CASTELLANOS-CONTRERAS v. DECATUR HOTELS, LLC

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018-administrative-practice-or-enforcement-policy29 C.F.R. § 790.18(a). The cases cited by the majority opinion, Bradley v. School Board of Richmond, 416 U.S. 696, 715-17, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974) (holding that "an appellate court must apply the law in effect at the time it renders its decision," unless such application would work a manifest injustice or there is statutory direction or legislative history to the contrary), and Landgrafv. USI Film Products., 511 U.S. 244, 286, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (holding that provisions of the Civil Rights Act of 1991 creating a right to recover compensatory and punitive damages for certain violations of Title VII, and providing for trial by jury if such damages are claimed, did not apply to Title VII case pending on appeal when the statute was enacted on retroactivity grounds), are inapposite to this case.

Fifth, the majority opinion's efforts to distinguish the underlying principles that govern this case from those applied by the Eleventh Circuit in Arriaga v. Florida Pacific Farms, L.L.C., 305 F.3d 1228 (11th Cir. 2002), are superficial and without merit. It is true that the Eleventh Circuit performed a direct plain language analysis of 29 C.F.R. §§ 531.32, 531.35, rather than a deferential reading of the DOL's interpretations as I have applied here, following the Supreme Court's cases. However, the Arriaga court's interpretations of the regulations are almost identical to the DOL's interpretations. The Eleventh Circuit concluded that "it is apparent that the line is drawn" between expenses that are for the benefit of the employer and those that can be charged to the employee "based on whether the employment-related cost[s][are] a personal expense that would arise as a normal living expense." Arriaga, 305 F.3d at 1243. "Uniforms provide an illustration of this dividing line. `Charges for rental uniforms,' when required by the employment, are considered to be primarily for the benefit of the eraployert[,] 29 C.F.R. § 531.32(c)[,]" because they would not arise from normal living. Id. at 1243-44. By contrast, "if the employer merely prescribes a general type of ordinary basic street clothing to be worn while working and permits variations in details of dress[,] the garments chosen would not be considered uniforms . . . and [are] therefore not primarily for the benefit of the employer" as their expense would be analogous to a typical living expense. Id. at 1244 (citations omitted) (first alteration in original) (quoting Ayres v. 127 Rest. Corp., 12 F.Supp.2d 305, 310 (S.D.N.Y. 1998), in turn quoting U.S. Dep't of Labor Wage Hour Field Operations Handbook § 30c12(f)) (quotation marks omitted).

In light of this plain language reading of the regulation, the Eleventh Circuit held that foreign guest workers' inbound "transportation cost[s][are] `an incident of and necessary to the employment,'" as their "employment necessitates that onetime transportation costs be paid." Arriaga, 305 F.3d at 1242 (quoting 29 C.F.R. § 531.32(a), (c)). Therefore, these costs must be borne by the employer. Id. at 1242-43. Similarly, the "visa costs here were necessitated by" the employers' use of the guest worker program. Id. at 1244. "By participating in the . . . program, the [employers] created the need for these visa costs, which are not the type of expense they are permitted to pass on to the" workers. Id.

The Eleventh Circuit did hold that the recruitment fees at issue in that case did not need to be reimbursed. Arriaga, 305 F.3d at 1244-45. However, this was only "[b]ecause the principles of agency law d[id] not hold the [employers] responsible for the recruitment fees." Id. at 1245. Nonetheless, under the Eleventh Circuit's logic, had the recruiters been found to be the employers' agents, as the Hotel Workers in the instant case allege and adduce evidence to show, the court would have held that recruitment costs also must be reimbursed. It would have been an expense incidental to and incurred for the benefit of the employers.

The majority also would have us ignore the entirety of Arriaga because it addresses H-2A rather than H-2B workers; "H-2A" denoting that the guest workers at issue were involved in agricultural work, rather than non-agricultural work for which H-2B visas are issued. 8 C.F.R. § 214.2(h)(1)(ii) (distinguishing H-2A from H-2B workers based on whether they were performing "agricultural work of a temporary or seasonal nature"). Yet this argument fails to recognize relevant cases and contradictory facts. Specifically, the Eleventh Circuit has adopted and applied Arriaga's reasoning in the H-2B context as well. See Morante-Navarro v. TY Pine Straw, Inc., 350 F.3d 1163, 1165-66 n. 2 (11th Cir. 2003). So have several district courts. See Rosales v. Hispanic Employee Leasing Program, LLC, No. 1:06-CV-877, 2008 WL 363479 (W.D.Mich. Feb. 11, 2008) (unpublished); Rivera v. Brickman Group, Ltd., Civ. No. 05-1518, 2008 WL 81570 (E.D.Pa. Jan. 7, 2008) (unpublished); Recinos-Recinos v. Express Forestry Inc., No. Civ. A. 05-1355, 2006 WL 197030, at *14 (E.D.La. Jan. 24, 2006) (unpublished). Further, there is no reasoned basis on which to distinguish between H-2A and H-2B workers. The H-2A/H-2B distinction is a relatively new one. The regulations at issue were promulgated when the H-2A and H-2B programs were one and the same. See 29 C.F.R. §§ 531.30, 531.32, 531.35; Glen M. Krebs, H-2B or Not To Be, 56-Jul Fed. Law. 62, 62 (2009). Therefore, Arriaga should be recognized as pertinent precedent and the majority opinion should be understood as creating a circuit split without justification. Moreover, and perhaps most importantly, the DOL has approved of Arriagas analysis of the regulations as being consistent with its own, while criticizing the panel opinion in this case as being in conflict with the regulations.

Wage and Hour Division, U.S. Dep't of Labor, Field Assistance Bulletin No. 2009-2, at 9, 11 n. 5 (2009), available at http://www.dol.gov/whd/FieldBulletins/ FieldAssistanceBulletin2009_2.htm.

Sixth, the majority incorrectly asserts that "[t]he first time the Department specifically spoke to reimbursement in the context of alleged `kickbacks' like those at issue here was its announcement in 2008." Majority Op. 402. As quoted above, the DOL's 1986 opinion letter stated that "an employee who pays his or her own transportation must be reimbursed to the extent the wages received the first week of employment less the transportation costs total less than the minimum wage for all hours worked." Wage-Hour Opinion Letter, dated Nov. 28, 1986 (emphasis added). That is the precise circumstance presented in this case. The majority's statement that this letter speaks to deductions, not reimbursements, is belied by the quoted language. Majority Op. 402 n. 10. So is the majority's contention that this interpretation is limited to the specific facts presented in the opinion letter — the interpretation does not refer only to the specific employees of the employer in that case but to an employee generically. Majority Op. 402 n. 10.

The majority also argues the 1986 letter should be ignored because it was a "post hoc rationalization" of the agency's position, un-worthy of deference under Auer. Majority Op. 402 n. 10 (citing Auer, 519 U.S. at 462, 117 S.Ct. 905). It is unclear why the majority thinks this out-of-context quotation from Auer is applicable to the 1986 letter. The language from Auer reflected the Court's concern with whether and when it should defer to an agency position adopted for the purposes of the litigation at bar, not with providing deference to an agency position taken decades before the present litigation was initiated. Auer, 519 U.S. at 462, 117 S.Ct. 905 (noting that the fear of agency "post hoc rationalization" was in response to the Court possibly deferring to an agency amicus brief submitted in the case at bar, not deferring to prior agency interpretations (alteration omitted)). Moreover, the notion that the 1986 letter was developed in response to litigation appears baseless. The citations in the letter are to a District Court for the District of New Jersey judgment entered in October 1979, more than seven years before the letter was written. See Wage-Hour Opinion Letter, dated Nov. 28, 1986 (citing Marshall v. Glassboro Serv. Ass'n, Inc., No. 78-377, 1979 WL 1989 (D.N.J., Oct. 19, J 979)).
In a further effort to discredit the 1986 letter, the majority also falls back on some of its earlier platitudes, arguing the letter should be disregarded because it addressed H-2A, not H-2B, workers and it is "doubtful that even the most diligent employer could have readily accessed" the letter to know his or her responsibilities and thus might "not know the amount" he or she was required to pay the employees. Majority Op. 402 n. 10. However, as described above, the H-2A/H-2B distinction drawn by the majority is a false one, in no way supported by the majority's citations or analysis. Moreover, as already noted, an employer need not have relied upon the letter to discern its employees' rights to reimbursement for transportation, visa and recruitment expenses, as there were numerous other interpretations and regulations supporting employees' rights to the reimbursements sought in the instant case. The majority's concern that the minimum wage might be difficult to calculate is of no moment. Majority Op. 402 n. 10. The FLSA imposes a minimum wage requirement upon the defendants-employers and it must be satisfied.

Moreover, the 1986 letter is merely a clear and accurate illustration of the DOL's consistent position regarding the meaning of the FLSA. Wage-Hour Opinion Letter, dated Nov. 28, 1986. The regulation, 29 C.F.R. § 531.35, promulgated in 1967, prohibits "kickbacks" from the employee to the employer that reduce the employee's wage below the statutory minimum. As cited above, the DOL has also issued numerous other interpretations of the FLSA, all of which, prior to 2008, are consistent with the 1986 opinion letter. The DOL's amicus brief to this court and its 2009 Field Assistance Bulletin state that the agency's interpretation of its regulations has been consistent except for the 98 day period at the turn of 2008-2009; and these consistent interpretations are fully worthy of deference under the Supreme Court's decisions.

To the extent that the majority means to suggest that these clear and unequivocal agency interpretations should be disregarded because the DOL was not, at times, "enforcing" its interpretations, Majority Op. 402, such an argument is also erroneous. Auer requires us to give deference to an agency's interpretations of its regulations, not to its enforcement practices. See Long Island Care at Home, 551 U.S. at 171, 127 S.Ct. 2339 (quoting Auer, 519 U.S. at 461, 117 S.Ct. 905). The DOL's regulations, in place since 1947, state that "administrative practices and enforcement policies differ from . . . [the] decisions or views which the agency has set forth in its regulations, orders, rulings, approvals, or interpretations." 29 C.F.R. § 790.18(a). See also id. § 790.18(c) ("An administrative practice or enforcement policy may, under certain circumstances be at variance with the agency's current interpretation of the law."). Thus, that the DOL chose not to enforce certain regulations or interpretations in particular cases or periods should in no way be understood as altering the DOL's interpretations of the regulations themselves. Id. § 790.18(a), (c). Enforcement is a discretionary agency action. See Massachusetts v. EPA, 549 U.S. 497, 527, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) ("As we have repeated time and again, an agency has broad discretion to choose how best to marshal its limited resources and personnel to carry out its delegated responsibilities."). Under the FLSA, these plaintiffs have an independent right of action that is anchored in the statute's rights and responsibilities, as properly interpreted by the Department of Labor. See 29 U.S.C. § 255.

Seventh, the majority contends that the Hotel Workers "proffered no evidence to support the concept that Decatur required any recruitment fees to be paid to the foreign recruiters or that it required the Workers to use these recruiters to apply to Decatur." This is not true. Even under the majority's incomplete and distorted view of the district court's order, the majority recognizes that the district court explicitly stated that additional discovery was required before it could resolve any of the disputed issues of fact pertaining to Decatur's alleged liability for the reimbursement of visa, transportation and recruitment costs. As demonstrated above, the plaintiffs introduced numerous declarations suggesting that the recruiters acted as the defendants' agents and charged fees for their recruitment services. Consequently, the majority errs here, in addition to its errors discussed above, in failing to remand this case in order to allow the district court to consider and decide this controverted factual issue.

For these reasons, I respectfully but vigorously dissent from the majority opinion's refusal to defer to the Secretary's and DOL's reasonable interpretations of the agency's own valid regulations under the FLSA and from the majority's order to the district court to enter a final judgment dismissing the plaintiffs' claims for unpaid minimum wages without a trial on the merits.

III.

This court of appeals has jurisdiction under 28 U.S.C. § 1292(b) to address the issue of whether the FLSA applies to H-2B workers; it does not have jurisdiction to address whether the hotels violated the FLSA, or whether the hotels owe the workers reimbursement for transportation, visa or recruitment expenses, because those issues are part of the merits of the case and are not material to the order issued by the district court that simply held that the FLSA applies to H-2B workers.

Section 1292(b) provides, in pertinent part:

When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of Jaw as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals . . . may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order. . . .

28 U.S.C. § 1292(b).

Under § 1292(b), a court of appeals can "exercise jurisdiction over any question that is included within the order that contains the controlling question of law identified by the district court." Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 204, 116 S.Ct. 619, 133 L.Ed.2d 578 (1996) (quoting Yamaha Motor Corp., U.S.A. v. Calhoun, 514 U.S. 1126, 115 S.Ct. 1998, 131 L.Ed.2d 999 (1995)) (internal quotation marks omitted). But to be included within the order, the question must at least be material to that order. See Note, Interlocutory Appeals in the Federal Courts Under 28 U.S.C. § 1292(b ), 88 Harv. L. Rev. 607, 629 (1975) (stating that the "scope of review [includes] all issues material to the order in question"), quoted in Yamaha, 516 U.S. at 205, 116 S.Ct. 619. As this court succinctly put it in Adkinson v. International Harvester Co.: "An appeal under 28 U.S.C. § 1292(b) is from the certified order of the district court, not from any other orders that may have been entered in the case." 975 F.2d 208, 211 n. 4 (5th Cir. 1992) (citing United States v. Stanley, 483 U.S. 669, 677, 107 S.Ct. 3054, 97 L.Ed.2d 550 (1987)). "Our jurisdiction, although not confined to the precise question certified by the district court, is confined to the particular order appealed from." Id. (citing Stanley, 483 U.S. at 677, 107 S.Ct. 3054). "In short, on a certified interlocutory appeal under section 1292(b), we have jurisdiction to hear only questions that are material to the lower court's certified order." Id. (citing United States v. Fleet Factors Corp., 901 F.2d 1550, 1554 n. 2 (11th Cir. 1990)).

Here, the order issued by the district court simply holds that "H-2B guestworkers are entitled to the protections of the FLSA," Castellanos-Contreras v. Decatur Hotels, L.L.C., 488 F.Supp.2d 565, 566 (E.D.La.), amended in part by Castellanos-Contreras v. Decatur Hotels, L.L.C., No. 06-4340, 2007 WL 6867035 (E.D.La. July 19, 2007) (unpublished) — that is, that the FLSA applies to H-2B workers period. A fair and commonsense reading of the district court's opinions shows that this simple holding of law is all the district court judge intended, and all the defendants originally intended — that this court review and either affirm or reverse on interlocutory appeal. No other reading of the district court's opinions makes any sense. The district judge said repeatedly that he was not deciding whether the defendants had violated the FLSA, or whether the defendants owed the workers reimbursement of any transportation, visa or recruitment expenses. Id. at 572 n. 5 ("[W]hether or not the Defendants have violated the FLSA is a factual issue that is not appropriate for summary judgment."); Castellanos-Contreras, 2007 WL 6867035, at *2 ("[T]he Court . . . refus[es] to determine, as a matter of law, whether or not the FLSA has been violated in this case. . . ."). Further, the district court refused to stay further proceedings pending resolution of this interlocutory appeal, but instead "allow[ed] discovery to proceed uninhibited." Castellanos-Contreras, 2007 WL 6867035, at *2. As an experienced district court judge, he evidently anticipated that this court would affirm his order that the FLSA applies to this case and that he would have to try the merits issues of the case, including violations vel non, and, if there were violations, reimbursements vel non. As a very competent trial judge, he would not have certified or requested that we review issues that he had not yet tried or decided, viz., whether the defendants had violated the FLSA and, if so, whether they owed the plaintiffs reimbursements. His plain intention was to issue an order deciding the "threshold legal issue in this case, namely whether the FLSA applies to non-agricultural guestworkers brought to the United States under the H-2B program," 488 F.Supp.2d at 567, and, if this court affirmed, to proceed to trial on the merits. He did not intend to shirk his duty and allow this court to decide the case on the merits, including violation and reimbursement issues; he merely intended to have us resolve the threshold legal issue of FLSA applicability before expending further significant judicial trial court resources.

Because the order the district court certified for our review was only the threshold legal ruling that the FLSA applies to H-2B workers, the questions of the defendants' alleged violations and reimbursement obligations plainly are not material or even relevant to the certified threshold legal order. Once we decide that the district court correctly held that the FLSA applies, that decision will stand no matter what the district court ultimately decides in respect to whether there were violations or whether reimbursements are due. Thus, these questions going to the merits of this particular case are simply not material or relevant to the threshold question of whether the FLSA applies to H-2B workers. Accordingly, the violations and reimbursement issues are not material to the district court's certified order and are not properly before us. See Adkinson, 975 F.2d at 211 n. 4.

Viewed in this light, the present case is ultimately a simple one in which the certified order and the certified question are coterminous and virtually identical. The order that the district court certified was that the FLSA applies to H-2B workers; the question that the district court certified is whether the FLSA applies to H-2B workers. However, even in more complicated cases in which the certified order and the certified question are not closely similar, this court and others have adhered to the same principle that courts of appeals have jurisdiction under § 1292(b) to hear only questions that are material to the district court's certified order.

For instance, in Link v. Mercedes-Benz of North America, Inc., the Third Circuit refused to consider on § 1292(b) interlocutory appeal the issue of "whether there may be separate juries utilized during the liability and damage phases of a bifurcated trial" because the portion of the district court decision addressing that question was not "definitive, effective, and in a posture capable of affirmance or reversal." 550 F.2d 860, 861, 863 (3d Cir. 1977) (en banc). The district court had opined about the inefficiencies inherent in a bifurcated trial and had contemplated alternatives. Id. at 863. However, it had "entered no order directing separate juries and whether it [would do so was] a matter of pure speculation" at the time of the interlocutory appeal. Id. at 864. Therefore, the appellate court found that deciding the question of separate juries would not only be improper under § 1292(b), but would be an unconstitutional exercise of its jurisdiction because its judgment would be "an advisory opinion." Id. at 864-65.

Here, all that has happened with this case is that the district court has determined that the FLSA applies to H-2B foreign temporary workers. Therefore, to reach an entirely distinct determination, not resolved by the district court, such as whether the defendants are liable under the FLSA for the visa, transportation and recruiter fee reimbursements sought by the plaintiffs, would be improper under § 1292(b). That question is neither contained within, nor material to our reviewing of the order appealed from deciding only that the FLSA applies to the wages of H-2B foreign temporary workers.

Likewise, in Adkinson, our court recognized that the district court had decided only one legal issue in its order denying summary judgment (namely, "whether the Mississippi Supreme Court would apply principles of contribution and indemnity to a breach of implied warranty of merchant-ability claim," 975 F.2d at 211-12), and therefore determined that the other issues the appellant sought to raise on appeal (timely notification and proximate cause, id. at 211 n. 4) were "not material to the District Court's order" and hence "not properly before us," id. at 211 n. 4. The court in Adkinson followed the principle that "we have jurisdiction to hear only questions that are material to the lower court's certified order." Id. The questions that were "not properly before us" were not material to the question the district court had decided: whether contribution and indemnity principles applied under Mississippi law had nothing to do with whether a party had given timely notification or whether a party's breach of warranty had proximately caused harm to another party. Id. at 211-12 n. 4.

In the instant case, the issues of whether the defendants violated the FLSA and whether they owe any reimbursements are just like the issues of notification and proximate cause in Adkinson: They are not properly before us because they are not material to the district court order from which this interlocutory appeal was taken. The district court did not need to decide those subsidiary issues in order to decide whether the FLSA has any application at all to this case, and the judge explicitly and repeatedly wrote that he was deciding only whether the FLSA applied. Just as in Adkinson, the additional issues the appellants seek to raise are not properly before this court.

Again, in Withhart v. Otto Candies, L.L.C., 431 F.3d 840 (5th Cir. 2005), our court recognized the "limited" nature of "[o]ur appellate jurisdiction under § 1292(b)" and did not review additional mixed questions of law and fact that went beyond the "`controlling question of law'" that the district court's order had decided. Id. at 841 (quoting 28 U.S.C. § 1292(b) and Malbrough v. Crown Equip. Corp., 392 F.3d 135, 136 (5th Cir. 2004)). The legal questions material to the district court's order were "whether general maritime law recognizes suits by vessel owners for property damage caused by negligent seamen," and if so, "whether the Jones Act or the FELA precludes" such claims. Id. at 842-43. This court therefore emphasized that it had jurisdiction to review "only" whether the appellant could assert such a claim, and not whether the claim could succeed, i.e., whether the defendant seaman was liable. Id.

In this case, likewise, the district court decided a "controlling question of law" (whether the FLSA applies to H-2B workers) in the order certified for interlocutory appeal; it expressly did not decide the mixed question of law and fact concerning whether the defendants are actually liable for reimbursing visa, transportation and recruitment costs to the plaintiffs under the FLSA. Just as in Withhart, "our review is limited" to the certified order holding that the FLSA applies to H-2B workers; we do not have jurisdiction to reach the subsequent, immaterial questions concerning whether the defendants violated that law and are liable for reimbursements.

"The manifest purpose of § 1292(b) is to support appeal from orders that cannot otherwise be reviewed by final judgment appeal or interlocutory appeal under some other provision of § 1292(b)." 16 Charles Alan Wright et al., Federal Practice and Procedure § 3929.1, at 400 (2d ed. 1996 Supp. 2010). It is self-evident that the purpose of § 1292(b) is not to undermine 28 U.S.C. § 1291's requirement of final judgment on the merits of a case before it may be appealed of right. "The basic requirement for interlocutory appeal under § 1292(b) is that the district court have made an order" that is not otherwise appealable, but has "some concrete effect." Id. § 3930, at 416-17. A district court's mere speculation on the consequences of one possible trial resolution of disputed factual issues is not ripe for review under § 1292(b). See id.

No one can reasonably dispute that the district court has never tried the merits of the present case, which include the issues of FLSA violations and reimbursement vel non; that the judge in fact stated repeatedly they were not ripe for trial; and that he therefore refused to stay the trial court proceedings and allowed full discovery to proceed in preparation for trial. The majority opinion's argument that the district court somehow decided or issued an order on the merits of the case is simply an unfounded assertion that is without merit. The only concrete legal order made by the district court is the order that the FLSA applies to H-2B workers such as the plaintiffs in this case. That is the only order certified by the district court to this court in the interlocutory appeal. Because no judge on this court appears to disagree with the order that the FLSA applies to H-2B workers, it is this court's duty to affirm that order and to remand the case to the district court for trial on the merits, including whether the defendants have violated the FLSA and, if so, whether they owe reimbursements to the plaintiffs.

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For these reasons, I respectfully but emphatically dissent.