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Simon V. Garcia, An Individual v. Gordon Trucking

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


July 14, 2011

SIMON V. GARCIA, AN INDIVIDUAL
PLAINTIFF,
v.
GORDON TRUCKING, INC., A CALIFORNIA CORPORATION, WHICH WILL TRANSACT BUSINESS IN CALIFORNIA AS L GORDON; STEVE GORDON, AN INDIVIDUAL; BOB GOLDBERG, AN INDIVIDUAL; AND DOES 1 THROUGH 20, INCLUSIVE,
DEFENDANTS.
CHRISTOPHER YANEZ AND EMMA YANEZ ON BEHALF OF THEMSELVES, ALL OTHERS SIMILARLY SITUATED, AND THE GENERAL PUBLIC,
PLAINTIFFS,
v.
GORDON TRUCKING, INC., A WASHINGTON CORPORATION, AND DOES 1 THROUGH 100, INCLUSIVE,
DEFENDANTS.

The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION AND ORDER 9 MOTION FOR STAY AND APPOINTMENT OF INTERIM CLASS COUNSEL (DOC. 52)

MEMORANDUM DECISION AND ORDER RE PLAINTIFFS‟ MOTION FOR CONSOLIDATION OF PENDING ACTIONS AND APPOINTMENT OF INTERIM CLASS COUNSEL (DOC. 37)

I. INTRODUCTION

Before the court are two putative class actions filed against Gordon Trucking, Inc. ("Defendant"): (1) Simon Garcia ("Plaintiff Garcia") v. Defendant etal. (1:10-cv-324-OWW-SKO) ("Garcia "), and (2) Christopher Yanez and Emma Yanez ("Yanez Plaintiffs") v. Defendant etal. (1:11-cv-272-OWW-SMS) ("Yanez ").

Yanez Plaintiffs move (1) to consolidate the Garcia and Yanez lawsuits, and (2) for appointment of James R. Patterson and Allison H. Goddard ("Yanez Counsel") as interim class counsel. Yanez Doc. 37. Defendant and Plaintiff Garcia filed an opposition in the Yanez lawsuit (Yanez Docs. 41 and 42, respectively), to which Yanez Plaintiffs replied (Yanez Doc. 46).

Plaintiff Garcia moves (1) to stay the hearing on Yanez Plaintiffs‟ motion for consolidation and (2) alternatively, for appointment of S. Brett Sutton ("Garcia Counsel") as interim class counsel. Garcia Doc. 52. Yanez Plaintiffs filed a motion to intervene in the Garcia Lawsuit and opposition to the motion to stay (Garcia Doc. 58), to which Plaintiff Garcia replied (Garcia Doc. 59).

The motions were heard July 11, 2011.

II.BACKGROUND

A.Garcia Lawsuit

The Garcia lawsuit against Defendant and individual Defendants Steve Gordon, Bob Goldberg, and Does 1 to 20 was filed in this court on February 23, 2010. Garcia Doc. 1. Plaintiff Garcia filed a First Amended Complaint on July 7, 2010 (Garcia Doc. 28) and a Second Amended Complaint ("SAC") on July 22, 2010 (Garcia Doc. 33).

The Garcia action seeks to represent the following putative classes:

a.All similarly situated persons employed by GTI who were driving tractor-trailer combinations and performing services related thereto within the State of California at any time within the Relevant Time Period, and were compensated on a per-mile basis for at least part of their compensation. This putative class will be referred to herein collectively as the "CALIFORNIA EMPLOYEES‟.

b.All similarly situated persons employed by GTI who were driving tractor-trailer combinations and performing services related thereto within any State excepting the State of California at any time within the Relevant Time Period, and were compensated on a per-mile basis for at least part of their compensation. This putative class will be referred to herein collectively as the "NATIONWIDE EMPLOYEES‟.

Garcia Doc. 33, ¶ 21.

The Garcia SAC asserts the following causes of action:

(1) First Cause of Action: Failure to pay minimum wages for all hours worked in violation of the Fair Labor Standards Act ("FLSA") (29 U.S.C. § 206);

(2) Second Cause of Action: Failure to pay minimum wages for all hours worked in violation of California Labor Code §§ 221-223, 1194, 1194.2, and 1197 and Industrial Welfare Commission Wage Order 9, § 11;

(3) Third Cause of Action: Failure to provide mandated meal periods or to pay an additional hour of wages in violation of California Labor Code §§ 226.7 and 512 and Industrial Welfare Commission Wage Order 9;

(4) Fourth Cause of Action: Failure to provide mandated rest periods or to pay an additional hour of wages in violation of California Labor Code §§ 226.7 and 512 and Industrial Welfare Commission Wage Order 8, § 11;

(5) Fifth Cause of Action: Failure to issue mandated accurate itemized wage statements in violation of California Labor Code §§ 226, 226.6, 1174, 1174.5, and 1175 and Industrial Welfare Commission Wage Order 9;

(6) Sixth Cause of Action: Failure to reimburse business expenses in violation of California Labor Code § 2802 and Industrial Welfare Commission Wage Order 9;

(7) Seventh Cause of Action: Failure to timely pay wages due at termination in violation of California Labor Code §§ 201, 202, and 203;

(8) Eighth Cause of Action: Violation of unfair competition law, California Business and Professions Code §§ 17200 et seq.; and

(9) Ninth Cause of Action: Recovery under the Labor Code Private Attorneys General Act of 2004.

Garcia Doc. 33. In Garcia , Plaintiff seeks to certify the First Cause of Action as a collective action under 29 U.S.C. § 216(b), for all acts within three years preceding the original Complaint and through the time of trial. Id. at ¶¶ 4-5. Plaintiff Garcia seeks to certify the Second through Eighth Causes of Action as a class action under Federal Rule of Civil Procedure 23, for all acts within four years preceding the original Complaint and through the time of trial. Id. at ¶¶ 4,6.

B.Yanez Lawsuit

The Yanez action was filed in the Superior Court of California, County of San Diego on October 12, 2010. Yanez Doc. 1, Ex. A. Defendant removed the case to the United States District Court for the Southern District of California on November 12, 2010. Yanez Doc. 1. Upon the parties‟ joint motion (Yanez Doc. 24), the Southern District transferred Yanez to this court on February 16, 2011 (Yanez Doc. 27).

The Yanez lawsuit is brought on behalf of the following putative class:

All persons who have been employed by Defendant as Over the Road Drivers in the State of California at any time during the Class Period.

Yanez Doc. 1, Ex. A, ¶ 1. The "Class Period" is the four-year period prior to filing, through disposition of the action. Id. at ¶ 3.

The Yanez Complaint asserts the following causes of action:

(1) First Cause of Action: Failure to pay wages due in violation of California Labor Code §§ 201, 202, 203, 226, 1194, 1194.2 and 1197 and Industrial Welfare Commission Wage Order 9;

(2) Second Cause of Action: Failure to provide or authorize meal periods in violation of California Labor Code § 226.7 and Industrial Welfare Commission Wage Order 9, §11;

(3) Third Cause of Action: Failure to provide or authorize rest periods in violation of California Labor Code §§ 200, 500, 512, and 226.7(b) and Industrial Welfare Commission Wage Order 9, § 12;

(4) Fourth Cause of Action: Failure to provide itemized wage statements in violation of California Labor Code § 226;

(5) Fifth Cause of Action: Failure to pay with proper instruments in violation of California Labor Code §§ 212 and 213.

(6) Sixth Cause of Action: Failure to timely pay wages due at termination in violation of California Labor Code §§ 201, 202, and 203; and

(7) Seventh Cause of Action: Violation of California Business and Professions Code §§ 17200 et seq.

Yanez Doc. 1, Ex. A.

III. MOTION TO STAY

A.Yanez Plaintiffs‟ Motion to Intervene in Garcia Lawsuit Yanez Plaintiffs move to intervene in Garcia for the limited purpose of opposing Plaintiff Garcia‟s motion to stay the Yanez action. Plaintiff Garcia does not address Yanez Plaintiffs‟ motion to intervene.

1.Intervention as of Right

Rule 24(a) governs intervention as of right:

On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

Fed. R. Civ. P. 24(a)(2). An applicant for intervention as of right must satisfy four requirements:

(1) it has a significant protectable interest relating to the property or transaction that is the subject of the action; (2) the disposition of the action may, as a practical matter, impair or impede the applicant's ability to protect its interest; (3) the application is timely; and (4) the existing parties may not adequately represent the applicant's interest.

S. Cal. Edison Co. v. Lynch , 307 F.3d 794, 802 (9th Cir. 2002). Rule 24(a) is construed liberally in favor of potential intervenors. State ex rel. Lockyer v. United States , 450 F.3d 436, 440 (9th Cir. 2006).

Yanez Plaintiffs satisfy the requirements for intervention as of right. Plaintiff Garcia seeks to delay the Yanez hearing on the motion for consolidation until after (1) Garcia ‟s July 22, 2011 mediation and (2) Garcia ‟s motion for class certification is filed July 15, 2011. The Garcia and Yanez lawsuits assert the same claims on behalf of the same putative class of California employees against the same employer for the same wage and hour violations. Yanez Plaintiffs have a significant protectable interest, and the disposition of the motion to stay will impair or impede Yanez Plaintiffs‟ ability to protect their interests and to proceed with their lawsuit. Yanez Plaintiffs‟ motion to intervene for the sole purpose of opposing Plaintiff Garcia‟s motion to stay the Yanez lawsuit was timely filed on June 13, 2011, fourteen days before the original hearing date on the motion to stay. No party in the Garcia lawsuit adequately represents the Yanez Plaintiffs‟ interests with respect to the motion to stay, as they oppose it.

Yanez Plaintiffs‟ motion for intervention as of right in the Garcia lawsuit for the limited purpose of opposing the motion for stay is GRANTED.

2.Permissive Intervention

Rule 24(b) governs permissive intervention:

On timely motion, the court may permit anyone to intervene who . . . has a claim or defense that shares with the main action a common question of law or fact. . . . In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights.

Fed. R. Civ. P. 24(b). An applicant seeking permissive intervention must show: "(1) it shares a common question of law or fact with the main action; (2) its motion is timely; and (3) the court has an independent basis for jurisdiction over the applicant's claims." Donnelly v. Glickman , 159 F.3d 405, 411 (9th Cir. 1998). "Even if the applicant satisfies those threshold requirements, the district court has discretion to deny permissive intervention ... In exercising its discretion, the district court must consider whether intervention will unduly delay the main action or will unfairly prejudice the existing parties." Id.

The requirements for permissive intervention are met: (1) Garcia and Yanez share common claims and the common question of whether the proposed stay is proper, and the underlying claim is predominately identical with the exception of the claimants; (2) Yanez Plaintiffs‟ motion is timely; and (3) the court already has jurisdiction over the Yanez lawsuit and Yanez Plaintiffs. Allowing Yanez Plaintiffs to intervene for purposes of opposing the motion to stay Yanez will not unduly delay the motion or unfairly prejudice Plaintiff Garcia; rather, denying Yanez Plaintiffs‟ motion to intervene may prejudice Yanez Plaintiffs.

Yanez Plaintiffs‟ motion for permissive intervention in the Garcia lawsuit for the limited purpose of opposing the motion for stay is GRANTED.

B.Plaintiff Garcia‟s Motion to Stay Yanez Lawsuit

1.Legal Standard "[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163 (1936). When considering a motion to stay, the court weighs the competing interests which will be affected by the grant or refusal of stay, including: (1) the possible damage which may result from granting the stay; (2) the hardship or inequity which a party may suffer in being required to go forward; and (3) the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962).

"[A] trial court may, with propriety, find it efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which may bear upon the case." Mediterranean Enters., Inc. v. Sangyong Corp., 708 F.2d 1458, 1465 (9th Cir. 1983) (quoting Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-864 (9th Cir. 1979). For a stay to be appropriate it is not required that the issues of such proceedings are necessarily controlling of the action before the court. Id.

The party moving for a stay bears the burden of establishing the need for a stay. Clinton v. Jones, 520 U.S. 681, 708 (1997); see also Landis, 299 U.S. at 255 ("the justice and wisdom" of a stay lays "heavily on the petitioners").

2.Discussion

Plaintiff Garcia moves for a 45-day stay of the hearing on Yanez Plaintiffs‟ motion to consolidate filed in the Yanez case. Plaintiff Garcia contends that the stay will allow the Garcia lawsuit to maintain its current briefing schedule with respect to the motion for class certification, which is due July 15, 2011, and to proceed with a scheduled mediation on July 22, 2011. Garcia Counsel declares that he has diligently and aggressively pursued the Garcia lawsuit for over two years, dedicating over 1,000 hours to evaluate and litigate the case, while the Yanez lawsuit is still in its infancy and Yanez Counsel has not conducted any discovery. Having agreed to a mediator and mediation date and in light of the upcoming deadline to file the motion for class certification, Plaintiff Garcia contends that consolidating the lawsuits prejudices the Garcia putative class.

Yanez Plaintiffs contend that a stay would severely prejudice them and the putative Yanez class. Yanez Plaintiffs argue that the Yanez and Garcia actions allege the same California Labor Code Violations, and both actions seek to certify the same class of California workers. Yanez Plaintiffs contend that they have a significant, protectable interest related to the Garcia lawsuit, and that granting the stay would block them from participating in the July 22, 2011 mediation.

The Yanez and Garcia lawsuits assert the same California Labor Code and Wage Order violations on behalf of the same putative class of California employees. Granting Plaintiff Garcia's motion to stay would unfairly favor the Garcia lawsuit over the Yanez lawsuit. As both cases encompass the same claims and same putative class members, hearing on consolidation of the Yanez and Garcia lawsuits cannot be stayed while the Garcia lawsuit proceeds to mediation and class certification. The Supreme Court has explained:

[A party seeking] a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to someone else. Only in rare circumstances will a litigant in one cause be compelled to stand aside while a litigant in another settles the rule of law that will define the rights of both.

Landis, 299 U.S. at 255. Moreover, as two prospective class actions have been filed against the same Defendant, the interests of all are best protected under Federal Rule of Civil Procedure 23 and related Rule 16 case management procedures.

Plaintiff Garcia‟s motion for stay of Yanez ‟s hearing on the motion to consolidate is DENIED.

IV. MOTION TO CONSOLIDATE

A.Legal Standard

Federal Rule of Civil Procedure 42(a) provides:

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

Fed. R. Civ. P. 42(a). A district court has broad discretion to consolidate actions. Pierce v. Cnty. of Orange , 519 F.3d 985, 996 (9th Cir. 2008). "The district court, in exercising its broad discretion to order consolidation of actions presenting a common issue of law or fact under Rule 42(a), weighs the saving of time and effort consolidation would produce against any inconvenience, delay, or expense that it would cause." Heune v. United States , 743 F.2d 703, 704 (9th Cir. 1984). Considerations of convenience and judicial economy "must yield to a paramount concern for a fair and impartial trial." Johnson v. Celotex Corp. , 899 F.2dnd 1281, 1285 (2 Cir. 1990). The party seeking consolidation bears the burden of establishing that judicial economy and convenience outweigh prejudice. Single Chip Sys. Corp. v. Intermec IP Corp ., 495 F.Supp.2d 1052, 1057 (S.D. Cal. 2007).

B.Discussion

Defendant contends that the Yanez and Garcia actions are not based on common issues of fact or law. The two lawsuits, however, share the following California claims: (1) failure to pay wages due and owing: Second Cause of Action in Garcia and First Cause of Action in Yanez ; (2) failure to provide or compensate for meal periods: Third Cause of Action in Garcia and Second Cause of Action in Yanez ; (3) failure to provide or compensate for rest periods: Fourth Cause of Action in Garcia and Third Cause of Action in Yanez ; (4) failure to provide accurate/itemized wage statements: Fifth Cause of Action in Garcia and Fourth Cause of Action in Yanez ; (5) failure to timely pay wages at termination: Seventh Cause of Action in Garcia and Sixth Cause of Action in Yanez ; and (6) violation of California Business and Professions Code §§ 17200 et seq.: Eighth Cause of Action in Garcia and Seventh Cause of Action in Yanez . In addition to their common legal questions, the Garcia lawsuit alleges three additional causes of action: (1) First Cause of Action for failure to pay minimum wages in violation of federal law (FLSA); (2) Sixth Cause of Action for failure to reimburse business expenses; and (3) Ninth Cause of Action for recovery under the Labor Code Private Attorneys General Act of 2004. The Yanez lawsuit alleges an additional cause of action: Fifth Cause of Action for failure to pay with proper instruments.

Garcia and Yanez share common truck driver class members. Yanez Plaintiffs contend that the California classes in Garcia and Yanez are identical. Garcia defines its California class as:

All similarly situated persons employed by GTI who were driving tractor-trailer combinations and performing services related thereto within the State of California at any time within the Relevant Time Period, and were compensated on a per-mile basis for at least part of their compensation. This putative class will be referred to herein collectively as the "CALIFORNIA EMPLOYEES‟.

Garcia Doc. 33, ¶ 21(a). Yanez defines its putative class as:

All persons who have been employed by Defendant as Over the Road Drivers in the State of California at any time during the Class Period.

Yanez Doc. 1, Ex. A, ¶ 1. Defendant rejoins that Garcia ‟s proposed class is broader than Yanez because Garcia presumably includes regional drivers in addition to Yanez ‟s putative class of over the road drivers. Defendant also asserts that Garcia alleges an additional, separate federal class for its federal law claim. Despite Defendant‟s arguments, it is undisputed that Yanez ‟s putative class is entirely encompassed within Garcia ‟s putative California class.

Judicial economy weighs in favor of consolidation. The bulk of Garcia ‟s claims are shared with Yanez , and Yanez ‟s putative class falls within Garcia ‟s putative California class. The two lawsuits share substantial overlapping discovery and proof. Consolidating the two lawsuits would save time, effort, duplication, and valuable judicial resources.

Defendant and Garcia Counsel contend that Garcia and Yanez should not be consolidated because the two lawsuits are in different procedural postures. Garcia was filed on February 23, 2010; Yanez was filed approximately nine months later on October 12, 2010. Garcia Counsel has taken and defended depositions, met and conferred with Defendant‟s counsel, and requested, received, and reviewed tens of thousands of pages of written discovery. Garcia ‟s motion for class certification is due July 15, 2011 and the motion is scheduled to be heard November 21, 2011. Garcia Doc. 48, 2. Garcia is scheduled for mediation July 22, 2011.

In contrast, Yanez ‟s scheduling conference has not yet taken place. Yanez Counsel declares that Defendant requested Yanez ‟s transfer to the Eastern District of California to coordinate with Garcia . Yanez Counsel declares that while Yanez was being transferred, Garcia Counsel was conducting discovery and Defendant agreed to provide Yanez Counsel a copy of all discovery produced in Garcia , except for any discovery that related solely to Plaintiff Garcia. Yanez Counsel contends that they have copies of all discovery, and the two parties are on relatively equal footing in discovery.

As the Yanez claims and class are subsumed within the Garcia California class, the Garcia lawsuit already includes the Yanaz class and claims. Consolidation should not require additional discovery except as to Yanez Plaintiffs. The motion for class certification is not scheduled for hearing until November 21, 2011. Although consolidation will affect Garcia ‟s schedule, there is no indication that the delay will be excessive or prejudicial.

Garcia Counsel contends that Yanez Counsel unnecessarily delayed filing a motion to consolidate until they were informed that Garcia had secured a mediation date. Yanez Counsel contends that Garcia Counsel and Defendant‟s counsel acted in concert to allow Garcia to gain a head start in the discovery process and freeze out Yanez . Yanez Counsel declares that they asked, but were denied permission to attend and participate in the July 22, 2011 mediation, which Yanez Counsel characterizes as "back door mediation." All Counsel are reminded that they are officers of the court and are expected to act in the best interests of their clients and putative class members.

Plaintiff Garcia contends that consolidation would prejudice Garcia because the Yanez Complaint asserts that "the Class Members‟ claims as a whole do not exceed the jurisdictional limit of $5,000,000." Yanez Doc. 1, Ex. A, ¶ 11. Plaintiff Garcia asserts that the potential class-wide recovery is far in excess of $5,000,000, as Defendant points out that the potential exposure on two of Yanez Plaintiffs‟ claims exceeds $7,000,000. Yanez Doc. 1, ¶¶ 9-11. Yanez Plaintiffs rejoin that Plaintiff Garcia‟s claim of prejudice is disingenuous, as Garcia Counsel proposed consolidating Garcia and Yanez on June 6, 2011. Yanez , Doc. 43-2.

The Garcia and Yanez lawsuits share common issues of law and fact; the Yanez putative class and claims are included within the Garcia California putative class. Balancing the considerations of judicial economy and convenience against the potential risks of delay and prejudice, the two cases should be consolidated.

Yanez Plaintiffs‟ motion for consolidation is GRANTED.

V.MOTION TO APPOINT INTERIM CLASS COUNSEL

Garcia Counsel requests appointment as interim class counsel for the putative California and federal classes. Yanez Counsel moves for appointment as interim class counsel for the California class and appointment of Garcia Counsel as interim class counsel for the putative federal class.

A.Legal Standard

Federal Rule of Civil Procedure 23(g)(3) provides that "[t]he court may designate interim counsel to act on behalf of a putative class before determining whether to certify the action as a class action." Fed. R. Civ. P. 23(g)(3).

B.Discussion

As ordered at the July 11, 2011 hearing, Yanez Counsel shall participate in the July 22, 2011 mediation. Yanez Counsel agreed that they will pay twenty-five percent (25%) of the mediation fees for the July 22, 2011 mediation, and that Garcia Counsel will serve as lead counsel at the July 22, 2011 mediation.

No interim lead counsel will be appointed. Designation of lead counsel will be deferred until ruling on the motion for class certification. Garcia and Yanez counsel are reminded that:

Whether or not formally designated interim counsel, an attorney who acts on behalf of the class before certification must act in the best interests of the class as a whole. For example, an attorney who negotiates a pre-certification settlement must seek a settlement that is fair, reasonable, and adequate for the class.

Fed. R. Civ. P. 23 advisory committee‟s note to 2003 amendment.

Plaintiff Garcia‟s motion for appointment of S. Brett Sutton as interim class counsel is DENIED. Yanez Plaintiffs‟ motion for appointment of James R. Patterson and Allison H. Goddard as interim class counsel is DENIED.

VI. CONCLUSION For the reasons stated:

1. Yanez Plaintiffs‟ motion to intervene in the Garcia lawsuit to oppose the motion for stay is GRANTED.

2. Plaintiff Garcia‟s motion for stay is DENIED and motion for appointment as interim counsel is DENIED.

3. Yanez Plaintiffs‟ motion for consolidation is GRANTED and motion for appointment of interim counsel is DENIED.

4.With respect to the July 22, 2011 mediation: (1) Yanez Counsel shall participate in the mediation; (2) Garcia Counsel shall serve as lead counsel at the mediation; and

(3) Yanez Counsel shall pay twenty-five percent (25%) of the mediation fees.

5. Plaintiff Garcia shall submit a proposed form of order consistent with this memorandum decision within five (5) days following electronic service of this memorandum decision.

SO ORDERED.

Oliver W. Wanger

20110714

© 1992-2011 VersusLaw Inc.



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