1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JOSE MACIEL, et al., Case No. 20-cv-03814-WHO
8 Plaintiffs, ORDER GRANTING MOTION TO 9 v. TRANSFER
10 FLOWERS FOODS, INC., et al., Re: Dkt. No. 18 Defendants. 11
12 Plaintiffs Jose Maciel and Maciel Distribution, Inc. (collectively, “Maciel”) filed this 13 action against defendants Flowers Foods, Inc., et al., Flowers Bakeries, LLC, and Flowers 14 Finance, LLC (collectively, “Flowers”), asserting claims under the Fair Labor Standards Act 15 (“FLSA”) and California’s Unfair Competition Law (“UCL”). Flowers moves to dismiss, or in 16 the alternative to transfer or stay, pursuant to the first-to-file rule. It claims that Maciel’s counsel 17 brought the same claims as those filed in an earlier filed case in the Southern District of California, 18 Ludlow v. Flowers Foods, Inc., Case No. 3:18-cv-001190-JLS-JLB (S.D. Cal.). I agree with 19 Flowers and GRANT its motion to transfer this case to the Southern District of California.1 20 BACKGROUND 21 Plaintiffs’ counsel filed Ludlow on June 6, 2018. Dkt. No. 18 (“Mot.”) 3. Ludlow asserted 22 claims under the FLSA and UCL, as well as multiple causes of actions under California’s Labor 23 Code. Id. at 4. Ludlow amended his complaint in February 2019 after moving to conditionally 24 certify the proposed FLSA collective action. Id. The Amended Complaint included causes of 25 action for failure to pay overtime under the FLSA on behalf of the named plaintiffs and the FLSA 26 collective class, for UCL violations on behalf of the named plaintiffs and the California Class, for 27 1 usury on behalf of the named plaintiff and the Usury Sub-Class, and for UCL violations on behalf 2 of the named plaintiff and the Usury Sub-Class. Dkt. No. 18-3 (“Ludlow Compl.”). The FLSA 3 Collective Class was defined as “[a]ll persons who worked pursuant to a ‘Distributor Agreement’ 4 or similar arrangement with Flowers Food, Inc., or one of its subsidiaries, in California that were 5 classified as ‘independent contractors’ during the period commencing three years prior to the 6 commencement of this action through the close of the Court-determined opt-in period.” Id. ¶ 42. 7 The Usury Sub-Class was defined as “[a]ll members of the California Class who received 8 financing at interest rates above 10 percent from Flowers Finance, LLC, Flowers Foods, Inc., 9 and/or its subsidiary(ies) for the purchase of a Flowers’ route or territory.” Id. ¶ 52. 10 The parties fully briefed the plaintiffs’ motion for certification of the California Class and 11 the Usury Sub-Class. Mot. 5. The Ludlow defendants subsequently moved to stay pending a 12 decision from the California Supreme Court regarding whether new law regarding independent 13 contractors applied retroactively, which the court granted. Id. At this time, 113 additional 14 plaintiffs have opted into the FLSA collective action. Id. 15 On April 17, 2020, Maciel’s counsel filed another FLSA and Rule 23 class action in the 16 Eastern District of California against Flowers, the “Wilson action.” Id. at 6. The complaint in that 17 action largely mirrored the Ludlow Amended Complaint. Id. After defense counsel sent Maciel’s 18 counsel a copy of the arbitration agreement that the Wilson plaintiffs signed and filed a motion to 19 compel, the Wilson plaintiffs voluntarily dismissed their case on June 4, 2020. Id. at 6-7. 20 Maciel filed the Complaint in this case on June 10, 2020. Dkt. No. 1 (“Compl.”). He 21 asserts four causes of action: (i) failure to pay overtime pay under the FLSA on behalf of himself 22 and the FLSA collective; (ii) injunctive relief and restitution under the UCL; (iii) usury on behalf 23 of himself and the “Usury Class”; and (iv) relief under the UCL on behalf of himself and the 24 Usury Class. Id. The proposed FLSA collective is defined as “[a]ll persons who worked pursuant 25 to a ‘Distributor Agreement’ or similar arrangement with Flowers Food, Inc., or one of its 26 subsidiaries, in California that were classified as ‘independent contractors.’” Id. ¶ 43. The 27 proposed Usury Class is defined as “[a]ll persons or entities in California who received financing 1 subsidiary(ies) for the purchase of a Flowers’ route or territory.” Id. ¶ 51. 2 Flowers moved to dismiss on July 23, 2020. Mot. 3 LEGAL STANDARD 4 A district court may stay proceedings pursuant to the “first-to-file” rule “if a similar case 5 with substantially similar issues and parties was previously filed in another district court.” Kohn 6 Law Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). 7 Although this rule endows the district court with discretion, it “should not be disregarded lightly.” 8 Id. The rule is driven by issues of economy, consistency, and comity. Id. at 1240. Courts must 9 analyze three factors in applying this rule: (i) chronology of the lawsuits, (ii) similarity of the 10 parties, (iii) and similarity of the issues. Id. at 1240. 11 DISCUSSION 12 It is undisputed that the Ludlow action was filed first. See Dkt. No. 21 (“Oppo.”) 7. 13 Instead, the parties dispute whether the parties to this action and the Ludlow action and the issues 14 in the actions are substantially similar. 15 I. SIMILARITY OF THE PARTIES 16 Maciel is not a named plaintiff or an opt-in FLSA class member in Ludlow, although he is 17 a member of the putative collective and class in Ludlow. See Oppo. 7; Mot. 12. The FLSA 18 collective at issue in Ludlow and the FLSA collective asserted here are identical, except that here 19 Maciel limits the time period to three years prior to the commencement of this action. See 20 Background. The Rule 23 class in this case is identical to the Usury Sub-Class in Ludlow. Id. 21 Maciel argues that the plaintiffs in this case are not substantially similar to those in Ludlow 22 because the named plaintiffs are different. Oppo. 7. He acknowledges that, as directed by the 23 case law cited by Flowers, courts compare similarity of classes (as opposed to named plaintiffs) in 24 Rule 23 class actions. Id. at 8. He nonetheless contends that in FLSA class actions, “comparison 25 of actual parties, rather than the proposed classes, is the more appropriate analysis.” Id. at 7. He 26 argues that FLSA collective actions are fundamentally different because under Rule 23, class 27 members are presumed to be within the class unless they opt out while under the FLSA, parties 1 Maciel relies heavily on Lac Anh Le v. Pricewaterhousecoopers LLP, where the court 2 found that under the first-to-file rule, the parties to two FLSA collective actions were not the same 3 because the named plaintiffs were different. No. C-07-5476 MMC, 2008 WL 618938, at *1 (N.D. 4 Cal. Mar. 4, 2008). In Lac Anh Le, the court devoted only one paragraph to the issue and did not 5 distinguish between FLSA collective actions and Rule 23 actions. Id. Instead, the court suggested 6 that the parties were not yet members of a class and thus not the same “[a]t the present time.” Id. 7 (“the district court in [the first-filed case] has recently conducted a hearing on a motion to certify a 8 class, which motion, if granted, could result in plaintiff herein becoming a party in both cases.”). 9 The court declined to stay the matter, but ordered the parties to show cause why the case should 10 not be transferred. Id. at *2. Maciel also relies on this case for his argument that the first-to-file 11 rule does not apply even to Rule 23 class actions where the class has not yet been certified. Oppo. 12 7-8. 13 Maciel’s reliance on Lac Anh Le is misplaced.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JOSE MACIEL, et al., Case No. 20-cv-03814-WHO
8 Plaintiffs, ORDER GRANTING MOTION TO 9 v. TRANSFER
10 FLOWERS FOODS, INC., et al., Re: Dkt. No. 18 Defendants. 11
12 Plaintiffs Jose Maciel and Maciel Distribution, Inc. (collectively, “Maciel”) filed this 13 action against defendants Flowers Foods, Inc., et al., Flowers Bakeries, LLC, and Flowers 14 Finance, LLC (collectively, “Flowers”), asserting claims under the Fair Labor Standards Act 15 (“FLSA”) and California’s Unfair Competition Law (“UCL”). Flowers moves to dismiss, or in 16 the alternative to transfer or stay, pursuant to the first-to-file rule. It claims that Maciel’s counsel 17 brought the same claims as those filed in an earlier filed case in the Southern District of California, 18 Ludlow v. Flowers Foods, Inc., Case No. 3:18-cv-001190-JLS-JLB (S.D. Cal.). I agree with 19 Flowers and GRANT its motion to transfer this case to the Southern District of California.1 20 BACKGROUND 21 Plaintiffs’ counsel filed Ludlow on June 6, 2018. Dkt. No. 18 (“Mot.”) 3. Ludlow asserted 22 claims under the FLSA and UCL, as well as multiple causes of actions under California’s Labor 23 Code. Id. at 4. Ludlow amended his complaint in February 2019 after moving to conditionally 24 certify the proposed FLSA collective action. Id. The Amended Complaint included causes of 25 action for failure to pay overtime under the FLSA on behalf of the named plaintiffs and the FLSA 26 collective class, for UCL violations on behalf of the named plaintiffs and the California Class, for 27 1 usury on behalf of the named plaintiff and the Usury Sub-Class, and for UCL violations on behalf 2 of the named plaintiff and the Usury Sub-Class. Dkt. No. 18-3 (“Ludlow Compl.”). The FLSA 3 Collective Class was defined as “[a]ll persons who worked pursuant to a ‘Distributor Agreement’ 4 or similar arrangement with Flowers Food, Inc., or one of its subsidiaries, in California that were 5 classified as ‘independent contractors’ during the period commencing three years prior to the 6 commencement of this action through the close of the Court-determined opt-in period.” Id. ¶ 42. 7 The Usury Sub-Class was defined as “[a]ll members of the California Class who received 8 financing at interest rates above 10 percent from Flowers Finance, LLC, Flowers Foods, Inc., 9 and/or its subsidiary(ies) for the purchase of a Flowers’ route or territory.” Id. ¶ 52. 10 The parties fully briefed the plaintiffs’ motion for certification of the California Class and 11 the Usury Sub-Class. Mot. 5. The Ludlow defendants subsequently moved to stay pending a 12 decision from the California Supreme Court regarding whether new law regarding independent 13 contractors applied retroactively, which the court granted. Id. At this time, 113 additional 14 plaintiffs have opted into the FLSA collective action. Id. 15 On April 17, 2020, Maciel’s counsel filed another FLSA and Rule 23 class action in the 16 Eastern District of California against Flowers, the “Wilson action.” Id. at 6. The complaint in that 17 action largely mirrored the Ludlow Amended Complaint. Id. After defense counsel sent Maciel’s 18 counsel a copy of the arbitration agreement that the Wilson plaintiffs signed and filed a motion to 19 compel, the Wilson plaintiffs voluntarily dismissed their case on June 4, 2020. Id. at 6-7. 20 Maciel filed the Complaint in this case on June 10, 2020. Dkt. No. 1 (“Compl.”). He 21 asserts four causes of action: (i) failure to pay overtime pay under the FLSA on behalf of himself 22 and the FLSA collective; (ii) injunctive relief and restitution under the UCL; (iii) usury on behalf 23 of himself and the “Usury Class”; and (iv) relief under the UCL on behalf of himself and the 24 Usury Class. Id. The proposed FLSA collective is defined as “[a]ll persons who worked pursuant 25 to a ‘Distributor Agreement’ or similar arrangement with Flowers Food, Inc., or one of its 26 subsidiaries, in California that were classified as ‘independent contractors.’” Id. ¶ 43. The 27 proposed Usury Class is defined as “[a]ll persons or entities in California who received financing 1 subsidiary(ies) for the purchase of a Flowers’ route or territory.” Id. ¶ 51. 2 Flowers moved to dismiss on July 23, 2020. Mot. 3 LEGAL STANDARD 4 A district court may stay proceedings pursuant to the “first-to-file” rule “if a similar case 5 with substantially similar issues and parties was previously filed in another district court.” Kohn 6 Law Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). 7 Although this rule endows the district court with discretion, it “should not be disregarded lightly.” 8 Id. The rule is driven by issues of economy, consistency, and comity. Id. at 1240. Courts must 9 analyze three factors in applying this rule: (i) chronology of the lawsuits, (ii) similarity of the 10 parties, (iii) and similarity of the issues. Id. at 1240. 11 DISCUSSION 12 It is undisputed that the Ludlow action was filed first. See Dkt. No. 21 (“Oppo.”) 7. 13 Instead, the parties dispute whether the parties to this action and the Ludlow action and the issues 14 in the actions are substantially similar. 15 I. SIMILARITY OF THE PARTIES 16 Maciel is not a named plaintiff or an opt-in FLSA class member in Ludlow, although he is 17 a member of the putative collective and class in Ludlow. See Oppo. 7; Mot. 12. The FLSA 18 collective at issue in Ludlow and the FLSA collective asserted here are identical, except that here 19 Maciel limits the time period to three years prior to the commencement of this action. See 20 Background. The Rule 23 class in this case is identical to the Usury Sub-Class in Ludlow. Id. 21 Maciel argues that the plaintiffs in this case are not substantially similar to those in Ludlow 22 because the named plaintiffs are different. Oppo. 7. He acknowledges that, as directed by the 23 case law cited by Flowers, courts compare similarity of classes (as opposed to named plaintiffs) in 24 Rule 23 class actions. Id. at 8. He nonetheless contends that in FLSA class actions, “comparison 25 of actual parties, rather than the proposed classes, is the more appropriate analysis.” Id. at 7. He 26 argues that FLSA collective actions are fundamentally different because under Rule 23, class 27 members are presumed to be within the class unless they opt out while under the FLSA, parties 1 Maciel relies heavily on Lac Anh Le v. Pricewaterhousecoopers LLP, where the court 2 found that under the first-to-file rule, the parties to two FLSA collective actions were not the same 3 because the named plaintiffs were different. No. C-07-5476 MMC, 2008 WL 618938, at *1 (N.D. 4 Cal. Mar. 4, 2008). In Lac Anh Le, the court devoted only one paragraph to the issue and did not 5 distinguish between FLSA collective actions and Rule 23 actions. Id. Instead, the court suggested 6 that the parties were not yet members of a class and thus not the same “[a]t the present time.” Id. 7 (“the district court in [the first-filed case] has recently conducted a hearing on a motion to certify a 8 class, which motion, if granted, could result in plaintiff herein becoming a party in both cases.”). 9 The court declined to stay the matter, but ordered the parties to show cause why the case should 10 not be transferred. Id. at *2. Maciel also relies on this case for his argument that the first-to-file 11 rule does not apply even to Rule 23 class actions where the class has not yet been certified. Oppo. 12 7-8. 13 Maciel’s reliance on Lac Anh Le is misplaced. In a subsequent case, the same judge stated 14 that “the majority of district courts in the Ninth Circuit that have applied the first-to-file rule in the 15 context of a class action have compared the putative classes rather than the named plaintiffs” and 16 noted that “comparison of the putative classes appears to have been implicitly endorsed by the 17 Ninth Circuit.” Pedro v. Millennium Prod., Inc., No. 15-CV-05253-MMC, 2016 WL 3029681, at 18 *3 (N.D. Cal. May 27, 2016). The court distinguished its prior decision in Lac Anh Le, stating that 19 “the distinction between a putative and certified class was not raised in Le.” Id. at *3 n.8. And 20 although some courts hold that finding similarity of classes is inappropriate prior to certification, 21 most courts in this district have rejected this position. Wallerstein v. Dole Fresh Vegetables, Inc., 22 967 F. Supp. 2d 1289, 1295 (N.D. Cal. 2013) (collecting cases); Koehler v. Pepperidge Farm, 23 Inc., No. 13-CV-02644-YGR, 2013 WL 4806895, at *4 (N.D. Cal. Sept. 9, 2013) (same). That the 24 classes at issue in this matter are putative does not defeat a finding of substantial similarity. 25 I am left with Maciel’s argument that collectives in the FLSA context differ from Rule 23 26 classes for the purposes of the first-to-file rule. That fails for two primary reasons. First, even if 27 Maciel were correct that the parties to the FLSA collective are not substantially the same, he has 1 his argument that FLSA collectives are different than Rule 23 classes is not supported by Lac Anh 2 Le or any other cases in the opposition. By contrast, courts have found that “[i]n a collective 3 action, the class members, and not the class representatives, are compared.” Taylor v. 4 AlliedBarton Sec. Servs. LP, No. 1:13-CV-01613-AWI, 2014 WL 1329415, at *7 (E.D. Cal. Apr. 5 1, 2014) see also Adoma v. Univ. of Phoenix, Inc., 711 F. Supp. 2d 1142, 1147–48 (E.D. Cal. 6 2010) (distinguishing Lac Anh Le and finding substantial similarity of parties in FLSA collective 7 action prior to certification). 8 In sum, the parties in this action and in Ludlow are substantially similar. 9 II. SIMILARITY OF ISSUES 10 Next, Maciel does not dispute that the causes of action in this matter are the same as some 11 of the causes of action in Ludlow. But he contends that the issues in this action are not 12 substantially similar because “this action does not implicate California employment law, including 13 the Dynamex decision whatsoever.” Oppo. 10. In other words, he asserts that because the Ludlow 14 action included additional causes of action that implicated the Dynamex decision, the issues in the 15 two actions are not similar. 16 His argument is unpersuasive. The issues in both cases need only be “substantially 17 similar,” not identical. Kohn, 787 F.3d at 1240. To determine whether issues are substantially 18 similar, courts examine whether there is “substantial overlap between the two suits.” Id. at 1241. 19 The causes of action in this matter are all at issue in Ludlow. Courts have found that this 20 establishes similarity of issues for the purpose of the first-to-file rule. See Posadas-Romesberg v. 21 24 Hour Fitness USA, Inc., No. 06-CV-0689 WQH (AJB), 2006 WL 8455546, at *4 (S.D. Cal. 22 Aug. 31, 2006) (“the fact that Plaintiffs in the instant matter have asserted numerous state law 23 causes of action not found in the [first filed] complaint, in addition to their FLSA claim, is no bar 24 to application of the first-to-file rule.”); Herrera v. Wells Fargo Bank, N.A., No. C 11-1485 SBA, 25 2011 WL 6141087, at *2 (N.D. Cal. Dec. 9, 2011) (rejecting argument that issues differ because 26 one alleged state-law claims and the other did not). This factor weighs in favor of granting 27 Flowers’s motion. I. EQUITABLE CONSIDERATIONS AND RELIEF SOUGHT Maciel contends that even if the threshold requirements of the first-to-file rule are met, equitable considerations weigh against its application here. Oppo. 10. It cites Brice v. Plain ° Green, LLC, in which I denied a motion to stay under the first-to-file rule because the first case had been stayed “without a concrete timeframe for that case resuming and with no class ° certification schedule.” 372 F. Supp. 3d 955, 976 (N.D. Cal. 2019). But critical in that case, I ° found that there was not significant overlap between the parties or the issues. Jd. ’ Perhaps more importantly, the consideration of comity weighs in favor of granting Flowers’s motion. In opposing a stay in Ludlow, plaintiffs’ counsel made many of the same ° arguments as here regarding hardship and that the actions at issue in this case were not affected by 0 the Dynamex decision. See Ludlow action, Dkt. No. 121. The court granted the motion to stay, " finding that discovery had already taken place and thus the preservation of evidence problems plaintiffs raised were not persuasive. Ludlow action, Dkt. No. 174. Allowing Maciel to proceed with the same claims that are before the Ludlow court and have been subject to discovery and S extensive briefing, and which the Ludlow court stayed, would interfere with that court’s disposition of the case. It would also impact potential class and collective members in that case. 5 Maciel’s arguments lack merit. = " CONCLUSION Z 18 For the above reasons, | GRANT Flowers’s motion. Given the advanced status of the Ludlow matter, I find that a transfer is the most appropriate form of relief. Accordingly, this case is TRANSFERRED to the Southern District of California. IT IS SO ORDERED. * Dated: September 28, 2020 23
25 Tram H. Orrick 6 United States District Judge 27 28