1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA
6 HERMAN OVERPECK, et al., 7 Case No. 18-cv-07553-PJH Plaintiffs, 8 v. ORDER DENYING MOTION FOR 9 LEAVE TO FILE MOTION FOR FEDEX CORPORATION, et al., RECONSIDERATION; DISMISSING 10 ISPs; TERMINATING MOTION TO Defendants. DISMISS; AND DENYING MOTIONS 11 TO SEAL
13 14 In the above-captioned case, defendants FedEx Corp. and FedEx Ground 15 (collectively, “FedEx”) have filed a motion for leave to file a motion for reconsideration of 16 the court’s February 5, 2021 order dismissing Bondz, Inc. 17 In the February 5 order, the court concluded that the ISPs1 were not properly 18 joined to the case under Federal Rule of Civil Procedure 19. First, the court concluded 19 that it could accord complete relief between plaintiffs and FedEx even in the absence of 20 the ISPs, thus making joinder improper under Rule 19(a)(1)(A). Second, the court 21 considered joinder under Rule 19(a)(1)(B), which applies to parties who “claim[] an 22 interest relating to the subject matter of the action.” Because Bondz, as the moving 23 party, had disclaimed any such interest, the court concluded that Bondz could not be 24 joined under either Rule 19(a)(1)(A) or 19(a)(1)(B), and dismissed Bondz from the case. 25 FedEx initially sought leave to file a motion for reconsideration under both Civil 26 Local Rule 7-9(b)(2) and 7-9(b)(3). See Dkt. 268-5. The court denied FedEx’s motion to 27 1 the extent it was based on L.R. 7-9(b)(3), as it violated L.R. 7-9(c)’s prohibition against 2 repetition of argument. See Dkt. 262 at 1-2. The court then gave plaintiffs and the ISPs 3 an opportunity to file a response to FedEx’s motion. Plaintiffs and one ISP (MRD 4 Transports, Inc.) have filed such responses. 5 Civil Local Rule 7-9(b)(2) requires the party seeking reconsideration of a court 6 order to show “reasonable diligence” in bringing its motion, and “the emergence of new 7 material facts or a change of law occurring after the time of such order.” 8 FedEx argues that “after briefing was completed on Bondz’s motion, new material 9 facts emerged that were unavailable to the court when it entered the order.” Dkt. 268-5 10 at 7. Specifically, FedEx points to “deposition testimony of the chief executive officer of 11 Bondz and the corporate representatives” of other ISPs. Id. 12 FedEx argues that the testimony “demonstrates that Bondz and other [ISPs] are 13 necessary parties because this litigation threatens their ability to operate as independent 14 businesses.” Dkt. 268-5 at 7. 15 Specifically, FedEx identifies the following categories of testimony as new material 16 facts warranting reconsideration: (1) “Bondz and related companies are sophisticated 17 independent business entities,” (2) “Bondz – not FedEx Ground – exercises control over 18 its drivers and is fully responsible for its own pay practices,” (3) “Bondz takes affirmative 19 steps to maintain independence from FedEx Ground,” (4) Bondz’s CEO “stands to lose 20 significant financial investments if his service provider agreements with FedEx Ground 21 are terminated,” and (5) “other [ISPs] have given similar testimony and provided similar 22 evidence” that they are independent businesses, whose owners have made substantial 23 investments, and who do not perceive themselves to be FedEx employees. Dkt. 268-5 at 24 13-15. 25 Again, to establish that the ISPs should be joined to the suit under Rule 26 19(a)(1)(A), the facts must show that, “in [the ISPs’] absence, the court cannot accord 27 complete relief among existing parties.” 1 independent business entities” is not relevant to the Rule 19 analysis. Nor does it appear 2 to be a “new” fact that “emerged” after the court’s February 5 order. Category (1) does 3 not provide a basis for relief under Civil Local Rule 7-9(b)(2). 4 As to category (2), while the level of control exercised by the ISPs is certainly 5 relevant to this litigation, it is not material to this court’s joinder analysis under Rule 19. 6 As stated in the court’s prior order, plaintiffs seek no relief from the ISPs. Thus, the court 7 can “accord complete relief among existing parties” without the presence of the ISPs. 8 FedEx is entitled to use this category of evidence in defending itself against plaintiffs’ 9 claims, but it does not follow that Bondz and the other ISPs must necessarily be joined to 10 this suit. Accordingly, category (2) does not provide a basis for relief under Civil Local 11 Rule 7-9(b)(2). 12 The court’s analysis of category (3) is similar to its analysis of category (2). To the 13 extent that Bondz and the other ISPs take steps to “maintain independence” from FedEx 14 – i.e., to regulate FedEx’s level of control – such evidence may be relevant to FedEx’s 15 defense, but it does not change the fact that plaintiffs seek no relief from the ISPs. As a 16 result, the court can “accord complete relief among existing parties” without the presence 17 of the ISPs. Category (3) does not provide a basis for relief under Civil Local Rule 18 7-9(b)(2). 19 As to category (4), FedEx argues that the Bondz CEO “stands to lose significant 20 financial investments if his service provider agreements with FedEx Ground are 21 terminated.” In making this argument, FedEx appears to imply some connection between 22 the court’s joinder ruling and FedEx’s own decision whether or not to terminate its service 23 agreements with the ISPs. The court fails to see any connection between the two. 24 Additionally, this does not appear to be “new” evidence that emerged after the court’s 25 ruling. Accordingly, category (4) does not provide a basis for relief under Civil Local Rule 26 7-9(b)(2). 27 Finally, as to category (5), FedEx argues that the testimony shows that the ISPs 1 who do not perceive themselves to be FedEx employees. The court has already 2 addressed the issue of the ISPs’ status as independent business entities in the context of 3 category (1). And the court has already addressed the issue of substantial investments 4 in the context of category (4). 5 As to the testimony that the ISPs “do not perceive themselves” to be FedEx 6 employees, this testimony is not material to the court’s joinder analysis under Rule 7 19(a)(1)(A). Plaintiffs seek relief only from FedEx, and in doing so, they will be 8 presenting evidence that FedEx is their employer. And as stated before, FedEx is 9 entitled to present evidence that they are not plaintiffs’ employer. None of this requires 10 the ISPs to be parties to the litigation. And as plaintiffs argue in their response, multiple 11 entities can be joint employers. Dkt. 274-5 at 8-9 (citing Martinez v. Combs, 49 Cal.4th 12 35, 59 (2010)). 13 Under Rule 19, complete relief can be accorded among existing parties even in 14 the absence of the ISPs, and the evidence cited by FedEx is not relevant to that 15 conclusion. Accordingly, category (5) does not provide a basis for relief under Civil Local 16 Rule 7-9(b)(2). 17 Because FedEx has not demonstrated “the emergence of new material facts or a 18 change of law occurring after the time” of the court’s order dismissing Bondz, FedEx’s 19 motion for leave to file a motion for reconsideration is DENIED. 20 Having determined that the court’s February 5, 2021 order will not be 21 reconsidered, the court will now address the ISP declarations filed in response to that 22 order. Specifically, three ISPs have filed declarations stating that they do not claim any 23 interest in this litigation, and that dismissal would not impair or impede their ability to 24 protect their interests. See Dkt. 251 (declaration from Dane Logistics), Dkt. 252 25 (declaration from Turner Holdings), Dkt. 253 (declaration from MRD Transports). 26 The court has previously concluded that joinder of these parties would not be 27 proper under Rule 19(a)(1)(A). See Dkt. 250 at 2-3.
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA
6 HERMAN OVERPECK, et al., 7 Case No. 18-cv-07553-PJH Plaintiffs, 8 v. ORDER DENYING MOTION FOR 9 LEAVE TO FILE MOTION FOR FEDEX CORPORATION, et al., RECONSIDERATION; DISMISSING 10 ISPs; TERMINATING MOTION TO Defendants. DISMISS; AND DENYING MOTIONS 11 TO SEAL
13 14 In the above-captioned case, defendants FedEx Corp. and FedEx Ground 15 (collectively, “FedEx”) have filed a motion for leave to file a motion for reconsideration of 16 the court’s February 5, 2021 order dismissing Bondz, Inc. 17 In the February 5 order, the court concluded that the ISPs1 were not properly 18 joined to the case under Federal Rule of Civil Procedure 19. First, the court concluded 19 that it could accord complete relief between plaintiffs and FedEx even in the absence of 20 the ISPs, thus making joinder improper under Rule 19(a)(1)(A). Second, the court 21 considered joinder under Rule 19(a)(1)(B), which applies to parties who “claim[] an 22 interest relating to the subject matter of the action.” Because Bondz, as the moving 23 party, had disclaimed any such interest, the court concluded that Bondz could not be 24 joined under either Rule 19(a)(1)(A) or 19(a)(1)(B), and dismissed Bondz from the case. 25 FedEx initially sought leave to file a motion for reconsideration under both Civil 26 Local Rule 7-9(b)(2) and 7-9(b)(3). See Dkt. 268-5. The court denied FedEx’s motion to 27 1 the extent it was based on L.R. 7-9(b)(3), as it violated L.R. 7-9(c)’s prohibition against 2 repetition of argument. See Dkt. 262 at 1-2. The court then gave plaintiffs and the ISPs 3 an opportunity to file a response to FedEx’s motion. Plaintiffs and one ISP (MRD 4 Transports, Inc.) have filed such responses. 5 Civil Local Rule 7-9(b)(2) requires the party seeking reconsideration of a court 6 order to show “reasonable diligence” in bringing its motion, and “the emergence of new 7 material facts or a change of law occurring after the time of such order.” 8 FedEx argues that “after briefing was completed on Bondz’s motion, new material 9 facts emerged that were unavailable to the court when it entered the order.” Dkt. 268-5 10 at 7. Specifically, FedEx points to “deposition testimony of the chief executive officer of 11 Bondz and the corporate representatives” of other ISPs. Id. 12 FedEx argues that the testimony “demonstrates that Bondz and other [ISPs] are 13 necessary parties because this litigation threatens their ability to operate as independent 14 businesses.” Dkt. 268-5 at 7. 15 Specifically, FedEx identifies the following categories of testimony as new material 16 facts warranting reconsideration: (1) “Bondz and related companies are sophisticated 17 independent business entities,” (2) “Bondz – not FedEx Ground – exercises control over 18 its drivers and is fully responsible for its own pay practices,” (3) “Bondz takes affirmative 19 steps to maintain independence from FedEx Ground,” (4) Bondz’s CEO “stands to lose 20 significant financial investments if his service provider agreements with FedEx Ground 21 are terminated,” and (5) “other [ISPs] have given similar testimony and provided similar 22 evidence” that they are independent businesses, whose owners have made substantial 23 investments, and who do not perceive themselves to be FedEx employees. Dkt. 268-5 at 24 13-15. 25 Again, to establish that the ISPs should be joined to the suit under Rule 26 19(a)(1)(A), the facts must show that, “in [the ISPs’] absence, the court cannot accord 27 complete relief among existing parties.” 1 independent business entities” is not relevant to the Rule 19 analysis. Nor does it appear 2 to be a “new” fact that “emerged” after the court’s February 5 order. Category (1) does 3 not provide a basis for relief under Civil Local Rule 7-9(b)(2). 4 As to category (2), while the level of control exercised by the ISPs is certainly 5 relevant to this litigation, it is not material to this court’s joinder analysis under Rule 19. 6 As stated in the court’s prior order, plaintiffs seek no relief from the ISPs. Thus, the court 7 can “accord complete relief among existing parties” without the presence of the ISPs. 8 FedEx is entitled to use this category of evidence in defending itself against plaintiffs’ 9 claims, but it does not follow that Bondz and the other ISPs must necessarily be joined to 10 this suit. Accordingly, category (2) does not provide a basis for relief under Civil Local 11 Rule 7-9(b)(2). 12 The court’s analysis of category (3) is similar to its analysis of category (2). To the 13 extent that Bondz and the other ISPs take steps to “maintain independence” from FedEx 14 – i.e., to regulate FedEx’s level of control – such evidence may be relevant to FedEx’s 15 defense, but it does not change the fact that plaintiffs seek no relief from the ISPs. As a 16 result, the court can “accord complete relief among existing parties” without the presence 17 of the ISPs. Category (3) does not provide a basis for relief under Civil Local Rule 18 7-9(b)(2). 19 As to category (4), FedEx argues that the Bondz CEO “stands to lose significant 20 financial investments if his service provider agreements with FedEx Ground are 21 terminated.” In making this argument, FedEx appears to imply some connection between 22 the court’s joinder ruling and FedEx’s own decision whether or not to terminate its service 23 agreements with the ISPs. The court fails to see any connection between the two. 24 Additionally, this does not appear to be “new” evidence that emerged after the court’s 25 ruling. Accordingly, category (4) does not provide a basis for relief under Civil Local Rule 26 7-9(b)(2). 27 Finally, as to category (5), FedEx argues that the testimony shows that the ISPs 1 who do not perceive themselves to be FedEx employees. The court has already 2 addressed the issue of the ISPs’ status as independent business entities in the context of 3 category (1). And the court has already addressed the issue of substantial investments 4 in the context of category (4). 5 As to the testimony that the ISPs “do not perceive themselves” to be FedEx 6 employees, this testimony is not material to the court’s joinder analysis under Rule 7 19(a)(1)(A). Plaintiffs seek relief only from FedEx, and in doing so, they will be 8 presenting evidence that FedEx is their employer. And as stated before, FedEx is 9 entitled to present evidence that they are not plaintiffs’ employer. None of this requires 10 the ISPs to be parties to the litigation. And as plaintiffs argue in their response, multiple 11 entities can be joint employers. Dkt. 274-5 at 8-9 (citing Martinez v. Combs, 49 Cal.4th 12 35, 59 (2010)). 13 Under Rule 19, complete relief can be accorded among existing parties even in 14 the absence of the ISPs, and the evidence cited by FedEx is not relevant to that 15 conclusion. Accordingly, category (5) does not provide a basis for relief under Civil Local 16 Rule 7-9(b)(2). 17 Because FedEx has not demonstrated “the emergence of new material facts or a 18 change of law occurring after the time” of the court’s order dismissing Bondz, FedEx’s 19 motion for leave to file a motion for reconsideration is DENIED. 20 Having determined that the court’s February 5, 2021 order will not be 21 reconsidered, the court will now address the ISP declarations filed in response to that 22 order. Specifically, three ISPs have filed declarations stating that they do not claim any 23 interest in this litigation, and that dismissal would not impair or impede their ability to 24 protect their interests. See Dkt. 251 (declaration from Dane Logistics), Dkt. 252 25 (declaration from Turner Holdings), Dkt. 253 (declaration from MRD Transports). 26 The court has previously concluded that joinder of these parties would not be 27 proper under Rule 19(a)(1)(A). See Dkt. 250 at 2-3. Having considered their 1 under Rule 19(a)(1)(B), as they do not “claim[] an interest relating to the subject matter of 2 the action” as required by the rule. See id. at 3 (citing United States v. Bowen, 172 F.3d 3 682, 689 (9th Cir. 1999)). Accordingly, Dane Logistics, Turner Holdings, and MRD 4 Transports are DISMISSED from the action under Rule 21.2 5 Finally, three motions to seal are pending before the court: (1) FedEx’s motion to 6 seal portions of its motion for leave to file a motion for reconsideration and related 7 exhibits, (2) plaintiffs’ motion to seal portions of its opposition to FedEx’s motion for leave 8 to file a motion for reconsideration and related exhibits, and (3) plaintiffs’ motion to seal 9 portions of its opposition to FedEx’s administrative motion to amend the class certification 10 briefing schedule and related exhibits.3 All three motions seek to seal deposition 11 testimony from the CEO of Bondz, Michael Grodi. 12 “There is a general principle in favor of public access to federal court records. 13 Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978). “The proponent of sealing 14 bears the burden with respect to sealing. A failure to meet that burden means that the 15 default posture of public access prevails.” Kamakana v. City & City of Honolulu, 447 F.3d 16 1172, 1182 (9th Cir. 2006). 17 The Ninth Circuit has recognized that two different standards may apply when a 18 request to seal a document is made in connection with a motion – namely the “compelling 19 reasons” standard or the “good cause” standard. Ctr. For Auto Safety v. Chrysler Grp., 20 LLC, 809 F.3d 1092, 1096-97 (9th Cir. 2016). The compelling reasons standard applies 21 to any sealing request made in connection with a motion that is “more than tangentially 22 related to the merits of a case.” Id. at 1101. 23 Bondz’s supporting declarations do not address whether the “good cause” or 24 “compelling reasons” standard applies. In this case, the court will apply the “good cause” 25 2 Because Dane Logistics is no longer a party to the case as a result of this dismissal, its 26 motion to dismiss for lack of jurisdiction is terminated as moot. See Dkt. 227. 3 FedEx and plaintiffs originally filed motions to seal that did not comply with the local 27 rules, and have since filed corrected motions. Accordingly, the incorrectly-filed motions 1 standard. 2 In its declarations, Bondz argues that the deposition excerpts have been 3 designated “highly confidential – attorneys’ eyes only” under the protective order in this 4 case. Dkt. 271, 272, 277. Bondz further argues that the excerpts are “highly confidential” 5 because they “contain commercially sensitive information” and “include proprietary 6 business information.” Id. Bondz further argues:
7 Such information includes: (a) the contract negotiation process between FedEx Ground and Bondz, (b) Bondz 8 corporate structure and confidential aspects of business transactions with non-party affiliates, (c) the hiring process at 9 Bondz, including the candidate selection and interview process, (d) communications with Bondz drivers relating to 10 route assignments, and (e) Bondz’s policies and practices regarding the discipline and termination of Bondz drivers. 11 12 Dkt. 271, ¶ 2; see also Dkt. 272, ¶ 2; Dkt. 277, ¶ 2. 13 As an initial matter, the court notes that simply being designated “highly 14 confidential” under a protective order does not automatically justify the sealing of 15 evidence. 16 The court further notes that many of the descriptions in the Bondz declaration are 17 boilerplate, conclusory phrases regarding the “confidential” and “proprietary” and 18 “sensitive” nature of the testimony. A sealing proponent must do more than offer bare 19 assertions that evidence is sensitive – it must provide a concrete reason for overcoming 20 the presumption in favor of public access. 21 To the extent that Bondz provides specific categories of information to be sealed, 22 the identification of those categories still does not provide support for sealing the cited 23 testimony. Many of these categories relate to the level of control exerted by Bondz in 24 relation to FedEx, which, as mentioned before, is one of the central issues in this case. 25 Evidence relating to that issue cannot be sealed. Moreover, the need to seal that 26 information is undermined by the fact that other ISPs – Bondz’s own competitors – have 27 already allowed similar information regarding their companies to be filed on the public 1 Accordingly, all three motions to seal are DENIED. The parties must file 2 unredacted copies of their papers within seven (7) days of the date of this order. 3 4 IT IS SO ORDERED. 5 Dated: March 9, 2021 6 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 7 United States District Judge
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