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D.Nev.: Statute of Limitations Tolled for Employees Who Opted Into First-Filed Case Where Conditional Certification Was Denied (and Their Consents Were Dismissed)

Orduna v. Champion Drywall, Inc.

This case was before the court on multiple motions, including plaintiff’s motion for tolling the statute of limitations. As discussed here, the precise issue before the court was what effect, if any, a plaintiff’s consent to join—filed in a prior lawsuit where conditional certification was ultimately denied, and such consent was dismissed—has on such opt-in’s statute of limitations. Electing to treat the motion as one for equitable tolling, the court held that such circumstances amounted to “extraordinary circumstances” such that equitable tolling was warranted. However, the court tolling the statute of limitations only for such time that the consent to join was filed with the court in the prior case, prior to dismissal.

The court reasoned, in part:

Plaintiffs assert that because they filed their consents to sue in a timely manner in Champion I, the statute of limitations for those claims should be equitably tolled to the date on which each plaintiff filed his or her consent. Defendants argue that plaintiffs’ motion should be denied or, in the alternative, tolling should only apply from the date that each plaintiff filed his or her consent until the date of the court’s denial of certification in Champion I on March 27, 2012. The court agrees with defendants’ latter position…

Upon decertification of the collective [action], therefore, it is critical to preserve opt-in plaintiffs’ ability to timely file individual actions.” Sliger v. Prospect Mortgage, LLC, 2012 WL 6005711 (E.D.Cal. Nov.30, 2012).

The Ninth Circuit has recognized the doctrine of equitable tolling of an FLSA claim. Partlow v. Lewis Orphans’ Home, Inc., 645 F.2d 757, 760 (9th Cir.1981), abrogated on other grounds, Hoffman–La Roche Inc. v. Sperling, 493 U.S. 165, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). Such tolling “applies when the plaintiff is prevented from asserting a claim by wrongful conduct on the part of the defendant, or when extraordinary circumstances beyond the plaintiff’s control made it impossible to file a claim on time.” Id. at 60. The doctrine of equitable tolling preserves a plaintiff’s claims when strict application of the statue of limitations would be inequitable. See United States v. Patterson, 211 F.3d 927, 930 (5th Cir.2000). Equitable tolling applies only in “rare and exceptional circumstances,” Teemac v. Henderson, 298 F.3d 452, 457 (5th Cir.2002), and should be applied sparingly. Steed v. Head, 219 F.3d 1298, 1300 (11th Cir.2000).

Applying this reasoning, the court granted the plaintiffs’ motion.  However, it limited tolling to the period of time in during which the opt-ins’ consents had been filed in the prior case:

Here, plaintiffs have not shown that the statute of limitations should be equitably tolled past the court’s denial of certification in Champion I. Plaintiffs claim that they did not know that the court would not grant the collective certification in that case, and that to preserve their rights, each plaintiff in a collective action would have to file individual actions at the same time they filed their consents to sue. The failure to predict the outcome of a motion for collective certification is experienced by each FLSA collective action litigant, and the possibility that diligence would be required in the filing of an individual claim if a collective action was denied or de-certified neither amounts to extraordinary circumstances nor a situation out of a plaintiff’s control.

Click Orduna v. Champion Drywall, Inc. to read the entire Opinion.

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.”

N.D.Tex.: FLSA Plaintiffs In Second-Filed Case Cannot Be Consolidated Into First-Filed Case, Where They Oppose Such Consolidation

Mumphrey v. CSA-Credit Solutions of America, Inc.

This case presented an interesting issue to the Court:  where 2 similar FLSA claims are filed by similarly situated employees in separate cases, may the Court consolidate the second-filed case into the first-filed case, notwithstanding Plaintiff (and opt-in Plaintiffs’) opposition to same.  The Court answered the question in the negative, and denied Defendant’s Motion to bifurcate the Plaintiff’s claims (separate FLSA unpaid wages claims that were identical to the first-filed case from the retaliation claims brought solely in the second case).

The Court reasoned, “[t]he collective action provision of the FLSA explicitly states 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.”  Consolidation of the Mumphrey FLSA claims with the Willins FLSA claims would de facto force Plaintiffs to opt in to a collective action without their consent, in contravention of the FLSA.  The Court therefore finds that the Plaintiffs’ FLSA claims should not be bifurcated from their retaliatory termination claims and consolidated with the Willins case against Plaintiffs’ wishes.

For the reasons stated above, CSA’s Motion to Bifurcate is DENIED. Plaintiffs’ claims will proceed as filed in this case.”

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.”