Melania Felix DE ASENCIO; Manuel A. Gutierrez; Asela Ruiz; Eusebia Ruiz; Luis A. Vigo; Luz Cordova; Hector Pantajos, on Behalf of Themselves and All Other Similarly Situated Individuals v. TYSON FOODS, INC., Appellant.
No. 02-3719.
United States Court of Appeals, Third Circuit.
Argued April 24, 2003. Filed Sept. 8, 2003.
342 F.3d 301
III.
For the reasons explained above, the judgment must be vacated and the case remanded for resentencing. The question at once arises - what more must the District Court do on remand in view of the sparse record? A few things at least suggest themselves. The Court may wish to consider additional factors, such as whether this drug courier occurrence was a repeated activity or an isolated event. Rodriguez had made a number of prior trips to the New York area to visit his children living there. The government concedes that this is the first time Rodriguez has ever been involved in importation, though perhaps the record on this issue can be further developed. The Court may also wish to consider the amount of money the courier was to receive as an indicator of the importance of the defendant‘s actions to the success of the venture. Additionally, the Court may wish to delve more deeply into the defendant‘s likely knowledge of the identities and roles of the other actors in the conspiracy as well as his likely knowledge of the overall scope of the conspiracy.
One further point bears mention. As explained above, see supra note 2, the safety-valve turns on the defendant providing to the government truthful information about the scheme. Here, the District Court must have believed that the defendant was truthful in his dealings with the government in order to grant the safety-valve. Thus, the District Court‘s refusal to credit the defendant‘s statements in the minor participant context may not have been based on lack of trust in those statements but rather on the misperception that it was not permitted to use uncorroborated statements as proof. This factor too might be considered. As suggested above, the Court is not limited to the three Headley factors if it can come up with other relevant considerations.
In sum, on remand the District Court must evaluate whatever information is available to it and make the findings necessary to support its (discretionary) determination as to whether Rodriguez met his burden of establishing minor role. The task is not easy on a sparse record, but District Courts are accustomed to making difficult calls.
The judgment of sentence will be vacated and the case remanded for further proceedings consistent with this opinion.
Michael J. Mueller, (Argued), Akin, Gump, Strauss, Hauer & Feld, Washington, DC, for Appellant.
Frederick P. Santarelli, (Argued), Thomas J. Elliott, Eric L. Young, Elliott, Reihner, Siedzikowski & Egan, Blue Bell, PA, for Appellees.
Before SCIRICA, Chief Judge,* AMBRO and GARTH, Circuit Judges.
SCIRICA, Chief Judge.
In a labor dispute over unpaid wages, plaintiffs gained certification of an opt-in
I.
A.
Plaintiffs are hourly employees at defendant Tyson Foods’ two chicken-processing plants in New Holland, Pennsylvania (Lancaster County). Plant One employees work on the production line slaughtering birds and producing meat for direct sale or further processing. Those at Plant Two process the chicken meat, producing prepared, packed chicken products, like chicken nuggets, chicken tenders, chicken patties, and Buffalo wings.
Animal flesh, blood, and fecal matter are present throughout both plants. To protect against disease and safety hazards, Tyson employees are required to perform “donning, doffing, and sanitizing” activities. This entails putting on protective clothing - like hairnets, earplugs, safety goggles, cotton smocks, gloves, and plastic aprons - before the start of their shift, and rinsing their clothing and washing their hands at the end of their shift. Employees receive two unpaid 30-minute meal periods per shift, and must don, doff, and sanitize at the beginning and end of these breaks.1
Tyson ordinarily does not pay its employees for time spent donning and doffing.2 The plaintiff employees are not organized nor do they work under a written contract. There is no collective bargaining.
B.
In August 2000, plaintiffs filed suit against Tyson under both federal law (the
On October 4, plaintiffs sought collective treatment of their FLSA action under the federal statute‘s opt-in provisions.
On January 31, 2001, the District Court granted plaintiffs’ request to issue notice to prospective class members under the FLSA action. The court‘s notice stated, in part, “The Court has not yet determined that the claims under the Pennsylvania WPCL can be pursued as a class action, and thus your right to participate in that claim will depend on a later decision by the Court.”
On March 15, Tyson mailed out the notice to 3,400 prospective FLSA class members. On June 21, Tyson filed a motion to
On July 24, the District Court closed the class period and denied plaintiffs’ motion to reissue notice. The class consisted of 504 current and former employees. The District Court later dismissed, on summary judgment, the claims of 57 of those employees as barred by the statute of limitations. All parties acknowledge that the current size of the FLSA class is 447 persons.
On December 31, the District Court closed discovery. Nearly two months later, on February 22, 2002, plaintiffs filed a motion to certify the supplemental state-law WPCL action under Fed. R. Civ. P. 23. Plaintiffs’ motion for class treatment under the supplemental state-law action was filed 17 months after their motion to certify the federal FLSA action. The District Court heard arguments on whether plaintiffs could bring a WPCL action because they had not pleaded a contract claim, the predicate for a WPCL action. On May 14, plaintiffs argued for the first time that the WPCL action was grounded in an implied contract between Tyson and its hourly employees.4
On July 17, despite Tyson‘s objections that the WPCL certification motion was late and that the implied contract argument was new, the District Court granted plaintiffs’ motion to certify the state WPCL action under Fed. R. Civ. P. 23(b)(3).5 The state-law class, an opt-out class, consisted of approximately 4,100 persons, including approximately 700 employees hired after notice was sent to the FLSA class.
The District Court had subject matter jurisdiction over plaintiffs’ FLSA action under
II.
A.
In 1938, Congress enacted the
The legislation propelled thousands of portal-to-portal lawsuits. The term “portal to portal” represents an employee‘s work day from starting time to quitting time. Jewell Ridge Coal Corp. v. United Mine Workers, 325 U.S. 161, 188 (1945) (Jackson, J., dissenting); Connors v. Beth Energy Mines, Inc., 920 F.2d 205, 208 (3d Cir. 1990) (work day was eight hours from portal-to-portal including thirty minutes for lunch). Between July 1, 1946 and January 31, 1947, employees around the country filed 1,913 such actions under the FLSA. 93 Cong. Rec. 2,082 (1947).
The dramatic increase in these suits was a result of the Supreme Court‘s decision in Anderson v. Mount Clemens Pottery Co., 328 U.S. 680 (1946), which expanded the scope of compensable “working time” for FLSA purposes. See 93 Cong. Rec. 2,089 (1947) (“[W]hat is the cause of this widespread litigation? The immediate incident which apparently brought this vast flood of litigation upon our nation was the decision of the Supreme Court [in Anderson ].“). Responding to this increase in litigation, Congress sought “to define and limit the jurisdiction of the courts” through the Portal-to-Portal Act, Pub. L. No. 80-49, ch. 52, § 1(b)(3), 61 Stat. 85 (1947). 93 Cong. Rec. 2,087 (1947) (“[T]he attention of the Senate is called to a dramatic influx of litigation, involving vast alleged liability, which has suddenly entered the Federal courts of the Nation.“). Noting the “immensity of the [litigation] problem,” id. at 2,082, Congress attempted to strike a balance to maintain employees’ rights but curb the number of lawsuits. Under the Portal-to-Portal Act, an FLSA action for overtime pay could be maintained by “one or more employees for and in behalf of himself or themselves and other employees similarly situated.”
Because the Portal-to-Portal Act amendment changed participation in an FLSA class from “opt-out” to “opt-in,” FLSA plaintiffs could not certify a class under Fed. R. Civ. P. 23, even though federal subject matter jurisdiction obtained. E.g., Lusardi v. Lechner, 855 F.2d 1062, 1068 n. 8 (3d Cir. 1988) (“Courts have generally recognized that Rule 23 class actions may not be used under FLSA § 16(b).“); 5 James Wm. Moore et al., Moore‘s Federal Practice § 23.06[1] (3d ed. 2003) (“Rule 23 is inapplicable to class proceedings under the FLSA.“). The principal difference between FLSA class actions and Fed. R. Civ. P. 23 class actions is that prospective plaintiffs under the FLSA must consent to join the class.
As noted, plaintiffs here obtained federal court jurisdiction when they filed a FLSA action, alleging that Tyson was liable to pay its employees for time spent donning and doffing. The District Court ordered notice to prospective class members and later certified a class of 504 persons who
B.
At issue is whether the District Court properly exercised supplemental jurisdiction over the state-law WPCL opt-out action.
In 1990, Congress broadened district courts’ ability to exercise supplemental jurisdiction over non-federal claims.
Section 1367 combined older notions of pendent jurisdiction and ancillary jurisdiction. Under the statute, which codified many of the principles enunciated in United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966), a district court may exercise supplemental jurisdiction where state-law claims share a “common nucleus of operative fact” with the claims that supported the district court‘s original jurisdiction. Id.; see also
Under section 1367, a district court has authority to exercise supplemental jurisdiction over non-federal claims arising from the same case or controversy as the federal claim. Here, the District Court determined the FLSA and WPCL actions arose from the same controversy and shared a common nucleus of operative fact. This ruling was not an abuse of discretion. Where “the same acts violate parallel federal and state laws, the common nucleus of operative facts is obvious.” Lyon v. Whisman, 45 F.3d 758, 761 (3d Cir. 1995). The FLSA and WPCL are parallel federal and
Still, section 1367 provides specific exceptions to supplemental jurisdiction. There is no supplemental jurisdiction where a federal statute expressly provides otherwise, either through direct preclusion or preemption of state-law claims.10
A district court has the responsibility to manage complex litigation. That responsibility requires a court to determine whether to exercise supplemental jurisdiction over pendent claims and parties. In enacting section 1367, Congress intended to enhance a district court‘s ability to gain jurisdiction over pendent claims and parties while providing those courts with the discretion to decline to exercise supplemental jurisdiction in several express circumstances. “It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff‘s right.” Gibbs, 383 U.S. at 726.
Because the FLSA does not expressly address supplemental jurisdiction, we consider the explicit statutory circumstances enunciated in section 1367(c) under which a district court may decline to exercise supplemental jurisdiction. In codifying much of Gibbs, Congress granted district court judges discretion to determine whether to exercise supplemental jurisdiction.
- the claim raises a novel or complex issue of State law,
- the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
- the district court has dismissed all claims over which it has original jurisdiction, or
- in exceptional circumstances, there are other compelling reasons for declining jurisdiction.
The dispositive provision here appears to focus on whether the state-law action substantially predominates over the FLSA action. Where “the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the
Our inquiry here centers on the terms of proof and the scope of the issues raised in the FLSA and WPCL actions.13 As we have held, the WPCL “‘does not create a right to compensation . . . . [r]ather, it provides a statutory remedy when the employer breaches a contractual obligation to pay earned wages. The contract between the parties governs in determining whether specific wages are earned.‘” Antol v. Esposto, 100 F.3d 1111, 1117 (3d Cir.1996) (quoting Weldon v. Kraft, Inc., 896 F.2d 793, 801 (3d Cir.1990)). Because Tyson‘s employees do not work under an employment contract or a collective bargaining agreement, plaintiffs will have to establish the formation of an implied oral contract between Tyson and its employees. Even then, whether an implied contract may give rise to a claim under the WPCL has never been addressed by the Pennsyl-
Another countervailing interest in relegating the WPCL claims here to state court is Congress‘s express preference for opt-in actions for the federal cause of action. Congress‘s interest in these matters is manifest. For policy reasons articulated in the legislative history, Congress chose to limit the scope of representative actions for overtime pay and minimum wage violations.
But the interest in joining these actions is strong as well. As noted, the actions share a common nucleus of operative fact and they arise from the same case or controversy. Moreover, joinder would permit the District Court to efficiently manage the overall litigation. Were supplemental jurisdiction not to obtain, and assuming the statute of limitations has not run, plaintiffs could file the WPCL action in state court and request an opt-out class on behalf of themselves and “other employes similarly situated.”
As we analyze the different levels of proof required and the relevant federal and state interests, the disparity in numbers here gives us pause. In terms of the number of plaintiffs, the sheer difference in numbers between the two prospective classes, 447 as opposed to 4,100, may constitute substantial predomination by the state WPCL action under section 1367.
Generally, the distinction between opt-in and opt-out classes is crucial. Under most circumstances, the opt-out class will be greater in number, perhaps even exponentially greater. Opt-out classes have numbered in the millions. See In re Prudential, 148 F.3d at 289-90. The aggregation of claims, particularly as class actions, profoundly affects the substantive rights of the parties to the litigation. Notably, aggregation affects the dynamics for discovery, trial, negotiation and settlement, and can bring hydraulic pressure to bear on defendants. The more aggregation, the greater the effect on the litigation.
But the size of a prospective class is important for another reason. Within the universe of possible claimants, it deter-
We do not tout the relative merits of either approach. For our purposes, it is sufficient to note that mandating an opt-in class or an opt-out class is a crucial policy decision. Congress has selected an opt-in class for FLSA actions.16
Predomination under section 1367 generally goes to the type of claim, not the number of parties involved. But the disparity in numbers of similarly situated plaintiffs may be so great that it becomes dispositive by transforming the action to a substantial degree, by causing the federal tail represented by a comparatively small number of plaintiffs to wag what is in substance a state dog.
Within the section 1367(c) analysis, certain issues of state law presented in the WPCL action also weigh heavily, tilting the balance against the exercise of supplemental jurisdiction. Pennsylvania courts have not addressed two novel and complex questions of state law squarely presented here: whether a WPCL action may rest on an implied employment contract that relies on alleged oral representations by Tyson managers; and whether the WPCL pertains to at will, non-collective bargaining employees. The need to resolve these is- sues, which are better left to the Pennsylvania state courts, weighs in favor of declining supplemental jurisdiction.
Whether the allegations of an implied employment contract run to the entire WPCL class is also in dispute and would implicate the predominance inquiry of Fed. R. Civ. P. 23(b)(3). “In cases involving implied contracts of employment, the litigant will be able to reach the jury only if he can clearly show that he and the employer intended to form a contract.” DiBonaventura v. Consolidated Rail Corp., 372 Pa. Super. 420, 539 A.2d 865, 868 (1988). Because the FLSA claim does not require an intent to form a contract, individual questions of implied contract formation with respect to each member of the WPCL class might conceivably predominate over the issues common to the claims of the FLSA plaintiffs.
We review a district court‘s exercise of supplemental jurisdiction for abuse of discretion. See Lyon, 45 F.3d at 760 (“[I]t is possible that even if the district court had the power to hear the supplemental claims, it abused its discretion in doing so.“). In exercising supplemental jurisdiction over the WPCL action here, the District Court held that “adding extra class members alone, whose interests will be represented by the named Plaintiffs, will not make the state law claims predominate. Regardless of the number of class members, the named plaintiffs will represent all of those with an FLSA claim or a WPCL claim.” De Asencio v. Tyson Foods, Inc., 2002 WL 1585580, at * 5 (E.D. Pa. July 17, 2002).
But whether the same group of named plaintiffs represent both the state and federal classes is not dispositive under
We also are mindful of the unique circumstances surrounding this litigation. On August 22, 2000, plaintiffs filed this suit. The complaint included both the FLSA and WPCL causes of action. On October 4, 2000, plaintiffs sought collective action treatment of their FLSA claim but did not seek certification of a class on the WPCL claim. It was not until nearly 17 months later, on February 22, 2002, after the District Court had closed the FLSA class period and ended discovery, that plaintiffs filed a motion to certify a class on the WPCL claim. Moreover, it was not until May 14, 2002, that plaintiffs first raised their implied contract theory to support the WPCL claim.
The way in which this suit evolved lends even greater credence to the conclusion that certification of the state-law class was plaintiffs’ second line of attack when the FLSA opt-in period yielded a smaller than desired federal class. This may be proper strategy where the state and federal actions raise similar issues and require similar terms of proof. But here, the state interest in whether plaintiffs may prevail on an implied contract WPCL action is disproportionately high.17
Accordingly, we find the District Court did not exercise sound discretion in granting supplemental jurisdiction over the WPCL action.18
III.
Of the approximately 3,400 FLSA notices that Tyson mailed to current or former employees, nearly 800 of them were “undeliverable” and “returned to sender” due to incorrect addresses.19 The record
In class actions, courts have equitable powers to manage the litigation in order to promote judicial economy and fairness to litigants. In re Diet Drugs Prods. Liab. Litig., 282 F.3d 220, 232 (3d Cir.2002) (noting the “equitable nature of class action proceedings“); In re Orthopedic Bone Screw Prods. Liab. Litig., 246 F.3d 315, 321 (3d Cir.2001) (discussing a court‘s equitable powers to “manage” class action litigation). For this reason, we direct the District Court to reopen the FLSA opt-in period for a reasonable period of time to allow additional notice to all eligible current and former employees. Tyson should make all reasonable efforts to provide notice to these potential class members.
IV.
For the foregoing reasons, we will reverse the judgment of the District Court and remand for proceedings consistent with this opinion.
ANTHONY J. SCIRICA
CHIEF JUDGE
Notes
Actions by an employe, labor organization, or party to whom any type of wages is payable to recover unpaid wages and liquidated damages may be maintained in any court of competent jurisdiction, by such labor organization, party to whom any type of wages is payable or any one or more employes for and in behalf of himself or themselves and other employes similarly situated, or such employe or employes may designate an agent or representative to maintain such action or on behalf of all employes similarly situated. Any such employe, labor organization, party, or his representative shall have the power to settle or adjust his claim for unpaid wages.
(a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
(b) In any civil action of which the district courts have original jurisdiction founded solely on
(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if -
- the claim raises a novel or complex issue of State law,
- the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
- the district court has dismissed all claims over which it has original jurisdiction, or
- in exceptional circumstances, there are other compelling reasons for declining jurisdiction.
In any civil action of which the district courts have original jurisdiction founded solely on
(a) Except as provided in subdivision (b) or as otherwise provided by the court, in certifying a plaintiff class or subclass the court shall state in its order that every member of the class is included unless by a specified date a member files of record a written election to be excluded from the class.
(b) If the court finds that
- the individual claims are substantial, and the potential members of the class have sufficient resources, experience and sophistication in business affairs to conduct their own litigation; or
- other special circumstances exist which are described in the order,
the court may state in its order that a person shall not be a member of the plaintiff class or subclass unless by a specified date the person files of record a written election to be included in the class or subclass.
Pa. R. Civ. P. 1711.- for existing workers who are class members, Tyson shall insert the Notice and Consent Form with the workers’ next paycheck, along with a postage paid envelope addressed to Plaintiffs’ counsel;
- for former workers who are class members, Tyson shall mail immediately the Notice with Consent Form to the workers’ last known addresses, along with a postage paid envelope addressed to Plaintiffs’ counsel; and
- Tyson shall promptly file with the Court, and serve a copy to Plaintiff‘s counsel, written certification confirming it has fully complied with the Court‘s Order including the date(s) that it complied with the instant Order.