UNITED STATES COURT OF APPEALSstatic.reuters.com/resources/media/editorial/20161216/f... · 2016. 12. 16. · Disclosure of Corporate Affiliations and Financial Interest Sixth Circuit

No. 16-5086

_______________________________________________

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _______________________________________________

WILLIAM WHITLOCK; DAVID SKYRM; KRISTIN MOORE; HOLLY GOODMAN; GARY MUNCY; MICHAEL BROWN,

Plaintiffs-Appellees,

v.

FSL MANAGEMENT, LLC; ENTERTAINMENT CONCEPTS

INVESTORS SERVICES, LLC; CORDISH OPERATING VENTURES,

LLC; ENTERTAINMENT CONSULTING SERVICES, LLC; FSH MANAGEMENT, LLC,

Defendants-Appellants.

________________________________________________________________

From the United States District Court

for the Western District of Kentucky, Civil Action No. 3:10-CV-00562

The Honorable Joseph H. McKinley, Jr. _______________________________________________

BRIEF OF DEFENDANTS-APPELLANTS _______________________________________________

Clark C. Johnson

Chadwick A. McTighe Jeffrey S. Moad

STITES & HARBISON PLLC

400 West Market Street, Suite 1800 Louisville, KY 40202-3352

Telephone: (502) 587-3400

Email: [email protected]

Counsel for Defendants-Appellants

Case: 16-5086 Document: 28 Filed: 03/22/2016 Page: 1

i

Disclosure of Corporate Affiliations and Financial Interest

Sixth Circuit Case No.: 16-5086

Case Name: William Whitlock, et al. v. FSL Management, LLC, et al.

Name of counsel: Clark C. Johnson, Chadwick A. McTighe, and Jeffrey S.

Moad

Pursuant to 6th Cir. R. 26.1, FSL Management, LLC makes the following disclosure:

1. Is said party a subsidiary or affiliate of a publicly-owned corporation?

Response: No.

2. Is there a publicly-owned corporation, not a party to the appeal, that has

a financial interest in the outcome?

Response: No.

/s/ Clark C. Johnson Dated: March 22, 2016

Clark C. Johnson

Chadwick A. McTighe

Jeffrey S. Moad Counsel for Defendants-Appellants


ii





Moad

Pursuant to 6th Cir. R. 26.1, Entertainment Concepts Investors, LLC makes the following disclosure:


Response: No.



Response: No.


Clark C. Johnson

Chadwick A. McTighe



iii





Moad

Pursuant to 6th Cir. R. 26.1, Cordish Operating Ventures, LLC makes the following disclosure:


Response: No.



Response: No.


Clark C. Johnson

Chadwick A. McTighe



iv





Moad

Pursuant to 6th Cir. R. 26.1, Entertainment Consulting International, LLC makes the following disclosure:


Response: No.



Response: No.


Clark C. Johnson

Chadwick A. McTighe



v





Moad

Pursuant to 6th Cir. R. 26.1, FSH Management, LLC makes the following disclosure:


Response: No.



Response: No.


Clark C. Johnson

Chadwick A. McTighe



TABLE OF CONTENTS

Page

vi

DISCLOSURE STATEMENTS .................................................................. i

TABLE OF CONTENTS .......................................................................... vi

TABLE OF AUTHORITIES ................................................................... viii

STATEMENT REGARDING ORAL ARGUMENT ................................ xii

JURISDICTIONAL STATEMENT ............................................................ 1

STATEMENT OF ISSUES PRESENTED FOR REVIEW .......................... 2

STATEMENT OF THE CASE ................................................................... 2

SUMMARY OF THE ARGUMENT .......................................................... 7

ARGUMENT ............................................................................................ 8

I. Standard of Review. ........................................................................... 8

II. Kentucky Law Precludes Class Actions in Wage and Hour Claims. .............................................................................................. 9

A. The Text of KRS 337.385 Precludes Class Relief. ....................... 9

B. Two Kentucky Appellate Decisions and Four Federal District Court Decisions Have Held That Class Relief Is

Unavailable under KRS 337.385. ............................................. 11

III. The District Court Abused Its Discretion in Refusing to Decertify the Class and Approving a Class Settlement. ..................................... 14

A. The Continued Existence of a Certified Class and Approval

of a Class Settlement Violated Rule 23. .................................... 15

1. The District Court Cannot Approve a Settlement That

Contravenes State Law. ................................................. 16

2. The Authority Relied upon by the District Court is Inapposite and Incorrectly Decided. ............................... 20

B. The Continued Existence of a Certified Class and Approval

of a Class Settlement Violated the Rules Enabling Act. ............. 22

CONCLUSION........................................................................................ 29

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE


TABLE OF CONTENTS

(continued)

vii

ADDENDUM

Designation of Relevant District Court Documents

Relevant Statutes, Rules, and Regulations


TABLE OF AUTHORITIES

Page

viii

Cases

Aldrich v. Univ. of Phoenix, Inc.,

2015 U.S. Dist. LEXIS 137916 (W.D. Ky. Oct. 9, 2015) ..................... 13

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) .......................................................... 16–17, 22, 26

Anderson v. GCA Servs. Grp. of N.C.,

2015 U.S. Dist. LEXIS 119742 (W.D. Ky. Sept. 9, 2015) .................... 13

Biodiversity Assocs. v. Cables,

357 F.3d 1152 (10th Cir. 2004) ..................................................... 19–20

Brown v. Tenn. Dep’t of Fin. & Admin.,

561 F.3d 542 (6th Cir. 2009) .............................................................. 19

Davenport v. Charter Commc’ns, LLC,

35 F. Supp. 3d 1040 (E.D. Mo. 2014)….. ........................... 12–13, 23, 25

Driver v. AppleIllinois, LLC,

739 F.3d 1073 (7th Cir. 2014) .............................................................. 5

Ehrheart v. Verizon Wireless,

609 F.3d 590 (3d Cir. 2010) .......................................................... 20–23

Erie R.R. v. Tompkins,

304 U.S. 64 (1938) ............................................................................ 14

Georgevich v. Strauss,

772 F.2d 1078 (3d Cir. 1985) ............................................................. 17

Green v. Platinum Rests. Mid-America, LLC,

2015 U.S. Dist. LEXIS 171647 (W.D. Ky. Feb. 24, 2015) ... 11–12, 23–25

Harris v. Reliable Reports Inc.,

2014 U.S. Dist. LEXIS 31223 (N.D. Ind. Mar. 10, 2014) ............... 25–26

In re Deepwater Horizon,

732 F.3d 326 (5th Cir. 2013) ................................................... 15, 22, 26



Page

ix

In re General Motors Corp. Engine Interchange Litig.,

594 F.2d 1106 (7th Cir. 1979) ............................................................ 27

In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig.,

302 F.R.D. 448 (N.D. Ohio 2014) ..................................................... 16

James River Ins. Co. v. Rapid Funding, LLC,

658 F.3d 1207 (10th Cir. 2011) .......................................................... 24

Klier v. Elf Atochem N. Am., Inc.,

658 F.3d 468 (5th Cir. 2011) .............................................................. 27

Marks v. United States,

430 U.S. 188 (1977) .......................................................................... 24

Marshall v. NFL,

787 F.3d 502 (8th Cir. 2015) .............................................................. 26

McCann v. Sullivan Univ. Sys.,

2015 Ky. App. Unpub. LEXIS 862 (Ky. App. Feb. 27, 2015) ..... 4, 12, 23

McCann v. Sullivan Univ. Sys.,

2015 Ky. LEXIS 1970 (Ky. Oct. 21, 2015).. ................................... 4, 13

McKinney v. Bayer Corp.,

744 F. Supp. 2d 733 (N.D. Ohio 2010) .......................................... 24, 25

Randleman v. Fid. Nat’l Title Ins. Co.,

646 F.3d 347 (6th Cir. 2011) ................................................................ 8

Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co.,

559 U.S. 393 ................................................................................ 23–26

Sullivan v. DB Invs., Inc.,

667 F.3d 273 (3d Cir. 2011) .......................................................... 26–27

Toyota Motor Mfg., Ky. v. Kelley,

2013 Ky. App. Unpub. LEXIS 910 (Ky. App. Nov. 15, 2013). ............ 11



Page

x

UAW v. GMC,

497 F.3d 615 (6th Cir. 2007) .............................................................. 17

United States v. Lexington-Fayette Urban Cnty. Gov’t,

591 F.3d 484 (6th Cir. 2010) ............................................................. 18

Vassalle v. Midland Funding LLC,

708 F.3d 747 (6th Cir. 2013) ................................................................ 8

Williams v. Vukovich,

720 F.2d 909 (6th Cir. 1983) .............................................................. 18

Ziegler v. IBP Hog Mkt., Inc.,

249 F.3d 509 (6th Cir. 2001) .............................................................. 14

Federal Statutes

28 U.S.C. § 1332 .......................................................................................... 1

28 U.S.C. § 1367 .......................................................................................... 1

28 U.S.C. § 1441 .......................................................................................... 1

28 U.S.C. § 1446 .......................................................................................... 1

28 U.S.C. § 1453 .......................................................................................... 1

28 U.S.C. § 1291 .......................................................................................... 1

29 U.S.C. § 216 ..................................................................................... 10–13

28 U.S.C. § 2072 ............................................................................. 15, 23–28

Portal-to-Portal Act § 1, Pub. L. No. 80-49, 61 Stat. 84 (1947) ...................... 10

State Statutes

KRS 337.010 ............................................................................................... 3

KRS 337.065 ............................................................................................... 3

KRS 337.275 ............................................................................................... 3

KRS 337.385 ................................................... 7–13, 15, 17–18, 22–23, 25, 28

KRS 337.427 .......................................................................................... 9–11



Page

xi

Rules

Fed. R. App. P. 4(1)(A) ................................................................................ 1

Fed. R. Civ. P. 23(a) .................................................................................... 3

Fed. R. Civ. P. 23(b) .................................................................................... 3

Fed. R. Civ. P. 23(c).............................................................................. 16, 17

Fed. R. Civ. P. 23(e) ................................................................... 5, 15, 17, 27

Fed. R. Civ. P. 23(f) ..................................................................................... 3


xii

STATEMENT REGARDING ORAL ARGUMENT

Appellants request oral argument. This appeal presents novel questions

concerning the role of the district court in approving a class action settlement.

Furthermore, oral argument would assist the Court in analyzing complex

questions concerning the interplay between the Kentucky Wage and Hour Act,

the Rules Enabling Act, and Federal Rule of Civil Procedure 23.


- 1 -

SUBJECT MATTER AND APPELLATE JURISDICTION

The District Court asserted subject matter jurisdiction over the action

from which this appeal is taken pursuant to 28 U.S.C. §§ 1332, 1367, 1441,

1446, and 1453. (See Compl., R. 1-4, Page ID # 14–19; Notice of Removal, R.

1, Page ID # 1–6; Second Am. Compl., R. 10, Page ID # 60–68.) The parties

are citizens of different states, (Mem. Op. & Order, R. 95, Page ID # 1105–

1109), and Plaintiffs seek more than $75,000. See 28 U.S.C. § 1332.

This Court has jurisdiction to review the District Court’s December 22,

2015 final and appealable order pursuant to 28 U.S.C. § 1291. (See R. 189 &

190, Page ID # 1926–1949.) Defendants filed a timely notice of appeal

pursuant to Federal Rule of Appellate Procedure 4(1)(A) on January 20, 2016.

(Notice of Appeal, R. 191, Page ID # 1950.)


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STATEMENT OF ISSUES PRESENTED FOR REVIEW

(1) Whether plaintiffs can obtain certification of a class in asserting

claims under the Kentucky Wage and Hour Act, which permits an employee

or group of employees to bring an action only “for and in behalf of himself,

herself, or themselves.”

(2) Whether the District Court had authority under Federal Rule of Civil

Procedure 23 to maintain a certified class and enter final approval of a class

settlement after the parties purportedly agreed to settlement terms when class

certification is impermissible as a matter of substantive Kentucky law.

(3) Whether the District Court applied Federal Rule of Civil Procedure

23 in a manner that violated the Rules Enabling Act when it declined to

decertify the class and approved a class settlement under a Kentucky statute

that prohibits representative actions and class-wide relief.

STATEMENT OF THE CASE

Six employees of three different bars and nightclubs located in

Louisville’s Fourth Street Live! Entertainment District initiated this case

against their employers. (Second Am. Compl., R.10, Page ID # 60–68.) They

alleged violations of the Kentucky Wage and Hour Act, and two of them also

asserted defamation claims. (Id. at Page ID # 65.)


- 3 -

Though the initial complaint contained only individual claims, (Compl.,

R. 1-4, Page ID # 14–19), in subsequent pleadings Plaintiffs asserted class

allegations under the Kentucky Wage and Hour Act, KRS 337.010, et seq.

(Second Am. Compl., R. 10, Page ID # 60–68.) On behalf of the putative

class, they alleged that Defendants1 violated KRS 337.275 (concerning off-the-

clock work) and KRS 337.065 (concerning tip pooling). (Id.) Over Defendants’

objection, in 2012 the District Court granted Plaintiffs’ motion for class

certification of the wage and hour claims under Federal Rules of Civil

Procedure 23(a) and (b)(3). (Mem. Op. & Order, R. 96, Page ID # 1110–35.)

Defendants filed a Rule 23(f) petition seeking interlocutory review, but the

petition was denied. (Order, R. 106, Page ID # 1267–1270.)

Consistent with Defendants’ assertions in that petition that class

certification sounded the death knell of the litigation due to the immense

pressure a certified class places on defendants to settle even meritless claims,

(Pet., R.100-2, Page ID # 1169–72), the parties commenced extended

settlement discussions. (See Mem. Op. & Order, R. 189, Page ID # 1928.) On

March 20, 2015, the parties filed a joint status report indicating that they had

reached a settlement and notifying the court that they “agreed to the terms of a

1 The Second Amended Complaint also removed all allegations against

Entertainment Concepts Investors, LLC. That entity nevertheless is a party to this appeal because it was named in subsequent orders.


- 4 -

settlement agreement and anticipate[d] filing the formal settlement documents

. . . by April 17, 2015.” (Status Report, R. 160, Page ID # 1545.) No formal

settlement documents were ever executed.

On March 27, former counsel for Defendants first expressed a concern

based on a month-old Kentucky Court of Appeals decision that the District

Court had no authority to certify the class, even for settlement purposes. (See

Mem. Op. & Order, R. 189, Page ID # 1928.) That opinion is McCann v.

Sullivan Univ. Sys., 2015 Ky. App. Unpub. LEXIS 862 (Ky. App. Feb. 27,

2015). As further detailed below, McCann and several district court opinions

decided in 2015 hold that the plain language of the Kentucky Wage and Hour

Act does not permit class actions.

After raising this concern, Defendants moved the District Court to stay

proceedings to approve a settlement agreement pending final resolution of

McCann.2 (Mot. for Stay, R. 161, Page ID # 1546–55.) The employees opposed

any stay and moved for approval of the class settlement. (Mot. for Settlement

Approval, R. 163, Page ID # 1560–62.)

On July 13, the District Court denied the motion to stay and granted the

motion for preliminary approval. (Order, R. 168, Page ID # 1676–91.) The 2 The Kentucky Supreme Court later granted discretionary review of McCann.

See McCann v. Sullivan Univ. Sys., 2015 Ky. LEXIS 1970 (Ky. Oct. 21, 2015).

The parties have begun briefing, but the court has not yet scheduled argument.


- 5 -

District Court erroneously relied on the Kentucky Rules of Civil Procedure

and, in a misapplication of the Erie doctrine, reasoned that “because McCann

was not final at the time of settlement, there was no precedential value to its

holding” and it did “not deprive the Court of the authority to bind absent class

members . . . or prohibit the Court from approval of the settlement under Fed.

R. Civ. P. 23(e).” (Id. at Page ID # 1684.) After finding that the parties had

entered into an enforceable settlement agreement, the District Court granted

preliminary approval of the settlement. (Id. at Page ID # 1690–91.) Defendants

subsequently filed a Rule 23(f) petition with this Court, which was denied.

(Order, R. 183, Page ID # 1802–04.)

In the order denying the Rule 23(f) petition, this Court noted that

McCann “may for all we know have undermined the reasons for certifying the

class in the first place, and the defendants can always move the district court to

decertify the class on the basis of new developments.” (Id. at Page ID # 1804

(quoting Driver v. AppleIllinois, LLC, 739 F.3d 1073, 1076 (7th Cir. 2014).)

Accordingly, Defendants promptly moved to decertify the class. (Mot. to

Decertify, R. 184, Page ID # 1808–15.) At oral argument, the District Court

acknowledged that if the action had been filed in December 2015, the court

“wouldn’t have certified the class.” (Transcript, R.193, Page ID # 1955.)


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On December 22, the District Court denied the Motion to Decertify and

entered final approval of a class action settlement. (Order, R. 189, Page ID #

1947–48.) The District Court found that if “the parties had not reached a

settlement agreement in this matter, the Court would stay the action pending

resolution of [McCann] by the Kentucky Supreme Court, instead of decertifying

the class as argued by the Defendants.” (Id. at Page ID # 1930.) The District

Court then found decertification inappropriate because, even though class

certification was improper, the parties agreed to settle the matter on a class

basis. (Id. at Page ID # 1931.) It relied on inapplicable Third Circuit precedent

and the Kentucky Rules of Civil Procedure to find that it had no independent

obligation under Rule 23(e) to ensure that the certified class was lawful before

approving the settlement. (Id.)

The court also relied entirely on a footnote from an Eighth Circuit

decision in finding that the Rules Enabling Act did not apply to court approval

of class settlements. (Id. at Page ID # 1934–35.) Further, it conflated

settlement approval with the motion to decertify in rejecting Defendants’

argument that the existence of a class violated the Rules Enabling Act,

reasoning: “The issue before this Court is not whether the class certification

violates the Rules Enabling Act. The issue is whether the approval of a

settlement under Rule 23 runs afoul of the Rules Enabling Act.” (Id.) For these


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reasons, the District Court denied the motion to decertify the class, (id.), and

granted final approval of a class settlement. (Id. at Page ID # 1935–48.)

The District Court entered a final and appealable order dismissing the

action, (Order of Dismissal, R. 190, Page ID # 1949), and Defendants filed a

timely notice of appeal. (Notice of Appeal, R. 191, Page ID # 1950.)

SUMMARY OF THE ARGUMENT

The District Court abused its discretion in approving a settlement

agreement with a class that, under Kentucky law, could not have been

certified. The plain language of Kentucky’s wage and hour statute has always

precluded class actions. It provides that a claim for lost wages “may be

maintained in any court of competent jurisdiction by any one (1) or more

employees for and in behalf of himself, herself, or themselves.” KRS 337.385(2)

(emphasis added). Unlike the state or federal statutes that the Kentucky act

otherwise traces, KRS 337.385 does not permit an action “for and in behalf of

others similarly situated.” That the General Assembly intended to preclude

class actions has become increasingly clear since 2012, as two unanimous

panels of the Kentucky Court of Appeals and four federal district courts have

found that the statute does not allow relief to be awarded to a class.

The District Court’s refusal to decertify the class and decision to approve

a class settlement of claims under KRS 337.385 contravened Kentucky law,


- 8 -

Rule 23, and the Rules Enabling Act. A federal court has a continuing

obligation to ensure that a class is properly certified and that any settlement is

lawful and consistent with the public interest. As the mere existence of a

certified class here contravened public policy as defined by the Kentucky

General Assembly, the District Court abused its discretion in refusing to

decertify the class and in approving a class settlement. In addition, the District

Court applied Rule 23 to “abridge, enlarge or modify” a substantive state right

in violation of the Rules Enabling Act. This Court should vacate the District

Court’s order denying the motion to decertify and approving a class settlement,

and remand this case to proceed on an individual basis.

ARGUMENT

I. Standard of Review.

This Court reviews a district court’s decision on a motion to decertify a

class for abuse of discretion. Randleman v. Fid. Nat’l Title Ins. Co., 646 F.3d 347,

352 (6th Cir. 2011). Likewise, this Court reviews a district court’s approval of a

settlement agreement for abuse of discretion. Vassalle v. Midland Funding LLC,

708 F.3d 747, 754 (6th Cir. 2013). “An abuse of discretion occurs when the

court ‘commits a clear error of judgment, such as applying the incorrect legal

standard, misapplying the correct legal standard, or relying upon clearly

erroneous findings of fact.’” Id. at 754.


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II. Kentucky Law Precludes Class Actions in Wage and Hour Claims.

A. The Text of KRS 337.385 Precludes Class Relief.

For more than four decades, the plain language of the Kentucky Wage

and Hour Act has precluded class actions. Under KRS 337.385(2), a claim for

lost wages “may be maintained in any court of competent jurisdiction by any

one (1) or more employees for and in behalf of himself, herself, or themselves.” KRS

337.385(2) (emphasis added). Stated differently, the statute allows (i) an

employee to maintain an action for and in behalf of himself or herself; or (ii) a

group of employees to maintain an action for and in behalf of themselves. The

statute does not permit an employee—or a group of employees, as here—to

maintain an action for and in behalf of others similarly situated.

A comparison with another statute in the same chapter enacted several

years prior that plainly includes class-enabling language underscores the

General Assembly’s intent to preclude class actions. The Kentucky statute

governing employer liability for gender discrimination provides, in part:

Action to recover the liability may be maintained in any court of

competent jurisdiction by any one (1) or more employees for and

in behalf of himself, herself, or themselves and others employees similarly situated.

KRS 337.427(2) (emphasis added). Besides the “others similarly situated”

clause, the operative language in both statutes is identical. Both statutes have

been amended several times over the past few decades—for example, both


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were amended in 2010 to add the word “herself”—but the operative language

has never changed. If the General Assembly intended to allow employees to

bring wage and hour claims in a representative capacity, it would have

included the “similarly situated” language that clearly authorized such actions

in gender discrimination suits.

Comparison to the federal Fair Labor Standards Act further confirms the

legislature’s intent in enacting KRS 337.385. Kentucky’s statute was modeled

after the FLSA and contains similar language authorizing a civil action:

An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer

(including a public agency) in any Federal or State court of

competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.

29 U.S.C. § 216.3 In contrast, the Kentucky Wage and Hour Act, which was

enacted several decades after the FLSA, provides:

Such action may be maintained in any court of competent

jurisdiction by any one (1) or more employees for and in behalf of himself, herself, or themselves.

KRS 337.385(2). Thus, the Kentucky statute mirrors the FLSA’s limitation on

representative actions, but—unlike the FLSA—contains no “similarly

3 In 1947, Congress also added a sentence to preclude opt-out class actions

but permit collective actions: “No 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.” Portal-to-Portal Act § 1, Pub. L. No. 80-49, 61 Stat. 84 (1947).


- 11 -

situated” language and no provision allowing for opt-in collective actions. In

omitting this key language from the FLSA and from KRS 337.427(2), the

Kentucky legislature made clear its intention that employees only have the

right to bring a civil action against their employers for unpaid wages in an

individual capacity.

B. Two Kentucky Appellate Decisions and Four Federal District

Court Decisions Have Held That Class Relief Is Unavailable

under KRS 337.385.

Since the District Court certified a class in 2012, several courts have

found that the plain language of KRS 337.385 precludes class treatment. The

Kentucky Court of Appeals first addressed this issue in 2013. See Toyota Motor

Mfg., Ky. v. Kelley, 2013 Ky. App. Unpub. LEXIS 910, at *24–25 (Ky. App.

Nov. 15, 2013). In Kelley, after reversing the trial court on other grounds, a

unanimous three-judge panel noted: “[W]ere we to reach the merits of this

argument, we would agree that the text of KRS 337.385(1)4 provides a clear

expression of intent that class actions are not permitted.” Id. (emphasis added).

Consistent with the language of the statute, the court reasoned that “the effect

of the ‘for and in behalf of’ language is to limit the individuals who may

4 When the Kentucky Court of Appeals decided Kelley, the operative

language now located in KRS 337.385(2) was located in KRS 337.385(1).

See Green v. Platinum Rests. Mid-America, LLC, 2015 U.S. Dist. LEXIS

171647, at *14 n.5 (W.D. Ky. Feb. 24, 2015).


- 12 -

participate in an action under the Act to those who actually bring the action.”

Id. As a result, it concluded, the statute “does not permit class actions.” Id.

The next year, a federal district court predicted that the Kentucky

Supreme Court would follow Kelley and apply the plain language of the statute.

See Davenport v. Charter Commc’ns, LLC, 35 F. Supp. 3d 1040, 1047–49 (E.D.

Mo. 2014). Shortly thereafter, in February 2015, another district court applied

Erie and dismissed a portion of the plaintiffs’ complaint asserting a

representative capacity suit under KRS 337.385. See Green v. Platinum Rests.

Mid-America LLC, 2015 U.S. Dist. LEXIS 171647, at *10–22 (W.D. Ky. Feb.

24, 2015). In analyzing the statutory text, the court reasoned that “the final

clause of KRS 337.385(2) has to mean something; Plaintiffs’ interpretation

would render it superfluous.” Id. at *17.

Days later, the Kentucky Court of Appeals decided McCann v. Sullivan

Univ. Sys., 2015 Ky. App. Unpub. LEXIS 862 (Ky. App. Feb. 27, 2015). In

McCann, a unanimous panel held that as a matter of substantive law, KRS

337.385 does not permit class actions. Id. at *10–14. The court reasoned that

“the language in KRS 337.385 contrasts sharply with the FLSA’s language,

which expressly permits plaintiffs to bring claims for wage and hour violations

‘on behalf of himself or herself or other employees similarly situated.’” Id. at *9

(quoting 29 U.S.C. § 216(b)). It also recognized that “Kentucky law provides


- 13 -

effective and inexpensive administrative remedies to resolve claims for unpaid

wages. . . . Class actions are not necessary to achieve any legislative goal under

Kentucky’s wage and hour statutes.” Id. at *14. On October 21, the Kentucky

Supreme Court granted discretionary review of this decision. McCann v.

Sullivan Univ. Sys., 2015 Ky. LEXIS 1970 (Ky. Oct. 21, 2015).

After McCann, additional federal district judges in Kentucky confronted

this issue and held that KRS 337.385 does not allow class actions. In Anderson

v. GCA Servs. Grp. of N.C., 2015 U.S. Dist. LEXIS 119742, at *6–7 (W.D. Ky.

Sept. 9, 2015), the court analyzed the plain language of the statute and cited

two pre-McCann decisions in holding that “[w]age and hour claims are not

viable class actions under Kentucky law.” Likewise, the court in Aldrich v.

Univ. of Phoenix, Inc., 2015 U.S. Dist. LEXIS 137916, at *11–12 n.2 (W.D. Ky.

Oct. 9, 2015), quoted McCann and held that “the statute’s plain language does

not permit representative actions.”

Class certification here was improper. Two unanimous panels of the

Kentucky Court of Appeals have found class treatment of claims under this

section to be impermissible. Every federal court to consider the issue has

agreed. Though the District Court was apparently not confronted with the

issue when it certified a class in 2012, it was presented with this information

when it declined to decertify a class and approved a class settlement in 2015. In


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refusing to decertify the class and in approving the class settlement in violation

of Kentucky substantive law, the District Court abused its discretion.

III. The District Court Abused Its Discretion in Refusing to Decertify the

Class and Approving a Class Settlement.

It is well-settled that in a diversity case such as this, the District Court

must apply state substantive and federal procedural law. See Erie R.R. v.

Tompkins, 304 U.S. 64, 68 (1938). In defining the state substantive law, “the

federal courts must apply state law in accordance with the then controlling

decision of the highest state court.” Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509,

517 (6th Cir. 2001) (quotations omitted). Where, as here, “the forum state’s

highest court has not addressed the issue, the federal court must ascertain from

all available data, including the decisional law of the state’s lower courts, what

the state’s highest court would decide if faced with the issue.” Id.

In refusing to decertify the class and in approving a class settlement, the

District Court misapplied Rule 23 and Kentucky law. To maintain a class and

approve a class settlement under Rule 23, a district court has an independent

obligation to ensure that the class is properly certified and that the settlement is

lawful and furthers public policy. Here, the District Court abused its discretion

in maintaining a certified class and approving a class settlement that

contravened Kentucky law, improperly concluding that its only role in ruling


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on a motion to decertify and in approving a settlement was to “protect the

absent class members.” (Mem. Op. & Order, R. 189, Page ID # 1932.)

The District Court also misapplied Rule 23 in a manner that violated the

Rules Enabling Act, which provides that a Federal Rule of Civil Procedure

“shall not abridge, enlarge or modify any substantive right.” 28 U.S.C. §

2072(a). In refusing to decertify and in approving a class settlement, the

District Court abused its discretion by applying Rule 23 to abridge, enlarge, or

modify substantive rights created by KRS 337.385.

A. The Continued Existence of a Certified Class and Approval of a

Class Settlement Violated Rule 23.

A class settlement is no ordinary contract between private parties. Rule

23(e) permits the claims of a certified class to be settled “only with the court’s

approval.” Fed. R. Civ. P. 23(e). Without court approval, a settlement of class

claims has no effect. Before granting this approval, a district court must hold a

hearing and find that the proposed class settlement is “fair, reasonable, and

adequate.” Fed. R. Civ. P. 23(e)(2). This requirement that a court place its

imprimatur on a class settlement means that it “is not a private agreement

between the parties. It is a creature of Rule 23, which authorizes its use to

resolve the legal claims of a class ‘only with the court’s approval.’” In re

Deepwater Horizon, 732 F.3d 326, 343 (5th Cir. 2013).


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Rule 23 does not provide—as the District Court held—that a settlement

may only be rejected if it is “[un]fair, [un]reasonable, and [in]adequate” to the

unnamed class members. While a court must ensure that any settlement is fair to

absent parties, it does not follow that it may approve any settlement the parties

request that directly contravenes state or federal law. The District Court

recognized that the existence of the class contravened Kentucky law, and it

abused its discretion in refusing to decertify and in approving a class

settlement. See Fed. R. Civ. P. 23(c)(1)(C); In re Whirlpool Corp. Front-Loading

Washer Prods. Liab. Litig., 302 F.R.D. 448, 459 (N.D. Ohio 2014) (noting that a

district court may decertify a class until entry of a final judgment).

1. The District Court Cannot Approve a Settlement That

Contravenes State Law.

Federal courts have an independent obligation to scrutinize class

settlements, regardless of what the parties request. See Amchem Prods., Inc. v.

Windsor, 521 U.S. 591, 628 (1997). In analyzing agreements between the

parties, the court must consider issues beyond fairness to absent class

members.

As one example, a class may only be maintained, and a settlement may

only be approved, when the requirements for class certification are otherwise

satisfied. See id. (“Federal courts, in any case, lack authority to substitute for

Rule 23’s certification criteria a standard never adopted—that if a settlement is


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‘fair,’ then certification is proper.”). As another example, a court may decline

to approve a class settlement under Rule 23(e) that fails to advance the public

interest. Cf. UAW v. GMC, 497 F.3d 615, 631 (6th Cir. 2007). Indeed, another

court has affirmed a district court order refusing to approve a Rule 23(e)

settlement based on “the court’s legitimate concerns about federal-state

relations . . . and the changed position of the defendant class representative,”

an issue having nothing to do with fairness to absent class members. See

Georgevich v. Strauss, 772 F.2d 1078, 1085 (3d Cir. 1985) (“[E]ven if both parties

had continued to support the consent decree the district court retained the

authority to disapprove of the settlement.”).

Here, before the District Court put its judicial stamp of approval on the

settlement agreement, it had an obligation to determine whether a certified

class could properly exist. While settlement approval in Amchem was improper

because the plaintiff failed to show commonality and adequacy, the District

Court here should have decertified the class and refused to approve a

settlement because Kentucky substantive law prohibits class actions. The

plaintiffs had no right to bring a representative action under KRS 337.385. The

District Court recognized this in noting that it “wouldn’t have certified the

class,” (Transcript, R.193, Page ID # 1955), if it had been faced with the initial

certification motion later.


- 18 -

The class settlement likewise fails the requirements of Rule 23(e). The

settlement could not have been “fair, adequate, and reasonable” when the

Kentucky legislature has determined that class actions under KRS 337.385 are

contrary to Kentucky law. Moreover, an agreement between a class and

Defendants could not have advanced the public interest when the mere

existence of the class directly contravened the public interest as defined by the

Kentucky legislature.

This Court and others, in the context of consent decrees, have held that

federal courts cannot approve a settlement that violates legislative intent. This

Court’s standard for approving a consent decree is nearly identical to the

requirements of Rule 23(e)(2) described above. A district court may only enter

a decree that is “fair, adequate, and reasonable, as well as consistent with the

public interest.” United States v. Lexington-Fayette Urban Cnty. Gov’t, 591 F.3d

484, 489 (6th Cir. 2010) (quotations omitted).

In considering the public interest,5 “the district court must consider

whether the decree is ‘consistent with the public objectives sought to be

5 Other considerations in approving a consent decree are nearly identical to

those required under this Court’s interpretation of Rule 23. In considering

fairness, the court considers the strength of the plaintiff’s case, the good

faith efforts of the negotiators, the opinions of counsel, and the possible

risks involved in the litigation if the settlement is not approved. Id. at 489.

In considering reasonableness, the Court considers the size of the penalty

and its likely effect in achieving its goal. Id.


- 19 -

attained by’” the legislature. Id. at 490 (quoting Williams v. Vukovich, 720 F.2d

909, 923 (6th Cir. 1983)).6 A consent decree that conflicts with the public

interest (as defined by the legislature) is invalid. In Brown v. Tenn. Dep’t of Fin.

& Admin., 561 F.3d 542 (6th Cir. 2009), this Court ruled that a “consent decree

designed to remedy violations of federal law is not a private contract; it is a

judicial decree enforcing rights created by federal law through means agreed

upon by the parties. So if a change in law eliminates the rights and duties the

consent decree is designed to enforce, then it should not be enforced simply

because the parties agreed to it.” Id. at 546 (citing Rufio v. Inmates of Suffolk

Cnty. Jail, 502 U.S. 367, 388 (1992)); see also id. at 543, 548 (vacating settlement

agreement entered as an agreed order where a change in law contravened the

consent decree at issue). Likewise, the Tenth Circuit has held that “a

settlement agreement or consent decree designed to enforce statutory directives

is not merely a private contract. It implicates the courts, and it is the statute—and

only incidentally the parties—to which the courts owe their allegiance.”

Biodiversity Assocs. v. Cables, 357 F.3d 1152, 1169 (10th Cir. 2004) (emphasis

added) (quotations omitted). The court continued: “The primary function of a

6 While it is also beneficial to promote settlement, id., that general

consideration does not provide courts with authority to approve unlawful agreements.


- 20 -

settlement agreement or a consent decree, like that of a litigated judgment, is to

enforce the congressional will as reflected in the statute.” Id.

The class settlement here, like a consent decree, meant nothing until the

District Court approved it. It was not governed by ordinary contract principles

because it necessarily implicated the courts. The settlement violated the public

policy as defined by the Kentucky legislature. Just as a court cannot approve

an unlawful consent decree simply because the parties agreed to it, a court

cannot approve a class settlement that contravenes substantive law.

2. The Authority Relied upon by the District Court Is Inapposite

and Incorrectly Decided.

The District Court erred in relying on an inapposite and improperly

decided Third Circuit case. See Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d

Cir. 2010). In Ehrheart, the parties agreed to settle class claims under the Fair

and Accurate Credit Transaction Act. Id. at 592. During negotiations,

Congress was considering legislation that would have eliminated the plaintiff’s

substantive cause of action. Id. Six weeks after the district court preliminarily

approved the settlement, but before final approval, the President signed the

legislation and eliminated the cause of action. Id. The district court vacated its

order granting preliminary settlement approval, and the plaintiffs appealed. Id.

The majority of a divided Third Circuit panel reversed for three reasons:

(i) “there is a restricted, tightly focused role that Rule 23 prescribes for district


- 21 -

courts, requiring them to act as fiduciaries for the absent class members, but

that does not vest them with broad powers to intrude upon the parties’

bargain”; (ii) “a strong public policy exists . . . favoring settlement of disputes”;

and (iii) generally, “changes in the law after a settlement is reached do not

provide ground for rescission of the settlement.” Id. at 593.

The dissent argued that the legislature’s elimination of the plaintiffs’

cause of action mooted the case and left the court without “authority to hold

the required fairness hearing, enter an order of final approval,” or order any

other relief to the plaintiffs. Id. at 601–02. The dissent also found that the

district court gave effect to the proposed settlement agreement, which the

parties agreed would be “null and void ab initio” if the district court declined to

grant final approval “for any reason.” Id. at 600.

The majority’s reasoning is misguided but nevertheless inapplicable here.

Even if safeguarding the interests of absent class members is the reason that

district courts must review and enter orders implementing class settlements, the

court must examine—as with every other judicial act—whether it has the

authority to do so. Unlike Ehrheart, where Congress eliminated the underlying

cause of action, the class here could never have been certified. The parties

cannot, by private contract, simply agree to require a federal court to approve a

class settlement without satisfying the requirements of class certification. See


- 22 -

Amchem, 521 U.S. at 620. In Amchem, that meant the failure to satisfy the Rule

23 commonality and adequacy requirements prohibited class settlement.

Similarly, here it means that the unavailability of class relief under KRS

337.385 prohibits class settlement.

As well, the proposed settlement agreement at issue here provided that it

was “conditioned upon the Court’s providing both preliminary and final

approval of the settlement terms.” (Proposed Settlement, R. 163-2, Page ID #

1587–88, 1591.) As the dissent in Ehrheart found, no binding contract existed

without the court’s approval, and the District Court erred in finding that the

tentative agreement trumped Kentucky law. See Deepwater Horizon, 732 F.3d at

343 (“A class settlement is not a private agreement between the parties. It is a

creature of Rule 23, which authorizes its use to resolve the legal claims of a

class ‘only with the court’s approval.’”).

The District Court abused its discretion in applying Ehrheart to maintain

a certified class and approve a settlement under Rule 23(e); as a result, the

District Court’s December 22, 2015 order should be vacated, and this case

should be remanded for resolution on an individual basis.

B. The Continued Existence of a Certified Class and Approval of a

Class Settlement Violated the Rules Enabling Act.

As two district courts have held and the Kentucky Court of Appeals has

opined, class certification under KRS 337.385 violates the Rules Enabling Act.


- 23 -

See Green, 2015 U.S. Dist. LEXIS 171647, at *17–23; Davenport, 35 F. Supp. 3d

at 1051; McCann, 2015 Ky. App. Unpub. LEXIS 862, at *10–13. As a result,

the District Court abused its discretion in declining to rectify the violation by

decertifying the class and in furthering the violation by approving a settlement.

The Rules Enabling Act authorizes the Supreme Court to prescribe

“general rules of practice.” 28 U.S.C. § 2072(a). It also provides: “Such rules

shall not abridge, enlarge or modify any substantive right. All laws in conflict

with such rules shall be of no further force or effect after such rules have taken

effect.” Id. at § 2072(b). In refusing to decertify the class and in approving a

class settlement, the District Court abused its discretion in applying Rule 23 to

“abridge, enlarge or modify” a substantive right to bring a civil action in an

individual capacity created by KRS 337.385(2).

The only courts to consider whether Rule 23 certification of a Kentucky

wage and hour class violates the Rules Enabling Act have concluded that it

does by analyzing Justice Stevens’s concurrence in Shady Grove. E.g., Green,

2015 U.S. Dist. LEXIS 171647, at *17–23 (citing Shady Grove Orthopedic Assocs.,

P.A. v. Allstate Ins. Co., 559 U.S. 393, 416–32 (2010) (Stevens, J. concurring)).

Shady Grove is a plurality opinion concerning whether a general rule of New

York procedure prohibiting class actions in suits seeking statutory penalties

should govern in federal court instead of Rule 23. Shady Grove, 559 U.S. at 397.


- 24 -

Five justices found that the plaintiff could seek class relief under Rule 23, but

the Court’s reasoning was splintered.7 As Justice Stevens concurred on the

narrowest grounds, his opinion controls.8 See Marks v. United States, 430 U.S.

188, 193 (1977) (“When a fragmented Court decides a case and no single

rationale explaining the result enjoys the assent of five Justices, the holding of

the Court may be viewed as that position taken by those Members who

concurred in the judgments on the narrowest grounds.”).

Justice Stevens concluded that a federal rule that conflicts with a state

statute cannot govern where it would “displace a state law that is procedural in

7 The judicial alignment in Shady Grove is unusual. Justice Scalia delivered

the opinion of the five-justice majority only with respect to Parts I (outlining

the claims and procedural history) and II-A (finding that Rule 23 and the

New York rule conflicted). Justice Scalia wrote for a four-justice plurality with respect to Parts II-B and II-D (applying the Rules Enabling Act).

Justice Ginsburg wrote for a four-justice minority in dissent. Justice Stevens

concurred in the judgment, but wrote separately because he “agree[d] with Justice Ginsburg that there are some state procedural rules that federal

courts must apply in diversity cases because they function as a part of the

State’s definition of substantive rights and remedies.” Id. at 416–17.

8 Numerous district courts in the Sixth Circuit (in addition to Green) have

found that Justice Stevens’s opinion controls. For example, one court found that Justice Stevens’s opinion controlled before holding that an Ohio statute

allowing a private right of action only “in an individual action” controlled

over Rule 23. McKinney v. Bayer Corp., 744 F. Supp. 2d 733, 747 (N.D. Ohio

2010). The Court reasoned: “Because application of Rule 23 would ‘abridge, enlarge, or modify’ Ohio’s rights and remedies by permitting class

actions even when the requirements [in the Ohio statute] are not satisfied, it

is ultra vires under the Rules Enabling Act.” Id. Other circuits likewise have

found that Justice Stevens’s opinion controls. See, e.g., James River Ins. Co. v.

Rapid Funding, LLC, 658 F.3d 1207, 1217 (10th Cir. 2011).


- 25 -

the ordinary use of the term but is so intertwined with a state right or remedy

that it functions to define the scope of the state-created right.” Shady Grove, 559

U.S. at 422. The concurrence applied this test and determined that the New

York rule at issue was purely procedural and not intertwined with a state right

or remedy. Justice Stevens emphasized that the New York rule applied evenly

to claims based on New York law, federal law, or laws of other states. Id. at

432. As a result, the concurrence concluded that Rule 23 should govern.

Every court to consider the issue has agreed that KRS 337.385(2) is

unlike the New York rule in Shady Grove. The class action restriction in KRS

337.385 “is found within the very statutory provision that authorizes a private

right of action for unpaid overtime wages, and the restriction applies only to

claims for violation” of certain sections. Green, 2015 U.S. Dist. LEXIS 171647,

at *22 (quoting Davenport, 35 F. Supp. 3d at 1051).

Moreover, “[t]he class action restriction in Section 337.385 functions to

define the scope of Plaintiffs’ substantive rights under the Kentucky Act;

therefore, Rule 23 does not apply” and the Kentucky statute must govern. Id.;

see also McKinney, 744 F. Supp. 2d at 747 (“Because application of Rule 23

would ‘abridge, enlarge, or modify’ Ohio’s rights and remedies by permitting

class actions even when the requirements [in the Ohio statute] are not satisfied,

it is ultra vires under the Rules Enabling Act.”); Harris v. Reliable Reports Inc.,


- 26 -

2014 U.S. Dist. LEXIS 31223, at *18–22 (N.D. Ind. Mar. 10, 2014) (holding

that class action restrictions in Indiana and Ohio wage and hour statutes

control over Rule 23). In refusing to decertify the class under Rule 23(c) before

final judgment, and in approving a class settlement under Rule 23(e) that

contravened Kentucky law, the District Court violated the Rules Enabling Act.

The District Court improperly relied on a footnote from the Eighth

Circuit to conclude that the Rules Enabling Act does not apply to class

settlement approval. (Order, R. 189, Page ID # 1934–35 (citing Marshall v.

NFL, 787 F.3d 502, 511 at n.4 (8th Cir. 2015).) There, the court noted that the

appellants “present[ed] no case holding that the Rules Enabling Act limits the

type of relief parties themselves may agree to.” Marshall, 737 F.3d at 511 n.4.

In addition to the authority identified above holding that private parties

cannot contract around the requirements for class certification or agree to an

unlawful settlement that requires court approval, other courts have squarely

rejected the Eighth Circuit’s position. As the Fifth Circuit holds, for example,

“In granting approval, the court must, as always, adhere to the precepts of . . .

the Rules Enabling Act.” Deepwater Horizon, 732 F.3d at 343 (citing Fed. R.

Civ. P. 23(e) and Amchem, 521 U.S. at 620). A dissenting opinion from a Third

Circuit decision provides further support. In Sullivan v. DB Invs., Inc., 667 F.3d

273, 353–54 (3d Cir. 2011), Judge Jordan noted that it “may be true” that the


- 27 -

Rules Enabling Act does not apply “when a settlement involves only private

parties who all participate in the settlement process, but it is not true in a class

action settlement.” Id. (emphasis added). He continued: “In the latter context,

the Federal Rules of Civil Procedure require district courts to be intimately involved,

because the approval of a class action settlement gives the government’s

imprimatur to the terms of the settlement and binds absent parties. . . . If a district

court credits potential class members with having a valid claim when the

underlying state law says there is none, the court has, by definition, enlarged and

modified those class members’ rights.” Id. (emphasis added); cf. Klier v. Elf Atochem

N. Am., Inc., 658 F.3d 468, 481–82 (5th Cir. 2011) (Jones, J., concurring)

(noting that in class settlements, “[c]y pres distributions arguably violate the

Rules Enabling Act”); In re General Motors Corp. Engine Interchange Litig., 594

F.2d 1106, 1136 (7th Cir. 1979) (“To permit the trial court to exercise its power

to approve class action settlements in this manner would contravene the Rules

Enabling Act . . . by abridging the substantive rights of those who did not

accept the settlement offer.”).

The District Court had an obligation to ensure that the existence of a

certified class comported with the Rules Enabling Act before giving the

judiciary’s imprimatur to the settlement agreement. It did not. The agreement

the parties reached had no effect until the District Court approved it, and the


- 28 -

parties only purported to reach an agreement after the District Court certified a

class that never should have been certified.

In any event, the settlement approval was not the only issue before the

District Court. Defendants also moved to decertify the class, and the District

Court maintained authority to decertify until it entered a final judgment. (See

Order, R. 183, Page ID # 1804 (noting that “the defendants can always move

the district court to decertify the class”).) Yet the District Court considered

only “whether the approval of a class settlement under Rule 23 runs afoul of

the Rules Enabling Act.” (Id.) As the existence of the class violated the Rules

Enabling Act, the District Court abused its discretion in refusing to decertify it.

To add to KRS 337.385 a right to recover on “behalf of others similarly

situated”—even through settlement—would rewrite Kentucky law. To

effectuate the legislature’s intent in enacting KRS 337.385, the District Court’s

order approving the class settlement should be vacated, the class should be

decertified, and Plaintiffs’ claims should be resolved on an individual basis.


- 29 -

CONCLUSION

For the foregoing reasons, the District Court abused its discretion when

it denied a motion to decertify the class and entered a final judgment

approving a class settlement. These decisions should be vacated, and the case

remanded for resolution of the claims on an individual basis.

Dated: March 22, 2016

Respectfully submitted,

/s/ Clark C. Johnson

Clark C. Johnson Chadwick A. McTighe

Jeffrey S. Moad

STITES & HARBISON PLLC 400 West Market Street, Suite 1800

Louisville, KY 40202-3352

Telephone: (502) 587-3400 Email: [email protected] Counsel for Defendants-Appellants


CERTIFICATE OF COMPLIANCE

The undersigned certifies that this brief complies with the type-volume

limitation of Fed. R. App. P. 32(a)(7)(B), as it contains 29 pages, excluding the

parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief

complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the

type style requirements of Fed. R. App. P. 32(a)(6), as it has been prepared

using a proportionally-spaced typeface using Microsoft Office Word 2010, in

14 point, Calisto MT font.

/s/ Clark C. Johnson Counsel for Appellants


CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing brief was served on the following counsel of record through CM/ECF on this the 22nd day of March,

2016:

Michele D. Henry CRAIG HENRY PLC

[email protected]

/s/ Clark C. Johnson Counsel for Appellants


ADDENDUM


DESIGNATION OF RELEVANT DISTRICT COURT DOCUMENTS

Pursuant to 6 Cir. Rule 28(b)(1)(A)(i), Appellants designate the

following documents from the action styled Whitlock, et al. v. FSL Management,

LLC, et al., No. 3:10-CV-562-JHM:

RECORD

NUMBER DESCRIPTION Page ID #

1 Notice of Removal 1–6

1-4 Complaint 14–19

10 Second Amended Complaint 60–68

95 Mem. Op. & Order 1105–09

96 Mem. Op. & Order 1110–35

100-2 Rule 23(f) Petition 1169–72

106 Order 1267–70

160 Status Report 1545

161 Mot. for Stay 1546–55

163 Mot. for Settlement Approval 1560–62

168 Order 1676–91

183 Order 1802–04

184 Mot. to Decertify 1808–15

189 Mem. Op. & Order 1926–48

190 Order of Dismissal 1949

191 Notice of Appeal 1950

193 Transcript 1952–81


REPRODUCTION OF STATUTES AND RULES

KRS 337.385(1)–(2). Employer’s liability—Unpaid wages and liquidated

damages.

(1) Except as provided in subsection (3) of this section, any employer

who pays any employee less than wages and overtime

compensation to which such employee is entitled under or by virtue of KRS 337.020 to 337.285 shall be liable to such employee

affected for the full amount of such wages and overtime

compensation, less any amount actually paid to such employee by the employer, for an additional equal amount as liquidated

damages, and for costs and such reasonable attorney’s fees as may

be allowed by the court.

(2) If, in any action commenced to recover such unpaid wages or

liquidated damages, the employer shows to the satisfaction of the

court that the act or omission giving rise to such action was in good faith and that he or she had reasonable grounds for believing

that his or her act or omission was not a violation of KRS 337.020

to 337.285, the court may, in its sound discretion, award no liquidated damages, or award any amount thereof not to exceed

the amount specified in this section. Any agreement between such

employee and the employer to work for less than the applicable wage rate shall be no defense to such action. Such action may be

maintained in any court of competent jurisdiction by any one (1)

or more employees for and in behalf of himself, herself, or themselves.


Fed. R. Civ. P. 23(e). Settlement, voluntary dismissal, or compromise.

The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court’s approval. The following

procedures apply to a proposed settlement, voluntary dismissal, or

compromise:

(1) The court must direct notice in a reasonable manner to all class

members who would be bound by the proposal.

(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and

adequate.

(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.

(4) If the class action was previously certified under Rule 23(b)(3), the

court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who

had an earlier opportunity to request exclusion but did not do so.

(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be

withdrawn only with the court’s approval.

28 U.S.C. § 2072. Rules of procedure and evidence; power to prescribe.

(a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the

United States district courts (including proceedings before

magistrate judges thereof) and courts of appeals.

(b) Such rules shall not abridge, enlarge or modify any substantive

right. All laws in conflict with such rules shall be of no further

force or effect after such rules have taken effect.

(c) Such rules may define when a ruling of a district court is final for

the purposes of appeal under section 1291 of this title.
