Shephard et al v. Lowe's HIW, Inc.

Filing 61

ORDER by Judge Jeffrey S. White GRANTING 41 Motion to Certify Class. (jswlc2, COURT STAFF) (Filed on 8/19/2013)

Download PDF
1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 11 For the Northern District of California United States District Court 10 RONALD SHEPARD and HENRY ROMINES, on behalf of themselves and all other similarly situated, 12 13 14 No. C 12-3893 JSW Plaintiffs, v. ORDER ON MOTION FOR CLASS CERTIFICATION LOWE’S HIW, INC. and DOES 1-50, Defendants. / 15 16 Now before the Court is the motion for class certification filed by Plaintiff Ronald 17 Shepard (“Plaintiff”). The Court finds that this matter is appropriate for disposition without 18 oral argument. See N.D. Civ. L.R. 7-1(b). Accordingly, the hearing set for August 23, 2013 is 19 HEREBY VACATED. Having carefully reviewed the parties’ papers, considered their 20 arguments and the relevant legal authority, the Court hereby GRANTS Plaintiff’s motion for 21 class certification. 22 23 BACKGROUND Plaintiff filed this putative class action against defendant Lowe’s HIW, Inc. 24 (“Defendant” or “Lowe’s”) on behalf of all persons who installed products on behalf of Lowe’s, 25 alleging violations of the California Labor Code §§ 2750.5 and 2802 as well as a claim for 26 unfair competition in violation of California Business and Professions Code § 17200. Lowe’s is 27 a home improvement retailer that operates approximately 98 stores in the State of California. 28 (Amended Complaint (“Am. Compl.”) at ¶ 3.) Defendant offers its customers the opportunity 1 2 to install products and services purchased at its retail stores. (Id.) Plaintiff alleges that he was hired to perform installations of garage doors for the Lowe’s 3 store in Victorville, California. (Id.) Plaintiff alleges that Defendant treated him and all others 4 hired as installers as independent contractors when they should have been classified as 5 employees and entitled to benefits. (Id. at ¶¶ 4-5.) Plaintiff alleges that Defendant had the right 6 to control, and in fact did control, all aspects of all installation jobs by Plaintiff and all other 7 class members by 8 designating the customers whom Plaintiffs would perform installation for; requiring the customer to pay Lowe’s directly for all work performed by Plaintiffs and then Lowe’s would pay Plaintiffs; requiring Plaintiffs and any employee working with Plaintiffs to wear Lowe’s shirts and hats and hold themselves out as employees of Lowe’s; specifically instructing Plaintiffs and their workers to inform customers that they were employees of Lowe’s; directing the work that Plaintiffs performed for customers; directing what Plaintiffs could or could not do as installers; overseeing all work performed by Plaintiffs; and prohibiting Plaintiffs from working for anyone aside from Lowe’s. 9 11 For the Northern District of California United States District Court 10 12 13 (Id. at ¶ 5.) 14 Plaintiff now seeks class certification pursuant to Federal Rule of Civil Procedure 23 for 15 the following class: 16 17 All persons who installed products for Lowe’s or performed services for Lowe’s in the State of California and who were treated as independent contractors by Lowe’s but over whom Lowe’s exercised control and discretion in the performance of their installation services. 18 19 (Id. at ¶ 7.) 20 ANALYSIS 21 “Class certifications are governed by Federal Rule of Civil Procedure 23,” and a 22 plaintiff seeking class certification bears the burden of “demonstrating that he has met each of 23 the four requirements of Rule 23(a) and at least one of the requirements of Rule 23(b).” Lozano 24 v. AT&T Wireless Servs., Inc., 504 F.3d 718, 724 (9th Cir. 2007); see also Zinser v. Accufix 25 Research Institute, Inc., 253 F.3d 1180, 1186 (9th Cir.), amended 273 F.3d 1266 (9th Cir. 2001) 26 (trial court must conduct a “rigorous analysis” to determine whether the requirements of Rule 27 23 have been met). “Rule 23 does not set forth a mere pleading standard. A party seeking class 28 certification must affirmatively deonstrate his compliance with the Rule – that is, he must be 2 1 prepared to prove that there are in fact sufficiently numerous parties, common questions of law 2 or fact, etc.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). Further, “[c]lass 3 certification is not immutable, and class representative status could be withdrawn or modified if 4 at any time the representatives could no longer protect the interests of the class.” Cummings v. 5 Connell, 316 F.3d 886, 896 (9th Cir. 2003) (citing Soc. Servs. Union, Local 535 v. County of 6 Santa Clara, 609 F.2d 944, 948-49 (9th Cir. 1979)). 7 A. 8 As a threshold matter, and apart from the explicit requirements of Rule 23(a), the party 9 seeking class certification must demonstrate that an identifiable and ascertainable class exists. Ascertainability. Mazur v. eBay Inc., 257 F.R.D. 563, 567 (N.D. Cal. 2009). “‘Although there is no explicit 11 For the Northern District of California United States District Court 10 requirement concerning the class definition in Fed. R. Civ. P. 23, courts have held that the class 12 must be adequately defined and clearly ascertainable before a class action may proceed.’” 13 Schwartz v. Upper Deck Co., 183 F.R.D. 672, 679-80 (S.D. Cal. 1999) (quoting Elliott v ITT 14 Corp, 150 F.R.D. 569, 573-74 (N.D. Ill. 1992)). “A class definition should be ‘precise, 15 objective and presently ascertainable.’” Rodriguez v. Gates, 2002 WL 1162675, at *8 (C.D. 16 Cal. 2002) (quoting O’Connor v. Boeing North American, Inc., 184 F.R.D. 311, 319 (C.D. Cal. 17 1998)); see also Manual for Complex Litigation, Fourth § 21.222 at 270-71 (2004). While the 18 identity of the class members need not be known at the time of certification, class membership 19 must be clearly ascertainable. DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970). The 20 class definition must be sufficiently definite so that it is administratively feasible to determine 21 whether a particular person is a class member. See, e.g., Davoll v. Webb, 160 F.R.D. 142, 144 22 (D. Colo. 1995). 23 Plaintiff asserts that the members of the purported class are known by Lowe’s discovery 24 responses. (See Declaration of Scott A. Mays (“Mays Decl.”), Ex. 16 at 31 (class contains 25 approximately 865 individuals who performed installation services on Defendant’s behalf in the 26 State of California).) Defendant does not contest the ascertainability of the purported class or 27 subclass. Accordingly, the Court finds that Plaintiff has set forth an identifiable and 28 ascertainable class. 3 1 B. Rule 23(a) Requirements. 2 Class certification is appropriate only if 3 4 5 (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. 6 not set forth a mere pleading standard. A party seeking class certification must affirmatively 9 demonstrate his compliance with the Rule – that is, he must be prepared to prove that there are 10 in fact sufficiently numerous parties, common questions of law or fact, etc.” Wal-Mart Stores, 11 For the Northern District of California Fed. R. Civ. P. 23(a). As noted above, the Supreme Court has made clear that “Rule 23 does 8 United States District Court 7 131 S. Ct. at 2551. The class can be certified only if the court “is satisfied, after a rigorous 12 analysis, that the prerequisites of Rule 23(a) have been satisfied.” General Telephone Co. of 13 Southwest v. Falcon, 457 U.S. 147, 160-61 (1982). 14 The Supreme Court has noted that “[f]requently . . . ‘rigorous analysis’ will entail some 15 overlap with the merits of the plaintiff’s underlying claim. That cannot be helped.” Wal-Mart, 16 131 S. Ct. at 2551. “The district court is required to examine the merits of the underlying claim 17 in this context, only inasmuch as it must determine whether common questions exist; not to 18 determine whether class members could actually prevail on the merits of their claims.” Ellis v. 19 Costco Wholesale Corp., 657 F.3d 970, 983 n.8 (9th Cir. 2011) (citing Wal-Mart, 131 S. Ct. at 20 2552 n.6 (clarifying that Rule 23 does not authorize a preliminary inquiry into the merits of the 21 suit for purposes other than determining whether certification was proper)). “To hold otherwise 22 would turn class certification into a mini-trial.” Ellis, 657 at 983 n.8. 23 24 1. Numerosity. In order to meet their burden on Rule 23(a)’s “numerosity” requirement, Plaintiff must 25 demonstrate that the proposed class is “so numerous that joinder of all members is 26 impracticable.” Fed. R. Civ. P. 23(a)(1); see also Hanlon v. Chrysler Corp., 150 F.3d 1011, 27 1019 (9th Cir. 1998). Although “[t]here is no absolute minimum number of plaintiffs necessary 28 to demonstrate that the putative class is so numerous so as to render joinder impracticable[,] . . . 4 1 [j]oinder has been deemed impracticable in cases involving as few as 25 class members. . . .” 2 Breeden v. Benchmark Lending Group, Inc., 229 F.R.D. 623, 628-29 (N.D. Cal. 2005) (internal 3 citations omitted) (finding joinder was impractical where there were over 236 members in the 4 putative class). As another court in this district has recognized “a survey of representative cases 5 indicates that, generally speaking, classes consisting of more than 75 members usually satisfy 6 the numerosity requirement of Rule 23(a)(1).” Id. (citing 7A Wright, Miller & Kane Federal 7 Practice and Procedure: Civil 3d § 1762 (2005)). In this case, Plaintiff contends that the class 8 exceeds 860 installers. Defendant has not contested numerosity. The Court finds that Plaintiff 9 has met his burden to show that the class is sufficiently numerous. 11 For the Northern District of California United States District Court 10 2. Commonality, Typicality, Superiority, and Predominance. Commonality requires that there be “questions of fact and law which are common to the 12 class.” Fed. R. Civ. P. 23(a)(2). “The commonality requirement serves chiefly two purposes: 13 (1) ensuring that absentee members are fairly and adequately represented; and (2) ensuring 14 practical and efficient case management.” Rodriguez v. Hayes, 591 F.3d 1105, 1122 (9th Cir. 15 2010) (internal quotation marks omitted). Courts look for “shared legal issues or a common 16 core of facts.” Id. Where diverging facts underlie the individual claims of class members, 17 courts consider whether the issues “at the heart” of those claims are common such that the class 18 vehicle would “facilitate development of a uniform framework for analyzing” each class 19 member’s situation. Id. at 1123. The class claims “must depend on a common contention,” 20 which “must be of such a nature that it is capable of classwide resolution – which means that 21 determination of its truth or falsity will resolve an issue that is central to the validity of each one 22 of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551. The commonality requirement has 23 been construed permissively and is “less rigorous than the companion requirements of Rule 24 23(b)(3).” Hanlon, 150 F.3d at 1019. 25 Typicality requires that “the claims or defenses of the representative parties are typical 26 of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). As with the commonality 27 requirement, the typicality requirement is applied permissively. Hanlon, 150 F.3d at 1020. 28 “[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with those of absent 5 1 class members; they need not be substantially identical.” Id.; see also Lozano, 504 F.3d at 734 2 (“Under Rule 23(a)(3) it is not necessary that all class members suffer the same injury as the 3 class representative.”); Simpson v. Fireman’s Fund Ins. Co., 231 F.R.D. 391, 396 (N.D. Cal. 4 2005) (“In determining whether typicality is met, the focus should be ‘on the defendants’ 5 conduct and plaintiff’s legal theory,’ not the injury caused to the plaintiff.”) (quoting Rosario v. 6 Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992)). Thus, typicality is “satisfied when each class 7 member’s claim arises from the same course of events, and each class member makes similar 8 legal arguments to prove the defendant’s liability.” Armstrong v. Davis, 275 F.3d 849, 868 (9th 9 Cir. 2001) (quoting Marisol v. Giuliani, 126 F.3d 372, 376 (2nd Cir. 1997)). In order to certify a class under Rule 23(b)(3), Plaintiff must establish that “common 11 For the Northern District of California United States District Court 10 questions . . . ‘predominate over any questions affecting only individual members,’” and also 12 must establish that class resolution is “‘superior to other available methods for the fair and 13 efficient adjudication of the controversy.’” Hanlon, 150 F.3d at 1022 (quoting Fed. R. Civ. P. 14 23(b)(3)). “The Rule 23(b)(3) predominance inquiry tests whether proposed classes are 15 sufficiently cohesive to warrant adjudication by representation.” Amchem Products, Inc. v. 16 Windsor, 521 U.S. 591, 623 (1997). The focus is “on the relationship between the common and 17 individual issues. When common questions present a significant aspect of the case and they can 18 be resolved for all members of the class in a single adjudication, there is clear justification for 19 handling the dispute on a representative rather than on an individual basis.” Hanlon, 150 F.3d 20 at 1022. 21 A plaintiff can satisfy the superiority requirement when he or she can show that “class- 22 wide litigation of common issues will reduce litigation costs and promote greater efficiency.” 23 Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). In order to make this 24 determination, the Court should consider the following factors: “the interest of members of the 25 class in individually controlling the prosecution or defense of separate actions; the extent and 26 nature of any litigation concerning the controversy already commenced by or against members 27 of the class; the desirability or undesirability of concentrating the litigation of the claims in the 28 6 1 particular forum; the difficulties likely to be encountered in the management of a class action.” 2 Fed. R. Civ. P. 23(b)(3)(A)-(D). 3 The Ninth Circuit has explained that individual questions regarding damages will not 4 adversely affect plaintiffs’ ability to demonstrate the predominance of common questions. See 5 Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975) (“The amount of damages is invariably an 6 individual question and does not defeat class action treatment.”); see also Local Joint Exec. Bd. 7 of Culinary/Bartender Trust Fund v. Las Vegas Sands, 244 F.3d 1152, 1163 (9th Cir. 2001). 8 Plaintiff contends that he is typical of all installers who were allegedly misclassified by principal test of an employment relationship is whether the person to whom service is rendered 11 For the Northern District of California Defendant Lowe’s as independent contractors instead of employees. Under California law, “the 10 United States District Court 9 has the right to control the manner and means of accomplishing the result desired . . . .” S.G. 12 Borello & Sons, Inc. v. Dept. of Industrial Relations, 48 Cal. 3d 341, 350 (1989). There are also 13 “secondary indicia of the nature of a service relationship,” including whether an employer has 14 the right to discharge at will and without cause.” Id. at 350-51. Additional factors include: 15 16 17 18 19 20 21 22 (a) whether the one performing the services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of a principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by time or by the job; (g) whether or not the work is part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship or employer-employee. Id. at 351; see also Narayan v. EGL, Inc., 616 F.3d 895, 900-01 (9th Cir. 2010). Plaintiff alleges that, like all installers, he was subject to an interview process, required 23 to submit to and pass a background check, and was required to enter into an installation services 24 agreement with Defendant. (See Mays Decl., Ex. 3 at 18, 41; Ex. 4 at 95, Exs. 5, 6; Declaration 25 of Matthew K. Edling (“Edling Decl.”), Ex. A.) Plaintiff also alleges that Lowe’s included 26 guides and standards as appendices to the installer contracts indicating the expectations for 27 performance on the contracts. (Mays Decl. at Ex. 3 at 44, 46; Exs. 8-11.) Plaintiff asserts that 28 Lowe’s controlled the payment on any installation project. (Id. at Ex. 3 at 73, 133; Ex. 18 at 22, 7 1 69; Edling Decl., Ex. B at 24-25, 73; Ex. C at 140-41.) Plaintiff further alleges that Defendant 2 maintained uniform policies for performance compliance and procedures for warning and 3 terminating the installer under certain circumstances. (Id. at Ex. 3 at 126-28, Exs. 14, 15; Ex. 4 18 at 25-26.) 5 Plaintiff contends that all of his claims rest upon the resolution of a single common 6 issue: whether Lowe’s installers are properly classified as employees or independent contractors 7 under California law. Although Plaintiff concedes there are minor differences among the 8 contracts for the types of installers and those contracts as they changed over time, the variations 9 do not effect the issue of Defendant’s “right to control and discretion as to the manner of performance of the contract.” See Borello, 48 Cal. 3d at 350-51. Further, Plaintiff argues that 11 For the Northern District of California United States District Court 10 the variations in the actual relationships between various Lowe’s stores and the multiple 12 installers does not alter the common legal issue of Lowe’s right to control, regardless of 13 whether Lowe’s elects to exercise that control in any particular relationship. The Court agrees: 14 the question of whether the installers are free from control and direction as a matter of contract, 15 rather than in fact, is common to all. See Wal-Mart, 131 S. Ct. at 2551 (holding that “[e]ven a 16 single [common] question will do,” so long as that question has the capacity to generate a 17 common answer “apt to drive the resolution of the litigation.”) (internal quotation marks 18 omitted). 19 Defendant argues that Plaintiff’s motion should be denied because each of the potential 20 class members has a unique set of circumstances upon which the claims turn. Defendant argues 21 that each installer’s experience, relationship, and interaction with Lowe’s is unique in ways that 22 will heavily impact the independent contractor analysis. (Opp. Br. at 3.) However, this 23 argument addresses the merits of Plaintiff’s claims. “The district court is required to examine 24 the merits of the underlying claim in this context, only inasmuch as it must determine whether 25 common questions exist; not to determine whether class members could actually prevail on the 26 merits of their claims.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 n.8 (9th Cir. 2011) 27 (citing Wal-Mart, 131 S. Ct. at 2552 n.6 (clarifying that Rule 23 does not authorize a 28 preliminary inquiry into the merits of the suit for purposes other than determining whether 8 1 certification was proper)). “To hold otherwise would turn class certification into a mini-trial.” 2 Ellis, 657 at 983 n.8. Although Lowe’s may be correct that some of the factual inquiries will 3 vary by individual store and individual installer, the Court finds that the primary legal issue – 4 Lowe’s right to control the installers – as well as many of the secondary indicia of classification 5 of the employment relationship – will involve common inquiries. “The underlying merits of a 6 case shouldn’t cloud the class certification analysis. The question is only whether the 7 requirement of Rule 23 are met.” Norris-Wilson, 270 F.R.D. at 601 (citing Eisen v. Carlisle & 8 Jacquelin, 417 U.S. 156, 177-78 (1974)). “[N]either the possibility that a plaintiff will be 9 unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to 11 For the Northern District of California United States District Court 10 certify a class which apparently satisfies the Rule.” Blackie v. Barrack, 524 F.2d 891, 901 (9th 12 Cir. 1975). 13 Because the contract and standards at issue are substantially identical and provide the 14 legal structure for the relationship and the scope of Defendant’s right to control the installers, 15 the Court finds class certification is appropriate. Also, although not determinative, the Court 16 finds that the Massachusetts decision in D’Italia v. Lowe’s Home Centers, Inc., based on a 17 similar factual record, found a similar, but more limited class, amenable to class certification. 18 Civ. No. 11-4758-BLS1 (Suffolk Super. Ct. Dec. 4. 2012). 19 Therefore, the Court finds that the proposed class share sufficient commonality to satisfy 20 the requirements of Rule 23(a)(2), that Plaintiff has satisfied the typicality requirement, and that 21 common legal questions predominate over individualized issues. The Court also finds that 22 Plaintiff has met his burden to show that a class action would be a superior method for resolving 23 this litigation. Members of the proposed class likely do not possess an interest in individually 24 controlling the prosecution of separate actions as the cost of maintaining a separate action 25 would be prohibitive. See, e.g., Perez v. Safety-Kleen Systems, Inc., 253 F.R.D. 508, 520 (N.D. 26 Cal. 2008). 27 28 9 1 3. 2 Adequacy of Representation. Rule 23(a)(4) requires that “the representative parties will fairly and adequately protect 3 the interests of the class.” Fed. R. Civ. P. 23(a)(4). “To satisfy constitutional due process 4 concerns, absent class members must be afforded adequate representation before entry of a 5 judgment which binds them.” Hanlon, 150 F.3d at 1020. In order to determine whether the 6 adequacy prong is satisfied, courts consider the following two questions: “(1) [d]o the 7 representative plaintiffs and their counsel have any conflicts of interest with other class 8 members, and (2) will the representative plaintiffs and their counsel prosecute the action 9 vigorously on behalf of the class?” Staton, 327 F.3d at 957; see also Fendler v. Westgate California Corp., 527 F.2d 1168, 1170 (9th Cir. 1975) (noting that representative plaintiffs and 11 For the Northern District of California United States District Court 10 counsel also must have sufficient “zeal and competence” to protect the interests of the class). 12 “‘[T]he adequacy-of-representation requirement is satisfied as long as one of the class 13 representatives is an adequate class representative.’” Rodriguez v. West Publishing Co., 563 14 F.3d 948, 961 (9th Cir. 2009) (quoting Local Joint Executive Bd. of Culinary/Bartender Trust 15 Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 n.2 (9th Cir. 2001) (brackets added in 16 West)). 17 The Court concludes, based on the current record as presented, that Plaintiff is an 18 adequate class representative and that Plaintiff’s counsel will vigorously prosecute this action 19 on behalf of the class. 20 Finally, although the Court does not intend to revisit the issue unless facts or 21 circumstances change, Rule 23 provides that “[a]n order that grants or denies class certification 22 may be altered or amended before final judgment.” Fed. R. Civ. P. 23(c)(1)(C). “Even after a 23 certification order is entered, the judge remains free to modify it in light of subsequent 24 developments in the litigation.” General Telephone Co. of Southwest v. Falcon, 457 U.S. at 25 160; see also United Steel, Paper & Forestry, Rubber, Mfg. Energy Allied Industries & Service 26 Workers Int’l Union, AFL-CIO, CLC v. ConocoPhillips Co., 593 F.3d 802, 809 (9th Cir. 2010) 27 (district court “retains the flexibility to address problems with a certified class as they arise, 28 including the ability to decertify”). 10 1 CONCLUSION 2 For the reasons set forth above, the Court GRANTS Plaintiff’s motion for class 3 certification. The Court continues the case management conference from August 23, 2013 at 4 9:00 a.m. to November 15, 2013 at 1:30 p.m. A joint case management statement shall be filed 5 no later than November 8, 2013. 6 IT IS SO ORDERED. 7 8 Dated: August 19, 2013 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?