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Sanchez v. Simply Right, Inc.

United States District Court, D. Colorado

May 22, 2017

AURELIO SANCHEZ, et al., Plaintiffs,
SIMPLY RIGHT, INC., et al., Defendants.


          RAYMOND P. MOORE United States District Judge.

         Pending before the Court is the April 13, 2017 Report and Recommendation (“R&R”) of U.S. Magistrate Judge Michael E. Hegarty (ECF No. 174), recommending granting in part and denying in part plaintiffs'[1] motion for conditional collective action certification (“the motion for conditional certification”) (ECF No. 121), and denying defendants' Simply Right, Inc. (“Simply Right”), Beatrice Permann, Daniel Kilgore, and Cinemark USA, Inc.'s (“Cinemark, ” and collectively, “defendants”) motion to strike (ECF No. 149). Also pending before the Court is plaintiffs' motion for status conference (ECF No. 177).[2]

         The Magistrate Judge recommended granting plaintiffs' motion for conditional certification in part because plaintiffs had made substantial allegations that the putative collective action members were similarly situated as to plaintiffs' minimum-wage and overtime claims under the Fair Labor Standards Act (“FLSA”). (ECF No. 174 at 11-16.) As a result, the Magistrate Judge recommended certifying a collective action defined as: “All Simply Right employees who cleaned Cinemark theaters on or after May 7, 2012 who brought non-employees to help them clean and/or who worked more than forty hours per week without payment of one-and-one-half times their regular rate for those hours worked over forty.” (Id. at 17.) The Magistrate Judge recommended, though, denying plaintiffs' motion for conditional certification as to the proposed notice to be sent to putative members because, in various respects, the notice was deficient. (Id. at 18-19.) The Magistrate Judge recommended that the parties confer as to a mutually agreeable notice and consent to join form, and for defendants to provide contact information and dates of employment of putative members once the notice was finalized. (Id.) The Magistrate Judge also forewarned the parties that they would have 14 days to file specific, written objections to the R&R. (Id. at 2 n.1.)

         Fourteen days later, Cinemark and Simply Right filed the only timely objections to the R&R. (ECF Nos. 175, 176.) Fourteen days thereafter, plaintiffs filed a response to both Cinemark and Simply Right's objections. (ECF No. 181.)

         I. Review of a Magistrate Judge's Report and Recommendation

         A district court may refer pending motions to a magistrate judge for entry of a report and recommendation. 28 U.S.C. §636(b)(1)(B); Fed.R.Civ.P. 72(b). The court is free to accept, reject, or modify, in whole or in part, the findings or recommendations of the magistrate judge. 28 U.S.C. §636(b)(1); Fed.R.Civ.P. 72(b)(3). A party is entitled to a de novo review of those portions of the report and recommendation to which specific objection is made. See Fed.R.Civ.P. 72(b)(2), (3). “[O]bjections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. 2121 E. 30 St., 73 F.3d 1057, 1060 (10th Cir. 1996). Furthermore, arguments not raised before the magistrate judge need not be considered by this Court. Marshall v. Chater, 75 F.3d 1421, 1426 (10th Cir. 1996) (“Issues raised for the first time in objections to the magistrate judge's recommendation are deemed waived.”).

         “When no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Fed.R.Civ.P. 72, Adv. Comm. Notes, subdivision (b) (1983); see also Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir. 1991) (“In the absence of timely objection, the district court may review a magistrate's report under any standard it deems appropriate.”).

         II. Legal Standard for Certification

         In Thiessen v. Gen. Electric Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001), the Tenth Circuit Court of Appeals concluded it was not an abuse of discretion for a district court to apply a two-stage “ad hoc” process in order to determine whether putative collective action members were “similarly situated” for purposes of § 216(b) of the FLSA. At the initial “notice” stage, this Court “requires nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan.” Id. at 1102 (quotations and alteration omitted). Then, at the conclusion of discovery, this Court makes a second, stricter determination of “similarly situated.” Id. at 1103. At this second stage, the Court “reviews several factors, including (1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; (3) fairness and procedural considerations; and (4) whether plaintiffs made [any] filings required by [statute] before instituting suit.” See id. (quotation omitted).

         Defendants ask that this Court not follow the precise two-step process outlined in Thiessen. Instead, defendants want this Court to enforce a “heightened standard” of “similarly situated review that is more than the “notice” stage but less than the second stage outlined in Thiessen. (ECF No. 175 at 12-13; ECF No. 176 at 5-6.) The Court will not do so. As an initial matter, Cinemark is correct that the Tenth Circuit has recently discussed Thiessen, in an entirely different procedural context to the one here, but that discussion does not help defendants in any way.

         In In re Chipotle Grill, Inc., Case No. 17-1028 (Mar. 27, 2017) (unpublished), the Tenth Circuit was faced with a petition for writ of mandamus, seeking vacatur of a district court's joinder of 10, 000 opt-in plaintiffs in a FLSA collective action. Id., slip op. at 1.[3] The Tenth Circuit observed that, in Thiessen, three different approaches to determining who was “similarly situated” were discussed. Id., slip op. at 3. Those three approaches were: “the ad hoc approach, the Rule 23 approach, and the spurious approach.” Id. In In re Chipotle Grill, the district court used something akin to the spurious approach, allowing individuals bringing the same statutory claim against the same employer to join as a collective, with the understanding that individuals could be challenged and severed from the collective if the basis for their joinder proved erroneous. Id., slip op. at 4-5. The Tenth Circuit concluded that this approach was not such a gross abuse of discretion to warrant mandamus relief, and thus, denied the petition. Id., slip op. at 5-9 & n.1. The Tenth Circuit reiterated that, in denying the petition, it was not making a “definitive determination on the merits” of the three approaches for analyzing “similarly situated.” Id., slip op. at 6 n.1.

         The one thing that jumps off the pages of the Tenth Circuit's order, at least in the context of the argument defendants present, is that defendants' approach-some alternative take on the ad hoc approach-is not one of the three approaches to determining “similarly situated” that the Tenth Circuit has identified as appropriate. In fact, never has the Tenth Circuit even mentioned defendants' “heightened standard, ” let alone identified it as a potentially appropriate way to assess “similarly situated.” All that In re Chipotle Grill and Thiessen suggest is that, on appellate review, a district court is unlikely to be found to have abused its discretion in using one of three approaches identified in those opinions. Defendants' “heightened standard” also suffers from the infirmity of muddying fairly clear waters. The ad hoc approach has two clear stages, with two clear standards to apply-a comparatively black and white legal test. Defendants' test, though, would throw a whole set of grey shades over the ad hoc approach by requiring the Court to gauge how far discovery has advanced and asking whether that is far enough to apply defendants' “heightened standard.” This obviously invites the question, how much discovery is enough to apply the “heightened standard”? The Court has no intention of resolving that question in every FLSA collective action case; not when there is an easily manageable ad hoc approach that does not require it. As a result, defendants' objections in this regard are rejected.[4]

         III. The Motion to Strike

         Neither Simply Right nor Cinemark raises any objection to the Magistrate Judge's recommendation to deny the motion to strike. As a result, the Court ADOPTS that recommendation, and DENIES defendants' motion to strike (ECF No. 149).

         IV. Matters That are Moot

         On May 22, 2017, this Court entered an Opinion and Order, inter alia, granting Cinemark's motion for summary judgment, finding Cinemark not to be a joint employer for purposes of the FLSA. (ECF No. 185.) In its objections, Cinemark argues that the Magistrate Judge erred in finding the putative collection action to be “similarly situated” with respect to whether Cinemark was the joint employer of its putative members. (ECF No. 175 at 6-11.) In response, plaintiffs assert that there is “voluminous” evidence in the record of Cinemark's joint employer status, and, at this stage, the Court need not take up Cinemark's potential liability and need only find substantial allegations that Cinemark was a joint employer.

         The obvious problem for plaintiffs is that the Court has already taken up, by virtue of both Cinemark and plaintiffs' motions for summary judgment, the issue of whether Cinemark was a joint employer. Thus, the Court need not rely upon plaintiffs' allegations, substantial or otherwise. As a result, because the Court has found that Cinemark is not a joint employer, the Court finds plaintiffs' motion for conditional certification to be moot to the extent it seeks certification of a collective action against Cinemark.[5]

         V. Simply Right's Objections to the R&R[6]

         A. Stayed Plaintiffs

         Simply Right argues that the Magistrate Judge erred in providing relief to the stayed plaintiffs.[7] (ECF No. 176 at 6-9.) Simply Right argues that this was error because the stayed plaintiffs' claims are pending arbitration, and any ruling on those claims would be on the merits, which is prohibited. (Id. at 7-8.) Simply Right also asserts that the parties agreed to submit the stayed plaintiffs' claims to arbitration. (Id. at 8-9.) In response, plaintiffs assert that ruling on their motion for conditional certification is not a merits ruling, defendants have stipulated that the motions to stay various plaintiffs would not affect the motion for conditional certification, and no party has been referred to arbitration. (ECF No. 181 at 10-11.)

         The Court agrees with plaintiffs. First, Simply Right fails to specifically address the Magistrate Judge's finding that ruling on the motion for conditional certification would not involve a merits determination. (See ECF No. 174 at 10-11.) Instead, Simply Right cites to the Magistrate Judge's finding, with respect to the motions for summary judgment, that ruling on those motions would result in a merits determination. (See ECF No. 176 at 7-8.) Apples and oranges spring to mind, given that the motions for summary judgment and the motion for conditional certification are entirely different beasts. Second, even if the Court were to put aside the lack of specific objections to the Magistrate Judge's finding, Simply Right fails to adequately explain how ruling on the motion for conditional certification results in a merits determination. Deciding whether the putative collective action is “similarly situated” on a conditional basis is not a merits determination; it is a ruling designed to simply allow (or not allow) for the mailing of notice to putative members.

         Third, the Court finds Simply Right's reliance upon the parties' agreement to arbitrate certain plaintiffs' claims to be, at best, disingenuous, given that both stipulations contained language that the stipulations would not affect any motion for conditional certification. (See ECF No. 40 at 2; ECF No. 47 at 2.) Although it is not precisely clear what the parties meant by saying the motion for conditional certification would be “unaffected” by the stipulations, the Court will not allow Simply Right to try and use the stipulations as evidence in its favor when the language of the same could so easily be construed against it. Put simply, to the extent Simply Right wished for the “unaffected” language to recognize a carve-out preventing the stayed plaintiffs from ...

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