Cormier v. Scribe Media, LLC

Filing 82

ORDER ADOPTING REPORT AND RECOMMENDATIONS. The Court thus ADOPTS the Magistrate Judge's Report and Recommendation as the opinion of the Court (Dkt. # 76 ), and GRANTS Plaintiffs Motion to Certify Class (Dkt. # 40 ). Signed by Judge David A. Ezra. (pg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
ALYSSA CORMIER, ET. AL,
Plaintiffs,
vs.
SCRIBE MEDIA, LLC, ET. AL,
Defendants.
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No. 1:23-CV-647-DAE

ORDER: (1) ADOPTING REPORT AND RECOMMENDATION; AND
(2) GRANTING PLAINTIFFS’ MOTION TO CERTIFY CLASS
Before the Court is a Report and Recommendation (the “Report”)
(Dkt. # 76) submitted by United States Magistrate Judge Dustin Howell. The
Court finds this matter suitable for disposition without a hearing. After reviewing
the Report and conducting its own de novo review of the issues raised in the
objections, the Court ADOPTS Judge Howell’s recommendation and GRANTS
Plaintiffs Alyssa Cormier, Claire Brudner, Marianna Acosta, and Esty Pittman’s
(“Plaintiffs”) Motion to Certify Class (Dkt. # 40).

BACKGROUND
The Court will recite the background facts of this matter as stated by
Judge Howell in his Report.1 On June 7, 2023, Plaintiffs initiated this putative
class-action lawsuit based on Defendant Scribe Media, LLC’s (“Scribe”) alleged
violation of the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
§ 2101 et seq. (the “WARN Act”). (Dkt. # 23.) Plaintiffs allege that Scribe, an
Austin-based publishing company, failed to comply with the WARN Act’s notice
requirement when it terminated ninety of its employees on May 24, 2023. (Id. at 4,
18.) Scribe, which had been experiencing financial difficulties, subsequently
sought to sell the company to eliminate debts and gain investors. (Id. at 4, 7.)
According to Plaintiffs’ third amended complaint, Enduring Ventures, Inc.
(“EV”),2 announced on LinkedIn in June 2023 that it had purchased Scribe. (Id. at
8–9.) Plaintiffs allege that EV created Defendant Bond Financial Technologies
(“Bond”), an Austin-based company, to assume control of Scribe. (Id.) Bond
contends that it purchased certain Scribe assets, not liabilities, in a foreclosure sale
on August 25, 2023. (Dkt. # 79 at 2.)
To the extent any objections are made to Judge Howell’s recitation of the facts,
the Court will note it in the objections discussed below.

1

The Court dismissed EV, Enduring Consulting Group LLC (“EC”), and Enduring
Ventures TY Partnership LLC (“EVP”) as defendants in this case on October 24,
2024. (Dkt. # 77.)
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On April 25, 2024, Plaintiffs moved to certify a class of individuals
who were impacted by the layoff. (Dkt. # 40.) On May 16, 2024, Bond filed a
response in opposition. (Dkt. # 45.) On June 6, 2024, Plaintiffs filed their reply.
(Dkt. # 47.) On May 17, 2024, the motion was referred to Magistrate Judge
Howell for his Report. 3 On October 4, 2024, Judge Howell held an evidentiary
hearing on the motion. (Dkt. # 72.) On October 16, 2024, Judge Howell issued his
Report. (Dkt. # 76.) On October 30, 2024, Plaintiffs filed objections to the Report
(Dkt. # 79); on November 13, 2024, Plaintiffs filed a response to the objections
(Dkt. # 81). The objections are addressed below.
APPLICABLE LAW
The Court must conduct a de novo review of any of the Magistrate
Judge’s conclusions to which a party has specifically objected. See 28 U.S.C.
§ 636(b)(1)(C) (“A judge of the court shall make a de novo determination of those
portions of the report or specified proposed findings or recommendations to which
objection is made.”). The objections must specifically identify those findings or
recommendations that the party wishes to have the district court consider.
Thomas v. Arn, 474 U.S. 140, 151 (1985). A district court need not consider
“[f]rivolous, conclusive, or general objections.” Battle v. U.S. Parole Comm’n,
834 F.2d 419, 421 (5th Cir. 1987). “A judge of the court may accept, reject, or
3

On August 9, 2024, this case was reassigned to the undersigned. (Dkt. # 54.)
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modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” 28 U.S.C. § 636(b)(1)(C).
Findings to which no specific objections are made do not require de
novo review; the Court need only determine whether the Recommendation is
clearly erroneous or contrary to law. United States v. Wilson, 864 F.2d 1219, 1221
(5th Cir. 1989).
DISCUSSION
Plaintiffs’ motion seeks to certify a class of “[a]ll former Scribe
employees throughout the United States who were terminated as a result of a ‘mass
layoff,’ as defined by the WARN Act, without 60 days advance written notice,
beginning in May 2023.” (Dkt. # 40 at 2.) However, in his Report, Judge Howell
found that the proposed class definition should be revised to include “[a]ll former
Scribe employees throughout the United States who were terminated as a result of
a ‘mass layoff,’ as defined by the WARN Act, without 60 days advance written
notice, beginning on May 24, 2023,” in order to bring Plaintiffs’ proposed class
definition into alignment with the record in this case and the pertinent statute.
(Dkt. # 76 at 6 (emphasis added).)
Additionally, the Magistrate Judge determined that Plaintiffs satisfied
Rule 23(a)’s four conditions for class certification, as well as Rule 23(b)(3)’s
requirements that common questions predominate over individualized ones and
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that a class action is the superior method of resolving the WARN Act claims in this
case. (Id.) Judge Howell ultimately recommended the Court grant Plaintiffs’
motion to certify. (Id.) Judge Howell thereafter recommended that the Court
allow notice to be provided to potential class members through Plaintiffs’ proposed
methods of First-Class mail, postage prepaid, SMS/text, and electronic mail. (Id.
at 20.)
Bond has filed objections to the Report. (Dkt. # 76.) Bond objects on
the basis that the Magistrate Judge conducted the class certification assessment
“without the requisite degree of exactitude, resulting in a recommendation for
certification on a record that, respectfully, does not support it.” (Dkt. # 79 at 4.)
Bond argues that: (1) the putative class is not so numerous as to justify
certification; (2) there are not common questions in material dispute; (3) the claims
of the named plaintiffs are not typical; (4) the named plaintiffs are not adequate
representatives; (5) class certification is not a superior means of resolution; and
(6) if a class is certified, it should be limited to those persons terminated on May
24, 2023, only. (Dkt. # 79.) The Court addresses each objection in turn.
A.

Numerosity
Bond first begins by arguing that the number of people laid off was

below 50 people and not upwards of 128 people as discussed by the Magistrate
Judge. (Dkt. # 79 at 4 n.2.) Additionally, Bond objects to the Magistrate Judge’s
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findings that others were laid off in June, or after May 24, 2023, as well as the
Magistrate Judge’s recommendation to broaden the putative class. (Id. at 4–5.)
Bond also argues that remote employees are not necessarily of a “single site of
employment” for purposes of the WARN Act and should not be considered part of
a “mass layoff” because the scattered nature of its employees counsels against
liability under the Act. (Id. at 6.) Additionally, Bond contends the Magistrate
Judge ignored evidence that many potential class members had not worked at
Scribe the previous six months of the year, rendering them ineligible for Warn Act
protections. (Id. at 7.) Bond also asserts that many potential class members have
already settled their claims and thus any other potential members could do the
same without being part of a class in this case. (Id.)
Upon thorough de novo review, the Court rejects Bond’s contention
regarding the numerosity requirement of Rule 23(a). Rule 23(a)(1) requires that
“the class is so numerous that joinder of all members is impracticable.” Fed. R.
Civ. P. 23(a)(1). As the Magistrate Judge correctly noted, when assessing
numerosity in the context of WARN Act claims, courts do not focus on “sheer
numbers alone,” but instead on “the geographical dispersion of the class, the ease
with which class members may be identified, the nature of the action, and the size
of each plaintiff’s claim.” In re TWL Corp., 712 F.3d 886, 894 (5th Cir. 2013)
(citations omitted). Regarding this, there are numerous courts that have certified a
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class with fewer than 90 proposed members; thus, it is of no consequence that the
potential numbers of plaintiffs in this case might fall below that threshold. See,
e.g., Stanley v. St. Croix Basic Servs., Inc., No. CIV. 2003/0055, 2008 WL
4861448 (D.V.I. Nov. 3, 2008 (finding numerosity requirement met for proposed
class of 67 individuals); Quintero v. Mulberry Thai Silks, Inc., No. C 08-02294
MHP, 2008 WL 4666395, at *3 (N.D. Cal. Oct. 22, 2008) (finding numerosity
requirement satisfied where proposed class included approximately 60
individuals). Bond also repeats its argument that remote workers should not be
included in this case and that many potential members did not work for more than
six months. And, once again, Bond cites no authority for these arguments and the
Court will overrule any objection on this basis. Furthermore, the length of time a
potential member worked for Scribe goes to the merits which the Court will not
consider at this time.
The Court also finds, as did the Magistrate Judge, that Plaintiffs
claims in the class are “particularly amenable” to class certification given the
evidence in this case that certain plaintiffs do not have the “resources to file a case
individually on [their] own behalf.” (Dkt. # 40-1 at 5; see also Dkts. ## 40-2, 403,
40-4.) Additionally, the likely small size of each class member’s damages for
claims would likely preclude their ability to sue on their own. (See id.) The Court
will thus overrule Bond’s objections regarding the numerosity requirement.
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B.

Commonality
Bond next objects that there are not common questions in material

dispute in this case. (Dkt. # 79 at 7.) Bond asserts that contrary to the Magistrate
Judge’s findings, most of the referenced common questions are highly
individualized inquiries and thus not appropriate for class resolution. (Id. at 8.)
Bond argues that there are significant differences between those who worked for
Scribe less than six months and those tenured for longer. (Id.) Bond also objects
that whether all the proposed class members suffered the same injury is highly
individualized. (Id. at 9.) Bond further argues that if it succeeds on its successor
liability defense, then there is no common issue that should factor in the Court’s
assessment of commonality. (Id. at 10.)
The Court overrules Bond’s objections as to the commonality factor
upon its de novo review of the issues. Rule 23(a) requires that Plaintiffs establish
that “there are questions of law or fact common to the class.” Fed. R. Civ. P.
23(a)(2). This requirement is “met when there is at least one issue, the resolution
of which will affect all or a significant number of the putative class members.”
Lightbourn v. Cnty. of El Paso, Tex., 118 F.3d 421, 426 (5th Cir. 1997) (citation
removed); see also Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 472 (5th Cir.
1986) (“The threshold of ‘commonality’ is not high.”).

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Bond again reasserts the same argument in its commonality objections
as it did before the Magistrate Judge. Bond has failed to identify any case law or
statutory basis for its argument that a part-time employee or those employed for a
shorter time period should not receive protection under the WARN Act in the same
way as a full-time employee or a longer tenured employee. Instead, such
distinction may only be relevant in determining whether the WARN Act applies to
the entire class. If the WARN Act indeed applies, then those members of the class
would be entitled to damages and would therefore be a question common to that
class. Regarding Bond’s argument concerning successor liability, the merits of
such defense have yet to be considered by this Court and therefore the Court
declines to entertain this objection. In sum, the Court finds no basis to reconsider
the Magistrate Judge’s conclusion on the commonality factor and Bond’s objection
is therefore overruled.
C.

Typicality
Bond next repeats its argument that the claims of the named Plaintiffs

are not typical of the proposed members of the class. (Dkt. # 79 at 11.) According
to Bond, the Magistrate Judge’s findings on typicality “piggybacks from its
findings on commonality” and errs for the same reasons. (Id.) Bond again asserts
that the Magistrate Judge’s conclusion again overlooks the individualized inquiry
that the Court must look at when assessing typicality. (Id.)
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The Court rejects Bond’s contention. Under Rule 23(a)(3), Plaintiffs
must show that “the claims or defenses of the representative parties are typical of
the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “Typicality focuses
on the similarity between the named plaintiffs’ legal and remedial theories and the
legal and remedial theories of those whom they purport to represent” and is “not
[a] demanding” test. Lightbourn, 118 F.3d at 426. Upon de novo review, the
Court finds the Magistrate Judge’s conclusions were correct that Plaintiffs have
shown that “in the event the class members in this case were to proceed in a
parallel action, they would advance legal and remedial theories similar, if not
identical, to those advanced by the named plaintiffs,” and thus Plaintiffs satisfied
the typicality requirement. Id.
D.

Adequacy of Representation
Repeating its arguments, Bond contends the named plaintiffs in this

case are not adequate representatives. Upon de novo review, the Court will deny
this objection. Rule 23(a)(4) requires Plaintiffs to demonstrate that “the
representative parties will fairly and adequately protect the interests of the class.”
Fed. R. Civ. P. 23(a)(4). This rule “mandates an inquiry into the zeal and
competence of the representative’s counsel and into the willingness and ability of
the representative to take an active role in and control the litigation and to protect

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the interests of absentees.” Horton v. Goose Creek ISD, 690 F.2d 470, 484 (5th
Cir. 1982).
The Magistrate Judge correctly noted that Bond did not take any issue
with Plaintiffs’ counsel’s “zeal and competence.” Nor does Bond object to
counsel’s competence now. And, upon de novo review, the Court agrees with the
Magistrate Judge that Plaintiffs’ interests in obtaining class wide resolution lines
up with the putative class members and that no major conflicts exist. Accordingly,
the Court will overrule Bond’s objections on this last Rule 23(a) factor.
E.

Superiority
Bond again argues in its objections that class certification is not a

superior means of resolution under Rule 23(b). (Dkt. # 79 at 14.) Bond repeats its
arguments that individualized questions predominate the issues in this case and that
other individualized issues may demonstrate that not all putative members can
comprise the same class. (Id. at 15.) Bond further asserts that a class action is not
a superior means to resolve WARN Act claims because not all the proposed class
members live in this jurisdictional district, among others. (Id. at 16–17.)
To certify a class under Rule 23(b), the court must determine 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 for fairly and efficiently adjudicating the controversy.”
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Fed. R. Civ. P. 23(b)(3). The Court has taken a thorough, careful review of each of
the four factors that courts should consider in evaluating whether a class should be
certified under Rule 23(b)(3): (1) “the class members’ interests in individually
controlling the prosecution or defense of separate actions”; (2) “the extent and
nature of any litigation concerning the controversy already begun by or against
class members”; (3) “the desirability or undesirability of concentrating the
litigation of the claims in the particular forum”; and (4) “the likely difficulties in
managing a class action.” Fed. R. Civ. P. 23(b)(3). And, upon de novo review, the
Court will overrule Bond’s objections to the Magistrate Judge’s findings on each
of these factors. The Magistrate Judge correctly determined that Plaintiffs
identified common legal and factual issues that need to be resolved according to
identical legal standards and evidence. For instance, questions such as whether the
WARN Act was violated and whether Bond is a successor in liability for Scribe for
Plaintiffs and putative class members turn on the same legal issues, which are
central to the case. Additionally, the Court finds that adjudicating this case once in
this district as a class action is superior to adjudicating it several times in several
courts across the country. The Court thus agrees with the Magistrate Judge’s
conclusion that Plaintiffs satisfy Rule 23(b)(3)’s requirements that common
questions predominate over individualized ones and that a class action is the
superior method of resolving the WARN Act claims in this case.
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F.

Whether Certification Should be Limited
The Court also overrules Bond’s objection that should a class be

certified, it should be limited to only those employees terminated on May 24, 2023.
(See Dkt. # 79 at 17.) After reviewing the matter de novo, the Court agrees with
the Magistrate Judge’s conclusion that the record demonstrates that class members
may have been laid off after May 24, 2023, and that the statute itself permits courts
to consider employment losses “within any 90-day period” of an alleged layoff
date to ascertain whether other terminations were part of the same “mass layoff,”
as defined under the statute.
CONCLUSION
Based on the foregoing, having made a careful de novo review of the
Magistrate Judge’s findings and conclusions and finding no errors, the Court will
accept and adopt the Report and Recommendation for the reasons stated therein.
The Court thus ADOPTS the Magistrate Judge’s Report and Recommendation as
the opinion of the Court (Dkt. # 76), and GRANTS Plaintiffs’ Motion to Certify
Class (Dkt. # 40). The certified class is defined as “[a]ll former Scribe employees
throughout the United States who were terminated as a result of a ‘mass layoff,’ as
defined by the WARN Act, without 60 days advance written notice, beginning on
May 24, 2023.” The Court further ORDERS that Plaintiffs Alyssa Cormier, Claire
Brudner, Marianna Acosta, and Esty Pittman are appointed as class representatives,
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and that Kaplan Law Firm, PLCC is appointed as class counsel. It is further
ORDERED that Plaintiffs must provide notice to potential class members through
First Class mail, postage prepaid, by SMS/text, and by electronic mail.
IT IS SO ORDERED.
DATE: Austin, Texas, November 22, 2024.

______________________________________
David Alan Ezra
Senior United States District Judge

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