By Kyle Hartman

The U.S. Court of Appeals for the Fifth Circuit recently issued its decision in Calder et al. v. Continental Airlines, Inc., No. 14-20291 (5th. Cir. Dec. 10, 2014), affirming the district court’s award of summary judgment in favor of Continental on Plaintiffs’ Uniformed Services Employment and Reemployment Rights Act (USERRA) claims. The Fifth Circuit also affirmed the district court’s denial of Plaintiffs’ Rule 56(d) motion, which argued that more discovery on class issues was necessary before Continental’s motion for summary judgment could be considered, and affirmed the district court’s decision to grant a stay of discovery pending a ruling on the dispositive motion. Plaintiffs relied solely on their Rule 56(d) motion to ward off complete summary judgment, and the difference in standards of review applicable to those motions (abuse of discretion versus de novo) was a critical factor in the outcome reached by the Fifth Circuit.

Case Background

Plaintiffs, each current or former members of the armed services, filed a class action in 2009 alleging several causes of action against Continental under the USERRA, including claims for the denial of vacation and sick leave accrual, denial of retirement benefits accrual, denial of health benefits coverage, hostile work environment, and failure to hire one of the four named Plaintiffs.

Earlier in the case, the district court dismissed the hostile work environment claim, ruling that the statute did not provide for such a claim, and the Fifth Circuit affirmed. Carder v. Cont’l Airlines, Inc., 636 F.3d 172, 182 (5th Cir. 2011), cert. denied, 132 S. Ct. 369 (2011) (abrogated by statute). The district court also granted an unopposed motion to dismiss Plaintiffs’ retirement benefits claim because the claim was precluded by the Railway Labor Act (“RLA”).

In October 2013, Continental filed for summary judgment on Plaintiffs’ remaining claims. In response, Plaintiffs’ filed a Rule 56(d) motion arguing that Plaintiffs could not respond to Continental’s summary judgment motion until Continental produced class-wide discovery documents, including a list of all pilots who took military and other leaves, all pilot applications, a list of all pilots hired, documents related to Continentals hiring practices, and a list of everyone involved in pilot hiring decisions, all dating back to 1994. Plaintiffs did not respond to the merits of Continental’s motion for summary judgment.

In March 2014, with the summary judgment and Rule 56(d) motions pending, Continental moved for a stay of discovery. The district court ordered Plaintiffs to respond to the motion, but then granted the stay five days before Plaintiffs were due to respond. The next day, on April 3, 2014, the district court issued a take-nothing-judgment denying Plaintiffs’ Rule 56(d) motion and granting summary judgment in favor of Continental with respect to all of Plaintiffs’ claims.

Fifth Circuit’s Decision

On appeal, taking the Rule 56(d) motion first, the Fifth Circuit agreed with the district court that the additional, class-wide discovery Plaintiffs sought was not necessary to the individual claims on which Continental had moved for summary judgment.

The Fifth Circuit found that Plaintiffs’ vacation and leave claims, like their dismissed retirement benefits claims, where precluded by the RLA, making class-wide discovery on the issue unnecessary. Likewise, class-wide discovery was not necessary on Plaintiffs’ individual health benefits claims because Continental established that Plaintiffs voluntarily dropped their coverage during their military leaves. Lastly, on the failure to hire claim, Plaintiffs argued that they needed additional, class-wide discovery to establish that Continental had a hiring bias against applicants with military affiliation.  However, according to the Fifth Circuit, establishing such a bias would not rebut the legitimate, non-discriminatory reason offered for Continental’s decision not to hire the individual Plaintiff — he had a poor score on his flight simulator evaluation.

Perhaps more important to the eventual outcome, the Fifth Circuit reviewed the Rule 56(d) ruling only for abuse of discretion and refused to consider Plaintiffs’ same arguments under the de novo standard as they related to the summary judgment decision. Plaintiffs made no argument about the merits of Continental’s motion for summary judgment at the district court or on appeal; instead, Plaintiffs relied solely on their argument that they needed class-wide discovery. When the district court, in its discretion, disagreed, Continental’s motion for summary judgment was unrefuted.

Finally, the Fifth Circuit held that the district court did not abuse its discretion by granting Continental’s motion to stay discovery before Plaintiffs had a chance to respond to the motion. While the Fifth Circuit noted that “at first blush” it may seem like error to set a response deadline and then grant the motion before Plaintiffs got a chance to respond, Plaintiffs were not deprived of their right to be heard on the issue because the substance of their Rule 56(d) motion was devoted to their argument that additional discovery was necessary.

Lessons Learned

First, as this ruling shows, an early motion for complete or partial summary judgment can be an effective way to stop a class action before it gets started, or at the very least, limit the scope of discovery by narrowing the claims at issue.

Second, when faced with an early motion for summary judgment, beware of putting all of your eggs in the Rule 56(d) basket. District courts have greater discretion in ruling on a Rule 56(d) motion, and their decision does not receive the same de novo review that a summary judgment ruling receives.  A party facing an early motion for summary judgment should seek expedited ruling on a 56(d) motion, request a stay of briefing on the underlying motion for summary judgment until the Rule 56(d) motion is decided, and ultimately be prepared to timely oppose the merits of the underlying motion for summary judgment.