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Schilling v. PGA Inc.

United States District Court, W.D. Wisconsin

June 19, 2017

PGA INC., Defendant.


          WILLIAM M. CONLEY District Judge.

         In a prior opinion and order, the court granted plaintiff leave to: (1) add two new plaintiffs to this proposed hybrid, FLSA collective and Wisconsin state labor law class action; and (2) assert a claim that PGA Inc. violated Wisconsin law by computing overtime pay using the rate for the type of work performed during the overtime hours, rather than the often higher average wage rate earned by the employee during that workweek. The court, however, denied plaintiffs leave to add a prevailing wage claim, as well as an additional, discrete claim concerning plaintiff Sinclair.

         The court's order has since spurred additional filings by the party. In this opinion and order, the court will take up plaintiffs' motion for reconsideration and plaintiffs' motion for sanctions, as well as defendant's motion to strike the third amended complaint. Going forward, the court also encourages plaintiffs' counsel to focus their energy on the claims actually before the court in this case and scheduled for trial in October, rather than search for other possible theories of liability. If anything, plaintiffs' filings to date call into question counsel's adequacy to serve as class counsel.


         I. Motion for Reconsideration

         In its prior opinion, the court denied plaintiffs leave to proceed on a prevailing wage claim, finding that such a claim would require class treatment under Rule 23, and that “[t]o add an unrelated claim to this action would unduly prejudice defendant, in light of its discovery efforts to date and preparations to move for decertification of the FLSA collective action and to oppose the recently-filed motion for class certification.” (2/17/17 Op. & Order (dkt. #61) 6-7 (citing Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 400 (2010).) In denying leave, the court, however, indicated that plaintiffs Sinclair and Krall were free to assert a prevailing wage claim in a separate lawsuit -- which they apparently did in state court, and that claim has now been removed to this court. Sinclair v. PGA, Inc., No. 17-cv-224-wmc (W.D. Wis. Mar. 21, 2017). Even if Rule 23 did not govern a state law prevailing wage claim brought by a representative party on behalf of other individuals, the court also indicated in a footnote that it would decline to exercise its supplemental jurisdiction over this claim, because it was unrelated to the core FLSA overtime pay claims and would likely delay resolution of those claims. (2/17/17 Op. & Order (dkt. #61) 6 n.3.)

         “To prevail on a motion for reconsideration under [Rule 59(e)], the movant must present either newly discovered evidence or establish a manifest error of law or fact.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (citation omitted). “A ‘manifest error' is not demonstrated by the disappointment of the losing party. It is the ‘wholesale disregard, misapplication, or failure to recognize controlling precedent.'” Id. (citation omitted). Consistent with this standard, Rule 59(e) is not meant to allow the parties “merely to relitigate old matters.” Diebitz v. Arreola, 834 F.Supp. 298, 302 (E.D. Wis. 1993).

         In their motion for reconsideration, plaintiffs re-hash their arguments that Rule 23 is “not an available mechanism to resolve Wisconsin prevailing wage laws” -- an argument that the court previously considered and rejected, rendering it inappropriate for a motion for reconsideration under Rule 59.[1] In addition, plaintiffs contend that the court erred in applying Justice Scalia's plurality opinion in Shady Grove to hold that Rule 23 always superseded state class-action rules in federal court. 559 U.S. at 406-10 (citing the Rules Enabling Act, 28 U.S.C. § 2072(a)). Instead, plaintiff contends that the court should have followed Justice Stevens' opinion concurring in the judgement, which focused on the application of the Erie doctrine to the question at hand. Id. at 416-428; see also Id. at 410-416 (section of plurality opinion in which three judges join to oppose Justice Stevens' approach).

         As an initial matter, this court is not writing on a clean slate on the issue, since the Seventh Circuit has cited Justice Scalia's plurality opinion with approval. See Show v. Ford Motor Co., 659 F.3d 584, 586 (7th Cir. 2011). Even if the court were to apply Justice Stevens' approach, however, plaintiffs fail to cite any authority or develop any argument as to why the Wisconsin procedure for a representative prevailing wage lawsuit, Wis.Stat. § 66.0903(11)(a), is substantive and not procedural, requiring this court to apply the Wisconsin law under Erie. Instead, plaintiffs presume that it is a substantive rule (Mot. for Reconsideration (dkt. #62) ¶ 9), but that assumption does not hold up. On the contrary, Justice Stevens himself concurred in the judgement in Shady Grove because he found that the New York statute at issue, which restricted class actions in certain suits, was procedural, not substantive. Moreover, in Sawyer v. Atlas Heating & Sheet Metal Works, Inc., 642 F.3d 560, 562 (7th Cir. 2011), the court described procedures for certifying class actions as procedural, contrasting it with a statute of limitations, which is considered substantive. Id. at 562 (citing Shady Grove, 559 U.S. 393).

         Accordingly, the court sees no basis to revisit its decision to deny plaintiffs leave to amend their complaint to add a prevailing wage claim. Since such a representative claim would require class certification under Rule 23, it is simply too late to add that claim to the proposed hybrid FLSA collective action and class action overtime pay claims already at issue. As such, plaintiffs' motion for reconsideration is denied.

         II. Motions for Sanctions

         In a couple of pages at the end of its opposition to plaintiffs' motion for reconsideration, defendant urged the court to award its attorneys' fees in responding to plaintiffs' motion for reconsideration. (Def.'s Opp'n (dkt. #63).) In tepid support, defendant cites to Rule 11(b) and plaintiffs' flawed argument that this court should rely on Justice Stevens' concurrence. Worse still, in response to that request, plaintiffs filed their own, even more curious motion for sanctions. (Dkt. #64.) In their motion, plaintiffs argue that defendant's request for fees was unfair in light of plaintiffs' efforts to (1) seek reconsideration under Rule 54(b)[2] and (2) flush out the appropriate rule under Shady Grove to apply to the proposed prevailing wage claim in this case.

         Other than to note that plaintiffs should have developed their argument in their original motion to amend, rather than simply cite to a state law case without any explanation or analysis as to why a state procedure embraced in that case would govern a class action in federal court, the court will decline both motions for attorneys' fees.

         III. ...

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