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Payne v. Tri-State Careflight, LLC

United States District Court, D. New Mexico

June 21, 2018

WILLIAM D. PAYNE; NICOLE PAYNE; LESLIE B. BENSON; KEITH BASTIAN; JACQUELINE FERNANDEZ-QUEZADA; CASON N. HEARD; GREGORY OLDHAM and SHERRY K. WELCH, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
TRI-STATE CAREFLIGHT, LLC, and BLAKE A. STAMPER, individually, Defendants.

          Christopher M. Moody Repps D. Stanford Alice Kilborn Moody & Warner, P.C. Albuquerque, New Mexico Attorneys for the Plaintiffs

          Charles J. Vigil Jeffrey L. Lowry Melanie B. Stambaugh Rodey, Dickason, Sloan, Akin & Robb, P.A. Albuquerque, New Mexico Attorneys for the Defendants

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) Plaintiffs' Opposed Fed.R.Civ.P. 42(a)(1) & (a)(2) Motion to Consolidate, filed October 19, 2017 (Doc. 178)(“Motion to Consolidate”); and (ii) Defendants' Motion to Strike or Dismiss Third Amended Complaint, filed November 1, 2017 (Doc. 180)(“Motion to Strike”). The Court held a hearing on June 5, 2018. The primary issues are: (ii) whether the Bell v. Tri-State CareFlight, LLC, No. CIV 17-0796 KG Stipulated Order Granting Defendants' Motion to Transfer Related Case to Honorable James O. Browning, filed October 6, 2017 (Doc. 15)(“Transfer Order”), consolidated Bell v. Tri-State CareFlight, LLC, with this case, and, if not, whether the Court should consolidate the cases pursuant to rule 42(a)(2) of the Federal Rules of Civil Procedure; and (ii) whether the Court should strike or dismiss the Plaintiffs' Third Amended Representative and Class Action Complaint for Damages for Violations of New Mexico Minimum Wage Act and New Mexico Common Law, filed October 4, 2017 (Doc. 177)(“Complaint”) in light of the Court's prior entry of Final Judgment, filed November 23, 2016 (Doc. 150). The Court concludes that: (i) the Transfer Order did not consolidate the cases, but the Court will consolidate the cases now; and (ii) the Court need not strike the Complaint in light of the Final Judgment, but the Court will not require the Defendants to answer the Complaint unless and until the Court determines that the Complaint is operative. Accordingly, the Court grants the Motion to Consolidate and denies the Motion to Strike.

         FACTUAL BACKGROUND

         Defendant Tri-State Careflight, LLC operates an air ambulance service in New Mexico, Arizona, Colorado, and Nevada. See Complaint ¶ 11, at 4. Tri-State CareFlight operates a fleet of aircraft, which it staffs with pilots and trained medical personnel. See Complaint ¶ 9 at 3. Tri-State CareFlight and Defendant Blake Stamper are or were employers within the definition of the New Mexico Minimum Wage Act, N.M. Stat. Ann. §§ 50-4-1 through 50-4-33 (“NMMWA”). Complaint ¶ 7, at 3. This case is a wage-and-hour dispute. See Complaint ¶ 1, at 2. The Plaintiffs seek to recover unpaid overtime compensation under the NMMWA and other unpaid compensation on a theory of unjust enrichment. See Complaint ¶¶ 95-128, at 12-18.

         PROCEDURAL BACKGROUND

         In September, 2014, William D. Payne and Nicole Payne, “on behalf of themselves and all others similarly situated, ” filed their original complaint against Tri-State CareFlight and Stamper. Representative Action Complaint for Damages for Violation of New Mexico Minimum Wage Act and Unjust Enrichment at 1, Payne v. Tri-State Careflight, LLC, D-101-CV-2014-02048 (First Judicial District, County of Santa Fe, State of New Mexico)(Montes, J.), filed November 17, 2014 in federal court (Doc. 1-1)(“Original Complaint”). Tri-State CareFlight and Stamper removed the case to federal court on November 17, 2014. See Notice of Removal, filed November 17, 2014 (Doc. 1)(“Notice of Removal”). They based removal on the Court's diversity jurisdiction. See Notice of Removal ¶ 4, at 2.

         On August 24, 2015, W. Payne and N. Payne moved to amend the Original Complaint to: (i) eliminate a claim for certain uncompensated travel time from the Original Complaint; and (ii) add an additional named Plaintiff -- Leslie B. Benson. See Plaintiffs' Amended Opposed Motion for Leave to File First Amended Complaint, filed August 24, 2015 (Doc. 44)(“First Motion to Amend”). On September 4, 2015, W. Payne and N. Payne filed Plaintiffs' Motion for and Brief in Support of Class Certification, filed September 4, 2015 (Doc. 48)(“First Motion for Class Cert.”).[1] The Court held a hearing on the First Motion to Amend on October 28, 2015. See Clerk's Minutes, filed October 28, 2015 (Doc. 67)(“Oct. 28th Clerk's Minutes”); Notice of Motion Hearing, filed October 16, 2015 (Doc. 64). At an October 28, 2015, hearing, the Court granted the First Motion to Amend. See Oct. 28th Clerk's Minutes at 1; Order at 1, filed March 14, 2016 (Doc. 112). Later that day, W. Payne and N. Payne filed their First Amended Representative Action Complaint for Damages for Violation of New Mexico Minimum Wage Act, filed October 28, 2015 (Doc. 68)(“Amended Complaint”).[2]

         By November, 2015, W. Payne, N. Payne, and Benson resolved their individual claims against the Defendants. On November 19, 2015, the Paynes reached a settlement with the Defendants in which the Defendants agreed to provide them with full relief under the NMMWA, i.e., all the relief they requested in the Amended Complaint. See Memorandum Opinion and Order at 47, 2016 WL 9738302, at *25, filed August 12, 2016 (Doc. 138)(“Intervenor MOO”). Benson, meanwhile, signed a global release of his claims against Tri-State CareFlight and Stamper on October 22, 2015. See Settlement Agreement and General Release at 1-3 (dated October 22, 2015), filed December 9, 2015 (Doc. 71-1).

         With W. Payne, N. Payne, and Benson's claims resolved, a new set of named Plaintiffs -- Keith Bastian, Cason N. Heard, Gregory Oldham, Sherry K. Welch, and Jacqueline Fernandez-Quezada -- sought to keep the case alive by intervening pursuant to rule 24 of the Federal Rules of Civil Procedure. See Opposed Motion to Intervene as Parties Plaintiff and Class Representatives at 1, filed December 15, 2015 (Doc. 73)(“First Intervention Motion”). In the First Intervention Motion, the intervenors asserted:

[N]one of the currently named Plaintiffs will be able to pursue this matter either individually or on behalf of the putative class members who were deprived of overtime pay pursuant to Defendants' uniform and unlawful overtime policies applicable to flight nurses, flight paramedics and pilots. Intervenors seek to pick up the prosecution of this lawsuit where the current Plaintiffs are soon to depart.

         First Intervention Motion at 2.

         As the First Intervention Motion was pending, the Defendants moved the Court, pursuant to rule 56 of the Federal Rules of Civil Procedure, to enter summary judgment in their favor, and to dismiss all claims in the Second Amended Complaint in their entirety and with prejudice. See Defendants Tri-State Careflight, LLC, and Blake A. Samper's Motion for Summary Judgment and Memorandum Brief in Support at 1, filed March 1, 2016 (Doc. 110)(“MSJ”). The Defendants argued that federal law preempts the Named Plaintiffs' state-law claim for the alleged NMMWA violation and the state-law claim for unjust enrichment. See MSJ at 1. The Named Plaintiffs opposed the Defendants' MSJ, and also filed their Motion to Exclude Consideration of New Law or New Argument Raised in Defendants' Reply to the Motion for Summary Judgment or, in the Alternative, to Permit Plaintiff to File a Surreply, filed on May 2, 2016 (Doc. 123)(“Motion to Exclude”), as a result of the Defendants' MSJ.

         On August 12, 2016, the Court, pursuant to rule 24(b) of the Federal Rules of Civil Procedure, granted the First Intervention Motion, permitting Bastian, Heard, Oldham, Welch, and Fernandez-Quezada to intervene as Plaintiffs. See Intervenor MOO at 1-2. The Court determined, among other things, that the apparent resolution of W. Payne, N. Payne, and Benson's claims “did not render this case moot under Article III because the personal stake of the indivisible class may inhere prior to a definitive ruling on class certification.” Intervenor MOO at 41 (citing Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1244-47 (10th Cir. 2011)).

         In October, 2016, the Court denied the Defendants' MSJ, concluding that Congress “has not preempted the field of labor regulation for railroad and airline workers, and the present dispute does not involve the interpretation of a collective bargaining agreement.” Memorandum Opinion and Order at 2, Payne v. Tri-State Careflight, LLC, No. CIV 14-1044, 2016 WL 6396214, at *1 (D.N.M. Oct. 25, 2016), filed October 25, 2016 (Doc. 147)(“MSJ MOO”). In the same ruling, the Court also determines that “the Defendants raised a new issue of law in their reply in support of their Motion for Summary Judgment, to which the Named Plaintiffs may reply with a surreply should they deem it appropriate.” MSJ MOO at 2.

         On November 2, 2016, the Defendants offered, under rule 68 of the Federal Rules of Civil Procedure, to pay the five named Plaintiffs -- Bastian, Heard, Oldham, Welch, and Fernandez-Quezada -- a specific amount of money plus their pre-offer “[a]ttorneys' fees and costs actually and reasonably incurred.” Offer of Judgement at 1 (dated November 2, 2016), filed November 17, 2016 (Doc. 149-1)(“Offer of Judgment”). The Offer of Judgment states: “By accepting this Offer of Judgment, Plaintiffs agree to the entry of the attached form of final judgment.” Offer of Judgment at 2. The Defendants informed the Court, on November 17, 2016, that those five Plaintiffs accepted the Defendants' rule 68 offer. See Notice of Acceptance of Rule 68 Offer of Judgment at 1, filed November 17, 2016 (Doc. 149)(“Acceptance Notice”). See also Email from Chris Moody, to Charles Vigil at 1 (dated November 16, 2016), filed November 17, 2016 (Doc. 149-1)(“Plaintiffs accept your offer of judgment.”). The Acceptance Notice states:

Defendants hereby notify the Court that Plaintiffs have accepted Defendants' Rule 68 Offer of Judgment. A copy of the accepted Offer of Judgment is attached as Exhibit A, a copy of the Form of Judgment incorporated by reference into the Offer is attached as Exhibit B, and Plaintiff's [sic] acceptance of the offer is attached as Exhibit C.

         Acceptance Notice at 1. Six days later, the Court took the Defendants' proposed final judgment and entered it with no changes. See Final Judgment at 1, filed November 23, 2016 (Doc. 150).

         On November 29, 2016, seventeen people sought to intervene in the case as named Plaintiffs. See Opposed Fed.R.Civ.P. 24(b) Motion and Supporting Memorandum to Intervene as Parties Plaintiff and Class Representatives, filed November 29, 2016 (Doc. 151)(“Motion to Intervene”). On June 27, 2017, fifty-two more people sought to intervene as named Plaintiffs into the case. See Opposed Fed.R.Civ.P. 24(B) Supplemental Motion and Supporting Memorandum to Intervene as Parties Plaintiffs and Class Representatives, filed June 27, 2017 (Doc. 166)(“Supp. Motion to Intervene”).

         On August 3, 2017, while the Court considered the Motion to Intervene and the Supp. Motion to Intervene, “a number of the proposed Plaintiffs/Intervenors filed a separate, but essentially duplicative” complaint in the United States District Court for the District of New Mexico, apparently to cover their bases vis-à-vis tolling concerns. Motion to Consolidate at 1. See Bell v. Tri-State CareFlight, LLC, No. CIV 17-0796 (“Bell”). Tri-State CareFlight and Stamper moved to transfer that case, Bell v. Tri-State CareFlight, LLC, No. CIV 17-0796 (“Bell”), from the Honorable Kenneth J. Gonzales, United States District Judge for the District of New Mexico, to the Court. See Bell, Defendants' Motion to Transfer Related Case to Honorable James O. Browning, filed September 26, 2017 (Doc. 11)(“Motion to Transfer”). In the Motion to Transfer, the Defendants state: “Pursuant to Rule 42(a)(3) of the Federal Rules of Civil Procedure, Defendants Tri-State CareFlight, LLC and Blake A. Stamper respectfully move the Court to transfer the above-captioned case to the Honorable James O. Browning.” Motion to Transfer at 1.

         On September 30, 2017, the Court granted the Motion to Intervene and the Supp. Motion to Intervene, which added sixty-nine current and former Tri-State CareFlight employees as named Plaintiffs. See Memorandum Opinion and Order at 60, 322 F.R.D. 647, 683, filed September 30, 2017 (Doc. 175)(“Intervention MOO”). In the Intervention MOO, the Court states:

First, the Court concludes that it has jurisdiction over the sixty-nine Proposed Intervenors pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(4)(A) (“CAFA”). Second, the Named Plaintiffs' settlement agreement did not render the Proposed Intervenors claims moot, because their personal stake in the class -- and, therefore, an Article III case or controversy -- inhered at the action's beginning. Third, relief from the Final Judgment is not necessary for the Proposed Intervenors to intervene. Fourth, the Motion to Intervene was timely, even though the Court had already entered a Final Judgment, because intervention will not unduly prejudice the Defendants.

         Intervention MOO at 2, 322 F.R.D. at 654. The Court also determines, in the Intervention MOO, that a nonparty may, in certain circumstances, intervene into a case in which a final judgment has been entered. See Intervention MOO at 55-56, 322 F.R.D. at 680. The Court states:

[T]he Proposed Intervenors need not disturb the Named Plaintiffs' Final Judgment in order to intervene; rather, they must first intervene before they can seek relief from the judgment.
Because intervention is a precondition for a nonparty to make a rule 60(b) motion, not the other way around, the Court concludes that the Named Plaintiffs' Final Judgment presents no insurmountable obstacle to the Proposed Intervenors' Motion to Intervene.

         Intervention MOO at 55-56, 322 F.R.D. at 680. The Court did not make a determination regarding whether the intervening Plaintiffs could proceed, notwithstanding the Court's Final Judgment, without obtaining relief from that Final Judgment via a motion under rule 60(b) of the Federal Rules of Civil Procedure. The Court also expressed its misgivings:

The Court arrives at this conclusion with reservations. First, the Court is skeptical that most motions to intervene after final judgment are timely, particularly here given that the Proposed Intervenors' attorneys also represent the Named Plaintiffs and therefore had a direct hand in reaching the settlement and entering the Final Judgment. The Proposed Intervenors, therefore, could not have been taken by surprise and presumably were capable of making their motion before the Final Judgment was entered. Second, the Court is not eager to deprive the Defendants of the benefit of that bargain: unlike the first settlements with the Original Plaintiffs, the Defendants took the rule 68 route with the Named Plaintiffs and deliberately negotiated for the Final Judgment. See Offer of Judgment at 2 (“By accepting this Offer of Judgment, Plaintiffs agree to the entry of the attached form of final judgment.”). The Defendants have not expressly stated why they bargained for the Final Judgment, but it could be precisely for this moment. One possibility is that, having unsuccessfully opposed the first motion to intervene, they figured a Final Judgment might make it harder for future intervenors. Another possibility is that the Defendants may want to do some judge-shopping: they may prefer to shut the case down before the Court and defend against the remaining claims that are undoubtedly on the way before another judge in a separate case. A third possibility is that they may want to force their opponents to file another case and pay another filing fee. Finally, and most likely, the Defendants may want to take advantage of any applicable statute of limitations and cut down on damages. See Tr. at 15:8-10 (Lowry)(“[W]e believe there are some people in the proposed class, assuming this proceeds as a class action, whose claims would be barred.”). By treating the Final Judgment like any other judgment -- i.e., not presuming that a post-final judgment intervention motion is untimely, or not requiring intervenors undo the final judgment via rule 60(b) before seeking intervention -- the Defendants may be deprived of the benefit of their bargain. That outcome looks a lot like prejudice. Also, simply ignoring rule 60(b)'s plain language, as the court does in United Airlines v. McDonald, seems misguided; rules should be construed like statutes, and under the rules of statutory construction, a statute's plain language should not be overlooked. See Lamie v. U.S. Trustee, 540 U.S. 526, 534 (2004)(“It is well established that when the statute's language is plain, the sole function of the courts -- at least where the disposition required by the text is not absurd -- is to enforce it according to its terms.”).
With respect to prejudice, the Court shares Justice Powell's misgivings expressed in his dissent in United Airlines v. McDonald, 432 U.S. 385, 399-400 (Powell, J., dissenting). The dissent asserted that allowing post-final judgment intervention in that case unduly prejudices the defendant, arguing that, because only named plaintiffs may appeal a certification denial, and the settlement ended the named plaintiffs' ability to appeal the denial, then no one remained to make the appeal -- not even an unnamed member of the putative class. See 432 U.S at 399-400 (Powell, J., dissenting). Thus, the dissent asserts, “[h]aving achieved a settlement of the case, [the defendant] was prejudiced by [the intervenor's] attempt to reopen the case.” 432 U.S. at 399 (Powell, J., dissenting). . The majority, meanwhile, stated that the defendant “can hardly contend that its ability to litigate the issue was unfairly prejudiced simply because an appeal on behalf of putative class members was brought by one of their own, rather than by one of the original named plaintiffs.” 432 U.S. at 394-95 (Powell, J., dissenting). .
The Court also shares the dissent's skepticism of the majority's “casual treatment of the prejudice” to a putative class action defendant who settles with all named plaintiffs. 432 U.S. at 399 (Powell, J., dissenting). Not only does the majority's approach risk prejudice to a defendant, but it does so by disregarding the judicial system's interest in settlements and finality, see 432 U.S. at 401 (Powell, J., dissenting)(“The Court also ignores the important ‘principle that (s)ettlement agreements are highly favored in the law and will be upheld whenever possible because they are a means of amicably resolving doubts . . . and preventing lawsuits.'” (quoting Pearson v. Ecological Sci. Corp., 522 F.2d 171, 176 (5th Cir. 1975))), and undermining public policy behind statute of limitations, see 432 U.S. 385, 400 (Powell, J., dissenting)(“Considerations of policy militate strongly against the result reached by the Court. Our cases reflect a long tradition of respect for statutes of limitations and the values they serve.”).

         Intervention MOO at 59-60 n.18, 322 F.R.D. at 682 n.18.

         Following the Intervention MOO, the parties' counsel began discussing a stipulated order to be filed in Bell vis-à-vis the Transfer Motion. On October 3, 2017, the Defendants' counsel wrote to the Plaintiffs' counsel:

What are your thoughts, in light of your agreement to not oppose consolidation, on the parties filing a joint motion with Judge Garza asking to vacate the JSR deadline and the scheduling conference?

         Email from Charles J. Vigil, to Christopher M. Moody and Repps D. Stanford at 3 (dated October 3, 2017), filed October 19, 2017 (Doc. 178-1). The Plaintiffs' counsel responded:

On our call we said that we would not oppose consolidation so long as there is no appeal of the intervention order. Thinking about it, I don't think you would have an appeal anyway so assuming that you agree not to try an interlocutory appeal, we are not opposing consolidation. If we are not opposing consolidation I think it makes sense to ask Judge Garza to vacate the JSR/scheduling conference and we submit an order of consolidation and then proceed with case scheduling before Judge Browning. In our experience Judge Garza is pretty available by phone so we might want to approach it that way.

         Email from Christopher M. Moody, to Charles J. Vigil and Repps D. Stanford at 3 (dated October 3, 2017), filed October 19, 2017 (Doc. 178-1). The Defendants responded: “Ok. Makes sense. We are not appealing the intervention order.” Email from Charles J. Vigil, to Christopher M. Moody and Repps D. Stanford at 3 (dated October 3, 2017), filed October 19, 2017 (Doc. 178-1).

         On October 4, 2017, the Defendants' counsel emailed the Plaintiffs' counsel a draft of the Stipulated Order, asking for the Plaintiffs' counsel's thoughts. See Email from Jeffrey L. Lowry, to Christopher M. Moody and Repps D. Stanford at 6 (dated October 4, 2017), filed October 19, 2017 (Doc. 178-1). The Plaintiffs' counsel responded: “The order looks fine except that we think it should refer to Rule 42(a)(2) rather than (a)(3). That's the part of the rule implicated in all the class cases involving consolidation that we have seen.” Email from Christopher M. Moody, to Jeffrey L. Lowry and Repps D. Stanford at 6 (dated October 4, 2017), filed October 19, 2017 (Doc. 178-1). The Defendants' counsel explained:

The motion cited Rule 42(a)(3) because it allows the most flexibility given the unusual circumstances and status of the two cases. Nevertheless, I don't know that we need to get hung up on the subparagraph. If we revise the order to cite Rule 42 without reference to any particular part of that rule, would that be acceptable?

         Email from Jeffrey L. Lowry, to Christopher M. Moody at 6 (dated October 4, 2017), filed October 19, 2017 (Doc. 178-1). Later that day, Defendants' counsel emailed Plaintiffs' counsel: “Here are the motion and order to vacate the Bell deadlines and scheduling conference as well as the final version of the stipulated order on the motion to transfer case. With your approval, I'll file / submit these today.” Email from Jeffrey L. Lowry, to Christopher M. Moody at 9 (dated October 4, 2017), filed October 19, 2017 (Doc. 178-1). The Plaintiffs' counsel replied: “Looks good.” Email from Repps D. Stanford, to Jeffrey L. Lowry and Christopher M. Moody at 9-10 (dated October 4, 2017), filed October 19, 2017 (Doc. 178-1). On the same day, the Plaintiffs filed the Complaint in this case, see Complaint at 1.

         On October 6, 2017, the Honorable Kenneth J. Gonzalez, United States District Judge of the District of New Mexico, approved Bell, Stipulated Order Granting Defendants' Motion to Transfer Related Case to Honorable James O. Browning, filed October 6, 2017 (Doc. 15) (“Transfer Order”). The Transfer Order states that the “Plaintiffs do not oppose” Tri-State FlightCare's Motion to Transfer and that Judge Gonzalez grants the Motion to Transfer. Transfer Order at 1. The Transfer Order concludes with the following: “Accordingly, pursuant to Rule 42 of the Federal Rules of Civil Procedure, IT IS HEREBY ORDERED that the above captioned case be transferred to the Honorable James O. Browning, who shall preside over all future proceedings.” Transfer Order at 1-2.

         On October 16, 2017, the Plaintiffs' counsel's paralegal, Anne Chavez, spoke with the Court's Courtroom Deputy, Michelle Behning, to determine whether Bell and this case had been consolidated. See Declaration of Anne Chavez ¶¶ 4-6, at 1 (dated November 15, 2017), filed November 15, 2017 (Doc. 181-2)(“Chavez Decl.”). Behning “confirmed that the cases had not formally been consolidated, and suggested that a motion to consolidate be filed if that was the direction Counsel wished to take.” Chavez Decl. ¶ 6, at 1. That same day, the Plaintiffs' counsel emailed the Defendants' counsel:

My paralegal spoke with Michelle at Judge Browning's chambers this morning regarding consolidation. We filed our reply brief on Friday only in the Bell case because we have not received any order consolidating the two cases from Judge Browning (just the notice from the clerk reassigning the Bell case to Judge Browning). Michelle told us that the two cases (Bell and Bastian or whatever we are calling it now) are not consolidated and that if we want them consolidated we need to file a motion. What do you think?

         Email from Christopher M. Moody, to Charles J. Vigil and Jeffrey L. Lowry at 10 (dated October 16, 2017), filed October 19, 2017 (Doc. 178-1). The Defendants' counsel responded:

Many thanks. Not being party to your paralegal's ex parte communications with Judge Browning's chambers, it is difficult for me to comment. We filed a motion to transfer the Bell case to Judge Browning and that is what was approved by Judge Gonzales. And, that is what has happened -- the Bell case is no[w] assigned to Judge Browning. It was most certainly never a motion to consolidate. . . . In any event, we believe consolidation is improper. To the extent Plaintiffs are entertaining making of such a motion, please be advised that the Defendants oppose and will oppose any motion to consolidate the two cases.

         Email from Charles J. Vigil, to Christopher M. Moody and Jeffrey L. Lowry at 10 (dated October 16, 2017), filed October 19, 2017 (Doc. 178-1)(emphasis in original).

         1. The Motion ...


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