Third Circuit Affirms Dismissal of Class Allegations for Vague Pleading
“’Twas brillig, and the slithy toves
Did gyre and gimble in the wabe:
All mimsy were the borogoves,
And the mome raths outgrabe.”
Whenever I see the names of the Iqbal and Twombly pleading cases, I can’t help but feel that the names were clipped from lost lines of Lewis Carroll’s Jabberwocky poem, perhaps as something similar to “Iqbal were the Civil Rules, and Twombly they did reign.” Ironically, whatever these names may have in common with Carroll’s nonsense poetry, they stand for the proposition that a Complaint must contain sufficient notice of what the defendant has done wrong for the plaintiff to proceed. And as we have commented previously, a growing number of courts have concluded that the Iqbal and Twombly standards fully apply to class allegations.
In Davis v. Abington Memorial Hospital, Case No. 12-3512 (3d Cir., Aug. 26, 2014), the plaintiffs’ attorneys brought several actions in the healthcare industry contending that various hospitals violated the FLSA by using an “auto-deduct” policy for breaks, discouraging the reporting of time worked outside shifts, and not paying for training time. These are common, run-of-the-mill allegations that have been brought against countless healthcare providers. The plaintiffs alleged what their “typical” work week was, claimed “frequent” unpaid time and guesstimated how much that time was.
The court of appeals, while stopping short of requiring the plaintiffs to allege the precise week in which overtime was incurred, held that these allegations failed under Iqbal/Twombly standards, in part because although it was possible that unpaid overtime was incurred, it was also quite possible that it was not.
In a related ruling, the court followed the lead of the vast majority of other courts and found that so-called gap time wages (where the plaintiff was not paid for all time, but still made above the minimum wage and did not incur overtime) were not compensable under the FLSA.
Reading between the lines of the Court’s opinion, perhaps one issue is that the plaintiffs simply filed a stack of similar complaints against a host of healthcare institutions that all likely had different policies and whose employees likely had different experiences. It was not too much to ask that they identify exactly what each employer had done wrong and how its actions had deprived the named plaintiffs of compensation they were due under the FLSA. All too often, employers receive such complaints and are forced to embark on expensive class discovery while it isn’t even clear what legal harm the plaintiff has actually suffered. The Third Circuit’s opinion says that they have to do more than to make allegations suggestive of FLSA violations – the allegations need to establish them.
The bottom line: Courts are increasingly holding class action complaints up to Iqbal standards and dismissing allegations that fall short of them.