Pimpanit v. Phumswarng ( 2022 )

Case: 21-20289 Document: 00516250336 Page: 1 Date Filed: 03/23/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
March 23, 2022
No. 21-20289
Lyle W. Cayce
Clerk
Saowalak “Jenny” Pimpanit,
Plaintiff—Appellant,
versus
Phumswarng, Incorporated, doing business as Thai Gourmet
Restaurant; Sawonya Tabers,
Defendants—Appellees.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:20-CV-289
Before Jones, Higginson, and Duncan, Circuit Judges.
Per Curiam:*
Saowalak “Jenny” Pimpanit worked as a server at a Thai restaurant.
Suspecting she and her co-workers were being underpaid, Pimpanit removed
data reports from the restaurant. She was fired. Pimpanit and her co-workers
sued the restaurant’s owners in Texas state court for underpayment of
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited circumstances set
forth in 5th Circuit Rule 47.5.4.
Case: 21-20289 Document: 00516250336 Page: 2 Date Filed: 03/23/2022
No. 21-20289
wages. Those claims settled. Pimpanit alone then sued the same defendants
in federal court, this time for unlawful retaliation. The district court
dismissed the federal case, concluding it was barred by the preclusive effect
of the state court settlement. We reverse and remand.
I.
Appellee Phumswarng, Inc. employed Appellant Pimpanit as a server
at Thai Gourmet Restaurant from March 2017 to March 2018. The
restaurant is owned by Appellee Sawanya Phumswarng. 1 In late 2017 or early
2018, some employees began complaining of late pay and suspected Thai
Gourmet was “tak[ing] money from the tips customers were leaving.”
Pimpanit was one of these employees. In February 2018, the group voiced
their concerns to the manager, who asked them to write down their questions
so she could consult with the owners. The employees provided a signed list
of questions. About a week later, management met with the employees, but
many felt their questions were still unanswered.
Pimpanit decided to take matters into her own hands by comparing
her pay to the restaurant’s daily reports. These reports included a trove of
data on tip collection, food sold, volume of cash sales, credit cards used, and
how much each server sold. Pimpanit obtained the reports from a cashier and
brought them home to compare the reports to her take-home pay. Upon
1
When Pimpanit sued, Sawanya’s last name was Tabers.
2
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discovering Pimpanit took the reports off restaurant premises, Phumswarng
fired Pimpanit. 2
In July 2018, seven former and current employees, including
Pimpanit, sued Appellees in Texas state court, claiming breach of a fiduciary
relationship under Texas law as well as violations of the Fair Labor Standards
Act (“FLSA”) for unpaid minimum wages and overtime, withheld tips, and
retaliatory termination of Pimpanit. See 29 U.S.C. §§ 201 et seq. The
employees amended their petition to proceed only on their underpayment
claims, removing factual allegations related to Pimpanit’s termination. The
amended petition included nothing about the list of questions, the
unsuccessful meeting, Pimpanit’s removal of the reports, or her subsequent
termination. The parties eventually settled the state litigation, with Pimpanit
receiving $23,062.64 for releasing her claims for minimum wages, overtime,
and tip theft. The release included a clause stating that it did not extend to
“any claims arising out of the circumstances of [Pimpanit’s] termination.” 3
About six weeks later, Pimpanit filed the present suit in federal court,
asserting unlawful retaliation under the FLSA. She claimed she was fired for
engaging in protected conduct, namely, “protesting Thai Gourmet’s illegal
actions and obtaining the evidence to prove her allegations.” Appellees
moved for summary judgment, which the district court granted. The court
agreed with Appellees that res judicata barred the retaliation claim because
(1) Pimpanit should have raised the claim in the state suit, (2) both suits arise
2
Employees were never expressly instructed not to take the daily reports from the
restaurant. But, as Appellees point out, there are various provisions in their manual
prohibiting theft of restaurant property and disclosure of confidential information.
3
On appeal, the parties dispute whether the release bars Appellees’ invocation of
res judicata. Because we decide res judicata does not apply, we need not address this issue.
3
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from a common nucleus of operative facts, and (3) the settlement release did
not preclude Appellees’ res judicata defense. Pimpanit timely appealed.
II.
We review a summary judgment de novo. Green v. Life Ins. Co. of N.
Am., 754 F.3d 324, 329 (5th Cir. 2014) (citation omitted); see Fed. R. Civ.
P. 56(a). “The res judicata effect of a prior judgment is a question of law that
we review de novo.” Davis v. Dallas Area Rapid Transit, 383 F.3d 309, 313 (5th
Cir. 2004) (citation omitted).
III.
“Under Texas[ 4] law, res judicata requires ‘(1) a prior final judgment
on the merits by a court of competent jurisdiction; (2) identity of parties or
those in privity with them; and (3) a second action based on the same claims
as were raised or could have been raised in the first action.’” Harmon v.
Dallas County, 927 F.3d 884, 890 (5th Cir. 2019) (quoting Amstadt v. U.S.
Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996)). Neither party disputes that
the first two conditions are met. So we must address only the third—whether
Pimpanit’s federal retaliation claim is “based on the same claims as were
raised or could have been raised in the [state] action.” Ibid.To answer that question, Texas courts take a “‘transactional’
approach” under which a prior judgment bars a second suit “not only on
matters actually litigated, but also on causes of action or defenses which arise
out of the same subject matter and which might have been litigated in the first
4
The district court cited both Texas and federal res judicata standards, but Texas
law plainly applies. See Harmon, 927 F.3d at 890 (“We apply Texas law to determine the
res judicata effect of a Texas judgment . . . .” (citations omitted)); see also Matter of 3 Star
Props., L.L.C., 6 F.4th 595, 604–05 (5th Cir. 2021) (“Texas law, not federal law, applies
when a federal court determines the preclusive effect of a Texas judgment.”).
4
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suit.” Ibid. (emphasis added) (quoting Getty Oil Co. v. Ins. Co. of N. Am., 845
S.W.2d 794, 798 (Tex. 1992)). How to pinpoint the prior suit’s “subject
matter,” though? That “necessarily requires an examination of the factual
basis of the claim or claims in the prior litigation.” Barr v. Resol. Tr. Corp. ex
rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 630 (Tex. 1992). And we must do so
“pragmatically, ‘giving weight to such considerations as whether the facts
are related in time, space, origin, or motivation, whether they form a
convenient trial unit, and whether their treatment as a trial unit conforms to
the parties’ expectations or business understanding or usage.’” Id. at 631(quoting Restatement (Second) of Judgments § 24(2)); see also
Sims v. City of Madisonville, 894 F.3d 632, 644–45 (5th Cir. 2018) (citing same
factors under Texas law); Jones v. Sheehan, Young & Culp, P.C., 82 F.3d 1334,
1342 (5th Cir. 1996) (citations omitted).
Pimpanit argues that, under these principles, her federal retaliation
claim does not arise out of the same subject matter as the underpayment
claims settled in her prior state suit. We agree. Comparing the two
complaints shows the facts required to prove each claim are distinct. See
Weaver v. Tex. Cap. Bank N.A., 660 F.3d 900, 907–08 (5th Cir. 2011) (asking
whether second claim rests on “same factual foundation” as first claim). In
the state case, the key facts concerned what hours Pimpanit worked, whether
she received all her tips, and whether she was paid according to her minimum
wage and hours. See, e.g., Steele v. Leasing Enter., Ltd., 826 F.3d 237, 242 (5th
Cir. 2016) (“Under § 203(m), an employer can only claim a tip credit if all
tips received by a tipped employee have been retained by the employee . . . .
The employer carries the burden to prove its entitlement to the tip credit.”
(cleaned up)); Harvill v Westward Commc’ns, L.L.C., 433 F.3d 428, 441 (5th
Cir. 2005) (“An employee bringing an action pursuant to the FLSA, based
on unpaid overtime compensation, must first demonstrate that she has
performed work for which she alleges she was not compensated.” (citing
5
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Anderson v. Mount Clemens Pottery Co., 328 U.S. 680, 687–88 (1946))). The
amended state petition did not mention Pimpanit’s termination or her taking
the reports. By contrast, her federal retaliation claim depends on precisely
those facts—namely, whether Pimpanit’s taking the records was a protected
activity and whether doing so was the reason for her termination. See Starnes
v. Wallace, 849 F.3d 627, 631–32 (5th Cir. 2017) (explaining that a prima facie
case of retaliation under the FLSA requires: “(1) participation in a protected
activity under the FLSA; (2) an adverse employment action; and (3) a causal
link between the activity and the adverse action” (citing Hagan v. Echostar
Satellite, L.L.C., 529 F.3d 617, 624 (5th Cir. 2008))). Appellees are therefore
mistaken in arguing that the facts underlying both suits are “nearly
identical.”
To be sure, the two suits involve related facts: suspicions about
underpaid wages led to Pimpanit’s actions that allegedly caused her firing.
So, her federal complaint mentions “Thai Gourmet’s scheme to steal
servers’ tips,” but merely to contextualize her retaliation claim. Those facts
do not make up the “subject matter” of her federal retaliation complaint,
however, any more than the circumstances surrounding Pimpanit’s
termination make up the “subject matter” of her state wage suit. Mere
relatedness between two sets of facts does not create one transaction. See
Barr, 837 S.W.2d at 631 (“A ‘transaction’ under the Restatement [of
Judgments] is not equivalent to a sequence of events . . . .”). 5
Nor would Pimpanit’s state and federal claims present “a convenient
trial unit” such that they should have been litigated together. Barr, 837
5
See also United States ex rel. Laird v. Lockheed Martin Eng’g & Sci. Servs. Co., 336
F.3d 346, 358–59 (5th Cir. 2003) (finding res judicata inapplicable despite fact that
employees’ first wrongful discharge suit and second False Claims Act action both related
6
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S.W.2d at 631. Her federal claim that Appellees retaliated against her
requires proof of different facts than her state claim that they underpaid her
wages. Compare Starnes, 849 F.3d at 631–32 (elements of retaliation claim),
with Steele, 826 F.3d at 242 (elements of wage claim). Specifically, the state
suit turned on evidence of pre-termination wrongdoing, while Pimpanit’s
present retaliation suit turns on the termination itself. Thus, Pimpanit’s state
and federal claims are not “[d]ifferent theories of recovery based on the same
operative facts,” Sims, 894 F.3d at 645 (citation omitted), but are different
causes of action based on different operative facts. Her retaliation claim is
therefore not barred by res judicata.
Appellees argue that because Pimpanit could have brought her
retaliation claim in the state suit, res judicata bars the present litigation. True,
Pimpanit might have joined her retaliation claim in the state case. See Tex.
R. Civ. P. 51(a). 6 That was evidently her initial plan, given that her petition
originally included the claim until it was omitted in the amended petition. 7
to employer’s inaccurate reporting), abrogated on other grounds by Rockwell Int’l Corp. v.
United States, 549 U.S. 457 (2007).
6
It is also true that employment discrimination and retaliation claims are usually
brought together. See, e.g., Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 301 (5th Cir. 2020);
Septimus v. Univ. of Houston, 399 F.3d 601 (5th Cir. 2005); Holtzclaw v. DSC Commc’ns
Corp., 255 F.3d 254, 257 (5th Cir. 2001); Hoffmann-La Roche Inc. v. Zeltwanger, 144 S.W.3d
438, 441 (Tex. 2004). But the facts of this case are unusual.
7
Appellees cite Citizens Insurance Co. of America v. Daccach, 217 S.W.3d 430 (Tex.
2007), for the proposition that “a plaintiff is prohibited from abandoning claims and
subsequently asserting them when the claims could have been litigated in the prior suit.”
To the extent they suggest that abandoned claims are per se barred by res judicata, they are
wrong. Citizens Insurance involved the interplay between Texas Rule of Civil Procedure 42
and res judicata in the class action context. Id. at 448–51. In holding that Rule 42 is no
exception to res judicata, the Texas Supreme Court did not carve out a special standard for
abandoned claims. See id. at 450. Rather, it clarified that class actions are held “to the same
res judicata standards as other forms of litigation” and reiterated that the res judicata
7
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But Texas law rejects any “rule [that] would require that all disputes existing
between parties be joined, regardless of whether the disputes have anything
in common.” Barr, 837 S.W.2d at 629; see also 3 Star Props., 6 F.4th at 607
(noting “res judicata does not bar a defendant in one action from later
bringing a claim it was not required to bring previously” (citation omitted)).
Accepting Appellees’ argument would ignore black-letter Texas law that
applies res judicata only to claims that “arise out of the same subject matter.”
Harmon, 927 F.3d at 890 (quoting Getty Oil, 845 S.W.2d at 798). As
explained, Pimpanit’s retaliation claim does not depend on “the same
operative facts” as her underpayment claims, ibid., and so she was not
required to litigate both claims in the state suit.
IV.
The district court’s judgment is REVERSED and the case is
REMANDED for further proceedings consistent with this opinion.
standard for “abandoned” claims still requires that they “aris[e] from the same subject
matter.” Id. at 450–51.
8