Lindsay v. Government Employees Insurance

448 F.3d 416, 371 U.S. App. D.C. 120, 11 Wage & Hour Cas.2d (BNA) 903, 2006 U.S. App. LEXIS 13166, 2006 WL 1453107
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 26, 2006
Docket05-7046
StatusPublished
Cited by82 cases

This text of 448 F.3d 416 (Lindsay v. Government Employees Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lindsay v. Government Employees Insurance, 448 F.3d 416, 371 U.S. App. D.C. 120, 11 Wage & Hour Cas.2d (BNA) 903, 2006 U.S. App. LEXIS 13166, 2006 WL 1453107 (D.C. Cir. 2006).

Opinion

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge.

Christine Lindsay and Robert McGru-der (appellants) work as auto damage adjusters for the Government Employees Insurance Company (GEICO). GEICO classified all auto damage adjusters as administrative employees, thereby making them ineligible for overtime pay under section 13(a)(1) of the Fair Labor Standards Act, 29 USC §§ 201 et seq. (FLSA or Act). The appellants brought this action against their employer, alleging that GEICO deliberately miscategorized them as administrative employees to avoid paying them overtime pay in violation of the FLSA and the New York Minimum Wage Act, N.Y. Lab. Law §§ 650 et seq. (New York Act). They sought certification of an “opt-in” class under the FLSA. They also sought certification of an “opt-out” class under the New York Act, using Federal Rule of Civil Procedure 23. The district court denied certification of the state law class, concluding that the FLSA class certification procedure requiring all class members to affirmatively opt in precluded it from exercising supplemental jurisdiction over those state law claimants who did not affirmatively join the FLSA claim. We disagree and therefore reverse the order denying certification and remand to the district court.

I.

The appellants’ FLSA claim alleged not only that the nature of an auto damage adjuster’s job duties entitles them to overtime pay under FLSA but also that GEICO’s classification of auto damage ad *419 justers as administrative employees constitutes a willful violation of the Act. 1 See 29 U.S.C. § 207(a). They sued on behalf of themselves and all other similarly situated auto damage adjusters under 29 U.S.C. § 216(b). 2 Section 216(b) is part of the so-called Portal-to-Portal Act, which the Congress enacted in 1947 in response to judicial interpretations of the FLSA. 3 See IBP, Inc. v. Alvarez, — U.S. -, -, 126 S.Ct. 514, 519, 163 L.Ed.2d 288 (2005). Of particular relevance here, section 216(b) provides that, in an action brought under, inter alia, section 207 — the overtime pay provision — of the FLSA, “[n]o 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.” 29 U.S.C. § 216(b). That is, potential class members must affirmatively join (“opt in”) the lawsuit. See Thompson v. Sawyer, 678 F.2d 257, 269 (D.C.Cir.1982).

Appellant McGruder also alleged that the nature of a New York-based auto damage adjuster’s job duties entitles those adjusters to overtime pay under the New York Act as well. See N.Y. Lab. Law §§ 663(1) (creating civil action for violation of compensation provisions); N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2 (requiring overtime compensation of time- and-one-half). 4 McGruder sought to bring the state law claim on behalf of himself and all other similarly situated New York-based auto damage adjusters pursuant to Federal Rule of Civil Procedure 23. Unlike the procedure set out in 29 U.S.C. § 216(b), Rule 23 class certification requires notice to all potential class members that they must affirmatively decline to join (“opt out”) the lawsuit if they do not want to be class members. See Fed.R.Civ.P. 23(c)(2)(B) (“For any class certified under Rule 23(b)(3), the court must direct to class members the best notice practicable under the circumstances ... that the court will exclude from the class any member *420 who requests exclusion, stating when and how members may elect to be excluded”); In re Veneman, 309 F.3d 789, 792 (D.C.Cir.2002) (“Certification pursuant to Rule 23(b)(3), however, comes with certain procedural requirements: Because members of a class seeking substantial monetary damages may have divergent interests, due process requires that putative class members receive notice and an opportunity to opt out.”).

The district court first determined that all GEICO auto damage adjusters nationwide were similarly situated within the meaning of 29 U.S.C. § 216(b). See Lindsay v. Gov’t Employees Ins. Co., C.A. No. 04-1213 (D.D.C. Nov. 9, 2004). Accordingly, notices were sent to all potential class members requesting them to affirmatively opt into the action if they so desired. The district court, however, subsequently declined to certify McGruder’s requested class of GEICO auto damage adjusters with state law claims under the New York Act. See Lindsay v. Gov’t Employees Ins. Co., 355 F.Supp.2d 119 (D.D.C.2004). First noting that “[t]his Circuit has yet to address the question of supplemental jurisdiction in the context of a federal opt-in class and a state opt-out class,” the district court briefly surveyed the decisions from other courts — both district and circuit— and. ultimately concluded that “it would be inappropriate to exercise jurisdiction over plaintiffs who have not affirmatively opted into the federal action.” Id. at 120, 121. Thus, it decided to exercise its supplemental jurisdiction over only the state law claims “of plaintiff McGruder and any New York plaintiff who is eligible to opt into the federal action and opts in by filing a notice of consent.” Id. at 123. We allowed the appellants to appeal the order denying class certification pursuant to Federal Rule of Civil Procedure 23(f). See In re Lindsay, No. 05-8001 (D.C. Cir. Mar. 18, 2005). Because subject matter jurisdiction is a prerequisite to class certification, it is properly reviewed in a Rule 23(f) interlocutory appeal. Cf. In re Lorazepam & Clorazepate Antitrust Litig., 289 F.3d 98, 108 (D.C.Cir.2002) (constitutional standing issue properly raised in Rule 23(f) appeal). Accordingly, we consider the district court’s denial of class certification based on its decision not to exercise supplemental jurisdiction.

II.

Although it is not clear from the district court order whether the court made its supplemental jurisdiction ruling under 28 U.S.C.

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Bluebook (online)
448 F.3d 416, 371 U.S. App. D.C. 120, 11 Wage & Hour Cas.2d (BNA) 903, 2006 U.S. App. LEXIS 13166, 2006 WL 1453107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lindsay-v-government-employees-insurance-cadc-2006.