Perrin v. Papa John's International, Inc.

Filing 435

MEMORANDUM AND ORDER...IT IS HEREBY ORDERED that Defendants' motion to stay this case is GRANTED, in part. (Doc. No. 426 .) Notwithstanding the stay, the Court will rule on the parties' pending motions for partial summary judgment, and the parties shall proceed in good faith with a mediation conference. However, all other proceedings in this case are STAYED until such time as the Supreme Court comes to a final disposition of Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146. IT IS FUR THER ORDERED that within seven (7) days following the Supreme Courts ruling in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, Defendants shall file an appropriate motion as to the lifting of the stay. IT IS FURTHER ORDERED that all deadlines previo usly set, including the hearing on Defendants motions to decertify set for June 25, 2015 and the trial date of August 10, 2015, are VACATED, to be reset as appropriate upon lifting of the stay. IT IS FURTHER ORDERED that this case shall be deemed closed for statistical purposes only, subject to reopening upon lifting of the stay herein imposed or other appropriate Order. (Case stayed., Terminate Case) Signed by District Judge Audrey G. Fleissig on 6/19/2015. (NEB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
WILLIAM TIMOTHY PERRIN, et al.,
Plaintiffs,
v.
PAPA JOHN'S INTERNATIONAL,
INC., et al.,
Defendants.

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No. 4:09-CV-01335-AGF

MEMORANDUM AND ORDER
This matter is before the Court on Defendants’ motion (Doc. No. 426) to stay this
case pending the decision of the United States Supreme Court in Bouaphakeo v. Tyson
Foods, Inc., 765 F.3d 791 (8th Cir. 2014), cert. granted, No. 1401146, 2015 WL 1278593
(U.S. June 8, 2015).1 The Court heard argument on the motion to stay on June 16, 2015.
For the reasons set forth below, the motion shall be granted, in part.
Plaintiffs brought these class and collective actions against Defendants Papa John’s
International, Inc. and Papa John’s USA, Inc., asserting claims under the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the minimum wage laws of five states
(Missouri, Arizona, Florida, Illinois, and Maryland). Plaintiffs, current and former delivery

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Defendants’ motion to stay also requested that the Court continue a hearing set on
Defendants’ motion to decertify the class and collective actions in this case, pending
resolution of the motion to stay. The Court held a telephone conference with the parties on
June 12, 2015 with respect to this request, and the parties agreed to argue the motion to stay
on June 16, 2015, and to continue the decertification hearing to nine days thereafter.
Therefore, the part of Defendants’ motion to stay requesting continuation of the
decertification hearing is moot.

drivers, allege that Defendants violated these laws by underestimating Plaintiffs’ automotive
expenses for reimbursement purposes, and consequently, failing to pay them minimum
wage.
Defendants require that their drivers maintain safe, legally operable, insured vehicles
for making deliveries. In addition to hourly wages, Defendants reimburse their drivers for
employment-related vehicle expenses. With the assistance of an industry consultant,
Defendants developed a delivery-related vehicle expense reimbursement formula that
compensated drivers at a flat, per-delivery rate, regardless of drivers’ actual costs-per-mile
or actual miles driven.
Plaintiffs allege that Defendants’ vehicle expense reimbursement methodology
underestimated Plaintiffs’ vehicle expenses and that the amount of under-reimbursement
effectively reduced Plaintiffs’ wages below the applicable minimum wages.
On September 14, 2011, the Court conditionally certified the FLSA collective action
based on Plaintiffs’ allegation that the drivers were similarly situated in that they were all
subject to a single policy which under-reimbursed them for vehicle expenses, decreasing
their hourly pay below their respective minimum wages. After discovery was conducted
against the opt-in class, Plaintiffs moved to certify the five state-law classes under Federal
Rule of Civil Procedure 23(b)(3). Defendants opposed certification primarily on the ground
that the individualized showings of each Plaintiff’s vehicle expenses predominated over
questions common to the classes. On the other hand, Plaintiffs contended that the question
whether Defendants’ reimbursement formula constituted a reasonable approximation of

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drivers’ vehicle expenses was common to each class and is the most important issue in the
case.
After careful consideration, the Court certified the five state-law classes on
December 31, 2013. The Court recognized that using generalized evidence instead of
individualized evidence could be troubling in some contexts, but found that it may be
acceptable in this case, as Plaintiffs’ claims each depend on common questions about the
reasonableness of Defendants’ policies for calculating and reimbursing vehicle expenses.
The Court found that these common questions were sufficient to satisfy the commonality
requirement of Rule 23, and predominated over the individualized questions regarding the
measurement of damages. In certifying the classes, the Court was also mindful of the
possibility that evidence could show that certain Plaintiffs had been paid minimum wage
throughout the relevant time period, and that lacking any injury, those Plaintiffs may not
have standing. Therefore, although the Court permitted certification, it held that “[i]f later
in the litigation it becomes apparent that any of the state classes include individuals who do
not have standing, the Court may decertify the class or amend the class definition.” (Doc.
No. 299 at 16.)
After discovery, Defendants moved to decertify the class and collective actions,2
asserting two main arguments: (1) that individualized issues will predominate because
Plaintiffs must demonstrate that their individual vehicle expenses caused them to receive
less than minimum wage, and that even if individual Plaintiffs can estimate these expenses
by reasonable inference, they may not do so using group-wide averages based on statistical

2

The decertification motions are fully briefed and are pending before the Court.
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samples and composite evidence, as Plaintiffs purport to do here, and (2) that, even under
Plaintiffs’ theory of the case, the class impermissibly contains uninjured members who lack
standing because they suffered no minimum wage violation in any workweek.
In the instant motion to stay, Defendants argue that the Supreme Court’s decision in
Bouaphakeo will provide controlling precedent regarding the two issues raised in their
decertification motions, and that staying this case pending the Supreme Court’s decision3
will ultimately save the parties and the Court significant time and resources.
In Bouaphakeo, the Eighth Circuit affirmed a jury verdict and a district court’s
decision not to decertify class and collective actions under the FLSA and the Iowa Wage
Payment Collection Law, Iowa Code 91A.1 et seq., which asserted that Tyson did not
properly compensate employees for time spent donning and doffing personal protective
equipment. See Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 794 (8th Cir. 2014).
Tyson employed a uniform policy of paying a flat amount of “K-code” time to compensate
employees for donning, doffing, and walking time, regardless of the actual time employees
spent performing these tasks. Id. at 795. The plaintiffs in Bouaphakeo claimed that the Kcode time was insufficient to compensate them for their donning, doffing, and walking time.
Although the plaintiffs lacked records for the actual time they spent performing these tasks,
they proved liability and damages by using “average donning, doffing, and walking times
calculated from 744 employee observations.” Id. at 796. Specifically, the plaintiffs’ expert
witness, a statistician, calculated the average donning and doffing time for different groups
of employees using statistical sampling techniques. Id. at 799. Tyson argued that
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At oral argument, Defendants stated that they believed the Supreme Court would
issue a decision in Bouaphakeo within 8-10 months. Plaintiffs did not suggest otherwise.
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certification was improper because “factual differences between plaintiffs—differences in
PPE and clothing between positions, the individual routines of employees, and variation in
duties and management among departments” predominated, and because “evidence at trial
showed that some class members did not work overtime” and would be entitled to no
damages “even if Tyson under-compensated their donning, doffing, and walking.” Id. at
797. The Eighth Circuit panel rejected these arguments, over the dissent of Judge Beam.
The Eighth Circuit found that the Supreme Court’s decision in Anderson v. Mt. Clemens
Pottery Co., 328 U.S. 680 (1980) (“Mt. Clemens”), supported the plaintiffs’ use of group
averages to prove by “reasonable inference” their donning and doffing time, particularly
where Tyson failed to track and keep records of this time. Id. at 798-800. The Eighth
Circuit also found that the class could proceed, notwithstanding its inclusion of members
who did not work overtime, because the jury instructions provided that those members
would not be entitled to recover damages. Id. at 798.
Tyson filed a petition for a writ of certiorari, asserting two questions presented:
I.

Whether differences among individual class members may be ignored
and a class action certified under Federal Rule of Civil Procedure
23(b)(3), or a collective action certified under the Fair Labor Standards
Act, where liability and damages will be determined with statistical
techniques that presume all class members are identical to the average
observed in a sample.

II.

Whether a class action may be certified or maintained under Rule
23(b)(3), or a collective action certified or maintained under the Fair
Labor Standards Act, when the class contains hundreds of members
who were not injured and have no legal right to any damages.

Petition for Writ of Certiorari, Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S. June 8,
2015), 2015 WL 1285369. The Supreme Court granted Tyson’s petition on June 8, 2015.

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Plaintiffs argue that Bouaphakeo is distinguishable from this case and therefore
oppose Defendants’ motion to stay. Although Plaintiffs concede that they relied on
Bouaphakeo to argue that class-certification is appropriate here, they contend that they did
so only as an alternative argument. Plaintiffs assert that there are two grounds supporting
their use of expert-created group averages and composite evidence to prove liability and
damages. The first is that the substantive regulations regarding reimbursable expenses in
this case permit employees to prove the amount of their vehicle expenses, for purposes of
demonstrating minimum wage liability, on a group-wide rather than an individual basis.
These regulations were not at issue in Bouaphakeo. The second is that, even if employees
are required to prove the amount of their individual expenses, they may do so by reasonable
inference, using statistical averages based on a sample. Plaintiffs acknowledge that the
second ground directly implicates Bouaphakeo, and that if the Supreme Court reverses the
Eighth Circuit and holds that plaintiffs cannot prove their claims through group averages,
that ground may be undermined. However, Plaintiffs argue that if the Court permits the
classes to remain certified on the first ground alone, based on a substantive interpretation of
the regulations regarding reimbursable expenses, the Supreme Court’s decision in
Bouaphakeo will not impact this case.
Plaintiffs also argue that the standing issues in Bouaphakeo are not relevant to this
case because, although there are some class members who admittedly suffered no damages
under Plaintiffs’ own theory of liability,4 these class members may be readily identified by

4

Plaintiffs argue that less than 4% of class members suffered no damages, which in
this class of more than 18,000 members, amounts to approximately 700 class members. See
Doc. No. 428 at 11 n.6.
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Plaintiffs’ experts and will be precluded from recovering damages. At oral argument,
Plaintiffs also suggested that the class definition could be revised to exclude these members,
but Plaintiffs did not specify how this could be accomplished other than by naming each
excluded member in the class definition.
Finally, Plaintiffs argue that staying this case for many months would prejudice them
because this case has already been pending for several years, the issues are very complex,
and many issues are ripe for ruling. Plaintiffs note that there are several pending motions
for partial summary judgment that have been fully briefed in this case and that these
motions “present questions that will be relevant even if the case is decertified and proceeds
individually, and are not issues impacted by Bouaphakeo.” (Doc. No. 428 at 8.) Therefore,
Plaintiffs submit that the Court should at least rule on the summary judgment motions
before determining whether a stay is appropriate.5
DISCUSSION
“[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself,
for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). “How this
can best be done calls for the exercise of judgment, which must weigh competing interests
and maintain an even balance.” Id. at 254-55. Thus, in considering a motion to stay, the
Court weighs the potential prejudice or hardship to the parties, as well as the interest of
judicial economy. See SSDD, LLC v. Underwriters at Lloyd’s, London, No. 4:13-CV-258

5

At oral argument, Defendants agreed that their motion to stay was focused on the
decertification motions and trial, and that it was likely not necessary to stay a ruling on the
summary judgment motions.
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CAS, 2013 WL 2420676, at *4 (E.D. Mo. June 3, 2013); Asarco LLC v. NL Indus., Inc., No.
4:11-CV-00864-JAR, 2013 WL 943614, at *3 (E.D. Mo. Mar. 11, 2013).
After carefully considering and weighing all of the competing interests in this case,
the Court concludes that a stay is warranted. The potentially dispositive impact of
Bouaphakeo on the class certification issues in this case, combined with the efficiency of
waiting for the Supreme Court’s ruling, weighs heavily in favor of granting the stay with
respect to Defendants’ decertification motions and trial. However, as the parties agree that
the pending summary judgment motions are not impacted substantially by Bouaphakeo, the
Court will rule on these motions.
The Court agrees with Plaintiffs that there are two grounds supporting their use of
expert-created group averages and composite evidence to prove liability and damages: one
based on a substantive interpretation of the regulations at issue in this case that were not at
issue in Bouaphakeo, and another based directly on Bouaphakeo. The Court has always
found the propriety of class certification in this case to be a close call, and in granting initial
certification and in considering Defendants’ decertification motions, the Court has given
weight to both grounds supporting Plaintiffs’ use of group-wide averages to prove liability
and damages. The Court is not prepared to say that the first ground, alone, is sufficient to
maintain class certification here. Rather, the Court continues to believe that the second
ground is the stronger of the two grounds, and if nullified by the Supreme Court, may
require decertification (or, if trial has gone forward, may require a reversal of certification).6

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For example, both Plaintiffs’ briefs in support of certification and the Court’s Order
granting certification relied extensively on a line of other pizza delivery cases holding that,
in proving a minimum wage claim based on unreimbursed vehicle expenses, “a plaintiff
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Moreover, significant issues have been raised at the decertification stage regarding
the definition of the classes in this case and the inclusion of class members who admittedly
lack standing. It is not clear that Plaintiffs’ proposed solution to these issues has support in
the caselaw, and the Court believes that the Supreme Court’s decision in Bouaphakeo is
likely to provide instruction regarding whether this class may proceed, notwithstanding the
presence of uninjured members, and if so, how.
The Court is mindful of the length of time that this case has been pending, and of the
proximity of the trial date. However, given the significant impact that the Supreme Court’s
decision in Bouaphakeo is likely to have in this case, the Court finds that staying further
proceedings on the motion to decertify and the trial pending the decision would not unduly
prejudice Plaintiffs. See, e.g., Michael v. Ghee, 325 F. Supp. 2d 829, 831-33 (N.D. Ohio
2004) (staying case pending a decision of the U.S. Supreme Court, after a grant of certiorari,
where the Supreme Court’s decision was likely to have a dispositive impact on the case, and
the risk of prejudice to the plaintiffs from a delay of less than one year did not outweigh the
risk of the “wasted and unnecessary” effort that may result from proceeding); Beydoun v.
may rely on a reasonable estimate of his vehicle-related expenses and need not show his
actual expenses.” See Doc. No. 299 at 15 (citing cases). But these cases, in turn, cite the
Mt. Clemens line of cases relied on by the Eighth Circuit in Bouaphakeo, regarding proof by
reasonable inference. See Darrow v. WKRP Mgmt. LLC, No. 09-CV-01613, 2011 WL
2174496, at *4 (D. Colo. June 3, 2011) (holding that “FLSA plaintiffs can rely on estimates
provided that there is evidence that the estimate is not an unreasonable approximation of the
actual figure,” and citing as support Mt. Clemens and its progeny); Smith v. Pizza Hut, Inc.,
No. 9-CV-01632-CMA-BNB, 2011 WL 2791331, at *4 n.4 (D. Colo. July 14, 2011)
(finding that the plaintiff “may rely on a reasonable estimate of his vehicle-related expenses
without knowing his exact expenses,” and citing as support Darrow, 2011 WL 2174496, at
*3); Wass v. NPC Int’l, Inc., No. 09–2254–JWL, 2010 WL 7762621, at *3 (D. Kan. Sept. 1,
2010) (holding that it is not implausible for plaintiffs to plead a collective action claim of
this sort “without pleading drivers’ actual expenses” because “drivers may be able to
estimate their expenses,” and citing as support progeny of Mt. Clemens).
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Holder, No. 14–cv–13812, 2015 WL 631948, at *4 (E.D. Mich. Feb. 13, 2015) (holding that
where a federal appellate decision in another case was “likely to have precedential effect on
questions of subject matter jurisdiction and to resolve at least some of the claims before the
[c]ourt,” a stay pending that decision was warranted). Indeed, were the case to proceed and
rulings related to the class claims were thereafter effectively overruled by the Supreme
Court’s holding in Bouaphakeo, the cost and delay to Plaintiffs could be considerably
greater.
However, the Court shall rule on the pending motions for summary judgment.
Further, the parties shall reschedule their previously planned mediation conference as soon
as possible.
CONCLUSION
For the reasons set forth above,
IT IS HEREBY ORDERED that Defendants’ motion to stay this case is
GRANTED, in part. (Doc. No. 426.) Notwithstanding the stay, the Court will rule on the
parties’ pending motions for partial summary judgment, and the parties shall proceed in
good faith with a mediation conference. However, all other proceedings in this case are
STAYED until such time as the Supreme Court comes to a final disposition of Tyson
Foods, Inc. v. Bouaphakeo, No. 14-1146.
IT IS FURTHER ORDERED that within seven (7) days following the Supreme
Court’s ruling in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, Defendants shall file an
appropriate motion as to the lifting of the stay.

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IT IS FURTHER ORDERED that all deadlines previously set, including the
hearing on Defendants’ motions to decertify set for June 25, 2015 and the trial date of
August 10, 2015, are VACATED, to be reset as appropriate upon lifting of the stay.
IT IS FURTHER ORDERED that this case shall be deemed closed for statistical
purposes only, subject to reopening upon lifting of the stay herein imposed or other
appropriate Order.

_______________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 19th day of June, 2015.

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