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Butler v. Directsat USA, LLC

United States District Court, D. Maryland

April 29, 2015

JEFFRY BUTLER, ET AL
v.
DIRECTSAT USA, LLC, ET AL

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

This collective action was brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., by Plaintiff Jeffry Butler ("Butler") against Defendants DirectSAT USA, LLC ("DirectSAT"), UniTek USA, LLC ("UniTek"), and UniTek Global Services, Inc. ("UGS") (collectively "Defendants"). DirectSAT is a subsidiary of UniTek and UGS, and provides satellite installation services to DirecTV customers throughout the country. Butler is a technician who previously installed, upgraded, and serviced DirecTV equipment at customer locations in Maryland, Virginia, and the District of Columbia. Butler brought this suit against Defendants for their alleged failure to pay overtime wages in violation of the FLSA and various state wage laws. As to the FLSA claim, Butler sought to represent a collective of all technicians employed by Defendants in Virginia, Maryland, and the District of Columbia. Conditional certification of the FLSA collective was granted on April 10, 2012. (ECF Nos. 65 and 66). Defendants filed a motion to decertify the collective on February 3, 2014, which was denied on September 18, 2014. (ECF Nos. 278 and 279). The collective presently consists of named Plaintiff Butler and twenty-five opt-in Plaintiffs (collectively "Plaintiffs").[1] On May 12, 2014, Defendants moved for summary judgment, which was granted in part and denied in part on October 16, 2014. (ECF Nos. 301 and 302). Shortly after issuance of the summary judgment opinion, this case was administratively closed because Defendants filed a notice of suggestion of bankruptcy. (ECF Nos. 311 and 312).

On March 17, 2015, Plaintiffs filed a motion to lift the bankruptcy stay, which is currently pending before the court. (ECF No. 315). Also pending and ready for resolution in this action are several motions that were filed prior to the administrative closing of this case, namely: (1) a motion for reconsideration of the July 6, 2011 order that dismissed Plaintiffs' Maryland Wage Payment and Collection Law ("MWPCL") claim (ECF No. 275); (2) a motion filed by Defendants for certification of an interlocutory appeal pursuant to 28 U.S.C. § 1292(b) of the undersigned's September 18, 2014 order denying decertification (ECF No. 298); (3) a motion to set a trial date filed by Plaintiffs (ECF No. 310); and (4) several renewed motions to seal various exhibits that were filed in conjunction with the parties' decertification and summary judgment motions (ECF Nos. 280, 299, 303, and 309). The issues have been briefed and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Plaintiffs' motion to lift the bankruptcy stay and reopen this case will be granted. Plaintiffs' motion for reconsideration of Butler's MWPCL claim and their motion to set a trial date will be granted. Defendants' motion for certification will be denied. Finally, the renewed motions to seal will be granted in part and denied in part.

I. Motion to Lift Bankruptcy Stay

Defendants filed a suggestion of bankruptcy on November 13, 2014, advising that UGS and "its affiliated debtors and debtors in possession" had filed a Chapter 11 petition and that the instant case was subject to an automatic bankruptcy stay pursuant to 11 U.S.C. § 362(a). (ECF No. 311). On the same date, the court issued an order administratively closing this case without prejudice to Plaintiffs' right to reopen it upon a showing of good cause. (ECF No. 312).

On March 17, 2015, Plaintiffs filed a "motion to lift the stay, " in which they indicate that the bankruptcy court handling Defendants' Chapter 11 proceeding issued a confirmation order and plan of reorganization on January 5, 2015. (ECF No. 315). Plaintiffs note that pursuant to the bankruptcy judge's order, the bankruptcy stay was lifted in this litigation as of the effective date of the reorganization plan, which was January 13, 2015, and Plaintiffs were granted permission to continue litigating their claims against Defendants. (ECF No. 315-1, at 58-61). Defendants did not respond to this motion, however, they had previously filed a notification on January 15, 2015, indicating that the Bankruptcy Court had confirmed their Chapter 11 plan of reorganization.

When a debtor files for bankruptcy protection, 11 U.S.C. § 362(a)(1) automatically stays "the commencement or continuation... of a judicial, administrative, or other action or proceeding against the debtor that was... commenced before the commencement of the case under this title." The "chief purpose" of the automatic stay provision is "to allow for a systematic, equitable liquidation proceeding by avoiding a chaotic and uncontrolled scramble for the debtor's assets in a variety of uncoordinated proceedings in different courts.'" Safety-Kleen, Inc. v. Wyche, 274 F.3d 846, 864 (4th Cir. 2001) ( quoting Fidelity Mortgage Investors v. Camelia Builders, Inc., 550 F.2d 47, 55 (2d Cir. 1976)). "Relief from the stay can be granted only by the bankruptcy court having jurisdiction over a debtor's case." Constitution Bank v. Tubbs, 68 F.3d 685, 691 (3d Cir. 1995). "Unless relief from the stay is granted, the stay continues until the bankruptcy case is dismissed or closed, or discharge [of the debtor's debts] is granted or denied." Id. at 691-92 ( citing 11 U.S.C. § 362(c)). In Chapter 11 bankruptcy proceedings, the bankruptcy court's confirmation of the plan "discharges the debtor from any [dischargeable] debt[, ]" unless otherwise provided for in the plan of reorganization. 11 U.S.C. § 1141(d)(1); see also U.S. v. White, 466 F.3d 1241, 1245-46 & 1245 nn.7-8 (11th Cir. 2006) ( citing 11 U.S.C. §§ 362(c)(2) and 1141(d)(1)).

Here, the bankruptcy court confirmed Defendants' Chapter 11 Plan of reorganization on January 5, 2015. In his confirmation order, the bankruptcy judge specifically addressed the Plaintiffs' current suit:

With respect to the plaintiffs [] and any members or putative members of any class or subclass [] in the following litigations [including] Butler, et al v. DirectSat, USA, LLC, et al., 10 cv 2747 (District of Maryland)[, ] [] any stay or injunction imposed by this Confirmation Order, the Plan or any other Order of the Bankruptcy Court, as applicable, is immediately removed as of the Effective Date of the Plan and is lifted in order to permit Plaintiffs and all other parties to fully litigate their Claims and the Claims of the Class members[.]

(ECF No. 315-1 ¶ 72). Defendants' reorganization plan became effective January 13, 2015, which lifted the bankruptcy stay. (ECF Nos. 313, 313-1, and 315). Accordingly, Plaintiffs' motion will be granted and this case will be reopened.

II. Motion for Reconsideration

Plaintiffs move for reconsideration of the undersigned's July 6, 2011 memorandum opinion and order (ECF Nos. 28 and 29), which dismissed their Maryland Wage Payment and Collection Law ("MWPCL") claim (count III) based on "an intervening change in controlling law." (ECF No. 275). The July 6, 2011 opinion dismissed Plaintiffs' claim based on the understanding that "[t]he MWPCL does not specifically address payment of overtime wages or provide a cause of action directed at employer's failure to pay overtime." (ECF No. 28, at 16). The opinion specifically notes that "other judges in this district have rejected plaintiffs' attempts to state claims for violation of the MWPCL where [like here] the parties' core dispute is whether plaintiffs were entitled to overtime wages at all and not whether overtime wages were paid on a regular basis or upon termination." ( Id. ).

Plaintiffs assert that the dismissal of their MWPCL claim was based on the improper determination that Plaintiffs' claim for overtime wages did not fall within the scope of the MWPCL. Plaintiffs point out that after the court issued its July 6, 2011 decision, the Court of Appeals of Maryland reached a different conclusion in Peters v. Early Healthcare Giver, Inc., 439 Md. 646 (2014), finding that the MWPCL does provide a vehicle for recovering unpaid overtime wages.

In response, Defendants argue that Plaintiffs' motion for reconsideration of their MWPCL claim must be denied because it relies upon the same argument that was previously rejected at the motion to dismiss stage - that the 2010 Amendment to the MWPCL made explicit that unpaid overtime wage claims were recoverable under the MWPCL. In addition, Defendants argue that Plaintiffs' MWPCL claim was dismissed in 2011 because of pleading deficiencies that are equally present today. Defendants add that "even if [] Peters finally resolves the question of whether the 2010 amendments to the MWPCL provide a private right of action for allegedly unpaid overtime, said amendments have no bearing" on this case because they were enacted after the only remaining named Plaintiff, Jeffry Butler, was no longer employed by DirectSat. (ECF No. 277, at 2-3). Defendants argue that neither the 2010 Amendments to the MWPCL nor the Peter court's interpretation of the same were intended to apply retroactively and therefore, should not be applied to Butler whose employment with Defendants ended in 2008.

Because Plaintiffs seek reconsideration of a non-final, interlocutory order, their motion is properly analyzed under Fed.R.Civ.P. 54(b). See Fed.R.Civ.P. 54(b) ("[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action... and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities."). The precise standard governing a motion for reconsideration of an interlocutory order is unclear. Although the standards articulated in Rules 59(e) and 60(b) are not binding in an analysis of Rule 54(b) motions, see Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 504, 514 (4th Cir. 2003), courts frequently look to these standards for guidance in considering such motions, see Cohens v. Md. Dep't of Human Res., 933 F.Supp.2d 735, 741 (D.Md. 2013). Under Rule 59(e), a motion to alter or amend a final judgment may be granted only "(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice." Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). Under Rule 60(b), a court may grant relief from a judgment or order for: (1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence; (3) fraud or misconduct by the opposing party; (4) voidness; (5) satisfaction; or (6) any other reason that justifies relief. Fed.R.Civ.P. 60(b).

Judge Hazel recently discussed in Chavez v. Besies Corp., No. GJH-14-1338, 2014 WL 5298032, at *2-3 (D.Md. Oct. 10, 2014), the scope of the MWPCL as clarified by the Court of Appeals of Maryland in two opinions it issued in 2014:

"[I]t is well-settled that the federal courts are bound by the interpretation placed on state statutes by the highest courts of the state." Wetzel v. Edwards, 635 F.2d 283, 289 (4th Cir. 1980). With that understanding, this Court turns to a recent decision where the Maryland Court of Appeals addressed the issue raised by Defendant. Marshall v. Safeway, 437 Md. 542, 88 A.3d 735 (Md. 2014). There, the Maryland Court of Appeals found that the MWPCL generally provides an employee with a cause of action against an employer, not just for the failure to pay wages on time, but also for "the refusal of employers to pay wages lawfully due." Id. at 561-62, 88 A.3d at 746. In explaining the MWPCL, Maryland's highest court stated, "what the timing relates to is what must be paid - all ...

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