Slack et al v. Swift Transportation Co. of Arizona, LLC

Filing 303

ORDER by Judge Benjamin H. Settle denying 295 Motion re overtime claim dispute; denying 297 Motion re overtime claim dispute. Joint status report due by 7/13/2018. (TG)

1
2
3
4
5
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

6
7
8

TROY SLACK, et al.,

CASE NO. C11-5843 BHS
Plaintiff,

9
10

v.
SWIFT TRANSPORTATION CO. OF
ARIZONA, LLC,

11
Defendant.
12
13
14
15
16

ORDER DENYING PARTIES’
MOTIONS ON THE SCOPE OF
THE OVERTIME CLASS AND
REQUESTING JOINT STATUS
REPORT ON PROCEDURE FOR
AMENDING CLASS
CERTIFICATION

This matter comes before the Court on the parties’ motions and responses
regarding the overtime claim dispute (Dkts. 295, 297, 298, 300). The Court has
considered the pleadings filed in support of and in opposition to the motions and the
remainder of the file and hereby rules as follows:

17

I.

PROCEDURAL AND FACTUAL BACKGROUND

18

On March 1, 2007, the Washington Supreme Court issued its decision in Bostain

19

v. Food Express, Inc., 159 Wn.2d 700 (2007). The court concluded that a “Washington-

20

based” driver was entitled to overtime under Washington’s Minimum Wage Act

21

(“MWA”), RCW Chapter 49.46, even if the driver worked some of his or her hours out of

22

ORDER - 1

1

state. Id. at 724 (“The overtime provisions of RCW 49.46.130 apply to all hours worked

2

by a Washington-based truck driver engaged in interstate transportation, whether within

3

Washington State or outside the state.”). The court also warned that “[e]mployers will

4

need to identify those employees who are subject to Washington’s MWA and keep track

5

of total hours.” Id. at 719.

6

On July 18, 2011, Plaintiff Troy Slack (“Slack”) filed a class action complaint

7

against Defendant Swift Transportation Co. of Arizona, LLC (“Swift”) in the Pierce

8

County Superior Court for the State of Washington. Dkt. 3 at 4–17. Slack alleged that he

9

was a resident of Washington and worked for Swift. Id. ¶ 3.1. He also alleged that his

10

base terminal was located in Washington. Id.

11

On September 9, 2011, Slack filed an amended class action complaint adding

12

Plaintiffs Richard Erickson, Jacob Grismer, and Scott Praye. Id. at 20–34. The new

13

plaintiffs alleged that they worked for Swift and that their base terminal was in

14

Washington. Id. ¶¶ 3.2–3.4.

15

On October 12, 2011, Swift removed the matter to this Court. Id.

16

On May 16, 2012, Plaintiffs Richard Erickson, Jacob Grismer, Scott Praye, and

17

Slack filed a second amended class action complaint adding Plaintiffs Gary Roberts,

18

Robert Ulrich, Henry Ledesma, Timothy Helmick, Dennis Stuber, Eric Dublinski and

19

Sean Forney (collectively “Plaintiffs”). Dkt. 29. Relevant to the instant motion,

20

Plaintiffs alleged a class as follows:

21
22

All current and former Washington based employees who at anytime
worked in excess of 40 hours in a week and whose duties include or have
included participating in orientation and training as well as independently

ORDER - 2

1

driving freight trucks while being paid under a mileage based compensation
system.

2
Id. ¶ 4.1. Plaintiffs asserted numerous claims, including a claim that Swift failed “to
3
compensate Plaintiffs for their employment in excess of 40 hours per week at a rate not
4
less than one and one-half times the regular rate of pay at which they were employed, or
5
the reasonable equivalent thereto,” in violation of the MWA. Id. ¶ 8.3.
6
On June 28, 2013, Plaintiff moved to certify the class and proposed an initial
7
definition of “Washington-based driver” as applied to the overtime claim as follows:
8
9
10

All current and former Swift employee interstate drivers who were
assigned by Swift to a Washington position and/or terminal after July 18,
2008; and,
(1) Who were paid by the mile and worked in excess of forty hours in a
week; . . . .

11
Dkt. 40 at 8. In support of this definition, Plaintiffs asserted as follows:
12

18

The above criteria allow for relatively easy identification of the class
members using Swift’s own work records. Swift’s management personnel
and named Plaintiffs have agreed that drivers assigned to a Washington
terminal are assigned specific position numbers or codes which are used by
Swift’s central payroll department. Corporate representative Sarah Koogle,
the payroll project leader for Swift, testified that she was able to use a
position code as “selection criteria of identifying drivers who were –
work—or based out of a Washington location” for the last four years.
Whether a driver exceeded forty hours of drive-time in any given week can
be determined by reviewing Swift’s payroll records and Swift’s Qualcomm
electronic logbook records (as well as the driver’s own DOT logbook) for
the average speed and mileage each week.

19

Id. at 9 (citing the deposition of Sarah Koogle, Dkt. 40-3). Ms. Koogle, as Swift’s

20

30(b)(6) representative, testified that Swift assigned “home terminals” for their drivers.

21

Dkt. 40-3 at 7, 35–36.

13
14
15
16
17

22

ORDER - 3

1

In support of their motion, Plaintiffs submitted a document created by Swift

2

regarding overtime pay in Washington. The form is titled “Ackowledgement of Rate of

3

Pay for Washington based employees” and provides as follows:

4
5

All Washington based drivers are entitled to overtime pursuant to
state law. Accordingly, the mileage rates in Washington State are higher
than elsewhere because, in accordance with state law, Swift has built
overtime into those rates.

6
Dkt. 40-2 at 2. At the bottom, the form provides that it is “To be signed in orientation for
7
all Washington based drivers.” Id. 1 Swift presented the form to Slack in 2011 even
8
though Slack began driving for Swift in 2006. Dkt. 49, ¶¶ 2, 13. Slack refused to sign
9
the form because he “did not agree that [his] mileage based pay rate has ever included an
10
amount to compensate [him] at an overtime rate for all driving time [he] worked over 40
11
hours in a week.” Id. ¶ 14. Moreover, Slack declares that no Swift employee “had ever
12
suggested that [his] mileage rate included an amount to compensate [him] with overtime
13
pay for driving in excess of 40 hours per week.” Id. ¶ 15.
14
On August 2, 2013, Swift responded and opposed certification. Dkt. 57. Swift
15
essentially argued that its accounting system is so complicated that Plaintiffs would be
16
unable to identify a “common method by which to identify drivers who are Washington
17
based.” Dkt. 57 at 9–10. In direct contradiction to the Washington Supreme Court’s
18
statement in 2007 that “[e]mployers will need to identify those employees who are
19
subject to Washington’s MWA and keep track of total hours,” Bostain, 159 Wn.2d at
20
21
1

22

This is evidence that, at some point in time, Swift was able to identify its “Washington
based drivers.”

ORDER - 4

1

719, Swift stated in 2013 that “[t]here is no means to determine which [Swift] drivers are

2

Washington based.” Dkt. 57 at 29. Swift, however, stated that it had “dedicated drivers”

3

and “Over-The-Road (“OTR”)” drivers assigned to its two Washington terminals. Id. at

4

7. Similar to the driver in Bostain, the dedicated drivers were assigned to a specific

5

terminal and work for only one account. Id.

6

In Plaintiffs’ reply, they argued that the Court should certify a class including both

7

the OTR drivers and the dedicated drivers. Regarding the dedicated drivers, Plaintiff

8

submitted evidence to establish that dedicated drivers start and end their trips at the same

9

Washington-based terminal located in either Sumner or Grandview. Dkt. 82 at 3–4.

10

On November 20, 2013, the Court granted in part and denied in part Plaintiffs’

11

motion. Dkt. 83. The Court found that Plaintiffs had submitted sufficient evidence to

12

establish that the dedicated “class of drivers would fall squarely within the type of

13

employee contemplated by Bostain.” Id. at 6. Thus, the Court certified the overtime

14

class as follows:

15
16
17

All current and former Swift employee designated drivers who were
assigned by Swift to a Washington position and/or terminal after July 18,
2008; and,
(1) Who were paid by the mile and worked in excess of forty hours
in a week; . . . .

18

Id. at 11. The Court erroneously stated “designated” when it meant “dedicated” in the

19

first line. The Court subsequently granted Plaintiffs’ motion to substitute “dedicated” for

20

“designated.” Dkt. 99 at 3.

21
22

On February 18, 2016, after years of formulating a proper class notice and
substitution of class counsel, Plaintiffs filed a motion for approval of class notice and

ORDER - 5

1

notice distribution plan. Dkt. 153. The single outstanding issue was the definition of the

2

word “dedicated.” Id. Plaintiffs proposed a definition as follows:

3

6

For purposes of this class action, “dedicated driver” means any
current or former employee driver who, at any time after July 18, 2008, was
assigned by Swift to a terminal and/or customer facility physically located
in the state of Washington and, during that assignment, drove routes for a
single specified customer account.
Drivers who were exclusively over-the-road drivers are expressly
excluded from the Class.

7

Dkt. 153-1 at 2. Swift objected to this definition because it “drastically and dramatically

8

increases the class size.” Dkt. 160 at 2. Swift argued that the definition would include

9

not only dedicated drivers that always worked for a single account but also OTR drivers

10

that may have worked as a dedicated driver at any time. Id. at 8. Swift offered limiting

11

language as follows:

4
5

12

15

For purposes of this class action, ‘dedicated driver’ means any
current or former employee driver, who, at any time after July 18, 2008,
was assigned by Swift to a terminal and/or Washington customer facility
physically located in the state and who, during the course of that primary
assignment, was assigned routes for a single, specified customer account
and engaged in local delivery service from that terminal or facility to points
in the state and/or region (WA, OR, and ID).

16

or

17

For purposes of this class action, “dedicated driver” means any
current or former employee driver, who at any time after July 18, 2008, was
assigned by Swift to a terminal and/or Washington customer facility
physically located in the state and assigned to a single, specified customer
account and not serving in a surge, overflow, seasonal or supplemental
capacity during such assignment.

13
14

18
19
20

Id. at 4–5. The Court adopted Plaintiffs’ proposed definition, approved the notice, and
21
approved the distribution plan. Dkt. 168. The Court concluded that Plaintiffs’ proposed
22

ORDER - 6

1

language was “the best notice practicable to clearly and concisely apprise potential class

2

members of the requirements of Rule 23(c)(2)(B).” Id. at 2.

3

After some discovery disputes, Swift produced a list of 2,764 potential class

4

members. Dkt. 216-21 at 5 (Angela Sabbe’s expert report). Swift’s attorney conceded

5

that the list potentially included up to 1,200 drivers who may have exclusively been OTR

6

drivers. Dkt. 285-1 at 2. Based on position codes provided by Swift, Ms. Sabbe

7

“determined 1,482 drivers were paid during the class period in at least one of the

8

mileage‐paid, dedicated driver position codes.” Id. at 10. Plaintiff expert, Dwight D.

9

Steward, Ph.D., produced a damages estimate based on Ms. Sabbe’s reduced list. He

10

estimated that lost overtime would amount to $6,361,938 with exemplary damages of

11

$6,361,938. Dkt. 216-24, ¶ 19.

12

On August 30, 2017, the Court granted the parties’ stipulated motion to stay the

13

proceeding due to settlement. Dkt. 273. On September 20, 2017, Plaintiffs filed a

14

motion for preliminary approval of class action settlement. Dkt. 274. On October 10,

15

2017, the Court granted the unopposed motion. Dkt. 278.

16

On December 5, 2017, the parties filed a stipulated motion to stay the settlement

17

deadlines and set a briefing schedule to resolve an issue “between the parties regarding

18

the scope of the class that is subject to the release in the class settlement.” Dkt. 280. On

19

December 7, 2017, the Court granted the motion. Dkt. 281. On December 21, 2017, the

20

parties filed opening briefs on the issue. Dkts. 282, 284. On March 20, 108, the Court

21

held a hearing on the issue. Dkt. 291. On April 10, 2018, the Court vacated its

22

preliminary approval of the class settlement and requested a joint status report on how the

ORDER - 7

1

parties intended to proceed. Dkt. 292. The Court concluded that a possibility existed that

2

Plaintiffs did not account for some potential class members when they reached

3

settlement. Id.

4

On April 20, 2018, the parties filed a joint status report stating that it is necessary

5

for the Court to resolve a class definition problem. Dkt. 294. Specifically, the parties

6

stated that:

7
8
9
10
11

Resolution of the current dispute will affect: (1) whether at least 23
additional drivers who have worked at least one shift for a dedicated
account in the Class period, but did not work overtime on any dedicated
driving shift, should be in the Class; (2) whether drivers who worked shifts
for dedicated accounts and worked overtime during such dedicated shifts
should also receive distribution of the settlement proceeds based on their
non-dedicated mileage-based overtime; and (3) whether Class members
will release claims for all mileage-based overtime worked during the Class
Period (dedicated and non-dedicated), or only overtime worked for
dedicated accounts.

12
Id. at 2.
13
On May 10, 2018, the parties filed opening briefs. Dkts. 295, 297. On May 31,
14
2018, the parties filed responsive briefs. Dkts. 298, 300.
15
II. DISCUSSION
16
It is apparent that a class definition issue exists. Plaintiffs contend that resolution
17
of the issue may result in vacating the settlement, Dkt. 298 at 7, while Swift contends that
18
“decertification of the entire class is warranted,” Dkt. 300 at 4. At this point, it appears
19
that the parties failed to reach a meeting of the minds on the scope of the settlement,
20
which means the settlement may not be enforceable. The class, however, may be
21
22

ORDER - 8

1

modified to more accurately reflect the evidence presented and resolve the parties’

2

dispute.

3

“An order that grants or denies class certification may be altered or amended

4

before final judgment.” Fed. R. Civ. P. 23(c)(1)(C). “A decision to certify or not to

5

certify a class may therefore require revisiting upon completion of full discovery.”

6

Blades v. Monsanto Co., 400 F.3d 562, 567 (8th Cir. 2005). “[W]here common issues

7

certainly exist, a district court might consider subclassing in lieu of decertification.”

8

Landsman & Funk PC v. Skinder-Strauss Associates, 640 F.3d 72, 95 (3d Cir. 2011),

9

opinion reinstated in part, 09-3105, 2012 WL 2052685 (3d Cir. Apr. 17, 2012).

10

In this case, the evidence has establish that identifiable groups of drivers exist.

11

For example, it seems undisputed that a group of drivers exists that worked for a

12

dedicated account similar to the plaintiff in Bostain. Ms. Sabbe refers to these

13

individuals as “Washington‐based, mileage‐paid, dedicated drivers at Swift.” Dkt. 216-

14

22, ¶ 30. These are the approximately “1,482 drivers who routinely drove dedicated

15

accounts, not all 2,764 drivers to whom Plaintiffs had provided class notice.” Dkt. 282 at

16

5. This appears to be the most easily identifiable subclass of overtime claims with the

17

only dispute being whether Swift paid these drivers the reasonable equivalent of

18

overtime. Amending the class definition to cover this subclass of overtime claims

19

appears warranted to better conform to the actual evidence produced in discovery. In

20

other words, now that experts have dissected Swift’s complicated accounting system,

21

there may exist a clearer definition of Swift’s Washington-based drivers.

22

ORDER - 9

1

Next, the parties have identified a group of drivers that occasionally drove for a

2

dedicated account and were paid by the mile, which the parties refer to as “hybrid

3

drivers.” See, e.g., Dkt. 297 at 2. At least two issues arise with these hybrid drivers: (1)

4

whether such a driver can be considered a Washington-based driver under Bostain if he

5

or she only occasionally drove a dedicated route, and (2) if the driver was Washington-

6

based, whether the driver would be entitled to overtime for weeks working as a

7

Washington-based driver or for all overtime during the class period. Plaintiffs bear the

8

burden to show that these drivers meet the criteria for class certification, and it may be

9

that individual issues predominate over class issues for these drivers. For example, if a

10

driver only worked one week on a mileage-paid, dedicated account, would that driver be

11

considered a Washington-based driver for purposes of the MWA?

12

Swift contends that the hybrid group of drivers were included in the class when the

13

Court approved Plaintiffs’ version of the class notice. Dkt. 297 at 9. Contrary to Swift’s

14

position, the Court did not “redefine” the class by approving Plaintiffs’ notice. Instead,

15

the Court stated that Plaintiffs’ version of the notice was the best way to apprise potential

16

class member of the class. In hindsight, the Court should have considered redefining the

17

certification order at that time, but it did not seem that this dispute would evolve into an

18

issue that could potentially derail a settlement. Regardless, the evidence establishes an

19

issue that can be addressed with developing subclasses.

20

Finally, there is the group of exclusive OTR drivers and/or non-Washington-based

21

drivers. The Court has excluded these drivers from the class even if some drivers were

22

on Swift’s initial list of potential class members.

ORDER - 10

1

In light of these concerns, the Court orders the parties to meet and confer

2

regarding a briefing schedule. Because Plaintiffs bear the burden of identifying

3

subclasses that are amenable to class resolution, it may make sense for Plaintiffs to file a

4

motion to amend the class certification order. The Court, however, will allow the parties

5

the opportunity to discuss and propose how the matter should proceed. In any event, the

6

current motions to redefine the class without actually redefining the class will be denied.

7

III. ORDER

8

Therefore, it is hereby ORDERED that the parties’ motions regarding the

9

overtime claim dispute (Dkts. 295, 297) are DENIED. The parties shall submit a joint

10

status report no later than July 13, 2018.

11

Dated this 9th day of July, 2018.

A

12
13

BENJAMIN H. SETTLE
United States District Judge

14
15
16
17
18
19
20
21
22

ORDER - 11