Day et al v. Celadon Trucking Services Inc
ORDER adopting 157 Findings and Recommendations to the extent that Angela Berry, Duarl Richardson, and Randy Anthony are excluded from the plaintiff class; denying as moot 153 Motion in Limine; denying 161 Motion for Discovery; denying 163 Motion to Certify Class; denying 165 Motion for Sanctions; denying as moot 167 Motion to Dismiss. The parties must file, on or before July 31, 2014 proposed findings of fact and conclusions of law concerning damages for the claims on which liability has been established. The parties will have up to and including August 14, 2014 in which to file a response to the opposing partys proposed findings of fact and conclusions of law. Signed by Judge Susan Webber Wright on 6/16/2014. (ks)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
STUART R. DAY, ET AL.
CELADON TRUCKING SERVICES,
NO: 4:09CV00031 SWW
This is a class action against Celadon Trucking Services, Inc. (“Celadon”) pursuant to the
Worker Adjustment and Retraining Notification Act (“WARN Act” or “Act”), 29 U.S.C.
§§ 2101-2109. Before the Court are (1) findings and recommendations regarding class
membership issued by United States Magistrate Judge H. David Young (ECF No. 157),
Plaintiffs’ objections (ECF No. 159), Celadon’s objections (ECF No. 160), and Celadon’s
response to Plaintiffs’ objections (ECF No. 162); (2) Celadon’s motion for discovery (ECF No.
161); (3) Celadon’s renewed motion to decertify the class (ECF No. 163), Plaintiffs’ motion to
dismiss Celadon’s motion to decertify (ECF No. 167), and Celadon’s reply (ECF No. 169); and
(4) Plaintiffs’ motion for sanctions (ECF No. 165), Celadon’s response in opposition (ECF No.
169), and Plaintiffs’ reply (ECF No. 170). After careful consideration, and for reasons that
follow, the findings and recommendations issued by Judge Young are adopted to the extent that
the Court finds that Angela Berry, Duarl Richardson and Randy Anthony do not meet the class
definition and thus are not members of the plaintiff class. Celadon’s motions for discovery and
decertification and Plaintiffs’ motion for sanctions are denied. The case will proceed on the
issue of damages.
I. The WARN Act
The WARN Act prohibits employers from ordering “a plant closing or mass layoff until
the end of a sixty-day period after the employer serves written notice of such an order . . . to each
. . . affected employee . . . .” 29 U.S.C. § 2102(a). An “affected employee” under the Act is an
employee who may reasonably be expected to experience an employment loss as a consequence
of a proposed plant closing or mass layoff. See 29 U.S.C. § 2101. An “affected employee” is
not a self-employed individual or a consultant or contract employee, who has an employment
relationship with and is paid by another employer. See 20 C.F.R. § 639.3(e).
A “mass layoff” occurs when there is a reduction in force that is not the result of a plant
closing1 that results in an employment loss (1) at a single site, for at least 33 percent of the
employees (excluding any part-time employees) and at least 50 employees (excluding any
part-time employees) or (2) at least 500 employees (excluding any part-time employees). See 29
U.S.C. § 2101(a)(3).
The WARN Act provides that any employer who violates the notice provision shall be
liable to each aggrieved employee who suffers an employment loss for back pay and benefits for
each day of the violation.2 An “aggrieved employee” under the Act is “an employee who has
A “plant closing” occurs with “the permanent or temporary shutdown of a single site of
employment, or one or more facilities or operating units within a single site of employment, if
the shutdown results in an employment loss at the single site of employment during any 30-day
period for 50 or more employees excluding any part-time employees.” 29 U.S.C. § 2101(a)(2).
The applicable provision of the WARN Act provides:
(1) Any employer who orders a plant closing or mass layoff in violation of section
3 of this Act [29 U.S.C. § 2102] shall be liable to each aggrieved employee who
worked for the employer ordering the . . . mass layoff and who, as a result of the failure by the
employer to comply with section 2102 . . . , did not receive timely notice . . . as required by
section 2102.” 29 U.S.C. § 2104(7).
In the case of the sale of all or part of a business, the WARN Act’s sale-of-business
provision allocates the duty to provide notice of a plant closing or mass layoff as follows: The
seller is responsible for providing notice for any plant closing or mass layoff that occurs up to
and including the effective date of the sale, and the purchaser is responsible for providing notice
of any plant closing or mass layoff that occurs after the effective date of the sale. See 29 U.S.C.
§ 2101(b)(1). The WARN Act provides that “any person who is an employee of the seller (other
than a part-time employee) as of the effective date of the sale shall be considered an employee of
suffers an employment loss as a result of such closing or layoff for—
(A) back pay for each day of violation at a rate of compensation not less
than the higher of—
(I) the average regular rate received by such employee during the
last 3 years of the employee's employment; or
(ii) the final regular rate received by such employee; and
(B) benefits under an employee benefit plan described in section 3(3) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(3)), including the cost of medical expenses incurred during the
employment loss which would have been covered under an employee
benefit plan if the employment loss had not occurred.
Such liability shall be calculated for the period of the violation, up to a maximum
of 60 days, but in no event for more than one-half the number of days the
employee was employed by the employer.
29 U.S.C. § 2104(a)(1).
the purchaser immediately after the effective date of the sale.” 29 U.S.C. § 2101(b)(1).
II. Case Background
Plaintiffs worked for non-party Continental Express, Inc. (“Continental”), a company that
operated a trucking business that was purchased by Celadon on December 4, 2008. Plaintiffs
filed this class action on January 1, 2009, claiming that after Celadon purchased Continental’s
business, it terminated their employment as part of a mass layoff, without providing sixty days’
advance notice as required under the WARN Act.
On August 16, 2010, the Court granted Plaintiffs’ renewed motion for class certification,
and certified a class defined as “all persons who were employees of the former Continental
operation in Little Rock and were terminated following the sale to [Celadon] in December of
2008, and who did not receive [sixty days’] notice that a plant closing and/or mass layoff was
going to take place at that time.” ECF No. 44, at 2.
Summary Judgment Proceedings on Liability
On April 6, 2011, Plaintiffs sought summary judgment on the issue of liability and
presented the following evidence:
A copy of an Asset Purchase Agreement (“APA”), documenting that Celadon
purchased Continental’s trucking business on December 4, 2008. See ECF No.
Attachments to the APA titled “Schedule 5.2" and “Schedule 5.6”
Paragraph 5.2 of the APA provides that “Schedule 5.2(a) (the “Driver
List”) sets forth the name of and employment information for each
employee driver, owner-operator driver and lease-purchase driver of
Seller . . . on the Closing Date.”
Paragraph 5.6 of the APA provides: “For a period of Fourteen (14) days
immediately following the Closing Date, Seller shall . . . continue to
employ the Non-Drivers not offered employment that are listed on
Schedule 5.6 and required for transition activities . . . . ”
The affidavit of Timothy Hodnett, who had served as Continental’s vice president
of human resources. Hodnett testified that Schedule 5.6 lists the names of all
non-drivers employed at Continental’s corporate offices as of December 4, 2008
and that Schedule 5.2 lists the names of truck drivers that were employed by
Continental as of December 4, 2008. See ECF No. 55-5. According to Hodnett’s
testimony, not one of the individuals listed on Schedules 5.2 and 5.6 was
terminated on or prior to the December 4, 2008 sale date, but some were
terminated on or before December 17, 2008.
A document provided by Celadon in response to a discovery request, titled
“Continental Drivers Hired by Celadon and Current Status,” which listed the
names of all former Continental drivers hired by Celadon following its purchase
of Continental’s business.3 See ECF No. 55-7.
A document provided by Celadon in response to a discovery request, which listed
all former Continental administrative personnel hired by Celadon following its
purchase of Continental’s business. See ECF No. 55-7.
The affidavit of Stuart R. Day, who had worked as Continental’s vice president of
operations. Day testified that he participated in transition activities that took
place after the December 4, 2008 sale and that “[t]here were no WARN Act
notices sent to [former Continental] employees who continued to work for
Celadon following the sale and had their employment subsequently terminated.”
ECF No. 55-6, ¶ 3.
Local Rule 56.1 provides that a party moving for summary judgment must submit a
statement of the material facts as to which it contends there is no genuine issue to be tried, and
the non-moving party must file a responsive statement of the material facts as to which it
contends a genuine issue exists to be tried. The Rule provides: “All material facts set forth in
the statement filed by the moving party . . . shall be deemed admitted unless controverted by the
Plaintiffs’ Interrogatory No. 1 sought the names of “each and every employee who was
employed by [Continental] on [December 4, 2008].” Pls.’ November 6, 2013 Hr’g Ex. #1, at 1.
In its response, Celadon provided the list titled “Continental Drivers Hired by Celadon and
Current Status,” and stated that the list contained the names of “all former [Continental] drivers
that [Celadon] hired.” Id. Celadon also provided Plaintiffs a “list of former [Continental]
administrative personnel that [Celadon] hired.” Id. at 1-2.
statement filed by the non-moving party . . . . ” Local Rule 56.1(c)(emphasis added).
Paragraph 14 of Plaintiffs’ statement of material facts in support of summary judgment
stated: “On the date of the sale, there were 658 employees working for Continental.” ECF No.
57, ¶ 14. In its responsive statement, Celadon specifically stated that it “did not dispute the
allegations in paragraphs 8-16" set forth in Plaintiffs’ statement.” ECF No. 64, ¶ 6.
Plaintiffs cited Schedules 5.2 and 5.6 in support of its assertion that there were 658
employees working for Continental on December 4, 2008, the day that Celadon purchased
Continental’s business. Schedule 5.6 listed 113 administrative employees and Schedule 5.2
listed 545 drivers. Plaintiffs further asserted that pursuant to the WARN Act’s sale-of-business
provision, 658 former Continental “employees” listed on Schedules 5.2 and 5.6 became Celadon
“employees” immediately after Celadon purchased Continental’s trucking business on December
4, 2008. Plaintiffs acknowledged that Celadon’s discovery responses showed that Celadon
retained 201 of the aforementioned 658 employees. Plaintiffs also recognized that eight
administrative employees listed on Schedule 5.6 did not work from Continental’s operation in
Little Rock and therefore did not meet the class definition. Based on the evidence presented,
Plaintiffs claimed that the remaining 449 employees listed on Schedules 5.2 and 5.6 suffered an
“employment loss” as a result of a “mass layoff” that occurred on or about December 17, 2009.
In its response in opposition to summary judgment, Celadon did not dispute that the 449
class members identified by Plaintiffs had been employed at Continental’s Little Rock facility
and suffered an “employment loss” as part of a “mass layoff” that occurred on or about
December 17, 2008. Nor did Celadon dispute Day’s testimony that Celadon failed to provide
WARN Act notice to the 449 class members. Instead, Celadon argued that it was not responsible
for providing WARN Act notice because it merely purchased Continental’s assets, which did not
amount to the sale of all or part of a business as required under the WARN Act’s sale-ofbusiness provision. The Court found that the undisputed evidence established that Celadon
purchased Continental’s business as a going concern on December 4, 2008 and that the class
members became Celadon employees by operation of the WARN Act’s sale-of-business
provision. And, given the uncontroverted evidence that 449 individuals identified as class
members suffered an “employment loss” as part of a “mass layoff,” without receiving the notice
required under the WARN Act, the Court granted Plaintiffs’ motion for summary judgment as to
Summary Judgment Proceedings on Damages
After the Court’s summary judgment ruling, the parties filed a joint motion, stating in
part as follows:
Counsel for the parties have conferred, and have determined that the most
economical and efficient method to address the damages portion of the class action
would be through stipulations after a claims process. Consequently, counsel for
both parties request that the trial be continued at this point in order to allow them to
attempt to produce a stipulated damages amount to the Court.
ECF No. 76, at 1.
The parties also requested a telephone conference for the purpose of developing a plan
for resolving the issue of damages. See docket entry #76. The Court continued the trial date
and scheduled a telephone conference as requested. See docket entry #77. However, before a
teleconference could take place, Celadon engaged new counsel and sought to appeal the Court’s
ruling on liability. On April 11, 2012, the Eighth Circuit denied Celadon’s petition for
On August 7, 2012, Plaintiffs filed a motion for summary judgment on damages.
Plaintiffs submitted spreadsheets containing damage amounts for each class member, along with
an affidavit by Timothy A. Hodnett, who had served as Continental’s vice president of human
resources. Hodnett testified that the damage spreadsheets were prepared under his direction, that
he had reviewed the source documents underlying the spreadsheet data, and that the spreadsheets
reflected “an accurate calculation of wages and benefits [the] employees would have earned
during the 60-day notice period.” ECF No. 103-8, ¶ 5.
Plaintiffs’ counsel, Abraham Bogoslavsky, submitted an affidavit stating that he and
Celadon’s original counsel of record, Michael S. Moore, had agreed that Plaintiffs would submit
a spreadsheet on damages and that Celadon would have an opportunity to review the spreadsheet
and assert objections. Bogoslavsky explained that he and Moore believed they “could agree on
almost all damages and streamline the trial, if one was even necessary.” ECF No. 103, Ex. G. ¶
3. Bogoslavsky further testified that based on his communications with Moore, he believed that
Celadon would not dispute any damage calculations that were based on a W-2, a pay stub, tax
information, or an affidavit. Id, ¶ 6.
On August 11, 2012, Celadon sought relief pursuant to Rule 56(d) of the Federal Rules of
Civil Procedure, asserting that it could not adequately respond to Plaintiffs’ motion for summary
judgment without examining the source documents underlying Plaintiffs’ damage spreadsheets
and deposing Hodnett and others. The Court declined to reopen discovery and noted that
Celadon had never before requested an extension of the April 19, 2010 discovery deadline.4
Shortly after Plaintiffs initiated this lawsuit, the parties filed a joint report pursuant to
Rule 26(f) of the Federal Rules of Civil Procedure, and they reported that discovery should be
completed by January 20, 2010. The parties did not request bifurcated discovery. Consistent
However, the Court extended Celadon’s response time and directed Plaintiffs to make all
documents supporting Plaintiffs’ damage calculations available for Celadon’s inspection.
Subsequently, Celadon filed a cross-motion for summary judgment, arguing among other
things that Plaintiffs’ class roster included “excludable” class members. Celadon presented
evidence that the class roster included (1) 148 individuals who worked for Continental as
owner/operators or independent contractors; (2) 182 individuals who were offered positions or
hired by Celadon; and (3) 11 individuals who were not employees of Continental’s operation in
Although Celadon had the burden to present the aforementioned evidence in opposition
to Plaintiffs’ motion for summary judgment on liability, the Court exercised its discretion to give
with the Rule 26(f) report, the Court set discovery and motions deadlines for January 20, 2010
and a jury trial for March 8, 2010.
Thereafter, Plaintiffs filed their first motion for class certification, and while that motion
was pending, the parties filed a joint motion for a continuance of the trial date and extensions of
the discovery and motions deadlines. The parties stated: “Both parties believe that this case may
be resolved on Motions for Summary Judgment upon the final completion of all necessary
discovery.” ECF No. 25, ¶ 4. By order entered January 26, 2010, the Court continued the trial
date and extended the discovery deadline to April 19, 2010. Thereafter, the Court denied
without prejudice Plaintiffs’ initial motion for class certification.
On April 2, 2010, Plaintiffs filed a second motion for class certification, and on April 14,
2010, both parties requested an extension of the motions deadline, but neither side requested an
extension of the discovery deadline. The Court granted the motion and extended the motions
deadline to June 2, 2010.
After Plaintiffs filed a reply in support of the second motion for class certification, but
before the Court could decide the motion, the parties filed a second joint motion requesting an
extension of the motions deadline, again stating that the “parties believe that his case may be
resolved on Motions for Summary Judgment.” ECF No. 42, ¶ 4. The discovery deadline had
expired, and neither side requested that the Court reopen discovery. The Court extended the
motions deadline as requested by the parties.
Celadon the opportunity to contest the inclusion of the disputed class members.5 The Court
denied summary judgment as to damages and notified the parties that it would schedule a
telephone conference for the purpose of developing a plan for identifying class members and
On March 13, 2013, the Court convened a telephone conference. Counsel reported that
both sides had offered proposals for resolution of this case, but they were unable to agree.
The Court then referred the case to United States Magistrate Judge H. David Young for
necessary proceedings and a recommended disposition as to which individuals seeking damages
in the case are properly included within the plaintiff class. See ECF No. 132.
III. Judge Young’s Findings and Recommendation
Judge Young held an evidentiary hearing and received post-hearing filings, including
Plaintiffs’ Exhibits A, B, and C, which listed the individuals who Plaintiffs contend are members
of the class. See ECF Nos. 149-1 (Pls.’ Ex. A), 149-2 (Pls.’ Ex. B), 149-3 (Pls.’ Ex. C). In
formulating his findings and recommendations, Judge Young used Plaintiffs’ Exhibits A, B, and
C as a starting point, and he considered whether Plaintiffs had established that each individual
listed on those exhibits qualified as a member of the plaintiff class.
The Court clarifies that it did not intend that Plaintiffs prove, once again, that each
individual listed on the class roster meets the class definition and qualifies as an “aggrieved
employee” under the WARN Act. In support of their first summary judgment motion, which the
Federal Rule of Civil Procedure 54(b) permits a trial court to reconsider interlocutory
rulings. It provides that “any order or other decision ... that adjudicates fewer than all the claims
or the rights and liabilities” of the parties that does not end the case “may be revised at any time
before the entry of a judgment adjudicating all the claims and all the parties' rights and
liabilities.” Fed. R. Civ. P. 54(b).
Court granted, Plaintiffs presented evidence identifying 449 former Continental employees, who
suffered an “employment loss” as part of a “mass layoff” that occurred after Celadon purchased
Continental. Celadon failed to seasonably dispute Plaintiffs’ evidence, and the Court’s summary
judgment ruling on liability, which remains the law of this case, extends to each of the 449
individuals previously established as members of the class. In denying Plaintiffs’ motion for
summary judgment on damages, the Court noted that it has discretion under Rule 54(b) of the
Federal Rules of Civil Procedure to reconsider previous rulings. Such discretion, however, is
limited to the law of the case doctrine and “subject to the caveat that ‘where litigants have once
battled for the court's decision, they should neither be required, nor without good reason
permitted, to battle for it again.’” Official Committee of Unsecured Creditors of Color Tile, Inc.
v. Coopers & Lybrand, LLP, 322 F.3d 147, 167 (2d Cir. 2003)(quoting Zdanok v. Glidden Co.,
327 F.2d 944, 953 (2d Cir.1964)); see also Chism v. W.R. Grace & Co., 158 F.3d 988, 992 n. 4
(8th Cir.1998)(“Motions for reconsideration cannot be used to introduce new evidence that could
have been produced while the summary judgment motion was pending.”). At this juncture,
Celadon has the burden to show that specific class members, identified by Celadon, should be
excluded from the class. Celadon is not entitled to retry this case from the beginning merely
because it has retained new counsel.
This Court admittedly should have directed the magistrate judge to find which class
members should be excluded from the class as opposed to which members should be included.
This Court’s failure to give proper direction in the referral order does not alter the fact that the
defendant failed to dispute liability as to the 449 aforementioned persons, and despite the lack of
a clear commission, the post-referral proceedings and Judge Young’s findings have assisted the
Plaintiffs’ Exhibit A, titled “administrative/non-drivers,” lists seventy-five class members
who, with one exception,6 are listed on Schedule 5.6 and do not appear on the list of
administrative employees hired by Celadon. Plaintiffs previously established that the individuals
listed on Exhibit A became Celadon employees pursuant to WARN Act’s sale-of-business
provision and that they suffered an employment loss as part of a mass layoff, without receiving
WARN Act notice.
Judge Young found that each individual appearing on Exhibit A is properly included in
the class, with the exception of Angela Berry7 and James Dunbar. Plaintiffs state no objection to
the exclusion of Angela Berry, but they do present arguments that impact the inclusion of James
Dunbar. For reasons stated in Section B of this order, the Court finds that James Dunbar is
properly included as a member of the plaintiff class.8
Celadon objects that six of the administrative/non-drivers listed Plaintiffs’ Exhibit A
worked outside of Little Rock and should therefore be excluded from the class, which is limited
to “persons who were employees of the former Continental operation in Little Rock.” However,
James Dunbar is the only class member listed on Plaintiff’s Exhibit A whose name does
not also appear on Schedule 5.6. Instead, Dunbar is listed on Schedule 5.2, the list of former
Continental drivers. Judge Young found that Dunbar is not a member of the class because a
copy of Schedule 5.2 presented at the evidentiary hearing indicated that he met Celadon’s hiring
requirements. However, for reasons stated in Section B of this order, the Court finds that
Celadon has failed to show that it hired or offered employment to Dunbar.
Judge Young reports that Plaintiffs previously acknowledged that Angela Berry was not
a member of the class. See ECF 157, at 7.
Supra note 6.
the Court finds that Judge Young properly credited the testimony of Timothy Hodnett, who
testified that the individuals in question were supervised from Continental’s Little Rock office.
The Court further finds that individuals who were supervised from Continental’s Little Rock
office qualify as “persons who were employees of the former Continental operation in Little
Rock” and that all class members listed on Plaintiffs’ Exhibit A (ECF No. 149-1), with the
exception of Angela Berry, are included in the class.
Celadon contends that a portion of the driver plaintiffs listed on the class roster do not
meet the class definition because (1) they were hired or offered employment by Celadon; (2)
they worked from non-Little Rock terminals; (3) they worked as independent-contractor drivers,
or (4) they were employed by Northstar Transportation Solutions, LLC (“Northstar”) or
Arkansas Trucking Services, Inc. (“ATS”).
Hired or Offered Employment
In the proceedings before Judge Young, the parties stipulated to the admission of an
unedited copy of Schedule 5.2, received as Plaintiffs’ Exhibit #3. Celadon presented the
testimony of James Steele, who served as Celadon’s recruiting agent when Celadon purchased
Continental. Steele testified that before the sale, he served on an acquisition team that carried
out a due diligence investigation at Continental’s Little Rock facility. Hr’g Tr. at 78-79. Steele
recalled that he reviewed Continental’s personnel records for the purpose of identifying drivers
that met Celadon’s hiring criteria and that he had access to “driver qualifications files, accident
history, the whole gambit of driver information.” Hr’g Tr. at 79. Steele explained that the
acquisition team worked from a list provided by Continental, which listed drivers’ names and
addresses. He further testified that Celadon’s acquisition team modified the list by adding a
column titled “Hire.” Steele identified the unedited copy of Schedule 5.2, introduced as
Plaintiffs’ Exhibit #3, as the modified list, and he testified that a “yes” entry under the “Hire”
column indicated that the driver met Celadon’s hiring requirements and was offered a job with
Celadon. Judge Young credited Steele’s testimony and found that drivers listed on Schedule 5.2
with a “yes” entry were offered employment or hired by Celadon and thus did not qualify as
members of the class.
Plaintiffs object and point out that on cross examination, Steele acknowledged that a
“yes” entry on Schedule 5.2 only meant that the driver in question appeared to meet Celadon’s
minimum job requirements and that he or she received a conditional job offer, subject to
additional pre-employment screening. Steele admitted that a “yes” entry did not guarantee that
Celadon actually hired the driver because after further investigation, he and other Celadon
recruiters determined that some drivers with a “yes” designation did not meet Celadon’s hiring
requirements.9 Steele also acknowledged Celadon withdrew some of the conditional offers of
employment it had extended to drivers who initially received a “yes” designation on Schedule
5.2, but he could not identify those drivers. See Hr’g Tr. At 104-105. Additionally, when asked
whether Celadon offered a job to every driver who qualified for employment, Steele responded:
The following exchange occurred during Plaintiffs’ cross examination of James Steele:
So there’s some yeses that may end up being no when you do further
investigation; there’s some noes that may be yeses?
That is correct.
Hr’g Tr. at 108.
“Yes, they were either offered a job or we made every attempt to try to get a hold of them.” See
Hr’g Tr. at 84. Considering Steele’s full testimony, the Court finds that Celadon failed to show
that drivers listed on Schedule 5.2 with a “yes” entry should be excluded from the class.10
Steele further testified that Celadon hired a portion of drivers with a “no” entry on
Schedule 5.2, after additional investigation revealed that they met Celadon’s hiring requirements.
Two drivers with a “no” on Schedule 5.2, Duarl Richardson and Randy Anthony, appear on the
document “Continental Drivers Hired by Celadon and Current Status,” which listed the names
of all former Continental drivers hired by Celadon. Judge Young finds that Richardson and
Anthony were hired by Celadon and do not qualify as members of the class, and the Court adopts
Celadon claims that some members of the class should be excluded because they served
Continental as independent-contractor drivers and thus do not qualify as “employees of the
former Continental operation in Little Rock.” Celadon correctly notes that Schedule 5.2 was
prepared in accordance with ¶ 5.2 of the APA, which provides: “Schedule 5.2(a) (the "Driver
List") sets forth the name of and other employment information for each employee driver, owneroperator driver and lease-purchase driver of Seller on the Closing Date.” ECF 55-3, at 7 (APA ¶
5.2(a)). Steele testified that “employee drivers” drove trucks owned by Continental, but “owner-
Judge Young noted “conflicting evidence” as to whether drivers with a “yes” entry were
actually hired by Celadon, but he found that Plaintiffs offered no evidence to the contrary.
However, Plaintiffs previously established that the individuals listed on Schedule 5.2, with the
exception of drivers listed on a document produced by Celadon, titled “Continental Drivers
Hired by Celadon and Current Status,” qualify as members of the class.
operators” drove trucks that they owned, and “lease-purchase drivers” drove trucks that they
leased from Continental. See Hr’g Tr. at 76-77.
Additionally, Steele offered his opinion that
former Continental owner-operators and lease-purchase drivers worked as independent
contractors, not employees.
Steele testified that as part of his due-diligence activities, he identified Continental
drivers who worked as independent contractors. See Hr’g Tr. at 88. Celadon proffered
Defendant’s Exhibit #4, a heavily edited version of Schedule 5.2 that includes the handwritten
notation “CEI-IC” beside the names of twenty-five drivers. Steele testified that “one of two
gentlemen” who assisted him in the due-diligence process made the “CEI-IC” notations at his
direction, indicating that the driver in question worked for Continental as an independent
contractor. See Hr’g Tr. 94. Steele provided no specific testimony as to how he determined
whether a Continental driver worked as an independent contractor, but it appears that if a driver
entered a lease-purchase agreement, Steele assumed that he or she worked as an independent
contractor. See Hr’g Tr. at 92-95.
Plaintiffs presented the testimony of Timothy Hodnett, who testified that none of
Continental’s drivers owned his or her own truck. See Hr’g Tr. at 71. Hodnett acknowledged
that a portion of Continental’s drivers entered lease-purchase agreements, which provided that
Continental retained exclusive possession and control of the leased equipment during the lease
period. Hr’g Tr. At 66, see also Def’s Hr’g Exs. #1, #2 (Contractor Operating Agreements).
However, Hodnett stated that “the lease operator was basically a glorified driver, [who] received
a higher rate of mileage pay to cover some additional expenses that they had.” Hr’g Tr. At 37.
According to Hodnett, Continental dispatched the leased trucks and controlled how they were
utilized. Id. He also stated that Continental’s lease-purchase drivers performed trucking
services “just like company drivers.” Id.
Plaintiffs also presented a benefits schedule showing that Continental provided insurance
benefits to a portion of the class members,11 and Hodnett testified that Continental granted such
benefits to employees, not independent contractors. See Hr’g Tr. at 26. Hodnett explained that
not every Continental employee participated the company’s benefits program but that
participating drivers were employees, not independent contractors.
Judge Young found that if a class member’s name appeared on Continental’s benefits
schedule, he or she qualified as an employee driver. But absent such evidence, Judge Young
found that Plaintiffs failed to demonstrate that drivers included in the class served Continental as
employee drivers, not independent contractors. The Court declines to adopt this finding. For
reasons previously stated, the Court finds that Celadon shoulders the burden to prove that
specific class members worked for Continental as independent contractors and thus do not
qualify for inclusion in the class. The Court further finds that Celadon has failed to carry this
Northstar Transportation Solutions - Northstar
The APA at issue in this case was entered by and among Celadon, as purchaser, and three
Hodnett testified that he prepared an insurance schedule in November 2008 that
recorded the names of Continental employees who received health insurance benefits. Plaintiffs
introduced the insurance schedule at the hearing as Plaintiffs’ Exhibit #9. See Hr’g Tr. at 27.
Hodnett explained that he prepared the insurance schedule in advance of Continental’s insurance
renewal. According to Hodnett, the insurance schedule does not include every former
Continental employee as of November 2009, but every person listed was a Continental
employee, not an independent contractor.
sellers: Continental, Northstar, and Great Western LLC. The introductory paragraph of the
APA provides that Continental, Great Western, and Northstar “are referred to herein collectively
as ‘Sellers,’ and when the context so requires, individually as ‘Seller’” . . . . ECF No. 55-3, at 1.
Celadon argues that it is possible that the drivers listed on Schedule 5.2, and by extension
individuals listed on the class roster, may have been employed by Northstar, not Continental.
However, paragraph 5.2 of the APA states that “Schedule 5.2(a) (the ‘Driver List’) sets forth the
name . . . for each employee driver, owner-operator and lease-purchase driver of the Seller . . . on
the Closing Date.” ECF No. 55, ¶ -3, at 7(emphasis added). Furthermore, in response to
Plaintiffs’ motion for summary judgment on liability, Celadon specifically stated that it did not
dispute that on December 4, 2008, Continental employed 658 individuals, including the drivers
listed on Schedule 5.2.12 Compare ECF No. 57, ¶ 14 with ECF No. 64, ¶ 6.
Steele testified that in the course of performing his due diligence investigation, he noted
that some drivers listed on Schedule 5.2 worked for Northstar. See Hr’g Tr. at 92. However,
Steele provided no details as to how he determined that a driver worked for Northstar, and the
Court finds that Celadon has failed to show that specific class members worked for Northstar,
Arkansas Trucking Services - ATS
After Plaintiffs moved for summary judgment on damages, the Court directed Plaintiffs
to make all documents supporting Plaintiffs’ damage calculations available for Celadon’s
Additionally, in response to Plaintiffs’ discovery request seeking the names of “each . . .
employee who was employed by Continental . . . on the date that the sale . . . was finalized[,]”
Celadon referred to “the schedules attached to the [APA] regarding [Continental] employees.”
Pls.’ Hr’g Ex. #1, at 1-2.
inspection. Celadon reports that the documents it reviewed included wage and tax statements
issued by ATS, and it contends that thirty-six class members were likely employed by ATS, not
Continental. Celadon further states that it believes that Plaintiffs’ payroll and tax records show
that ten additional class members were not employed by Continental on December 4, 2008.
In his testimony before Judge Young, Hodnett characterized ATS as a “shell company,” with
no employees. Hodnett testified that Continental employed and paid individuals that were merely
labeled ATS employees and that Continental prepared the payroll and funded a “zero balance”
account for ATS. See Hr’g Tr. At 36-37. In light of Hodnett’s testimony, the Court finds that
Celadon has failed to show that a portion of class members were ATS employees. The Court also
finds that Celadon has failed to show that ten class members were not employed by Continental on
December 4, 2009. Celadon urges the Court to reopen discovery on these issues, but for reasons that
follow, that request is denied.
In sum, the Court adopts Judge Young’s recommendation that the following individuals be
excluded from the plaintiff class: Angela Berry, Duarl Richardson, and Randy Anthony.
IV. Celadon’s Motion for Discovery
Celadon requests that the Court reopen discovery and order Plaintiffs to all produce
payroll and tax records in their possession. Celadon reports that such records, which defense
counsel has examined but does not possess, show that at least thirty-six class members were
employed by ATS, not Continental. Celadon also claims that the records “call into question
whether at least ten other individuals . . . were in fact employed by Continental at the time of the
sale in December 2008.” ECF No. 161, ¶ 8.
Rule 16 of the Federal Rules of Civil Procedure requires a district judge to issue a
scheduling order that limits the time to join parties, amend pleadings, complete discovery, and
file motions, see Fed. R. Civ. P. 16(b)(1), and the Court’s discovery deadline in this case expired
on April 19, 2010.13 A modification of the Court’s scheduling order is proper only when the
movant has demonstrated good cause, see Fed. R. Civ. P. 16(b), and the primary measure of
good cause is the movant’s diligence in attempting to meet court-ordered deadlines. See
Bradford v. DANA Corp. 249 F.3d 807, 809 (8th Cir. 2001). In support of its motion for
discovery, Celadon states that the documents it seeks are necessary “so that the Court may have
a complete record to consider in determining class membership.” Id., ¶ 10. However, the Court
has decided the issue of class membership, and Celadon has failed to persuade the Court that
good cause exists for reopening discovery.
V. Celadon’s Renewed Motion for Decertification
In certifying the class, the Court determined that Plaintiffs met the numerosity,
commonality, typicality, and adequacy of representation requirements under Rule 23(a). The
Court further determined that certification was proper under Rule 23(b)(3) because common
issues regarding Celadon’s liability for WARN Act violations outweighed any potential,
individual damages issues. Celadon now contends that the class must be decertified because the
resolution of Plaintiffs’ claims will require individual inquiries regarding the make-up of the
class. However, as previously explained, issues regarding class membership and liability have
Celadon also contends that the Supreme Court’s decision in Comcast v. Behrend, –––
U.S. ––––, 133 S.Ct. 1426, 185 L. Ed.2d 515 (2013), precludes the maintenance of a class in this
case because damage determinations will require a careful analysis of individual circumstances.
See supra footnote 4 discussing the Court’s discovery deadline and related background.
The Court disagrees. In Comcast, an antitrust action, the Supreme Court concluded that the
district court erred in certifying a class because the plaintiffs’ damages model was incongruent
with the theory of liability.14 Unlike Comcast, this is not a case in which the plaintiffs must
demonstrate the existence of a uniform damage methodology directly related to the asserted
theory of liability. The class members have suffered the same injury, and a straight-forward
remedy is provided by statute. An employer found to have violated the WARN Act is liable for
back pay and benefits for each day of the violation. See 29 U.S.C. § 2104(a)(1). Given
differences in pay and benefits, damages will not be identical for each class member, but
individualized damage questions do not warrant decertification.
VI. Plaintiffs’ Motion for Sanctions
In support of their motion for sanctions, Plaintiffs charge that Celadon withheld
information that Plaintiffs sought during discovery but produced such information in a lastminute attempt to avoid the Court’s ruling on liability and drastically reduce the size of the
plaintiff class. Plaintiffs note that early in this case, they sought and obtained an order
compelling Celadon to provide initial disclosures and responses to Plaintiffs’ interrogatories and
requests for production. Plaintiffs’ Interrogatory No. 1 sought the name of “each and every
The class in Comcast v. Behrend, ––– U.S. ––––, 133 S.Ct. 1426, 185 L. Ed.2d 515
(2013), included more than 2 million current and former Comcast subscribers, who charged that
the company engaged in practices that eliminated competition and held prices for cable services
above competitive levels. The plaintiffs pursued four separate theories of antitrust impact, but
the district court accepted only one of those theories as capable of class-wide proof. In moving
for class certification, the plaintiffs submitted a damages model that calculated overall damages
based on combination of all four theories of antitrust impact, not the specific theory that the
district court deemed suitable for certification. Nonetheless, the district court refused to
entertain arguments bearing on the propriety of class certification and the impact of the
plaintiffs’ broad damages model, and it granted class certification under Rule 23(b)(3).
employee” who was employed by Continental on the date that Continental’s sale to Celadon was
finalized. See Pls.’ Hr’g Ex. #1, at 1. For each employee listed, Plaintiffs sought a
corresponding job title, work address, home address, date of termination, and rate of pay.
Plaintiffs also sought the current position of former Continental employees who were hired by
In response to Plaintiffs’ discovery request, Celadon produced two lists, which it
described as “a list of all former [Continental] drivers [Celadon] hired as well as a list of former
[Continental] administrative personnel [Celadon] hired.” Id. Celadon also referred Plaintiffs to
Schedules 5.2 and 5.6, which they described as the “schedules attached to the Asset Purchase
Agreement regarding [Continental] employees.” Id. at 2. And in response to Plaintiffs’ Request
for Production No. 1, requesting “a copy of any and all lists” of persons employed by
Continental at the time of the sale at the time, Celadon stated that it had no such lists, but it
stated: “See Response to Interrogatory No. 1.” Id. at 4.
In support of their motion for summary judgment on liability, Plaintiffs presented
Schedules 5.2 and 5.6 and aforementioned “hire lists” that Celadon produced in discovery.
Plaintiffs asserted that, with a few exceptions noted by Plaintiffs, the individuals listed on
Schedules 5.2 and 5.6, which were not included on Celadon’s hire lists, were members of the
plaintiff class, who suffered an “employment loss” as a result of a “mass layoff” that occurred
after Celadon purchased Continental. Celadon did not dispute those assertions, and the Court
granted summary judgment in Plaintiffs’ favor.
Plaintiffs assert that either the facts that went unchallenged at the liability stage should be
deemed established or the Court should order Celadon to pay all costs and fees that Plaintiffs
incurred following the Court’s summary judgment ruling on liability. The Court finds that its
rulings regarding excludable class members adequately address the issues raised by Plaintiffs
and that the motion for sanctions should be denied.
VII. Damages Phase
With the issues of class membership and Celadon’s liability finally decided, the case will
now proceed, without delay, on the issue of damages. When Plaintiffs commenced this case,
they demanded a trial by jury, and by letter to the Court dated April 21, 2014, Plaintiffs’ counsel
requested that the Court schedule a jury trial “at the earliest possible setting.” The WARN Act
does not specifically address the right to a jury, leaving it to the courts to decide whether a jury
trial is constitutionally required. The Eighth Circuit has not addressed this question, but after
careful consideration, the Court finds that a jury trial is not required.
The Seventh Amendment preserves the right to a jury trial in “suits at common law” filed
in federal court, and the Supreme Court has established a two-prong test for determining whether
a party enforcing a statutory right is entitled to a jury trial under the Seventh Amendment. See
Tull v. United States, 481 U.S. 412, 417–18, 107 S.Ct. 1831 (1987). First, a court must compare
the statutory action to 18th-century actions brought in the courts of England prior to the merger
of the courts of law and equity. Id. Second, a court must examine the remedy sought and
determine whether it is legal or equitable in nature, and this inquiry is more important that the
first. See Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 565, 110
S.Ct. 1339 (1990).
In Bledsoe v. Emery Worldwide Airlines, Inc., 635 F.3d 836 (6th Cir. 2011), the Sixth
Circuit found that the back pay remedy available under the WARN Act provides equitable
restitutionary relief for which there is no constitutional right to a jury trial. The Sixth Circuit
reasoned that the exclusive WARN Act remedy is restitutionary and equitable in nature because
it seeks to restore the pay and benefits the employer should have provided aggrieved employees
during or in lieu of a sixty-day notice period. See Bledsoe, 635 F.3d at 843. The Court of
Appeals also noted that the WARN Act grants a district court discretion to reduce the amount of
the liability or penalty, which reinforces the view that WARN Act remedies are equitable in
nature. See Bledsoe, 635 F.3d at 844(citing Albemarle Paper Co. v. Moody, 422 U.S. 405, 443,
95 S.Ct. 2362 (1975) (Rehnquist, J., concurring)(“To the extent, then, that the District Court
retains substantial discretion as to whether or not to award backpay notwithstanding a finding of
unlawful discrimination, the nature of the jurisdiction which the court exercises is equitable . . . .
”). This Court agrees with the Sixth Circuit’s reasoning and finds that WARN Act damages are
restitutionary in nature and analogous to reimbursement of wrongfully withheld funds, as
opposed to compensation for damages flowing from wrongful termination. Accordingly, the
Court finds that Plaintiffs are not entitled to a jury trial. The Court will direct the parties to file
proposed findings of fact and conclusions of law, which will enable the Court to identify
disputed issues and determine the most efficient way to proceed.
IT IS THEREFORE ORDERED that the findings and recommendations (ECF No. 157)
issued by United States Magistrate H. David Young are adopted as this Court’s findings to the
extent that Angela Berry, Duarl Richardson, and Randy Anthony are excluded from the plaintiff
IT IS FURTHER ORDERED that Defendant’s motion for discovery (ECF No. 161),
Defendant’s renewed motion for decertification (ECF No. 163), and Plaintiffs’ motion for
sanctions (ECF No. 165) are DENIED.
IT IS FURTHER ORDERED that Defendant’s motion in limine and for judicial notice
(ECF No. 153)15 and Plaintiffs’ motion to dismiss Defendant’s renewed motion for
decertification (ECF No. 167) are DENIED AS MOOT.
IT IS FURTHER ORDERED that the parties must file, on or before July 31, 2014
proposed findings of fact and conclusions of law concerning damages for the claims on which
liability has been established. The submissions should include any affidavits and documentary
evidence that support the proposed findings. Counsel should draft findings in neutral language,
avoiding argument, and identify specific evidence expected to establish each proposed finding.
The parties will have up to and including August 14, 2014 in which to file a response to the
opposing party’s proposed findings of fact and conclusions of law.
IT IS SO ORDERED THIS 16th DAY OF JUNE, 2014.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
Before Judge Young issued his findings and recommendations, Celadon filed a motion
asking the Court to take judicial notice of a “company snapshot” for Northstar Transportation
Solutions, LLC (“Northstar”), issued by the United States Department of Transportation.
Celadon asserts that the snapshot shows that Northstar was granted carrier operating authority,
which it claims contradicts Plaintiffs’ evidence. For reasons explained in this order, the Court
finds that Celadon has failed to show that specific class members should be excluded from the
class on the ground that they worked as Northstar employees.
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