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Cryer v. InterSolutions

April 20, 2007

CHANEL CRYER, ET AL., PLAINTIFFS,
v.
INTERSOLUTIONS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge

MEMORANDUM OPINION

The named plaintiffs in this case allege that defendants InterSolutions, Inc., Drew Golin and Sarah Walder violated the overtime provisions of the Fair Labor Standards Act ("FLSA") and Maryland Statutory law by failing to pay time and a half to hourly-paid employees for hours worked in excess of forty hours per week. Pending before the Court is defendants' Motion to Dismiss Count II of Plaintiffs' Amended Complaint and plaintiffs' Motion for Extension of Time to File for Class Certification of the Maryland State-Law Claims. Upon review of the motions, responses and reply thereto, and applicable law, defendants' motion to dismiss is denied and plaintiffs' motion for extension of time is granted.

I. BACKGROUND*fn1

InterSolutions provides staffing for concierge, leasing, and maintenance services to residential and commercial properties in the District of Columbia, Maryland, Virginia, and Pennsylvania. Plaintiff Chanel Cryer resides in Maryland and began working in 2003 for InterSolutions' concierge division as an hourly-paid employee at work sites in D.C., Maryland, and Virginia.

Pursuant to Federal Rule of Civil Procedure 23 and based on alleged violations of the Maryland Code, Cryer brings a class action claim on behalf of herself and other similarly situated hourly-paid InterSolutions employees who worked on behalf of InterSolutions at work sites in Maryland, and who worked more than forty hours in any given workweek, between November 29, 2003 and the final disposition of this action. These individuals are referred to in the First Amended Collective Action and Class Action Complaint ("Amended Complaint") as the Maryland Subclass. Cryer and other members of the Maryland Subclass, like the members of the class that has already been conditionally certified by this Court pursuant to the Fair Labor Standards Act ("FLSA"), allege that they worked more than forty hours in certain workweeks in the relevant time period and were not paid an appropriate amount of overtime pay.

Plaintiffs filed their initial complaint in this case on November 29, 2006. They filed an amended complaint on January 9, 2007. On January 25, 2007, defendants filed a motion to dismiss Count II of plaintiffs' Amended Complaint. Count I of plaintiffs' Amended Complaint alleges violations of the FLSA and Count II alleges violations of Maryland law. On March 21, 2007, plaintiffs filed a motion for extension of time to file for class certification on the Maryland state-law claim.

II. ANALYSIS

A. Motion to Dismiss

Defendants have moved to dismiss Count II of the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Rule 12(b)(6) tests the legal sufficiency of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). The factual allegations of the complaint are presumed to be true and are construed liberally in plaintiff's favor. See, e.g., United States v. Phillip Morris, Inc., 116 F. Supp. 2d 131, 135 (D.D.C. 2001). Dismissal is not appropriate unless the "plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Hishon v. King & Spalding, 467 U.S. 69, 73 (1974) (holding that a court may dismiss a complaint for failure to state a claim only if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations").

Defendants argue that there is an inherent inconsistency between the nature of state law class actions under Federal Rule of Civil Procedure 23 and the nature of collective actions under the FLSA. Under the FLSA, potential class members must affirmatively join -- or opt in -- to the lawsuit. See 29 U.S.C. § 216(b) ("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."). In contrast, in Rule 23 class actions, potential class members must affirmatively opt out if they do not want to be part of the class action. See Fed. R. Civ. P. 23(c)(2)(B) (explaining that the notice to class members must state "that the court will exclude from the class any member who requests exclusion" and state "when and how members may elect to be excluded"). Some courts have found the differences between the opt-in procedures for FLSA actions and the opt-out procedures for Rule 23 class actions to be "inherently incompatible" and have not allowed these claims to proceed together in the same lawsuit. See, e.g., Himmelman v. Continental Cas. Co., 2006 WL 2347873, at *2-*3 (D.N.J. Aug. 11, 2006); see also Chase v. Aimco Props., L.P., 374 F. Supp. 2d 196, 202 (D.D.C. 2005) (noting that the court would be disinclined to exercise supplemental jurisdiction over state law class action claims when FLSA claims were part of the case, in part, because of the "unacceptable complexities" that the state class would inject into the case).*fn2

The D.C. Circuit recently addressed an issue almost identical to the one in this case. In Lindsay v. GEICO, 448 F.3d 416 (D.C. Cir. 2006), the plaintiffs sought to recover unpaid overtime under both the FLSA and the New York Minimum Wage Act. The defendants argued that the state law class action claim could not proceed because the plaintiffs had also asserted an FLSA claim. Id. at 422-23. The district court denied a request to certify the New York class, finding 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." Id. at 418. The D.C. Circuit disagreed and reversed.

In reversing the lower court's decision, the Circuit Court held that federal courts have supplemental jurisdiction under 28 U.S.C. § 1367(a) over state law overtime claims in situations where the complaint alleges that "members of both classes performed the same type of work for the same employer and were deprived of overtime compensation as a result of the same action taken by their employer." Id. at 424. The Circuit rejected arguments that differences between the opt-in procedures under the FLSA and the opt-out procedures under Federal Rule of Civil Procedure 23 should prevent the court from exercising mandatory supplemental jurisdiction under section 1367(a). See id. ("While there is unquestionably a difference -- indeed an opposite requirement -- between opt-in and opt-out procedures, we doubt that a mere procedural difference can curtail section 1367's jurisdictional sweep.").

Even though the Circuit Court found that there is no bar to exercising jurisdiction over FLSA and state law class action claims in the same lawsuit, the Circuit left the door open for the district court to use its discretion to decline to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c). See id. The Circuit noted, however, that the district court's ability to decline to exercise supplemental jurisdiction is "circumscribed." Id. Under 1367(c), a federal court may decline to exercise supplemental jurisdiction over a state law claim when (1) the claim raises a novel or complex issue of state law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. 28 U.S.C. § 1367.

In Lindsay, the D.C. Circuit indicated that the district court did not rely on the 1367(c) factors for "good reason." 448 F.3d at 424. First, the Circuit approvingly noted that the District Court found that the state law issues (wage and hour claims under New York law) were not novel or complex within the meaning of 1367(c)(1). The Circuit also accepted the District Court's conclusion that the state law claims did not predominate over the federal law claims. The Circuit noted that "[p]redomination under 1367(c)(2) relates to the type of claim and here the state law claims essentially replicate the FLSA claims -- they plainly do not predominate." Id. at 425. However, the Circuit did recognize that in some circumstances the state law claims could involve complex issues of law not present in the federal claims and that a huge disparity in numbers between state law plaintiffs and federal law plaintiffs could result in predomination of state law claims. Id. at 425 n.11, n.12. As in the case presently before this Court, the district court in Lindsay had not dismissed the FLSA claims so 1367(c)(3) did not apply. The Circuit Court indicated that the district court could consider on remand whether there were "other compelling reasons" for declining jurisdiction under 1367(c)(4). Id. at 425. The Circuit instructed the district court to balance "economy, ...


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