{"id":717,"date":"2023-08-06T20:05:30","date_gmt":"2023-08-07T00:05:30","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=717"},"modified":"2023-08-06T20:10:08","modified_gmt":"2023-08-07T00:10:08","slug":"louisiana-federal-court-grants-defendants-motion-to-decertify-collective-action-and-evidences-a-new-fifth-circuit-regime-post-swales","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2023\/08\/06\/louisiana-federal-court-grants-defendants-motion-to-decertify-collective-action-and-evidences-a-new-fifth-circuit-regime-post-swales\/","title":{"rendered":"Louisiana Federal Court Grants Defendants\u2019 Motion To Decertify Collective Action And Evidences A New Fifth Circuit Regime Post-Swales"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr. and Emilee N. Crowther<\/strong><\/p>\n

Duane Morris Takeaways<\/em>: <\/strong>In Moore v. MW Servicing, LLC, No. 20-CV-217 (E.D. La. Aug. 2, 2023), Judge Greg Guidry of the U.S. District Court for the Eastern District of Louisiana granted<\/a> Defendants Motion to Decertify Plaintiffs\u2019 Collective Action, holding that, pursuant to Swales v. KLLM Transportation Services, L.L.C., 985 F.3d 430 (5th Cir. 2021), Plaintiffs had not met their burden of establishing they were \u201csimilarly situated\u201d to the opt-ins during the decertification stage.\u00a0 The decision in Moore evidences the new Fifth Circuit regime in certifying\/decertifying \u00a0collective actions post-Swales, in that it properly places the \u201csimilarly situated\u201d burden in Plaintiff\u2019s court at all relevant times. The ruling should be required reading for all businesses defending wage & hour litigation in the states comprising the Fifth Circuit.<\/em><\/p>\n

Case Background<\/strong><\/p>\n

Defendants MW Servicing, LLC, WBH Servicing, LLC, Bruno, Inc., and Joshua Bruno (\u201cDefendants\u201d) own and operate various properties in Louisiana.\u00a0 Plaintiffs Brittany Moore, Dmitry Feller, Jada Eugene, Christopher Willridge, and five opt-in Plaintiffs (\u201cPlaintiffs\u201d) worked for Defendants as property managers, leasing agents, leasing consultants, accounting managers, executive assistants, janitorial\/maintenance workers, and babysitters.<\/p>\n

Plaintiffs filed their a collective action (the \u201cComplaint\u201d) against Defendants on January 20, 2020, asserting Defendants failed to pay minimum wage under the Federal Labor Standards Act (\u201cFLSA\u201d), and failed to pay, or untimely paid, Plaintiffs their final checks under the Louisiana Wage Payment Act (\u201cLWPA\u201d).<\/p>\n

The Lusardi v. Xerox Corporation Standard<\/em><\/strong><\/p>\n

At the time Plaintiffs filed their Complaint, the standard practice in federal courts to certify a collective action and send notice to potential opt-in plaintiffs followed the two-step process outlined in Lusardi v. Xerox Corporation<\/em>, 116 F.R.D. 351 (D.N.J. 1987).<\/p>\n

The first Lusardi <\/em>step, also known as the \u201cnotice stage,\u201d required courts to determine whether the named plaintiffs and potential opt-in plaintiffs were \u201csimilarly situated\u201d solely on the basis of the pleadings and affidavits submitted by the parties.\u00a0 Id<\/em>. at 360-61.\u00a0 Once the named plaintiffs met this lenient threshold, courts often granted conditional certification and notice was sent to the potential opt-ins.\u00a0 Id<\/em>.<\/p>\n

The second Lusardi <\/em>step, also known as the \u201cdecertification stage,\u201d permitted defendants to move to decertify the conditional certification, but shifted the burden of establishing that plaintiffs are not \u201csimilarly situated\u201d to defendants.\u00a0 Id<\/em>.<\/p>\n

In Moore<\/em>, Plaintiffs filed their motion for conditional certification on May 5, 2020.\u00a0 Almost a year later, on March 15, 2021, the Court granted Plaintiffs\u2019 Motion for Conditional Certification.<\/p>\n

The Fifth Circuit\u2019s Departure From Lusardi \u201cNotice Stage\u201d In Swales<\/em><\/strong><\/p>\n

In Swales v. KLLM Transport Services, L.L.C.<\/em>, 985 F.3d 430, 441 (5th Cir. 2021), the Fifth Circuit rejected Lusardi\u2019s <\/em>\u201cnotice stage\u201d approach. The Fifth Circuit held that the text of the FLSA did not require a certification phase, and courts should instead determine at the outset<\/em> of the case \u201cwhat facts and legal considerations are material to determining whether Plaintiff and the proposed class are similarly situated.\u201d (emphasis added).<\/p>\n

Importantly, in rejecting Lusardi<\/em>\u2019s \u201cnotice stage\u201d approach, the Fifth Circuit held that the burden of establishing that the plaintiffs and opt-ins are \u201csimilarly situated\u201d rests with plaintiffs at all relevant times.\u00a0 Id<\/em>. at 443, n. 65 (\u201ca plaintiff should not be able to simply dump information on the district court and expect the court to sift through it and make a determination as to similarity\u201d).<\/p>\n

On January 5, 2022, Defendants in Moore<\/em> filed a motion to decertify the collective action. They asserted that Plaintiffs were not \u201csimilarly situated,\u201d and the collective action should be decertified.<\/p>\n

The Court\u2019s Decision<\/strong><\/p>\n

On August 2, 2023, Judge Guidry granted Defendants motion to decertify on the grounds that Plaintiffs had not met their burden to establish they were \u201csimilarly situated\u201d to the opt-ins. Moore<\/em>, No. 20-217, at 7.<\/p>\n

In reaching its decision, the Court acknowledged that while Swales <\/em>rejected the traditional Lusardi<\/em> \u201cnotice stage,\u201d the Fifth Circuit clarified that the factors considered by courts in Lusardi<\/em>\u2019s \u201cdecertification stage\u201d could \u201chelp inform or guide\u201d courts \u201csimilarly situated analysis.\u201d\u00a0 Id<\/em>. at 3 (citing Loy v. Rehab Synergies, L.L.C.<\/em>, 71 F 4th 329, 336-37 (5th Cir. 2023)).\u00a0 Thus, even though Lusardi<\/em>\u2019s \u201cnotice stage\u201d had been employed in this case, the Court elected to impose Swales<\/em> for the decertification stage and required Plaintiffs to establish that they had met the \u201csimilarly situated\u201d requirement of the FLSA.\u00a0 Id<\/em>.<\/p>\n

The court considered three factors, including: \u201c(1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; [and] (3) fairness and procedural considerations.\u201d\u00a0 Id<\/em>. at 3 (quoting Thiessen v. Gen. Elec. Capital Corp.<\/em>, 267 F.3d 1095, 1103 (10th Cir. 2001)).<\/p>\n

As to the first factor, the Court noted substantial differences existed between the plaintiffs and opt-ins\u2019 method of payment (salary versus hourly), employer (all worked for different entities), job titles, and the asserted wrongful acts of Defendants.\u00a0 Id<\/em>. at 5-6.\u00a0 As to the second factor, the Court found that too many individualized claims remained in the matter (such as joint employment, good faith and willfulness, common policies, and salary status), which would necessarily require individualized defenses.\u00a0 Id<\/em>. at 6.\u00a0 As to the final factor, while the Court acknowledged that the plaintiffs and opt-ins did have some overlapping common issues, \u201cother methods of managing [the] litigation to the benefit of judicial efficiency\u201d existed.\u00a0 Id<\/em>.<\/p>\n

Ultimately, the Court found that a single trial of all plaintiffs\u2019 claims would \u201cresult in confusion both for the jury and management of the trial itself,\u201d and granted Defendants\u2019 motion to decertify the collective action.\u00a0 Id<\/em>. at 7.<\/p>\n

Implications for Employers<\/strong><\/p>\n

In the Fifth Circuit pre-Swales<\/em>, plaintiffs\u2019 counsel could readily establish that plaintiffs and opt-ins were \u201csimilarly situated\u201d during the notice stage by presenting minimal evidence.\u00a0 After plaintiffs\u2019 counsel met this low threshold and conditional certification was granted, employers were left with two options: (1) expend significant resources to conduct extensive discovery in pursuit of establishing that plaintiffs and opt-ins were not \u201csimilarly situated\u201d; or (2) settle.\u00a0 Thus, until Swales<\/em>, Plaintiffs\u2019 counsel were able to utilize employers\u2019 looming financial burden to unfairly obtain settlements on the basis of threadbare evidence.<\/p>\n

Post-Swales<\/em>, however, district courts in the Fifth Circuit are required to \u201crigorously scrutinize the realm of \u2018similarly situated\u2019 workers, [at] the outset of the case, not after a lenient, step-one \u2018conditional certification.\u2019\u201d\u00a0 Swales<\/em>, 985 F.3d at 434.\u00a0 By placing the FLSA\u2019s \u201csimilarly situated\u201d burden on Plaintiffs, this ensures that collective action complaints can no longer be used as fishing expeditions, and reduces the likelihood that frivolous lawsuits are filed.<\/p>\n

Since Swales<\/em>, the Sixth Circuit in Clark v. A&L Homecare and Training Center, LLC<\/em>, 68 F.4th 1003, 1009 (6th Cir. 2023), similarly rejected Lusardi<\/em>\u2019s two-step certification approach, but elected not to adopt Swales <\/em>\u201crigorous scrutiny\u201d standard.\u00a0\u00a0\u00a0 Instead, the Sixth Circuit held that notice must only be sent to potential plaintiffs if they show \u201ca \u2018strong likelihood\u2019 that those employees are similarly situated to the plaintiffs themselves.\u201d Id<\/em>. at 1011.<\/p>\n

While at present only the Fifth and Sixth Circuits have departed from the longstanding Lusardi<\/em> standard, other circuits may follow suit, and depending on how many circuits \u201cjump ship\u201d from Lusardi<\/em>, the issue may soon be ripe for judicial review with the U.S. Supreme Court.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr. and Emilee N. Crowther Duane Morris Takeaways: In Moore v. MW Servicing, LLC, No. 20-CV-217 (E.D. La. Aug. 2, 2023), Judge Greg Guidry of the U.S. District Court for the Eastern District of Louisiana granted Defendants Motion to Decertify Plaintiffs\u2019 Collective Action, holding that, pursuant to Swales v. KLLM Transportation … <\/p>\n

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