Minnesota Living Assistance, Inc. v. Peterson, 080818 FED8, 17-2658

Docket Nº:17-2658
Opinion Judge:GRUENDER, CIRCUIT JUDGE
Party Name:Minnesota Living Assistance, Inc., doing business as Baywood Home Care Plaintiff- Appellant v. Ken B. Peterson, Commissioner, Department of Labor and Industry, State of Minnesota, in his official capacity; John Aiken, Interim Director of Labor Standards, Department of Labor and Industry, State of Minnesota, in his official capacity Defendants -...
Judge Panel:Before GRUENDER, ERICKSON, and GRASZ, Circuit Judges.
Case Date:August 08, 2018
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Minnesota Living Assistance, Inc., doing business as Baywood Home Care Plaintiff- Appellant

v.

Ken B. Peterson, Commissioner, Department of Labor and Industry, State of Minnesota, in his official capacity; John Aiken, Interim Director of Labor Standards, Department of Labor and Industry, State of Minnesota, in his official capacity Defendants - Appellees

No. 17-2658

United States Court of Appeals, Eighth Circuit

August 8, 2018

Submitted: June 13, 2018

Appeal from United States District Court for the District of Minnesota - Minneapolis

Before GRUENDER, ERICKSON, and GRASZ, Circuit Judges.

GRUENDER, CIRCUIT JUDGE

This case involves two sets of proceedings. In the first, the Minnesota Department of Labor and Industry ("DLI") brought an administrative action against Minnesota Living Assistance, Inc. ("Baywood") for failing to pay overtime compensation to companionship-services employees in violation of the Minnesota Fair Labor Standards Act ("MFLSA"). In the second, the one before us today, Baywood sued in federal court the Commissioner and the Director of Labor Standards at the DLI, arguing that the federal Fair Labor Standards Act ("FLSA") preempts the MFLSA and that Baywood therefore need not pay state penalties for any MFLSA violation. The district court1 found that the Younger doctrine required it to abstain while the state proceeding was pending and dismissed the case. Because we find abstention appropriate, we affirm.

I.

Baywood is a Minnesota corporation that employs domestic-service workers who provide companionship services.[2] The FLSA and the MFLSA both provide requirements regarding the minimum wage and the maximum hours per week that an individual can work before an employer is required to pay overtime compensation. But during the relevant time period, there were two pertinent differences between the statutes: (1) the FLSA standards were generally more protective than the MFLSA, compare 29 U.S.C. §§ 206(a)(1)(C), 207(a)(1), with Minn. Stat. §§ 177.24, subdiv. 1(b) (2012), 177.25; and (2) the FLSA exempted companionship-services employees from protection, whereas the MFLSA did not, compare 29 U.S.C § 213(a)(15), with Minn. Stat. § 177.23, subdiv. 11.

In 2014, a Baywood employee filed a complaint alleging that Baywood violated the MFLSA by failing to pay overtime compensation to companionship-services employees from March 2012 to March 2014. The DLI conducted an investigation into Baywood's practices and determined that Baywood had not paid its companionship-services employees the wages required by the MFLSA. The DLI issued a compliance order in May 2016. The order assessed a penalty of $1, 000 for failure to keep records pursuant to Minn. Stat. § 177.30 and required Baywood to pay back wages of $557, 714.44 in addition to liquidated damages of $557, 714.44. The order also indicated that Baywood should cease its illegal practices and comply with the MFLSA.

Baywood contested the compliance order, so, in August 2016, the DLI initiated a contested case proceeding before an administrative law judge ("ALJ") at the Minnesota Office of Administrative Hearings. In June 2017, the ALJ issued a report recommending that the DLI Commissioner enforce the compliance order as to backpay and liquidated damages but that he deny it as to the determination that Baywood failed to keep accurate records.

While the proceeding before the ALJ was pending, but before the June recommendation, Baywood filed suit in federal district court seeking (1) a declaration that the FLSA preempts the MFLSA and (2) injunctive relief prohibiting the DLI from further processing, investigating, or adjudicating its claims against Baywood. The DLI moved to dismiss the complaint, arguing that the district court should abstain from exercising jurisdiction under Younger v. Harris, 401 U.S. 37 (1971). The district court granted the DLI's motion to dismiss under Younger.

II.

We review the district court's decision to abstain under Younger for abuse of discretion. Whether Younger abstention is appropriate is a question of law, and the district court abuses its discretion when it makes an error of law. Geier v. Mo. Ethics Comm'n, 715 F.3d 674, 678 (8th Cir. 2013) (citing Plouffe v. Ligon, 606 F.3d 890, 894-95 (8th Cir. 2010) (Colloton, J., concurring)). Although federal courts have a "virtually unflagging obligation . . . to exercise the jurisdiction given them," Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976), exceptions to this obligation...

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