[00:00:00] Speaker 00:
We'll call our next case.

[00:00:03] Speaker 00:
And I'm going to apologize to the appellant in advance.

[00:00:05] Speaker 00:
25 10 19 Miguel versus HPG pizza one.

[00:00:12] Speaker 00:
You can correct me when you come up if I got that wrong and I won't do it again.

[00:00:19] Speaker 00:
Please proceed.

[00:00:22] Speaker 04:
Good morning.

[00:00:23] Speaker 04:
May it please the court.

[00:00:24] Speaker 04:
Laura Farmold on behalf of appellant Steve Mile, a pizza delivery driver who worked for appellees, owners and operators of Papa John's franchise restaurants.

[00:00:33] Speaker 00:
Sounded like Mile to me.

[00:00:35] Speaker 00:
OK, got it.

[00:00:36] Speaker 00:
Go ahead.

[00:00:37] Speaker 04:
I would like to reserve five minutes of my time for rebuttal.

[00:00:40] Speaker 00:
We'll do our best.

[00:00:42] Speaker 00:
Go.

[00:00:42] Speaker 04:
Today we ask the court to reverse the district court's decision because the dismissal of Mr. Miles FLSA claims was based on two distinct misunderstandings or misapplication of the law that resulted in math errors.

[00:00:57] Speaker 03:
I'm going to interrupt you before you get to your two substantive points.

[00:01:02] Speaker 03:
What is the order on review here?

[00:01:05] Speaker 03:
The district court resolved this under 12B1.

[00:01:10] Speaker 03:
So it's a subject matter, lack of subject matter dismissal for failure to allege standing, it seems.

[00:01:18] Speaker 03:
Your briefing and your friend's briefing

[00:01:21] Speaker 03:
seem to be merging 12b1 and 12b6 standards.

[00:01:25] Speaker 03:
So can you help me with that threshold question of what do you understand the ruling before us to be?

[00:01:31] Speaker 04:
Yes, thank you, Your Honor.

[00:01:33] Speaker 04:
So in our briefing, we did note that we believed what the district court did was a 12b6 standard.

[00:01:41] Speaker 04:
But even looking at it under the 12b1 subject matter standard, we believe we are still successful.

[00:01:48] Speaker 04:
And so that's what we focused on in our briefing, was looking at it under the 12b1 standing.

[00:01:53] Speaker 02:
Don't we have to look at it under either 12b6 or 56 when the merits issue is inextricably intertwined with the standing issue?

[00:02:03] Speaker 02:
I mean, isn't that our case law?

[00:02:08] Speaker 02:
It's not a 12b1 issue, is it?

[00:02:12] Speaker 04:
We agree.

[00:02:13] Speaker 04:
It is actually a 12b6 issue, yes.

[00:02:16] Speaker 02:
Well, it could be a 56 too, right?

[00:02:21] Speaker 04:
We don't think that rule 56 applies here.

[00:02:26] Speaker 04:
The district court did look at the declaration and pay stubs outside of the pleadings, but it did rely on Mr. Miles estimates when it made its conclusion.

[00:02:39] Speaker 04:
So it only relied on the information provided in the complaint to reach its ultimate conclusion.

[00:02:45] Speaker 03:
So you disagree that the district court relied on, oh, sorry, Judge McHugh, go ahead.

[00:02:50] Speaker 02:
Well, the pay stubs were referenced in the complaint, weren't they?

[00:02:54] Speaker 02:
So even under a 12b6, would the court be at liberty to consider those?

[00:03:03] Speaker 04:
I don't believe the pay stubs were referenced in the complaint.

[00:03:06] Speaker 04:
I believe Mr. Mile alleged that he was paid approximately $10.60 per hour.

[00:03:10] Speaker 02:
He actually references the pay stubs, but I have to find the site.

[00:03:17] Speaker 03:
But you didn't object to the consideration of the pay stubs, did you?

[00:03:22] Speaker 04:
That's correct, Your Honor.

[00:03:24] Speaker 04:
We just noted for the court that we thought the proper standard was 12 v 6.

[00:03:32] Speaker 03:
I apologize, it derailed you.

[00:03:33] Speaker 03:
So your two points.

[00:03:35] Speaker 04:
No, that's no problem.

[00:03:37] Speaker 04:
The first being that the court improperly included the tip credit when it was looking at Mr. Miles' FLSA minimum wage violation.

[00:03:46] Speaker 04:
And that is because no employer subject to the Colorado Minimum Wage Act can claim an FLSA tip credit.

[00:03:54] Speaker 04:
The second error.

[00:03:55] Speaker 02:
Well, they didn't claim a tip credit under the FLSA, did they?

[00:04:01] Speaker 04:
that's correct your honor and they admit that they never sought a tip credit which they would have had to do i believe under section 203m yes that is correct and because they did not claim a tip credit and they did not comply with 203m's requirements they are not permitted to count any tips the employee received towards their minimum wage obligation

[00:04:26] Speaker 04:
And we know this.

[00:04:27] Speaker 02:
Or for anything, right?

[00:04:30] Speaker 02:
They also can't consider it as to the tools of the trade for the car use.

[00:04:38] Speaker 02:
Is that correct?

[00:04:41] Speaker 02:
Whether or not they... If they didn't comply with 203M notice, is it your position that they can't use the tip credit for anything?

[00:04:57] Speaker 04:
That's correct, Your Honor.

[00:05:01] Speaker 04:
And what the court did in calculating whether or not Mr. Mile had shown an FLSA minimum wage obligation was use the full $13.65 an hour

[00:05:14] Speaker 04:
calculation to subtract the estimated kickback of 458 to show that he was not below 725 an hour, but this is not proper.

[00:05:25] Speaker 04:
The way that that should have been calculated based on Mr. Miles estimates was reducing the 458 per hour kickback from that 1063 per hour wage that he was actually paid.

[00:05:38] Speaker 02:
Well, the district court also ruled that that he couldn't rely on his kickback figure because it was unsubstantiated and based on speculation.

[00:05:49] Speaker 02:
How do you respond to that?

[00:05:53] Speaker 04:
Yes, thank you, your honor.

[00:05:55] Speaker 04:
We do find that that statement was a bit confusing because the court did use that Mr. Miles estimate in its ultimate decision making.

[00:06:05] Speaker 04:
It used his estimates to create those calculations on which it based its decision.

[00:06:11] Speaker 04:
And because we are at the pleading stage, in particular, the case law is clear that employees can use estimates in the pleading stage to talk about their vehicle expenses, as well as their miles driven, hours worked, and wages paid.

[00:06:27] Speaker 02:
And that is the burden to keep track of the expenses for mileage and car maintenance.

[00:06:36] Speaker 04:
Yes, thank you, Your Honor.

[00:06:37] Speaker 04:
That burden falls on the employer.

[00:06:39] Speaker 00:
How are they supposed to keep that?

[00:06:41] Speaker 00:
Did your clients provide them with any records?

[00:06:43] Speaker 00:
Is that alleged?

[00:06:44] Speaker 00:
I mean, how's the employer supposed to know how your client's Prius drives versus my client's Ram 2500 that gets eight miles to the gallon in town?

[00:06:57] Speaker 04:
Yes, and we do not contest that it would be difficult to calculate actual expenses, but it is the employer's obligation, and that is clear in the statute.

[00:07:07] Speaker 04:
And as Judge Kethledge noted in the Parker decision out of the Sixth Circuit and looking at this issue, it is the employer's obligation.

[00:07:15] Speaker 04:
And they could have done several things to avoid this issue.

[00:07:19] Speaker 04:
They could have decided not to shift the enormous cost of owning, maintaining,

[00:07:25] Speaker 04:
and fueling a vehicle onto their minimum wage workers, they could have chosen to purchase a fleet of vehicles themselves for their workers to use.

[00:07:33] Speaker 04:
They could have also chosen to provide a platform for their employees to provide receipts, to be able to look at the actual costs that their employees were incurring.

[00:07:45] Speaker 04:
But none of that happened here.

[00:07:47] Speaker 02:
And what's the relevance of the IRS mileage credit or whatever they call it?

[00:07:57] Speaker 04:
The IRS standard business mileage rate?

[00:07:59] Speaker 02:
Yes.

[00:07:59] Speaker 04:
So the relevance is not huge here at the pleading stage.

[00:08:05] Speaker 04:
The plaintiff can rely on the IRS standard business mileage rate for an estimation of what his vehicle expenses were, whether or not

[00:08:16] Speaker 04:
that is ultimately what is used in the case is not before the court and would come much later.

[00:08:22] Speaker 04:
Mr. Mile has not alleged that the employer was required to reimburse at the IRS rate.

[00:08:28] Speaker 04:
Instead, what he has done is estimate that his vehicle expenses were approximately at the IRS rate.

[00:08:35] Speaker 04:
And that is because, based on his estimations of what he recalls from his work experience.

[00:08:41] Speaker 00:
But we don't know what his estimations were.

[00:08:43] Speaker 00:
There's nothing in the complaint about what he thinks it cost him to operate the vehicle, is there?

[00:08:50] Speaker 04:
Not about what he thinks it cost him to operate the vehicle, but what he used was the IRS standard business mileage rate as his estimate of what it cost him to operate the vehicle.

[00:09:03] Speaker 04:
And it is our position that that meets the plausibility standard at this stage of the case.

[00:09:10] Speaker 04:
Turning quickly to the second math error in the overtime calculation provision, the court misapplied the tip credits to Mr. Miles' overtime claim because an employee's regular rate can never be less than the full state law minimum wage.

[00:09:27] Speaker 04:
In this case, while Mr. Mile was employed with HPG, the state law minimum wage was $13.65 an hour.

[00:09:35] Speaker 04:
The court used the $10.60 per hour tipped wage rate to make its calculation.

[00:09:42] Speaker 04:
However, the statute is clear and as well as the case law that a regular rate is the cash wage that the employer pays plus the amount of tip credit taken, which in this case would have been 13.65 an hour as the base regular rate as opposed to the 10.60 an hour that the district court used to make its determination.

[00:10:02] Speaker 02:
And are you saying that they couldn't take any tip credit on the overtime calculation?

[00:10:10] Speaker 04:
The employer is not permitted to take a tip credit.

[00:10:14] Speaker 04:
That's correct.

[00:10:15] Speaker 02:
So it would have to be the higher Colorado minimum wage plus half of that, plus 50%.

[00:10:24] Speaker 04:
Yes, that's correct, Your Honor.

[00:10:26] Speaker 04:
And that was discussed in the Perrin case and is also explicitly provided in two separate regulations, 778.5 and 531.60.

[00:10:36] Speaker 03:
So is it, if I understand your argument, you're saying that an employer can never take a tip credit if they pay a cash wage greater than the FLSA minimum?

[00:10:50] Speaker 04:
The employer can never take an FLSA tip credit if they pay a wage rate that's higher than that $7.25 an hour.

[00:10:59] Speaker 04:
Yes, that's correct.

[00:11:01] Speaker 02:
There's no allegation to complain whether there was a Colorado tip credit.

[00:11:08] Speaker 02:
Is that relevant here?

[00:11:11] Speaker 02:
Is there such a thing?

[00:11:15] Speaker 04:
So it may become relevant later on in the case.

[00:11:18] Speaker 04:
And I do not have that statutory language ready to present to you today because we are just here on the dismissal of the FLSA claims.

[00:11:28] Speaker 04:
But yes, all right, I don't have the information, but we could brief that for you and send it in to you if that would be helpful.

[00:11:34] Speaker 00:
What did you argue before the district court about the tip credit?

[00:11:39] Speaker 04:
We argued that the tip credit

[00:11:42] Speaker 04:
that the HPG did not claim a tip credit, and therefore the minimum wage violation calculation should be based on the wage rate he was actually paid, that $10.60 an hour.

[00:11:53] Speaker 00:
And was your position on that based on the Romero case, or was it statutory based?

[00:11:58] Speaker 04:
It was statutory.

[00:12:01] Speaker 00:
Okay.

[00:12:01] Speaker 00:
You're not relying on the Romero case?

[00:12:04] Speaker 04:
Oh, I am relying on the Romero case, but that is additional support for the plain statutory language in 203M.

[00:12:14] Speaker 04:
And if you have no other questions, I would like to reserve my remaining time for rebuttal.

[00:12:19] Speaker 00:
Thank you, counsel.

[00:12:20] Speaker 04:
Thank you.

[00:12:25] Speaker 01:
May it please the court.

[00:12:27] Speaker 01:
My name is Hillary Ross, and I represent the appellees in this matter, HBG Pizza One, HBG Pizza Two, LLC, and Rob Prang.

[00:12:35] Speaker 01:
The court should affirm the district court's dismissal of Mr. Miles' claim under Rule 12b1 for two reasons.

[00:12:43] Speaker 01:
First of all, as the district court held in this case, Mr. Miles- I'm going to stop you.

[00:12:47] Speaker 02:
You're saying we should review this under 12b1, not 12b6?

[00:12:52] Speaker 01:
Yes, your honor.

[00:12:53] Speaker 01:
Our argument was that Mr. Mile doesn't have standing because he was unable to allege damages under the FLSA.

[00:12:58] Speaker 02:
Well, you can't determine if he hasn't proved damages without going to the merits of his claim, right?

[00:13:09] Speaker 02:
Haven't we been pretty clear that when they're inextricably intertwined, you've got to go to 12b6 or 56?

[00:13:22] Speaker 01:
Under these circumstances, Your Honor, it's HPG's position that because Mr. Mile put calculations in his amended complaint stating how he alleges damages under the FLSA, that his failure to

[00:13:34] Speaker 01:
actually alleged violation of the FLSA because he was paid at all times.

[00:13:39] Speaker 01:
The then existent Colorado minimum wage of $13.65 shows that he lacked standing to bring a minimum wage claim to the FLSA.

[00:13:47] Speaker 03:
I'm struggling with how to receive your argument even on its own terms.

[00:13:51] Speaker 03:
We have the plenary authority to convert.

[00:13:57] Speaker 03:
uh 12b1 to a 12b6 as Judge McHugh was alluding to if the issue is inextricably intertwined as it seems to be here but even assuming that what we have before us is just a 12b1 you raised both a facial facial and a factual attack in the district court and the factual attack relied on documents that you submitted and asked the court to consider right

[00:14:21] Speaker 01:
Yes, your honor.

[00:14:22] Speaker 03:
And then the other side did not oppose that and so those were in fact before the court and the court in fact looked at them.

[00:14:28] Speaker 03:
And now, in a footnote in your briefing to us, you disclaim reliance on a factual approach.

[00:14:36] Speaker 01:
Your honor, we do intend to rely on both a facial and a factual approach because that is what the district court relied on.

[00:14:42] Speaker 03:
But you disclaimed it in your opening brief.

[00:14:43] Speaker 03:
So now you don't want us to... I guess I'm having trouble understanding if you put the evidence, the relevant...

[00:14:54] Speaker 03:
subject matter jurisdiction, standing evidence before the district court and you challenged standing on under a factual approach.

[00:15:04] Speaker 03:
Now you're disclaiming that.

[00:15:06] Speaker 03:
How are we supposed to be thinking about that?

[00:15:08] Speaker 03:
And your response is, we don't need to be thinking about that because notwithstanding that it's in your brief, you insist you still maintain a factual approach, a factual challenge.

[00:15:19] Speaker 01:
Yes, yes, HPG's position is that there is a factual challenge that was made.

[00:15:23] Speaker 01:
There was evidence that was submitted to the district court and as the record reflects that was evidence that was not objected to by the by Mr. mile.

[00:15:32] Speaker 03:
So if we were not to.

[00:15:34] Speaker 03:
convert this as you seem to suggest it's just 12 B one, then we would analyze whether the district court correctly concluded under the face of the complaint, but also with the documents that you provided.

[00:15:48] Speaker 03:
That's, that's your position on those documents are available to us on appeal.

[00:15:51] Speaker 03:
Correct?

[00:15:51] Speaker 01:
Yes, your honor.

[00:15:56] Speaker 01:
As the district court held, Mr. Mile cannot show that he has damages under the Fair Labor Standards Act because based upon his own allegations, at all times, he was always paid at a minimum of $9.07 per hour.

[00:16:09] Speaker 02:
And secondly, is that taking into consideration the amounts that he says have to be backcharged for the use of his vehicle?

[00:16:20] Speaker 01:
Yes, Your Honor, because at all times, Mr. Mile was required by Colorado law to be paid at the then, in effect, Colorado minimum wage, which was $13.65 per hour.

[00:16:33] Speaker 01:
So if you back out what Mr. Mile is claiming as a kickback, the $4.58 per hour, I believe.

[00:16:40] Speaker 01:
Math is not my strong point, but I believe that gets us to $9.07 per hour, which would have been the minimum wage that he was paid at any time, even assuming his allegations are correct.

[00:16:49] Speaker 02:
And assuming no tip credit?

[00:16:53] Speaker 01:
Your Honor, I believe it was clear in the complaint and in the briefing that a tip credit was taken, but a tip credit under Colorado law.

[00:17:01] Speaker 01:
And I think that's an important distinction that needs to be made here.

[00:17:05] Speaker 01:
HPG's requirement wasn't to comply with the $7.25

[00:17:11] Speaker 01:
federal minimum wage under the FLSA.

[00:17:13] Speaker 01:
HPG was required to comply with Colorado law, which sets a far higher minimum wage at the time, $13.65.

[00:17:20] Speaker 01:
So the reason that HPG never took a tip credit under federal law is because it paid a much higher salary or much higher wage because it had to.

[00:17:30] Speaker 01:
But it did take a tip credit under Colorado law, which was also clear from the pay stubs and even in Mr. Miles allegations because he claims that he was paid

[00:17:39] Speaker 03:
Is there any question in this case about whether your client can appropriately rely on the Colorado tipped minimum wage number as the relevant metric here?

[00:17:54] Speaker 03:
Is there any reason we would think you couldn't rely on that number?

[00:17:57] Speaker 01:
No, Your Honor, because under Colorado, the FLSA certainly allows employers to pay more than the FLSA $7.25 per hour.

[00:18:04] Speaker 01:
The FLSA is concerned with subminimum wages, with anything that falls below that threshold.

[00:18:11] Speaker 01:
Under Colorado law, because there is a higher minimum wage that is required, but there is also in the comps order, there is a provision for a tip credit that can be taken as well.

[00:18:21] Speaker 01:
The fact that there is no allegation in the complaint, that Mr. Mile doesn't claim that

[00:18:27] Speaker 01:
that he was not a tipped employee.

[00:18:29] Speaker 01:
He doesn't claim that HPG inappropriately took a Colorado tip credit.

[00:18:34] Speaker 01:
He doesn't claim that he received less than $3.02 per hour in tips and therefore he wasn't appropriately able to be subjected to a tip credit.

[00:18:44] Speaker 01:
And so for that reason, because

[00:18:46] Speaker 02:
How does the Colorado TIP credit apply in determining his obligations under federal law when 203M makes it very clear that you can't rely on a TIP credit for calculating your obligations under federal law unless you've given notice and complied with 203M?

[00:19:10] Speaker 01:
Yes, Your Honor.

[00:19:11] Speaker 01:
First of all, there are no facts in the record as to whether or not there was notice to employees with respect to any type of credit.

[00:19:18] Speaker 01:
That's just not something that's before the court at this point, because it wasn't an allegation that was in the amended complaint.

[00:19:24] Speaker 02:
Second of all, Your Honor, my point is that because the- Well, it's because the district court relied on a tip credit to do its calculations, right?

[00:19:36] Speaker 01:
It did not rely on a tip credit for purposes of the FLSA, because at the point that HPG properly took a tip credit towards wages under Colorado law, any tips that may or may not have been used to make up for the shortfall between the tipped minimum wage under Colorado law, which was $10.63 an hour, to the $13.65 per hour, they properly count as wages.

[00:20:02] Speaker 01:
And therefore, they're wages for all purposes.

[00:20:05] Speaker 03:
But the district court used the 1365 number, didn't it?

[00:20:08] Speaker 01:
Yes, Your Honor, because that is the appropriate wage that needs to be used because that was the wage that was required to be paid by HPG and Mr. Mile does not claim in his amended complaint that he was paid anything less.

[00:20:19] Speaker 03:
And this gets back to my question about if there's any reason to think that reliance on the 1365 number is legally erroneous in this case.

[00:20:27] Speaker 03:
And I think I understood your response to Judge McEw to be maybe under 203M, but there are no allegations that there wasn't compliance with that section.

[00:20:40] Speaker 03:
Is that correct?

[00:20:41] Speaker 01:
Yes, Your Honor.

[00:20:42] Speaker 01:
And at the same time, because

[00:20:45] Speaker 01:
HPG was required to comply with Colorado minimum wage, which is significantly higher.

[00:20:49] Speaker 01:
The issue is whether or not there was any sort of allegation that they did not properly comply with any sort of Colorado requirements with respect to taking a tipped minimum wage.

[00:21:00] Speaker 01:
And there are no allegations that they did.

[00:21:01] Speaker 01:
And there's also, because of that, the difference between the $10 and $63 an hour that he was paid as a cash wage as an appropriate Colorado tipped minimum wage and the $13.65 an hour that

[00:21:15] Speaker 01:
That was the the minimum wage threshold under Colorado law that that amount is considered wages.

[00:21:21] Speaker 00:
So when you're dealing with the state.

[00:21:24] Speaker 02:
Go ahead judgment queue on the overtime claim you admit that the district court use the wrong minimum wage don't you.

[00:21:31] Speaker 02:
You can see.

[00:21:32] Speaker 01:
No, Your Honor.

[00:21:33] Speaker 01:
In fact, the district court did not use the wrong minimum wage.

[00:21:36] Speaker 01:
What the district court used was, and this is where the 12b1 factual analysis is most appropriate here, is because the district court looked at Mr. Miles' pay stubs that were attached to the Pring Declaration.

[00:21:50] Speaker 01:
And in those pay stubs, it demonstrated that he was paid a cash wage of $20.82 per hour for all overtime that he worked.

[00:21:58] Speaker 01:
There was no tip credit taken against that.

[00:22:01] Speaker 01:
Candidly, Your Honor, I don't know why that was what the wage was that was used.

[00:22:05] Speaker 01:
But that is the actual wage that he was paid.

[00:22:07] Speaker 01:
And that is far in excess of what he was required to be paid under federal minimum wage law, even if you were to back out the $4.85 that he's alleging is a kickback.

[00:22:19] Speaker 00:
OK, so on the tip credit issue, it takes up a lot of bandwidth.

[00:22:28] Speaker 00:
In a state like Colorado, the federal tip credit, 203M, is basically never in play because you have a minimum wage that's well above the federal minimum wage.

[00:22:45] Speaker 01:
Correct, Your Honor.

[00:22:46] Speaker 00:
Okay.

[00:22:47] Speaker 00:
And so, I mean, you would never have a situation where you needed to take a federal tip credit because you have to pay a cash wage of basically three bucks more

[00:22:59] Speaker 01:
Yes, your honor.

[00:23:00] Speaker 01:
You have to pay either a cash wage or a tipped minimum wage that would equal, at that time, $13.65 an hour.

[00:23:07] Speaker 02:
I don't recall in the district court's decision an explanation that it was relying on the Colorado tip credit.

[00:23:16] Speaker 02:
And there's nothing in the complaint that I see that talks about the Colorado tip credit.

[00:23:23] Speaker 02:
Am I missing something in the district court's decision?

[00:23:28] Speaker 01:
Your honor, in the amended complaint, there is a reference to the tip credit.

[00:23:33] Speaker 01:
If you I'll refer you to the record at page 52 plaintiff contends that he was making or he was paid $10 plus tips for delivering food or $10 and 60 cents plus tips for delivering food.

[00:23:47] Speaker 01:
So in his complaint, the complaint are you in?

[00:23:51] Speaker 01:
That would be paragraphs 98 through 99.

[00:23:53] Speaker 01:
Thank you.

[00:23:55] Speaker 03:
But by adopting the 1365 number, the district court understood that to have been inclusive of the Colorado TIP credit, right?

[00:24:03] Speaker 01:
That's correct, Your Honor.

[00:24:04] Speaker 01:
And also, just common sense, there's no allegation in the complaint, again, that he was paid subminimum wage under Colorado law, setting aside the alleged kickback issue, because he was all times paid at least $13.65 an hour, as the district court recognized that he conceded in his complaint.

[00:24:31] Speaker 01:
So because Mr. Mile did not allege that he was not a tipped employee, he did not allege that he did not receive at least $3.02 a tips per hour each hour that he spent delivering pizzas.

[00:24:46] Speaker 01:
He doesn't claim that the tipped wage that he was paid was somehow improper under Colorado law.

[00:24:51] Speaker 01:
The Colorado tipped minimum wage is the appropriate reference for determining whether or not there's a minimum wage violation here under the FLSA.

[00:25:00] Speaker 01:
So that's $13.65 an hour and not $10.63 an hour, which is what Mr. Mile claims should be relied upon.

[00:25:07] Speaker 00:
What role did the complaints use of estimates and assumptions play in the district court's decision?

[00:25:17] Speaker 01:
Your Honor, as the district court pointed out, the estimates that were used by Mr. Mile were estimates that were built upon assumptions.

[00:25:27] Speaker 01:
And those assumptions were frankly a bit confusing to us because he claims at one point that he would

[00:25:36] Speaker 01:
drive an average of five miles per delivery.

[00:25:39] Speaker 01:
And then elsewhere, he says he regularly drove between five and 10 miles per delivery.

[00:25:44] Speaker 01:
An average of five miles per delivery would suggest that it was something less than five miles sometimes, and it was something more than five miles sometimes.

[00:25:53] Speaker 01:
Between five and 10 miles is something significantly higher.

[00:25:56] Speaker 01:
And therefore, there was a huge range, and it was difficult to tell exactly what Mr. Mile was claiming as far as what would be the mileage that he drove.

[00:26:02] Speaker 00:
Right, I guess my question is more along the lines of, did the district court rely on that in deciding that there was no, he didn't allege a concrete injury?

[00:26:10] Speaker 00:
Or is it based on his own numbers where the district court took the numbers in the complaint and the pay stubs you submitted and just calculated them up and said no injury?

[00:26:23] Speaker 01:
As far as what the district court truly relied on, I would agree with you, Your Honor.

[00:26:26] Speaker 01:
It was more on the calculations that Mr. Mile put in his complaint.

[00:26:30] Speaker 01:
And also that there was a reference to the, at least for the overtime claim, the actual overtime rate that he was paid.

[00:26:40] Speaker 03:
What is your response to this, which is if what we have before us is a ruling on standing, and if we decide that that ruling is incorrect, that either facially or factually there is standing here,

[00:27:01] Speaker 03:
Why shouldn't we just remand this for the district court to undertake an appropriate next step, whether it be a 12b6 or a 56?

[00:27:13] Speaker 03:
Because it does seem to me that your position relies on, both relies and disclaims, it's a little bit confusing, frankly, to follow documents that are not in the complaint.

[00:27:26] Speaker 03:
So what is your reaction to why that would not be a good idea?

[00:27:29] Speaker 01:
I see my time has expired.

[00:27:31] Speaker 01:
May I briefly conclude?

[00:27:32] Speaker 01:
Go ahead.

[00:27:34] Speaker 01:
I think it's both, but under a 12b6 analysis, again, even just looking at the allegations that are in the face of his complaint.

[00:27:43] Speaker 01:
So even without reference to the pay stubs, the math still doesn't work.

[00:27:49] Speaker 01:
He claims in his complaint that he made $13.65 per hour, and there's no way that you can back out the $4.58 that he is claiming was a kickback and get to below the federal minimum wage.

[00:28:04] Speaker 00:
Thank you, counsel.

[00:28:06] Speaker 00:
All right, we have some rebuttal.

[00:28:17] Speaker 04:
Thank you.

[00:28:18] Speaker 04:
I first would like to address the interplay between the Colorado TIP credit and the FLSA TIP credit.

[00:28:26] Speaker 04:
And what we are here about today is whether or not the FLSA TIP credit could be claimed or those TIPs could be counted towards the employer's minimum wage obligation, and they cannot.

[00:28:37] Speaker 04:
And that is because the employer paid more than the $7.25 per hour, and they did not comply with the notice requirements under 203M.

[00:28:46] Speaker 00:
Well, you only take a tip credit for purposes of when your cash wage is less than the minimum wage.

[00:28:56] Speaker 00:
And so their cash wage has always been more than the federal minimum wage.

[00:29:02] Speaker 00:
So why would they provide notice and why would they take a FLSA tip credit?

[00:29:11] Speaker 04:
Well, I think that they were required to because just because they comply with the Colorado Minimum Wage Act, if they did, that doesn't excuse them from complying with the FLSA.

[00:29:26] Speaker 04:
And that is spelled out in numerous cases and also in some of the regulations that we cited to the court, specifically 29 CFR 778.5.

[00:29:35] Speaker 04:
So simply because they paid a higher hourly rate, that does not mean that they are

[00:29:41] Speaker 04:
free to ignore the FLSA obligations and particularly the tip credit obligations.

[00:29:47] Speaker 00:
In your opinion, they should have they should have filed a notice that they were taking a tip credit under Colorado law.

[00:29:58] Speaker 04:
they should have informed the employees the amount of the tip credit that they were taking.

[00:30:03] Speaker 04:
And if this case goes on further, we will get into whether or not they even could because they did not properly consider or account for Mr. Miles' actual vehicle expenses.

[00:30:15] Speaker 03:
Did you plead that, the 203M facts?

[00:30:20] Speaker 04:
Did you?

[00:30:21] Speaker 03:
Well, did you plead that, yeah, okay.

[00:30:23] Speaker 04:
Yes, we did plead that they did not properly comply with the tip credit requirements.

[00:30:29] Speaker 02:
Is it your position that the argument that we just heard was that if you take the amount that your client is claiming he was paid, which is the $13.65, and you back out the $5.58, you're still above the federal minimum wage, even without a tip credit.

[00:30:55] Speaker 02:
Do you dispute that?

[00:30:58] Speaker 04:
Well, Your Honor, he was not paid $13.65 an hour.

[00:31:02] Speaker 04:
Did he end up receiving $13.65 an hour because he also received some tips that we do not dispute that if you remove the $4.58 from $13.65, that does not result in an FLSA violation.

[00:31:17] Speaker 02:
So what's his amount without tips per hour?

[00:31:21] Speaker 04:
1063, the amount he was actually paid by the employer.

[00:31:25] Speaker 04:
That is the only amount that they are allowed to consider when determining whether or not they complied with the FLSA.

[00:31:31] Speaker 03:
So your argument is, I'm sorry Judge McHugh, go ahead.

[00:31:35] Speaker 02:
So even if legally they could have a tip credit for purposes of Colorado law, you're saying that that tip credit, that state tip credit is irrelevant for purposes of the FSLA.

[00:31:51] Speaker 02:
Yes, Your Honor.

[00:31:54] Speaker 00:
Okay, thank you, Councilor, your time is up.

[00:31:55] Speaker 02:
Thank you.