Santiago Pineda, et al v. JTCH Apartments, L.L.C., et al

Filing

PUBLISHED OPINION FILED. [15-10932 Affirmed in Part, Reversed in Part and Remanded] Judge: EHJ, Judge: RHB, Judge: GJC. Mandate pull date is 01/09/2017 [15-10932]

Case: 15-10932

Document: 00513803202

Page: 1

Date Filed: 12/19/2016

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit

FILED
No. 15-10932

December 19, 2016
Lyle W. Cayce
Clerk

SANTIAGO PINEDA, and all others similarly situated under 29 U.S.C.
216(B); MARIA PENA,
Plaintiffs - Appellants Cross-Appellees
v.
JTCH APARTMENTS, L.L.C.; SIMONA VIZIREANU,
Defendants - Appellees Cross-Appellants
Appeals from the United States District Court
for the Northern District of Texas
Before JONES, BARKSDALE, and COSTA, Circuit Judges.
GREGG COSTA, Circuit Judge:
This appeal raises two questions about the retaliation provision of the
Fair Labor Standards Act: Does the Act allow a retaliation victim to recover
damages for emotional distress? Does the Act protect a nonemployee spouse
from employer backlash? We conclude that the FLSA allows only employees
to bring suit, but that an employee may recover for emotional injury resulting
from retaliation.
I.
Santiago Pineda and Maria Pena, a married couple, lived in an
apartment owned by JTCH Apartments, L.L.C. and leased to Pena. Pineda
did maintenance work in and around the apartment complex. As part of
Pineda’s compensation for this work, JTCH discounted Pena’s rent.

Case: 15-10932

Document: 00513803202

Page: 2

Date Filed: 12/19/2016

No. 15-10932
Pineda filed this lawsuit initially just seeking unpaid overtime under the
FLSA. He sued JTCH and its owner and manager, Simona Vizireanu. Three
days after Pineda served JTCH with the summons, he and his wife received a
notice to vacate their apartment for nonpayment of rent. The amount JTCH
demanded equaled the rent reductions Pena had received over the period of
Pineda’s employment. In response to the notice, the couple left the apartment.
Pena then joined Pineda’s suit, and the amended complaint included
retaliation claims based on the back rent demanded after the filing of the
lawsuit.

See 29 U.S.C. § 215(a)(3).

During the jury trial that followed,

Defendants moved successfully for judgment as a matter of law on Pena’s
retaliation claim, arguing that a nonemployee like Pena is outside the
protections of the FLSA. At the charge conference, Pineda unsuccessfully
sought an instruction on emotional distress damages for his retaliation claim.
The jury found for Pineda on both his overtime wage claim and his
retaliation claim. It awarded him $1,426.50 on the former and $3,775.50 on
the latter. In post-trial rulings, the district court awarded Pena liquidated
damages of $1,426.50 and awarded his counsel $76,732.88 in attorney’s fees,
which was a 25% reduction from the amount requested. The court ordered the
reduction primarily because the fee request was “grossly disproportionate to
the modest recovery.”
Pineda and Pena appeal. Pineda argues that the court should have
instructed the jury on damages for emotional harm. Pena argues that she is
within the zone of interests protected by the FLSA retaliation provision and
thus should have also been able to seek such damages from the jury.
Defendants also appeal. Their brief seeks to undo the jury’s verdict on a
number of grounds, among them that Pineda was an independent contractor
and failed to prove that JTCH was an enterprise engaged in commerce. Their
2

Case: 15-10932

Document: 00513803202

Page: 3

Date Filed: 12/19/2016

No. 15-10932
notice of appeal raising those issues was deemed untimely, however, by a
motions panel of this court. The only issue they timely raised relates to the fee
award.
II.
A
We begin by considering whether the district court should have asked
the jury whether it believed Pineda had proven damages for emotional distress.
As the availability of such damages under the FLSA is a question of statutory
interpretation, our review is de novo.

GE Capital Commercial, Inc. v.

Worthington Nat. Bank, 754 F.3d 297, 302 (5th Cir. 2014) (“[W]hen ‘a jury
instruction hinges on a question of statutory construction, this court’s review
is de novo.’” (quoting United States v. Garcia-Gonzalez, 714 F.3d 306, 312 (5th
Cir. 2013))).
The damages provision of the FLSA provides the following remedies for
retaliation claims: “Any employer who violates the provisions of section
215(a)(3) of this title shall be liable for such legal or equitable relief as may be
appropriate to effectuate the purposes of section 215(a)(3) of this title,
including without limitation employment, reinstatement, promotion, and the
payment of wages lost and an additional equal amount as liquidated damages.”
29 U.S.C. § 216(b). Although we have not decided whether this language
allows a plaintiff to recover for emotional injuries, the two courts of appeals
that have analyzed the question have. Moore v. Freeman, 355 F.3d 558, 563
(6th Cir. 2004); Travis v. Gary Cmty. Mental Health Ctr., 921 F.2d 108, 112
(7th Cir. 1990). And a number of other circuits have upheld jury awards for
emotional damages in FLSA retaliation cases though the legal question was
not challenged on appeal. Travers v. Flight Servs. & Sys., Inc., 808 F.3d 525,
530, 539–42 (1st Cir. 2015); Broadus v. O.K. Indus., Inc., 238 F.3d 990, 992
3

Case: 15-10932

Document: 00513803202

Page: 4

Date Filed: 12/19/2016

No. 15-10932
(8th Cir. 2001) (per curiam); Lambert v. Ackerley, 180 F.3d 997, 1011 (9th Cir.
1999).
The remedies provision for retaliation claims was added to the FLSA in
1977. Travis, 921 F.2d at 111. Prior to the 1977 amendments, plaintiffs only
had a cause of action for minimum wage and overtime violations. For those
claims, section 216(b) was limited, as it still is today, to awarding lost pay,
liquidated damages, and attorneys’ fees.

Id.; 29 U.S.C. § 216(b).

The

amendment, however, provided a private cause of action to enforce the FLSA’s
antiretaliation provision (before 1977, the Secretary had to bring an
enforcement action). Fair Labor Standards Amendments of 1977, Pub. L. No.
95-151, 91 Stat. 1252 (Nov. 1, 1977). In granting employees the ability to
enforce the antiretaliation provision on their own, Congress allowed them to
recover not just wages and liquidated damages but also “such legal or equitable
relief as may be appropriate.” 29 U.S.C. § 216(b). As the Seventh Circuit has
recognized, this is expansive language that should be read to include the
compensation for emotional distress that is typically available for intentional
torts like retaliatory discharge. Travis, 921 F.2d at 112 (“Compensation for
emotional distress, and punitive damages, are appropriate for intentional torts
such as retaliatory discharge.”). This also explains the more limited damages
available for failure to pay minimum wage or overtime pay because an
employer can inadvertently pay less than the law requires, see 29 U.S.C. §
255(a) (recognizing that not all FLSA wage and overtime claims are willful); it
cannot unintentionally retaliate against an employee who complains about it.
Despite the uniform view of our sister circuits that damages for
emotional distress are available in FLSA retaliation suits, this district court
was not the only one in our circuit to conclude otherwise. Compare Little v.
Tech. Specialty Prods., LLC, 940 F. Supp. 2d 460, 479 (E.D. Tex. 2013), and
4

Case: 15-10932

Document: 00513803202

Page: 5

Date Filed: 12/19/2016

No. 15-10932
Saldana v. Zubha Foods, LLC, 2013 WL 3305542, at *6 (W.D. Tex., June 28,
2013) (holding that emotional distress damages are available under the FLSA),
with Adams v. Cedar Hill Indep. Sch. Dist., 2014 WL 66488, at *6–7 (N.D. Tex.,
Jan. 8, 2014), and Douglas v. Mission Chevrolet, 757 F. Supp. 2d 637, 639–40
(W.D. Tex. 2010) (holding that emotional damages are not available under the
FLSA). The disagreement stems from our decisions stating that the remedies
provision of the FLSA and the Age Discrimination in Employment Act should
be interpreted consistently. See Lubke v. City of Arlington, 455 F.3d 489, 499
(5th Cir. 2006). That congruity is the result of the ADEA incorporating the
FLSA’s remedy provision. See id.; 29 U.S.C. § 626(b) (providing that the
“provisions of this chapter shall be enforced in accordance with the powers,
remedies, and procedures provided in sections 211(b), 216 (except for
subsection (a) thereof) and 217 of this title [all FLSA provisions] and subsection
(c) of this section”). Applying this equivalence principle, some courts have
concluded that our ruling in Dean v. American Security Insurance Co., 559 F.2d
1036 (5th Cir. 1977), that emotional distress damages were not available under
the ADEA must mean they are also unavailable under the FLSA. See, e.g.,
Mission Chevrolet, 757 F. Supp. 2d at 639.
The trouble with this line of reasoning is that when Dean considered
whether the ADEA afforded a remedy for emotional harm by looking to the
FLSA remedy provision via the cross reference, it was looking at the pre-1977
FLSA. 1 As already discussed, that statute limited relief to economic damages
and did not even allow private retaliation suits. Dean thus observed that
“[r]eading together the ADEA and the identified sections of the FLSA, an

The 1977 Amendments became effective on November 1 of that year, after Dean was
decided by the court of appeals and more than a year after it was filed in the district court.
See Dean, 559 F.2d at 1036; Dean v. Am. Sec. Ins. Co., 429 F. Supp. 3 (N.D. Ga. 1976).
1

5

Case: 15-10932

Document: 00513803202

Page: 6

Date Filed: 12/19/2016

No. 15-10932
employer is subject to liability to the employee for ‘unpaid minimum wages or
unpaid overtime compensation’ and that amount may be doubled to provide
‘liquidated damages,’ in cases of willful violations.” Dean, 559 F.2d at 1037.
In contrast to its ready rejection of the argument that the ADEA allowed
recovery for emotional distress through its incorporation of the since amended
FLSA damages provision, Dean spent more time considering whether a standalone provision of the ADEA provided such relief. After the ADEA incorporates
the FLSA damages provision, it goes on to provide that: “In any action brought
to enforce this chapter the court shall have jurisdiction to grant such legal or
equitable relief as may be appropriate to effectuate the purposes of this chapter
. . . .” 29 U.S.C. §626(b).

Analyzing this language, Dean concluded that

awarding emotional damages to ADEA plaintiffs would “frustrate, rather than
[] ‘effectuate the purposes”’ of the statute because allowing emotional damages
would “introduce[] a volatile ingredient into the tripartite negotiations
involving Secretary, employee and employer” that is the dispute resolution
procedure the ADEA prefers. 559 F.2d at 1038–39 (citing Rogers v. Exxon
Research & Eng’g Co., 550 F.2d 834 (3d Cir. 1977)).
We have never said that this freestanding language in the ADEA
automatically applies to the FLSA, and that would make little sense. Although
the ADEA incorporates portions of the FLSA, the FLSA does not incorporate
the ADEA. Nonetheless, much of the language in that ADEA provision—“such
legal or equitable relief as may be appropriate to effectuate the purposes of this
chapter” —is similar to the language Congress added to the FLSA in 1977. But
the final “as may be appropriate to effectuate the purposes” phrase on which
Dean focuses warrant a different result when it comes to the FLSA retaliation
provision. The FLSA has no comparable legislative preference for the ADEA’s
administrative conciliation and mediation scheme that motivated the ruling in
6

Case: 15-10932

Document: 00513803202

Page: 7

Date Filed: 12/19/2016

No. 15-10932
Dean. 559 F.2d at 1038; see also Bogacki v. Buccaneers Ltd. P’ship, 370 F.
Supp. 2d 1201, 1205 (M.D. Fla. 2005) (refusing to apply Dean to an FLSA claim
because “the core of its decision was the notion that the allowance of damages
for emotional distress under the ADEA would thwart the goal of speedy,
uncomplicated administrative resolution of ADEA disputes”).

Instead of

requiring exhaustion of remedies before an agency like the EEOC, the FLSA
follows the path of tort law, authorizing immediate suits by employees to
provide compensation and deterrence. See Bogacki, 370 F. Supp. 2d at 1204–
05; 29 U.S.C. § 216(b).
We thus conclude that our case law interpreting the ADEA is no obstacle
to joining other circuits in deciding that the FLSA’s broad authorization of
“legal and equitable relief” encompasses compensation for emotional injuries
suffered by an employee on account of employer retaliation.
The question remains whether there was a factual basis for instructing
the jury on that type of damages in Pineda’s case. Indeed, this question, rather
than the legal question about whether the FLSA generally allows damages for
emotional distress, is the one Defendants raise in defending the trial court’s
ruling. We find, however, that the evidence is sufficient to have the jury decide
the question. During trial, Pineda testified to experiencing marital discord,
sleepless nights, and anxiety about where his family would live after JTCH
made what the jury found to be a retaliatory demand for back rent. Such
testimony is sufficient to enable a jury to find that the plaintiff experienced
compensable emotional distress. See Salinas v. O’Neill, 286 F.3d 827, 832 (5th
Cir. 2002) (“Damages for emotional distress may be appropriate, however,
where the plaintiff suffers sleeplessness, anxiety, stress, marital problems, and
humiliation.”). A question asking whether Pineda had proven any damages for
emotional distress should have been submitted to the jury.
7

Case: 15-10932

Document: 00513803202

Page: 8

Date Filed: 12/19/2016

No. 15-10932
B
Pena also sought emotional damages. But even before ruling on the
emotional damages question, the district court dismissed Pena’s retaliation
claim in its entirety because she was not an employee of JTCH. She contends
that she was nonetheless protected by the FLSA because as the spouse of an
employee retaliated against for his complaints, she was within the zone of
interests the statute protects. See Thompson v. N. Am. Stainless, LP, 562 U.S.
170, 178 (2011) (using the zone of interests test for determining who may bring
an action alleging retaliation under Title VII).
Pena’s attempt to apply Thompson to her situation ignores a critical
distinction between the text of Title VII it addressed and the FLSA’s retaliation
provision. Under the FLSA, it is only unlawful “to discharge or . . . discriminate
against any employee because such employee has filed any complaint.” 29
U.S.C. § 215(a)(3) (emphasis supplied). In contrast, the remedies provisions of
Title VII permit a “person claiming to be aggrieved” to file a civil suit. 42
U.S.C. § 2000e-5(f)(1). The Supreme Court read these words to authorize suits
by a person, in that case the terminated fiancé of a coworker who filed a
discrimination complaint, in the zone of interests sought to be protected by
Title VII. Thompson, 562 U.S. at 178. In the FLSA, the obstacle to a suit by a
nonemployee like Pena is found not in the remedies provision but in the
substantive prohibition of retaliation. The wage and hour law only prohibits
discharging or discriminating against an “employee.” 29 U.S.C. § 215(a)(3). In
light of this language, it is not surprising Pena is unable to cite any case
allowing a nonemployee to bring an FLSA retaliation claim. The district court
correctly dismissed Pena’s retaliation claim.

8

Case: 15-10932

Document: 00513803202

Page: 9

Date Filed: 12/19/2016

No. 15-10932
III.
Defendants appeal the district court’s award of attorney’s fees to Pineda.
They do not, however, contest the accuracy of the time entries or the
reasonableness of that time in light of the factors listed in Johnson v. Georgia
Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). Instead, they assert that
the plaintiffs violated Federal Rule of Civil Procedure 11 by filing a complaint
in bad faith. They also rely upon the doctrine of excessive demand, a creature
of Texas law. Both of these arguments rest on allegations that plaintiffs’
counsel did not settle the case at an early state before significant fees accrued.
The problem is that Defendants waived these arguments by not bringing them
before the district court in a proper manner.

With respect to Rule 11,

Defendants never filed a separate motion for sanctions with the district court,
instead only invoking the rule in their opposition to Pineda’s motion for
attorneys’ fees. See FED. R. CIV. P. 11(c)(2) (“A motion for sanctions must be
made separately from any other motion . . . .”). As a result, there are no district
court findings on the fact-intensive allegations Defendants raise—and the
counterallegations opposing counsel makes about the course of the litigation—
for us to review or consider in assessing the fee award. As to the excessive
demand argument, Defendants did not raise it in any manner in the district
court. See Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249,
267 (5th Cir. 2014) (stating general rule that arguments not raised before the
district court are waived).
With no challenge to the fee award properly before us, we affirm the
district court’s award. This case is not over, however. Because we hold that
damages for emotional distress are available in an FLSA retaliation suit, and
the district court’s ruling to the contrary was made prior to instructing the jury
rather than after the verdict was rendered, the case must be remanded for a
9

Case: 15-10932

Document: 00513803202

Page: 10

Date Filed: 12/19/2016

No. 15-10932
determination whether Pineda has proven any such harm.

Given the

significant discrepancy the district court has already noted between the fees
expended and the amounts recovered, counsel are instructed to complete the
final aspect of this case in an expeditious, cost-sensitive manner.
***
The judgment is AFFIRMED in part, REVERSED in part, and the case
REMANDED for trial on Pineda’s entitlement to compensation for emotional
distress.

10

Case: 15-10932

Document: 00513803202

Page: 11

Date Filed: 12/19/2016

No. 15-10932
JONES, Circuit Judge, concurring:
I concur in this good opinion and write only to emphasize the panel's
admonition that this case ought to be terminated expeditiously and at
minimum cost to the defendants. Testimony in the record implies that Pineda
may have filed this suit for a tiny sum partly to retaliate after the apartment
manager reported his possible child abuse to law enforcement. The record also
demonstrates unacceptable hardball tactics by plaintiff's counsel, including the
ex parte freezing of the defendant's bank accounts. Even worse, this and other
tactics seem to reflect counsel's standard operating procedure to maximize
recovery for minimum FLSA violations. Federal courts must be vigilant to
prevent procedural abuses.

11