RANDY DEAN QUINT; JOHN LINN; MARK MOLINA, individually and on behalf of all others similarly situated v. VAIL RESORTS, INC., a Delaware corporation
No. 22-1226
United States Court of Appeals, Tenth Circuit
October 17, 2023
PUBLISH
Submitted on the briefs:*
Edward P. Dietrich, Edward P. Dietrich, APC, Beverly Hills, California, for Plaintiffs-Appellants.
Michael H. Bell, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.,** Denver, Colorado, for Defendant-Appellee.
Before TYMKOVICH, BALDOCK, and McHUGH, Circuit Judges.
TYMKOVICH, Circuit Judge.
Randy Dean Quint, John Linn, and Mark Molina (“Colorado Plaintiffs“) filed a class and collective action against Vail Resorts, Inc., in the District of Colorado alleging violations of federal and state labor laws (“Colorado Action“). Different plaintiffs filed similar lawsuits against a Vail subsidiary, which are pending in federal and state courts in California. After Vail gave notice that it had agreed to a nationwide settlement with some of the other plaintiffs, Colorado Plaintiffs filed an emergency motion asking the district court to enjoin Vail from consummating the settlement. The district court denied their motion, and Colorado Plaintiffs filed this interlocutory appeal. Exercising jurisdiction under
I. Background
The Colorado Action alleges that certain of Vail‘s nationwide employment practices violate the Fair Labor Standards Act and state law. Colorado Plaintiffs seek payment of unpaid wages, overtime, and other benefits for themselves and similarly situated parties. Five other actions filed by different plaintiffs in California asserted similar claims against Vail subsidiaries.
Vail notified Colorado Plaintiffs and the district court that it had negotiated a nationwide settlement with other plaintiffs encompassing all claims for alleged unpaid wages and any other violation of state or federal law involving Vail and its subsidiaries (“Settlement“). Vail initially indicated the Settlement would be submitted for approval in the district court in the Eastern District of California, but the settling parties later stipulated to stay the California federal-court actions and seek approval of the Settlement in a California state-court actiоn. Colorado Plaintiffs filed an emergency motion seeking an injunction under the All Writs Act,
A magistrate judge issued a report and recommendation (“R&R“) to deny the Injunction Motion, concluding the relief Colorado Plaintiffs sought was barred by the
II. Discussion
Colorado Plaintiffs argue the district court erred by: (1) applying the wrong standard in reviewing the R&R; (2) holding the Anti-Injunction Act applies to an injunction against Vail rather than the state court; (3) declining to consider one exception to the Anti-Injunction Act; (4) holding a second exception to the Anti-Injunction Act did not apply; (5) failing to enforce the first-to-file rule; and (6) abstaining under the Colorado River doctrine.2
A. Standard of Review Applied to R&R
Colorado Plaintiffs first argue the district court applied the wrong standard in reviewing the magistrate judge‘s R&R. The court concluded the R&R was “not dispositive of a party‘s claim or defense,” so it should “‘modify or set aside any part of the order that is clearly erroneous or is contrary to law.‘” Aplt. Apр., Vol. 5 at 1186 (quoting
Vail contends Colorado Plaintiffs waived this issue by arguing for the clearly-erroneous-or-contrary-to-law standard of review in their objections to the R&R. In Birch v. Polaris Industries, Inc., 812 F.3d 1238, 1247 (10th Cir. 2015), we held appellants waived their de-novo-review argument by agreeing with the district court that it had correctly articulated the standard as clearly erroneous or contrary to law. But the waiver question here is not аs clear as in Birch. In this case the magistrate judge issued a report and recommendation rather than entering an order and also cited Federal Rule of Civil Procedure 72(b), which applies to dispositive motions. See Aplt. App., Vol. 5 at 1083 & n.2. Although Colorado Plaintiffs did assert the R&R was clearly erroneous and contrary to law, they also argued for de novo review. See id. at 1112. And the district court chided them for misstating the standard of review in their objections, suggesting that it rejected their contention regarding de novo review. See id. at 1189 n.1. We decline to find a waiver under these circumstances. See United States v. Walker, 918 F.3d 1134, 1153 (10th Cir. 2019) (“To be clear, whether issues should bе deemed waived is a matter of discretion.“).
We review de novo whether the district court applied the correct standard in reviewing the R&R. See Birch, 812 F.3d at 1246. We agree with Colorado Plaintiffs that the court was required to review the R&R de novo, but we decline to remand because the error was harmless.
1. Dispositive Motion
Magistrate judges are “not Article III judicial officers” and their “jurisdiction
The eight motions enumerated in
Vail asserts this analysis requires an additional step: determining whether a motion for injunctive relief is dispositive of a claim or defense under Federal Rule of Civil Procedure 72. It maintains the Injunction Motion was not dispositive in this sense. But Vail misconstrues
That Rule
reflects the division in section 636(b) between matters as to which magistrates may issue orders and matters as to which magistrates may make only proposed findings of fact and recommendations. Significantly, the Rule does not list the specific motions which fall into each category, but simply refers to matters as either “dispоsitive” or “not dispositive” of a claim or defense.
Id. (quoting Rule 72). The two categories used in Rule 72(a) and (b)—nondispositive and dispositive—are tied to referrals under subsection (A) and subsection (B) of
We have also concluded that “motions not designated on their face as one of those excepted in [§ 636(b)(1)](A) are nevertheless to be treated as such a motion when they have an identical effect.” Id. Thus, for example, a dismissal of claims with prejudice, “whether as a discovery sanction or for some other reason, constitutes the involuntary dismissal of an action within the meaning of section 636(b)(1)(A).” Id. at 1463. This is so because “[t]he Constitution requires that Article III judges exercise final decisionmaking authority” rather than magistrate judges. Id.
In contrast, we have never held, nor have we found authority for the proposition, that a magistrate judge may “hear and determine” a type of motion expressly excepted in
authority beyond its unambiguous, congressionally defined scope in
2. Harmless Error
But we agree with Vail that the district court‘s error in applying the review standard applicable to nondispositive matters was harmless. We conclude that the district court‘s error was not prejudicial to Colorado Plaintiffs. See
B. The Anti-Injunction Act
Colorado Plaintiffs filed the Injunction Motion seeking an injunction under the All Writs Act, which grants federal courts authority to “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law,”
The district court held the Anti-Injunction Act barred the injunction Colorado Plaintiffs requested. They contend the court erred because (1) the Anti-Injunction Act does not apply to an injunction against Vail, or (2) an exception to the Anti-Injunction Act permits the relief they requested. We review these issues de novo. See Tooele County, 820 F.3d at 1187.
1. Applicability of the Anti-Injunction Act
Colorado Plaintiffs first contend the Anti-Injunction Act does not apply to the specific injunction they sought because they “asked the District Court only to enjoin Vail from submitting to a state court a collusive reverse auction settlement designed to extinguish the federal Colorado Action, not to ‘stay proceedings in a State court.‘” Aplt. Opening Br. at 42 (quoting
We are not persuaded. First, Colorado Plaintiffs’ apparent assertion that, as a factual matter, “[a]n injunction against settlement does not ‘stay proceedings,‘” id. at 43, ignores that the California state-court action has been focused on submission, approval, and appeal of the Settlement. Second, they cite no authority for the proposition that the Anti-Injunction Act does not prohibit enjoining a party from proceeding in state court. In Tooele County, for example, we held the Anti-Injunction Act precluded the district court from enjoining parties from prosecuting a state-court action. See 820 F.3d at 1185 (describing order appealed as enjoining certain parties); id. at 1192 (holding “the district court erred by concluding that it could enjoin the state-court proceedings“).
Tooele County is consistent with Supreme Court caselaw. In Donovan v. City of Dallas, 377 U.S. 408, 413 (1964), the Court held that where a state court lacks power to restrain federal-court proceedings, it also may not restrain parties from proceeding in the federal court. In reference to the “rule that state courts are completely without power to restrain federal-court proceedings in in personam actions,” the Court said, “it does not matter that the prohibition here was addressed to the parties rather than to the federal court itself.” Id. (footnote omitted).5 Donovan relied on Peck v. Jenness, 48 U.S. 612, 625 (1849). See 377 U.S. at 413 n.12. Like this case, Peck involved a federal court‘s power to еnjoin a state court, see 48 U.S. at 624-25. And the Court noted in Peck that it had previously reversed a federal-court order enjoining a defendant from proceeding in state court because, under a precursor to
proceedings. See id. at 625; see also Mitchum v. Foster, 407 U.S. 225, 231-32 (1972) (tracing history of Anti-Injunction Act to version cited in Peck); 17A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 4221 & n.5 (3d ed. Apr. 2023 update) (same).
Colorado Plaintiffs nonetheless argue the Anti-Injunction Act does not apply to an injunction enjoining Vail from consummating a state-court settlement because the All Writs Act authorizes a district court to enjoin a party before it from pursuing conflicting litigation in a state court. They rely on Hillman v. Webley, 115 F.3d 1461, 1469 (10th Cir. 1997), but Hillman is not controlling on this point. First, our statement that “[t]he district court undoubtedly had the authority under the All Writs Act to enjoin parties before it from pursuing conflicting litigation in the state court,” id., was dicta. The district court in Hillman “did not pursue that route,” id., and the only issue before this court was the propriety of the district court‘s so-called “removal” under the All Writs Act of an action from state court to federal court, see id. at 1468 & n.4. Second, Hillman did not discuss the Anti-Injunction Act as a limitation on the district court‘s authority under the All Writs Act to enjoin parties from litigating in state court.
We reject Colorado Plaintiffs’ assertion that the Anti-Injunction Act does not apply to their Injunction Motion because they sought to enjoin Vail from consummating the settlement in state court rather than to enjoin the state court directly.
2. Exceptions to the Anti-Injunction Act
There are three exceptions to the prohibition in the Anti-Injunction Act that “[a] court of the United States may not grant an injunction to stay proceedings in a State court“: (1) Congress “expressly authorized” an injunction, (2) an injunction is “necessary in aid of [the federal court‘s] jurisdiction,” or (3) an injunction is issued “to protect or effectuate [the federal court‘s] judgments.”
Colorado Plaintiffs have taken inconsistent positions on which exceptions they believe apply to their Injunction Motion. In that motion, they asserted that “at least two exceptions apply; the injunction is ‘necessary in aid of jurisdiction’ and ‘to protect or effectuate’ the Court‘s judgments.” Aplt. App., Vol. 2 at 418 (quoting
In reviewing the R&R, the district court noted:
At various points in their motion and reply, Plaintiffs contend that all three exceptions apply. [The magistrate judge‘s R&R] only addresses the second and third exceptions. But he did not have to discuss an argument raised only in the reply. Nor will I indulge Plaintiffs
in a review of arguments not properly raised befоre [the magistrate judge].
Id. at 1189 (footnote and citations omitted). The court added:
I am growing concerned about Plaintiffs’ counsel‘s trend of waiting to raise new arguments in reply briefs. . . . While I will not speculate as to whether these errors were intentional, I remind counsel that they have ethical obligations of candor to the court and general competency. Should such errors continue, I may have to take additional measures to ensure that Plaintiffs’ counsel adhere to their ethical obligations.
Id. at 1189 n.1 (citation omitted). The district court then proceeded to review the R&R with regard tо the second and third exceptions to the Anti-Injunction Act—those that Colorado Plaintiffs had raised in the Injunction Motion and that the R&R addressed.
On appeal, Colorado Plaintiffs argue the first and second exceptions apply.
a. Authorized-by-Congress Exception
Colorado Plaintiffs contend the district court erred in declining to address the authorized-by-Congress exception on the ground it was newly raised in their reply in support of the Injunction Motion.6 They argue (1) they did not raise a new argument
in their reply, (2) the district court otherwise abused its discretion, (3) Vail failed to seek leave to file a sur-reply, and (4) the Constitution required the district court to review all arguments raised in their objections to the R&R.
The district court concluded it would not address an issue Colorado Plaintiffs raised for the first time in their reply in support of the Injunction Motion, citing Beaudry v. Corrections Corp. of America, 331 F.3d 1164, 1166 n.3 (10th Cir. 2003).7 Colorado Plaintiffs contend they did not raise a new argument in their reply because they were instead responding to a contention in Vail‘s opposition to the motion. See id. (“[W]e make an exception when the new issue argued in the reply brief is offered in response to an argument raised in the appellee‘s brief.“); Sadeghi v. INS, 40 F.3d 1139, 1143 (10th Cir. 1994) (“[W]here appellee raises argument not addressed by appellant in opening brief, appellant may respond in reply brief.“).
We are not persuaded. Colorado Plaintiffs assert that they argued the authorized-by-Congress exception in their reply “in response to Vail‘s argument that the district court was precluded from issuing an injunction by the [Anti-Injunction Act].” Aplt. Opening Br. at 47. But Colorado Plaintiffs addressed the applicability of exceptions to the Anti-Injunction Act in the Injunction Motion. In response, Vail cited the three exceptions, noted Colorado Plaintiffs’ failure to contend that the
authorized-by-Congress exception applied, and addressed the two exceptions Colorado
Colorado Plaintiffs contend the district court nonetheless abused its discretion in declining to address the authorized-by-Congress exception because it was mistaken about their “trend of waiting to raise new arguments in reply briefs.” Aplt. App., Vol. 5 аt 1189 n.1. They maintain the examples the court cited do not evidence such conduct. But contrary to their assertion, they did raise a new argument in their reply in support of their Injunction Motion. Moreover, the court‘s commentary about Colorado Plaintiffs’ “trend” of raising new arguments in reply was directed to potential “additional measures” in the event it continued. Id. Again, we see no abuse of discretion.
Colorado Plaintiffs also appear to argue the district court abused its discretion by declining to address the new argument in their reply because Vail did not seek leave to file a sur-reply. They cite cases grounded in a previous version of Federal Rule of Civil Procedure 56(c) holding that district courts did not abuse their discretion by considering new material in a reply in support of a summary judgment motion when the nonmoving party did not seek leave to file a sur-reply. See Pippin v. Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1191-92 (10th Cir. 2006) (citing Beaird v. Seagate Tech., Inc., 145 F.3d 1159, 1164-65 (10th Cir. 1998) (discussing the requirements of former Rule 56(c))). These cases do not demonstrate that because Vail did not ask to file a sur-reply, the district court abused its discretion by declining to consider Colorado Plaintiffs’ new argument in its reply in support of a motion for injunctive relief.
Finally, Colorado Plaintiffs contend the Constitution required the distriсt court to address every contention in their objections to the R&R, including the merits of their argument that the removal statute authorized the injunction they sought, an issue the R&R did not address. The cases they cite do not support this proposition. “The Constitution requires that Article III judges exercise final decisionmaking authority.” Ocelet Oil Corp., 847 F.2d at 1463. Consistent with that requirement, “Congress has provided that the magistrate‘s proposed findings and recommendations shall be subjected to a de novo determination by the judge who then exercises the ultimate authority to issue an appropriate order. Moreover, the authority—and the responsibility—to make an informed, final determination remains with the judge.” United States v. Raddatz, 447 U.S. 667, 681-82 (1980) (citation, brackets, ellipses, and internal quotation marks omitted). But “in providing for a de novo determination Congress intended to permit whatever reliance a district judge, in the exercise of sound judicial discretion, chose to place on a magistrate‘s proposed findings and recommendations.” Id. at 676 (internal quotation marks omitted).
Here the magistrate judge did not address the authorized-by-Congress exception to the Anti-Injunction Act in the R&R, concluding Colorado Plaintiffs had not argued that exception applied. They objected that, contrary to the R&R, they had argued that exception, pointing to their reply in support of the Injunction Motion. See Aplt. App., Vol. 5 at 1116
b. Necessary-in-Aid-of-Jurisdiction Exception
The R&R concluded that the necessary-in-aid-of-jurisdiction exception to the Anti-Injunction Act is narrowly construed and applies only when in rem or quasi in rem actions are pending in both state and federal courts. And where that is the case, the first court to acquire jurisdiction or assume control over the property is entitled to maintain and exercise its jurisdiction to the exclusion of the other court. Concluding Colorado Plaintiffs’ case was in personam rather than in rem or quasi in rem, the R&R recommended rejecting their contention that this exception applied to the Injunction Motiоn. Colorado Plaintiffs objected, asserting this action is in rem or quasi in rem because back wages are property. See Aplt. App., Vol. 5 at 1119.
Reviewing that objection, the district court held they failed to cite, nor could it find, any case holding a claim for back wages is considered in rem or quasi in rem.
On appeal, Colorado Plaintiffs first contend the necessary-in-aid-of-jurisdiction exception is not limited to in rem or quasi in rem proceedings. But they did not raise this issue in their objections to the R&R. See id. They therefore waived appellate review of this argument. See Casanova v. Ulibarri, 595 F.3d 1120, 1123 (10th Cir. 2010) (“This circuit has adopted a firm waiver rule when a party fails to object to the findings and recommendations of the magistrate judge.” (brackets and internal quotation marks omitted)); Soliz v. Chater, 82 F.3d 373, 375-76 (10th Cir. 1996) (holding specific appellate arguments not raised in objections to magistrate judge‘s recommendation are waived).8
Colorado Plaintiffs also argue, as they did in their objections, that this case is in rem or quasi in rem because unpaid wages are property. In an action in rem a court has already “reduced the res to its actual possession” or “it may later become necessary in order to effectuate the deсree of the court[] to seize it.” Boynton v. Moffat Tunnel Improvement Dist., 57 F.2d 772, 778 (10th Cir. 1932) (noting the latter cases are referred to as quasi in rem). “[T]he rule is limited . . . to actions which deal
either actually or potentially with specific property or objects.” Id. As the district court concluded, the cases Colorado Plaintiffs cite do not hold that a claim for back wages is considered in rem or quasi in rem. Consequently, they have not shown the court erred in concluding the necessary-in-aid-of-jurisdiction exception to the Anti-Injunction Act does not apply to the Injunction Motion.
C. First-to-File Rule
Colorado Plaintiffs also argue the district court erred by not enforcing the first-to-file rule, which “permits, but
D. Colorado River Abstention
Colorado Plaintiffs assert that the district court improperly abstained from exercising jurisdiction in favor of the California state court contrary to the Colorado River abstention doctrine. See Colo. River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). Addressing their objection, the district court concluded they misunderstood and misinterpreted the R&R, noting the magistrate judge “did not recommend abstention under Colorado River; he instead cited to Colorado River as a contradictory proposition to his explanation that the first-to-file [rule] does not pertain to a case filed and proceeding [in] state court.” Aplt. App., Vol. 5 at 1192. Colorado Plaintiffs contend the district court still “effectively abstained” and therefore erred by not applying the Colorado River test. Aplt. Opening Br. at 62. We reject this assertion: in denying the Injunction Motion, the district court did not abstain—actually or effectively, properly or improperly—under Colorado River.9
III. Conclusion
We affirm the district court‘s order denying the Injunction Motion.