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Espinosa v. Stevens Tanker Division, LLC

United States District Court, W.D. Texas, San Antonio Division

April 27, 2017




         On this date, the Court considered the status of the above captioned case. There are currently three pending motions-Plaintiff's Motion to Decertify the Conditional Class (Docket no. 91), Defendant's Motion for Attorney Fees (Docket no. 94), and Plaintiffs' Motion for Reconsideration (Docket no. 98). The second and third motions derive from the same underlying dispute and will be discussed together.

         After careful consideration, the Court DENIES Plaintiff's Motion to Decertify (Docket no. 91). The Court GRANTS IN PART Defendant's Motion for Attorney Fees (Docket no. 94) and GRANTS IN PART AND DENIES IN PART Plaintiffs' Motion for Reconsideration (Docket no. 98).


         I. Introduction

         Plaintiff Michael Espinosa filed his Complaint on October 12, 2015, alleging violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. Docket no. 1 at 1. Espinosa was employed as a dispatcher for Defendant Stevens Tanker Division, LLC (“Stevens”). He claims his duties included answering phone calls, informing drivers of dispatch sites, recording information from drivers who were present at job sites, and other office tasks. Docket no. 20 at 2. He alleges that he worked a schedule of “one week on and one week off” and that during the “on” weeks he regularly worked approximately 84 hours a week. Docket no. 1 at 3. He claims he was improperly classified as an exempt employee and did not receive overtime pay for the hours he worked in excess of forty per week. Id. The Complaint states that Espinosa brings his claim “on behalf of all similarly situated present and former employees of Defendant who were either misclassified and/or not properly paid for all overtime due and/or not paid for all hours worked.” Id.

         II. Conditional Certification

         On August 5, 2016, this Court entered an Order granting in part and denying in part Plaintiff's Motion for Conditional Class Certification. Docket no. 40. The Court granted initial conditional certification of a class composed of all past or present salaried dispatchers who worked for Defendant any time since October 12, 2012, at any of Defendant's locations, who were not paid overtime compensation. The Court also ordered Stevens to produce a list-in electronic format-of the name, last known physical address, last known email address, and last four digits of social security number of all current and former employees in the class as granted above within fourteen days of the Order. Upon receipt of the list, Plaintiff was ordered to send a notice to potential class members with a date-specific deadline for opting-in that is sixty days from the date of the mailing of the notices. Counsel for both parties were ordered to confer regarding the content of the notice and notify the Court in the case of any disputes.

         Much of this order addresses Plaintiffs' opposed Motion to Decertify the Conditional Class, in which Plaintiffs seek decertification of their own class because “in reviewing the potential claims of numerous opt-ins, it is apparent that their claims are not the same or similar and/or their work situations varied greatly from [Espinosa].” Docket no. 91 at 2.

         III. The Sanctions Order

         On January 20, 2017, Stevens filed a Motion to Void Opt-in Consents (“motion to void”). Docket no. 69. The thrust of the motion was that Class Counsel sent out notices to potential opt-in plaintiffs that deviated from the agreed upon notice in terms of substance, form, and frequency. See generally id. At a January 25 hearing, the Court heard limited argument on this motion. The Court advised the parties that it was taking the matter under consideration and that if indeed Class Counsel engaged in sanctionable conduct, the innocent opt-ins would not be punished by having their consent forms stricken. To this extent, the Court denied the motion to void. Class Counsel did not file a response to this motion either before the hearing or after the hearing.

         On February 7, the Court issued an order denying Stevens' Motion to Void but sanctioning class counsel. Docket no. 74. The sanctions order summarizes the conditional certification order. Id. at 3 (discussing Docket no. 40). As the Court stated in the sanctions order, the certification order made clear that the Court contemplated that only one notice be sent. Id.; see also Docket no. 40 at 8. With this background, the Court stated:

Despite the Court's Order and the parties' agreement, Class counsel issued four notices. Further, as indicated above, Class Counsel deviated from the agreed upon language of the Notice and included statements that would mislead the recipient to infer that the Court was mandating that they join the lawsuit, or that the Defendant was providing incorrect addresses in an effort to dissuade them from joining the lawsuit. Just as importantly Class counsel violated his duty as an officer of the Court to be candid and cooperative when possible. The Court needs parties to engage in cooperative behavior when possible to achieve a “just, speedy, and inexpensive determination” of the case. See Fed. R. Civ. P. 1.
This Court does not sanction Class counsel for violation of Rule 1. Nor does the Court grant Stevens' request to strike the opt-in members. This remedy would serve only to sanction innocent individuals who were not aware of the parties' agreed upon notice. The Court, however, does sanction Class counsel under the Court's inherent authority for acting in bad faith. “It is well-settled that a federal court, acting under its inherent authority, may impose sanctions against litigants or lawyers appearing before the court so long as the court makes a specific finding that they engaged in bad faith conduct.” In re Yorkshire, LLC, 540 F.3d 328, 332 (5th Cir. 2008).
Class counsel was aware of the Court's Order authorizing one notice, never sought clarification of the Order, reached an agreement with counsel for Defendant as to the form of the Notice, and then proceeded to issue four notices that deviated from the agreed upon form. The last two notices proceeded to give the reader the impression that the Court had an opinion as to the merits of the case. The Court advised Class counsel it was taking under consideration what, if any, sanctions should be imposed, offered Class counsel an opportunity to explain his conduct, and no satisfactory explanations were given.

Docket no. 74 at 3-4 (footnotes omitted). On this reasoning, the Court sanctioned Class Counsel as follows: “It is ORDERED that should Class counsel be successful in recovering a settlement or judgment in this case, neither he nor his law firm may recover any attorney's fees for the prosecution of any of the opt-in plaintiffs who signed their opt-in forms after receiving the second, third or fourth notice. It is further ORDERED that Class Counsel pay the reasonable attorney's fees incurred by Defendant for their filing of its Motion to Void Opt-In Consents (docket no. 69).” Id. at 4.


         I. Plaintiffs' Motion to Decertify

         The Court's previous certification order summarized the applicable law as follows:

29 U.S.C. § 216 [of the FLSA] permits an employee to bring an action against an employer “[on] behalf of himself . . . and other employees similarly situated.” Unlike a Rule 23 class action, in which plaintiffs “opt out” of the class, a § 216 plaintiff must “opt in” to become part of the class. See Fed. R. Civ. P. 23; Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1212 (5th Cir. 1995). Accordingly, the method adopted by this Court[1] for determining whether to certify a collective action under § 216(b)-the Lusardi two-tiered approach-involves conditional certification, allowing the plaintiff to notify potential members of the action, followed by a factual determination at a second stage as to whether the putative class members are similarly situated. Lusardi v. Xerox Corp., 118 F.R.D. 351 (D. N.J. 1987); Mooney, 54 F.3d at 1213-14.
In the first stage, called the notice stage, the district court must make an initial determination whether notice of the action should be sent to potential class members. Lusardi v. Xerox Corp., 118 F.R.D. at 351; Mooney, 54 F.3d at 1213. This determination is based solely on the pleadings and affidavits. The pleadings and affidavits must make a preliminary factual showing that a similarly situated group of potential plaintiffs exists. Trezvant v. Fid. Employer Servs. Corp., 434 F.Supp.2d 40, 43 (D. Mass. 2006). The standard is a lenient one typically resulting in conditional certification of a representative class to whom notice is sent and whose members receive an opportunity to opt in. “The decision to create an opt-in class under § 216(b), like the decision on class certification under Rule 23, remains soundly within the discretion of the district court.” Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001); see U.S.C. § 216(b); Mooney, 54 F.3d at 1213-14.
Once conditional certification is granted, the case proceeds through discovery as a representative action. Mooney, 54 F.3d at 1214. Upon completion of discovery, the defendant may file a motion for decertification. Id. At this second stage of the analysis, the district court should make a factual determination as to whether the putative class members are similarly situated. Id. If so, then the representative action may proceed; if not, then the class should be decertified, the opt-in plaintiffs dismissed, and the class representatives should be allowed to proceed on their individual claims. See Johnson v. TGF Precision Haircutters, Inc., 319 F.Supp.2d 753, 754-55 (S.D. Tex. 2004). . . .
A finding that employees are similarly situated does not require that the employees work in identical positions. Mateos v. Select Energy Services, LLC, 977 F.Supp.2d 640, 643-45 (W.D. Tex. 2013) (citing Walker v. Honghua Am., LLC, 870 F.Supp.2d 462, 468 (S.D. Tex. 2012)). However, to satisfy the “similarly situated” standard, a plaintiff must provide “substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination.” Mooney, 54 F.3d at 1214 n. 8 (quoting Sperling v. Hoffmann-La Roche, Inc., 118 F.R.D. 392, 407 (D. N.J. 1988)). Furthermore, the class member representatives “must be similarly situated in terms of job requirements and similarly situated in terms of payment provisions.” Ryan v. Staff Care, Inc., 497 F.Supp.2d 820, 824-25 (N.D. Tex. 2007). In other words, while “[s]light differences in job duties or functions do not run afoul of the similarly situated requirement, ” Tolentino v. C & J Spec-Rent Servs., Inc., 716 F.Supp.2d 642, 651 (S.D. Tex. 2010), “[i]f the job duties among putative class members vary significantly, then class certification should be denied.” Villarreal v. St. Luke's Episcopal Hosp., 751 F.Supp.2d 902, 918 (S.D. Tex. 2010).

Docket no. 40 at 3-4 (footnote original, some alterations added).

         Having arrived at the second stage of the Lusardi approach, the Court must now make the factual determination of whether the opt-in plaintiffs are similarly situated, which requires the Court to examine three factors: “(1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; and (3) fairness and procedural considerations.” Clark v. Centene Co. of Tex., L.P., 44 F.Supp.3d 674, 688 (W.D. Tex. 2014); Roussell v. Brinker Intern., Inc., 441 F. App'x. 222, 226 (5th Cir. 2011); Mooney, 54 F.3d at 1214. District courts in the Fifth Circuit have repeatedly stated that plaintiffs need only be similarly situated, not identically situated. See, e.g., Falcon v. Starbucks Corp., 580 F.Supp.2d 528, 534 (S.D. Tex. 2008) (“Courts have repeatedly stressed that Plaintiffs must only be similarly-not identically-situated to proceed collectively.”).

         Before turning to the three-factor “similarly situated” inquiry, the Court briefly notes the procedural oddity of Plaintiffs' motion. The case law speaks unambiguously in terms of a defendant's ability to seek decertification at the second stage of the Lusardi analysis. See, e.g., Valdez v. Calton Management LLC, No. SA-13-CA-865-FB, 2015 WL 12552024, at *2 (W.D. Tex. Sept. 15, 2015) (“The [conditional certification] motion is granted subject to the Court revisiting the issue of certification should the defendants file a motion to decertify the class once discovery is complete. McPherson v. LEAM Drilling Sys., LLC, 2015 WL 1470554 at *2 (S.D. Tex. Mar. 30, 2015). Even after a court has denied a motion to decertify, the issue may be revisited as the case progresses. Id.”). Yet in this case, it is the plaintiffs-not the defendant- who have moved to decertify the conditional class, and the defendant opposes this request. Plaintiffs identify no cases in which a conditionally certified class moves to decertify itself. Stevens identifies two such cases, but both present issues distinct from the one here-namely, a contested question of full decertification at the opt-ins' own request.[2] As a result of this strange posture, the parties' positions from the conditional certification stage have effectively flipped- previously, Plaintiffs argued in favor of certification and Stevens argued against it.[3] With this odd procedural posture in mind, the Court assumes that plaintiffs are able to request decertification of their own class and that the legal standard governing a defendant's motion to decertify also applies when a plaintiff brings the same motion.

         a. There are no disparate factual and employment settings of the individual plaintiffs that warrant decertification.

         The majority of Plaintiffs' motion to decertify is a recitation of details that Plaintiffs argue show disparate factual and employment settings of the individual plaintiffs. These facts are also relevant to the second factor, which involves Stevens' defense of the administrative exemption. On both points, Plaintiffs assert that: (1) the opt-ins performed different job duties; (2) “[d]efendant had two separate district offices and each office worked under different management”; (3) some dispatchers worked under a dispatch supervisor while others did not; and (4) some dispatchers were actually ...

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