[00:00:02] Speaker 04:
Let's start over.

[00:00:03] Speaker 04:
We'll give you your six seconds back.

[00:00:04] Speaker 01:
All right.

[00:00:05] Speaker 01:
Thank you.

[00:00:06] Speaker 01:
15 minutes.

[00:00:07] Speaker 01:
My name is James Coleman, and I'm counsel for Crocker Barrel Oil Country Store.

[00:00:12] Speaker 01:
And I would like to start by requesting reserve five minutes of my time for rebuttal.

[00:00:18] Speaker 01:
There are five issues I'd like to touch on.

[00:00:23] Speaker 01:
Four have been fully briefed in the briefing that concluded in October of last year.

[00:00:28] Speaker 01:
The fifth issue pertains to a decision from the U.S.

[00:00:34] Speaker 01:
Supreme Court of three weeks ago that was handed down involving burdens of proof under the Fair Labor Standards Act.

[00:00:43] Speaker 01:
the 28J notice the day after that decision was handed down.

[00:00:49] Speaker 01:
And then last week, we filed a motion for leave to file a limited supplemental brief that was attached to that motion.

[00:00:57] Speaker 01:
That is still pending.

[00:00:59] Speaker 01:
And I guess I'll just simply say I'd urge the Court to consider granting that motion and considering the arguments that are in that brief and then setting whatever the Court deemed is appropriate for an appellee brief on that issue.

[00:01:18] Speaker 01:
The decision is EMD sales versus Carrera.

[00:01:21] Speaker 01:
It's an FLSA case.

[00:01:24] Speaker 01:
The very specific issue involved in it was the proper burden of proof for an employer to prove the outside sales exemption applies.

[00:01:34] Speaker 01:
And essentially the Fourth Circuit was reversed because the court determined that the preponderance of the evidence standard is the default standard

[00:01:44] Speaker 01:
in American civil litigation and it is the default standard when it comes to statutory interpretation under the FLSA.

[00:01:54] Speaker 01:
The court went through a mode of analysis in first determining the proper default standard and then

[00:02:02] Speaker 01:
looking at whether there's either a statutory constitutional or a unique common law warrant that would justify deviating from the default standard.

[00:02:12] Speaker 01:
And in that case, the court said there's no such warrant that's applicable to the Fair Labor Standards Act.

[00:02:19] Speaker 01:
And what we are asserting, the final element of that decision, and it was unanimous, was that the court reiterated what the court had said in 2018 in the Encino Motorcars case and that was that, you know, the day of interpreting the Fair Labor Standards Act loosely in favor of employees based on public policy was over and that the statute needed to be given

[00:02:49] Speaker 01:
a fair reading when interpreting.

[00:02:52] Speaker 01:
And Cracker Barrel is asserting that if the default standard is preponderance of the evidence, that it applies equally to the request of a plaintiff for conditional certification and for issuance of notice to turn an FLSA case into a collective action.

[00:03:12] Speaker 03:
And that would tell you, that doesn't seem like a tight fit to me.

[00:03:17] Speaker 03:
There's no application here of a clear and convincing standard, which is what the Supreme Court's decision spoke to, and decisions on a preliminary basis in lots of contexts, preliminary determination that there's jurisdiction to proceed with the case.

[00:03:36] Speaker 03:
Certainly in the class context, you don't apply necessarily the same standards you're going to have to to enter judgment,

[00:03:45] Speaker 03:
in order to deal with preliminary questions.

[00:03:48] Speaker 03:
And I'm not sure how the recent decision of the Supreme Court is supposed to undermine our court's decision in Campbell, which we are bound to follow unless it's clearly irreconcilable with Supreme Court subsequent decisions.

[00:04:02] Speaker 03:
So that's the standard you have to meet.

[00:04:05] Speaker 03:
And I'm not sure how much you want to spend of your time focusing on that.

[00:04:09] Speaker 03:
I got to say, for me, it's a hard sell.

[00:04:11] Speaker 01:
OK.

[00:04:11] Speaker 01:
I would just briefly, Your Honor, understand the question.

[00:04:17] Speaker 01:
It's debatable whether or not Campbell adopts Losardi.

[00:04:21] Speaker 03:
I think at best all you can say... We care less about Losardi than Campbell because Campbell's what binds us.

[00:04:28] Speaker 01:
Yes, true.

[00:04:30] Speaker 01:
But the entire issue ultimately focuses on

[00:04:35] Speaker 01:
Are there employees that are similarly situated?

[00:04:37] Speaker 01:
And then what does similarly situated mean?

[00:04:40] Speaker 01:
And section 216b unfortunately uses the term similarly situated but doesn't go further in terms of defining it.

[00:04:48] Speaker 01:
In this case, for example, there's been no discovery.

[00:04:51] Speaker 01:
There's

[00:04:53] Speaker 01:
Almost no factual record developed, yet the court's order that is before this court has authorized court-approved notice to go to over 142,000 individuals.

[00:05:05] Speaker 01:
They, the, Losardi, and to the extent you say Campbell acquiesced to Losardi, there's almost no chance.

[00:05:15] Speaker 03:
You could use that term.

[00:05:16] Speaker 03:
It's not the one I would choose to use because we are bound by Campbell.

[00:05:20] Speaker 03:
Whatever Losardi said.

[00:05:21] Speaker 01:
Yes, I understood, understood.

[00:05:23] Speaker 01:
But the confusion on Campbell is, as an example, the Fifth Circuit in the Swales decision, the Fifth Circuit believes that Campbell rejected Lussardi and that they state that point blank in their ruling.

[00:05:39] Speaker 03:
And that's fine.

[00:05:40] Speaker 03:
We're bound by Campbell.

[00:05:41] Speaker 03:
If you want to argue to us that Campbell

[00:05:43] Speaker 03:
should point to a different result.

[00:05:45] Speaker 03:
You can make that argument.

[00:05:45] Speaker 01:
Well, and I would submit that Campbell does not have to be reversed.

[00:05:50] Speaker 01:
It doesn't have to be overturned in order for this court to adopt the preponderance of the evidence standard in determining who is similarly situated before notice goes out.

[00:06:05] Speaker 01:
Notice under the FLSA is an exceedingly powerful tool

[00:06:10] Speaker 01:
It can change the dynamics of a case dramatically and for notice to be permitted to go out under the approval of a district court without a rigorous analysis of whether the recipients are in fact similarly situated.

[00:06:33] Speaker 01:
It's just solicitation of claims.

[00:06:35] Speaker 01:
And the Supreme Court said many years ago in Hoffman-La Roche,

[00:06:38] Speaker 01:
that the district courts need to go to great lengths to avoid the solicitation of claims.

[00:06:45] Speaker 02:
Can we get, if you don't mind, what for me is the heart of this case?

[00:06:52] Speaker 02:
And it relates to the issues that you've started to address.

[00:06:57] Speaker 02:
And let me just go right to the heart of it.

[00:07:00] Speaker 02:
If we're convinced that Bristol Myers applies, what's left of this case?

[00:07:08] Speaker 01:
If Bristol Myers, if this court applies Bristol Myers to this case and to FLSA Collective Actions, what's left of this case is that any employee that worked for Cracker Barrel at one of its 14 stores in the state of Arizona has valid jurisdiction and the federal court has valid impersonal jurisdiction over Cracker Barrel.

[00:07:36] Speaker 01:
with respect to its employees that worked for the company in Arizona.

[00:07:42] Speaker 02:
Doesn't that go to notice?

[00:07:45] Speaker 01:
It would absolutely would impact notice.

[00:07:47] Speaker 01:
I mean, as it stands right now, the court has authorized notice.

[00:07:52] Speaker 01:
Cracker Barrel has 14 stores in Arizona.

[00:07:54] Speaker 01:
They have 657 nationwide.

[00:07:57] Speaker 01:
That's 2 percent.

[00:07:59] Speaker 02:
The court has currently... And this is not its principal place of business.

[00:08:02] Speaker 01:
I'm sorry?

[00:08:03] Speaker 02:
This is neither his headquarters or its principal place of business.

[00:08:06] Speaker 01:
That's absolutely correct.

[00:08:07] Speaker 01:
The state of Tennessee is where the corporate headquarters is, and the company is organized under the laws of Tennessee.

[00:08:15] Speaker 01:
So there is general personal jurisdiction in Tennessee, and then there'd be general personal jurisdiction for any employee to sue in the state where they are.

[00:08:26] Speaker 02:
And by dealing with the statute, as I understand it,

[00:08:30] Speaker 02:
that does not include provision allowing nationwide service of process?

[00:08:35] Speaker 01:
Absolutely correct, Your Honor.

[00:08:37] Speaker 01:
There is no nationwide service of process provisions in the Fair Labor Standards Act.

[00:08:42] Speaker 02:
This is a little bit of an interlocutory appeal in the sense, at least to me, that there are other issues bouncing around.

[00:08:49] Speaker 02:
Where are we on whether employees who signed the shrink wrap, if you will,

[00:08:59] Speaker 02:
arbitration agreement, whether they can be purposefully part of this class or not.

[00:09:07] Speaker 01:
As the lower courts order currently stands,

[00:09:11] Speaker 01:
The very first order the court issued in November of 2021, it's ER page 45 and following, the court found Cracker Barrel's ADR agreement to be fully enforceable and in fact dismissed the first complaint in its entirety.

[00:09:28] Speaker 01:
And then that was completely superseded with a second.

[00:09:31] Speaker 02:
So as we sit here today, that's the law of the case.

[00:09:37] Speaker 01:
I don't think it's the law of the case without a court of appeals ruling.

[00:09:41] Speaker 02:
As we sit here today, looking at the body of work that the district court did.

[00:09:48] Speaker 01:
Yes.

[00:09:49] Speaker 01:
But inexplicably, the court later authorized notice to adult signers of the ADR agreement.

[00:09:59] Speaker 01:
And that is the overwhelming, that's probably 85% of the

[00:10:04] Speaker 01:
of the universe of employees signed agreements to arbitrate their claims as adults.

[00:10:11] Speaker 01:
And then the other smaller percentage would be people that missed signing it or may have signed it as a minor and then timely repudiated.

[00:10:23] Speaker 01:
On the Bristol-Meyer-Squibb issue, I would just note – and it's all in the briefs – that four sister circuits have applied Bristol-Meyer-Squibb to FLSA collective actions, and only one circuit, the First Circuit, has looked at that issue and gone in the opposite direction.

[00:10:42] Speaker 01:
And obviously we believe the First Circuit got it wrong.

[00:10:46] Speaker 01:
And I would just direct the court to the most recent ruling applying Bristol Myers is from the Seventh Circuit last August.

[00:10:55] Speaker 01:
And there's a great analysis in that opinion of what the First Circuit got wrong in reaching the opposite conclusion.

[00:11:04] Speaker 01:
But it essentially focuses on Rule 4, K1A of the federal rules, which is what you have to look to when you don't have

[00:11:15] Speaker 01:
nationwide service of process provisions and in this case you do not have them under the FLSA and 4K1A incorporates if you will and references state law and that's how the 14th Amendment comes into play and puts limitations on personal jurisdiction.

[00:11:39] Speaker 01:
Okay.

[00:11:42] Speaker 04:
Did you wish to reserve your remaining time?

[00:11:44] Speaker 01:
Yeah, I think I'd like, I'm down to three minutes or almost, so I'll reserve for rebuttal from here.

[00:11:50] Speaker 04:
All right, thank you.

[00:11:51] Speaker 01:
Thank you.

[00:12:00] Speaker 00:
May it please the court, Nathan Studd on behalf of the appellees.

[00:12:06] Speaker 00:
The procedural background of this case shows that the district court's decision

[00:12:10] Speaker 00:
should be affirmed in full, and the issues presented by Cracker Barrel, especially the BMS personal jurisdiction issue, are not appropriate for interlocutor appeal because it has waived or has judicially stopped from making that argument.

[00:12:23] Speaker 00:
And I'm going to kind of get into what appears to be the two or three main issues raised by the panel, and that was addressed by my friend on the other side.

[00:12:33] Speaker 00:
The procedural background is such that when this case was originally filed, we had one Arizona plaintiff, three out of state plaintiffs, named plaintiffs, as well as several others who had opted in.

[00:12:45] Speaker 00:
At the time Cracker Barrel sought to first respond, they chose to move to compel arbitration.

[00:12:56] Speaker 00:
They used Arizona law to find that the arbitration agreement was enforceable, applying it to out of state

[00:13:03] Speaker 00:
three out-of-state plaintiffs.

[00:13:05] Speaker 00:
And the court agreed with that.

[00:13:07] Speaker 00:
So it did not file a 12b2 motion.

[00:13:10] Speaker 00:
It did not seek to dismiss any of the 200 opt-in plaintiffs or the three out-of-state named plaintiffs.

[00:13:17] Speaker 00:
It waived that argument.

[00:13:18] Speaker 00:
In Canada and in Waters, that issue became ripe when the defendants did actually file motions to dismiss timely under 12b2.

[00:13:32] Speaker 00:
With respect to the arbitrability issue, the court has recognized that there are several disputes as to who is subject to arbitration.

[00:13:43] Speaker 00:
And those disputes need to be resolved at the second stage of the Campbell certification process.

[00:13:49] Speaker 00:
to try to resolve those disputes pre-certification would essentially be not compliance, not in compliance with Campbell.

[00:13:58] Speaker 00:
It would result in a massive amount of discovery, a massive amount of resolving disputes about who signed the agreement when, are they avoidable?

[00:14:09] Speaker 00:
The definition of minor varies.

[00:14:11] Speaker 00:
Let's take the easy one.

[00:14:13] Speaker 03:
Suppose we limit ourselves to the people who worked in Arizona.

[00:14:19] Speaker 03:
And chances are they were Arizona residents, so I guess there could be a handful that aren't.

[00:14:26] Speaker 03:
Do you have any sense of what the breakdown is between the number that might have a claim to be able to disclaim the arbitration agreement because they were minors or for some other reason?

[00:14:38] Speaker 00:
We would not know that at this time.

[00:14:40] Speaker 03:
I suspect the fraction, I mean, I suspect there are a lot of people who are minors working at Cracker Barrel.

[00:14:47] Speaker 03:
I wouldn't expect it to be an enormous percentage.

[00:14:52] Speaker 03:
And it does raise the question, if you can sort out a certain large percentage, what's the point of giving notice that will be effectively futile because they're bound by these arbitration agreements?

[00:15:07] Speaker 00:
I don't think we can sort it out that easily.

[00:15:08] Speaker 00:
And there are two ways to show this.

[00:15:10] Speaker 00:
Well, first of all, the notice actually specifically states

[00:15:14] Speaker 00:
If you're subject to arbitration, you can't proceed.

[00:15:16] Speaker 00:
So if these people get the notice and they read it, and it says you're subject to arbitration, if they know they're subject to arbitration, they can disregard it.

[00:15:24] Speaker 00:
All right?

[00:15:24] Speaker 00:
We're saving time upon it.

[00:15:25] Speaker 03:
So part of the problem is, are they going to know they're subject to arbitration?

[00:15:29] Speaker 03:
But I get your point.

[00:15:31] Speaker 00:
And they may not, all right?

[00:15:32] Speaker 00:
And in those situations when, let's say somebody submits it in and we find out, we have to investigate whether or not they're subject to arbitration.

[00:15:39] Speaker 00:
We have miners, current miners, we have

[00:15:42] Speaker 00:
Adults who signed as minors, and we have to evaluate whether they can void them.

[00:15:47] Speaker 00:
We have a group of people who would have signed.

[00:15:50] Speaker 00:
We have a group of people that have flat out didn't sign them.

[00:15:52] Speaker 00:
That's an easy one.

[00:15:53] Speaker 00:
And we would have a group of people that may have signed them, left employment, came back, and did not re-sign.

[00:15:58] Speaker 00:
There's two versions of the arbitration agreement, one in 2015, one in 2019.

[00:16:03] Speaker 00:
We've not had an opportunity to challenge the 2019 version.

[00:16:07] Speaker 00:
And we still have the right to consider procedural grounds.

[00:16:11] Speaker 00:
These are not my clients.

[00:16:13] Speaker 00:
I don't have the ability to investigate this issue until they opt in.

[00:16:17] Speaker 00:
And this is why I think it will run afoul of Campbell.

[00:16:20] Speaker 02:
In the current posture of this case, is the district court assuming that if you have one plaintiff

[00:16:35] Speaker 02:
that notice can go out nationwide and bring in claims?

[00:16:42] Speaker 00:
Well, under BMS, sorry, BMS, so basically under the statute, the FLSA statute, if we're establishing jurisdiction of a worker here that satisfies the prong and serves the, meets specific personal jurisdiction, serves the defendant, then that is the representative or the named plaintiff

[00:17:04] Speaker 00:
And then therefore, yes, notice can go out.

[00:17:06] Speaker 00:
There are 14 Cracker Barrel stores in Arizona.

[00:17:09] Speaker 00:
There are lots of employees here.

[00:17:11] Speaker 02:
But the notice the district court contemplates went out nationwide, didn't it?

[00:17:16] Speaker 00:
Correct.

[00:17:17] Speaker 00:
It would go nationwide to all servers.

[00:17:18] Speaker 02:
And doesn't that assume that Bristol Myers doesn't apply?

[00:17:24] Speaker 00:
Correct.

[00:17:26] Speaker 00:
Because it would be, well, Bristol Marles does not apply one because of the representations made by Cracker Barrel throughout this.

[00:17:33] Speaker 00:
So I don't think we even get to that question.

[00:17:36] Speaker 03:
I want to focus on what we've been raising here.

[00:17:41] Speaker 03:
If Arizona stores are 2% of Cracker Barrel stores, then we know or can safely infer that the percentage of people to receive notice who have

[00:17:54] Speaker 03:
claims based on Arizona activity is a tiny fraction.

[00:18:01] Speaker 03:
And that raises the same question that I was asking before with regard to the arbitration clause, except that we know that it's a small fraction and what the point of that notice would be.

[00:18:15] Speaker 03:
I'm interested in it.

[00:18:16] Speaker 03:
Now, you're talking about that you alleged that they somehow waived that argument.

[00:18:20] Speaker 03:
I think we may need to deal with that separately.

[00:18:22] Speaker 03:
But if they haven't waived the argument,

[00:18:24] Speaker 03:
and we would decide that Bristol Myers applies, I'm struggling with why notice should be given to 98% of the people who aren't eligible to receive in Arizona.

[00:18:35] Speaker 00:
Well, if the court makes a determination right now that BMS applies and we cannot, and then anybody who is out of state cannot be part of the lawsuit, then you're correct.

[00:18:48] Speaker 00:
We can't get notices out to them.

[00:18:49] Speaker 00:
But that's not the posture we're at right now.

[00:18:53] Speaker 00:
because one, of the waiver issue, but also if, with respect to resolving the, I know there's a cross over here because we're talking about resolving the arbitrability issue as well.

[00:19:03] Speaker 00:
And so to try to resolve the arbitrability issue would involve a massive investigation up front.

[00:19:11] Speaker 03:
And so what- Well, I hear your argument on arbitrability, at least with those who have the Arizona connection, but it seems to me to launch,

[00:19:21] Speaker 03:
notice and possible investigation for a potentially 98 percent of the recipients of the notice if we reach the Bristol Myers issue and decide that if you don't have the contact with Arizona, you can't be included in this lawsuit.

[00:19:41] Speaker 03:
Are you acknowledging that if we reach the issue and make that decision with regard to Bristol Myers, then maybe notice to most of the country is

[00:19:50] Speaker 03:
not appropriate.

[00:19:50] Speaker 00:
Well, if the court makes that decision that Bristol Myers applies to this case and that potential opt-ins out of the state cannot join in, then I agree that they should not get noticed.

[00:20:00] Speaker 03:
So why is it we should apply, why is it you argue we should not or cannot apply Bristol Myers?

[00:20:07] Speaker 00:
So for several reasons.

[00:20:10] Speaker 00:
One, the plain language of the statute that FLSA just need to establish jurisdiction of the named plaintiff.

[00:20:16] Speaker 00:
and then anybody else who's similarly situated can opt in.

[00:20:19] Speaker 02:
Isn't that exactly what the Supreme Court of California said that Bristol Myers reversed?

[00:20:28] Speaker 00:
Well, Bristol Myers is a different situation.

[00:20:30] Speaker 00:
It was not a representative action.

[00:20:34] Speaker 00:
It doesn't follow the statute.

[00:20:37] Speaker 02:
Am I wrong?

[00:20:38] Speaker 02:
This came out of the Supreme Court of California.

[00:20:41] Speaker 00:
No, that's correct, Bristol-Myers.

[00:20:42] Speaker 02:
Which basically said if you've got one plaintiff there in Sacramento or whatever, you can reach out to the entire nation.

[00:20:51] Speaker 02:
And Bristol-Myers said, no, you can't do that for two reasons.

[00:20:56] Speaker 02:
One, there's no nationwide service of process provision in the LMRA.

[00:21:03] Speaker 02:
And if you then apply traditional jurisdictional jurisprudence

[00:21:11] Speaker 02:
That ruling can't stay?

[00:21:13] Speaker 00:
So Bristol Myers, it was state law claims, eight separate lawsuits that were consolidated.

[00:21:18] Speaker 00:
State law claims by over 600 plaintiffs from around the country applying state law.

[00:21:23] Speaker 00:
We have a federal law claim here that applies equally to everybody.

[00:21:26] Speaker 00:
The same statute applies to everybody.

[00:21:29] Speaker 00:
So federal law, and under the statute, it's helped dealt with differently.

[00:21:35] Speaker 00:
And that's why we're saying it's different here.

[00:21:38] Speaker 04:
Are you arguing

[00:21:40] Speaker 04:
Essentially endorsing the amici who argued that this is really whether it's 14th Amendment or 5th Amendment and that Bristol Myers really turned on the 14th Amendment because California is a state and they don't have the authority beyond the boundaries of their state to bring in a defendant to face claims from non-California residents.

[00:22:01] Speaker 00:
That's correct.

[00:22:02] Speaker 00:
I mean, all we need here are connections to the United States.

[00:22:05] Speaker 04:
So that makes it kind of a variation on 4K2 service.

[00:22:10] Speaker 04:
have a provision that allows nationwide service of process under 4K2 when you have a connection to the United States and there's no general jurisdiction in a particular state.

[00:22:19] Speaker 04:
But here there is general jurisdiction of Cracker Barrel in Tennessee.

[00:22:23] Speaker 04:
So how do we get nationwide service of process?

[00:22:25] Speaker 00:
Again, well, we want to be careful here because if the statute, the Fair Labor Standards Act has been applied for 70, 80 years, you've established jurisdiction with respect to the name plaintiff as it states.

[00:22:37] Speaker 00:
and then anybody who is similarly situated can opt in, and that's the way it's always been done.

[00:22:41] Speaker 04:
By applying Rule 4... So you take it completely out of Rule 4 and say Rule 4 is only to acquire personal jurisdiction over the defendant, and then after that the similarly situated opt-ins do not have to serve process, they just become a party to the...

[00:22:56] Speaker 04:
to the action?

[00:22:57] Speaker 00:
That's correct.

[00:22:58] Speaker 00:
Every time someone comes in, they don't have to opt in.

[00:23:02] Speaker 00:
They do have to opt in.

[00:23:03] Speaker 00:
I mean, sorry, they don't have to serve, I apologize, they don't have to serve, re-serve summons on the defendant, and that would be unnecessary to do so.

[00:23:11] Speaker 00:
So basically, the name plaintiff who establishes jurisdiction here, and nothing about the statute requires that to be limited to the state.

[00:23:19] Speaker 00:
The evidence that's in the record shows this is a nationwide policy

[00:23:26] Speaker 00:
coming from corporate applies to everybody.

[00:23:28] Speaker 00:
And so there's no difference between what state you're in.

[00:23:32] Speaker 00:
And we're applying the federal law to everybody.

[00:23:35] Speaker 00:
And so that's why there's a difference here.

[00:23:37] Speaker 00:
And I think Bristol Myers, it was very specific, and I think the dissent in Canada articulated this very well.

[00:23:45] Speaker 00:
But in Bristol Myers, it said, in order for a state court to exercise specific jurisdiction, the suit

[00:23:52] Speaker 00:
and I emphasize the suit, must arise out of or relate to the defendant's contacts with the form.

[00:23:57] Speaker 00:
Here the suit started when we had an Arizona plaintiff.

[00:24:01] Speaker 00:
This is not, we're not looking at claim specific or party specific.

[00:24:04] Speaker 00:
We're looking at the lawsuit.

[00:24:06] Speaker 00:
That couldn't happen in Bristol Myers because we had, there were multiple lawsuits filed that were then consolidated.

[00:24:13] Speaker 00:
And so that's one of the differences between the two.

[00:24:16] Speaker 04:
Is it fair to read Rule 4 as Congress imposing limitations on nationwide jurisdiction?

[00:24:26] Speaker 04:
I mean, the first provision, 4K1, establishes personal jurisdiction or minimum contacts.

[00:24:34] Speaker 04:
And then you have another provision for nationwide service process that doesn't seem to apply by its own terms here.

[00:24:40] Speaker 04:
So even if under the Fifth Amendment,

[00:24:42] Speaker 04:
this jurisdiction could have existed, Congress seems to have reigned that in by adopting 4K1.

[00:24:48] Speaker 00:
Well, I think we want to be careful about the Rules Enabling Act.

[00:24:52] Speaker 00:
So the statute, the FLSA's Congress started this.

[00:24:56] Speaker 00:
The Rules Enabling Act, 4K cannot be used to undermine the statute.

[00:25:01] Speaker 00:
And that's exactly what would happen if we applied 4K to change how the statute's been applied.

[00:25:07] Speaker 00:
And I think that's a huge concern.

[00:25:10] Speaker 04:
So we would have to read the statute as intended to foster a nationwide collective action as opposed to

[00:25:19] Speaker 04:
perhaps statewide collective actions.

[00:25:21] Speaker 00:
And nothing about the statute limits it to the state.

[00:25:24] Speaker 00:
For 70 to 80 years, it was applied in this way.

[00:25:28] Speaker 00:
It didn't matter.

[00:25:29] Speaker 00:
If Cronkitebrough's policy and the way we're articulating it was, hey, this is how they do things in Arizona, then that's who's similarly situated.

[00:25:39] Speaker 00:
We're not doing that.

[00:25:40] Speaker 00:
This is a nationwide policy, and we've shown that through the evidence provided.

[00:25:44] Speaker 00:
And so that's why the definition of similarly situated is going to be focused on the violations.

[00:25:49] Speaker 04:
So when you were responding to Judge Clifton's questions about service when a potential plaintiff may have signed an arbitration agreement, you said it's going to require a lot of discovery, a lot of upfront work, and under the two-step process in Campbell, that should happen at the second step.

[00:26:07] Speaker 04:
But you seem to concede that that's not the case with this issue, that if somebody's claim arises from Crocker Barrel's contacts to Arizona,

[00:26:17] Speaker 04:
It's an easier call.

[00:26:19] Speaker 04:
Like we could send notice, but then we could easily weed those people out.

[00:26:22] Speaker 00:
Also, I mean, there was a district court decision from last month saying that that could also be done at the second stage.

[00:26:28] Speaker 00:
And I would propose that that should be done the second stage.

[00:26:30] Speaker 04:
But it seems like you were conceding to Judge Clifton that that's a different sort of analysis.

[00:26:34] Speaker 04:
It would be pretty straightforward.

[00:26:36] Speaker 04:
And so we could do it now.

[00:26:37] Speaker 00:
You can do it now.

[00:26:38] Speaker 00:
It's possible to do it now, but again, we'd have to do some discovery or some verification as to what it is.

[00:26:44] Speaker 00:
Whether it's a two-step process in swales or determining what it is, there has to be some upfront investigation.

[00:26:51] Speaker 00:
And that's why I think just getting the notices out in a very neutral manner, which the court has already approved, and you're basically reducing the scope of what is evaluated.

[00:27:04] Speaker 00:
And normally, there's a 15% to 20% opt-in rate

[00:27:07] Speaker 00:
But when you have these notices that actually say, look, if you're subject to arbitration, there'll be less, instead of the 100 to 150,000, we're bringing the scope of discovery down.

[00:27:17] Speaker 00:
And that's a huge difference in terms of what we're evaluating.

[00:27:20] Speaker 00:
And that's why Campbell is important to be able to get to that second stage.

[00:27:23] Speaker 04:
Well, how burdensome does the investigation sort of discovery process need to be at the first step?

[00:27:31] Speaker 04:
Yes, there's some burden to do that, but the court has to determine on some basis that the people receiving notice are going to be similarly situated.

[00:27:40] Speaker 04:
So what should the standard be?

[00:27:41] Speaker 04:
How rigorous does that need to be and how much work do you need to do up front before you can, as the defendants would put it, solicit claims across the country?

[00:27:50] Speaker 00:
Well, I believe the Campbell's standard is what it is.

[00:27:53] Speaker 00:
And I think we've more than met that standard.

[00:27:55] Speaker 00:
I don't think anything else has to be done.

[00:27:59] Speaker 03:
I do wonder, though, if it

[00:28:01] Speaker 03:
Particularly, excuse me, with the 2% figure, which I understand isn't rock solid precise, but if most of the people to whom SOTUS is going to be sent requiring the court to sort out thousands perhaps of opt-ins, it's an awful lot of effort to go if you think the success rate is going to be so small as compared

[00:28:28] Speaker 03:
And this is sort of outside, but I sit here wondering, why are you going to all that trouble when you could actually get everybody if you sued in Tennessee?

[00:28:37] Speaker 00:
Well, this is the party's choice.

[00:28:39] Speaker 00:
And I think the procedural posture in this case was such that, look, we started this.

[00:28:45] Speaker 00:
We have two of the three lawyers in Arizona.

[00:28:47] Speaker 00:
We started this with an Arizona group that brought this to us and it was plaintiff's choice.

[00:28:53] Speaker 00:
And when we filed the complaint and Cracker Barrel responded, they did not challenge jurisdiction.

[00:29:00] Speaker 00:
In fact, Arizona law was applied.

[00:29:02] Speaker 00:
They, under Burger King, they availed themselves to the benefits of being in Arizona to enforce the arbitration agreement with respect to out-of-state

[00:29:10] Speaker 00:
opt-ins and then proceeded in that route.

[00:29:13] Speaker 00:
And I made it pretty clear, they even said that in their own pleading.

[00:29:18] Speaker 00:
We cannot bring a personal jurisdiction challenge because there was an Arizona named plaintiff.

[00:29:25] Speaker 00:
They essentially conceded

[00:29:27] Speaker 00:
indirectly that BMS does not apply and that they're subject to jurisdiction as long as you have an Arizona named plaintiff.

[00:29:33] Speaker 00:
So the posture of this case was such that in real time, if we're going step by step in terms of what happened over the last three and a half years, we're relying on what they submitted and we're relying on the court's orders to fix the problems that the court identified and towards the end getting Bach, the minor who then voided it, to be the Arizona named plaintiff

[00:29:57] Speaker 00:
Our understanding was this is why we have jurisdiction here.

[00:30:00] Speaker 00:
So yes, it is possible to do it there, but in this case, and this is why we proceeded in this route, that's why we're here.

[00:30:07] Speaker 04:
So that would seem to undercut your argument under the Rules Enabling Act that this would undermine the statutory purpose.

[00:30:14] Speaker 04:
If you can bring the claim in a state in the United States and have your nationwide claim, how is Rule 4K undermining the FLSA?

[00:30:25] Speaker 00:
I don't think we can have a nation – well, crack – for example, Cracker Barrel is in 45 states.

[00:30:30] Speaker 00:
They're not in five states.

[00:30:32] Speaker 00:
If we have nationwide service, theoretically I can have an Arizona plaintiff suing Cracker Barrel in, I think, Hawaii.

[00:30:38] Speaker 00:
I don't think Cracker Barrel is in Hawaii.

[00:30:39] Speaker 00:
Don't think so.

[00:30:40] Speaker 00:
I welcome these.

[00:30:42] Speaker 00:
And so that nationwide service would allow for that.

[00:30:46] Speaker 00:
I think an employment case may be different than other cases that

[00:30:50] Speaker 00:
may allow for nationwide service.

[00:30:52] Speaker 00:
You have to have employees where they are, and I think that's where the statute addresses that issue.

[00:30:57] Speaker 00:
Once you meet the requirements of the statute and the Fair Labor Standards Act, and you serve process under 4K, then you're done.

[00:31:05] Speaker 04:
Thank you.

[00:31:05] Speaker 00:
Thank you.

[00:31:06] Speaker 00:
Thank you.

[00:31:12] Speaker 04:
Mr. Coleman, I'm going to give you a couple more minutes because we took Mr. Sudo for time by about five minutes, so we'll give you five minutes on every bottle.

[00:31:19] Speaker 01:
Thank you, Your Honor.

[00:31:21] Speaker 01:
I want to start by trying to put some context on a question that was asked by Judge Clifton.

[00:31:29] Speaker 01:
The relevant number would be approximately 2300 if you focused only on Arizona, so 2300 out of over 142000.

[00:31:43] Speaker 01:
And if you then looked at that 2,300 and you calculated the number of adult signers of arbitration agreements, you'd be down to about 300.

[00:31:54] Speaker 01:
So there's only about 300 and change that worked in Arizona and either did not sign an arbitration agreement or may have signed one as a minor and then timely repudiated.

[00:32:13] Speaker 02:
a plaintiff in a situation like this to do, assuming the panel agrees with your jurisdictional approach?

[00:32:22] Speaker 02:
Do they file separate suits in 45 states with in-state plaintiffs who did not sign arbitration agreements and then ask the multi-district litigation panel to pull them together?

[00:32:38] Speaker 01:
That would be one option.

[00:32:40] Speaker 01:
Any employee that worked for Cracker Barrel, let's say in South Carolina, South Carolina would have proper jurisdiction over that employee's claim.

[00:32:51] Speaker 01:
The other option would be in this case to go to Tennessee and sue in Tennessee and this entire issue never comes up.

[00:33:00] Speaker 01:
Because Tennessee, the federal courts in Tennessee would have general personal jurisdiction over Cracker Barrel.

[00:33:07] Speaker 01:
And that's essentially what

[00:33:09] Speaker 01:
the four circuits who have applied Bristol Myers Squibb to FLSA collective actions, that's what they have noted in their decisions.

[00:33:16] Speaker 01:
And that brings me to another point.

[00:33:19] Speaker 01:
The FLSA is very, very unique, and the collective action is nothing like a Rule 23 class action.

[00:33:26] Speaker 01:
There is no class.

[00:33:29] Speaker 01:
The statutory language is very, very clear.

[00:33:32] Speaker 01:
Two things have to happen for a collective action.

[00:33:38] Speaker 01:
There has to be determination as to who is similarly situated.

[00:33:42] Speaker 01:
And then number two, an opt-in plaintiff must file a consent to opt-in.

[00:33:46] Speaker 01:
At that point, they become a party plaintiff.

[00:33:49] Speaker 01:
There's no class.

[00:33:50] Speaker 01:
There's no, you know, it's a completely different concept than a class action.

[00:33:57] Speaker 01:
And that's why personal jurisdiction over the defendant is necessary on a plaintiff by plaintiff basis.

[00:34:05] Speaker 01:
And that's essentially what the four circuits who have applied it to collective actions have said.

[00:34:13] Speaker 01:
And they liken an FLSA collective action to the mass tort claims that were at issue in the Bristol Myers case that went to the Supreme Court.

[00:34:29] Speaker 01:
Cracker Barrel asserts that if notice is permitted to go out to employees outside the state or it's permitted to be mailed to employees that signed arbitration agreements that the court has already reviewed and found to be enforceable and that means they signed them as an adult, that amounts to pure solicitation of claims.

[00:34:54] Speaker 01:
They cannot join the lawsuit.

[00:34:56] Speaker 01:
They cannot be similarly situated to a plaintiff who is not bound to arbitrate.

[00:35:01] Speaker 01:
And in the case of jurisdiction, somebody who worked for Cracker Barrel in Virginia cannot be similarly situated to somebody who worked for Cracker Barrel in Arizona.

[00:35:14] Speaker 01:
Well, they could be.

[00:35:15] Speaker 03:
I mean, they are if the lawsuit is filed in Tennessee.

[00:35:18] Speaker 03:
The only thing you have to distinguish is the argument that

[00:35:23] Speaker 03:
They couldn't sue themselves directly in Arizona, but similarly situated isn't so precisely defined that mostly what we're looking at is employment.

[00:35:35] Speaker 03:
Are they employees?

[00:35:36] Speaker 03:
Are they employees of the same kind?

[00:35:38] Speaker 03:
Are they subject to the tip credit and so forth?

[00:35:43] Speaker 03:
I'm not sure that defining federal court jurisdictional reach really changes whether employees are similarly situated.

[00:35:53] Speaker 03:
If they sued in Tennessee, you wouldn't dispute that, would you?

[00:35:56] Speaker 01:
Yeah, it would not be an issue in Tennessee.

[00:36:02] Speaker 01:
Also, there was a question.

[00:36:03] Speaker 01:
There is no anchor.

[00:36:05] Speaker 01:
And I think the question was from Judge Patey.

[00:36:10] Speaker 01:
The court below did view the Arizona plaintiff as the anchor that somehow

[00:36:17] Speaker 01:
sort of magically corrected the lack of specific personal jurisdiction over Cracker Barrel.

[00:36:24] Speaker 01:
And we think that's reversible error.

[00:36:27] Speaker 04:
Your friend on the other side has argued that Cracker Barrel waived the jurisdictional issue in the way it litigated the case in the district.

[00:36:34] Speaker 04:
Can you respond to that?

[00:36:36] Speaker 01:
So the original complaint had four named plaintiffs.

[00:36:39] Speaker 01:
One had worked in Arizona and three were out of state.

[00:36:44] Speaker 01:
Cracker Barrel's first pleading was a motion petition, if you will, under the Federal Arbitration Act asking the court to examine the arbitration agreement, find it enforceable, compel those four to arbitration, and dismiss the complaint.

[00:37:03] Speaker 01:
That was granted.

[00:37:04] Speaker 01:
That was the court's November 12, 2021 order.

[00:37:08] Speaker 01:
It's ER 45.

[00:37:12] Speaker 01:
So that complaint was completely wiped out.

[00:37:15] Speaker 01:
And opposing counsel is correct.

[00:37:17] Speaker 01:
Cracker Bell did not raise the issue at that time in that process.

[00:37:22] Speaker 01:
Leave was granted by the court and a first amended complaint was filed.

[00:37:28] Speaker 01:
Completely new set of plaintiffs.

[00:37:31] Speaker 01:
No overlap whatsoever.

[00:37:32] Speaker 01:
The original four were gone and three new.

[00:37:35] Speaker 01:
And the three new ones, not a single one of them,

[00:37:39] Speaker 01:
had worked for Cracker Barrel in Arizona and Cracker Barrel filed a 12b2 motion and the court granted that motion and dismissed the first amended complaint but granted leave to amend again.

[00:37:52] Speaker 04:
So would your position be that Cracker Barrel waived the jurisdictional issue with respect to the first complaint and those specific plaintiffs?

[00:38:02] Speaker 04:
But now that complaint has been dismissed, and so we're dealing with a new set of plaintiffs.

[00:38:06] Speaker 01:
At most, that would be the case.

[00:38:09] Speaker 01:
If there was waiver, it was only with regard to those three who were dismissed for other reasons anyway.

[00:38:16] Speaker 01:
But there's no way to say, well, now you've waived as to 142,000 plus people that the court is going to authorize notice to go to.

[00:38:27] Speaker 01:
That first original complaint

[00:38:29] Speaker 01:
was completely superseded by the filing of the first original complaint was totally superseded by the filing of the first amended complaint which in turn was voided and superseded by the filing of the second amended complaint.

[00:38:47] Speaker 01:
And so yes, that our position is there can be no waiver but if there is waiver,

[00:38:57] Speaker 01:
It can't be extended beyond the three where Cracker Barrel could have challenged personal jurisdiction at that point, but chose to petition to compel arbitration under the FAA.

[00:39:13] Speaker 04:
Well, you're over time, so if you want to just conclude, please.

[00:39:17] Speaker 01:
All right.

[00:39:17] Speaker 01:
Thank you.

[00:39:18] Speaker 04:
All right.

[00:39:18] Speaker 04:
Thank you.

[00:39:19] Speaker 04:
Thank you, counsel, for your arguments this morning.

[00:39:21] Speaker 04:
They were very helpful.

[00:39:24] Speaker 04:
This case is submitted.