Court Opinion

ID: 857908
Source: CourtListenerOpinion
Date Created: 2013-04-12 17:02:58.996338+00
Date Added: 2024-06-11T09:06:37.998133
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

JESSE BUSK; LAURIE CASTRO , on            No. 11-16892
behalf of themselves and all others
similarly situated,                          D.C. No.
                 Plaintiffs-Appellants,   2:10-cv-01854-
                                             RLH-RJJ
                  v.

INTEGRITY STAFFING SOLUTIONS,               OPINION
INC.,
              Defendant-Appellee.

      Appeal from the United States District Court
               for the District of Nevada
     Roger L. Hunt, Senior District Judge, Presiding

                Argued and Submitted
        February 12, 2013—Stanford, California

                   Filed April 12, 2013

     Before: Jerome Farris, Sidney R. Thomas, and
            N. Randy Smith, Circuit Judges.

                Opinion by Judge Thomas
2         BUSK V . INTEGRITY STAFFING SOLUTIONS

                           SUMMARY*

                            Labor Law

   The panel affirmed in part and reversed in part the district
court’s dismissal of warehouse workers’ claims for unpaid
wages under the Fair Labor Standards Act and Nevada state
law.

    The panel reversed the dismissal of state law claims on
the basis that they would be certified using different class
certification procedures than the federal wage-and-hour
claims. Agreeing with other circuits, the panel held that a
FLSA collective action and a state law class action are not
inherently incompatible as a matter of law even though
plaintiffs must opt into a collective action under the FLSA but
must opt out of a class action under Federal Rule of Civil
Procedure 23.

    The panel held that the workers stated an unpaid wages
claim under the FLSA for undergoing a security screening
meant to prevent employee theft. The panel concluded that
the workers sufficiently alleged that this “postliminary”
activity was “integral and indispensable” to their principal
activities.

    The panel affirmed the dismissal of a claim under the
FLSA for shortened lunch periods. It remanded for the
district court to consider the argument that the workers stated

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
         BUSK V . INTEGRITY STAFFING SOLUTIONS                3

a state law claim regarding lunch periods because Nevada
defines “work” differently than federal law.

                         COUNSEL

Mark R. Thierman, Jason J. Kuller, Joshua D. Buck (argued),
Thierman Law Firm, P.C., Reno, Nevada, for Plaintiffs-
Appellants.

Rick D. Roskelley (argued), Roger L. Grandgenett II, Cory
Glen Walker, Littler Mendelson, P.C., Las Vegas, Nevada,
for Defendant-Appellee.

                          OPINION

THOMAS, Circuit Judge:

    In this appeal, we consider whether the district court erred
in dismissing the plaintiffs’ state law claims for unpaid wages
because those claims would be certified using different class
certification procedures than their federal wage and hour
claims. We also consider whether the plaintiffs have alleged
plausible claims for unpaid wages under federal and Nevada
law for undergoing a security screening meant to prevent
employee theft and for unpaid lunch periods shortened by
five-minute walks to the cafeteria. We affirm the district
court in part, reverse in part, and remand for further
proceedings.
4          BUSK V . INTEGRITY STAFFING SOLUTIONS

                                     I

    Plaintiffs Jesse Busk and Laurie Castro are former
employees of Integrity Staffing Solutions, Inc., which
provides warehouse space and staffing to clients such as
Amazon.com.1 Busk and Castro worked as hourly employees
at warehouses in Las Vegas and Fernley, Nevada,
respectively, filling orders placed by Amazon.com customers.
In 2010, Busk and Castro sued Integrity on behalf of a
putative class of workers in both warehouses, claiming
violations of the Fair Labor Standards Act (FLSA) and
Nevada labor laws.

    Busk and Castro alleged Integrity violated federal and
state labor laws by requiring them to pass through a security
clearance at the end of each shift, for which they were not
compensated. Employees waited up to 25 minutes to be
searched; removed their wallets, keys, and belts; and passed
through metal detectors. The plaintiffs alleged the clearances
were “necessary to the employer’s task of minimizing
‘shrinkage’ or loss of product from warehouse theft.”

    The plaintiffs also sought compensation under FLSA and
Nevada law for their entire 30-minute unpaid lunch periods
because they spent up to 10 minutes of the meal period
“walking to and from the cafeteria and/or undergoing security
clearances.” They said it took them about five minutes after
punching out “to walk to the facility cafeteria and/or pass

    1
    All facts are drawn from the first amended complaint. In considering
an appeal from a district court order granting a motion to dismiss, we
accept all factual allegations of the complaint as true, and we construe the
facts in the light most favorable to the plaintiff.              Wilson v.
Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012).
         BUSK V . INTEGRITY STAFFING SOLUTIONS                5

through security clearances” and “approximately five minutes
to walk from the cafeteria to the time keeping system to clock
back in.” Additionally, managers would frequently “remind”
workers to “finish their meal period quickly so that they
would clock back in on time.”

    The district court granted Integrity’s motion to dismiss
the amended complaint for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). The court held that
the time spent clearing security was not compensable under
FLSA, relying on out-of-circuit cases finding the time
employees spent passing through security screenings
noncompensable. The court also held that the plaintiffs’
allegations about shortened meal periods did not state a claim
under FLSA because the plaintiffs did not allege that they
performed “any duty related to their job as warehouse
workers” during their lunch breaks.

    The district court also held that the state law claims “must
be dismissed” due to “conflicting” class certification
mechanisms, namely that while plaintiffs must opt into a
collective action under FLSA, plaintiffs must opt out of a
class action under Federal Rule of Civil Procedure 23.
Alternatively, the court dismissed the state claims on the
merits. It held that since the claims were based entirely on
the security clearance and lunch allegations, the “Plaintiffs
have failed to allege fact scenarios that would support a valid
claim” under Nevada law.

                              II

   We review de novo the district court’s conclusion that a
FLSA collective action and state law class action are
inherently incompatible as a matter of law. See Miranda v.
6          BUSK V . INTEGRITY STAFFING SOLUTIONS

Anchondo, 684 F.3d 844, 849 (9th Cir. 2011) (questions of
statutory construction and interpretation reviewed de novo).
We agree with all other circuits to consider the issue that such
actions can peacefully coexist. Therefore, the district court
erred in dismissing the state law claims based on a perceived
conflict.

    Under FLSA, a potential plaintiff does not benefit from
(and is not bound by) a judgment unless he or she
“affirmatively ‘opts in’” to the lawsuit. Kinney Shoe Corp. v.
Vorhes, 564 F.2d 859, 862 (9th Cir. 1977), overruled on other
grounds by Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165
(1989); see also 29 U.S.C. § 216(b) (“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 such action is brought.”). This rule is in
contrast to a typical Rule 23 class action, where a potential
plaintiff must opt out to be excluded from the class. See Fed.
R. Civ. P. 23(c)(2)(B)(v) (“the court will exclude from the
class any member who requests exclusion”). Although some
district courts have held that a FLSA collective action cannot
be brought in the same lawsuit as a state-law class action
based on the same underlying allegations,2 all circuit courts
to consider the issue have held that the different opting
mechanisms do not require dismissal of the state claims.
Knepper v. Rite Aid Corp., 675 F.3d 249, 253–62 (3d Cir.
2012); Ervin v. OS Rest. Servs., Inc., 632 F.3d 971, 976–79

    2
    See, e.g., Ellis v. Edward D. Jones & Co., 527 F. Supp. 2d 439, 452
(W .D. Pa. 2007); Williams v. Trendwest Resorts, Inc., No. 2:05-CV-0605,
2007 W L 2429149, at *3–4 (D. Nev. Aug. 20, 2007); Otto v. Pocono
Health Sys., 457 F. Supp. 2d 522, 524 (M .D. Pa. 2006); cf. Leuthold v.
Destination Am., Inc., 224 F.R.D. 462, 469–70 (N.D. Cal. 2004). Knepper
v. Rite Aid Corp., 675 F.3d 249 (3d Cir. 2012), overruled Ellis and Otto.
         BUSK V . INTEGRITY STAFFING SOLUTIONS               7

(7th Cir. 2011); Shahriar v. Smith & Wollensky Rest. Grp.,
659 F.3d 234, 247–49 (2d Cir. 2011); Lindsay v. Gov’t Emps.
Ins. Co., 448 F.3d 416, 424 (D.C. Cir. 2006).

    Our sister circuits have correctly reasoned that FLSA’s
plain text does not suggest that a district court must dismiss
a state law claim that would be certified using an opt-out
procedure. Its opt-in requirement extends only to “any such
action” – that is, a FLSA claim. See 29 U.S.C. § 216(b);
Knepper, 675 F.3d at 259–60 (noting Section 216(b)
“explicitly limits its scope to the provisions of the FLSA, and
does not address state-law relief”); Ervin, 632 F.3d at 977
(“Nothing” about FLSA’s text “suggests that the FLSA is not
amenable to state-law claims for related relief in the same
federal proceeding.”). FLSA also expressly permits more
protective state labor laws. See 29 U.S.C. § 218(a) (“No
provision of this chapter . . . shall excuse noncompliance with
any Federal or State law or municipal ordinance establishing
a minimum wage higher than the minimum wage established
under this chapter or a maximum work week lower than the
maximum workweek established under this chapter . . . .”).
This savings clause provides further evidence that a federal
lawsuit combining state and federal wage and hour claims is
consistent with FLSA. See Ervin, 632 F.3d at 977; Shahriar,
659 F.3d at 247–48.

    Nor does the legislative history of Section 216(b) support
the view of some district courts that allowing both actions to
proceed simultaneously “would essentially nullify Congress’s
intent in crafting Section 216(b) and eviscerate the purpose of
Section 216(b)’s opt-in requirement.” Otto v. Pocono Health
Sys., 457 F. Supp. 2d 522, 524 (M.D. Pa. 2006), overruled by
Knepper, 675 F.3d at 253–62. We agree with the Third
Circuit that the “full legislative record casts doubt” on the
8          BUSK V . INTEGRITY STAFFING SOLUTIONS

contention that Section 216(b) was intended to eliminate opt-
out class actions. Knepper, 675 F.3d at 260; see also Ervin,
632 F.3d at 977-78; Shahriar, 659 F.3d at 248. When
Congress created Section 216(b)’s opt-in requirement as part
of the Portal-to-Portal Act of 1947, it was responding to
concerns about third parties filing “representative” FLSA
actions on behalf of disinterested employees. See Hoffman-
La Roche, 493 U.S. at 173. Accordingly, it amended FLSA
“for the purpose of limiting private FLSA plaintiffs to
employees who asserted claims in their own right and freeing
employers of the burden of representative actions.” See id.

    This purpose does not evince an intent to eliminate opt-
out class actions for state wage and hour claims brought in
federal court. Even if it did, Congress has expressed a
contrary intent in the Class Action Fairness Act of 2005,
which confers federal jurisdiction over class actions where
certain diversity and amount-in-controversy requirements are
met. See Class Action Fairness Act of 2005, Pub. L. No. 109-
2, 119 Stat. 4. Because the Class Action Fairness Act
provides that federal courts should exercise jurisdiction over
certain class actions (including those alleging violations of
state wage and hour laws), and these class actions are
certified pursuant to Rule 23’s opt-out procedure, we cannot
conclude that Congress intended such claims be dismissed
simply because they were brought in conjunction with FLSA
claims.3

    3
   Integrity also argues that because an opt-out class is likely to be much
larger than the opt-in class, the district court would be in the “peculiar
position of exercising supplemental jurisdiction in a situation where the
state law claims would be far more prominent and controlling than the
federal.” But here jurisdiction over the Nevada claims is premised not on
supplemental jurisdiction under 28 U.S.C. § 1367 but on 28 U.S.C.
§ 1332(d), as amended by the Class Action Fairness Act. In any case, all
           BUSK V . INTEGRITY STAFFING SOLUTIONS                          9

    Integrity argues that allowing both classes to proceed
simultaneously would cause “unnecessary confusion” for
potential class members who would receive notices “stating
both that they must opt in to have their compensation issues
adjudicated and that they must opt out to avoid having their
compensation issues adjudicated.” While we do not
minimize this practical concern, we agree with the Seventh
Circuit that district courts should be able to “work[] out an
adequate notice in this type of case.” Ervin, 632 F.3d at 978.
Furthermore, “if these actions were to proceed separately –
the FLSA in federal court and the state-law class action in
state court – an entirely different and potentially worse
problem of confusion would arise, with uncoordinated notices
from separate courts peppering the employees.” Id.

    In sum, we agree with the other circuits to consider the
issue that the fact that Rule 23 class actions use an opt-out
mechanism while FLSA collective actions use an opt-in
mechanism does not create a conflict warranting dismissal of
the state law claims.

                                    III

   Turning to the merits, we review de novo a district court’s
dismissal of a complaint for failure to state a claim under
Rule 12(b)(6). N.M. State Inv. Council v. Ernst & Young
LLP, 641 F.3d 1089, 1094 (9th Cir. 2011). Accepting the

circuit courts to consider the issue have rejected the argument that the
larger size of a state law class alone is reason for a district court not to
exercise supplemental jurisdiction. See Shahriar, 659 F.3d at 248–49;
Ervin, 632 F.3d at 979–81; Lindsay, 448 F.3d at 424–25. This court has
held the same in Wang v. Chinese Daily News, Inc., 623 F.3d 743, 760–62
(9th Cir. 2010), though that decision was vacated on other grounds, 132 S.
Ct. 74 (2011).
10       BUSK V . INTEGRITY STAFFING SOLUTIONS

plaintiffs’ allegations as true and construing them in the light
most favorable to plaintiffs, we may affirm a dismissal only
if the complaint fails to state a claim for relief that is
plausible on its face. Id. Applying this standard, we hold that
the district court erred in holding that the plaintiffs failed to
state a claim under FLSA for passing through security
clearances at the end of the day. But, under the facts alleged,
we affirm its dismissal of the claim for shortened lunch
periods.

                               A

    FLSA, as amended by the Portal-to-Portal Act of 1947,
generally precludes compensation for activities that are
“preliminary” or “postliminary” to the “principal activity or
activities” that the employee “is employed to perform.”
29 U.S.C. § 254(a). But preliminary and postliminary
activities are still compensable under the Portal-to-Portal Act
if they are “integral and indispensable” to an employee’s
principal activities. Steiner v. Mitchell, 350 U.S. 247, 332
(1956) (changing clothes and showering were “integral and
indispensable” to producing batteries). To be “integral and
indispensable,” an activity must be (1) “necessary to the
principal work performed” and (2) “done for the benefit of
the employer.” Alvarez v. IBP, Inc., 339 F.3d 894, 902–03
(9th Cir. 2003), aff’d on other grounds, 546 U.S. 21 (2005).

    In Alvarez, we held that putting on and taking off
protective gear was necessary to the principal work of
employees at a meat packing plant because the gear was
required by the employer’s rules, by federal regulators, and
by the “‘nature of the work.’” 339 F.3d at 903 (quoting
29 C.F.R. § 790.8(c) n.65). Moreover, the donning and
doffing benefited the employer by preventing “workplace
         BUSK V . INTEGRITY STAFFING SOLUTIONS               11

injury and contamination.” Id.; see also Ballaris v. Wacker
Siltronic Corp., 370 F.3d 901, 911 (9th Cir. 2004) (donning
and doffing uniforms was compensable when company
required employees to change on premises to avoid
contaminating silicon chips manufactured there). But in
Bamonte v. City of Mesa, 598 F.3d 1217 (9th Cir. 2010), we
held that donning and doffing police uniforms was not
necessary to police officers’ principal work because they
could change at home and chose to do so at work for their
own benefit. Id. at 1225–26.

    Here, Busk and Castro have alleged that Integrity requires
the security screenings, which must be conducted at work.
They also allege that the screenings are intended to prevent
employee theft – a plausible allegation since the employees
apparently pass through the clearances only on their way out
of work, not when they enter. As alleged, the security
clearances are necessary to employees’ primary work as
warehouse employees and done for Integrity’s benefit.
Assuming, as we must, that these allegations are true, the
plaintiffs have stated a plausible claim for relief.

    In holding otherwise, the district court relied upon out-of-
circuit cases holding that time spent clearing security was not
compensable under the Portal-to-Portal Act. But these cases
are distinguishable because, in these cases, everyone who
entered the workplace had to pass through a security
clearance. In Gorman v. Consolidated Edison Corp.,
488 F.3d 586 (2d Cir. 2007), the Second Circuit held that
security procedures at a nuclear power plant were part of
noncompensable travel time under 29 U.S.C. § 254(a)(1) in
part because the “security measures at entry are required (to
one degree or another) for everyone entering the plant,”
including visitors. Id. at 594. In Bonilla v. Baker Concrete
12       BUSK V . INTEGRITY STAFFING SOLUTIONS

Construction Co., 487 F.3d 1340 (11th Cir. 2007), the
Eleventh Circuit held that construction workers employed by
a subcontractor to work on an airport construction project
were not entitled to compensation for passing through a
security clearance. Id. at 1345. Because the Federal Aviation
Administration mandated the security process, the court held
that the screening did not benefit the employer. Id.

    Gorman and Bonilla do not concern a security screening
put in place because of the nature of the employee’s work.
But here Integrity allegedly requires the screening to prevent
employee theft, a concern that stems from the nature of the
employees’ work (specifically, their access to merchandise).
Therefore, the district court erred in assuming Gorman and
Bonilla created a blanket rule that security clearances are
noncompensable instead of assessing the plaintiffs’ claims
under the “integral and indispensable” test.

    Because we hold that the plaintiffs have stated a valid
claim for relief under FLSA for the time spent passing
through security clearances, we also reverse the district
court’s dismissal of the parallel state law claim.

                              B

    The district court also held that the plaintiffs failed to
state a claim under FLSA for their shortened lunch periods.
Under the facts as alleged, we agree.

    FLSA does not require compensation for an employee’s
lunch period, but an “employee cannot be docked for lunch
breaks during which he is required to continue with any
duties related to his work.” Brennan v. Elmer’s Disposal
Serv., Inc., 510 F.2d 84, 88 (9th Cir. 1975); see also
           BUSK V . INTEGRITY STAFFING SOLUTIONS                      13

29 C.F.R. § 785.19 (providing that an employee must be
“completely relieved from duty for the purposes of eating
regular meals”).4 An “employee is not relieved if he is
required to perform any duties, whether active or inactive,
while eating.” 29 C.F.R. § 785.19. For example, “an office
employee who is required to eat at his desk or a factory
worker who is required to be at his machine is working while
eating.” Id.

    Here, Busk and Castro alleged they were not “completely
relieved from duty” because by placing the time clocks far
from the lunchroom, Integrity forced upon them the “duty to
walk to the lunch room in order to eat lunch.” But the district
court correctly held that walking to the lunchroom is not a
work duty. Walking to the lunchroom is not necessary to the
plaintiffs’ principal work as warehouse employees.
Moreover, though the Portal-to-Portal Act does not clearly
preclude compensation for walking to the lunchroom, as it
only expressly applies to walking before the workday starts

   4
      Some circuits have declined to defer to 29 C.F.R. § 785.19’s
“completely relieved from duty” language or interpreted it to mean that an
employee is entitled to compensation for a meal period only if he or she
“predominately benefits” from the meal period. See Roy v. Cnty. of
Lexington, 141 F.3d 533, 544–45 (4th Cir. 1998); Bernard v. IBP, Inc. of
Neb., 154 F.3d 259, 264–65 (5th Cir. 1998); Reich v. S. New England
Telecomms. Corp., 121 F.3d 58, 64–65 (2d Cir. 1997); Leahy v. City of
Chicago, 96 F.3d 228, 230 n.2 (7th Cir. 1996); Henson v. Pulaski Cnty.
Sheriff Dep’t, 6 F.3d 531, 534–35 (8th Cir. 1993). But see Kohlheim v.
Glynn Cnty., 915 F.2d 1473, 1477 (11th Cir. 1990) (applying “completely
relieved from duty” standard). The distinction between the “completely
relieved from duty” and “predominant benefit” standards does not matter
for this case, which turns on whether the activities at issue are
compensable “work.”
14         BUSK V . INTEGRITY STAFFING SOLUTIONS

and after it ends,5 it would be incongruous to preclude
compensation for walking into work on the employer’s
premises, but require it for walking to the lunchroom.6

    Busk and Castro also argue they are entitled to
compensation for their entire 30-minute lunch periods
because supervisors would frequently “remind” workers to
“finish their meal period quickly so that they would clock
back in on time.” They rely upon cases noting that “very
frequent interruptions” might make meal periods
compensable. See Roy v. Cnty. of Lexington, 141 F.3d 533,
546 (4th Cir. 1998). But these cases concern whether
employees are entitled to compensation for lunch periods
when they remain “on call.”            They use the term
“interruptions” to refer to instances where the employee has
to resume a work duty – for instance, when emergency
medical service employees fielded emergency calls, id., or
maintenance workers responded to maintenance problems,
Bernard v. IBP, Inc. of Neb., 154 F.3d 259, 265 (5th Cir.
1998). That supervisors may have “interrupted” Busk and
Castro in another sense of the word does not make their lunch

  5
    The Act precludes compensation for “walking, riding or traveling to
and from the actual place of performance of the principal activity or
activities which such employee is employed to perform, and . . .which
occur either prior to the time on any particular workday at which such
employee commences, or subsequent to the time on any particular
workday at which he ceases, such principal activity or activities.”
29 U.S.C. § 254(a).

  6
   Busk and Castro did not claim the walks deprived them of adequate
time to eat lunch. We express no view on whether such a claim is
cognizable under FLSA, nor on whether the plaintiffs could amend their
complaint to state a valid claim under FLSA. W e leave that to the district
court’s consideration on remand.
           BUSK V . INTEGRITY STAFFING SOLUTIONS                        15

periods compensable absent any claim that they performed a
work duty.

    Finally, the first amended complaint alleges that
employees had to pass through a security clearance on their
way to the lunchroom. Assuming that the time passing
through the security clearance on the way to lunch constitutes
compensable work, the time alleged in this case is de minimis.
See Lindow v. United States, 738 F.2d 1057, 1062–64 (9th
Cir. 1984) (discussing de minimis exception). As alleged in
the first amended complaint, the walk to and from the
cafeteria takes “approximately five minutes” each way,
though employees pass through security only on their way to
the cafeteria, not on the return trip. The relatively minimal
time expended on the clearance in this context differs from
the 25-minute delay alleged for employees passing through
security at day’s end. Therefore, the district court correctly
dismissed this claim under Rule 12(b)(6).7

    The plaintiffs also argue that even if the district court
correctly dismissed their FLSA claim relating to the
shortened lunch periods, it should not have dismissed their
state law claim because Nevada law would require
compensation even when federal law does not.

    Nevada law requires that an employer provide a half-hour
meal break if it employs a worker for a continuous eight-hour
period. Nev. Rev. Stat. § 608.019. The law provides, “No
period of less than 30 minutes interrupts a continuous period

  7
    Because we affirm the district court’s holding that Busk and Castro
have not alleged they were required to perform a work duty during lunch,
we need not review its alternative justification that the time spent walking
to the cafeteria was de minimis.
16       BUSK V . INTEGRITY STAFFING SOLUTIONS

of work for the purposes of this subsection.” Id. But there is
no private right of action to enforce this section. The Nevada
Legislature has entrusted the enforcement of this statute to the
state Labor Commissioner by expressly providing that the
“Labor Commissioner or the representative of the Labor
Commissioner shall cause the provisions of NRS 608.005 to
608.195, inclusive, to be enforced.” Nev. Rev. Stat.
§ 608.180; see also Baldonado v. Wynn Las Vegas, LLC,
194 P.3d 96, 102 (Nev. 2008) (holding there was no implied
private right of action to enforce Nev. Rev. Stat. § 608.160
when the “Legislature has expressly ordered the Labor
Commissioner to enforce that statute”).

     Nevada Revised Statute § 608.140 does provide a private
right of action to recoup unpaid wages. Baldonado, 194 P.3d
at 104 n.33. Thus, the district court correctly focused on
whether Busk and Castro alleged they were required to
“work” during their lunch periods. However, the plaintiffs
raised for the first time on appeal their argument that Nevada
defines “work” differently than federal law, such that their
lunch periods might be compensable under state law even if
they were not compensable under federal law. Because the
district court has not considered this argument, we remand for
it to do so in the first instance. Cf. Sun v. Taiwan, 201 F.3d
1105, 1110 (9th Cir. 2000) (remanding for district court to
consider new theory of negligence raised for first time on
appeal).

   AFFIRMED IN PART; REVERSED IN PART;
REMANDED. Each party shall bear its own costs on
appeal.