Collinge et al v. Intelliquick Delivery Incorporated et al

Filing 342

ORDER the 310 Motion Seeking Decertification is DENIED and the 303 Motion to Certify Class is GRANTED IN PART and DENIED IN PART. ORDERED certifying a class action that includes all current and former drivers or couriers as described here in. ORDERED appointing plaintiffs' counsel as class counsel under Rule 23(g). IT IS FURTHER ORDERED that defendants shall provide to plaintiffs' counsel the last-known contact information for the class members within 21 days of this Order and plaintiffs shall submit a proposed class notice within 14 days of this Order. Signed by Judge John W Sedwick on 3/23/2015. (See Order for details.)(LFIG)

1
2
3
4
5
6
7
8
9
10
11

UNITED STATES DISTRICT COURT

12

DISTRICT OF ARIZONA

13
14
15
16
17
18
19

David Collinge, et al.,

)
)
Plaintiffs,
)
)
vs.
)
)
IntelliQuick Delivery, Inc., an Arizona )
corporation, et al.,
)
)
Defendants.
)
)

2:12-cv-00824 JWS

ORDER AND OPINION
[Re: Motions at docs. 303 and 310]

20
I. MOTIONS PRESENTED
21
At docket 59 the court conditionally certified a collective action brought by
22
plaintiffs David Collinge, et al. (collectively “plaintiffs”) to enforce the Fair Labor
23

Standards Act (“FLSA”).1 At docket 310 defendants IntelliQuick Delivery, Inc., et al.

24
(collectively, “defendants”) move for decertification of the FLSA class pursuant to 29
25
U.S.C. § 216(b). Plaintiffs oppose at docket 318. Defendants reply at 326.
26
Additionally, at docket 303 plaintiffs move for class action certification on their non27
FLSA claims (Counts II-V of the Second Amended Complaint (“the Complaint”))
28
1

29 U.S.C. § 201 et seq.

1

pursuant to Federal Rule of Civil Procedure 23. Defendants oppose at docket 319.

2

Plaintiffs reply at docket 325. Oral argument was heard on March 17, 2015.

3
4

II. BACKGROUND
Plaintiffs and the proposed class currently work or have worked for IntelliQuick

5

Delivery, Inc. (“IntelliQuick”) as delivery drivers. Plaintiffs maintain that they have been

6

misclassified as independent contractors when they are actually employees, and as a

7

result defendants have violated their rights under various wage and hour laws. Count I

8

of the Complaint alleges FLSA violations and is the subject of defendants’ present

9

motion for decertification. The FLSA class that was conditionally certified consists of

10

“All current and former drivers or couriers, who made pick-ups or deliveries for or on

11

behalf of IntelliQuick Deliveries, Inc. as a Freight Driver, Route Driver, or On-Demand

12

Driver within the State of Arizona and who were or are classified or paid as independent

13

contractors or not classified or paid as employees at any time on or after April 9, 2009.”2

14

Plaintiffs non-FLSA claims allege violations of Arizona’s Wage Act (Count II),

15

restitution and unjust enrichment (Count III), violations of the Family and Medical Leave

16

Act (“FMLA”) (Count V), and seek a declaratory judgment that several of defendants’

17

contracts are unenforceable (Count IV). Plaintiffs now seek class certification on these

18

non-FLSA claims as well as certification of the following four subclasses of drivers:

19
20
21
22
23
24

Subclass A - Freight Drivers: All Drivers who use vehicles or vans that
are owned or leased by IntelliQuick or [Majik Leasing, LLC] to make
deliveries and pick-ups for or on behalf of IntelliQuick or its customers.
Subclass B - Route Drivers: All Drivers who generally use their own
vehicles to make deliveries and pick-ups on an assigned route for or on
behalf of IntelliQuick or its customers.
Subclass C - On-Demand Drivers: All Drivers who generally use their
own vehicles to make specific deliveries and pick-ups for or on behalf of
IntelliQuick or its customers and who have not been assigned a regular
route.

25
26
27
28

2

Doc. 59 at 6.

-2-

1
2

Subclass D - FMLA Covered Drivers: All Drivers who have worked in
excess of 1,250 hours during any 12-month period of time and are or were
eligible for FMLA leave.3

3

III. DISCUSSION

4
5

A.

FLSA decertification
Section 207(a) of Title 29 requires employers to pay their nonexempt employees

6

who work more than forty hours a week overtime compensation, and Section 206

7

requires employers to pay their employees a minimum wage. Section 216(b) states

8

that actions to recover unpaid overtime or minimum wages “may be maintained against

9

any employer . . . by any one or more employees for and in behalf of himself or

10

themselves and other employees similarly situated.” Section 216(b) requires that

11

employees file consent in writing in order to become plaintiffs. A class may include any

12

employee who is “similarly situated” to the named plaintiff employees. Although the

13

Ninth Circuit has not yet sanctioned a procedure for district courts to use when

14

determining whether workers are similarly situated, a majority of courts employ an ad

15

hoc two-step approach. 4

16

At the first step, plaintiffs must make a “modest factual showing” that they and

17

the potential opt-in plaintiffs were victims of a common policy or plan that violated the

18

law. If they can do so, as plaintiffs have here, the court will send notice to the potential

19

opt-in plaintiffs who may be similarly situated to the named plaintiffs.5 This first step is

20

referred to as “conditional certification” because “the decision may be reexamined once

21

the case is ready for trial.”6

22

The second stage occurs after discovery and is triggered by an employer’s

23

motion for decertification. “At the second stage, the district court will, on a fuller record,

24
25

3

Doc. 303 at 6.

26

4

27

5

28

6

See, e.g., Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1260 (11th Cir. 2008).
Myers v. Hertz Corp., 624 F.3d 537, 555 (2d Cir. 2010).
Morgan, 551 F.3d at 1261.

-3-

1

determine whether a so-called ‘collective action’ may go forward by determining

2

whether the plaintiffs who have opted in are in fact ‘similarly situated’ to the named

3

plaintiffs.”7 “This second stage is less lenient, and the plaintiff bears a heavier burden.”8

4

To determine whether plaintiffs are similarly situated at the second stage, courts review

5

several factors, including (1) the “disparate factual and employment settings of the

6

individual plaintiffs; (2) the various defenses available to defendant which appear to be

7

individual to each plaintiff;” and (3) “fairness and procedural considerations.” 9 The

8

ultimate decision whether to decertify the class “rests largely within the district court’s

9

discretion.”10

10

1.

The individual plaintiffs’ factual and employment settings are similar

11

Plaintiffs claim that the opt-in class members are similarly situated to the named

12

plaintiffs because they are victims of a common policy or plan that mischaracterizes

13

them as independent contractors when in fact they are employees. The parties agree

14

that the test for determining whether the drivers are employees is the “economic

15

realities” test, which utilizes a non-exhaustive list of six factors set forth by the Ninth

16

Circuit in Real v. Driscoll Strawberry Associates, Inc. 11 The ultimate focus of the

17

economic realities test is whether “as a matter of economic reality, the individuals ‘are

18

dependent upon the business to which they render service.’”12 The court’s task at this

19
20

7

Myers, 624 F.3d at 555.

21

8

22

9

23

Morgan, 551 F.3d at 1261.

Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1103 (10th Cir. 2001). See also
Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 796 (8th Cir. 2014).
10

24

Morgan, 551 F.3d at 1261 (internal quotation omitted).

11

25
26
27
28

603 F.2d 748, 754 (9th Cir. 1979).

12

Donovan v. Sureway Cleaners, 656 F.2d 1368, 1370 (9th Cir. 1981) (quoting Bartels v.
Birmingham, 332 U.S. 126 (1947)). See also Doty v. Elias, 733 F.2d 720, 722-23 (10th Cir.
1984) (“The focal point in deciding whether an individual is an employee is whether the
individual is economically dependent on the business to which he renders service, or is, as a
matter of economic fact, in business for himself.”) (citations omitted).

-4-

1

stage of the litigation is not to consider the merits whether the economic realities test is

2

satisfied, but rather to decide whether the factual and employment settings of the opt-in

3

plaintiffs and the named plaintiffs are similar. The factual and employment “settings” at

4

issue in this case are those that relate to the econom ic-realities-test factors. These six

5

factors are:

6

(1) “the degree of the alleged employer’s right to control the manner in
which the work is to be performed;”

7
8

(2) “the alleged employee’s opportunity for profit or loss depending upon
his managerial skill;”

9

(3) “the alleged employee’s investment in equipment or materials required
for his task, or his employment of helpers;”

10
(4) “whether the service rendered requires a special skill;”
11
(5) “the degree of permanence of the working relationship;” and
12
13

(6) “whether the service rendered is an integral part of the alleged
employer’s business.”13

14

According to defendants, numerous factual differences in the drivers’ work

15

settings render them disparately situated for Section 216(b) purposes. Although

16

defendants do not separate them out as such, these alleged differences appear to

17

relate to the first three economic-realities-test factors. Thus, defendants effectively

18

concede that the individual plaintiffs are similarly situated with regard to factors four,

19

five, and six.

20
21
22
23
24
25
26
27
28

13

Real, 603 F.2d at 754.

-5-

1

a.

Plaintiffs are similarly situated with regard to the degree of
control that IntelliQuick exercises over their work performance

2
All IntelliQuick drivers are subject to the same work contract that, according to
3
4
5
6

defendants, “sets forth the parameters of the working relationship.”14 More importantly,
once hired, the drivers are trained by defendants15 and subject to a series of “uniform
standard operating procedures” (“SOPs”)16 that tell them what they are required to do,17

7
8
9
14

10

Doc. 321 at 19 ¶ 2.

15

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

See Doc. 32-3 at 4 ¶ 10; 32-4 at 6 ¶ 16; 305-1 at 168 (stating that all drivers were
expected to attend a “drivers’ meeting”); Doc. 305-3 at 2-6, 38-39; Doc. 305-5 at 24-26; 50-52,
54-58. Although defendants dispute that they provide training to their drivers, the basis for this
dispute is that they contend they provide their drivers “orientation” and not “training.” Doc. 321
at 9 ¶ 41. This distinction is without a difference. Further, at oral argument defense counsel
argued that even if IntelliQuick has the hypothetical right to train the drivers, it does not actually
train all of them, and the training it does provide does not extend “beyond simple instruction on
the operation of communication devices and the physical location of where deliveries would be
made.” This argument’s flawed premise is that only formal training provided at the beginning of
a driver’s tenure is “training.” The record shows that, in addition to initial orientation training,
IntelliQuick trains its drivers on an ongoing basis. See, e.g., Doc. 307 at 105 rows 269 (“[T]his
is a training issue the stop was not closed out by the driver”), 277 (“[H]e was having issues
scanning to his route but did not let anyone know of this. Please retrain agent again on Salibas
procedures.”), and 278 (“[D]river did not follow delivery procedures, please print out attached
and educate driver”); Doc. 307 at 110 rows 263, 269, 270, 271 (“All drivers have been advised
not to leave pkg with autho”), 272 (“[R]etrained driver on the absolute necessity for verifying
ab#s and pc count always”), and 275 (“I will let him know this could of been a chargeback”);
Doc. 307 at 130 at rows 383 (“[H]e should of been trained on this I will speak to both him and
utility”), 390 (“[T]his was his 1st day training and reggie instructed him improperly he is now
aware of sop”), and 395 (“[D]river was charged for the special and has been educated”); and
Doc. 307 at 141 row 442 (“[T]raining alert sent out to all drivers and TA.”).
16

Doc. 305 at 7-9; Doc. 305-3 at 8; Doc. 305-5 at 2-10, 28-29, 46-48, 60-61, 139-40,
147-48; Doc. 305-6 at 78, 80, 95-96, 98-108, 110-26, 128, 130-31, 133, 135, 137, 139, 141-42,
144, 146, 158-59. Defendants object to plaintiffs’ reliance on Exhibit 40 to Jeffrey Lieber’s
deposition, claiming that plaintiffs did not attach a copy of that exhibit to their statement of facts.
Doc. 321 at 7 ¶ 39. Defendants are mistaken. Doc. 305-3 at 38-39. It does not appear that
plaintiffs attached a copy of deposition Exhibit 235 to their statement of facts, however. The
court is unable to consider that evidence.
17

See Doc. 305-1 at 201-03 (stating that the purpose of the SOPs was to inform drivers
of “what they needed to do” with the packages); Doc. 305-5 at 24-25.

-6-

1

within which “time frame” they must do it,18 what they are required to wear,19 and which

2

equipment they must use.20 Further, IntelliQuick monitors its drivers’ work using its

3

“CXT system,” which allows IntelliQuick to know where its drivers are at all times and to

4

communicate with them.21

5

If drivers commit what IntelliQuick refers to as “service failures,” such as late or

6

missed deliveries or violations of IntelliQuick policy, IntelliQuick may sanction them with

7

“chargebacks” (i.e., financial penalties).22 IntelliQuick maintains a “care ticket system”

8

to, among other things, document customer complaints and service failures.23 This

9

care ticket system shows that IntelliQuick closely monitors the details of its drivers’

10

activities24 and routinely metes out chargebacks or other discipline when a driver’s

11

performance falls below expectations.25 The evidence does not show some drivers are

12

subject to these policies and procedures and others are not; to the contrary , it shows

13

that all of IntelliQuick’s drivers are similarly situated with regard to the level of control

14

that IntelliQuick exercises over their work.

15

Despite this evidence, defendants assert that IntelliQuick exercises a disparate

16

degree of control over its individual drivers’ work performance for numerous reasons.

17

They first argue that “individual supervisors could variously affect” the degree of control

18
18

19
20

Doc. 305-1 at 205.

19

Doc. 305-5 at 135.

21

20

22

21

23

22

24

23

25

24

26
27
28

See, e.g., Doc. 305-1 at 23.
Doc. 305-1 at 221.
Doc. 305-1 at 166, 251; Doc. 305-2 at 198; Doc. 305-6 at 158.
Doc. 305-2 at 94, 106-08.
Doc. 307 at 16, 26, 35, 45, 55, 65, 75, 84, 94, 99, 105, 116, 125, 136, 147, 158.

25

Doc. 307 at 20, 30, 39, 49, 59, 69, 79, 88, 99, 110, 121, 130, 141, 152, 163. Column
BN of these spreadsheets indicates the resolution of the care ticket. Doc. 305-2 at 106. These
spreadsheets refute despite defendants’ contention that IntelliQuick only occasionally issued
chargebacks. Doc. 326 at 8.

-7-

1

that IntelliQuick exercises over its drivers.26 Defendants rely on the deposition

2

testimony of former IntelliQuick representative Jason Ortiz (“Ortiz”), who stated that he

3

had the words “direction and control” “drilled into [his] head” in training. Ortiz testified

4

that after that training “the whole direction and control thing” continued in his

5

interactions with IntelliQuick drivers, which meant, “you do not give them direction,

6

you’re not giving control.”27 Defendants contrast this with Ortiz’s testimony that he

7

witnessed other IntelliQuick “managers, dispatchers, and supervisors” exercising

8

“direction and control over the drivers.”28 This testimony is far too vague to be

9

informative.

10

Defendants also point to Ortiz’s testimony that he had discretionary power to

11

reassign drivers’ stops and to issue chargebacks,29 but defendants offer no evidence

12

that different supervisors exercised these two powers differently. The fact that

13

IntelliQuick’s supervisors have discretion to reassign drivers’ stops or issue

14

chargebacks, without more, does not establish disparate work conditions. If the

15

opposite were true, no two workers could be similarly situated if they are overseen by

16

supervisors who possess discretionary power, as almost all supervisors do.

17

Second, defendants argue that the court should discount the weight of

18

IntelliQuick’s standardized work policies because deposition testimony from various

19

drivers shows that these policies “were either not actually applied at all or, at a

20

minimum, not applied with any consistency.”30 The testimony that defendants offer

21

does not show disparate treatment, however. Among other things, defendants highlight

22

numerous aspects of opt-in plaintiff Eliseo Castillo, Jr.’s (“Castillo”) deposition

23
26

24
25

Doc. 310 at 7.

27

Doc. 310-1 at 6.

26

28

27

29

28

30

Doc. 310-1 at 7 lines 10-19.
Doc. 310-1 at 3-4.
Doc. 310 at 12.

-8-

1

testimony, including that he only spoke with IntelliQuick dispatchers, that he selected

2

his own vehicle, that he was able to go “somewhere else” if he let dispatch know where

3

he was going, that he was able to choose which of two non-urgent packages to deliver

4

first, and that he responded “I don’t recall anything anymore” when asked if IntelliQuick

5

gave him any instructions other than what he should wear.31 Defendants also point to

6

opt-in plaintiff Eddie Miller’s (“Miller”) testimony that he received only minor instructions

7

from IntelliQuick on a typical day, and plaintiff Melonie Priestly’s (“Priestly”) testimony

8

that she remembered that IntelliQuick instructed her to wear her uniform, keep her

9

uniform clean, get signatures, get into the warehouse early, and get her route done and

10

back on time, but did not remember all of the other instructions IntelliQuick gave her.

11

The only evidence with which defendants contrast any of this testimony, however, is

12

plaintiff David Collinge’s (“Collinge”) declaration that IntelliQuick “controlled almost all

13

aspects of his daily work.” Collinge’s vague declaration is not inherently inconsistent

14

with the testimony upon which defendants rely, and therefore is insufficient to show

15

disparate conditions.

16

Defendants also argue that IntelliQuick’s vehicle inspection policy was applied

17

inconsistently. Pursuant to that policy, all drivers are expected to regularly maintain and

18

self-inspect their vehicles.32 Defendants contrast opt-in plaintiff Susan Little’s (“Little”)

19

testimony that IntelliQuick inspected her vehicle before she started her deliveries with

20

the testimony from other drivers that IntelliQuick never inspected their vehicles.33 But

21

Little’s testimony does not show that IntelliQuick inspected her vehicle at all, let alone in

22
23
24

31

25

32

26
27
28

Doc. 310 at 12-3.
Doc. 305-5 at 142.

33

Doc. 310 at 18. See also 310-2 at 5 (Priestly testified that IntelliQuick never inspected
her vehicle); id. at 59 (Campagna testified that IntelliQuick never inspected his vehicle); Doc.
310-1 at 40 (Collinge testified that he did not recall anyone at IntelliQuick ever inspecting his
vehicle).

-9-

1

the manner described in IntelliQuick’s policy. Little merely testified that defendant Bill

2

Cocchia told her that she needed to clean out the back of her truck.34

3

Third, defendants contrast Castillo’s testimony that he was not able to reject

4

assignments with opt-in plaintiff Yvonne Trevino’s (“Trevino”) testimony that she had

5

declined work between 2 and 5 times and Miller’s testimony that he could reject work

6

and come and go as he pleased. The significance of Castillo’s testimony is negated by

7

his later admission that he did not know what would have happened if he had tried to

8

reject an assignment.35 Further, Miller’s testimony actually weighs in favor of similarity

9

because he stated that the reason he believed he could reject work was because “[t]he

10

contract that we signed said we were independent contractors.” 36 This is the same

11

contract that all drivers signed.

12

Fourth, defendants argue that the drivers are not similarly situated with regard to

13

their ability to modify the order of their routed deliveries. Defendants contrast Little’s

14

testimony37 with that of plaintiffs Heather Arras (“Arras”) and Brian Black (“Black”). On

15

one hand, Little testified that she was trained to follow the order of deliveries listed on

16

her manifest and if she needed to make a “slight change” she had to ask for permission

17

from management. “[I]f it says an order is due at this time,” Little stated, “you have to

18

get it there at that time.”38 On the other hand, Arras testified that it was possible to

19

reorder her non-time-sensitive deliveries, but she had never done so.39 Further, Black

20
21

34

22

35

23

Doc. 310-2 at 26.

Doc. 310-1 at 13 (Q. “Do you know what would happen if you told the person on the
radio that you didn’t have time? A. No.”).
36

24
25
26

Doc. 310-1 at 66.

37

Defendants also rely on Collinge’s testimony that he did not believe he had the ability
to change the order of his deliveries. Doc. 310-1 at 50. Because defendants do not provide
any foundation for Collinge’s belief, the court accords this testimony little weight.

27

38

28

39

Doc. 310-2 at 25.
Doc. 310-2 at 33-34.

-10-

1

testified that he would manually put his routed deliveries “in order by address in the

2

area that [he] thought would be the best way.”40 At first blush this testimony appears to

3

establish that Little was prohibited from changing the order of her routes whereas Arras

4

and Black were not. Two considerations militate against such a finding, however. First,

5

defendants do not appear to be comparing apples to apples. Little was testifying about

6

reordering her time-sensitive deliveries, whereas Arras was not.41 It is unclear about

7

which type Black was testifying. Second, defendants offer no explanation as to why

8

this disparity might exist. Based on these uncertainties, the court is unable to m ake a

9

determination regarding whether the drivers are similarly situated in this regard.

10

Fifth, defendants argue that IntelliQuick required only some drivers to purchase a

11

specific vehicle.42 On one hand, defendants point to Campagna’s testimony that

12

defendant Jeff Lieber told him he had to “get a truck with a cab on it” to replace the car

13

he was driving at the time,43 and Little’s testimony that IntelliQuick told her that she

14

could perform a specific route because she had “a big enough vehicle.”44 On the other

15

hand, defendants note that Priestly testified that IntelliQuick did not instruct her on

16

which vehicle she could or could not drive while completing a route.45 Defendants’

17

argument is not supported by the testimony upon which it relies. Neither Campagna

18

nor Little testified that IntelliQuick actually required them to purchase a vehicle or alter

19
20
21

40

Doc. 310-2 at 45.

22
41

23
24
25

See 310-2 at 33 (Arras testified that “time-sensitive things, like pharmaceuticals, had
to be delivered first. Everything else kind of just falls into place, so you just continue about your
route.”).
42

Doc. 310 at 18.

26

43

27

44

28

45

Doc. 310-2 at 58-59.
Doc. 310-2 at 19.
Doc. 310-2 at 6.

-11-

1

their conduct in any way. This testimony does not show that IntelliQuick exercised

2

varying degrees of control over its drivers’ vehicle choices.

3

Sixth, defendants argue that the drivers are not similarly situated with regard to

4

their “potential for negotiating their rate of pay.” According to defendants, deposition

5

testimony establishes three distinct groups of drivers: (1) those who were “unaware that

6

they had the ability to negotiate their rate of pay;” (2) those who “tried to negotiate their

7

rate of pay but could not do so;” and (3) those “who did in fact negotiate their rate of

8

pay.”46 They assert that Priestly,47 Collinge,48 and plaintiff Robert Campagna

9

(“Campagna”)49 belong in the first group because they testified that they were not able

10

to negotiate their pay rate and instead were told to take it or leave it; those exact same

11

plaintiffs—Priestly, Collinge, and Campagna—also belong in the third group because

12

they were able to negotiate their pay rates;50 and Black belongs in the second group

13

because he requested a raise and “was allegedly rebuffed.”51

14
15

Defendants’ argument lacks merit. The fact that the exact same three drivers
comprise two of defendants’ three groups casts considerable doubt on defendants’

16
17
46

18

Doc. 310 at 20.

47

19
20
21
22
23
24
25
26
27
28

Doc. 310-2 at 11-12 (“I didn’t determine [my pay rate]. I was told it was this amount of
money, and I could take it or not.”).
48

Doc. 310-1 at 48 (Collinge testified that after his pay rate changed in January 2012 he
neither requested nor received a different rate, and he did not recall being asked to or informed
that he could request a higher rate).
49

Doc. 310-2 at 64 (Campagna testified that when he was first offered his route he was
told that it would start off paying $150 per day. When asked if he negotiated this amount with
IntelliQuick, Campagna replied, “No. That’s what [IntelliQuick] told me it paid. And so, ‘Okay.’
No discussion, no nothing. Just ‘okay.’”).
50

Doc. 310 at 20-21; Doc. 326 at 7.

51

Doc. 310-2 at 43 (Black testified that he asked for a pay raise for his “p.m. route due to
increase of covered area,” but was told by the IntelliQuick employee he asked that she “doesn’t
make those decisions” and “would have to speak with somebody upstairs with IntelliQuick.”
That was the last Black heard about this request.).

-12-

1

claim of disparate treatment. Defendants do not contend that only some drivers were

2

eligible for pay raises and others were not. Based on the evidence before the court, all

3

drivers appear to be united in their “potential for negotiating their rate of pay,” even if

4

not all drivers know they can request a pay raise and IntelliQuick does not grant all such

5

requests.

6

b.

Plaintiffs are similarly situated with regard to their opportunity
for profit or loss depending upon their managerial skills

7
The second economic realities test factor measures “the alleged employee’s
8

opportunity for profit or loss depending upon his managerial skill.”52 In Real, the Ninth

9
Circuit found that this factor weighed in favor of finding that the strawberry grower
10
plaintiffs were employees because their opportunity for profit or loss appeared “to
11
depend more upon the managerial skills of [their alleged employers] in developing
12
fruitful varieties of strawberries, in analyzing soil and pest conditions, and in marketing
13
than it does upon the [growers’] own judgment and industry in weeding, dusting,
14

pruning and picking.”53

15
Defendants argue that the drivers are not similarly situated with regard to the
16
degree with which their managerial skills affect their opportunity for profit or loss. They
17
point out that Collinge was able to increase his profits by requesting more on-demand
18
19
20

work beyond his regular routed delivery work;54 Black was able to “order his deliveries to
achieve maximum efficiency”;55 and Castillo was able to reduce his operating costs by
investing in a vehicle with good gas mileage.56 Defendants’ argument fails because

21
22
23

52

24

53

25

54

26

Real, 603 F.2d at 754.
Id. at 755.

Doc. 310 at 13-14. Collinge testified that on “very few” occasions he asked
dispatchers for on-demand work after he completed his routed deliveries. Doc. 310-1 at 44-45.

27

55

28

56

Doc. 310 at 16.
Doc. 310 at 18.

-13-

1

they do not establish that IntelliQuick deprived other drivers of these same

2

opportunities.

3

c.

4

Plaintiffs are similarly situated with regard to their employment
of helpers but not completely similarly situated with regard to
their investment in equipment or materials required for their
task.

5
The third economic realities test factor measures “the alleged employee’s
6
investment in equipment or materials required for his task, or his employment of
7
8

helpers.”57 In Real, for example, the Ninth Circuit held that the strawberry growers’
“investment in light equipment hoes, shovels and picking carts [was] minimal in

9
comparison with the total investment in land, heavy machinery and supplies necessary
10

for growing the strawberries.”58 In Spellman v. Am. Eagle Express, Inc., the District

11
Court for the Eastern District of Pennsylvania held that the proposed FLSA class
12
members were not similarly situated with regard to the third economic realities factor.
13
Although almost all class members “had to invest in a vehicle, cell phone, cargo
14
scanner, and accident insurance,” some used cars they already owned while others
15
purchased cargo vans; many purchased hand trucks and locks while others did not; and
16

only some invested in home offices while others did not. 59

17
Defendants argue that the drivers are not similarly situated with regard to the
18
degree with which they invest in their own equipment or materials. Defendants cite
19
Collinge’s testimony that he mostly used his own vehicle, but sometimes used an
20

IntelliQuick vehicle,60 whereas Little testified that she used her own vehicle except for

21
one incident where she used an IntelliQuick vehicle and Priestly testified that she used
22
23
24
25

57

Real, 603 F.2d at 754.

26

58

27

59

28

60

Id. at 755.
No. 10-1764, 2013 U.S. Dist. LEXIS 35032, *16-17 (E.D. Pa. Mar. 14, 2013).
Doc. 310-1 at 40.

-14-

1

her own vehicle. This testimony does not support defendants’ argument; each plaintiff

2

is similarly situated in that none was required to purchase a vehicle for the job.

3

Defendants also point out that various plaintiffs purchased their own cargo

4

scanners and other communication devices, whereas others did not. 61 Plaintiffs do not

5

dispute that some drivers purchase their own communication devices, while others do

6

not.62 Further, Arras was required to buy a dolly and a camper shell for her truck,63

7

whereas Little did not have to buy a dolly or other equipment.64 This evidence

8

establishes that, at least with respect to these items, the plaintiffs invested in equipment

9

required for the job to varying degrees, which weighs in favor of decertification.

10

Defendants next assert that the drivers are not similarly situated because while

11

“many individuals who have provided testimony in this matter were aware of their ability

12

to hire helpers,”65 Castillo was not.66 Castillo testified that IntelliQuick did not tell him

13

whether he could or could not hire employees.67 Whether a worker is aware of his or

14

her ability to employ helpers is not the relevant inquiry; the extent to which the workers

15
16
17
18

61

19

62

20

63

21
22
23
24
25
26

Doc. 310 at 19.
Doc. 318 at 12.
Doc. 310-2 at 36.

64

Doc. 310-2 at 27.

65

Doc. 310-2 at 46 (Black testified in response to an apparent question about his ability
to hire helpers that, “I would, if I would hire them under my name and subcontract them. But
then I would have to get into more—more permits, more fees, more licenses.”); Doc. 310-2 at
21-22 (Little testified that she never hired helpers, but was told by IntelliQuick that if she “were
ever to hire anybody, they had to go through the whole process, like background and CMS and
all that.”); Doc. 310-1 at 68 (Miller testified that “[i]t was known that you could [hire helpers], but
you had to pay for them.”).

27

66

28

67

Doc. 310 at 22.
Doc. 310-1 at 24.

-15-

1

actually employ helpers is what matters.68 Defendants’ only evidence that some drivers

2

employ helpers comes from Miller’s deposition testimony that he “put together a crew”

3

of drivers for a large, two-month job.69 Defendants argue that this establishes that Miller

4

employed his own helpers, but Miller’s testimony later in his deposition proves

5

otherwise. When Miller was specifically asked whether drivers could employ helpers he

6

testified that it was possible, but he did not know “that anybody ever did it.”70

7

In sum, the drivers are similarly situated with regard to at least five of the six

8

economic realities test factors. This is sufficient to defeat defendants’ decertification

9

motion. Further, it bears noting that despite IntelliQuick’s contention that it exerts

10

disparate control over its drivers, IntelliQuick uniformly treats all of its drivers as

11

independent contractors, and this decision does not turn on a sing le individualized

12

factor. “There is nothing unfair about litigating a single corporate decision in a single

13

collective action, especially where there is robust evidence that [the workers] perform

14

uniform, cookie-cutter tasks mandated by a one-size-fits-all corporate manual.”71

15
16
17
18
68

19
20
21
22
23
24
25

See Real, 603 F.2d at 754 (citing Mednick v. Albert Enterprises, Inc., 508 F.2d 297,
301 (5th Cir. 1975)); Donovan, 656 F.2d at 1372; Martin v. Selker Bros., 949 F.2d 1286, 1294
(3d Cir. 1991); Mednick, 508 F.2d at 300 (“[T]he court below and the parties placed too great
reliance on the bare legal powers which each of the parties had under their informal working
agreement. The result was to permit potential powers of little or no effective significance in the
actual operation of the working arrangement to overweigh the actual operation, the ‘economic
reality’ of the situation.”); Moba v. Total Transp. Servs. Inc., No. C13-138 MJP, 2014 WL
1671587, at *1264-65 (W.D. Wash. Apr. 25, 2014); Perez v. Oak Grove Cinemas, Inc., No.
03:13-CV-00728-HZ, 2014 WL 7228983, at *5 (D. Or. Dec. 17, 2014). But see Solis v. Velocity
Exp., Inc., No. CV 09-864-MO, 2010 WL 3259917, at *7 (D. Or. Aug. 12, 2010) (“Because the
undisputed facts show that the delivery drivers were allowed to employ substitutes and other
helpers . . . [this factor weighs] in favor of [the company].”) (emphasis added).

26

69

27

70

28

71

Doc. 310-1 at 55.
Doc. 321-1 at 17.
Morgan, 551 F.3d at 1264.

-16-

1

2.

Individual defenses

2

“‘[T]he similarities necessary to maintain a collective action under § 216(b) must

3

extend beyond the mere facts of job duties and pay provisions’ and encompass the

4

defenses to some extent.”72 Thus, the second factor that courts consider at the

5

decertification stage is whether the various defenses available to the alleged employer

6

appear to be individual to each plaintiff. Defendants argue that even if the drivers are

7

found to be employees, their entitlement to overtime pay would be subject to

8

defendants’ individualized Motor Carrier Act Exemption (“MCAE”) defenses.73 That

9

defense is based on Section 13(b)(1) of the FLSA, which exempts from the FLSA’s

10

overtime pay requirements “any employee with respect to whom the Secretary of

11

Transportation has power to establish qualifications and maximum hours of service

12

pursuant to the provisions of section 204 of the Motor Carrier Act of 1935” (“MCA”).74 In

13

order for the MCAE to apply the employer must prove that (1) it is either a “motor

14

carrier” or a “motor private carrier” subject to the Secretary of Transportation’s

15

jurisdiction;75 and (2) the employee engaged “in activities of a character directly

16

affecting the safety of operation of motor vehicles in the transportation on the public

17

highways of passengers or property in interstate or foreign commerce.”76 Accordingly,

18
19
20
21

72

Id. at 1262 (quoting Anderson, 488 F.3d at 953).

22
73

23

Doc. 310 at 23.

74

24

29 C.F.R. §§ 782.1(a), 782.2(a)(1).

75

25
26
27
28

49 U.S.C. § 31502(b). A “motor carrier” is “a person providing motor vehicle
transportation for compensation.” 49 U.S.C. § 13102(14). A “motor private carrier” is “generally
a person who transports his own property ‘for sale, lease, rent, or bailment or to further a
commercial enterprise.’” Allen v. Coil Tubing Servs., L.L.C., 755 F.3d 279, 292 (5th Cir. 2014)
(Dennis, J., dissenting) (quoting 49 U.S.C. § 13102(15)).
76

29 C.F.R. § 782.2(a)(2).

-17-

1

the MCAE “depends both on the class to which his employer belongs and on the class

2

of work involved in the employee’s job.”77

3

To satisfy the first MCAE element, the carrier/employer must be engaged in

4

more than de minimus interstate commerce.78 The caselaw suggests that “a company’s

5

interstate business is de minimus if it constitutes less than one percent of the overall

6

trips taken by the company.”79 Interstate business has been defined to include not only

7

the actual transport of goods across state lines, but also “the intrastate transport of

8

goods in the flow of interstate commerce.”80 To satisfy the second MCAE element, the

9

employer must prove that the employee’s bona fide job duties require him “to be called

10

upon in the ordinary course of his work to perform, either regularly or from time to time,

11

safety-affecting activities” on the public highways in interstate or foreign commerce.81

12

The employer can satisfy this burden by showing either that the driver drove in

13

interstate commerce or “could ‘reasonably have been expected to make one of the

14

carrier’s interstate runs.’”82

15

Defendants argue that the first element of the MCAE defense requires an

16

individualized showing that “the particular individual at issue was involved in the

17

interstate movement of goods.”83 They assert that the Ninth Circuit in Reich v.

18
19
20
21

77

29 C.F.R. § 782.2(a).

78

Abel v. S. Shuttle Servs., Inc., 631 F.3d 1210, 1213 (11th Cir. 2011).

22
79

23

Walters v. Am. Coach Lines Of Miami, Inc., 575 F.3d 1221, 1228 (11th Cir. 2009).

80

24
25
26
27
28

Allen, 755 F.3d at 283 (quoting Songer v. Dillon Res., Inc., 618 F.3d 467, 472 (5th
Cir.2010)).
81

Id.

82

Reich v. Am. Driver Serv., Inc., 33 F.3d 1153, 1157 (9th Cir. 1994) (quoting 46 Fed.
Reg. 37,902, 37,903 (1981)).
83

Doc. 310 at 23.

-18-

1

American Drier Service,84 suggested that, in order to establish that the MCAE applies to

2

a driver who only engages in intermittent interstate travel, defendants must present

3

“concrete evidence such as an actual trip in interstate commerce.”85 Defendants are

4

confusing the two MCAE elements and misreading Reich. The first MCAE element

5

depends on the class to which IntelliQuick belongs—not its drivers.86

6

Even if the court construes defendants’ argument as directed toward the second

7

MCAE element, it still fails. Under that element, a defendant need not establish that

8

every driver was engaged in the interstate transportation of goods, as defendants claim.

9

Rather, an employer can satisfy the second MCAE element merely by showing that

10

each driver “could reasonably have been expected to make one of the carrier’s

11

interstate runs.”87 This does not necessarily require an individualized showing. For

12

example, in Songer, the Fifth Circuit held that the defendants had satisfied the second

13

MCAE element with regard to all drivers based on testimony of several drivers that they

14

understood that they might have to make out-of-state trips when they took the job and

15

evidence that dispatchers assigned such routes indiscriminately. This evidence

16

established that “any driver could have been assigned to an interstate trip.” 88

17
18
19
20
21
22
23
24
25
26

84

33 F.3d 1153, 1156 (9th Cir. 1994).

85

Doc. 310 at 24 (quoting Reich, 33 F.3d at 1156).

86

See Songer, 618 F.3d at 473 (explaining that the first requirement for jurisdiction under
the MCA is establishing that the plaintiffs “work for carriers engaged in interstate commerce.”)
(emphasis added); id. at 475 (interpreting the same DOT Notice at issue in Reich as meaning
that “if the Secretary claims jurisdiction over a driver who has not driven in interstate commerce,
evidence must be presented that the carrier has engaged in interstate commerce and that the
driver could reasonably have been expected to make one of the carrier’s interstate runs.”)
(emphasis added).

27

87

28

88

Id. at 475.
Id. (emphasis added).

-19-

1

The evidence here shows that none of the drivers own their routes and

2

IntelliQuick can assign any driver to any job indiscriminately.89 The question before the

3

court is not whether these drivers could reasonably have been expected to transport

4

goods in the flow of interstate commerce; it is merely whether they appear to be

5

similarly situated in this regard. Because defendants do not contend that any subset of

6

drivers is more or less likely than any other subset of drivers to be assigned interstate

7

trips, defendants’ argument fails.

8
9

Finally, in what is effectively an exception to the MCAE, employees covered by
§ 306 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act

10

(“SAFETEA–LU”) Technical Corrections Act (“TCA”) are entitled to FLSA overtime pay

11

regardless whether they would otherwise be excluded from such pay by the MCAE.90

12

Because the TCA only covers drivers of motor vehicles with a gross vehicle weight

13

rating (“GVWR”) of 10,000 pounds or less, 91 defendants argue that they will be required

14

to show that each driver drove a vehicle that weighs more than 10,000 pounds.

15

Although defendants note that Campagna testified at his deposition that he and Miller

16

drove a 25-foot box truck to perform a job92 and plaintiffs assert that Freight Drivers

17

“require larger vehicles for delivery,”93 neither party has submitted any evidence

18

regarding the GVWR of any vehicle driven by an IntelliQuick driver. The court is

19

therefore unable to make a determination regarding whether the drivers are similarly

20
21
22
23
24
25

89

See, e.g., Doc. 32-3 at 4 9, 8 ¶ 19; Doc. 32-4 at 5 ¶ 13; Doc. 32-5 at 4 ¶ 14; Doc. 3031 at 3-4 ¶ 11.
90

See Pub.L. No. 110–244, Title III, § 306, 122 Stat. 1572, 1620 (2008) (in relevant part
defining “covered employee” as an individual who (1) is employed by a motor carrier or motor
private carrier; (2) works as a driver; and (3) affects “the safety of operation of motor vehicles
weighing 10,000 pounds or less” in interstate commerce).

26

91

27

92

28

93

McCall v. Disabled Am. Veterans, 723 F.3d 962, 966 (8th Cir. 2013).
Doc. 310-2 at 60.
Doc. 305 at 18 ¶ 117.

-20-

1

situated with regard to the weight of the vehicles they drove. This uncertainty weighs in

2

favor of decertification. But the negative weight given to this uncertainty is lessened

3

somewhat by the fact that the weight of the drivers’ vehicles will not be relevant unless

4

two contingencies occur: (1) plaintiffs establish that they are employees and

5

(2) defendants establish that the MCAE applies. Further, even if both contingencies

6

occur and further discovery reveals that Freight Drivers are not similarly situated to

7

other drivers because their vehicles weigh more than 10,000 pounds, identifying those

8

drivers would likely be a simple, ministerial task.

9
10

3.

Fairness and procedural considerations

The final factor that courts consider at the decertification stage is whether

11

fairness and procedural considerations support collective action.94 This requires the

12

court to analyze the case with an eye toward the twin purposes of § 216(b):

13

“(1) reducing the burden on plaintiffs through the pooling of resources, and

14

(2) efficiently resolving common issues of law and fact that arise from the same illegal

15

conduct.”95 The court must also determine “whether it can coherently manage the class

16

in a manner that will not prejudice any party.”96

17

Defendants argue that the three main types of drivers at issue in this

18

case—Route Drivers, Freight Drivers, and On-Demand Drivers—renders representative

19

litigation unmanageable even if the plaintiffs are divided into subclasses. Defendants

20

assert that subclasses “would not be able to adequately account for those who

21

frequently switched between delivery roles nor would it account for the limited

22

specialized work that some drivers accepted,” nor would they “adequately address the

23

various combinations of the different classes of delivery work that some drivers

24
25
26
27
28

94

Thiessen, 267 F.3d at 1103.

95

Morgan, 551 F.3d at 1264.

96

Reed v. Cnty. of Orange, 266 F.R.D. 446, 462 (C.D. Cal. 2010) (internal quotation

omitted).

-21-

1

performed concurrently.”97 These assertions are premised on the notion that the three

2

types of drivers are not similarly situated with regard to the economic realities test

3

factors, a premise this court rejects for the reasons set forth above. Even if there are

4

some differences among the drivers’ work conditions, these differences do not appear

5

to be so great that they would render a collective action unmanageable. Allowing the

6

drivers to proceed as a class would satisfy the twin purposes of § 216(b) because it

7

would reduce the burden on the plaintiffs by allowing them to pool their resources and

8

would likely lead to the resolution of common issues of law and fact that arise from the

9

same allegedly illegal conduct. After carefully considering the record as a whole in light

10

of each of the above-identified factors, the court finds a collective action would

11

maximize efficiency and would be reasonably manageable.

12

B.

13

Rule 23 Class Action
Class certification is governed by Rule 23. A party seeking class certification

14

bears the burden of satisfying Rule 23(a)’s four requirements: (1) numerosity;

15

(2) commonality; (3) typicality; and (4) adequacy of representation. 98 Additionally, the

16

party must satisfy at least one of the requirements of Rule 23(b), which defines the

17

three different types of class actions. Although the decision to grant or deny class

18

certification is within the trial court’s discretion, 99 the court must undertake a “rigorous

19

analysis” to determine whether the party seeking class certification has done more than

20

plead compliance with Rule 23, but instead has affirmatively demonstrated his or her

21

compliance with the Rule.100

22
23
24
25

97

Doc. 310 at 11.

26

98

27

99

28

100

See Parsons v. Ryan, 754 F.3d 657, 674 (9th Cir. 2014).
Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 712 (9th Cir. 2010).
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011).

-22-

1

1.

Rule 23(a)

2

a.

Numerosity

3

Rule 23(a)(1) provides that a class action may be maintained only if “the class is

4

so numerous that joinder of all members is impracticable.” “‘[I]mpracticability’ does not

5

mean ‘impossibility,’ but only the difficulty or inconvenience of joining all members of

6

the class.”101 There is no bright-line rule regarding how many class members it takes to

7

render joinder impracticable; the specific facts of each case must be considered. 102

8

“When class size reaches substantial proportions, however, the impracticability

9

requirement is usually satisfied by the numbers alone.”103 It is generally accepted that

10

“the numerosity factor is satisfied if the class comprises 40 or more members and . . .

11

not satisfied when the class comprises 21 or fewer.”104

12

Plaintiffs assert that the proposed class consists of approximately 981 current

13

and former drivers.105 Plaintiffs point to the deposition testimony of former IntelliQuick

14

executive Timothy Cocchia, who stated that IntelliQuick likely employs and contracts

15

over 200 drivers,106 and a list of approximately 781 former drivers that they obtained

16
17
18
101

19
20
21
22
23
24
25
26

Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909, 913-14 (9th Cir. 1964)
(quoting Advertising Specialty Nat. Ass’n v. FTC, 238 F.2d 108, 119 (1st Cir. 1956)).
102

General Tel. Co. of Northwest, Inc. v. E.E.O.C., 446 U.S. 318, 330 (1980).

103

In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996).

104

See Californians for Disability Rights, Inc. v. California Dep’t of Transp., 249 F.R.D.
334, 346 (N.D. Cal. 2008) (citing Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473,
483 (2d Cir.1995); Ansari v. New York Univ., 179 F.R.D. 112, 114 (S.D.N.Y.1998)); Newberg on
Class Actions § 3:12 (5th ed. 2014) (“As a general guideline . . . a class that encompasses
fewer than 20 members will likely not be certified absent other indications of impracticability of
joinder, while a class of 40 or more members raises a presumption of impracticability of joinder
based on numbers alone.”).

27

105

28

106

Doc. 303 at 6; Doc. 305 at 6 ¶ 28.
Doc. 327-1 at 13 lines 6-16.

-23-

1

through discovery.107 Defendants do not dispute these numbers.108 Instead, they

2

counter that under Thiebes v. Wal-Mart Stores, Inc.,109 the court should base its

3

numerosity analysis on only the number of individuals who have opted-into the FLSA

4

collective action, instead of the proposed Rule 23 class as a whole. Joinder of the 89

5

collective action opt-ins in this case, they argue, “is not inherently impracticable.”110

6

Thiebes represents a minority view111 and is unpersuasive. Thiebes found that

7

numerosity was not satisfied because only 425 of the over 15,000 potential class

8

members opted into the FLSA collective action, which the court interpreted to mean that

9

certification of the proposed Rule 23 class “would bring in many more employees than

10

those who believe they were actually aggrieved by Wal-Mart’s alleged conduct.”112 A

11

court’s task under Rule 23(a)(1) is to determine whether joinder of “all members” of the

12

proposed class would be impracticable—not merely those members who believe they

13

were aggrieved. Further, it does not necessarily follow that employees who do not opt-

14

in do not believe they were aggrieved. Fear of retaliation may deter potential plaintiffs

15
16
17
18
19
20
21

107

22

108

23

109

24

110

25

111

26
27
28

Doc. 303-2 at 13-68.
Doc. 321 at 7 ¶¶ 27-28.
No. CIV. 98-802-KI, 2002 WL 479840, at *3 (D. Or. Jan. 9, 2002).
Doc. 319 at 7.

See Meyers v. Crouse Health Sys., Inc., 274 F.R.D. 404, 414 (N.D.N.Y. 2011)
(“Courts in the Second Circuit have rejected Thiebes and continue to assess numerosity based
on the number of proposed class members rather than the number of opt-ins.”) (citations
omitted).
112

2002 WL 479840, at *3.

-24-

1

from opting-into a FLSA collective action or from suing individually.113 This factor

2

weighs in favor of class certification, not against it.114

3

Plaintiffs have sufficiently demonstrated that the proposed class consists of close

4

to 1,000 members. The court finds that joinder of all members would be impracticable

5

and numerosity is satisfied.

6
7

b.

Commonality

Rule 23(a)(2) provides that a class action may be maintained only if “there are

8

questions of law or fact common to the class.” “[F]or purposes of Rule 23(a)(2) even a

9

single common question will do.”115 To assess whether the putative class members

10

share a common question, courts must identify the elements of the class members’

11

case-in-chief.116 In Wal-Mart, the Supreme Court held that the plaintiffs’ claims must

12

share a common contention such that a determination of that contention “will resolve an

13

issue that is central to the validity of each one of the claims in one stroke.”117 Despite

14

Rule 23(a)(2)’s ostensible focus on common “questions,” the Supreme Court declared

15
16
17
18
19
20
21
22
23
24
25

113

See Newberg on Class Actions § 3:12 (“Fear of retaliation—in, for example, civil rights
or employment cases—is an additional factor that occasionally argues for relaxing the
numerosity requirement generally (not just in terms of sheer numbers of class members), as
such a fear might deter potential plaintiffs from suing individually, making a representative
action especially pertinent.”); Ellen C. Kearns, et al., Employment Litigation: Emerging Trends in
Wage & Hour Litigation After Dukes v. Wal-Mart, 9 J.L. Econ. & Pol’y 347, 370-71 (2013)
(“[F]rankly, employees are terrified of opting in. The opt-in rates in FLSA actions are varied but
they range from below 10% (in the worst cases) to 15 to 20% (in the typical case) because
people are worried that if they step forward, they’ll be fired. On the other hand, when people
have a chance to be an absent class member (such is the case in an ‘opting-out’ class), opt-out
rates are far lower than their opt-in rates.”).
114

See Romero v. Producers Dairy Foods, Inc., 235 F.R.D. 474, 485 (E.D. Cal. 2006)
(“The numerosity requirement is more readily met where a class contains employees suing their
present employer. This is because class members may be unwilling to sue their employer
individually out of fear of retaliation.”); Newberg on Class Actions § 3:12.

26

115

27

116

28

117

Wal-Mart, 131 S.Ct. at 2556 (quotation marks and alteration omitted).
Parsons, 754 F.3d at 676.
Wal-Mart, 131 S.Ct. at 2556.

-25-

1

that “what matters to class certification . . . is not the raising of common

2

‘questions’—even in droves—but, rather the capacity of a classwide proceeding to

3

generate common answers apt to drive the resolution of the litigation.”118

4

Where a defendant’s allegedly injurious conduct differs from plaintiff to plaintiff, as it did

5

among the 3,400 stores involved in Wal-Mart, common answers are unlikely to be

6

found.119 But where “the same conduct or practice by the same defendant gives rise to

7

the same kind of claims from all class members,” there is a common question.120

8
9

(1)

Counts II and V

The primary common question that plaintiffs identify is whether defendants had a

10

uniform policy that mis-characterized the proposed class members as independent

11

contractors.121 The answer to this question will drive resolution of whether the proposed

12

class is protected by Arizona’s Wage Act (Count II)122 and the FMLA (Count V). 123 With

13

regard to plaintiffs’ Arizona Wage Act claim, the distinction between an employee and

14

an independent contractor is determined by the objective nature of the parties’

15

relationship, “upon an analysis of the totality of the facts and circumstances of each

16
17
18
118

19
20
21
22
23
24
25
26
27
28

Id. (emphasis in original) (quoting Richard A. Nagareda, Class Certification in the Age
of Aggregate Proof, 84 N.Y.U. L.Rev. 97, 132 (2009)).
119

Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 756 (7th Cir. 2014).

120

Id. See also 1 McLaughlin on Class Actions § 4:7 (11th ed. 2014) (“Commonality . . .
is satisfied where the district court makes a factually supported finding that key elements of
proof required for the claims of the proposed class may be productively adjudicated for all class
members at once, and the common answers yielded by that adjudication will drive the
resolution of the litigation.”).
121

Doc. 303 at 9.

122

Plaintiffs allege violations of A.R.S. §§ 23-351, 23-352, 23-355(A), and 23-363.
These provisions protect the rights of employees, not independent contractors.
123

Plaintiffs allege violations of 29 U.S.C. §§ 2612, and 2615. These provisions protect
the rights of eligible employees, not independent contractors.

-26-

1

case.”124 This analysis “usually rests on the extent of control the employer may exercise

2

over the details of the work.”125 With regard to plaintiffs’ FMLA claim, the Ninth Circuit

3

has not yet addressed which test courts should use when determining whether an

4

individual is an employee for FMLA purposes. Most courts utilize the economic realities

5

test discussed above.126 Despite utilizing different terminology, the Ninth Circuit has

6

observed that “there is no functional difference” between the economic realities test and

7

the common law agency test.127

8
9

Defendants argue that analyzing whether the putative class was mischaracterized will require the court to conduct a fact-specific inquiry into “the particular

10

interactions, instructions, and training (or lack thereof) experienced by each potential

11

class member.”128 Plaintiffs disagree, claiming that the evidence shows that defendants

12

have established uniform policies that treat all drivers as employees. At this stage of

13

the litigation, the court’s task is not to determine the merits of plaintiffs’ claims;129 rather,

14

it is to determine whether plaintiffs have sufficiently demonstrated that it will be possible

15

to determine whether the proposed class members were employees in one stroke.

16

Defendants argue that mini-trials will be required to determine whether each driver had

17

discretion over his or her vehicle and equipment, was able to hire other drivers to work

18
19

124

20

125

21
22
23

Anton v. Indus. Comm’n of Arizona, 688 P.2d 192, 194 (Ariz. Ct. App. 1984).

Munoz v. Indus. Comm’n of Arizona, 318 P.3d 439, 444 (Ariz. Ct. App. 2014) (quoting
Cent. Mgmt. Co. v. Indus. Comm’n, 781 P.2d 1374, 1376 (Ariz. Ct. App.1989)).
126

See Haybarger v. Lawrence Cnty. Adult Prob. & Parole, 667 F.3d 408, 417 (3d Cir.
2012) (compiling cases). But see Alexander v. Avera St. Luke’s Hosp., 768 F.3d 756, 764 (8th
Cir. 2014) (adopting the common law hybrid test).

24

127

25

128

26
27
28

Murray v. Principal Fin. Grp., Inc., 613 F.3d 943, 945 (9th Cir. 2010).
Doc. 319 at 8.

129

See Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 133 S. Ct. 1184, 1195
(2013) (“Merits questions may be considered to the extent—but only to the extent—that they
are relevant to determining whether the Rule 23 prerequisites for class certification are
satisfied.”).

-27-

1

under him or her, was able to negotiate his or her rate or pay, was able to reject work,

2

or was subject to discipline. 130 But the evidence that defendants point to (discussed at

3

length above) does not suggest that these factors vary from driver to driver on an ad

4

hoc basis, as if they were committed to the degree of managerial discretion seen in

5

Wal-Mart. To the contrary, the record reflects that the drivers’ working relationship with

6

defendants is primarily governed by uniform policies. Commonality is satisfied with

7

respect to Counts II and V.

8
9

(2)

Count IV

Count IV of the Complaint seeks a declaratory judgment that the “Membership

10

Application and Agreement” (“MAA”), the “Vehicle Lease Agreement” (“VLA”) (which

11

plaintiffs sometimes refer to as the “Vehicle Rental Agreement”), and the “Independent

12

Contractor Owner/Operator Agreement” (“ICOOA”) between defendants and the drivers

13

are unconscionable. 131 The Complaint asserts that “many” drivers are required to sign

14

the MAA, which is a contract between the driver and defendant Transportation

15

Authority, LLC;132 “some” drivers are required to use vehicles owned by defendant Majik

16

Leasing, LLC (“Majik”) and Majik “often” required those drivers to sign the VLA;133 and

17

IntelliQuick approached all drivers in April 2013 and forced each to sign the ICOOA.134

18

Plaintiffs assert that the drivers have no ability to negotiate the terms or conditions of

19
20
21
22
130

23

Doc. 319 at 9.

131

24
25

Doc. 187 at 40. Plaintiffs describe Count IV as seeking “declaratory and injunctive
relief that the independent contractor and other related agreements are unenforceable.”
Doc. 303 at 21.

26

132

27

133

28

134

Doc. 187 at 27 ¶¶ 173, 175.
Doc. 187 at 9 ¶ 31, 28 ¶ 186-88.
Doc. 187 at 35 ¶ 222.

-28-

1

these agreements.135 The only common question that plaintiffs identify with regard to

2

Count IV is whether these three contracts are unconscionable. 136

3

Arizona law recognizes two forms of unconscionability: procedural

4

unconscionability (“something wrong in the bargaining process”) and substantive

5

unconscionability (“the contract terms per se”).137 Procedural unconscionability is

6

primarily concerned with remedying “unfair surprises” caused by bargaining that did not

7

proceed as it should because of, among other things, fine print clauses and ignorance

8

of important facts.138 Although a contract may exhibit both forms of unconscionability,

9

“a claim of unconscionability can be established with a showing of substantive

10

unconscionability alone.”139

11

Defendants argue that plaintiffs’ unconscionability claims are overly fact-specific

12

because the procedural unconscionability analysis requires the court to determine the

13

individual circumstances under which each class member entered into the

14

agreements.140 To the extent that Count IV alleges procedural unconscionability, which

15

requires the court to determine the individual circumstances under which each class

16

member entered into the ICOOA, commonality is lacking. As defendants correctly

17

observe, this claim depends on individualized facts regarding the bargaining process,

18
19
20
21

135

Doc. 305 at 19 ¶¶ 132-33; Doc. 305-2 at 71, 75.

22
136

Doc. 303 at 9.

23

137

Nelson v. Rice, 12 P.3d 238, 242 (Ariz. Ct. App. 2000).

24
25
26
27
28

138

Steinberger v. McVey ex rel. Cnty. of Maricopa, 318 P.3d 419, 436 (Ariz. Ct. App.

2014).
139

Coup v. Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931, 947 (D. Ariz. 2011)
(quoting Maxwell v. Fid. Fin. Servs., Inc., 907 P.2d 51, 59 (Ariz. 1995)).
140

Doc. 319 at 12.

-29-

1

including, among other things, the individual driver’s age, education, intelligence, and

2

business acumen.141

3

Plaintiffs argue that such individualized inquiries are unnecessary because the

4

drivers were unable to negotiate the terms of the agreement.142 In essence, plaintiffs’

5

argument is that contracts of adhesion are per se procedurally unconscionable. This is

6

incorrect. Under Arizona law, contracts of adhesion are not necessarily

7

unenforceable.143 Instead, to determine whether such contracts are enforceable courts

8

“look to two factors: the reasonable expectations of the adhering party and whether the

9

contract is unconscionable.” 144 The former factor is substantively identical to the

10

procedural unconscionability test; each seek to prevent unfair surprise. In other words,

11

even if the ICOOA is a contract of adhesion, determining whether its terms exceed the

12

range of the drivers’ reasonable expectations relies on individualized inquiries

13

unsuitable for class-wide resolution.145

14

Plaintiffs’ substantive unconscionability claim, however, does not present any

15

individualized questions. Defendants do not contend, nor could they, that whether the

16

contracts are substantively unconscionable presents a question of law common to a

17
18
19
20
21
22
23
24

141

Doc. 319 at 12 (quoting Steinberger, 318 P.3d at 437).

142

Doc. 325 at 12.

143

Broemmer v. Abortion Servs. of Phoenix, Ltd., 840 P.2d 1013, 1016 (Ariz. 1992) (“Our
conclusion that the contract was one of adhesion is not, of itself, determinative of its
enforceability.”).
144

25
26
27
28

Id.

145

See id. at 1017 (“Plaintiff was under a great deal of emotional stress, had only a high
school education, was not experienced in commercial matters, and is still not sure ‘what
arbitration is.’ Given the circumstances under which the agreement was signed and the nature
of the terms included therein . . . [we conclude] that the contract fell outside plaintiff's
reasonable expectations.”).

-30-

1

significant number of putative class members.146 This is all that is required at the

2

commonality stage.

3

(3)

Count III

4

Count III alleges unjust enrichment and seeks restitution for defendants’

5

allegedly unconscionable contracts and for defendants’ policies that require drivers to

6

work without any compensation, allow IntelliQuick to illegally deduct money from the

7

drivers’ paychecks, and impose on the drivers’ various illegal fees.147 Under Arizona

8

law unjust enrichment claims require proof of five elements: “(1) an enrichment, (2) an

9

impoverishment, (3) a connection between the enrichment and impoverishment, (4) the

10

absence of justification for the enrichment and impoverishment, and (5) the absence of

11

a remedy provided by law.”148 “In short, unjust enrichment provides a remedy when a

12

party has received a benefit at another’s expense and, in good conscience, the

13

benefitted party should compensate the other.” 149

14

Because a class-wide proceeding will not be able to generate common answers

15

apt to drive the resolution of plaintiffs’ unjust enrichment claims, commonality is lacking.

16

Such claims are inherently unsuitable for class certification because, before a court can

17

grant unjust enrichment relief it “must examine the particular circumstances of an

18

individual case and assure itself that, without a remedy, inequity would result or

19

persist.”150 Thus, even if plaintiffs could establish that a particular driver was

20

impoverished by the challenged conduct, whether that impoverishment was unjust

21
22
146

23

See Newberg on Class Actions § 3:23 (5th ed. 2014).

147

24
25
26
27
28

Doc. 187 at 39.

148

Freeman v. Sorchych, 245 P.3d 927, 936 (Ariz. Ct. App. 2011).

149

Wang Elec., Inc. v. Smoke Tree Resort, LLC, 283 P.3d 45, 49 (Ariz. Ct. App. 2012).

150

Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1274 (11th Cir. 2009). See also Osuna v.
Wal-Mart Stores, Inc., No. C20014319, 2004 WL 3255430, at *6 (Ariz. Super. Ct. Dec. 23,
2004).

-31-

1

depends on equitable considerations surrounding that driver’s unique understanding

2

and expectations. The individualized nature of this “fairness” inquiry renders class

3

certification inappropriate.

4
5

c.

Typicality

Rule 23(a)(3) provides that a class action may be maintained only if “the claims

6

or defenses of the representative parties are typical of the claims or defenses of the

7

class.” “The inherent logic of the typicality requirement is that a class representative will

8

adequately pursue her own claims, and if those claims are ‘typical’ of those of the rest

9

of the class, then her pursuit of her own interest will necessarily benefit the class as

10

well.”151 “Under the rule’s permissive standards, representative claims are ‘typical’ if

11

they are reasonably coextensive with those of absent class members; they need not be

12

substantially identical.”152 “The test of typicality is ‘whether other members have the

13

same or similar injury, whether the action is based on conduct which is not unique to

14

the named plaintiffs, and whether other class members have been injured by the same

15

course of conduct.’”153

16

The named plaintiffs here currently hold, or have held, positions identical to

17

those of the members of each proposed subclass. 154 They allege many injuries that are

18

a result of defendants’ course of conduct that is not unique to any of them. Specifically,

19

they allege that they were each subjected to defendants’ uniform policies regarding

20
21

151

Newberg on Class Actions § 3:28.

22

152

23

153

24

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir.1998).

Parsons, 754 F.3d at 685 (quoting Hanon v. Dataproducts Corp., 976 F.2d 497, 508
(9th Cir.1992)).
154

25
26
27
28

Brian Black currently works, and David Collinge and Robert Campagna formerly
worked, for defendants as a Freight Driver, Route Driver, and On-Demand Driver. Doc. 187 at
3-5 ¶¶ 10, 14, 16; Doc. 325 at 9. Melonie Priestly formerly worked for defendants as a Route
Driver and On-Demand Driver. Doc. 187 at 4 ¶ 11; Doc. 325 at 9. John Morena and Brian
Kingman currently work, and Heather Arras formerly worked, for defendants as a Route Driver.
Doc. 187 at 4-5 ¶¶ 12, 15, 17; Doc. 325 at 9. Heather Arras alleges that she was eligible for
FMLA leave but not allowed to take it. Doc. 187 at 4 ¶ 13.

-32-

1

overtime pay, minimum wages, “chargebacks” and other fees, FMLA leave, and control

2

over their work. Further, plaintiffs allege that all class members who were drivers in

3

April 2013 are parties to the ICOOA. This includes Brian Black, Brian Kingman, and

4

John Morena.155 This establishes typicality with respect to these claims.

5

The named plaintiffs have failed to establish typicality, however, with respect to

6

their MAA- and VLA-based claims (Count IV and a portion of Count III). Not all

7

members of the proposed class are parties to these two contracts. Rather, “many” are

8

parties to the MAA and “some” are parties to the VLA. The plaintiffs do not contend

9

that any of the named plaintiffs are parties to either of these two contracts; this is fatal

10

to their typicality argument.156

11

d.

12

Adequacy

Rule 23(a)(4) provides that a class action may be maintained only if the named

13

plaintiffs “will fairly and adequately protect the interests of the class.” The purpose of

14

the adequacy inquiry is “to uncover conflicts of interest between named parties and the

15

class they seek to represent.” 157 Defendants do not contend that any of the named

16

plaintiffs have a conflict of interest or that class counsel is not competent. Adequacy is

17

satisfied.

18

2.

19

Having concluded that the requirements of Rule 23(a) are satisfied, the court

20

Rule 23(b)

must now determine whether plaintiffs have met their burden of showing that the

21
22
23

155

24

156

25
26
27
28

Doc. 305 at 5-6.

See Vega, 564 F.3d at 1276 (“Without a common contract, it is impossible for [the
named plaintiff] to bring a case typical of all other class members.”); Newberg on Class Actions
§ 3:37 (5th ed. 2014) (“[W]hen the class suit is predicated on more individualized contracts, and
differences exist among the relevant provisions in different class members’ contracts, the
representative’s claim may not be typical of the claims of class members with different
contracts.”).
157

Amchem Products, Inc. v. Windsor, 521 U.S. 591, 625 (1997).

-33-

1

proposed class satisfies one of the Rule 23(b) categories. Plaintiffs argue that the

2

proposed class meets the requirements of Rules 23(b)(1)-(3).

3

a.

Rule 23(b)(1)

4

A Rule 23(b)(1) class action may be maintained if requiring individual class

5

members to prosecute separate actions would create a risk of either “(A) inconsistent or

6

varying adjudications with respect to individual class members that would establish

7

incompatible standards of conduct for the party opposing the class” or

8

“(B) adjudications with respect to individual class members that, as a practical matter,

9

would be dispositive of the interests of the other members not parties to the individual

10

adjudications or would substantially impair or impede their ability to protect their

11

interests.”158 Plaintiffs request certification under Rule 23(b)(1)(A) because, if

12

certification is not granted, a different court may issue a different ruling than this court

13

with regard to whether a particular driver has been mis-characterized as an

14

independent contractor, whether the agreements are unconscionable, or whether

15

defendants are liable for their allegedly unlawful policies and practices. 159 None of

16

these hypothetical inconsistent adjudications would establish incompatible standards of

17

conduct for IntelliQuick, however.160

18

Plaintiffs also seek certification under Rule 23(b)(1)(B), arguing that “a

19

determination that IntelliQuick has not misclassified Plaintiffs, that the agreements

20

Defendants forced Plaintiffs to sign . . . are enforceable, and that mandatory deductions

21

taken from Plaintiffs pay are not unlawful will be dispositive of or substantially impair the

22

ability of other Drivers to make similar claims.”161 Plaintiffs do not explain why, exactly,

23

this might be. But presumably plaintiffs are arguing that future actions would be

24
25

158

Fed. R. Civ. P. 23(b)(1).

26

159

27

160

28

161

Doc. 303 at 13.
See Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1193 (9th Cir. 2001).
Doc. 303 at 15.

-34-

1

thwarted by the stare decisis consequences of this action. This is insufficient to sustain

2

class certification under Rule 23(b)(1)(B). 162

3

b.

Rule 23(b)(2)

4

Plaintiffs seek class certification of Counts III and IV of the Complaint under

5

Rule 23(b)(2). A Rule 23(b)(2) class action may be maintained if defendants have

6

“acted or refused to act on grounds that apply generally to the class, so that final

7

injunctive relief or corresponding declaratory relief is appropriate respecting the class as

8

a whole.”163 As the Supreme Court held in Wal-Mart:

9
10
11

The key to the (b)(2) class is “the indivisible nature of the injunctive or
declaratory remedy warranted—the notion that the conduct is such that it
can be enjoined or declared unlawful only as to all of the class members
or as to none of them.” In other words, Rule 23(b)(2) applies only when a
single injunction or declaratory judgment would provide relief to each
member of the class.164

12
“These requirements are unquestionably satisfied when members of a putative class
13
seek uniform injunctive or declaratory relief from policies or practices that are generally
14

applicable to the class as a whole.”165

15
Count III alleges that defendants have been unjustly enriched by various
16
unconscionable contracts, uncompensated work, and allegedly unlawful fees and
17
18

deductions.166 But because Count III does not primarily seek declaratory or injunctive

19
20
21
22
23

162

La Mar v. H & B Novelty & Loan Co., 489 F.2d 461, 467 (9th Cir. 1973) (“Neither the
stare decisis consequences of an individual action nor the possibility of false reliance upon the
improper initiation of a class action can supply either the practical disposition of the rights of the
class, or the substantial impairment of those rights, at least one of which is required by
Rule 23(b)(1)(B).”).

24

163

25

164

26

Fed. R. Civ. P. 23(b)(2).

Wal-Mart, 131 S.Ct. at 2557 (quoting Nagareda, Class Certification in the Age of
Aggregate Proof, 84 N.Y.U.L.Rev. 97, 132 (2009)).

27

165

28

166

Parsons, 754 F.3d at 687-88.
Doc. 187 at 39-40.

-35-

1

relief, Rule 23(b)(2) does not apply.167 Count IV of the Complaint seeks a declaratory

2

judgment that the ICOOA is unconscionable. To the extent that Count IV alleges that

3

the ICOOA is substantively unconscionable, a declaratory judgment would provide relief

4

to each member of the subclass who signed the ICOOA. The court therefore certifies

5

the substantive unconscionability claims in Count IV to proceed under Rule 23(b)(2).

6
7

c.

Rule 23(b)(3)

In Wal-Mart, the Supreme Court held that class actions that are predominantly to

8

recover individualized money damages “belong in Rule 23(b)(3).”168 Rule 23(b)(3)

9

requires the court to find that “the questions of law or fact common to class members

10

predominate over any questions affecting only individual members, and that a class

11

action is superior to other available methods for fairly and efficiently adjudicating the

12

controversy.” This inquiry “tests whether proposed classes are sufficiently cohesive to

13

warrant adjudication by representation.”169

14
15

(1)

Predominance

“Rule 23(a)(2)’s ‘commonality’ requirement is subsumed under, or superseded

16

by, the more stringent Rule 23(b)(3) requirement that questions common to the class

17

‘predominate over’ other questions.”170 The primary concern of the predominance

18

inquiry is “the balance between individual and common issues.”171 On one hand, where

19

“common questions present a significant aspect of the case and they can be resolved

20

for all members of the class in a single adjudication, there is clear justification for

21
22
167

23
24
25

Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1314 (9th Cir. 1977) (“[T]he action
seeks as a major portion of the claimed relief, monetary restitution. To the extent that such
relief predominates over the injunctive relief, section (b)(2) of Rule 23 is inappropriate.”).
168

Wal-Mart, 131 S. Ct. at 2558.

26

169

27

170

28

171

Amchem, 521 U.S. at 623.
Id. at 609.
In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 959 (9th Cir.2009).

-36-

1

handling the dispute on a representative rather than on an individual basis.”172 On the

2

other hand, where “claims require a fact-intensive, individual analysis,” class

3

certification is inappropriate. 173 “Under the predominance inquiry, a district court must

4

formulate some prediction as to how specific issues will play out in order to determine

5

whether common or individual issues predominate in a given case.”174

6

(I)

A.R.S. § 23-351 claims

7

Plaintiffs’ minimum wage and overtime claims arise under A.R.S. § 23-351. As

8

noted above, the threshold question whether the drivers are employees, and therefore

9

covered by A.R.S. § 23-351, is amenable to class-wide resolution. After analyzing the

10

remainder of these claims, the court concludes that predominance is satisfied. With

11

respect to their minimum wage claim, plaintiffs allege that the drivers are paid less than

12

the statutory minimum wage175 as a result of IntelliQuick’s policies of (1) assigning them

13

“additional work” without any additional compensation and (2) deducting standard,

14

weekly fees and discretionary chargebacks from their pay.176 Whether these policies

15

exist and, if so, whether they permit the drivers’ hourly wages to fall below the statutory

16

minimum are questions of fact common to all putative class members. The same can

17

be said about the question whether IntelliQuick’s policies permit the drivers to regularly

18

work in excess of 40 hours per week without overtime compensation. Although the

19

putative class members would be entitled to different damages based on the amount

20

below the minimum wage they were actually paid or how much uncompensated

21
22
172

23

Hanlon, 150 F.3d at 1022 (quoting 7A Charles Alan Wright, Arthur R. Miller & Mary
Kay Kane, Federal Practice & Procedure § 1778 (2d ed.1986)).

24

173

25

174

26

Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 947 (9th Cir.2009).

In re New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6, 20 (1st Cir. 2008)
(internal quotation omitted).

27

175

28

176

A.R.S. § 23-363.
Doc. 187 at 21-22.

-37-

1

overtime work they actually performed, such “individual issues do not overcome the fact

2

that common questions present a significant aspect of the case and can be resolved on

3

a representative rather than individual basis.”177

4
5

(ii)

A.R.S. § 23-352 claims

The Complaint also alleges that IntelliQuick’s deductions from the drivers’

6

paychecks referenced above violate A.R.S. § 23-352, which prohibits employers from

7

withholding any portion of an employee’s wages unless (1) the employer is “required or

8

empowered to do so” by law, (2) the employer has written authorization from the

9

employee, or (3) “[t]here is a reasonable good faith dispute as to the amount of wages

10

due, including . . . any claim of . . . set-off asserted by the employer against the

11

employee.”178 Defendants argue that plaintiffs’ unlawful deduction claim will require the

12

court to conduct an individualized analysis of each deduction to determine whether

13

each was based on a good faith dispute over the amount of wages due.179 With regard

14

to chargebacks, the court agrees.180 The evidence shows that IntelliQuick supervisors

15

exercise discretion when deciding whether to issue chargebacks, and chargebacks may

16

be levied for myriad reasons.181 The fact-intensive, individual analysis, required to

17

determine whether each chargeback was levied in good faith defeats class certification

18

on that claim.

19
20
21

177

22

178

23

179

24

180

25
26
27
28

Juvera v. Salcido, 294 F.R.D. 516, 522 (D. Ariz. 2013).
A.R.S. § 23-352.
Doc. 319 at 10.

See Baughman v. Roadrunner Commc’ns, LLC, No. CV-12-565-PHX-SMM, 2014 WL
4259468, at *7 (D. Ariz. Aug. 29, 2014) (“The Court finds that based on the validity of the
variety of individual charge backs assessed against the putative class, and in application,
whether they violated A.R.S. § 23-352, it is clear that the putative class members’ claims do not
depend upon a common contention whose truth or falsity will resolve an issue that is central to
the validity of each one of the claims in one stroke.”).
181

See, e.g., Doc. 305-1 at 255-56; Doc. 305-2 at 198-99; Doc. 307 at 16.

-38-

1

Whether IntelliQuick deducts its standardized fees from its drivers’ paychecks in

2

good faith, however, is amenable for class-wide resolution. A weekly scanning device

3

fee is deducted from the paychecks of all drivers who use IntelliQuick’s scanners, 182 a

4

weekly secondary insurance fee is deducted from the paychecks of all drivers who do

5

not have their own secondary insurance policy,183 and weekly uniform and paycheck

6

processing fees are deducted from all drivers’ paychecks.184 Because these deductions

7

are standardized, the question whether they comply with A.R.S. § 23-352 can be

8

resolved for all members of the class in a single adjudication. Predominance is

9

satisfied with regard to these claims.

10
11

(iii)

FMLA claims

Plaintiffs seek class certification under Rule 23(b)(3) on their claims that

12

defendants are violating the FMLA by failing to provide FMLA leave185 and by penalizing

13

employees who take unpaid leave.186 As defendants observe, however, the drivers will

14

have to prove the following five elements to establish a violation of the FMLA: (1) “the

15

driver was eligible for the FMLA’s protections (in other words, an employee),”

16

(2) IntelliQuick was covered by the FMLA, (3) the driver was entitled to FMLA leave,

17

(4) the driver provided IntelliQuick sufficient notice of his or her intent to take leave, and

18

(5) IntelliQuick denied the driver FMLA benefits.187 Defendants argue that elements

19

three through five present individual questions that will predominate. At oral argument

20

plaintiffs’ counsel conceded that this claim is ill-suited for class treatment to the extent it

21
22

182

23

183

24

184

25

185

26
27
28

Doc. 305-1 at 122.
Doc. 305-1 at 124.
Doc. 305-1 at 124-26.
See 29 U.S.C. § 2612.

186

See 29 U.S.C. § 2615.

187

In re FedEx Ground Package Sys., Inc., Employment Practices Litig., 283 F.R.D. 427,
460 (N.D. Ind. 2012).

-39-

1

seeks monetary damages for FLMA violations. Alternatively, however, plaintiffs’

2

counsel argued that plaintiffs have alleged that IntelliQuick has a policy of requiring a

3

driver to find a replacement driver before he or she may take leave, and that the court

4

should certify their claim for declaratory relief that this policy violates the FMLA. But

5

because the Complaint does not mention any such policy or request such declaratory

6

relief, plaintiffs’ argument lacks merit.

7
8
9
10

(2)

Superiority

When assessing whether a class action is superior to other methods of
adjudicating the controversy, courts should consider:
(A) the class members’ interest in individually controlling the prosecution
or defense of separate actions;

11
12

(B) the extent and nature of any litigation concerning the controversy
already begun by or against class members;

13

(C) the desirability or undesirability of concentrating the litigation of the
claims in the particular forum; and

14

(D) the likely difficulties in managing a class action.188

15
Plaintiffs argue that a class action is a superior method of adjudication because the
16
individual class members have little interest in controlling the prosecution of the case,
17
“significant discovery on major factual and legal issues” has already been completed in
18
this action, and concentrating the litigation in the District of Arizona is desirable because
19
that is where “the vast majority, if not all, of class members and all witnesses are
20

located.”189

21
22
23
24
25
26
27
28

188

Fed. R. Civ. P. 23(b)(3). See also Zinser v. Accufix Research Ins., Inc., 253 F.3d
1180, 1190 (9th Cir. 2001).
189

Doc. 303 at 23.

-40-

1

Defendants respond by citing Epenscheid v. DirectSat USA, LLC,190 and arguing

2

that the individualized damages calculations defeat superiority.191 In Epenscheid, the

3

defendant employer allegedly concealed its wage and hour violations by forbidding its

4

workers from recording time spent on certain tasks. 192 The Seventh Circuit found that

5

the lack of records of the time these workers worked but did not report on their time

6

sheets, and class counsel’s inability to propose a feasible litigation plan to address this

7

evidentiary deficiency, rendered class action treatment inferior to a complaint filed with

8

the Department of Labor.193

9

Defendants’ argument fails for several reasons. First, defendants do not

10

contend that the situation in this case is akin to Epenscheid. That is, that the drivers

11

failed to record the time for which they now wish to be compensated. To the contrary, it

12

appears from the record here that calculating damages would be reasonably feasible.194

13

Second, defendants do not suggest any alternatives to class action litigation that would

14

be a superior method of adjudicating these claims.

15
16
17
18

IV. CONCLUSION
For the reasons above, the motion at docket 310 is DENIED, and the motion at
docket 303 is GRANTED IN PART and DENIED IN PART as follows:
C

IT IS ORDERED certifying a class action that includes all current and

19

former drivers or couriers who made pick-ups or deliveries for or on behalf

20

of IntelliQuick Deliveries, Inc. as a Freight Driver, Route Driver, or On-

21

Demand Driver within the State of Arizona and who were or are classified

22
23

190

24

191

25

192

26
27
28

705 F.3d 770, 773 (7th Cir. 2013).
Doc. 319 at 16-17.
Espenscheid, 705 F.3d at 773-74.

193

Id. at 775-76.

194

See, e.g., Doc. 305-1 at 204, 221. See Leyva v. Medline Indus. Inc., 716 F.3d 510,
515 (9th Cir. 2013).

-41-

1

or paid as independent contractors or not classif ied or paid as employees

2

at any time on or after April 9, 2009;

3

C

IT IS FURTHER ORDERED certifying the following subclasses of

4

plaintiffs:

5

C

Subclass A - Freight Drivers: All drivers who use vehicles or vans

6

that are owned or leased by IntelliQuick or Majik Leasing, LLC to

7

make deliveries and pick-ups for or on behalf of IntelliQuick or its

8

customers.
C

9

Subclass B - Route Drivers: All drivers who generally use their own

10

vehicles to make deliveries and pick-ups on an assigned route for

11

or on behalf of IntelliQuick or its customers.
C

12

Subclass C - On-Demand Drivers: All drivers who generally use

13

their own vehicles to make specific deliveries and pick-ups for or on

14

behalf of IntelliQuick or its customers and who have not been

15

assigned a regular route.
C

16
17
18

Subclass D - All drivers who are parties to the “Independent
Contractor Owner/Operator Agreement.”

C

IT IS FURTHER ORDERED permitting the named plaintiffs and class of

19

similarly situated individuals to proceed as a class action pursuant to

20

Federal Rule of Civil Procedure 23(b)(2) with respect to the plaintiffs’

21

claim that the “Independent Contractor Owner/Operator Agreement” is

22

substantively unconscionable;

23

C

IT IS FURTHER ORDERED permitting the named plaintiffs and class of

24

similarly situated individuals to proceed as a class action pursuant to

25

Federal Rule of Civil Procedure 23(b)(3) with respect to the plaintiffs’

26

claims for minimum wage and overtime violations under A.R.S. § 23-351

27

and plaintiffs’ claims that the defendants’ standardized payroll deductions

28

violate A.R.S. § 23-352;
-42-

1

C

2
3

IT IS FURTHER ORDERED appointing plaintiffs’ counsel as class counsel
under Rule 23(g);

C

IT IS FURTHER ORDERED that defendants shall provide to plaintiffs’

4

counsel the last-known contact information for the class members within

5

21 days of this order; and

6
7
8

C

IT IS FURTHER ORDERED that plaintiffs shall submit a proposed class
notice within 14 days of this order.

DATED this 23rd day of March 2015.

9
10
11

/s/ JOHN W. SEDWICK
SENIOR UNITED STATES DISTRICT JUDGE

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-43-