Kenneth Mercer v. Patterson-UTI Drilling Co
16-20604
| 5th Cir. | Dec 27, 2017Background
- Plaintiffs were Patterson-UTI employees working on mobile drilling rigs that were “stacked” (temporarily decommissioned) after customer work ended, resulting in terminations between Dec 2014–Feb 2015.
- Plaintiffs sued under the WARN Act, alleging Patterson-UTI failed to give 60 days’ notice of a mass layoff/plant closing. Cases were consolidated in the S.D. Tex.; district court granted summary judgment for defendant and awarded partial costs. Plaintiffs appealed.
- Plaintiffs argued rigs within each of seven geographic operational areas should be aggregated as a single site of employment under 20 C.F.R. § 639.3(i)(3) (reasonable geographic proximity) and alternatively under § 639.3(i)(6) (outstationed employees) and other DOL regs.
- Patterson-UTI contended the WARN notice obligation never attached because no mass layoff/plant closing occurred at a single site of employment; it also argued plaintiffs were not outstationed employees or their home bases were individual rigs.
- District court found plaintiffs failed to raise a genuine fact dispute on aggregation (especially geographic proximity) and granted summary judgment; plaintiffs did not press § 639.3(i)(6) below. Plaintiffs also appealed the award of costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether multiple rigs in an operational area can be aggregated as a single site of employment under 20 C.F.R. § 639.3(i)(3) | Rigs in each operational area are in reasonable geographic proximity, used for same purpose, and share staff/equipment, so should aggregate | Rigs are separate facilities often miles apart across counties/states; plaintiffs failed to show reasonable geographic proximity or the required aggregation facts | Court affirmed: plaintiffs failed to show genuine dispute as to reasonable geographic proximity (no evidence of distances/groupings); aggregation fails |
| Whether plaintiffs qualify as outstationed employees under 20 C.F.R. § 639.3(i)(6) | (Raised on appeal) Plaintiffs contend § 639.3(i)(6) applies and operational-area home base aggregates sites | Patterson-UTI argued plaintiffs are not outstationed; even if they were, home base is the individual rig, not operational area | Court declined to consider § 639.3(i)(6) because plaintiffs did not present/argue it in district court; forfeited on appeal |
| Whether district court improperly granted summary judgment on alternative theories not briefed by defendant (e.g., § 639.3(b), § 639.3(i)(8)) | District court erred by deciding theories not raised in defendant’s motion | Patterson-UTI’s motion put plaintiffs on notice that no single site suffered ≥50 employment losses, requiring plaintiffs to present all evidence on aggregation and plant-closing theories | Court affirmed: no error—defendant’s briefing should have put plaintiffs on notice to present all evidence; summary judgment proper on alternative theories |
| Whether awarding costs to Patterson-UTI under Fed. R. Civ. P. 54(d)(1) was an abuse of discretion | Plaintiffs argued good-faith claims, close/novel issue, and WARN Act’s remedial nature justify denying costs | Defendant argued prevailing-party costs presumptively awarded under Rule 54(d)(1); plaintiffs’ good faith alone insufficient to deny costs | Court affirmed: no abuse of discretion; presumption favors awarding costs and plaintiffs failed to show a sufficient reason to deny them |
Key Cases Cited
- Davis v. Signal Int’l Tex. GP, L.L.C., 728 F.3d 482 (5th Cir.) (definition and review framework for single site of employment)
- Meadows v. Latshaw Drilling Co., L.L.C., 866 F.3d 307 (5th Cir.) (refusal to aggregate distant drilling sites; summary judgment principles on WARN aggregation)
- Viator v. Delchamps Inc., 109 F.3d 1124 (5th Cir.) (all three aggregation factors under § 639.3(i)(3) must be met)
- Williams v. Phillips Petroleum Co., 23 F.3d 930 (5th Cir.) (geographically separate plants rarely a single site)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S.) (summary judgment burden-shifting and need for nonmovant to come forward with evidence)
- Pacheco v. Mineta, 448 F.3d 783 (5th Cir.) (standard and discretion for awarding costs under Rule 54(d)(1))
- Moore v. CITGO Ref. & Chems. Co., L.P., 735 F.3d 309 (5th Cir.) (clarifying limits of denying costs despite good-faith litigation)
- Cheatham v. Allstate Ins. Co., 465 F.3d 578 (5th Cir.) (presumption in favor of awarding costs to prevailing party)