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NUMBER 13-03-00559-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI B EDINBURG
LARRY YOUNG, ET AL., Appellants,
v.
CITY OF CORPUS CHRISTI, Appellee.
On appeal from the 94th District Court of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Hinojosa, Yañez, and Castillo
Memorandum Opinion by Justice Hinojosa
This is an appeal from the trial court=s order granting the motion for summary judgment of appellee, City of Corpus Christi. In a single issue, appellants, 243 police officers currently or formerly employed by the City of Corpus Christi, contend the trial court erred in concluding that their claims are barred by res judicata and/or collateral estoppel. We affirm in part and reverse and remand in part.
A. Background
On November 5, 1999, twenty-one of these 243 police officers[1] (AOriginal Plaintiffs@) filed suit against the City in the 117th District Court of Nueces County. On December 15, 1999, the City removed that case to the United States District Court for the Southern District of Texas, Corpus Christi Division, and the case was docketed as Civil Action No. C-99-536.
1. The Prior Federal Suit
In their petition, the Original Plaintiffs claimed that the City had required them to work more hours during a calendar week than the majority of other municipal employees and had failed to compensate them for hours worked in excess of 40 hours per week at the rate of not less than one and one-half of the employee=s regular rate of pay. The Original Plaintiffs further claimed that the City had violated (1) the Fair Labor Standards Act (FLSA),[2] (2) the Texas Local Government Code,[3] and (3) the collective bargaining agreements that the City had negotiated with the Corpus Christi Police Officers Association. The Original Plaintiffs asserted that in addition to typically working ten-hour shifts, four days per week, prior to the start of each and every shift they were required to attend a fifteen-minute briefing period, for which they received neither regular nor overtime compensation.
The Original Plaintiffs later filed an amended complaint, asserting that the City had failed to properly credit employees= sick leave and personal leave accounts. The federal district court, however, struck the amended complaint because it was untimely filed, and the Original Plaintiffs had not requested leave to file the complaint after the court=s deadline for amended pleadings had expired.
Both the City and the Original Plaintiffs moved for summary judgment. In their motion, in addition to asserting that the City had failed to compensate them for hours worked in excess of forty hours per week (pre-shift briefing periods), the Original Plaintiffs claimed that (1) the City had failed to properly calculate their regular rate of pay for the purpose of overtime compensation and comp-time remuneration by not incorporating certain Aadd-ins,@[4] (2) officers were not being afforded the proper number of vacation and sick hours, and (3) the City had failed to properly credit vacation and sick time. However, because these additional claims were not raised in the Original Plaintiffs= complaint, the federal district court found that they were raised for the first time in the motion for summary judgment and did not consider them.
The district court analyzed the officers= compensation for the pre-shift briefing periods under the FLSA, the Texas Local Government Code, and each collective bargaining agreement, and concluded that (1) Aunder the terms of the collective bargaining agreements, plaintiffs are paid on a salary basis for the defined >workweek,=@ and Athe evidence shows that plaintiffs do receive regular compensation for the briefing period because the defined >workweek= encompasses the 15 minute briefing period;@ (2) the City meets the requirements for a section 207(k)[5] exemption for a seven-day work period and, therefore, is not required to pay overtime until the law enforcement employee has worked more than 43 hours; (3) the collective bargaining agreements prevail over section 142.0015 of the Texas Local Government Code for purposes of establishing the maximum regular pay workweek; and (4) the collective bargaining agreements define a regular workweek as 41.25 hours and incorporate the pre-shift briefing period as part of the regular hours of a workweek. Accordingly, the federal district court granted the City=s motion for summary judgment on the issue of compensation for pre-shift briefing periods only.
The Original Plaintiffs appealed the federal district court=s decision to the U.S. Court of Appeals for the Fifth Circuit. However, the Original Plaintiffs later voluntarily dismissed the appeal before the court decided the case.
2. The Current Suit
In February 2001, the twenty-one Original Plaintiffs filed the underlying suit in the 94th District Court of Nueces County. The Original Plaintiffs were subsequently joined by an additional 222 police officers for a total of 243 plaintiffs.
In the underlying suit, appellants asserted that (1) the City had failed to include all Aadd-ins@ when calculating an officer=s regular rate of pay for the purpose of determining proper overtime compensation and comp-time rates of remuneration; (2) officers were not compensated for hours worked in excess of 40 hours per week, in violation of the FLSA, the Texas Local Government Code, and the collective bargaining agreements; (3) the City improperly maintained a policy that overtime worked of fifteen minutes or less was not compensated; (4) officers were not afforded the proper number of vacation and sick hours; (5) sick leave and vacation time were not being properly credited; (6) retirement Adrag-up@ pay was not being properly credited; (7) there were math errors in the calculation of salary and benefits; (8) there were record keeping violations in the records of wages and hours; and (9) the City had failed to properly compensate officers for, among other things, (a) time they were required to stand by, (b) time engaged in various training classes, (c) time driving a car on City business, (d) time spent servicing and maintaining police vehicles, (e) time spent organizing, operating, and administering a community-policing-related Little League baseball program, (f) the care and maintenance of police dogs by those officers to whom they were assigned, and (g) various law enforcement functions performed Aoff the clock.@
On March 17, 2003, the trial court granted partial summary judgment in favor of the City, concluding that all of appellants= claims, except those for breach of contract involving the interpretation of the terms Aregular rate of pay,@ were barred by res judicata. The City then filed a second motion for summary judgment asserting that the remaining breach of contract claims were also barred by res judicata. On August 2, 2003, the trial court agreed that appellants= remaining breach of contract claims were barred by res judicata and granted the City=s second motion for summary judgment.
In a single issue, appellants contend the trial court erred in concluding that their claims are barred by res judicata and/or collateral estoppel.
B. Standard of Review
We review the granting of a motion for summary judgment de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994). A movant for summary judgment must show that (1) there is no genuine issue of material fact, and (2) he is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). When reviewing a summary judgment, we take as true all evidence favorable to the non‑movant and indulge every reasonable inference in the non‑movant's favor. Id. at 549.
For summary judgment to be proper, the City, as movant, was required to establish all elements of the affirmative defense of res judicata as a matter of law. See Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); see also Ford v. City State Bank of Palacios, 44 S.W.3d 121, 131 (Tex. App.BCorpus Christi 2001, no pet.) (citing Barr v. Resolution Trust Corp., 837 S.W.2d 627, 627‑28 (Tex. 1992)) (noting that summary judgment is proper in a case barred by res judicata).
C. Res Judicata
Because the prior judgment was issued by a federal district court, federal law controls the determination of whether res judicata bars a later state court proceeding. Meza v. Gen. Battery Corp., 908 F.2d 1262, 1265 (5th Cir. 1990); Eagle Prop., Ltd. v. Scharbauer, 807 S.W.2d 714, 718 (Tex. 1990). Four requirements must be met for res judicata to apply: (1) the parties must be identical in both suits; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same cause of action must be involved in both cases. Meza, 908 F.2d at 1265.
None of the parties in this case contend that the federal district court was not a court of competent jurisdiction in the prior lawsuit, nor do they contend that the court's summary judgment was not a final judgment on the merits. Therefore, we will not address those elements.
However, appellants contend that (1) the present claims are not the same cause of action as the prior federal suit, and, in the alternative, (2) the trial court erred in granting summary judgment against the 222 appellants who were not parties to the prior federal suit because the parties are not identical.[6]
1. Causes of Action
Under res judicata, as applied by the federal courts, a final judgment on the merits is transactional in nature and, thus, precludes parties from relitigating issues that were or could have been decided in the prior action. Ellis v. Amex Life Ins. Co., 211 F.3d 935, 938 (5th Cir. 2000); Collins v. City of Corpus Christi, No. 13‑03‑00428‑CV, 2006 Tex. App. LEXIS 2379, at *22 (Tex. App.BCorpus Christi Mar. 30, 2006, no pet. h.). Thus, the critical issue is whether the two actions under consideration are based on the same nucleus of operative facts. Ellis, 211 F.3d at 938; Southmark Props. v. Charles House Corp., 742 F.2d 862, 870‑71 (5th Cir. 1984). In this inquiry, we look to the factual predicate of the claims asserted, not the legal theories upon which the plaintiff relies. Eubanks v. Fed. Deposit Ins. Corp., 977 F.2d 166, 171 (5th Cir. 1992); Collins, 2006 Tex. App. LEXIS 2379, at *22.
All of the claims asserted by appellants in the instant case, and all those asserted or attempted in the prior suit, involve the City=s methodology and practices in determining (1) the number of hours in a standard Aworkweek,@ (2) employees= regular rate of pay, (3) overtime hours and pay, and (4) calculation and crediting of vacation and sick time. See Collins, 2006 Tex. App. LEXIS 2379, at *26 (Athe Fifth Circuit has held that theories which were the subject of an untimely motion to amend, filed in the earlier action, could have been brought in the earlier action@) (quoting Nilsen v. Moss Point, 701 F.2d 556, 563 (5th Cir. 1983)). We conclude that appellants= claims in the present case involve the same nucleus of operative facts as those asserted in the prior federal suit,[7] see Collins, 2006 Tex. App. LEXIS 2379, at *25, and thus assert the same causes of action for the purposes of res judicata.
2. Identity of Parties
We next turn to whether the parties in both suits are identical for purposes of res judicata. It is undisputed that twenty-one of the appellants in this case are the same twenty-one Original Plaintiffs in the prior federal suit. However, the remaining 222 appellants were not named parties in the prior federal suit.
In general, it is a violation of due process Ato bind litigants to a judgment rendered in an earlier litigation to which they were not parties and in which they were not adequately represented.@ Richards v. Jefferson County, 517 U.S. 793, 794 (1996) (citing Hansberry v. Lee, 311 U.S. 32, 37 (1940)). However, Afederal courts have nevertheless held that in certain circumstances judgments can bind persons not party to the litigation in question.@ Meza, 908 F.2d at 1266. Traditionally this preclusive effect extends to persons "in privity" with the parties to the litigation. See Southwest Airlines Co. v. Tex. Int=l Airlines, Inc., 546 F.2d 84, 95 (5th Cir. 1977). APrivity@ denotes a legal conclusion that Athe relationship between the one who is a party on the record and the non‑party is sufficiently close to afford application of the principle of preclusion,@ rather than itself being a judgmental process or reason to include or exclude a person from the binding effect of a prior judgment. Id. (quoting Vestal, Preclusion/Res Judicata Variables: Parties, 50 Iowa L. Rev. 27 (1964)). Thus, Aprivity is merely another way of saying that there is sufficient identity between parties to prior and subsequent suits for res judicata to apply.@ Id.
For res judicata purposes, the federal courts have determined that privity exists in just three narrowly‑defined circumstances: (1) where the non‑party is the successor in interest to a party's interest in property, (2) where the non‑party controlled the prior litigation, and (3) where the non‑party's interests were adequately represented by a party to the original suit. Meza, 908 F.2d at 1266; Southwest Airlines, 546 F.2d at 95. Here, the remaining 222 appellants are not successors in interest to any property interest of the twenty-one Original Plaintiffs; nor is there any evidence that the twenty-one Original Plaintiffs controlled the prior litigation. Therefore, privity only exists if we conclude that the remaining 222 appellants= interests were adequately represented in the prior federal suit by the twenty-one Original Plaintiffs.
The federal courts have identified several circumstances under which a party may be considered bound as a result of adequate representation: (1) authorized representation, where Aa non‑party is bound if he authorized a party in the prior suit to represent his interests;@ (2) class or associational representation, where a non-party is bound if he was represented as a member of a class or by an association in the original litigation; and (3) virtual representation, where Aa party to the original suit is >so closely aligned to the non‑party's interests as to be his virtual representative.=" Meza, 908 F.2d at 1266-67 (quoting Aerojet‑Gen. Corp. v. Askew, 511 F.2d 710, 719 (5th Cir.), appeal dismissed, 423 U.S. 908 (1975)); Southwest Airlines, 546 F.2d at 95. ACourts have tended to treat authorized representation, class representation, associational representation, and virtual representation as synonymous with adequate representation for res judicata purposes.@ Meza, 908 F.2d at 1267.
We first note that while the Original Plaintiffs filed a motion in the prior federal case for class certification, that motion was withdrawn and no class was ever certified. Therefore, class representation is not available to establish privity.
a. Authorized Representation
Of the remaining appellants in the current suit, 188 attempted to join the prior federal suit as party plaintiffs by filing notices of consent under section 216(b) of the FLSA.[8] See 26 U.S.C.S. ' 216(b) (2006). However, the federal district court struck the notices of consent, and those appellants were not joined as party plaintiffs to the federal suit. Nonetheless, the City asserts that the written consents of these 188 appellants equate to authorized representation.
Section 216(b) of the FLSA provides that ANo employee shall be a party plaintiff to any . . . action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.@ 26 U.S.C.S. ' 216(b) (2006). Consequently, an individual who is not named in a complaint is not a party, is not bound by the adjudication, and is not barred from filing an individual claim, unless he affirmatively Aopts in@ by filing a written consent‑to‑join with the court. Kinney Shoe Corp. v. Vorhes, 564 F.2d 859, 862 (9th Cir. 1977). Furthermore,Aone employee may not represent another unless the represented employee has filed a written consent to become a party plaintiff in the court in which the action is brought.@ La Chapelle v. Owens‑Illinois, Inc., 513 F.2d 286, 288 (5th Cir. 1975).
We agree with the City that the filing of a consent form under the FLSA can create a situation of authorized representation. However, that is not the situation here. The City cites no legal authority, and we have found none, showing that a consent form that was struck by the trial court and not filed as part of the record can bind a non-party. Accordingly, we conclude there was no authorized representation of the remaining appellants in the prior suit.
b. Virtual Representation
The City further asserts that privity exists because the interests of the twenty-one Original Plaintiffs were so closely aligned to the interests of the remaining 222 appellants that they constituted virtual representatives. The City argues that the remaining 222 appellants (1) share the same interests as the Original Plaintiffs in recovering additional straight time and overtime pay, and (2) are represented by the same attorneys that represented the Original Plaintiffs.
However, Avirtual representation demands the existence of an express or implied legal relationship in which parties to the first suit are accountable to non‑parties who file a subsequent suit raising identical issues.@ Pollard v. Cockrell, 578 F.2d 1002, 1008 (5th Cir. 1978); see Freeman v. Lester Coggins Trucking, Inc., 771 F.2d 860, 864 (5th Cir. 1985); Southwest Airlines, 546 F.2d at 97 (reviewing relationships where virtual representation has been found, including Aestate beneficiaries bound by administrators, presidents and sole stockholders by their companies, parent corporations by their subsidiaries, and a trust beneficiary by the trustee.@ (citations omitted)). The underlying rationale for allowing virtual representation is that the relationship between the parties is sufficiently close that Athe nonparty has in effect had his day in court.@ Freeman, 771 F.2d at 865 (quoting Hardy v. Johns‑Manville Sales Corp., 681 F.2d 334, 339 (5th Cir. 1982)). ABecause res judicata denies a non‑party his day in court, the due process clauses prevent preclusion when the relationship between the party and nonparty becomes too attenuated.@ Southwest Airlines Co., 546 F.2d at 95 (citing Hansberry v. Lee, 311 U.S. 32 (1940)); see U.S. Const. amend. XIV, ' 1; Tex. Const. art. I, ' 19. Although appellants may be co-workers with similar interests, that is not enough to establish privity through virtual representation and deny the remaining 222 appellants their Afull and fair opportunity to litigate an issue.@ See Hardy, 681 F.2d at 338. APrivity is not established by the mere fact that persons may happen to be interested in the same question or in proving the same state of facts.@ Id. at 340 (quoting Benson v. Wanda Petroleum Co., 468 S.W.2d 361, 363 (Tex.1971)); see Pollard, 578 F.2d at 1008 (rejecting virtual representation between two groups where parties had identical interests in the determination of an issue, were represented by the same attorneys, and presented complaints that were identical on the relevant issue). We conclude that there is insufficient identity of parties for purposes of res judicata.
The sole issue of the twenty-one Original Plaintiffs is overruled. The sole issue of the remaining 222 appellants is sustained.
We affirm the trial court=s order granting the City=s motion for summary judgment against Larry Young, David Cook, Isaac Valencia, John Valentine, Rocky Vipond, Carlos Rios, Julie Hernandez, Robert Diaz, Duane Pacheco, Charles Bartels, David Leal, Sam Granato, Domingo Ibarra, Russell McNorton, Sr., Don Canchola, Albert Leal, Sr., Wayne Hodge, John Rodriguez, Arnulfo Garcia, Arnulfo Guerrero, Jr., and O.V. Morales. We reverse the trial court=s summary judgment order against the remaining 222 appellants and remand the case to the trial court for further proceedings.
FEDERICO G. HINOJOSA
Justice
Memorandum Opinion delivered and filed
this the 18th day of May, 2006.
[1] The twenty-one appellants who were parties in the prior federal suit are: Larry Young, David Cook, Isaac Valencia, John Valentine, Rocky Vipond, Carlos Rios, Julie Hernandez, Robert Diaz, Duane Pacheco, Charles Bartels, David Leal, Sam Granato, Domingo Ibarra, Russell McNorton, Sr., Don Canchola, Albert Leal, Sr., Wayne Hodge, John Rodriguez, Arnulfo Garcia, Arnulfo Guerrero, Jr., and O.V. Morales.
[2] See 29 U.S.C.S. ' 207 (2006).
[3] See Tex. Loc. Gov=t Code Ann. ' 142.0015 (Vernon 1999).
[4] The Aadd-ins@ which the parties argue were not incorporated in the regular rate include (1) shift-differential pay, (2) restricted on-call compensation, (3) field training officer pay, (4) education incentive pay, (5) clothing and equipment pay, (6) bomb squad pay, (7) breathalyzer certification pay, (8) pistol pay, (9) dog handler pay, (10) SWAT pay, (11) hostage negotiation team pay, and (12) dive team pay.
[5] 29 U.S.C.S. ' 207(k) (2006).
[6] The City asserts that the issues raised by appellants are waived because they are being presented for the first time on appeal. We disagree. Our review of the record shows that all arguments herein addressed were presented to the trial court in the motion for summary judgment of one or the other of the parties. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979) (noting that an appellate court cannot reverse a summary judgment based on an issue not presented to the trial court). Furthermore, a Anon‑movant needs no answer or response to the motion to contend on appeal that the grounds expressly presented to the trial court by the movant's motion are insufficient as a matter of law to support summary judgment.@ Id.
[7] The factual scenario presented by this case is strikingly similar to that presented to another panel of this Court in Collins v. City of Corpus Christi, No. 13‑03‑00428‑CV, 2006 Tex. App. LEXIS 2379, at *22 (Tex. App.BCorpus Christi Mar. 30, 2006, no pet. h.). The Collins opinion reviewed concurrent issues and arguments asserted by present or former members of the Fire Department of the City of Corpus Christi. Id. at *2. Our disposition today is in accordance with this Court=s holding in that case.
[8] The remaining thirty-four appellants did not make any attempt to join the prior suit.