Mongue v. The Wheatleigh Corp.

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR CLASS CERTIFICATION (DKT NO. 75)

KATHERINE A. ROBERTSON, UNITED STATES MAGISTRATE JUDGE

I. Introduction

Plaintiff Arleta Mongue (“Plaintiff”) is a former employee of the defendant The Wheatleigh Corporation (“Wheatleigh”), which was owned and operated by the remaining defendants L. Linfield Simon, Susan Simon, and Marc Wilhelm (collectively, “Defendants”). Plaintiff alleges in her amended complaint that Defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., by failing to pay her an overtime premium, paying her less than the federal minimum wage, not providing proper notice before utilizing a tip credit, and operating an illegal tip pool. Plaintiff also states state law claims against these Defendants under Massachusetts wage laws. Specifically, Plaintiff claims that Defendants violated the Massachusetts Fair Minimum Wage Act, Mass. Gen. Laws ch. 151, §§ 1, 7, by paying Plaintiff the service rate when she should have received full minimum wage due to Defendants' unlawful

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distribution of its tip pools, the un-tipped tasks to which Plaintiff was assigned, and Defendants' failure to provide proper written notice before utilizing the service rate; the Massachusetts Tips Act, Mass. Gen. Laws ch. 149, § 152A, by unlawfully distributing wages from the tip pool to non-wait staff employees and supervisors; and the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148, 150, by failing to timely pay wages. Before the court is Plaintiff's Motion for Class Certification (Dkt. No. 75) on her state law claims only. The parties have consented to this court's jurisdiction (Dkt. No. 14). See 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. For the following reasons, Plaintiff's motion for class certification is GRANTED.^[1]

II. DISCUSSION

A. Supplemental Jurisdiction

Before considering whether the prerequisites of Rule 23 have been met, the court addresses Defendants' argument that the court should decline the exercise of supplemental jurisdiction. Pursuant to 28 U.S.C. § 1367(a), “in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other

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claims that are so related to claims in the action within such general jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a). Nevertheless, pursuant to § 1367(c), a court may decline to exercise supplemental jurisdiction over the state law claims if: “(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(c). See also MOCA Sys., Inc. v. Bernier, Civ. Action No. 13-10738-LTS, 2013 WL 6017295, at *1 (D. Mass. Nov. 12, 2013). In making the determination whether to exercise supplemental jurisdiction, the court must examine the totality of the circumstances and consider issues of comity, economy, convenience, and fairness. See Curtis v. GreenPoint Mortg. Funding, Inc., 661 F.Supp.2d 65, 67, 69 (D. Mass. 2009). “‘[I]f there is some basis for original jurisdiction, the default assumption is that the court will exercise supplemental jurisdiction over all related claims.” MOCA Sys., Inc., 2013 WL 6017295, at *1 (quoting Pacheco v. St. Luke's Emergency Assocs., P.C., 879 F.Supp.2d 136, 143 (D. Mass. 2012)).

Defendants rely primarily on the asserted predominance of state law claims to convince the court to decline the exercise of supplemental jurisdiction. Defendants note that Plaintiff has put the number of proposed class members at 92 (a figure they dispute), which, with each class member having three state law claims, means that the court would be adjudicating a total of 276 Massachusetts wage claims, as compared to Plaintiff's three individual FLSA claims. Defendants rely on one circuit court decision and one district court decision to support the

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argument that this quantitative difference should lead the court to decline to exercise supplemental jurisdiction.^[2]

In De Asencio v. Tyson Foods, Inc., 342 F.3d 301 (3d Cir. 2003), the Third Circuit held that the district court had abused its discretion in exercising supplemental jurisdiction over the plaintiffs' state law minimum wage and overtime claims because those claims substantially predominated over their FLSA claims within the meaning of 28 U.S.C. § 1367(c). De Asencio, 342 F.3d 312. As directed by the Supreme Court decision in United Mine Workers v. Gibbs, 383 U.S. 715 (1966), the Third Circuit focused on whether state issues predominated “'in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought.'” De

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Asencio, 342 F.3d at 309 (quoting Gibbs, 383 U.S. at 726). The court determined that “the scope of state issues may substantially predominate over the more straightforward federal scheme, ” where the state law did not create a right to compensation, but rather provided a statutory remedy when the employer breached a contractual obligation to pay wages. Because there was no express contract between the defendant and its employees, the plaintiffs would have to establish the formation of an implied oral contract to prevail on their state law claims, an element not present in their FLSA claims. Id. at 309-310. Secondarily, the court noted that the “disparity in numbers” between the 29 U.S.C. § 216(b) opt-in class under federal law and the Rule 23 opt-out class under state law gave it “pause.” Id. at 310. While notice was sent to 3, 400 prospective FLSA class members, the opt-in class ultimately consisted of only 447 persons. Id. at 304-05. The Rule 23 state law opt-out class, on the other hand, consisted of approximately 4, 100 persons. Id. at 305. The court noted that “[p]redomination under section 1367 generally goes to the type of claim, not the number of parties involved, ” but that the “the disparity in numbers of similarly situated plaintiffs may be so great that it becomes dispositive by transforming the action to a substantial degree, by causing the federal tail represented by a comparatively small number of plaintiffs to wag what is in substance a state dog.” Id. at 311. In addition to predominance, the De Asencio court identified two “novel” and “complex” questions of state law, including the question of whether an action under the Pennsylvania Wage Payment & Collection Law could rest on an implied oral employment contract as advanced by the plaintiffs. Id. at 311.

In de la Cruz v. Gill Corn Farms, Inc., No. 03-CV-1133, 2005 WL 5419056, at *9 (N.D.N.Y. Jan. 25, 2005), another case involving claims under the FLSA and state wage law, the court declined to certify the state law claim as a class action, finding that the requirements of

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Fed. R. Civ. P. 23(b) were not met. In so holding, the court noted in dicta that, [e]ven if certification was proper … the Court would decline to exercise supplemental jurisdiction over a state Labor Law class claim.” Id. at *7. The court relied on De Asencio for the proposition that “the sheer numbers involved would cause this case to become predominated by state claims.” Id. at 7. The court did not quantify the number of individuals that would be in the proposed class other than to indicate that it would be over 40. Id. at *3. By contrast, there were no members of the FLSA class except for two of the three named plaintiffs, despite the fact that 168 days had elapsed since preliminary certification of the FLSA class claims. Id. at *6, *7 n.5.

The First Circuit has not addressed the question of whether the larger size of a state law class alone can create a reason for a district court not to exercise supplemental jurisdiction on predominance grounds. However, aside from the Third Circuit in De Asencio, other circuit courts to address the issue have rejected the argument. First, in Wang, the Ninth Circuit held that, while the number of claimants and damages in the state law claim may have been higher, “[p]redomination under section 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., 623 F.3d at 743 (quoting Lindsay, 448 F.3d at 425 (emphasis added)). The Lindsay court for its part did not opine on the correctness of the De Asencio court's conclusion that the “disparity in numbers of similarly situated plaintiffs may be so great that it becomes dispositive, ” 342 F.3d at 311, because, even if the view were correct, it did not apply to the case before it in which the two classes were “almost identical in size.” Lindsay, 448 F.3d at 425 n.12. In Ervin, the Seventh Circuit noted that “[a] simple disparity in numbers should not lead a court to the conclusion that a state claim ‘substantially predominates' over the FLSA action, as section 1367(c) uses that phrase.” Id., 632 F.3d at 980. To the contrary, “[a]s long as the claims are similar between the

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state plaintiffs and the federal action, it makes no real difference whether the numbers vary.” Id. The Ervin court, like the Lindsay court, took no position on “whether a state-law class might ever so dwarf a federal FLSA action that supplemental jurisdiction becomes too thin a reed on which the ferry the state claims into federal court.” Id. However, the case before it, in which the FLSA class numbered 30 participants and the state-law classes consisted of between 180 and 250 people, did not present enough of a...