Mary E. McCann Individually and on Behalf of All Others Similarly Situated v. The Sullivan University System, Inc., D/B/A Sullivan University College of Pharmacy ( 2017 )

RENDERED: AUGUST 24, 2017
TO BE PUBLISHED
Summe am of BEM§H AL
20-15 SC- 000144- DG ©ATET : z dnloc
MARY E. MCCANN APPELLANT
(INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED)
ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2014-CA-000392
JEFFERSON CIRCUIT COURT NO. lO-CI-OOl 130
THE SULLIVAN UNIVERSITY SYSTEM, APPELLEE
INC., D/B/A SULLIVAN UNIVERSITY
COLLEGE OF PHARMACY, ET AL
OPINION OF THE COURT BY JUSTICE WRIGHT
R.EVERSING AND REMANDING
Mary McCann filed a CR 23 motion to certify a class_action in Jefferson
Circuit Court. The trial court denied that motion as a matter of law and
McCann appealed. The Court of Appeals affirmed the trial court’s judgment
and held KRS 337.385 does not authorize class actions. McCann then moved
this Court for discretionary review, and we granted her motion. On appeal,
McCann argues that the Court of Appeals erred by reading KRS 337.385 to
prohibit class actions. We agree. Therefore, we reverse the judgment of the
Court of Appeals and remand this case to Jefferson Circuit Court for
proceedings consistent with this opinion.
` 1. BAcKGRoUND
The Sullivan University System, Inc., hired Mary McCann as an
admissions officer in March 2006 at its Fort Knox Campus. In May 2007,
Sullivan transferred McCann to its Spencerian College campus in Louisville. In
April 2008, Sullivan terminated McCann’s employment
Following her termination, McCann filed an action in Jefferson Circuit
Court. Sullivan removed McCann’s action to federal court after the United
States Department of Labor filed a complaint against Sullivan under the federal
Fair Labor Standards Act. Sullivan disputed the Department of Labor’s
allegations, but as part of that settlement, agreed to treat its admissions
officers as non-exempt employees, to pay overtime wages, and to pay back
wages to certain admissions officers. By agreed order, the federal district court
dismissed McCann’s federal Fair Labor Standards Act claims against Sullivan
and remanded the remaining state law claims to Jefferson Circuit Court.
When McCann moved to certify a class, the Jefferson Circuit Court .
denied the motion on purely legal grounds. In its order denying class
certification, the trial court relied upon dicta in an unpublished Court of
Appeals’lopinion, Toyota Motor Mfg., Kentucky, Inc. v. ’Kelley, 2012-CA-001508-
ME, 2013 WL 6046079, at *9 (Ky. App. Nov. 15, 2013). The Court of Appeals in
Kelley did not reach the merits of Whether a class action is available for claims
brought under KRS 337.385. Yet, the panel opined that if it were to reach that
question, it would conclude that a class action is not available for claims
brought under KRS 337.385. McCann appealed the trial court’s judgment to
the Court of Appeals.
In the instant case_unlike in Kelley_the Court of Appeals did reach the
question whether a class action is available for claims brought under KRS
337.385. The Court of Appeals ultimately held that KRS 337 ._385 does not
authorize class actions. The court reasoned this provision constitutes a special
statutory proceeding that displaces our Rules of Civil Procedure. The court
also noted that the statutory provision does not explicitly authorize class
actions. We must determine whether the Court of Appeals erred in its reading
of this provision. D.etermining the correct reading of a statute is a question of
law that we review de novo without affording deference to lower courts. Board
of Educ. of Fayette County v. Hurley-Richards, 396 S.W.3d 879, 885 (Ky. 2013).
II. ANALYSIS
A. The Rules of Civil Procedure and Special Statutory Proceedings
Section 116 of the Constitution of this Commonwealth empowers this
Court “to prescribe . . . rules of practice and procedure for the Court of
Justice.” Pursuant to that constitutional grant of authority, CR 1 defines the
scope of the rules’ application, stating: “[t]hese Rules govern procedure and
practice in all actions of a civil nature in the Court of Justice except for Special
statutory proceedings . . . .” (Emphasis added.) Therefore, based upon this
constitutional grant of authority to prescribe the rules of practice and
procedure, this Court retains the ultimate authority to determine the
procedures used within the courts of this Commonwealth. However, in CR 1,
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we specifically state that the Rules of Civil Procedure govern all actions of a
civil nature except special statutory proceedings.1 Absent this caveat for
special statutory proceedings, the Rules of Civil Procedure govern all civil
actions within the Court of Justice. Now we must determine what constitutes
a special statutory proceeding that displaces the Rules of Civil Procedure.
“A ‘special statutory proceeding’ is one that is ‘complete within itself
having each procedural detail prescribed.’” C.C. v. Cabinet for Health and
Family Services, 330 S.W.3d 83, 87 (Ky. 2011) (quoting Swift & Co. v. Campbell,
360 S.W.2d 213, 214 (Ky.1962). In C.C., We determined that dependency,
neglect, and abuse (DNA) actions and the implementing procedures within the
Uniform Juvenile Code constitute a special statutory proceeding that displaces
any conflicting Rule of Civil Procedure. We reasoned that the Uniform Juvenile
Code foundin KRS Chapters 600 to 645 is complete within itself and describes
in detail the comprehensive procedures accompanying those causes of action.
`For instance, the entirety of KRS Chapter 610 is entitled “Procedural Matters.”
That chapter includes fifty-one separate sections detailing matters including
preliminary intake procedures (KRS 610.030)`, hearing procedures (KRS
610.070), procedures for appeals of disposition orders (KRS 610.130),
evidentiary procedures (KRS 610.300), fees (KRS 610.350), and procedures
relating to fees and court costs (KRS 610.360). The Uniform Juvenile Code is
but one example of a special statutory proceeding that We have recognized.
1 This Court extends comity to the General Assembly by allowing deviation from
our Rules of Procedure within the context of special statutory proceedings.
4
Our predecessor Court recognized “that an election contest is a special
statutory proceeding . . . .”2 Brock v. Saylor, 180 S.W.2d 688, 689 (Ky. 1945).
Likewise, we recently acknowledged that KRS 383.200-285 constitutes a
special statutory proceeding relating to forcible entry and detainer in landlord-
tenant law. Shinkle v. Turner, 2015-SC-000039-DG, 2016 WL 4487203, at *2
(Ky. Aug. 25, 2016). Furthermore, the most easily recognizable special
statutory proceeding is one in which the adjudication begins within an agency
or a commission, but provides for an appeal to the Court of Justice. For
instance, we acknowledged that, “[a]n appeal from an adverse decision of the
[Unemployment Insurance] Commission is a special statutory proceeding.”
Westem Kentucky Coca-Cola Bottling Co., Inc. v. Runyon, 410 S.W.3d 113, 116
(Ky. 2013).
In sum, this Court determines the existence of a special statutory
proceeding by evaluating whether the statute in question provides for a
comprehensive, wholly self-contained process that prescribes each procedural
detail of the cause of action. Shinkle, 2016 WL 4487203, at *2 (statute had “an
exclusive procedure, complete unto itself”); Runyon, 410 S.W.3d at 116 (the
statute provided for a wholly self-contained administrative process); C.C., 330
S.W.3d at 87 (the statute “laid out in detail” the comprehensive procedures and
2 This case occurred before the adoption of the modern Rules of Civil Procedure
and before “special statutory proceeding” became a term of art. However, based upon
a review of the current statutory scheme surrounding election contests, the result
continues to hold true. KRS Chapter 120 contains procedures for contesting a
primary election (KRS 120.055), a general election (KRS 120.165), as well as
procedures for contesting an election on a public question (KRS 120.250) or
constitutional amendment (KRS 120.280).
constituted a special statutory proceeding because the process was “complete
within itself”); Swift, 360 S.W.2d at 214 (statutory cause of action was
“complete within itself” and prescribed “each procedural detail”); Brock, 189
S.W.2d at 689 (the multi-step, detailed procedural requirements created a
“special statutory proceeding”).
Now, we must determine whether KRS 337.385 meets this standard.
B. Whether KRS 337.385 Constitutes a Special Statutory Proceeding
The statute at issue, KRS 337.385(2), states:
If, in any action commenced to recover such unpaid wages or
liquidated damages, the employer shows to the satisfaction of the
court that the act or omission giving rise to such action was in
good faith and that he or she had reasonable grounds for believing
that his or her act or omission was not a violation of KRS 337 .020
to 337.285, the court may, in its sound discretion, award no
liquidated damages, or award any amount thereof not to exceed
the amount specified in this section. Any agreement between such
employee and the employer to work for less than the applicable
wage rate shall be no defense to such action. Such`action may be
maintained in any court of competent jurisdiction by any one (1) or
more employees for and in behalf of himself, herself, or themselves.
Both parties focus our attention on the last sentence of KRS 337.385(2).
McCann argues that after the adoption of Kentucky’s modern CR 23 in 1969,
the General Assembly had no need to include language specifically allowing
class actions when it adopted KRS 337.385 in 1974. Sullivan counters and
argues that even absent a special statutory proceeding, CR 23 does not apply
because KRS 337 .385 omits language specifically authorizing class actions.
Thus, the crux of both parties’ argument turns not upon the words actually
used in the statute, but upon what words the General Assembly did not use.
While statutory history3 may be informative at times, it cannot be the starting
gate for determining the proper reading of a statute. Rather, when determining
the proper reading of a statute, “[i]t must be clear at the outset that . . . the
text of the statute is supreme. Upon review, the words of the text are of
paramount concern, and what they convey, in their context, is what the text
means.” Owen v. University of Kentucky, 486 S.W.3d 266, 270 (Ky. 2016)
(internal citations and quotation marks omitted).
We agree that the actual words used in the statute do not expressly
permit the use of a class action, nor do those words explicitly prohibit its use.
Even when reading the entirety of KRS 337.385, this statute fails to create the
comprehensive, wholly self-contained procedural process necessary to
constitute a recognized special statutory proceeding Therefore, we hold that
the cause of action created by KRS 337.385 does not constitute a special
statutory proceeding that operates outside of the Rules of Civil Procedure.
Furthermore, courts widely understand that “[t]he class action is an
exception to the usual rule that litigation is conducted by and on behalf of the
individual named parties only.” Comcast Corp. v. Behrend, 133 S. Ct. 1426
(2013) (citing Califano v. Yamasaki, 442 U.S. 682, 700-701 (1979) (internal
quotation marks omitted)); Accord Worledge v. Riverstone Residential Group,
3 Statutory history differs from legislative history in that it looks to the history
of the development of the actual words used in a statute overtime as opposed to
extraneous committee reports or testimony. See Commonwealth ex rel. Beshear v.
Commonwealth Ojj‘ice of the Gouemor ex rel. Bevin, 2016 CA-000738-MR, 201 6 WL
5248011, at *14, fn. 9 (Ky. Sept. 22, 2016).
LLC, 379 Mont. 265, 274 (Mt. 2015), ’Iliadis v. Wal-Mart Stores, Inc., 922 A.2d
710, 718 (NJ. 2007), Cullen v. State Farm Mut. Auto. Ins. Co., 999 N.E.2d 614,
620 (Oh. 2013), Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 537 (6th Cir.
2012). And CR 23 simply defines the parameters for determining when use of
this exception to the rule is appropriate. Therefore, a statute need not contain
specific language authorizing the use of a class action precisely because our
Rules of Civil Procedure perform that function. In fact, the Civil Rules do
exactly what Sullivan argues the statute does not: they authorize class
actions. In the absence of a special statutory proceeding, the statute need not
prospectively authorize application of the Rules of- Civil Procedure.
Going further, McCann asks this Court to adopt a rule similar to the one
the United States Supreme Court announced in Califano v. Yamasaki, 442 U.S.
682 (1979). In Califano, the Court stated that the Federal Rules of Civil
Procedure apply to all civil actions brought in federal court absent a direct
expression by Congress to the contrary. 442 U.S. 682, 700 (1979). By default,
the Califano rule applies Federal Rule of Civil Procedure 23 absent explicit
statutory language prohibiting class actions.
We have no need to adopt the Califano rule because CR 1 already
requires application of the Rules of Civil Procedure “in all actions of a civil
nature in the Court of Justice except for special statutory proceedings . . . .”
The Rules of Civil Procedure currently apply to all civil actions within the
Commonwealth unless the General Assembly creates a cause of action and a
corresponding special statutory proceeding that sufficiently prescribes the
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procedural details to displace the Rules of Civil Procedure. If the General
v Assembly desires to prohibit class actions for a particular statutory cause of
action, it may do so through the operation of CR 1 by creating a special
statutory proceeding that provides for a comprehensive, wholly self-contained
process that prescribes each procedural detail of that cause of action.
The General Assembly did not create a special statutory proceeding for
actions brought under KRS 337 .385. Therefore, we hold, as a matter of law,
that CR 23 remains an available procedural mechanism applicable to
McCann’s cause of action brought under KRS 337.385. Because the trial court
denied the motion to certify a class as a matter of law, we need not determine
whether McCann’s class meets the requirements set forth by this Court in CR
23. The trial court must make that determination upon remand.
III. CONCLUSION
For the foregoing reasons, we reverse the judgment of the Court of
Appeals and remand this case to Jefferson Circuit Court for proceedings
consistent with this opinion.
All sitting. Minton, C.J., Cunningham, Keller, and Venters, JJ. concur.
Hughes and VanMeter, JJ., concur in result only.
COUNSEL FOR APPELLANT:
Theodore W. Walton
Garry Richard Adams, Jr.
COUNSEL FOR APPELLEES,THE SULLIVAN UNIVERSITY SYSTEM, INC.,
D/B/A/ SULLIVAN UNIVERSITY COLLEGE OF PHARMACY, SULLIVAN
COLLEGE OF TECHNOLOGY AND DESIGN, SULLIVAN UNIVERSITY GLOBAL
E- LEARNING, DALE CARNEGIA KENTUCKIANA, INTERNATIONAL CENTER
FOR DISPUTE RESOLUTION LEADERSHIP, SULLIVAN UNIVERSITY,
LOUISVILLE TECHNICAL INSTITUTE, THE NATIONAL CENTER FOR
HOSPITALITY STUDIES, INSTITUTE FOR PARALEGAL STUDIES, SPENCERIAN
COLLEGE AND INTERIOR DESIGN INSTITUTE:
Grover C. Potts, Jr.
Michelle Deann Wyrick
Rania Marie Basha
Emily Christine Lamb
COUNSEL FOR APPELLEES, THE KENTUCKY CHAMBER OF COMMERCE
(“CHAMBER”), AND THE KENTUCKY SOCIETY FOR HUMAN RESOURCES
MANAGEMENT (“KYSHRM”):
Jeffrey Alan Savarise
John Choate Roach
Timothy James Weatherholt
COUNSEL FOR APPELLEE, JEFFERSON COUNTY TEACHERS ASSOCIATION
(JCTA):
Thomas J. Schulz
COUNSEL FOR APPELLEE, KENTUCKY EQUAL JUSTICE CENTER (“KEJC”)
AND JOBS WITH JUSTICE:
John Christopher Sanders
McKenzie Cantrell
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COUNSEL FOR APPELLEES, KENTUCKY JUSTICE ASSOCIATION, KENTUCKY
CHAP'I`ER OF AMERICAN FEDERATION OF LABOR AND CONGRESS ODF
INDUSTRIAL ORGANIZATIONS, KENTUCKY STATE BUILDING AND
CONSTRUCTION TRADE COUNCIL, RIVER CITY FRATERNAL ORDER OF
POLICE LODGE 614, INC., TEAMSTERS LOCAL 783, INTERNATIONAL UNION,
UNITED AUTOMOBILE, AEROSPACE AND_AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA, AND UNITED STEEL, PAPER AND FORESTRY,
RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND ALLIED
INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION:
Kevin Crosby Burke
Irwin H.Cutler, Jr.
David Lindsay Leightty
Jamie Kristin Neal
COUNSEL FOR APPELLEE, UPS CERTIFIED CLASS
Andrew J. Horne
Michael Douglas Grabhorn
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