Lear v. Hitachi America, Ltd.
Filing
68
MEMORANDUM OPINION & ORDER: 1) Dft's Motion to Dismiss 20 is DENIED AS MOOT due to the filing of Amended Complaint; 2) Plts' Motion to Certify Class 32 is GRANTED subject to the limitations listed herein; 3) Plts' Motion for Leav e to File Second Amended Complaint 46 is GRANTED; 4) Plts' Motion to Modify the Scope of the Collective Class 48 is DENIED; 5) Dft's Motion for Leave to File Sur-Reply to Plts' Reply 51 is GRANTED; 6) Plts' Motion to Set Rul e 16 Scheduling Conference 56 is GRANTED; 7) Dft's Motion for Leave to File Response to Plts' Supplemental Authority 63 is GRANTED; 8) w/in 21 days, Dft SHALL PRODUCE to Plts a list of all current and former employees to receive notice; 9) Parties shall meet and confer re form of notice in a good faith effort to resolve Dfts' obj and either file agreed notice or competing notices w/in 31 days; 10) No later than 21 days, parties meet to discuss nature and basis of claims and de fenses and possibilities of prompt resolution of case, make Rule 26(a)(1) disclosures and develop proposed discovery plan; 11) w/in 10 days after meeting, file joint status report; 12) counsel may use Form 52 as form of joint status report. Signed by Judge Joseph M. Hood on 3/26/2018.(STC)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
CAROL LEAR and JAMES TINCHER,
On behalf of themselves & all
others similarly situated,
Plaintiffs,
v.
HITACHI AUTOMOTIVE SYSTEMS,
AMERICAS, INC.,
Defendant.
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Action No.
5:17-cv-186-JMH
MEMORANDUM OPINION AND ORDER
***
This case is before the Court upon various motions of both
parties [DE 20, 32, 46, 48, 51, 56, and 63].
are either ripe or moot.
All of the motions
The substantive motions which require
analysis are the Plaintiffs’ Motion to Certify Class [DE 32] and
Motion to Modify the Scope of the Collective Class [DE 48].
I.
FACTS
This is an action for unpaid overtime wages brought by
Plaintiffs Carol Lear and James Tincher (“Plaintiffs”) on behalf
of themselves and other similarly situated employees, including
without limitation, Production Supervisors employed by Defendant
Hitachi
Automotive
Systems
Americas,
Inc.
(“Defendant”
“Hitachi”) at its Berea, Kentucky manufacturing facilities.
or
This
collective action challenges Defendant’s policy of failing to pay
1
Plaintiffs and other similarly situated employees overtime pay for
hours over 40 worked in a workweek in violation of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. and the Kentucky
Wage and Hour Act, KRS § 337.010, et seq.
To date, more than 40
current and former supervisors from Defendant’s Berea, Kentucky
manufacturing
facilities,
including
Production
Supervisors,
Quality Supervisors, and Warehouse Supervisors, have filed consent
forms to join this action and recover unpaid overtime wages that
they are owed.
Plaintiffs allege the putative class and opt-in
plaintiffs are current or former employees of Defendant with the
job title of supervisor who work or worked at one or more of
Defendant’s Berea, Kentucky manufacturing facilities (referred to
herein as the “BK” and “BM North” facilities; the parties agreed
to exclude “BM South”).
According to the Complaint, Plaintiffs
and other supervisors routinely work in excess of 40 hours per
workweek, sometimes as much as 60 or more hours per workweek, but
are not compensated at the required time-and-a-half rates for the
hours over 40.
The supervisors are instead paid their “straight
time” or regular hourly wage.
Plaintiffs allege they did not
receive a salary, only hourly wages, and that their pay was reduced
if they missed worktime, including partial days.
Plaintiffs admit
Hitachi told them they were paid a salary and were classified as
exempt workers, but aver that this is untrue.
their
claims
with
several
sworn
2
Plaintiffs support
statements
from
Hitachi
supervisors.
Hitachi
responded
that
Plaintiffs
and
other
supervisors are, in fact, paid a salary and properly classified as
exempt employees under federal and state laws, and supported this
contention with a sworn statement from Hitachi’s human resources
director.
Procedurally, Plaintiffs initially moved the Court to certify
a collective action pursuant to FLSA.
Pursuant to the Kentucky
Supreme Court’s August 24, 2017 decision in McCann v. Sullivan
Univ. Sys. Inc., 528 S.W.3d 331 (Ky. Aug. 2017), Plaintiffs filed
a motion to modify the scope of the collective class [DE 48] to
include supplemental state law claims.
In McCann, the Kentucky
Supreme Court reversed the Kentucky Court of Appeals and held that
it is permissible to bring KWHA claims on a representative basis.
Defendants vehemently oppose the motion to modify the scope
of the putative class because the statute of limitations for KWHA
claims is five years and the FLSA statute of limitations is three
years. Plaintiffs ask the Court to apply the five-year limitations
period set forth under the KWHA and conditionally certify a FLSA
collective class of supervisors who worked at BK and BM North
between April 24, 2012 and present.
In addition, the standard for
class certification pursuant to Rule 23’s one-step process is
substantially
more
onerous
than
the
standard
for
conditional
certification as an FLSA collective action (step one of two in
FLSA certification), and Defendant argues Plaintiffs attempt to
3
circumvent the more stringent standard by notifying the FLSA and
KWHA putative class members during this stage of the litigation.
II.
LEGAL STANDARD
“Congress
‘protect[ing]
enacted
all
the
covered
FLSA
workers
oppressive working hours.’”
Corp.,
132
S.
Ct.
2156,
in
1938
from
with
the
substandard
goal
wages
of
and
Christopher v. SmithKline Beecham
2162
(2012)
(quoting
Barrentine
v.
Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)); see
also 29 U.S.C. § 202(a).
Chief among the FLSA’s provisions is the
overtime wage requirement, which generally obligates “employers to
compensate employees for hours in excess of 40 per week at a rate
of 1½ times the employees’ regular wages.”
Id.; see also 29 U.S.C.
§ 207(a).
“[A]ny one or more employees” may seek redress for violations
of the FLSA by initiating a collective action “on behalf of himself
or themselves and other employees similarly situated.”
§ 216(b).
by
29 U.S.C.
Similarly situated employees may “opt-into” such suits
“signal[ing]
in
writing
participate in the action.”
their
affirmative
consent
to
Comer v. Wal-Mart Stores, Inc., 454
F.3d 544, 546 (6th Cir. 2006) (noting that this type of suit “is
distinguished from the opt-out approach utilized in class actions
under Fed. R. Civ. P. 23”).
Certification of FLSA collective actions typically proceeds
in two phases.
Comer, 454 F.3d at 546-47.
4
“[A]t the notice stage,
the certification is conditional and by no means final.”
(internal quotations omitted).
Id.
“The plaintiff must show only that
his position is similar, not identical, to the positions held by
the putative class members.”
(emphasis added).
lenient
Id. (internal quotations omitted)
“[T]his determination is made using a fairly
standard,
and
typically
results
certification of a representative class.”
in
conditional
Id. (stating further
that “authorization of notice need only be based on a modest
factual showing”) (internal quotations omitted).
“At
the
second
stage,
following
discovery,
trial
courts
examine more closely the question of whether particular members of
the class are, in fact, similarly situated.”
Id. at 547.
The
final-certification decision depends upon “a variety of factors,
including the factual and employment settings of the individual[]
plaintiffs, the different defenses to which the plaintiffs may be
subject on an individual basis, [and] the degree of fairness and
procedural impact of certifying the action as a collective action.”
O’Brien v. Ed Donnelly Enter., Inc., 575 F.3d 567, 584 (6th Cir.
2009) (internal quotations omitted), overruled on other grounds by
Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016).
The
FLSA
“grant[s]
the
court
the
requisite
procedural
authority to manage the process of joining multiple parties in a
manner that is orderly, sensible and not otherwise contrary to the
statutory commands or the provisions of the Federal Rules of Civil
5
Procedure.”
Hoffman-LaRoche v. Sperling, 493 U.S. 165, 171 (1989)
(discussing 29 U.S.C. § 216(b), the FLSA’s enforcement provision,
as incorporated into the ADEA).
Thus, “district courts have
discretion, in appropriate cases, to implement 29 U.S.C. 216(b) …
by facilitating notice to potential plaintiffs.”
Id.
“Court
authorization of notice serves the legitimate goal of avoiding a
multiplicity of duplicative suits and setting cutoff dates to
expedite disposition of the action.”
Id.
III. ANALYSIS
1) FLSA Claims
This
case
sits
certification process.
at
the
notice
stage
of
the
bifurcated-
Plaintiffs ask the Court to conditionally
certify their FLSA claim for unpaid overtime wages as a collective
action and order notice of the action to:
All current and former supervisors including,
without limitation, Production Supervisors,
Quality
Supervisors,
and
Warehouse
Supervisors employed by the Defendant in its
Berea, Kentucky manufacturing facilities at
any time since April 24, 2012, excluding all
supervisors who have only worked on the south
side of the Berea Motors facility since April
24, 2012.
[Motion
to
Modify
Scope
of
Collective
Class,
DE
48,
p.
2].
Plaintiffs also ask the Court to facilitate notice by ordering
Defendants to produce a list of all employees to receive notice
(based on the definition above), including their names, last known
mailing addresses, and email addresses.
6
[DE 32, p. 2].
Defendant
inappropriate
asserts
because
that
conditional
Plaintiffs
were
certification
properly
is
classified
as
exempt employees, and thus, were not entitled to overtime wages
under the FLSA.
Courts generally do not evaluate the legality of
the challenged policy or the applicability of an FLSA exemption at
this stage of the certification process.
See Bradford v. Logan’s
Roadhouse, Inc., 137 F. Supp. 3d 1064, 1072 (M.D. Tenn. 2015)
(“[T]he
court
does
not
substantive
issues
going
credibility
determinations”
resolve
to
the
at
factual
ultimate
the
notice
disputes,
merits,
stage)
decide
or
make
(internal
quotations omitted); Waggoner v. U.S. Bancorp, 110 F. Supp. 3d
759, 769 (N.D. Ohio 2015) (“It would be inappropriate to consider
the merits of defendant’s defense at this time, before the record
has been developed.”).
While Defendant has produced evidence in
support of its position, Plaintiffs have likewise produced sworn
statements and other evidence supporting their allegations.
Thus,
these are factual disputes not appropriate for resolution at this
stage
of
the
proceeding.
Because
Defendant’s
argument
is
premature, the Court need not consider it further.
Defendant “does not ask the Court to deny Plaintiffs’ Motion”
if the Court reserves ruling on the substantive issues, but instead
asks that the notice be limited to:
7
All persons currently and formerly employed as
Production
Supervisors
in
Hitachi’s
production facilities located in Berea,
Kentucky who were paid on a salary basis and
received a salary in addition to straight time
compensation based on hours worked over forty
(40) in a workweek from April 24, 2014 to May
31, 2016, and those who received a salary in
addition to straight time compensation based
on hours worked over forty (40) in a workweek
from June 1, 2016 to present.
[Defendant’s Response to Motion to Certify Class, DE 41, pp.
359 and 371].
Defendant’s notice limits the putative class to
Production Supervisors, the positon held by the named Plaintiffs,
and to those employed after April 24, 2014.
Plaintiffs’ proposed
notice class includes everyone who could be included under longer
the KWHA statute of limitations, whereas Defendant requests notice
be limited to the FLSA three-year statute of limitations.
At
this
first,
or
“notice,”
stage
of
the
two-stage
certification process, a “fairly lenient standard” applies that
“typically
results
in
‘conditional
certification’
of
the
representative class.” Comer v. Wal-Mart Stores, Inc., 454 F.3d
544, 547 (6th Cir. 2006).
a
plaintiff
seeking
The Sixth Circuit has emphasized that
certification
“must
only
show
that
‘his
position is similar, not identical, to the positions held by the
putative
class
members.”
Id.
at
546-47
(emphasis
added).
Plaintiffs submitted affidavits from a Warehouse Supervisor and a
Quality Supervisor which state these employees were paid in the
same way Plaintiffs allege they were paid. [DE 45, Ex. 1 and 2].
8
Hitachi does not deny this, but states via affidavit of the human
resources
director
different
job
that
duties,
“[e]ach
utilizes
category
of
different
supervisors
equipment,
has
manages
different work processes and reports to different managers.”
After consideration of the parties’ arguments, the lenient
standard, and in the interest of justice, the Court holds the
notice shall include:
All current and former supervisors including,
without limitation, Production Supervisors,
Quality
Supervisors,
and
Warehouse
Supervisors employed by the Defendant in its
Berea, Kentucky manufacturing facilities at
any time since April 24, 2014, who worked more
than forty (40) hours in any workweek during
their employment, excluding all supervisors
who have only worked on the south side of the
Berea Motors facility since April 24, 2014.
In addition to facilitating notice, the FLSA allows courts to
“monitor[] preparation and distribution of the notice” to the
putative members of the collective action, thereby “ensur[ing]
that it is timely, accurate, and informative.”
Hoffman-LaRoche v.
Sperling, 493 U.S. 165, 171-72 (1989) (discussing 29 U.S.C. §
216(b), the FLSA’s enforcement provision, as incorporated into the
ADEA).
Plaintiffs have submitted a Proposed Notice and Opt-In
Consent Form, to be sent via first class mail, which sets an optin period of ninety days.
Defendants have raised several concerns
about the content of Plaintiffs’ Proposed Notice and Opt-In Consent
Form. Plaintiffs request the parties be ordered to meet and confer
9
concerning the form of the notice in a good faith effort to resolve
Defendants’ objections to this notice and to file either an agreed
notice or competing notices.
This request is well made and the
Court will grant it, with the caveat that, as explained below, the
notice shall not include reference to the KWHA claims.
2) KWHA Claims
Plaintiffs state this court has jurisdiction over the FLSA
claims because they raise federal questions pursuant to 28 U.S.C.
§ 1331 and jurisdiction over Plaintiffs’ supplemental state law
claims pursuant to 28 U.S.C. § 1367.
District courts have discretion to exercise supplemental
jurisdiction over state law claims, or to decline to exercise
jurisdiction over those claims.
Cirasuola v. Westrin, 1997 WL
472176, at *1 (6th Cir. Aug.18, 1997).
28 U.S.C. § 1367 permits
courts to decline to exercise supplemental jurisdiction over a
state law claim if “the claim raises a novel or complex issue of
State law” or “in exceptional circumstances, there are other
compelling reasons for declining jurisdiction.”
28 U.S.C. §
1367(c)(1) and (4).
There are several considerations which weigh in favor of the
Court declining jurisdiction over the KWHA claims in this matter.
First,
the
KWHA
class
action
claims
are
nearly
identical
allegations but would be brought pursuant to Rule 23, which is a
a substantially different standard than FLSA collective actions.
10
The disagreement between the parties regarding the statute of
limitations
and
other
issues
in
the
notice
exemplify
the
difficulties in going forward with the state and federal law
claims.
The statute of limitations for the KWHA claims would be
five years but only three years for the FLSA claims.
The KWHA
claims would require class members to opt out while the FLSA class
members – largely the same individuals – would have to opt in.
These issues could create significant confusion for the putative
class members in any combined notice, or in two notices which
result from the same law suit in the same court.
Finally, and
most importantly, while KWHA is not a new area of state law, a
class action brought pursuant to KWHA is an entirely new claim
permitted under Kentucky law.
McCann v. Sullivan Univ. Sys. Inc.,
528 S.W.3d 331 (Ky. Aug. 2017). The Court cannot find any Kentucky
case law on KWHA class action lawsuits as of yet.
For these
reasons, the Court declines to exercise supplemental jurisdiction
over the state law claims pursuant to 28 U.S.C. § 1367(c)(1) and
(4).
Accordingly, the supplemental state law claims will be
dismissed without prejudice to Plaintiffs’ right be refile those
claims in state court.
3) Other matters
Plaintiffs request the Court order the parties to conduct a
Rule 26(f) meeting; that request will be granted.
The parties
filed a number of requests for leave to file additional arguments
11
and
authority;
those
requests
will
be
granted.
The
Court
considered all arguments and authorities in the record in rendering
this opinion.
Plaintiffs also requested leave to file a second
amended complaint to narrow their collective definition to cover
only the Berea, Kentucky facility and Berea Motors South facility.
Because parties appear to be in agreement on this issue, and
pursuant to Rule 15(a)(2), this motion will be granted.
IV.
CONCLUSION
For
the
reasons
stated
herein,
and
the
Court
being
sufficiently advised, IT IS ORDERED as follows:
1) Defendant’s Motion to Dismiss [DE 20] is DENIED AS MOOT
due to the filing of the Amended Complaint;
2) Plaintiffs’ Motion to Certify Class [DE 32] is GRANTED
subject to the limitations listed herein;
3) Plaintiffs’
Motion
for
Leave
to
File
Second
Amended
Complaint [DE 46] is GRANTED;
4) Plaintiffs’ Motion to Modify the Scope of the Collective
Class [DE 48] is DENIED;
5) Defendant’s
Motion
for
Leave
to
File
Sur-Reply
to
Plaintiffs’ Reply [DE 51] is GRANTED;
6) Plaintiffs’ Motion to Set Rule 16 Scheduling Conference
[DE 56] is GRANTED;
7) Defendant’s
Motion
for
Leave
to
File
Response
Plaintiffs’ Supplemental Authority [DE 63] is GRANTED;
12
to
8) Within 21 days of the date of this Order, Defendant SHALL
PRODUCE to Plaintiffs a list of all current and former
employees
definition
to
receive
herein),
notice
including
(based
their
on
names,
the
Court’s
last
known
mailing addresses, and email addresses;
9) The parties shall meet and confer concerning the form of
the notice in a good faith effort to resolve Defendants’
objections, and file either an agreed notice or competing
notices within 31 days of the date of this Order;
10)
That no later than 21 days after the date of this Order,
the parties, by counsel, shall meet, either in person or
by telephone, to discuss the nature and basis of their
claims and defenses and the possibilities for a prompt
settlement or resolution of the case, to make or arrange
for the disclosures required by Fed. R. Civ. P. 26(a)(1),
as amended December 1, 2010, and to develop a proposed
discovery plan.
See Fed. R. Civ. P. 26(f), as amended
December 1, 2006.
11)
That within ten (10) days after the meeting the parties
shall file a joint status report containing:
(a)
the discovery plan;
in formulating their plan, the
parties should consider the Court’s belief that discovery
should last between three and five months;
13
(b)
the parties' estimate of the time necessary to file
pretrial motions;
(c)
the parties' estimate as to the probable length of
trial;
(d)
the dates mutually convenient for trial;
(e)
the parties' decision as to whether the action may
be referred to a United States magistrate judge for trial
pursuant to 28 U.S.C. § 636(c); and
(f)
the
parties’
determination
as
to
whether
the
resolution of the case may be aided by mediation or other
special procedures as authorized by statute or local rule.
12)
Counsel may utilize Form 52, Fed. R. Civ. P.(App.) as
the form of the joint status report. Each party is directed
to advise the Court at the time of the submission of the
joint report of all parent corporations, subsidiaries,
affiliates,
members
and/or
partners
associated.
IT IS SO ORDERED.
This the 26th day of March, 2018.
14
with
which
it
is
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