U.S. Court of Appeals for the Fifth Circuit. (Photo: Mike Scarcella / ALM)

Lawyers for Texas, Nevada and the restaurant chain Chipotle are defending the sanctions a federal trial judge imposed on three plaintiffs firms that allegedly defied the nationwide injunction blocking an Obama-era labor rule that expanded overtime eligibility to millions of additional workers.

Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas issued a contempt sanction in March against attorneys at Cohen Milstein Sellers & Toll, Outten & Golden, and Green Savits for filing a lawsuit in New Jersey that said Chipotle Mexican Grill was violating the U.S. Labor Department’s new overtime rule.

Texas and Nevada had successfully sued to stop the rule, winning a preliminary injunction from Mazzant in 2016. Mazzant concluded the plaintiffs lawyers, who were not a part of the case in Texas, “recklessly disregarded” a duty to obey the national injunction when they sued Chipotle. The firms, represented by Jenner & Block, are appealing the contempt order, which was held in abeyance until the dispute is resolved in the U.S. Court of Appeals for the Fifth Circuit.

“The district court’s preliminary injunction was clear, unequivocal, and easily understood. It prevented DOL’s new overtime rule from becoming effective and banned enforcement,” Lawrence VanDyke, solicitor general of Nevada, said in a court filing on Friday. The Texas Attorney General’s Office was also on the brief.

Chipotle’s lawyers at Messner Reeves and Cantey Hanger also asked the appeals court to uphold the contempt sanction. Chipotle last year sought the sanctions against three plaintiffs firms, saying the Texas court had “authority to enforce its own injunctive decree and to punish those who disobey it.”

The appeal comes amid widespread scrutiny of the propriety of nationwide injunctions. U.S. Justice Department lawyers, lamenting the number of national injunctions thwarting Trump administration policies, urged the U.S. Supreme Court to use the travel ban case to force lower judges to narrowly tailor any injunctions. The court did not take up the request. Justice Clarence Thomas, however, used a concurring opinion to cast doubt on the power of trial judges to issue “universal” injunctions.

VanDyke, the lawyer for Nevada, noted Thomas’ observations, but he did not mention the justice’s skepticism. Indeed, the appeals court brief Nevada and Texas filed backed the injunction Mazzant issued to freeze the Labor Department’s overtime rule.

“As Justice Thomas recently emphasized, whether the authority to issue a nationwide injunction springs from statute or the courts’ inherent constitutional power, the authority must comply with our country’s history and traditions as well as longstanding principles of equity,” VanDyke wrote. “There is history and tradition in equity to support binding appellants to the district court’s injunction in this case.”

The Jenner & Block team representing the plaintiffs lawyers in the Fifth Circuit in May called Mazzant’s contempt order “radical and profoundly troubling.” They argued in part that Mazzant did not have power to punish plaintiffs lawyers, who were not parties in the Texas litigation, for filing a lawsuit in New Jersey.

“This court should not lightly embrace a legal theory that effectively empowers a single district judge to enjoin—and then potentially hold in contempt—tens of millions of nonparties throughout the country,” Jenner & Block’s Matthew Hellman told the appeals court in his opening brief.

The three plaintiffs firms also contend their suit against Chipotle was proper, because Mazzant’s order blocking the Labor Department from enforcing its new overtime rule did not vacate the rule itself or postpone its effective date. “[T]hreatening millions of people (and their lawyers) with contempt will chill the assertion of novel arguments to vindicate legitimate claims and impede the development of the law,” Hellman wrote.

Lawyers for Texas and Nevada said the plaintiffs firms were acting essentially on behalf of the Labor Department when they sued Chipotle for alleged overtime violations. The three firms, VanDyke wrote in his brief, “should have to take the bitter with the sweet—if they want to piggyback on a rule issued by a federal agency, then they should not be allowed to complain that an injunction against that agency involving that rule affects them also.”

 

Read more:

Plaintiffs Firms Call Texas Judge’s Contempt Order ‘Profoundly Troubling’

Thomas, Alone, Asserts National Injunctions Are ‘Historically Dubious’

Texas Judge Holds Plaintiffs Firms In Contempt in Labor-Rule Suit

DOJ Policy Head Scolds ‘Dogged Determination’ to Enjoin Trump

Chipotle Wants Lawyers in Overtime Suit Sanctioned for Contempt