Lauren Houston v. Country Club, Inc.
Lauren Houston v. Country Club, Inc.
Opinion
This case presents an issue of first impression regarding the status of opt-in plaintiffs in collective actions under the Fair Labor Standards Act (FLSA),
I. BACKGROUND
In April 2014, Andrea Mickles
1
filed a complaint against Country Club Inc., alleging she was proceeding on behalf of herself and all other similarly-situated employees in a collective action lawsuit under the FLSA,
Other employees then opted into the litigation by filing consents to become party plaintiffs. On June 11, 2014, Lauren Houston filed a "Consent to Become a Party Plaintiff" with the court, stating she consented to sue as a plaintiff in the FLSA action. On August 26, 2014, Shana McAllister and April Lemon filed their "Consent[s] to Become ... Party Plaintiff[s]," also consenting to sue as plaintiffs in the FLSA action. 2
Discovery began on August 22, 2014. Mickles and Country Club agreed that, per Northern District of Georgia Local Rule 7.1(A)(2), except as specifically provided, all "motions must be filed WITHIN THIRTY (30) DAYS after the beginning of discovery unless the filing party has obtained prior permission of the court to file later." The district court adopted this deadline in its Scheduling Order. All motions (absent a few exceptions) were required to be filed by September 22, 2014. 3
Country Club took the depositions of Houston, McAllister, and Lemon during the discovery period. The district court twice extended the discovery period, which ultimately ended on April 6, 2015. On May 14, 2015, more than a month after the close of discovery, Mickles filed a motion for conditional certification of a collective action. She moved to certify the collective action under
On January 6, 2016, the district court denied the motion for conditional certification (conditional certification order) based on untimeliness, as the motion was filed "nearly eight months" past the deadline set by the local rules, and Mickles did not have "prior permission of the court" to file the motion after the deadline. The district court noted that the burden on a plaintiff seeking conditional certification is minimal, and Mickles was "well aware that there were other plaintiffs who were similarly situated and wished to opt-in before the deadline for filing the motion for conditional certification." The district court also rejected Mickles' argument that granting the motion for conditional certification would serve the interests of judicial economy, "as it would allow other potential plaintiffs to join this action, rather than forcing the plaintiffs to file separate actions." The court stated "[i]t is, indeed, unfortunate that needless costs may result as a consequence of Plaintiff's failure to file her Motion in a timely manner," but noted costs would also result if discovery were reopened. The district court decided "the best course of action is to enforce the deadline, and thus to deny Plaintiff's motion as untimely." The court concluded, "[f]or the foregoing reasons, Plaintiff's Motion for Conditional Collective Action Certification ... is DENIED." The conditional certification order made no mention of dismissing Houston, McAllister, and Lemon from the litigation.
On October 6, 2016, Country Club filed a motion for clarification of the district *1275 court's conditional certification order, inquiring about which individual plaintiffs remained parties in the action. Mickles, Houston, McAllister, and Lemon each believed they were party plaintiffs in the action because the district court never dismissed their claims. Country Club believed Houston, McAllister, and Lemon never formally became party plaintiffs, and that they effectively fell out of the case when the motion for conditional certification was denied, leaving only Mickles as a party plaintiff. Mickles, Houston, McAllister, and Lemon responded, agreeing that clarification was necessary, but they disagreed that the denial of the motion for conditional certification caused Houston, McAllister, and Lemon to be automatically dismissed from the case. On October 17, 2016, the district court granted the motion for clarification (clarification order), stating that Houston, McAllister, and Lemon were never adjudicated to be similarly situated to Mickles, and, therefore, were never properly added as party plaintiffs to the collective action.
On October 31, 2016, Country Club notified the district court that it had reached a settlement with Mickles. Mickles and Country Club filed a motion to approve the settlement, which resolved both the substantive claims and the counterclaims. On December 5, 2016, the district court approved the settlement. Houston, McAllister, and Lemon filed a notice of appeal, specifying that they were appealing the district court's (1) conditional certification order, (2) clarification order, and (3) order approving the settlement.
II. DISCUSSION
A. Jurisdiction
As an initial matter, we must determine whether Houston, McAllister, and Lemon (collectively, Appellants) have appellate standing. We issued a jurisdictional question to the parties, asking them to address: (1) whether Appellants were considered parties such that they had a right to appeal; and (2) if so, whether their appeal was timely as to the orders that foreclosed their rights to participate in the litigation. We hold we have jurisdiction to entertain Appellants' appeal, as they (1) are parties to the litigation, and (2) timely appealed the final judgment in the case. 4
1. Whether Appellants were parties to the litigation
The standing question is intertwined with the primary merits issue in this case, specifically: whether the district court erred in determining Appellants "never became parties" to the litigation. Because we must determine whether Appellants were ever parties to this FLSA collective action, a review of the typical process in an FLSA collective action is necessary.
We first turn to the FLSA provision providing the opt-in mechanism for collective actions,
*1276
written consent with the court in order to be considered a class member and be bound by the outcome of the action."
Hipp
,
Looking to the FLSA collective action statute, we discern two requirements. The first is a requirement of the named plaintiff-she must file on behalf of herself and "other 'similarly situated' employees."
Hipp
,
In this case, there is no dispute Appellants satisfied the second requirement. Appellants each consented in writing to become opt-in plaintiffs and filed their consents in the appropriate court. However, Country Club argues the first requirement was not satisfied. Although Mickles filed her complaint on behalf of herself and others similarly situated, Appellants were never found to be similarly situated to Mickles. Thus, according to Country Club, the Appellants never became party plaintiffs.
Our Court has suggested a two-tiered approach in making a similarly-situated determination in opt-in collective actions.
Hipp
,
The second stage is precipitated by a motion for decertification from the defendant, which is typically filed after discovery is complete and the matter is ready for trial.
In
Hipp
, we noted that nothing in our circuit precedent
requires
district courts to use this approach.
In this case, the district court did not conduct a
Hipp
analysis because it determined the conditional certification motion was untimely under the local rules.
6
Thus, the district court never made a similarly-situated determination at either the more lenient first stage or the more demanding second stage.
See
Observations about the purpose of conditional certification in other contexts support the conclusion that conditional certification is unnecessary to obtain party-plaintiff status. In holding an FLSA collective action was moot when the lead plaintiff settled her claim and no other plaintiffs had opted in, the Supreme Court explained the purpose of conditional certification.
Genesis Healthcare Corp. v. Symczyk
,
When reviewing a district court's denial of a motion to decertify a collective action following discovery, this Court explained "[b]ecause similarly situated employees must affirmatively opt into the litigation, the decision to certify the action, on its own, does not create a class of plaintiffs."
Morgan v. Family Dollar Stores, Inc.
,
*1278
The plain language of § 216(b) supports that those who opt in become party plaintiffs upon the filing of a consent and that nothing further, including conditional certification, is required.
See
Prickett v. DeKalb County
,
2. Whether Appellants can appeal the final judgment
This Court "usually cannot hear appeals from non-final orders."
Barfield v. Brierton
,
The first time Appellants could appeal from the district court's January 6, 2016, conditional certification order and its October 17, 2016, clarification order was after the December 5, 2016, final order approving the settlement. Appellants could not have appealed from the conditional certification order because that order was not a final order and did not dismiss them from the case. Therefore, any appeal would have been premature. Nor could Appellants have appealed from the clarification order which also was not final and did not dismiss Appellants from the case; rather, it deemed them non-parties. 9 The only final, appealable order was the order approving the settlement between Mickles and Country Club which purported to resolve all claims between all remaining parties.
*1279
10
This final order drew into question all prior orders, including the order for conditional certification and the clarification order.
See
B. Conditional Certification Order
Decisions regarding conditional certification in an FLSA collective action are reviewed for an abuse of discretion.
Morgan
,
The district court denied the motion for conditional certification on the sole basis that it was untimely under the Scheduling Order, which incorporated a local rule stating: "Specific filing times for some motions are set forth below. All other motions must be filed WITHIN THIRTY (30) DAYS after the beginning of discovery unless the filing party has obtained prior permission of the court to file later." N.D. Ga. Loc. R. 7.1(A)(2). Appellants contend the district court did in fact give prior permission to file the conditional certification motion out of time. Appellants rely on the following exchange in a phone conference on April 14, 2015, where the district court deferred the resolution of plaintiffs' discovery request until after the conditional certification motion was filed:
THE COURT: Have you filed that certification motion or condition[al] certification motion yet?
[APPELLANTS' COUNSEL]: Not yet. We will be, you know, imminently.
THE COURT: Well, you file that motion and I'll entertain doing this.
The conditional certification motion was filed one month later, on May 14, 2015. Appellants argue the local rule simply refers to "prior permission" and does not contain any requirement the permission be secured through a formal filing. They contend the district court gave the necessary permission by instructing counsel to file the motion.
The district court did not abuse its discretion in denying the motion for conditional certification as untimely. The day the motion was due was September 22, 2014, yet the motion was not filed until May 14, 2015. The exchange recounted above during a phone conference regarding discovery does not constitute "prior permission" to file an untimely motion for conditional certification nearly eight months after the deadline provided by the *1280 local rules. While the district court stated that Appellants could file the motion in the phone conference, its statement to file the motion does not constrain the district court from later finding that motion untimely. The district court did not abuse its discretion, and we affirm the district court's denial of conditional certification as untimely.
C. Clarification Order
Appellants contend we should construe and review the district court's clarification order as a dismissal with prejudice, since it effectively barred further litigation under the relevant statute of limitations. We agree with Appellants' contention that the district court's deeming them non-parties in the clarification order was tantamount to dismissing them with prejudice, as the applicable statute of limitations would probably bar them from refiling their claims.
Where a dismissal without prejudice has the effect of precluding a plaintiff from refiling his claim due to the running of the statute of limitations, the dismissal is "tantamount to a dismissal with prejudice, a drastic remedy to be used only in those situations where a lesser sanction would not better serve the interests of justice."
Burden v. Yates
,
Generally, when conditional certification of a collective action is denied, existing opt-in plaintiffs are dismissed from the lawsuit without prejudice and the matter proceeds on the named plaintiff's individual claims.
Fox v. Tyson Foods, Inc.
,
As we held in the jurisdictional section, Appellants were parties to the litigation upon filing consents and, absent a dismissal *1281 from the case, remained parties in the litigation. Thus, the district court erred in deeming Appellants non-parties in the clarification order, which had the effect of dismissing their claims with prejudice.
III. CONCLUSION
We AFFIRM the district court's denial of conditional certification. We VACATE the district court's clarification order and REMAND with instructions for the district court to either (1) dismiss Appellants from the case without prejudice to refile, or (2) go forward with Appellants' individual cases since discovery has been completed. In addition, we hold Appellants are entitled to statutory tolling of their claims beginning on the dates they filed their written consents.
See
AFFIRMED in part; VACATED and REMANDED in part.
The record variously refers to the named plaintiff as either Andrea "Mickle" or "Mickles." Although the district court's case style states her name as "Mickle," the plaintiff personally signs her name as "Mickles," and that is the name used in this opinion.
On September 5, 2014, Joy Richardson filed a consent to become a party plaintiff. The district court later dismissed Richardson as a plaintiff from the action without prejudice, as a sanction for failing to appear for her deposition. Richardson is not a party to this appeal.
Thirty days from the beginning of discovery was September 21, 2014. Since September 21 was a Sunday, the parties had until Monday, September 22, 2014, to file motions.
"[W]e review jurisdictional issues
de novo
."
United States v. Lopez
,
"Although
Hipp
involved a collective action brought under the Age Discrimination and Employment Act of 1967,
This case illustrates why it is better for parties and the district court to follow the Hipp process. Of course, the district court's failure to follow the Hipp process was precipitated by Mickles' late filing of the motion for conditional certification. As stated above, this motion is typically filed based only on the pleadings and affidavits, and full discovery is unnecessary. Here, Mickles unnecessarily waited until the close of discovery to file for conditional certification.
The Third Circuit stated that the question of what "party status" means in an FLSA collective action, "particularly before a district court has considered whether those who have filed consent forms are in fact 'similarly situated' to the named plaintiff for purposes of § 216(b)," is an "as-yet unanswered question."
Halle v. W. Penn Allegheny Health Sys. Inc.
,
§ 216(b) is written in the negative, providing that "[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." Thus, the statute establishes that it is, at a minimum, necessary to file a written consent in order to become a party-plaintiff, but it is silent as to whether filing such a consent, without more, is sufficient to confer that status.
In Morgan , the district court followed the Hipp process of using certification to facilitate notice. It was in this context that we assumed a similarly-situated determination will have preceded parties opting into the litigation. But, as we have emphasized, Hipp is optional. Therefore, it does not follow from our statements in Morgan that a similarly-situated determination must precede a party opting in-particularly where, as here, the Hipp process was not utilized.
Country Club argues Appellants should have moved to intervene in the case in order to appeal their status as non-parties. If a non-party seeks to appeal an order in a case, that party generally must move to intervene.
Marino
,
Normally, persons not bound by a class judgment on the merits cannot appeal from the class certification or settlement orders.
AAL High Yield Bond Fund v. Deloitte & Touche LLP
,
Country Club's argument that Appellants waived their right to appeal because they consented to the order approving the settlement without reserving their right to appeal is meritless. While Appellants' attorney also represented Mickles, the settlement was between Mickles and Country Club only. The settlement and subsequent judgment did not bind Appellants merely because they were represented by the same attorney as Mickles and did not file an objection.
In
Bonner v. City of Prichard
,
At oral argument, Country Club's counsel conceded that if this Court holds Appellants became parties upon the filing of their consents, Appellants should have been dismissed without prejudice when conditional certification was denied. In fact, Richardson, an opt-in plaintiff who did not participate in discovery ended up in a better position to refile her case than Appellants, as the district court dismissed Richardson's case without prejudice.
To the extent Country Club's response to this Court's jurisdictional question is construed as a motion to dismiss the appeal for a lack of jurisdiction, the motion is denied. Additionally, Country Club's motion for sanctions for filing a frivolous appeal is denied.
Reference
- Full Case Name
- Andrea MICKLES, ON BEHALF OF HERSELF and All Others Similarly Situated, Plaintiff-Counter Defendant, Lauren Houston, Plaintiff-Counter Defendant-Appellant, Shana McAllister, April Lemon, Plaintiffs-Appellants, Joy Richardson, Plaintiff, v. COUNTRY CLUB INC., D.B.A. Goldrush Showbar, Defendant-Counter Claimant-Appellee.
- Cited By
- 106 cases
- Status
- Published