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Montes v. Janitorial Partners, Inc.

United States Court of Appeals, District of Columbia Circuit

June 16, 2017

Marcos Montes, Appellee/Cross-Appellant
Janitorial Partners, Inc. and Ray Park, Appellants/Cross-Appellees Geoff Ogden, et al., Cross-Appellees Consolidated with 16-7063

          Argued May 15, 2017

         Appeals from the United States District Court for the District of Columbia (No. 1:13-cv-00410) Denise M. Clark argued the cause and filed the briefs for the appellee/cross-appellant. John A. DiNucci argued the cause and filed the briefs for the appellants/cross-appellees.

          Before: Garland, Chief Judge, and Henderson and Wilkins, Circuit Judges.



         Karen LeCraft Henderson, Circuit Judge: Manuel Montes sued his employer for wage underpayment. When his employer failed to respond, Montes obtained a default judgment for himself and two fellow employees. But there was a problem: the statute he sued under required the fellow employees to formally "opt in" to the lawsuit. They had not done so. Reacting to their failure, the district court vacated its default judgment as to Montes's two fellow employees, concluding it had lacked subject matter jurisdiction to enter it. That was error. The opt-in omission did not oust the court of subject matter jurisdiction of their claims. Nevertheless, the judgment may be void for a different reason: two defendants claim they were never served with the complaint. To decide the service issue, the district court must hold an evidentiary hearing on remand.

         I. BACKGROUND

         Janitorial Partners, Inc. (JPI) is a Virginia corporation that provides janitorial services throughout the District of Columbia (D.C.) metropolitan area. For several years, it employed Montes as a janitor. In March 2013, Montes sued JPI and four of its officers, including President Ray Park. He asserted claims under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq. and two D.C. statutes, [1]alleging the defendants failed to pay, inter alia, minimum wage or overtime.

         Montes styled his lawsuit as an FLSA collective action. In a collective action, the named plaintiff sues on behalf of himself and other similarly-situated employees. 29 U.S.C. § 216(b). Section 16(b) of the FLSA provides that "[n]o employee shall be a party plaintiff to [a collective] action unless he gives his consent in writing . . . and such consent is filed in the court in which such action is brought." Id. Montes alleged that "there [were] 2 similarly-situated persons" whose "harms suffered . . . were the same as or substantially similar" to his. Compl. ¶¶ 57, 59, Joint Appendix 19. He also alleged that collective-action "[c]onsents . . . have [been] and continue to be executed." Id. ¶ 10, Joint Appendix 11. But he did not file the consents with his complaint.

         Summonses issued for each defendant. According to process server Dervin Romero's two affidavits, service was effectuated on Park both individually and as JPI's registered agent on June 6, 2013, at JPI headquarters.[2]This meant JPI and Park had until June 27 to answer but neither did. The clerk of court therefore declared them in default on July 2. Montes's counsel subsequently moved for entry of default judgment on behalf of "Plaintiffs Marcos Montes, Victor Palma, and Sandra Zelaya." Joint Appendix 52. Although a supporting memorandum asserted that Palma and Zelaya "consented to th[e] action, " Joint Appendix 54 n.2, their consent forms remained unfiled. The district court nonetheless entered a default judgment for Montes, Palma and Zelaya. It also awarded costs and attorney's fees.

         The three soon began efforts to collect on their judgment. But because the judgment caption listed only Montes's name, they could not register it in the Virginia courts. Accordingly, they requested the district court to "issue a new Order and Judgment with the full caption." Joint Appendix 89. The district court obliged. Several months later, they sought and obtained an entry of judgment and writ of execution against PNC Bank, N.A., JPI's and Park's garnishee. The bank then paid Montes, Palma and Zelaya the full amount of the default judgment.

         JPI and Park moved to vacate the default judgment under Federal Rule of Civil Procedure 60(b). They argued, inter alia, that the judgment was void because Palma and Zelaya had not opted in. JPI and Park also claimed they had never been served and therefore the district court lacked personal jurisdiction of them. In support, they submitted several declarations. Park's declaration asserted that he generally worked from home, not at JPI headquarters where Romero allegedly served him. Park also noted that Romero's affidavit described him as thirty-five years old when in fact he was over fifty. According to the declaration of JPI general manager, Donald Garrett, Romero went to JPI headquarters but did not serve Park while there. In another declaration, Jeffrey Lawson, a former JPI business advisor, stated he e-mailed Park on June 6, 2013 shortly after 3:00 pm. Had Park come in that day, Lawson said, the two would not have corresponded by email. In light of this evidence, JPI and Park requested the district court to conduct a hearing before crediting Romero's affidavit.

         In September 2015, the district court rejected JPI's and Park's defense without a hearing. It emphasized that Romero's "affidavits unequivocally state[d] that . . . Park . . . was served . . . at 2:24PM on June 6, 2013." Montes v. Janitorial Partners, Inc., 128 F.Supp.3d 188, 192 (D.D.C. 2015). The court did not find Park's, Garrett's or Lawson's declarations sufficiently credible. Nevertheless, it set aside its judgment for Palma and Zelaya. Reasoning that the FLSA's opt-in requirement was "more than just a procedural technicality, " id. at 193, the court concluded it lacked subject matter jurisdiction because Palma and Zelaya were not party plaintiffs and vacated the judgment in their favor. It then referred the case to a magistrate judge for a report and recommendation regarding Montes's attorney's fees award in light of the partial vacatur.

         II. ANALYSIS

         Each party challenges one of the district court's rulings. Montes principally attacks the substance of the district court's vacatur decision, arguing that "the District Court's judgment in Ms. Zelaya and Mr. Palma's favor, while perhaps granted in error, was not void." Cross-Appellant Br. 13. JPI and Park challenge the district court's ...

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