Salazar v. Agriprocessors, Inc.
| Decision Date | 22 October 2007 |
| Docket Number | No. 07-CV-1006-LRR.,07-CV-1006-LRR. |
| Citation | 527 F.Supp.2d 873 |
| Parties | Eduardo SALAZAR, Walter Ortiz, Gregorio Lux, Gustavo Cujluj, Santos Tepaz, Rubelino Hernandez, William Sir, Jeronimo Toj Granados, Marvin Lopez, Imelda Lozano, Cesar Toj Micolax, Cladio Ruiz, Carlos hen Choc, Cesar Marroquin, Berulo Jimenez, Bernardo Lemus, Antonio Figueroa, Hugo Lopez, Samuel Garcia, Luis Lopez, Jose Dany Lopez, Sergio Vergara and Jose Damasio Lopez, on behalf of themselves and all other similarly situated individuals, Plaintiffs, v. AGRIPROCESSORS, INC., Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Brian P. McCafferty, Kenney, Eagan, McCafferty & Young, Plymouth Meeting, PA, Connie L. Howard, Metcalf, Kaspari, Howard, Engdahl & Lazarus, PC, Minneapolis, MN, MacDonald Smith, Smith & McElwain, Sioux City, IA, for Plaintiffs.
Benjamin Patrick Roach, Jay Eaton, Thomas M. Cunningham, Nyemaster Goode Voigts West Hansell & O'Brien, PC Des Moines, IA, Jeffery A. Meyer, Keith J. Gutstein, Kaufman Dolowich & Voluck, LLP, Woodbury, NY, for Defendant.
TABLE OF CONTENTS
I. INTRODUCTION 875
II. RELEVANT PROCEDURAL HISTORY 875
III. PARTIES' ARGUMENTS 876
IV. "COLLECTIVE" VS. "CLASS" ACTIONS 877
V. ANALYSIS 878
A. Rule 12(b)(6) 878
B. The Existence of Supplemental Jurisdiction 880
C. Whether the Court Should Exercise its Supplemental Jurisdiction 880
1. A split in the persuasive authorities 881
a. The District of Columbia Circuit Court of Appeals: Lindsay 881
b. The Third Circuit Court of Appeals: De Asencio 882
2. The court's finding 884
VI. DISPOSITION 887
The matter before the court is Defendant AgriProcessors, Inc.'s ("AgriProcessors") Motion to Dismiss Class Action Claims ("Motion to Dismiss") (docket no. 22).
On March 27, 2007, Plaintiffs Eduardo Salazar, Walter Ortiz, Gregorio Lux, Gustavo Cujluj, Santos Tepaz, Rubelino Hernandez, William Sir, Jeronimo Toj Granados, Marvin Lopez, Imelda Lozano, Cesar Toj Micolax, Cladio Ruiz, Carlos Ixen Choc, Cesar Marroquin, Berulo Jimenez, Bernardo Lemus, Antonio Figueroa, Hugo Lopez, Samuel Garcia, Luis Lopez, Jose Dany Lopez, Sergio Vergara and Jose Damasio Lopez ("Plaintiffs") filed a two-count "Complaint—Class Action" ("Complaint"). Plaintiffs seek unpaid wages and unpaid overtime wages. In Count I, Plaintiffs seek relief pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. ("FLSA Claim"). In Count II, Plaintiffs seek relief for "all class members" and allege violations of the Iowa Wage Payment Collection Law ("IWPCL"), Iowa Code § 91A.1, et seq. ("IWPCL Claim"). In the IWPCL Claim, Plaintiffs seek to represent "at least 1500 present and former production and support employees" of AgriProcessors's meat processing facility in. Postville, Iowa ("Postville Facility"). Complaint (docket no. 2), at ¶¶ 1, 2, 34 and 61-68. They seek class certification pursuant to Federal Rule of Civil Procedure 23, an injunction, and damages for, among other things, lost wages. Id. at ¶ 68. On June 7, 2007, AgriProcessors filed an answer and affirmative defenses.
On July 30, 2007, AgriProcessors filed the instant Motion to Dismiss. On August 14, 2007, Plaintiffs filed a "Brief in Opposition to Defendant's Motion to Dismiss Class Action Claims" ("Resistance") (docket no. 24). On August 24, 2007, AgriProcessors filed "Defendant's Reply Brief in Support of Motion to Dismiss" ("Reply") (docket no. 28).
On October 17, 2007, the court held a hearing on the Motion to Dismiss ("Hearing"). Attorney Brian P. McCafferty represented Plaintiffs. Attorneys Jay Eaton and Jeffery A. Meyer represented AgriProcessors. The court finds the Motion to Dismiss fully submitted and ready for decision.
In the Motion to Dismiss, AgriProcessors relies on Federal Rule of Civil Procedure 12(b)(6) and seeks to dismiss the class action portion of the IWPCL Claim based on Plaintiffs' failure to state a claim upon which relief can be granted. AgriProcessors argues that "[t]he opt-out procedure' for Plaintiffs' Rule 23 class action in Count II is inconsistent with the opt-in procedure of Plaintiffs' FLSA collection action in Count I." Motion to Dismiss (docket no. 22), at ¶ 6. It argues that, "FLSA collective actions for overtime pay" require Plaintiffs to affirmatively opt in to the claim. Motion to Dismiss (docket no. 22-2), at 4 (citing 29 U.S.C. § 216(b)). It argues that the FLSA opt-in procedure is "opposite" the Rule 23 opt-out procedure, which requires class members to affirmatively opt out of the class. Id. at 6. AgriProcessors argues that the FLSA Claim and the IWPCL Claim are incompatible due to the divergent required procedures, and it states that dismissal of the class action claim is required.
AgriProcessors goes on to argue that, after the court dismisses the class action portion of the IWPCL Claim, it should decline to invoke its supplemental jurisdiction over the claims of the named Plaintiffs under the IWPCL. It argues that, due to the procedural conflict between the FLSA Claim and the IWPCL Claim, there are "exceptional circumstances" which should "compel [the court to decline supplemental jurisdiction over the class action claims." Motion to Dismiss (docket no. 22-2), at 8.
In their Resistance, Plaintiffs classify AgriProcessors's "main issue" as whether the court has supplemental jurisdiction over the IWPCL Claim. See Resistance (docket no. 24), at 5. Plaintiffs rely on Lindsay v. Government Employees Insurance Company, 448 F.3d 416 (D.C.Cir. 2006), and argue that this court should follow the District of Columbia Circuit Court of Appeals, which held that Rule 23 opt-out claims could be litigated simultaneously with FLSA collective action opt-in claims. Plaintiffs also cite several recent district court decisions that support their position.
Plaintiffs additionally argue that the court should examine the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1711, et seq., and its legislative history. Plaintiffs argue that, through the CAFA "Congress has placed the adjudication of state law class claims largely in the hands of federal courts and . . . federal courts have been granted broader original jurisdiction over state law class claims." Resistance (docket no, 24), at 10. They point to the legislative history of the CAFA, which provides, in part: "the Committee firmly believes that such cases properly belong in federal court." Id. at 11.
Finally, Plaintiffs argue that AgriProcessors's reliance on Bartleson v. Winnebago Industries, Inc., 219 F.R.D. 629 (N.D.Iowa 2003) (Bennett, C.J.) is misplaced, because it was overruled sub silentio by Exxon Mobil Corporation v. Allapattah Services, Inc., 545 U.S. 546, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). Plaintiffs argue that the Supreme Court in Exxon emphatically rejected the notion "that each claim of the individual members of a permissive class are distinct cases and controversies; and that each member or claim must separately support federal jurisdiction." Resistance (docket no. 24), at 14. Therefore, Plaintiffs ask the court to reject AgriProcessors's argument that the court can only exercise supplemental jurisdiction over the claims of Plaintiffs who have opted in to the case pursuant to the FLSA Claim.
In its Reply, AgriProcessors argues that Plaintiffs' discussion is misplaced, because AgriProcessors's Motion to Dismiss was made pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). It cites a recent case, Ramsey v. Ryan Beck & Company, Inc., Civil Action No. 07-635, 2007 WL 2234567 (E.D.Pa. Aug. 1, 2007), in which a district court dismissed state law class claims under Rule 12 because they were inherently incompatible with the FLSA collective action. AgriProcessors further argues that CAFA is not applicable here, because CAFA does not provide original federal court jurisdiction for Plaintiffs' IWPCL Claim.
At the outset, it is crucial to note the distinction between a FLSA collective action and a Rule 23 class action. The distinction is sometimes blurred. "The Federal Rules of Civil Procedure, including Rule 23 authorizing class actions, apply in all civil actions except when Congress has decided otherwise." 5 Moore's Federal Practice § 23.04 (3d ed.2007) [hereinafter "Moore's"] (citing Fed.R.Civ.P. 1 and Califano v. Yamasaki, 442 U.S. 682, 700, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979)). Under Rule 23, class members are bound by the lawsuit's results "unless they have opted out of the action." Id.; see also Fed. R.Civ.P. 23(c)(2)(B) ().
"Class actions may not be maintained under Rule 23, however, when Rule 23's procedures are inconsistent with the substantive statute under which the action is brought or when the substantive statute provides an alternative means for obtaining class or group relief." Moore's, § 23.04 (footnote omitted). Section 216(b) of the FLSA is one of the statutes which sets out an "alternative means" for collective actions. Id. Congress expressly limited FLSA collective actions by requiring plaintiffs affirmatively to opt in to the claim. It provides, in part: "No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b). Therefore, "Rule 23 is inapplicable to proceedings under the FLSA." Moore's, § 23.04. A collective action under the FLSA is not a traditional "class" action.
The Eighth Circuit Court of Appeals determined that Rule 23 is irreconcilable with § 216(b). Schmidt v. Fuller Brush Co., 527 F.2d 532, 536 (8th Cir.1975). The Eighth Circuit...
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