Donatti, et al v. Charter Communications, LLC, et al

Filing 75

ORDER granting 37 motion for partial summary judgment; denying 48 motion for partial summary judgment. Signed on 10/22/2012 by Magistrate Judge Matt J. Whitworth. (Bode, Kay)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION

PETER DONATTI, et al.,

)
)
Plaintiffs,
)
)
v.
)
)
CHARTER COMMUNICATIONS, L.L.C., et al., )
)
Defendants.
)

No. 11-4166-CV-C-MJW

ORDER
Both plaintiffs, Peter Donatti and Matthew Cowen, and defendants Charter
Communications, L.L.C., and Charter Communications, Inc., (hereinafter “Charter”) have filed
motions for partial summary judgment pertaining to the effect of the settlement in Goodell v.
Charter Communications, L.L.C., No. 08-512-bbc (W.D. Wis. 2010), on plaintiffs’ claims from
June 27, 2008, to May 24, 2010. The motions are fully submitted.1
In the First Amended Complaint, plaintiffs, on behalf of themselves and all similarly
situated “Cable Technicians,” seek unpaid wages and overtime compensation from Charter.
Plaintiffs allege that Charter violated state wage laws and the Fair Labor Standards Act “FLSA,”
29 U.S.C. § 201, et. seq. At issue in the motions for partial summary judgment are the FLSA
claims asserted by plaintiffs. The relevant period for plaintiffs’ FLSA claims is June 27, 2009,
through June 27, 2011, or if Charter is determined to have acted willfully, the FLSA provides the
relevant dates would be June 27, 2008, to June 27, 2011. The motions argue the issue of whether
plaintiffs continue to have viable claims, pursuant to the FLSA, even after the settlement
agreement and judgment was entered in another district court in a case titled Goodell v. Charter
Communications, LLC.
Charter asserts that plaintiffs and all other members of the Goodell settlement class
specifically released any and all wage-and-hour claims against Charter up to and including May
24, 2010. Charter asserts that the Goodell settlement included both the named plaintiffs Donatti
1

With the consent of the parties, this case was transferred to the United States Magistrate
Judge, pursuant to the provisions of 28 U.S.C. § 636(c).

and Cowan. Charter asserts that neither of the plaintiffs opted out of the settlement in Goodell
and is, therefore, bound by the Goodell settlement. Accordingly, Charter asserts that plaintiffs
are precluded from asserting any wage-and-hour claims, including FLSA claims, for any period
covered by the Goodell settlement agreement (in Missouri, the relevant class period was August
25, 2008, through August 25, 2010). Charter asserts that plaintiffs’ claims under the FLSA for
the relevant period covered by Goodell are barred by res judicata.
Plaintiffs assert they are two current employees who, like all technicians employed by
Charter at any time during the “class period,” were included in the Rule 23 class action in
Goodell. Plaintiffs assert that neither participated in the Goodell case or settlement, and neither
received any monetary or other kind of relief from the Goodell settlement. Plaintiffs allege their
instant action is based on two grounds: (1) Charter continues to violate the Fair Labor Standards
Act and applicable state law by failing to compensate its cable installers for time spent
transporting equipment and materials to and from customer locations for the period after the
Goodell settlement (for Missouri, the Goodell class period was August 25, 2008, through August
25, 2010); and (2) plaintiffs’ FLSA claims were not extinguished by the Goodell settlement
agreement, and therefore, plaintiffs also assert FLSA claims for the period of June 27, 2008,
through May 24, 2010. Plaintiffs do not assert state law claims for the period of June 27, 2008,
through May 24, 2010. Plaintiffs concede their state law claims for the time frame up to August
25, 2010, were extinguished, pursuant to the Goodell settlement under Rule 23 of the Federal
Rules of Civil Procedure.
Summary Judgment Standard
Rule 56(c) of the Federal Rules of Civil Procedure requires "the entry of summary
judgment . . . against a party who fails to make a showing sufficient to establish the existence of
an element essential to that party's case, and on which that party will bear the burden of proof at
trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The burden on the party moving for
summary judgment "is only to demonstrate . . . that the record does not disclose a genuine
dispute on a material fact." City of Mt. Pleasant, Iowa v. Associated Elec. Co-Op., 838 F.2d
268, 273 (8th Cir. 1988).
Once the moving party has done so, the burden shifts to the nonmoving party to go
beyond his pleadings and show, by affidavit or by "depositions, answers to interrogatories, and
2

admissions on file," that there is a genuine issue of fact to be resolved at trial. Celotex, 477 U.S.
at 323. Evidence of a disputed factual issue which is merely colorable or not significantly
probative, however, will not prevent entry of summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).
Summary judgment, however, "is an extreme remedy, to be granted only if no genuine
issue exists as to any material fact." Hass v. Weiner, 765 F.2d 123, 124 (8th Cir. 1985). In
ruling on a motion for summary judgment, this Court must view all facts in a light most
favorable to the nonmoving party, and that party must receive the benefit of all reasonable
inferences drawn from the facts. Robinson v. Monaghan, 864 F.2d 622, 624 (8th Cir. 1989).
If "there is no genuine issue as to any material fact and . . . the movant is entitled to
judgment as a matter of law," the Court must grant summary judgment. Fed. R. Civ. P. 56(c).
Discussion
Upon review, and for the reasons set forth below, this Court finds that the material facts
are not in dispute, and that as a matter of law, Charter is not entitled to partial summary judgment
pertaining to the effect of the Goodell settlement agreement and judgment, and plaintiffs are
entitled to partial summary judgment as a matter of law as to the effect of the Goodell settlement
agreement and judgment.
Background of the Law
A “class action” lawsuit alleging violation of state wage law can be brought, pursuant to
Rule 23 of the Federal Rules of Civil Procedure. A “collective action” alleging violation of the
federal FLSA can be brought, pursuant to 29 U.S.C. § 216(b). The courts are divided on whether
Rule 23 class actions and section 216(b) collective actions are compatible within the same case.
See Butler v. DirectSat USA, LLC, 800 F. Supp. 2d 662 (D. Md. 2011) (discussing division
among the courts). In this circuit, courts have held that even though Rule 23 class actions are
inherently different from section 216(b) collective actions, the two are not inherently
incompatible and can exist parallel in the same case. See Osby v. Citigroup, Inc., 2008 WL
2074102 * 3 (W.D. Mo. 2008) (although fundamentally different, FLSA claims and state law
claims can be fairly adjudicated in the same case). See also Salazar v. Agriprocessors, Inc., 527
F. Supp. 2d 873 (N.D. Iowa 2007) (same).

3

Parallel claims under Rule 23 and section 216(b) require a court to manage the
differences between section 216(b) opt-in and Rule 23 opt-out provisions. Section 216(b) of the
FLSA states: “No employee shall be a party plaintiff to any such action unless he gives his
consent in writing to become such a party and such consent is filed in the court in which such
action is brought.” See also Davis v. NovaStar Mortg., Inc., 408 F. Supp. 2d 811, 814-15 (W.D.
Mo. 2005) (similarly situated employee does not become a plaintiff and is not bound by a
subsequent judgment in a case proceeding under § 216(b) unless he gives his consent in writing
to become such a party and files consent where the action is pending.”). In contrast, Rule
23(b)(3) requires that class members must affirmatively opt out of the litigation in order to be
excluded from the class and not bound by the court’s decisions. See Carden v. Scholastic Book
Clubs, Inc., 2011 WL 2680769 at *1 (W.D. Mo. 2011) (“under section 216(b), a similarly
situated employee must “opt in” to the collective action to be bound by the proceedings outcome,
whereas under Rule 23, a similarly situated plaintiff must “opt out” to avoid being bound.”); See
also Butler v. DirectSat USA, LLC, 800 F. Supp. 2d 662, 673 (D. Md. 2011) (employee may
bring an FLSA class action on behalf of herself and other employees who are similarly situated;
however, “unnamed plaintiffs must affirmatively opt in using a court approved form in order to
join the case.”).
FLSA Claims in Previous Rule 23 Class Action of Goodell
Charter’s argument that the Rule 23 class action settlement in Goodell resolves the FLSA
claims of plaintiffs who did not opt in to the Rule 23 action is without merit.
The FLSA statute and case law do not support that FLSA claims can be resolved by
settlement or otherwise based on Rule 23 opt-out procedures. While Rule 23 and section 216(b)
can proceed concurrently in the same case, see Osby at *4 (“[S]tate law opt-out class [can]
proceed alongside the federal opt-in collective action in the same case.”), they must be resolved
separately. See, e.g., Butler at 674 (court held Rule 23 and FLSA plaintiffs would only receive
the relief prescribed under the law governing the part of the case in which they were involved;
plaintiffs may be part of both FLSA group and Rule 23 class or they may be in one group but not
the other). See also Osby, No. 07-6085 (W.D. Mo. 2012) (Doc. 145) (settlement approval
separating FLSA and state law release of claims based on opt-in and opt-out requirements). “An
examination of whether a class should be certified under Rule 23 follows much different
4

standards than an examination of whether a collective action should be . . . certified under the
FLSA.” Davis at 818.
There is a fundamental, irreconcilable difference between the class action described by
Rule 23 and that provided for by FLSA s 16(b). In Rule 23 proceeding a class is
described; if the action is maintainable as a class action, each person within the
description is considered to be a class member and, as such, is bound by judgment,
whether favorable or unfavorable, unless he has ‘opted out’ of the suit. Under s 16(b) of
FLSA, on the other hand no person can become a party plaintiff and no person will be
bound by or may benefit from judgment unless he has affirmatively ‘opted into’ the class;
that is, given his written, filed consent.
Schmidt v. Fuller Brush Co., 527 F.2d 532, 536 (8th Cir. 1975).2
The certification of a Rule 23 class does not affect an employee’s ability to opt in or not
to an FLSA collective action. Calderon v. GEICO General Ins. Co., 279 F.R.D. 337, 342 (D.
Md. 2012) (citing Espenscheid v. DirectSat USA, LLC, 708 F. Supp. 2d 781, 793 (W.D. Wis.
2010)). “Rule 23 cannot be invoked to circumvent the consent requirement of the third sentence
of FLSA s 16(b).” Schmidt at 536. Thus here, Charter’s assertion that the Rule 23 opt-out
procedures were sufficient to extinguish the FLSA claims of all eligible Charter employees,
including those who did not opt in to the Goodell settlement, fails. While some courts believe
such preclusion can be allowed, e.g., Klein v. Ryan Beck Holdings, Inc., 2007 WL 2059828 *7
(S.D.N.Y. 2007), this Court does not find this case law persuasive.3 Rather, this Court finds the
analysis set forth in the decision of LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 288 (11th
Cir. 1975), to be persuasive. In LaChapelle, the court found “[i]t is crystal clear that s 16(b)
precludes pure Rule 23 class actions in FLSA suits.” LaChapelle is consistent with the holding
of recent district court decisions in Illinois and California. In La Parne v. Monex Deposit Co.,
2010 WL 4916606 * 3 (C.D. Cal. 2010), the court held that with regard to approval of settlement
terms, “under no circumstances can counsel collude to take away FLSA rights including the
worker’s right to control his or her own claim without the burden of having to opt out of
someone else’s lawsuit. . . . [O]nly class members who affirmatively opt in to the settlement
should be bound by the Settlement’s release of FLSA liability.” In Butler v. American Cable &
Telephone, LLC, 2011 WL 4729789 *12 (N.D. Ill. 2011), the court stated “we disagree with the
2

FLSA § 16(b) is codified in Title 29, United States Code, Section 216(b).
Klein court held that FLSA claims of putative class members were extinguished when
class members failed to opt out of Rule 23 class action on those same claims.
3

5

Objectors’ assertions that the parties’ Agreement would still extinguish the FLSA claims of even
those workers who do not affirmatively opt in. . . . This is consistent with language of FLSA and
our prior opinion, in which we held the parties could not agree to release claims of absent class
members who do not opt in.”
Res Judicata
Charter’s argument that res judicata precludes the plaintiffs’ FLSA claims is also without
merit.
Although it appears that in Goodell the parties may have attempted to extinguish all
Charter employees’ FLSA claims, even if the employees had not opted in to the case contrary to
the requirements of section 216(b), the lack of a collective action or certification under section
216(b) precludes such an effect.
There is no dispute that plaintiffs in the Wisconsin court action of Goodell did not seek,
nor did the court grant, certification of an FLSA collective action, pursuant to section 216(b). It
is clear that the requirements of pursuing a section 216(b) collective action are independent of,
and unrelated to, the requirements for class action under Rule 23 of the Federal Rules of Civil
Procedure. Graham v. Town & Country Disposal of Western Missouri, Inc., 2010 WL 5173181
*1 (W.D. Mo. 2010). See also AON Corp. Wage & Hour Employment Practices Litigation,
2010 WL 1433314 (N.D. Ill. 2010) (citing differences in Rule 23 class action and section 216(b)
collective action, court granted separate certifications under Rule 23 for state minimum wage law
claims, and under section 216(b) for FLSA claims, difference in what members are bound by a
judgment was noted as the reason for separate certifications). Accordingly, the court’s
certification of only the Rule 23 class action made the FLSA claims in the settlement agreement
simply individual actions on behalf of the named plaintiffs in the case and those plaintiffs who
opted in to the settlement agreement. Espenscheid v. DirectSat USA, LLC, 688 F.3d 872, 877
(7th Cir. 2012) (if a collective action is not certified, it is simply the individual action on behalf of
the named plaintiffs). Without certification, the FLSA claims of the plaintiffs in this case, who
did not opt in to the settlement agreement, were not resolved by the settlement agreement in
Goodell. See id. See also Espenscheid v. DirectSat USA, LLC., 708 F. Supp. 2d 781, 792
(W.D. Wis. 2010) (finding that while Rule 23 and FLSA could proceed alongside of each other,
the “plaintiffs must still meet the requirements for collective action and class action
6

certification.”). See also McCormick v. Festiva Development Group, LLC, 2010 WL 582218 *8
(D. Me. 2010) (court determined that side-by-side opt-in and opt-out mechanism was the
appropriate manner in which to proceed on a hybrid claim of state law wage claims and FLSA
claims; while the maintenance of side-by-side opt-in and opt-out mechanisms may pose case
management difficulties, it necessarily does not undermine the limitation of FLSA collective
actions to opt-in participants only); Brown v. Money Tree Mortg., 222 F.R.D. 676, 679 (D. Kan.
2004) (FLSA claim must be certified under section 16(b) and cannot be certified under Rule 23);
and above discussion titled “FLSA Claims in Previous Rule 23 Action of Goodell.” Therefore,
plaintiffs cannot be said to have been a part of the Goodell settlement class, and claim preclusion
does not apply. Further, because FLSA claims are that of the individual plaintiff, FLSA claims
cannot be said to be barred by issue preclusion either. See 29 U.S.C. § 216(b) (providing that
FLSA action may be brought only by an employee for himself and on behalf of other employees
similarly situated who have given consent, in writing, to become such a party). See also
Cameron-Grant v. Maxim Healthcare Services, Inc., 347 F.3d 1240, 1249 (11th Cir. 2003)
(Ҥ 216(b) is a fundamentally different creature than the Rule 23 class action. Even if the
§ 216(b) plaintiff can demonstrate that there are other plaintiffs ‘similarly situated’ to him, . . . he
has no right to represent them.”). Under the FLSA, even in a collective action, only those claims
of employees who opted in are extinguished. See Cameron-Grant at 1249 (“Under § 216(b), the
action does not become a ‘collective’ action unless other plaintiffs affirmatively opt into the class
by giving written and filed consent. . . . Until such consent is given, ‘no person will be bound
by or may benefit from the judgment.”).
Charter’s cites to case law, such as Chao v. A-One Medical Services, Inc., 346 F.3d 908,
921-22 (9th Cir. 2003) (affirming dismissal of employee’s FLSA claim because that individual
employee had previously litigated his state law claim for overtime against employer), and Molina
v. Sea-Land Servs., Inc., 2 F. Supp. 2d 180, 184-85 (D. Puerto Rico 1997) (holding FLSA claims
were precluded for an employee because that same individual had filed a previous state court
class action in which a judgment was entered on the employee’s state wage claims), do not
support that the plaintiffs here are bound by the Goodell FLSA judgment. This is because the
facts in this case do not match those in the cases cited by Charter. Rather, the facts here are that
plaintiffs did not file the Goodell Rule 23 lawsuit, did not opt in to the suit and did not receive
7

any benefit from the Goodell suit.4 Cf: Prickett v. DeKalb County, 349 F.3d 1294, 1297 (11th
Cir. 2003) (plaintiffs who opted-in to a Rule 23 state wage law class action were bound by the
judgment which later also included FLSA claims). Moreover, Goodell did not certify an FLSA
section 216(b) (a/k/a FLSA section 16(b)) collective action. The only action certified as a class
was the Rule 23 state wage claim action. As stated above, “Rule 23 cannot be invoked to
circumvent the requirement of the third sentence of FLSA section 16(b).” LaChapelle, 513 F.2d
at 289. See also Schmidt v. Fuller Brush Co., 527 F.2d 532 (8th Cir. 1975) (court’s class action
certification, pursuant to Rule 23, for FLSA claims violated the express terms of section 16(b) of
the Fair Labor Standards Act, 29 U.S.C. § 216(b)). Charter’s cite to Espenscheid, 708 F. Supp.
2d at 792, fails to support that plaintiffs’ claims are precluded by res judicata. In this particular
Espenshceid case, the judge specifically stated, “of course plaintiffs must still meet the
requirements for a collective action and a class action certification.” There was no certification
of a collective action under the FLSA in Goodell, and therefore, the FLSA claims of the
plaintiffs here who did not file in Goodell or opt in to the Rule 23 suit, are not precluded by res
judicata. This does not undermine the fact that plaintiffs’ Rule 23 state law wage claims for the
relevant dates of Goodell are precluded; rather this application of the law prevents the voiding of
the FLSA by pure Rule 23 state law wage class actions.
For the reasons set forth above, this Court does not find the case of Kuncl v. IBM Corp.,
660 F. Supp. 2d 1246 (N.D. Ok. 2009), asserted by Charter to be persuasive.5 This Court finds
that the law, as applied to the facts in this case, does not support that plaintiffs’ FLSA claims are
barred by res judicata. This Court has considered the important policy considerations behind res

4

Although neither plaintiff Donatti nor plaintiff Cowan received any monies, tax writeoffs for the cy pres fund, or any other benefit from the Goodell settlement, the plaintiffs are
bound by the Goodell judgment as to the state class action wage claims which were clearly
resolved by the court, pursuant to the Rule 23 certification. Donatti and Cowan do not contest
this issue, noting that in order not to be bound by a judgment in a Rule 23 class action suit, they
would have had to opt out. Plaintiffs do not dispute that they failed to opt out of the Rule 23
class action state law wage claim lawsuit.
5
Kuncl v. IBM Corp., 660 F. Supp. 2d 1246 (N.D. Ok. 2009), held that where district
court had certified a class action under Rule 23, and a parallel collective action under section
216(b), the settlement agreement reached in the case precluded state and FLSA claims of all
putative class members who did not opt out of the Rule 23 action, regardless of whether they did
or did not opt in to the section 216(b) FLSA collective action.
8

judicata, but finds that a determination of res judicata in this case is not appropriate and denies
plaintiffs their rights under the FLSA. To determine otherwise would essentially eliminate the
requirements of FLSA collective action certification which are distinct from Rule 23
certification, as well as the opt-in requirement of the FLSA.
Conclusion
Accordingly, this Court finds that the judgment entered in Goodell has no preclusive
effect on plaintiffs’ FLSA claims in this case. This finding, as set forth above, is not a collateral
attack on the judgment entered in Goodell.
IT IS, THEREFORE, ORDERED that the partial motion for summary judgment filed by
plaintiffs Peter Donatti and Matthew Cowen is granted. [37] It is further
ORDERED that the partial motion for summary judgment filed by defendants Charter
Communications, L.L.C., and Charter Communications, Inc., be denied. [48]
Dated this 22nd day of October, 2012, at Jefferson City, Missouri.

/s/

Matt J. Whitworth

MATT J. WHITWORTH
United States Magistrate Judge

9