Kinkead v. Humana at home Inc.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR CLASS CERTIFICATION AND MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

          JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE

         Plaintiffs are home healthcare workers employed by defendant Humana, Inc. and its corporate affiliates. They have filed this collective and class action lawsuit alleging that Humana has unlawfully failed to pay them time-and-a-half overtime wages and unlawfully failed to pay them for the number of hours that they worked. They bring their claims under the federal Fair Labor Standards Act, as well as under the Connecticut Minimum Wage Act and New York Labor Law.

         Plaintiffs now move for class certification and to file an amended complaint to add an additional class representative. I will grant in part and deny in their part the motion for class certification. I will also grant their motion to file an amended complaint.

         Background

         The plaintiffs in this case are home healthcare workers (HHWs) who go to the homes of elderly and disabled people to provide “companionship services.” Plaintiffs all worked for Humana, Inc. and related company defendants. Doc. #181 at 3 (¶¶ 7-10).

         Humana employs HHWs to serve clients in two types of arrangements: as live-in and non-live-in caregivers. A live-in caregiver spends a 24-hour shift in a client's home, part of which time the caregiver sleeps and has meals as needed. A non-live-in caregiver spends a distinct number of hours or “shift” at a client's home (e.g., an 8-hour or 12-hour shift).

         The Fair Labor Standards Act (FLSA) generally requires that employers pay time-and-a-half wage rates for hours that an employee works beyond the regular 40-hour work week. See 29 U.S.C. § 207(a). In 2013, the U.S. Department of Labor promulgated a new regulation, 29 C.F.R. § 552.109, which expanded the class of workers eligible for overtime pay under the FLSA. Prior to the issuance of this regulation, the FLSA's overtime pay requirements did not apply to companionship service workers whose services were provided by means of a third-party employer like Humana. See Kinkead v. Humana, Inc., 206 F.Supp.3d 751, 753 (D. Conn. 2016). The new regulation eliminated this exemption with an effective date of January 1, 2015. Ibid.

         The validity of the new regulation was put into doubt for a time by court decisions in the District of Columbia. At first, a district court in the District of Columbia vacated the rule in late 2014, but then the D.C. Circuit reversed this decision in August 2015. See ibid. (citing Home Care Ass'n of Am. v. Weil, 76 F.Supp.3d 138 (D.D.C. 2014), rev'd and remanded, 799 F.3d 1084 (D.C. Cir. 2015)). In the meantime, while the regulation remained in limbo before the courts in the District of Columbia, Humana did not generally pay overtime to its companionship workers as the regulation required.

         In November 2015, plaintiff Daverlynn Kinkead sued defendants Humana and its corporate affiliates, alleging that she had worked as a HHW for Humana in Connecticut and that the new regulation entitled her to overtime pay for hours that she worked from January 2015 until May 2015. Doc. #1. Kinkead based her claim on the FLSA as well as on cognate provisions of the Connecticut Minimum Wage Act.

         Humana moved to dismiss Kinkead's complaint, contending that the new regulation was not effective until the D.C. Circuit issued its mandate reinstating the regulation on October 13, 2015. Doc. #14-4 at 2. In July 2016, I denied Humana's motion, concluding that- notwithstanding the intervening court challenge to the validity of the regulation-the regulation went into effect as of its intended effective date of January 1, 2015. See Kinkead, 206 F.Supp.3d at 753-55.^[1] In May 2017, I granted the parties' joint motion for conditional certification of a national FLSA collective action pursuant to 29 U.S.C. § 216(b). Doc. #114.

         The litigation then took another turn in November 2017 when I granted leave to file an amended complaint. Doc. #181. The amended complaint added another co-plaintiff, Claude Mathieu, who worked as a home healthcare worker for Humana in New York from approximately February 2015 to July 2016 and who would act as a class representative for Humana HHWs in New York State. Doc. #181.

         Under the terms of the amended complaint, both Kinkead and Mathieu seek collective and class action relief to recover unpaid overtime wages under the FLSA as well as under parallel provisions of the Connecticut Minimum Wage Act and New York Labor Law. In addition to their claims for overtime hours, plaintiffs also seek relief for unpaid hours, alleging that Humana systematically undercounted the number of hours that it paid HHWs who worked for 24-hour live-in shifts. Doc. #181 at 17-18 (¶¶ 64-73); Doc. #204-1 at 7-9.

         Plaintiffs have now moved pursuant to Federal Rule of Civil Procedure 23 for certification of four different classes. The first two classes-referred to as the “Effective Date” classes for both Connecticut and New York-seek to be paid for overtime hours that they worked from January 1 to October 12, 2015. Doc. #204-1 at 7-8. As discussed above, this “Effective Date” period corresponds to the time when there was legal uncertainty about the enforceability and effective date of the new regulation that required third-party employers to pay overtime to their companionship service employees.

         The second two classes-referred to as the “Unpaid Hours” classes for both Connecticut and New York-seek additional relief on the ground that Humana did not properly calculate the hours to be credited for those HHWs who worked 24-hour live-in shifts. These unpaid hours claims turn on plaintiffs' argument that both Connecticut and New York law impose their own statutory minimum number of hours for which any HHW who served a 24-hour live-in shift must be paid and that Humana violated the statutory minimum law by paying HHWs for only 8 hours of work per 24-hour live-in shift.

         There are additional differences between the claims of the Connecticut Unpaid Hours class and the New York Unpaid Hours class. For the Connecticut Unpaid Hours class, plaintiffs seek certification of a class limited to HHWs who worked live-in shifts between January 1, 2015, and January 25, 2016. According to plaintiffs, Connecticut law entitled Connecticut workers to be paid for 13 hours per live-in shift. Even assuming some plaintiffs actually worked more than 13 hours during a 24-hour live-in shift, plaintiffs seek payment only for 13 hours as required by the statutory minimum.

         For the New York Unpaid Hours class, plaintiffs seek certification of a class of HHWs who worked between November 11, 2009, and the present. Plaintiffs allege that New York live- in workers were entitled under New York law to be paid for the full 24 hours of a live-in shift. Doc. #204-1 at 8-9.

         A complication for plaintiffs' claim is that courts are broadly split on the question of whether New York law requires that a HHW who works a 24-hour live-in shift be paid for a full 24 hours or for only 13 hours. See Downie v. Carelink, Inc., 2018 WL 3585282, at *9-*10 (S.D.N.Y. 2018) (citing cases). The issue is presently before the New York Court of Appeals for definitive resolution. See Andryeyeva v. N.Y. Health Care, Inc., APL-2018-00038 (N.Y. argued Feb. 12, 2019).

         In light of this legal uncertainty, plaintiffs base their unpaid hours claim in the alternative on a 13-hour minimum. As with the Connecticut unpaid hours claim, the New York plaintiffs seek payment only for whatever is determined to be the statutory minimum number of hours (i.e., either 24 hours or 13 hours) that is required to be paid for a 24-hour live-in shift, and they do not seek an individual-by-individual determination of the number of hours actually worked by any HHWs during the course of serving a 24-hour live-in shift.

         This legal uncertainty about whether New York requires a full 24 hours of pay for a 24hour live-in shift also has implications for the New York overtime claim that is pressed by the New York “Effective Date” class. Indeed, Humana has opposed plaintiffs' motion for class certification, arguing among other reasons that, because the New York class representative plaintiff (Claude Mathieu) worked only three 24-hour live-in shifts per week, she would not be an appropriate class representative for the New York Effective Date class in the event that it is decided that New York law requires payment for only 13 hours per 24-hour live-in shift. If New York law requires payment for only 13 hours for a 24-hour live-in shift, Mathieu's total hours would amount to only 39 hours and fall below the 40-hour threshold for overtime pay. See Doc. #234 at 12-14.

         In light of this challenge to Mathieu as an appropriate representative, plaintiffs have moved in the interim to file a second amended complaint to add Shirley Caillo as a representative plaintiff for the New York classes alongside Mathieu. Doc. #256.^[2] Caillo is a member of the FLSA collective that I conditionally certified earlier in this litigation. Doc. #169-1 at 1. Caillo alleges that she worked over 40 hours per week for Humana under either interpretation of the New York law that governs the calculation of hours to be paid for a 24-hour live-in shift. Doc. #256-1 at 4 (¶ 6). Caillo also worked some non-live-in shifts, ibid., and during discovery, testified that she had received overtime pay for at least some of that work. Doc. #279-2 at 54.

         At oral argument, the parties agreed-at least for class certification purposes and in light of discovery-that defendants paid overtime during the Effective Date period to their New York workers whose work week was composed entirely of non-live-in shifts. Doc. #291 at 15-16, 44- 45. The parties do not otherwise dispute that overtime was not paid to other workers during the Effective Date period from January 1 to October 12, 2015.

         Mathieu and Caillo both signed Humana's “Caregiver Agreement” form when they started at Humana. Doc. #234-9; Doc. #279-2 at 59-60. The Caregiver Agreement stated that each HHW would be paid $10 per hour for each non-live-in shift, and $130 per day for each 24hour live-in shift. Doc. #234-9 at 1; Doc. #279-2 at 59. The Caregiver Agreement also specified that HHWs were “paid for 8 hours of intermittent work per day at the Live-in pay rate.” Doc. #234-9 at 1; Doc. #279-2 at 59.

         During the course of depositions, Humana executives suggested that Humana used its Caregiver Agreements nationwide, Doc. #234-5 at 17, and that in any event, Humana had a general policy of counting each 24-hour shift as only eight hours of work, Doc. #234-2 at 4-5. Humana also claims that it paid its HHWs $130 per day, and in doing so satisfied all applicable wage laws. Doc. #234 at 12-13.^[3]

         Discussion

         Rule 23 of the Federal Rules of Civil Procedure permits a federal court to certify a class action by which named plaintiffs may litigate claims on behalf of a class of similarly situated aggrieved class members. “Class actions under Rule 23 of the Federal Rules of Civil Procedure are an exception to the general rule that one person cannot litigate injuries on behalf of another.” Langan v. Johnson & Johnson Consumer Cos., Inc., 897 F.3d 88, 93 (2d Cir. 2018). On the other hand, no class may be certified under Rule 23 if it is apparent that any member of the proposed class lacks Article III standing. See Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006).

         In order for the Court to grant plaintiffs' motion to certify a class under Rule 23(b)(3), plaintiffs must satisfy seven requirements. First, plaintiffs must satisfy the four threshold requirements of Rule 23(a)-numerosity, commonality, typicality, and adequate representation of the class. See In re Petrobras Secs., 862 F.3d 250, 260 (2d Cir. 2017). Next, plaintiffs must satisfy two more requirements under Rule 23(b)(3)-predominance and superiority. In addition, plaintiffs must also satisfy “an implied requirement of ascertainability” to ensure that the class is sufficiently definite so that the Court can determine whether a particular individual is a member. See Petrobras, 862 F.3d at 260. I will review each of these requirements in turn to determine whether to grant plaintiffs' motion for class certification.

         Standing

         It is axiomatic that federal courts lack jurisdiction over a lawsuit unless a plaintiff alleges a concrete and particularized injury-in-fact that is fairly traceable to a defendant's wrongful conduct and redressable by a court order. See, e.g., Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016); Crupar-Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76, 79 (2d Cir. 2017). “The filing of suit as a class action does not relax this jurisdictional requirement.” Denney, 443 F.3d at 263. Accordingly, as the Second Circuit has made clear, not only must the named plaintiff in a class action have individual standing to sue, but “no class may be certified that contains members lacking Article III standing.” Id. at 264. While each member of a class is not required to submit evidence of personal standing, id. at 263, the class nonetheless “must . . . be defined in such a way that anyone within it would have standing.” Id. at 264. Of course, if the rule were otherwise, then class actions would become a means for courts to award money and relief to multitudes of class members who were never injured at all.

         Humana argues that Mathieu lacks standing to assert any overtime claims because, if New York law is interpreted to require payment for only 13 hours of a 24-hour live-in shift, then Mathieu's claim to have worked three live-in shifts per week would result in only 39 hours per week, which is below the overtime threshold. Although Humana might eventually be proved correct on this legal issue, Mathieu is entitled for purposes of a standing inquiry to the benefit of her interpretation of the law under which she has alleged an injury. “Where a plaintiff alleges a concrete, economic injury resulting from a defendant's violation of a statutory provision, the plaintiff has alleged a sufficient injury to establish Article III standing, regardless of the merits of the plaintiff's statutory interpretation.” Dubuisson v. Stonebridge Life Ins. Co., 887 F.3d 567, 574 & n.10 (2d Cir. 2018). The right interpretation of New York law is a question for the merits of Mathieu's claim, but no matter how that question is resolved, she has standing for now to pursue it.

         Humana also challenges Mathieu's standing to assert a claim for unpaid time on behalf of the New York Unpaid Hours class, again on the theory that Mathieu's $130 daily rate satisfied the minimum wage provisions of the NYLL if she only needed to be credited with 13 hours of work per 24-hour shift. Doc. #234 at 13. This argument is misplaced for the same reason: that the correct statutory interpretation is a question for the merits, not for standing. See Dubuisson, 887 F.3d at 574.

         Even though Mathieu has standing to assert a claim for overtime, it is clear that plaintiffs have overbroadly defined the Effective Date classes to include HHWs who would have no standing to assert an overtime claim. Plaintiffs' proposed Effective Date classes include all of Humana's HHWs who were employed in Connecticut and New York from January 1, 2015, to October 12, 2015, but without any further requirement that each class member have worked more than 40 hours per week. Doc. #204 at 1. If an employee has not worked more than 40 hours per week, then the employee plainly lacks standing to pursue a claim against the employer for failure to pay overtime. Plaintiffs acknowledged this shortcoming at oral argument. See Doc. #291 at 6-8.

         Still, “[a] court is not bound by the class definition proposed in the complaint, ” Robidoux v. Celani, 987 F.2d 931, 937 (2d Cir. 1993), and Humana's objection to the overbroad proposed definition of the Effective Date classes “is readily met by redefining the classes to include only those persons who worked more than 40 hours per week.” Strauch v. Comput. Scis. Corp., 322 F.R.D. 157, 180-81 (D. Conn. 2017). I will therefore narrow plaintiffs' proposed Effective Date classes to include only those Humana HHWs in Connecticut and New York who worked over 40 hours in a week.

         In short, I conclude that the Effective Date classes (as more narrowly defined) and the Unpaid Hours classes as defined are sufficient for standing purposes because they are defined to include only members who have standing to pursue a claim on ...