Minnesota Living Assistance, Inc. v. Peterson et al

Filing 24

ORDER granting 8 Motion to Dismiss; denying as moot 10 Motion for Summary Judgment (Written Opinion) Signed by Senior Judge David S. Doty on 6/27/2017. (DLO)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 17-1011 (DSD/DTS)
Minnesota Living Assistance,
Inc., d/b/a Baywood Home Care,
Plaintiff,
v.

ORDER

Ken B. Peterson, Commissioner,
Department of Labor and Industry,
State of Minnesota, in his official
capacity; and John Aiken, Interim
Director of Labor Standards,
Department of Labor and Industry,
State of Minnesota, in his official
capacity,
Defendants.
Bruce J. Douglas, Esq., Stephanie J. Willing, Esq. and
Ogletree, Deakins, Nash, Smoak & Stewart, P.C., 90 South
Seventh Street, Suite 3800, Minneapolis, MN 55402, counsel for
plaintiff.
Jonathan D. Moler, Minnesota Attorney General’s Office, 445
Minnesota Street, Suite 900, St. Paul, MN 55101, counsel for
defendants.

This matter is before the court upon the motions to dismiss by
defendants Ken B. Peterson and John Aiken1 and for summary judgment
by plaintiff Minnesota Living Assistance, Inc. d/b/a Baywood Home
Care (Baywood).

Based on a review of the file, record, and

proceedings herein, and for the following reasons, the court grants

1

Peterson and Aiken are sued in their official capacities as
Commissioner for the Minnesota Department of Labor and Industry and
Interim Director of Labor Standards for the Minnesota Department of
Labor and Industry. Although Aiken is sued as Interim Director, he
is actually the Director.

defendants’ motion to dismiss and denies plaintiff’s motion for
summary judgment.

BACKGROUND
Baywood is a Minnesota corporation that employs domestic
service workers who provide companionship services as defined under
the Federal Labor Standards Act (FLSA).2

Compl. ¶¶ 1, 3.

The FLSA

establishes a minimum wage of $7.25 an hour and a maximum workweek
of forty hours, after which employers must pay workers one and onehalf times their regular hourly pay.
207(a)(1).
are

exempt

See 29 U.S.C. §§ 206(a)(1)©,

Workers who perform companionship services, however,
from

requirements.

the

minimum

wage

and

weekly

See 29 U.S.C. § 213(a)(15).

maximum

hour

Unlike the FLSA, the

MFLSA subjects companionship services to minimum wage, maximum
weekly hours, and overtime requirements. See Minn. Stat. § 177.23,
subdiv. 11.
Based on a complaint by a Baywood employee, the Minnesota
Department of Labor and Industry (DLI) investigated whether Baywood
unlawfully

withheld

overtime

compensation

2

for

companionship

“[C]ompanionship services means the provision of fellowship
and protection for an elderly person or person with an illness,
injury, or disability who requires assistance in caring for himself
or herself.”
29 C.F.R. § 552.6(b).
The Minnesota Fair Labor
Standards Act (MFLSA) adopts the FLSA definition of companionship
services. See Minn. Stat. § 177.23, subdiv. 11.
2

services employees from March 21, 2012, to March 21, 2014.3
¶¶ 17-18.

Compl.

After its investigation, on May 17, 2016, DLI assessed

a penalty of $1,000 for failure to keep records pursuant to Minn.
Stat. § 177.30 and ordered Baywood to pay back wages of $557,714.44
in addition to liquidated damages of $557,714.44.
Moler Aff. Ex. A.

Compl. ¶ 22;

Baywood objected to the penalties, and DLI

brought a contested case proceeding at the Minnesota Office of
Administrative Hearings before an Administrative Law Judge (ALJ).4
Compl. ¶ 23; Moler Aff. Ex. B.
On

May

31,

2017,

Baywood

brought

this

suit

seeking

a

declaration that the FLSA preempts the MFLSA and injunctive relief
prohibiting

DLI

from

further

processing,

adjudicating its claims against Baywood.

investigating,

or

Defendants now move to

dismiss the complaint arguing that the court should abstain from
exercising jurisdiction under Younger v. Harris, 401 U.S. 37
(1971).

3

It is unclear
investigation began.

when

the

4

complaint

was

made

or

the

On June 1, 2017, the ALJ recommended that the Commissioner
grant DLI’s motion for summary disposition regarding unpaid
Baywood may file
overtime wages.
See Moler Aff. II Ex. A.
exceptions with DLI within ten days, and the Commissioner has
ninety days to issue a final decision. See Minn. Stat. §§ 14.6162.
3

DISCUSSION
I.

Younger Abstention Doctrine
Under the Younger abstention doctrine, “federal courts should

abstain from exercising jurisdiction when (1) there is an ongoing
state proceeding, (2) which implicates important state interests,
and (3) there is an adequate opportunity to raise any relevant
federal questions in the state proceedings.” Plouffe v. Ligon, 606
F.3d 890, 892 (8th Cir. 2010) (citing Middlesex Cty. Ethics Comm.
v. Garden State Bar Ass’n, 457 U.S. 423, 432 (1982)).

The parties

do not dispute that the first and third elements are met.

Baywood

argues, however, that Younger abstention does not apply because an
important state interest is not implicated.

Specifically, Baywood

contends that an important state interest cannot exist when the
state law the underlying proceeding seeks to enforce is preempted
by federal law.
Baywood’s argument is based, in part, on dicta in New Orleans
Pub. Serv., Inc. v. Council of the City of New Orleans, 491 U.S.
350

(1989)

(NOPSI),

where

the

“Supreme

Court

left

open

the

possibility of an exception to Younger for preemption claims that
are facially conclusive.”

Cedar Rapids Cellular Tel., L.P. v.

Miller, 280 F.3d 874, 880 (8th Cir. 2002) (internal quotation marks
and citation omitted); see also NOPSI, 491 U.S. at 367 (emphasis in
original) (“[N]OPSI argues [that] ... even if a substantial claim
of federal pre-emption is not sufficient to render abstention
4

inappropriate, at least a facially conclusive claim is.
so.

Perhaps

But we do not have to decide the matter here ....”).
The Eighth Circuit has not addressed what makes a preemption

claim

facially

conclusive.

Other

circuits,

however,

have

identified the following scenarios where preemption claims are not
facially

conclusive:

required;

(2)

when

(1)
the

when

a

claim

further

involves

a

factual

inquiry

question

of

is

first

impression; and (3) when the court must conduct a “detailed
analysis” of the state statute in question, “including resolving
interjurisdictional differences.”
Co.

v.

Medley,

572

F.3d

22,

Colonial Life & Accident Ins.

27-28

(1st

Cir.

2009)

(citing

Woodfeathers, Inc. v. Washington County, Oregon, 180 F.3d 1017,
1022 (9th Cir. 1999); GTR Mobilnet of Ohio v. Johnson, 111 F.3d
469, 478 (6th Cir. 1997)).

When courts have found that preemption

was facially conclusive, they merely applied established precedent
that easily resolved the preemption issue. See Chaulk Servs., Inc.
v. Mass. Comm’n Against Discrimination, 70 F.3d 1361, 1370 (1st
Cir. 1995) (holding that under Supreme Court precedent it was
“readily apparent” the conduct at issue was subject to the National
Labor Relations Act); Gartrell Constr. Inc. v. Aubry, 940 F.2d 437,
441-42 (9th Cir. 1991) (holding that under Ninth Circuit precedent
it was “readily apparent” that the state law at issue was preempted

5

by ERISA).5
Here, Baywood fails to cite to any binding precedent that the
FLSA preempts the MFLSA, or, more specifically, that the FLSA
preempts state regulation of workers who are exempt under the FLSA.
In fact, it appears that federal courts may be divided on the
issue. Compare Pac. Merch. Shipping Ass’n v. Aubry, 918 F.2d 1409,
1418 (9th Cir. 1990) (holding that preemption from the FLSA did not
preempt the state’s ability to enforce overtime provision as to
seamen), with Coil v. Jack Tanner Co., 242 F. Supp. 2d 555, 559
(S.D. Ill. 2002) (holding that the state’s overtime laws as applied
to seamen directly conflicted with the exemption of seamen under
the FLSA).

This division in the federal courts belies Baywood’s

argument that preemption of the MFLSA is readily apparent.
Baywood also argues that the FLSA clearly preempts the MFLSA
because the MFLSA fails to meet the requirements of the FLSA’s
Savings Clause.6

Specifically, Baywood argues that the Savings

5

Baywood also cites Norfolk & W. Ry. Co. v. Pub. Utils.
Comm’n of Ohio, 926 F.2d 567, 573 (6th Cir. 1991), but in that case
the federal statute expressly preempted the state statute. Here,
it is undisputed that the FLSA does not expressly preempt the
MFLSA.
6

The Savings Clause states in relevant part:

No provision of this chapter or any order thereunder
shall excuse noncompliance with any Federal or State law
or municipal ordinance establishing a minimum wage higher
than the minimum wage established under this chapter or
a maximum workweek lower than the maximum workweek
established under this chapter ....
6

Clause does not apply because, during the relevant period, the
MFLSA set a minimum wage of $6.15 per hour and a forty-eight-hour
maximum workweek whereas the FLSA set a minimum wage of $7.25 per
hour and a forty-hour maximum workweek.

See 29 U.S.C. §§ 206

(a)(1)©, 207 (a)(1); Minn Stat. §§ 177.24, subdiv. 1(b) (2011),
177.25, subdiv. 1. Defendants reply that the court should focus on
the work requirements as applied to companionship services.

Under

defendants’ analysis, the MFLSA provides a higher minimum wage and
lower

maximum

workweek

because

under

the

FLSA

companionship

services are subject to no minimum wage and no maximum workweek.
In order to determine whether the Savings Clause applies to
the MFLSA, the court must conduct a detailed analysis as to whether
the Savings Clause requirements refer to a state’s regulations in
general, as argued by Baywood, or as applied to the specific class
of workers at issue, as argued by defendants.

As a result, it is

not readily apparent that the FLSA preempts the MFLSA.

In the

absence of a readily apparent preemption of the MFLSA, the court
finds that the State has a strong interest in its ability protect
workers by enforcing its wage and labor laws. See Massachusetts v.
Morash, 490 U.S. 107, 119 (1989) (citation and internal quotation
marks

omitted)

(“The

States

have

traditionally

regulated

the

payment of wages .... Absent any indication that Congress intended
[otherwise], we are reluctant to ... significantly interfere with

29 U.S.C. § 218(a).
7

the separate spheres of governmental authority preserved in our
federalist system.”).
Baywood next argues that Younger abstention is inappropriate
because the DLI proceeding is not a type of exceptional case to
which abstention applies.
in

exceptional

cases,

Younger abstention is appropriate only
which

include

“[1]

state

criminal

prosecutions, [2] civil enforcement proceedings, and [3] civil
proceedings

involving

certain

orders

that

are

uniquely

in

furtherance of the state courts’ ability to perform their judicial
functions.”

Sprint Commc’ns, Inc. v. Jacobs, 134 S. Ct. 584, 588

(2013) (citation and internal quotation marks omitted).

The

Younger doctrine applies to civil enforcement proceedings only if
the civil enforcement is similar to a criminal prosecution.7
at 592.

Id.

A civil enforcement proceeding is similar to a criminal

prosecution when a state actor initiates a proceeding that seeks to
sanction

the

proceedings,

federal

plaintiff.

“investigations

See

are

id.

Further,

commonly

in

involved,

culminating in the filing of a formal complaint or charges.”

such
often
Id.

Baywood contends that the DLI proceeding is insufficiently
akin to a criminal prosecution. The court is not persuaded. Here,
the

DLI

proceeding

meets

all

three

indicia

of

a

criminal

proceeding: the civil enforcement action was “brought by the State

7

It is undisputed that the DLI proceeding does not fall into
the first or third category of cases.
8

in its sovereign capacity” in order to sanction Baywood after an
investigation which culminated in charges against it.

Trainor v.

Hernandez, 431 U.S. 434, 444 (1977).
Baywood responds that, because DLI has not sought criminal
sanctions, the enforcement action is more akin to civil suits
brought by employees to recover unpaid wages than a criminal
enforcement proceeding.

But the Younger doctrine does not require

that the State seek criminal penalties in addition to civil
enforcement.

See

Trainor,

431

U.S.

at

444

(applying

the

Younger doctrine to a state civil enforcement action to recover
fraudulent obtained welfare payments where the state “also had the
option

of

vindicating

prosecutions”);

see

also

these
Ohio

policies
Civil

Rights

through
Comm’n

criminal
v.

Dayton

Christian Sch., 477 U.S. 619, 627-29 (1986) (holding abstention was
appropriate in a state-initiated civil proceeding to enforce civil
rights laws); Moore v. Sims, 442 U.S. 415 (1979) (state-initiated
civil proceeding to gain custody of allegedly abused children). As
a result, the civil enforcement proceeding against Baywood is akin
to a criminal prosecution, and abstention is appropriate.
II.

Summary Judgment
Because the court abstains from exercising jurisdiction, it

denies Baywood’s motion for summary judgment as moot.

9

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.

Defendants’ motion to dismiss [ECF No. 8] is granted;

2.

Plaintiff’s motion for summary judgment [ECF No. 10] is

denied as moot; and
3.

The case is dismissed without prejudice.

LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: June 27, 2017
s/David S. Doty
David S. Doty, Judge
United States District Court

10