A U.S. Supreme Court decision limiting forum-shopping in mass tort actions does not apply to divest a court of jurisdiction over non-resident plaintiffs in a class action alleging a multistate employer violated the Fair Labor Standards Act by refusing to pay overtime, a federal judge in Boston has ruled.
The employer in the case, Day & Zimmerman NPS, moved to dismiss out-of-state plaintiffs from the class action pursuant to the Supreme Court’s 2017 decision in Bristol-Myers Squibb Co. v. Superior Court of California.
“Prior to this case coming out, the best [precedent] we had in this jurisdiction was an opinion by a [U.S. District Court] judge to the contrary. That made employers hopeful that that’s the direction our circuit would go.”
— Alicia J. Samolis, Providence
U.S. District Court Judge Nathaniel M. Gorton noted that no circuit court of appeals has addressed the application of Bristol-Myers Squibb to FLSA collective actions and that federal trial courts are “squarely split” on the question.
In denying the motion to dismiss, Gorton concluded that FLSA collective actions are more akin to class actions brought pursuant to Federal Rule of Civil Procedure 23 than the mass tort claims at issue in Bristol-Myers Squibb.
“Congress enacted the FLSA (1) as a remedial statute specifically to address employment practices nationwide, and (2) specifically to limit duplicative lawsuits where numerous employees have been harmed by the same employers,” Gorton wrote. “Extending BMS to the FLSA context would contravene the explicit intent of Congress in enacting the FLSA.”
The 14-page decision is Waters v. Day & Zimmerman NPS, Inc.
Disappointing decision for employers?
The decision raises a red flag for employers operating within the 1st Circuit, according to Alicia J. Samolis, a management-side attorney in Providence.
“This was particularly disappointing because, prior to this case coming out, the best [precedent] we had in this jurisdiction was an opinion by a [U.S. District Court] judge to the contrary,” Samolis said. “That made employers hopeful that that’s the direction our circuit would go.”
Samolis took issue with the notion that there is not a significant risk for employers of forum-shopping in FLSA cases. The opposite is true, she said, noting that that risk was exemplified in Waters, in which court records revealed that, apart from the lead plaintiff, none of the opt-in plaintiffs worked in Massachusetts.
“Essentially, they forum-shopped to be in Massachusetts, which is not surprising because Massachusetts is a pretty favorable forum for employees,” Samolis said. “Now, if I’m an employer and get a collective action in a wage case, it’s going to be in the least favorable state that I have an employee in.”
But Raymond Dinsmore, who represents employees, said that Gorton reached the right conclusion in Waters.
“In BMS, each plaintiff was suing individually in a mass action and needed to establish personal jurisdiction in order to bring their claims in California. But many of those plaintiffs didn’t reside or suffer harm in the state in which they were suing, so there are good arguments the Supreme Court reached the correct result,” said Dinsmore, who practices in Springfield, Massachusetts.
A collective action is different, Dinsmore said, “because you have a plaintiff who is championing the rights of other workers who were harmed under the standards of the FLSA. Judge Gorton correctly pointed out that there is nothing in the FLSA that would limit the rights of out-of-state plaintiffs to opt in.”
Donald R. Frederico, a class action defense attorney in Boston, said he was persuaded by the reasoning of the two contrary Massachusetts decisions cited by Gorton. U.S. District Court Judge Allison J. Burroughs and U.S. Magistrate Judge Katherine A. Robertson in separate decisions held that, under BMS, district courts may not exercise specific jurisdiction over the FLSA claims of non-resident employees.
“That’s because employees who wish to participate in FLSA collective actions must take the affirmative step of opting into the case, which makes them analogous to mass tort plaintiffs,” Frederico said.
The policy reasons cited by Gorton for limiting the reach of BMS with respect to FLSA claims overlook the fact that plaintiffs retain the ability to bring nationwide claims in districts where defendants are incorporated or have their principal places of business, according to Frederico.
“Nothing in BMS limits the nationwide reach of either FLSA collective actions or nationwide class actions where general jurisdiction applies,” he said.
Frederico argued that FLSA cases are not so different from the mass tort cases at issue in BMS.
“In each case, the person has taken affirmative steps to participate in the litigation and may be bound by, or benefit from, the court’s decisions that affect their claims,” he said. “If the employee who opts into an FLSA case did not work in the forum state, and the practices that affected them did not occur in the forum state, they have no better contact with that state than the non-resident plaintiffs in BMS.”
The plaintiff in Waters is represented by Michael Josephson of Houston and Philip J. Gordon of Boston. Gordon did not respond to a request for comment. Defense attorney Keri L. Engelman of Boston also did not respond to a request for comment.
FLSA collective action
Day & Zimmerman is a Delaware corporation with a principal place of business in Pennsylvania. The company provides engineering, construction, operations, security and other services to businesses and governments around the world.
According to court records, the lead plaintiff, John Waters, was employed by the defendant in Plymouth, Massachusetts, as a mechanical supervisor from January to May 2018. In July 2019, the plaintiff filed a complaint in federal court in Massachusetts alleging that the defendant failed to pay him and other similarly situated workers overtime in violation of the FLSA.
The plaintiff sought certification of a class of all individuals who were employed by the defendant, performed substantially similar job duties, and were not paid overtime.
In moving to dismiss “opt-in” plaintiffs under BMS, the defendant alleged that none of the 36 plaintiffs who filed written consents to join the collective action in Waters had worked for the defendant in Massachusetts.
Opt-in plaintiffs remain
In BMS, the Supreme Court held that California courts lacked specific jurisdiction over the claims of out-of-state plaintiffs who had joined a mass action filed in California state court against Bristol-Myers Squibb for injuries allegedly caused by the prescription blood thinner Plavix.
In addressing whether due process permitted the court to exercise jurisdiction over the opt-in plaintiffs in Waters pursuant to Massachusetts’ long-arm statute, Gorton first noted that the court had no general jurisdiction over an out-of-state company such as Day & Zimmerman.
The defendant argued that BMS extended beyond mass tort actions to FLSA collective actions, divesting the court of specific jurisdiction over non-Massachusetts opt-in plaintiffs.
Gorton observed that, in two cases earlier this year, he had joined the majority of U.S. District Court judges to address the issue and determined that BMS does not apply to Rule 23 class actions.
To avoid the same result, the defendant argued that an FLSA collective action is different than a Rule 23 class action. In that regard, the FLSA simply permits plaintiffs to bring suits on behalf of “themselves and other employees similarly situated.”
While observing that U.S. district courts have divided on the precise question before him, Gorton noted that two federal judges in Massachusetts — Burroughs in Chavira v. OS Restaurant Services and Robertson in Roy v. FedEx Ground Package System, Inc. — concluded that BMS divests courts of specific jurisdiction over the FLSA claims of out-of-state plaintiffs.
Nonetheless, Gorton wrote that he found “synergy” with those courts holding that BMS does not apply to FLSA collective actions.
First, the judge recognized that an FLSA collective action is inherently different from the mass tort at issue in BMS.
“In the mass tort context, each individual plaintiff is a real party in interest and therefore a Court must have jurisdiction over each plaintiff,” Gorton wrote. “In contrast, in an FLSA collective action the suit is between the named plaintiff and the defendant. That other members of a putative class in the FLSA action must opt-in does not change the dynamics of the suit which remains between the plaintiff and defendant.”
In denying the defendant’s motion to dismiss, Gorton also found sound policy reasons for distinguishing FLSA cases, in particular avoiding duplicative lawsuits and fulfilling the statute’s goal of providing nationwide standards for addressing alleged unlawful employment practices.
“The Court has personal jurisdiction over claims brought by the named plaintiff, Waters, which is all that is needed to confer personal jurisdiction over defendant in the instant putative FLSA collective action,” he concluded.