Askew v. Inter-Continental Hotels Corp.
| Docket Number | 5:19-cv-24-BJB |
| Decision Date | 08 August 2022 |
| Citation | 620 F.Supp.3d 635 |
| Parties | Alisha ASKEW, Individually and on Behalf of Those Similarly Situated, et al., Plaintiffs v. INTER-CONTINENTAL HOTELS CORPORATION, et al., Defendants |
| Court | U.S. District Court — Western District of Kentucky |
Gordon E. Jackson, J. Russ Bryant, Robert E. Turner, IV, Jackson Shields Yeiser & Holt, Memphis, TN, Lori J. Keen, Glassman Edwards Wade & Wyatt, PC, Memphis, TN, for Plaintiffs.
David L. Kelly, Keuler Kelly Hutchins & Blankenship, LLP, Paducah, KY, for Defendants Lingate Hospitality, Lingate, Burger Theory, Big Blue Bar, Inc., Glenn Enterprises, Inc., Glenn Higdon.
Alisha Askew, Deborah Williams, and Shavonna Askew are or were bartenders who earned a combination of hourly wages and tips working at Inter-Continental Hotels, Burger Theory, and other restaurants owned or operated by LinGate Hospitality or Big Blue Bar. These wages were less than minimum wage, according to the bartenders, who sued their former employers under the Fair Labor Standards Act. Complaint (DN 1) ¶¶ 1-14. They sued not only on their own behalf, but also as representatives of a putative class of similarly situated employees who were paid according to a "tip credit" rate. ¶ 22. Under the unusual conditional-certification process courts have utilized for "collective actions" under the FLSA,1 the Court conditionally certified the class. DN 34. Plaintiffs' counsel then sent a Court-approved notice to putative class members. DN 46. Fourteen opted in as plaintiffs. See DNs 47-54; 29 U.S.C. § 216(b) ().
The three named Plaintiffs then filed two stipulated dismissals. The first stipulation voluntarily dismisses without prejudice six opt-in Plaintiffs because "they were not employed by Defendants in a tipped employee capacity and paid at or above minimum wage." DN 55 at 1. The second stipulation "notice[s] the dismissal of this matter with prejudice" and without explanation. DN 56 at 1.
Federal Rule of Civil Procedure 41, cited in both stipulations, allows a plaintiff, subject to "any applicable federal statute," to "dismiss an action without a court order by filing . . . a stipulation of dismissal signed by all parties who have appeared." FED. R. CIV. P. 41(a)(1)(A)(ii). Ordinarily, a stipulation signed by all parties terminates the action and doesn't require the district court's consent. See Charles Alan Wright & Arthur R. Miller, 9 Federal Practice & Procedure § 2363 (4th ed. 2022). But an "applicable federal statute" may change the parties' authority to dismiss and require court input before dismissal. FED. R. CIV. P. 41(a)(1)(A); see also Wright & Miller § 2363 at n. 15 ().
The Plaintiffs' notices of dismissal do not expressly request court approval, but implicitly raise that question: does the FLSA qualify as an "applicable federal statute" that limits the parties' ability to dismiss under Rule 41(a)(1)(A)(ii)? If it does, then any dismissal would be valid only if it complied with the FLSA requirements discussed below. But because the FLSA's text doesn't require court approval, it is not an "applicable federal statute" under Rule 41(a)(1)(A), and the Court acknowledges the dismissals based on the Plaintiffs' filings under Rule 41 alone.
I.
Interpreting the Federal Rules, like a federal statute, begins with the text. Pavelic & LeFlore v. Marvel Ent. Group, 493 U.S. 120, 123, 110 S.Ct. 456, 107 L.Ed.2d 438 (1989) (). Rule 41(a) authorizes a plaintiff to "dismiss an action without a court order" at any point with defendants' consent (subsection (a)(1)(A)(i)) and unilaterally before service of "an answer or a motion for summary judgment" (subsection (a)(1)(A)(ii)). The Rule subjects this authority to dismiss, however, "to Rules 23(e), 23.1(c), 23.2, and 66 and"—as relevant here—"any applicable federal statute."
The Rule does not itself identify any such "applicable federal statute." But two examples of laws that plainly require judicial consent before dismissal—8 U.S.C. § 164 (now § 1329) and 31 U.S.C. § 232 (now § 3730)—are easy to find because they're included in the 1937 Notes of the Advisory Committee on Rules. These "[p]rovisions regarding dismissal . . . are preserved by" Rule 41(a)(1), according to the committee note. Notably, these provisions are both preexisting and explicit in the statutory text:
No suit or proceeding for a violation of any of the provisions of this subchapter [immigration violations] shall be settled, compromised, or discontinued without the consent of the court in which it is pending and any such settlement, compromise, or discontinuance shall be entered of record with the reasons therefor.
8 U.S.C. § 1329 (emphasis added).
A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.
31 U.S.C. § 3730(b)(1) (emphasis added). Although the Committee Notes contemplate the possibility of other "such statutes," no additional laws are listed in the Notes or have been added, even though Rule 41(a)(1) has been amended regarding judicial approval of class-action settlements. See FED. R. CIV. P. 41 advisory committee's note to 1946 and 2007 amendments (regarding subsection (a)).
The specific Federal Rules enumerated in Rule 41, moreover, contain similar express language. Rule 23(e) requires "the court's approval" to "settl[e], voluntarily dismis[s], or compromis[e]" the "claims, issues, or defenses of a certified class." Rule 23.1(c), which governs derivative actions, provides for settlement, voluntary dismissal, or compromise "only with the court's approval." FED. R. CIV. P. 23(e). Rule 23.2 provides that "the procedure for settlement, voluntary dismissal, or compromise" of "an action brought by or against the members of an unincorporated association . . . must correspond with the procedure in Rule 23(e)"—which requires court approval. FED. R. CIV. P. 23.2. Finally, Rule 66 provides that "[a]n action in which a receiver has been appointed may be dismissed only by court order." FED. R. CIV. P. 66. Like the two statutes discussed above, these Rules leave little doubt that court approval is necessary.
The FLSA's text, by contrast, is silent on this matter. Courts that condition approval of FLSA settlements on their own consent have relied on § 216, the FLSA's penalties provision. E.g., Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352-53 (11th Cir. 1982) (citing §§ 216(b) & 216(c)). But nothing in these sections suggest a court must approve a settlement. As to § 216(b), the only portion relevant to judicial authority (italicized below) concerns awarding fees and costs, not approving settlements:
An action to recover the liability prescribed in 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. 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 the filing of a complaint by the Secretary of Labor . . . .
And subsection (c) doesn't mention judicial authority at all. Rather, it speaks to the authority of the Secretary of Labor, who may:
supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees under section 206 or section 207 of this title, and the agreement of any employee to accept such payment shall upon payment in full constitute a waiver by such employee of any right he may have under subsection (b) of this section to such unpaid minimum wages or unpaid overtime compensation and an additional equal amount as liquidated damages.
Why would Congress bother to specify the Secretary's role in distribution after a resolution, but omit the district court's (purported) role of approving a settlement in the first place? Isn't that at least equally important as a matter of judicial administration or policy—and even more so as a matter of statutory interpretation, given the default found in Rule 41 that any judicial specification would need to overcome? And how strange it would be to specify that an employee can waive other FLSA rights without mentioning that the agreement has no effect absent court approval. Indeed, courts usually presume "that a matter not covered is not covered." Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 93 (2012).
And Congress supplied additional rules for settlements when it amended the FLSA through the Portal-to-Portal Act of 1947. See Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608, 623 (W.D. Tex. 2005) (discussing amendment history). 29 U.S.C. § 253(a) gives parties the authority to settle claims "accrued prior to May 14, 1947" in any action, "whether instituted prior to or on or after May 14, 1947," so long as "there exists a bona fide dispute as to the amount payable by the employer to his employee." Subsection (b) allows the same for FLSA's liquidated damages, also...
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