Ruggeri v. Boehringer Ingelheim Pharmaceuticals

• Decision Date: 17 November 2008
• Docket Number: Civil No. 3:06cv1085 (JBA).
• Citation: 585 F.Supp.2d 308
• Parties: Luann RUGGERI, Ricardo Jaramillo, and Prakash Naik on behalf of themselves and others similarly situated, Plaintiffs, v. BOEHRINGER INGELHEIM PHARMACEUTICALS, INC., Defendant.
• Court: U.S. District Court — District of Connecticut

585 F.Supp.2d 308

Luann RUGGERI, Ricardo Jaramillo, and Prakash Naik on behalf of themselves and others similarly situated, Plaintiffs, v. BOEHRINGER INGELHEIM PHARMACEUTICALS, INC., Defendant.

Civil No. 3:06cv1085 (JBA).

United States District Court, D. Connecticut.

November 17, 2008.

Andrew W. Skolnick, Brian J. Wheelin, David A. Slossberg, J. Daniel Sagarin, Hurwitz Sagarin Slossberg & Knuff LLC, Milford, CT, Charles Joseph, Michael D. Palmer, Joseph & Herzfeld LLP, New York, NY, Eric B. Kingsley, Kingsley & Kingsley APC, Encino, CA, Gregory N. Karasik, Ira Spiro, Spiro Moss Barness LLP, Los Angeles, CA, James M. Finberg, Altshuler Berzon LLP, John T. Mullan, Kenneth J. Sugarman, Rudy Exelrod & Zieff, LLP, San Francisco, CA, James P. Keenley, Todd F. Jackson, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, CA, for Plaintiffs.

David R. Golder, Holly L. Cini, Margaret J. Strange, William Joseph Anthony, Jackson Lewis, Hartford, CT, Jacqueline C. Tully, Paul Decamp, Jackson Lewis LLP, Reston, VA, for Defendant.

RULING ON DEFENDANT'S MOTION FOR PERMISSION TO TAKE INTERLOCUTORY APPEAL FROM ORDER DENYING SUMMARY JUDGMENT [Doc. # 182]

JANET BOND ARTERTON, District Judge.

In this suit Plaintiffs Luann Ruggeri, Richard Jaramillo and Prakash Naik (collectively, "Plaintiffs") claim that Boehringer Ingelheim Pharmaceuticals, Incorporated ("Boehringer" or "Defendant"), their former employer, violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., by failing to pay them for their overtime work.¹ Defendant moved for summary judgment [Doc. # 141], arguing that it need not pay overtime wages to Plaintiffs and other pharmaceutical sales representatives ("PSRs") similarly situated to them because they fall within either of two exemptions to the FLSA's protections—the outside sales exemption and the administrative exemption. Plaintiffs cross-moved for summary judgment [Doc. # 140] as to the outside sales exemption. On September 29, 2008 this Court denied Defendant's motion for summary judgment and granted partial summary judgment to Plaintiffs as to the outside sales exemption [Doc. # 177], and on November 13, 2008 this Court issued an amended ruling correcting a statement of California law in the September 29th ruling but leaving the disposition unchanged [Doc. # 204] ("Amended Ruling").² Defendant now moves [Doc. # 182] for permission to take an interlocutory appeal as to this Court's ruling on the outside sales exemption. (See Def.'s Mem. Supp. Mot. Permission Interloc. Appeal [Doc. # 182-1] ("Def.'s Mem. Supp.") at 3.)

I. Standards

The propriety of an interlocutory appeal is governed by 28 U.S.C. § 1292(b), under which a district court may permit an appeal of its order when it is "of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." On its face, this statute requires the Court to find that the order on which interlocutory appeal would be taken satisfies three criteria: first, the order must "involve[] a controlling question of law"; second, there must be "substantial ground for difference of opinion" regarding such question of law; and third, immediate appeal from the Court's order could "materially advance" the end of litigation. See also Williston v. Eggleston, 410 F.Supp.2d 274, 276 (S.D.N.Y.2006).

Even where these criteria are met, the Court retains discretion to deny permission for interlocutory appeal, and is mindful that "[i]t is a basic tenet of federal law to delay appellate review until a final judgment has been entered." Koehler v. Bank of Bermuda Ltd., 101 F.3d 863 (2d Cir.1996) (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 475, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978)). Interlocutory appeals are disfavored, and, because the procedure "was not intended as a vehicle to provide early review of difficult rulings in hard cases," a party seeking to appeal must demonstrate "exceptional circumstances" justifying it. Williston, 410 F.Supp.2d at 276 (providing expanded discussion of "exceptional circumstances," and collecting cases) (citations omitted).

II. Discussion

Boehringer claims that there is "substantial difference of opinion ... on whether individuals with job duties similar to [P]laintiffs fall within the outside sales exemption." (Def.'s Mem. Supp. at 2-3.) In particular, Defendant argues that difference of opinion exists as to whether the outside sales exemption can apply where the employee has not actually consummated "sales" within the meaning of that term as defined in the FLSA. (Id. at 3.)

In ruling on the parties' motions for summary judgment this Court construed the FLSA outside sales exemption to apply only where the employee had made or consummated actual "sales." It explained:

The regulation itself thus dictates that if employees do not make any sales and do not obtain any orders or contracts, then they cannot fit within the outside sales exemption, because such work must be their "primary duty." ... If the employees make at least some sales or obtain at least some orders or contracts, then the outside sales exemption may apply, provided that such work constitutes the employees'"primary duty." ... [The] indicia-of-sales inquiry, however, is limited to circumstances where the employee actually makes sales, and the question is whether her consummation of sales, plus her work "incidental to and in conjunction with" such consummation, is sufficient to deem sales her "primary duty."

(Amended Ruling, slip op. at 9-10 (emphasis in original; paragraph breaks omitted; citations to regulations and caselaw omitted).) Because the Court concluded that Plaintiffs did not make or "consummate" sales, it held the outside sales exemption inapplicable and declined to engage in an indicia-of-sales analysis.

Boehringer suggests that there is substantial difference of opinion as to whether this is the proper construction of the outside sales exemption. (See Def.'s Mem. Supp. at 2 (describing Plaintiffs' primary duty as being "to visit physicians and pharmacies for the purposes of influencing them to prescribe Boehringer pharmaceutical products" and not actually to make "sales," but arguing that "the issue on which this case turns[] is one controlling question of law," i.e., whether Plaintiffs fall within the exemption); Def.'s Reply Supp. Mot. Permission Interloc. Appeal ("Def.'s Reply Supp.") at 3 n. 1 (proposing that question of law be "Whether Plaintiffs' job duties involve `any sale, exchange, contract to sell, consignment for sale, shipment for sale or other disposition' within the meaning of the outside sales exemption to the [FLSA].").) It argues that "almost every [c]ourt that has examined the duties of pharmaceutical sales representatives for purposes of the outside sales exemption has held that these employees do `sell' and are properly classified as exempt" (id. at 3), and that "any attempt to make a distinction between a classically defined sales job and what [PSRs] do would be to point out a `distinction without a difference' because `[n]othing in the language of the outside salesperson exemption requires an exempted employee to engage in direct as opposed to indirect sales'" (id. at 4 (quoting Barnick v. Wyeth, 522 F.Supp.2d 1257, 1264 (C.D.Cal.2007))). In other words, Defendant urges that the outside sales exemption may apply on the strength of an indicia-of-sales analysis alone even where the potentially exempt employee has not actually consummated any sales.

In support of these arguments Defendant points to four cases from the Central District of California in which PSRs employed by pharmaceutical companies were held to be within the outside salesman exemption of the California Labor Code; a FL SA regulation that construes broadly the term "selling"; and Magistrate Judge Margolis's February 25, 2008 discovery Ruling on Defendant's Motion for Protective Order and Plaintiffs' Motion to Compel [Doc. # 138] ("Discovery Ruling").³ Examination of this authority reveals no substantial ground for difference of opinion regarding the Court's analysis of the outside sales exemption in this case, and therefore Defendant's motion is denied.

A. Narrow Construction of FLSA Exemptions

As an initial matter, the Second Circuit has explicitly instructed that the FLSA exemptions, including the outside sales exemption, be read narrowly. As this Court noted:

Exemptions to the FLSA's overtime requirement are to be "`narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.'" Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 222 (2d Cir.2002) (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)) (emphasis added). Therefore, "[t]he burden of invoking these exemptions rests upon the employer." Bilyou, 300 F.3d at 222.

(Amended Ruling, slip op. at 8-9.)

Defendant urges that because of the way the pharmaceutical industry is regulated and structured, PSRs are as close as Boehringer has to outside salespeople, and in particular that the fact that Boehringer promotes its products to physicians, but actually sells them to wholesalers, is an artifact of the regulations under which its industry operates. In rejecting the relevance of the structure and regulation of the pharmaceutical industry, this Court pointed out:

In essence Defendant's argument is that the Court should back-fit the FLSA to the practices of the industry. To do so, however, would flip the law of this Circuit, which narrowly applies the FLSA's overtime exemptions and imposes the burden on the employer to demonstrate that its arrangements "plainly and unmistakably" fit the statute and regulations. Bilyou, 300 F.3d at 222. Because Defendant has not shown that Plaint...