Case: 15-30789 Document: 00513741220 Page: 1 Date Filed: 10/31/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 15-30789 October 31, 2016
Lyle W. Cayce
Clerk
JAVIER PORTILLO, on behalf of himself or other persons similarly situated,
Plaintiff - Appellant
v.
PERMANENT WORKERS, L.L.C.; CONRAD INDUSTRIES,
INCORPORATED; DANNY CEPERO,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 6:15-CV-1048
Before HIGGINBOTHAM, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Javier Portillo (“Portillo”) sued his former employers for unpaid overtime
wages in a collective action suit under the Fair Labor Standards Act (‘FLSA”).
When Defendants responded that they had no record of his employment,
Portillo revealed that he had applied for employment using a fake name and
social security number. Defendants then filed a reply asserting summary
judgment was appropriate on equitable grounds. Portillo moved to have the
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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No. 15-30789
class certified with himself as the class representative. The district granted
summary judgment, explaining that Portillo was unfit to represent the
proposed collective action. Because dismissal of Portillo’s individual claim was
not the appropriate remedy for a rejection of his sought-for representative role
in this collective action, we VACATE and REMAND.
I.
Portillo worked from approximately November 2011 to December 2012
as a general laborer for Defendant Permanent Workers, LLC (“Permanent
Workers”), which is owned by Defendant Danny Cepero (“Cepero”). Permanent
Workers provided staff for three shipbuilding facilities managed by Defendant
Conrad Industries, Inc. (“Conrad”).
Portillo applied for employment under the assumed alias “Felix
Serrano,” using a fake social security card and state-issued identification. 1
While employed by Permanent Workers, he worked at all three shipyards
managed by Conrad and allegedly worked 50-hour weeks on a frequent basis.
Alongside a number of other similarly situated workers, Portillo alleges that
he was never paid overtime of “time-and-half” for his services beyond the 40-
hour week. In his sworn declaration, Portillo stated
I was paid $18.00 per hour. For every hour that I worked in excess
of forty in any particular work week, I was paid $18.00. On
average, I worked approximately fifty hours per week . . . . I know
from my conversations with my co-workers that they received
approximately $18.00 per hour . . . . I know for a fact that many of
these workers did not receive full overtime compensation.
1Portillo used this fake identity to complete paperwork including a Form I-9
(“Employment Eligibility Verification”), a Form W-4, and a medical questionnaire.
2
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Following a Department of Labor investigation, Permanent Workers
voluntarily sent notice letters to workers it had underpaid, offering the back
wages it owed. Portillo received a letter, but it was addressed to “Felix
Serrano,” and Portillo never responded to it.
Instead, Portillo filed a “Collective Action Complaint” against
Defendants, claiming a violation of the FLSA on behalf of himself and others
similarly situated. 2 He sought unpaid wages, interest, liquidated damages, and
attorney fees. Cepero and Permanent Workers responded, arguing inter alia
that they had no record of ever having employed anyone under the name of
“Javier Portillo.” 3 They argued that Portillo failed to establish the requisite
“employment relationship” necessary to establish a prima facie violation of the
FLSA, and moved for summary judgment. In response, Portillo admitted for
the first time that he had been employed under the identity “Felix Serrano.” 4
Defendants responded that Portillo’s admission further supported summary
judgment on equitable grounds. 5
Portillo then filed a motion for conditional certification of the collective
action. In support of his motion, Portillo described two of his former Permanent
2 29 U.S.C. §§ 206-07 (2015). To recover under the FLSA for unpaid overtime wages
a plaintiff must prove by a preponderance of the evidence:
(1) that there existed an employer-employee relationship during the unpaid
overtime periods claimed;
(2) that the employee engaged in activities within the coverage of the FLSA;
(3) that the employer violated the FLSA’s overtime wage requirements; and
(4) the amount of overtime compensation due.
Johnson v. Heckmann Water Res. (CVR.), Inc., 758 F.3d 627, 630 (5th Cir. 2014) (citing
Harvill v. Westward Commc’ns, LLC, 433 F.3d 428, 441 (5th Cir. 2005)).
3 Conrad responded separately, making similar arguments.
4 Portillo made this admission through a sworn affidavit, attached to his response in
opposition to Defendants’ motion for summary judgment.
5 Specifically, Defendants argued that Portillo should be (1) equitably estopped from
any benefits derived under the assumed identity of “Felix Serrano;” (2) barred from
recovery under the doctrine of unclean hands; or (3) barred from recovery under the
doctrine of after-acquired evidence.
3
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Workers colleagues, Pedro Cruz and Julio Virgen, as prospective collective
action members. Portillo argued that Cruz and Virgen were “similarly
situated,” justifying conditional certification of the collective action. 6 He also
asked the district court to authorize notice to other potential plaintiffs who
might “opt-in” to the collective action as authorized under the FLSA. 7
The district court scheduled a hearing to address Portillo’s motion for
conditional certification of the collective action. The scheduled hearing never
took place, because the court granted “summary judgment” before the date of
the certification hearing. As we read the transcript of the summary judgment
hearing, the district court’s decision to dismiss Portillo’s claims rested on its
disapproval of the collective action component of his complaint. Specifically,
the court observed that Portillo lacked credibility, and that his legal status and
identity were unverified. 8 The court concluded that it “c[ould] not allow
someone who has broken federal law to be the number one person in a class
action,” and granted summary judgment. Although the court “dismissed [the
case] in its entirety without prejudice,” it indicated that a future suit with a
different lead plaintiff – and Portillo as a member of the collective action – was
permissible. Portillo timely appealed.
6 For instance, Cruz and Virgen worked at the same three shipyards as Portillo –
those managed by Defendant Conrad. Like Portillo, both Cruz and Virgen alleged that they
were underpaid for their overtime labor.
7 See 29 U.S.C. § 216(b) (Under the FLSA, “[n]o employee shall be a party plaintiff to
any such 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.”).
8 We note that Portillo’s immigration status alone does not bar him from bringing an
FLSA suit. See Mitchell Bros. Film Grp. v. Cinema Adult Theater, 604 F.2d 852, 863 (5th Cir.
1979) (“[I]t is well established that the protections of the Fair Labor Standards Act are
applicable to citizens and aliens alike and whether the alien is documented or undocumented
is irrelevant.”). Defendants argue that Portillo’s fraudulent acts are an affirmative defense
against his individual FLSA claims, a defense which the district court did not reach and about
which we express no opinion here.
4
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Because the court’s grant of summary judgment rested on its conclusion
that Portillo was unfit to be the lead plaintiff in a collective action, 9 we construe
the district court’s grant of summary judgment as an implicit denial of
conditional certification of Portillo’s proposed collective action.
II.
We review a district court’s grant of summary judgment de novo,
applying the same standards as the district court. 10 Under this standard, this
Court evaluates whether the party seeking summary judgment has
demonstrated that “there is no genuine dispute as to any material fact” and
that they are “entitled to judgment as a matter of law.” 11
III.
“[T]his court has never set a legal standard for collective-action
certification,” but we have affirmed at least two approaches. 12 Although we do
not reach here the application of either standard, the district court will.
The first approach tracks Rule 23, where district courts evaluate FLSA
collective actions against the well-established requirements of numerosity,
9 “There’s no way I would allow this individual to be the main plaintiff in a civil
action . . . I’m going to dismiss it without prejudice.”
10 Kerstetter v. Pac. Sci. Co., 210 F.3d 431, 435 (5th Cir. 2000).
11 FED. R. CIV. P. 56(a).
12 Roussell v. Brinker Int’l, Inc., 441 F. App’x 222, 226 (5th Cir. 2011) (unpublished)
(citing Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1216 (5th Cir.1995)); see also Lott v. Ten
Star Truck Wash, Inc., No. CIV.A.H-06-00042, 2006 WL 6584401, at *1 (S.D. Tex. Aug. 18,
2006) (“[T]he Fifth Circuit has declined to endorse any particular standard for evaluating
requests for notice to potential class members under the FLSA . . . .”).
5
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commonality, typicality, and adequacy. 13 The second is the “Lusardi
approach,” named for an opinion describing a two-stage certification process. 14
During the first stage of the Lusardi approach,
“[T]he plaintiff moves for conditional certification of his or her
collective action. The district court then decides, usually based on
the pleadings and affidavits of the parties, whether to provide
notice to fellow employees who may be similarly situated to the
named plaintiff, thereby conditionally certifying a collective
action.” 15
Because plaintiffs seeking conditional certification need not identify other
hypothetical collective action members, the stage one standard is considered
to be “fairly lenient.” 16 The decision whether to conditionally certify “lends
itself to ad hoc analysis on a case-by-case basis,” 17 but courts typically grant
certification. 18 Upon grant of conditional certification, “notice of the action
13 Mooney, 54 F.3d at 1214; Fed. R. Civ. P. 23(a).
14 Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987); see Mooney, 54 F.3d at 1213
(describing Lusardi); Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 915 n.2 (5th Cir. 2008)
(explaining the two-step approach).
Most courts have adopted or approved the Lusardi approach. See Mielke v. Laidlaw
Transit, Inc., 313 F. Supp. 2d 759, 762 (N.D. Ill. 2004) (stating that the majority of courts
have employed or implicitly approved the two-step method); see also Monroe v. FTS USA,
LLC, 815 F.3d 1000, 1008-09 (6th Cir. 2016) (“[W]e may not examine the certification issue
using a Rule 23-type analysis; we must apply the ‘similarly situated’ standard governed by
the three-factor test.”); Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1105 (10th Cir.
2001) (“Arguably, the ad hoc approach [of Lusardi] is the best of the three approaches
outlined because it is not tied to the Rule 23 standards. Congress clearly chose not to have
the Rule 23 standards apply . . . and instead adopted the ‘similarly situated’ standard.”);
England v. New Century Fin. Corp., 370 F. Supp. 2d 504, 511 (M.D. La. 2005) (applying
Lusardi in FLSA suit); Basco v. Wal-Mart Stores Inc., No. Civ.A. 00-3184, 2004 WL 1497709,
at *4 (E.D. La. 2004) (stating that the two-step Lusardi approach is the preferred method for
making the similarly situated analysis and that the standard does not incorporate Rule 23
requirements). But see Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010) (applying Rule
23 to affirm denial of certification of a collective action under the FLSA).
15 Sandoz, 553 F.3d at 921 n.2 (citations omitted); see also Mooney, 54 F.3d at 1213-
14, overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003).
16 Mooney, 54 F.3d at 1214.
17 Id. at 1213.
18 Id. at 1214; see also Lott, 2006 WL 6584401, at *1.
6
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should be given to potential class members,” 19 allowing them the opportunity
to “opt-in” to the collective action. 20
In the second stage of the Lusardi approach, “once discovery is complete
and the employer moves to decertify the collective action, the court must make
a factual determination as to whether there are similarly-situated employees
who have opted in.” 21 At this stage, courts are much less likely to allow the
collective action to continue to trial. 22 The court may consider: “(1) the
disparate factual and employment settings of the individual plaintiffs; (2) the
various defenses available to [defendant] which appear to be individual to each
plaintiff; [and] (3) fairness and procedural considerations.” 23
Whichever standard a district court applies, this Court reviews its
application of that standard for an abuse of discretion. 24
IV.
This appeal does not require us to determine whether the district court
abused its discretion in implicitly declining to certify Portillo’s proposed
collective action. We express no opinion as to the merits of certification of the
collective action here, nor do we endorse either standard for evaluating
proposed collective actions in FLSA cases like this one. 25 Rather, we are
compelled to vacate the district court’s dismissal of Portillo’s individual claim
for reasons unrelated to the viability of the proposed collective action.
19 Id. at 1214.
20 29 U.S.C. § 216(b).
21 Sandoz, 553 F.3d at 915 n.2.
22 Mooney, 54 F.3d at 1214.
23 Mooney, 54 F.3d at 1213-14 & n.7.
24 Steele v. Leasing Enters., Ltd., No. 15-20139, 2016 WL 3268996, at *7 (5th Cir. June
14, 2016).
25 We also do not reach the ultimate merits of the asserted defenses to Portillo’s
individual claim.
7
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This Court has explained that when a court declines to certify a proposed
collective action, it “must dismiss the opt-in employees, leaving only the named
plaintiff’s original claims.” 26 The original plaintiffs then “proceed to trial on
their individual claims.” 27 Our sister circuits have similarly explained that
“[w]hen a collective action is decertified, it reverts to one or more individual
actions on behalf of the named plaintiffs.” 28
Here, the court could have explicitly ruled on Portillo’s motion for
conditional certification of the collective action. If it denied certification,
Portillo’s individual action should have proceeded. Alternatively, if the court
chose to allow the collective action to proceed with a different lead plaintiff, it
should not have dismissed but ought to have allowed counsel to offer another
suitable plaintiff to lead the collective action. 29 By dismissing Portillo’s
26 Sandoz, 553 F.3d at 915 n.2 (5th Cir. 2008) (emphasis added); see also Mooney, 54
F.3d at 1214.
27 Mehmedi v. La Dolce Vita Bistro, LLC, No. 1:10CV1591, 2013 WL 9349700, at *12
(N.D. Ohio Feb. 22, 2013) (citing Hipp v. Liberty Nat. Life Ins., 252 F.3d 1208, 1218 (11th Cir.
2001)). This is not to say that Portillo is guaranteed a trial on the merits in the district court.
Granting summary judgment may well be the appropriate disposition of this case. We leave
determining whether there is any genuine dispute of material fact and whether Permanent
Workers is entitled to judgment as a matter of law in the capable hands of the district court.
28 Alvarez v. City of Chicago, 605 F.3d 445, 450 (7th Cir. 2010); see also O’Brien v. Ed
Donnelly Enter., Inc., 575 F.3d 567, 573 (6th Cir. 2009) (affirming dismissal of the opt-in
plaintiffs and noting that most subsequently filed individual actions); Fox v. Tyson Foods,
Inc., 519 F.3d 1298, 1301 (11th Cir. 2008) (affirming decertification of an FLSA collective
action, dismissal of the opt-in plaintiffs, and severance of named plaintiffs into multiple
individual actions).
29 See Silva v. Vowell, 621 F.2d 640, 649-50 (5th Cir. 1980) (remanding to the district
court for a new named plaintiff since original named plaintiff’s case had become moot).
We note that other circuits have found it within the inherent authority of the district
court to dismiss a plaintiff’s claim with prejudice as a sanction for litigating under a false
name. See, e.g., Zocaras v. Castro, 465 F.3d 479, 483-85 (11th Cir. 2006); Dotson v. Bravo,
321 F.3d 663, 666-69 (7th Cir. 2003). However, the rationale for such a severe sanction is not
present here, as there is no allegation that Portillo has filed this suit under an assumed name
or that his misrepresentation otherwise constitutes an abuse of the judicial process. Cf.
Sanchez v. Litzenberger, 09 Civ. 7207 (THK), 2011 WL 672413, at *5 (S.D.N.Y. Feb. 24, 2011)
(denying defendants’ motion to dismiss where “[p]laintiff did not invent a fictitious name
solely for the purpose of obstructing the judicial process” and the misrepresentation was, “at
worst, only tangentially related to the issues in dispute”); Rodriguez v. City of Highland Park,
8
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individual claim without prejudice, it appears that the court intended to effect
this result. However, the court erred as a matter of law by dismissing Portillo’s
individual claim.
We VACATE and REMAND for further proceedings.
No. 01 C 4486, 2002 WL 31557628, at *3-5 (N.D. Ill. Nov. 14, 2002) (plaintiff who filed suit
under an assumed name but disclosed his true name in response to discovery requests
permitted to pursue his claims because he had not invented alias to deceive courts and
prejudice to defendants was limited).
9
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EDITH BROWN CLEMENT, Circuit Judge.
The district court committed legal error by granting summary judgment
without prejudice. See Rivera v. PNS Stores, Inc., 647 F.3d 188, 194 (5th Cir.
2011). This type of mistake is usually a clerical error that is easily corrected,
and the district court’s true intention is easily discerned. But this is not the
case here. Although I appreciate the majority’s attempt to decipher the district
court’s action, I concur only in the result to vacate and remand.
10