Transportation Executive Summary: Eighth Circuit Affirms Dismissal of FLSA Case Regarding Payment for Student Drivers
Summary:
The United States Court of Appeals for the Eighth Circuit has upheld a ruling from the District Court for the District of Nebraska, holding that the district court did not err in its analysis regarding the inadmissibility of an expert report and the inappropriateness of appointing an independent expert. Petrone v. Werner Enterprises, Inc., 2024 WL 3196019 (8th Cir. June 24, 2024). Further, the Eighth Circuit rejected the cross-appeal of the Defendants that asked for dismissal of the appeal for being untimely. We have reported on this case before at earlier procedural stages on our website.
Facts:
Philip Petrone and other student drivers (“Plaintiffs”) filed a class action against Werner Enterprises, Inc. and Drivers Management, LLC (“Defendants”) alleging violation of the Fair Labor Standards Act and Nebraska state law claims. Defendants are trucking companies that operate student driver training and orientation programs for new drivers. Plaintiffs sued alleging that they were not properly compensated by Defendants.
Procedural History and Court Rulings:
At trial, the jury found in favor of Plaintiffs. In the first appeal, the Eighth Circuit vacated the judgment and remanded to the district court, holding that the district court improperly amended the scheduling order to allow Plaintiffs to submit an expert report after the deadline. On remand, the district court entered judgment in favor of Defendants. In the second appeal brought by the Plaintiffs, the Eighth Circuit again vacated the judgment and remanded to the district court to conduct the necessary analysis regarding (1) whether Plaintiffs’ expert report should be excluded as a discovery sanction and (2) whether the district court should appoint an independent expert.
On remand, the district court entered judgment in favor of Defendants after conducting the necessary analysis and concluded (1) exclusion of Plaintiffs’ expert report was the appropriate sanction for Plaintiffs’ late disclosure; (2) appointment of an independent expert was not appropriate; (3) Plaintiffs could not prove damages without expert testimony; and (4) Plaintiffs were not entitled to a new trial. The district court also granted a motion by Plaintiffs to extend the deadline to file a notice of appeal.
In the instant appeal, Plaintiffs argued that the district court erred in its analysis of issues (1) and (2) and it erred when it entered judgment in favor of Defendants without notice to Plaintiffs or the opportunity to respond. Defendants cross-appealed and argued for dismissal of Plaintiffs’ appeal because Plaintiffs’ notice of appeal was untimely.
Analysis: Plaintiffs’ Appeal
When a party fails to timely disclose an expert report, the district court has authority under Federal Rule of Civil Procedure 37(c)(1) to exclude that material or to impose an alternative penalty, unless the untimely disclosure was substantially justified or was harmless. The district court found that the untimely disclosure was not substantially justified because Plaintiffs’ expert had the information necessary to develop a proper methodology at the time of the original report. Thus, Plaintiffs had no reasonable excuse for the deficiencies in the original report that led to the untimely filing of the subsequent report. The district court further found that the untimely disclosure was not harmless to Defendants when considering the delay of trial, additional expenses, Defendants’ reliance on the existing record to prepare for trial and assert Plaintiffs’ lack of admissible evidence of damages, and the duplication of effort that the untimely report required of Defendants. Finally, the district court determined that despite the importance of the information in the expert report, the appropriate sanction for the untimely disclosure was exclusion. In its reasoning, the district court relied on many of the same reasons that it found the late disclosure to not be harmless: Plaintiffs had no adequate reason for noncompliance, the untimely disclosure prejudiced the Defendants, and it disrupted the order and efficiency of trial. The Eighth Circuit held that the district court’s analysis was adequate for whether the untimely disclosure was substantially justified, whether the untimely disclosure was harmless, and what the appropriate sanction for the untimely disclosure was.
Under Federal Rule of Evidence 706, a trial judge may appoint an independent expert on the motion of a party. Trial judges rarely exercise this authority absent extraordinary and compelling circumstances. The district court recognized that this case presented complicated issues and that without expert testimony, Plaintiffs could not prove damages. Nonetheless, the district court held that appointment of an independent expert was not appropriate because Plaintiffs’ need for appointment of expert testimony on damages was the result of the Plaintiffs’ own neglect for which they provided no justification. The Eighth Circuit also upheld this holding.
Finally, the Eighth Circuit addressed Plaintiffs’ argument that the district court erred when it entered judgment in favor of Defendants without notice to Plaintiffs or the opportunity to respond. The Eighth Circuit explained that the district court’s entry of judgment was not part of a pretrial summary judgment proceeding. Rather, the district court entered judgment after it determined that Plaintiffs could not prove damages and denied Plaintiffs’ motion for a new trial, so all that remained was entry of judgment in favor of Defendants. The Eighth Circuit further noted that the district court reopened Plaintiffs’ motion for a new trial and ordered supplemental briefing on second remand, which gave Plaintiffs notice and an opportunity to be heard.
Defendants’ Cross-Appeal
Under Federal Rule of Appellate Procedure 4(a)(1)(A), a notice of appeal must be filed within thirty days of the court entering the judgment or order that is appealed from. That period may be tolled if a party files a motion to alter or amend the judgment under Federal Rule of Civil Procedure 59 or a motion for relief under Federal Rule of Civil Procedure 60 within twenty-eight days of the court entering judgment.
Here, Plaintiffs filed a motion to alter or amend the judgment (FRCP 59) or for relief (FRCP 60) within twenty-eight days of the district court entering judgment. That motion was denied without prejudice by the district court because it did not comply with a Local Rule, but the district court provided Plaintiffs with an additional seven days to re-assert the motion. The district court lacked the authority to grant this extension under Federal Rule of Civil Procedure 6(b)(2), which provides that courts “must not extend the time to act” for filing motions under Federal Rules of Civil Procedure 59(e) and 60(b).
Thus, the Eighth Circuit stated that the Plaintiffs’ deadline for filing an appeal was not tolled by the additional seven days that was improperly provided by the district court. The Court noted, however, that this was not the end of the inquiry.
Under Federal Rule of Appellate Procedure 4(a)(5)(A), a district court may extend the time to file a notice of appeal if a party makes the motion to extend within thirty days after the prescribed time expires and the party shows excusable neglect or good cause. To determine whether excusable neglect occurred, the district court considered four circumstances. First, the danger of prejudice to the non-moving party. Second, the length of delay and its potential impact on judicial proceedings. Third, the reason for the delay, including whether it was within the reasonable control of the party making the motion. Fourth, whether the party making the motion acted in good faith. The Eighth Circuit concluded that although “a simple scan” of Rule 6(b)(2) would have informed Plaintiffs that the district court did not have authority to make the extension, the district court adequately considered the four factors and all relevant circumstances. Thus, the district court did not err when it concluded that excusable neglect existed that warranted extension of the deadline to file a notice of appeal.
Consequently, the case appears to be at the end of the road. For practitioners, it provides a primer on the importance of timely revelation of expert reports and opinions. At the same time, the procedural history demonstrates the devastating consequences for those that fail to abide by the rules.
for more information
Contact John F. Fatino for more information about trucking and transportation matters at (515) 288-6041. Shay A. Slifka, J.D. candidate, University of Iowa College of Law, assisted in the preparation of this article.