Eberline v. Douglas J. Holdings, Inc.
| Decision Date | 01 March 2019 |
| Docket Number | Case No. 14-cv-10887 |
| Parties | Joy Eberline, et al., Plaintiffs, v. Douglas J. Holdings, Inc., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO AMEND AND CERTIFY ORDER FOR INTERLOCUTORY APPEAL [81], DENYING MOTIONS FOR LEAVE TO FILE AMICUS CURIAE BRIEF [90, 91], AND STAYING CASE
On October 1, 2018, the Court issued an opinion and order granting plaintiffs' motion for partial summary judgment and granting in part and denying in part defendants' motion for summary judgment. Eberline v. Douglas J. Holdings, Inc., 339 F. Supp. 3d 634 (E.D. Mich. 2018). The Court held that plaintiffs, former students in defendants' cosmetology schools, were employees entitled to compensation under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 203, when they clean, do laundry, and restock products during the clinical training portion of the defendants' curriculum. (Id. at 34.) However, the Court found that plaintiffs were not employees at all other times in the clinical training program, in part because the Court believed that plaintiffs no longer dispute this as a result of comments made at oral argument. (Id. at 2.) Thus, the cross-motions for summary judgment on the cleaning, laundering, and restocking activities were decided in plaintiffs' favor, while summary judgment was granted on the remaining part of defendants' motion related to all other aspects of the parties' relationship.
The parties filed several motions in response to that order. Plaintiffs filed a motion for reconsideration, arguing that during oral argument they did not intend to limit their FLSA claims to time spent cleaning, laundering towels, and restocking products. (Dkt. 78 at 3.) Defendants filed a motion to amend and certify the order for interlocutory appeal and stay the case. (Dkt. 81.) Several would-be amici curiae sought to file briefs in support of the motion to certify the Court's order for interlocutory appeal (Dkts. 90, 91), which plaintiffs oppose. (Dkts. 97, 98.)
A district court shall permit a party to appeal a non-final order when the court is "of the opinion that such order involves [1] a controlling question of law [2] as to which there is substantial ground for difference of opinion and [3] that an immediate appeal from the order may materially advance the ultimate termination of the litigation . . . ." 28 U.S.C. § 1292(b); see also In re Trump, 874 F.3d 948, 950-51 (6th Cir. 2017); cf. 28 U.S.C. 1291 (). The burden is on the moving party to show that each requirement of § 1292(b) is satisfied, see In re Miedzianowski, 735 F.3d 383, 384 (6th Cir. 2012), and the district court must "expressly find in writing that all three § 1292(b) requirements are met," Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010); § 1292(b). Such appeals are the exception, however, not the rule. In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002) (). Here, all three conditions of § 1292(b) are met and this is the exceptional case that warrants an interlocutory appeal.
First, the order turns on a controlling question of law. "A legal issue is controlling if it could materially affect the outcome of the case." Memphis, 874 F.3d at 351 (citing In re Baker & Getty Fin. Servs., Inc. v. Nat'l Union Fire Ins. Co., 954 F.2d 1169, 1172 n.8 (6th Cir. 1992)). In this case, the issue is whether cleaning, laundering towels, and restocking products are activities that may be extracted from the entire relationship between the parties before examining their overall relationship under the primary benefit test enunciated in Solis v. Laurelbrook Sanitarium and School, Inc., 642 F.3d 518 (6th Cir. 2011), because those activities are "beyond the pale of the contemplated [cosmetology education and training]." Eberline, 339 F. Supp. 3d at 644-45 (citing Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199, 1215 (11th Cir. 2015)). This issue may materially affect the outcome of the case because considering these activities alone led the Court to grant plaintiffs' motion for partial summary judgment. Moreover, should the Court of Appeals disagree with the Court's analysis, the Court would need to consider those activities as a part of the entire relationship between the parties. This would affect the Court's earlier analysis, and therefore could affect the outcome of the case. Therefore, the order granting plaintiffs' motion for partial summary judgment turns on a controlling question of law.
Second, there is substantial ground for difference of opinion on the controlling legal issue. Substantial grounds for difference of opinion exist "when 'the question is difficult, novel and either a question on which there is little precedent or one whose correct resolution is not substantially guided by previous decisions.'" Miedzianowski, 735 F.3d at 384 (citing City of Dearborn v. Comcast of Mich. III, Inc., No. 08-10156, 2008 U.S. Dist. LEXIS 107527, at *7 (E.D. Mich. Nov. 24, 2008)). An issue is novel "where reasonable jurists might disagree on an issue's resolution." Trump, 874 F.3d at 952 (quoting Reese v. BP Expl., Inc., 643 F.3d 681, 688 (6th Cir. 2011)). The controlling legal issue in the order is novel and its resolution is not substantially guided by previous decisions.
It is novel because the Sixth Circuit has not yet had an occasion to consider whether activities or tasks that are entirely unrelated to the training or learning situation, and that appear to take unfair advantage of a student's need to complete certain requirements, fit within the Laurelbrook framework. In fact, the Sixth Circuit has not considered an FLSA case in the context of an externship, internship, or other sort of vocational training program as other circuits have.1 Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528 (2d Cir. 2016); Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015); Benjamin v. B&H Educ., Inc., 877 F.3d 1139 (9th Cir. 2017); Blair v. Wills, 420 F.3d 823, 829 (8th Cir. 2005); Reich v. Parker Fire Prot. Dist., 992 F.2d 1023 (10th Cir. 1993). Nor has it considered whether cosmetology students can be employees under FLSA as other circuits have. Velarde v. GW GJ, Inc., 914 F.3d 779 (2d Cir. 2019); Benjamin v. B &H Educ. Inc., 877 F.3d 1139 (9th Cir. 2017); Hollins v. Regency Corp., 867 F.3d 830 (7th Cir. 2017).
Relatedly, the issue is not substantially guided by Sixth Circuit precedent. Laurelbrook had no occasion to consider separating the non-de minimis tasks that bore no relation to the training or educational program; there, the plaintiffs chose a Seventh-Day Adventist education, which "include[d] hands-on, practical training." 642 F.3d at 531. The question in Laurelbrook was whether students were entitled to compensation when they participated in the vocational training portion of their education. Id. Nor did Marshall v. Baptist Hospital, Inc., 473 F. Supp. 465 (M.D. Tenn. 1979), rev'd on other grounds, 668 F.2d 234 (6th Cir. 1981), consider a limited number of tasks that were beyond the pale of the expected training program. The entire x-ray trainee program in Marshall was so deficient that there was no educational value, leading the court to find the hospital was the primary beneficiary. See 473 F. Supp. at 476-77. Therefore, there was no reason for the court to consider extracting those tasks that were entirely unrelated to the educational goal from the relationship. And although Marshall is cited with approval by Laurelbrook, id. at 526-28, it is not binding precedent. Thus, there is no precedent that speaks to whether tasks beyond the pale of the contemplated training or learning situation must be evaluated with the rest of the rest of the relationship under Laurelbrook's primary benefit test.2
Admittedly, other courts disagree with this Court.3 See Velarde v. GW GJ, Inc., 914 F.3d 779 (2d Cir. 2019); Benjamin v. B &H Educ. Inc., 877 F.3d 1139 (9th Cir. 2017); Hollins v. Regency Corp., 867 F.3d 830 (7th Cir. 2017). And the Eleventh Circuit has not yet had an opportunity to apply Schumann to find that an individual is an employee when he or she completes tasks beyond the pale of the contemplated training or educational program, but is a student in all other legitimate respects, though it has reaffirmed Schumann. See Axel, 711 F. App'x at 946 (citing Schumann, 803 F.3d at 1214) (applying the Glatt primary benefit test). Substantial ground for disagreement exists.
Third, an interlocutory appeal may materially advance the termination of litigation. To determine whether "[a]n interlocutory appeal will materially advance the litigation," courts consider "if it will 'save substantial judicial resources and litigant expense.'" U.S. ex rel. Elliott v. Brickman Grp. Ltd., LLC, 845 F. Supp. 2d 858, 871 (S.D. Ohio 2012) (quoting In re Regions Morgan Keegan ERISA Litig., 741 F.Supp.2d 844, 849 (W.D. Tenn. 2010)). This includes "sav[ing] the parties and the judicial system substantial resources and expense by avoiding extensive discovery, motion practice, and potentially a trial." Newsome v. Young Supply Co., 873 F. Supp. 2d 872, 879 (E.D. Mich. 2012). This requirement "is closely tied" to whether the interlocutory order involves a controlling question of law. Id. at 878 (quoting Comcast, 2008 U.S. Dist. LEXIS 107527, at *7).
An interlocutory appeal may save the Court and parties expense here. Following the Court's ruling, the parties must engage in additional discovery to determine how much time was spent cleaning, laundering towels, and...
To continue reading
Request your trial