Espencheid v. DirectSat USA, LLC et al
Filing
643
ORDER decertifying case as a class and collective action. Claims of all opt-in plaintiffs and unnamed class members are dismissed without prejudice. Plaintiffs are to notify court whether they intend to proceed to trial with claims of named plainti ffs before 4:00 p.m. on 5/26/11. Defendants are to notify court whether they object to the 6/6/11 trial date on plaintiffs' individual claims before 4:00 p.m. on 5/26/11. Parties are to inform court which of their motions in limine they consider relevant to plaintiffs' individual claims by midnight on 5/24/11. Signed by District Judge Barbara B. Crabb on 5/23/11. (krj)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - AARON L. ESPENSCHEID,
GARY IDLER and MICHAEL CLAY,
on behalf of themselves and a class of
employees and/or former employees
similarly situated,
OPINION and ORDER
09-cv-625-bbc
Plaintiffs,
v.
DIRECTSAT USA, LLC and
UNITEK USA, LLC,
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This is a collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§
201-219, and a class action under the wage and overtime compensation laws of Wisconsin,
Minnesota and Pennsylvania. From the beginning of the case, defendants have insisted that
it should not go forward as a collective and class action given the varied employment
experiences of the plaintiffs and class members. Nonetheless, I certified a collective and class
action because I believed that the main issues in the case were whether defendants’
nationwide policies and practices caused violations of federal and state wage law. I divided
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the case into subclasses, concluding the use of subclasses and a bifurcated trial would address
the variety of claims and experiences as well as protect the parties’ due process rights.
The case is scheduled for a jury trial on June 6, 2011. However, on May 12, 2011,
after reviewing plaintiffs’ proposed trial plan and expert reports, I became concerned about
the manageability of the case. Plaintiffs’ plan did not appear to address the subclasses or
differences between the plaintiffs’ claims and experiences. In an order dated May 12, 2011,
I instructed the parties to advise the court whether this case can remain certified as a
collective and class action.
After reviewing the parties’ responses to the May 12 order, as well as their proposed
trial plans, jury instructions, special verdict forms and the record in this case, I conclude that
this case is not fit for adjudication as a collective and class action, at least under the plan
proposed by plaintiffs. For the following reasons, I am decertifying this case as a collective
and class action and dismissing without prejudice the claims of the opt-in plaintiffs and class
members, leaving the original plaintiffs to pursue their claims individually.
PROCEDURAL AND FACTUAL BACKGROUND
Initially, plaintiffs brought this action on behalf of four separate classes of installation
technicians employed or formerly employed by defendants.
The classes were (1) a
nationwide opt-in class for violations of the FLSA; (2) a Wisconsin class for violations of
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Wisconsin wage and overtime compensation laws; (3) a Minnesota class for violations of
Minnesota wage and overtime compensation laws; and (4) a Pennsylvania class for violations
of Pennsylvania wage and overtime compensation laws.
Utilizing the two-stage certification approach employed by the majority of courts in
determining whether to certify a case as a collective action under § 216(b) of the FLSA, I
conditionally certified this matter as collective action on June 4, 2010. Dkt. #129. The
parties then sent notices to potential opt-in plaintiffs. In response, roughly 1,000 plaintiffs
consented to join in this litigation as opt-in plaintiffs. A little more than four months later
on October 22, 2010, plaintiffs moved to certify state law classes under Fed. R. Civ. P. 23
for technicians in Wisconsin, Pennsylvania and Minnesota.
On November 12, 2010,
defendants moved to decertify the nationwide FLSA class.
Defendants based their motion to decertify on the depositions of several opt-in
plaintiffs.
Defendants’ primary argument for decertification was that the opt-in class
members were not similarly situated. The class members testified to varying employment
experiences and asserted different theories of liability. Plaintiffs countered with declarations
of members of the opt-in class and with depositions of corporate officers describing
defendants’ uniform policies and practices. After reviewing the evidence presented by both
parties, I concluded that “[n]ot all technicians performed all of [the alleged] tasks, nor did
they perform them everyday or for a consistent period of time,” and explained, for instance,
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that “some technicians testified that they spent a significant amount of time loading and
unloading equipment from their vehicles everyday, while others admitted that they rarely
unloaded equipment.” Dkt. #387, at 15. However, I concluded that plaintiffs’ primary
challenge was to defendants’ uniform policies and practices and that defendants’ concerns
could be managed through bifurcation and the creation of the following subclasses: (1)
plaintiffs who were denied overtime because they recorded a lunch break that they did not
take or otherwise underreported hours they worked between their first and last installation
or service job of the day; (2) plaintiffs who were denied overtime because they were not
compensated for work performed before their first installation or service job of the day or
after their last installation or service job of the day; and (3) plaintiffs whose regular and
overtime wages for nonproductive work were calculated improperly. I certified similar
subclasses for plaintiffs’ state law claims, creating a total of twelve subclasses. I concluded
that dividing plaintiffs into these classes alleviated defendants’ due process concerns, but I
noted that “as the case develops further or reaches the damages phase, it may become
unmanageable in its current form.” Id. at 54. Defendants sought interlocutory appeal of the
certification decision, stressing manageability, typicality and due process concerns. Dkt.
#423. In addition, defendants sought leave to file an interlocutory appeal of the denial of
decertification. Both attempts at interlocutory appeal were denied.
After certification, the parties continued discovery and filed cross-motions for partial
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summary judgment. With the exception of concluding that some plaintiffs performed
potentially compensable work at home, I denied plaintiffs’ motion in large part because
plaintiffs had not established who in fact performed the “outside the window” tasks, which
tasks those individuals performed or the length and frequency of the work. Dkt. #485 at
46-57.
In connection with the summary judgment opinion, I directed the parties to develop
a joint trial plan. The parties submitted separate plans. In plaintiffs’ trial plan, plaintiffs
revealed that they intended to prove their claims at a non-bifurcated trial and without the
use of the subclasses developed by the court. Plaintiffs’ proposed damages expert report also
failed to address the subclasses. Instead, the report relied on the theory that there was an
overall “average” technician representing every technician for every subclaim. A few days
later, plaintiffs filed motions to eliminate the subclasses and proceed with a non-bifurcated
case. In an order dated May 6, 2011, I denied plaintiffs’ motions related to the subclasses
and bifurcation, expressing concern with plaintiffs’ failure to take into consideration the
subclasses and different issues present in the case. Dkt. #549. I directed plaintiffs to
explain how their expert report accounted for the subclasses and to file a new trial plan.
In an order dated May 12, 2011, I struck plaintiffs’ expert report for its failure to
comply with Fed. R. Civ. P. 26. Dkt. #595. I noted that although plaintiffs might be able
to cure the problems with their expert report, there were larger problems with plaintiffs’ plan
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for proving the case at trial. In particular, plaintiffs had still failed to articulate how they
were planning to address the distinct issues represented by each subclass. I concluded that
plaintiffs’ inability to address these issues indicated that the case had become too difficult
to manage collectively and that I was prepared to decertify the case. I directed the parties
to respond to my concerns.
PLAINTIFFS’ PROPOSED TRIAL PLANS
Plaintiffs have proposed two trial plans. First, they urge the court to eliminate the
twelve subclasses and certify an FLSA national class of “all installation or service technicians
who were employed by DirectSat and compensated on a piece-rate basis from three years
prior to the date of each individual class members’ opt-in until the present date.” Dkt. #609
at 15. They propose similar classes for the state law claims. Plaintiffs contend that because
the “heart of [their] claims is a set of uniform, national policies that apply to every
technician” and that “all technicians are claiming compensation for work that was performed
with defendants’ knowledge,” it is not necessary to create subclasses to account for
differences in the effect of defendants’ policies. Under this trial plan, plaintiffs would
present the testimony of several technicians who were allegedly uncompensated for work
performed either at home or during the official work window and the jury would decide
whether defendants have failed to pay plaintiffs properly for some time they worked, be that
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work at home, at meetings, driving between jobs or working on customer jobs.
In the alternative, plaintiffs’ second proposed trial plan proposes the use of
representative proof to establish liability under the twelve subclasses. For the FLSA subclass
related to work performed “outside the window,” plaintiffs plan to present 42 technicians
who will provide “representative testimony that they performed specific work-related tasks
outside the window period and that they were not compensated for these tasks.” Plts.’
Proposed Trial Plan, dkt. #604, at 4. The same 42 technicians will testify as representatives
of the second subclass regarding work they performed within the window period for which
they were not compensated. Id. at 5. Finally, for the third subclass, the same technicians
will testify that there was no agreement with defendants that payment for productive time
was intended to include payment for all time worked, including non-productive time. Id.
at 6-7. A subset of the 42 technicians will provide testimony for each of the state law classes.
At the liability stage, the jury will be asked to determine whether (1) plaintiffs and
class members worked unrecorded time; (2) defendants knew that plaintiffs worked
unrecorded hours; (3) defendant failed to compensate plaintiffs for the unrecorded hours;
(4) there was an agreement that pay for productive hours was intended to compensate class
members for all non-productive time worked; (5) defendants’ method for calculating
overtime violated the FLSA and state law; (6) defendants failed to maintain accurate time
records for employees; and (7) defendants’ violation of federal and state wage and hour law
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was willful.
Plaintiffs propose to calculate damages by determining the average number of nonproductive and productive hours worked by technicians in a workweek. Thus, the jury will
be asked to determine the average number of uncompensated productive and non-productive
hours in each work week after hearing the testimony of the 42 representative class members.
Plaintiffs contend that they do not need an expert to assist the jurors with this
determination. Post-trial, the parties would use the jury’s averages to determine the amount
of damages owed each class member and opt-in plaintiff. Specifically, the parties would add
the average uncompensated hours to the weekly pay totals each class members already
received during the relevant time period. This method allows for consideration of training
weeks during which a class member did not have any piece-rate earnings as well as work
weeks in which a class member may have been on light duty, workers’ compensation or leave.
OPINION
A. Certification of Collective Actions under the FLSA and Class Actions under Rule 23
Although it is the eve of trial, it is necessary to reexamine the propriety of collective
treatment in this case in light of plaintiffs’ proposed trial plan, the nature of the claims and
the development of the evidence in this case. District courts are “charged with the duty of
monitoring [their] class decisions in light of the evidentiary development of the case. The
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district judge must define, redefine, subclass, and decertify as appropriate in response to the
progression of the case from assertion to facts.” Richardson v. Byrd, 709 F.2d 1016, 1019
(5th Cir. 1983); see also Baldridge v. SBC Communications, Inc., 404 F.3d 930, 931 (5th
Cir.2005) (certification of a collective action under § 216(b) of FLSA is “subject to revision
before the district court addresses the merits”); In re School Asbestos Litigation, 789 F.2d
996, 1011 (3d Cir. 1986) (“When, and if, the district court is convinced that the litigation
cannot be managed, decertification is proper.”); Eggleston v. Chicago Journeymen Plumbers’
Local Union No. 130, 657 F.2d 890, 896 (7th Cir. 1981); Walker v. Bankers Life &
Casualty Co., 2008 WL 2883614, *9 (N.D. Ill. July 28, 2008) (“If certification is later
deemed improvident at any time during the course of litigation, a court may decertify the
class.”); Blihovde v. St. Croix County, 219 F.R.D. 607, 614 (W.D. Wis. 2003) (district court
“can decertify the class at any time before a decision on the merits”) (citing Fed. R. Civ. P.
23(c)(1)).
Under the FLSA, one or more employees may pursue an action in a representative
capacity only if they are “similarly situated” to the employees they represent. 29 U.S.C. §
216(b). This standard takes into account (1) whether the factual and employment settings
of the individual plaintiffs are similar or disparate; (2) whether defendants may assert
various defenses that appear to be individual to each plaintiff; and (3) whether fairness and
procedural considerations support proceeding as a collective action. Thiessen v. General
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Electric Capital Corp., 267 F.3d 1095, 1103 (10th Cir. 2001); Russell v. Illinois Bell
Telephone Co., 721 F. Supp. 2d 804, 811 (N.D. Ill. 2010); Mielke v. Laidlaw Transit, Inc.,
313 F. Supp. 2d 759, 762 (N.D. Ill. 2004). Similarly, class actions under Fed. R. Civ. P. 23
require that “the questions of law or fact common to class members predominate over any
questions affecting only individual members,” Rule 23(b)(3), and whether a class action is
superior to other methods for the adjudication of the proposed class’ claims. Mejdrech
v.Met-Coil Systems Corp., 319 F.3d 910, 911 (7th Cir. 2003) (“[C]lass action treatment is
appropriate and is permitted by Rule 23 when the judicial economy from consolidation of
separate claims outweighs any concern with possible inaccuracies from their being lumped
together in a single proceeding for decision by a single judge or jury.”).
In many cases, collective and class actions provide efficiency and judicial economy
in wage and hour disputes because the a court may resolve common factual and legal
questions collectively on basis of evidence that is representative of the whole. However, the
more dissimilar plaintiffs' job experiences are from one another and the more individualized
an employer’s defenses are, the less appropriate the matter is for collective treatment. The
problems with collective adjudication of the claims in this case have become more
pronounced as it approaches trial.
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B. The Claims and Record in this Case
In the May 12, 2011 order, dkt. #595, I noted concern with plaintiffs’ proposed trial
plan and directed the parties to address whether this case had become unmanageable as a
collective and class action. In their response, plaintiffs criticize the subclasses as being
unworkable and improper and insist that they should be able to proceed with one class. In
the alternative, plaintiffs propose that they be allowed to proceed with the subclasses, based
on the assumption that all plaintiffs and class members have claims in every subclass.
Neither of plaintiffs’ proposals is acceptable. Both are merely attempts to work
around the subclasses that I created as an alternative to decertifying the case. Thus,
although the subclasses may have problems, the solution is not to ignore them. As I noted
in the order creating the subclasses, the opt-in plaintiffs and class members have divergent
testimony, distinct theories of liability and unique employment environments and
experiences. Dkt. #387 at 39 (concluding that “defendants’ concerns are manageable
through bifurcation and the creation of subclasses); see also dkt. #549 at 3 (concluding that
case could proceed as class action “if plaintiffs’ claims were divided into three subclasses for
the purposes of summary judgment and trial”); dkt. #595 at 13 (reminding parties that this
case cannot be tried with “one class” because the “experiences” and claims of the class
members vary too widely”).
As the case has developed, I have become more convinced that it cannot proceed as
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one class. Despite my findings at the certification stage that plaintiffs’ claims were grounded
primarily in defendants’ uniform policies and practices, the evidence in the case suggests that
proof of plaintiffs’ claims depends on how individual technicians responded to the numerous
policies and practices at issue in the case.
However, even if all of the plaintiffs and class members could be lumped together into
one class based on a broad theory of liability, plaintiffs have not proposed a trial plan that
would lead to a fair result. Under either of their proposed plans, plaintiffs would present the
testimony of 42 “representative” technicians, as well as other declarations and documentary
evidence, to prove the claims of 2,300 individuals. Plaintiffs have not explained how the 42
technicians are representative of the whole class or how counsel could extrapolate the
findings from a small sub-set of individuals to an absent class, particularly without the use
of an expert. The idea of representative proof is that plaintiffs could provide testimony from
a sample of technicians who can provide detail information regarding their experiences,
which can then be extrapolated to the remainder of the group without significant error.
Without an expert, it is not clear who would testify as to whether extrapolating from the 42
technicians is scientifically or statistically appropriate.
The single fact that all technicians were subject to the same policies, practices and job
descriptions does not permit a conclusion that a small sub-set would automatically be
representative of the whole. If it were the case that technicians had relatively uniform
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experiences, then the reported experiences of representative technicians would closely
resemble the experiences of absent technicians who have not provided detailed information.
In this case, however, there are many complicating factors that undermine the conclusion
that one technicians’ testimony is representative of an absent technicians’ experiences.
Thus, there is too great a chance that the determination by a jury of the “average” number
of uncompensated hours worked by class members each week would be unreliable and would
result in rewarding some technicians who have already been compensated fully and,
simultaneously reducing the awards to which others are entitled.
One of the complicating factors is that the quantity of work available to technicians
varied according to time and location. In some offices, technicians report an average of
around 30 hours a week while at other offices, the average is closer to 40 or 50. Dkt. #31920, 21 & 22. Thus, the amount of nonproductive work, such as the number of customer
calls each day, the amount of equipment to load and unload and the number of satellites that
must be built at home, would vary depending on time and location. The wide variability in
weekly hours worked implies strongly that one technician’s experiences may not be a proxy
for others.
Another complicating factor is that the technicians used a variety of methods to
record the time on their timesheets, including whether they recorded time spent driving,
attending meetings and sharing equipment with other technicians.
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Some technicians
reported that they recorded time spent in meetings and driving, while others reported that
they did not record such time. Some technicians stated that their supervisors did not allow
them to record more than 40 hours a week and required them to record a lunch break
regardless whether they actually took one; other technicians stated that they were allowed
to record overtime and that they recorded lunch breaks only if they took one. In addition,
the time technicians devoted to these activities varied. For example, some declarants stated
that it took about five minutes to call customers while others spent more than 30 minutes
on the same task. Some declarants stated that it took them 15 minutes to drive to their first
customer job while others declared that it took up to two hours. Some declarants state that
they spent 30 minutes a week in unpaid meetings while others claim to have spent 90
minutes. These are only a few examples from declarations and deposition testimony of optin plaintiffs in the record, but they illustrate the wide differences in employment experiences
between individual employees and the problem with using a small subset of technicians to
represent the whole. Given the wide variability and inconsistencies in technician testimony,
it would be difficult for a jury to determine what experiences are representative of the entire
group of technicians at issue in this case without gross margins of error.
Additionally, plaintiffs’ proposed trial plan would make it extremely difficult for
defendants to assert their various defenses. Defendants contend that their GPS data reveals
that many technicians were overreporting the time they worked, or at least, that many
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technicians were recording and were paid for the time they spent performing nonproductive
tasks at home. This defense goes to the credibility of certain plaintiffs’ testimony and
claims, and would be difficult to assert without the ability to cross-examine individual
technicians. Defendants also contend that some technicians would not be entitled to recover
for driving time under the continuous workday doctrine because they did not perform their
at-home tasks immediately before and after driving. Rutti v. Lojack Corp, 596 F.3d 1046,
1060 (9th Cir. 2010) (citing 29 C.F.R. § 785.16) (continuous workday rule applies only
where employee is actually engaged continuously in work or is otherwise not free to use time
for his own purposes).
Defendants cannot prove this defense by calling a handful of
witnesses whose testimony suggests that they waited until after they had been home for a
few hours to perform certain tasks, because plaintiffs’ witnesses will testify to the contrary.
As one court noted, collective treatment is not appropriate where a defendant would be
required to “pick the class apart, plaintiff by plaintiff, going into the day-to-day job duties
of each of the plaintiffs to prove” their defenses. Johnson v. Big Lots Stores, Inc., 561 F.
Supp. 2d 567, 586 (E.D. La. 2008) (decertifying case after court trial on merits because
evidence at trial showed class was not similarly situated). “That exercise is tantamount to
conducting multiple individual trials on the merits and is the antithesis of a collective
action.” Id. Defendants cannot be expected to present “representative” proof of its defenses
when the plaintiffs and class members are not clearly representative of each other.
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In sum, the evidence in this case reveals substantial variations among the opt-in
plaintiffs and class members. At a high level of generality, the opt-in plaintiffs and class
members perform similar job duties and are subject to the same corporate policies. But in
terms of individual experiences, the evidence shows that opt-in plaintiffs and class members
have different work experiences and were affected by defendants’ policies in different ways.
It is unfortunate that this case must be decertified at this stage, on the eve of trial and after
the large investment of resources by the parties. However, I cannot allow this case to
proceed to a jury trial under plaintiffs’ proposed plan. As the court stated in Big Lots, 561
F. Supp. 2d at 588, the “all or nothing posture of this case makes ruling on the merits
fundamentally unfair to both sides.” Were the jury to rule in plaintiffs’ favor under its
proposed plan, the jury would have to do so on the basis of proof that is not representative
of the whole class, and defendants would be deprived of the opportunity to assert their
individualized defenses. On the other hand, a verdict for defendants would extinguish all
of plaintiffs’ and the class members’ claims and would be unfair to those technicians who
were denied pay in violation of federal and state law. Under such circumstances, the case
must be decertified.
C. Conclusion
After the case is decertified, only the named plaintiffs’ claims remain in the case.
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Plaintiffs must decide whether they wish to proceed to trial on June 6 with their individual
claims.
Plaintiffs should notify the court of their decision before the final pre-trial
conference scheduled for Thursday, May 26. Defendants should also inform the court before
the pretrial conference whether they object to the June 6 trial date on plaintiffs’ individual
claims. In addition, both parties should review their motions in limine and inform the court
by midnight on Tuesday, May 24, which of their motions in limine they consider to be
relevant to plaintiffs’ individual claims.
ORDER
IT IS ORDERED that
1. This case is DECERTIFIED as a class and collective action. The claims of all optin plaintiffs and unnamed class members are DISMISSED WITHOUT PREJUDICE, leaving
before the court the named plaintiffs who originated these actions.
2. Before the final pretrial conference scheduled for Thursday, May 26, 2011 at 4:00
p.m., plaintiffs should notify the court whether they intend to proceed to trial with the
claims of the named plaintiffs. Defendants should also inform the court before the pretrial
conference whether they object to the June 6 trial date on plaintiffs’ individual claims. In
addition, both parties should review their motions in limine and inform the court by
midnight on Tuesday, May 24, which of their motions in limine they consider relevant to
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plaintiffs’ individual claims.
Entered this 23rd day of May, 2011.
BY THE COURT:
/s/
__________________________________
BARBARA B. CRABB
District Judge
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