Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 1 of 10. CASE NO CIV-ALTONAGA/Simonton ORDER

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1 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 1 of 10 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO CIV-ALTONAGA/Simonton ARLE CALDERON, et al., vs. Plaintiffs, FORM WORKS/BAKER JV, LLC, Defendant. / ORDER THIS CAUSE came before the Court on Defendant, Form Works/Baker JV, LLC s ( Defendant[ s] ) Motion to Amend Order... ( Motion ) [ECF No. 38], filed on September 6, Plaintiffs, Arle Calderon, Jose Cardenas, Andy Del Toro, Manny Fernandez, Williams Galantino, Adalberto Galo, Sergio Hernandez, Pedro Martinez, and Luis Molina (collectively, Plaintiffs ) filed a Response to Defendants [sic] Motion to Amend Order... ( Response ) [ECF No. 42] on September 23, Defendant filed its Reply... ( Reply ) [ECF No. 44] on September 27, The Court has carefully reviewed the parties written submissions, the record, and applicable law. I. BACKGROUND This case involves a wage dispute brought by the Plaintiff-employees against their employer under the Fair Labor Standards Act, 29 U.S.C. 201 et seq. ( FLSA ). Defendant was involved with the construction of Marlins Park (the Project ). (See Compl. 8, 20 [ECF No. 1]). Plaintiffs were employed by Defendant to work on the Project between February 12, 1 By Order [ECF No. 48] dated October 11, 2013, the Court granted Defendant s Motion, vacated its August 14, 2013 Order [ECF No. 35], and communicated to the parties a more thorough order would be forthcoming. This is that Order.

2 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 2 of and May 31, (See Statement of Claim ( Statement ) 1 [ECF No. 11]). At various times during their employment, Plaintiffs worked in excess of forty hours in a workweek. (See Compl. 22). Because Defendant was performing work for Miami-Dade County pursuant to a publicly funded construction project, Miami-Dade County Code, section (the County Ordinance ) [ECF No. 19-1] governs the prevailing wages paid to Defendant s employees based on the employees job classifications. (See Mot. 4). Plaintiffs claim Defendant misclassified them as employees, resulting in lower-paying wages. (See Compl. 25). Plaintiffs Complaint includes four counts: Count I alleges Plaintiffs were not paid overtime at the proper statutory rate; Count II alleges Plaintiffs were not paid the prevailing wage for all hours worked; Count III alleges Plaintiffs were intentionally misclassified into lower-paying job categories; and Count IV is merely a prayer for relief, seeking a declaratory judgment based on the allegations of Counts I, II, and III. (See generally id.). Defendant filed a Motion to Dismiss Plaintiffs Complaint [ECF No. 19] on May 28, 2013, asserting the Court lacked subject-matter jurisdiction over Plaintiffs claims. By Order dated August 14, 2013, the Court denied Defendant s Motion to Dismiss Plaintiffs Complaint. (See Aug. 14, 2013 Order 9). In the August 14 Order, the Court concluded it had subject-matter jurisdiction over Plaintiffs claim in Count I, and supplemental jurisdiction over Plaintiffs claims in Counts II, III, and IV. (See id. 6 9). Accepting the allegations of the Complaint as true, the Court found, [w]hen Defendant misclassified Plaintiffs jobs, Plaintiffs hourly compensation although above the federal minimum wage became deficient. This deficiency in Plaintiffs hourly wage calculation logically resulted in deficient overtime wages. Consequently, this shortfall in Plaintiffs overtime wages yields an FLSA claim. (Id. 6 (citation omitted)). Because the Court 2

3 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 3 of 10 believed Plaintiffs had properly stated an FLSA claim for overtime wages, the Court was satisfied it had jurisdiction over Count I pursuant to 28 U.S.C. section (See id. 6, 9). Having found subject-matter jurisdiction over Count I, the Court sua sponte exercised supplemental jurisdiction over the remaining claims pursuant to 28 U.S.C. section 1367(a). (See id. 9). The present Motion asks the Court to certify the August 14 Order for interlocutory appeal, or in the alternative, reconsider it and dismiss the Complaint for lack of subject-matter jurisdiction. (See Mot. 18). II. LEGAL STANDARDS Pursuant to Federal Rule of Civil Procedure 59(e), a party may move to alter or amend a judgment within twenty-eight days of the entry of judgment. FED. R. CIV. P. 59(e). Courts have distilled three major grounds justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or manifest injustice. Instituto de Prevision Militar v. Lehman Bros., Inc., 485 F. Supp. 2d 1340, 1343 (S.D. Fla. 2007) (quoting Cover v. Wal-Mart Stores, Inc., 148 F.R.D. 294, 295 (M.D. Fla. 1993)) (internal quotation marks omitted). The reconsideration decision is committed to the sound discretion of the district judge. Tristar Lodging, Inc. v. Arch Specialty Ins. Co., 434 F. Supp. 2d 1286, 1301 (M.D. Fla. 2006) (quoting Am. Home Assur. Co. v. Glenn Estess & Assocs., Inc., 763 F.2d 1237, (11th Cir. 1985)) (internal quotation marks omitted). Federal Rule of Civil Procedure 60(b) sets forth several grounds upon which a court may use its discretion to rescind or amend a final judgment. A court may grant a party relief from final judgment due to mistake, inadvertence, surprise, or excusable neglect, or for any other reason that justifies relief from judgment. FED. R. CIV. P. 60(b)(1), (6). [R]elief under this clause is an extraordinary remedy which may be invoked only upon a showing of exceptional 3

4 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 4 of 10 circumstances. Griffin v. Swim-Tech Corp., 722 F.2d 677, 680 (11th Cir. 1984) (citation omitted). The party moving for relief has the burden of showing that absent such relief, an extreme and unexpected hardship will result. Id. (quoting United States v. Swift & Co., 286 U.S. 106, 119 (1932)). III. ANALYSIS Defendant asserts the Court must resolve errors of law in the August 14 Order to correct clear error and prevent injustice, as the Court s decision directly contravenes Eleventh Circuit law. (Mot. 15). Defendant requests the Court vacate the August 14 Order in its entirety and enter an order dismissing the case with prejudice for lack of jurisdiction. (See Reply 2). According to the Defendant, Plaintiffs remedies are limited to those set forth in the County Ordinance. (See id. 2 3). Alternatively, Defendant asks the Court to certify the question of subject-matter jurisdiction to the Eleventh Circuit on interlocutory appeal. (See id. 3). In their Response, Plaintiffs argue state law interpretations of the existence of a private right of action [are] of no relevance in light of the well-established federal cause of action conferred on the Plaintiffs by the FLSA. (Resp. 4). Particularly, Plaintiffs contend the Supremacy Clause of the United States Constitution prevents the County Ordinance from divesting the Court of jurisdiction over Plaintiffs FLSA claims. (See id. 3 4). Additionally, Plaintiffs maintain there is nothing novel in the Complaint that requires the Court to certify the questions presented in the Motion for interlocutory appeal. (See id. 4 5). The Court agrees Defendant satisfies the foregoing standards for reconsideration and relief from final judgment and necessarily rejects Plaintiffs position. As it did in the Motion to Dismiss, Defendant once again argues Grochowski v. Phoenix Construction, 318 F.3d 80 (2d Cir. 2003), is controlling with respect to the Court s jurisdiction 4

5 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 5 of 10 over Count I. (See Mot ). In Grochowski, the plaintiffs employees working on a federally-funded project attempted to state an FLSA claim for unpaid overtime wages based on their employer s failure to pay them the higher prevailing wage they were entitled to under the Davis-Bacon Act (the DBA ). See Grochowski, 318 F.3d at The DBA like the County Ordinance at issue here sets forth a set of administrative procedures for an underpaid employee to pursue claims and has been construed as not intending a private right of action for employees asserting DBA claims. See id. at 85. The Grochowski court found the DBA limited [an aggrieved employee] to those administrative mechanisms set forth in the text of the statute. Id. at 87 (citation omitted). Consequently, the Second Circuit held the procedural requirements of the DBA prevented the employees from using the FLSA to circumvent the DBA s administrative process. Id. The August 14 Order found Grochowski distinguishable on the basis [n]o such federal statutory scheme is present here. (Aug. 14, 2013 Order 7). In the present Motion, Defendant now soundly distinguishes the case at bar from Sobczak v. AWL Industries, Inc., 540 F. Supp. 2d 354 (E.D.N.Y. 2007) a case the Court previously found more analogous to the present action and better explains (than it did before) the applicability of Grochowski. As Defendant accurately notes, the August 14 Order relied heavily on Sobczak, summarized as follows: In Sobczak, several employees misclassified into lower-paying positions filed suit against their employers for unpaid overtime pursuant to the FLSA. Under state law, a prevailing wage system was in place that paid employees a set rate determined by their specific job classifications. The employees, who were paid above the federal minimum wage and received overtime pay for every hour they worked, claimed to have been misclassified at allegedly lower-paying positions. They contended, under state prevailing wage law, they should have been paid at an even higher base rate, and it is that rate upon which their overtime should have been calculated. The employers in Sobczak argued the employees claims alleging a failure to pay overtime at one and one-half times the state prevailing wage did not implicate the FLSA. The court recognized that to allow an employer to circumvent the FLSA simply by breaching the base wage 5

6 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 6 of 10 provisions of the contract and paying overtime on the improperly reduced base wage... would [leave the employer with] no liability because it will have paid overtime on the artificial regular rate. And although the employees would first have to prove their entitlement to the state prevailing wages at issue before being able to recover under the FLSA, that was just a substantive element of proof that did not affect the validity of their FLSA claim. Thus, the court concluded the employees overtime claim was a valid FLSA claim. (Aug. 14, 2013 Order 5 6 (internal citations omitted)). As Defendant correctly points out, Sobczak was decided pursuant to New York state law, which explicitly provides an aggrieved employee a choice of parallel remedies. Employees in New York may pursue their wage claims through an administrative process or as a private cause of action in state court. (See Mot. 12). See also Sobczak, 540 F. Supp. 2d at 361 ( New York law permits parallel remedies, allowing employees to pursue either administrative claims under, or sue as third-party beneficiaries of, state prevailing wage contracts. (citations omitted)). In contrast, the County Ordinance is silent regarding an employee s private right of action or the ability to pursue separate judicial remedies. (See generally Cnty. Ordinance). The County Ordinance s silence regarding parallel judicial remedies is particularly troubling in light of Eleventh Circuit precedent expressing reluctance to read private rights of action in state laws where state courts and state legislatures have not done so. Swerhun v. Guardian Life Ins. Co. of Am., 979 F.2d 195, 198 (11th Cir. 1992) (citations omitted). The Court must agree with Defendant that [t]he determinative factor is that, unlike the plaintiffs in Sobczak, Plaintiffs in this case have no parallel judicial remedies under the County Ordinance.... (Mot. 13). The August 14 Order expressed some dissatisfaction with the limited role given aggrieved employees pursuing any claims before the Miami-Dade County Department of Small Business Development, as described in the County Ordinance and Supplemental General Conditions [ECF No. 19-2]. (See Aug. 14, 2013 Order 7 8). Nevertheless, as more thoroughly 6

7 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 7 of 10 explained by Defendant in the Motion, when an administrative process or scheme is provided by statute or ordinance, a court should be particularly hesitant to provide a private right of action when none is expressly granted. See Francois v. Caribbean Airmail, Inc., No. 01-CV CIV-Jordan, 2002 WL , at *1 (S.D. Fla. June 18, 2002) ( Had the County intended a judicial remedy in addition to the administrative one, it would have so expressly stated. ). Although the administrative remedies under the County Ordinance involve relatively little participation on the part of the wronged employee, the Ordinance and Supplemental General Conditions do allow underpaid employees to file a complaint with the Director of the Department of Small Business Development in an effort to collect unpaid wages. (See Supp. Gen. Conditions 2 3; see generally Cnty. Ordinance). Considering the availability of administrative means to uphold Plaintiffs rights and the County Ordinance s silence regarding private rights of action, the Court agrees it was error to conclude a separate judicial remedy is permitted. In effect, the August 14 Order furnished Plaintiffs a private cause of action in federal court for wages allegedly owed to them pursuant to a local ordinance despite the presence of an administrative process and the lack of legislative authority from the County (or state) granting a private cause of action. Upon further careful review, the Court agrees with Defendant that such a result, absent binding authority to the contrary, works to improperly expand the Court s subjectmatter jurisdiction. Cf. Chalfonte Condo. Apartment Ass n, Inc. v. QBE Ins. Corp., 695 F.3d 1215, 1227 (11th Cir. 2012) ( [L]egislative intent has become the primary factor that most courts, including the United States Supreme Court, use to determine whether to judicially infer a cause of action when a statute does not expressly provide for one. (citation omitted)). To expose Defendant to potential liability for a collective action, including liquidated damages and 7

8 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 8 of 10 attorney s fees, when the Court appears to lack subject-matter jurisdiction over the case would result in an injustice to the Defendant. Cf. Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) ( [W]hen a federal court acts outside its statutory subject-matter jurisdiction, it violates the fundamental constitutional precept of limited federal power. (alteration added; citation omitted)). Plaintiffs argument that the Supremacy Clause of the United States Constitution forbids the County Ordinance from divesting the federal courts of their jurisdiction to hear FLSA cases does not persuade. Although [u]nder the Supremacy Clause of the United States Constitution, state laws that conflict with federal law are without effect, and are preempted[,] Sosnowy v. A. Perri Farms, Inc., 764 F. Supp. 2d 457, 463 (E.D.N.Y. 2011) (citations omitted), no such conflict is present here. In enacting the FLSA, Congress chose not to preempt state wage laws providing employees with wages in excess of the federally-mandated minimum wage, expressly stating, [n]o provision of [the FLSA] or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter U.S.C. 218(a); see also Sosnowy, 764 F. Supp. 2d at 464 ( Congress intent to allow state regulation to coexist with the federal scheme can be found in [section] 18(a) of the FLSA, which explicitly permits states to mandate greater overtime benefits.... [E]very Circuit that has considered the issue has reached the same conclusion state overtime wage law is not preempted by... the FLSA. (internal citations omitted; quoting Overnite Transp. Co. v. Tianti, 926 F.2d 220, 222 (2d Cir. 1991))). Here, there is no conflict between the protection afforded employees by the FLSA and the greater protection given employees working on publicly-funded projects by the County Ordinance. 8

9 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 9 of 10 Moreover, the County Ordinance cannot divest a federal court of something it never possessed, namely, jurisdiction to hear a labor dispute where the employee was paid in excess of the minimum wage and overtime was paid in compliance with the terms of the FLSA. By setting prevailing wages above the federal minimum wage for skilled and unskilled laborers working at County-funded construction sites and establishing a distinct process for addressing wage violations, the County Ordinance provides local employees with more generous protection than that bestowed by the FLSA complete with its own administrative process for vindicating individual claims. This appears to be exactly what Congress contemplated when it enacted the FLSA. See Cortez v. Neb. Beef, Inc., 266 F.R.D. 275, 283 (D. Neb. 2010) ( [T]here is a strong presumption that Congress, in enacting the FLSA for the benefit of workers, did not intend to override the States traditional role in protecting the health and safety of their citizens. (alteration added; internal quotation marks and citation omitted)). Thus, the County Ordinance does not run afoul of the Supremacy Clause, and the Court lacks subject-matter jurisdiction over Count I. Nor does the Court possess subject-matter jurisdiction over any of the remaining counts in the Complaint. In Counts II and III, Plaintiffs allege they were paid at rates below the prevailing wages provided by the County Ordinance. But in their Statement, Plaintiffs admit to being paid at rates exceeding the federal minimum wage. (See Statement 2 3). Consequently, these counts do not raise a substantial federal question. See Perez v. Brands Mart Serv. Corp., No CIV, 2011 WL , at *7 (S.D. Fla. July 28, 2011) ( As a general rule, an employee cannot succeed on a claim under the FLSA if his average wage for a period in which he works no overtime exceeds minimum wage. (quoting Bolick v. Brevard Cnty. Sheriff s Dep t, 937 F. Supp 1560, 1568 (M.D. Fla. 1996))); cf. Hanna v. CFL Pizza, LLC, No. 6:11-cv- 9

10 Case 1:13-cv CMA Document 49 Entered on FLSD Docket 12/12/2013 Page 10 of Orl-22DAB, 2012 WL , at *6 (M.D. Fla. Jan. 30, 2012) (finding the FLSA did not provide the court with subject-matter jurisdiction where a delivery driver alleged he was being under-reimbursed for vehicle expenses, resulting in compensation below the rate established by the Florida Minimum Wage Act). Further, Count IV s request for a declaratory judgment on the same set of facts that make up the preceding counts does not properly state a claim but is rather a prayer for relief. It is duplicative of the Plaintiffs other claims and does not establish an independent basis for jurisdiction. See Sembler Family P ship No. 41, Ltd. v. Brinker Fla., Inc., No. 8:08-cv-1212-T-24 MAP, 2008 WL , at *2 (M.D. Fla. Dec. 19, 2008). Because the Court lacks subject-matter jurisdiction over each of Plaintiffs claims, and allowing the case against Defendant to proceed would result in manifest injustice, the Court vacates the August 14 Order. 2 IV. CONCLUSION Based on the foregoing, it is ORDERED AND ADJUDGED that Form Works/Baker JV, LLC s Motion [ECF No. 38] is GRANTED. Plaintiffs Complaint [ECF No. 1] is DISMISSED with prejudice. The Clerk is directed to CLOSE the case, and any pending motions are DENIED as moot. DONE AND ORDERED in Miami, Florida, this 12th day of December, CECILIA M. ALTONAGA UNITED STATES DISTRICT JUDGE cc: counsel of record 2 As the Court finds vacatur of the August 14 Order is warranted, the Court does not reach the question of whether certification for interlocutory appeal to the Eleventh Circuit is proper. 10