Opinion
CASE NO. 1:15-CV-00368
06-25-2015
DALVON MCLEOD, ET AL., Plaintiffs, v. JUST ENERGY MARKETING CORP., ET AL., Defendants.
OPINION & ORDER
[Resolving Doc. 21]
:
In this case, Plaintiffs Dalvon McLeod, Peter Gordon, and Timothy Joiner seek allegedly unpaid minimum wage and overtime from Defendants Just Energy Marketing Corp., Commerce Energy, Inc., and Just Energy Group, Inc. Plaintiffs are door-to-door workers who were paid on a commission basis to solicit residential customers for the Defendants' energy services. They say that under this compensation scheme, they "were not paid for all hours worked and were not paid overtime wages for the hours they worked over 40 per week."
Doc. 1.
Id. at ¶ 59.
Plaintiffs bring these claims on behalf of a putative class under the Fair Labor Standards Act ("FLSA"), the Ohio Minimum Fair Wage Standards Act ("Ohio Wage Act"), and the Maryland Wage and Hour Law. Defendants have moved to dismiss on the ground that this case is duplicative of another case before the Court, Hurt v. Commerce Energy Inc.
29 U.S.C. § 201 et seq.
Ohio Rev. Code § 4111.01 et seq.
Md. Code Ann. Lab. & Empl. § 3-401, et seq.
Doc. 21. Plaintiffs oppose. Doc. 22. Defendants have replied. Doc. 23.
For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss.
I. Background
A. The Hurt Litigation
The Court has previously issued opinions detailing the factual background of the Hurt action and incorporates those descriptions by reference. In short, Defendants sell electricity and natural gas to residential and commercial customers in the United States and Canada. Plaintiffs went door-to-door to obtain applications from potential customers. Plaintiffs were paid commissions for every finalized contract; if an application was rejected for any reason before the contract became final, the employee was not paid.
See, e.g., Hurt v . Commerce Energy, Inc., No. 1:12-cv-00758, 2013 WL 4427257, at *1-3 (N.D. Ohio Aug. 15, 2013).
Plaintiffs brought suit in 2012, alleging this commission-based compensation system deprived them of minimum wage and overtime. Against these claims, Defendants argued that Plaintiffs were exempt from overtime and minimum wage requirements under an "outside salesperson" exemption.
See 29 U.S.C. § 213(a)(1); Ohio Rev. Code § 4111.03(D)(3)(d).
In August 2013, the Court certified two classes in the Hurt lawsuit: a Rule 23 class action seeking overtime under Ohio law, and a nationwide FLSA collective action seeking minimum wage and overtime under federal law. The Hurt Rule 23 class consisted of all employees who went door-to-door in Ohio for Defendants from March 28, 2010, to the day the certification order was issued. The Hurt FLSA collective action consisted of "all persons who at any point in the last 3 years" went door-to-door for Defendants.
Hurt v . Commerce Energy, Inc., No. 1:12-cv-00758, 2013 WL 4427255, at *7-8 (N.D. Ohio Aug. 15, 2013), amended by Order, Hurt v. Commerce Energy, Inc., No. 1:12-cv-00758, (N.D. Ohio Aug. 28, 2013), ECF Doc. 93.
Id. at *8.
Following a trial in October 2014, a jury found Defendants liable for violations of the FLSA and the Ohio Wage Act. The Hurt litigation is now proceeding to the damages phase, where class members will receive individualized damages based on the numbers of hours worked and the compensation they earned.
See Hurt v . Commerce Energy, Inc., ___ F. Supp. 3d ___, 2015 WL 1039761, at *1 (N.D. Ohio Mar. 10, 2015).
See Order at *1-2, Hurt v. Commerce Energy, Inc., No. 1:12-cv-00758 (N.D. Ohio June 2, 2015), ECF Doc. 846.
B. Claims of Plaintiffs McLeod, Gordon, and Joiner
Plaintiffs in this case are three former door-to-door workers. Plaintiff McLeod worked for Defendants in Ohio from 2009 until 2014. Plaintiffs Gordon and Joiner worked for Defendants in Maryland from 2012 to 2013.
Doc. 1 at ¶¶ 21, 25.
Id. at ¶¶ 22-23, 26.
Because Plaintiffs all worked for Defendants during the period covered by the class definitions in Hurt, all three received notice of the Hurt FLSA collective action. None, however, opted in to that action, and as a result none are members of the Hurt collective action. In addition, as a putative member of the Ohio Rule 23 class in Hurt, Plaintiff McLeod received notice of that action as well. He did not, however, opt out of the Rule 23 class, and as a result is currently a member of the Hurt Ohio class action.
Plaintiffs' claims in this case are substantively identical to those in the Hurt action. The only new claim is for minimum wage and overtime under Maryland law. The only other meaningful difference between this action and Hurt is the range of dates covered. Plaintiffs seek to certify a FLSA collective action and two Rule 23 class actions—one based on Ohio law and one based on Maryland law—for "all persons since August 30, 2013, who" went door-to-door for Defendants. Plaintiffs argue that this represents a "temporally distinct class of employees" who should be allowed to bring their own collective and class actions against Defendants.
Compare id. with Second Amended Complaint, Hurt v. Commerce Energy, Inc., No. 1:12-cv-00758 (N.D. Ohio Oct. 16, 2012), ECF Doc. 49.
Doc. 1 at ¶¶ 24-26.
See Doc. 22 at 9.
II. Law and Analysis
At base, this motion raises the question: "Are these the right plaintiffs to bring these claims?" Plaintiffs contend that, with this motion, "Defendants are effectively arguing that they are immunized from class action litigation for their continuing violations of wage and hour law because one class has already been certified." But this somewhat misstates the issue. Defendants challenge the ability of these three Plaintiffs—each of whom received class notice in the Hurt action—to bring new collective and class actions for the same substantive claims, on behalf of some people who are either already part of the Hurt action or who chose not to join it. The Court concludes that, against this background, Plaintiffs' class and collective action claims cannot be maintained. Plaintiffs may, however, continue with their individual FLSA claims.
Id. at 1.
A. Claims for Minimum Wage and Overtime Under Maryland Law
Plaintiffs Gordon and Joiner, who worked for Defendants in Maryland, bring claims under Maryland law for minimum wage and overtime. This is the only claim in this case that was not also brought in Hurt. Defendants move to dismiss this claim on the ground that the Maryland Wage and Hour Law exempts individuals paid on a commission basis from the state's minimum wage and overtime requirements. Plaintiffs do not oppose the dismissal, and assert that they "are not pursuing their claims under Maryland law." The Court therefore GRANTS Defendants' motion to dismiss the Maryland law claims.
Doc. 1 at ¶¶ 95-105.
Doc. 21-1 at 16-17 (citing Md. Code Ann. Lab. & Empl. § 3-403(5)).
Doc. 22 at 9.
B. Claim for Overtime Under Ohio Law
Plaintiff McLeod brings a claim for overtime under Ohio law. This is exactly the same claim that was brought by the Rule 23 class in Hurt. In Hurt, the Court certified a class of Ohio plaintiffs who worked as door-to-door salespeople for Defendants between March 28, 2010, and August 28, 2013. Plaintiff McLeod worked for Defendants in Ohio from 2009 to 2014, which means that he was within the class certified in Hurt. Because he did not opt out, Plaintiff McLeod is a member of that Rule 23 class.
Doc. 1 at ¶¶ 86-94; see Ohio Rev. Code § 4111.03.
See Hurt v. Commerce Energy, Inc., 2013 WL 4427255, at *7-8 (N.D. Ohio Aug. 15, 2013), amended by Order, Hurt v. Commerce Energy, Inc., No. 1:12-cv-00758, (N.D. Ohio Aug. 28, 2013), ECF ECF Doc. 93.
Defendants say this claim must be dismissed because, as a member of the Hurt Rule 23 class, Plaintiff McLeod will be bound by the outcome in Hurt and therefore cannot maintain a separate suit covering the same conduct. Plaintiffs counter that, because some members of the putative class would have started working after the cut-off date in Hurt, their claims would not be covered by Hurt and therefore they are able to bring their own class action.
Doc. 21-1 at 15-16; Doc. 23 at 2-5.
See Doc. 22 at 3-7.
"Faced with a duplicative suit, the federal court may exercise its discretion to stay or dismiss the suit before it, allow both federal cases to proceed, or enjoin the parties from proceeding in the other suit." "Courts should invoke the rule when two suits involving substantially the same parties and purpose have been filed in a concurrent jurisdiction." "Simple dismissal of the second suit is a common disposition because plaintiffs have no right to maintain two actions on the same subject in the same court, against the same defendant at the same time." When deciding whether a later-filed action is duplicative, the Court considers whether it involves substantially the same parties, the same facts, the same legal theories, and seeks to recover the same damages.
Twaddle v . Diem, 200 F. App'x 435, 438 (6th Cir. 2006) (citing Smith v . SEC, 129 F.3d 356, 361 (6th Cir. 1997)).
Smithers-Oasis Co . v. Clifford Sales & Mktg., 194 F. Supp. 2d 685, 687 (N.D. Ohio 2002) (quoting Plating Resources , Inc. v. UTI Corp., 47 F. Supp. 2d 899, 903 (N.D. Ohio 1999)) (internal quotation marks and alterations omitted).
Twaddle, 200 F. App'x at 438 (quoting Curtis v . Citibank, N.A., 226 F.3d 133, 138 (2d Cir. 2000)) (internal quotation marks and alterations omitted); accord Missouri v . Prudential Health Care Plan, Inc., 259 F.3d 949, 953-54 (8th Cir. 2001); Zerilli v . Evening News Ass'n, 628 F.2d 217, 222 (D.C. Cir. 1980) (citing Walton v . Eaton Corp., 563 F.2d 66, 70 (3d Cir. 1977)); cf. Colorado River Water Conservation Dist . v. United States, 424 U.S. 800, 817-19 (1976).
See Twaddle, 200 F. App'x at 438-39.
Here, Plaintiff McLeod employs the same legal theories and same basic facts against the same Defendants as what is being litigated in Hurt. As a member of the Hurt Rule 23 class, Plaintiff McLeod will be be bound by the outcome of Hurt as to his claim for overtime under Ohio law. The issue of Defendants' liability in Hurt has already been adjudicated, and a jury has found in favor of the Rule 23 class. All that is left is to determine what damages the class members, including McLeod, are owed.
See Taylor v . Sturgell, 553 U.S. 880, 884 (2008) (citing Hansberry v . Lee, 311 U.S. 32, 41 (1940)).
Defendants assert, without citation to authority, that the Hurt "class members' damages are ongoing through the time of trial." McLeod would therefore get damages going back as far as the statute of limitations allows, all the way up through the end of his employment, which ended before the completion of the Hurt trial. Plaintiffs do not refute this assertion.
Doc. 23 at 4 n.2.
As a general matter, "[a] loss that happens after an action is brought, as a direct consequence of the wrong for which the action was brought, may be compensated, even if it had not happened . . . when the action was brought." And under the Ohio Wage Act, an employer is liable for "the full amount of the [unpaid] overtime." Further, while the Court's Certification Order in Hurt set a cut-off date for being a member of the class, it does not prevent members of that class from recovering damages for ongoing violations that continued after August 28, 2013. Thus, Defendants' contention would seem to be correct, and Plaintiff McLeod would seem to be seeking exactly the same damages here that he is already entitled to recover in Hurt.
30 Ohio Jur. 3d § 12.
The Court also notes that Defendants would be unlikely to make this concession, which is against their economic interest, if it were not accurate.
Because Plaintiff McLeod's claim under Ohio law involves the same parties, operative facts, legal theories, and damages as Hurt, the Court concludes that his claim here is duplicative.
Plaintiffs' briefing is primarily concerned with recovering damages for people who started working for Defendants after August 30, 2013. Plaintiff McLeod, however, is not a member of this group—he started working for Defendants in 2009. McLeod seeks to represent employees who performed any door-to-door work for Defendants after August 30, 2013, regardless of when they started working for Defendants. The group Plaintiffs primarily point to—those who started working after August 30, 2013—is merely a subset of the proposed class. Members of this subset may be able to bring their own claims, as they would not be part of the Hurt Rule 23 class and therefore would not be bound by its outcome, nor would they receive any damages. But the mere fact that some members of the putative class may have viable claims does not allow Plaintiff McLeod to bring his own.
See Warth v . Seldin, 422 U.S. 490, 501 (1975); Sutton v . St. Jude Med. S.C., Inc., 419 F.3d 568, 570 (6th Cir. 2005) (citing O'Shea v . Littleton, 414 U.S. 488, 494 (1974)).
Furthermore, concerns of judicial economy and efficiency counsel in favor of the Court exercising its discretion to dismiss this action. The primary purpose of class action litigation is to efficiently manage numerous similar claims in a single proceeding, rather than to "adjudicate [them] in piecemeal fashion by multiple actions at law." That purpose would be lost if individual class members could bring their own suits while still remaining in the class. Class members can't have it both ways—either they are passively in the class, or they must opt out and proceed separately.
See Curtis, 226 F.3d at 138 (quoting Kerotest Mfg . Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952)) ("The power to dismiss a duplicative lawsuit is meant to foster judicial economy and the 'comprehensive disposition of litigation.'").
See Devlin v . Scardelletti, 536 U.S. 1, 11 (2002); 7A Wright & Miller, Federal Practice & Procedure Civil § 1751 (3d ed. 2015).
Because Plaintiff McLeod's claim for overtime under Ohio law is already being fully adjudicated in Hurt, the Court concludes McCleod's overtime claim should not also be litigated in this action. The Court therefore DISMISSES this claim, without prejudice to McCleod's right to seek recovery in the Hurt action.
C. Claims for Minimum Wage and Overtime Under the FLSA
All three Plaintiffs in this case bring claims for minimum wage and overtime under the FLSA, both as individuals and collectively on behalf of "all persons since August 30, 2013, who" were door-to-door workers. Defendants say this claim should be dismissed as a duplicative collective action.
Doc. 1 at ¶¶ 24, 60-63.
Unlike a Rule 23 class action, a plaintiff must affirmatively join a FLSA collective action by filing an opt-in notice with the Court. If a class member does not join, though, he may still pursue his claim individually. Plaintiffs in this case have done just that, bringing their claims as individuals. Accordingly, the Court DENIES Defendants' motion to dismiss Plaintiffs' individual claims under the FLSA.
7B Wright & Miller, Federal Practice & Procedure Civil § 1807 (3d ed. 2015).
Plaintiffs also seek to press their claims on behalf of a group of similarly situated employees. Just like the Ohio law claim, a court may, in its discretion, dismiss a "duplicative" FLSA collective action—that is, one that covers "substantially" the same claims as an earlier filed collective action. Once again, this rule grows out of the Court's inherent ability to conserve judicial resources and promote the efficient disposition of cases. This also promotes fairness to defendants, who should not have to litigate multiple collective actions regarding substantially the same conduct at the same time.
E.g., Castillo v . Taco Bell of Am., LLC, 960 F. Supp. 2d 401, 404 (E.D.N.Y. 2013); Fuller v . Abercrombie & Fitch Stores, Inc., 370 F. Supp. 2d 686, 688-89 (E.D. Tenn. 2005).
See Castillo, 960 F. Supp. 2d at 404.
Id. at 405.
As previously discussed, the legal theories and operative facts are the same in this case as they are in Hurt. Plaintiffs argue, however, that their claims are "temporally distinct" from the Hurt litigation because the putative collective action includes employees who did not start working for Defendants until August 30, 2013, and therefore did not receive notice of the Hurt action. True, the putative collective action would include these employees. But the collective action would also include a great number of people who received notice of and could have opted into the Hurt action, including the named plaintiffs in this case. Once again, although a subset of the proposed class may have claims that are distinct from Hurt, that does not mean these Plaintiffs do.
Doc. 22 at 3-7.
The Court concludes that the FLSA claims of the three Plaintiffs in this case are substantially similar to those in Hurt. Plaintiffs had the opportunity to opt in to Hurt, and chose not to. Numerous courts to have considered similar situations have decided that the earlier-filed collective action should be given priority. The Court will follow those decisions, and GRANT Defendants' motion to dismiss Plaintiffs' FLSA collective action claims.
E.g., Castillo, 960 F. Supp. 2d at 404-05, Greene v . H&R Block E. Enters., Inc., 727 F. Supp. 2d 1363, 1366-69 (S.D. Fla. 2010); Ortiz v . Panera Bread Co., No. 1:10CV1424, 2011 WL 3353432, at * 1-3 (E.D. Va Aug. 2, 2011); Walker v . Progressive Cas. Ins. Co., No. C03-656, 2003 WL 21056704, at *2-3 (W.D. Wash. May 9, 2003).
A final word. Plaintiffs may proceed on their individual FLSA claims. In other cases involving such circumstances, courts have given plaintiffs the opportunity to opt in to the earlier-filed collective action. Defendants have indicated that they would not object to Plaintiffs McLeod, Gordon, and Joiner filing late opt-in notices to join the Hurt action. If Plaintiffs are amenable to this efficient resolution of their claims, the Court would likely grant an appropriate motion to allow this to happen.
E.g., Castillo, 960 F. Supp. 2d at 405.
Doc. 23 at 9-10. --------
III. Conclusion
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' motion to dismiss. Plaintiffs may proceed only on their individual claims for minimum wage and overtime under the FLSA.
IT IS SO ORDERED Dated: June 25, 2015
s/ James S. Gwin
JAMES S. GWIN
UNITED STATES DISTRICT JUDGE