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Kinkead v. Humana, Inc.

United States District Court, D. Connecticut

October 13, 2016

DAVERLYNN KINKEAD, Plaintiff,
v.
HUMANA, INC., HUMANA AT HOME, INC., and SENIORBRIDGE FAMILY COMPANIES CT, INC., Defendants.

          ORDER

          Jeffrey Alker Meyer United States District Judge

         Pursuant to 28 U.S.C. § 1292(b), defendants have moved to certify this Court's order of July 19, 2016, denying their motion to dismiss. See Kinkead v. Humana, Inc., __F.Supp.3d __, 2016 WL 3950737 (D. Conn. 2016). Specifically, defendants seek review of my conclusion that the federal administrative regulation that is allegedly applicable to this case took effect on January 1, 2015. Defendants also move for a stay pending appeal. For the reasons that follow, I will grant defendants' motion for certification and for a stay pending any interlocutory appeal.

         Background

         As discussed in my prior ruling, the U.S. Department of Labor (DOL) promulgated a new administrative rule in 2013 to expand the class of workers to whom employers must pay higher wages for overtime work under the Fair Labor Standards Act (FLSA). The rule had an effective date of January 1, 2015. But just as the rule was to take hold, a federal district judge in the District of Columbia vacated the rule on the ground that it was inconsistent with the statute. The DOL appealed, and several months later the D.C. Circuit reversed the district court's decision, issuing its mandate in October 2015. The Supreme Court subsequently denied certiorari.

         Plaintiff brought this putative class action to recover pay for overtime hours she worked between January and May 2015 as a home health care worker employed by defendants at a facility in Connecticut. Because plaintiff falls within the expanded class of workers covered by the new administrative rule-and because plaintiff seeks overtime pay for work performed between the rule's stated effective date in January 2015 and the D.C. Circuit's mandate reversing the district court's vacatur of the rule in October 2015-defendants' liability in this case hinges on the date that the rule is determined to have taken effect.

         In their motion to dismiss, defendants argued that employers were liable to pay overtime only from the date that the D.C. Circuit's mandate issued in October 2015. In opposition, plaintiff argued that-notwithstanding the interim vacatur of the rule by the D.C. district court- that the D.C. Circuit's decision had retroactive effect, fully reinstating the agency's effective date for the new rule to impose liability on employers as of January 1, 2015.

         On July 19, 2016, I denied defendants' motion to dismiss. I concluded that the D.C. Circuit's decision reversing the district court's vacatur applied retroactively, and therefore the new rule took effect on the effective date set forth by the agency. My decision was based on the well-established principle that judicial decisions “must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule.” Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 97 (1993).

         Defendants have now moved to certify my July 19 order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), and for a stay pending appeal. See Doc. #58. Plaintiff opposes defendants' motion for certification and stay. See Doc. #65.

         Discussion

         This Court may certify an otherwise non-appealable order for interlocutory review if the order “[1] involves a controlling question of law as to which [2] there is substantial ground for difference of opinion” and “[3] an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b) (internal brackets added). Certification is permitted “only when [the] three enumerated factors suggesting importance are all present.” Bullard v. Blue Hills Bank, 135 S.Ct. 1686, 1696 (2015). Even if a district court certifies an order for appeal under § 1292(b), the party seeking review “still has the burden of persuading the court of appeals” to take the appeal, and “[t]he appellate court may deny the appeal for any reason, including docket congestion.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978).

         With respect to the first factor, I agree with both plaintiff and defendants that “a controlling question of law” is involved here. “It is clear that a question of law is ‘controlling' if reversal of the district court's order would terminate the action.” Klinghoffer v. S. N.C. Achille Lauro, 921 F.2d 21, 24 (2d Cir. 1990). If the Second Circuit were to find that the DOL's new rule did not take effect until October 2015, then plaintiff's complaint would be dismissed, and the case would be terminated. This question is therefore not only controlling, but potentially outcome-dispositive.

         Skipping ahead to the third factor, I find that an immediate appeal may materially advance the ultimate termination of this litigation. Plaintiff seeks to certify a nationwide class of similarly situated employees who worked for defendants and were denied overtime pay during the time period in question. If the Second Circuit were to reverse my order on interlocutory appeal, the litigation would be terminated, and the parties would be spared the expensive and time-consuming process of class certification and discovery. And if the Second Circuit were to uphold my order, the parties would be spared an appeal on this central issue at the conclusion of the district court proceedings. See Doc. #58-1 at 13 (indicating that defendants intend to appeal my July 19 order as a matter of right at the conclusion of the proceedings).

         The closest question here concerns the second factor: whether there is a “substantial ground for difference of opinion” about whether the DOL regulation took effect as of January 1, 2015, rather than as of the later date when the D.C. Circuit's mandate issued. The retroactivity of an appellate court's reinstatement of an administrative rule that has been previously vacated by a district court appears to be an issue of first impression in this circuit.

         Moreover, district courts elsewhere across the country have reached conflicting conclusions when presented with this question in the context of the particular DOL rule at issue in this case. Two district courts from Maryland and Ohio have found-albeit with little explanation-that the DOL's new rule did not go into effect prior to the D.C. Circuit's mandate.[1]More recently, another ...


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