Chaney v. Vermont Bread Company

District Court, D. Vermont·Decided August 17, 2022·No. 2:21-cv-00120·Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

Matthew Chaney, Nadine ) Miller and Arthur Gustafson, ) on behalf of themselves and ) all others similarly ) situated, ) ) Plaintiffs, ) ) v. ) Case No. 2:21-cv-120 ) Vermont Bread Company, ) Superior Bakery, Inc., Koffee ) Kup Bakery, Inc., Koffee Kup ) Distribution LLC, KK Bakery ) Investment Company LLC, KK ) Bakery Holding Acquisition ) Company, and American ) Industrial Acquisition ) Corporation, ) ) Defendants, ) ) and ) ) Linda Joy Sullivan, in her ) capacity as the Dissolution ) Receiver for Koffee Kup ) Bakery, Inc., Vermont Bread ) Company and Superior Bakery, ) Inc., ) ) Intervenor-Defendant- ) Crossclaimant, ) ) v. ) ) KK Bakery Investment Company, ) LLC, KK Bakery Holding ) Acquisition Company, and ) American Industrial ) Acquisition Corporation, ) ) Crossclaim Defendants. ) OPINION AND ORDER Plaintiffs Matthew Chaney, Nadine Miller, and Arthur Gustafson bring this action on behalf of themselves and a putative class alleging violations of the Worker Adjustment and Retraining Notification Act of 1988 (“WARN Act”), 29 U.S.C. §§

2101-2109, et seq. Pending before the Court is Plaintiffs’ motion for class certification, appointment of class representatives, and approval of class counsel. Plaintiffs also move for approval of the form and manner of class notice. For the reasons set forth below, Plaintiffs’ motion is granted. Factual Background On April 26, 2021, Vermont Bread Company, Inc., Superior Bakery, Inc., and Koffee Kup Bakery, Inc. ceased operations. As a result, over 400 people lost their jobs. The WARN Act requires that before executing a plant closing or mass layoff, a covered employer must provide 60 days’ written notice to employees. Plaintiffs allege that Defendants failed to provide

the required notice. Accordingly, the First Amended Complaint seeks wages and benefits for a maximum of 60 days on behalf of Plaintiffs, as well as a putative class of other similarly situated employees. The WARN Act’s notice requirement applies to employers with 100 or more employees. Defendants were separate corporations with plants in three different locations, two in Vermont and one in Connecticut. At least half of the 400 laid-off employees worked in the Vermont facilities. Plaintiffs contend that despite the separate corporate entities and plant locations, Defendants qualified as a “single employer” for purposes of the WARN Act. Defendants dispute the “single employer”

characterization, and submit that Superior Bakery and Vermont Bread Company each employed fewer than 100 full-time employees. The question of whether Defendants constituted a “single employer” invites an inquiry into their corporate relationships. The First Amended Complaint alleges that Koffee Kup Bakery purchased Superior Bakery in 2010. In 2013, Koffee Kup Bakery purchased Vermont Bread Company. It is undisputed that at the time of the alleged WARN Act violations, those entities were wholly-owned subsidiaries of Kup Co. Plaintiffs claim that in the weeks prior to April 1, 2021, in anticipation of purchasing 80% of the stock of Vermont Bread Company, Superior Bakery, Koffee Kup Bakery and Koffee Kup

Distribution, LLC, Defendant American Industrial Acquisition Corp. AIAC (“AIAC”) formed Koffee Kup Bakery Investment Company, LLC and Koffee Kup Bakery Holding Acquisition Company to hold its stock interests. After the stock purchase on April 1, 2021, the purchasing Defendants allegedly joined or succeeded the purchased entities as Plaintiffs’ “single employer.” Plaintiffs filed their Class Action Complaint on April 29, 2021, and their First Amended Class Action Complaint on June 15, 2021. On March 17, 2022, Linda Joy Sullivan moved to intervene as the Dissolution Receiver for Koffee Kup Bakery, Vermont Bread Company, and Superior Bakery. The Court granted her unopposed

motion on March 30, 2022. Now before the Court is Plaintiffs’ motion regarding class certification and related issues. ECF No. 76. Discussion I. The WARN Act and Class Actions The WARN Act prohibits employers of 100 or more employees from ordering “a plant closing or mass layoff until the end of a 60–day period after the employer serves written notice of such an order.” 29 U.S.C. § 2102(a); see also Cashman v. Dolce Int’l/Hartford, Inc., 225 F.R.D. 73, 78 (D. Conn. 2004). This advance notice aims to “provide[] workers and their families some transition time to adjust to the prospective loss of

employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market.” 20 C.F.R. § 639.1(a); see also Guippone v. BH S&B Holdings LLC, 737 F.3d 221, 225 (2d Cir. 2013). Failure to provide a WARN Act notice may subject an employer to civil liability in the form of back pay and benefits for the period of the WARN Act violation up to a maximum of 60 days. See 29 U.S.C. § 2104(a)(1). “Because WARN Act lawsuits are permitted only against employers with more than 100 employees, WARN actions are particularly amenable to class-based litigation.” Cashman, 225

F.R.D. at 90; see also Guippone v. BH S&B Holdings LLC, No. 09 CIV. 1029 CM, 2011 WL 1345041, at *2 (S.D.N.Y. Mar. 30, 2011) (“Class certification is routinely granted in WARN Act cases.”). “Nonetheless, the Court must still ensure that the requirements of Rule 23 of the Federal Rules of Civil Procedure are met before it certifies a WARN class.” Austen v. Catterton Partners V, LP, 268 F.R.D. 146, 148 (D. Conn. 2010). When presented with a motion for class certification, the Court must first determine whether, as required by Rule 23(a): (1) the proposed 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 plaintiffs are typical of the claims or defenses of the class; and (4) the representative plaintiffs will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a). These four requirements are commonly referred to as numerosity, commonality, typicality, and adequacy of representation. Beyond the Rule 23(a) requirements, certification of the class must be deemed appropriate under one of the three Rule 23(b) subcategories. Brown v. Kelly, 609 F.3d 467, 475 (2d Cir. 2010). Here, Plaintiffs move to certify a class under Rule 23(b)(3), which requires 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.” Fed. R. Civ. P. 23(b)(3). In addition, Plaintiffs must satisfy the implied requirement of ascertainability, which requires them to show that the class is sufficiently well-defined. In re Petrobras Sec., 862 F.3d 250, 260 (2d Cir. 2017).

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Chaney v. Vermont Bread Company, (D. Vt. 2022).

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