Ninth Circuit: State Law Claims Survive Despite Conflict between Class Certification Mechanisms | Practical Law

Ninth Circuit: State Law Claims Survive Despite Conflict between Class Certification Mechanisms | Practical Law

In Busk v. Integrity Staffing Solutions, Inc., the US Court of Appeals for the Ninth Circuit held that conflicting class certification mechanisms under the Fair Labor Standards Act (FLSA) and Federal Rule of Civil Procedure (FRCP) 23 do not warrant dismissal of plaintiffs' state law claims. While the Ninth Circuit's decision is in line with the circuit courts that have considered this issue, practitioners should note that district courts in other circuits remain divided.

Ninth Circuit: State Law Claims Survive Despite Conflict between Class Certification Mechanisms

by PLC Litigation
Published on 16 Apr 2013 • USA (National/Federal)
In Busk v. Integrity Staffing Solutions, Inc., the US Court of Appeals for the Ninth Circuit held that conflicting class certification mechanisms under the Fair Labor Standards Act (FLSA) and Federal Rule of Civil Procedure (FRCP) 23 do not warrant dismissal of plaintiffs' state law claims. While the Ninth Circuit's decision is in line with the circuit courts that have considered this issue, practitioners should note that district courts in other circuits remain divided.
In an April 12, 2013 decision, Busk v. Integrity Staffing Solutions, Inc., the US Court of Appeals for the Ninth Circuit held that conflicting class certification mechanisms under the Fair Labor Standards Act (FLSA) and FRCP 23 do not warrant dismissal of plaintiffs' state law claims. While the Ninth Circuit's decision is in line with the circuit courts that have considered this issue, practitioners should note that district courts in other circuits remain divided.
The plaintiffs are former hourly employees of defendant Integrity Staffing Solutions (ISS), which provides warehouse space and staffing to its clients. Plaintiffs sued ISS on behalf of a putative class of workers under the FLSA and Nevada state law, claiming they were not compensated for time they spent undergoing security screenings and walking to the company cafeteria during lunchtime. The district court dismissed the plaintiffs' state law claims on several grounds, including the existence of a conflict between the class certification mechanisms of the FLSA and FRCP 23. Under the FLSA, plaintiffs must opt into a collective action to benefit from a judgment. Under FRCP 23, which governs class actions alleging state law claims, putative class members must opt out to be excluded from the class.
In its decision, the Ninth Circuit:
  • Reversed the district court's dismissal of plaintiffs' state law claims on the ground that they are incompatible with the FLSA.
  • Rejected ISS's argument that allowing the FLSA and FRCP 23 classes to proceed simultaneously would be unnecessarily confusing to potential class members.
  • Noted that district courts could devise adequate notices to plaintiffs in these types of actions.
In the Ninth Circuit, and every other circuit to consider the issue, conflicting opt-in and opt-out procedures for class actions asserting federal and state law claims do not warrant dismissal of the state law claims. However, practitioners must be aware that some district courts in other circuits continue to hold otherwise.
Court documents: