Category Archives: Multidistrict Litigation

U.S.Jud.Pan.Mult.Lit.: 4 Off-the-Clock Cases Against Foot Locker Centralized to Venue of First-Filed Case

In re: FOOT LOCKER, INC.

These proceedings were before the Multi District Panel, pursuant to 28 U.S.C. § 1407.  The defendants (Foot Locker) moved to centralize several pending cases, all arising from similar claims, in the Eastern District of Pennsylvania.  At the time Foot Locker’s motion was made four actions were pending in four districts.  Plaintiffs in all actions oppose centralization.  Notwithstanding the opposition of all plaintiffs in all cases, the Panel granted Foot Locker’s motion.

Largely breaking from its prior jurisprudence (in granting the motion over opposition of multiple parties), the Panel reasoned:

“On the basis of the papers filed and hearing session held, we find that these actions involve common questions of fact, and that centralization in the Eastern District of Pennsylvania will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. No party disputes that these actions share factual questions arising out of allegations that Foot Locker routinely fails to pay retail employees wages for work they performed. These actions allege that (1) the timekeeping system used by Footlocker allows managers to modify or decrease the time recorded; and (2) Footlocker’s bonus policy encourages managers to force employees to work off-the-clock and to delete time recorded. As in In re Bank of America Wage and Hour Employment Practices Litigation, it appears that defendants’ timekeeping and labor budgeting policies and practices are corporate-wide and uniformly applied. See 706 F.Supp.2d 1369, 1371 (J.P.M.L.2010). Discovery among these actions regarding defendants’ corporate labor budgeting and timekeeping policies therefore will overlap. This litigation, like In re Bank of America, is distinguishable from wage and hour dockets “in which the Panel has denied centralization, because the duties of the employees at issue appeared to be subject to significant local variances.” Id. at 1371, n.3 (citing In re Tyson Foods, Inc., Meat Processing Facilities Fair Labor Standards Act (FLSA) Litig., 581 F.Supp.2d 1374, 1375 (J.P.M.L.2008)).

Plaintiffs’ primarily argue that informal coordination is preferable to centralization since only four actions are pending and plaintiffs are represented by common counsel. Plaintiffs make a strong case against centralization but, on balance, particularly given the likely overlap in discovery and pretrial proceedings, we are persuaded that centralization will promote the just and efficient conduct of this litigation. Though a large number of actions are not presently before the Panel, also weighing in favor of centralization is that additional related actions alleging similar class claims in other states could well be filed. Centralization in these circumstances will have the benefit of eliminating duplicative discovery; preventing inconsistent pretrial rulings, including with respect to class certification; and conserving the resources of the parties, their counsel, and the judiciary.

We are persuaded that the Eastern District of Pennsylvania is the most appropriate transferee district. The first-filed Pereira action has been pending there since May 2007, and Judge J. Curtis Joyner is familiar with the issues in this litigation. Although the Pereira action has been pending for some time, discovery is ongoing and, given that plaintiffs in all actions are represented by common counsel, plaintiffs will not be prejudiced by transfer to the Eastern District of Pennsylvania.”

Thus, although the Panel noted that the plaintiffs made a “strong case” against centralization, it centralized the case nonetheless.

Click In re: Foot Locker, Inc. to read the entire Transfer Order.

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S.D.N.Y.: Although Elements of First-Filed Rule Satisfied, Court Declines to Transfer Second-Filed Case Due to Lack of Progress of First-Filed Case

Pippins v. KPMG LLP

This case was before the court on defendant’s motions to dismiss the case under the first-filed rule, or in the alternative to transfer the case to the site of the first-filed case, as well as defendant’s motion to stay the case, pending the outcome of a related appeal in the first-filed case.  Citing the lack of progress in the first-filed case, the court denied the motions, although acknowledging that the underlying elements necessary for application of the first-filed rule were present.

The court reasoned:

“KPMG has met its burden of showing that the first-filed rule applies in this case by demonstrating that the Present Action and the California Action are nearly identical; however, due to the extensive delay in the California Action, the application of the first-filed rule is diminished.

Since the actions include the same parties and claims, the first-filed rule applies. However, application of the first-filed rule is diminished where there has been little progress in the first-filed action. Am. S.S. Owners Mut. Prot. & Indem. Ass’n, Inc. v. Lafarge N. Am., Inc., 474 F.Supp.2d 474, 489 (S.D.N.Y.2007), aff’d sub nom, N.Y. Marine & Gen. Ins. Co. v. Lafarge N. Am ., Inc., 599 F.3d 102 (2d Cir.2010); see Raytheon Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 306 F.Supp.2d 346, 352–53 (S.D.N.Y.2004). This case was filed by the California Plaintiffs in 2007. Since that time there has been no significant movement in the case, (Swartz Decl. Ex. 2.) and there has been no movement since the case was stayed in 2009 pending the outcome of Campbell by the Ninth Circuit. Thus, the presumption afforded the California Action is diminished here. If Plaintiffs can show the balance of convenience tilts even slightly in their favor, there is no reason for this court to transfer the action.

Plaintiffs have not identified any “special circumstances” that warrant deviation from the first-filed rule.  However, the balance of convenience factors weigh in favor of maintaining this action in the Southern District of New York.”

The court also denied defendant’s motion for a stay, pending the outcome of a related appeal in the Ninth Circuit, noting:

“The first three factors are similar to those considered in the “first-filed” analysis, so those factors weigh in favor of proceeding with this action. The interests of the persons not parties to the civil litigation and the public interest also weigh in favor of denying Defendant’s motion to stay the action. As a collective action, the statute of limitations for opt-in plaintiffs continues to run until the plaintiffs opt-in to the action. 29 U.S.C. § 216(b); Hoffman v. Sbarro, Inc., 982 F.Supp. 249, 260 (S.D.N . Y.1997) (Sotomayor, J.). The FLSA has a statute of limitations of three years, two if “willfulness” is not found. Any further delay could prejudice the interests of potential opt-in plaintiffs, whose claims may stale. Public interest also favors the swift resolution of claims alleging violations of the FLSA.”

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E.D.Mo.: First-Filed Rule Inapplicable to FLSA Case For A Variety of Reasons

Arnold v. DirecTV, Inc.

This FLSA putative collective action was before the court on defendants’ motion to dismiss.  The opinion is of interest, because it discusses an issue raised more and more frequently in recent years, given the proliferation of FLSA cases around the country- the so-called first-filed rule.  Here, the defendants were sued in state court in the first action.  Nine (9) days later, the plaintiffs in this case filed a second case, alleging similar claims.  The defendants moved to dismiss this second-filed case, in favor of the first-filed case, in part based on the first-filed rule.  The court rejected the applicability of the first-filed rule in this context and suggested that given the opt-in procedures applicable in FLSA cases, the first-filed rule may not be applicable to FLSA cases in general.

The court reasoned:

“To conserve judicial resources and avoid conflicting rulings, the first-filed rule gives priority, for purposes of choosing among possible venues when parallel litigation has been instituted in separate courts, to the party who first establishes jurisdiction.” Nw. Airlines, Inc. v. Am. Airlines, Inc., 989 F.2d 1002, 1006 (8th Cir.1993). The rule “is not intended to be rigid, mechanical, or inflexible, but is to be applied in a manner best serving the interests of justice.” Id. at 1005 (citation omitted). The prevailing standard is that “in the absence of compelling circumstances the first-filed rule should apply.” Id. at 1005 (citation omitted). However, district courts enjoy wide discretion in applying the first-filed rule. Id. at 1004.

Upon review of the record, the relevant case law, and the arguments of the parties, this Court declines to apply the first-filed rule to dismiss or stay the present case, for several reasons. Although several district courts have applied the first-filed rule to FLSA collective actions, see, e.g., Abushalieh v. Am. Eagle Exp., Inc., No. 10-211, 2010 WL 2301150 (D.N.J. Jun. 7, 2010), this Court is not convinced that the rule is a good fit for such actions. Generally, the rule is applied when the two cases are between the same parties litigating essentially the same issue, with one party being the plaintiff in one case and the defendant in the other, and vice versa. The decision of whether to apply the first-filed often turns on whether one party unfairly “raced to the courthouse.” See, e.g., Innovation Ventures, L.L.C. v. Custom Nutrition Labs., 534 F.Supp.2d 754 (E.D.Mich.2008). This is not the case here.

Application of the rule in the FLSA opt-in collective action context would, in theory, limit all potential members of a nation-wide class to opt into just one and the same collective action in all the federal district courts. Defendants have not pointed to anything in the FLSA itself that indicates that such a situation was intended. The Court notes that the prejudice claimed by Defendants resulting from having to defend against two (or more) contemporaneous lawsuits raising the same FLSA claims could be mitigated by Defendants availing themselves of multidistrict litigation options. See, e.g., In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953 (9th Cir.2009) (multidistrict litigation arising from three putative collective actions and one putative class action against home mortgage company on behalf of current and former home mortgage consultants seeking overtime pay).

In addition, the Court is not convinced that in this context, the date that Lang was filed in state court should be the operative date for determining which case, i.e., Lang or the present case, was filed first for purpose of the first-filed rule. Clearly, had Lang remained in state court, this Court would not dismiss or stay the present action in deference to Lang. In light of the fact that the first-filed rule is one of comity as between the federal district courts, it seems to this Court that the question is which federal court first obtained jurisdiction over the issues and parties. At least one federal district court has so held. See N. Am. Commc’ns, Inc. v. Homeowners Loan Corp., No. CIVA 3:2006-147, 2007 WL 184776, at *3 n. 1 (W.D.Pa. Jan. 22, 2007) (“In applying the first-filed rule, the first-filed case is the federal civil action which is first in time, whether by removal or the actual filing of a civil action in federal court. Since the rule the Court follows today is limited to federal district courts, the plaintiff in a state civil action can avoid being the second-filed matter by simply filing a complaint in a federal district court, not a state trial court at the outset.”).

Lastly, but not of least significance, the present case has a defendant, DTV Home Services II, LLC, that is not a defendant in Lang and Lang has two defendants that are not defendants here. Although DTV Home Services II, LLC, is a wholly-owned subsidiary of DIRECTV, it is a separate party. See Martin v. Citizens Fin. Group, Inc., No. 10-260, 2010 WL 3239187, at *2 (E.D .Pa. Aug. 13, 2010) (declining to apply first-filed rule to a FLSA case where one of the defendants was not a defendant in an earlier case raising the same issues); Gardner v. GC Servs., LP, No. 10-CV-997-IEG, 2010 WL 2721271, at *5-6 (S.D.Cal. July 6, 2010).

Although not determinative, the Court also notes that with the filing of the amended complaint in Lang, the nature of that suit has changed. In addition, the class action aspects of the two suits are different-one brought under Missouri law and one brought under Louisiana law. See Gardner, 2010 WL 2721271, at *5-6. In sum, the Court declines to dismiss or stay this action under the first-filed rule, and turns to consider the merits of Defendants’ motion to dismiss for failure to state a claim and on other grounds.”

Click Arnold v. DirecTV, Inc. to read the entire opinion.

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U.S.Jud.Pan.Mult.Lit.: 12 Cases Against Bank of America For “Personal Bankers” Claiming Off-the-Clock Work Transferred to Kansas For Discovery, Because First-Filed There, Central Location, Lighter Docket And Capable Judge

In re Bank of America Wage and Hour Employment Practices Litigation

Defendants Bank of America moved, pursuant to 28 U.S.C. § 1407, for coordinated or consolidated pretrial proceedings of this litigation, consisting of 12 different related actions, in the Central District of California. Plaintiffs in two actions support the motion. Plaintiffs in five actions supported centralization of some actions, but suggest excluding certain actions from centralized proceedings. Plaintiffs in five other actions oppose centralization or inclusion of their actions in centralized proceedings. Plaintiffs, in the first instance or in the alternative, suggested the Central District of California, the Northern District of California, or the District of Kansas as transferee district.

Significantly, the Court noted:

“All of these cases contain allegations that Bank of America routinely fails to pay its employees for off-the-clock overtime work in violation of the Fair Labor Standards Act and/or state law. To be sure, there are differences among the cases. However, as a general rule the similarities seem to outweigh the differences. As we explain below more specifically, we believe that centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification; and conserve the resources of the parties, their counsel, and the judiciary.”

Additionally, the Court explained that Bank of America acknowledged its timekeeping policies were the same nationwide for the employees in question.  Therefore, the Court concluded that the cases were ripe for centralization.  Explaining that the discovery for all cases was most suitable to be centralized in Kansas, the Court reasoned:

“The parties have suggested a number of acceptable transferee districts. For instance, Bank of America makes a strong argument for the Central District of California as the central focus of the litigation. For the following reasons, however, we conclude that the District of Kansas would be the best forum. The first-filed Brawner action is pending in that district, with a motion for class certification currently pending. The district is centrally located for the parties and the likely discovery in this nationwide litigation. It has docket conditions that are significantly more favorable than the other primary contenders for this litigation. More specifically and of paramount importance, Judge John W. Lungstrum has the experience, energy and time to handle this litigation efficiently.”

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U.S.Jud.Pan.Mult.Lit.: First-Filed Venue Best Venue For FLSA MDL, Since Discovery Is Well Underway

In re Sepracor Inc. Fair Labor Standards Act (FLSA) Litigation

Defendant Sepracor Inc. (Sepracor) moved, pursuant to 28 U.S.C. § 1407, for coordinated or consolidated pretrial proceedings of this litigation in the Middle District of Florida or, alternatively, the District of Massachusetts. Plaintiffs in an action pending in the District of Arizona action opposed the motion or, alternatively, suggested centralization in the District of Arizona. The Court was persuaded by the Plaintiffs in the Arizona action and transferred the MDL to that District stating:

“This litigation currently consists of two actions pending in two districts, one action each in the District of Arizona and the Middle District of Florida.

On the basis of the papers filed and hearing session held, we find that these actions involve common questions of fact, and that centralization under Section 1407 in the District of Arizona will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. Each action brings claims under the Fair Labor Standards Act of 1938, and each alleges that defendants avoided paying overtime to employees classified as “pharmaceutical sales representatives.” Centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings; and conserve the resources of the parties, their counsel and the judiciary.

We are persuaded that the District of Arizona is an appropriate transferee forum for this litigation, because the first-filed action is pending there and discovery is well underway in that action.”

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U.S.Jud.Pan.Mult.Lit.: 7 “Assistant Manager” Misclassification Cases Against Enterprise Rent-A-Car Suitable For Centralization

In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation

Before the Multidistrict Litigation Panel was Plaintiff in an action pending in the Northern District of Illinois’ ( Averill ) Motion, pursuant to 28 U.S.C. § 1407, for centralization of this litigation in the Northern District of Illinois. This litigation currently consists of two actions pending in the Northern District of Illinois (including the moving plaintiff’s action) and five actions pending in the Middle District of Florida, the Southern District of Florida, the Northern District of Georgia, the Southern District of New York, and the Western District of Pennsylvania, respectively, as listed on Schedule A.

Granting Plaintiff’s Motion, the Court reasoned, “Plaintiffs in the six other constituent actions support centralization. With the exception of plaintiff in the Western District of Pennsylvania action, who urges that the Panel select that district as transferee district, all responding plaintiffs support selection of the Northern District of Illinois. Responding defendants Enterprise Rent-A-Car Co., Inc., and its affiliates, however, oppose centralization, and, if the Panel orders centralization over their objections, ask that the Eastern District of Missouri be selected as transferee district.

On the basis of the papers filed and hearing session held, we find that these seven actions involve common questions of fact, and that centralization under Section 1407 in the Western District of Pennsylvania will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. All actions involve allegations that defendants violated the Fair Labor Standards Act (FLSA) by misclassifying their assistant managers as salaried and thus not entitled to overtime. Centralization under Section 1407 will eliminate duplicative discovery and prevent inconsistent pretrial rulings (particularly with respect to plaintiffs’ multiple requests for certification of a nationwide collective action), and conserve the resources of the parties, their counsel and the judiciary.

In opposing centralization, defendants argue, inter alia, that the actions do not share factual issues, because individual Enterprise subsidiaries-unique to each state-employed the assistant branch managers and were responsible for classifying them as exempt and ensuring compliance with the FLSA. We are not persuaded by this argument, however, because the record indicates that the involvement vel non of Missouri-based Enterprise Rent-A-Car Co., Inc., in overseeing its subsidiaries and, in particular, setting policies affecting the employment of assistant managers is, in fact, an open question common to the actions in the litigation. On this and any other common issues, centralization under Section 1407 has the benefit of placing all actions in this docket before a single judge who can structure pretrial proceedings to consider all parties’ legitimate discovery needs, while ensuring that common parties and witnesses are not subjected to discovery demands that duplicate activity that has already occurred or is occurring in other actions. See, e.g., In re Department of Veterans Affairs (VA) Data Theft Litigation, 461 F.Supp.2d 1367, 1368-69 (J.P.M.L.2006). As centralized proceedings evolve in the transferee district, it may be that unique issues in one or more of the subject actions render their continued inclusion in the multidistrict proceedings unnecessary or inadvisable. At that point, defendants (or the involved plaintiff or plaintiffs) are free to approach the transferee judge for a suggestion of remand to the transferor court. Whenever the transferee judge deems remand of any claims or actions appropriate, procedures are available whereby this may be accomplished with a minimum of delay. See Rule 7.6, R.P.J.P.M.L., 199 F.R.D. 425, 436-38 (2001).”


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U.S.Jud.Pan.Mult.Lit.: Declines to Consolidate Actions Pending In 2 Different Districts

In re: U.S.A. Exterminators, Inc., Fair Labor Standards Act (FLSA) Litigation

Considering Defendant’s unopposed Motion to Consolidate 2 actions, one pending in the E.D.N.Y. and the other pending in the S.D.N.Y., the Court denied the Motion.  The Multidistrict Panel reasoned “Section 1407 centralization would not necessarily serve the convenience of the parties and witnesses or further the just and efficient conduct of this litigation. Inasmuch as this litigation involves only two actions, which are pending in adjacent districts, the proponents of centralization have failed to persuade us that any common questions of fact are sufficiently complex and/or numerous to justify Section 1407 transfer in this docket at this time. Alternatives to transfer exist that can minimize whatever possibilities there might be of duplicative discovery and/or inconsistent pretrial rulings.”

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