good morning everyone and welcome to the th circuit i want to thank my colleagues judge fernand isn't just to sima not to make them feel old but i was a law clerk on the court once upon a time when they were judges so it's actually a great honor and a little bit intimidating  argued counsel just remember to keep track of your time the clock runs backwards and if you make all your points and there's still time on the clock and we're not asking any questions it's ok to sit down i always say there are no bonus points for using all of your time in the th circuit and with that we'll go ahead and call the st case this morning hopefully i'm pronouncing this correctly versus stetson desert project c good morning your own argument please the court my name is andrew sterling i represent the plaintiff opponents in one of the three consolidated cases in this appeal but i will be speaking today on behalf of all of the plates of opponents and in the three cases you're on is this is a misclassification case under the fair labor standards act of one thousand nine hundred and thirty eight it's one of scores of similar cases that have been walking through the federal court since the late thirty's the central question in all of these cases is whether ruling is to dismiss with prejudice our cases for lack of subject matter jurisdiction on the grounds that in the court's view we would not be able to prove that our clients are in fact employees and the  of discretion standard the the lenient standard was met and this court should order on remonde that the class or cos collective be conditionally certified with respect to issue number one destroy dismiss a case for lack of subject matter jurisdiction with prejudice i think that nd question is quite clear if the court were to dismiss a case for lack of subject matter jurisdiction so by definition it couldn't reach the  expressly identified the issue that occurred here the quote in that case is that subject matter jurisdiction in federal question cases is sometimes erroneous lee conflated with the plaintiff's need and ability to prove the defendant bound by the federal law asserted as a predicate for a leaf for relief which is a merits related to terminations and the court kind of went through and that was an ethical a case but of it's since been sort of articulated in the title seven context and also we've cited nine cases where less a case and so in all of these cases courts hold that it is appropriate to address those issues either under rule rule twelve or rule fifty six or have it go to the jury that you mentioned the different mechanisms to assess assess this can you remind me what in terms of discovery was actually taken on this issue well there was i guess limited provisional initial discovery there was some confusion on my part since i wasn't aware of sort of a subject matter jurisdiction discovery as best i could there is some precedent pre our ball to what's called a factual attacked a subject matter jurisdiction where issues can be delved into but they have to be collateral to the some some in or all the tours that were propounded so there was an initial round of discovery depositions of who or what kind of person would believe the defendant took the deposition of the of the sum of the name plaintiffs and about the place you taking discovery  know now we've cited twenty seven cases now this is a this is a case involving exotic dancers there are twenty i believe seven or twenty nine cases in the books determining this or size question in favor of dancers on the merits there are no cases or maybe there's one sort of outlier on the other side but you know we were we were at least at that point somewhat assuming that this would be you know whether a summary judgment issue or a  full blown trial the reason why i was asking the question was is that i i'm assuming you're opposing counsel he's going to stand up and say wait a nd there was discovery on this issue there was a factual contest on this district courts can take issues out of order if they think it's more efficient to do that so where's the harm here and what would your response to that well harm or several fold st of all this is a suicide twelve b one motion there is no and there was no article or there was a moving standard that we had to meet at the threshold i believe the standard was that we had to articulate sort of some some rational basis or some plausible inference some fact that could support an inference that we would state a claim so kind of like a qualified twelve b six tender now we clearly  did that the court found that four out of six of the this totality of circumstances test weighed in our favor but in the ruling in actual fact the ruling appeared to basically just apply a preponderance of the evidence standard against us and require us without any any protections afforded by rule fifty six or frankly by by by a right to a jury trial to have these disputed issues of fact resolved by a fact finder and you know obviously it's summ judgment we would have all these facts resolved in our favor and it appears that was not done it i mean it was not done the court ruled as a matter of law that it did not believe on the facts presented that we had met effectively our burden of proof as a threshold matter of summary you know as a summary judge starr as a matter of subject matter jurisdiction now if you get what you want which is us to send this case back what further factual development would you be looking to do on this issue is eventually you do  precedent on the matter is not persuasive in this judge's mind and that's the judge's right so we if this judge were to preside over this matter remonde then we would likely not prevail at summary judgment as a matter of law but we absolutely believe if the cry standard is is applied and subject to do novo review we believe we would absolutely survive summary judgment and we would have that issue tried to a jury but in terms of factual development at the rule fifty six dollars stage is there any further factual development you feel you would want to do that you have not done at this point yes standard of review the appellee would would prefer to have abuse of discretion apply because this would i guess it was viewed as sort of a case management authority sort of an inherent discretion of the court to sort of decide this issue lawyers quite clear that we are up on de novo review of the subject matter jurisdiction issue and again to the to the court's point we absolutely believe we were entitled to the rule for rue fifty six does provide procedural safeguards for example in this case we weren't permitted to reply now again perhaps that's my experience to sort of just sort of take it upon myself to follow or apply was one was not requested by the court but that you know the court requested on importance of providing a plaintive with adequate procedural safeguards and that's when fifty six safeguards the court relied on two cases for itself already to do what it did rather fo the plaintiff in that case alleged she was a prospective employee and the f s a gave her certain rights and the court correctly ruled in that case no as a matter of law your claim under the facts you've alleged don't provide you with any grounds for relief but even that was all of those district courts rejected that argument on the grounds that we're now we're now suggesting the nd issue is the camel issue like to reserve three minutes for a bottle but again that it is clear that the the adit district court may abuse its discretion as this court held in campbell by refusing to to follow that the few dictates provided by in the f a a say for what's called conditional certification now it 's true this is a judicially created construct but this circuit that's what this circuit did very very in a very detailed fashioning campbell and it suggested that we have a lenient standard at the initial certification stage that is clearly met and  arizona district court has the same standard in play that we when we allege allegations in our complaint that were victims of a single plan or policy conditional certification is appropriate we believe of course to move a later stage o discovery for decertification again we believe that's now again that the court here never reached that question because it said it was premature we do believe on the on the record this court has authority to determine that that lenient standard was met and  the club with the establishment to discuss the operations of the business and i apologize that's two foreign accents that you have to deal with in one single or see nothing either of us can do about it unfortunately there are two issues and i think you touched upon them churchill once the main one is the flexibility of the court we have two primary components an abus discretion as to whether a trial court judge has to discretion to determine that certification on a six section sixteen b of the f s a is inappropriate in a particular case and then you have the secondary issue which actually sort of at the core here which is under what circumstance going to court decide to take certain matters in a different order than what the parties may be used to and that's sort of what this case is about is about case management we as attorneys as officers harken back to some of the cases that you have for instance when you had prison detail performing services and making claims that they weren't title to the fair labor standards of protection you had to rule on some of these issues as to whether they were employees to begin with in the context of these cases this issue came to judge mcnamee's attention on the dancers motion to have collective action certification heard and as they did that they included the ark agreement that they have with my my clients according to which they are licensees not employees of the club that created a red flag because in the same breath that she's saying we're similarly situated because we'll have this agreement this agreement also says we're not employees and that's sort of the genesis of why judge mcnamee escalated this particular issue to the forefront to try to address it because obviously if the individuals who are making the claims at themselves stating they're not employees as part of their declaration in support of the rule sixteen b motion it creates an issue in terms of the latitude that the court has and how it employs its discretion in addressing the request that's being made by the moving party by the claim makes of the plaintiffs as it's denying as he's denied their motion for a conditional sort of occasion he's asking for a briefing on the issue of whether the individuals are employees not at that particular stage we had already exchanged discovery consolidated file their action the answer was filed i believe on may st and that will sixteen conference was held in july the the motion for collective sort of the preliminary st step motion for certification of the collective action was filed in june of two thousand and sixteen so we're not talking about being at the very beginning of a case one of two months into the whole process discoveries had already been exchanged between the parties not just the initial disclosures but actual discovery exchanged by the parties as we indicated as you saw probably in the in a briefing my claim do not have extensive policies in contrast to a lot of other clubs that may be out there so there isn't a tremendous amount to go back to a question you to show and there really isn't an awful lot of additional information that could be reduced in this particular case it would be a redundancy of a number of additional witnesses but i mean if you did to lead plaintiffs i took their depositions the my mccauley requested the deposition of a thirty six corporate representative which was provided to an entire day dealt with every single issue of operations of the company but address policies that were in place in just the overall operations of the club when we talk about where we stand in this particular case it is truly no different than if judge mcnamee had elected to bifurcate discovery which by the way the parties agreed would be a positive thing to do in this particular case that's part of the joint case my plan that we submitted the other element that i would bring out we have to be flexible when a judge says this is an issue that matters to me we have to address it the plaintiffs dancers in this a strategic decision based upon the judge's statement to not provide any evidence in support of their position to just simply go with allegations whereas we provided actual declarations  and actual statements from the plaintiffs themselves to their deposition and a thirty six dollars representative plus additional supporting documents was nothing precluding the then surveys from asking for the same either at the onset maybe a motion for clarification as to what would be allowed by the court there was no request that was made over the course of the proceedings for a delay as you would have under fifty six dollars f to take additional dispositive additional discovery that would be required to address the issue none of that was brought up the issue that we've had is three separate motion for reconsideration of the denial of the sort of acacia motion that also is a little bit of something that's mislabel i think in for an abuse of discretion and the nd is the standard for review of the determination of the court made as to whether the individuals were police under the f s a and that's again over a review that's on page ten of our brief we do not disagree with that particular component mirrored a previous decision from the u s district court in the district of arizona which was upheld by the th circuit and young chaffer says aaa cap transportation same analysis consists same factors i think the issue again here is the dancers take issue with the determination because it does not follow a dozen or two dozen other cases on the same on the same industry just because one case is not reaching the same conclusion as the other doesn't mean that it is wrongly decided each of these cases stand on their own merits the fact that there are significant differences from wanted your other is just something that judge mcnamee had to account for  somehow it's a foregone conclusion what the judge would do on remand but maybe or maybe not but the issue is not what we should do on remans why was this not brought up to the court's attention at the time that we were at the district court level if there was a need for additional discovery which honestly i don't see what other need there would be for this not discovery will be facing the exact same evidence if this case were to be remanded we'd have the same statements made by the plaintiffs and i'm going to change what they said and we're going to have the same thing for thirty six representatives there's nothing else that he's going to say either so these are the individuals who are most knowledgeable about this issue who have their own particular interest that they've articulated and the court reached the determination based upon the information that was received in very much the same way as as the case that the court actually cited the dancers take issue with the standard that supply in that particular determination but that standard is absolutely correct it's  analysis it's right evaluation of the six factors that appear in rio and ultimately it's a correct decision in terms of this particular case which is unique in comparison to others the corps did not abuse its discretion this determining that it didn't want to certify a collective action when the very affidavit that the individuals provided created an issue as to whether the authority of the court itself was properly invoked by the plaintiffs the core we're talking about a judicial creation there is no standard that the f s a provides for how to handle sixteen action everything sort of says for better or for worse spawns out of hofmann or ro spurling and the progeny of cases that come from there but huffman erosion the supreme court's decision there clearly states that it is a matter of discretion of the court as to how they're going to administer the handling of the case it originates by request by the defense side that the plaintiff side do not contact potential witnesses or do so only within confines provided by the court and so it's been extrapolated over the years but even campbell that's that's cited extensively in a brief the th circuit's panel in this particular case makes it very clear that it's ok to call bull different means of adjudicating a case and balancing the way in which you want to present it it is absolutely fine to use a piece from this very s class action if you want to do so at the certain level or use a portion of the minority view on how to handle the particularly certification questions or handled differently at the outset there is no harm that comes to the plaintiffs from their request for a collective action to not be certified they are not the st to whom this as a happen there are plenty of the citizens under the f l essay where federal judges are decided that you know what this is not an appropriate place case for sixteen b motion to certify at the outset and this was the determination here it doesn't affect the substance of the case for the individuals because under the f l i say every individual remains bound by his or her own cause of action their claim stand alone even though some of them may be adjudicated commonly each claim stands by itself so at the court there is no impact upon their actual their actual cause of action and their rights in this particular case the last thing that i would say is that the plaintiffs suggest that they took quote unquote provisional discovery taking a thirty six dollars deposition that goes on for approximately eight hours that every single subject that is out there is not what i would call a provisional discovery sending out requests to the other side this was in august of two thousand and sixteen sending out requests to the other side for every piece of information every policy ever promulgated indicating sources of receipts literally every issue in this case was covered by the discovery that was taken up to the time and if the plaintiffs felt that they needed additional time to conduct discovery that would have been useful to the court's determination they certainly could have asked for it you will notice that it is absent what is present goes a stipulation to grant more time for the defendants to file their response on that particular issue everything was above board and it sounds more like a case of regret about how the strategic decision turned out rather than it is about the harm that's actually befell any of the individuals one of that against this case for these reasons we would ask the court to uphold the decision two minutes thank your honor i'd like to just pick up on a strategic decision we agree if the trial court wanted to accelerate bifurcate and move up rule fifty six for an initial threshold determination we would have no objection to that we would have the ability to fall for rule fifty six dollars relief we believe for the discovery was required but most importantly we'd have an appellate court that could review that decision again adverse decision under don't over standard looking at the statement of facts which was not provided in this case and we could argue that the court reached the wrong result here basically what we're stuck with is a is a mosque rule fifty six dollars decision that was that was that was at least the court suggested was a route was not will fifty six decision and so we do believe that is absolutely prejudicial for us for the simple reason that we're not here today arguing why the court applying the rule fifty six dollars nattered reached the wrong result and again if we look at the order  instructions to was your initial told the one standard that the court articulated was that we had a quote initial burden of alleging specific facts that permit an inference that she is an employee so some sort of that's really kind of a twelve b dollars so we approach the i mean again that's not that's not in accordance with any case law but if that were the court's discretion we believe we obviously accomplish that task by producing a affidavits and deposition testimony and meeting for the six elements of the test but again at the end of the day what was done was a merits related determination indicated by the dismissal with prejudice and we have no no means of challenging that decision on appeal which which results in the real prejudice to