Court Opinion

ID: 20721
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:37:07+00
Date Added: 2024-06-11T16:46:55.817066
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                      Nos. 98-60636 & 98-60610

TERRY BARFIELD, ET AL,

                                 Plaintiffs,

          versus

MADISON COUNTY, MISSISSIPPI;
KARL BANKS; J.L. MCCULLOUGH;
DAVID RICHARDSON; LOUISE SPIVEY;
LUTHER WALDROP,

                                 Defendants-Third Party Plaintiffs,
                                 Counter Defendants-Appellees;

          versus

JESSIE HOPKINS, In His Individual Capacity,

                                 Third Party Defendant,
                                 Counter Claimant-Appellant.

      Appeals from the United States District Court for the
                 Southern District of Mississippi

                             May 10, 2000

Before POLITZ, GARWOOD, and DAVIS, Circuit Judges.

GARWOOD, Circuit Judge:

     Present and former employees of the Sheriff’s Department in Madison

County, Mississippi (collectively, Sheriff’s Employees), brought this

suit against defendants-appellees Madison County, Mississippi,

individual members of Madison County’s Board of Supervisors, and Jessie
Hopkins,   in   his   official   capacity   as   Madison    County   Sheriff

(collectively, Madison County). The Sheriff’s Employees alleged, inter

alia, that Madison County violated the Fair Labor Standards Act (FLSA),

29 U.S.C. § 201 et seq., by refusing to pay them owed overtime

compensation. In response, Madison County asserted a third-party claim

for indemnity against appellant Jessie Hopkins, in his individual

capacity (Hopkins). Following a bench trial, the district court entered

judgment in favor of the Sheriff’s Employees on their FLSA claims and

in favor of Madison County on its indemnification claim against Hopkins.

Madison County then settled with the Sheriff’s Employees, and, pursuant

to its earlier ruling, the district court ordered Hopkins to indemnify

Madison County for the amount of the settlement and for its attorneys’

fees and expenses.      Hopkins appeals.    We   reverse.

                      Factual and Procedural History

     In December 1995, the Department of Labor began investigating

reports of unpaid overtime accrued by employees of the Madison County

Sheriff’s Department. On September 5, 1996, before the Department of

Labor completed its investigation, the Sheriff’s Employees filed suit

in federal district court against Madison County, Mississippi, and the

individual members of Madison County’s Board of Supervisors,1 alleging

they were owed unpaid overtime compensation under the FLSA.              The

Sheriff’s Employees later amended their complaint to include, inter

     1
       The Sheriff’s Employees later voluntarily dismissed their claims
against the individual board members.

                                     2
alia, claims under 42 U.S.C. § 1983 for deprivations of property rights

in wages for work performed and for violations of the Equal Protection

Clause of the Fourteenth Amendment, and to name Jessie Hopkins, in his

official capacity as Madison County Sheriff, as a defendant in the

action. In its answer, Madison County filed a third-party claim seeking

indemnification from Hopkins individually on the basis that he was an

employer or joint employer of the Sheriff’s Employees and individually

responsible for any unpaid overtime owed to them.         Hopkins then

counterclaimed against Madison County, alleging that Madison County’s

third-party claim against him was brought in retaliation for his

cooperation with the Sheriff’s Employees in their attempts to obtain

unpaid overtime.

     After the Sheriff’s Employees named Sheriff Hopkins in his official

capacity as a defendant, Hopkins’s attorney filed an answer on behalf

of Sheriff Hopkins in his official capacity, admitting all of the

substantive allegations made by the Sheriff’s Employees. Madison County

subsequently filed a motion to strike this answer and submitted its own

answer on behalf of Sheriff Hopkins in his official capacity, denying

the Sheriff’s Employees’ claims.       In response, Hopkins moved to

disqualify Madison County’s counsel, for allegedly filing responses

without consulting with him and that were directly inconsistent with

earlier positions he espoused. The district court entered an order

striking Hopkins’s answer and denying the motion to disqualify. The

same counsel continued to represent both Madison County and Sheriff

                                   3
Hopkins in his official capacity throughout the litigation, including

this appeal.

     Following discovery, all parties moved for partial summary

judgment. The district court granted the motions in part, dismissing

Hopkins’s retaliation claim against Madison County and all of the

Sheriff’s Employees’ claims, except those under the FLSA. Additionally,

the district court ruled that Madison County and Hopkins individually

were both “employers” under the FLSA.

     A bifurcated bench trial proceeded. Beginning on March 23, 1998,

the district court conducted the first half of the trial to determine

liability   under   the   FLSA   and   Madison   County’s   third-party

indemnification action. On March 25, 1998, the district court found

Madison County violated the FLSA by refusing to pay the Sheriff’s

Employees overtime. In addition, the district court concluded that

Madison County’s refusal to pay overtime was willful and not in good

faith, thereby extending the statute of limitations to three years

(instead of two), 29 U.S.C. § 255, and permitting an award of liquidated

damages, 29 U.S.C. § 260. Applying Mississippi common law to Madison

County’s third-party claim against Hopkins, the district court

determined that Hopkins was primarily responsible for the unpaid

overtime and ordered Hopkins to indemnify Madison County for any

judgment Madison County would pay to the Sheriff’s Employees for the

FLSA violations.

     Pending the damages phase of the trial, Madison County settled with

                                   4
the Sheriff’s Employees for $750,000. Pursuant to its previous ruling

on the indemnification claim, the district court then entered judgment

in favor of Madison County against Hopkins for $750,000. Madison County

subsequently filed a motion to recover attorneys’ fees and expenses from

Hopkins. Relying again on Mississippi common law, the district court

granted Madison County its attorneys’ fees and expenses, which totaled

$264,430.32.   Hopkins appeals.

                              Discussion

     On appeal, Hopkins asserts the following claims of error: (1) he

was not an “employer” under the FLSA, 29 U.S.C. § 203(d); (2) the FLSA

preempts the application of Mississippi common law indemnification; (3)

the district court misapplied Mississippi indemnity law; and (4) the

district court should have disqualified Madison County’s counsel from

representing any party in the suit. We agree that the district court

erred in its application of Mississippi law. Because this conclusion

relieves Hopkins of the judgment entered against him, we need not

address the other issues presented in this appeal.

     In this appeal from a bench trial, we review the district court’s

factual findings for clear error. See Odom v. Frank, 3 F.3d 839, 843

(5th Cir. 1993). We review de novo the district court’s determination

of law, whether federal or state. See Gardes Directional Drilling v.

U.S. Turnkey Exploration Co., 98 F.3d 860, 864 (5th Cir. 1996); see also

Salva Regina College v. Russell, 111 S. Ct. 1217, 1225 (1991) (“The

obligation of responsible appellate review and the principles of a

                                   5
cooperative judicial federalism underlying Erie [R. Co. v. Tompkins, 58
S. Ct. 817 (1938)] require that courts of appeals review the state-law

determinations of district courts de novo.”).

     Madison County does not contend that the FLSA, federal common law,

or Mississippi statutory law provide for its indemnification claim.

Therefore, the only remaining basis for indemnification lies in

Mississippi common law.    Accordingly, Mississippi substantive law

governs Madison County’s common law indemnification claim against

Hopkins. When adjudicating claims for which state law provides the

rules of decision, we are bound to apply the law as interpreted by the

state’s highest court. See Transcontinental Gas v. Transportation Ins.

Co., 953 F.2d 985, 988 (5th Cir. 1992). If the state’s highest court

has not spoken on the particular issue, “it is the duty of the federal

court to determine as best it can, what the highest court of the state

would decide.” Id. When making such an Erie guess, we are bound by an

intermediate state appellate court decision unless “convinced by other

persuasive data that the highest court of the state would decide

otherwise.” First Nat’l Bank of Durant v. Trans Terr Corp., 142 F.3d
802, 809 (5th Cir. 1998) (internal quotations and footnote omitted).

However, “we will not expand state law beyond its presently existing

boundaries.” Rubinstein v. Collins, 20 F.3d 160, 172 (5th Cir. 1994)

(footnote omitted); see also Johnson v. Sawyer, 47 F.3d 716, 729 (5th

Cir. 1995) (en banc) (“We have long followed the principle that we will

not create ‘innovative theories of recovery or defense’ under local law,

                                   6
but will rather merely apply it ‘as it currently exists.’”) (quoting

Galindo v. Precision American Corp., 754 F.2d 1212, 1217 (5th Cir. 1985)

and citing several other decisions of this Court); 19 CHARLES ALAN WRIGHT

ET AL.,   FEDERAL PRACTICE   AND   PROCEDURE § 4507, at 207 (2d ed. 1996) (“Nor is

it the function of the federal court to expand the existing scope of

state law.”). By seeking indemnification from Hopkins, Madison County

has petitioned the federal court to do just that—expand the existing

scope of Mississippi law; we decline the invitation.

      The district court ordered Hopkins to indemnify Madison County for

the judgment entered in favor of the Sheriff’s Employees, as per the

settlement agreement, and for its attorneys’ fees and costs.                  The

district court considered Madison County and Hopkins to be joint

tortfeasors, based on its conclusions that each was an employer of the

Sheriff’s Employees and that each violated the FLSA by causing the

accrual of unpaid overtime–Hopkins by scheduling the Sheriff’s

Employees’ shifts and duties and by maintaining their personnel records,

and Madison County by willfully refusing to appropriate funds to pay

overtime once accrued. The district court then applied the principles

of non-contractual implied indemnity between joint tortfeasors as set

forth by the Mississippi Supreme Court:

            “The general rule governing implied indemnity for tort
      liability is that a joint tort feasor, whose liability is
      secondary as opposed to primary, or is based upon imputed or
      passive negligence, as opposed to active negligence or is
      negative negligence as opposed to positive negligence, may
      be entitled, upon an equitable consideration, to shift his
      responsibility to another joint tort feasor. However, where
      the fault of each is equal in grade and similar in character,

                                             7
     the doctrine of implied indemnity is not available since no
     one should be permitted to base a cause of action on his own
     wrong. Thus, the determination of whether or not indemnity
     should be allowed must of necessity depend upon the facts of
     each case. . . .
          Two critical prerequisites are generally necessary for
     the invocation of non-contractual implied indemnity in
     Mississippi: (1) The damages which the claimant seeks to
     shift are imposed upon him as a result of some legal
     obligation to the injured person; and (2) it must appear that
     the claimant did not actively or affirmatively participate
     in the wrong.” Homes Ins. Co. of N.Y. v. Atlas Tank Mfg.
     Co., Inc., 230 So. 2d 549, 551 (Miss. 1970) (citing Bush v.
     City of Laurel, 215 So. 2d 256 (Miss. 1968); Southwest Miss.
     Elec. Power Ass’n v. Harragill, 182 So. 2d 220 (Miss. 1966)).

With these principles in mind, the district court concluded that Madison

County engaged in secondary negligence, while Hopkins’s actions

constituted primary negligence. These findings provided the basis for

ordering Hopkins to indemnify Madison County.2

     In its findings of fact and conclusions of law, the district court

stated:

          “While there are no judicial precedents directly
     addressing the issue of whether a county board of supervisors
     may recover indemnification from a sheriff for violation of
     the FLSA, the Court is persuaded by the logic of Mississippi
     cases in which defendants have sought indemnification from
     joint tortfeasors.”

However, as the Mississippi Supreme Court cautioned in Atlas Tank, “the

determination of whether or not indemnity should be allowed must of

necessity depend upon the facts of each case.”     Id.   Madison County

     2
        We need not and do not resolve whether the district court
properly determined Madison County to be a secondary tortfeasor, and
Hopkins a primary one, despite the district court’s parallel conclusion
that Madison County “willfully failed to pay [the Sheriff’s Employees]
overtime as required under the FLSA.”

                                   8
fails to cite, and our independent research fails to disclose, any

Mississippi case in which an employee of a Mississippi governmental

entity has been held liable in tort type indemnity or contribution to

his governmental entity employer.3 Because no authority supports the

extension of such non-contractual implied indemnity to this context, we

will not either, particularly given the countervailing considerations

suggested by Mississippi statutory law and the substantial questions of

federal preemption, as noted in the margin.4 See Johnson v. Sawyer, 47

     3
       No case cited to us by Madison County addressed the prospect of
a public employee indemnifying a public entity. See Home Ins. Co. of
N.Y., 230 So. 2d at 554-55 (affirming a trial court’s determination not
to order an employer to indemnify a utility company); Bush, 215 So. 2d
at 260 (permitting indemnity in favor of a municipality against its
independent contractor); Southwest Miss. Elec. Power Ass’n, 182 So. 2d
at 468 (addressing a company’s claim for indemnity against a truck
dealership and a break repair shop).
     4
        Although we need not and do not ultimately resolve the issue,
Mississippi law, as Hopkins argues, may in any event immunize him from
Madison County’s state common law indemnification claim or may indicate
a public policy against imposition of tort liability on governmental
employees for actions in the course and scope of their employment. See
MISS. CODE ANN. § 11-46-9; Mississippi Transp. Comm’n v. Jenkins, 699
So. 2d 597, 599-600 (Miss. 1997) (indicating that Mississippi’s Sovereign
Immunity–Tort Claims--Act’s provisions apply to indemnity and
contribution actions). Additionally, although we do not decide the
matter, there is a bona fide question whether the FLSA permits the
application of a state-law based indemnity remedy benefitting employers.
See LeCompte v. Chrysler Credit Corp., 780 F.2d 1260, 1264 (5th Cir.
1986) (refusing to apply a state-law cause of action for indemnity, in
context of defendant employer’s counterclaim against two of plaintiff-
employees suing for FLSA overtime, because it would conflict with goals
of FLSA and “would deprive them [counter-defendants] of overtime
compensation to which the federal statute otherwise entitles them”); see
also Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 144 (2d Cir. 1999)
(“[T]he FLSA’s remedial scheme is sufficiently comprehensive as to
preempt state law” with respect to contribution or indemnification
claims by employers.).
9
F.3d at 729 & n.28.

                              Conclusion

     Finding no authority recognizing under Mississippi law a tort type

indemnification claim by a public entity against a public employee for

acts in the course and scope of employment, we reverse the district

court’s judgment for Madison County and render judgment for Hopkins on

Madison County’s third-party indemnification claim, and on its claim for

attorneys’ fees and expenses, against him. Accordingly, we do not reach

the remaining points raised by Hopkins. For the reasons stated, the

judgment below is

                       REVERSED AND RENDERED.

                                   10