### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 13

‐ 8029

G LENN D RIVER et al

., on behalf of themselves and all

others similarly situated,

Plaintiffs

‐ Respondents

,

v.

A PPLE I LLINOIS

, LLC, et al

., Defendants

.

P ETITION OF W. C URTIS S MITH

.

____________________

Petition for Permission to Appeal from the

United States District Court for the

Northern District of Illinois, Eastern Division.

No. 06 C 6149

— Geraldine Soat Brown

, Magistrate Judge

.

____________________

S UBMITTED D ECEMBER 16, 2013

— D ECIDED J ANUARY 15, 2014

____________________

Before W OOD

, Chief Judge

, and B AUER and P OSNER

, Circuit

Judges

.

P OSNER

, Circuit Judge

. This is the second petition by the

remaining defendant in a class action suit for permission to2 No. 13

‐ 8029

appeal from the denial by the magistrate judge presiding

over the case of his challenge to the certification of the class.

Fed. R. Civ. P. 23(f). We denied the first petition, and we are

denying this second one as well, but we think it may be

helpful to future litigants contemplating Rule 23(f) appeals

to spell out our reasons for this second denial.

The rule authorizes a court of appeals to entertain inter

‐ locutory appeals from orders granting or denying class certi

‐

fication. It does not forbid a party to file repeated motions

seeking our permission to appeal if, as is not uncommon, the

district judge alters the class definition from time to time and

therefore issues a new certification order each time. To avoid

being inundated we need a standard for coping with repeat

motions.

The class that the district court has certified is composed

of waiters, bartenders, and other tipped employees at restau

‐

rants owned by entities controlled by defendant Smith (the

other individual defendants have dropped by the wayside:

two have died, the others have settled), who is subject to

both the federal Fair Labor Standards Act and the Illinois

Minimum Wage Law, 29 U.S.C. § 203(d); 820 ILCS 105/3(c), if

determined to be an employer under those Acts (an issue not

yet determined). Because they receive tips their employer is

not required to pay them the full federal or state minimum

wage; in effect their tips are credited against the minimum

wage to which they would otherwise be entitled. 29 U.S.C.

§ 203(m); 820 ILCS 105/4(c). But of course if the tipped em

‐ ployees also perform non

‐ tipped duties (provided those du

‐

ties are unrelated to their tipped duties—an important quali

‐

fication, as we’ll see), such as, in the case of restaurant serv

‐

ers, washing dishes, preparing food, mopping the floor, orNo. 13

‐ 8029 3

cleaning bathrooms, they are entitled to the full minimum

wage for the time they spend at that work. Although only

the state

‐ law claims have been certified for class treatment,

neither the Illinois statute nor the implementing regulation,

56 Ill. Admin. Code § 210.720, addresses the issue presented

by this appeal. But that is of no consequence, because in such

situations Illinois courts (and likewise, therefore, federal

courts administering Illinois law) seek guidance in the fed

‐

eral case law interpreting the Fair Labor Standards Act. See

56 Ill. Admin. Code § 210.120; Kerbes v. Raceway Associates,

LLC

, 961 N.E.2d 865, 870–71 (Ill. App. 2011); Urnikis

‐ Negro v.

American Family Property Services

, 616 F.3d 665, 672 n. 3 (7th

Cir. 2010).

In her first ruling on class certification, the judge certified

a class consisting of employees “who worked as tipped em

‐ ployees earning a sub

‐ minimum, tip credit wage rate, and

who performed duties unrelated to their tipped occupation

for which they are not paid at the minimum wage rate.” A

second ruling modified the definition, and the last—the one

that precipitated the current petition (filed more than three

years after Smith’s first petition) for permission to appeal—

substituted a much simpler definition: employees “who

worked as tipped employees earning a sub

‐ minimum, tip

credit wage rate.”

The definition is overinclusive because it says nothing

about the tipped employees’ work for which they weren’t

tipped. True, the judge found that the defendant had a pol

‐ icy of requiring tipped employees to do non

‐ tipped work yet

without paying them the full minimum wage for the time

they spent doing that work. But the Department of Labor,

interpreting section 203(m), has distinguished between non

‐4 No. 13

‐ 8029

tipped work that is, and is not, “related” to tipped work, and

has decided that as long as the tipped employee spends no

more than 20 percent of his workday doing non

‐ tipped work

related to his tipped work (such as a waiter’s setting or clear

‐ ing a table that he waits on), the employer doesn’t have to

pay the full minimum wage (that is, the minimum wage

without the tip credit) for the time the employee spends do

‐ ing that work. 29 C.F.R. § 531.56(e); U.S. Department of La

‐

bor, Field Operations Handbook § 30d00(e) (June 30, 2000),

www.dol.gov/whd/FOH/FOH_Ch30.pdf (visited Jan. 7,

2014); see Fast v. Applebee ʹ s International, Inc.

, 638 F.3d 872

(8th Cir. 2011). Although in an earlier order the judge found

that “many” of the defendant’s employees spent more than

20 percent of their workday doing work related to tipped

work, she didn’t find that all did, or that all who didn’t did

at least some non

‐ tipped work unrelated to tipped work and

would therefore be entitled to full minimum wage for that

work.

In nevertheless including all the tipped employees in the

class, the judge relied on Bolden v. Walsh Construction Co.

, 688

F.3d 893, 895 (7th Cir. 2012), which disapproved a class that

“defines its members as persons who did not earn more ‘be

‐

cause of their race.’ Using a future decision on the merits to

specify the scope of the class makes it impossible to deter

‐

mine who is in the class until the case ends, and it creates the

prospect that, if the employer should prevail on the merits,

this would deprive the judgment of preclusive effect: any

other former worker could file a new suit, given that the los

‐ ing ‘class’ lacked any members.” To cure this problem, the

opinion in Bolden suggested “changing the language from

‘who were denied opportunities to work, not afforded over

‐

time hours or not afforded premium pay hours, because ofNo. 13

‐ 8029 5

their race’ to something like ‘who sought but were denied

opportunities to work, overtime hours, or premium pay

hours.’ Then the litigation could determine whether those

events occurred because of race.” Id

.

Our suggested definition in Bolden covered a class of

workers who had suffered harm (denied opportunities of

work, etc.), however, whereas to define a class as all “tipped

employees earning a sub

‐ minimum, tip credit wage rate”

does not define a class of persons harmed. A tipped em

‐ ployee is entitled just to the sub

‐ minimum, tip credit wage

rate unless he is doing either unrelated non

‐ tipped work or

related non

‐ tipped work in excess of 20 percent of his work

‐ day. When there is no allegation of a harm that a suit might

redress, there is no claim over which a federal court can ex

‐

ercise jurisdiction.

A recognized ground for granting a Rule 23(f) petition is

that deciding the appeal would clarify class action law, see

Blair v. Equifax Check Services, Inc.

, 181 F.3d 832, 835 (7th Cir.

1999), and that ground could have been made the basis of

the defendant’s petition. But it was not. He is not challeng

‐ ing the district court’s class definition. He thinks that the fact

that the court changed the definition since our denial of his

previous petition opens the door for him to renew his chal

‐ lenge to the initial grant of class certification on grounds de

‐

rived from developments in the litigation since that grant,

including subsequent rulings by the district court. That can’t

be right. In the course of a class action suit the presiding

judge is quite likely to alter the class definition. There is no

reason why such an alteration should open the door to an

interlocutory appeal unrelated to the alteration.6 No. 13

‐ 8029

And so we and the Tenth Circuit have held, and other

courts of appeals have implied, that to justify a second ap

‐ peal from an order granting or denying class certification the

order appealed from must have “materially alter[ed] a pre

‐

vious order granting or denying class certification.” Matz v.

Household International Tax Reduction Investment Plan

, 687

F.3d 824, 826 (7th Cir. 2012); Carpenter v. Boeing Co.

, 456 F.3d

1183, 1191 (10th Cir. 2006); cf. In re DC Water & Sewer Author

‐ ity

, 561 F.3d 494, 496 (D.C. Cir. 2009); Gutierrez v. Johnson &

Johnson

, 523 F.3d 187, 193 (3d Cir. 2008); Jenkins v. BellSouth

Corp.

, 491 F.3d 1288, 1291–92 (11th Cir. 2007). The reason for

requiring a material alteration is both practical and interpre

‐

tive. Without such a requirement parties could file Rule 23(f)

petitions whenever there was the slightest change in the

class definition, resulting in the entry of a modified class cer

‐

tification order. And since Rule 23(f) authorizes interlocu

‐

tory appeals only of orders “granting or denying class

‐ action

certification,” an order that alters the class certification im

‐ materially can’t readily be thought a grant or a denial of cer

‐

tification, while an order that alters the certification materi

‐ ally is to that extent a grant or denial of certification. In Matz

the order was a partial decertification that reduced the size

of the class by between 57 and 71 percent. 687 F.3d at 825.

We noted the arbitrariness of denying permission to allow

an appeal just because the order was not formally a grant or

denial of certification, when if the judge had defined the

class as narrowly in his original certification order that order

would have unequivocally been within the scope of Rule

23(f). See id. at 826.

There was a material alteration in the present case as

well—the change in the class definition. But as we said that’s

not what the defendant wants to challenge. He’s concernedNo. 13

‐ 8029 7

with several orders issued by the district court since his first

Rule 23(f) petition was filed and denied more than three

years ago, such as an order allowing the plaintiffs to use

“representative evidence”—in effect, allowing damages to

be extrapolated from a sample of the class members, rather

than requiring that they be calculated for all 15,000 of them

individually. The words “granting” and “denying” class cer

‐

tification can be stretched only so far. They can’t embrace

every order the judge issues that a party doesn’t like. The

interim orders in this case may for all we know have under

‐

mined the reasons for certifying a class in the first place, and

the defendant can always move the magistrate judge to de

‐ certify the class on the basis of new developments, as indeed

he did; the judge’s denial of that motion was the precipitant

of the defendant’s petition for permission to appeal. Driver v.

AppleIllinois, LLC

, 2013 WL 5818899, at *12–13 (N.D. Ill. Oct.

29, 2013). Should the judge continue to refuse, her refusals

won’t be appealable under Rule 23(f). A refusal to decertify a

class is neither an order granting nor an order denying certi

‐

fication; it is merely a denial of reconsideration of a previous

ruling. Gary v. Sheahan

, 188 F.3d 891, 892 (7th Cir. 1999); In re

DC Water & Sewer Authority

, supra

, 561 F.3d at 496–97.

The petition for permission to appeal is therefore

D ENIED

.