Harris v. Med. Transp. Mgmt., Inc.
| Docket Number | 22-7033 |
| Decision Date | 18 July 2023 |
| Citation | 77 F.4th 746 |
| Parties | Isaac HARRIS, et al., Appellees v. MEDICAL TRANSPORTATION MANAGEMENT, INC., Appellant v. Star Transportation LLC, et al., Appellees. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
77 F.4th 746
Isaac HARRIS, et al., Appellees
v.
MEDICAL TRANSPORTATION MANAGEMENT, INC., Appellant
v.
Star Transportation LLC, et al., Appellees.
No. 22-7033
United States Court of Appeals, District of Columbia Circuit
Argued November 8, 2022
Decided July 18, 2023
Appeal from the United States District Court for the District of Columbia (No. 1:17-cv-01371).
Jean-Claude André argued the cause for appellant. With him on the briefs were John J. Hathway, Darci F. Madden, and William F. Ryan.
Jennifer B. Dickey, Gilbert C. Dickey, and Jessica L. O'Brien were on the brief for amicus curiae the Chamber of Commerce of the United States of America in support of appellant.
William M. Jay and David J. Zimmer were on the brief for amicus curiae Prof. Joan Steinman in support of appellant.
Michael T. Kirkpatrick argued the cause for appellees. With him on the brief were Joseph M. Sellers, Harini Srinivasan, and Wendy Liu.
Robert H. Klonoff, Elizabeth J. Cabraser, and Samuel Issacharoff, pro se, were on the brief for amici curiae Robert H. Klonoff, Elizabeth J. Cabraser, and Samuel Issacharoff, in support of appellees as to Rule 23(c)(4) standard.
Before: Millett and Childs, Circuit Judges, and Rogers, Senior Circuit Judge.
Millett, Circuit Judge:
Isaac Harris, Darnell Frye, and Leo Franklin work as non-emergency medical transportation drivers. In July 2017, they brought a putative class action and Fair Labor Standards Act collective action against Medical Transportation Management, Inc. ("MTM"). Their complaint alleged that MTM is their employer and had failed to pay them and its other drivers their full wages as required by both federal and District of Columbia law.
MTM now appeals the district court's certification of an "issue class" under Federal Rule of Civil Procedure 23(c)(4), and its denial of MTM's motion to decertify plaintiffs' Fair Labor Standards Act collective action. We remand the district court's certification of the issue class because the court failed to ensure that it satisfies the class-action criteria specified in Rule 23(a) and (b). We decline to exercise pendent appellate jurisdiction to review the district court's separate decision on the Fair Labor Standards Act collective action.
Federal Rule of Civil Procedure 23 governs class action litigation in the federal courts. Rule 23(a) sets out the threshold criteria for eligibility as a class action, which are that (1) the proposed class be "so numerous that joinder of all members is impracticable"—the numerosity requirement; (2) class members' claims share common questions of law or fact—the commonality requirement; (3) the claims or defenses of the named representative parties be typical of all class members—the typicality requirement; and (4) the representative parties be capable of providing adequate representation to the whole class—the adequacy of representation requirement. FED. R. CIV. P. 23(a)(1)-(4).
In addition to meeting those four prerequisites, Rule 23(b) provides that a proposed class must also qualify as one of three specified "types of class actions." FED. R. CIV. P. 23(b)(1)-(3) (formatting modified); see Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).
Rule 23(b)(1) defines the first type of class action as applying when there are multiple claims arising out of the same subject matter and the prosecution of separate actions by or against individual class members "would create a risk of" either "inconsistent or varying" judgments establishing "incompatible standards of conduct" for the party opposing the class. FED. R. CIV. P. 23(b)(1). A class can also
proceed under Rule 23(b)(1) if resolution of individual class members' claims would, "as a practical matter" dispose of the interests of the non-party members of the class, or "would substantially impair or impede their ability to protect their interests[.]" Id.
Rule 23(b)(2) identifies a second type of class action, which may be maintained if the party opposing the class "has acted or refused to act on grounds that apply generally to the class," so that "final injunctive relief or corresponding declaratory relief" would be appropriate to resolve all class claims. FED. R. CIV. P. 23(b)(2).
Finally, a Rule 23(b)(3) class action can be maintained when "questions of law or fact common to class members predominate over any questions affecting only individual members," and "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." FED. R. CIV. P. 23(b)(3).
Other parts of Rule 23 set out the procedural and operational requirements of a class action. For example, upon certifying a class action, the district court "must define the class and the class claims, issues, or defenses[.]" FED. R. CIV. P. 23(c)(1)(B). Also, for any class certified under Rule 23(b)(3), the district court is required to provide class members "the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." FED. R. CIV. P. 23(c)(2)(B). The notice requires, among other things, a statement informing class members of their right to opt out of the action and thereby to maintain their ability to pursue any action individually. FED. R. CIV. P. 23(c)(2)(B)(v) ("The notice must clearly and concisely state in plain, easily understood language * * * that the court will exclude from the class any member who requests exclusion[.]"); see also, e.g., FED. R. CIV. P. 23(e), (g).
In addition to all of those mandatory class-action requirements, Rule 23 has permissive provisions concerning the district court's management of class litigation. This case concerns the application of one of them, Rule 23(c)(4), which provides: "When appropriate, an action may be brought or maintained as a class action with respect to particular issues." FED. R. CIV. P. 23(c)(4).
This appeal asks us to decide what role Rule 23(c)(4) plays in class certification decisions and, in particular, whether a Rule 23(c)(4) issue class must also meet the Rule 23(a) and (b) class action requirements.
Non-emergency medical transportation services are used by individuals who receive Medicaid and lack transportation for their medical appointments. MTM contracts with the District of Columbia to provide District residents with such services. To fulfill those contracts, MTM engages dozens of subcontractors.
Plaintiffs Harris, Frye, and Franklin (collectively, "Drivers") are non-emergency medical transportation drivers in the District of Columbia. The Drivers allege that while they and hundreds of other drivers were working for MTM and its subcontractors, MTM failed to pay their legally mandated wages under federal and District law. They allege that they and the other drivers routinely started work between 5:00 a.m. and 7:00 a.m., and worked until between 5:00 p.m. and 8:00 p.m. Nevertheless, the Drivers were paid a flat rate for driver services that "regularly fell below" the legally required "minimum wage and the living wage rates" and omitted overtime wages. Compl. at 9-10, J.A. 40-41.
The Drivers brought suit against MTM under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), under District of Columbia wage-and-hour laws, see D.C. Code § 32-1001 (Minimum Wage Act); id. § 2-220.01 et seq. (Living Wage Act); id. § 32-1302 (Wage Payment and Collection Law), and for common-law breach of contract. As required to state a claim under those causes of action, the Drivers' complaint alleged that MTM was an employer of the Drivers under federal law and a general contractor under District law.
Whether MTM is either an employer or a general contractor with respect to the Drivers is a threshold question of liability for MTM. If MTM is deemed the employer of the plaintiffs, or a joint employer with its subcontractors, MTM may be held liable under both the FLSA and District law. And if it is a "general contractor," that status would separately subject it to strict liability for violations of District law by its subcontractors. See Harris v. Medical Transp. Mgmt., Inc., 300 F. Supp. 3d 234, 246 (D.D.C. 2018) ("Harris I"). But if, as MTM argues, it neither employed nor acted as a general contractor in relation to the Drivers, it cannot be liable for any underpayment of wages. In that case, the subcontractors MTM engaged and to which the Drivers directly reported would be the only proper defendants.
MTM moved to dismiss the complaint in its entirety. The district court granted the motion as to the Drivers' common-law breach of contract claim, but denied it as to the Drivers' claims under federal and District statutory law. Harris I, 300 F. Supp. 3d at 237. Then the district court granted the Drivers' motion for conditional certification of an FLSA collective action, approved the Drivers' proposed collective action notice, and equitably tolled the limitations period for members of the collective action. See Harris v. Medical Transp. Mgmt., Inc., 317 F.Supp.3d 421, 423-424 (D.D.C. 2018) ("Harris II").
The Drivers subsequently filed a motion to certify a class action under Rule 23(b)(3) for the non-FLSA claims. The district court denied the motion. Harris v. Medical Transp. Mgmt., Inc., No. 17 Civ. 01371, 2020 WL 5702085 (D.D.C. Sept. 24, 2020) ("Harris III"). The district court found that the proposed class action met the requirements of Rule 23(a), and the superiority requirement of Rule 23(b)(3)—that is, it found that a class action would be "superior to other available methods for fairly and effectively adjudicating the controversy[,]" FED. R. CIV. P. 23(b)(3). Harris III, 2020 WL 5702085, at *4-7. The district court also found that the question of whether MTM was, with its subcontractors, a joint employer of the putative class members "meets the predominance requirement of Rule 23(b)(3)" because evidence common to the class would be used to resolve it....
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