good morning your honor may it please the court my name is alan crone from memphis tennessee and it's my pleasure represent ms margaret white here today against baptist hospital the apple e this is a case which arose out of  the denial of plaintiff's motion to set aside the clerk's order that ms white be pay through fifty four discretionary costs in this matter we believe that the court erred three pretty simple reasons first is that the f l s say excludes the plaintiffs from the liability of paying defense costs under rule fifty four second that under the established precedent for factors to determine whether or not plaintiffs should have to bear discretionary costs those factors weigh in favor of the plaintiff in this case and the third in the alternative that the plaintiff is responsible for some costs that it should not become responsible for the costs of the so called opt in plaintiff's since baptist was not  prevailing party with respect to those particular plaintiffs when when we look at whether the question is whether or not under rule fifty four the language of the rule says that a prevailing party may recover these discretionary costs provided that a statute does not provide otherwise the f l s say provides otherwise as we noted in our supplemental letter brief when you use the marks vs general revenue corporation case recently decided by the supreme court under the fair debt collection practices act in its statutory provision supreme court held in that particular case that the fair debt collection practices act does not provide otherwise but provided this court and other  basically said that you could recover attorney's fees and expenses but did not mention discretionary costs and the defendants argued in that case because of that it didn't provide otherwise and the court went through an analysis of the context of that particular statute and when we look at the fair when we look at the fair fair labor standards act the context of that statute is much different than the context of the fair debt collection practices act for example the a simply similar wording appears in the f l s a but it appears in a list of other provisions that exclude language appears in that list it is not illogical to say that congress implicitly excluded collection of discretionary costs from  completely different remedial purposes and in particular the f l s say provides at section two sixteen be a list of three provisions our provision the instant provision is the last of those pre three provisions 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 the action is brought those two provisions exclude the operation of rule twenty three rule twenty three isn't mentioned in those provisions but this court and supreme court of the courts have held that rule twenty three doesn't apply the facts and legal circumstances were similar and fry fry was decided in a per curiam opinion marks had not yet come out at that point and so particularly in this in this case i would say this is fresh before the court  for that reason in particular and that's an argument against her having everybody's cost assess the answer is that you're saying that's an argument against having any cost assessed against her saying that the f three and collective actions the reason we have collective actions under rule two sixteen b is that rule two sixteen be implicitly excludes the operation of rule twenty three and that has a lot of  on fifty four six i'm relying on the language of the of the rule itself and marks versus general revenue corporation attorney's fee to be paid by the defendant and costs of the action it does not mention allowing a prevailing party to recover discretionary cost and just as the other again if  analyzing the rule and the statute in particular and within its own context we say that that particular provision which excludes discretionary costs is similar to the other two provisions that immediately preceded it in excluding the operation of rule twenty three in other words this is a list of provisions which exclude the operation of the federal rules of civil procedure as it relates to the  a marks just a case of a mission or no no you know what marks the way the supreme court analyzed it that's that's correct because that was the context of the fair debt collection practices  but in the context of the f l s say you have to look at first the remedial nature of the f l i say and the fact that the f l s say completely rearrange is in a number of ways how the federal rules of civil procedure apply to cases the next basis for reversal is that if the court determines that the rule fifty four applies to the f l a saying in the traditional way that according to the district court's own factual analysis the factors that govern whether or not discretionary call should be imposed argue in favor of not imposing them on this particular plaintiffs  the court cited been and white and white and other six circuit precedent to say that among the factors to consider and these are the ones that the district court cho to to list art whether the action was reasonable and brought in good faith i don't think there's any doubt or contention that this action wasn't brought in good faith whether the prevailing party can bear its own costs without hardship which again i don't think there's any doubt that that just hospital can bear the cost without hardship and whether a warning a call should have a chilling effect on litigants bringing similar claims again i don't think you have to be a expert  cases on behalf of other people if you're going to impose thirty forty fifty thousand dollars worth the costs on those plaintiffs that's going to have a chilling effect on whether or not a plaintiff is going to take a case if  lawyer has to say well i know you want to proceed in this manner but you understand that if if you're not successful you may have to bear thirty or forty thousand dollars worth of of costs that's going to have a chilling effect on litigants bringing these cases and just as an option ok court said you know the amounts in controversy are so small that there really isn't enough enough cost benefit analysis for plaintiffs to do that and the public policy should be to encourage these types of action because otherwise hundreds of people could go uncompensated because they either don't know about the problem which the notice is designed to secure or they just for whatever reason aren't comfortable coming forward but might be comfortable coming forward in a large group and the district court just kind of offhand dismisses the idea that it could be a chilling effect without much comment and again i think in this case or so dollars to what extent do we weigh that inability to pay back that this would cost her to become impoverished placed in financial considered other again to saying that that is why i did not come forward with enough proof i'm not sure what proof would be enough i mean in this day and age i'm not sure what it means to become impoverished by something like this but again a working person who  specific situation should weigh heavily but in a global situation i think the chilling effect is just is just as important from a policy standpoint on a going forward basis what prove to see provide as to her financial condition she provided a schedule of her income and expenses and the fact that it at the time i can say without going outside the record at the time she was completely disabled and so had no money coming in and  you know i think any working person putting thirty five thousand dollars on them for something like this is is going to make impoverished in terms of having to dig out from under that and the schedule o income and expenses also shows generally the assets that she has available to her what she owns you can be disabled and have limited income and still have considerable assets just wondering if you're i don't i don't recall i don't i can say that just from my own knowledge i know that she doesn't have considerable assets whether we listed that in the petition or not it's in the right i apologize you know i don't have that my my fingertips  and then so when the other people were given notice opt in why weren't they informed that they may have to pay if it doesn't work out the notice did not provide for that and  i'm not sure that option plaintiffs would have to provide for those for those particular costs even under rule fifty four d the the bottom line though is if i took the last  last factor of my argument goes into that which is that just wasn't even a prevailing party as to those people because all baucus got was a dismissal without prejudice the last thing i'll say is that betters could have avoided all of those costs by simply police the court my name is paul prager and i am counsel for baptist health care and the other respondents including baptist desoto have a couple things i'd like to say first an overview first by way of apology to the court the marks case was decided after the  of the only legal issue really before the court judge white commented just a moment ago that it's very difficult to distinguish and i'll come back to that in a moment the second over you comment is that brian white began as one case they were divided because it's actually two separate employers within the same umbrella of corporate hospital family that's based in memphis the desoto hospital actually is in desoto county mississippi but ms white's a tennessee resident in th before the federal district court for the western district cases were divided and as you point out the judge called that opinion was decided in december it was a procuring opinion it does answer all the questions best the one thing that's distinctive and i'll come come back to that in the final thing that i think we have to keep in mind is except for the legal issue that's raised by mark's everything here i believe this viewed through the lens of abuse of discretion and while i know that you  people may have different minds reach different conclusions both the clerk of the court rules wrote an opinion that followed the white versus white factors and then judge mays turned around and wrote an opinion on this and did extensive analysis of this and i think it must be viewed by this court through the standard of abuse of discretion now let me come back to mark's and start there because that's where mr crone stroh's to start i think mark's is directly dispositive in fact of this issue because of the difference can recover cost and fees and then it goes on to have a provision that says if the defendant wins and the plaintiff brought in bad faith they can recover cost and c the supreme court looked at that and rejected the negative implication that that congress had excluded anything else that could happen if a defendant went on saying that the defendant can recover cost a visa that's not enough that is not otherwise provide what about the argument though that the two statutes are really fundamentally  distinctive the fair labor standards act could apply to let's just say for the sake of argument the entire employees all the employees of the hospital who are being  alleging underpayment would would risk having the cost land on them if for one reason or another they can't make a case and so if it is the chilling effect argument i think that that just doesn't seem to me to be in the collection area i don't know why i have a reaction that those are not the same sort of remedial statute i appreciate that your honor and what i can intellectually and honestly i know there are there going to be fair debt collection acts that go against an industry wide practice or at least a company wide practice but it seems to me built into this is a much more likely situation where the fair labor standards act produces class action for the other part about it just already that i think is important to look at by way of analogy is a rule twenty three h because within rule twenty three we have the same sort of cost shifting provision in it of itself and that's speaking directly to class actions and again i think what congress and the courts have done is balance the you know the the the winning and losing part of that will protect the with classes because what we routinely see as you know is  is the name plain absentees actions seek a greater bonus if you will in terms of their reward as being the representative is choosing to represent all these other people miss white was required to bring this is a not and you know we're all familiar with these class actions where i think i think i may be covered by a couple of them right now where i stand to gain twenty three cents for some action against netfli wrong but those are not lawyers to make a buck by providing forty million people with twenty three cents apiece this is somebody who's really concerned that what's happening is she isn't being paid what she's  rules the rules fifty four exists the supreme court looked at it in marks and the chilling effect of the raw i don't like the word chilling to be honest i think that it would cause anyone to should cause anyone to pause with a little caution when you enter into litigation realizing there's consequences not only your own face but face the other side both positive potential consequences and negative consequence so let me ask you this the the call to point out from the pla people and so we deposed around twenty three was the number i made and i may be off one or two just on those that actually necessary yes your honor i think it was because ultimately you know at the end of the day we filed both a motion for s opposed it but it gets certified and then you have to go through the process of taking this discovery and you took we took quite step as it's the same time and so at the end of discovery we filed a motion for summary judgment as to why a motion to decertify the people because this is an off the clock work case it's not a misclassification case and those inherently are very difficult to treat in a class format and not too surprising that the outcome so are their cases and the other circuits that race this exact question with regard to this exact are we dealing in a vacuum here well i guess with the question of whether the statute itself allows the award of cost it's been done  other circuits and give me a moment i think i can are they in your brief cases and yeah i don't think there's any dispute i don't think there would be a conflict in this in the circuit on that and the circuits on that and how did the cases go i've looked at the brief but i'm not remembering there was not a there's not a host of cases on this most of the cases have come from the from the lower courts and the f l s that i do i think they're most mostly district court cases i don't about the fact that there were people who ms miswired just background and this is kind of going back to the argument i stood here and made a few months back in the merits of the on the merits of this this white knew how to use the op the exception claim to the other people who at least theoretically still had a claim that may have been in the opt in class there were a number of reasons we asserted for the decertification judgement mazed did what a good judge should do he went to the simplest one once he said summ judgment why no class because there's nobody she's not similar situation that a decision on there it's not options are dismissed without prejudice the thing that i'm glad you asked that question because fifty four doesn't require a decision on the merits it requires to be prevailing party and in fact cost to retain the awarded in dismissals for lack of jurisdiction and proper venue those sorts of things so i think it's confusing to say because we didn't win on the merits of the opt in claims that were not the liked to have done it that way unfortunately the courts certifies the class and sets a discovery timeline for us to do this and we did all the some of the discovery all in one without and frankly i wouldn't tell you that i was certain i was go in your research in filed a motion perhaps at the time it wasn't so clear that you know exactly how that outcome would be but i don't remember the order of things sitting here today climbing looking back as an excellent question  can answer you know whether we could have done some different maybe should have gone to judge mays and said hold up on this it stretched out much too long and my client would have been certainly better served if we could have made it shorter there's no question so you're going to circle back to the issue of ability to see judge call the thing here is that ms white and contrary to what mr mr crone represents the submitted something and i don't have what she submitted before the hearing on the clerk and the clerk said not enough so between the tip time the clerk ruled and the time to judge may's address this you submit a supplemental affidavit of financial status and it's in i don't know what it's in the court's record but it's document number two seventy eight in the district court record below and it's was follow on december twenty ninth two thousand and eleven and hopefully that'll help your staff be able to find that but it's a supplemental affidavit and she says that she was in a car accident and that she'd broken her ankles and she was in the hospital for an undetermined amount of time and she goes on and says that she had for a one k a count of ten thousand dollars and that she would be  that should be impoverished there's no documents attached there's no financial records attached and what judge mays and you have to put that in the context of should or been told not enough by the clerk and i can't remember what used to mean it was some sort of this is a supplemental affidavit so my belief stand here today is that was a eleventh circuit which talks about the substantial evidence necessary and there's a case from the western district toggle which i think cited in the briefs where ju hearing you know i don't know what there should should be there was no hearing it was handled on the briefs before judge mays we didn't have a hearing could he have had a hearing yes my experience with our district courts today is more often we do things by paper and it was extensively briefed he thought she would what i would have looked for i mean and my mind would have been financial records you know to back up what she said in terms of what her bank account is but the one thing that i think that is distinct here and look at the other cases is it's  not it's not about an immediate ability to pay a bill it can you pay it some time in the future and i was called to your attention judge call you were on a panel in the singleton case goes back to two thousand and one and i have the cite for that because i couldn't find it dollars this one was about four five thousand and it was significant i mean and it was thirty six thousand and i understand the difference sure but the i think in terms of looking at it from your standard today is you know was i went to the first conference with the clerk told about this we discussed at length whether this should be mr fry's expense in that case or mr fry and the class members and what i knew going to the hearing was no notice had be given formally by the court what i didn't know is what arrangements had been made or what notice had been given by plaintiff's counsel with these people as they opted in because they became their clients and what came out of that was there had been no notice and i think that's a decision that people who choose to be represented parties are entitled to make that you know i'm going to bear the risk or i'm not going to bear the risk i'm going to be a represent a party i'm not going to represent the party those are all decisions that you know from from the standpoint of the right with whatever her ratio of the costs is and let the hospital or the health care system pick up the rest of it that says to her and to anybody else stop and think before you fall asleep like this but doesn't tax her with the entire amount of applying the factors of white versus white your honor i think that had had judge maced decided that i'd be carrying a big heavy load or to try to row up the hill to get convince you to say that was an abuse of discretion i think that the court could have done that that's not what judge made did and is there any possibility that there could be a settlement to that effect ok thank you thank you very much rob thank you ana i think in my two minutes of rebuttal i think the most important thing to focus on is the difference between the f l s say in just about any other federal statute rule twenty three does not apply i discipline myself never to refer to these groups as classes i always refer to them as collectives because it's different and it's different in two very important context that that come into play in this particular circumstance first place it's different is that is the options don't get a relation back they have to opt in in order to to toll the statute of limitations and that has to be done early and the second thing is in a class action you don't take the depositions of putative class members so there would have been twenty or thirty depositions of putative class members and as it turns out those depositions as judge white noted those depositions as it turned out were not necessary for the outcome of this case and when you take all of that into consideration and you take that the particular charism of the f l a say in the particular procedural posture and choices that it but they can they can let discovery take its course and it's not going to be as as inflated as this particular collective was and that's an operation of this very part of the statute that contains both the rule twenty three varian named representative get thirty six thousand dollars in incentive payments if you going to wager a dollar for dollar that's not a good use of your time so i mean if you're going to say that the then then incentive payments ought to be ninety one hundred thousand dollars considering how much submitted i should at least mention i guess i'd be remiss if i didn't that the court does have a in house mediator actually mediation staff you're probably both well aware services from the mediation office but they are they are the panel has no involvement in the mediation process we're not of made aware of any discussions those are confidential between un and the mediation office so it's up to you if you decide you want to make contact i'm raising it only because mr prager you said there have been some discussions and if you choose to go that route  then maybe there will be some benefit to all parties again not suggesting you do that we will proceed forthwith with what we have to do is panel and if you do press for