Davis v. Capital One Home Loans, LLC et al

Filing 104

MEMORANDUM OPINION AND ORDER: Capital One's 68 motion to amend is DENIED and Davis's request for equitable tolling is DENIED. In addition, Capital One shall provide Davis with the applicable list of all individuals who have originated loan products regardless of job title within the United States at any time during the last three years. (Ordered by Senior Judge A. Joe Fish on 2/6/2019) (axm)

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

JEFFREY DAVIS, on Behalf of Himself
and All Others Similarly Situated,
Plaintiff,
VS.
CAPITAL ONE HOME LOANS, LLC,
ET AL.,
Defendants.

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CIVIL ACTION NO.
3:17-CV-3236-G

MEMORANDUM OPINION AND ORDER
Before the court is the motion of the defendants Capital One Home Loans,
LLC, and Capital One National Association (collectively “Capital One”) to alter or
amend this court’s August 2, 2018 Memorandum Opinion and Order (docket entry
67) granting the plaintiff Jeffrey Davis (“Davis”)’s motion for conditional
certification (docket entry 30). See Motion to Amend (docket entry 68). For the
reasons stated below, the defendants’ motion is DENIED.
I. BACKGROUND
A full statement of the factual and procedural background of this case can be
found in the court’s August 2, 2018 Memorandum Opinion and Order. See
Memorandum Opinion and Order at 2-4. To address Capital One’s motion to

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amend, the court need only summarize the factual and procedural history relevant to
Capital One’s motion.
On February 23, 2018, Davis filed a motion for notice and conditional
certification of his collective action claims brought under the Fair Labor Standards
Act (“FLSA”). See Plaintiff’s Motion for Notice and FLSA Conditional Certification.
By way of this motion, Davis sought to conditionally certify a class consisting of:
All persons who are, have been, or will be employed by
[Capital One] as “Mortgage Loan Officers” “Mortgage
Loan Originators,” “Senior Mortgage Loan Officers,” and
other individuals who originated loan products with similar
job titles within the United States at any time during the
last three years through the entry of judgment in this case.
Plaintiff’s Original Complaint (docket entry 1) ¶ 47; Plaintiff’s Motion for Notice
and FLSA Conditional Certification at 10-15 (arguing that Davis has met his burden
of demonstrating that all class members are similarly situated).
On August 2, 2018, the court issued a Memorandum Opinion and Order
granting Davis’s motion for notice and conditional certification of his collective
action claims. Id. at 13-18. The court granted Davis’s motion because it found that
“[a]fter due consideration . . . Davis ha[d] met the lenient burden of establishing, at
stage one [of the two stage certification process for collective actions], that he and the
potential class members are similarly situated in terms of job requirements and
compensation[,]” and that he and the potential class members “are (or were) subject
to a common policy or plan.” Id. at 16.
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In particular, the court concluded that Davis had established that he and the
potential class members were similarly situated in terms of job requirements because
Davis had provided “evidence suggesting that the members of the putative class have
(or had) the same essential job duties – i.e., originating mortgages – and are (or were)
paid pursuant to a similar compensation plan.” Id. at 15. Moreover, the court
concluded that Davis had established that he and potential class members were
similarly situated in terms of compensation because Davis provided “evidence
suggesting that the members of the putative class are (or were) all paid in essentially
the same way – hourly pay plus commissions.” Id. (citing Jeffrey Davis’s Sworn
Statement (docket entry 31-3) ¶ 13). The court also concluded that Davis
established that he and potential class members were subject to a common policy or
plan because Davis, by way of his sworn statement, provided evidence of a common
policy or plan which “misclassified loan officers as exempt and discouraged
non-exempt loan officers from recording their overtime hours.” Id. at 16 (citing
Jeffrey Davis’s Sworn Statement ¶¶ 8-14). Accordingly, this court granted Davis’s
motion and conditionally certified a class consisting of the following individuals:
All persons who are, have been, or will be employed by
[Capital One] as ‘Mortgage Loan Officers’ ‘Mortgage Loan
Originators,’ ‘Senior Mortgage Loan Officers,’ and other
individuals who originated loan products regardless of job
title within the United State at any time during the last
three years.

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Id. While recognizing that by shifting the focus from job title to job requirements
this court conditionally certified a class that differed slightly from the class proposed
by Davis, the court explained that Capital One would have “an opportunity to renew
many of their arguments and challenge the propriety of maintaining the class through
trial at stage two – after the discovery process – through a motion to decertify.” Id.
“At that stage, with more facts in hand, the court will be in a better position to
conduct a more searching inquiry.” Id.
On August 10, 2018, eight days after the memorandum opinion and order was
issued and well before this litigation entered stage two of the certification process,
Capital One filed its motion to alter or amend this court’s memorandum opinion and
order. See Motion to Amend. Davis filed his response to Capital One’s motion to
alter or amend on August 31, 2018. See Plaintiff’s Response (docket entry 75).
Shortly thereafter, on September 13, 2018, Capital One filed its reply. Defendants’
Reply (docket entry 80). Capital One’s motion is now ripe for decision.
II. ANALYSIS
A. Standard for Motion for Reconsideration
“Courts in the Fifth Circuit treat so-called motions to reconsider either as
motions to alter or amend under Rule 59 or as motions for relief from judgment
under Rule 60.” Carolina Casualty Insurance Co. v. James Sowell Co., No.
3:07-CV-0584-G, 2007 WL 3129467, at *1 (N.D. Tex. Oct. 25, 2007) (Fish, Chief

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J.). “If the motion is served within ten days of the rendition of the judgment, it falls
under Rule 59(e); if the motion is served after that time, it falls under Rule 60(b).”
Id. Here, there is no question that Capital One filed its motion to amend within ten
days of this court’s memorandum opinion and order granting Davis’s motion for
conditional certification. See Motion to Amend. Accordingly, this court must treat
Capital One’s motion as a motion to amend under Federal Rule of Civil Procedure
59(e).
“A motion to alter or amend the judgment under Rule 59(e) must clearly
establish either a manifest error of law or fact or must present newly discovered
evidence and cannot be used to raise arguments which could, and should, have been
made before the judgment issued.” Equal Employment Opportunity Commission v.
Methodist Hospitals of Dallas, No. 3:15-CV-3104-G, 2017 WL 930923, at *1 (N.D.
Tex. Mar. 9, 2017) (Fish, Senior J.) (quoting Schiller v. Physicians Resource Group Inc.,
342 F.3d 563, 567 (5th Cir. 2003)). “Importantly, a ‘Rule 59(e) motion is not
proper to relitigate matters that have been resolved to the movant’s dissatisfaction’
and a party cannot attempt to obtain a ‘second bite at the apple’ on issues that were
previously addressed by the parties and the court.” Id. (quoting Alvarado v. Texas
Rangers, No. EP-03-CA-0305-FM, 2005 WL 142086, at *2 (W.D. Tex. June 14,
2005)). “Reconsideration of a judgment after its entry is an extraordinary remedy
that should be used sparingly.” Id. (quoting Templet v. HydroChem Inc., 367 F.3d 473,

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479 (5th Cir.), cert. denied, 543 U.S. 976 (2004)). “Indeed, the remedy is so
extraordinary that the standard under Rule 59(e) favors denial of motions to alter or
amend a judgment.” Berry v. Indianapolis Life Insurance Company,
No. 3:08-CV-0248-B, 2009 WL 1979262, at *1 (N.D. Tex. July 8, 2009) (Boyle, J.)
(citations and internal quotations omitted). Ultimately, “[t]he decision to alter or
amend the judgment under Rule 59(e) is within the district court’s discretion.”
Centerboard Securities, LLC v. Benefuel, Inc., No. 3:15-CV-2611-G, 2017 WL 1091599,
at *1 (N.D. Tex. Mar. 23, 2017) (Fish, Senior J.) (citing Stroman v. Thaler, No.
3:05-CV-1616-D, 2009 WL 3295128, at *1 (N.D. Tex. Oct. 9, 2009) (Fitzwater,
Chief J.) (citations omitted)).
B. Application
In its motion to amend, Capital One argues that this court should amend its
previous memorandum opinion and order because this court committed a manifest
error of fact or law by conditionally certifying a class larger than the class originally
proposed by Davis. Motion to Amend at 3-5. Specifically, Capital One takes issue
with this court’s conditional certification of a class that includes “other individuals
who originated loan products regardless of job title[,]” Memorandum Opinion and
Order at 16, as this class would include centralized loan officers and/or home equity
sales consultants. Id. at 3-6. Capital One submits that conditionally certifying this
class was a manifest error of fact because Davis stated in his reply brief concerning his

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motion to conditionally certify that he was not seeking conditional certification of
centralized loan officers or home equity sales consultants. Id. at 2-3 (“If the Court
was unaware of [Davis’s] statement in his reply brief that he was not seeking
conditional certification of ‘centralized’ loan officers and home equity sales
consultants, [Capital One] submits that this was an inadvertent error of fact.”).
Moreover, Capital One maintains that this court’s conditional certification was a
manifest error of law because, based on Davis’s statements in his reply brief, Davis
failed to meet his burden of establishing that centralized loan officers and home
equity sales consultants were similarly situated to other members of the putative class
in terms of job requirements and compensation. Id. at 3, 5.
Capital One also stresses the magnitude of the court’s error, arguing that by
conditionally certifying a class more expansive than the class Davis proposed, the
court has effectively allowed Davis to pass stage one of the certification process while
providing no evidence “that the additional collective members are appropriately
included in the collective action.” Id. at 5. Capital One argues the court’s
memorandum opinion and order therefore “effectively erases stage one of the FLSA
certification process.” Id. Additionally, Capital One warns the that the court’s
decision could result in Davis conducting a frivolous fishing expedition during
discovery and stirring up unwarranted litigation in the future. Id. at 5-6.

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In response to Capital One’s motion, Davis maintains that the court did not
err in conditionally certifying a class different than the class Davis originally sought.
Plaintiff’s Response at 2. In particular, Davis maintains that by bringing this motion
Capital One is attempting to obtain an improper “second bite of the apple” of
conditional certification by rehashing arguments Capital One already made before the
court. Id. at 2, 10. Davis also submits that he wrote in his reply brief that he was
not seeking conditional certification of centralized loan officers because “he planned
to obtain conditional certification of distributed loan officers first” before filing a
second conditional certification motion covering centralized loan officers and home
equity consultants. Id. at 5. In fact, Davis avers that if the court grants Capital
One’s motion to amend, he will file a second motion for conditional certification
which covers centralized loan officers and home equity consultants. Id.
Furthermore, Davis argues that Capital One has failed to show that the court
committed a manifest error of fact or law because Capital One failed to cite any case
law demonstrating that the court’s decision to certify a class larger than the class
originally sought by plaintiff constitutes error. Id. at 7. Moreover, Davis avers that
Capital One is incorrect in claiming that Davis failed to satisfy his evidentiary burden
of establishing that distributed loan officers, centralized loan officers, and home
equity consultants were similarly situated in terms of job requirements and pay
structures. Id. at 8. Specifically, Davis contends that both parties submitted

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evidence which established that all loan officers and home equity consultants were:
(1) tasked with the primary duty of selling Capital One mortgage products; (2) paid
in the same manner (hourly plus commission); (3) subject to the same non-exempt
employee time tracking policy; and (4) subject to the same code of business conduct
and ethics. Id. at 8-9.
In addition to responding to Capital One’s arguments, Davis – in his
response – asks the court to order Capital One immediately to provide Davis with the
applicable list of all individuals who have originated mortgage products in the United
States in the last three years, including centralized loan officers and home equity
consultants. Id. at 11. Davis also asks the court to equitably toll the FLSA statute of
limitations from August 23, 2018 (the date Capital One produced the distributed
loan officer list) until the date Capital One produces a complete loan officer list. Id.
Davis contends that if the court does not equitably toll the FLSA statute of
limitations, Capital One will benefit from the delay caused by its motion to amend.
Id.
In its reply, Capital One submits that it is not trying to obtain a second bite by
rehashing old arguments. Defendants’ Reply at 2. Rather, Capital One insists that it
is simply raising new arguments about the size of the class conditionally certified by
the court. Id. Additionally, Capital One reiterates its arguments that Davis
presented no evidence establishing that centralized loan officers and home equity

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sales consultants are similarly situated to other members of the class conditionally
certified by the court. Id. at 3. As for Davis’s claim that both parties presented
evidence establishing that all loan officers and home equity consultants shared similar
job duties and received payments in the same manner, Capital One argues that its
evidence actually establishes that centralized loan officer and home equity
consultants differ from other members of the class certified by the court. Id. For
instance, Capital One claims that its evidence shows that unlike other members of
the class certified by the court, centralized loan officers and home equity consultants
were never misclassified as exempt. Id. at 3 n.2.
Capital One also addresses Davis’s request for equitable tolling in its reply
brief. Id. at 5-7. In Capital One’s view, Davis has failed to meet his heavy burden of
establishing that equitable tolling is appropriate in response to Capital One’s motion
to amend, since Davis has failed to establish that he is diligently pursuing his rights,
or that Capital One’s motion to amend has prevented Davis from asserting his rights.
Id. at 6.
After reviewing both parties’ arguments and revisiting the evidence submitted
by both parties on Davis’s motion for conditional certification, the court declines
Capital One’s invitation to amend its memorandum opinion and order.
First, the court disagrees with Capital One’s contention that the court’s
memorandum opinion and order conditionally certifying a class slightly different than

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the class proposed by Davis constitutes a manifest mistake of fact. Capital One’s
argument is that the court committed a mistake of fact because it ignored, or may
have been unaware of, a portion of Davis’s reply brief where Davis stated he only
sought to conditionally certify a class consisting of distributed loan officers. See
Motion to Amend at 2-3; see also Plaintiff’s Reply in Support of his Motion for Notice
and FLSA Conditional Certification (docket entry 44) at 4 (“Plaintiff seeks
conditional certification of ‘Distributed’ Loan Officers who worked for Defendants in
the last three years . . . he seeks this narrow [Loan Officer] collective only”). Capital
One is mistaken. The court was fully apprised of both parties’ arguments as well as
the specific statements contained within Davis’s reply brief. In fact, in its prior
memorandum opinion and order, the court acknowledged that by shifting the focus
from job title to job requirements, this court conditionally certified a class different
than the class sought by Davis in his pleadings. See Memorandum Opinion and
Order at 16. Nevertheless, the court concluded that conditionally certifying such a
class was appropriate because Davis had “met the lenient burden of establishing, at
stage one, that he and the potential class members are similarly situated in terms of
job requirements and compensation.” Id. Accordingly, the court does not find that
its previous memorandum opinion and order contained a manifest mistake of fact.
Second, the court disagrees with Capital One’s argument that its decision to
conditionally certify a class different than the class sought by Davis constituted a

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manifest mistake of law. Capital One submits that the court’s decision was a mistake
of law because by conditionally certifying a class containing centralized loan officers
and home equity sales consultants, the court allowed Davis to bypass stage one of the
two stage certification process without presenting any evidence that these groups
were similarly situated with respect to job requirements and compensation. Motion
to Amend at 4-5; Defendants’ Reply 4-5. Specifically, because in Davis’s reply brief
he stated that he only sought conditional certification of distributed loan officers,
Capital One submits that Davis produced “zero ‘allegations’ (much less evidence or
argument)” as to whether centralized loan officers and home equity sales consultants
were similarly situated to the rest of the class. Defendants’ Reply at 5. Again, the
court cannot agree with Capital One.
As the court stated in its memorandum opinion and order, although Capital
One pointed out “numerous differences” between distributed loan officers,
centralized loan officers, and home equity sales consultants, Davis provided evidence
which satisfied his lenient burden of showing that the members of the putative class
were all similarly situated. See Memorandum Opinion and Order at 15.
First, the court found that Davis had provided evidence that the members of
the class conditionally certified by the court are (or were) all tasked with the primary
objective of selling Capital One’s mortgage products. Id. (citing Plaintiff’s Reply in
Support of his Motion for Notice and FLSA Conditional Certification at 2); see also

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Plaintiff’s Appendix to his Motion for Notice and FLSA Conditional Certification
(docket entry 31), Exhibits C-M at 28-91; Plaintiff’s Appendix to his Reply in
Support of his Motion for Notice and FLSA Conditional Certification (docket entry
45), Exhibits P-Q at 107-118; Defendants’ Appendix to Their Response in
Opposition to Plaintiff’s Motion for Notice and FLSA Conditional Certification
(docket entry 36), Exhibits A-E at 2-23. As the court stated in its memorandum
opinion and order, having the same primary objective was a sufficient factual nexus
for stage one of the certification process. Memorandum Opinion and Order at 15
(citing Zachary v. Cobalt Mortgage, Inc., No. 4:16-CV-00754, 2017 WL 1079374, at *2
(E.D. Tex. Mar. 22, 2017)).
Second, Davis provided evidence suggesting that the members of the class
certified by this court are (or were) paid in a similar manner. Id. (citing Jeffrey
Davis’s Sworn Statement ¶ 13); see also Plaintiff’s Appendix to his Reply in Support
of his Motion for Notice and FLSA Conditional Certification, Exhibits P-Q at
107-118; Defendants’ Appendix to Their Response in Opposition to Plaintiff's
Motion for Notice and FLSA Conditional Certification, Exhibits A-E at 2-23. While
the court acknowledged that Capital One provided evidence which pointed to some
differences in compensation among members of the class, the court found that
Davis’s evidence showed that at base all members were paid in “essentially the same
way – hourly pay plus commissions.” Memorandum Opinion and Order at 15.

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Finally, Davis provided evidence that members of the class were all subject to a
common policy or plan. Id. at 15-16 (citing Jeffrey Davis’s Sworn Statement
¶¶ 8-14). Specifically, this court found that Davis’s evidence suggested that all class
members were subjected to a policy which “misclassified loan officers as exempt and
discouraged non-exempt officers from recording their overtime hours.” Id. at 16.
Accordingly, the court cannot agree with Capital One that the decision to
conditionally certify a class which included centralized loan officers and home equity
sales consultants was made with no evidence and thus constituted a mistake of law.
All in all, while the court understands Capital One’s concerns, it would like to
remind Capital One that they “will have an opportunity to renew many of their
arguments and challenge the propriety of maintaining the class through trial at stage
two – after the discovery process – through a motion to decertify.” Memorandum
Opinion and Order at 16. Nevertheless, Capital One argues that it may face serious
consequences “that simply cannot be undone through decertification.” Motion to
Amend at 5. First, Capital One warns that this court’s conditional certification may
result in Capital One being subject to a “frivolous fishing expedition.” Id. While this
may be a possibility – the key word being “may” – abusive discovery practices can be
properly checked during discovery. The mere possibility that Capital One may be
subject to abusive discovery does not justify granting Capital One’s motion and
preventing discovery of materials related to certain class members. After all, it is only

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after the discovery process has concluded that this court “will be in a better position
to conduct a more searching inquiry [as to the propriety of maintaining the class
through trial].” Memorandum Opinion and Order at 16.
Second, Capital One warns that “improvident conditional certification can . . .
result in significant settlements even in marginal cases.” Motion to Amend at 6
(internal quotations omitted). Similarly, Capital One claims that the court’s
conditional certification will likely stir up unwarranted future litigation. Again,
although these results could happen, these hypothetical consequences are not enough
to convince the court of Capital One’s position.
Finally, the court must address Davis’s request for equitable tolling. In his
response brief, Davis alleges that equitable tolling is necessary because Capital One
benefits from the delay caused by its motion to amend through the daily expiration
of the FLSA statute of limitations. Plaintiff’s Response at 11. Moreover, Davis
submits that if equitable tolling is not granted, going forward “every FLSA defendant
will file a rule 59(e) motion to further expire the FLSA statute of limitations.” Id.
After reviewing both parties’ arguments, this court agrees with Capital One that
Davis has failed to satisfy his burden of demonstrating that this is one of the “rare
and exceptional” cases where equitable tolling applies. Teemac v. Henderson, 298 F.3d
452, 457 (5th Cir. 2002) (“Equitable tolling applies only in rare and exceptional
circumstances.”) (internal quotations and citations omitted). Put simply, Davis’s

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cursory arguments in his response brief fail to show that Davis has been prevented
from asserting his rights or that he has been pursuing his rights diligently. Pace v.
DiGuglielmo, 544 U.S. 408, 418 (2005) (“Generally, a litigant seeking equitable
tolling bears the burden of establishing two elements: (1) that he has been pursuing
his rights diligently, and (2) that some extraordinary circumstances stood in his
way.”). Consequently, the court declines to grant Davis’s request for equitable
tolling. Going forward, if Davis seeks equitable tolling due to Capital One’s motion
to amend, he should file a separate motion seeking this relief.
III. CONCLUSION
For the reasons stated above, Capital One’s motion to amend is DENIED and
Davis’s request for equitable tolling is DENIED. In addition, Capital One shall
provide Davis with the applicable list of all individuals who have originated loan
products regardless of job title within the United States at any time during the last
three years.
SO ORDERED.
February 6, 2019.

___________________________________
A. JOE FISH
Senior United States District Judge

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