Co-authored by Richard Alfred, Jessica Schauer and Michael Fleischer
As we await the Supreme Court’s decision in Christopher v. SmithKline following the April 16, 2012 argument, counsel for the plaintiffs (Petitioners before the Supreme Court) filed a letter with the Court that appeared on the docket dated May 25. No explanation of the substance of this letter was included in the docket entry, and the letter is not available on the Court’s website. Fortunately, we were able to obtain a copy of this letter and want to share it with our readers.
The letter from Petitioners’ counsel informs the Court about the Seventh Circuit’s May 8, 2012 decision in Schaefer-LaRose v. Eli Lilly & Co. and Jirak v. Abbott Laboratories, Inc. As previously discussed on this Blog, that decision held that pharmaceutical sales representatives (“PSRs”) are exempt under the FLSA’s Administrative Exemption and criticized the U.S. Department of Labor’s position that deference should be given to an “unambiguous regulation.” Petitioners’ May 25 letter states that Schaefer-LaRose is in conflict with the Second Circuit’s decision in In Re Novartis Wage and Hour Litigation, which held that PSRs do not qualify for the Administrative Exemption. The letter further states that “[t]he plaintiffs [in Schaefer-LaRose] presently plan to file a petition for certiorari from the Seventh Circuit’s decision.”
There are at least two curious aspects of the Petitioners’ letter filing. First, the timing is interesting. While it took the plaintiffs in In re Novartis about one day to inform the Supreme Court (which at that time was considering Novartis’ cert petition) of the Ninth Circuit’s decision in Christopher about the Christopher plaintiffs’ intent to file a petition for full panel review, it took Petitioners’ counsel in Christopher more than 2 1/2 weeks to inform the Supreme Court of the obvious circuit split resulting from Schaefer-LaRose. The reason for such a significant delay at the time when the Court was deliberating on its decision is unclear. Second, the observation that Schaefer-LaRose created a circuit split was hardly newsworthy, especially at the late date that the letter was submitted. Further, the fact that the plaintiffs in Schaefer-LaRose (and, presumably, Jirak) intend to file a cert petition is unsurprising and has seemingly little impact on the outcome of Christopher.
So, why did Petitioners’ counsel submit the letter? Seasoned counsel like Petitioners’ attorneys are unlikely to have done so without careful consideration. Of course, one cannot be certain without hearing from them. However, our best analysis is that Petitioners may have submitted this letter to highlight an avenue for the Court to find in their favor, ruling that the Outside Sales Exemption does not apply to pharmaceutical sales representatives, while underscoring the further opportunity the Court is likely to have to consider whether PSRs are exempt from overtime under the Administrative Exemption. We surmise that Petitioners’ counsel may have wanted to make the point to the Court – and, in particular, to any Justice who may be on the fence in deciding the Outside Sales Exemption issue – that they would have another chance to consider whether PSRs may be classified as exempt, albeit under a different exemption. Justice Ginsburg, for example, in an oft-recited comment from the bench, expressed concern that a PSR could become entitled to overtime for time spent with prescribers on the golf course, a patently unjust result. Petitioners, concerned that the Court may rule against them, may have intended to inform the Court of an alternative option: decide Christopher in Petitioners’ favor – ruling that PSRs are not subject to the Outside Sales Exemption – with the understanding that the Justices will have an opportunity soon to review PSRs’ exempt status again through the lens of the Administrative Exemption.
We expect a written decision in the case by the end June. We will update readers immediately after the Court issues its opinion(s).