Court Opinion

ID: 6350112
Source: CourtListenerOpinion
Date Created: 2022-06-15 19:00:22.533876+00
Date Added: 2024-06-11T09:16:08.990900
License: Public Domain

Case: 21-20202     Document: 00516357515         Page: 1     Date Filed: 06/15/2022

           United States Court of Appeals
                for the Fifth Circuit                                 United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                         June 15, 2022
                                  No. 21-20202
                                                                        Lyle W. Cayce
                                                                             Clerk
   Scott Easom; Adrian Howard; John Nau,

                                                           Plaintiffs—Appellants,

                                      versus

   US Well Services, Incorporated,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 4:20-CV-2995

   Before Stewart, Clement, and Elrod, Circuit Judges.
   Carl E. Stewart, Circuit Judge:
          Scott Easom, Adrian Howard, and John Nau (collectively,
   “Appellants”) filed this interlocutory appeal seeking reversal of the district
   court’s order denying their motions for summary judgment and
   reconsideration. In its order denying Appellants’ motions, the district court
   certified two questions for interlocutory appeal: (1) Does COVID-19 qualify
   as a natural disaster under the Worker Adjustment and Retraining
   Notification Act’s (“WARN Act” or “the Act”) natural-disaster exception,
   29 U.S.C. § 2102(b)(2)(B)?; (2) Does the WARN Act’s natural-disaster
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   exception, 29 U.S.C. § 2102(b)(2)(B), incorporate but-for or proximate
   causation?
          In response, we hold that the COVID-19 pandemic is not a natural
   disaster under the WARN Act and that the natural-disaster exception
   incorporates proximate causation. We therefore REVERSE and
   REMAND for proceedings consistent with this opinion.
                        I.   FACTS & PROCEEDINGS
          Appellants filed a class action complaint against their former
   employer, US Well Services, Inc. (“US Well”) for allegedly violating the
   WARN Act by terminating them without advance notice. The WARN Act
   requires covered employers to give affected employees sixty days’ notice
   before a plant closing or mass layoff. 29 U.S.C. § 2102(a). The Act provides
   three exceptions to the notice requirement—including the natural-disaster
   exception, under which no notice is required. Id. § 2102(b).
          By way of background, oil producers hire US Well to perform
   hydraulic fracturing services known as fracking. When the price of oil drops
   below a commercially viable price, oil producers—including those that hire
   US Well—often discontinue work. In early March 2020, oil prices
   plummeted to historic lows due to a price conflict between Saudi Arabia and
   Russia. This effect was compounded by a decline in travel and decreased
   demand for oil and gas during the COVID-19 pandemic. As a result, several
   of US Well’s customers curtailed or completely shut down the fracking work
   US Well had been performing at multiple well sites in Texas. When crew
   members, including Appellants, returned from the well sites to their
   respective headquarters after shutting down operations, they were
   immediately informed that they were laid off. Appellants’ termination
   letters, dated March 18, 2020, and effective immediately, stated: “Your
   termination of employment is due to unforeseeable business circumstances
   resulting from a lack of available customer work caused by the significant

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   drop in oil prices and the unexpected adverse impact that the Coronavirus
   has caused.”
          Appellants filed this suit on August 26, 2020, and amended their
   complaint on October 14, 2020. The parties cross-moved for summary
   judgment. US Well argued that COVID-19 was a natural disaster under the
   WARN Act, and consequently, that it was exempt from the WARN Act’s
   notice requirement pursuant to the natural-disaster exception. Appellants
   countered that COVID-19 was not a natural disaster and was not a direct
   cause of their layoffs. The district court concluded that COVID-19 was a
   natural disaster and that the natural-disaster exception uses but-for causation
   standards. It denied both motions for summary judgment, however, on
   grounds that the record did not show whether COVID-19 was the but-for
   cause of the layoffs. Appellants moved for reconsideration or, in the
   alternative, certification of three questions for interlocutory appeal. The
   district court denied the motion for reconsideration but certified two
   questions for interlocutory appeal: (1) Does COVID-19 qualify as a natural
   disaster under the WARN Act’s natural-disaster exception?; (2) Does the
   WARN Act’s natural-disaster exception incorporate but-for or proximate
   causation?
                        II.    STANDARD OF REVIEW
          “Although we ordinarily review a district court’s summary judgment
   ruling de novo, our appellate jurisdiction under § 1292(b) extends only to
   controlling questions of law, thus, we review only the [questions] of law
   certified for appeal.” Tanks v. Lockheed Martin Corp., 417 F.3d 456, 461 (5th
   Cir. 2005). We do not review whether either party has shown “that there is
   [a] genuine dispute as to any material fact” under Rule 56. Fed. R. Civ. P.
   56(a); see La. Patients’ Comp. Fund Oversight Bd. v. St. Paul Fire & Marine Ins.
   Co., 411 F.3d 585, 588 (5th Cir. 2005); Malbrough v. Crown Equip. Corp., 392
   F.3d 135, 136 (5th Cir. 2004). Instead, we determine de novo whether the

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   district court properly interpreted the WARN Act’s natural-disaster
   exception. See Tanks, 417 F.3d at 461.
                                III.      ANALYSIS
          The WARN Act prohibits an employer from ordering “a plant closing
   or mass layoff until the end of a [sixty]-day period after the employer serves
   written notice of such an order” to affected employees. 29 U.S.C. § 2102(a).
   Employers who violate § 2102 are required to provide aggrieved employees
   “back pay for each day of violation.” Id. § 2104(a)(1)(A). “To prove a
   WARN Act claim, a plaintiff must demonstrate that: (1) the defendant was
   ‘an employer’; (2) the defendant ordered a ‘plant closing’ or ‘mass layoff’;
   (3) the defendant failed to give to the plaintiff sixty days[’] notice of the
   closing or layoff; and (4) the plaintiff is an ‘aggrieved’ or ‘affected’
   employee.” In re TWL Corp., 712 F.3d 886, 897 (5th Cir. 2013) (quoting §§
   2102, 2104).
          “If a plaintiff establishes these requirements, the employer may avoid
   liability by proving that it qualifies for the Act’s ‘faltering company’
   exemption, or that the closing or layoff resulted from ‘unforeseen business
   circumstances’ or a ‘natural disaster.’” Id. at 897–98 (citing 20 C.F.R. §
   639.9 (1989)). Relevant here, the WARN Act’s natural-disaster exception
   provides that “[n]o notice under this chapter shall be required if the plant
   closing or mass layoff is due to any form of natural disaster, such as a flood,
   earthquake, or the drought currently ravaging the farmlands of the United
   States.” 29 U.S.C. § 2102(b)(2)(B).
          Section 2107(a) of the WARN Act requires the Secretary of Labor to
   “prescribe such regulations as may be necessary to carry out this chapter.”
   29 U.S.C. § 2107(a). “Such regulations shall, at a minimum, include
   interpretative regulations describing the methods by which employers may
   provide for appropriate service of notice as required by this chapter.” Id. To

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   that end, the Department of Labor has explained the following regarding the
   natural-disaster exception to the notice requirement:
          (1) Floods, earthquakes, droughts, storms, tidal waves or
          tsunamis and similar effects of nature are natural disasters
          under this provision.
          (2) To qualify for this exception, an employer must be able to
          demonstrate that its plant closing or mass layoff is a direct
          result of a natural disaster.
          (3) While a disaster may preclude full or any advance notice,
          such notice as is practicable, containing as much of the
          information required in [20 C.F.R.] § 639.7 as is available in the
          circumstances of the disaster still must be given, whether in
          advance or after the fact of an employment loss caused by a
          natural disaster.
          (4) Where a plant closing or mass layoff occurs as an indirect
          result of a natural disaster, the exception does not apply but the
          “unforeseeable business circumstance” exception described in
          paragraph (b) of this section may be applicable.

   20 C.F.R. § 639.9(c)(1)–(4) (the “DOL regulation”). Further, the
   Department of Labor has clarified that “[t]he employer bears the burden of
   proof that conditions for the exceptions have been met.” Id. § 639.9. We now
   turn to the certified questions.
    A. Whether COVID-19 qualifies as a natural disaster under the WARN Act’s
       natural-disaster exception
         Appellants argue that COVID-19 does not qualify as a natural disaster
   under the WARN Act. We agree.
          When interpreting a statute, a court must “start with the specific
   statutory language in dispute.” Murphy v. Smith, 138 S. Ct. 784, 787 (2018).
   “A fundamental canon of statutory construction is that, unless otherwise
   defined, words will be interpreted as taking their ordinary, contemporary,
   common meaning.” Perrin v. United States, 444 U.S. 37, 42 (1979).

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             Because the WARN Act does not define “natural disaster,” we turn
   to the “ordinary meaning of the word . . . as understood when the [Act] was
   enacted.” See Carcieri v. Salazar, 555 U.S. 379, 388 (2009). “Ordinarily, a
   word’s usage accords with its dictionary definition.” Yates v. United States,
   574 U.S. 528, 537 (2015). “But we do not ‘make a fortress out of the
   dictionary.’” Chapman v. Durkin, 214 F.2d 360, 362 (5th Cir. 1954) (quoting
   Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S. 755, 764 (1949)).
             When the WARN Act was enacted in 1988, the term “natural
   disaster” was not yet defined in leading dictionaries. See, e.g., Webster’s
   New World Dictionary (3d coll. ed. 1988); The Random House
   Dictionary of the English Language (2d unabridged ed. 1987);
   Webster’s Third New International Dictionary of the
   English Language (1976). So, our dictionary-based analysis of the term
   is limited to combining two component definitions. Taking the terms in
   isolation, “natural” was defined as “of or arising from nature; in accordance
   with what is found or expected in nature” and “produced or existing in
   nature; not artificial or manufactured.” Natural, Webster’s New
   World Dictionary (3d coll. ed. 1988). “Disaster” was defined as “any
   happening that causes great harm or damage; serious or sudden misfortune;
   calamity.” Disaster, Webster’s New World Dictionary (3d coll.
   ed. 1988). The district court reasoned that COVID-19 qualified as “natural”
   because human beings did not start or consciously spread it. Easom v. US Well
   Servs., Inc., 527 F. Supp. 3d 898, 908 (S.D. Tex. 2021). It further reasoned
   that COVID-19 qualified as a “disaster” based on how many people were
   killed or infected by the virus. Id. Although the dictionary definitions of the
   words “natural” and “disaster” bear consideration, they are not dispositive
   of the meaning of “natural disaster” in the WARN Act. See Yates, 574 U.S.
   at 538.

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          To supplement our combined dictionary definition of “natural
   disaster,” we consider the term’s statutory context. See Robinson v. Shell Oil
   Co., 519 U.S. 337, 341 (1997) (“The plainness or ambiguity of statutory
   language is determined by reference to the language itself, the specific
   context in which that language is used, and the broader context of the statute
   as a whole.”). The natural-disaster exception provides that “[n]o notice
   under this chapter shall be required if the plant closing or mass layoff is due
   to any form of natural disaster, such as a flood, earthquake, or the drought
   currently ravaging the farmlands of the United States.” 29 U.S.C.
   § 2102(b)(2)(B) (emphasis added). Congress’s use of the term “such as”
   “indicat[es] that there are includable other matters of the same kind which
   are not specifically enumerated by the standard.” Donovan v. Anheuser-
   Busch, Inc., 666 F.2d 315, 327 (8th Cir. 1981) (relying on dictionaries from
   1967 to 1971). By providing three examples after “such as,” Congress
   indicated that the phrase, “natural disaster” includes events of the same kind
   as floods, earthquakes, and droughts. Traditional canons of statutory
   construction further support this interpretation.
          In the proceedings below, Appellants argued that the district court
   should apply the canon of noscitur a sociis. Noscitur a sociis means “it is known
   by its associates.” Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex
   rel. Wilson, 559 U.S. 280, 287 (2010). This canon “counsels that a word is
   given more precise content by the neighboring words with which it is
   associated.” United States v. Williams, 553 U.S. 285, 294 (2008). The district
   court rejected Appellants’ argument on grounds that the phrase, “any form
   of natural disaster” signaled intentional breadth. Easom, 527 F. Supp. 3d at
   910. But the Supreme Court has applied noscitur a sociis even where a list

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   begins with the word “any,”1 thus, we apply that canon here. Courts rely on
   the canon of noscitur a sociis to “avoid ascribing to one word a meaning so
   broad that it is inconsistent with its accompanying words, thus giving
   unintended breadth to the Acts of Congress.” Yates, 574 U.S. at 543.
   Applying noscitur a sociis to this case, the appearance of “natural disaster” in
   a list with “flood, earthquake, or drought” suggests that Congress intended
   to limit “natural disaster” to hydrological, geological, and meteorological
   events.
           The canon of expressio unius est exclusio is also helpful here. It means
   that where, as here, “the items expressed are members of an ‘associated
   group or series,’ [that] justif[ies] the inference that items not mentioned were
   excluded by deliberate choice, not inadvertence.” Barnhart v. Peabody Coal
   Co., 537 U.S. 149, 168 (2003). By the late 1980s, Congress was familiar with
   pandemics and infectious diseases—for instance, H1N1 (1918), H2N2 (1957-
   1958), and H3N2 (1968). See Past Pandemics, Ctrs. for Disease
   Control               &         Prevention                 (Aug.          10,         2018),
   https://www.cdc.gov/flu/pandemic-resources/basics/past-
   pandemics.html. As early as 1938, Congress specified coverage for “plant
   disease” in the Federal Crop Insurance Act, which authorized federal crop
   insurance to help agriculture recover after the Dust Bowl. 7 U.S.C.
   § 1508(g)(5)(A). So, by the time agriculture was hit by the North American
   drought of 1988, Congress knew how to, and could have, included terms like
   disease, pandemic, or virus in the statutory language of the WARN Act. That
   it chose not to justifies the inference that those terms were deliberately
   excluded. See Barnhart, 537 U.S. at 168.

           1
              See, e.g., Yates v. United States, 574 U.S. 528, 544 (2015) (holding that fish were
   not included within the term “tangible object” under the Sarbanes-Oxley Act because
   “tangible object” appeared in a list that began “any record [or] document” and thus must
   refer to tangible objects used to record or preserve information).

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          Finally, we recognize that the WARN Act was “adopted in response
   to the extensive worker dislocation that occurred in the 1970s and 1980s.”
   Hotel Emps. & Rest. Emps. Int’l Union Loc. 54 v. Elsinore Shore Assocs., 173 F.3d
   175, 182 (3d Cir. 1999). Under the Act, employers are required to provide
   notice to employees and to local government agencies to allow “some
   transition time to adjust to the prospective loss of employment, to seek and
   obtain alternative jobs and, if necessary, to enter skill training or retraining
   that will allow these workers to successfully compete in the job market.” 20
   C.F.R. § 639.1(a). This court has observed that the WARN Act’s exceptions
   permitting a reduction of the notice period run counter to the Act’s remedial
   purpose and thus, are to be “narrowly construed.” Carpenters Dist. Council
   of New Orleans v. Dillard Dep’t Stores, Inc., 15 F.3d 1275, 1282 (5th Cir. 1994);
   see also San Antonio Sav. Ass’n v. Comm’r, 887 F.2d 577, 586 (5th Cir. 1989)
   (noting the “general principle of narrow construction of exceptions”). We
   therefore decline to expand the definition of “natural disaster” beyond what
   is justified by the Act’s statutory language, context, and purpose.
          Accordingly, we hold that COVID-19 does not qualify as a natural
   disaster under the WARN Act’s natural-disaster exception.
    B. Whether the WARN Act’s natural-disaster exception incorporates but-for or
       proximate causation
          Appellants contend that the phrase “due to” in the natural-disaster
   exception requires proximate cause. In the alternative, they argue that the
   phrase, “due to” is ambiguous and that this court should thus defer to the
   DOL regulation requiring an employer to “demonstrate that its plant closing
   or mass layoff is a direct result of a natural disaster.” 20 C.F.R. § 639.9(c)(2).
   We agree that deference is appropriate here.
          We first consider “whether Congress has directly spoken to the
   precise question at issue,” here, whether the phrase “due to” in the natural-

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   disaster exception requires but-for or proximate causation.2 See Chevron,
   U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842 (1984). Congress
   has not. When “the court determines Congress has not directly addressed
   the precise question at issue, the court does not simply impose its own
   construction on the statute, as would be necessary in the absence of an
   administrative interpretation.” Id. at 843. “Rather, if the statute is silent or
   ambiguous with respect to the specific issue, the question for the court is
   whether the agency’s answer is based on a permissible construction of the
   statute.” Id. “If Congress has explicitly left a gap for the agency to fill, there
   is an express delegation of authority to the agency to elucidate a specific
   provision of the statute by regulation.” Id. at 843–44. “Such legislative
   regulations are given controlling weight unless they are arbitrary, capricious,
   or manifestly contrary to the statute.” Id. at 844.
           In light of these principles, we recognize that Congress explicitly left
   a gap for the Department of Labor to fill by requiring the Secretary of Labor
   to “prescribe such regulations as may be necessary to carry out [the WARN
   Act].” 29 U.S.C. § 2107(a). The Department of Labor’s interpretation is not
   arbitrary, capricious, or manifestly contrary to the Act. Thus, we give

           2
             The district court began its causation analysis by reasoning that “due to” means
   “because of.” Easom, 527 F. Supp. 3d at 912. It then cited Bostock v. Clayton County, 140 S.
   Ct. 1731, 1739 (2020), Safeco Insurance Co. of America v. Burr, 551 U.S. 47, 64 n.14 (2007),
   and Burrage v. United States, 571 U.S. 204, 214 (2014), where the Supreme Court stated
   that “because of” incorporates but-for causation. But none of those cases held that
   “because of” necessarily excluded proximate causation. Indeed, neither Bostock nor Safeco
   mention proximate causation. The Sixth, Tenth, and D.C. Circuits have concluded that the
   phrase, “due to” is ambiguous. See U.S. Postal Serv. v. Postal Regulatory Comm’n, 640 F.3d
   1263, 1268 (D.C. Cir. 2011); Kimber v. Thiokol Corp., 196 F.3d 1092, 1100 (10th Cir. 1999);
   Adams v. Director, OWCP, 886 F.2d 818, 821 (6th Cir. 1989). Specifically, the D.C. Circuit
   has observed that “[t]he phrase ‘due to’ is ambiguous [because it] ‘has been given a broad
   variety of meanings in the law ranging from sole and proximate cause at one end of the
   spectrum to contributing cause at the other.’” U.S. Postal Serv., 640 F.3d at 1268 (quoting
   Kimber, 196 F.3d at 1100). We are persuaded by this reasoning and conclude the same.

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   controlling weight to the DOL regulation, 20 C.F.R. § 639.9(c)(2): “To
   qualify for [the natural-disaster] exception, an employer must be able to
   demonstrate that its plant closing or mass layoff is a direct result of a natural
   disaster.”
          Supreme Court and Fifth Circuit precedent equate direct causation
   and proximate causation. See, e.g., Paroline v. United States, 572 U.S. 434, 444
   (2014) (“The idea of proximate cause . . . . generally ‘refers to the basic
   requirement that . . . there must be “some direct relation between the injury
   asserted and the injurious conduct alleged[.]”’”); Dixie Pine Prods. Co. v. Md.
   Cas. Co., 133 F.2d 583, 585 (5th Cir. 1943) (“It is well settled that the words
   ‘direct cause’ ordinarily are synonymous in legal intendment with
   ‘proximate cause[.]’”). This precedent leads us to the conclusion that the
   DOL regulation’s “direct result” requirement imposes proximate causation.
          US Well argues that the DOL regulation’s direct causation
   requirement would require the natural disaster to be the sole cause of the
   mass layoff and would foreclose the application of the natural-disaster
   exception in any case with an intermediate event between the natural disaster
   and the layoff. It points to instances such as when a hurricane causes a power
   outage, which in turn causes layoffs, or when Hurricane Katrina caused a
   breach of the levees, which in turn caused the city of New Orleans to flood
   and forced businesses to shut down. But this argument belies traditional
   proximate cause principles.
          The Supreme Court has explained that “[a]s a general matter, to say
   one event proximately caused another is a way of making two separate but
   related assertions.” Paroline, 572 U.S. at 444. “First, it means the former
   event caused the latter.” Id. “This is known as actual cause or cause in fact.”
   Id. Second, “[e]very event has many causes . . . and only some of them are
   proximate”—to wit, those “with a sufficient connection to the result.” Id.
   So proximate cause is not synonymous with sole cause. A proximate cause

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   requirement merely “serves, inter alia, to preclude liability in situations
   where the causal link between conduct and result is so attenuated that the
   consequence is more aptly described as mere fortuity.” Id. at 445.
          Under Texas law, “there can be more than one proximate cause of an
   injury,” but “a new and independent, or superseding, cause may ‘intervene[]
   between the original wrong and the final injury such that the injury is
   attributed to the new cause rather than the first and more remote cause.’”
   Stanfield v. Neubaum, 494 S.W.3d 90, 97 (Tex. 2016) (alteration in original)
   (citation omitted). “In assessing whether an intervening cause disrupted the
   causal connection between the [initial cause] and the plaintiff’s harm and
   constitutes a new and independent cause, [Texas courts] consider a variety
   of factors, including foreseeability.” Id. at 98.
          Here, flooding, power outages, layoffs, and shutdowns are among the
   reasonably foreseeable consequences of hurricanes and other natural
   disasters. Thus, imposing a proximate cause requirement on employers that
   must lay off employees due to a natural disaster would not foreclose the
   natural-disaster exception for all cases involving an intermediate cause.
          Accordingly, based on the DOL regulation’s “direct result”
   requirement and binding precedent equating direct cause with proximate
   cause, we hold that the WARN Act’s natural-disaster exception incorporates
   proximate causation.
                               IV.    CONCLUSION
          For the reasons set forth above, we REVERSE the order of the
   district court and REMAND for further proceedings consistent with this
   opinion.

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