Casaretti v. United States

In the United States Court of Federal Claims

No. 15-294C

(Filed February 16, 2017)

* * * * * * * * * * * * * * * * * *

*

*

J. CASARETTI, et al., * FLSA collective action, 29 U.S.C.

* § 216(b); Federal Air Marshals;

Plaintiffs, * Transportation Security Admin.;

* 49 U.S.C. § 40122(g)(2); Back Pay

v. * Act, 5 U.S.C. § 5596; RCFC 12(b)(1),

* 12(b)(6); overtime pay; prejudgment

THE UNITED STATES, * interest not available.

*

Defendant. *

*

* * * * * * * * * * * * * * * * * *

Nicholas M. Wieczorek, Morris Polich & Purdy LLP, Las Vegas, Nevada, for

plaintiffs.

Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil

Division, Department of Justice, with whom were Benjamin C. Mizer, Principal

Deputy Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Scott

Austin, Assistant Director, all of Washington, D.C., for defendant. Janessa Grady

Fleming, Senior Counsel, Transportation Security Administration, Washington,

D.C., of counsel.

ORDER

WOLSKI, Judge.

Named plaintiff J. Casaretti brought this case as a collective action claiming

overtime pay under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), on

behalf of himself and several thousand Federal Air Marshals (FAMs). 1 The

complaint also included claims brought under the Back Pay Act, 5 U.S.C. § 5596,

1 To date, consent forms have been filed for an additional 3453 FAMs. See ECF No.

53 (Dec. 7, 2016).

and sought non-overtime compensation and pre-judgment interest. Compl. ¶¶ 1, 23,

28–29, 32, 40–43 & Prayer for Relief ¶¶ F–H, J, M.

The government filed a motion for the partial dismissal of this case under

Rules 12(b)(1) and (b)(6) of the Rules of the United States Court of Federal Claims

(RCFC). See Def.’s Partial Mot. Dismiss (Def.’s Mot.) at 1. The government

contends that any Back Pay Act claims, including the request for prejudgment

interest, are not within this court’s subject-matter jurisdiction because that portion

of title 5 does not apply to employees of the Transportation Security Administration

(TSA). Id. at 2–4, 7–9 (discussing 49 U.S.C. §§ 114(n), 40122(g)(2)). 2 Defendant

also maintains that, to the extent the complaint may be construed as seeking to

recover compensation for anything other than overtime pay, it fails to state a claim

upon which relief can be granted. Def.’s Mot. at 9–10. After plaintiffs clarified that

they were seeking prejudgment interest under the FLSA, Resp. of Pls. to Def.’s Mot.

(Pls.’ Resp.) at 3–4, the government argued that the FLSA did not provide plaintiffs

with a claim for such relief. Def.’s Reply at 3–4 (citing, inter alia, Library of

Congress v. Shaw, 478 U.S. 310 (1986); Doyle v. United States, 931 F.2d 1546 (Fed.

Cir. 1991)).

The government’s motion was prompted by some confusing language in the

complaint, which began with the statement that plaintiffs sought “to recover

overtime and other unpaid wages” under the FLSA. Compl. ¶ 1 (emphasis added).

The complaint recognizes that previous litigation established that a FAM’s regular

workweek consists of forty-three, not forty hours, id. ¶ 22 (citing Fed. Air Marshals

(FAM) FAM 1 v. United States (FAM1), 84 Fed. Cl. 585 (2008)), and thus overtime

pay is not owed until hours worked in a week exceed forty-three. But plaintiffs

allege that they have not been paid for working more than forty hours, id. ¶¶ 23, 25;

allege that their failure to receive proper compensation “for regular time” violates

the FLSA, id. ¶ 32; and seek relief under the FLSA associated with hours worked

above forty, id. Prayer for Relief ¶¶ F–G. Plaintiffs also allege that the FAMs were

not fully compensated at premium rates for hours worked on holidays, Saturdays,

and Sundays, and did not receive appropriate Law Enforcement Availability Pay

(LEAP) compensation. Compl. ¶ 28. 3

Plaintiffs’ opposition paper confuses matters further, as instead of limiting

their claims to overtime pay, they repeatedly invoke such formulations as “all hours

2 Plaintiffs concede that the Back Pay Act count should be dismissed. Resp. of Pls.

to Def.’s Mot. (Pls.’ Resp.) at 3. Thus, the government’s motion to dismiss plaintiffs’

claims under the Back Pay Act is GRANTED.

3 This availability pay boosts wages by 25 percent for the year when a FAM

averages at least ten hours of work per work day, and was found to be an offset to

overtime pay owed. FAM1, 84 Fed. Cl. at 596–97.

-2-

worked, including overtime,” Pls.’ Resp. at 2, and seem to contend that “unpaid

wages for on-duty work” violates the FLSA, id. at 5. They also concede that

overtime pay is not owed unless they work more than forty-three hours in a week,

id. at 6, and deny that they are bringing “gap-time” claims for pay associated with

non-overtime hours worked when the minimum wage per hour worked was

nonetheless received, id. at 9 (discussing Lopez v. Tri-State Drywall, Inc., 861 F.

Supp. 2d 533, 536 (E.D. Pa. 2012)). But they also maintain that they “seek to

vindicate a key policy goal of the FLSA,” which they identify as “compensating

employees for hours worked.” Id. at 6.

Whether or not the FLSA can be said to have such a goal, see 29 U.S.C.

§ 202(b) (Congressional declaration of policy), this does not mean that the act must

apply whenever that goal is invoked. By its very terms, the FLSA imposes liability

in only three circumstances: when employers fail to pay a minimum wage; when

less than the specified amount of overtime pay is received; and when employers

retaliate against employees due to certain activities. See 29 U.S.C. §§ 206–07,

215(a)(3), 216(b). The only substantive provision upon which plaintiffs base

jurisdiction is the overtime provision of the FLSA. See Compl. ¶ 2 (citing 29 U.S.C.

§ 207(a)(1)). Due to the application of the law enforcement exemption in 29 U.S.C.

§ 207(k), see FAM 1, 84 Fed. Cl. at 592–94, this is limited to claims that FAMs were

paid “less than one and one-half times the regular rate” for hours worked in excess

of forty-three in a workweek, 29 U.S.C. § 207(a)(1).

Thus, to the extent plaintiffs might be claiming pay for hours worked that

were not in excess of forty-three in a given week, no relief can be granted under the

FLSA and such claims must be dismissed from this case. As a practical matter, this

merely requires construing the claim of entitlement to “back pay” under the FLSA

as limited to compensation for overtime hours, Compl. ¶ 36; and in the Prayer for

Relief, limiting the awards requested in paragraphs F and G to compensation and

damages for hours worked in excess of forty-three in a workweek, and disregarding

the request for “other compensation” in paragraph H.

Hours worked for which premium pay should have been paid but was not are,

of course, still relevant to claims for overtime pay in at least two different ways.

First, the inclusion of such unpaid hours in a workweek could push the total worked

above forty-three, entitling plaintiffs to overtime compensation to the extent that

threshold is surpassed. And second, when the premium pay remuneration which

should have been paid for such hours worked is included in the calculation of a

FAM’s regular rate of pay, see 29 U.S.C. § 207(e), the regular rate could increase ---

thereby increasing the overtime pay owed under the “one and one-half times the

regular rate” formula, id. § 207(a)(1). In addition, the failure of a FAM to receive

availability pay could also affect overtime compensation owed to the FAM, if the

unpaid portion of availability pay was nevertheless offset against overtime

payments. See FAM 1, 84 Fed. Cl. at 596–97. For these reasons, the specific

allegations concerning hours unpaid may properly remain in this case.

-3-

Turning now to the issue of interest, plaintiffs argue that prejudgment

interest is awardable for the unpaid compensation portion of their claims. Because

plaintiffs advanced a legal theory during oral argument that was not raised in their

opposition paper, and relied upon authorities they had not previously cited, this

topic became the subject of supplemental briefing. Although the Federal Circuit

has held that “[t]he FLSA does not waive immunity for suits against the

Government for interest,” Doyle v. United States, 931 F.2d 1546, 1551 (Fed. Cir.

1991), plaintiffs maintain that interest is available in an action brought under the

FLSA, courtesy of the interest provision contained in the Back Pay Act, 5 U.S.C.

§ 5596(b)(2). See Pls.’ Sur-reply in Supp. Resp. to Def.’s Mot. at 2–5.

Plaintiffs cite one case from our court, and five cases from four other Circuits,

for the proposition that the Back Pay Act waiver of sovereign immunity from

interest liability may be used to award interest under other federal statutes,

including the FLSA. Id. (citing Astor v. United States, 79 Fed. Cl. 303, 319–20

(2007); Adam v. Norton, 636 F.3d 1190, 1192–94, 1196 (9th Cir. 2011); Social

Security Admin. v. FLRA, 201 F.3d 465, 468 (D.C. Cir. 2000); Woolf v. Bowles, 57

F.3d 407, 410–11 (4th Cir. 1995); Edwards v. Lujan, 40 F.3d 1152, 1154 (10th Cir.

1994); Brown v. Sec’y of the Army, 918 F.2d 214, 216–17 (D.C. Cir. 1990)). The

government argues to the contrary, relying on Doyle, see Def.’s Sur Sur Reply in

Supp. Def.’s Mot. at 2–3 (citing Doyle, 931 F.2d at 1550–51), the exclusion of TSA

employees from the ambit of the Back Pay Act, id. at 3–4 (citing 49 U.S.C.

§ 40122(g)(2)), a different decision from our court, id. at 7–8 (citing Angelo v. United

States, 57 Fed. Cl. 100, 111 (2003)), and a decision from yet another Circuit, id. at

6–7 (citing Arneson v. Callahan, 128 F.3d 1243, 1246–47 (8th Cir. 1997)).

The various precedents cited by the parties trace back to the Supreme Court

decision in Loeffler v. Frank, 486 U.S. 549 (1988), which concluded that the broad

waiver of immunity in the sue-and-be-sued clause applying to U.S. Postal Service

operations “cast off the Service’s ‘cloak of sovereignty’ and [gave] it the ‘status of a

private commercial enterprise,’” exposing it to the same liability for interest

payments that would apply to private parties, id. at 556 (quoting Library of

Congress v. Shaw, 478 U.S. 310, 317 n.5 (1986)). Plaintiffs’ case presents the exact

opposite circumstance, as they contend that a statute which does not apply to them

at all somehow accomplished this waiver of sovereign immunity. Yet even the

opinions they rely on reflect no more than the principle that “prejudgment interest

is available if a case falls within the coverage of the Back Pay Act.” Edwards, 40

F.3d at 1154; see also Astor, 79 Fed. Cl. at 319 (explaining that ‘[t]he circumstances

of this case fall squarely within the [Back Pay Act’s] provisions”); Adam, 636 F.3d at

1192–93 (applying waiver where claim comes within the “clear terms” of the Back

Pay Act); FLRA, 201 F.3d at 468 (explaining that waiver “is effective only as to

awards that come within the scope of the” Back Pay Act); Woolf, 57 F.3d at 410

(explaining that “interest is allowed only on ‘an amount payable under paragraph

(1)(A)(i)’ of the [Back Pay] Act” (quoting 5 U.S.C. § 5596(b)(2)(A)); Brown, 918 F.2d

-4-

at 218 (explaining that Back Pay Act requirements “must be satisfied” for waiver to

apply).

As Congress has expressly provided that the Back Pay Act does not apply to

the claims of TSA employees, which include the FAMs, see 49 U.S.C. §§ 114(n),

40122(g)(2), the Court concludes that provisions of that act cannot waive sovereign

immunity with respect to any claims of those employees. As a consequence, the

relief of prejudgment interest cannot be granted in connection with the FLSA claims

of plaintiffs, and must be dismissed from this case. Paragraphs J and M from the

Prayer for Relief will accordingly be disregarded.

For the foregoing reasons, defendant’s motion for the partial dismissal of

claims in this case is GRANTED.

IT IS SO ORDERED.

s/ Victor J. Wolski

VICTOR J. WOLSKI

Judge

-5-