1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 TERRY NELSON, No. 2:23-cv-02756-DJC-CSK 12 Plaintiff, 13 v.
14 PENSKE LOGISTICS LLC,
15 Defendant. 16 JAMES MILAM, No. 2:24-cv-01944-DJC-CSK 17 Plaintiff, 18 v. ORDER
19 PENSKE LOGISTICS LLC,
20 Defendant. 21
22 Both Nelson v. Penske, No. 2:23-cv-02756-DJC-CSK, and Milam v. Penske, No. 23 2:24-cv-01944, are actions, brought individually and on behalf of a putative class, 24 concerning wage and hour claims against Defendant Penske Logistics LLC. Presently 25 before the Court is a Motion to Dismiss or Stay filed in the Milam action (Mot. to 26 Dismiss (Milam ECF No. 36)) filed by Defendant Penske and a Motion to Consolidate 27 the Milam and Nelson actions (Mot. to Consolidate (Milam ECF No. 40, Nelson ECF 28 No. 23)), filed in both actions by Plaintiff James Milam. Both motions seek to resolve 1 the fact that these actions are largely duplicative, though the motions propose 2 different solutions. 3 For the reasons stated below, the Court grants in part and denies in part 4 Defendant’s Motion to Dismiss or Stay and denies Plaintiff Milam’s Motion to 5 Consolidate. 6 I. Background 7 Plaintiff Terry Nelson filed a class action complaint against Defendant Penske 8 on November 27, 2023. The current operative complaint is the First Amended 9 Complaint (“FAC”) filed on January 22, 2024. (Nelson FAC (ECF No. 13).) In the FAC, 10 Plaintiff Nelson claims that Defendant Penske had required workers at its to work “off- 11 the-clock” before their shifts, failed to reimburse employees for the purchase of steel- 12 toed boots, failed to accurately calculate regular rates of pay by omitting bonuses in 13 the calculation of regular rate of pay, failed to prove proper meal and rest breaks 14 based on the implementation of computerized systems, failed to accurate wage 15 statements based on the above, did pay money owed on termination of employment, 16 and did not comply with California quota laws. (See id.) 17 Plaintiff James Milam initiated the Milam action against Defendant on January 18 26, 2024, in the District Court for the Northern District of California. (Milam Compl. 19 (ECF No. 1).) The allegations in that complaint cover most of the same allegations in 20 the Nelson FAC, including that Defendant Penske’s employees were required to 21 perform work “off-the-clock” for which they were not compensated, did not receive 22 full meal and rest breaks, received inaccurate wage statements based on the above, 23 were not paid money owed on termination. (See id.) Plaintiff Milam also includes a 24 separate but related claim that Defendant Penske failed to maintain business records, 25 as well as a claim under the UCL, which Plaintiff Nelson does not include in the Nelson 26 FAC. (see id.) 27 After the Milam action was transferred from the Northern District, Defendant 28 moved to dismiss or stay that action, which is now fully briefed. (Mot. to Dismiss; 1 Opp’n re:Mot. to Dismiss (Milam ECF No. 39); Reply re:Mot. to Dismiss (Milam ECF 2 No. 42).) Plaintiff Milam subsequently filed a counter motion to consolidate the 3 Nelson and Milam actions which both Defendant Penske and Plaintiff Nelson 4 opposed. (Mot. to Consolidate; Nelson Opp’n re:Mot. to Consolidate (Nelson ECF 5 No. 25); Penske Opp’n re:Mot. to Consolidate (Nelson ECF No. 24; Milam ECF No. 6 43); Reply re:Mot. to Consolidate (Nelson ECF No. 23; Milam ECF No. 44).) 7 II. Discussion 8 Plaintiff Nelson, Plaintiff Milam, and Defendant Penske agree that the Nelson 9 and Milam actions are largely duplicative. (Mot. to Consolidate at 1 (“[the] respective 10 actions assert almost identical claims under the California Labor Code”); Mot. to 11 Dismiss at 11; Nelson Opp’n re:Mot. to Consolidate at 3–4.) On review, the Court 12 confirms that the two actions are duplicative as the Milam action includes the claims 13 raised in the Nelson action. The only claims in the Milam actions that are not present 14 in the Nelson action are a claim that Defendant failed to maintain accurate records — 15 which appears subordinate to Plaintiff Milam’s main claims — and the UCL claim that 16 can only be plead in the alternative. The relief sought in both actions is the same and 17 the defendant and class are also the same.1 See Adams v. Cal. Dep't of Health Servs., 18 487 F.3d 684, 689 (9th Cir. 2007). There also is no dispute that the Nelson action is 19 the earlier filed of the two cases. 20 To resolve the duplicative actions, Plaintiff Milam requests that the Court 21 consolidate the actions. Defendant Penske and Plaintiff Nelson oppose that request. 22 Defendant Penske suggests that the Court should dismiss or stay Plaintiff Milam's 23 action instead. 24 1 When determining whether class actions are duplicative, courts look to the whether the classes are the 25 same, not whether the named plaintiffs are the same. See Weinstein v. Metlife, Inc., No. 06-cv-04444-SI, 2006 WL 3201045, at *4 (N.D. Cal. Nov. 6, 2006). Additionally, while the class of the Milam action 26 presently differs due to the longer class period, the parties agree that the class period in Milam must be reduced to a period nearly identical to the Nelson action because of the release in the McDowell state 27 court settlement. (See Mot. to Dismiss at 17–18; see also Opp’n re:Mot. to Dismiss at 7.) Given the Court’s decision in this order to stay the Milam action, the Court will not discuss or resolve the effect of 28 the McDowell settlement on the class period in the Milam action at this time. 1 When faced with duplicative actions, “the district court may exercise its 2 discretion to dismiss a duplicative later-filed action, to stay that action pending 3 resolution of the previously filed action, to enjoin the parties from proceeding with it, 4 or to consolidate both actions.” Adams, 487 F.3d at 688. This is essentially an 5 extension of the “first-to-file” rule that permits a district court to stay or dismiss a case 6 “if a similar case with substantially similar issues and parties was previously filed in 7 another district court.” Kohn L. Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 8 1239 (9th Cir. 2015). The first-to-file rule isn't a rigid, mechanical rule but a tool that is 9 “applied with a view to the dictates of sound judicial administration.” Pacesetter Sys., 10 Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). 11 Here, consolidation does not appear a proper course of action. When 12 determining whether to consolidate an action, the Court weighs “the interest in 13 judicial convenience against the potential delay, confusion and prejudice caused by 14 consolidation.” Paxonet Commc'ns, Inc. v. TranSwitch Corp., 303 F. Supp. 2d 1027, 15 1028 (N.D. Cal. 2003). The parties to the Nelson action have been engaged in 16 discovery for six months at the time of this order and are rapidly approaching the class 17 certification motion deadline currently scheduled for January 15, 2025. (See ECF Nos. 18 17, 28.) The Milam action has not yet passed the pleading stage. Consolidating these 19 actions would require that a new amended complaint be filed in the consolidated 20 action to unify Plaintiff Nelson and Plaintiff Milam’s pleadings. This would open up the 21 possibility of new motion practice based on that amended complaint and the need to 22 expand discovery based on the inclusion Plaintiff Milam as a named plaintiff and 23 representative of the putative class. It would also mean that all future litigation would 24 be burdened by the need to coordinate with an additional party.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 TERRY NELSON, No. 2:23-cv-02756-DJC-CSK 12 Plaintiff, 13 v.
14 PENSKE LOGISTICS LLC,
15 Defendant. 16 JAMES MILAM, No. 2:24-cv-01944-DJC-CSK 17 Plaintiff, 18 v. ORDER
19 PENSKE LOGISTICS LLC,
20 Defendant. 21
22 Both Nelson v. Penske, No. 2:23-cv-02756-DJC-CSK, and Milam v. Penske, No. 23 2:24-cv-01944, are actions, brought individually and on behalf of a putative class, 24 concerning wage and hour claims against Defendant Penske Logistics LLC. Presently 25 before the Court is a Motion to Dismiss or Stay filed in the Milam action (Mot. to 26 Dismiss (Milam ECF No. 36)) filed by Defendant Penske and a Motion to Consolidate 27 the Milam and Nelson actions (Mot. to Consolidate (Milam ECF No. 40, Nelson ECF 28 No. 23)), filed in both actions by Plaintiff James Milam. Both motions seek to resolve 1 the fact that these actions are largely duplicative, though the motions propose 2 different solutions. 3 For the reasons stated below, the Court grants in part and denies in part 4 Defendant’s Motion to Dismiss or Stay and denies Plaintiff Milam’s Motion to 5 Consolidate. 6 I. Background 7 Plaintiff Terry Nelson filed a class action complaint against Defendant Penske 8 on November 27, 2023. The current operative complaint is the First Amended 9 Complaint (“FAC”) filed on January 22, 2024. (Nelson FAC (ECF No. 13).) In the FAC, 10 Plaintiff Nelson claims that Defendant Penske had required workers at its to work “off- 11 the-clock” before their shifts, failed to reimburse employees for the purchase of steel- 12 toed boots, failed to accurately calculate regular rates of pay by omitting bonuses in 13 the calculation of regular rate of pay, failed to prove proper meal and rest breaks 14 based on the implementation of computerized systems, failed to accurate wage 15 statements based on the above, did pay money owed on termination of employment, 16 and did not comply with California quota laws. (See id.) 17 Plaintiff James Milam initiated the Milam action against Defendant on January 18 26, 2024, in the District Court for the Northern District of California. (Milam Compl. 19 (ECF No. 1).) The allegations in that complaint cover most of the same allegations in 20 the Nelson FAC, including that Defendant Penske’s employees were required to 21 perform work “off-the-clock” for which they were not compensated, did not receive 22 full meal and rest breaks, received inaccurate wage statements based on the above, 23 were not paid money owed on termination. (See id.) Plaintiff Milam also includes a 24 separate but related claim that Defendant Penske failed to maintain business records, 25 as well as a claim under the UCL, which Plaintiff Nelson does not include in the Nelson 26 FAC. (see id.) 27 After the Milam action was transferred from the Northern District, Defendant 28 moved to dismiss or stay that action, which is now fully briefed. (Mot. to Dismiss; 1 Opp’n re:Mot. to Dismiss (Milam ECF No. 39); Reply re:Mot. to Dismiss (Milam ECF 2 No. 42).) Plaintiff Milam subsequently filed a counter motion to consolidate the 3 Nelson and Milam actions which both Defendant Penske and Plaintiff Nelson 4 opposed. (Mot. to Consolidate; Nelson Opp’n re:Mot. to Consolidate (Nelson ECF 5 No. 25); Penske Opp’n re:Mot. to Consolidate (Nelson ECF No. 24; Milam ECF No. 6 43); Reply re:Mot. to Consolidate (Nelson ECF No. 23; Milam ECF No. 44).) 7 II. Discussion 8 Plaintiff Nelson, Plaintiff Milam, and Defendant Penske agree that the Nelson 9 and Milam actions are largely duplicative. (Mot. to Consolidate at 1 (“[the] respective 10 actions assert almost identical claims under the California Labor Code”); Mot. to 11 Dismiss at 11; Nelson Opp’n re:Mot. to Consolidate at 3–4.) On review, the Court 12 confirms that the two actions are duplicative as the Milam action includes the claims 13 raised in the Nelson action. The only claims in the Milam actions that are not present 14 in the Nelson action are a claim that Defendant failed to maintain accurate records — 15 which appears subordinate to Plaintiff Milam’s main claims — and the UCL claim that 16 can only be plead in the alternative. The relief sought in both actions is the same and 17 the defendant and class are also the same.1 See Adams v. Cal. Dep't of Health Servs., 18 487 F.3d 684, 689 (9th Cir. 2007). There also is no dispute that the Nelson action is 19 the earlier filed of the two cases. 20 To resolve the duplicative actions, Plaintiff Milam requests that the Court 21 consolidate the actions. Defendant Penske and Plaintiff Nelson oppose that request. 22 Defendant Penske suggests that the Court should dismiss or stay Plaintiff Milam's 23 action instead. 24 1 When determining whether class actions are duplicative, courts look to the whether the classes are the 25 same, not whether the named plaintiffs are the same. See Weinstein v. Metlife, Inc., No. 06-cv-04444-SI, 2006 WL 3201045, at *4 (N.D. Cal. Nov. 6, 2006). Additionally, while the class of the Milam action 26 presently differs due to the longer class period, the parties agree that the class period in Milam must be reduced to a period nearly identical to the Nelson action because of the release in the McDowell state 27 court settlement. (See Mot. to Dismiss at 17–18; see also Opp’n re:Mot. to Dismiss at 7.) Given the Court’s decision in this order to stay the Milam action, the Court will not discuss or resolve the effect of 28 the McDowell settlement on the class period in the Milam action at this time. 1 When faced with duplicative actions, “the district court may exercise its 2 discretion to dismiss a duplicative later-filed action, to stay that action pending 3 resolution of the previously filed action, to enjoin the parties from proceeding with it, 4 or to consolidate both actions.” Adams, 487 F.3d at 688. This is essentially an 5 extension of the “first-to-file” rule that permits a district court to stay or dismiss a case 6 “if a similar case with substantially similar issues and parties was previously filed in 7 another district court.” Kohn L. Grp., Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 8 1239 (9th Cir. 2015). The first-to-file rule isn't a rigid, mechanical rule but a tool that is 9 “applied with a view to the dictates of sound judicial administration.” Pacesetter Sys., 10 Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). 11 Here, consolidation does not appear a proper course of action. When 12 determining whether to consolidate an action, the Court weighs “the interest in 13 judicial convenience against the potential delay, confusion and prejudice caused by 14 consolidation.” Paxonet Commc'ns, Inc. v. TranSwitch Corp., 303 F. Supp. 2d 1027, 15 1028 (N.D. Cal. 2003). The parties to the Nelson action have been engaged in 16 discovery for six months at the time of this order and are rapidly approaching the class 17 certification motion deadline currently scheduled for January 15, 2025. (See ECF Nos. 18 17, 28.) The Milam action has not yet passed the pleading stage. Consolidating these 19 actions would require that a new amended complaint be filed in the consolidated 20 action to unify Plaintiff Nelson and Plaintiff Milam’s pleadings. This would open up the 21 possibility of new motion practice based on that amended complaint and the need to 22 expand discovery based on the inclusion Plaintiff Milam as a named plaintiff and 23 representative of the putative class. It would also mean that all future litigation would 24 be burdened by the need to coordinate with an additional party. On the other side of 25 the scale, the benefits of consolidation to judicial convenience are minimal, especially 26 considering that the Court also has the option to dismiss or stay the Milam 27 proceedings instead. Thus, consolidation is inappropriate for the present 28 //// 1 circumstances given the potential for delay and confusion and the limited judicial 2 convenience gained. 3 Dismissal of the Milam action also seems improper. The Milam action’s UCL 4 claim could theoretically provide an avenue for equitable relief if legal remedies are 5 ultimately determined to be unavailable.2 The Nelson action does not include UCL 6 claims. Thus, if the Court were to dismiss the Milam action and the legal remedies 7 sought in the Nelson action were to fail, those UCL claims, if viable, would go untested 8 and unheard. If instead the Court were to stay the Milam action and the legal claims in 9 the Nelson action were dismissed on the merits, Plaintiff Milam’s UCL claim could still 10 be pursued to their conclusion. 11 Staying the newer action is an appropriate method for handing a duplicative 12 action. See Adams, 487 F.3d at 688. In determining whether a stay is appropriate, 13 courts consider the CMAX factors which cover the competing interests that must be 14 weighed in granting a stay. Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 15 2005) (citing CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). These include “[1] 16 the possible damage which may result from the granting of a stay, [2] the hardship or 17 inequity which a party may suffer in being required to go forward, and [3] the orderly 18 course of justice measured in terms of the simplifying or complicating of issues, proof, 19 and questions of law which could be expected to result from a stay.” Lockyer, 398 20 F.3d at 1111. 21 The CMAX factors weigh clearly in favor of staying the Milam action. First, the 22 damage that results from granting a stay are minimal to non-existent. The Nelson 23 action will still be litigated, seek to resolve the same issues underling both cases, and 24 potentially provide release to the class if Plaintiff Nelson is ultimately successful. 25 2 It seems that Plaintiff Milam’s UCL claims are presently inadequately plead. While this Court has ruled 26 that UCL claims can be plead in the alternative, see Watson v. Crumbl LLC, --- F. Supp. 3d ----, 2024 WL 3010880, at *4–5 (E.D. Cal. June 10, 2024), Plaintiff does not take even the minimal step of alleging that 27 he lacks an adequate legal remedy. See Sonner v. Premier Nutrition Corp., 971 F.3d 834, 844 (9th Cir. 2020). However, given the Court’s ultimate determination to stay the Milam action, the Court will defer 28 addressing this issue until after the stay of that action is ultimately lifted. 1 Second, if a stay were not imposed, Defendant would be forced to simultaneously 2 litigate two distinct actions brought on extremely similar claims. This duplicate 3 litigation would cause clear hardship for Defendant. Third, the orderly course of 4 justice is in favor of granting a stay. Permitting near-identical actions to proceed 5 would be a wasteful use of the parties’ and the Court’s time and resources. As 6 analyzed above, the alternative options of dismissal and consolidation both present 7 potential complications to the orderly course of justice. By comparison, staying the 8 Milam action has the benefits of simplifying and streamlining this course of litigation 9 without the downside of dismissing potential claims without an opportunity to fully 10 litigate their merits. 11 The CMAX factors thus favor a stay of the Milam action while the Nelson action 12 is pending. The Court will stay the Milam case until the Nelson action reaches a final 13 resolution. Defendant’s Motion to Dismiss the Milam action will be denied as will 14 Plaintiff Milam’s Motion to Consolidate the Milam and Nelson actions. 15 III. Conclusions 16 For the reasons stated above, IT IS HEREBY ORDERED, that: 17 1. Plaintiff Milam’s Motion to Consolidate (Nelson ECF No. 23; Milam ECF No. 18 40) is DENIED. 19 2. Defendant’s Motion to Dismiss or Stay (Milam ECF No. 36) is GRANTED IN 20 PART and DENIED IN PART as follows: 21 a. Defendant’s Motion to Dismiss is DENIED3; and 22 b. Defendant’s Motion to Stay is GRANTED. 23 3. Milam v. Penske, 2:24-cv-01944-DJC-CSK is STAYED pending the resolution 24 of Nelson v. Penske, 2:23-cv-02756-DJC-CSK. 25 //// 26 3 As noted earlier, this order does not decide the adequacy of Plaintiff Milam’s UCL claims and the 27 effect of the McDowell settlement on the class period in the Milam action. While the Court denies Defendant’s Motion to Dismiss, this denial is without prejudice to the renewal of these arguments after 28 the stay of the Milam actin is lifted. 1 4. Within twenty-one (21) days of the Court entering a dispositive order in the 2 Nelson action, the parties shall file a Joint Status Report in the Milam action. 3 4 5 IT 1S SO ORDERED. 6 | Dated: _December 2, 2024 “Dane A Cob bra tto— Hon. Daniel alabretta / UNITED STATES DISTRICT JUDGE 8 9 10 11 | DJC1 - nelson23cv02756&milam24cv01944.consolidation 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28