Valencia v. Homedeliverylink Inc

• Court: District Court, E.D. Washington
• Decided: September 23, 2019
• Docket: 4:18-cv-05034
• Status: Unknown

Opinion

1 U.S. FDILISETDR IINC TT HCEO URT EASTERN DISTRICT OF WASHINGTON Sep 23, 2019 2 SEAN F. MCAVOY, CLERK 3 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 4 DANIEL VALENCIA, BELARMINO No. 4:18-cv-05034-SMJ 5 HERNANDEZ, and JUNIOR ARACHIGA, individually and on ORDER CERTIFYING CLASS 6 behalf of all others similarly situated, 7 Plaintiffs, 8 v. 9 HOMEDELIVERYLINK INC., 10 Defendant. 11 Plaintiffs Daniel Valencia, Belarmino Hernandez, and Junior Arachiga allege 12 Defendant HomeDeliveryLink Inc. (“HDL”) mischaracterized them and similarly 13 situated people as independent contractors when they are, under Washington law, 14 employees entitled to overtime wages, rest and break periods, and no pay 15 deductions. Before the Court is Plaintiffs’ Motion for Class Certification, ECF No. 16 37. Plaintiffs seek an order certifying a class and subclass. Id. at 8–9. Specifically, 17 Plaintiffs seek an order certifying (1) “a Class defined as: All persons who, from 18 March 1, 2015 and the date of final disposition of this action, have performed 19 services for HDL in Washington as delivery drivers”; and (2) “a Subclass defined 20 as: All persons who, from March 1, 2015 and the date of final disposition of this 1 action, have performed services for HDL in Washington as delivery drivers and 2 paid funds to HDL through check deductions.” Id. Plaintiffs also seek an order

3 appointing themselves as class representatives and appointing their counsel, the law 4 firms of Terrell Marshall Law Group PLLC and Licthen & Liss-Riordan PC, as 5 class counsel. Id. at 11. HDL opposes the motion. ECF No. 64.

6 The Court held a hearing on the motion on August 22, 2019. Having reviewed 7 the briefing and the entire file in this matter, the Court is fully informed and grants 8 the motion because Plaintiffs have met all requirements of Federal Rule of Civil 9 Procedure 23(a) (numerosity, commonality, typicality, and adequacy of

10 representation) and (b)(3) (predominance of common questions and superiority of 11 class adjudication). 12 BACKGROUND

13 HDL delivers furniture and appliances for Washington retailers. HDL 14 performs such deliveries through drivers it classifies as independent contractors. 15 Plaintiffs allege that they and their proposed class and subclass are, in fact, HDL’s 16 employees rather than independent contractors.1 In support, Plaintiffs argue “HDL’s

17 drivers are economically dependent on HDL”; “HDL’s client contracts require HDL 18 to control its delivery drivers”; “HDL controls its hiring process”; “HDL requires 19

20 1 Plaintiffs assert six causes of action alleging HDL violated various Washington statutes and regulations. ECF No. 1 at 23–32. 1 contract carriers to sign substantially uniform contracts”; “HDL controls drivers’ 2 delivery services through training, mandatory meetings, and performance

3 monitoring”; “HDL controlled the tools, clothing, and equipment that drivers use”; 4 “[d]rivers cannot deviate from assigned routes, negotiate their pay, or make 5 deliveries for other companies”; “[d]rivers’ services are integral to HDL’s business

6 and require no special skill”; and “HDL makes unlawful deductions from contract 7 carriers’ pay.” ECF No. 37 at 2, 13–27. 8 Having reviewed the copious evidence Plaintiffs provided, the Court finds 9 that, at this stage, sufficient evidence exists to sustain the above contentions. Upon

10 these facts, Plaintiffs propose certifying a class of 121 Washington HDL drivers and 11 a subclass of thirty-nine such drivers who endured pay deductions. Id. at 9. 12 LEGAL STANDARD

13 “A representative plaintiff may sue on behalf of a class when the plaintiff 14 affirmatively demonstrates the proposed class meets the four threshold 15 requirements of . . . Rule . . . 23(a): numerosity, commonality, typicality, and 16 adequacy of representation.” Sali v. Corona Reg’l Med. Ctr., 909 F.3d 996, 1002

17 (9th Cir. 2018), cert. dismissed, 139 S. Ct. 1651 (2019). “Additionally, a plaintiff 18 seeking certification under Rule 23(b)(3) must demonstrate that ‘questions of law 19 or fact common to class members predominate over any questions affecting only

20 individual members, and that a class action is superior to other available methods 1 for fairly and efficiently adjudicating the controversy.’” Id. (quoting Fed. R. Civ. P. 2 23(b)(3)).

3 “[B]efore certifying a class, the trial court must conduct a rigorous analysis 4 to determine whether the party seeking certification has met the prerequisites of 5 Rule 23.” Id. at 1004 (quoting Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180,

6 1186 (9th Cir. 2001)). 7 DISCUSSION 8 The issue is whether the Court should certify a class of Washington HDL 9 drivers, and a subclass of such drivers who endured pay deductions, all of whom

10 allege they are HDL’s employees under Washington’s economic-dependence test. 11 Under the Washington Minimum Wage Act, Revised Code of Washington section 12 49.46.010(2), “an employee includes any individual permitted to work by an

13 employer.” Anfinson v. FedEx Ground Package Sys., Inc., 281 P.3d 289, 297 14 (Wash. 2012). “The relevant inquiry is whether, as a matter of economic reality, the 15 worker is economically dependent upon the alleged employer or is instead in 16 business for himself.” Id. at 299 (internal quotation marks omitted). Possible

17 nonexclusive factors fall into two categories and include 18 (A) The nature and degree of control of the workers; (B) The degree of supervision, direct or indirect, of the work; 19 (C) The power to determine the pay rates or the methods of payment of the workers; 20 (D) The right, directly or indirectly, to hire, fire, or modify the employment conditions of the workers; and 1 (E) Preparation of payroll and the payment of wages. . . . . 2 (1) whether the work was a specialty job on the production line; (2) whether responsibility under the contracts between a labor 3 contractor and an employer pass from one labor contractor to another without material changes; 4 (3) whether the premises and equipment of the employer are used for the work ([e.g.,] the alleged employee’s investment in equipment or 5 materials required for his task, or his employment of helpers); (4) whether the employees had a business organization that could or did 6 shift as a unit from one worksite to another; (5) whether the work was piecework and not work that required 7 initiative, judgment or foresight ([i.e.,] whether the service rendered requires a special skill); 8 (6) whether the employee had an opportunity for profit or loss depending upon the alleged employee’s managerial skill; 9 (7) whether there was permanence in the working relationship; and (8) whether the service rendered is an integral part of the alleged 10 employer’s business.

11 Becerra v. Expert Janitorial, LLC, 332 P.3d 415, 421 (Wash. 2014) (internal 12 quotation marks, brackets, and citations omitted). 13 HDL argues Plaintiffs cannot meet Rule 23’s commonality, predominance, 14 and adequacy requirements.2 Additionally, HDL argues Plaintiffs cannot establish 15 acertainability. The Court addresses each argument in turn. 16 A. Ascertainability

17 HDL argues Plaintiffs’ proposed class and subclass cannot be reasonably 18 ascertained with objective criteria. ECF No. 64 at 17–19. The Court disagrees. The 19

20 2 HDL does not challenge numerosity or superiority, and addresses typicality only in the context of adequacy. See ECF No. 64 at 29; ECF No. 75 at 4. 1 Ninth Circuit has not adopted an “ascertainability” requirement. Briseno v. ConAgra 2 Foods, Inc., 844 F.3d 1121, 1124 n.4 (9th Cir. 2017). For certification, it is sufficient

3 that a class is defined by objective criteria. See id. at 1124, 1133. 4 Plaintiffs are correct that, here, “[c]lass membership is based entirely on 5 objective criteria: (1) that the class member performed services for HDL, (2) as a

6 delivery driver, (3) in Washington, (4) on March 1, 2015 or after.” ECF No. 68 at 6. 7 “Subclass members must meet these requirements and have paid funds to HDL 8 through check deductions.” Id. 9 Plaintiffs are also correct that “[a]ny class identification issues in this case are

10 manageable.” Id. at 7. Class membership can be determined from the records of HDL 11 and its delivery customers—Innovel Solutions Inc. (formerly known as Sears 12 Logistics Services Inc.), Hill Country Holdings LLC (doing business as Ashley

13 Furniture Homestores), and Mor Furniture for Less. While two Plaintiffs drove for 14 HDL under other names, they claim they did so at the direction of, and with the 15 knowledge of, HDL management. See ECF No. 44 at 2; ECF No. 51 at 2; ECF No. 16 69 at 9–12, 17–20. During a post-judgment claims process, HDL can raise

17 challenges to whether a claimant is a qualified member of the class or subclass. But 18 this does not affect class certification. 19 Finally, Plaintiffs are correct that “choice-of-law issues are not before the

20 Court and . . . do not defeat class certification” because “HDL identifies no foreign 1 law that conflicts with Washington law.” ECF No. 68 at 9 (citing In re Hyundai & 2 Kia Fuel Econ. Litig., 926 F.3d 539, 562–63 (9th Cir. 2019) (en banc)).

3 B. Commonality

4 Rule 23(a)(2) requires “questions of law or fact common to the class.”3 HDL 5 argues “resolution of Plaintiffs’ core claim—that they were misclassified as 6 independent contractors—turns on each putative class member’s experience under 7 the factors set out in Washington’s economic-dependence test” and “[b]y necessity, 8 that analysis entails examining issues that find no uniformity among the proposed 9 class.” ECF No. 64 at 6. The Court disagrees. “All questions of fact and law need

10 not be common to satisfy the [commonality requirement]. The existence of shared 11 legal issues with divergent factual predicates is sufficient, as is a common core of 12 salient facts coupled with disparate legal remedies within the class.” Meyer v.

13 Portfolio Recovery Assocs., LLC, 707 F.3d 1036, 1041 (9th Cir. 2012) (alteration in 14 original) (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998)). 15 “The common contention ‘must be of such a nature that it is capable of classwide 16 resolution—which means that determination of its truth or falsity will resolve an

17 3 Regarding commonality, Plaintiffs argue that, “[f]or the Class, common questions 18 of law and fact include (1) whether HDL is an employer of the Class members under Washington law; (2) whether HDL unlawfully failed to pay Class members overtime 19 for all hours worked over 40 hours per week; and (3) whether HDL failed to ensure that drivers received rest and meal breaks required by law.” ECF No. 37 at 4. Also, 20 “[t]he claims of the Subclass raise the additional common question of whether HDL made unlawful deductions from Subclass members’ wages.” Id. 1 issue that is central to the validity of each one of the claims in one stroke.’” Id. at 2 1401–42 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)).4

3 That is the case here. Plaintiffs contend their proposed class and subclass are 4 all HDL’s employees under Washington’s economic-dependence test. This common 5 contention is capable of classwide resolution because determining its truth or falsity

6 will resolve in one stroke the misclassification issue central to the validity of each 7 individual claim. There are shared legal issues and a common core of salient facts 8 derived from common evidence. Thus, there are questions of law and fact common 9 to the class and subclass. Plaintiffs have demonstrated commonality. See Williams

10 v. Jani-King of Phila. Inc., 837 F.3d 314, 319–25 (3d Cir. 2016); DaSilva v. Border 11 Transfer of MA, Inc., 296 F. Supp. 3d 389, 398–404 (D. Mass. 2017); Vargas v. 12 Spirit Delivery & Distrib. Servs., Inc., 245 F. Supp. 3d 268, 286–87 (D. Mass. 2017);

13 Wilkins v. Just Energy Grp., Inc., 308 F.R.D. 170, 182–84 (N.D. Ill. 2015); 14 Villalpando v. Exel Direct Inc., 303 F.R.D. 588, 606 (N.D. Cal. 2014); Scovil v. 15 FedEx Ground Package Sys., Inc., 886 F. Supp. 2d 45, 48 (D. Me. 2012); Phelps v. 16 3PD, Inc., 261 F.R.D. 548, 555–57 (D. Or. 2009).

17 // 18 4 “The commonality and typicality requirements . . . ‘tend to merge’ . . . .” Meyer, 19 707 F.3d at 1041 (quoting Dukes, 564 U.S. at 350 n.5). “[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with those of absent class members; 20 they need not be substantially identical.” Id. at 1042 (alteration in original) (quoting Hanlon, 150 F.3d at 1020). 1 C. Predominance

2 Rule 23(b)(3) requires a court finding that “the questions of law or fact 3 common to class members predominate over any questions affecting only individual 4 members,” and “a class action is superior to other available methods for fairly and 5 efficiently adjudicating the controversy.”5

6 “Rule 23(b)(3)’s predominance inquiry is ‘far more demanding’ than Rule 7 23(a)’s commonality requirement.” Sali, 909 F.3d at 1008 (quoting Amchem Prods., 8 Inc. v. Windsor, 521 U.S. 591, 624 (1997)). “When evaluating predominance, ‘a 9 court has a duty to take a close look at whether common questions predominate over

10 individual ones, and ensure that individual questions do not overwhelm questions 11 common to the class.’” Id. (quoting In re Hyundai & Kia Fuel Econ. Litig., 881 F.3d 12 679, 691 (9th Cir. 2018), vacated on other grounds on reh’g en banc, 926 F.3d 539

13 (9th Cir. 2019)). “The main concern of the predominance inquiry under Rule 14 23(b)(3) is the balance between individual and common issues.” Id. (quoting Wang 15 v. Chinese Daily News, Inc., 737 F.3d 538, 545–46 (9th Cir. 2013)). Relevant factors 16 include

18 5 Regarding predominance, Plaintiffs argue that “numerous questions of law and fact common to all members of the Class and Subclass predominate over any 19 individualized issues.” ECF No. 37. at 10. “The central common issue—whether HDL is the delivery drivers’ employer—predominates over any individualized 20 issue.” Id. Further, “Plaintiffs have no conflicts with other Class members, have retained experienced counsel, and are diligently pursuing Class claims.” Id. 1 (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; 2 (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; 3 (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and 4 (D) the likely difficulties in managing a class action.

5 Fed. R. Civ. P. 23(b)(3). 6 Here, the questions of law and fact common to class and subclass members 7 predominate over any questions affecting only individual members. Individual 8 questions do not overwhelm questions common to the class and subclass. 9 Plaintiffs have submitted copious evidence, common to their proposed class 10 and subclass, tending to show HDL’s Washington drivers are its employees entitled 11 to overtime wages, rest and break periods, and no pay deductions. HDL disputes the 12 merits of Plaintiffs’ allegations.6 But HDL does not argue its policies and practices 13 varied significantly among its Washington drivers. Minor differences do not 14 preclude a finding of predominance. Nor do variances in potential damages.7 15

16 6 “Although . . . a court’s class-certification analysis must be ‘rigorous’ and may ‘entail some overlap with the merits of the plaintiff’s underlying claim,” Rule 23 17 grants courts no license to engage in free-ranging merits inquiries at the certification stage.” Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 465–66 (2013) 18 (quoting Dukes, 564 U.S. at 351). “Merits questions may be considered to the extent—but only to the extent—that they are relevant to determining whether the 19 Rule 23 prerequisites for class certification are satisfied.” Id. at 466. 7 “[T]he need for individual damages calculations does not, alone, defeat class 20 certification.” Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150, 1155 (9th Cir. 2016). 1 Contrary to HDL’s assertion, Plaintiffs do not merely rely on anecdotal evidence.8 2 To the extent any gaps in the record exist, Plaintiffs are entitled to the benefit of

3 reasonable inferences. Further, HDL’s waiver defense is speculative at this juncture 4 and does not preclude a finding of predominance. Plaintiffs have demonstrated 5 predominance. See Costello v. BeavEx, Inc., 810 F.3d 1045, 1059–61 (7th Cir.

6 2016); DaSilva, 296 F. Supp. 3d at 405–06; Vargas, 245 F. Supp. 3d at 289; Wilkins, 7 308 F.R.D. at 184–89; Villalpando, 303 F.R.D. at 607–10; Scovil, 886 F. Supp. 2d 8 at 49–55; Phelps, 261 F.R.D. at 559–63. 9 D. Adequacy

10 Rule 23(a)(4) requires that “the representative parties will fairly and 11 adequately protect the interests of the class.”9 “Determining whether 12 representation is adequate requires the court to consider two questions: ‘(a) do

13 the named plaintiffs and their counsel have any conflicts of interest with other 14 class members and (b) will the named plaintiffs and their counsel prosecute the 15 action vigorously on behalf of the class?’” Sali, 909 F.3d at 1007 (quoting In re 16 8 Regardless, using representative evidence appears to be a reliable means of proving 17 or disproving the elements of Plaintiffs’ causes of action, including liability and damages. See Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1046 (2016); 18 Vaquero, 824 F.3d at 1155. 9 Regarding adequacy, Plaintiffs argue they “have no conflicts with other Class 19 members, have retained experienced counsel, and are diligently pursuing Class claims.” ECF No. 37 at 10. They reason that, “[r]egardless of whether they paid 20 funds to HDL through paycheck deductions, Plaintiffs and members of the Class and Subclass were all subjected to the same unlawful conduct by HDL.” Id. 1 Mego Fin. Corp. Secs. Litig., 213 F.3d 454, 462 (9th Cir. 2000)).10 2 Here, Plaintiffs and their counsel do not have any conflicts of interest with

3 other class or subclass members. Plaintiffs and their counsel will prosecute the 4 action vigorously on behalf of the class and subclass. Therefore, Plaintiffs will 5 fairly and adequately protect the interests of the class and subclass.

6 HDL argues a conflict of interests exists between the thirty-nine “contract 7 carriers” (Washington drivers who performed HDL deliveries pursuant to signed 8 contracts) and the eighty-two “second drivers” (Washington drivers who 9 performed HDL deliveries but never signed contracts). Specifically, HDL

10 argues contract carriers employed second drivers, so the former may be liable to 11 the latter as employers. Courts have rejected this argument on the reasoning that 12 if one group has employment status, so too does the other, and the sole employer

13 is the company utilizing their services. See ECF No. 68 at 13–14 (collecting 14 cases). This reasoning applies here. If contract carriers are employees, so too are 15 second drivers, and the sole employer is HDL. After all, HDL treated contract 16 carriers no differently than second drivers. No conflict of interests exists.

17 HDL also challenges one Plaintiff’s ability to represent the subclass. ECF 18 But its claim that he was an absentee owner of a carrier business does not hold 19 10 The commonality and typicality requirements “tend to merge with the 20 adequacy-of-representation requirement.” Dukes, 564 U.S. at 350 n.5 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 158 n.13 (1982)). 1 up. And, he has the minimum level of sophistication and understanding required 2 of a named plaintiff. Plaintiffs have demonstrated adequacy.

3 Accordingly, IT IS HEREBY ORDERED: 4 1. Plaintiffs’ Motion for Class Certification, ECF No. 37, is GRANTED. 5 2. The following CLASS is CERTIFIED for litigation in this case:

6 All persons who, from March 1, 2015 and the date of final 7 disposition of this action, have performed services for HDL in 8 Washington as delivery drivers. 9 3. The following SUBCLASS is CERTIFIED for litigation in this case:

10 All persons who, from March 1, 2015 and the date of final 11 disposition of this action, have performed services for HDL in 12 Washington as delivery drivers and paid funds to HDL through

13 check deductions. 14 4. Plaintiffs Daniel Valencia, Belarmino Hernandez, and Junior Arachiga 15 are APPOINTED as CLASS REPRESENTATIVES. 16 5. The law firms of Terrell Marshall Law Group PLLC and Licthen &

17 Liss-Riordan PC are APPOINTED as CLASS COUNSEL. 18 6. No later than five business days from the date of this Order, Plaintiffs 19 shall file a proposal for sending notice of this action to the class and

20 subclass. 1 IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and

2 || provide copies to all counsel. 3 DATED this 23" day of September 2019. 4 poate Me M4 5 SALVADOR MENDOZA\ JR. United States District Judge 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20