California Court of Appeals, First District, Second Division
Superior Court of Alameda County No. RG08379099, Honorable Robert B. Freedman Trial Judge.
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Chauvel & Glatt, Ronald C. Chauvel and Kenneth M. Weinfield for Defendant and Appellant.
Weinberg, Roger & Rosenfeld, David A. Rosenfeld, Theodore Franklin, Caren P. Spencer and Lisl R. Duncan for Plaintiffs and Respondents.
Named plaintiffs Lavon Godfrey and Gary Gilbert initiated this class action lawsuit against Oakland Port Services Corp., doing business as AB Trucking (AB). They alleged that AB did not pay its drivers for all hours worked, misclassified some drivers as non-employee trainees and did not pay them at all, and failed to provide required meal and rest breaks. Plaintiffs sought certification of the class of drivers who performed work for AB out of its Oakland, California facility. The trial court granted the class certification motion, and the case proceeded to a bench trial. Plaintiffs prevailed on most of their causes of action and the court awarded the class a total of $964,557.08. In a post-judgment order, the court awarded attorney fees, litigation expenses, and class representative enhancements to plaintiffs.
On appeal, AB relies primarily on the argument that federal law preempts application of California’s meal and rest break requirements to motor carriers. AB also argues in passing that the court order granting class certification was unsupported by substantial evidence, but without addressing the evidence presented on the motion; that the court should have reserved individual determinations of damages for the claims administration process; that AB’s drivers are expressly excluded from coverage under Industrial Welfare Commission (IWC) Order No. 9-2001; and that the award of attorney fees and class representative enhancements should be reversed. We find no merit in AB’s preemption or other arguments and affirm.
Class members are employees of AB who drive trucks owned by AB between the Port of Oakland and AB’s yard, located in the general port area.
Drivers also drive loads to customer locations within the San Francisco Bay Area and elsewhere in California.
On September 20, 2010, plaintiffs filed a second amended complaint (SAC) in which they sought to represent the class of all drivers who performed work for AB out of its Oakland facility between March 28, 2004, and November 1, 2010. The SAC stated eight causes of action: (1) unfair business practices, in violation of Business and Professions Code section 17200 et seq. (unfair competition law or UCL); (2) failure to pay for all hours worked; (3) failure to pay for any hours worked due to misclassification of employment status; (4) failure to pay overtime; (5) violation of the living wage provision of the Oakland City Charter; (6) failure to provide all required meal and rest breaks; (7) failure to pay wages owed at termination of employment; and (8) provision of inaccurate wage statements.
When plaintiffs moved for class certification on October 29, 2010, they identified the class as those drivers who performed work for AB out of the Oakland facility between March 28, 2004, and December 3, 2010. They identified five subclasses: (1) those who had not been paid for all hours worked; (2) those who were misclassified as non-employee trainees and paid no wages; (3) those who were not paid for overtime worked; (4) those who were paid less than Oakland’s living wage; and (5) those who had not been provided the required meal and rest breaks. Following a hearing, the trial court granted plaintiffs’ motion on December 3, 2010, identifying the time period defining the class to be from March 28, 2004, “through the date of notice to the class.”
Immediately prior to trial, AB moved for reconsideration of the class certification order, seeking “modification or decertification of the class.” The court denied AB’s motion.
A bench trial took place over several days in February 2012. Eight drivers testified (among other witnesses)—six class members, including Godfrey and Gilbert, for plaintiffs and two drivers, who had chosen to opt out of the class, for AB.
The court issued a notice of intended decision on October 2, 2012. AB requested a written statement of decision on October 11, 2012. Plaintiffs filed a proposed statement of decision and AB filed objections, among which it contended that California’s meal and rest break requirements, as applied to motor carriers, are preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA; Pub.L. No. 103-305 (Aug. 23, 1994) 108 Stat. 1569). Following a hearing, the court filed a statement of decision (SOD) and judgment on May 21, 2013.
The SOD noted that plaintiffs had dismissed the fourth cause of action, for failure to pay overtime wages, during trial. For the remaining causes of action, the court found in favor of plaintiffs on causes of action Nos. 1, 2, 3, 6, 7, and 8. It found in favor of AB on the fifth cause of action, for violation of Oakland’s living wage ordinance, because AB did not employ enough people to be covered by the ordinance. The SOD awarded the class a total of $964, 557.08.
The court’s primary factual findings in the SOD were: (1) AB failed to pay for all hours worked because AB’s records showed that “it deducted one hour per day from each employee. This deduction took place, even though the driver did not receive a one hour meal period.”; (2) “AB misclassified drivers who were suffered or permitted to work as non-employees, or unpaid ‘trainees.’... The evidence reflected these trainees were suffered or permitted [to] work by AB and were not paid at all.”; and (3) plaintiffs had “presented substantial and persuasive evidence that class members were routinely and consistently precluded by AB from taking meal periods and rest breaks.” The court then determined that these primary findings supported the derivative claims that AB had engaged in unfair competition, had failed to pay all wages owed on termination of employment, and had failed to provide accurate, itemized wage statements. The trial court also rejected AB’s contention that the FAAAA preempts California’s meal and rest break requirements.
On August 9, 2013, the trial court awarded plaintiffs $487, 810.50 in attorney fees, $42, 106.16 in litigation expenses, and $20, 000 in class representative enhancements.
AB timely filed a notice of appeal on July 19, 2013.
AB maintains that the FAAAA preempts California law governing meal and rest breaks as applied to motor carriers. AB’s preemption argument does
not apply to plaintiffs’ other claims that do not involve meal and rest breaks. Also, AB does not argue that plaintiffs’ UCL claim is preempted, but if AB were to prevail on its preemption argument, then AB’s violation of California meal and rest break laws could not support that portion of the UCL claim. Because we conclude that AB’s preemption argument fails, we need not further consider the UCL claim.
A. Standard of Review
To the extent that we are called upon to interpret the FAAAA’s preemption provision, discussed below, we apply a de novo standard of review. (People v. Petrilli (2014) 226 Cal.App.4th 814, 824 [172 Cal.Rptr.3d 480].) To the extent that evidence is required to support AB’s preemption argument, we review for substantial evidence. (Cellphone Termination Fee Cases (2011) 193 Cal.App.4th 298, 311 [122 Cal.Rptr.3d 726].)
We also begin with a presumption that California’s meal and rest break laws are not preempted by the FAAAA. In preemption cases “ ‘ “ ‘in which Congress has “legislated... in a field which the States have traditionally occupied, ”... we “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” ’ ” [Citations.]’ [Citation.] This is known as the presumption against preemption, and its role is to ‘ “ ‘provide assurance that “the federal-state balance” [citation] will not be disturbed unintentionally by Congress or unnecessarily by the courts.’ ” [Citation.]’ [Citations.]” (People ex rel. Harris v. PAC Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 778 [174 Cal.Rptr.3d 626, 329 P.3d 180] (PAC Anchor)) Regulation of wages and hours is, of course, an area of traditional state regulation. (California Div. of Labor Standards Enforcement v. Dillingham Construction., N.A., Inc. (1997) 519 U.S. 316, 330-334 [136 L.Ed.2d 791, 117 S.Ct. 832].)
B. Meal and Rest Breaks—Legal Background
Labor Code section 226.7 provides, in relevant part: “(b) An employer shall not require an employee to work during a meal or rest or recovery period mandated pursuant to an applicable statute, or applicable regulation, standard, or order of the [IWC].... [¶] (c) If an employer fails to provide an employee a meal or rest or recovery period in accordance with a state law, including, but not limited to, an applicable statute or applicable regulation, standard, or order of the [IWC]..., the employer shall pay the employee one additional hour ...