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Soto v. Diakon Logistics

August 30, 2010


The opinion of the court was delivered by: M. James Lorenz United States District Court Judge


This putative class action claiming violation of California wages and hours laws was brought by three drivers working for Defendant. Plaintiffs filed a motion for class certification pursuant to Federal Rule of Civil Procedure 23. Defendant filed an opposition and Plaintiffs replied.*fn1 The parties also filed a Stipulation Serving as Supplemental Briefing to Clarify Record Regarding Plaintiff's Motion for Class Certification and two notices of recent decisions. In addition, Defendant filed an Ex Parte Application for Supplemental Briefing on Plaintiffs' Motion for Class Certification. For the reasons which follow, Plaintiffs' motion for class certification is DENIED WITHOUT PREJUDICE. The time for Plaintiffs to file a motion for class certification is hereby extended to September 20, 2010. Defendant's ex parte application for supplemental briefing is DENIED.

Defendant Diakon Logistics (Delaware), Inc. provides home delivery services to various retailers, including Sears, Ethan Allen and other retailers selling large items. Plaintiffs Josue Soto, Ghazi Rashid and Mohamed Abdelfattah are truck drivers who worked for Defendant in California. They claim they were inappropriately classified by Defendant as independent contractors when they were in fact non-exempt employees.

Mr. Soto filed a putative class action complaint in state court seeking recovery from Defendant for failure to pay minimum wages, provide proper meal and rest periods, reimburse for reasonable business expenses, issue itemized wage statements and for other alleged violations of the California Labor Code provisions. He also alleged that Defendant violated California Business and Professions Code Sections 17200 et seq. He requested damages and injunctive relief. Defendant removed the action to this court pursuant to 28 U.S.C. § 1441 based on diversity jurisdiction under 28 U.S.C. Section 1332(a)(1) and (d)(2). Subsequently, the complaint was amended to add the remaining two Plaintiffs.

Plaintiffs filed a motion to certify a class action under Federal Rule of Civil Procedure 23. They define the putative class as:

All persons presently and formerly employed by Defendant in the State of California between December 5, 2003 and the present as delivery personnel during the Class Period who were subject to the "Service Agreement" (or similar document), which categorized them as independent contractors and not employees.

(Pls' Mem. of P.&A. at 2.). Rule 23 contains two distinct sets of requirements set forth in Rule 23(a) and (b). United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union v. ConocoPhillips Co., 593 F.3d 802, 806 (9th Cir. 2010) ("United Steel").

Rule 23(a) outlines four requirements, all of which must be met for class certification: (1) the class must be so numerous that joinder of all members is impracticable; (2) there must be questions of law or fact common to the class; (3) the claims or defenses of the class representatives must be typical of the claims or defenses of the class; and (4) the class representatives must fairly and adequately protect the interests of all members of the class. The four requirements of Rule 23(a) are commonly referred to as "numerosity," "commonality," "typicality," and "adequacy of representation" (or just "adequacy"), respectively.

. (citations omitted). "Where a putative class satisfies all four requirements of Rule 23(a), it must still meet at least one of the three additional requirements outlined in Rule 23(b) in order to be eligible for certification." Id. "The party seeking class certification bears the burden of demonstrating that the requirements of Rules (a) and (b) are met." United Steel, 593 at 807.

Neither the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies Rule 23.

. at 809 (brackets, internal quotation marks and citation omitted).

Plaintiffs contend that this case meets all the requirements of Rule 23(a) and Defendant does not dispute it. Plaintiffs had identified over 200 putative class members as of October 2009, all of whom can be ascertained through Defendant's records.*fn2 Accordingly, the putative class satisfies the numerosity requirement of Rule 23(a)(1).

The commonality requirement of Rule 23(a)(2) is satisfied if "there are questions of fact and law which are common to the class." Fed. R. Civ. P. 23(a)(2). "All questions of fact and law need not be common to satisfy the rule. The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). Plaintiff argues that an issue common to all putative class members is whether they should have been classified as employees rather than independent contractors. This is a factual as well as a legal issue. If they were erroneously classified as independent contractors, then additional issues common to the putative class members are whether they were paid the minimum wage, provided with meal and rest periods, and whether they were reimbursed for certain expenses as required by California law. This is sufficient to satisfy the commonality requirement of Rule 23(a)(2).*fn3

The typicality requirement of Rule 23(a)(3) is met if "the claims or defenses of the representative parties are typical of the claims or defenses of the class." Fed. R. Civ. P. 23(a)(3). "[R]epresentative claims are typical if they are reasonably co-extensive with those of absent class members; they need not be substantially identical." Hanlon, 150 F.3d at 1020. Plaintiffs fit within the class definition -- they were drivers for Defendant during the class period, they were classified as independent contractors and signed substantially identical agreements with Defendant. They were subject to the same policies regarding independent contractor classification, compensation and reimbursement of work-related expenses. Because these policies appear to have been company-wide, Plaintiffs' claims are typical of the putative class as required by Rule 23(a)(3).

The adequacy requirement of Rule 23(a)(4) is satisfied if "the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a)(4). "Resolution of two questions determines legal adequacy: (1) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (2) will the named Plaintiffs and their counsel prosecute vigorously on behalf of the class?" Hanlon, 150 F.3d at 1020. Plaintiffs failed ...

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