Swales et al v. KLLM Transport Services, LLC et al
Filing
222
ORDER granting 195 Motion to Certify Class as set out in the Order. Signed by Chief District Judge Daniel P. Jordan III on September 24, 2019. (SP)
Case 3:17-cv-00490-DPJ-FKB Document 222 Filed 09/24/19 Page 1 of 11
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
HARRY SWALES, ET AL.
PLAINTIFFS
V.
CIVIL ACTION NO. 3:17-CV-490-DPJ-FKB
KLLM TRANSPORT
SERVICES, LLC
DEFENDANT
CONSOLIDATED WITH
MARCUS BRENT JOWERS
V.
PLAINTIFF
CIVIL ACTION NO. 3:17-CV-517-DPJ-FKB
KLLM TRANSPORT
SERVICES, LLC
DEFENDANT
ORDER
These consolidated cases arising under the Fair Labor Standards Act (“FLSA”) are before
the Court on Plaintiffs’ Amended Motion for Conditional Certification [195]. For the following
reasons, the motion is granted, but the scope of the proposed collective action is narrowed. This
ruling is certified for interlocutory appeal.
I.
Facts and Procedural History
Defendant KLLM Transport Services, LLC, is “a motor carrier that is authorized by the
Federal Motor Carrier Safety Administration . . . to provide transportation of property for hire to
the public.” Def.’s Mem. [210] at 8.1 Plaintiffs Corey Lilly, Kyle Shettles, John McGee, and
Marcus Brent Jowers all worked as truck drivers for KLLM under Independent Contractor
1
All references to page numbers in the parties’ briefs are to the CM/ECF pagination.
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Agreements (“ICAs”) between October 2015 and January 2017.2 Plaintiffs say KLLM
misclassified them and similarly situated truck drivers as independent contractors when, under
Mississippi law and the FLSA, they were employees entitled to payment of the federal minimum
wage.
Plaintiffs Lilly, Shettles, and McGee filed the lead case against KLLM on June 21, 2017;
Jowers filed the member case on June 28, 2017. Plaintiffs seek relief for themselves and on
behalf of similarly situated KLLM drivers under 29 U.S.C. § 216(b). The cases were
consolidated for purposes of discovery on March 29, 2018, and the parties engaged in discovery
limited to the issue of § 216(b) certification. Now that the initial phase of discovery is closed,
Plaintiffs seek conditional certification of a class of “all individual persons and/or entities who
entered into [ICAs] and Tractor Lease/Purchase Agreements with KLLM.” Pls.’ Mem. [195-1]
at 4.
II.
Analysis
Section 216(b) of the FLSA provides:
Any employer who violates the provisions of [the FLSA] shall be liable to the
employee or employees affected in the amount of their unpaid minimum wages
. . . . Any action to recover the liability prescribed in [this section] may be
maintained against any employer . . . in any Federal or State court of competent
jurisdiction by any one or more employees for and in behalf of himself or
themselves and other employees similarly situated. No employee shall be a party
plaintiff to any such action unless he gives his consent in writing to become such
a party and such consent is filed in the court in which such action is brought.
29 U.S.C. § 216(b). “Thus, the FLSA allows an employee to bring a claim on behalf of other
similarly[ ]situated employees, but the other employees do not become plaintiffs in the action
2
The Court dismissed the claims of Plaintiff Harry Swales, the first-named plaintiff in the lead
case, on August 31, 2018. Order [125].
2
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unless and until they consent in writing.” Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 915
(5th Cir. 2008).
Few areas of the law are less settled than the test for determining whether a collective
action should be certified under § 216(b). Within the Fifth Circuit, district courts routinely
follow the two-step approach adopted in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987):
First, the plaintiff moves for conditional certification of his or her collective
action. The district court then decides, usually based on the pleadings and
affidavits of the parties, whether to provide notice to fellow employees who may
be similarly situated to the named plaintiff, thereby conditionally certifying a
collective action. Second, once discovery is complete and the employer moves to
decertify the collective action, the court must make a factual determination as to
whether there are similarly[ ]situated employees who have opted in. If so, the
collective action may proceed, and if not, the court must dismiss the opt-in
employees, leaving only the named plaintiff’s original claims.
Sandoz, 553 F.3d at 915 n.2 (citations omitted).
At the first step of this test, courts typically apply a “fairly lenient standard” for deciding
whether to conditionally certify a collective action. Mooney v. Aramco Servs. Co., 54 F.3d 1207,
1214 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90
(2003). Certification is proper when the plaintiff raises “substantial allegations that the putative
class members were together the victims of a single decision, policy, or plan.” Id. at 1214 n.8.
And when that is so, “[d]istrict courts have discretion in determining whether to order courtsupervised notice to prospective plaintiffs.” Harris v. Hinds Cty., No. 3:12-CV-542-CWR-LRA,
2014 WL 457913, at *1 (S.D. Miss. Feb. 4, 2014) (citing Hoffman-La Roche Inc. v. Sperling,
493 U.S. 165, 169 (1989)).
But the Fifth Circuit Court of Appeals “has carefully avoided adopting” the Lusardi
method. In re JPMorgan Chase & Co., 916 F.3d 494, 500 n.9 (5th Cir. 2019). As it noted in
one case, the test “by its nature, does not give a recognizable form to an [FLSA] representative
class, but lends itself to ad hoc analysis on a case-by-case basis.” Mooney, 54 F.3d at 1213. Yet
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despite these misgivings, the Fifth Circuit has neither rejected the Lusardi approach nor offered
an alternative.
The question is even more complicated when—as here—some but not all discovery has
occurred. The first step of the Lusardi approach typically happens before discovery. See Clarke
v. Convergys Customer Mgmt. Grp., Inc., 370 F. Supp. 2d 601, 606 (S.D. Tex. 2005) (explaining
that, at notice stage, “little, if any, discovery has taken place”). So according to KLLM, the
Court should instead apply “a more stringent standard” because “substantial discovery has
already been conducted.” Def.’s Mem. [210] at 9. More specifically, KLLM cites the standards
one district court applied at the second decertification step. Def.’s Mem. [210] at 13 & n.23
(citing Gatewood v. Koch Foods of Miss., LLC, No. 3:07-CV-82-KS-MTP, 2009 WL 8642001,
at *13 (S.D. Miss. Oct. 20, 2009)).
Courts addressing conditional certification based on similar discovery have taken
different approaches. Some simply collapse the two steps of the collective-action process, as
KLLM seems to propose. See Harris v. Fee Transp. Servs., Inc., No. 3:05-CV-77-P, 2006 WL
1994586, at *3 (N.D. Tex. May 15, 2006) (“[W]here the parties have had the opportunity to
conduct discovery on the issue of certification, the similarly situated inquiry is more stringent.
Courts generally consider the evidence submitted and the two-step inquiry collapses into one.”
(citation omitted)). Under this approach, the three factors typically considered at the
decertification stage come into play: “(1) the disparate factual and employment settings of the
individual plaintiffs, (2) the various defenses available to the defendant which appeared to be
individual to each plaintiff, and (3) fairness and procedural considerations.” Id.
Other courts have applied a “heightened standard” to conditional certification after
discovery by requiring the plaintiff “to produce evidentiary support beyond the bare allegations
4
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contained in [the] complaint and personal declaration.” Valcho v. Dall. Cty. Hosp. Dist., 574 F.
Supp. 2d 618, 622 (N.D. Tex. 2008). Those courts have explained that when discovery has taken
place, “the standard for certification at the notice stage will appropriately be less lenient,” but it
remains less “onerous [than the] standard that applies at the second, decertification stage.” Clay
v. Huntington Ingalls Inc., No. 09-7625, 2011 WL 13205917, at *3 (E.D. La. Sept. 29, 2011).
These courts note that the more demanding standard utilized at the decertification stage is
not appropriate at this stage because “[t]hat standard is only appropriate after discovery is largely
complete and the case is ready for trial.” Id. (citing McKnight v. D. Houston, Inc., 756 F. Supp.
2d 794, 802 (S.D. Tex. 2010)); accord West v. Lowes Homes Ctrs., Inc., No. 6:09-1310, 2010
WL 5582941, at *6 (W.D. La. Dec. 16, 2010) (refusing to proceed to second stage of Lusardi
analysis where some discovery was conducted, but applying “the more lenient ‘notice stage’
standard” while “consider[ing] all the depositions, affidavits, and documents of record in
deciding whether the first-stage requirements are met”), R. & R. adopted sub nom. West v. Lowes
Home Ctrs., Inc., 2011 WL 126908 (W.D. La. Jan. 14, 2011); see also Thiessen v. Gen. Elec.
Capital Corp., 996 F. Supp. 1071, 1081 (D. Kan. 1998) (explaining that, although 30 individuals
had filed opt-in notices and the parties engaged in three months of discovery, court would not
apply “the ‘higher’ standard typically used at the post-discovery stage” in considering
conditional-certification motion).
The Court agrees with the latter approach but not for all the same reasons. To begin,
discovery is not complete, and this case is not “ready for trial,” which is the normal point at
which the decertification standards apply. Mooney, 54 F.3d at 1214. More substantively, we do
not know how many drivers will opt in or the extent to which their claims might make a
collective action viable. The step-two considerations KLLM urges the Court to apply necessarily
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consider the scope and nature of the opt-in claims. For example, a collective action with 10
drivers might present fewer disparate facts and more readily satisfy “fairness and procedural
concerns,” whereas a collective action involving thousands may require a different analysis.
Harris, 2006 WL 1994586, at *3 (listing step-two factors); see also Mooney, 54 F.3d at 1213
(noting that similarity is a fact question under Lusardi that “lends itself to ad hoc analysis on a
case-by-case basis”).
Thus, the Court will not jump to the second Lusardi step before identification of the optin claimants. It will instead require “more than minimal evidence” of the notice-stage
requirements. Parker v. Silverleaf Resorts, Inc., No. 3:14-CV-2075-B, 2017 WL 1550522, at *8
(N.D. Tex. May 1, 2017).3
As to the requirements for conditional certification, Plaintiffs must show (1) “that
aggrieved individuals exist,” (2) who “are similarly situated to the plaintiff in relevant respects
given the claims and defenses asserted,” and (3) “that those individuals want to opt in to the
lawsuit.” Hinds Cty., 2014 WL 457913, at *2. Here, the record adequately shows that aggrieved
individuals exist and that there are others who have opted in.4
3
Even assuming the Court should skip step one as KLLM suggests, there is no clear guidance on
the standards that apply at decertification. KLLM bases its argument on an unpublished districtcourt case discussing decertification. But in Tyson Foods, Inc. v. Bouaphakeo, the parties agreed
that “the standard for certifying a collective action under the FLSA is no more stringent than the
standard for certifying a class under the Federal Rules of Civil Procedure.” 136 S. Ct. 1036,
1045 (2016). The Supreme Court “assume[d], without deciding, that this is correct.” Id. At
some point, this Court will need more guidance from the parties on the proper standards for
ultimately certifying a collective action.
4
That some individuals feel aggrieved does not mean they will ultimately prevail. Nothing in
this Order suggests—or should be construed as suggesting—that the Court has any opinion on
the potential merits of these claims. See Hoffmann-La Roche Inc., 493 U.S. at 174 (holding that
courts engaged in notice process “must be scrupulous to respect judicial neutrality” and “must
take care to avoid even the appearance of judicial endorsement of the merits of the action”); see
also In re JPMorgan Chase, 916 F.3d at 503–04 (holding that district court in FLSA case erred
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Turning to similitude, some courts say the named plaintiffs and the potential opt-in
plaintiffs “‘need not be identical, but similar,’ with respect to their ‘job requirements and with
regard to their pay provisions.’” Eberline v. Media Net LLC, No. 1:13-CV-100-LG-JMR, 2013
WL 11609929, at *2 (S.D. Miss. Oct. 24, 2013) (quoting Aguilar v. Complete Landsculpture,
Inc., No. 3:04-CV-776-D, 2004 WL 2293842, at *1 (N.D. Tex. Oct. 7, 2004)).
On these metrics, Plaintiffs have minimally shown the existence of similarly situated
aggrieved individuals “given the claims and defenses asserted.” Hinds Cty., 2014 WL 457913, at
*2. All four named plaintiffs, and the four individuals who opted-in, drove trucks for KLLM
under a version of KLLM’s ICA. All were paid per mile according to the appendices to the ICA.
All leased their trucks from KLLM under a Tractor Lease/Purchase Agreement, and they then
leased the trucks back to KLLM under the terms of the ICA. All were classified as independent
contractors and thus exempt from FLSA. Yet there is evidence suggesting common policies and
practices that impacted their independence.
That is not to say there were no differences. For example, over-the-road and regional
drivers had different per-mile compensation rates. There were also differences and
individualized facts regarding the hours the drivers worked. But again, pay was determined
based on similar methods utilizing the same ICA appendices; the same business model existed
for the drivers; and the job responsibilities were substantially the same. See Mooney, 54 F.3d at
1214 & n.8 (noting that certification may be proper if pay is based on a “single decision, policy,
or plan”).5
by suggesting during conditional-certification hearing that employer engaged in illegal
employment practices).
5
KLLM says the individual pay histories demonstrate the lack of similarity, but it also notes that
there are no available records for much of this time. Def.’s Mem. [210] at 36. The Supreme
Court faced a similar issue in Tyson Foods, where the plaintiffs claimed that they did not receive
7
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Finally, as to step one, the claims and defenses largely turn on the same questions, like
whether the drivers were misclassified as independent contractors. See Hinds Cty., 2014 WL
457913, at *2 (considering similarity relevant to claims and defenses). Whether the drivers were
misclassified is based on the economic-realities test, which uses “five non-exhaustive factors” to
determine “whether the alleged employees, as a matter of ‘economic reality,’ are ‘economically
dependent’ on the business to which they supply their labor and services.” Parrish v. Premier
Directional Drilling, L.P., 917 F.3d 369, 379 (5th Cir. 2019) (citing Hopkins v. Cornerstone Am.,
545 F.3d 338, 343 (5th Cir. 2008)). As stated above, the Court may not reach the merits of this
issue at the pre-notice stage. Hoffmann-La Roche Inc., 493 U.S. at 174. But KLLM says the
differing facts each Plaintiff will ultimately present under the economic-realities test is enough to
deny conditional certification. Def.’s Mem. [210] at 21. KLLM may ultimately have a point.
But this case is at the pre-notice stage, and as stated, we do not yet know how many drivers will
opt in or how similar their claims may be.
In sum, Plaintiffs have provided evidence that they are “similarly situated to other
[drivers] in terms of their relationship to Defendant, the skill required to perform their positions,
the extent of their investments and Defendant’s investments, and the degree to which their
opportunity for profit and loss is determined by the alleged employer.” Walker v. Honghua Am.,
LLC, 870 F. Supp. 2d 462, 471 (S.D. Tex. 2012); see Pls.’ Reply [211] at 9 (summarizing
overtime pay for time spent donning and doffing their protective gear. 136 S. Ct. at 1041. The
defendant argued that “person-specific inquiries into individual work time predominate over the
common questions raised by respondents’ claims, making class certification improper.” Id. at
1046. But because no time records existed, the plaintiffs used representative evidence to
establish typical donning-and-doffing times. Id. The Supreme Court concluded—based on the
facts presented—that the representative evidence could be used to show the predominance of
common questions of law or fact. Id. at 1048–49. Tyson may prove distinguishable, but that too
will be clearer when the opt-in plaintiffs have been identified.
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Plaintiffs’ declarations as showing “KLLM controlled the work provided, the instrument
required to perform the work, and the amount paid for performance—and lease-operators were
not able to seek loads elsewhere” such that “Plaintiffs and opt-ins were completely dependent on
KLLM for their entire income”). Plaintiffs have established a basis for conditional certification
under § 216(b).
That does not, however, mean the conditional class should be as broad as Plaintiffs want.
KLLM correctly points out that Plaintiffs’ request for conditional certification contains no
temporal limitations. “[C]ourts within the Fifth Circuit have repeatedly recognized that ‘based
on the statute of limitations . . . class certification is appropriately limited to workers employed
by the defendant up to three years before notice is approved by the court.’” Perez v. City of New
Orleans, No. 12-2280, 2015 WL 4547505, at *1 (E.D. La. July 28, 2015) (quoting Tolentino v. C
& J Spec-Rent Servs., Inc., 716 F. Supp. 2d 642, 654 (S.D. Tex. 2010)). Plaintiffs offer no
response to this argument, and the Court agrees with KLLM that the class should be limited to
those employed within three years of the date this Order is entered.
KLLM also asserts that any class should exclude drivers who first signed an ICA on or
after September 25, 2017, because, as of that date, KLLM’s master ICA was revised to include a
waiver of the driver’s right “to file, bring, join, consent to, or participate in any lawsuit or
arbitration purporting to form, or seeking to form, a class, class action, collective action or mass
action.” Revised ICA [209-33] at 15. Again, Plaintiffs did not respond to the argument, and the
Court agrees that the class should be so limited. See In re JPMorgan Chase, 916 F.3d at 502
(explaining that district court lacked discretion to send notice to potential opt-in plaintiffs who
had valid arbitration agreements that would prevent their participation in collective action).
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Finally, the parties disagree as to how much information about potential opt-ins KLLM
should be required to provide Plaintiffs, with KLLM objecting to having to provide phone
numbers, e-mail addresses, or social security numbers. Def.’s Mem. [210] at 41–42. Plaintiffs
respond that they “are willing to address this issue” by “meet[ing] and confer[ring] . . . after
conditional certification is granted.” Pls.’ Reply [211] at 12. In the event KLLM declines to
petition for interlocutory appeal or the Fifth Circuit denies its petition, the parties should meet
and confer about the procedure for notice and contact the chambers of United States Magistrate
Judge F. Keith Ball to set a status conference to discuss the timing and logistics of notice and
further discovery and to enter new case-management deadlines as appropriate.
III.
Interlocutory Appeal
The Court certifies this decision for interlocutory appeal. To begin, this Order involves
controlling questions of law as to which there is substantial ground for difference of opinion.
See 28 U.S.C. § 1292(b). As noted, there are open questions regarding the applicable standards,
especially when some discovery has occurred. See In re JPMorgan Chase, 916 F.3d at 500 n.9
(noting that court of appeals “has carefully avoided adopting the two-stage ‘Lusardi’ method of
certifying a collective action” but offering no alternative test). And assuming the Court should
have applied the ultimate standard for certification, that too is unclear. Also, an immediate
appeal may materially advance the ultimate termination of the litigation. See 28 U.S.C. §
1292(b). KLLM presented thoughtful arguments for denying certification under a more exacting
standard. If it is correct, the Court need not participate in the notice process, allow an opt-in
period, oversee discovery as to possibly thousands of drivers’ claims, and then face the
certification issue again at the decertification stage. Finally, applying a different test for
conditional certification—or for the ultimate decision whether to certify—could materially
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impact the trial of this matter; the case will either be a collective action or involve individual
claims. The case is therefore certified for interlocutory appeal and stayed until the appeal is
concluded or the parties indicate that no appeal will be filed and request a status conference to
plan the logistics of issuing notice.
IV.
Conclusion
The Court has considered all arguments. Those not addressed would not have changed
the outcome. For the foregoing reasons, Plaintiffs’ Amended Motion for Conditional
Certification [195] is granted. The Court conditionally certifies the following class:
Those individual persons and/or entities who entered into Independent Contractor
Agreements and Tractor Lease/Purchase Agreements with KLLM Transport
Services, LLC, at any time on or after September 24, 2016, but excluding any
individual persons and/or entities who first executed Independent Contractor
Agreements or Tractor Lease/Purchase Agreements with KLLM Transport
Services, LLC, on or after September 25, 2017.
SO ORDERED AND ADJUDGED this the 24th day of September, 2019.
s/ Daniel P. Jordan III
CHIEF UNITED STATES DISTRICT JUDGE
11
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