Pennington v. Fluor Corporation et al
Filing
133
ORDER AND OPINION granting 21 Motion to Certify Class. Signed by Honorable J Michelle Childs on 7/17/2018.(asni, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ROCK HILL DIVISION
Harry Pennington III and Timothy Lorentz, )
on behalf of themselves and all others
)
similarly situated,
)
)
Plaintiffs,
)
)
v.
)
)
Fluor Corporation, Fluor Enterprises, Inc., )
Fluor Daniel Maintenance Services, Inc.,
)
SCANA Corporation, and South Carolina )
Electric & Gas Company,
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Defendants.
)
____________________________________)
Civil Action No.: 0:17-cv-02094-JMC
ORDER AND OPINION
This matter is before the court pursuant to Plaintiffs Harry Pennington III and Timothy
Lorentz’s Motion for Class Certification, on behalf of themselves and all others similarly situated
(collectively, “Plaintiffs”) (ECF No. 21). Defendants Fluor Corporation, Fluor Enterprises, Inc.,
Fluor Daniel Maintenance Services, Inc. (collectively, “Fluor Defendants”), SCANA Corporation
(“SCANA”), and South Carolina Electric & Gas Company (“SCE&G”) (collectively, “SCANA
Defendants”) filed responses in opposition (ECF Nos. 37, 123, 124). For the reasons set forth
below, the court GRANTS Plaintiffs’ Motion for Class Certification (ECF No. 21).
I.
BACKGROUND RELEVANT TO THE INSTANT MOTION
This case arises out of the decision on July 31, 2017, to stop all construction at the V.C.
Summer Nuclear Station (“VC Summer”) in Jenkinsville, South Carolina. (ECF No. 41 at 2 ¶ 4.)
As a result of that decision, Plaintiffs allege that approximately 5,000 employees were laid off who
had been working and/or receiving assignments at VC Summer. (Id. at 5 ¶ 23.) Until their
respective terminations, Plaintiffs further allege that Pennington worked directly for Fluor Daniel
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at VC Summer as a Heavy Equipment Operator and Lorenz was employed by Westinghouse
Electric Company LLC (“WEC”) as a Project Manager. (Id. at 4 ¶¶ 14, 15.) However, at the same
time, for purposes of the WARN Act, Plaintiffs allege that they were employees of SCANA
Defendants. (Id. at 2 ¶¶ 1, 2.) To this point, Plaintiffs generally allege that SCANA Defendants
were the single employer together with Fluor Defendants and/or WEC of all individuals working
at VC Summer. (Id. ¶ 6; see also id. at 3 ¶ 7, 19 ¶ 103 & 22 ¶ 118.)
In their Amended Complaint, Plaintiffs allege that in 2008, SCANA Defendants entered
into an agreement with WEC for the purpose of constructing “two AP-1000 1 nuclear reactors
known as VC Summer 2 and 3.” (ECF No. 41 at 6 ¶ 31.) Plaintiffs allege that as the general
contractor “WEC was generally responsible for the design, manufacture, and procurement of the
nuclear reactor, steam turbines, and generators.” (Id. at 7 ¶ 34.) Plaintiffs further allege that in or
around 2015, Fluor Corporation was brought in as a subcontractor to WEC to “provide staffing for
craft (manual labor) employees and [] take primary responsibility for on-site construction” to
include “responsibility for the craft, field engineers, and project controls personnel including the
costs and scheduling of personnel.” (Id. ¶¶ 37, 38.) At the same time, WEC “generally accepted
liability for the cost overruns on the Summer Project, by agreeing to build it for a ‘fixed-price’ at
SCANA [Defendants]’ option,” which option was exercised in May 2016 thus “capping [] costs
for the Summer Project at close to $14 billion.” (Id. ¶¶ 39, 40.)
Plaintiffs allege that “[i]n early 2017, WEC experienced cash shortfalls related to the
Summer Project and a deepening liquidity crisis,” which eventually led to WEC and its subsidiaries
1
“The AP1000 is a nuclear power plant designed and sold by Westinghouse Electric Company,
now majority owned by Toshiba.” AP1000, https://en.wikipedia.org/wiki/AP1000 (last visited
July 17, 2018). “The plant is a pressurized water reactor with improved use of passive nuclear
safety.” Id.
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fil[][ing] [] voluntary petitions for relief under Chapter 11 of Title 11 of the United States
Bankruptcy Code in the Southern District of New York” on March 29, 2017. (ECF No. 41 at 8 ¶¶
44, 45.) Plaintiffs allege that as a result of WEC’s bankruptcy “SCANA [Defendants] became
financially accountable for the ongoing costs and plan of completion” for the VC Summer Project.
(ECF No. 71 at 10.) Moreover, Plaintiffs assert that SCANA Defendants took over complete
control of the VC Summer Project as demonstrated by the following post-bankruptcy conduct:
•
“SCANA [Defendants] began paying Fluor’s payroll directly to Fluor” (ECF No.
41 at 10 ¶ 57);
•
SCANA Defendants “reassigned Fluor and WEC employees in a line of supervision
interspersed with SCANA’s own managers to whom Fluor and WEC employees
would report at various levels” (id. at 11 ¶ 61);
•
“SCANA [Defendants]’[] ground-level overseers attended all significant
construction events, such as crane lifts and major concrete placements, and they
attended the continual meetings across the site that took place throughout the day
between Fluor and WEC and their respective crews dealing with the operational
nuts-and-bolts of the constructions tasks” (id. ¶ 64);
•
“SCANA [Defendants]’[] input into day-to-day operations became proactive,
intrusive, and decisional, in keeping with its assumption of CEO-type control and
leadership” (id. at 13 ¶ 72);
•
“SCANA [Defendants’] field monitors, who had previously been silent, became
vocal in directing Fluor/WEC personnel” (id. ¶ 73);
•
“SCANA [Defendants] gave specific orders and directions concerning virtually all
facets of the project, including construction, and safety - particularly concerning
anything that would cause a delay or add cost” (id. ¶ 75);
•
SCANA [Defendants] used their authority to “set the levels of craft personnel
needed to perform assignments” or determine whether to hire highly skilled
employees for specialized jobs (id. at14 ¶¶ 76, 77, 80);
•
SCANA [Defendants] controlled the work schedules of employees of WEC and
Fluor to include whether they worked overtime, the number of overtime hours, their
days off or days designated as holidays (id. at 15 ¶¶ 82–84); and
•
SCANA [Defendants] provided the facilities, equipment, tools [heavy construction
equipment] and materials necessary to complete the work (id. ¶¶ 85, 86).
Plaintiffs allege that after SCANA Defendants gained control of the VC Summer Project,
they recognized by “at least March 2017, [that] mass layoffs and shutdowns were almost inevitable
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at the Summer Project in mid-summer.” (ECF No. 41 at 17 ¶ 91.) Subsequently, on July 31, 2017,
SCANA Defendants sent WARN Act correspondence to the Director of Business Services for the
South Carolina Department of Employment and Workforce containing the following relevant
information:
This notice is provided in compliance with the Worker Adjustment Retraining and
Notification Act and regulations promulgated thereunder.
SCANA, the parent company of SCE&G, has decided to stop the construction of
both Unit 2 and Unit 3 and file a petition for approval of abandonment with the
Public Service Commission of South Carolina. Unfortunately, this process is
expected to involve immediate, total, and permanent termination of the new nuclear
construction project at VC Summer Nuclear Station, . . . . This complete
termination of the construction project will affect 617 SCE&G employees and a
currently unknown number of employees of affiliated companies that provide
administrative support to the project.
The separations are expected to begin on: September 30, 2017.
(ECF No. 9-4 at 2.)
Also on July 31, 2017, Plaintiffs allege that Fluor Defendants and WEC were told by
SCE&G “to cease work on the project immediately” resulting in the immediate termination of
Plaintiffs’ employment. (ECF No. 41 at 17 ¶¶ 95–96.) Additionally, Plaintiffs contend that
“SCANA controlled the decision to terminate all the employees on the site without advance
notice.” (Id. ¶ 95.)
As a result of the foregoing, Pennington filed a putative class action Complaint in this court
against Defendants Fluor Corporation, Fluor Enterprises, Inc. and SCANA on August 8, 2017,
alleging violations of the WARN Act. (ECF No. 1.) In his Complaint, Pennington sought to
represent “all other similarly situated former employees, pursuant to 29 U.S.C. § 2104(a)(5) and
Fed. R. Civ. P. 23(a), who worked at, reported to, or received assignments from one of Defendants’
Facilities and were terminated without cause on or about July 31, 2017, and within 30 days of that
date, or were terminated without cause as the reasonably foreseeable consequence of the mass
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layoffs and/or plant closings ordered by Defendants on or about July 31, 2017, . . . .” (ECF No. 1
at 3–4 ¶ 16.) Pennington further alleged that Fluor Corporation, Fluor Enterprises, Inc. and
SCANA knowingly failed to give their employees at least 60 days prior notice of termination
of their employment as required by the WARN Act. (ECF No. 1 at 2 ¶ 3.) On October 25,
2017, Pennington filed an Amended Class Action Complaint, which provided additional WARN
Act allegations and added Timothy Lorentz as Plaintiff and Fluor Daniel and SCE&G as
Defendants. (ECF No. 41.) On November 20, 2017, Fluor Defendants answered the Amended
Complaint and asserted their affirmative defenses. (ECF No. 68.)
As it pertains to the present Motion, Plaintiffs filed a Motion for Class Certification and
Supplemental Motions in Support of Class Certification, stating that Plaintiffs have satisfied the
requirements of Federal Rule of Civil Procedure 23. (ECF Nos. 21, 49, 82, 115.) 2
SCANA Defendants filed responses in opposition, maintaining that (1) Plaintiffs have not
satisfied their evidentiary burden of proof and (2) Plaintiffs have not met the requirements of
Federal Rule of Civil Procedure 23. (ECF Nos. 37, 123.) 3 SCANA Defendants’ main argument
is that “Plaintiffs do not provide any evidence of the manner by which SCANA and/or SCE&G
supposedly controlled or dictated the terms and conditions of Plaintiffs’ work individually or any
other specific individual on site who they seek to include in the purported class.” (ECF No. 123
at 4-5.) SCANA Defendants’ position remains that they never implemented an across-the-project
plan or policy to control or direct the work of the individuals employed by Fluor Defendants or
Westinghouse. (Id. at 13.) Accordingly, SCANA Defendants argue that at least two requirements
of class certification – commonality and typicality – cannot be met until the court decides whether
2
Lorentz was not yet a named plaintiff at the time ECF No. 21 (Motion to Certify Class) was filed.
SCE&G was not a party to this matter at the time ECF No. 37 (Response in Opposition to Motion
to Certify Class) was filed.
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the SCANA Defendants are considered a single employer with Plaintiffs’ respective immediate
employers, Fluor Defendants and Westinghouse. (Id. at 7.) Therefore, SCANA Defendants assert
that Plaintiffs cannot adequately represent the class because they were employed by different
employers, working in different positions, and performing different tasks than the putative class
members at the VC Summer Project. (Id. at 18.)
The Fluor Defendants filed a response in opposition to Plaintiffs’ Motion, maintaining that
(1) Plaintiffs’ shifting class definition is inappropriate; (2) Plaintiffs cannot meet the commonality
or typicality prongs of Rule 23; and (3) Plaintiffs’ proposed notice is confusing and misleading.
(ECF No. 124.) Similar to the SCANA Defendants, the Fluor Defendants contend that the single
employer issue must be addressed prior to class certification. (Id. at 11.)
Plaintiffs filed a reply to the SCANA Defendants’ Response, stating (1) class certification
is appropriate because the predominant issues present in this case are class wide; and (2) the
SCANA Defendants’ focus on “ground-level operational activities” is irrelevant because the
allegations in the Amended Complaint address many aspects of the SCANA Defendants’ control
over the VC Summer Project, none of which entail individualized control over each employee’s
job duties. (ECF No. 130.)
Plaintiffs also filed a reply to the Fluor Defendants’ Response, averring that (1) the class
lists are easily ascertained, and therefore no discovery is needed; and (2) adopting the Amended
Complaint’s class definition will avoid any concerns regarding the two groups in the class. (ECF
No. 131.)
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II.
JURISDICTION
This court has jurisdiction over Plaintiffs’ WARN Act cause of action via 28 U.S.C. §
1331, as it arises under a law of the United States, and also via 29 U.S.C. § 2104(a)(5), which
empowers district courts to hear claims alleging violations of the WARN Act.
III.
LEGAL STANDARD
The United States Court of Appeals for the Fourth Circuit has held that a class cannot be
certified if the class members are not identifiable or ascertainable, stating “. . . Rule 23 contains an
implicit threshold requirement that the members of a proposed class be ‘readily identifiable.’”
EQT Prod. Co. v. Adair, 764 F.3d 347, 358 (4th Cir. 2014) (quoting Hammond v. Powell, 462 F.2d
1053, 1055 (4th Cir. 1972)); see also Solo v. Bausch & Lomb Inc., No. 2:06-CV-02716-DCN, 2009
WL 4287706, at *4 (D.S.C. Sept. 25, 2009) (“[A]s a preliminary matter, the court must consider
the definition of the class when determining the appropriateness of class certification.”) (citing
Kirkman v. North Carolina R. Co., 220 F.R.D. 49, 53 (M.D.N.C. 2004)).
In addition to demonstrating ascertainability, the party seeking class certification bears the
burden of demonstrating that it meets the requirements of Rule 23. See, e.g., Romig v. Pella
Corporation, 2016 WL 3125472, at *3 (D.S.C. June 3, 2016).
Rule 23(a) provides that
certification is only proper if: “(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.”
Once these prerequisites are met, the proposed class must still satisfy one of three
additional requirements for certification under Rule 23(b). See EQT Prod. Co., 764 F.3d at 357
(quoting Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 423 (4th Cir. 2003)). Plaintiffs seek
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certification under Rule 23(b)(3); therefore, Plaintiffs must show that “questions of law or fact
common to class members predominate over any questions affecting only individual members,
and that a class action is superior to other available methods of fairly and efficiently adjudicating
the controversy.” (emphasis added). “The predominance requirement is similar to but “more
stringent” than the commonality requirement of Rule 23(a). Thorn v. Jefferson-Pilot Life Ins. Co.,
445 F.3d 311, 319 (4th Cir. 2006) (quoting Lienhart v. Dryvit Sys., 255 F.3d 138, 146 n.4 (4th Cir.
2001)).
A party must produce enough evidence to demonstrate that class certification is in fact
warranted. See Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). If one of the
requirements necessary for class certification is not met, Plaintiffs’ efforts to certify a class must
fail. See Clark v. Experian Info. Sols. Inc., Nos. Civ.A.8:00-1217-24, Civ.A.8:00-1218-24,
Civ.A.8:00-1219-24, 2001 WL 1946329, at *4 (D.S.C. March 19, 2001) (citing Harriston v.
Chicago Tribune Co., 992 F.2d 697, 205 (7th Cir. 1993)).
The court must go beyond the pleadings, taking a “close look” at relevant matters,
conducting “a rigorous analysis of such matters,” and making “findings” that the requirements of
Rule 23 have been satisfied. See Gariety v. Grant Thornton, LLP, 368 F.3d 356, 365 (4th Cir.
2004) (citations omitted). While the court should not “include consideration of whether the
proposed class is likely to prevail ultimately on the merits, id. at 366 (citing Eisen v. Carlisle and
Jacquelin, 417 U.S. 156, 177-78 (1974)), “sometimes it may be necessary for the district court to
probe behind the pleadings before coming to rest on the certification question.” Id. (citing Gen.
Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 160 (1982)).
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IV.
ANALYSIS
A. Federal Rule of Civil Procedure 23(a)
The Rule 23 requirements have been met. First, numerosity is satisfied because there are
an estimated 5,000 putative class members who worked at the VC Summer Project who were
terminated allegedly by all Defendants beginning on July 31, 2017 or thereafter as the reasonably
foreseeable result of the mass layoffs or plant closings carried out on July 31, 2017 (ECF No. 1,
¶¶ 1, 101, 102). Plainly, such a large number makes joinder impracticable.
Second, commonality is satisfied because this factor of Rule 23(a) “requires the plaintiff
to demonstrate that the putative class members “have suffered the same injury.” Thomas v. FTS
USA, LLC, 312 F.R.D. 407, 417 (E.D. Va. 2016). Plaintiffs’ claims here are not different from
the claims of the absent class members, nor will the defenses raised against Plaintiffs differ from
those asserted against the group. Plaintiffs’ proof of their own individual claims, and refutation
of Defendants’ assertion that they are not a single employer, will advance the claims of the
putative class. Here, there are at least three common questions of fact and law. First, whether
Defendants were subject to the requirements of the WARN Act. Second, whether the appropriate
WARN notice was given. Third, whether Defendants are legally liable for the alleged WARN
violation as a single employer.
Third, typicality, which is similar to commonality, is satisfied here because Plaintiffs and
the putative class have an interest in prevailing in similar legal claims. Nolan v. Reliant Equity
Partners, LLC, 08-cv-062, 2009 WL 2461008, at *3 (N.D. W.Va. Aug. 10, 2009). All class
members, including Plaintiffs, must eventually establish that Defendants acted as a single
employer in order to hold them liable for the WARN violation. The court disagrees with
Defendants’ contention that because the single employer issue has not yet been decided, the court
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cannot certify the class at this time. The court is not bound by the class definition proposed in
the Amended Complaint and can modify its language as the case progresses. See Robidoux v.
Celani, 987 F.2d 931, 937 (2d Cir. 1993).
Fourth, adequacy of representation is satisfied here. Pennington has no conflicts of
interest with the putative class and has vigorously pursued his claims. (See ECF No. 21-4.)
Lorentz, the new proposed class representative, has also fairly and adequately represented the
interests of the putative class members. (See ECF No. 115-3.) Lorentz has no conflicts of interest
with the putative class and intends to continue to assist in prosecution of this case should he be
appointed class representative. (Id.) The proposed class counsel has also vigorously pursued
this action by continuing to stay involved in the developments in this case and the three other
related WARN actions.
(See ECF No. 115-1.)
Therefore, Plaintiffs satisfy all of the
requirements of Rule 23(a).
B. Federal Rule of Civil Procedure 23(b)(3)
A class action is a superior method of adjudicating the WARN claims here. It is in the
interest of judicial economy and efficiency to consolidate as many as 5,000 potential claims into
a single action, which will allow the common questions of law and fact to be determined
collectively, rather than by consideration in a haphazard and piecemeal fashion. Finally, class
action litigation is superior to other methods of resolving the dispute because without
certification, it would be economically unfeasible for individual plaintiffs to bring their cases
independently. See Quint v. Trident Mgmt., Inc., No. 1:14-CV-287, 2014 WL 4556944, at *1
(M.D.N.C. Aug. 20, 2014) (proposed WARN class satisfied Rule 23(b)(3) because “common
questions of law predominate over individual questions and a class action is superior to other
available methods for the fair and efficient adjudication of the matters in controversy.”).
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Accordingly, both prongs of Rule 23(b)(3) – predominance and superiority – are satisfied here.
As such, the court finds that class certification is appropriate.
Accordingly, it is hereby ORDERED:
A class (the “Class”) is certified comprising:
Plaintiffs and all persons (i) who were former employees of Defendants and worked
at, reported to, or received assignments from the V.C. Summer Nuclear Station (the
“Facility”), located at Highway 215 & Bradham Blvd, Jenkinsville, South Carolina
29065, (ii) who were terminated without cause on or about July 31, 2017 or within
30 days of that date, or were terminated without cause as the reasonably foreseeable
consequence of the mass layoffs and/or plant closings ordered by Defendants on or
about July 31, 2017, (iii) who are “affected employees” within the meaning of 29
U.S.C. § 2101(a)(5), and (iv) who have not filed a timely request to opt-out of the
Class.
V.
CONCLUSION
Based on the foregoing, the court GRANTS Plaintiffs’ Motion for Class Certification
(ECF No. 21).
IT IS SO ORDERED.
United States District Judge
July 17, 2018
Columbia, South Carolina
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