Hinds et al v. FedEx Ground Package System, Inc. et al
Filing
262
ORDER DENYING Demand for Jury Trial on PAGA Claims and Court's Intended Procedures for Bench Trial on PAGA Claims. Signed by Judge Jeffrey S. White on October 14, 2022. (jswlc2, COURT STAFF) (Filed on 10/14/2022)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
MICHELLE HINDS, et al.,
7
Plaintiffs,
8
v.
9
United States District Court
Northern District of California
Case No. 18-cv-01431-JSW
10
FEDEX GROUND PACKAGE SYSTEM,
INC., et al.,
11
Defendants.
ORDER (1) DENYING PLAINTIFFS’
DEMAND FOR JURY TRIAL ON
PAGA CLAIMS; (2) AND COURT’S
INTENDED PROCEDURES FOR
BENCH TRIAL ON PAGA CLAIMS
12
13
14
15
16
17
This matter is scheduled for a trial on October 24, 2022. Plaintiffs Michelle Hinds and
Tyrone Powell (“Plaintiffs”) allege that Defendants, FedEx Ground Package System, Inc.
(“FedEx”) and Bay Rim Services, Inc. (“Bay Rim”), violated various provisions of California’s
Labor Code and Industrial Wage Commission Orders.1 Plaintiffs also assert that FedEx is liable
because it was their “joint employer.”
18
19
20
21
22
23
24
In addition to their individual claims for relief, Plaintiffs bring claims under the California
Labor Code Private Attorneys General Act of 2004 (the “PAGA claim”), which the Court has
limited to individuals employed by Bay Rim. (See Dkt. No. 201.) The parties dispute whether the
Seventh Amendment requires a jury trial to determine Defendants’ liability to other Bay Rim
employees on that claim.2 The Ninth Circuit has not addressed this issue, although some district
courts within the Circuit have determined PAGA claims are tried to the court. See, e.g., Abrams v.
ACTS-Aviation Sec., Inc., No. 20-cv-05719-ODW (JEMx), 2021 WL 8153637, at *1 (C.D. Cal.
25
26
27
28
1
On August 18, 2022, Bay Rim filed for bankruptcy. The Bankruptcy Court lifted the
automatic stay, and Bay Rim appeared at the pretrial conference held on October 3, 2022, through
its counsel. Bay Rim took no position on the issue addressed in this Order.
2
Plaintiffs agree the Court must determine the amount of penalties to be imposed, if any.
1
1
Dec. 9, 2021); Thomas v. CVS Health Corp., No. 19-cv-04283-R-FFM, 2019 WL 3526344, at *3
2
(C.D. Cal. Aug. 1, 2019); O’Connor v. Uber Techs., Inc., No. 13-cv-03826-EMC, 2015 WL
3
8587589, at *3 (N.D. Cal. Dec. 10, 2015).3
The Court has considered the parties’ papers, including the supplemental briefs and
4
5
proffers submitted on October 12, 2022, relevant legal authority, and oral argument during the
6
pretrial conference held on October 3, 2022. The Court also is mindful of the principle that “the
7
jury, as a fact-finding body is of such importance and occupies so firm a place in our history and
8
jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with
9
the utmost care.” Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 501 (1959).
ANALYSIS
10
United States District Court
Northern District of California
11
A.
The PAGA Claims Will be Tried to the Court.
The Seventh Amendment right to a jury trial applies in “suits at common law.” U.S.
12
13
Const. amend. VII. “Suits at common law” include statutory claims that are legal as opposed to
14
equitable. Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 348 (1998); Tull v. United
15
States, 481 U.S. 412, 417 (1987). To determine whether the Seventh Amendment provides a right
16
to jury trial, the Court examines the nature of the action and the remedy sought; the second inquiry
17
is the most important. Tull, 481 U.S. at 417, 421.
The “substantive dimension” of the PAGA claim is grounded in state law, and the Court
18
19
will consider the manner in which the California Supreme Court and the California Courts of
20
Appeal interpret PAGA to guide its analysis. See, e.g., In re Payless Shoesource, Inc., No. 09-
21
MD-2022 FCD GGH, 2009 WL 3233820, at *1 (E.D. Cal. Sept. 11, 2009) (concluding there is no
22
Seventh Amendment right to a jury trial on claims seeking penalties for violations of California’s
23
Song-Beverly Credit Card Act, Cal. Civ. Code § 1747.08 (“Section 1747.08”)). Ultimately, “the
24
characterization of th[e] state-created claim as legal or equitable for purposes of whether a right to
25
jury trial is indicated must be made by recourse to federal law.” Simler v. Conner, 372 U.S. 221,
26
222 (1963).
27
28
3
None of these cases analyze whether the Seventh Amendment applies.
2
United States District Court
Northern District of California
1
In Tull, the government filed suit to enforce provisions of the Clean Water Act and sought
2
civil penalties as a remedy for the violations. 481 U.S. at 414-15. The defendant argued that a
3
claim for penalties was analogous to an action in debt, a type of action historically viewed as
4
requiring a jury trial. The Government argued the claim was more analogous to an action to abate
5
a public nuisance, which would have been equitable in nature. Id. at 417-19. The Court
6
concluded both types of actions were “appropriate analogies,” but determined it need not select
7
between the two because, reasoning the “relief sought is more important than finding a precisely
8
analogous common-law cause of action.” Id. at 420-21.
9
The Court stated civil penalties historically were viewed as legal, in part, because an
10
“important characteristic”’ of that remedy is that “it exacts punishment[.]” Id. at 422 & n. 7. That
11
led the Court to hold the defendant had a right to a jury trial to determine liability on a claim for
12
penalties under the Clean Water Act but held the amount of any penalty to be imposed should be
13
determined by the court. Id. at 427. The Supreme Court also has held, “[a]t least in cases in
14
which ‘public rights’ are being litigated, e.g., cases in which the Government sues in its sovereign
15
capacity to enforce public rights created by statutes … the Seventh Amendment does not prohibit
16
Congress from assigning the factfinding function an initial adjudication to an administrative forum
17
with which the jury would be incompatible.” Atlas Roofing Co. v. OSHA Review Comm’n, 430
18
U.S. 442, 450 (1977).
19
Plaintiffs argue that, following the reasoning in Tull, the PAGA claim for penalties is legal
20
and Defendants’ liability must be decided by a jury. The Court is not persuaded. The California
21
legislature enacted PAGA to facilitate enforcement of California’s Labor Code, and its Supreme
22
Court has described PAGA actions as “different from conventional civil suits.” Kim v. Reins Int’l
23
California, Inc., 9 Cal. 5th 73, 86 (2020). “[A] PAGA claim is an enforcement action between the
24
LWDA and the employer, with the PAGA plaintiff acting on behalf of the government.” Id.
25
PAGA actions are not actions for damages. See, e.g., O’Connor, 2015 WL 8587589, at *3.
26
Rather, the civil penalties “are intended to remediate present violations [of the Labor Code] and to
27
deter future ones, not to redress employees’ injuries.” Kim, 9 Cal. 5th at 86 (internal quotations
28
and emphasis omitted); see also Arias v. Super. Ct., 46 Cal. 4th 969, 981 (2009) (“[A] private
3
1
plaintiff suing under [PAGA] is essentially bringing a law enforcement action designed to protect
2
the public.”).
3
4
provide the right to a jury trial on a PAGA claim. LaFace v. Ralphs Grocery Co., 75 Cal. App.
5
5th 388, 391 (2022). “The California Constitution affords a right to a jury trial in common law
6
actions at law that were triable by a jury in 1850, but not to suits in equity that were not triable by
7
a jury at that time.” Id. at 395. To make that determination, California courts “look to the gist of
8
the action: whether the nature of the rights involved and the facts of the particular case show that it
9
is legal and therefore cognizable at law.” Id. Although LaFace does not apply the Seventh
10
11
United States District Court
Northern District of California
The California Court of Appeal recently held that the California Constitution does not
Amendment, the analysis is similar, and the Court finds its reasoning persuasive.
The court began with the established principle that a PAGA plaintiff “possesses the same
12
legal right and interest as the state.” Id. at 397 (quoting Iskanian v. CLS Transp. Los Angeles,
13
LLC, 59 Cal. 4th 348, 380 (2014), abrogated on other grounds by Viking River Cruises, Inc. v.
14
Moriana, 142 S.Ct. 1906 (2022)). The court then reviewed the provisions of the Labor Code
15
applicable to proceedings instituted by the LDWA, and concluded that the nature of the right
16
afforded is “administrative regulatory enforcement, which occurs in administrative proceedings
17
and which is subject to judicial review without a jury trial right.” Id. at 398. It concluded PAGA
18
was a “civil action only in the sense that its designated forum is the trial courts” and reasoned it
19
would be “anomalous to vest the state’s proxies with more rights than the state would otherwise
20
have on its own.” Id. at 401.
21
PAGA penalties are fixed by statute, and a court considering a PAGA claim is afforded the
22
“same discretion” to assess a penalty “subject to the same limitations and conditions” as the
23
LWDA. Cal. Lab. Code §§ 2699(e)(1), (f). A court also is granted discretion “to award less than
24
the maximum penalty authorized ‘if, based on the facts and circumstances of the particular case, to
25
do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.”
26
Id. § 2699(e)(2). The LaFace court concluded exercising that type of discretion was a “task for
27
which a jury seems unsuited.” The court also rejected the plaintiff’s argument that a court could
28
sever the penalty portion of a PAGA claim from the liability portion and allow a jury to resolve
4
1
the latter. The court viewed that proposal as granting a plaintiff “a jury trial right not otherwise
2
available to either the agency or employers.” Id. at 402.
3
The Court concludes that a PAGA claim is analogous to the type of administrative
4
enforcement proceeding designed to protect a public right in Atlas than the government’s claim in
5
Tull. It is not a typical civil action. See Kim, 9 Cal. 5th at 86. A PAGA plaintiff stands in the
6
shoes of the LWDA, which would otherwise initiate an administrative proceeding to enforce a
7
public right.
The Court also concludes that the nature of the PAGA remedy, which is the most
United States District Court
Northern District of California
8
9
important factor, also distinguishes the civil penalties available as a remedy from the civil
10
penalties in Tull. In In re Payless, the court stated the purpose of Section 1747.08 was “to
11
promote the lawful use of credit cards and deter conduct that would put consumers’ privacy at
12
risk.” Id. The court reasoned that the statutory penalties under that statute are “imposed in order
13
‘to deter misconduct and harm, not to compensate the plaintiff for actual damages sustained.’” In
14
re Payless, 2009 WL 3233820, at *3 (quoting Dipirro v. Bondo Corp., 153 Cal. App. 4th 150, 183
15
(2007)). Similarly, the civil penalties provided for in PAGA are not intended “to redress
16
employees’ injuries.” Kim, 9 Cal. 5th at 86; see also Cal. Lab. Code § 225.5 (stating percentage of
17
penalties recovered by LWDA to be paid into a fund “dedicated to educating employers about
18
state labor laws”).
The court also found it significant that the amount of the penalty was highly discretionary
19
20
and distinguished Tull because “there [was] no indication that the legislature [had] directed the
21
consideration of non-equitable factors, such as punishment or retribution, in determined the
22
amount of” the penalty to be imposed. Id. & n.3. Although PAGA is intended to deter violations,
23
a court can reduce a penalty if it determines the facts of the case demonstrate that awarding the
24
maximum penalty would be “unjust, arbitrary and oppressive, or confiscatory.” Cal. Lab. Code §
25
2699(e)(2).
Accordingly, the Court concludes the Seventh Amendment does not require jury trial on
26
27
Defendants’ liability for the PAGA claims and those claims will be tried to the Court.
28
//
5
1
B.
The Court now turns to the timing and manner in which the Court will hear evidence on
2
3
the PAGA claims, including the evidence on whether FedEx is a joint employer. The parties’
4
proffers suggest that much of the evidence to be presented on Plaintiffs’ individual claims and
5
FedEx’s defenses to those claims would overlap with the evidence to be presented on the PAGA
6
claims. By way of example, Plaintiffs state they will rely on scanner records produced by FedEx
7
and the ISP to show joint employment.4 They also state that Plaintiffs and Mr. Parikh about Bay
8
Rim’s general practices, and that Messrs. Means, Moser, and Parikh can testify about FedEx’s
9
control over working conditions for drivers.
FedEx states that it would present testimony from Mr. Means that would show FedEx did
10
United States District Court
Northern District of California
Timing and Presentation of Evidence on the PAGA claim.
11
not have “any right to control any Bay Rim employee’s working conditions,” including an
12
employee’s route, vehicle, hours, pay, or rest breaks. It also states it will present testimony from
13
Mr. Parikh that he was responsible for deciding whether to terminate a particular driver’s
14
employment, decided how and when drivers were paid, and determined their hours.
In order to avoid any inconvenience to witnesses from having to return after the jury
15
16
renders a verdict, the Court intends to hear evidence on the PAGA claims concurrently with the
17
jury trial. The Court clarifies that does not mean it will permit the jury to hear evidence that
18
should only be considered as part of the PAGA trial. The Court will use Mr. Means’ proposed
19
testimony as an example. If, in connection with the Plaintiffs’ claims, he would testify that FedEx
20
had no control their working conditions, that testimony would be presented to the jury. Once Mr.
21
Means finished presenting testimony that was relevant only to the Plaintiffs’ individual claims, the
22
Court would excuse the jury and take any testimony from Mr. Means that would only be relevant
23
to the PAGA claims.
The Court also advises the parties that it is inclined to require them to present evidence on
24
25
the individual and the PAGA claims in the time it has allotted. It will, however, allow them to
26
27
28
4
By referring to these records, the Court is not making a ruling on FedEx’s objections to
their introduction at trial.
6
1
2
3
4
5
present brief argument on why that would not be feasible.
IT IS SO ORDERED.
Dated: October 14, 2022
______________________________________
JEFFREY S. WHITE
United States District Judge
6
7
8
9
10
United States District Court
Northern District of California
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7
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?