O'Neal et al v. America's Best Tire LLC et al

Filing 51

ORDER denying 44 Motion for Bond. Signed by Judge David G Campbell on 7/25/2016.(DGC, nvo)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Deoncea O’Neal, et al.,

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Plaintiffs,

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ORDER

v.

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No. CV-16-00056-PHX-DGC

America’s Best Tire LLC, et al.,

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Defendants.

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This case involves a dispute as to whether Defendants, a group of tire stores and

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their individual owners, violated the Fair Labor Standards Act (“FLSA”) by failing to pay

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their tire porters, crew members, and tire technicians the statutory premium for overtime

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work. Defendants made an offer of judgment to the named Plaintiffs, who rejected the

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offer and elected instead to pursue a collective action. One group of defendants, the

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Travis Dees Defendants (hereinafter “Defendants”),1 now moves for an order requiring

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Plaintiffs to post a bond or other security to ensure payment of costs in the event that

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Defendants are the prevailing party.

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(Docs. 46, 49) and no party has requested oral argument. For the reasons that follow, the

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Court will deny the motion.

Doc. 44.

The motion has been fully briefed

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While “[t]here is no specific provision in the Federal Rules of Civil Procedure

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relating to security for costs,” “federal district courts have inherent power to require

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The Travis Dees Defendants are Travis Dees and his fourteen companies. See
Doc. 36 at 2, n.3.

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plaintiffs to post security for costs.” Simulnet E. Assocs. v. Ramada Hotel Operating Co.,

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37 F.3d 573, 574 (9th Cir. 1994) (citation omitted).

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discretion to require security for costs should not be exercised in a manner that interferes

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with the policy of the underlying federal statute.” 10 Fed. Prac. & Proc. Civ. § 2671 (3d

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ed.). Of particular relevance here, one federal court has expressed “grave doubts” as to

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whether a plaintiff in an FLSA action can be required to post security for costs.

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Cornacchio v. Coniglio, 7 F.R.D. 749, 750 (E.D.N.Y. 1947).

However, “a federal court’s

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The Court shares these concerns. The FLSA was enacted to protect the health and

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well-being of low-income workers. 29 U.S.C. § 202. Because these workers generally

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have little in the way of savings, even a modest security requirement might stand as an

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obstacle to their exercise of their statutory rights. Any such requirement would risk

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contravening the FLSA’s “broad remedial purposes,” Lambert v. Ackerley, 180 F.3d 997,

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1012 (9th Cir. 1999), as well as the judicial policy that “indigent litigants [not be]

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completely prohibited from seeking judicial relief,” Rumbough v. Equifax Info. Servs.,

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LLC, 464 F. App’x 815, 817 (11th Cir. 2012) (citation and quotation marks omitted).

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The fact that Defendants have made an offer of judgment to the named Plaintiffs

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does not change this analysis. The FLSA gives an employee the right to proceed “for and

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in behalf of himself . . . and other employees similarly situated.” 29 U.S.C. § 216.

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Requiring an employee to post security for costs, or else forego the right to proceed in a

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collective action, would “frustrate Congress’s decision to give FLSA plaintiffs the

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opportunity to proceed collectively.” Genesis Healthcare Corp. v. Symczyk, 133 S. Ct.

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1523, 1536 (2013) (Kagan, J., dissenting) (citation and quotation marks omitted).

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Even assuming that it might in some circumstances be appropriate to require an

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FLSA plaintiff to post security for costs, Defendants fail to show that it would be

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appropriate here. In deciding similar issues, courts have considered such factors as “the

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probability of plaintiff’s success on the merits, the background and purpose of the suit,

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and the reasonableness of amount of the posted security viewed from the perspective of

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both plaintiff and defendant.” Ehm v. Amtrak Bd. of Directors, 780 F.2d 516, 517 (5th

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Cir. 1986) (citing Aggarwal v. Ponce Sch. of Med., 745 F.2d 723, 727-28 (1st Cir. 1984)).

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Defendants have not shown that Plaintiffs are unlikely to succeed on the merits. They

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argue that the named Plaintiffs are unlikely to obtain damages beyond those included in

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the offer of judgment, but they ignore entirely the prospect that Plaintiffs might succeed

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on the merits by proving their collective action claims. Doc. 44 at 3. As explained, the

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nature of this suit militates against an order requiring Plaintiffs to post security for costs.

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Finally, Defendants offer no evidence that the amount of security they seek is necessary

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to prevent them from suffering significant harm.

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IT IS ORDERED that Defendants’ motion for security for costs (Doc. 44) is
denied.
Dated this 25th day of July, 2016.

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