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Blundell v. Home Quality Care Home Health Care Inc.

United States District Court, N.D. Texas, Dallas Division

January 3, 2018

SABRINA A. BLUNDELL, on behalf of Herself and all others similarly situated, and ALICIA K. MORGAN, on behalf of Herself and all others similarly situated, Plaintiffs,
v.
HOME QUALITY CARE HOME HEALTH CARE, INC. d/b/a Bethany Home Health Services, BRADLEY P. LASSITER, and WYNDALL S. LANDERS, Defendants.

          MEMORANDUM OPINION AND ORDER

          DAVID L. HORAN, UNITED STATES MAGISTRATE JUDGE.

         Background

         This case has been referred to the undersigned United States magistrate judge for pretrial management under 28 U.S.C. § 636(b) and a standing order of reference from United States District Judge Sam A. Lindsay. See Dkt. No. 18.

         On November 29, 2017, the Court determined that, in the interest of justice and to appropriately control the Court's docket, this case should be stayed until the automatic stay as to Defendant Home Quality Care Home Health Care, Inc., d/b/a Bethany Home Health Services is lifted, either by conclusion of the bankruptcy or an order from the bankruptcy court granting relief from the automatic stay, and therefore ordered that, because Plaintiffs Sabrina A. Blundell and Alicia K. Morgan's claims against Defendant Home Quality Care Home Health Care, Inc., d/b/a Bethany Home Health Services are subject to 11 U.S.C. § 362(a)'s automatic stay protections and, in an exercise of the Court's sound discretion, the case should also be stayed as to Plaintiffs Sabrina A. Blundell and Alicia K. Morgan's claims against the non-debtor co-defendants Bradley P. Lassiter and Wyndall S. Landers, subject to this stay's being lifted upon the motion of any party once the 11 U.S.C. § 362 automatic stay is lifted - either by conclusion of the bankruptcy or an order from the bankruptcy court granting relief from the automatic stay - and all pending, unexpired deadlines are terminated. See Dkt. No. 40 (the “Order”).

         Plaintiffs have filed a Motion to Modify the Magistrate Judge's Order Staying this Case. See Dkt. No. 41 (the “Motion to Modify”). They ask the Court to “modify the Order staying this lawsuit in order to: (a) toll the statute of limitations under the federal Fair Labor Standards Act (‘FLSA') as to all claims of all absent collective action members against Defendant Home Quality Care Home Health Care, Inc. d/b/a Bethany Home Health Services (‘Bethany'), Bradley P. Lassiter (‘Lassiter'), and Wyndall S. Landers (‘Landers') (collectively ‘Defendants') for a time period equaling the pendency of the subject bankruptcy proceeding by Bethany; and (b) require Defendants to maintain and preserve all data identified in 29 C.F.R. § 516.2 relative to Plaintiffs and the putative FLSA collective action members in addition to the last known mailing address, phone number(s), and e-mail address(es) for each of the FLSA putative collective action members for the time period of July 27, 2014 and forward, ” id. at 1-2 (footnote omitted).

         Plaintiffs explain that “[t]he reason for this requested modification is because, unlike Rule 23 class actions, the FLSA limitations period is not tolled for absent collective action members upon the filing of the lawsuit. Instead, the limitations period for FLSA putative collective action members continues to run until each such individual files a consent to join the lawsuit as an opt-in plaintiff pursuant to 29 U.S.C. § 216(b)” and that, “[a]ccordingly, as the Court has stayed this case indefinitely as to all Defendants during the pendency of Bethany's bankruptcy action, absent collective action members will suffer irreparable harm as they will lose their right to seek recovery of some or all damages from Landers and/or Lassiter due to the running and/or expiration of their FLSA statute of limitations once this lawsuit resumes.” Id. at 2.

         Plaintiffs' counsel “represents to the Court that he has found no case law on point to the issue before this Court - whether equitable tolling should be allowed in situations where the district court stays a FLSA case against all defendants due to bankruptcy proceedings of one of the defendants prior to conditional certification and close of the notice period” - and asserts that “[t]he absence of such case law supports Plaintiffs' position that this is a ‘rare and exceptional' circumstance which warrants equitable tolling of the FLSA limitations period for absent collective action members.” Id. at 5. According to Plaintiffs, “[a] review of the docket in this case shows that Plaintiffs have acted ‘diligently' and that the delay in putative collective action members being issued court-ordered notice and the opportunity to opt-into this case is due to the extraordinary circumstances of Bethany's bankruptcy filing and this Court's ruling extending the bankruptcy stay provisions to Lassiter and Landers, Defendants who are not otherwise subject to the Section 362 bankruptcy stay provision, ” and “a ‘strict application' of the FLSA limitations period in this case by not tolling the FLSA limitations period would result in the type of ‘harsh' application of the limitations period cautioned against by the Fifth Circuit.” Id. at 5-6 (quoting Orozco v. Anamia's Tex-Mex Inc., No. 3:15-cv-2800-L-BK, 2016 WL 6311237, at *1 (N.D. Tex. Oct. 6, 2016), rec. adopted, 2016 WL 6277843 (N.D. Tex. Oct. 27, 2016); United States v. Patterson, 211 F.3d 927, 931 (5th Cir. 2000)). Invoking Federal Rules of Civil Procedure 60(a) and 60(b)(6) in support of their requests, Plaintiffs explain that they “believe the Court did not intend to cut off the ability of FLSA putative collective action members to assert their claims for damages against Lassiter and Landers in issuing its Order.” Id. at 8.

         As to their second request, Plaintiffs assert that, “[f]urthermore, unless Defendants are ordered to retain and preserve the data requested herein, issuing notice to putative collective action members and/or having access to records relative to their damage calculations may be lost or destroyed.” Id. at 2.

         Through the Motion to Modify, “Plaintiffs, on behalf of themselves and the putative collective action members, ask that [the Court] modify the Order to toll the FLSA statute of limitations and require Defendants to maintain and preserve the requested data” and that, “[i]n the event the Court declines to grant that relief, ... that the Court modify the Order so as to permit the case to resume against Lassiter and Landers while severing the claims against Bethany.” Id. (footnote omitted).

         Lassiter and Landers respond that no extraordinary circumstances are present to justify Rule 60(b)(6) relief, where “[n]o change in facts or circumstances has occurred since the briefing was completed with respect to the Briefs Regarding Suggestion of Bankruptcy filed by Plaintiffs (Dkt. 35) and Defendants (Dkt. 37)”; “[t]he fact that the statute of limitations is running for individuals who are not parties to the case has been true since the date Plaintiffs decided to file their lawsuit, since Bethany filed a suggestion of bankruptcy, and since the briefing referenced above was completed”; and “Plaintiffs were not concerned about the running of the statute of limitations at that time.” Dkt. No. 43 at 1-2 (emphasis omitted).

         But “Defendants will agree to maintain any data in their possession, custody, and control and do not oppose that portion of Plaintiffs' Motion” to Modify. Id. at 2.

         Plaintiffs reply that “Defendants' Response appears to advance the argument that an order may only be modified under the following limited circumstances: (1) mistake, (2) newly discovered evidence, (3) fraud, (4) a void or satisfied judgment or (5) any other reason that justifies relief after a showing of extraordinary circumstances, ” but Plaintiffs contend that “this Court has broad discretion under Rule 60 to modify its order and may do so either upon motion or sua sponte, with or without notice.” Dkt. No. 44 at 1-2.

         Plaintiffs explain that they “hold a good-faith belief that, in issuing its order, the Court did not intend to deny the FLSA putative collective action members the ability to assert their claims for damages against non-debtor defendants Lassiter and Landers” and that, “[s]hould this be the case, this Court would not be bound by the ‘limited circumstances' suggested in Defendants' Response” but, rather, “the plain language of [Rule 60(a)] allows district courts to modify orders based on oversights either ‘on motion or on its own, with or without notice.'” Id. at 3-4 (quoting Fed.R.Civ.P. 60(a)).

         Plaintiffs also argue that, while Defendants further argue “that (1) before an order may be modified under FRCP 60(b)(6), there must be ‘a showing of extraordinary circumstances' and (2) that ‘[n]o extraordinary circumstances are present here, '” “Plaintiffs specifically set forth in their Motion to Modify the ‘rare and exceptional circumstances' which ...


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