Quint v. Vail Resorts, Inc.

89 F.4th 803

Randy Dean QUINT; John Linn; Mark Molina, individually andon behalf of all others similarly situated, Plaintiffs - Appellants, v. VAIL RESORTS, INC., a Delaware corporation, Defendant - Appellee.

No. 22-1226

United States Court of Appeals, Tenth Circuit

FILED October 17, 2023

Date Filed December 27, 2023

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:20-CV-03569-DDD-GPG)

Submitted on the briefs:^*

Edward P. Dietrich, Edward P. Dietrich, APC, Beverly Hills, California, for Plaintiffs-Appellants.

Michael H. Bell, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.,^** Denver, Colorado, for Defendant-Appellee.

Before TYMKOVICH, BALDOCK, and McHUGH, Circuit Judges.

TYMKOVICH, Circuit Judge.

Randy Dean Quint, John Linn, and Mark Molina ("Colorado Plaintiffs") filed a class and collective action against Vail Resorts, Inc., in the District of Colorado alleging violations of federal and state labor laws ("Colorado Action"). Different plaintiffs filed similar lawsuits against a Vail subsidiary, which are pending in federal and state courts in California. After Vail gave notice that it had agreed to a nationwide settlement with some of the other plaintiffs, Colorado Plaintiffs filed an emergency motion asking the district court to enjoin Vail from consummating the settlement. The district court denied their motion, and Colorado Plaintiffs filed this interlocutory appeal. Exercising jurisdiction under 28 U.S.C. § 1292(a)(1), we affirm.

I. Background

The Colorado Action alleges that certain of Vail's nationwide employment practices violate the Fair Labor Standards Act and state law. Colorado Plaintiffs seek payment of unpaid wages, overtime, and other benefits for themselves and similarly situated parties. Five other actions filed by different plaintiffs in California asserted similar claims against Vail subsidiaries.

Vail notified Colorado Plaintiffs and the district court that it had negotiated a nationwide settlement with other plaintiffs encompassing all claims for alleged unpaid wages and any other violation of state or federal law involving Vail and its subsidiaries ("Settlement"). Vail initially indicated the Settlement would be submitted for approval in the district court in the Eastern District of California, but the settling parties later stipulated to stay the California federal-court actions and seek approval of the Settlement in a California state-court action. Colorado Plaintiffs filed an emergency motion seeking an injunction under the All Writs Act, 28 U.S.C. § 1651, "to enjoin [Vail] from consummating a facially collusive 'reverse auction' settlement in a recently filed placeholder California state court action or any other court." Aplt. App., Vol. 2 at 410 ("Injunction Motion").

A magistrate judge issued a report and recommendation ("R&R") to deny the Injunction Motion, concluding the relief Colorado Plaintiffs sought was barred by the Anti-Injunction Act, 28 U.S.C. § 2283. The district court overruled Colorado Plaintiffs' objections, accepted and adopted the R&R, and denied the Injunction Motion. Colorado Plaintiffs appealed.¹

II. Discussion

Colorado Plaintiffs argue the district court erred by: (1) applying the wrong standard in reviewing the R&R (2) holding the Anti-Injunction Act applies to an injunction against Vail rather than the state court; (3) declining to consider one exception to the Anti-Injunction Act; (4) holding a second exception to the Anti-Injunction Act did not apply; (5) failing to enforce the first-to-file rule; and (6) abstaining under the Colorado River doctrine.²

A. Standard of Review Applied to R&R

Colorado Plaintiffs first argue the district court applied the wrong standard in reviewing the magistrate judge's R&R. The court concluded the R&R was "not dispositive of a party's claim or defense," so it should " 'modify or set aside any part of the order that is clearly erroneous or is contrary to law.' " Aplt. App., Vol. 5 at 1186 (quoting Fed. R. Civ. P. 72(a)). Colorado Plaintiffs contend the court erred in concluding the R&R was not dispositive and in failing to apply de novo review. They argue we must remand for the district court to apply the correct standard of review.

Vail contends Colorado Plaintiffs waived this issue by arguing for the clearly-erroneous-or-contrary-to-law standard of review in their objections to the R&R. In Birch v. Polaris Industries, Inc., 812 F.3d 1238, 1247 (10th Cir. 2015), we held appellants waived their de-novo-review argument by agreeing with the district court that it had correctly articulated the standard as clearly erroneous or contrary to law. But the waiver question here is not as clear as in Birch. In this case the magistrate judge issued a report and recommendation rather than entering an order and also cited Federal Rule of Civil Procedure 72(b), which applies to dispositive motions. See Aplt. App., Vol. 5 at 1083 & n.2. Although Colorado Plaintiffs did assert the R&R was clearly erroneous and contrary to law, they also argued for de novo review. See id. at 1112. And the district court chided them for misstating the standard of review in their objections, suggesting that it rejected their contention regarding de novo review. See id. at 1189 n.1. We decline to find a waiver under these circumstances. See United States v. Walker, 918 F.3d 1134, 1153 (10th Cir. 2019) ("To be clear, whether issues should be deemed waived is a matter of discretion.").

We review de novo whether the district court applied the correct standard in reviewing the R&R. See Birch, 812 F.3d at 1246. We agree with Colorado Plaintiffs that the court was required to review the R&R de novo, but we decline to remand because the error was harmless.

1. Dispositive Motion

Magistrate judges are "not Article III judicial officers" and their "jurisdiction and powers . . . are governed by 28 U.S.C. § 636, and limited by the Constitution." Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1461 (10th Cir. 1988). Section 636(b) "establishes that magistrates may hear and determine any pretrial matters pending before the court, save for eight excepted motions. These eight motions are generally referred to as 'dispositive' motions." Id. (emphasis added) (footnote omitted). "While magistrates may hear dispositive motions, they may only make proposed findings of fact and recommendations, and district courts must make de novo determinations as to those matters if a party objects to the magistrate's recommendations." Id. at 1462; see § 636(b)(1)(B), (C).

The eight motions enumerated in § 636(b)(1)(A) that are excepted from a magistrate judge's authority to "hear and determine" include "a motion for injunctive relief." Because Colorado Plaintiffs' Injunction Motion sought injunctive relief, it was a "motion excepted in subparagraph (A)," § 636(b)(1)(B). Thus, the magistrate judge could not hear and determine that motion; rather, it could only "submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court." Id. And the district court was required to "make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." § 636(b)(1); see also Fed. R. Civ. P. 72(b)(3).

Vail asserts this analysis requires an additional step: determining whether a motion for injunctive relief is dispositive of a claim or defense under Federal Rule of Civil Procedure 72. It maintains the Injunction Motion was not dispositive in this sense. But Vail misconstrues § 636(b)(1). That section nowhere refers to motions as dispositive or nondispositive. It does, however, unambiguously list eight motions a magistrate judge may not hear and determine. The dispositive/nondispositive-motion distinction comes from Rule 72, which "specifies the procedures to be used by magistrates with regard to pretrial matters." Ocelot Oil Corp., 847 F.2d at 1462. That Rule

reflects the division in section 636(b) between matters as to which magistrates may issue orders and matters as to which magistrates may make only proposed findings of fact and recommendations. Significantly, the Rule does not list the specific motions which fall into each category, but simply refers to matters as either "dispositive" or "not dispositive" of a claim or defense.

Id. (quoting Rule 72). The two categories used in Rule 72(a) and (b)—nondispositive and dispositive—are tied to referrals under subsection (A) and subsection (B) of § 636(b)(1). See Ocelot Oil Corp., 847 F.2d at 1462.

We have also concluded that "motions not designated on their face as one of those excepted in [§ 636(b)(1)](A) are nevertheless to be treated as such a motion when they have an identical effect." Id. Thus, for example, a dismissal of claims with prejudice, "whether as a discovery sanction or for some other reason, constitutes the involuntary dismissal of an action within the meaning of section 636(b)(1)(A)." Id. at 1463. This is so because "[t]he Constitution requires that Article III judges exercise final decisionmaking authority" rather than magistrate judges. Id.

In contrast, we have never held, nor have we found authority for the proposition, that a magistrate judge may "hear and determine" a type of motion expressly excepted in § 636(b)(1)(A)—whether it be a motion for injunctive relief or any other listed motion—on the ground that it is not dispositive of a claim or defense under the rubric in Rule 72.³ Such a conclusion would expand the magistrate judge's authority beyond its unambiguous, congressionally defined scope in § 636(b)(1). Rather, the motions "explicitly listed in subsection (A) are dispositive within the context of section 636." Ocelot Oil Corp., 847 F.2d at 1463; see also PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 13 (1st Cir. 2010) ("Dispositive motions include those enumerated in 28 U.S.C. § 636(b)(1)(A) . . . ."); 12 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §...