D. 178, 184-86 (M.D. Pa. 2008). At the time, the FLSA apparently

allow[ed] an individual to come into court alleging that he is suing on behalf of 10,000 persons and actually not hav[e] a solitary person behind him, and then later on have 10,000 men join in the suit, which was not brought in good faith, was not brought by a party in interest, and was not brought with the actual consent or agency of the individuals for whom an ostensible plaintiff filed the suit.

Id. at 185 (quoting Ellis v. Edward D. Jones & Co., L.P., 527 F. Supp. 2d 439, 447 (E.D. Pa. 2007) (quoting 93 Cong. Rec. 2, 2182 (1947)) (emphasis in original). That unwholesome practice is distinct from anything that occurred here. Its elimination says little about whether Congress intended to strip opt-in plaintiffs of FLSA claims of which they remained unaware because of circumstances beyond their [*9] control.4

The most that can be said is that Congress did not intend to provide automatic, Rule 23-style, class-wide tolling at the moment the collective action complaint is filed. It is unclear that Congress considered the question

4 If Scotts were right that Congress intended to prevent courts from reading equitable tolling into Section 255(a), one might think Congress would have made the provision a statute of repose rather than one of limitation. See CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2183, 189 L. Ed. 2d 62 (2014) ("One central distinction between statutes of limitations and statutes of repose underscores their differing purposes. Statutes of limitations, but not statutes of repose, are subject to equitable tolling. . . .") (internal citations and quotations omitted); see also Chao v. Va. DOT, 157 F. Supp. 2d 681, 700 (E.D. Va. 2001) ("The provision at issue, 29 U.S.C. § 255, is a statute of limitations.") (citing Hodgson v. Humphries, 454 F.2d 1279, 1283-84 (10th Cir. 1972); Henchy, 148 F. Supp. 2d at 438. Scotts does not suggest that the FLSA statute of limitations is jurisdictional.

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of equitable tolling, upon a proper showing, at all. Because equitable tolling, a principle of widespread and general application, was not called into question, it makes sense that it would apply here, as it does elsewhere.

In that context, Judge Dickson clearly did not "fail to account" for the FLSA's staggered commencement and its two (or three) year statute of limitations. (Def. Br. 1, 4) To the contrary, he detailed the FLSA's requirements (and relevant equitable tolling principles) in two pages of cogent exegesis. (Dickson op. 2-4) In ruling that the opt-in plaintiffs should not be penalized for the delay between the filing of the conditional motion for certification/notice and the Court's grant of that motion, Judge Dickson was in step with a number of courts across the country that have considered the issue.5 In short, neither the text nor the policy of the FLSA prohibited the Magistrate Judge from providing such equitable relief.6

5 E.g., Iriarte v. Cafe 71, Inc., Civ. No. 15-3227, 2015 U.S. Dist. LEXIS 166945, at *17-18 (S.D.N.Y. Dec. 10, 2015); Jackson v. Bloomberg, L.P., 298 F.R.D. 152, 170-71 (S.D.N.Y. 2014); Ornelas v. Hooper Holmes, Inc., 2014 U.S. Dist. LEXIS 172903, at *16-17 (D.N.J. August 1, 2014); Bergman v. Kindred Healthcare, Inc., 949 F. Supp. 2d 852, 860 (N.D. Ill. 2013) (collecting cases); Struck v. PNC Bank N.A., 931 F. Supp. 2d 842, 846-49 (S.D. Ohio 2013); McGlone v. Contract Callers, Inc., 867 F. Supp. 2d 438, 445 (S.D.N.Y. 2012); Gorey v. Manheim Servs. Corp., Civ. No. 7: 10-1132, 2010 U.S. Dist. LEXIS 141868, at *15-16 (S.D.N.Y. Nov. 10, 2010) [*10] ; Stickle v. SCI Western Mkt. Support Ctr., L.P., Civ. No. 08-083, 2008 U.S. Dist. LEXIS 83315, at *63-65 (D. Ariz. Sept. 29, 2008).

There are of course other courts that have denied the equitable relief Judge Dickson ordered here. The did so, however, as a matter of equitable discretion—not because they thought they were prohibited from providing such relief. E.g., Bitner v. Wyndham Vacation Resorts, 301 F.R.D. 354, 363-64 (W.D. Wis. 2014); Perez v. Comcast, No. 10-1127, 2011 U.S. Dist. LEXIS 136953, at*7-8 (N.D. Ill. Nov. 29, 2013); Vargas v. Gen. Nutrition Ctrs., Inc., Civ. No. 2:10-867, 2012 U.S. Dist. LEXIS 154073, at *11-26 (W.D. Pa. Oct. 26, 2012); Titchenell v. Apria Healthcare, Inc., Civ. Act. No. 11-563, 2012 U.S. Dist. LEXIS 122759, at *18-25 (E.D. Pa. Aug. 29, 2012); Hinterberger v. Catholic Health Sys., Civ. No. 08-380S, 2009 U.S. Dist. LEXIS 97944, at *43-49 (W.D.N.Y. Oct. 21, 2009); Woodard, 250 F.R.D. at 194.

6 Scotts bookends its policy argument with the assertion that Judge Dickson's order "in practical effect compels routine tolling in FLSA actions whenever and for the entire time period a motion for conditional certification is pending." (Def. Br. 5)

2. Ornelas v. Hooper Holmes

Scotts next attacks Judge Dickson's reliance on Ornelas v. Hooper Holmes, Inc., No. 12cv3106, 2014 U.S. Dist. LEXIS 172162, 2014 WL 7051868 at *4 (D.N.J. Dec. 12, 2014) (affirming and adopting Report & Recommendation of Magistrate Judge Douglas E. Arpert, dated August 1, 2014, attached to the opinion 2014 U.S. Dist. LEXIS 172903, [WL] at *5-*11), both as to the substantive standards for equitable tolling and the issue of plaintiffs' diligence.

1. The Ornelas case

In Ornelas, District Judge Pisano (adopting the reasoning of Magistrate Judge Arpert) tolled the FLSA statute of limitations for the period that a motion for conditional certification was sub judice. As a matter of law, Scotts says, Ornelas applied the wrong equitable tolling standard, and thus so did Judge Dickson.

Ornelas involved issues that were similar to, if not the same as, those presented here. (ECF No. 64, p. 4-10) There, Judge Pisano ruled that "whether this is an 'extraordinary circumstance' as provided for by extra-jurisdictional case law or in the 'interests of justice' as permitted by the Third Circuit,"' the plaintiffs had demonstrated that the Court's two-year delay in deciding a motion for conditional [*11] certification was sufficient to trigger equitable tolling relief. Ornelas, 2014 U.S. Dist. LEXIS 172162, [WL] at *4• Recognizing the soundness of that reasoning, Judge Dickson likewise found no "reason to rule contrary to the Court['s] holding in Ornelas, especially given the similarities [between Ornelas and this case] in every other respect." (Dickson op. 6-7 (quoting Ornelas)). That ruling was plainly correct, in my view, and that view has case law support.See, e.g., Oshiver, 38 F.3d at 1387; Seitzinger, 165 F.3d at 242.

ii. Period of sub judice delay

The basis for Judge Dickson's ruling seems clear enough. To remove doubt, however, for the reasons stated below, I concur that the conditional certification motion's sub judice status was a circumstance that

Even setting aside the fact that trial-level decisions do not "compel" other courts to do the same, this is hyperbole. Equitable tolling will be applied only when the circumstances suggest to a reviewing court that it is appropriate.

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warranted equitable tolling of the statute of limitations under the circumstances of this case.

The delay in this case was, in round figures, a year. The delay in Ornelas, calculated on the same basis, was about two years. Calculated from the date that the motion was fully briefed, however, the Ornelas delay was eighteen months. Scotts seizes on Judge Dickson's use of the eighteen month figure in stating that the discrepancy between that case and this was six months. (Dickson Op. at 7)7 Judge Dickson thus erred, says Scott, because [*12] an apples-to-apples comparison of the two delays yields a discrepancy of not six months but one year, and the extraordinary two-year delay in Ornelas distinguishes that case from the "garden variety" one-year delay that happened here.

I do not read so much into Judge Dickson's six-month reference. Judge Dickson was well aware that the Ornelas delay, if calculated from the date of filing of the motion, was two-years. See Dickson Op. at 6 (two separate references to two-year pendency of motion in Ornelas). In this case, about a year elapsed from the time the motion for conditional certification was filed until the date I decided it. For a relatively time-sensitive motion preliminary to the merits, neither a two-year nor a one-year delay is ideal. I say that for a particular reason. The statute of limitations here is generally a relatively short two years. To be sure, two years of delay, as in Ornelas, could eat up the entire limitations period. But even the loss of one year (plus whatever time had elapsed before the action was filed) has the potential to gravely prejudice the absent opt-ins' rights.

In short, Judge Dickson's reliance on Ornelas was not misplaced simply because that [*13] case involved a delay that was longer (whether longer by six months or by a year). I join in his reasoned judgment that the one-year delay in this case, like the delay in Ornelas, was long enough to prejudice absent parties' rights under this relatively short statute of limitations.

iii. Plaintiffs' diligence

Scotts also argues that Ornelas is distinguishable because those plaintiffs were more diligent than the parties here. By this, Scotts means a number of things.

Scotts notes that the Ornelas plaintiffs raised the issue

7 In Ornelas, the tolling period at issue ran from the completion of briefing on the motion, not from the filing of the motion.

of tolling immediately, "in connection with a pre-trial scheduling conference and secured an agreed tolling order before even moving for conditional certification." (P1. Br. 7) Scotts thus faults named plaintiffs here for not seeking tolling at the initial conferences. The parties have engaged in a lively dispute over who said what in the initial conferences in this case. (See Def. Br. 7, 10-1 1; P1. Oppo. 6-7; Def. Reply 4-5) I am not now in a position to evaluate these conferences from two years ago; indeed, the person in the best position to do so was Judge Dickson. At any rate, that named plaintiffs might have raised the issue earlier does not change my view as [*14] to the equities vis-à-vis the absent opt-ins.8

Scotts also argues that the opt-ins themselves could have been more diligent, either (1) opting in before receiving notice or (2) bringing their own lawsuits. Scotts notes that five plaintiffs learned they possessed claims and opted into this lawsuit prior to the motion for conditional certification. See Bitner v. Wyndym Vacation Resorts, Inc., 301 F.R.D. 354, 363-64 (W.D. Wisc. 2014); see also Ruehl v. Viacom, 500 F.3d 375, 384 (3d Cir. 2007) (noting, in the context of an individual claim brought under the Age Discrimination in Employment Act, that "equitable tolling requires the plaintiffs to demonstrate that he or she could not, by the exercise of reasonable diligence, have discovered essential information bearing on her claim"). Even if the necessary facts were available to me, I would decline to do a plaintiff-by-plaintiff equitable tolling analysis as to the 5 pre-notice opt-ins or the 101 post-notice opt-ins. The disparity between those numbers suggests that notice was both desirable and efficacious. And the response to the notice confirms the benefits and efficiencies of collective action under FLSA, which I am reluctant to undermine by putting the burden on potential class members to act individually.

On the subject of notice, Scotts complains, in effect, [*15] that plaintiffs did not press Scotts hard enough for information. While plaintiffs secured in discovery the names and dates of employment of potential class members, Scotts says they should have compelled Scotts to turn over their addresses or other contact information. (Def. Br. 9) But Scotts does not argue that plaintiffs lacked sufficient information to

8 Scotts' argument that plaintiffs should have obtained a tolling order sooner is in some tension with their other argument: that such an order would not have been appropriate until there had been an extraordinary delay in the neighborhood of two years, as in Ornelas.

2017 U.S. Dist. LEXIS 8884, *11


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contact members of the putative class with the information they had. More generally, I agree with Judge Dickson that plaintiffs here did not sit on the rights of the opt-ins while the motion for conditional certification was pending.

Viewing the case as a whole, the picture that emerges is a case delayed somewhat by unavoidable transfers among district judges and magistrate; an early three month delay at Scotts' request; commencement of pre-certification discovery without any evident dilatory conduct; the prompt filing of a motion for conditional certification two months after the close of that discovery; and, nine months later, the plaintiffs' filing of a motion for equitable tolling as the statute of limitations loomed. Nothing about that procedural history suggests that plaintiffs have prosecuted this case with a lack of diligence [*16] or without an eye towards protecting the rights of the opt-in plaintiffs. I therefore decline to reverse Judge Dickson's opinion on that basis.9

I view the matter from the opt-ins' point of view. As the motion remained sub judice before me, they had not received notice, for reasons perhaps attributable to plaintiffs, Scotts, or me, but anyway having nothing to do with them. From their point of view, allocation of fault for the delay among the named plaintiffs, Scotts, and the court is simply irrelevant. As it happens, a substantial part of the delay in the motion's hitting the court's decision calendar resulted from plaintiffs' need to refile certain exhibits; thereafter, some seven months passed before I granted the certification motion; but no part of the delay is attributable to the potential opt-in plaintiffs, who had not received notice of this lawsuit but nevertheless were in jeopardy of losing their claims.

3. Tolling Period

Scotts' last, backup argument concerns the particular tolling period ordered by Judge Dickson, which Scotts

9 I do not accept Scotts' contention that Judge Dickson improperly accepted at face value the plaintiffs' representations about the diligence with which they prosecuted this case. Judge Dickson recited the appropriate equitable tolling standard and discussed plaintiffs' diligence (although in the context of this case's similarities to Ornelas) in his opinion. (Dickinson Op. 4, 5-7). And for my own account, I state in this Opinion the reasons for concluding that the delay in this case was an extraordinary circumstance; that plaintiffs diligently pursued the opt-ins' rights; and that the absent, innocent opt-ins were entitled to equitable relief.

considers to be arbitrary. The argument goes as follows: a decision on a motion cannot be "delayed" as of the date the motion was filed; it is [*17] not yet ripe for decision. So, Scotts says, tolling the opt-ins' claims from then—as opposed to, for example, the motion's return date—is unduly generous.10

To begin with, Scotts' argument, whatever its merits, is not one that it made to Judge Dickson. Scotts instead took the maximalist position that no period of tolling was appropriate. That strategic choice had the virtues of clarity and a clear upside, but it also left Scotts vulnerable in the event plaintiffs prevailed. I cannot find any error in Judge Dickson's failure to anticipate Scotts' now-preferred, second-best solution sua sponte.

Even on the merits, though, I cannot find any error, whether under a plenary, abuse of discretion, or clearly erroneous standard. Judge Dickson's choice of a tolling period retroactive to the filing of the motion for conditional certification was a permissible one. That period is designed simply to allow for the conditional certification process as a whole—which, after all, is a precondition to sending notice and adding opt-ins——to play itself out. See, e.g. Iriarte, 2015 U.S. Dist. LEXIS 166945, at * 17-18 (tolling as of the filing of a motion for conditional certification to the date on which notice was sent to the potential [*18] opt-in plaintiffs); Jackson, 298 F.R.D. at 170-71 (tolling as of the filing of a motion for conditional certification); McGlone, 867 F. Supp. 2d at 445 (same) Struck, 931 F. Supp. 2d at 846-49 (tolling as of the filing of the motion for conditional certification to 60 days after notice was mailed to opt-ins).11

10 Scotts also takes issue with the ten days that Judge Dickson added to the end of the tolling period. Those days were added, plaintiffs explain, in order to allow some time for the parties to prepare and send notice to the potential opt-ins in the event that I granted the motion for conditional certification. (At the time plaintiffs filed their motion for equitable tolling I had not yet decided the motion for conditional certification or authorized notice.) Although Scotts' argument has some force because notice had been sent to the potential opt-ins prior to Judge Dickson's opinion, Judge Dickson did not err in fashioning a tolling period that that would have accounted for the small window of time between when the motion was granted and when notice was approved. See, e.g. Iriarte, 2015 U.S. Dist. LEXIS 166945, at *17-18; Struck, 931 F. Supp. 2d at 846-49. As it happened, I approved the form of notice two weeks after conditional certification was granted.

11 But see Gorey v. Manheim Servs. Corp., Civ. No. 7:10-1132, 2010 U.S. Dist. LEXIS 141868 (tolling beginning on the date that the motion for conditional certification was fully briefed);

2017 U.S. Dist. LEXIS 8884, *15


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Although I will uphold Judge Dickson's Opinion and Order for the reasons stated above, I add that Scotts has not been prejudiced by the tolling period ordered. Baldwin County Welcome Center v. Brown, 466 U.S. 147, 151-52, 104 S. Ct. 1723, 80 L. Ed. 2d 196 (noting that "absence of prejudice is a factor to be considered in determining whether the doctrine of equitable tolling should apply once a factor that might justify it is identified"). Scotts has known from the moment it received the collective action complaint that the named plaintiffs were likely to be joined by others in claiming unpaid overtime. From its own records it could probably identify the likely claimants. Scotts stands today where it stood then. Judge Dickson's well-considered ruling merely affords the parties who are most affected and least responsible for the delay a fair shot at their day in court.

IV. CONCLUSION

For the foregoing reasons, Scotts' appeal of Judge Dickson's Order granting equitable tolling is DENIED. (ECF No. 110) Judge Dickson's well-reasoned [*19] Opinion is affirmed and adopted by the Court.

Dated: January 20, 2017

/s/ Kevin Mcnulty

KEVIN MCNULTY


ORDER

KEVIN MCNULTY, U.S.D.J.:

THIS MATTER having come before the Court on the appeal (ECF No. 110) of defendant The Scotts Company LLC of an Order and Opinion (ECF Nos. 107, 109) of Magistrate Judge Joseph A. Dickson equitably tolling the statute of limitations for putative opt-in collection action members pursuant to Fed. R. Civ. P. 72 and L. Civ. R. 72.1(c); and plaintiffs Dominick DePalma and Joseph Leszcaynski having filed an opposition to the motion (ECF No. 111); and defendant having filed a reply (ECF No. 113); and a number of other parties having joined the action as opt-ins (ECF Nos. 3, 21, 26, 29, 72-10 1, 103-106); and the Court

Bergman v. Kindred Healthcare, Inc, 949 F. Supp. 2d 852, 860 (N.D. Ill. 2013) (same).

having considered the papers, and having arrived at a decision without oral argument pursuant to Fed. R. Civ. P. 78; for the reasons set forth in the accompanying opinion, and for good cause shown:

IT IS this 20th day of January, 2017,

ORDERED that defendant's appeal of the Magistrate Judge's Order is DENIED, that the Order is affirmed, and that the Magistrate Judge's Opinion is adopted by the Court.

/s/ Kevin Mcnulty

KEVIN MCNULTY


End of Document

2017 U.S. Dist. LEXIS 8884, *18


Engel v. Burlington Coat Factory Direct Corp.

United States District Court for the Southern District of Ohio, Western Division

September 12, 2013, Filed

Case No. 1:11cv759


Karen Susan Engel, et al., Plaintiffs, v. Burlington Coat Factory Direct Corporation, et al., Defendants.

Prior History: Engel v. Burlington Coat Factory Direct Corp., 2013 U.S. Dist. LEXIS 77506 (S.D. Ohio, June 3, 2013)

Counsel: [*1] For Karen Susan Engel, Jennifer M Jones, Plaintiffs: Bruce H Meizlish, Deborah R Grayson, LEAD ATTORNEYS, Meizlish & Grayson - 1, Cincinnati, OH.

For Burlington Coat Factory Direct Corporation, Burlington Coat Factory Warehouse Corporation, Burlington Coat Factory Investment Holdings, Inc., Defendants: Tracy Stott Pyles, LEAD ATTORNEY, Natalie M McLaughlin, Littler Mendelson, Columbus, OH; Andrew J Voss, PRO HAC VICE, Littler Mendelson PC, Minneapolis, MN.

Judges: JUDGE MICHAEL R. BARRETT.

Opinion by: MICHAEL R. BARRETT

Opinion

ORDER & OPINION

This matter is before the Court upon Plaintiffs' Motion to Toll the Statute of Limitations. (Doc. 37). Defendants filed a Memorandum in Opposition (Doc. 38) and Plaintiffs filed a Reply (Doc. 39).

I. BACKGROUND

On October 27, 2011, Plaintiffs filed their complaint, claiming that Defendants improperly classified Area Managers as exempt and denied the payment of overtime required by the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207(a). The parties engaged in settlement discussions which were unsuccessful.

However, the parties entered into a Tolling Agreement which stopped the running of the statute of limitations for a 76-day period between May 7, 2012 and July 22, 2012. On [*2] October 9, 2012,

Plaintiffs filed their Motion for Conditional Certification. After extended briefing of the Motion, the Court granted Plaintiffs' Motion on June 3, 2013. Plaintiffs ask this Court to toll the statute of limitations on the FLSA claims of prospective opt-in plaintiffs from October 9, 2012 until sixty days after the opt-in plaintiffs receive notice of this lawsuit. This tolling would be in addition to the seventy-six days in the parties' Tolling Agreement.

II. ANALYSIS

Plaintiffs maintain that tolling the statute of limitations is proper under the doctrine of equitable tolling.

"The propriety of equitable tolling must necessarily be determined on a case-by-case basis." Truitt v. Cnty. of Wayne, 148 F.3d 644, 648 (6th Cir. 1998) (citing Jarrett v. U.S. Sprint Communications Co., 22 F.3d 256, 259-60 (10th Cir. 1994)). However, courts have extended equitable tolling only sparingly. Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 96, 111 S. Ct. 453, 112 L. Ed. 2d 435, (1990). "Typically, equitable tolling applies only when a litigant's failure to meet a legally-mandated deadline unavoidably arose from circumstances beyond that litigant's control." Graham—Humphreys v. Memphis Brooks Museum of Art, Inc., 209 F.3d 552, 561-62 (6th Cir. 2000) [*3] (citing Baldwin County Welcome Center v. Brown, 466 U.S. 147, 151, 104 S. Ct. 1723, 80 L. Ed. 2d 196 (1984)).

The Sixth Circuit has established the following factors to be considered in determining whether equitable tolling should apply:

(1) the petitioner's lack of notice of the filing requirement; (2) the petitioner's lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to


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the respondent; and (5) the petitioner's reasonableness in remaining ignorant of the legal requirement for filing his claim.

Allen v. Yukins, 366 F.3d 396, 401 (6th Cir. 2004) (quoting Dunlap v. United States, 250 F.3d 1001, 1007 (6th Cir.), cert. denied, 534 U.S. 1057, 122 S. Ct. 649, 151 L. Ed. 2d 566 (2001)).

As one federal district court has noted:

Several courts have allowed equitable tolling of FLSA claims where the case's litigation posture has delayed the court's consideration of the motion for conditional certification and notice. See, e.g., Stickle v. SCIWestern Market Support Center, L.P., No. CV 08-083-PHX-MHM, 2008 U.S. Dist. LEXIS 83315, 2008 WL 4446539, at 21-22 (D.Ariz. Sep. 30, 2008) (equitably tolling the FLSA statute of limitations where court delayed ruling on the plaintiffs' collective action pending determination of defendant's [*4] motion to dismiss); Adams v. Tyson Foods, Inc., No. 07-CV-4019, 2007 U.S. Dist. LEXIS 38511, 2007 WL 1539325, at *2 (W.D.Ark. May 25, 2007) (tolling the statute of limitations pending a decision by the MDL panel whether to transfer the case); Beauperthuy v. 24 Hour Fitness USA, Inc., 06-0715 SC, 2007 U.S. Dist. LEXIS 21315, 2007 WL 707475 at *8 (N.D.Cal. Mar. 6, 2007) (equitably tolling FLSA statute of limitations because of factors outside plaintiffs' control, including litigation and the competition between attorneys that occurred during the settlement of related action).

Perez v. Comcast, 10 C 1127, 2011 U.S. Dist. LEXIS 126401, 2011 WL 5979769 (N.D. Ill. Nov. 29, 2011); see also Helton v. Factor 5, Inc., 2011 U.S. Dist. LEXIS 136170, 2011 WL 5925078, *2 (N.D.Cal. Nov. 28, 2011) (equitably tolling FLSA statute of limitations pending decision on plaintiffs' motion for conditional certification). This Court has done the same. See, e.g., Baden-Winterwood v. Life Time Fitness, 484 F. Supp. 2d 822, 828 (S.D. Ohio 2007) (equitably tolling FLSA statute of limitations where parties were unable inability to reach an agreement on how to best provide notice to potential plaintiffs); Struck v. PNC Bank N.A., 2:11-CV-00982, 931 F. Supp. 2d 842, 2013 U.S. Dist. LEXIS 41666, 2013 WL 1142708, *6 (S.D. Ohio Mar. 19, 2013) (equitably tolling FLSA statute of limitations [*5] from date plaintiffs sought to notify putative class members of pending action).

The Court finds that equitable tolling is applicable here.

There is no evidence in this case that the potential opt-in plaintiffs had actual notice of the filing requirement. This Court has previously acknowledged that the Sixth Circuit has recognized in an unpublished decision that the mere existence of the FLSA statute provides plaintiffs with constructive notice of their rights under the FLSA and the filing deadlines. Baden-Winterwood, 484 F. Supp.2d at 828 (citing Archer v. Sullivan County Tenn., 1997 U.S. App. LEXIS 33052, 1997 WL 720406 at *4 (6th Cir. 1997)). However, as this Court explained:

If the mere existence of a law suffices to impart constructive notice, an inquiry into the notice factors would be meaningless. A court would always find that every plaintiff had constructive notice of the filing requirement. Such a finding also questions why notice is required to be sent to all potential opt-in plaintiffs to inform them of their rights and statutory deadlines.

Id. With regards to diligence in pursuing one's rights, after the parties' early attempt at mediation failed, Plaintiffs filed their Motion for Conditional Certification [*6] in less than three months. As to the absence of prejudice to the respondent, the Court recognizes that Defendant has a right to raise its statute of limitations defense, however, Defendants were notified of the potential liability of these claims when Plaintiffs filed this action. See Baden—Winterwood, 484 F.Supp.2d at 828-29 (explaining no prejudice because defendant "had full knowledge that the named Plaintiff brought the suit as a collective action on the date of the filing" and "was fully aware of its scope of potential liability."). Finally, the Court finds that it was reasonable for potential opt-in plaintiffs to remain ignorant of the filing requirement. The two named plaintiffs in this case are no longer employed by Defendants, and Defendants have eliminated the Area Manager position.

Therefore, Plaintiffs' Motion to Toll the Statute of Limitations (Doc. 37) is GRANTED. The Court tolls the statute of limitations for the period of time between the filing of the Motion for Conditional Certification on October 9, 2012 until sixty days after the opt-in plaintiffs receive notice of this lawsuit.

IT IS SO ORDERED.

/s/ Michael R. Barrett

JUDGE MICHAEL R. BARRETT

End of Document

2013 U.S. Dist. LEXIS 130513, *3


Gaffers v. Kelly Servs.

United States District Court for the Eastern District of Michigan, Southern Division

October 13, 2016, Decided; October 13, 2016, Filed

Case Number 16-10128


JONATHAN GAFFERS, Plaintiff, v. KELLY SERVICES, INC., Defendant.

Prior History: Gaffers v. Kelly Servs., 203 F. Supp. 3d 829, 2016 U.S. Dist. LEXIS 112789 ( E.D. Mich., Aug. 24, 2016)

Counsel: [*1] For Jonathan Gaffers, Plaintiff: Jason J. Thompson, Sommers Schwartz, P.C., Southfield, MI; Jesse L. Young, Sommers Schwartz, Southfield, MI; Kevin J. Stoops, Sommers Schwartz, PC, Southfield, MI.

For Kelly Services, Inc., Defendant: Christopher M. Cascino, Gerald L. Maatman, Jr., Peter J. Wozniak, Seyfarth Shaw, LLP, Chicago, IL; Shannon V. Loverich, William B. Forrest, Kienbaum, Opperwall, Birmingham, MI.

Judges: Honorable DAVID M. LAWSON, United States District Judge.

Opinion by: DAVID M. LAWSON

Opinion

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO STAY PROCEEDINGS PENDING APPEAL

On August 24 this year, the Court granted the plaintiff's motion to certify this case conditionally as a collective action under the Fair Labor Standards Act and denied the defendant's motion to stay the action and compel arbitration. The Court also approved the notice to be sent to putative class members, ordered the defendant to furnish information to the plaintiff so that notices could be sent, and established an opt-in deadline of November 7, 2016. The defendant filed a notice of appeal directed to that part of the Court's order denying the motion to compel arbitration. Now before the Court is the defendant's motion for a stay [*2] pending appeal.

"An order denying a motion to stay proceedings pending arbitration is immediately appealable." Stutler v. T.K. Constructors Inc., 448 F.3d 343, 345 (6th Cir. 2006) (citing 9 U.S.C. § 16(a)(1)(A)). "The filing of a notice of appeal is an event of jurisdictional significance — it confers jurisdiction on the court of appeals and divests the district court of its control over those aspects of the case involved in the appeal." Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58, 103 S. Ct. 400, 74 L. Ed. 2d 225 (1982). "It is generally understood that a federal district court and a federal court of appeals should not attempt to assert jurisdiction over a case simultaneously." Ibid.

However, in certain circumstances the district court may retain limited power to address aspects of the case not involved in the appeal. As one commentator has explained:

An interlocutory appeal ordinarily suspends the power of the district court to modify the order subject to appeal, but does not oust district-court jurisdiction to continue with proceedings that do not threaten the orderly disposition of the interlocutory appeal. When an appeal is taken under the "collateral order doctrine," the fact that the issues on appeal are separate from the merits of the case may mean that the pendency of the appeal does not oust the district court's jurisdiction to proceed with the [*3] case. But if further district court proceedings would violate the very right being asserted in the appeal taken under the collateral order doctrine — as is the case with claims of qualified immunity or double jeopardy — then the pendency of the appeal does oust the district court of authority to proceed, at least if the appeal is properly taken and not patently frivolous.

16A Fed. Prac. & Proc. Juris. § 3949.1 (4th ed. 2016); see also Seeds of Peace Collective v. City of Pittsburgh, No. 09-1275, 2010 U.S. Dist. LEXIS 76612, 2010 WL 2990734, at *3 (W.D. Pa. July 28, 2010) (denying stay as to defendants not subject to appeal of the denial of


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qualified immunity in a civil rights case).

In this case, the pool of potential opt-in plaintiffs includes some who may have signed an employment agreement that included arbitration language, and others who will not be subjected to arbitration in any event, because they either never signed the arbitration agreement or they have claims that pre-date it. The "majority of circuits have held that an appeal regarding arbitrability of claims does divest the district court of jurisdiction over those claims, as long as the appeal is not frivolous," Dental Associates, P.C. v. Am. Dental Partners of Michigan, LLC, No. 11-11624, 2012 U.S. Dist. LEXIS 59960, 2012 WL 1555093, at *2 (E.D. Mich. Apr. 30, 2012) (emphasis added), but not others. Therefore, even if the arbitration provision is found not to be illegal, there are some claims that will not be subject [*4] to arbitration regardless of the outcome on the appeal. The defendants conceded in their briefing on the motion to compel arbitration that those claims would not, ultimately, be subject to arbitration, but they suggested that litigation of all of the claims should be stayed pending arbitration, to avoid the hazard of inconsistent rulings as to some plaintiffs that could affect the rights of others.

When considering a motion to stay proceedings while an interlocutory appeal is pending, the Court must "evaluate four factors . . . under Federal Rule of Appellate Procedure 8(a): (1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public interest in granting the stay." Michigan State A. Philip Randolph Inst. v. Johnson, 833 F.3d 656, No. 16-2071, 2016 WL 4376429, at *3 (6th Cir. Aug. 17, 2016).

Assessing these factors, the Court believes that the best course is to allow the present action to proceed through the opt-in period, which will permit potential plaintiffs to identify themselves and preserve their rights against a possible statute of limitations defense. Once those individuals are identified and given an opportunity to join this lawsuit, [*5] further action in the case can be suspended until the appeal has been adjudicated. There are several reasons for this conclusion.

First, the Court does not believe that the defendant has much of a chance of prevailing on appeal. Although other circuit courts have held that an employer does not commit an unfair labor practice when it compels its

employees to waive rights to pursue class or collective claims in all forums by signing the arbitration agreements, as discussed in the Court's earlier opinion, the defendant's position in this case bucks the trend established by other circuits — notably the Seventh and the Ninth — and the direction favoring employee rights signaled by the Sixth Circuit in Boaz v. FedEx Customer Info. Servs., Inc., 725 F.3d 603 (2013), and Killion v. KeHE Distributors, LLC, 761 F.3d 574 (6th Cir. 2014), both of which also were discussed in the earlier opinion denying the motion to compel arbitration.

Second, the defendant will not be harmed by proceeding with discovery identifying those potential opt-ins, because ultimately it would have to proceed with the litigation of their claims regardless of how the appeal is resolved. The defendant appears to have ready access to information that will allow the population of potential opt-ins to be partitioned, and to identify those who did and [*6] did not execute the agreement in question. As to those who did sign the agreement, the Court cannot proceed on their claims, because the core issues in the instant appeal are (1) whether their claims may proceed in a collective fashion in any forum; and (2) whether, if they are barred from collective litigation, they may proceed in this Court or must proceed individually to the arbitral forum. But allowing discovery and the sending of notice to those opt-ins who ultimately may be barred from proceeding with any collective action would not prejudice the defendant, because even if the defendant is successful on appeal, those individuals merely would be relegated to pursuing their claims individually in an arbitral forum.

Third, the potential opt-in plaintiffs will be irreparably harmed if discovery is halted and notice is not sent promptly to them, because the limitations period on their claims was not tolled by either the filing of the complaint or the conditional certification of the collective litigation. "The sole consequence of conditional certification is the sending of court-approved written notice to employees, who in turn become parties to a collective action only by filing written [*7] consent with the court." Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1530, 185 L. Ed. 2d 636 (2013) (citing 29 U.S.C. § 216(b)). Unlike in class action cases brought under Rule 23, in collective actions brought via section 216(b) "all class members who seek relief under [the] FLSA must submit their affidavits of consent before the statute of limitations applying to their individual claims has run." Sperling v. Hoffmann-La Roche, Inc., 24 F.3d 463, 469 (3d Cir. 1994). The possibility that these plaintiffs' viable claims will be time barred by a delay of proceedings weighs

2016 U.S. Dist. LEXIS 182057, *3


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strongly in favor of proceeding forthwith to address them.

Fourth, the public interest clearly favors proceeding with discovery and notice procedures, in order to ensure the prompt and economical collective resolution of the unpaid overtime claims brought by those potential plaintiffs, regardless of whether they might be subject to arbitration in any event. If the defendant's employees who signed the version of the employment agreement containing arbitration language opt in to this lawsuit, and that agreement is declared valid, the action as to those plaintiffs can be stayed and their claims can be arbitrated individually. See 9 U.S.C. § 3 (directing a court, "upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration," to "stay the trial of the action until such arbitration [*8] has been had in accordance with the terms of the agreement").

Once the potential plaintiffs have opted in, however, it is sensible to stay the action as to all of them, so that the entire universe of plaintiffs pursuing their rights in this Court can be known with more certainty. District courts readily have found that the better practice is to stay all proceedings pending the outcome of an appeal of the denial of a motion to compel arbitration, because the core issue on appeal is whether the case may proceed in the district court at all, or must be shunted to the arbitral forum. E.g., Huffman v. Hilltop Companies, LLC, No. 13-00219, 2014 U.S. Dist. LEXIS 23055, 2014 WL 695844, at *2 (S.D. Ohio Feb. 24, 2014) ("Because the appeal could ultimately send this matter to arbitration, the interests of justice militate in favor of waiting for the mandate to issue on whether this matter will even remain before this Court.").

Accordingly, it is ORDERED that the defendant's latest motion to stay the action [dkt. #81] is GRANTED IN PART AND DENIED IN PART.

It is further ORDERED that the defendants must furnish to counsel for the plaintiffs the contact information of the potential members of the described class as stated in this Court's August 24, 2016 opinion and order.

It is further ORDERED that proceedings in this case [*9] will be STAYED after November 7, 2016, but not before.

/s/ David M. Lawson

DAVID M. LAWSON


Dated: October 13, 2016

End of Document

2016 U.S. Dist. LEXIS 182057, *7


Gortat v. Capala Bros.

United States District Court for the Eastern District of New York

April 9, 2010, Decided; April 9, 2010, Filed

07-CV-3629 (ILG)

Reporter2010 U.S. Dist. LEXIS 35451 *; 16 Wage & Hour Cas. 2d (BNA) 41; 2010 WL 1423018

MIROSLAW GORTAT, et al., Plaintiffs, -against- CAPALA BROTHERS, INC., et al., Defendants.

Subsequent History: Later proceeding at Gortat v. Capala Bros., Inc., 2010 U.S. Dist. LEXIS 45549 (E.D.N.Y., May 10, 2010)

Prior History: Gortat v. Capala Bros., 2009 U.S. Dist. LEXIS 101837 (E.D.N.Y., Oct. 16, 2009)

Counsel: [*1] For Miroslaw Gortat, Plaintiff: Robert Wisniewski, Robert Wisniewski & Associates P.C., New York, NY.

For Henryk Bienkowski, Grzegorz Drelich, Miroslaw Filipkowski, Artur Lapinski, Jan Swaltek, on behalf of themselves and on behalf of all others similarly situated, Plaintiffs: Robert Wisniewski, LEAD ATTORNEY, Robert Wisniewski & Associates P.C., New York, NY.

For Capala Brothers, Inc., Pawel Capala, Robert Capala, Defendants, Counter Claimants: Felipe E. Orner, Felipe E. Orner, Esq., Flushing, NY.

For Miroslaw Gortat, Counter Defendant: Robert Wisniewski, LEAD ATTORNEY, Robert Wisniewski & Associates P.C., New York, NY.

Judges: I. Leo Glasser, United States Senior District Judge.

Opinion by: I. Leo Glasser

Opinion

MEMORANDUM AND ORDER

GLASSER, United States Senior District Judge:

Defendants object to a combined report and order by Magistrate Judge Steven M. Gold certifying a collective action under the Fair Labor Standards Act ("FLSA") and recommending that the Court certify a class action for

claims under the New York State Labor Law ("NYLL"). For the reasons stated below, the Court overrules defendants' objections to Magistrate Judge Gold's report and recommendation, adopts the report and recommendation substantially [*2] in its entirety, and grants plaintiffs' motion for class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure. For the reasons stated below, the Court also overrules defendants' objections to Magistrate Judge Gold's order certifying the collective action and directing plaintiffs to submit a proposed notice of the collective and class actions.

FACTS & PROCEDURAL HISTORY

Plaintiffs are laborers and foremen formerly employed by Capala Brothers, Inc. ("Capala"), a construction firm. They allege that they were illegally underpaid and bring claims against Capala and its principals, Pawel and Robert Capala, under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., the Portal-to-Portal Act, 29 U.S.C. § 254, and the New York State Labor Law ("NYLL"). On June 11, 2009, plaintiffs filed separate motions asking the Court to certify a class action with respect to the NYLL claims and to certify a collective action with respect to the FLSA claims. 1 On October 16, 2009, Magistrate Judge Gold issued a single opinion ("Order & Report") which both authorized plaintiffs to proceed on the FLSA collective action and recommended the certification of the NYLL class action. [*3] 2 In addition to certifying the collective action and

1 FLSA claims may not be brought as part of a Rule 23 class action, but rather the FLSA provides for a special opt-in collective action procedure. See Alleyne v. Time Moving & Storage Inc., 264 F.R.D. 41, 2010 WL 322882, at *2 (E.D.N.Y. 2010) ("FLSA claims are ineligible for certification under Rule 23 and can only be certified as 'collective actions' pursuant to 29 U.S.C. § 216(b)").

2 A [*4] magistrate judge has the authority to authorize an FLSA collective action. Mazur v. Olek Lejbzon & Co., No. 05 Civ. 2194(RMB)DF, 2005 U.S. Dist. LEXIS 30321, 2005 WL


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recommending class certification, Magistrate Judge Gold issued instructions regarding the proposed notice to be sent to putative members of the collective and class actions. On October 28, 2009, defendants filed objections to Magistrate Judge Gold's order ("Defs.' Objs. to Collective Action"), contesting both the certification of the collective action and the form and contents of the proposed notice. On November 3, 2009, defendants filed objections to Magistrate Judge Gold's recommendation of class certification ("Defs.' Objs. to Class Cert."). Plaintiffs have not responded to either set of objections. The Court assumes familiarity with this litigation generally, and with Magistrate Judge Gold's October 16, 2009 Order & Report specifically.

DISCUSSION

1. Class Action

a. Standard of Review

Under 28 U.S.C. § 636(b)(1)(A), a magistrate judge may not decide a motion "to dismiss or to permit maintenance of a class action." The district judge may, however, refer such a motion to the magistrate judge for a report and recommendation. 28 U.S.C. § 636(b)(1)(B). When a magistrate judge issues a report and recommendation regarding such a dispositive motion, "[t]he district judge must determine de novo any part of the magistrate judge's disposition that has been properly objected to." Fed. R. Civ. Proc. 72(b)(3).

b. Ascertainability

Defendants first challenge the class certification on the grounds of ascertainability. Although it is not one of the formal prerequisites for class certification defined in Rule 23(a) of the Federal Rules of Civil Procedure, [*5] "courts have held that in order for a class to be certified, the named plaintiffs must demonstrate that there is an 'identifiable class.'" Cortigiano v. Oceanview Manor Home For Adults, 227 F.R.D. 194, 207 (E.D.N.Y. 2005) (quoting In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 209 F.R.D. 323, 336 (S.D.N.Y. 2002)). This standard, however, is not demanding. It is designed only to prevent the certification of a class whose membership

3240472, at *2 n.1 (S.D.N.Y. Nov. 30, 2005). A class action must be certified by the district court judge, 28 U.S.C. § 636(b)(1)(A), but the Court, on July 9, 2009, referred the class certification motion to Magistrate Judge Gold for a report and recommendation.

is truly indeterminable. See, e.g., Rios v. Marshall, 100 F.R.D. 395, 403 (S.D.N.Y. 1983) (narrowing class definition when proposed class would require determination of the state of mind of numerous putative class members). It does not require that every class member be identifiable prior to class certification. See Ashe v. Bd. of Elections in New York, 124 F.R.D. 45, 47 (E.D.N.Y. 1989); Somerville v. Major Exploration, Inc., 102 F.R.D. 500, 503 (S.D.N.Y. 1984). Rather, the Court need only "be able to ascertain the general boundaries of the proposed class." In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 241 F.R.D. 185, 194 (S.D.N.Y. 2007) (internal quotations omitted). Here, plaintiffs' proposed class is limited to persons employed by the [*6] defendants during a definite period of time. This easily satisfies the ascertainability requirement.

c. Numerosity

Defendants next challenge the magistrate judge's finding of numerosity. According to records submitted by defendants, seventy-four foremen and laborers were employed by Capala during the relevant time period. 3 Under Second Circuit case law, a presumption of numerosity arises when a putative class contains at least forty members. Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). The primary area of contention is the significance of affidavits submitted by defendants purporting to demonstrate that forty-one of the potential class members are not properly within the class. The affidavits, characterized by defendants as "nonjoinder affidavits," are largely identical and contain the following language:

1. I [was/am] an employee of defendant in this action, Capala Brothers, Inc and I am aware of the litigation started in Federal Court by my former co-employees in this action claiming unpaid hours and wages from my employer.

2. With such awareness and knowledge of these claims by them, I hereby provide notice of my knowledge of such litigation, the types [*7] of claims presented and what they are for, and declare that I do not join in claiming any unpaid

3 Plaintiffs have alleged that there were additional cash employees paid off the books who would also be members of the proposed class. Defendants vehemently deny this allegation. Because the seventy-four employees identified by defendants are sufficient to support numerosity, the existence of any such employees is irrelevant to the Court's numerosity determination.

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hours or wages from the defendants in this action.

It is well-settled that prior to the certification of a class action, a defendant may seek settlements with potential class members. Weight Watchers of Philadelphia, Inc. v. Weight Watchers Int'l, Inc., 455 F.2d 770, 773 (2d Cir. 1972). This is so even if the settlements might have the effect of destroying numerosity and thus preventing class certification. Id. There is a "strong judicial policy in favor of settlements, particularly in the class action context," In re Painewebber Ltd. P'ships Litig., 147 F.3d 132, 138 (2d Cir. 1998). This policy applies with equal force to settlements entered into prior to class certification.

In this case, however, the nonjoinder affidavits do [*8] not purport to be releases or to otherwise settle the claims that are the subject of this proposed class action. Defendants are quite clear about this, stating that "the 41 (forty-one) submitted nonjoinder affidavits . . . do not constitute either a stipulation, or a settlement or any waiver of any statutory rights." 4 Defs.' Objs. to Class Cert. 15; see also id. at 10 ("[T]he affidavits executed retained legal rights for such affiants."). Rather, defendants are attempting via these affidavits to preemptively and vicariously opt these potential plaintiffs out of any class action that might be certified. Defendants have cited no precedent for such an approach and this Court is aware of none. 5 See 5

4 Defendants actually attempt to have it both ways, referring to the affidavits as "releases" and citing settlement cases in support of defendants' right to negotiate settlements with plaintiffs prior to class certification, Defs.' Objs. to Class Cert. 11-12 ("[T]he Second Circuit does favor settlement of claims by putative class members before the class action is certified."), while at the same time distinguishing cases in which the court exercised supervisory authority over such negotiations on the ground that in this case no rights are being waived by prospective plaintiffs, Defs.' Objs. to Class Cert. 9-10, 15. In the most extreme example, defendants endorse both of these contradictory positions within a single sentence. [*10] Defs.' Objs. to Class Cert. 16-17 (". . . despite that this is not a stipulation and settlement agreement between the parties as to disputed claims between the affiants and the defendants, and despite that the release provisions of a sworn statement must be honored and respected . . ." (emphasis omitted)).

5 Magistrate Judge Gold stated that "when asked during oral argument to identify any precedent addressing the effect of affidavits like the ones presented here, defendants were unable to do so," Order & Report 9. Defendants characterize this statement as "disregard[ing] the existing case law and the

Newberg on Class Actions § 15:19 (4th ed.) ("Generally, affidavits of noninterest are inappropriate at the class certification hearing."); see also Fed. R. Civ. Proc. 23(c)(2)(B)(vi) (implicitly authorizing the court to define "the time and manner for requesting exclusion" (emphasis added)). Not only would giving effect to these nonjoinder affidavits fail to serve the purposes behind the courts' preference for settlements, but it would be contrary to the policy behind "the liberal provisions [*9] of the Federal Rules of Civil Procedure for joinder of parties and claims," Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 581, 125 S. Ct. 2611, 162 L. Ed. 2d 502 (2005). This policy favoring the resolution of related claims in a single litigation also lies behind the availability of "opt out," but not "opt in" class actions under Rule 23, see Kern v. Siemens Corp., 393 F.3d 120, 124-25 (2d Cir. 2004). Defendants ask this Court to endorse a novel procedure which undermines these policies.

It is for this Court, not the defendants, to designate the appropriate means by which class members may opt out of a certified class action. The Federal Rules of Civil Procedure provide for court-approved notice to class members informing them not only of their right to opt out, but also of the nature of the action and their right to participate in it. See Fed. R. Civ. Proc. 23(c)(2)(B). The district court has broad supervisory authority over class actions, which extends even to communications with potential class members before an action has been certified. See In re Currency Conversion Fee Antitrust Litig., 361 F. Supp. 2d 237, 252 (S.D.N.Y. 2005). It is certainly within this Court's discretion to disregard affidavits purporting to opt potential plaintiffs out of a class action when this Court had no role in supervising the communications that led to their creation.

Finally, the mere possibility that members of a potential class may choose to opt out in the future is not enough to preclude a finding of numerosity. See Sunrise Toyota, Ltd. v. Toyota Motor Co., 55 F.R.D. 519, 533 (S.D.N.Y. 1972) ("Defendants' suggestion that many members

Second Circuit's [s]tated preference to allow settlements of putative class members' claims before the class is certified," Defs.' Objs. to Class Cert. 11-12. But the magistrate judge was requesting precedents regarding an "affidavit of non-participation" in a class action, specifically distinguishing it from a "release of a Minimum Wage Act claim under New York State Law." Tr. of 9/10/09, at 6-8. The oral argument transcript is crystal clear on this point. Defendants' only response was that "[t]here is no case law to the contrary to exclude them either," id. at 7; see also id. at 8. Their [*11] attempts to now argue otherwise are disingenuous.

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[*12] of the class will elect to opt out after notice offers no basis for declining to make the class determination now."). Plaintiffs have met their burden of showing that "the class is so numerous that joinder of all members is impracticable." Fed. R. Civ. Proc. 23(a)(1).

d. Typicality and Commonality

Defendants also challenge the magistrate judge's findings of typicality and commonality. Defendants' primary concern is the potential inclusion of cash employees within the certified class. As an initial matter, because numerosity can be satisfied on the basis of the seventy-four on-the-books employees acknowledged by defendants, findings of typicality and commonality with respect to hypothetical cash employees are not necessary for class certification. Nevertheless, whether typicality and commonality are satisfied with respect to cash employees' claims may be relevant to the scope of the class defined by the Court.

Defendants argue that cash employees cannot be included within the class certified by the court on two related grounds: (1) defendants would have defenses to the claims of cash employees not applicable to the named plaintiffs; and (2) plaintiffs do not have standing to raise claims [*13] by cash employees. Neither of these arguments has merit.

First, while it is true that unique defenses may preclude a particular plaintiff from serving as a class representative, Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 59 (2d Cir. 2000), Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990), there is no requirement that all members of a class be subject to the same defenses, In re Nassau County Strip Search Cases, 461 F.3d 219, 225 (2d Cir. 2006). Rather, to establish typicality plaintiffs need only show that "each class member's claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant's liability." In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009) (quotations omitted). "When it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be represented, the typicality requirement is usually met irrespective of minor variations in the fact patterns underlying individual claims." Robidoux v. Celani, 987 F.2d 931, 936-37 (2d Cir. 1993). The NYLL claims of cash employees, [*14] if any such employees exist, are fairly encompassed within the class action brought by the named plaintiffs.

Second, in order to have standing to bring claims on behalf of a class, it is necessary only that at least one named plaintiff have standing to bring each separate claim. Comer v. Cisneros, 37 F.3d 775, 788 (2d Cir. 1994) ("For federal courts to have jurisdiction over any of these claims, only one named plaintiff need have standing with respect to each claim."). In order for standing to exist, three elements must be present: "(1) an injury in fact, by which is meant an invasion of a legally protected interest; (2) a causal connection between the injury and the conduct complained of; and (3) a likelihood that the injury will be redressed by a favorable decision." Fulton v. Goord, 591 F.3d 37, 41 (2d Cir. 2009) (internal quotations omitted). If potential class members allege the same injury as a named plaintiff, i.e. an invasion of the same legal right, caused by the same conduct, then the named plaintiff has standing to bring claims on their behalf in a class action. There is no requirement that the precise factual circumstances of each class plaintiff's claim be shared by a named [*15] plaintiff. In this case, if any cash employees exist, as long as they have claims under the same provisions of New York law for substantially similar conduct by defendants, the named plaintiffs have standing to represent them.

Defendants' argument that recent employees cannot be part of the same class action fails for the same reasons. Defendants argue that because recent employees have signed an employment contract, defendants would have "separate and distinct defenses against these employees," which would prevent them from being part of a single class with named plaintiffs. 6 Defs.' Objs. to

6 Defendants accuse the magistrate judge of mischaracterizing their argument:

Footnote 6 of the [Order & Report] incorrectly asserts that defendants assert that employees who had been hired after the complaint filed [sic] are not part of this potential class action because they signed newly [sic] employer-employee regulations and policies stating clearly that work begins at 7:30 A.M., instead of the 7:00 A.M. claimed by the instant plaintiffs.

Defs.' [*16] Objs. to Class Cert. 4. In fact, this is precisely what defendants argued in their brief opposing class certification:

[S]uch workers signed receipts of policy and procedures acknowledging that work started at 7:30 A.M., even though they might have hired [sic] in 2007 before the complaint was served in August of 2007. The existence of these signed policy and procedures documents excludes these individuals from being in the same

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Class Cert. 4. As noted above, the existence of different defenses to the claims of different class members will not preclude a finding of typicality.

Finally, defendants argue that because the foremen claim they were not paid for hours at the end of the work day, while the laborers claim only [*17] unpaid time in the morning, there is insufficient commonality to allow the claims to be brought as a single class. The Court has previously addressed this issue:

Lastly, the defendants argue that the foremen and laborers cannot comprise the same class because the foremen seek compensation for the work they did between 4:00 p.m. and 5:30 p.m., a claim that the laborers do not make. These arguments are not persuasive. . . . As to the distinctions between . . . the claims of the foremen and the laborers, the complaint and the proffered evidence suggest that any individualized questions regarding the number of hours that a specific employee worked will not predominate over the questions of fact and law that are relevant to all members of the purported class, including when and where the workday began.

Gortat v. Capala Bros., Inc., 257 F.R.D. 353, 362 (E.D.N.Y. 2009) (citations omitted). Typicality is also satisfied, especially in light of the fact that both foremen and a laborer are among the named plaintiffs.

e. Adequacy of Representation

Defendants also challenge the named plaintiffs' ability to adequately represent the class, alleging "extensive evidence of perjury" by several of the plaintiffs. [*18] Defendants provide the Court with a laundry list of incidents of alleged perjury. The Court has already addressed many of these allegations. 7 See Gortat, 257

potential class as the present plaintiffs.

Defs.' Br. in Opp. to Class Cert. 16-17 (citation omitted). Magistrate Judge Gold stated:

After the complaint was filed, defendants claim that they required new hires to sign "regulations of employment" acknowledging that the workday began at 7:30 a.m. To the extent defendants argue that these "regulations" are the equivalent of a release, this argument is rejected for the reasons stated in the text.

Order & Report 7 n.6. There is no misrepresentation in the magistrate judge's opinion. Defendants' characterization of the argument as concerning defenses is new to their objections.

7 In its earlier opinion, the Court noted that:

F.R.D. at 363-65. The Court will not indulge defendants by examining each of these allegations in detail; it suffices to note that most of them can be grouped into a few categories.

First, defendants allege perjury by plaintiffs on the basis of supposed inconsistencies in their testimony that, upon further examination, are revealed to be inconsequential or even non-existent. For example, defendants allege that plaintiff Filipkowski "committed perjury at his deposition when he testified that he never saw anybody else drink alcoholic beverages at the job." Defs.' Objs. to Class Cert. 22. Defendants assert that this contradicts another signed statement by Filipkowski. Id. But the deposition transcript reveals that Filipkowski was asked "Did you ever see anybody else drink at the job at Capala Brothers?" and answered "No." Deposition of Miroslaw Filipkowski, dated Sept. 12, 2008, at 48:4-7 (Dkt. No. 173, Ex. V) (emphasis added); see also id. 49:17-24. The signed statement, on the other hand, recounts Filipkowski's "impression" that a co-worker "was under the influence of alcohol." Filipkowski Statement, dated Mar. 14, 2005 (Dkt. No. 171, Ex. B). There is no inconsistency or contradiction whatsoever between these two statements.

In another example, discussed by Magistrate Judge [*20] Gold, defendants describe plaintiff Lapinski's testimony regarding the employees' morning routine as "conflicting and contradictory" because he inconsistently described preliminary activities as taking thirty, twenty, or fifty minutes to complete. Defs.' Objs. to Class Cert. 22. In fact, in Lapinski's declaration, he says the preliminary activities "would take around half an hour to finish," Declaration of Artur Lapinski, dated Jan. 14,

To substantiate their argument, the defendants highlight the allegations in their amended third counterclaim against the plaintiffs for tortious interference, the allegations that some of the plaintiffs have filed false unemployment insurance applications, and the fact that plaintiffs Filipkowski and Lapinski invoked their Fifth Amendment right against self-incrimination during their depositions. In addition, the defendants proffered affidavits from their employees that, in the defendants' words, "indicate the level of violence and threats that most of these plaintiffs have imposed on the workers who after one and half year [sic] of litigation have resisted their unsuccessful attempts to have them join this litigation."

Gortat, 257 F.R.D. at 363 (footnote and citations omitted, alteration in original opinion). [*19] Defendants raise all of these arguments again in their opposition to class certification.

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2009, at P 7 (Dkt. No. 85), while at his deposition he testified that they typically left the shop between 7:20 and 7:50 a.m., 8 i.e. twenty to fifty minutes, Deposition of Artur Lapinski ("Lapinski Dep."), dated Sept. 15, 2008, at 87:19-21 (Dkt. No. 173, Ex. U). As Magistrate Judge Gold noted, "[t]here is no meaningful inconsistency here." Order & Report 14. See also Lapinski Dep. 160:6-161:7.

Second, defendants allege perjury on the basis [*21] of factual disputes between plaintiffs' and defendants' affidavits. As this Court has already noted, to the extent that these disagreements are not related to the matter in dispute in this case, they are not relevant to the adequacy analysis. "Whether the Court should examine the named plaintiffs' overall character or should restrict its inquiry to their credibility, it is clear that the Court may not find them inadequate for conduct that does not touch upon the central issues in this litigation." Gortat, 257 F.R.D. at 364.

On the other hand, a factual dispute between the parties, even when the dispute does touch upon "central issues" in the litigation, merely serves to demonstrate the existence of a genuine issue of material fact. See Order & Report 13 n.9. Resolving such disputes is the very reason trials exist and the trial process cannot be circumvented by characterizing these factual disputes as concerns about plaintiffs' credibility.

Third, defendants allege perjury solely on the basis of statements by plaintiffs that defendants regard as implausible. For example, defendants dispute the time that it would take to load vans in the morning, not on the basis of any testimony to that [*22] effect, but on the bare assertion that it "could not possibly take the three to five men crew 30 minutes to load and unload" and the complaint that "[i]t is truly incomprehensible how such false testimony can be given any plausible weight at all." Defs.' Objs. to Class Cert. 22. Similarly, defendants

8 The full exchange was as follows:

Q: So what time on the average was it, on the average, that you left the shop?

A: At times, 7:20, other times ten or 15 to 8:00.

Q: So somewhere between 7:20 and 7:50 a.m.?

A: Approximately.

Q: Most of the times it was 7:20 or closer to 7:50?

A: I don't remember.

Lapinski Dep. 87:14-24.

dispute Lapinski's testimony concerning the existence of cash employees, arguing that "it is inconceivable" that he would not remember their names, because it was "not that long ago" that his employment ended. Id. A credibility determination based solely on the alleged implausibility of a witness's statements of memory is a matter for the jury at trial.

Finally, it is worth noting that while defendants' allegations frequently provide tendentious interpretations of affidavits or deposition testimony without directly quoting that testimony, occasionally they cross into what is difficult to regard as other than intentional misrepresentation. For example, defendants assert that plaintiffs' counsel has admitted knowledge of incidents in which Filipkowski threatened a former plaintiff with physical violence. Defs.' Objs. to Class Cert. 26. The affidavit to which defendants cite, however, explicitly [*23] and unequivocally denies that the alleged incidents occurred. Declaration of Robert Wisniewski ("Wisniewski Decl."), dated Jan. 15, 2009, at P 24 (Dkt. No. 86). 9

f. Class Definition

Rule 23(c)(1)(B) directs that as part of class certification, the district court must define the class and appoint class counsel. Magistrate Judge Gold's recommendation of certification does not explicitly define the class being certified, so this Court must do so in the first instance. 10 Plaintiffs propose the following class definition in their motion for certification:

all employees of the Defendants during the six years immediately preceding the initiation of this action up to the date of this decision, who performed work as [*24] roofers, bricklayers, masons, building laborers, drivers, foremen and

9 The declaration states, in relevant part:

Realizing that they needed evidence of threats of physical violence, and having identified Plaintiff Filipkowski as the alleged ringleader of Plaintiffs' alleged conspiracy to interfere with Defendants' contracts, Defendants, upon information and belief, apparently convinced former Plaintiff Drelich, as well as one of his colleagues, to file fraudulent criminal complaints against Plaintiff Filipkowski for harassment.

Wisniewski Decl. P 24.

10 The magistrate judge quotes the class definition proposed by plaintiffs but never explicitly adopts that definition. Order & Report 3.

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other manual workers with the same or similar duties who are entitled to compensation from the Defendants for unpaid minimum wages, and/or overtime premium wages, and/or spread-of-hours wages, and/or other wages, and who are asserting claims under the New York State Labor Law, including without limitation, Sec. 190 et seq. and Sec. 650 et seq. as well as the wage orders promulgated thereunder.

Memorandum of Law in Support of Motion for Class Certification ("Pls.' Br. for Class Cert."), dated June 11, 2009, at 1. Defendants argue that this class definition is inappropriate because it defines the class to include spread-of-hours wage claims, which are not supported by the plaintiffs' factual allegations.

This argument has some force. Under New York State labor law, a "spread-of-hours" regulation requires in some cases the payment of an additional hour's wage to any employee who works in excess of ten hours in a single day. 12 N.Y.C.C.R. § 142-2.4. Aside from the proposed class definition, [*25] plaintiffs' motion for class certification mentions explicitly only unpaid wages and overtime wages, not spread-of-hours claims. In this case, plaintiffs were paid wages for eight hours of work per day, but allege that they were actually required to work an additional half hour in the morning, and the foremen were required to work up to an additional hour-and-a-half at the end of the day. Defendants argue that, because even the foremen's claims would amount to no more than ten hours per day, plaintiffs' allegations do not implicate the spread-of-hours requirements.

In response, plaintiffs argue that, although they agree with defendants that they were paid for eight hours of work per day, they dispute precisely which eight hours they were paid for. Defendants argue that they paid plaintiffs for the hours of 7:30 AM to 4:00 PM, with an unpaid thirty minute lunch. Plaintiffs describe the disagreement as follows:

Plaintiffs claim that Defendants' employees were obligated to report to Defendants' company shop at 7:00 am and foremen were required to return for a meeting at Defendants' company shop until 5:30 pm. While Defendants allege that they paid Plaintiffs for 7:30 am until 4:00 pm, Plaintiffs [*26] dispute that Defendants paid them for those particular hours. It is unclear whether Defendants promised to pay their employees for the half an hour lunch period and, accordingly, it remains an open question for which particular eight (8) hours Defendants paid their employees.

Combined Reply Memorandum of Law in Support of Plaintiffs' Motion for Approval of Collective Action Notice and to Certify a Class under Rule 23(b)(3) ("Pls.' Reply Br."), dated August 12, 2009, at 12-13. This, however, stands in stark contrast to plaintiffs' earlier statements waiving any claim to payment for the lunch break. See Pls.' Br. for Class Cert. 5 n.1 ("Although some plaintiffs recall it being Defendants' policy to pay their employees for the half an hour lunch break, plaintiffs are forgoing any claims for the lunch break."); id. at 17 n.2 ("Although a number of plaintiffs recall being promised pay for lunch, for simplicity's sake, Plaintiffs are waiving claims for the half an hour lunch break."). This Court cannot see any way of reconciling these statements with the argument that payment for the lunch break is still in dispute. Furthermore, plaintiffs have not alleged that any other potential plaintiffs [*27] worked different or longer hours that might entitle them to spread-of-hours wages. See Pls.' Reply Br. 2 ("[A]ll of Defendants' manual laborers worked on similar construction sites, performing similar work, for virtually the same hours.").

The Court adopts the following modified definition for the certified class:

All persons employed by Defendants as roofers, bricklayers, masons, building laborers, drivers, foremen and other manual workers with the same or similar duties during the six years immediately preceding the initiation of this action up to the date of this decision who are asserting claims under the New York State Labor Law for unpaid minimum wages or overtime premium wages.

In addition, the Court appoints plaintiffs' counsel, Mr. Wisniewski, as class counsel pursuant to Rule 23(g). See Gortat, 257 F.R.D. at 365 ("[T]he Court finds further that plaintiffs' counsel is qualified and able to represent the class and has demonstrated his willingness to do so.").

2. Collective Action


A magistrate judge has the authority to rule on nondispositive issues. Fed. R. Civ. Proc. 72(a). A motion to authorize a collective action is such a nondispositive action. Mazur v. [*28] Olek Lejbzon & Co., No. 05 Civ. 2194(RMB)DF, 2005 U.S. Dist. LEXIS 30321, 2005 WL 3240472, at *2 n.1 (S.D.N.Y. Nov. 30, 2005). When objections are filed to orders of the magistrate judge, the district judge "must consider timely objections and modify or set aside any part of the order

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that is clearly erroneous or is contrary to law." Fed. R. Civ. Proc. 72(a).

b. Heightened Scrutiny

Defendants argue that, because the motion for collective action certification was made after discovery had already taken place, the magistrate judge should have applied a heightened level of scrutiny to the certification decision. The magistrate judge did in fact refer to this heightened level of scrutiny. Order & Report 17 ("Where, as here, plaintiffs move to proceed as collective action post-discovery, courts apply heightened scrutiny to this inquiry as compared to pre-discovery." [*29] (internal quotations omitted)). Defendants give no explanation as to why certification is inappropriate under this heightened scrutiny, and thus have not shown that the magistrate judge's decision was clearly erroneous or contrary to law. In addition, for the reasons that follow, the Court finds that such heightened scrutiny is not appropriate in this case.

The process of certifying an FLSA collective action is not specified by the statute itself, which only provides, in relevant part, that:

An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No 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). To implement this standard, courts have developed a two-stage process. 11 Morales v. Plantworks, Inc., No. 05 Civ. 2349(DC), 2006 U.S. Dist. LEXIS 4267, 2006 WL 278154, at *1 (S.D.N.Y. Feb. 02, 2006). First, [*30] plaintiffs may move to certify a collective action. Id. This preliminary certification allows notice to be sent to potential similarly situated plaintiffs

11 Technically speaking, there is no statutory requirement that a court "certify" a collective action under the FLSA. See 29 U.S.C. § 216(b). A court must, however, determine whether to permit notice to potential plaintiffs and must determine whether opt-in parties satisfy the statute's "similarly situated" requirement. This Court will follow the common usage of other courts in using the language of "certification" to refer to these determinations.

inviting them to opt in to the collective action. Id. Second, after discovery is complete, defendants may move the court to decertify the collective action. Id.

Defendants misconceive the function of this two-stage process. Because the statute of limitations for FLSA claims continues to run for each individual plaintiff until he or she opts in, see 29 U.S.C. § 256(b), early certification and notice are favored in order to protect plaintiffs' rights. Thus, only a minimal evidentiary burden is imposed in order to satisfy the "similarly situated" requirement. Hoffmann v. Sbarro, Inc., 982 F. Supp. 249, 262 (S.D.N.Y. 1997) [*31] ("[C]ourts have endorsed the sending of notice early in the proceeding, as a means of facilitating the FLSA's broad remedial purpose and promoting efficient case management."); see also Krueger v. N. Y. Tel. Co., Nos. 93 CIV. 0178 (LMM), 93 CIV. 0179 (LMM), 1993 U.S. Dist. LEXIS 9988, 1993 WL 276058, at *2 (S.D.N.Y. July 21, 1993) (discussing the benefits of "reaching out to potential plaintiffs"). Because the putative "similarly situated" plaintiffs have not yet been joined, and may not even be known, the certification is viewed as preliminary and subject to revisitation by the court. Bowens v. Atlantic Maint. Corp., 546 F. Supp. 2d 55, 82 (E.D.N.Y. 2008) ("FLSA's opt-in provision merely provides an opportunity for potential plaintiffs to join and is only a preliminary determination as to which potential plaintiffs may in fact be similarly situated.").

In each of the cases cited by defendants it is clear that the court envisions the heightened standard applying not only after discovery, but also after notice and opportunity to opt-in. See Sipas v. Sammy's Fishbox, Inc., No. 05 Civ. 10319(PAC), 2006 U.S. Dist. LEXIS 24318, 2006 WL 1084556, at *2 n.1 (S.D.N.Y. Apr. 24, 2006) ("If the Court finds that the plaintiffs are not similarly situated, [*32] the Court will decertify the collective action and the claims of the opt-in plaintiffs will be dismissed before trial." (emphasis added)); Laroque v. Domino's Pizza, LLC, 557 F. Supp. 2d 346, 352 (E.D.N.Y. 2008) ("After discovery, a second inquiry begins, generally precipitated by a defendant's motion for decertification, in which the court examines with a greater degree of scrutiny whether the members of the plaintiff class -- including those who have opted in -- are similarly situated." (emphasis added)); Sobczak v. AWL Indus., Inc., 540 F. Supp. 2d 354, 362-63 (E.D.N.Y. 2007) ("It also does not prejudice defendants because the determination to certify the class and to permit notice to be sent is merely preliminary." (emphasis added)); Valcho v. Dallas County Hosp. Dist., 574 F. Supp. 2d 618, 621 (N.D. Tex. 2008) ("[T]he court

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reexamines the class after notice, time for opting in, and discovery has taken place, typically in response to defendant's motion. If it finds that the class is no longer made up of similarly-situated persons, it decertifies the class." (citations omitted and emphasis added)); Guzman v. VLM, Inc., No. 07-CV-1126 (JG)(RER), 2007 U.S. Dist. LEXIS 75817, 2007 WL 2994278, at *2 (E.D.N.Y. Oct. 11, 2007) [*33] ("Due to the conditional nature of the certification contemplated at the notice stage, the burden on plaintiffs is not a stringent one, and the court need only reach a preliminary determination that potential plaintiffs are similarly situated." (internal quotations omitted and emphasis added)); see also Patton v. Thomson Corp., 364 F. Supp. 2d 263, 268 (E.D.N.Y. 2005) ("It may be revisited if it later appears, after appropriate discovery, that the additional plaintiffs who opt to join the lawsuit, if any, are not similarly situated to [plaintiff]." (emphasis added)). 12

This case is unusual in that a motion for collective action certification did not occur much earlier, before discovery. Thus, unlike the situation in a typical decertification motion, the identities of potential "similarly situated" opt-in plaintiffs are still unknown, as no notice has yet been issued. The heightened scrutiny standard is only appropriate after the opt-in period has ended and the court is able to examine whether the actual plaintiffs brought into the case are similarly situated. See Davis v. Lenox Hill Hosp., No. 03 Civ.3746 DLC, 2004 U.S. Dist. LEXIS 17283, 2004 WL 1926086, at *7 (S.D.N.Y. Aug. 31, 2004) [*35] ("The test is

12 In one case cited by the magistrate judge, Torres v. Gristede's Operating Corp., No. 04 Civ. 3316(PAC), 2006 U.S. Dist. LEXIS 74039, 2006 WL 2819730, at *9 (S.D.N.Y. Sept. 29, 2006), the court explicitly endorsed the application of heightened scrutiny in a post-discovery, but pre-notice, context. Torres adopts this standard without discussion, and the case cited in support, Harrington v. Educ. Mgmt. Corp., No. 02 Civ. 0787 (HB), 2002 U.S. Dist. LEXIS 8823, at *4-5 (S.D.N.Y. May 17, 2002), holds only that "[i]t is only later down the road that the court need engage in a second more heightened stage of scrutiny as to whether the plaintiffs are [*34] similarly situated for the purposes of maintaining the collective action," and citing in turn two cases more consistent with the view that heightened scrutiny is appropriate only after notice and opportunity to opt in. See Jackson v. N. Y. Tel. Co., 163 F.R.D. 429, 431 (S.D.N.Y. 1995) ("The inquiry at the inception of the lawsuit is less stringent than the ultimate determination that the class is properly constituted."); Rodolico v. Unisys Corp., 199 F.R.D. 468, 480 (E.D.N.Y. 2001) (distinguishing the lenient standard "at the notice stage" from the second stage when "the case is ready for trial"). This Court declines to follow Torres.

whether there is a 'factual nexus' between the claims of the named plaintiff and those who have chosen to opt-in to the action."); Gjurovich v. Emmanuel's Marketplace, Inc., 282 F. Supp. 2d 101, 105 (S.D.N.Y. 2003) ("Should it become clear later that the parties who have opted-in are not similarly situated to the Plaintiff here, I will make any rulings that are necessary and appropriate to ensure that the case is properly formed."); see also Chowdhury v. Duane Reade, Inc., No. 06 Civ. 2295(GEL), 2007 U.S. Dist. LEXIS 73853, 2007 WL 2873929, at *3 (S.D.N.Y. Oct. 02, 2007) (discussing deposition of opt-in plaintiffs as part of discovery). 13 It would not sensibly serve the purposes of the two-step scheme to impose on plaintiffs a heightened burden of proving that as-yet-unknown plaintiffs are similarly situated.

Additionally, in this case, plaintiffs initially filed a motion for certification of the collective action on January 15, 2009, prior to the completion of discovery. On January 25, 2009, defendants moved to stay the determination of the collective action motion pending the resolution of defendants' own summary judgment motion, and ultimately, on February 12, 2009, entered into a stipulation with plaintiffs pursuant to which the motion for collective action certification was voluntarily dismissed. Defendants received the benefit of [*37] delaying the collective action certification and cannot now use that very delay as a weapon to defeat the certification.

c. Lack of Proof of Additional Plaintiffs

Defendants also object to the certification of the collective action, arguing that plaintiffs provided insufficient proof of the existence of similarly situated

13 Even in cases with language suggesting that the second stage review might occur prior to opt in, see, e.g., Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363, 369 (S.D.N.Y. 2007) ("If the fruits of full discovery reveal that plaintiffs are not, in fact, 'similarly situated' to defendants' other employees, or that only employees who worked at the [*36] same facility or engaged in a particular job are 'similarly situated,' I may later decertify the class or divide it into subclasses, if appropriate."), it is clear, reading the opinions in their entirety, that the court expected the second review to occur after opt in, id. at 367 ("If the claimants are indeed similarly situated, the collective action proceeds to trial, and if they are not, the class is decertified, the claims of the opt-in plaintiffs are dismissed without prejudice, and the class representative may proceed on his or her own claims." (emphasis added)). See also Lynch v. United Servs. Auto. Ass'n, 491 F.Supp.2d 357, 368, 369 (S.D.N.Y. 2007).

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plaintiffs. Specifically, they argue that plaintiffs have failed to show that any of the proposed similarly situated plaintiffs "desire to opt in" to the action. Defs.' Objs. to Collective Action 10. In support of this argument, defendants cite cases following the Eleventh Circuit's decision in Dybach v. State of Florida Department of Corrections, 942 F.2d 1562, 1567-68 (11th Cir. 1991), which required the district court to find that potential plaintiffs exist "who desire to 'opt-in' and who are 'similarly situated.'" Although some district courts outside of the Eleventh Circuit have adopted Dybach's "desire to opt in" requirement, 14 no other Circuit Court has done so, and it is not the law of this Circuit. Moreover, this requirement has been strongly criticized by several courts outside the Eleventh Circuit. See Delgado v. Ortho-McNeil, Inc., No. SACV07-263CJCMLGX, 2007 U.S. Dist. LEXIS 74731, 2007 WL 2847238, at *2 (C.D. Cal. Aug. 07, 2007) [*38] ("The Dybach court provided no explanation for requiring plaintiffs to show that other class members desire to opt in, nor does the County indicate why this Court should adopt such a rule. The Court finds the Dybach rule inappropriate at the 'notice stage.' Conditional certification at this stage is designed to provide notice to potential plaintiffs specifically because they might not yet be informed of the action or their ability to participate in it."); Heckler v. DK Funding, LLC, 502 F. Supp. 2d 777, 780 (N.D. Ill. 2007) ("Defendants' proposed rule does not make sense. It would essentially force plaintiffs or their attorneys to issue their own form of informal notice or to otherwise go out and solicit other plaintiffs. This would undermine a court's ability to provide potential plaintiffs with a fair and accurate notice and would leave significant opportunity for misleading potential plaintiffs. That aside, the logic behind defendants' proposed procedure -- requiring [plaintiff] to show that others want to join in order to send them notice asking if they want to join -- escapes the Court. Requiring a plaintiff to make an advance showing [*39] that others want to join would undermine the 'broad remedial goal' of the FLSA."); Reab v. Elec. Arts, Inc., 214 F.R.D. 623, 629 (D. Colo. 2002) ("The cited language in Dybach . . . appears to conflict with United States Supreme Court's position that the Act should be liberally 'applied to the furthest reaches consistent with congressional direction.'" (quoting Alamo Found. v. Sec'y of Labor, 471 U.S. 290, 296, 105 S. Ct. 1953, 85

14 See, e.g., Parker v. Rowland Express, Inc., 492 F.Supp.2d 1159, 1164-66 (D. Minn. 2007) (defending the "desire to opt in" requirement and citing cases from outside the Eleventh Circuit applying it).

L. Ed. 2d 278 (1985))); Reab, 214 F.R.D. at 629 ("requiring plaintiffs in § 216(b) actions to have some unknown number of persons decide whether to opt in places plaintiffs in the position of communicating with potential litigants without court supervision or guidance, leaving plaintiffs subject to allegations of improper solicitation and 'tainting' of the putative class."). This Court similarly rejects the "desire to opt in" requirement, and follows the overwhelming majority of district courts outside of the Eleventh Circuit in requiring only a showing of similarly situated persons.

Furthermore, [*40] even were this Court to adopt the Dybach standard, plaintiffs in this case have made an adequate showing. First, this case was not brought by a single plaintiff, but rather by a group of similarly situated plaintiffs, which is suggestive of a greater degree of interest in participation by similarly situated persons. See Simmons v. T-Mobile USA, Inc., Civil Action No. H-06-1820, 2007 U.S. Dist. LEXIS 5002, 2007 WL 210008, at *9 (S.D. Tex. Jan. 24, 2007) (explaining that this issue has not reached the Fifth Circuit "presumably because generally there are multiple plaintiffs or several current or former employees that seek to join the suit" (emphasis added)). Second, and more importantly, in the course of this litigation, three additional plaintiffs joined the action after being subpoenaed for depositions. See Amended Complaint, dated Feb. 13, 2009, Ex. 1; Pls.' Reply Br. 8-9. This lends significant weight to the idea that other similarly situated persons would also choose to opt in if given notice. See Dumitrescu v. Mr. Chow Enters., Ltd., No. 07 Civ. 3601(PKL), 2008 U.S. Dist. LEXIS 49881, 2008 WL 2600667 (S.D.N.Y. June 30, 2008) (holding that "plaintiffs have adequately demonstrated that there is a class of people potentially interested [*41] in joining the collective action" by presenting evidence of "at least fifty other tipped employees who were subjected to the same policies as plaintiffs, two of whom have already come forth expressing interest in joining the suit.").

d. Individualized Defenses

Defendants also argue that the magistrate judge failed to consider their individualized defenses against different plaintiffs in certifying the collective action. As an initial matter, defendants failed to make this argument in their brief opposing certification of the collective action, Memorandum in Opposition to Plaintiffs' Motion for Notice under Collective Action under 29 U.S.C.A. Sec. 216(b), dated June 30, 2009, and thus the argument is waived here. The Court is satisfied, however, that certification of the collective

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action would be appropriate even if individualized defenses were considered.

Defendants suggest that they would have distinct defenses against two groups of potential plaintiffs: (1) cash employees, if any exist; 15 and (2) more recent employees who allegedly signed an employment agreement which explicitly addresses their working hours. 16 The key issue in dispute in this action, which is relevant to the claims [*42] of all potential plaintiffs, is whether Capala had a policy of routinely paying wages to employees for fewer hours than they were required to be present at work. The Court is satisfied that these core issues common to all plaintiffs are sufficient to make them similarly situated for purposes of the FLSA. See Torres v. Gristede's Operating Corp., No. 04 Civ. 3316(PAC), 2006 U.S. Dist. LEXIS 74039, 2006 WL 2819730, at *11 n.10 (S.D.N.Y. Sept. 29, 2006) ("[T]he standard of proof and required evidence under FLSA is not an individualized inquiry but one based on policy, practice, and conduct." (internal quotations omitted)). Furthermore, the Court is empowered to revisit this issue should substantially different defenses arise. At that point, with knowledge of the identities and circumstances of the plaintiffs who have actually chosen to join the action, the Court can dismiss dissimilar opt-in plaintiffs or subdivide the collective action as appropriate. See Ayers v. SGS Control Servs., Inc., No. 03 Civ. 9077 RMB, 2007 U.S. Dist. LEXIS 19634, 2007 WL 646326, at *6 (S.D.N.Y. Feb. 27, 2007) ("[T]o the extent Defendants present individual defenses, the Court may grant collective action and bifurcate trial, as necessary, to address those defenses." [*43] (internal quotations omitted)); accord Torres, 2006 U.S. Dist. LEXIS 74039, 2006 WL 2819730, at *11 n.10.

3. Notice to Potential Plaintiffs


The form and content of notices to be issued to class members or potential collective action opt-in plaintiffs is a nondispositive matter upon which a magistrate judge may rule. See, e.g., Jemine v. Dennis, No. CV 2008-3072(RRM)(MDG), 2009 U.S. Dist. LEXIS 24870, 2009 WL 837802 (E.D.N.Y. Mar. 26, 2009). The district judge "must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is

15 See Defs.' Objs. to Collective Action 8.

16 See Defs.' Objs. to Class Cert. 4.

contrary to law." Fed. R. Civ. Proc. 72(a).

b. Objections to Contents of Notice

Defendants raise various objections to Magistrate Judge Gold's determinations regarding the notice to be sent to members of the class action and to potential opt-in plaintiffs in the collective action. Some of these objections are directed at the content of the notice. Specifically, defendants argue that (1) the proposed notice does not sufficiently define those employees who are members of the class or are eligible to join the collective action, and (2) the proposed notice inappropriately fails to adequately [*44] advise class members or potential opt-in plaintiffs of their legal rights, including rights related to legal representation and legal fees.

These objections are premature. Magistrate Judge Gold's Order & Report, to which defendants object, did not approve plaintiffs' proposed notice, and in fact, instructed plaintiffs to submit a new proposed notice, after considering the magistrate judge's suggestions and the case law. At the time defendants filed these objections, plaintiffs' proposed notice had yet to be filed, 17 and as of now, Magistrate Judge Gold has not yet approved any specific notice language. Until Magistrate Judge Gold actually approves specific notice language there is simply nothing to which Capala can object. 18 This Court takes no position on the merits of defendants' arguments at this time, leaving it to the magistrate judge in the first instance to approve appropriate notice. 19 Counsel shall submit a proposed notice for my review by November 4, 2009. In the event that the parties are unable to agree on a proposal, plaintiffs shall submit their proposed notice by November 4, 2009, and defendants will file objections one week thereafter. Order & Report 20. Although [*45] plaintiffs submitted their proposed notice on November 4, 2009, defendants have submitted no objections in response. The Court leaves it to the magistrate judge in the first instance to determine whether defendants have waived their opportunity to object, or whether their objections to the Order & Report might be construed as in response to

17 Plaintiffs subsequently filed a proposed combined notice on November 4, 2009.

18 To the extent defendants object to Magistrate Judge Gold's rulings and recommendations regarding the form, as opposed to the content, of the notice, these objections are addressed below.

19 The magistrate judge instructed the parties as follows:

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plaintiffs' proposal.

c. Objections to Form of Notice

In addition to the objections to the content of the proposed notice, defendants object to the form of the notice approved by the magistrate judge. Specifically, defendants argue that (1) published notice is inappropriate given the small number of known potential plaintiffs, and (2) a single notice for both the collective and class actions is inappropriate. The Court will address these objections in turn.

In addition to sending a notice to employees on the list provided by defendants, [*46] plaintiffs proposed publishing the notice for five consecutive weekends in Nowy Dziennik, "a New York-based Polish language newspaper." Order & Report 20. The magistrate judge approved of this publication, but, due to the "lack of concrete information" about additional employees, he held that plaintiffs should bear the cost of publication unless a significant number of additional plaintiffs are identified as a result of the notice. 20 Order & Report 20-21. Defendants argue that because plaintiffs have not provided sufficient proof of other potential plaintiffs, this published notice is inappropriate. The cases cited give little support for this argument. 21 For example,

20 The magistrate judge held as follows:

[i]f a significant number of class members who were not on defendants' list of seventy-four employees join the class after publication, plaintiffs may seek to have the cost of publication shifted to defendants.

Order & Report 20-21. The notice is directed at both members of the class action and potential collective action opt-in plaintiffs. Although the magistrate judge appears to be referring only to opt-in plaintiffs in the quoted language, the Court believes that cost-shifting would be appropriate if the notice results in a significant number of either new collective action opt-in plaintiffs or previously unidentified members of the class action, whether or not such persons [*48] choose to opt out of the class.

21 Amazingly, defendants cite an American Law Reports annotation, Wesley Kobylak, Annotation, Notice to potential class members of right to "opt-in" to class action, under § 16(b) of Fair Labor Standards Act (29 U.S.C.A. § 216(b)), 67 A.L.R. Fed. 282 (1984), for the proposition that there is a circuit split concerning whether courts have the authority to authorize collective action notice. The Supreme Court definitively resolved this split in favor of allowing notice over twenty years ago. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989). Defendants have inexplicably failed to notice that this ALR

defendants cite Rubery v. Buth-Na-Bodhaige, Inc., 569 F. Supp. 2d 334 (W.D.N.Y. 2008), for the proposition that newspaper publication is inappropriate unless plaintiffs can show that mailed or posted notice is insufficient. But Rubery did not involve newspaper publication, but rather publication in the company newsletter. Id. at 338. The court's reasoning was made clear in Sherrill v. Sutherland Global Services, Inc., 487 F. Supp. 2d 344, 351 (W.D.N.Y. 2007), the case upon which Rubery relied, which grounded this limitation [*47] on notice in "minimizing any disturbance to [the] workplace." Despite this concern with avoiding workplace disruption, in both Rubery and Sherrill, the court did require employers to prominently post the notice on company bulletin boards. In this case, plaintiffs proposed newspaper notice does not require any affirmative steps by defendants or the commandeering of company resources. 22 Such notice is appropriate, and in any event, is not clearly erroneous or contrary to law.

Defendants also argue that it is inappropriate to issue a single notice for both the class action and collective action, arguing that it is prejudicial due to the different statutes of limitations governing each of the claims. Because the statute of limitations for FLSA claims is only three years while the NYLL claims have a six-year limitations period, some plaintiffs may be members of the class action, but ineligible to join the collective action. Defendants argue that the inclusion of both claims in a single notice would cause confusion. The magistrate judge found, and this Court agrees, that more confusion is likely if two separate notices are sent concerning claims based on the same underlying facts. 23 Furthermore, it is difficult to see how defendants are

annotation was originally published in 1984, and that all of the cases disapproving of notice cited therein predate Hoffmann-La Roche. Similarly, defendants cite Montalto v. Morgan Guaranty Trust Co., 83 F.R.D. 150, 152 (S.D.N.Y. 1979), wherein the district court held that "[n]o notice appears to be required by 29 U.S.C. § 216(b) and it would be inappropriate for the court to stimulate litigation by giving its imprimatur to any such procedure," while completely ignoring the Supreme Court's statement in Hoffmann-La Roche holding "that district courts [*49] have discretion, in appropriate cases, to implement 29 U.S.C. § 216(b) . . . by facilitating notice to potential plaintiffs," Hoffmann-La Roche, 493 U.S. at 169.

22 And, as noted above, defendants will not even bear the costs unless a significant number of additional plaintiffs are identified as a notice.

23 Defendants' argument that it would be less confusing to publish two separate notices in the newspaper rather than a

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seriously prejudiced if such a combined notice is received by a person who has claims that are more than three but less than [*50] six years old. Such a person would be entitled to notice of the class action and, if he attempts to opt in to the collective action, could simply be informed that he is ineligible.

Defendants cite four cases in which courts limited notice of FLSA claims to claims within the past three years. None of these cases supports their demand for separate notices of the class and collective actions. In each of these cases, the dispute concerned whether persons with claims between three and six years old should receive any notice whatsoever. Here, defendants concede, as they must, that once a class action has been certified notice is perfectly appropriate for the state law claims for the full six year period. These cases are not relevant to the question of whether a single combined notice is appropriate. In Summa v. [*51] Hofstra University, No. CV 07-3307(DRH)(ARL), 2008 U.S. Dist. LEXIS 62591, 2008 WL 3852160 (E.D.N.Y. Aug. 14, 2008), plaintiffs brought no state law claims. The dispute regarding the temporal scope of the notice related only to the availability of equitable tolling. In Sobczak v. AWL Industries, Inc., 540 F. Supp. 2d 354 (E.D.N.Y. Oct. 22, 2007), and LeGrand v. Education Management Corp., No. 03 Civ.9798(HB)(HBP), 2004 U.S. Dist. LEXIS 17696, 2004 WL 1962076 (S.D.N.Y. Sept. 02, 2004), the courts declined to extend the notice period to cover state law claims, finding that no class action was available for the state law claims and thus notice was not appropriate for those claims. That is obviously inapplicable here where a class action has been certified on the state law claims. Finally, in Suarez v. S & A Painting & Renovation Corp., No. 08-CV-2984 (CPS)(JO), 2008 U.S. Dist. LEXIS 95184, 2008 WL 5054201 (E.D.N.Y. Nov. 21, 2008), the magistrate judge cited his lack of authority to certify a class action as precluding the authorization of notice regarding the state law claims. Again, in this case, where a class action has been certified by the Court, there is no such barrier to approving notice of the state law claims. 24

single combined notice is nonsensical. Since the newspaper advertisement isn't targeted to specific individuals, it would serve no purpose to separate the claims. Rather, it would increase the likelihood that former employees might fail to read one of the two notices.

24 Defendants mischaracterize the magistrate judge's [*52] opinion, claiming that he "states that these cases did not involve claims for years 3 through 6 by employees which would be covered by a class action pursuant to NYLL." Defs.' Objs. to Collective Action 9. In fact, the magistrate judge

In addition, several courts have approved a single notice of both FLSA and state law claims, covering the full six-year state law limitations period, even when no class action had yet been certified for the state law claims. See Jemine, 2009 U.S. Dist. LEXIS 24870, 2009 WL 837802; 25 Guzman, 2007 U.S. Dist. LEXIS 75817, 2007 WL 2994278; Wraga v. Marble Lite, Inc., No. 05-CV-5038 (JG)(RER), 2006 U.S. Dist. LEXIS 60457, 2006 WL 2443554 (E.D.N.Y. Aug. 22, 2006); Harrington v. Education Management Corp., No. 02 Civ. 0787(HB), 2002 U.S. Dist. LEXIS 8823, 2002 WL 1343753 (S.D.N.Y. June 19, 2002); Realite v. Ark Restaurants Corp., 7 F. Supp. 2d 303 (S.D.N.Y. 1998). In this case, where both the class and collective actions have been certified, notice covering the full six-year period is clearly appropriate.

Jemine, 2009 U.S. Dist. LEXIS 24870, 2009 WL 837802, at *2. This is entirely consistent with Magistrate Judge Gold's Order.

4. Motion for Recusal

stated, accurately, that "none of the cases defendants rely upon involved motions to certify a Rule 23 class pursuant to NYLL." Order & Report 20 n.15.

25 Defendants completely misrepresent the holding in Jemine, stating that "separating the collective action notice from [*53] the class action, that Magistrate reserved the class action notice for years 3-6 and addressed them on a separate notice." Defs.' Objs. to Collective Action 8-9. This description bears absolutely no resemblance to the actual holding of Jemine in which the magistrate judge approved a single notice for both the FLSA collective action and state claims Rule 23 class action, stating:

[T]he notice sent to putative plaintiffs should clearly distinguish between the time periods applicable to the federal law claim and the New York law claim and explain that plaintiffs may have claims under the FLSA if they worked more than forty hours per week during the last three years and/or claims under New York law if they worked more than forty hours per week or more than 10 hours per day during the last six years. The notice should further advise that failing to file a consent form affects only the FLSA portion of the case. Relatedly, the notice should provide that only the employees who worked for some time during the last three years may join the collective action. Finally, the notice should provide that those plaintiffs who have claims under New York law and join the collective action may waive their [*54] right to liquidated damages under New York state law and that they may want to contact plaintiffs' counsel or another

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In their objections to the magistrate judge's Report, defendants accuse the Court of a "lack of objectivity and fairness" and ask leave of the Court to file a motion for recusal. Defs.' Objs. to Class Cert. 32. Defendants made a similar request in a submission to Magistrate Judge Gold. 26 Memorandum of Law in Opposition to Magistrate's Sua Sponte Order to Show Cause ("Defs.' Br. in Opp. to Show Cause Order"), dated October 29, 2009, at 19. No leave is required to file a recusal motion. See Morisseau v. DLA Piper, 532 F. Supp. 2d 595, 622 (S.D.N.Y. 2008). If defendants wish to file such a motion, they may do so.

On the other hand, while defendants surely have a right under 28 U.S.C. § 455 to request recusal, casting aspersions on this Court's integrity while holding out the threat of a recusal motion is wholly inappropriate. 27 If defendants have concerns about the impartiality of this Court, those concerns should be raised in a proper recusal motion, or not at all.

CONCLUSION

For the aforementioned reasons, defendants' objections to the magistrate judge's certification of the collective action are OVERRULED, defendants' objections to the magistrate judge's recommendation of class certification are OVERRULED, and plaintiffs' motion for class action certification is GRANTED.

SO ORDERED.

Dated: [*56] Brooklyn, New York

April 9, 2010

attorney.

26 In their brief objecting to class certification, defendants state that "leave is requested for recusal by the Court and/or change of venue." Defs.' Objs. to Class Cert. 32. In the filing before Magistrate Judge Gold, defendants state more clearly that they are requesting "leave and adequate time to file a motion for recusal and/or change [*55] of venue." Defs.' Br. in Opp. to Show Cause Order 19. Because the language in their brief objecting to class certification is unclear, the Court will construe it consistently with their brief to the magistrate judge, filed only five days earlier, as requesting leave to file a motion, rather than actually making that motion.

27 It is worth noting however, that months have passed since defendants requested from Magistrate Judge Gold time to file a motion for recusal, and no recusal motion has been forthcoming.

/s/

I. Leo Glasser

United States Senior District Judge

End of Document

2010 U.S. Dist. LEXIS 35451, *54


Helton v. Factor 5, Inc.

United States District Court for the Northern District of California, Oakland Division

November 22, 2011, Decided; November 28, 2011, Filed

Case No: C 10-04927 SBA


JESSE HELTON; ALISHA PICCIRILLO; CHAD LOWE; individually and on behalf of all others similarly situated, Plaintiffs, vs. FACTOR 5, INC.; FACTOR 5, LLC; BLUHARVEST, LLC; WHITEHARVEST, LLC; JULIAN EGGEBRECHT; HOLGER SCHMIDT; THOMAS ENGEL; and DOES 1-100, Defendants.

Subsequent History: Partial summary judgment denied by Helton v. Factor 5, Inc., 2012 U.S. Dist. LEXIS 79887 (N.D. Cal., June 7, 2012)

Related proceeding at Crowley v. Factor 5, Inc., 2014 U.S. Dist. LEXIS 63332 (N.D. Cal., May 5, 2014)

Counsel: [*1] For Jesse Helton, individually and on behalf of all others similarly situated, Alisha Piccirillo, individually and on behalf of all others similarly situated, Chad Lowe, individually and on behalf of all others similarly situated, Plaintiffs: James Alan Neal Smith, LEAD ATTORNEY, Damien Patrick Lillis, Smith Lillis Pitha LLP, San Francisco, CA; Martin Lukas Pitha, Smith Lillis Pitha LLP, Irvine, CA.

For Whiteharvest, LLC, Defendant: Kenneth Keith McAllister, Law Office of K. Keith McAllister, Tiburon, CA.

For Julian Eggebrecht, Holger Schmidt, Thomas Engel, Defendants: Malcolm Leader-Picone, LEAD ATTORNEY, Bartlett, Leader-Picone & Young LLP, Oakland, CA.

Judges: SAUNDRA BROWN ARMSTRONG, United States District Judge.

Opinion by: SAUNDRA BROWN ARMSTRONG

Opinion

ORDER

Dkt. 40

Jesse Helton, Alisha Piccirillo, and Chad Lowe ("Plaintiffs"), individually and on behalf of all others similarly situated, bring the instant action to, among other things, recover unpaid wages under the Fair Labor Standards Act ("FLSA"). As party-defendants, the Complaint names corporate defendants Factor 5, Inc. ("Factor 5"), Factor 5, LLC, BluHarvest, LLC, and WhiteHarvest, LLC ("WhiteHarvest"), as well as individual defendants Julian Eggebrecht, [*2] Holger Schmidt, and Thomas Engel (the "individual Defendants"). The matter comes before the Court on the Plaintiffs' application for an order shortening the time to hear Plaintiffs' motion for conditional certification of their FLSA claims, or alternatively, to equitably toll the FLSA statute of limitations. Dkt. 40. Having read and considered the papers filed in connection with this matter, and being fully informed, the Court hereby DENIES the Plaintiffs' request to shorten time and GRANTS their request to toll the statute until the motion can be heard on the Court's regular civil law and motion calendar. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed.R.Civ.P. 78(b).

I. BACKGROUND

Plaintiffs are three former employees of Factor 5, which has since dissolved as a corporation. Defs.' Opp'n Mot. at 1, Dkt. 45. They initially filed a class action Complaint on January 21, 2009 in the Marin County Superior Court to recover earned wages and other benefits due under California law. Id. The Complaint was amended to include corporate Defendants BluHarvest, LLC, later renamed WhiteHarvest, which had acquired Factor 5 assets through an Asset [*3] Purchase Agreement. Pls.' Appl. at 1, Dkt. 40; Dkt. 1, Ex. C ("Register") at 1. Factor 5 filed for bankruptcy in May 2009, and a year later in May 2010, WhiteHarvest filed for bankruptcy. Pls.' Appl. at 2; Register at 2, 5. Proceedings in the state court were stayed as to defendants Factor 5 and WhiteHarvest. Register at 4, 5.


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Following the close of both entities' bankruptcy proceedings, Plaintiffs moved to amend their Complaint to add the individual Defendants and the FLSA claims. Defs.' Opp'n Mot. at 1. The state court granted leave to amend on October 13, 2010. Id.; Register at 6-7. Thereafter, Defendants removed the action to this Court on October 29, 2010. Defs.' Opp'n Mot. at 1; Notice of Removal, Dkt. 1.

This Court conducted an initial case management conference ("CMC") on February 23, 2011. Pls.' Appl. at 2. At the CMC, Plaintiffs indicated that they were prepared to proceed with their motion for preliminary certification of a FLSA collective action. They proposed filing their motion by March 11, 2011, with a hearing date of April 15, 2011. Pls.' Appl. at 2; Smith Decl. ¶ 8, Dkt. 41. For their part, the individual Defendants urged the Court to stay all proceedings pending the [*4] outcome of WhiteHarvest's re-opened bankruptcy and a court-ordered settlement conference. Pls.' Appl. at 2; Smith Decl. ¶ 9.

At the close of the CMC, the Court indicated that it would not schedule any substantive hearings until the parties attended a court-ordered settlement conference. Pls.' Appl. at 3; Smith Decl. ¶ 10. The case was referred to a magistrate judge for settlement. Dkt. 24. On October 26, 2011, the parties participated in a settlement conference conducted by Magistrate Judge Elizabeth LaPorte. Dkt. 33. The case did not settle, however. Id. Thus, on the same date, Plaintiffs filed their Motion for Collective Certification of FLSA Claims. Dkt. 34.

The individual Defendants are now taking the position that the statute of limitations for willful violations of the FLSA will run on December 19, 2011, based on the fact that Factor 5 ceased operation on December 19, 2008. Defs.' Opp'n Mot. at 1. If correct, claimaints who have not filed opt-ins by December 19, 2011 will be barred from joining this action. Although Plaintiffs have filed their motion for conditional certification, the next available hearing date is in March 2012. Pls.' Appl. at 3; Smith Decl. ¶ 11. Thus, Plaintiffs [*5] allege that putative collective action members face substantial prejudice, including a complete bar to their FLSA claims, unless the Court shortens time and permits their motion to be calendared for hearing in December 2011. Alternatively, Plaintiffs request the Court to equitably toll the statute until the motion can be heard. Dkt. 40.

II. DISCUSSION

Title 29, United States Codes, Section 255(a) sets the limitations period for a cause of action for unpaid wages under the FLSA. The FLSA permits the filing of complaints for unpaid wages or overtime for two years "after the cause of action accrued." 29 U.S.C. § 255(a). Willful violations of the FLSA are subject to a three-year statute of limitations. Id. § 255(a). Unlike a typical class action, in FLSA collective actions, claimants must affirmatively opt-in to participate in the litigation. 29 U.S.C. § 216(b). Thus, the FLSA statute of limitations runs until a valid consent is filed. 29 U.S.C. § 256(b); Partlow v. Jewish Orphans' Home of S. Cal., Inc., 645 F.2d 757, 760 (9th Cir. 1981), abrogated on other grounds by Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989). However, the statute of limitations may be equitably tolled (1) [*6] when extraordinary circumstances beyond a plaintiff's control make it impossible to file a claim on time, or (2) when a plaintiff is prevented from asserting a claim by wrongful conduct on the part of the defendant. See Stoll v. Runyon, 165 F.3d 1238, 1242 (9th Cir. 1999); Alvarez-Machain v. United States, 107 F.3d 696, 701 (9th Cir. 1996).

Plaintiffs request that the Court toll the statute of limitations for opt-in claimants wishing to join the collective action on account of procedural delay. The Court finds good cause to grant their request. The record confirms that in February 2011, Plaintiffs were prepared to file their motion for conditional certification, and proposed an April 15, 2011 hearing on such motion. CMC Statement at 8, Dkt. 23. However, the Court declined to set a briefing schedule on the motion at that juncture, finding instead that the parties should first make a good faith effort to resolve the action without further litigation. To that end, the Court deferred the motion for collective certification and ordered the parties to participate in a mandatory settlement conference. 1

1 The individual Defendants acknowledge that the Court ordered the parties to a mandatory settlement conference, but assert that the Court did not preclude Plaintiffs from filing their motion for conditional certification. This contention lacks merit. Although the minute order from the CMC did not expressly forbid Plaintiffs' from filing their motion, that clearly was the intent of the Court's order referring the parties to a mandatory settlement [*8] conference prior to the Court's consideration of Plaintiffs' motion for conditional certification. If the Court had permitted Plaintiffs to file their motion despite the reference to a magistrate judge for a settlement conference, the Court would not have ordered the parties to file an updated CMC Statement with "scheduling suggestions" in advance of the next CMC. Dkt. 24.

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When the action did not settle, Plaintiffs promptly filed their motion. Given this procedural [*7] history, coupled with the lack of available motion hearing dates until March 2012, tolling is appropriate. E.g., Lee v. ABC Carpet & Home, 236 F.R.D. 193, 199 (S.D.N.Y. 2006) ("Where parties are ordered or agree by stipulation to suspend proceedings during the pendency of legal proceedings, the time during which a party is prevented from obtaining legal relief is not counted for purposes of statutes of limitations."); c.f. Owens v. Bethlehem Mines Corp., 630 F. Supp. 309, 312 (S.D.W.Va. 1986) (equitable tolling warranted due to judicial delay in ruling on certification motion). The Court therefore tolls the FLSA statute of limitations until such time as the Court renders a decision on Plaintiffs' motion for conditional FLSA certification. 2

III. CONCLUSION

For the reasons stated above,

IT IS HEREBY ORDERED THAT Plaintiffs' application for an order shortening the time to hear Plaintiffs' Motion for Collective Certification of FLSA Claims is DENIED. However, the statute of limitations applicable to Plaintiffs' FLSA claims is tolled pending the Court's ruling on Plaintiffs' motion for conditional certification. This Order terminates Docket 40.

IT IS SO ORDERED.

Dated: November 22, 2011

/s/ Saundra Brown Armstrong

SAUNDRA BROWN ARMSTRONG


End of Document

2 Given the Courts holding as to tolling for procedural delay, the Court need not reach Plaintiffs' alternative argument that the statute of limitations should be tolled on the independent ground that Defendants refuse to produce a list of potential collective action members.

2011 U.S. Dist. LEXIS 136170, *8


Kampfer v. Fifth Third Bank

United States District Court for the Northern District of Ohio, Western Division

March 22, 2016, Filed

Case No. 3:14 cv 2849


Judith Kampfer, Plaintiff v. Fifth Third Bank, et al., Defendants

Prior History: Stallard v. Fifth Third Bank, 2013 U.S. Dist. LEXIS 186531 (W.D. Pa., Dec. 12, 2013)

Counsel: [*1] For Judith Kampfer, individually and on behalf of all others similarly situated, Plaintiff: Drew T. Legando, LEAD ATTORNEY, Jack Landskroner, Landskroner Grieco Merriman, Cleveland, OH; Fran L. Rudich, Seth R. Lesser, Klafter Olsen & Lesser, Rye Brook, NY; Gregg I. Shavitz, Paolo C. Meireles, Shavitz Law Group, Boca Raton, FL; Michael J. Palitz, Shavitz Law Group - New York, New York, NY; Peter D. Winebrake, Winebrake & Santillo, Dresher, PA; Susan H. Stern, Shavitz Law Group - Boca Raton, Boca Raton, FL.

For Fifth Third Bank, Fifth Third Financial Corporation, Fifth Third Bancorp, Defendants: Corey Donovan Tracey, Jeffrey B. Keiper, Jackson Lewis - Cleveland, Cleveland, OH; David K. Montgomery, Jamie M. Goetz-Anderson, Jackson Lewis - Cincinnati, Cincinnati, OH.

Judges: Jeffrey J. Helmick, United States District Judge.

Opinion by: Jeffrey J. Helmick

Opinion

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff Judith Kampfer initiated this action on December 31, 2014, against Defendants Fifth Third Bank, Fifth Third Financial Corporation, and Fifth Third Bancorp ("Fifth Third") alleging violations of the Fair Labor Standards Act by misclassifying Customer Service Managers ("CSMs") as exempt from FLSA's overtime requirements. [*2] Also alleged are violations

of Ohio's Wage and Hour law brought on behalf of an Ohio class representative and the putative Ohio class.

In 2012, a similar FLSA collective action was commenced in the Western District of Pennsylvania against Fifth Third asserting similar allegations. Stallard v. Fifth Third Bank, et al., Case No. 2:12 cv 1092 (W.D. Penn.). On December 12, 2013, the Pennsylvania district court conditionally certified the collective action and I am advised the Stallard litigation was concluded in February 2015, following approval of the collective action settlement by the Hon. Mark R. Hornak.

Although eligible, Plaintiff Kampfer did not opt-into the Stallard litigation.

This matter is before me on Plaintiffs' motion for conditional certification (Doc. No. 33) under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), Defendants' opposition (Doc. No. 39) and Plaintiff's reply (Doc. No. 40). Also before me is Plaintiffs' motion for equitable tolling (Doc. No. 42), Defendants' opposition (Doc. No. 43), and Plaintiffs' response (Doc. No. 44). For the reasons that follow, Plaintiffs' motion for conditional certification is granted as is the motion for equitable tolling.

II. APPLICABLE LEGAL [*3] STANDARD

Section 207 of the FLSA requires employers to pay overtime to covered employees who work more than 40 hours in one workweek at a rate of one and one-half times their regular rate of pay. 29 U.S.C. § 207(a)(1). A collective action under the FLSA is authorized under 29 U.S.C. § 216(b), "against any employer . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated."

In considering a FLSA action, the Sixth Circuit has adopted a two-phase inquiry, the notice stage and the decertification stage. Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006). The notice stage, applicable to the present action, occurs early in the


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case, generally at the beginning of discovery. At this stage, the court considers conditional certification "as a collective action so that potential opt-in plaintiffs can be notified of the suit's existence and of their right to participate." Wlotkowski v. Michigan Bell Telephone Co., 267 F.R.D. 213, 217 (E.D. Mich. 2010) (citation omitted). The determination is based upon a "fairly lenient standard." Swigart v. Fifth Third Bank, 276 F.R.D. 210, 213 (S.D. Ohio 2011).

This fairly lenient standard requires only that the named and potential plaintiffs were victims of common, illegal plan or policy. Comer, 454 F.3d at 547; Olivo v. GMAC Mortg. Corp., 374 F.Supp.2d 545, 548 (E.D. Mich. 2004). A plaintiff may prove she is similarly situated to potential plaintiffs by showing "they suffer from a single, FLSA-violating policy, and [that] proof of that policy [*4] or of conduct in conformity with that policy proves a violation as to all the plaintiffs. O'Brien v. Ed Donnelly Enters., 575 F.3d 567, 585 (6th Cir. 2009).

At the notice stage, a plaintiff "submit[s] evidence establishing at least a colorable basis for their claim that a class of 'similarly situated' plaintiffs exists," and the trial "court does not resolve factual disputes, decide substantive issues going to the ultimate merits, or make credibility determinations." Wlotkowski, 267 F.3d at 217, citing Brasfield v. Source Broadband Servs., LLC, 257 F.R.D. at 642 (W.D. Tenn. 2009).

III. DISCUSSION

A. Allegations and Positions of the Parties

Judith Kampfer was employed by the Defendants and their predecessors for nearly forty years. Kampfer worked for Fifth Third from February 2008 until March 2013 as a CSM and contends she regularly worked in excess of forty hours in a workweek. On behalf of herself and the opt-in Plaintiffs, Kampfer alleges that Fifth Third misclassified CSMs as exempt employees thereby removing them from the overtime provisions of the FLSA. Specifically, Kampfer alleges "[t]he primary job duties of Plaintiff and the Collective Action Members did not materially differ from the duties of non-exempt hourly paid employees. The performance of non-exempt duties occupied the majority of Plaintiff's and Collective Action Members' working hours." (Doc. No. [*5] 1 at ¶ 32). Moreover, Plaintiffs state that "[p]ursuant to a centralized, company-wide policy, pattern and/or practice, Defendants classified all CSMs and other

similarly situated current and former employees holding comparable positions but different titles, as exempt from coverage of the overtime provisions of the FLSA." (Id. at ¶ 33).

Plaintiffs contend they have presented the necessary requirements for conditional certification and there is no prohibition against a second collective action. In contrast, the Defendants object to the motion because it is a second collective action against the same parties and is not an efficient use of the FLSA. Alternatively, they argue a heightened "modest plus" standard of evidence applies in this case, as well as sufficient differences among the opt-in plaintiffs to deny conditional certification.

B. A Second Collective Action under FLSA

There is no dispute amongst the parties that an identical FLSA violation was alleged against Defendants, based upon the previous classification of CSMs, in the now-concluded, Stallard litigation. Defendants oppose conditional certification in the present litigation because it is aimed at a group "already solicited and unequivocally [*6] uninterested" and that the present motion is "duplicative and unnecessary." (Doc. No. 39, p. 7). I disagree.

The FLSA has been characterized as "remedial and humanitarian in purpose." Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S. Ct. 698, 88 L. Ed. 949 (1944). Moreover, FLSA "must not be interpreted or applied in a narrow, grudging manner." Id. Keeping in mind the precepts for statutory interpretation, I begin with the language itself.

The language of Section 216(b)1 does not expressly

1 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 minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Any employer [*7] who violates the provisions of section 215(a)(3) of this title shall be liable for such legal or equitable relief, as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including without limitation employment, reinstatement, promotion, and payment of wages lost and an additional equal amount as liquidated damages. An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees

2016 U.S. Dist. LEXIS 37056, *3


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prohibit a second collective action as correctly observed by both sides in this case. Several courts have also endorsed this position. Akins v. Worley Catastrophe Response, LLC, 921 F.Supp.2d 593, 598 (E.D. La. 2013) ("Had Congress wished to limit the number of collective actions that could be brought against an employer, it could have said that 'only one action to recover' may be maintained on behalf of a group of employees. It did not do so."); Yates v. Wal-Mart Stores, Inc., 58 F.Supp.2d 1217, 1218 (D. Colo. 1999) (allowing a contemporaneous, separate collective action with identical issues where the opt-in date in the first action had passed). See also Hautur v. Kmart Corp., 2015 U.S. Dist. LEXIS 127082, 2015 WL 5567912 *9 (W.D.N.Y. Sept. 22, 2015); Brown v. United Furniture Indus., Inc., 2015 U.S. Dist. LEXIS 40308, 2015 WL 1457265 *3 (N.D. Miss. March 30, 2015).

In support of its opposition to this litigation, the Defendants cite cases prohibiting a second collective action. In reviewing those cases, I find them to be distinguishable as they involved competing similar litigation and analysis of the first-filed rule. In the case before me, there is no competing litigation and the deadline for opting into the Stallard case had passed when Kampfer filed her case here. (Doc. No. 33-12, pp. 3, 5, 7, and 8).

Plaintiffs propose three possible groups of potential opt-in plaintiffs: (1) employees who, like Kampfer, did not opt into the Stallard litigation; (2) employees who were employed for a short duration; and (3) employees who became CSMs after the initial Stallard notice was mailed. The Defendants do not challenge this potential group of opt-in plaintiffs but question Kampfer's

for and in behalf of himself or themselves and other employees similarly situated. No 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. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action. The right provided by this subsection to bring an action by or on behalf of any employee, and the right of any employee to become a party plaintiff to any such action, shall terminate upon [*8] the filing of a complaint by the Secretary of Labor in an action under section 217 of this title in which (1) restraint is sought of any further delay in the payment of unpaid minimum section 207 of this title by an employer liable therefore under the provisions of this subsection or (2) legal or equitable relief is sought as a result of alleged violations of section 215(a)(3) of this title. (Emphasis added).

motivation [*9] in not opting into the Stallard case. In the absence of any authority which takes motivation into consideration on the issue of a successive FLSA action, the Defendants' arguments are without merit.

As § 216(b) does not prohibit a second collective action, I find the Court can entertain Plaintiffs' request for conditional certification in this case.

C. Conditional Certification

1. Similarly Situated Potential Plaintiffs

At the notice stage of conditional certification, a lenient standard generally applies requiring the plaintiff establish a colorable basis for their claim that a class of similarly situated plaintiffs exist. Waggoner v. U.S. Bancorp, 110 F.Supp.3d 759, 764-65 (N.D. Ohio 2015), citing Comer, 454 F.3d at 546-47. For example, claims "unified by common theories of defendants' statutory violations" are sufficient to meet this threshold. Castillo v. Morales, Inc., 302 F.R.D. 480, 486 (S.D. Ohio 2014), quoting O'Brien, 575 F.3d at 585.

Defendants advocate the "modest 'plus' factual showing" based upon the discovery already undertaken in this litigation as well as that in Stallard. In cases where discovery is undertaken on the issue of conditional certification, many courts have adopted a "modest plus" factual showing or hybrid approach. See Creely v. HCR ManorCare, Inc., 789 F.Supp.2d 819, 823-27 (N.D. Ohio 2011) (collecting cases). This is in contrast to the "modest factual showing" standard utilized when little or no discovery has [*10] been undertaken on the issue of conditional certification. See Waggoner, 110 F.Supp.3d at 764-66.

At the Case Management Conference in this case, a discovery deadline was set for conditional certification issues. (Doc. No. 38). In light of the discovery undertaken on conditional certification in this case and the discovery conducted in the Stallard litigation, I find the "modest plus" standard to be applicable in this case. This requires an elevated factual showing, something beyond what is alleged in the pleadings and otherwise advancing the ball down the field beyond the pleadings.

The Defendants contend the collective plaintiffs are not similarly situated because their actual, day-to-day duties varied and there are significant differences in their actual experiences. Second, Defendants object the opt-in plaintiffs are similarly situated because they were not

2016 U.S. Dist. LEXIS 37056, *7


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subject to the same pay practices or policies as the proposed collective plaintiffs includes persons who were paid on a salaried basis as well as those paid on an hourly basis. Finally, the Defendants argue that unique defenses apply to some of the collective members, thereby negating conditional certification.

In this case, the complaint characterizes the collective [*11] action to include CSMs who were paid on a salary basis and were classified as exempt during the FLSA statutory period as follows:

5. Pursuant to corporate policy, Fifth Third classified its CSMs as exempt from overtime pay requirements even though, and in contravention of the FLSA, Plaintiff and other CSMs primarily perform duties that are non-exempt in nature, including: working on the teller line; taking and making telephone calls with customers; greeting customers in the lobby; taking information for loan applications; answering customer inquiries; and engaging in other customer service duties such as, for example, selling banking products, opening and closing accounts, pulling daily reports, and counting and balancing cash drawers.. . . .31. Plaintiff and other CSMs are similarly situated in that they have substantially similar job duties and are subject to Fifth Third's common compensation policies, patterns, and/or practices, including without limitation Fifth Third's misclassification of CSMs as exempt from the protections of the FLSA.. . . .

33. Pursuant to a centralized, company-wide policy, pattern and/or practice, Defendants classified all CSMs and other similarly situated [*12] current and former employees holding comparable positions but different titles, as exempt from coverage of the overtime provisions of the FLSA.. . . .37. Fifth Third failed to pay Plaintiff and the Collective Action Members for all hours worked as well as overtime compensation for the hours they worked over 40 in a workweek due to the policy of classifying CSMs company-wide as exempt.. . . .42. Fifth Third has intentionally, willfully, and regularly engaged in a company-wide policy, pattern, or practice of violating the FLSA with respect to Plaintiff and the Collective Action Members, which was authorized, established, promulgated, and/or ratified by Fifth Third's corporate headquarters. This policy, pattern or

practice includes but it's not limited to:a. willfully failing to record all of the time the Plaintiff and the Collective Action Members have worked for the benefit of Fifth Third;b. willfully failing to keep accurate time records as required by the FLSA or applicable state wage and hour laws;c. willfully failing to credit Plaintiff and the Collective Action Members for all hours worked including overtime hours, consistent with the requirements of the FLSA;

d. willfully failing [*13] to pay Plaintiff and the Collective Action Members wages for all hours worked including overtime wages for hours worked in excess of 40 hours per workweek;e. willfully classifying Plaintiff and the Collective Action Members as exempt despite their primary duties being non-exempt in nature; andf. failing to provide sufficient resources in the labor budgets for non-exempt employees to complete all of the non-exempt tasks in each bank, when Defendants knew or recklessly disregarded the fact that failing to provide sufficient resources in bank labor budgets resulted in Plaintiff and other similarly-situated CSMs (who were not paid overtime) to work more than 40 hours in a workweek and primarily perform non-exempt duties during their workweeks, without receiving overtime compensation—which allowed Defendants to avoid paying additional wages (including overtime) to the non-exempt bank-level employees.

(Complaint, Doc. No. 1).

Plaintiffs also attach a copy of the CSM job description (Doc. No. 33-6), the transcripts of two of Defendants' Rule 30(b)(6) witnesses (Doc. No. 33-3 and 33-5), and all items submitted in the Stallard litigation. The declarations of opt-in plaintiffs include those of Misty McGregor [*14] (Doc. No. 33-8) and Cynthia Sipos (Doc. No. 33-9). Also submitted are depositions, opt-in notices, proposed notices, and all orders from the Stallard litigation.

Of significance to this determination is the deposition of Sandra Holzgen, Defendants' corporate representative, taken in the Stallard litigation. While being questioned about the individual responsibilities of CSMs, Holzgen was asked:

Q: How is the job performance of CSMs measured?A: There are goals that are set up for each- - for that position, for the CSM position, and they're measured based on the responsibilities of the role.

2016 U.S. Dist. LEXIS 37056, *10


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Q: And the responsibilities of the role are what you just previously testified to?A: Yes.Q: And those are the primary duties of all CSMs, correct?A: They're - - you know, because we have such a wide network of distribution in our CSMs and we have CSMs that have different skill levels across our organization, some CSMs may be involved in different projects or in different duties.

The primary responsibilities are the same for all CSMs. The day-today responsibilities are - - are the same.Q: Okay. And is this the - - is a form used to - - like for performance evaluations of CSMs?A: Correct.

Q: And is - - [*15] is it the performance management form?A: Yes.Q: Okay. Okay. And it's the same form that's used throughout the country for all CSM's?A: The form is the same.Q: And regardless of the location or state in which a CSM works, they use the same performance evaluation form, correct?

A: They use the same evaluation form.

(Doc. No. 33-3, pp. 93-94) (Emphasis added). Holzen also testified that there was a singular job description for all CSMs regardless of their location. (Id. at pp. 76-78); (Doc. No. 33-6).

At the initial certification stage, the putative collective positions must be shown to be "similar, not identical, to the positions held by the putative class members." Lewis v. Huntington Nat. Bank, 789 F.Supp.2d 863, 867-68 (S.D. Ohio 2011). The Defendants' corporate representative's deposition testimony undercuts Defendants' argument that the collective plaintiffs were not similarly situated. Testimony which supports the similarity of CSM day-to-day duties, a singular job description adopted by the Defendants for this position, and utilization of the same evaluation form for all CSMs is more than sufficient to meet the "modest plus" showing in this instance. I also agree with Judge Hornak's finding, "[w]here, as here, there has been some discovery aimed at these matters, arguably an [*16] incrementally higher standard applies, but it is not so substantially greater as to convert the question before the court to one involving a dispositive merits resolution of the issues at hand." Stallard, 2013 U.S.

Dist. LEXIS 186531 at *2 (W.D. Pa. 2013).

Defendants' second argument challenging similarly situated opt-in plaintiffs takes aim at those CSMs who were paid on a salaried basis as well as those paid on an hourly basis. Plaintiffs state they are only seeking to certify a collective action for those CSMs who were paid a salary and classified as exempt during the FLSA statutory period. (Doc. No. 40 at p.5). There appears to be no dispute the Defendants reclassified all CSMs from exempt to non-exempt in the fall of 2014.2 Thus, the Defendants' second argument for a collective class containing both salaried and hourly employees is without merit as the collective action is limited to those CSMs who were paid a salary.

The Defendants' third argument regarding the "unique defenses" by putative class members is likewise of little moment. A determination on conditional certification is not final and is subject to decertification. The Defendants' reliance on Frye v. Baptist Memorial Hospital, Inc., 495 Fed. Appx. 669 (6th Cir. 2012) is misplaced as Frye concerned a decertification ruling, something not yet before this Court. "At the notice stage, district courts within the Sixth Circuit typically do not consider the merits of the plaintiff's claims, resolve factual disputes, make credibility determinations, or decide substantive issues." Swigart v. Fifth Third Bank, 276 F.R.D. at 214, n7. See also Waggoner, 110 F.Supp.3d at 769 (declining to consider evidence of employee exempt status as it was a merits determination).

2. Proposed Scope and Form of Notice

Plaintiffs request notice "issue to Fifth Third CSMs who were classified as exempt from overtime at any time from May 7, 2012 to the date Fifth Third reclassified the CSM position as nonexempt and started paying CSMs overtime wages (excepting, as noted, those CSMs whose claims were entirely resolved in Stallard)." (Doc. No. 33 at p. 14). In contrast the Defendants advocate the three year period from the date the notice itself is

2 In her declaration, Defendants' Vice President and Employee Relations Advisor, Meaghan Ruehl, stated, "[b]eginning in September 2014, however, Fifth Third re-classified its CSMs as non-exempt employees and began to pay them on an hourly basis, including overtime at the rate of one and one half times their regular rate for any hours worked [*17] over 40 per week."

(Doc. No. 39-2 at ¶ 5).

2016 U.S. Dist. LEXIS 37056, *14


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sent. (Doc. No. 39 at p. 19).

Over [*18] the Defendants' objections, I will allow the time period three years prior to the filing of the motion for conditional certification. Defendants object to any reference to the previous litigation arguing it is potentially prejudicial. I am not convinced prejudice inures to either side on this issue but will allow counsel for the parties a brief opportunity to meet and confer. If the parties are unable to come to a resolution on this issue, the Plaintiff's proposed notice will be adopted.

IV. PLAINTIFFS' MOTION FOR EQUITABLE TOLLING

Plaintiff also moves for equitable tolling of the statute of limitations to protect the interests of potential opt-in plaintiffs. The Defendants oppose equitable tolling as premature and object that Plaintiffs have not established extraordinary circumstances to justify departing from the plain mandate of the statute. I disagree.

Equitable tolling "allows courts to toll a statute of limitations when a 'litigant's failure to meet a legally-mandated deadline unavoidably arose from circumstances beyond that litigant's control." Robertson v. Simpson, 624 F.3d 781, 783 (6th Cir. 2010). The party invoking equitable tolling bears the burden of establishing entitlement to this legal doctrine. Struck v. PNC Bank N.A., 931 F.Supp.2d 842, 846 (S.D. Ohio 2013) citing Allen v. Yukins, 366 F.3d 396, 401 (6th Cir. 2004). The doctrine of equitable [*19] tolling is typically used "only sparingly." See Irwin v. Dep't of Veteran Affairs, 498 U.S. 89, 90, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990). Moreover, a decision on equitable tolling "lies solely within the discretion of the trial court." Baden-Winterwood v. Life Time Fitness, 484 F.Supp.2d 822, 826 (S.D. Ohio 2007), citing Truitt v. City of Wayne, 148 F.3d 644, 648 (6th Cir. 1998).

The Sixth Circuit has listed five factors for consideration in an equitable tolling analysis:

(1) The petitioner's lack of [actual] notice of the filing requirement; (2) the petitioner's lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to the respondent; and (5) the petitioner's reasonableness in remaining ignorant of the legal requirement for filing his claim.

Cook v. Comm'r of Social Security, 480 F.3d 432, 437 (6th Cir. 2007). This is not a comprehensive list nor are all these factors necessarily relevant in every case.

Allen v. Yukins, 366 F.3d at 401. Rather, the appropriateness of equitable tolling "is determined on a case-by-case basis." Truitt v. City of Wayne, 148 F.3d at 648.

The Defendants argue such relief is premature as the Plaintiffs are not asking for relief on their own behalf but on behalf of the potential opt-in plaintiffs. Certainly a number of district courts have rejected equitable tolling on those very grounds. See Atkinson v. TeleTech Holdings, Inc., 2015 U.S. Dist. LEXIS 23630, 2015 WL 853234 (S.D. Ohio 2015); In re Amazon.com, Inc., Fulfillment Center Fair Labor Standards Act and Wage and Hour Litigation, 2014 U.S. Dist. LEXIS 100716, 2014 WL 3695750 (W.D. Ky. 2014). Other courts have tolled the statute of limitations for potential opt-in FLSA plaintiffs. Struck, 931 F.Supp.2d at 846-49; Baden-Winterwood v. Life Time Fitness, 484 F.Supp.2d 822 (S.D. Ohio 2007); Engle v. Burlington Coat Factory Direct Corp., 2013 U.S. Dist. LEXIS 130513, 2013 WL 5177184 (S.D. Ohio 2013); Thompson v. Direct General Consumer Products, Inc., 2014 U.S. Dist. LEXIS 28912, 2014 WL 884494 (M.D. Tenn. 2014). See also, Chime v. Peak Security Plus, Inc., 137 F.Supp.3d 183, 2015 U.S. Dist. LEXIS 131727, 2015 WL 5773951 (E.D. N.Y. 2015); Putnam v. Galaxy 1 Marketing, Inc., 276 F.R.D. 264 (S.D. Iowa 2011). See e.g., Bradford v. Logan's Roadhouse, Inc., 137 F.Supp.3d 1064, 2015 U.S. Dist. LEXIS 134726, 2015 WL 5794545 (N.D. Tenn. 2015) (declining to rule on tolling as [*20] it was an underdeveloped issue at that juncture of the proceedings).

While this issue is the subject of debate among some of my trial court colleagues in this Circuit, I find there is a valid reason to allow limited equitable tolling in this case. As noted by the Sixth Circuit, "[t]he propriety of equitable tolling must necessarily be determined on a case-by-case basis." Truitt, 148 F.3d at 648.

Here, Plaintiffs broached the subject of tolling at the initial Case Management Conference on April 8, 2015, with no interest from the Defendants. On May 7, 2015, Plaintiffs moved for conditional certification and the motion was fully briefed as of August 13, 2015. Six months after filing its motion on conditional certification, Plaintiffs moved for equitable tolling of the statute of limitations. This situation represents a delay beyond the movant's control and exhibits the Plaintiffs' diligence. In addition, as the movants sought an agreement on tolling from the outset of this litigation, the Defendants can hardly complain of prejudice in this case.

2016 U.S. Dist. LEXIS 37056, *17


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Under these specific circumstances, I find the relevant factors tipping the balance in favor of equitable tolling. See Struck, 931 F.Supp2d, at 846-49. See also Putnam v. Galaxy 1 Marketing, Inc., 276 F.R.D. at 276 (allowing tolling from date [*21] certification motion filed to the outset of the notice period); Jackson v. Bloomberg L.P., 298 F.R.D. 152, 170 (S.D.N.Y. 2014) (equitable tolling granted where plaintiff moved quickly for conditional certification and the motion was fully briefed for over seven months). The statute of limitations in this case is tolled from May 7, 2015 until ten (10) days following the issuance of this Order.

V. CONCLUSION

For the reasons stated above, Plaintiffs' motion for conditional certification (Doc. No. 33) is granted. Plaintiffs' motion for equitable tolling (Doc. No. 42) is also granted. The statute of limitations is tolled from May 7, 2015 until ten (10) days after the issuance of the present Order.

Finally, this matter is scheduled for a telephonic status conference on April 7, 2016 at 11:00 AM. Counsel to call the bridge line at (877) 411-9748, Access Code 1231873.

So Ordered.

/s/ Jeffrey J. Helmick


JUDGMENT ENTRY

For the reasons stated in the Memorandum Opinion and Order filed contemporaneously herewith, it is Ordered that Plaintiffs' motion for conditional certification (Doc. No. 33) is granted;

It is Further Ordered that Plaintiffs' motion for equitable tolling (Doc. No. 42) is granted and the statute of limitations is tolled [*22] from May 7, 2015 until ten (10) days after the entry of this Memorandum Opinion and Judgment Entry.

It is Further Ordered that a telephonic status conference is scheduled for April 7, 2016 at 11:00 AM. Counsel to call the bridge line at (877) 411-9748, Access Code 1231873.

/s/ Jeffrey J. Helmick


End of Document

2016 U.S. Dist. LEXIS 37056, *20


Ruffin v. Entm't of the E. Panhandle

United States District Court for the Northern District of West Virginia

January 5, 2012, Decided; January 5, 2012, Filed

Civil Action No. 3:11-CV-19


PATRICE RUFFIN, a/k/a "KARMA," Plaintiff, v. ENTERTAINMENT OF THE EASTERN PANHANDLE, d/b/a THE LEGZS CLUBS, et al., Defendants.

Subsequent History: Motion granted by, in part, Motion denied by, in part Ruffin v. Entm't of the E. Panhandle, 2012 U.S. Dist. LEXIS 29835 (N.D. W. Va., Mar. 7, 2012)

Prior History: Ruffin v. Entm't of the Eastern Panhandle, 2011 U.S. Dist. LEXIS 135609 (N.D. W. Va., Nov. 23, 2011)

Counsel: [*1] For Patrice Ruffin, also known as Karma, Plaintiff: Garry G. Geffert, LEAD ATTORNEY, Garry G. Geffert, Attorney at Law, Martinsburg, WV; Gregg C. Greenberg, LEAD ATTORNEY, PRO HAC VICE, The Zipin Law Firm, LLC, Silver Spring, MD.

For Entertainment of the Eastern Panhandle, Inc., doing business as The Legz Clubs, The Legz Club, Inc., Legz Morgan Town, Inc., doing business as The Legz Clubs, Troy W. Erickson, Defendants: Harry A. Smith, III, LEAD ATTORNEY, McNeer, Highland, McMunn & Varner, LC - Elkins, Elkins, WV; J. Michael Murray, Raymond Vasvari, LEAD ATTORNEYS, PRO HAC VICE, Berkman, Gordon, Murray & DeVan - Cleveland, Cleveland, OH.

For T. Weston, Inc., doing business as Legz Gold Club, Defendant: Harry A. Smith, III, LEAD ATTORNEY, McNeer, Highland, McMunn & Varner, LC - Elkins, Elkins, WV.

For Entertainment of the Eastern Panhandle, Inc., The Legz Club, Inc., Legz Morgan Town, Inc., Troy W. Erickson, Counter Claimants: Harry A. Smith, III, LEAD ATTORNEY, McNeer, Highland, McMunn & Varner, LC - Elkins, Elkins, WV; J. Michael Murray, Raymond Vasvari, LEAD ATTORNEYS, PRO HAC VICE, Berkman, Gordon, Murray & DeVan - Cleveland, Cleveland, OH.

For Patrice Ruffin, Counter Defendant: Garry [*2] G. Geffert, LEAD ATTORNEY, Garry G. Geffert, Attorney

at Law, Martinsburg, WV; Gregg C. Greenberg, LEAD ATTORNEY, PRO HAC VICE, The Zipin Law Firm, LLC, Silver Spring, MD.

For The Legz Club, Inc., Troy W. Erickson, Entertainment of the Eastern Panhandle, Inc., Legz Morgan Town, Inc., Counter Claimants: Harry A. Smith, III, LEAD ATTORNEY, McNeer, Highland, McMunn & Varner, LC - Elkins, Elkins, WV; J. Michael Murray, Raymond Vasvari, LEAD ATTORNEYS, Berkman, Gordon, Murray & DeVan - Cleveland, Cleveland, OH.

For T. Weston, Inc., Counter Claimant: Harry A. Smith, III, LEAD ATTORNEY, McNeer, Highland, McMunn & Varner, LC - Elkins, Elkins, WV.

For Patrice Ruffin, Counter Defendant: Garry G. Geffert, LEAD ATTORNEY, Garry G. Geffert, Attorney at Law, Martinsburg, WV; Gregg C. Greenberg, LEAD ATTORNEY, The Zipin Law Firm, LLC, Silver Spring, MD.

Judges: JOHN PRESTON BAILEY, UNITED STATES DISTRICT JUDGE.

Opinion by: JOHN PRESTON BAILEY

Opinion

ORDER GRANTING PLAINTIFF'S MOTION FOR EQUITABLE TOLLING OF THE FLSA STATUTE OF LIMITATIONS

Pending before this Court is the plaintiff's Motion for Equitable Tolling of the FLSA Statute of Limitations [Doc. 60], filed December 30, 2011. Specifically, the plaintiffs ask this Court to toll [*3] the statute of limitations for claims arising under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., pending a decision on the plaintiff's Motion to Facilitate Identification and Notification of Similarly Situated Employees [Doc. 27]. For the reasons that follow, this Court concludes that the plaintiff's motion should be


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GRANTED.

BACKGROUND

In this action, plaintiff Patrice Ruffin a/k/a "Karma" ("Ruffin"), an exotic dancer, has sued her former exotic dance club, Entertainment of the Eastern Panhandle, Inc., d/b/a The Legz Clubs, among others (the "defendants"), for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., and West Virginia Wage Payment and Collection Act ("WPCA"), W.Va. Code § 21-5-1, et seq. [Doc. 48]. Regarding the FLSA, Ruffin claims that though she was treated as an employee, she was not paid a minimum wage. (Id. at ¶¶ 42-49). In this regard, Ruffin has filed a Motion to Facilitate Identification and Notification of Similarly Situated Employees [Doc. 27], which asks this Court to, inter alia, conditionally certify her FLSA claim as a collective action pursuant to 29 U.S.C. § 216(b).

The defendants have asserted the following four [*4] counterclaims: (1) conversion, (2) breach of contract, (3) fraud, and (4) unjust enrichment / accounting [Doc. 52]. The claims seek either an offset against any award of wages by the amount of private and semi-private performance fees Ruffin was allowed to keep as a result of allegedly electing to be classified as an independent contractor, or the return of those private and semi-private performance fees. (Id. at 26-27). The defendants also seek an accounting of the private and semi-private performance fees retained by Ruffin and the tips collected by Ruffin. (Id. at 27). Subsequently, this Court dismissed the defendants' claims for conversion, fraud, and an accounting, while allowing their claims for breach of contract and unjust enrichment to proceed "to the extent that they seek an offset of performance fees against any award of minimum wages, assuming the defendants can prove that those performance fees constituted service charges as opposed to tips." ([Doc. 53] at 10).

Shortly thereafter, this Court ordered that a status conference be held at which counsel agreed that a setoff could have an impact on the viability of Ruffin's FLSA claim [Doc. 59]. As a result, the Court concluded [*5] that the setoff issue should be decided prior to any determination of whether an FLSA should be conditionally certified. Accordingly, the Court ordered the plaintiff to file a motion for partial summary judgment on the FLSA setoff issue on or before January 16, 2012, while permitting the defendants to file a response on or before February 28, 2012. (Id. at 1). As a final matter,

Ruffin's counsel noted their concern that the claims of putative similarly-situated plaintiffs would become untimely before the FLSA setoff issue reached a resolution. As a solution, Ruffin's counsel proposed that the Court apply equitable tolling. Accordingly, the Court ordered the plaintiff to brief the equitable tolling issue by December 30, 2011. (Id. at 2).

On December 30, 2011, Ruffin filed the instant Motion for Equitable Tolling of the FLSA Statute of Limitations [Doc. 60]. In support of her motion, Ruffin argues that equitable tolling should be applied when claims of absent class members would otherwise be lost due to delays in adjudicating whether conditional certification should be granted. ([Doc. 61] at 6-7).

DISCUSSION

I. Applicable Standard

"By statute, the limitations period for an opt-in plaintiff [*6] continues to run until the plaintiff files a written consent to join the action. 29 U.S.C. § 256(b). Nevertheless, the FLSA statute of limitations, like any other federal limitations period, is subject to the doctrine of equitable tolling." Beetler v. Trans-Foam, Inc., 2011 U.S. Dist. LEXIS 141349, 2011 WL 6130805, *4 (N.D. Ohio Dec. 8, 2011) (citing Hughes v. Region VII Area Agency on Aging, 542 F.3d 169, 187-88 (6th Cir. 2008)). "The doctrine applies 'only when a litigant's failure to meet a legally-mandated deadline unavoidably arose form circumstances beyond the litigant's control.'" Id. (quoting Graham-Humphreys v. Memphis Brooks Museum of Art, Inc., 209 F.3d 552, 560-61 (6th Cir. 2000)). Finally, "[a] plaintiff bears the burden to demonstrate why he is entitled to equitable tolling of the statute of limitations." Id. (citing Roberts v. Simpson, 624 F.3d 781, 784 (6th Cir. 2010); Allen v. Yukins, 366 F.3d 396, 401 (6th Cir. 2004)).

II. Analysis

In the instant motion, Ruffin contends that this Court should toll the FLSA statute of limitations until it resolves her Motion to Facilitate Identification and Notification of Similarly Situated Employees. For the reasons that follow, this Court agrees.

"Several courts [*7] have allowed equitable tolling of FLSA claims where the case's litigation posture has delayed the court's consideration of the motion for

2012 U.S. Dist. LEXIS 1511, *3


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conditional certification and notice. See e.g., Stickle v. SCI Western Mkt. Support Ctr., L.P., 2009 U.S. Dist. LEXIS 97735, 2008 WL 4446539, *21-22 (D. Ariz. Sept. 30, 2008) (equitably tolling the FLSA statute of limitations where court delaying ruling on the plaintiffs' collective action pending determination of defendant's motion to dismiss); Adams v. Tyson Foods, Inc., 2007 U.S. Dist. LEXIS 38511, 2007 WL 1539325, *2 (W.D. Ark. May 25, 2007) (tolling the statute of limitations pending a decisions by the MDL panel whether to transfer the case); Beauperthuy v. 24 Hour Fitness USA, Inc., 2007 U.S. Dist. LEXIS 21315, 2007 WL 707475, *8 (N.D. Cal. Mar. 6, 2007) (equitably tolling FLSA statute of limitations because of factors outside plaintiff's control, including litigation and the competition between attorneys that occurred during the settlement of related action)." Perez v. Comcast, 2011 U.S. Dist. LEXIS 136953, 2011 WL 5979769, *2 (N.D. Ill. Nov. 29, 2011); see also Helton v. Factor 5, Inc., 2011 U.S. Dist. LEXIS 136170, 2011 WL 5925078, *2 (N.D. Cal. Nov. 28, 2011) (equitably tolling FLSA statute of limitations pending decision on plaintiffs' motion for conditional certification).

Like the [*8] cases listed above, this action presents a proper situation in which to apply the doctrine of equitable tolling. Ruffin moved for conditional certification on August 26, 2011, which the parties fully briefed by September 23, 2011. However, this Court subsequently decided that the FLSA setoff issue should be resolved before determining whether conditional certification should be granted. As such, this Court ordered briefing scheduled to conclude on February 28, 2012. As a result, claims of putative opt-in plaintiffs could become time-barred before those potentially similarly-situated individuals receive notice of this action. This constitutes a circumstance beyond those individuals' control. Accordingly, this Court holds that the FLSA statute of limitations should be equitably tolled pending a determination on conditional certification.

CONCLUSION

For the foregoing reasons, this Court concludes that the plaintiff's Motion for Equitable Tolling of the FLSA Statute of Limitations [Doc. 60] should be, and hereby is, GRANTED. Accordingly, this Court hereby tolls the FLSA statute of limitations until such time as the Court renders a decision on the plaintiff's Motion to Facilitate Identification [*9] and Notification of Similarly Situated Employees [Doc. 27].

It is so ORDERED.

The Clerk is directed to transmit copies of this Order to all counsel of record herein.

DATED: January 5, 2012.

/s/ John Preston Bailey

JOHN PRESTON BAILEY

UNITED STATES DISTRICT JUDGE

End of Document

2012 U.S. Dist. LEXIS 1511, *7


Smith v. Lowe's Cos.

United States District Court for the Southern District of Ohio, Eastern Division

May 11, 2005, Decided

Civil Action 2:04-CV-774


JASON SMITH, et al., Plaintiffs, vs. LOWE'S COMPANIES, INC., et al., Defendants.

Subsequent History: Later proceeding at Smith v. Lowe's Home Ctrs., 2006 U.S. Dist. LEXIS 26686 (S.D. Ohio, May 5, 2006)

Disposition: [*1]

Counsel: For Jason Smith, on behalf of himself and all others similarly situated, Plaintiff: Robert E DeRose, II, Barkan+Neff, Columbus, OH; Sanford Alan Meizlish, Barkan & Neff - 2, Columbus, OH; Anthony Ray Reeves, Barkan & Neff, Tampa, FL; Joseph Mariotti, Paul Keeler, Coviello & Mariotti LLC, Scranton, PA; Mary D Walsh-Dempsey, Todd J O'Malley, O'Malley & Langan PC, Scranton, PA; Peter D Winebrake, Tujillo Rodriguez & Richard LLC, Philadelphia, PA.

For Gary L Austin, Rick Gressner, Jack W Angle, Robin L King, Wendell G Estep, Plaintiffs: Anthony Ray Reeves, Barkan & Neff, Tampa, FL; Joseph Mariotti, Paul Keeler, Coviello & Mariotti LLC, Scranton, PA; Mary D Walsh-Dempsey, Todd J O'Malley, O'Malley & Langan PC, Scranton, PA; Robert E DeRose, II, Barkan+Neff, Columbus, OH.

For Lowe's Home Centers, Inc, Defendant: Amy Poland Toepper, David L Christlieb, Garrison L Phillips, John A Ybarra, Littler Mendelson PC, Chicago, IL; David Anthony Kadela, Littler Mendelson PC - 2, Columbus, OH.

Judges: Magistrate Judge King. Gregory L. Frost, United States District Judge. [*2]

Opinion by: Gregory L. Frost

Opinion

OPINION AND ORDER

I. Background

On August 19, 2004, Plaintiff Jason Smith commenced this action against his employer, Lowe's Home Centers [hereinafter "Lowe's"], alleging that Lowe's failed to pay him appropriate overtime compensation under both federal and state law. The complaint seeks relief under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. [hereinafter "FLSA"], and asserts this claim on behalf of Jason Smith and other similarly situated employees as a collective action under § 16(b) of the FLSA, 29 U.S.C. § 216(b). Complaint, at PP31, 47-50. The complaint also seeks relief under the Ohio Minimum Wage Act, O.R.C. § 4111.01 et. seq. [herinafter "OMWA"], and asserts this claim on behalf of Jason Smith and other similarly situated employees as a traditional class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. Id., at PP32, 51-54. 1

[*3] According to the complaint, Lowe's has failed to pay full overtime benefits to a class of employees identified as "non-exempt salaried employees" such as department managers, assistant department managers and specialists. Id., at P16. It is alleged that these employees are regularly scheduled to work a minimum of 48 hours per week and are subject to Lowe's "Salaried Plus Overtime Eligible Compensation Plan." Id., at P18; Exhibit A, attached to Plaintiff's Motion for Expedited Discovery and Court-Supervised Notice to Potential Opt-In Plaintiffs [hereinafter "Plaintiff's Motion"]. The complaint alleges that Lowe's violated the FLSA and the OMWA by paying these employees overtime compensation pursuant to the "fluctuating workweek" method set forth in 29 C.F.R. § 778.114; according to Plaintiff, this method of payment enables employers to pay overtime premiums that are significantly less than the premiums that would

1 Since the institution of the action, additional individuals have joined as plaintiffs in the action.


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otherwise apply under the FLSA. 2 Complaint, at P22. An employer may utilize the fluctuating workweek method only if each of the following four conditions is satisfied: (1) the employee's hours of work must fluctuate from week [*4] to week; (2) the employee must receive a fixed salary that does not vary with the number of hours worked during the week (excluding overtime premiums); (3) the amount of salary must be sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours he or she works is greatest; and (4) the employer and employee must share a "clear mutual understanding" that the employer will pay that fixed salary regardless of the number of hours worked. O'Brien v. Town of Agram, 350 F.3d 279, 288 (1st Cir. 2003); 29 C.F.R. § 778.114. The complaint asserts that Lowe's has failed to satisfy the above conditions.

On October 13, 2004, Plaintiffs [*5] served Lowe's with an initial set of interrogatories seeking the identity, contact information and pertinent employment dates for each non-exempt salaried employee employed at Lowe's Ohio retail or warehouse establishments since August 19, 2001. Exhibit C, attached to Plaintiffs' Motion. The motion to expedite explains that this information is necessary in order to provide notice to all potential opt-in plaintiffs.

II. Application

A. Standard

Plaintiffs seek conditional class certification to pursue their claims and authorization to send notice of this lawsuit to potential opt-in plaintiffs pursuant to § 216(b) of the FLSA. Section 216(b) provides:

Action to recover…[for violation of § 207 of the FLSA] may be maintained against any employer…by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any 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

2 The regulations provide that overtime compensation is calculated pursuant to a fluctuating workweek plan at one-half the rate of the employee's salary calculated as straight time compensation for all hours worked. See 29 C.F.R. § 778.114(a).

brought.

29 U.S.C. § 216(b). Therefore, "to be bound by the judgment" or "benefit from it, [*6] " potential plaintiffs must "opt-in" to an FLSA collective action, and only by "opting-in" can potential plaintiffs' claims be tolled. 3 Hoffman v. Sbarro, Inc., 982 F. Supp. 249, 260 (S.D.N.Y. 1997). The United States Supreme Court has made it clear that the collective action provisions of the FLSA authorize a district court to issue court-supervised notice to potential class members. Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 169, 107 L. Ed. 2d 480, 110 S. Ct. 482 (1989) ("District courts have discretion…to implement [§ 216(b)]…by facilitating notice to potential plaintiffs"). Notice at an early stage of litigation is appropriate to further the FLSA's broad remedial goals and to promote efficient case management. Id., at 169-171; Braunstein v. Eastern Photographic Labs, Inc., 600 F.2d 335, 336 (2nd Cir. 1978) (notification of putative plaintiffs "comports with the broad remedial purpose of the Act, which should be given a liberal construction, as well as with the interest of the courts in avoiding multiplicity of suits").

[*7] The strict requirements of Rule 23 of the Federal Rules of Civil Procedure do not apply to FLSA collective actions. Miklos v. Golman-Hayden Cos., 2000 U.S Dist. LEXIS 22352, 2000 WL 1617969, at *1 (S.D. Ohio 2000); Hoffman, 982 F. Supp. at 263. Thus, no showing of numerosity, typicality, commonality, and representativeness is required. Id. Instead, the only threshold requirement plaintiffs must meet is to demonstrate that potential class members are "similarly situated." 29 U.S.C. § 216(b). Although the FLSA does not define this term, courts have held that "plaintiffs need show only that their positions are similar, not identical, to the positions held by the putative class members." Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988), aff'd in part and appeal dismissed in part, 862 F.2d 439 (3rd Cir. 1988); aff'd, 493 U.S. 165, 107 L. Ed. 2d 480, 110 S. Ct. 482 (1989); Prichard v. Dent Wizard International Corp., 210 F.R.D. 591, 595 (S.D. Ohio 2002); Viciedo v. New Horizons Computer, Learning Center of Columbus, Ltd., 2:01-cv-250 (S.D. Ohio 2001).

[*8] Plaintiffs bear the burden of establishing that they

3 Unlike a Rule 23 class action, the commencement of a representative action under § 216(b) does not toll the running of the 2-3 year statute of limitations period applicable to FLSA actions. See 29 U.S.C. § 256(b); Cahill v. City of New Brunswick, 99 F. Supp. 2d 464, 479 (D.N.J. 2000).

2005 U.S. Dist. LEXIS 9763, *3


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and the class they wish to represent are similarly situated. See Grayson v. K Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996). Most courts hold that the determination of whether FLSA claimants are "similarly situated" for the purposes of § 216(b) is a two-step procedure. De Asencio v. Tyson Foods, Inc., 130 F. Supp. 2d 660, 663 (E.D. Pa. 2001), Briggs v. United States, 54 Fed. Cl. 205, 206 (2002). The first step, which is generally conducted early in the litigation process, is a preliminary inquiry into whether the plaintiffs' proposed class is constituted of similarly-situated employees. de Asencio, 130 F. Supp. 2d at 663; Briggs, 54 Fed. Cl. at 206. The second step, which is usually conducted after the completion of class-related discovery, is a specific factual analysis of each employee's claim to ensure that each actual claimant is appropriately made party to the suit. De Asencio, 130 F. Supp. 2d at 663, Briggs, 54 Fed. Cl. at 206.

B. Application

Although Plaintiffs need not meet [*9] the Rule 23 standards for class certification, in order to create a conditional class under § 216(b), Plaintiffs must demonstrate that they and the class they wish to represent are "similarly situated." Plaintiffs request that the Court allow them to send notice of this lawsuit to all non-exempt salaried employees employed at Lowe's Ohio retail or warehouse establishments since August, 2001. Lowe's contends that Plaintiffs have not carried their burden of showing that the members of this class of potential plaintiffs are similarly situated to Plaintiffs.

The Sixth Circuit has not yet determined what standard to apply in considering whether potential class members are "similarly situated." Pritchard, 210 F.R.D. at 595; Viciedo, No. 2:01-cv-250 (S.D. Ohio 2001). However, "courts generally do not require prospective class members to be identical." Moss v. Crawford & Co., 201 F.R.D. 398, 409 (W.D. Pa. 2000). In the absence of appellate guidance, this Court looks to other districts and circuits, which have applied varying standards. "Some courts hold that a plaintiff can demonstrate that potential class members are 'similarly situated,' for purposes [*10] of receiving notice, based solely upon allegations in a complaint of class-wide illegal practices." 4 [*11] Pritchard, 210 F.R.D. at 595 (quoting

4 See, e.g.,; Goldman v. Radio Shack Corp., 2003 U.S. Dist. LEXIS 7611, 2003 WL 21250571, *8, (E.D. Pa. 2003) ("During this first-tier inquiry, we ask only whether the plaintiff and the

Belcher v. Shoney's, Inc., 927 F. Supp. 249, 251 (M.D. Tenn. 1996)). Other courts generally apply a more stringent, although nonetheless lenient, test that requires that plaintiff make a "modest factual showing" that the similarly situated requirement is satisfied. 5 Pritchard, 210 F.R.D. at 595-96; Belcher, 927 F. Supp. at 251. Courts requiring a factual showing "have considered factors such as whether potential plaintiffs were identified; whether affidavits of potential plaintiffs were submitted; and whether evidence of a widespread discriminatory plan was submitted." Pritchard, 210 F.R.D. at 596 (quoting H&R Block, Ltd. v. Housden, 186 F.R.D. 399, 400 (E.D. Tex. 1999) (citations omitted)).

[*12] In the case at bar, this Court concludes Plaintiffs have sufficiently alleged a collective action under § 216(b) of the FLSA to proceed with conditional certification. Plaintiffs have met their burden of showing that they are similarly situated to those whom they request to represent under either standard set forth above. Applying the less restrictive standard, i.e., mere allegations in the complaint of class-wide illegal practices, the Court concludes that Plaintiffs have sufficiently set forth allegations of Lowe's class-wide practice of not paying full overtime wages to its "non-exempt salaried employees." Applying the more restrictive standard, i.e., factual support for the class

proposed representative class members allegedly suffered from the same scheme."); De Asencio, 130 F. Supp. 2d at 663 ("Courts appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan." (internal quotations omitted)); Allen v. Marshall Field & Co., 93 F.R.D. 438, 442-45 (N.D. Ill. 1982).

5 See, e.g., Dyback v. Fla. Dep't of Corr., 942 F.2d 1562, 1567-68 (11th Cir. 1991) ("Before determining to exercise [its] power [to approve notice to potential plaintiffs], the district court should satisfy itself that there are other employees…who desire to 'opt-in' and who are 'similarly situated'…"); Mueller v. CBS, Inc., 201 F.R.D. 425, 428 (W.D. Pa. 2001) (requiring plaintiff to provide "a sufficient factual basis on which a reasonable inference could be made" that potential plaintiffs are similarly situated (internal quotations omitted)); Harper v. Lovett's Buffet, Inc., 185 F.R.D. 358, 362 (M.D. Ala. 1999) ("Plaintiffs have the burden of demonstrating that a reasonable basis for crediting their assertions that aggrieved individuals exist in the broad class that they propose."); Jackson v. New York, 163 F.R.D. 429, 431 (S.D.N.Y. 1995) ("Plaintiffs need merely to provide some factual basis from which the court can determine if similarly situated potential plaintiffs exist." (internal quotations omitted)); Briggs, 54 Fed. Cl. at 207 (requiring "modest factual showing that [plaintiffs] are similarly situated with other, un-named potential plaintiffs").

2005 U.S. Dist. LEXIS 9763, *8


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allegations in the complaint, the Court concludes that Plaintiffs have met this standard as well. The affidavits of the six opt-in Plaintiffs demonstrate that potential class members are "similarly situated." Each of the opt-in Plaintiffs purports to be similarly situated to Plaintiff Jason Smith; that he or she was required to work a minimum of 48 hours per week and that he or she did not have a clear understanding that his or her salary was fixed (excluding overtime premiums), despite the number [*13] of hours worked. See Affidavit of Consent of Gary L. Austin, at P4; Affidavit of Consent of Wendell G. Estep, at P8; Affidavit of Consent of Jack W. Angle, at P7; Affidavit of Consent of Rick Gressner, at P7; Affidavit of Consent of Robin L. King, at P7; and Affidavit of Consent of Ronald E. Roar, at P4. Plaintiffs also submit documentation outlining the job description of a specialist, assistant manager and manager. This documentation explains that employees in these positions are "generally scheduled [to work] for 48 hours [per week]." Exhibit A, attached to Plaintiff's Motion. Furthermore, Plaintiffs submit evidence that suggests that Lowe's implements its fluctuating workweek program pursuant to standard and company-wide policies and practices. Affidavit of Aleda Jo Howard, at P6, attached as Exhibit B to Plaintiffs' Motion.

Under the FLSA, the statute of limitations period continues to run against each potential class member until he or she formally elects to join the collective action. 29 U.S.C. § 256(b). For this reason, it is widely accepted that, at the notice stage of a § 216(b) collective action, the plaintiff's burden of establishing [*14] that he is similarly situated to potential opt-in class members is extremely light. See e.g., Cameron-Grant v. Maxim Healthcare Servs., 347 F.3d 1240, 1243 (11th Cir. 2003); Thiessen v. GE Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001); Mooney v. Aramco Services Co., 54 F.3d 1207, 1214 (5th Cir. 1995). At this early stage of the case, courts generally "examine the record and affidavits to determine whether notice should be given to potential plaintiffs." Clausman v. Nortel Networks, Inc., 2003 U.S. Dist. LEXIS 11501, 2003 WL 21314065, *3 (N.D. Ind. 2003) (citing Mosses v. Crawford & Co., 201 F.R.D. 398 (W.D. Pa. 2000)). "The standard at this time is 'fairly lenient' and often results in the 'conditional certification' of the class." Id. Plaintiffs have met this burden.

In light of the foregoing discussion, Plaintiffs' motion for expedited discovery and court-supervised notice to potential opt-in plaintiffs, Doc. No. 30, is GRANTED. It is hereby ORDERED that Defendant respond to the October 13, 2004 discovery requests within twenty (20)

days of the date of this Order. Furthermore, within ten (10) days [*15] of this Order, the parties shall submit to the Court proposed language for the notification and consent forms.

Date: 5/11/05

Gregory L. Frost


End of Document

2005 U.S. Dist. LEXIS 9763, *12


Stickle v. SCI Western Mkt. Support Ctr., L.P.

United States District Court for the District of Arizona

September 29, 2008, Decided; September 30, 2008, Filed

No. CV 08-083-PHX-MHM

Reporter2008 U.S. Dist. LEXIS 83315 *; 45 Employee Benefits Cas. (BNA) 2800

James Stickle; Eleanor Riggio; Frank Acuna; Joseph Biernacki; Gordon Farmer; Rhealyn Holland; Richard Lamasters; Kenneth Allen, et. al, on behalf of themselves and all employees similarly situated, Plaintiffs, vs. SCI Western Market Support Center, L.P. a/k/a SCI Western Market Support Center, Inc.; SCI Eastern Market Support Center, L.P.; SCI Houston Market Support Center, L.P.; SCI Funeral and Cemetery Purchasing Cooperative, Inc.; Service Corporation International; Jane D. Jones; Gwen Petteway; Thomas Ryan; Curtis Griggs; the SCI 401K Retirement Savings Plan; and Julie Douglas, Defendants.

Subsequent History: Class certification granted by, Motion to strike granted by Stickle v. SCI Western Mkt. Support Ctr., L.P., 2009 U.S. Dist. LEXIS 97735 (D. Ariz., Sept. 30, 2009)

Related proceeding at Anthony v. Serv. Corp. Int'l, 2011 U.S. Dist. LEXIS 38734 (W.D.N.C., Mar. 17, 2011)

Related proceeding at Tulip v. Serv. Corp. Int'l, 2014 Wash. App. LEXIS 526 (Wash. Ct. App., Mar. 10, 2014)

Prior History: Helm v. Alderwoods Group, Inc., 2008 U.S. Dist. LEXIS 111765 (N.D. Cal., July 22, 2008)

Counsel: [*1] For James Stickle, on behalf of himself and all employees similarly situated, Eleanor Riggio, on behalf of herself and all employees similarly situated, Frank Acuna, on behalf of himself and all employees similarly situated, Joseph Biernacki, on behalf of himself and all employees similarly situated, Gordon Farmer, on behalf of himself and all employees similarly situated, Rhealyn Holland, on behalf of herself and all employees similarly situated, Richard LaMasters, on behalf of himself and all employees similarly situated, Kenneth Allen, on behalf of himself and all employees similarly situated, Plaintiffs: Tod F Schleier, LEAD ATTORNEY, Bradley Hugh Schleier, Schleier Law Offices PC, Phoenix, AZ; Annette M Gifford, J Nelson Thomas, Justin M Cordello, Michael J Lingle, Patrick J Solomon, Dolin Thomas & Solomon LLP, Rochester, NY; Charles H Saul, Kyle Tice McGee, Liberty Jane Weyandt,

Margolis Edelstein, Pittsburgh, PA.

For SCI Western Market Support Center, L.P., also known as SCI Western Market Support Center, Inc., SCI Eastern Market Support Center, L.P., SCI Houston Market Support Center, L.P., SCI Funeral and Cemetery Purchasing Cooperative, Inc., Service Corporation International, [*2] The SCI 401K Retirement Savings Plan, Defendants: Amy E Dias, LEAD ATTORNEY, Jones Day, Pittsburgh, PA; Lonnie James Williams, LEAD ATTORNEY, Carrie Marie Francis, Quarles & Brady LLP, Phoenix, AZ; Matthew W Lampe, LEAD ATTORNEY, Jones Day, New York, NY.

For Jane D. Jones, Gwen Petteway, Thomas Ryan, Curtis Briggs, Defendants: David M Daniels, Nicholas P Forestiere, Steven H Gurnee, LEAD ATTORNEYS, Gurnee & Daniels LLP, Roseville, CA; Benjamin John Naylor, Quarles & Brady LLP, Phoenix, AZ.

For Julie Douglas, Defendant: David M Daniels, LEAD ATTORNEY, Gurnee & Daniels LLP, Roseville, CA; Benjamin John Naylor, Quarles & Brady LLP, Phoenix, AZ.

Judges: Mary H. Murguia, United States District Judge.

Opinion by: Mary H. Murguia

Opinion

ORDER

This action arises out of alleged violations of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., based on a purported failure to pay wages to certain employees of SCI subsidiary companies. Plaintiffs also asserts derivative claims for purported violations of the Employment Retirement Income Security Act, 29 U.S.C. § 1132(a)(3), 29 U.S.C. § 1104(a)(1), 29 U.S.C. § 1059(a)(1); and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., [*3] based on Defendants' alleged FLSA


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violations. The Complaint names as Defendants numerous entities and individuals, each of whom, Plaintiffs assert, was an employer, joint employer, or alter ego for purposes of the FLSA claim.

Presently pending before the Court are three Motions to Dismiss filed by various Defendants. Two motions seek dismissal of certain Defendants based on the lack of personal jurisdiction (Fed.R.Civ.P. 12(b)(2)), and on Plaintiffs' failure to state a claim upon which relief may be granted (Fed.R.Civ.P. 12(b)(6)). One of these motions has been filed by Defendants SCI Eastern Market Support Center, L.P., ("SCI Eastern") and SCI Houston Market Support Center, L.P. ("SCI Houston"). The second motion has been filed by individual Defendants Jane D. Jones, Gwen Petteway, Thomas Ryan, Curtis Briggs, and Julie Douglas (the "Individual Defendants").

The third motion is entitled "Motion to Dismiss or Strike pursuant to Fed.R.Civ.P. 12(b)(2), 12(b)(6), and 12(f)." This Motion was filed by Defendants Service Corporation International ("SCI"), SCI Funeral and Cemetery Purchasing Cooperative, Inc., ("the Cooperative"), SCI Western Market Support Center, L.P., ("SCI Western"), and [*4] SCI 401K Retirement Savings Plan (the "Plan").

Defendants' Motions to Dismiss have characteristics similar to a Motion for Summary Judgment, including the citation to documents outside the pleadings. However, the parties have all indicated they would like to proceed without converting the Motions to Dismiss to a Motion for Summary Judgment.

Also pending is Plaintiffs Motion for an Equitable Toll of the Statute of Limitations. All four Motions are fully briefed. In addition, the parties have submitted supplemental briefing regarding the compatibility of FLSA opt-in and Rule 23 opt-out actions in the same action. After reviewing all papers submitted and hearing oral argument, the Court issues the following Order.

BACKGROUND

This action arises out of alleged violations of the Fair Labor Standards Act of 1938, as amended, 29 US.C. §201 et seq. ("FLSA"), based on purported failures to pay wages to certain employees of subsidiary companies of Service Corporation International, a Texas corporation ("SCI"). Plaintiffs' Complaint also asserts derivative claims, two under the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §

1132(a)(3), 29 U.S.C. § 1104(a)(1), 29 U.S.C. § 1059(a)(1) [*5] -- one claim for failure to keep adequate records sufficient to determine benefits due and one claim for breach of fiduciary duty -- and a derivative claim under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., ("RICO"). The Complaint names as Defendants numerous entities and individuals, each of whom, Plaintiffs assert was an employer, joint employer or alter ego for purposes of the FLSA. (Compl. P 29).

In their Complaint, Plaintiffs assert that they worked for Defendants and were not paid their regular or statutorily required rate of pay for all hours worked and were not paid at time and a half for hours they worked over 40 hours a week. Plaintiffs claim it was Defendants' policy not to pay for certain compensable work Plaintiffs regularly performed. Plaintiffs provide the following examples of Defendants' policies and practices that Plaintiffs' argue have deprived Plaintiffs of their earned wages and wage premiums.

Subclass A: Defendants implemented an "On Call Pay Policy." Under the policy, employees perform work by handling calls and other work related issues after normal business hours, but Defendants did not compensate employees for all such "on [*6] call" work performed.

Subclass B: Defendants implemented a "Community Work Policy." Under the policy, Plaintiffs contend that employees performed "community work" so as to increase Defendants' revenues but that Defendants did not compensate the employees for such time spent in community work in furtherance of the employer's business under the "Community Work Policy."

Subclass C: Defendants implemented a "Training Compensation Policy." Under the policy, employees would take various types of training but Defendants did not pay for such training, despite having employees attend such training.

Subclass D: Defendants implemented a "Pre-Needs Appointment Policy." Plaintiffs contend that under this policy, employees would meet with clients to discuss pre-need purchases. To the degree that such appointments were not considered part of the employees' schedule, the employees were suffered or permitted to continue the appointments, but were not paid for such time worked under the "Pre-Needs Appointment Policy." Defendants' management have attempted to justify this policy on the grounds that the employee would likely receive a commission if the client

2008 U.S. Dist. LEXIS 83315, *3


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purchased a pre-needs product.

Subclass E: Defendants [*7] implemented a "Meal Break Deduction Policy." Under the policy, Defendants did not pay for meal breaks but would often have employees perform work during such meal breaks. Plaintiffs contend that time spent on meal "breaks" was deducted from the employee's pay even when Defendants suffered or permitted work to be performed during such "breaks."

Subclass F: Defendants implemented a "Pre-Approval for Overtime Pay Policy."Under this policy, Plaintiffs assert that Defendants only permitted payments for overtime if the overtime was pre-approved.

Subclass G: Defendants implemented an "Unrecorded Work Time Policy." Under this policy, Plaintiffs contend that employees performed work but their hours were not recorded. Plaintiffs claim that Defendants then refused to pay for the time worked under the "Unrecorded Work Time Policy" because, even though Defendants knew such time had been worked, it had not been "recorded."

Subclass H: Defendants' policy was to not include all remuneration (such as bonuses and commissions) in the calculation of Plaintiffs' overtime.

Plaintiffs further contend that Defendants failed to make, keep and preserve adequate and accurate records of the employment of Plaintiffs [*8] concerning their wages, hours and other conditions of employment. More specifically, the records kept by defendants failed to adequately and accurately disclose among other things, hours worked each work day, the total hours worked each work week and/or the total overtime compensation for each work week.

In addition, Plaintiffs assert that Defendants devised, intended to devise, and carried out a scheme to cheat Plaintiffs out of their property and to convert Plaintiffs' property, including their wages and/or overtime pay. Plaintiffs contend that Defendants' scheme consisted of illegally, willfully and systematically withholding or refusing to pay Plaintiffs their regular or statutorily required rate of pay for all hours worked in violation of federal law. In executing or attempting to execute the scheme, Plaintiffs assert that Defendants repeatedly mailed payroll checks, either directly to Plaintiffs or between Defendants' business locations. Plaintiffs assert that these mailings occurred on a regular basis and more than 100 such mailings occurred in the last 10 years.

In their Motions to Dismiss, SCI Eastern, SCI Houston, and the Individual Defendants contend that the Court lacks personal [*9] jurisdiction over them. Specifically, these Defendants claim they are non-residents of the State of Arizona with insufficient minimum contacts with the state and they have not purposefully availed themselves of the privilege of conducting activities in the state, such that personal jurisdiction over them cannot be established.

In their Motion to Dismiss, SCI, the Cooperative, and SCI Western claim that Plaintiffs cannot establish liability against them under the FLSA. SCI claims that it is a holding company with no employees, and therefore it is not liable under the FLSA. Similarly, the Cooperative and SCI Western claim that Plaintiffs have not alleged sufficient allegations to maintain an FLSA claim against them. These Defendants, along with the Plan, also claim that Plaintiffs' ERISA claims should be dismissed because they are "entirely dependent upon [Plaintiffs] FLSA claims and thus are unripe unless and until Plaintiffs first establish an FLSA violation. In addition, these Defendants claim that Plaintiffs' RICO claims should be dismissed because Plaintiffs' mail fraud allegations are entirely predicated on purported violations of wage and hour laws, which, Defendants claim, the [*10] Ninth Circuit has held cannot be maintained based on a failure to pay overtime. These Defendants also claim that Plaintiffs cannot maintain their Rule 23 class action allegations regarding their ERISA and RICO claims because the Rule 23 opt-out class is incompatible with Plaintiffs' proposed FLSA § 216(b) opt-in class, and Plaintiffs' ERISA and RICO claims are dependent upon finding an FLSA violation. In the same Motion to Dismiss, the Plan asserts that it should be dismissed because Plaintiffs have failed to assert a claim against it. Finally, SCI also argues that it should be dismissed for lack of personal jurisdiction.

DISCUSSION

I. PERSONAL JURISDICTION

A. LEGAL STANDARD -- RULE 12(B)(2)

Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, a defendant may move to dismiss for lack of personal jurisdiction. The plaintiff then bears the burden of demonstrating that jurisdiction exists. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d

2008 U.S. Dist. LEXIS 83315, *6


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797, 800 (9th Cir. 2004). The plaintiff "need only demonstrate facts that if true would support jurisdiction over the defendant." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995); Fields v. Sedgwick Assoc. Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986). [*11] Uncontroverted allegations in the complaint must be taken as true. AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996). However, the court may not assume the truth of such allegations if they are contradicted by affidavit. Data Disc, Inc. V. Systems Technology Associates, Inc., 557 F.2d 1280, 1284 (9th Cir. 1977). Conflicts in the evidence must be resolved in the plaintiff's favor. AT&T, 94 F.3d at 588.

If the material facts are controverted or if the evidence is inadequate, a court may permit discovery to aid in determining whether personal jurisdiction exists. Data Disc, Inc., 557 F.2d at 1285 n.1. If the submitted materials raise issues of credibility or disputed questions of fact, the district court has the discretion to hold an evidentiary hearing in order to resolve the contested issues. Id.

There are two independent limitations on the court's power to exercise personal jurisdiction over a non-resident defendant: the applicable state personal jurisdiction rule and constitutional principles of due process. Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990); Data Disc, Inc., 557 F.2d at 1286. Arizona's jurisdictional statute is co-extensive with federal due process [*12] requirements; therefore, jurisdictional inquiries under state law and federal due process standards merge into one analysis. Arizona's long-arm statute provides for personal jurisdiction to the extent permitted by the Due Process Clause of the United States Constitution. Ariz. R. Civ. P. 4.2(a); see also Uberti v. Leonardo, 181 Ariz. 565, 569, 892 P.2d 1354, 1358, cert. denied, 516 U.S. 906, 116 S. Ct. 273, 133 L. Ed. 2d 194 (1995) (stating that under Rule 4.2(a), "Arizona will exert personal jurisdiction over a nonresident litigant to the maximum extent allowed by the federal constitution").

The exercise of jurisdiction over a non-resident defendant violates the protections created by the due process clause unless the defendant has "minimum contacts" with the forum state such that the exercise of jurisdiction "does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L. Ed. 95 (1945). Personal jurisdiction may be either general or specific.

General jurisdiction exists where the defendant's contacts with the forum state are so substantial or continuous and systematic that jurisdiction exists even if the cause of action is unrelated to those contacts. [*13] Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). The standard for establishing general jurisdiction is "fairly high." Id.; Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986). The defendant's contacts must approximate physical presence in the forum state. Schwarzenegger, 374 F.3d at 801.

Specific jurisdiction exists where the cause of action arises out of or relates to a defendant's activities within the forum. Data Disc, Inc., 557 F.2d at 1286. Specific jurisdiction is analyzed using a three-prong test: (1) the non-resident defendant must purposefully direct its activities or consummate some transaction with the forum or a resident thereof; or perform some act by which it purposefully avails itself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or results from the defendant's forum-related activities; and (3) the exercise of jurisdiction must be reasonable. Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). Each of these conditions is required for asserting jurisdiction. Insurance Co. of N. Am. v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981).

A [*14] showing that a defendant "purposefully availed" itself of the privilege of doing business in a forum state typically consists of evidence of the defendant's actions in the forum, such as executing or performing a contract there. Schwarzenegger, 374 F.3d at 802. The requirement of purposeful availment ensures that the defendant should reasonably anticipate being haled into the forum state court based on its contacts. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L. Ed. 2d 490 (1980). The purposeful availment test is met where "the defendant has taken deliberate action within the forum state or if he has created continuing obligations to forum residents." Ballard, 65 F.3d at 1498.

The second prong of the specific jurisdiction test requires that the claim arise out of or result from the defendant's forum-related activities. A claim arises out of a defendant's conduct if the claim would not have arisen "but for" the defendant's forum-related contacts. Panavision Int'l v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998).

2008 U.S. Dist. LEXIS 83315, *10


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Once the plaintiff has satisfied the first two prongs, the defendant bears the burden of overcoming a presumption that jurisdiction is reasonable by presenting a [*15] compelling case that specific jurisdiction would be unreasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 85 L. Ed. 2d 528 (1985); Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392, 1397 (9th Cir. 1986). Seven factors are considered in assessing whether the exercise of jurisdiction over a non-resident defendant is reasonable: (1) the extent of the defendant's purposeful interjection into the forum state's affairs, (2) the burden on the defendant, (3) conflicts of law between the forum state and the defendant's home jurisdiction, (4) the forum state's interest in adjudicating the dispute, (5) the most efficient judicial resolution of the dispute, (6) the plaintiff's interest in convenient and effective relief, and (7) the existence of an alternative forum. Caruth v. International Psychoanalytical Ass'n, 59 F.3d 126, 128 (9th Cir. 1995); Roth v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991).

A defendant may move, prior to trial, to dismiss the complaint for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). The mode of its determination is left to the trial court. See Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S. Ct. 725, 83 L. Ed. 1111 (1939). The limits the district judge imposes [*16] on the pre-trial proceedings will affect the burden the plaintiff is required to meet. Data Disc, 557 F.2d at 1285. For example, if the court requires only affidavits or affidavits and discovery materials, then a plaintiff must make only a prima facie showing of jurisdiction to overcome a defendant's motion to dismiss. Id. (citation omitted).

This is not to say that a prima facie showing alone guarantees a trial on the merits. If the materials received by the court reveal controverted questions of fact and issues of credibility bearing on the jurisdictional question, the court may, in its discretion, resolve the disputed issues with the aid of additional evidence taken at a preliminary hearing. Id. at 1285. At that time, the plaintiff is required to establish jurisdiction by a preponderance of the evidence. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S. Ct. 780, 80 L. Ed. 1135 (1936).

B. ANALYSIS

SCI Eastern, SCI Houston, and the Individual Defendants have moved to dismiss the case against them arguing that this Court lacks personal jurisdiction

over them because they have essentially no contact with the State of Arizona and have done nothing to avail themselves of any rights or benefits accorded [*17] under Arizona law. Further, these Defendants assert that they have not attempted to or consummated any business in the state, nor have they initiated litigation or otherwise sought the benefits or protections of the laws of the state. Finally, these Defendants contend they have not been regularly present in the state for any purpose. These Defendants argue, therefore, the purposeful availment prong has not been met and the Court cannot exercise jurisdiction over them.

The Plaintiffs concede that this Court lacks general jurisdiction over SCI Eastern, SCI Houston, and the Individual Defendants.

Regarding specific jurisdiction, Plaintiffs contend that Defendants purposefully directed activities within the State of Arizona. Plaintiffs assert that the Court should consider the substance, rather than the forum, of the activities alleged in determining personal jurisdiction. See Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392, 1398 (9th Cir. 1986). Plaintiffs claim that wage and hour cases, like the instant case, warrant consideration of the effects of Defendants' conduct as opposed to the location where that conduct occurred. See El-Hakem v. BJY, Inc., 2001 U.S. Dist. LEXIS 12613, 2001 WL 34043760 at *3 (D. Or. August 15, 2001) [*18] (purposeful availament "is satisfied when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state"); Chao v. Benitez Drywall, LLC, 2007 U.S. Dist. LEXIS 17380, 2007 WL 781760 at *4 (S.D. Tex. 2007) (using the quality and nature of a nonresident's contacts with the forum state, rather than the number of contacts, in determining specific jurisdiction).

1. SCI EASTERN AND SCI HOUSTON

SCI Eastern and SCI Houston claim that Plaintiffs cannot prove any of the facts required for this Court to assert personal jurisdiction over them. Defendants contend that Plaintiffs have proffered no evidence that either SCI Eastern or SCI Houston were involved in creating, adopting, or enforcing any of the employment policies complained of in Plaintiffs' Complaint.

In support of their position, Defendants point to the declarations of Robert Pisano and Jane Petteway filed in support of SCI Eastern and SCI Houston, which state

2008 U.S. Dist. LEXIS 83315, *14


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that SCI Eastern and SCI Houston: (1) never entered into any contracts, employment or otherwise, with any of the Plaintiffs in this action; (2) never employed or supervised the employment of any of the Plaintiffs; and (3) never [*19] provided any management, administrator, counting, data processing, or human resource services within the State of Arizona or to any business entity doing business in the State of Arizona.

In an effort to contradict Defendants' declarations, Plaintiffs cite the declaration of Judith M. Marshall filed in the case of Prise et al. V. Alderwoods Group Inc., et al., (W.D.Pa. No. 06-1641), now pending in the Western District of Pennsylvania. Plaintiffs cite Ms. Marshall's declaration as stating that "the three SCI Support Centers, 1 together, provide 'all . . . human resources services' at defendants' locations." Pls' Resp. at 4:22. However, Plaintiffs have provided this quote out of context, quoting only a snippet of Ms. Marshall's declaration, and giving a skewed impression of her actual statement. In fact, Ms. Marshall declared, in pertinent part, as follows:

[The] day-to-day human resources and support for individual locations are provided by three separate companies -- SCI Eastern Market Support Center, L.P., SCI Western Market Support Center, Inc., and SCI Houston Market Support Center, L.P. Each of these entities has a Management Services Agreement with the locations in their region [*20] of the country that states that they will provide all executive, management, administrative, accounting, data processing, and human resources services for the locations.

Complaint, Appendix B -- Judith M. Marshall dec. P 4 (emphasis added). Thus, Ms. Marshall's declaration does not support that all three SCI Support Centers provide human resources for all employees country-wide as Plaintiffs contend.

Plaintiffs further assert that SCI Eastern and SCI Houston, along with SCI Western, employ a "single line management model to streamline the organization and ensure operational efficiencies," by which SCI Eastern and SCI Houston, along with SCI Western, would have purposefully directed activities into the state by managing employees here. Compl. P 45. However, Plaintiffs provide no citation for this statement. Moreover, even if Plaintiffs' assertion is true, based on the evidence presented, a single line management

1 The "SCI Support Centers" refers to SCI Western, SCI Eastern, and SCI Houston.

model most likely would originate with the Cooperative and, with regard to this jurisdiction, would carry through to SCI Western. In fact, Ms. Marshall's declaration quoted above demonstrates that each [*21] regional SCI has a management services agreement with the locations in that region.

Plaintiffs point to other allegations in the Complaint that, they claim, demonstrate that SCI Eastern and SCI Houston have purposefully directed activities within the forum state. For example, Plaintiffs allege that the SCI Support Centers provide on-sight training (Compl. at P41), nationwide training (Id. at P 43), a newsletter and intranet site through which defendants communicate with their nationwide employees (Id. at P43), benefit plans for employees (Id. at P43), a payroll department (Id. at P44), and centralized employment records and payroll information (Id. at P44), along with a "centralized management." Plaintiffs contend that these services coupled with SCI's "single line management model," establish SCI Eastern and SCI Houston's activities in the forum state.

However, Plaintiffs have misconstrued these claims from Defendants' declarations. For example, Plaintiffs cite Ms. Marshall's declaration when claiming that SCI Support Centers provide on-sight training, but Ms. Marshall's declaration actually states that field personnel and training departments affiliated with the various human resources [*22] providers at each of the field locations provide on-sight training. Compl., App. B -- Judith M. Marshall Decl. at P6. Regarding nationwide training, Plaintiffs refer to "Dignity University training programs," which are provided by the Cooperative, not SCI Eastern or SCI Houston. Regarding the newsletter and intranet site to which Plaintiffs refer, the weekly newsletter "Frontline," is published by the Cooperative. Likewise, the "Global Village" intranet site also is operated and maintained by the Cooperative. Id. at P 7. Similarly, benefit plans are administered by the Cooperative. Compl., App. C -- Gwen Petteway Decl. at P 5. Finally, with respect to the employment records and payroll information, Plaintiffs cite the Declaration of Liana Jensen. Ms. Jensen states that in relation to Prise v. Alderwoods Group, Inc. et al., she contacted the payroll departments of both Alderwoods Group, Inc. and the Cooperative. Compl., App. D -- Liana Jensen Decl. at P 3. Ms. Jensen also states that she accessed a database with current and former employees of SCI subsidiaries. Id. Ms. Jensen does not directly state who controls this database but in the very next sentence, she states that she asked [*23] a senior data analyst at the Cooperative to perform databases searches of

2008 U.S. Dist. LEXIS 83315, *18


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employees. Id. Thus, it appears that the Cooperative controls the employee database. It also appears that Plaintiffs' references and attempts to establish that SCI Eastern and SCI Houston have some connection to Arizona are insufficient to establish specific personal jurisdiction. Moreover, Defendants have provided W-2s for the named Plaintiffs employed in Arizona showing that they are employed by the Cooperative, which has not filed a motion to dismiss. Thus, Plaintiffs have not met the first prong of the test to establish specific jurisdiction as to SCI Eastern and SCI Houston. Accordingly, SCI Eastern and SCI Houston's Motion to Dismiss is granted.

2. INDIVIDUAL DEFENDANTS

The Individual Defendants claim that they have not purposefully directed conduct into the forum state, or a resident thereof, without which, they are not subject to personal jurisdiction here.

Plaintiffs claim that each Individual Defendant has directed activity into the forum state through the operation of their employment. Plaintiffs contend that the Individual Defendants have made no attempt to deny or even address the allegations in the [*24] Complaint that they are subject to specific jurisdiction here; nor have they attempted to deny that they are Plaintiffs' employers. Thus, Plaintiffs assert, this demonstrates the Individual Defendants' inability to disprove Plaintiffs' jurisdictional assertions.

The Individual Defendants have filed the Declaration of Nicholas P. Forestiere in support of their Motion. In his declaration, Mr. Forestiere, who is an attorney representing the Individual Defendants, seeks to have the Court take judicial notice of Taghulk Proprietary, Ltd. et al. v. Service Corp Int'l. Inc. et al., NDCA, No. 99-5151 (2000). In Taghulk the court in the Northern District of California found that SCI was not subject to personal jurisdiction in California. However, Taghulk is distinguishable because it pertained to jurisdiction in California, and because it considered jurisdiction in the context of a patent and trademark infringement action; it did not consider jurisdiction with regard to SCI's employment policies and activities or in the context of a wage and hour lawsuit.

In addition, it is relevant to note, as Plaintiffs point out, that the court in Taghulk made its personal jurisdiction determination after [*25] the parties had had an opportunity to conduct discovery. The parties in the instant case have yet to conduct discovery. If material

facts are controverted or if the evidence is inadequate, a court may permit discovery to aid in determining whether personal jurisdiction exists. Data Disc, Inc., 557 F.2d at 1285 n.1. If the submitted materials raise issues of credibility or disputed questions of fact, the district court has the discretion to hold an evidentiary hearing in order to resolve the contested issues. Id. As shown below, Plaintiffs have made a prima facie showing that Individual Defendants Jane D. Jones, Gwen Petteway, and Curtis Briggs are subject to personal jurisdiction. However, the Court directs the parties to conduct discovery as to this Court's exercise of jurisdiction over Individual Defendants Thomas Ryan and Julie Douglas.

a) JANE JONES

In her declaration, Jane Jones states that she is a resident of Houston, Texas and works as Vice President of Human Resources for SCI. Ms. Jones states that at no time has she "hired, terminated, or supervised any of the plaintiffs nor any other employees of any funeral establishment, cemetery or other local facility that is owned by [*26] a subsidiary of Service Corporation International, including any such funeral establishments, cemeteries or other local facilities located in the State of Arizona." Declaration of Jane D. Jones P 12. Ms. Jones further states that she has not had minimum contacts with the state. Id. at PP 3-12. Therefore, Ms. Jones argues that she is not subject to specific jurisdiction here.

Plaintiffs contend that as Vice President of Human Resources for SCI, Ms. Jones, has directed activities within this forum by "oversee[ing] human resources, training and education, and payroll and commission services -- activities that assist approximately 20,000 employees in North America." Compl. P 142. Plaintiffs have alleged that Ms. Jones is "responsible for, provides direction and control over, and is authorized to direct all aspects of human resources functions across SCI's network." Compl. P 143. Plaintiffs have further alleged that Ms. Jones is actively involved in the creation of the wage and hour policies at issue in this lawsuit, including the "On Call Pay Policy, Community Work Policy Training Compensation Policy, Pre-Needs Appointment Policy, Meal Break Deduction Policy, Pre-Approval for Overtime Pay [*27] Policy, Unrecorded Work Time Policy, and the policy regarding the calculation of Plaintiffs' overtime." Compl. P 144.

Though Ms. Jones contends that she has not hired, terminated, or supervised the SCI employees involved in this lawsuit, nor any other employees of SCI,

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including SCI locations in Arizona, she has not contested the allegations that she is actively involved in the policies that affect these employees. As stated above, uncontroverted allegations in the complaint must be taken as true. AT&T, 94 F.3d at 588. Conflicts in the evidence must be resolved in the plaintiff's favor. Id. Thus, through Ms. Jones' asserted involvement with the human resources policies affecting SCI employees across the country, including Arizona, Plaintiffs have met the "purposeful availment" prong of the Lake test. See Lake, 817 F.2d at 1421.

Regarding the second prong of the test -- "arising out of" or resulting from the Defendant's forum-related activities -- applying the Panavision Int'l "but-for" test, the question is but for Ms. Jones' involvement with the policies affecting Arizona SCI employees, would Plaintiffs' claims have arisen? See Panavision, 141 F.3d at 1316. Based on Plaintiffs' assertion [*28] in their Complaint that Ms. Jones "oversees human resources . . . that assist approximately 20,000 employees" (Compl. at P 142), the answer is no.

Finally, the third prong of the Lake test requires that jurisdiction be reasonable. See Lake, 817 F.2d at 1421. The Individual Defendants have the burden to establish that this Court's exercise of jurisdiction over them would not be reasonable. Defendants argue that it would be "manifestly unreasonable" to require them to defend themselves "in a distant forum with which they have clearly had no contact." Defs' Reply at p. 7. However, in light of Ms. Jones' position and her responsibilities within the Company, she has not established that exercising jurisdiction over her here would be unreasonable. Accordingly, Ms. Jones' Motion to Dismiss is denied.

b) GWEN PETTEWAY

Gwen Petteway is a resident of Brazoria County, Texas and is employed by the Cooperative as a director of human resources. Compl. Appendix C. In her Declaration, Ms. Petteway states that in performing her job she works with the SCI Houston Market Support Center in Houston and does not have minimum contacts with the State of Arizona. Def's Response, Exh. 5, at p. 2. Therefore, Ms. [*29] Petteway argues, she should not be subject to personal jurisdiction here.

Plaintiffs assert that Gwen Petteway directed activities with this forum state through her job responsibilities, which include familiarity "with the human resources services of the subsidiary and affiliate company of SCI, as well as training and benefits provided by those

companies." Compl. P 166. Further, Plaintiffs claim that Ms. Petteway has admitted that, as Human Resources Director, her job responsibilities include "day-to-day human resources services and support for [defendants'] funeral home locations." Compl. P 167.

Though Ms. Petteway claims that she has not hired, terminated, or supervised the SCI employees involved in this lawsuit, she has stated that she is the director of human resources for SCI Houston and that day-to-day human resources services are provided in part by SCI Houston. Compl., Appendix C. Ms. Petteway also has stated that the Cooperative, for whom she is employed, creates and distributes employee handbooks or manuals and that the Cooperative administers benefit plans. Id. As a director of human resources, employed by the Cooperative, it appears that Ms. Petteway is subject to personal [*30] jurisdiction here.

The second prong of the test is also satisfied because but for Ms. Petteway's actions as director of human resources employed by the Cooperative, these claims would not have arisen. See Panavision, 141 F.3d at 1316.

Finally, in light of the allegations against Ms. Petteway and her position in the Company, Ms. Petteway has not established that the exercise of jurisdiction over her would be unreasonable. Accordingly, Ms. Petteway's Motion to Dismiss is denied.

c) THOMAS RYAN

Thomas Ryan is a resident of Houston, Texas. Mr. Ryan is an employee of SCI Executive Services, Inc., and serves in the position of President and Chief Executive Officer of SCI. In his declaration, Mr. Ryan claims not to have any ownership interest in any of the funeral establishments, cemeteries and other local facilities owned by a subsidiary of SCI. Decl. of Thomas Ryan P 3. Mr. Ryan further claims not to have minimum contacts with the state. Id. at PP 4-12. Therefore, Mr. Ryan claims not to be subject to personal jurisdiction here.

Plaintiffs assert that Mr. Ryan directed activities within the forum state by acting as President and Chief Executive Officer of SCI and by actively managing SCI and [*31] the SCI network, including those activities related to Defendants' employment-related policies and decisions. Compl. PP 191-92.

As President and Chief Executive Officer of SCI and by virtue of this position, it appears that Mr. Ryan may have

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a role in affecting employment related policies within the SCI network of companies. In fact, in contrast to the other Individual Defendants' affidavits, Mr. Ryan's affidavit omits the statement that he has not participated in hiring, termination, or supervision of Plaintiffs or other employees in Arizona. However, the allegations about Mr. Ryan in Plaintiffs' Complaint are based either on information and belief or on Mr. Ryan's authority due to his position. Thus, the Court finds it appropriate to require discovery as to Mr. Ryan's alleged involvement in the alleged claims. See Data Disc, Inc., 557 F.2d at 1285 n.1 (stating that if the evidence of one's personal jurisdiction is inadequate, a court may permit discovery to aid in determining whether personal jurisdiction exists).

d) CURTIS BRIGGS

Curtis Briggs is a resident of Houston, Texas and serves as senior corporate counsel for the Cooperative. Defs' Mot. to Dismiss, Exh. 1, at p. 2. In his declaration, [*32] Mr. Briggs asserts that he has never actively managed any funeral establishment, cemetery or other facility for SCI in Arizona. Id. Mr. Briggs also states that at no time has he hired, terminated, or supervised any of the Plaintiffs or other employee of SCI or an SCI subsidiary located in Arizona. Id.

Plaintiffs contend that Curtis Briggs has directed activities within this forum through his involvement with SCI-affiliated entities, including that Mr. Briggs makes decisions concerning SCI affiliates' employment-related policies pertaining to human resources, training, payroll, and benefits. Resp. at p. 6; Compl. at P 221.

Mr. Briggs claims not to have "actively managed" any SCI subsidiary in Arizona nor to have hired, terminated, or supervised Plaintiffs or any employee of SCI or SCI subsidiary employee in Arizona. However, Mr. Briggs does not claim that his work with employment-related policies pertaining to human resources, training, payroll, and benefits for SCI affiliates have not affected Plaintiffs or other SCI or SCI subsidiary employees. As senior corporate counsel with authority to make employment-related policies, it appears Mr. Briggs has purposefully directed activities into [*33] this state.

Second, Plaintiffs have established that but for Mr. Briggs' employment-related policy decisions, Plaintiffs would not have filed the instant lawsuit.

Finally, based on all of the information presented Mr. Briggs has not established that the exercise of jurisdiction over him would be unreasonable.

Accordingly, Mr. Briggs is subject to personal jurisdiction here.

e) JULIE DOUGLAS

Finally, Julie Douglas resides in Houston, Texas and serves as an employee benefits manager for the Cooperative. In her Declaration, Ms. Douglas states that she is not, nor has she ever been, the Plan Administrator for the SCI 401K Pension Plan. Defs' Motion to Dismiss, Exh. 2 (Doc. 54-2).

Plaintiffs contend that Julie Douglas has directed activities within this forum through her administration of the Defendant SCI 401K Retirement Savings Plan (the "Plan") (Compl. P 33), in which Plaintiffs -- including Arizona residents -- are or were eligible to participate (Compl. P 31).

Ms. Douglas claims not to be the Plan administrator, whereas Plaintiffs assert that she is the Plan administrator. As stated above, if material facts are controverted, a court may permit discovery to aid in determining whether personal [*34] jurisdiction exists. Data Disc, Inc., 557 F.2d at 1285 n.1. Thus, the Court finds it appropriate to require discovery as to Ms. Douglas' position at the Cooperative and what, if any, work she does or has done with the Plan.

I. FAILURE TO STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED -- RULE 12(B)(6) ASSERTION

A. LEGAL STANDARD

A motion to dismiss for failure to state a claim will be denied unless it is "clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th Cir. 2002), citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002). A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). "Each averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required." Fed.R.Civ.P. 8(e). These rules "do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is 'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiffs claim is and the grounds on which [*35] it rests." Conley v.

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Gibson, 355 U.S. 41, 47, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957).

B. FLSA CLAIM

Under the FLSA plaintiffs may maintain claims only against "employers" for whom they worked as "employees." See 29 U.S.C. § 216(b) (an action to recover for unpaid overtime compensation under the FLSA may be "maintained against any employer . . . by any one or more employees . . . ."

Defendant SCI as a holding company and Defendants the Cooperative, SCI Western, and the Plan (the "Corporate Defendants"), move to dismiss the FLSA claim arguing that Plaintiffs cannot establish that they are Plaintiffs' employer or Plaintiffs' joint employer. 2 In support of their position, Defendants cite Benshoff v. City of Virginia Beach, 180 F.3d 136, 140 (4th Cir. 1999) and Choe-Rively v. Vietnam Veterans of Am., 135 F.Supp. 2d 462 470 (D. Del. 2001). However, neither Benshoff nor Choe-Rively are precedent here. Furthermore, both Benshoff and Choe-Rively discuss FLSA claims in the context of summary judgment.

Defendants spend a substantial portion of their Motion discussing litigation between these same parties in the Western District of Pennsylvania. Defendants' discussion includes citations and quotations in the Pennsylvania proceedings. The Corporate Defendants' main argument appears to be that this Court should dismiss the FLSA claim against them because the Western District of Pennsylvania court did not allow an FLSA claim to proceed there. However, not only are the Pennsylvania hearings outside the pleadings, they also have no precedential authority here.

In contrast, Plaintiffs assert that their FLSA claim should not be dismissed because the Corporate Defendants are Plaintiffs' employers. Plaintiffs contend, at the motion to dismiss stage Plaintiffs are not required to conclusively prove Defendants' employer status. Rather, at this stage, Plaintiffs contend, they are only required to provide Defendants adequate notice of the claims against them and the grounds for those claims.

2 In a footnote to their Motion to Dismiss, SCI Eastern and SCI Houston state that they join this Motion. However, because the Court dismissed SCI Eastern and SCI Houston for lack of personal jurisdiction, the Court will not consider [*36] them with regard to the Motion to Dismiss the FLSA claim.

In support of their FLSA claim, Plaintiffs also refer to the declarations submitted in the Pennsylvania litigation and attached to their Complaint in [*37] which SCI stated that its human resources and employment functions are the responsibility of SCI Western, SCI Eastern, SCI Houston, and the Cooperative.

The FLSA broadly defines the "employer-employee relationship[s]" subject to its reach. Rutherford Food Corp. v. McComb, 331 U.S. 722, 728, 67 S. Ct. 1473, 91 L. Ed. 1772 (1947). "'Employ' includes to suffer or permit to work." 29 U.S.C. § 203(g). "'Employer' includes any person acting directly or indirectly in the interest of an employer . . . ." Id. § 203(d). The FLSA's definition of employee has been called the "'broadest definition that has ever been included in any one act.'" United States v. Rosenwasser, 323 U.S. 360, 363 n. 3, 65 S. Ct. 295, 89 L. Ed. 301 (1945) (quoting 81 Cong.Rec. 7,657 (1938) (statement of Sen. Black)).

Regulations promulgated under the FLSA recognized that an employee may have more than one employer under the FLSA. 29 C.F.R. § 791.2 ("A single individual may stand in the relation of an employee to two or more employers at the same time . . . ."). When more than one entity is an employer for purposes of the FLSA, the entities are termed "joint employers." Id. The Ninth Circuit has specified that whether an entity is an employer under the FLSA is a question of law that [*38] must be determined by applying the economic reality test. Torres-Lopez v. May, 111 F.3d 633, 638, 639 (9th Cir. 1997) (citing Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469, 1470 (9th Cir. 1983); Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748, 754 (9th Cir. 1979)). Under the economic reality test, a court must "consider the totality of the circumstances of the relationship, including whether the alleged employer has the power to hire and fire the employees, supervises and controls employee work schedules or conditions of employment, determines the rate and method of payment, and maintains employment records." Hale v. State of Arizona, 993 F.2d 1387, 1394 (9th Cir. 1993) (citing Bonnette, 704 F.2d at 1470).

Defendants cite Singh v. 7-Eleven, Inc., 2007 U.S. Dist. LEXIS 16677, 2007 WL 715488 at *3 (N.D. Cal. Mar. 8, 2007), which states that to be a joint employer, a defendant must have operational control over the plaintiffs' work, such as the "power to hire and fire the employees, supervise[] and control[] employee work schedules or conditions of employment, determine[] the rate and method of payment, and maintain[]

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employment records." However, the order in Singh was issued at [*39] the summary judgment stage of the case. Defendants contend that this distinction is irrelevant, as Defendants cite it for the criteria for finding two entities joint employers. However, the Court is not inclined to preclude Plaintiffs from an opportunity to conduct discovery to discover evidence that meets the criteria expounded in Singh.

Defendants cite many documents outside the pleadings in an effort to dismiss the instant claims against them. However, at the motion to dismiss stage Plaintiffs need only set forth a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). Defendants cite the recently-decided antitrust case of Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L. Ed. 2d 929 (2007) (holding that a plaintiff's obligation on a motion to dismiss is to provide more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action"), in an effort to argue that Plaintiffs' allegations here are insufficient. However, Twombly does not apply a new regime whereby plaintiffs must set forth proof of their claims to overcome a motion to dismiss. Instead, Twombly directs that a complaint must meet a standard of [*40] "plausibility," rather than merely "possibility." Id. at 1974.

During oral argument, Defendants again asserted that Plaintiffs Complaint does not meet the Twombly standard and point to the November 15, 2007 transcript of a hearing before the Honorable Joy Flowers Conti, United States District Court for the Western District of Pennsylvania in Prise et al. v. Alderwoods et al., No. 06-16431 (W.D. Pa. November 15, 2007), in which Judge Conti found that plaintiffs' proposed amended complaint did not meet the Twombly test there. Judge Conti stated that the plaintiffs' proposed amended complaint does not allege fact but, rather, it alleged disguised legal conclusions. Defendants stated that this transcript was incorporated in the Complaint. However, this transcript actually was submitted in the Affirmation in Response to Defendants' Motion to Dismiss or Strike and to Dismiss Complaint Pursuant to FRCP 12(b)(2) and FRCP 12(b)(6) (Doc. 90). Nevertheless, the Court considers Defendants' assertion but does not find it compelling. It is the Court's understanding that Judge Conti did not dismiss the claims in Alderwoods but simply did not allow plaintiffs there to amend to add the SCI defendants. [*41] In addition, although there are some allegations in the Complaint based on "understanding and belief the Court finds that the Complaint does include sufficient facts to meet the Twombly "plausibility"

test.

Defendants assert that in Plaintiffs' Complaint, they have set forth only very broad-based conclusions without factual underpinnings, thereby falling short of the Twombly standard. The Court disagrees with Defendants' interpretation of Plaintiffs' Complaint. Without determining whether the Twombly pleading standard applies outside of the context of antitrust cases, the Court finds that Plaintiffs have met the Twombly "plausibility" requirement. Twombly, 127 S.Ct. at 1974.

1. SCI WESTERN

The Complaint alleges sufficient facts to overcome Defendants' Motion to Dismiss Plaintiffs' FLSA claim as to SCI Western. Specifically, the Complaint alleges, based on Defendants' sworn admissions which are attached to the Complaint, that the SCI Support Centers provide "day-to-day human resources services and support for individual locations," including "all executive, management, administrative, accounting, data processing, and human resources services for [Defendants'] locations." Compl. at P 40. [*42] In addition, Plaintiffs complaint alleges that SCI Western provides "Dignity University training programs," by which Defendants ensure uniform services at nationwide locations, publish and maintain the weekly newsletter "Frontline," and the "Global Village" intranet site through which Defendants communicate with their nationwide employees, and administer benefits plans for employees and contract with third-party benefit providers to respond to questions related to day-to-day benefits services. Compl. at PP 42-43. These allegations are sufficient to meet the totality of the economic realities test to overcome the instant Motion to Dismiss as to SCI Western.

2. THE COOPERATIVE

The Complaint alleges sufficient facts to overcome Defendants' Motion to Dismiss Plaintiffs' FLSA claim as to the Cooperative. Specifically, the Complaint cites sworn declarations the Defendants submitted in the Western District of Pennsylvania litigation and alleges that the Cooperative provides human resources service and support for the SCI Support Centers, including SCI Western. Compl. at P 74. The Complaint also alleges that Defendants have admitted that the field personnel and training departments affiliated [*43] with the

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Cooperative provide "on-site training at funeral homes and cemeteries." Compl. at P 76. Further, the Complaint alleges that Defendants have admitted that the Cooperative publishes and maintains the weekly newsletter "Frontline," and the "Global Village" intranet site, through which Defendants communicate with their employees nationwide. Compl. at P 77. Additionally, the Complaint asserts that the Cooperative administers benefits by "contract[ing] with third-party benefit providers to respond to questions related to day-to-day benefits services, such as local provider questions, access to online services, and benefits provider contact information. To the extent that those third-party providers cannot respond to questions, [the Cooperative] will respond." Compl. at P 78. Finally, the Complaint alleges that the Cooperative maintains a payroll department and "a database that contains information on current and former employees of SCI subsidiaries." Compl. at P 79. These allegations are sufficient to meet the totality of the economic realities test to overcome the instant Motion to Dismiss as to the Cooperative.

3. SCI

The Complaint alleges sufficient facts to overcome Defendants' [*44] Motion to Dismiss Plaintiffs' FLSA claim as to SCI. Specifically, Plaintiffs have alleged that SCI and its affiliates employ "a single line management model in an effort to streamline the organization and ensure that operational efficiencies [are] achieved throughout the SCI network." Compl. at P 111. The Complaint also alleges, that SCI maintains control and authority over its affiliate companies and that it oversees human resources and employment functions, such as hiring and firing employees, supervision and control of work schedules or conditions of employment, determination of rate and methods of pay, and maintenance of employment records. Compl. at PP 113-14, 127-30. These allegations are sufficient to meet the totality of the economic realities test to overcome the instant Motion to Dismiss as to SCI.

The Court finds that Plaintiffs have sufficiently pled their FLSA claim to overcome Defendants' Rule 12(b)(6) Motion to Dismiss. Accordingly, the Court denies Defendants' Motion to Dismiss as to Plaintiffs' FLSA claim.

C. ERISA CLAIMS

Defendants assert a number of arguments as to why Plaintiffs' ERISA claims should be dismissed. First, Defendants argue that Plaintiffs' ERISA claims [*45] are unripe because they are derivative of, and entirely dependent upon, Plaintiffs' FLSA claim, which Plaintiffs have yet to establish and because they are contingent on future events (the future events as Defendants present them are the following: (i) Plaintiffs needing to succeed on the merits of their FLSA claim for overtime and wages; and (ii) a refusal of the Plan Administrator to approve credits after reviewing claims submitted through the Plan's review procedures). Second, Defendants argue that Plaintiffs' Section 1132(a)(1)(B) claim fails for failure to exhaust administrative remedies. Third, Defendants assert that ERISA does not provide for a private cause of action for a record-keeping. 3 Finally, Defendants argue that Plaintiffs' breach of fiduciary duty claim fails because Plaintiffs have not established that Defendants owed Plaintiffs a fiduciary duty.

1. RIPENESS

Regarding Defendants' ripeness argument, generally there are two prongs to a ripeness inquiry, including the fitness of the issue for judicial decision, and the hardship [*46] to the parties. See Abbott Labs v. Gardner, 387 U.S. 136, 149, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967).

Defendants argue that Plaintiffs' ERISA claims are unripe because they are derivative of, and entirely dependent upon, Plaintiffs' FLSA claim, which Plaintiffs have yet to establish. In support of their position, Defendants cite Texas v. United States, 523 U.S. 296, 300, 118 S. Ct. 1257, 140 L. Ed. 2d 406 (1998), which held that a claim is not ripe for adjudication if it rests upon contingent future events. However, in Texas the Court ruled on the issue of whether a Voting Rights Act's pre-clearance provisions could apply to allow sanctions under the Texas Education Code against a local school district if it were to fail to meet state-mandated educational achievement levels. Id. The Court found the issue unripe for adjudication because the Court had "no idea whether or when such [a sanction] will be ordered." Id. Texas is distinguishable because, here, the asserted events giving rise to Plaintiffs' ERISA claims already have allegedly occurred

3 Both Defendants' failure to exhaust argument and their record-keeping argument pertain to Claim II, Plaintiffs' 29 U.S.C. § 1132(a)(3) ERISA claim.

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and the only delay in the Court's ability to consider Plaintiffs' ERISA claims is that it must first rule on Plaintiffs' FLSA claim.

Plaintiffs, on the other hand, contend that courts routinely hold that ERISA claims [*47] are ripe and fit for review, even when dependent on FLSA claims. In support of their position, Plaintiffs cite In re Farmers Ins. Exchange Claims Representatives' Overtime Pay Litigation, 2005 U.S. Dist. LEXIS 42706, 2005 WL 1972565 (D. Or. Aug. 15, 2005) (stating, "I will hold the two ERISA claims in abeyance and defer any further activity on the claims (including class certification, discovery, summary judgment), until I rule on defendants' liability for overtime pay"), and Rosenburg v. IBM Corp., 2006 U.S. Dist. LEXIS 41775, 2006 WL 1627108 (N.D. Cal. June 12, 2006).

In In re Farmers Ins. Exchange, the court denied the defendants' motion to dismiss the ERISA claims, suggesting that the ERISA claims be deferred until after a ruling on the merits of the overtime liability claims. 2006 U.S. Dist. LEXIS 41775, [WL] at * 5. In Rosenberg the court found plaintiffs' ERISA claims dependent on their FLSA claims but that the dependence of the ERISA claims did not render plaintiffs' claims unripe. Rosenberg, 2006 U.S. Dist. LEXIS 41775, 2006 WL 1627108 at *8-9. The court denied the defendant's motion that the ERISA claims were unripe stating that the plaintiffs' ERISA claims were for equitable relief and not for damages that have not yet occurred. Id.

Defendants attempt to distinguish In re Farmers and Rosenberg [*48] to no avail. Defendants contend that In re Farmers does not apply here because the defendants did not raise a ripeness argument in their motion to dismiss. However, regardless of the argument set forth in the motion, the court deferred consideration of the ERISA claims pending a ruling on the merits of the FLSA claim. Defendants distinguish Rosenberg by asserting that plaintiffs' ERISA claims there were only for equitable relief and not damages. The Court does not find this distinction merits dismissal of Plaintiffs' ERISA claims here. Plaintiffs ERISA claims are based on damages alleged to have already occurred and not on speculation of future injury. Therefore, the Court is not persuaded by Defendants' ripeness argument.

2. EXHAUSTION

Defendants argue that Plaintiffs' Section 1132(a)(1)(B) ERISA claim fails for failure to exhaust administrative remedies. In opposition, Plaintiffs assert that they were

not required to exhaust administrative remedies because doing so would have been futile. Thus, Plaintiffs contend, they may proceed under ERISA's "catch-all" provision, 29 U.S.C. § 1132(a)(3). 4 A beneficiary seeking a determination of rights or benefits under a plan must first exhaust [*49] the administrative remedies provided by the plan. Amato v. Bernard, 618 F.2d 559, 567 (9th Cir. 1980). A district court has discretion to waive the exhaustion requirement, Southeast Alaska Conservation Council v. Watson, 697 F.2d 1305, 1309 (9th Cir. 1983), and should do so when exhaustion would be futile. Amato, 618 F.2d at 568.

The ERISA plan in question compensates employees for hours worked as recorded by the Corporate Defendants. Plaintiffs assert that the Corporate Defendants' failed to properly account and pay employees for hours they worked, which has resulted in inaccurate payroll records from which credits under the Plan are derived. Plaintiffs have based their ERISA claims on the Corporate Defendants' alleged failure to properly account and credit Plaintiffs for hours worked, therefore, it would be futile to exhaust administrative duties with the Plan [*50] because the Plan has not received adequate accounting from the Corporate Defendants. The Court agrees. It would be futile for Plaintiffs to exhaust administrative remedies with the Plan when, Plaintiffs allege, the Plan has not been provided a correct record of Plaintiffs hours. See Horan v. Kaiser Steel Retirement Plan, 947 F.2d 1412, 1416 n.1 (9th Cir. 1991) (finding plaintiff not required to take steps to exhaust administrative remedies for ERISA claims when such steps would be futile). Accordingly, the Court is not persuaded by Defendants' exhaustion argument.

3. ERISA RECORD KEEPING PROVISION

Next, Defendants assert that Plaintiffs' record keeping claim fails because the ERISA record-keeping provision does not provide a private cause of action. In response, Plaintiffs cite Farmers, 2005 U.S. Dist. LEXIS 42706, 2005 WL 1972565 at *3 (citations omitted), to assert that ERISA's civil enforcement provision, 29 U.S.C. § 1132(a)(3), provides plan participants the right to seek

4 Contrary to Defendants' argument that Plaintiffs have asked the Court to "excuse their mistake" as to their lack of exhaustion, which is required by 29 U.S.C. § 1132(a)(1)(B), Plaintiffs Complaint asserts the ERISA claims under the ERISA catchall provision, 29 U.S.C. § 1132(a)(3), which is used when exhaustion would be futile.

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civil remedy for any violation of ERISA, including record-keeping violations. As pointed out in Farmers, the catchall provision of 29 U.S.C. § 1132(a)(3) provides in relevant part that

A civil action may be brought --* * *

(3) by a participant, [*51] beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan . . . .

29 U.S.C. § 1132(a)(3).

"Thus, Section 1132(a)(3) confers on plan participants the right to bring suit to enjoin "any" violation of "this title." "This title" is Title I, which encompasses 29 U.S.C. §§ 1001 through 1191, including the record-keeping requirements of § 1059(a)." Farmers, 2005 U.S. Dist. LEXIS 42706, 2005 WL 1972565 at * 3. Accordingly, Defendants' argument as to Plaintiffs' record-keeping claim in not compelling; Defendants' Motion to Dismiss Claim II is denied. Nevertheless, the Court will hold in abeyance Plaintiffs' record-keeping claim pending the outcome of Plaintiffs' FLSA claim.

4. DEFENDANTS' DUTY

Finally, Defendants argue that Plaintiffs' breach of fiduciary duty claim fails because Plaintiffs have not first established that Defendants had a duty to credit Plaintiffs' ERISA plans for hours Plaintiffs have worked. Essentially, it appears that Defendants assert that ERISA does not govern their decisions about [*52] how to administer payroll and that ERISA's fiduciary duties apply only to a company's actions with respect to its employee benefit plan, and not its roll as an employer.

In contrast, Plaintiffs contend that Defendants had a fiduciary duty under ERISA to ensure that Plaintiffs were paid in accordance with the FLSA but that this analysis is premature and inappropriate on a motion to dismiss because discovery is necessary to determine the extent of Defendants' fiduciary duty. 5

In support of their position, Defendants cite Ballaris v.

5 As stated above, Plaintiffs assert that the Corporate Defendants' failed to properly account and pay employees for hours they worked, which has resulted in inaccurate payroll records from which credits under the Plan are derived.

Wacker Siltronic Corp., 2002 U.S. Dist. LEXIS 2746, 2002 WL 926272 (D.Or. February 7, 2002), and Veliz v. Cintas Corp., 2003 WL 23857822 (N.D. Cal. November 4, 2003). In Ballaris the court found that the employer's decision concerning whether to pay wages for time employees spent preparing to work had "only an extremely indirect connection to the administration of the ERISA plan" and, therefore, did not give rise to a fiduciary duty under the plan. Ballaris, 2002 U.S. Dist. LEXIS 2746, 2002 WL 926272 at *2. [*53] In Veliz the court dismissed plaintiffs' breach of fiduciary duty claim under ERISA, finding the decision of whether to characterize plaintiffs as non-hourly employees, rather than hourly employees, and thereby not keep record of plaintiffs' hours worked was a business decision and does not equate to a breach of fiduciary duty. 2002 U.S. Dist. LEXIS 2746, [WL] at *5.

Under ERISA, crediting hours is a fiduciary function, independent of the payment of wages, necessary to determine participants' participation, vesting and accrual of rights. See, e.g., Lockheed Corp. v. Spink, 517 U.S. 882, 890, 116 S. Ct. 1783, 135 L. Ed. 2d 153 (1996) (distinguishing between fiduciary and settlor functions). As such, it is subject to ERISA's strict fiduciary standards. See id. Moreover, Plaintiffs have asserted this claim against the Plan and the alleged Plan Administrator. The Court finds that Plaintiffs have asserted sufficient facts to overcome a Rule 12(b)(6) motion to dismiss their ERISA breach of fiduciary duty claim. Accordingly, Defendants' Motion to Dismiss Count III is denied. Nevertheless, the Court will hold in abeyance Plaintiffs' breach of fiduciary duty claim pending the outcome of Plaintiffs' FLSA claim.

D. RICO

Plaintiffs allege that Defendants engaged [*54] in a pattern of mail fraud, whereby every time Defendants mailed a paycheck to Plaintiffs, Defendants "mislead Plaintiffs about the amount of wages to which they were entitled, as well as their status and rights under the FLSA." Compl. at P 257.

Defendants argue that Plaintiffs RICO claim is unripe because Plaintiffs must first establish that they were entitled to wages or overtime under FLSA for which they have not been compensated. Similar to Plaintiffs' ERISA claims above, the alleged events possibly giving rise to Plaintiffs' RICO claim already have allegedly occurred and the only delay in the Court's ability to consider Plaintiffs' RICO claims is that it must first rule on

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Plaintiffs' FLSA claim. Therefore, the Court is not persuaded by Defendants' ripeness argument here.

Citing Miller v. Yokohama Tire Corp., 358 F.3d 616, 621, (9th Cir. 2004), Defendants also argue that Plaintiffs fail to state a claim under RICO arguing that RICO claims cannot be predicated on alleged violations of wage and hour laws. Plaintiffs point out in their Response, that Miller is a state wage and hour case (that did not allege FLSA violations) in which the court dismissed plaintiffs RICO claims because [*55] they were based on a misrepresentation of law (regarding plaintiff's legal status as an exempt employee), and not on a misrepresentation of fact. Id. In Reply, Defendants contend that the RICO claim in the instant case is also based on misrepresentations of law. However, the dispute here is not over a legal question of whether Plaintiffs should be categorized as hourly or non-hourly employees. Rather, the dispute is over how much pay these hourly-employees should have received. This is a question of fact. Thus, the issue in Miller is distinguishable from the issue here.

In support of their RICO claim Plaintiffs cite Choimbol v. Fairfield Resorts, Inc., 428 F.Supp. 2d 437, 443 (E.D.Va. 2006), in which the court upheld similar allegations that employees' paychecks contained actionable fraudulent misrepresentations, which were sufficient to sustain plaintiffs RICO claim. Defendants do not distinguish Choimbol in their briefing. During oral argument Defendants attempt to distinguish Choimbol by claiming that in Choimbol the RICO claim was predicated on actionable fraud whereas, here, Defendants contend, the RICO claim is predicated on success on the FLSA claim. Defendants again point the [*56] Court to Miller,358 F.3d at 621. However, the Court has already determined that the issue in Miller is distinguishable from the issue here.

A prima facie RICO case requires the following: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity. Miller, 358 F.3d at 620. Plaintiffs have alleged that every time Defendants mailed Plaintiffs a paycheck, Defendants "mislead Plaintiffs about the amount of wages to which they were entitled, as well as their status and rights under the FLSA." Compl. at P 257. This assertion meets the requirements for a prima facie RICO case, as Plaintiffs have alleged conduct (mailing paychecks), of an enterprise 6

6 An enterprise can include a "group of persons associated together for a common [*57] purpose of engaging in a course of conduct." United States v. Turkette, 452 U.S. 576, 583, 101

(Defendants-businesses), through a pattern (continually mailing incorrect paychecks) of racketeering activity (denying Plaintiffs' pay due them). Plaintiffs have asserted a prima facie case of RICO sufficient to overcome a Rule 12(b)(6) motion to dismiss. Accordingly, Defendants' Motion to Dismiss Plaintiffs' RICO claim is denied. The Court will, however, hold in abeyance Plaintiffs' RICO claim pending the outcome of Plaintiffs' FLSA claim.

III. RULE 23

Defendants have asserted that Plaintiffs' Rule 23 "opt-out" certification allegations, which includes Plaintiffs' ERISA and RICO claims, should be struck. Defendants contend that Plaintiffs' ERISA and RICO claims cannot be maintained as Rule 23 "opt-out" claims since they are dependent on Plaintiffs' underlying FLSA claims, which are subject to the "opt-in" mechanism of 29 U.S.C. § 216(b).

The FLSA provides for participation in the collective action on an opt-in basis. See 29 U.S.C. § 216(b) (An employee cannot be a plaintiff "unless he gives his consent in writing to become such a party and such consent is filed in the court."). By contrast, under Rule 23, Fed.R.Civ.P., each member of the class is bound by the court's judgment unless the class member requests exclusion from the class. Fed.R.Civ.P. 23(c)(2).

Citing Silverman v. Smithkline Beecham Corp., 2007 U.S. Dist. LEXIS 80035, 2007 WL 3072274 (C.D. Cal. Oct. 16, 2007); Ellison v. Autozone, Inc, 2007 U.S. Dist. LEXIS 70187, 2007 WL 2701923 (N.D. Cal. Sept. 13, 2007), Plaintiffs assert that their FLSA "opt-in" actions are compatible with Rule 23 "opt-out" class actions. Plaintiffs [*58] also assert that determining the scope of a class action is a case management issue that is premature at this stage of the litigation. Silverman, 2007 U.S. Dist. LEXIS 80035, 2007 WL 3072274 at *2.

Defendants distinguish these cases by asserting that both Silverman and Ellison involved FLSA and state law claims, not FLSA-dependent ERISA and RICO claims, as are pled here. Because the ERISA and RICO claims are dependent on the underlying "opt-in" FLSA claims, Defendants contend, the proposed "opt-out" classes are defectively overbroad and unworkable.

The only case in which a court has addressed the compatibility between opt-in FLSA and opt-out ERISA

S. Ct. 2524, 69 L. Ed. 2d 246 (1981).

2008 U.S. Dist. LEXIS 83315, *54


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claims is Geer v. Challenge Financial Investors Corp., 2005 U.S. Dist. LEXIS 38333, 2005 WL 3502270 (D. Kan. Dec. 22, 2005). Though Greer is distinguishable in that the ERISA claims the plaintiffs sought to add to their existing FLSA collective action claims were not contingent upon a finding of liability under the FLSA, the court there rejected defendants' argument that the ERISA Rule 23 class action claims were irreconcilable with the FLSA opt-in claims. 2005 U.S. Dist. LEXIS 38333, [WL] at *3. Here, each of the FLSA, ERISA, and RICO claims depend on many of the same facts. The Court is, however, mindful that if it does not [*59] allow Plaintiffs' ERISA and RICO claims to proceed in the instant litigation, these claims may later be barred by collateral estoppel or the statute of limitations.

During oral argument Plaintiffs indicated that the opt-out classes for the ERISA and RICO claims will be limited to those Plaintiffs who opted in to the FLSA claim. The Court will hold in abeyance Plaintiffs ERISA and RICO claims pending the outcome of Plaintiffs' FLSA claim. If Plaintiffs succeed on their FLSA claim, the Court will allow Plaintiffs to proceed at that time with their ERISA and RICO claims on a Rule 23 class-action basis, provided the class is narrowly defined only as to those who opted-in to the FLSA claim.

IV. PLAINTIFFS' CLAIM AGAINST THE PLAN

Defendants assert that Plaintiffs have failed to allege a claim against the Plan because Plaintiffs "failed to allege any facts that could establish liability" with respect to the Plan. Motion to Dismiss (Doc. 72) at p. 18. Defendants assert that Plaintiffs never allege that the Plan itself did anything or had any responsibility but merely lump the Plan with the other Defendants as to all four causes of action.

In response, Plaintiffs do not dispute that they have not [*60] sufficiently asserted a claim against the Plan for violations of the FLSA or RICO. Plaintiffs do contend that they have sufficiently asserted an ERISA claim against the Plan.

ERISA provides that an employee benefit plan may be sued under ERISA. 29 U.S.C. § 1132(d)(1). Here, in their Complaint, Plaintiffs identify the statute under which they have asserted their ERISA claims, they state that the claims are brought "for defendants' failure to maintain accurage payroll records and credit plaintiffs' 401 (k) plans with their on-reduced weekly wages and correct overtime compensation." Compl. P 1. Plaintiffs also allege that Defendants, including the Plan, failed to

make and keep accurate records of all Plaintiffs' time worked and, thus, those records are insufficient to determine benefits. Compl. PP 1, 249-51. Plaintiffs further allege that Defendants breached their fiduciary duties under ERISA by failing to credit or even investigate crediting overtime pay as compensation used to determine benefits. Compl. P 251. In considering the allegations as set forth in their Complaint, it appears that Plaintiffs have meet the Twombly standard for pleading an ERISA claim against the Plan, and it is [*61] not clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. See Falkowski, 309 F.3d at 1132. Accordingly, Defendants' Motion to Dismiss the Plan is denied as to Plaintiffs' ERISA claims.

V. EQUITABLE TOLLING OF THE STATUTE OF LIMITATIONS

Plaintiffs move for equitable tolling of the statute of limitations. To put Plaintiffs' Motion in context, a brief procedural background is in order. On January 15, 2008, Plaintiffs filed the instant Class Action Complaint on behalf of themselves and all others similarly situated as a collective action under the FLSA, ERISA, and RICO. On January 16, 2008, Plaintiffs filed a motion for expedited collective action notification (Doc. 3) and a Motion for expedited briefing on their motion for collective action notification (Doc. 5). On January 29, 2008, Defendants Eastern and SCI Houston filed a motion to stay plaintiffs' motion for expedited collective action notification (Doc. 46), and a response in opposition to plaintiffs' motion to expedite consideration of defendants' motion to expedite briefing on their motion for collective action notification (Doc. 49).

On January 31, 2008, the Court issued [*62] a brief Order (Doc. 49), which denied without prejudice Plaintiffs' motion for expedited collective action notification and directed that Plaintiffs may re-file a motion for class notification after the Court rules on Defendants' then-anticipated motion to dismiss. The Order also denied Plaintiffs' motion for expedited briefing on their motion for collective action notification, denied Defendants' motion to stay, granted Defendants' motion for expedited consideration of Defendants' motion to stay and Ordered Defendants to file their motion to dismiss by February 8, 2008, directing the parties to brief the motion to dismiss on an expedited basis.

On February 8, 2008, all Defendants filed motions to

2008 U.S. Dist. LEXIS 83315, *58


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dismiss (Docs. 88, 89, 90). These motions are fully briefed. On May 5, 2008, Plaintiffs filed the instant Motion and Memorandum of Points and Authorities in Support of their Motion for An Equitable Toll of the Statute of Limitations (Doc. 174). This Motion also is fully briefed.

In their Motion, Plaintiffs assert that equitable tolling is appropriate to prevent the expiration of Plaintiffs' claims because of delays in the case not due to the fault of the Plaintiffs. Defendants oppose Plaintiffs' [*63] Motion for Equitable Tolling asserting that equitable tolling is only warranted in two situations, namely: (1) where the plaintiffs actively pursued their legal remedies by filing defective pleadings within the statutory period; or (2) where the defendant's misconduct caused plaintiffs to miss the deadline.

The commencement of a lawsuit does not act to toll the statute of limitations under the FLSA for putative class members. Instead, the statute of limitations continues to run until putative class members file consent forms. See 29 U.S.C. § 256; see also Grayson v. K Mart Corp., 79 F.3d 1086, 1106 (11th Cir. 1996), cert. denied, Helton v. Kmart, 519 U.S. 987, 117 S. Ct. 447, 136 L. Ed. 2d 342 (1996). Courts have equitably tolled the statute of limitations in a FLSA action when doing so is in the interest of justice. See, e.g., Partlow v. Jewish Orphans' Home of Southern Cal., Inc., 645 F.2d 757, 760-61 (9th Cir. 1981) (equitable tolling proper where plaintiffs were without fault and "practical effect of not tolling the statute would be to bar forever any claim" the employees had against defendant), abrogated on other grounds by Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989); see [*64] also Beauperthuy v. 24 Hour Fitness USA, Inc., 2007 U.S. Dist. LEXIS 21315, 2007 WL 707475 at *8 (N.D.Cal. Mar. 6, 2007) (equitably tolling FLSA statute of limitations because of factors outside plaintiffs' control, including litigation, arbitration and settlement of related action).

The Court finds it appropriate in the interest of justice to toll the statute of limitations here. Defendants here will not be prejudiced by an equitable toll. See, e.g., Baden-Winterwood, 484 F.Supp. 2d 822, 828 (S.D. Oh. 2007) (defendant was fully aware of its scope of potential liability on the date the suit was filed). If not tolled, the statute of limitations could act to deprive consenting employees of their right of action. Partlow, 645 F.2d at 761; see also Lee v. ABC Carpet & Home, 236 F.R.D. 193, 199 (S.D.N.Y. 2006) (holding that "the time during which a party is prevented from obtaining legal relief is

not counted for purposes of statutes of limitations."). Here, the Court has not made a determination as to Plaintiffs' collective action notification pending its determination of Defendants' Motions to Dismiss. As the Supreme Court noted in Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 170, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989), the inherent benefits of [*65] the collective action "will disappear" if plaintiffs are not notified of the suit before their statute of limitations expires. Similarly, here, without tolling the statute of limitations, Plaintiffs will have lost the time between the filing of the Motions to Dismiss on February 8, 2008 until the filing of the instant Motion that they could have used to notify potential class members. Accordingly, Plaintiffs' Motion for an Equitable Toll of the Statute of Limitations is granted. Plaintiffs' statute of limitations is hereby tolled from the date Defendants filed their Motions to Dismiss, February 8, 2008, until the date Plaintiffs re-file their motion for expedited collective action notification.

CONCLUSION

For the foregoing reasons,

IT IS ORDERED granting SCI Eastern Market Support Center and SCI Houston Market Support Center's Motion to Dismiss (Doc. 55). SCI Eastern and SCI Houston are hereby dismissed from these proceedings.

IT IS FURTHER ORDERED directing additional discovery as to the personal jurisdiction of Defendants Thomas Ryan and Julie Douglas. The parties are directed to file any briefing on this issue after they have had the opportunity to conduct such discovery (Doc. 54).

IT [*66] IS FURTHER ORDERED denying the Motion to Dismiss as to Defendants Jane D. Jones, Gwen Petteway, Thomas Ryan, Curtis Briggs (Doc. 54).

IT IS FURTHER ORDERED denying Defendants' Motion to Dismiss Plaintiffs' FLSA claim (Doc. 72).

IT IS FURTHER ORDERED denying Defendants' Motion to Dismiss Plaintiffs' ERISA claims (Doc. 72). The Court will hold these claims in abeyance pending the outcome of Plaintiffs' FLSA claim.

IT IS FURTHER ORDERED denying Defendants' Motion to Dismiss Plaintiffs' RICO claim (Doc. 72). The Court will hold this claim in abeyance pending the outcome of Plaintiffs' FLSA claim.

2008 U.S. Dist. LEXIS 83315, *62


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IT IS FURTHER ORDERED denying Defendants' Motion to Strike the Rule 23 Allegations as to the ERISA and RICO claims but directing that no action be taken as to the Rule 23 class until after the FLSA claim is decided (Doc. 72).

IT IS FURTHER ORDERED granting in part and denying in part Defendants' Motion to Dismiss the Plan (Doc. 72). Plaintiffs' FLSA and RICO claims are dismissed as to the Plan. Plaintiffs' ERISA claims may proceed as to the Plan.

IT IS FURTHER ORDERED granting Plaintiffs' Motion for an Equitable Toll of the Statute of Limitations (Doc. 174). Plaintiffs' statute of limitations is, hereby, [*67] tolled from the date Defendants filed their Motions to Dismiss, February 8, 2008, until the date Plaintiffs re-file their motion for expedited collective action notification.

DATED this 29th day of September, 2008.

/s/ Mary H. Murguia

Mary H. Murguia


End of Document

2008 U.S. Dist. LEXIS 83315, *66


Taylor v. Pittsburgh Mercy Health Sys.

United States District Court for the Western District of Pennsylvania

May 11, 2009, Decided; May 11, 2009, Filed

Civil Action No. 09-377


YVONNE TAYLOR, et al., Plaintiffs, v. PITTSBURGH MERCY HEALTH SYSTEM, INC., et al., Defendants.

Subsequent History: Related proceeding at Camesi v. Univ. of Pittsburgh Med. Ctr., 2009 U.S. Dist. LEXIS 40571 (W.D. Pa., May 14, 2009)

Related proceeding at Kuznyetsov v. W. Penn Allegheny Health Sys., 2009 U.S. Dist. LEXIS 47163 (W.D. Pa., June 1, 2009)

Motion granted by Taylor v. Pittsburgh Mercy Health Sys., 2009 U.S. Dist. LEXIS 57328 (W.D. Pa., July 7, 2009)

Counsel: [*1] For YVONNE TAYLOR, Plaintiff: J. Nelson Thomas, LEAD ATTORNEY, Thomas & Solomon LLP, Rochester, NY; Justin M. Cordello, Thomas & Solomon, Rochester, NY; Michael J. Lingle, Patrick J. Solomon, PRO HAC VICE, Thomas & Solomon LLP, Rochester, NY.

For KAREN CAMESI, Plaintiff: J. Nelson Thomas, LEAD ATTORNEY, Thomas & Solomon LLP, Rochester, NY; Justin M. Cordello, Thomas & Solomon, Rochester, NY.

For PITTSBURGH MERCY HEALTH SYSTEM, INC, THE MERCY HOSPITAL OF PITTSBURGH, ST. PIUS X RESIDENCE, INC, KENNETH ESHAK, KRISTEN BELL, Defendants: Brian D. Balonick, Terrence H. Murphy, LEAD ATTORNEY, Pittsburgh, PA; Gregory A. Miller, LEAD ATTORNEY, Buchanan Ingersoll, Pittsburgh, PA; James F. Glunt, Mark R. Hornak, LEAD ATTORNEY, Buchanan Ingersoll Rooney, Pittsburgh, PA.

Judges: Cathy Bissoon, United States Magistrate Judge. Magistrate Judge Bissoon. 1

Opinion by: Cathy Bissoon

1 By consent of the parties, the undersigned sits as the District Judge in this case. See Consent forms (Docs. 30 & 31).

Opinion

ORDER

Counsel for the parties shall appear before the undersigned for a status conference to discuss the issues identified below.

Plaintiffs have brought this proposed collective/class action alleging, among other things, that Defendants [*2] have violated provisions of the Fair Labor Standards Act ("FLSA"). See generally Compl. (Doc. 1). Plaintiffs have filed a Motion seeking expedited notification of potentially affected employees so that they may timely "opt in" to the putative collective action. See generally Mot. (Doc. 3).

Much of Defendants' response in opposition addresses the speed and urgency with which Plaintiffs have sought conditional certification and Court-facilitated notice. See generally Defs.' Opp'n Br. (Doc. 32) at 1-10 (arguing that Plaintiffs' request for notice is "premature"; that the expedited nature of Plaintiffs' request is inappropriate; that Defendants first should be permitted to seek dismissal of certain claims under Rule 12(b)(6); and that no harm will result from delaying adjudication of conditional certification). Although Defendants also oppose the notification request on its merits, see id. at 10-21, Defendants' "timing" issues present threshold inquiries.

As Defendants undoubtedly are aware, "time [is] of the essence" for the purposes of FLSA notice "[b]ecause the . . . statute of limitations is not tolled [until] a potential plaintiff opts in[to]" the proposed collective action. Ruggles v. WellPoint, Inc., 591 F. Supp.2d 150, 162 n.12 (N.D.N.Y. 2008); [*3] accord Pontius v. Delta Fin. Corp., 2005 U.S. Dist. LEXIS 46331, 2005 WL 6103189, *4 (W.D. Pa. Jul. 22, 2005) (Lancaster, J.) (under FLSA, "the statute of limitations is not tolled" and "valid damages claims, if any, are . . . lost or reduced"


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over time) (citation in footnote omitted). Although Defendants have compiled an impressive list of cases in which conditional certification was addressed at later stages in the litigation, neither their briefing nor the Court's independent research has identified legal standards governing when FLSA notice can or should first be addressed.

In the absence of such authority, the Court, on its own, must strike a balance between the putative collective action members' interest in asserting timely claims and Defendants' interest in fully and fairly contesting this litigation. The logical starting point is Defendants' stated intention to seek dismissal of certain claims under Rule 12(b)(6).

Defendants identify four potential grounds for dismissal:1. lack of specificity as to Plaintiffs' claims;2. ambiguity as to the identity of Defendants;3. Plaintiffs' failure to state a claim for "estoppel"; and4. Plaintiffs' failure to state a claim under RICO.

Defs.' Opp'n Br. at 7.

Although Defendants [*4] have not yet enjoyed an opportunity to fully address these issues, none of them causes the Court to suspect that Defendants seek, or will secure, a full and final dismissal of Plaintiffs' FLSA claims. The RICO and "estoppel" claims aside, Plaintiffs' current FLSA averments appear to easily satisfy the notice pleading standards and seem likely to survive a specificity challenge. As for the RICO and estoppel claims, they in no way are implicated by Plaintiffs' request for the issuance of FLSA notice.

All that remains are questions regarding the identity of Defendants. As Defense counsel notes, paragraphs 15 and 16 of the Complaint list "health care facilities and centers" of the named Defendants and "affiliated health care facilities and centers," and paragraph 17 purports to identify these facilities, along with the named Defendants, as "Defendants." See Compl. at PP 15-16. At this juncture, the Court has no concrete basis to conclude that the list of actual Defendants extends beyond those identified in the caption and in paragraph 14 of the Complaint. See id. To the extent Plaintiffs hold a contrary view, they should be prepared to discuss it at the conference scheduled herein.

Aside [*5] from Defendants' anticipated motion to dismiss, their counsel have offered no meaningful explanation for why conditional certification should be delayed. On the other side of the equation, though, Defendants question the actual urgency with which

Plaintiffs have approached this litigation:As evidenced by when the consents [to opt in] filed in this action were signed, [P]laintiffs' counsel has had these claims in their hands for nine months. Of the 138 consent forms filed to date, at least 36 were signed eight months before, and at least 124 three months before, the lawsuit was commenced. Plaintiffs have voluntarily imposed delay in filing this action, so they cannot claim unfair prejudice from not receiving expedited notice.In fact, [P]laintiffs' counsel have been in contact with putative class members for almost a year, soliciting individuals to join the litigation. Plaintiffs have published press releases about the case, held a televised press conference . . . on April 1, 2009, set up a website for potential class members . . ., and contacted potential class members, advising of potential claims against the Pittsburgh Mercy Health System and others.

[Plaintiffs'] assertion that[,] [*6] in the absence of immediate, [C]ourt-facilitated notice, putative class members will be unfairly prejudiced is belied by the fact that their counsel has been sending notices and has been in contact with putative class members for almost a year. In light of these solicitation efforts, [P]laintiffs cannot claim harm from not receiving expedited notice, and their motion is revealed for what it is -- . . . a fast-track effort to [obtain] conditional class certification before . . . Defendants or the Court have any real opportunity to consider and address the many issues that will directly affect whether and what type of notice is permitted.

Defs.' Opp'n Br. at 8-9.

Assuming these assertions are true, the Court is not now prepared to opine on the degree to which they impact the legislative and jurisprudential interests in protecting putative collective action members from losing their claims to the statute of limitations. Nevertheless, the Court cannot rule out the potential impact of Defendants' assertions, and Plaintiffs' counsel should be called upon to respond.

In weighing the conflicting interests identified above, the Court also must consider a mechanism through which all parties may [*7] be protected: the tolling of putative members' statute of limitations. Defense counsel has cited one decision, Rubery v. Buth-Na-Bodhaige, Inc., as an example of a case in which the court granted "expedited" notice more than "four years after the complaint was filed." See Defs.' Opp'n Br. at 6

2009 U.S. Dist. LEXIS 40080, *3


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(emphasis in original) (citing Rubery, 569 F. Supp. 2d 334 (W.D.N.Y. Aug. 8, 2008)). Any "expeditiousness" in that case is explained by those litigants having "recently canceled" a "tolling agreement" entered between them. See Rubery at 338-39. Should the parties here stipulate to a similar agreement, Defendants may pursue their anticipated Rule 12(b)(6) motion (and file a responsive pleading) while at the same time preserving the rights of putative collective action members.

Even if the parties cannot reach such an agreement, one of the other cases cited by Defendants demonstrates that the Court itself may impose equitable tolling. See Stickle v. SCI Western Market Support Ctr., L.P., 2008 U.S. Dist. LEXIS 83315, 2008 WL 4446539, *22 (D. Ariz. Sept. 30, 2008) ("[c]ourts [may] equitably toll [] the statute of limitations in a[n] FLSA action when doing so is in the interest of justice") (citations omitted); see also Defs.' [*8] Opp'n Br. at 8 (citing and relying on Stickle as "a similar case, involving the same [P]laintiffs' counsel"). The Stickle court found equitable tolling appropriate because: "defendant[s] [were] fully aware of [the] scope of potential liability on the date the suit was filed"; absent tolling, "the statute of limitations could act to deprive consenting employees of their right of action"; the court had made no determination regarding the plaintiffs' collective action notification given the pendency of defendants' motions to dismiss; and because "the inherent benefits of the collective action" are eviscerated "if plaintiffs are not notified of the suit before their . . . limitations [period] expires." Id. Most, if not all, of these observations apply here with equal force.

To be sure, one of the factors relevant to equitable tolling is Plaintiffs' degree of diligence -- an issue already challenged by Defendants. Compare Faison v. Texas EZPawn, L.P., 2007 U.S. Dist. LEXIS 36864, 2007 WL 1481047, *1 (S.D. Tex. May 21, 2007) (holding same) with discussion supra. The ultimate question, however, is whether a grant of equitable tolling would be "in the interest[s] of justice," and there are other factors supporting its [*9] application in this case.

As referenced above, the Court currently has little reason to believe that Defendants' anticipated Rule 12(b)(6) motion (the only articulable basis for delaying conditional certification) will result in a full dismissal of Plaintiffs' FLSA claims. Under the circumstances, the "narrowing [of] issues" contemplated by Defendants (see Defs.' Opp'n Br. at 10) would not appear to outweigh the interest in timely preserving claims of putative collective action members.

Another factor is the time it will take for Defendants to file their motion to dismiss; for Plaintiffs to respond; and for the Court to issue a reasoned decision and address potential requests for amendment. While these considerations arguably may apply in any FLSA collective action, the Court is disinclined here to allow non-FLSA related, tangentially related, or curable deficiencies to cause the lapse of potential FLSA claims while Defendants' requests for dismissal run their course through the adjudicative process.

Finally, the Court notes that one of the named Defendants in this case, The Mercy Hospital of Pittsburgh, also is named as a defendant in the related case, Camesi v. University of Pittsburgh Medical Center, Civil Action No. 09-85J, 2009 U.S. Dist. LEXIS 40571 (W.D. Pa. 2009), [*10] and said Defendant has immediately resisted on the merits Plaintiffs' expedited request for conditional certification. See generally Doc. 93 in Civ. Action No. 09-85J. Although fairness precludes the Court from attaching much weight to this factor, at a minimum, it does demonstrate that adjudicating the request for conditional certification and notice in the first instance is not beyond the pale of measured judicial process.

For all of these reasons, counsel shall appear before the undersigned for a status conference to address how this litigation should proceed. As referenced above, the parties shall be prepared to discuss: whether they have or can enter into a "tolling agreement" covering the time it takes to adjudicate Defendants' anticipated motion to dismiss; any proposed curative amendments; and/or the period for Defendants' responsive pleading. Otherwise, counsel will have an opportunity at the conference to state their positions regarding the judicial invocation of equitable tolling, and the Court then will issue its ruling.

In addition, the parties shall confer in advance of the conference to discuss any ambiguities regarding [*11] which entities are, or are meant to be, named Defendants in this case. 2 Defendants also should apprise Plaintiffs of the lack of specificity they perceive in the Complaint, and the parties shall determine whether a request for dismissal can be avoided through curative amendment.

Finally, Plaintiffs should be prepared to state their

2 As appropriate, Plaintiffs also should be prepared to explain why The Mercy Hospital of Pittsburgh can and/or should be a Defendant in both this and the related FMLA collective action filed at Civil Action No. 09-85J.

2009 U.S. Dist. LEXIS 40080, *7


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position regarding the proposed subclasses identified in their Complaint. In both this action and the related case at Civil Action No. 09-85J, Plaintiffs' notice request has focused exclusively on Defendants' purported "Meal Break" policy and others directly related thereto. See Pls.' Br. (Doc. 4) at 33-34 (requesting issuance of notice to employees "whose pay was subject to an automatic [meal break] deduction even when employees performed compensable work"); Doc. 5 in Civ. Action No. 09-85J at 39 (stating identical request). In both Complaints, however, Plaintiffs also make reference to Defendants' purported "Unpaid Preliminary and Postliminary [*12] Work Policy" and "Unpaid Training Policy." See Compl. in 09-377 at PP 94-97, 98-102 and Compl. in 09-85J at PP 106-109, 110-13; cf. also Compl. in 09-377 at PP 103-110 (alleging other unrelated violations of FLSA).

As Defense counsel highlights, Plaintiffs have offered no explanation of whether, and when, these allegations will be addressed for the purposes of notice and otherwise. See generally Defs.' Opp'n Br. at 9 ("[u]nless plaintiffs will concede that claims based on the alleged 'Meal Break Deduction Policy' are the only ones requiring notice," Defendants and Court cannot rule out possibility that "later Court-facilitated notice(s) will be requested"); see also generally affirmations attached to Mots. for Expedited Notice in 09-377 & 09-85J (making no reference to FLSA violations unrelated to meal breaks). The Court also submits that, if the crux of this case is what it appears to be (i.e., employee meal breaks), Plaintiffs' additional claims seem more akin to the type of "fishing expedition" commonly disfavored in the law. Cf. generally Rappaport v. Embarq Mgmt. Co., 2007 U.S. Dist. LEXIS 92869, 2007 WL 4482581, *5 (M.D. Fla. Dec. 18, 2007) (for purposes of FLSA notice, "[e]mployers should not be unduly burdened [*13] by . . . frivolous fishing expedition[s] conducted by the plaintiff at the employer's expense []") (citation to quoted source omitted).

Having been placed on notice of this issue, Plaintiffs must be prepared to define the scope of FLSA relief they intend to seek through the collective action vehicle and how they intend to pursue it. It also remains Defendants' prerogative to object to later requests for notice and/or attempts to press subsidiary theories based on the delay resulting from Plaintiffs' chosen litigation strategies. And while Plaintiffs obviously are the masters of their own case, counsel should consider the potential dilutive effect and distraction that may result from a continued pursuit of tangential theories under the FLSA.

Consistent with the foregoing, counsel for the parties shall appear in the undersigned's Chambers at 10:00 a.m. on May 22, 2009 for a status conference to discuss how this case shall proceed.

IT IS SO ORDERED.

May 11, 2009

/s/ Cathy Bissoon

Cathy Bissoon


End of Document

2009 U.S. Dist. LEXIS 40080, *11


Yahraes v. Rest. Assocs. Events Corp.

United States District Court for the Eastern District of New York

March 8, 2011, Decided; March 8, 2011, Filed

10-CV-935 (SLT)


DANIEL B. YAHRAES, ET AL., Plaintiffs, -against- RESTAURANT ASSOCIATES EVENTS CORP., ET AL., Defendants.

Subsequent History: Motion granted by, Settled by Yahraes v. Rest. Assocs. Events Corp., 2013 U.S. Dist. LEXIS 4147 (E.D.N.Y., Jan. 10, 2013)

Counsel: [*1] For Daniel B. Yahraes, Kyle Hanagarne, Ellie Hanagarne, on behalf of themselves and all others similarly situated, Plaintiffs: Judith L. Spanier, Orin R. Kurtz, Abbey Spanier Rodd & Abrams, LLP, New York, NY; Mitchell Schley, Mitchell Schley, East Brunswick, NJ.

For Restaurant Associates Events Corp., RA Tennis Corporation, Levy Restaurants, Inc., Defendant: Andrew P. Marks, LEAD ATTORNEY, Sara Danielle Sheinkin, Littler Mendelson, P.C., New York, NY.

For Amerivents, Scott Frain, James Della Pace, JKdella Sales Dimensions, Inc., Defendants: Andrew P. Marks, LEAD ATTORNEY, Littler Mendelson, P.C., New York, NY; Jerome Patrick Coleman, LEAD ATTORNEY, Joseph Cartafalsa, Michael Christopher Moon, Putney, Twombly Hall & Hirson LLP, New York, NY.

For Peter M. Milanovich, Defendant: Judith L. Spanier, Orin R. Kurtz, Abbey Spanier Rodd & Abrams, LLP, New York, NY.

Judges: STEVEN M. GOLD, United States Magistrate Judge.

Opinion by: STEVEN M. GOLD

Opinion

MEMORANDUM & ORDER

GOLD, STEVEN M., U.S.M.J.:

Plaintiffs, on behalf of themselves and others similarly

situated, bring this action, inter alia, to recover unpaid overtime wages pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Plaintiffs worked as "suite [*2] attendants" at the U.S. Tennis Open, which occurs every year in late August to early September. Currently before the court is plaintiffs' motion seeking equitable tolling of their 2007 FLSA claims. 1 Docket Entry 96.

During oral argument on plaintiffs' motion to certify that this case may proceed as a collective action pursuant to 29 U.S.C. § 216(b), I questioned whether the 2007 FLSA claims, even assuming that defendants' violation was willful, were still viable or were now time-barred. 2 Plaintiffs conceded that, although United States District Judge Sandra L. Townes had granted a stay and tolled the limitations period for approximately 160 days, the 2007 claims were set to expire within a week. 02/09/11 Oral Arg. Tr. ("Tr.") 5-6, Docket Entry 97. Plaintiffs then filed the instant motion, seeking to toll the limitations period to permit the 2007 claims of potential opt-in plaintiffs, who only recently received notice of their possible claims for unpaid wages, to proceed.

DISCUSSION

A. [*3] Standard

The FLSA provides for a two-year statute of limitations generally, with an additional one-year extension for willful violations. 29 U.S.C. § 255(a). In a FLSA collective action, the statute of limitations runs for each plaintiff until he files written consent with the court to join the lawsuit. Id. § 256(b). Thus, unlike the statute of limitations in a Rule 23 class action which is tolled for all putative class members upon the filing of the complaint, the limitations periods in a FLSA action continues to run

1 By letter dated February 17, 2011, the parties consented to have me decide the motion. Docket Entry 98.

2 A willful violation extends the statute of limitations from two to three years. 29 U.S.C. § 255(a)


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until an individual affirmatively opts into the action. Moreover, "[s]igned consents do not relate back to the original filing date of the complaint." Lee v. ABC Carpet & Home, 236 F.R.D. 193, 199 (S.D.N.Y. 2006). Nonetheless, the court has the discretion to equitably toll the limitations period.

Federal courts should grant equitable tolling "sparingly," Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 96, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990), and "only . . . in [ ] rare and exceptional circumstance[s]," Zerilli-Edelglass v. New York City Transit Auth., 333 F.3d 74, 80 (2d Cir. 2003) (alteration in original) (internal quotation marks omitted). Equitable tolling is generally reserved for situations "where [*4] the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass." Irwin, 498 U.S. at 96. Nevertheless, "[a] statute of limitations may be tolled as necessary to avoid inequitable circumstances." Iavorski v. U.S. Immigration & Naturalization Serv., 232 F.3d 124, 129 (2d Cir. 2000). In determining whether equitable tolling is warranted, the Second Circuit has stated that a court "must consider whether the person seeking application of the equitable tolling doctrine (1) has acted with reasonable diligence during the time period she seeks to have tolled, and (2) has proved that the circumstances are so extraordinary that the doctrine should apply." Zerilli-Edelglass, 333 F.3d at 80-81 (internal quotation marks omitted).

The delay caused by the time required for a court to rule on a motion, such as one for certification of a collective action in a FLSA case, may be deemed an "extraordinary circumstance[]" justifying application of the equitable tolling doctrine. See Abadeer v. Tyson Foods, Inc., 2010 U.S. Dist. LEXIS 136978, 2010 WL 5158873, at *2-4 (M.D. Tenn. Dec. 14, 2010); [*5] Israel Antonio-Morales v. Bimbo's Best Produce, Inc., 2009 U.S. Dist. LEXIS 51833, 2009 WL 1591172, at *1 (E.D. La. Apr. 20, 2009) (collecting cases for the proposition that "[c]ourts routinely grant equitable tolling in the FLSA collective action context to avoid prejudice to actual or potential opt-in plaintiffs that can arise from the unique procedural posture of collective actions"); Stickle v. SCI Western Mkt. Support Ctr., 2008 U.S. Dist. LEXIS 83315, 2008 WL 4446539, at *22 (D. Ariz. Sept. 30, 2008) (collecting cases); Owens v. Bethlehem Mines Corp., 630 F. Supp. 309, 312 (S.D.W.V. 1986). But see Hintergerger v. Catholic Health Sys., 2009 U.S. Dist. LEXIS 97944, 2009 WL 3464134, at *14-15 (W.D.N.Y. Oct. 21, 2009) (denying tolling for the time period while

certification motion was pending).

B. Analysis

Plaintiffs argue for equitable tolling primarily on the ground that they have diligently pursued their claims and, through no fault of their own, have been frustrated in their attempts to send notice any sooner to potential 216(b) opt-in plaintiffs. 3 Docket Entry 96. I find that the circumstances of this case, and in particular plaintiffs' diligence in pursuing the FLSA claims on behalf of putative opt-ins, warrant equitable tolling to avoid an inequitable result. [*6] A discussion of the procedural history of this case will explain the "extraordinary circumstances" present here that justify tolling.

Less than one month after filing an amended complaint, plaintiffs filed a fully-briefed motion to certify the collective action. 4 Docket Entries 33-39. In their opposition to plaintiffs' certification motion, defendants noted that one of the defendants, Amerivents, had recently entered into an agreement with the New York State Department of Labor ("NYSDOL") to pay unpaid wages. Docket Entry 41 at 14. During a conference in

3 Plaintiffs also argue that equitable tolling is warranted because of defendants' misclassification of 2007 and 2008 suite attendants as "independent contractors." Docket Entry 102. Independent contractors are not covered by the FLSA and have no rights under the FLSA. 29 U.S.C. §§ 206(a), 207(a)(1) (requiring "employers" to pay minimum and overtime wages to "employees"). Thus, plaintiffs argue, the collective class did not have notice of their FLSA rights until receipt of the 216(b) notice. Docket Entry 102. Because I find equitable tolling is warranted on other grounds, and in light of the split among courts whether a failure to give notice of FLSA rights warrants equitable tolling, see Ramirez v. Rifkin, 568 F. Supp. 2d 262, 269-70 (E.D.N.Y. 2008) (citing cases), I decline to address this argument. See also Gustafson v. Bell Atlantic Corp., 171 F. Supp. 2d 311, 323 (S.D.N.Y. 2001) (rejecting plaintiff's argument for equitable tolling because he was aware of his classification as an independent contractor and thus should have known of his FLSA cause [*7] of action).

In addition, plaintiffs contend that Judge Townes' tolling is still ongoing. Docket Entries 96, 102. For the reasons just stated, I do not reach this question either.

4 Plaintiffs originally filed this action on March 3, 2010, and promptly served the defendants. In lieu of answers, defendants filed pre-motion conference applications in anticipation of their motions to dismiss. [*8] Plaintiffs then filed an amended complaint on April 30, 2010 and defendants renewed their application for a pre-motion conference.

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June, 2010, Judge Townes issued a stay of the proceedings until November 19, 2010, to await the result of the NYSDOL investigation. The parties agree that plaintiffs' claims were tolled for approximately 160 days while the stay was in place. See Docket Entry 102 n.3 (stating that 160 days is "the minimum undisputed number of days the statute of limitations was tolled"); see also Tr. 5.

After the stay was lifted, defendants requested leave to re-brief their opposition to the certification motion, and sought to defer the certification motion until Judge Townes decided their motion to dismiss, which had not yet even been filed. 5 Docket Entry 81. During a telephone conference held in December, 2010, I set a short briefing schedule for the certification motion, with the fully-briefed motion due at the end of January, 2011. At the oral argument held on February 9, 2011, I granted plaintiffs' motion for certification of the collective action.

This procedural history demonstrates that plaintiffs have vigorously pursued their claims and, through no fault of their own, have been delayed in prosecuting their action and distributing 216(b) notice to potential opt-in plaintiffs. Moreover, defendants' actions — re-briefing the certification motion, seeking to defer [*9] certification in anticipation of dispositive motions, and failing to produce documents in connection with the NYSDOL investigation 6 — have frustrated plaintiffs' diligent attempts to ensure that claims did not expire. I attribute no trickery or wrongdoing on the part of defendants. I do, however, conclude that defendants will not be prejudiced by any tolling because they have been on notice since the complaint was served in March, 2010, that they were potentially liable for 2007 FLSA claims. Accordingly, in the interest of fairness, I find equitable tolling is warranted from the date plaintiffs served their original certification motion, May 3, 2010, to June 8, 2010, the date Judge Townes issued the stay (a period of 37 days), and from the date plaintiffs re-filed their certification motion, December 17, 2010, to February 9, 2011, the date I granted it (a period of 55

5 Defendants' opening brief in support of their motion to dismiss was served on February 22, 2011. Docket Entry 103. The motion will not be fully briefed until April 19, 2011. Docket Entry 90.

6 During oral argument on the certification motion, counsel for plaintiffs [*10] stated that she had repeatedly sought documents pertaining to the NYSDOL proceedings but that defendants had not produced them. Tr. 42-46.

days). The additional 92 days will permit any collective member who timely opts in to maintain a FLSA claim based on wages allegedly due for labor performed in September, 2007, assuming plaintiffs establish defendants' willful violation of the statute. 7

CONCLUSION

For the reasons stated above, I find equitable tolling of plaintiffs' FLSA claims warranted in light of the procedural history of this case.

SO ORDERED.

/s/

STEVEN M. GOLD


Dated: Brooklyn, New York

March 8, 2011

End of Document

7 The 216(b) notice requires opt-in plaintiffs to file their consent no later than May 2, 2011.

2011 U.S. Dist. LEXIS 23115, *8


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