Fochtman v. Hendren Plastics, Inc.
| Decision Date | 25 August 2022 |
| Docket Number | 20-2061, No. 20-2068 |
| Citation | 47 F.4th 638 |
| Parties | Mark FOCHTMAN, individually, and on behalf of all others similarly situated; Corby Shumate, individually, and on behalf of all others; Michael Spears, individually and on behalf of all others; Andrew Daniel, individually and on behalf of all others; Fabian Aguilar, individually and on behalf of all others; Sloan Simms, individually and on behalf of all others, Plaintiffs - Appellees, v. HENDREN PLASTICS, INC., Defendant - Appellant, Arkansas Prosecuting Attorney Association; Simmons Foods ; Simmons Pet Food, Inc. ; Work-Based Rehabilitation Program Graduates; Americans for Prosperity Foundation ; Texas Public Policy Foundation; Cenikor Foundation ; CAAIR, Inc.; R&R Engineering, Amici on Behalf of Appellant(s). Mark Fochtman, individually, and on behalf of all others similarly situated; Corby Shumate, individually, and on behalf of all others; Michael Spears, individually and on behalf of all others; Andrew Daniel, individually and on behalf of all others; Fabian Aguilar, individually and on behalf of all others; Sloan Simms, individually and on behalf of all others, Plaintiffs - Appellees, v. DARP, Inc., Defendant - Appellant, Arkansas Prosecuting Attorney Association; Simmons Foods ; Simmons Pet Food, Inc. ; Work-Based Rehabilitation Program Graduates; Americans for Prosperity Foundation ; Texas Public Policy Foundation; Cenikor Foundation ; CAAIR, Inc.; R&R Engineering, Amici on Behalf of Appellant(s). |
| Court | U.S. Court of Appeals — Eighth Circuit |
Counsel who presented argument on behalf of the appellant Hendren Plastics, Inc. in 20-2061 and appeared on the appellant brief was Abtin Mehdizadegan, of Little Rock, AR. The following attorney(s) appeared on the appellant brief; Melissa McJunkins Duke, of Little Rock, AR.
Counsel who represented the appellant DARP, Inc. in 20-2068 was Williams B. Putman, of Fayetteville, AR.
Counsel who presented argument on behalf of the appellees and appeared on the appellees brief was Timothy A Steadman, of Little Rock, AR. The following attorney(s) appeared on the appellee brief; John T Holleman, of Little Rock, AR.
The following attorney(s) appeared on the amicus brief of Arkansas Prosecuting Attorney Association on behalf of the appellant; Timothy J Droske, of Saint Paul, MN., Joshua P. Oie, of Minneapolis, MN., Steven J. Wells, of Minneapolis, MN.
The following attorney(s) appeared on the amici brief of Simmons Foods and Simmons Pet Food, Inc. on behalf of the appellant; Amelia A. Fogleman, of Tulsa, OK., Justin A. Lollman, of Tulsa, OK., Christopher S. Thrutchley, of Tulsa, OK.
The following attorney(s) appeared on the amicus brief of Work-Based Rehabilitation Program Graduates on behalf of appellant; Landon Wade Magnusson, of Liberty, MO.
The following attorney(s) appeared on the amici brief of Americans for Prosperity Foundation and Texas Public Policy Foundation on behalf of appellant; Michael David Pepson, of Arlington, VA., Robert Henneke, of Austin, TX.
The following attorney(s) appeared on the amicus brief of R&R Engineering on behalf of appellant; Jacqueline M. Holmes, of Washington, DC., Ariel Volpe, of Washington, DC., James Robert Saywell, of Cleveland, OH.
The following attorney(s) appeared on the amici brief of Cenikor Foundation and CAAIR, Inc. on behalf of appellant; Christopher Dove, of Houston, TX., David M. Gregory, of Houston, TX., Andrew Reed, of Houston, TX., Randall Edwin Long, of Tulsa, OK.
Before LOKEN, COLLOTON, and BENTON, Circuit Judges.
Mark Fochtman and five others brought class action suits against DARP, Inc. and Hendren Plastics, Inc. The plaintiffs, who were participants in a court-ordered drug and alcohol recovery program, alleged that DARP and Hendren failed to pay class members the minimum wage required by the Arkansas Minimum Wage Act. On cross-motions for summary judgment, a principal fighting issue was whether the plaintiffs were "employees" of DARP and Hendren when they performed work for Hendren as part of the program. The district court concluded that the class members were employees, and resolved the motions in favor of the class. On appeal by DARP and Hendren, we reach a contrary conclusion, and therefore reverse the judgment.
DARP is a non-profit drug and alcohol recovery program that caters to parties who can avoid imprisonment in a criminal case by agreeing to participate with DARP. As a residential program, DARP provides its participants with room and board, clothing, and other necessities. DARP does not charge costs or fees to those who participate in the program.
DARP states that developing a work ethic is central to its recovery program, and participants work for local for-profit businesses as part of the program. DARP provides transportation to and from work, but does not compensate the participants for work performed while in the program. The local businesses also do not pay the participants, but they send DARP a predetermined amount of money for each hour worked by a DARP participant. These payments from the local businesses are DARP's only revenue.
DARP sent some participants to work at Hendren Plastics, a local for-profit business. Hendren did not pay the DARP participants, but agreed to pay the DARP organization based on the number of hours that participants worked at Hendren. Hendren's payments equaled $9.00 per regular hour, and $13.50 per overtime hour, worked by a DARP participant—amounts that exceeded the minimum wage in Arkansas of $6.25 per regular hour and $9.38 per overtime hour. Hendren increased these amounts to $9.20 per hour and $13.80 per hour, respectively, in 2015, again exceeding the highest minimum wage rates during the time period at issue: $8.50 per regular hour and $12.75 per overtime hour.
Fochtman and the other named plaintiffs represent a class of people who worked for Hendren while at DARP. Most class members were referred to DARP through drug court programs in Arkansas and Oklahoma. These drug offenders were offered the opportunity to complete DARP's recovery program in lieu of serving a term of imprisonment. The typical stay at DARP was six months, although participation could last up to a year.
In October 2017, Fochtman brought an action in Arkansas state court against DARP, Hendren, another work-based recovery program called CAAIR, Inc., and Simmons Foods, Inc., another for-profit business. Fochtman alleged, among other claims, that the defendants failed to pay adequate wages and overtime as required by the Arkansas Minimum Wage Act, Ark. Code. Ann. § 11-4-201 et seq.
Simmons removed the matter to federal court under the Class Action Fairness Act, 28 U.S.C. § 1332(d). The district court granted motions to sever the action under Federal Rule of Civil Procedure 21, but denied motions by DARP and Hendren to dismiss the case or to remand the action to state court. The court ordered Fochtman to file an amended complaint addressing only those claims that pertained to DARP and Hendren.
After dismissing some of Fochtman's claims, the court certified a class of all DARP participants between October 23, 2014, and the present, who worked for Hendren Plastics in Arkansas during their time at DARP. The parties then filed cross-motions for summary judgment on the question whether the DARP participants were "employees" under the Arkansas Minimum Wage Act. The court determined that the plaintiffs were employees, and that DARP and Hendren were their joint employers. The court also concluded that the plaintiffs were entitled to liquidated damages under the Act.
Hendren and DARP unsuccessfully moved to vacate the judgment based on the Rooker - Feldman doctrine. See D.C. Ct. of Appeals v. Feldman , 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983) ; Rooker v. Fidelity Trust Co. , 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). Hendren and DARP appeal the court's grant of summary judgment and award of liquidated damages. We review the judgment de novo .
As the outset, we must assess whether the district court had subject matter jurisdiction over the action. Auer v. Trans Union, LLC , 902 F.3d 873, 877 (8th Cir. 2018). Hendren challenges the district court's jurisdiction over the case on two grounds.
First, while acknowledging that removal to federal court was proper under the Class Action Fairness Act ("CAFA"), Hendren argues that the district court lost subject matter jurisdiction when the court severed the claims against DARP and Hendren from the claims against CAAIR and Simmons. Hendren suggests that after the cases were severed, the action against DARP and Hendren no longer met the amount-in-controversy requirement for federal jurisdiction under the CAFA. See 28 U.S.C. § 1332(d)(2).
We reject this contention because "jurisdiction is determined at the time of removal, even though subsequent events may remove from the case the facts on which jurisdiction was predicated." Hargis v. Access Cap. Funding , 674 F.3d 783, 789 (8th Cir. 2012) (internal quotation omitted). While "[s]everance under Rule 21 creates two separate actions or suits where previously there was but one," Reinholdson v. Minnesota , 346 F.3d 847, 850 (8th Cir. 2003) (alteration in original) (internal quotation omitted), this does not mean that jurisdiction must be reestablished for each separate action. We see no reason to distinguish severance from other post-removal events, like the denial of class certification or amendment of a complaint, that do not eliminate jurisdiction. See Buetow v. A.L.S. Enters. , 650 F.3d 1178, 1182 n.2 (8th Cir. 2011) (); Hargis , 674 F.3d at 789-90 ().
Hendren relies on the Fifth Circuit's conclusion in Honeywell International, Inc. v. Phillips Petroleum Co. , 415 F.3d 429 (5th Cir. 2005), that severed actions "must have an independent jurisdictional basis." Id. at 431. As the Fifth Circuit later...
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