Mark Fochtman v. Hendren Plastics, Inc., 47 F.4th 638

DARP is a non-profit residential drug- and alcohol-recovery program that provides room, board, clothing, transportation, and other necessities to participants; participation commonly was court-ordered in lieu of imprisonment.
Participants did not receive direct wages from DARP; DARP placed many participants to work for local for-profit businesses and received per-hour payments from those businesses for participant labor.
Hendren Plastics employed DARP participants at its facility and paid DARP (not the participants) a set per-hour amount that exceeded Arkansas’s statutory minimum wage.
Fochtman sued DARP and Hendren under the Arkansas Minimum Wage Act, alleging the participants were “employees” entitled to minimum wages and overtime; the district court granted summary judgment for the class and awarded liquidated damages.
Hendren and DARP appealed, challenging subject-matter jurisdiction arguments (post-removal severance and Rooker–Feldman) and the district court’s conclusion that participants were employees; the Eighth Circuit reviewed de novo.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject-matter jurisdiction after severance (CAFA)	Removal under CAFA was proper and jurisdiction persists	Severance under Rule 21 eliminated the CAFA amount-in-controversy so federal jurisdiction ended	Jurisdiction is assessed at removal and survives subsequent severance; federal jurisdiction existed at removal and remained
Rooker–Feldman doctrine	Suit challenges unpaid-wage obligations, not state-court criminal judgments	Litigation is an impermissible collateral attack on state drug-court orders that sent participants to DARP	Rooker–Feldman inapplicable because plaintiffs do not seek review of state-court judgments; claims are independent federal-state law matters
Employee status under Arkansas Minimum Wage Act	Fochtman: participants were employees of DARP and Hendren and entitled to statutory wages	DARP/Hendren: participants were primarily beneficiaries of a court-ordered rehabilitative program, had no expectation of compensation, and thus were not employees	Participants were not employees of DARP or Hendren under the Act (economic-reality/primary-beneficiary analysis); summary judgment for class reversed
Liquidated damages under the Act	Plaintiffs sought and district court awarded liquidated damages	Defendants challenged award as dependent on employee finding	Because participants are not employees, award of liquidated damages cannot stand; judgment reversed and remanded

Walling v. Portland Terminal Co., 330 U.S. 148 (1947) (broad “suffer or permit to work” definition has limits—no employee when work is solely for individual’s own benefit)
Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290 (1985) (associates found to be employees based on implied compensation expectations and economic dependence)
Vaughn v. Phoenix House N.Y., Inc., 957 F.3d 141 (2d Cir. 2020) (resident in court-approved treatment program was not an employee; primary beneficiary was resident)
Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947) (totality-of-the-circumstances/economic-reality approach)
Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528 (2d Cir. 2016) (adopts primary-beneficiary test for trainee/worker status)
Williams v. Strickland, 87 F.3d 1064 (9th Cir. 1996) (homeless man in Salvation Army rehabilitation not an employee where program was primarily rehabilitative)
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005) (articulates scope of Rooker–Feldman doctrine)
Hargis v. Access Cap. Funding, 674 F.3d 783 (8th Cir. 2012) (jurisdiction judged at time of removal; subsequent events do not divest jurisdiction)