United States: The Overtime Rule Litigation: The Action Continues While The DOL Appeals

Last Updated: December 21 2016
Article by Greg Guidry

Even though the preliminary injunction against implementation of the overtime rule granted by Judge Mazzant is on a fast track appeal in the Fifth Circuit, the activity in the trial court has not ended.

Texas AFL-CIO Seeks to Intervene

On December 9, 2016, the Texas AFL-CIO, representing 650 local unions throughout the State of Texas, filed a motion to intervene in the lawsuit. Its primary basis for the motion to intervene is its position that it doesn't expect the U.S. Department of Labor (DOL) to maintain its appeal of the trial court's preliminary injunction once President-elect Trump takes office on January 20, 2017. On December 12, the Department of Labor (DOL) notified the court that they do not take a position on the Texas AFL-CIO's motion to intervene.

On December 15, the business-plaintiffs filed an Opposition to the Texas AFL-CIO's motion to intervene, arguing that the Texas AFL-CIO does not have a right to intervene in this action as "of right" under Rule 24(a)(2) of the Federal Rules of Civil Procedure (FRCP), which provides that on "timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." [Emphasis added.]

The business-plaintiffs argue that the motion to intervene should be dismissed for several reasons. The primary argument focuses on the claim that the motion is untimely, having been filed almost three months after the lawsuits were filed, after the present parties had fully briefed the motion for preliminary injunction and the pending motion for summary judgement, and after the DOL had filed an interlocutory notice of appeal.

The business-plaintiffs also submitted that the Texas AFL-CIO is not entitled to a permissive intervention, available under Rule 24(b) of FRCP, which provides that "[o]n timely motion, the court may permit anyone to intervene who . . . has a claim or defense that shares with the main action a common question of law or fact" and also provides that "[i]n exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." [Emphasis added.] The opposition brief against intervention argues that the motion is untimely and that allowing intervention at this point in the proceedings would unduly delay the case and prejudice the business-plaintiffs' rights, as well as cause "greater confusion among the regulated community."

DOL Seeks to Stay Proceedings in the District Court Pending Appeal

Also pending before the district court is the DOL's Motion to Stay Proceedings pending the outcome of the expedited appeal to the Fifth Circuit Court of Appeals, filed on December 12. The DOL argues that the Fifth Circuit's decision will greatly impact any further proceedings in the district court and that any ruling will control the merits on all matters pending in the district court. Currently pending is the business-plaintiffs' motion for summary judgment on the merits and the state-plaintiffs' (i.e., the 21 states that filed a separate lawsuit now consolidated with the business-plaintiffs' suit) motion to join their briefing on the preliminary injunction motion with the business-plaintiffs' motion for summary judgment. The DOL argues that allowing the district court proceedings to continue will be inefficient and contrary to judicial economy.

On December 15, the business-plaintiffs filed an Opposition to the DOL's motion to stay the proceedings. In contrast to the DOL's position, the business-plaintiffs point out that its motion for summary judgment is already fully briefed and ready for the court to decide without any further briefing or hearing and that the court's issuance of a final judgment vacating the allegedly unlawful overtime rule would permit the Fifth Circuit to review the legality of the rule in a single proceeding after a final judgment—rather than adopting the cumbersome piecemeal approach advocated by the DOL. Thus, according to the business-plaintiffs, the interests of judicial economy and efficiency strongly militate in favor of the court proceeding expeditiously to rule on the plaintiffs' motion for summary judgment.

On December 16, Judge Mazzant entered an order setting a telephone status conference on Friday, December 30, 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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