Order Granting MTN for Leave and Stay Proceedings

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION DAN CERJANEC, RODRIGO BRAVO, MARK MODLIN, and WILLIAM WINFREY, on behalf of themselves and all others similarly situated;

Case No. 17-10319 Honorable Laurie J. Michelson

Plaintiffs, v.

FCA US, LLC, Defendant.

ORDER GRANTING MOTION TO CERTIFY ISSUE FOR INTERLOCUTORY APPEAL AND TO STAY PROCEEDINGS [63] Named Plaintiffs are current and former employees of Fiat Chrysler Automobiles (FCA).

They allege that an employee-evaluation policy has a disparate impact on employees aged 55 and older. As a result of this policy, Plaintiffs, and others like them, allegedly received lower evaluation scores which resulted in missed career advancements, bonuses, placement on probation, and, in some cases, termination. Plaintiffs additionally bring individual claims of intentional age discrimination.

In their motion to dismiss, FCA argued that Plaintiffs could not propose a sub-class of employees aged 55 and older under the ADEA, as that statute only protects a class of individuals aged 40 and over. (R. 39.) The Court, noting a circuit split and that the Sixth Circuit has not definitively ruled on the propriety of sub-classes in ADEA disparate impact cases, found that a 55and-older subclass was permissible. Cerjanec v. FCA US, LLC, No. 17-10619, 2018 WL 3729063 (E.D. Mich. Aug. 6, 2018).

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FCA now seeks to immediately appeal this ruling to the Sixth Circuit and asks the Court to stay the proceedings in the meantime. (R. 63.) Evaluating the relevant factors, the Court believes this is the type of exceptional case that should be certified for interlocutory appeal. Thus, the motion will be granted.

I. Though discovery has yet to commence in this case, it already has a lengthy procedural history. Plaintiffs filed their first complaint on February 27, 2017, and amended a month later to add new parties. (R. 1, 4.) FCA then filed motions to compel arbitration and to dismiss and strike class allegations; the Court denied these motions but gave Plaintiffs leave to amend. Cerjanec v.

FCA US, LLC, No. 17-10619, 2017 WL 6407337 (E.D. Mich. Dec. 15, 2017). After Plaintiffs filed another amended complaint (R. 37), FCA again moved to dismiss and to strike. (R. 39.) As part of their second motion to dismiss, because the ADEA protects individuals 40 and older, FCA asserted that Plaintiffs’ proposed subgroup of employees aged 55 and older was impermissible under the ADEA. (R. 39, PageID.1410–11.)

On August 6, 2018, the Court granted in part and denied in part FCA’s motion to dismiss.

Cerjanec, 2018 WL 3729063 at *12. The Court disagreed with FCA that the Sixth Circuit has conclusively ruled that subgroups are impermissible in ADEA-disparate-impact cases. Id. at *5.

The Court relied on O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996) and Karlo v. Pittsburgh Glass Works, LLC, 849 F.3d 61 (3d Cir. 2017), in permitting Plaintiffs’ class claims to go forward. See O’Connor, 517 U.S. at 312 (finding that the ADEA “does not ban discrimination against employees because they are aged 40 or older; it bans discrimination against employees because of their age, but limits the protected class to those who are 40 and older.”).

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FCA now asks the Court to certify the following issue for interlocutory appeal to the Sixth Circuit: whether subclasses are valid in ADEA disparate-impact, collective-action claims. (R. 63, PageID.2281.) Plaintiffs oppose the request. (R. 67.)

II. A district court has the discretion to certify an order for interlocutory appeal if: “(1) the order involves a controlling question of law, (2) a substantial ground for difference of opinion exists regarding the correctness of the decision, and (3) an immediate appeal may materially advance the ultimate termination of the litigation.” In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002) (citing 28 U.S.C. § 1292 (b)). “Review under § 1292(b) is granted sparingly and only in exceptional cases.” Id. Such review is warranted here.

A. “The Sixth Circuit has . . . set a low bar for a determination that a question of law is ‘controlling’ in the context of a motion for certification under § 1292(b).” Newsome v. Young Supply Co., 873 F. Supp. 2d 872, 875–76 (E.D. Mich. 2012). “[T]he resolution of an issue need not necessarily terminate an action . . . to be ‘controlling.’ Rather, all that must be shown in order for a question to be ‘controlling’ is that resolution of the issue on appeal could materially affect the outcome of litigation in the district court.” In re Baker & Getty Fin. Servs., Inc., 954 F.2d 1169, 1172 n.8 (6th Cir. 1992) (citation and internal quotation marks omitted). For example, an issue could be controlling if its resolution on appeal “could result in a reversal of a district court’s final judgment,” “has precedential value,” or “is central to liability[.]” W. Tennessee Chapter of Associated Builders & Contractors, Inc. v. City of Memphis, 138 F. Supp. 2d 1015, 1018–19 (W.D. Tenn. 2000).

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FCA’s proposed interlocutory appeal involves a controlling issue of law. A ruling by the Sixth Circuit as to whether subclasses are permissible in disparate-impact ADEA claims could resolve Plaintiffs’ disparate-impact, collective-action claim. See Black & Decker (US), Inc. v.

Smith, No. 07-1201, 2008 WL 3850825, at *2 (W.D. Tenn. Aug. 13, 2008) (holding that the issues raised were controlling where “a ruling in favor of the Defendant on the issues raised in his motion to dismiss would not end the lawsuit, but would dispose of several of the claims against him.”).

Further, should the ADEA collective action be dismissed (upon a ruling that the 55 and older subclass is impermissible), it is likely the Court would decline to exercise supplemental jurisdiction over the ELCRA class action and individual claims. These state law claims would predominate over the remaining, narrow ADEA disparate treatment claims. See 28 U.S.C. § 1367(c)(2). And if this case is narrowed down to a few individual ADEA claims, that would certainly affect the manner in which the litigation would be conducted; most immediately for the parties, the scope of the discovery.

The first factor is met.

B. Second, there is substantial ground for differences in opinion on the ADEA-subgroup issue.

Substantial grounds for disagreement exist when: (1) the question is difficult, novel and either a question on which there is little precedent or one whose correct resolution is not substantially guided by previous decisions; (2) the question is difficult and of first impression; (3) a difference of opinion exists within the controlling circuit; or (4) the circuits are split on the question. In re Miedzianowski, 735 F.3d 383, 384 (6th Cir. 2013) (citation omitted).

Multiple factors apply here. First, there is little precedent on the issue: Barnes v. GenCorp Inc., 896 F.2d 1457, 1466 n. 12 (6th Cir. 1990), a disparate treatment case where the Sixth Circuit

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indicated in a footnote that age subgroups may not be permissible in disparate-impact claims; and the unpublished Smith v. Tennessee Valley Authority, 924 F.2d 1059 (table), 1991 WL 11271 at *3–4 (6th Cir. 1991), where the Court held, without any analysis or explanation for why disparate impact and disparate treatment claims should be treated differently, that subgroups are not permissible in disparate impact cases. But both decisions predated O’Connor v. Consolidated Coin Caterers Corp., 517 U.S. 308 (1996), and Smith was not published. And a district court in this Circuit has since held that subgroups are permissible. See Bondurant v. Air Line Pilots Ass’n, 718 F. Supp.2d 836, 843 (E.D. Mich. 2010). Further, there is a circuit split on this issue. The Eighth Circuit, E.E.O.C. v. McDonnell Douglas Co., 191 F.3d 948, 951 (8th Cir. 1999), and Second Circuit, Lowe v. Commack Union Free Sch. Dist., 886 F.2d 1364, 1371 (2d Cir. 1989), do not permit subgroups, while the Third Circuit, Karlo v. Pittsburgh Glass Works, LLC, 849 F.3d 61 (3d Cir. 2017), and Seventh Circuit, Timothy O'Brien, et al v. Caterpillar Inc., No. 17-2956, — F.3d —, 2018 WL 3966520 (7th Cir. 2018), do.

The second factor is met.

C. Lastly, the immediate appeal of the subgroup issue would expedite the resolution of this case.

An interlocutory appeal materially advances the ultimate termination of litigation when appellate review could save “judicial resources and litigant expense.” Newsome v. Young Supply Co., 873 F. Supp.2d 872, 878 (E.D. Mich. 2012) (citation omitted). “Interlocutory appeal is favored where reversal would substantially alter the course of the district court proceedings or relieve the parties of significant burdens. . . . the role of interlocutory appeal is diminished when a case is nearing trial and large expenditures have already been made.” W. Tennessee Chapter of Associated

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Builders & Contractors, Inc. v. City of Memphis, 138 F. Supp. 2d 1015, 1026 (W.D. Tenn. 2000).

“When litigation will be conducted in substantially the same manner regardless of [the Court of Appeals’] decision, the appeal cannot be said to materially advance the ultimate termination of the litigation.” In re City of Memphis, 293 F.3d 345, 351 (6th Cir. 2002).

As discussed, should the Sixth Circuit find that age subgroups are impermissible, Plaintiffs’ ADEA collective action disparate impact claim would be dismissed. That could also cause the related ELCRA class action to be dismissed. And although the litigation has already gone on for over a year, the case is still in its early stages. The parties have yet to conduct discovery. It would be a waste of resources for the parties to engage in extensive, costly, and time-consuming class action discovery on a claim or claims that may ultimately be dismissed. The same goes for dispositive motion practice and trial. Further, Plaintiffs have filed to conditionally certify the ADEA collective action. This motion would be moot if the subgroup was impermissible.

The last factor is met.

III. For the foregoing reasons, FCA’s Motion to Certify Issue for Interlocutory Appeal is GRANTED. (R. 63.) As judicial resources would be spared in adjudicating pending motions that may become moot after the appeal, the Court will STAY the proceedings pending the appeal.

SO ORDERED.

Dated: September 4, 2018

s/Laurie J. Michelson U. S. DISTRICT JUDGE

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CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing document was served on the attorneys and/or parties of record by electronic means or U.S. Mail on September 4, 2018. + s/Teresa McGovern Case Manager Generalist

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