Kinney Shoe Corp. v. Vorhes

• Decision Date: 25 October 1977
• Docket Number: No. 75-2242,75-2242
• Citation: 564 F.2d 859
• Parties: 23 Wage & Hour Cas. (BN 593, 44 A.L.R.Fed. 109, 15 Empl. Prac. Dec. P 7958, 82 Lab.Cas. P 33,604 KINNEY SHOE CORPORATION, a New York Corporation, Defendant-Appellant, v. Bob W. VORHES and John A. Wagner et al., Plaintiffs-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 859

564 F.2d 859

23 Wage & Hour Cas. (BN 593, 44 A.L.R.Fed. 109,

15 Empl. Prac. Dec. P 7958, 82 Lab.Cas. P 33,604

KINNEY SHOE CORPORATION, a New York Corporation, Defendant-Appellant, v. Bob W. VORHES and John A. Wagner et al., Plaintiffs-Appellees.

No. 75-2242.

United States Court of Appeals, Ninth Circuit.

Oct. 25, 1977.

Albert H. Ebright, argued, Ball, Hunt, Hart, Brown & Baerwitz, Beverly Hills, Cal., for defendant-appellant.

J. David Rosenfield, Alfred H. Krieger, argued, Encino, Cal., for plaintiffs-appellees.

On Appeal from the United States District Court for the Central District of California.

Before DUNIWAY, CHOY and WALLACE, Circuit Judges.

CHOY, Circuit Judge:

Appellant Kinney Shoe Corp. (Kinney) takes this interlocutory appeal from a district court order permitting the sending of notice and consent-to-join forms to potential plaintiffs in a class action under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b). We reverse and remand.

Facts and Proceedings Below

Appellees Bob Vorhes and John Wagner filed this action against appellant Kinney, their former employer, for the recovery of minimum wages and overtime compensation allegedly owed them, and for additional amounts as liquidated and punitive damages and attorney's fees. They proceeded on behalf of themselves and all other Kinney employees similarly situated pursuant to § 216(b). To date of the briefs, seven other employees have intervened or filed written consents-to-join as claimant parties in the action, as permitted under the FLSA.

Appellees moved the district court (1) to compel Kinney to provide the names and addresses of all full-time employees from February 27, 1970 (the date three years prior to the filing of the action) to date of the order, and (2) to have the court prescribe the form and content of notice and consent-to-join forms to be sent to employees who had not yet joined in the action. The court declined to supervise or require the sending of the materials to potential plaintiffs, observing that, since this is not a class action under Federal Rule of Civil Procedure 23, the court was without authorization to do so. It also held that it would be improper for appellees' counsel to send such notice. The court did, however, order Kinney to prepare the employee list so that appellees themselves could circulate the forms. They were permitted to consult counsel for review and removal of inaccuracies and potentially defamatory content, and the court directed appellees to submit the proposed notice to Kinney's counsel. The court also stated its availability to resolve any disputes with respect to the notice should the need arise.

Upon the preparation of a proposed notice by appellees, and upon its submission to, rejection by, and subsequent redraft by Kinney, the court ultimately approved the circulation of a notice substantially in the form prepared by Kinney. ¹ On February 12, 1975, the court ordered the preparation of the employee list by Kinney, and it permitted the sending of the notice and consent-to-join. ² The court simultaneously certified that the order contested here involved a controlling question of law and that an immediate appeal would materially advance the litigation. This court granted Kinney permission to take an interlocutory appeal. Appellate jurisdiction thus rests on 28 U.S.C. § 1292(b). Execution of the order was stayed pending appeal.

Issues

In a class action under § 216(b) of the FLSA, may the district court (1) compel plaintiffs' former employer to furnish plaintiffs with the names and addresses of all full-time employees during the period dating from three years prior to the commencement of the action, and (2) permit the circulation of a court-approved notice of the instant action to those employees, which offered them the opportunity to consent to join in said action?

Discussion

Appellant Kinney concentrates its argument here on the second part of the district court order permitting a notice and consent-to-join to be sent to former employees. Because our disposition of that issue affects our review of the order to produce, we will consider the two components in reverse order.

A. The Notice and Consent-to-Join

At the outset, it should be emphasized that this class action is being prosecuted under § 216(b), and not under Rule 23. Under § 216(b), a member of the class who is not named in the complaint is not a party unless he affirmatively "opts in" by filing a written consent-to-join with the court. 29 U.S.C. §§ 216(b) & 256. No member of the class is either bound by the class action adjudication or barred from filing an individual claim within the limitations period unless he opts to become a party. See generally 3B Moore's Federal Practice P 23.10(4) (2d ed. 1976). This is in contrast to a Rule 23 class action, where, in general, a member of the class once certified is a party to the action unless he affirmatively "opts out." See Fed.R.Civ.P. 23(c)(2)-(3). A FLSA class action under § 216(b) is "spurious," wherein the res judicata effect extends only to the named parties, see Committee Note of 1966 to Fed.R.Civ.P. 23, 3B Moore's Federal Practice, supra ; while in a "true" Rule 23 class action, the res judicata effect of a judgment extends to the entire class, see Committee Note, supra. Aside from the instant context, the question of the applicability of Rule 23 doctrine to § 216(b) cases also arises in suits under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634, by virtue of the provision that the ADEA shall be enforced under § 216(b). 29 U.S.C. § 626(b).

The clear weight of authority holds that Rule 23 procedures are inappropriate for the prosecution of class actions under § 216(b). See LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975); McGinley v. Burroughs Corp., 407 F.Supp. 903, 911 (E.D.Pa.1975). ³ At least two circuits have held that Rule 23 and § 216(b) class actions are "mutually exclusive" and "irreconcilable." See Schmidt v. Fuller Brush Co., 527 F.2d 532, 536 (8th Cir. 1975); LaChapelle, supra. Indeed, no case brought to our attention has approved notice to potential § 216(b) class plaintiffs.

Two ADEA cases have considered the issue before us and have held that notice to potential plaintiffs was unavailable in a § 216(b) class action. In McGinley, supra, plaintiffs argued that they could assert their age discrimination claims as a class action under Rule 23. After examining the legislative history of the ADEA, the court reasoned that in light of the clearly-stated applicability of § 216(b) to ADEA actions and the absence of reference to Rule 23 of which Congress was presumably well aware the legislature had clearly intended § 216(b) to afford a statutory class action "independent of and unrelated to the class action covered by Rule 23 . . . ." 407 F.Supp. at 911.

Plaintiffs then alternatively argued as appellees argue here that, even if Rule 23 were itself inapplicable, the court should nevertheless permit a Rule 23-type notice to facilitate the opting-in of potential class members. The court found that adoption of a portion of the procedures of Rule 23 would be just as contrary to the congressional intent as total adoption of the rule. 407 F.Supp. at 911.

In Roshto v. Chrysler Corp., 67 F.R.D. 28 (E.D.La.1975), plaintiff conceded that potential class action aspects in ADEA cases are governed by § 216(b), and defendant moved the court to fix a cutoff date for the appearance of additional plaintiffs. Plaintiff agreed, provided that she be given the right to notify potential plaintiffs of the pendency of the action. Noting the absence of specific authority for notice procedures in § 216(b) class actions, the court proceeded to analyze extensively the distinctions between Rule 23 and § 216(b).

The failure to provide for notice to the class can not be attributed to mere oversight. While notice is, of course, a standard feature of many Rule 23 class actions, it is all too easy to confuse the effect of notice with the true purpose which that notice serves. Needless to say, the effect of notifying potential class members is to alert them to the possibility that they may be sitting on legal claims of their own. Without the benefit of the information provided by the notice, many might never realize that their rights may have been violated and that redress is available in court. However, this interest is not one which class notice is designed to further. Instead, notice is necessary in appropriate cases under Rule 23 so as to provide the due process without which any subsequent judgment might not be binding on all class members. Under Rule 23(c)(2), notice must be ordered so that class members have the opportunity to opt out and avoid being bound by the disposition of the case. As the Advisory Committee noted, the various notice provisions of Rule 23 are "designed to fulfill requirements of due process to which the class action procedure is of course subject." 39 F.R.D. 69, 107 (1966) . . . .

It is readily apparent that the due process considerations which necessitate class notice in certain Rule 23 situations are not present in the case at bar. As noted above, § 216(b) establishes an "opt in" class action. Only those class members who file written consents are permitted to become plaintiffs. Needless to say, any subsequent judgment in favor of the defendant is binding only upon those who have specifically opted in. Since the legal rights of those who fail to opt in can in no way be adversely affected by any such judgment, no due process interests of theirs can be at stake which need to be protected by the giving of notice.

67 F.R.D. at 29-30 (citation omitted). The court also considered the policy concerns of avoiding the involvement of either plaintiff or court in the stirring up of litigation and the solicitation of claims. Id. at 30. See Kline v. Coldwell, Banker & Co., 508 F.2d 226, 237-39 (9th Cir. 1974) (Duniway, J.,...