Judge David S. Cunningham, Case Number: 21STCV23621, Date: 2024-08-21 Tentative Ruling

Judge: David S. Cunningham, Case: 21STCV23621, Date: 2024-08-21 Tentative Ruling

Tentative Ruling Re: Motion for Class Certification Re: Hernandez (21STCV23621)

Plaintiff’s objections to Defendant’s foreign-language declarations are sustained, except the objection to the Alfonso Jauregui declaration is overruled.

The hearing on Defendant’s motion for class certification is continued to allow the parties to file supplemental evidence and supplemental briefs regarding ascertainability.

Masa is a company that transports cargo. Plaintiff used to work for Masa as a truck driver. He claims Masa subjected him and other current and former employees to multiple wage-and-hour violations.

The plaintiff bears the burden of demonstrating that class certification is proper. (See City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 460; see also Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 654.) To do so, [t]he party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021.)

A class is “ascertainable when it is defined ‘in terms of objective characteristics and common transactional facts’ that make ‘the ultimate identification of class members possible when that identification becomes necessary.’” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980.)

“The class must be ‘numerous’ in size. But there is no fixed minimum or maximum number . . . The numerosity analysis is limited to how many individuals fall within the class definition and whether their joinder is impracticable, not how many ‘net’ class members there might be after considering affirmative defenses.” (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2023 Update) ¶ 14:21, emphasis in original.)

“A party seeking class certification bears the burden of satisfying the requirements of Code of Civil Procedure section 382, including numerosity, and the trial court is entitled to consider ‘the totality of the evidence in making [the] determination’ of whether a ‘plaintiff has presented substantial evidence of the class action requisites.’” (Soderstedt v. CBIZ S. California, LLC (2011) 197 Cal.App.4th 133, 154.)

Class: All current and former hourly, non-exempt employees of Defendant Masa Trucking Co. (“Defendant”) who performed work for Defendant within the State of California at any time from June 23, 2017, to the date the Class is certified.

Facial Wage Statement Sub-Class: All members of the Class who, at any time from June 23, 2020, to the date the Class is certified, received at least one wage statement from Defendant that either did not show Defendant’s address, showed pay period start and end dates of less than seven days, or both.

Derivative Wage Statement Sub-Class: All members of the Class who, at any time from June 23, 2020, to the date the Class is certified, received at least one wage statement from Defendant.

Waiting Time Pay Sub-Class: All members of the Class who, at any time from June 23, 2018, through the date the Class is certified, separated their employment from Defendant.

Plaintiff claims the putative members can be ascertained “from Defendant’s records.” (Motion, p. 7.)

As of June 8, 2022, Defendant identified at least 129 members of the Class and 37 members of the Waiting Time Penalty Sub-Class. [Citation.] As of January 15, 2024, Defendant employed 79 putative Class Members, whose names, positions, and employment start dates are included in Defendant’s roster printouts. And Plaintiff’s expert estimated approximately 93 employees from the lists produced by Defendant[].

The Court finds that Plaintiff fails to meet his burden. The class definition and the derivative and waiting-time subclass definitions appear overbroad in that they apply to all employees, regardless of whether they experienced some (or all) of the alleged violations. Because of the overbreadth, Plaintiff’s numerosity estimates are unreliable. Plaintiff also fails to establish numerosity as to the facial subclass. While the facial definition contains sufficient objective characteristics and transactional facts, Plaintiff fails to show how many employees fall under the definition. These defects must be fixed before certification can be granted.

The hearing is continued, and the Court grants the parties leave to file supplemental evidence and supplemental briefs.

“[T]he proponent of certification must show, inter alia, that questions of law or fact common to the class predominate over the questions affecting the individual members[.]” (Washington Mutual Bank, FA v. Superior Court (2001) 24 Cal.4^th 906, 913.) This means “each member must not be required to individually litigate numerous and substantial questions to determine his [or her] right to recover following the class judgment[.]” (Edmon & Karnow, supra, at ¶ 14:11.6.) “[T]he issues which may be jointly tried, when compared with those requiring separate adjudication, must be sufficiently numerous and substantial to make the class action advantageous to the judicial process and to the litigants.” (Ibid.)

The proposed class pertains to Plaintiff’s first cause of action for unpaid wages. The cause of action is based on two theories: (1) Defendant auto-deducts 30 minutes from employees’ hours when they work shifts over eight hours; (2) Defendant deducts 15% when it pays employees in cash. (See Motion, p. 10; see also Reply, p. 4.)

Plaintiff contends common questions predominate as to the first theory because the evidence shows that Defendant did not record meal periods and that it automatically deducted 30 minutes after eight hours of work, no matter whether the employees took breaks. (See Motion, pp. 10-12; see also Reply, pp. 4-6.)

Defendant disagrees. Defendant asserts that individual issues predominate because, “[e]ven where Masa did auto-deduct time for meal periods,” Plaintiff’s expert “offers no way to determine whether the meal period was actually taken or whether the deducted time exceeded the duration of the meal period.” (Opposition, p. 16; see also id. at pp. 12-15, 17.)

There is evidence of a common practice. Defendant’s operation administrator, Mauro Arce, declares that Defendant automatically deducts lunch breaks “when an employee has worked a shift longer than eight hours.” (Arce Decl., ¶ 8) In that situation, if the employee did not take a lunch break after eight hours, Defendant’s policy requires “the employee to inform Masa so that the automatic lunch deduction can be reversed.” (Id. at ¶ 9.) The practice places the burden on the employee and could result in a violation if the employee fails to inform Defendant and if no reversal is made.

Notably, federal courts have certified classes with similar allegations and facts. (See, e.g., Dilts v. Penske Logistics, LLC (S.D. Cal. 2010) 267 F.R.D. 625, 635 [“[T]he Court finds that common issues predominate with respect to this subclass. The ultimate underlying factual issue is the existence of the thirty minute auto-deduct. If class members were not paid for time they actually worked, then Defendant is liable. And there is no question that Defendant deducted thirty minutes per day regardless of whether a break was taken. Thus, the common issues predominate over the individual issues on the question of liability.”]; see also, e.g., Nguyen v. Baxter Healthcare Corp. (C.D. Cal. 2011) 275 F.R.D. 596, 600-601 [“Ms. Nguyen's complaint and the putative class member's claims depend on a common contention, namely that Baxter employed uniform policies with respect to the meal breaks and wages of their non-exempt manufacturing employees at their Irvine facility. Specifically, with respect to the class's claims regarding meal breaks, Ms. Nguyen has shown that Baxter treated these workers uniformly. Employees on a production line went to lunch at the same time, as determined by the lead or supervisor. [Citation.] Baxter used software which automatically deducted one 30 minute meal break per shift from all employees' time, without regard to whether a first meal break was late or missed, or whether a second meal break was required on a shift of more than 10 hours. [Citation.]”].)

What is missing, arguably, is common proof of common harm. Plaintiff’s expert, James Toney, considered a sample of payroll records. The randomness and reliability of the sample is questionable, his opinions seem to be laced with speculation, and he does not have personal knowledge. (See, e.g., Toney Decl., pp. 4-15; see also Opposition, pp. 10-16; Regus Decl., ¶¶ 5-16.) The Court’s inclination would be to order him to testify at a Sargon hearing as a precondition to admitting his declaration. (See Sargon Enterprises, Inc. v. Univ. of Southern Cal. (2012) 55 Cal.4th 747.)[1]

Nevertheless, the Court has discretion to certify a liability class. As the Dilts court recognized, the existence of the auto-deduct feature creates an overarching, predominant common issue “on the issue of liability[,]” and Defendant’s argument goes to the “measure of damages[,]” which “do[es] not preclude a finding” of commonality. (Dilts, supra, 267 F.R.D. at 635.)

The Court favors the liability-class option, but Plaintiff still needs to demonstrate an ascertainable class. The hearing is continued to provide Plaintiff an opportunity to prove ascertainability.

For the second theory, Plaintiff claims Defendant frequently paid Plaintiff in cash but deducted 15% from the payments. (See Motion, p. 12.) Plaintiff contends his expert reviewed some putative members’ records and determined that Defendant still used the practice, class-wide, in 2022 and 2023. (See ibid.; see also Reply, p. 6.)

Defendant contends Plaintiff is the only employee who received cash payments. Defendant states that it never paid other employees in cash and never deducted 15% from their wages. (See Opposition, p. 9.)

The Court agrees with Defendant and finds that the motion should be denied as to the second theory. Plaintiff cites three pieces of evidence – Plaintiff’s declaration, one of Plaintiff’s wage statements, and Toney’s declaration. (See Motion, pp. 5-6.) Plaintiff’s declaration and wage statement are specific to Plaintiff and do not demonstrate a common practice applicable to the other employees. (See Hernandez Decl., ¶ 11; see also Plaintiff’s Compendium of Evidence, Ex. 5.) Toney’s declaration is questionable and speculative, and, independent of his need to testify at a Sargon hearing, he lacks personal knowledge of the alleged policy. (See, e.g., Toney Decl., pp. 4-15 [assuming cash payments].) Bottom line, Plaintiff’s burden is unsatisfied.[2]

Plaintiff claims the wage statements had two facial defects – they failed to list Defendant’s address, and they failed to “specify the inclusive dates of the payroll period[.]” (Motion, p. 9; see also id. at pp. 8, 10; Reply, pp. 3-4.)

The Court agrees and finds that Plaintiff satisfies his burden. Defendant admits that both defects existed during a portion of the alleged subclass period. (See Arce Decl., ¶¶ 11-13; see also Opposition, p. 17.) This suffices to prove commonality, at least up to July 2022. (See Reply, p. 3.)

The Court grants Plaintiff leave to amend the subclass period to make it consistent with this evidence and date.

The Court finds that common issues predominate. The derivative and waiting-time subclasses derive from the proposed class, in particular, the first-theory/auto-deduction claim. (See Motion, p. 13.) They rely on the same facts. (See ibid.; see also Reply, pp. 6-7.) For the reasons stated above, the evidence shows a common practice and supports certification of a liability class as to the first theory (if Plaintiff ends up meeting the ascertainability prong).

“The ‘test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.’” (Edmon & Karnow, supra, at ¶ 14:29 [quoting Martinez v. Joe’s Crab Shack Holdings (2014) 231 Cal.App.4^th 362, 375].)

“That the purported class representative's claims must be ‘typical’ does not mean they must be identical to the claims of other class members. It is sufficient that the representative is similarly situated so that he or she will have the motive to litigate on behalf of all class members.” (Id. at ¶ 14:29.2.) “Thus, it is not necessary that the class representative have personally incurred all of the damages suffered by each of the other class members.” (Ibid., emphasis in original.)

The class representative’s claim is atypical “if it is subject to ‘factually intensive or legally complex unique defenses that pose any significant risk of diverting [plaintiff’s] attention from class issues.’” (Id. at ¶ 14:35.10 [citing Fireside Bank v. Superior Court (2007) 40 Cal.4^th 1069] emphasis in original.)

Defendant contends Plaintiff is atypical because the second-theory/cash-payment claim is unique to him. (See Opposition, p. 16.)

The Court disagrees. The second theory is out – is not being certified – due to Plaintiff’s failure to demonstrate commonalilty. Yet Plaintiff is typical as to the first theory, facial subclass, and derivative subclasses. Indeed, he and the putative members allege similar injuries caused by the same common practices. This is enough to meet his burden.

“The class representative, through qualified counsel, must be capable of ‘vigorously and tenaciously’ protecting the interests of the class members.” (Edmon & Karnow, supra, at ¶ 14:36.)

“The prospective class representative must file a declaration stating that he or she desires to represent the class and understands the fiduciary obligations of serving[.]” (Ibid.)

Defendant asserts that Plaintiff is a lying, disgruntled former employee and that his deposition testimony contradicts his declaration. (See Opposition, pp. 2-8.)

The Court finds the adequacy prong satisfied. Disgruntled or not, Plaintiff’s evidence shows that Defendant commonly auto-deducted time for meal breaks and gave employees facially defective wage statements. On these facts, there is little to no contradiction between his deposition testimony and declaration. (See, e.g., Defendant’s Compendium of Evidence, Ex. B, pp. 88-89, 95-96; see also, e.g., Hernandez Decl., ¶¶ 6-10; Reply, pp. 9-10.) Moreover, “[i]t is not necessary that [he] be intimately familiar with every factual and legal issue in the case.” (In re Adobe Systems, Inc. Securities Litigation (N.D. Cal. 1991) 139 F.R.D. 150, 156.) The key point is that his declaration and counsel’s declaration contain the requisite information (see Hernandez Decl., ¶¶ 14-18; see also Daily Decl., ¶¶ 3-17), and the Court sees nothing suggesting that he has a conflict of interest.

“The proponent of class certification must demonstrate that the proposed class action is manageable [citation].” (Edmon & Karnow, supra, at ¶ 14:11.10.) “This requires the trial court ‘to carefully weigh the respective benefits and burdens of a class action, and to permit its maintenance only where substantial benefits will be accrued by both litigants and the courts alike.’ [Citation.]” (Ibid., emphasis in original.)

“In certifying a class action, the court must also conclude that litigation of individual issues, including those arising from affirmative defenses, can be managed fairly and efficiently.” (Duran v. U.S. Bank Nat. Assn. (2014) 59 Cal. 4th 1, 28-29.) “Trial courts must pay careful attention to manageability when deciding whether to certify a class action. In considering whether a class action is a superior device for resolving a controversy, the manageability of individual issues is just as important as the existence of common questions uniting the proposed class.” (Id. at 29.)

“A class action is not ‘superior’ where there are numerous and substantial questions affecting each class member's right to recover, following determination of liability to the class as a whole.” (Edmon & Karnow, supra, at ¶ 14:46, emphasis in original.)

In light of the commonality analysis, Plaintiff’s burden is met. The class method is manageable and superior given the predominating common issues concerning the first theory, facial subclass, and derivative subclasses.

[1] Defendant’s expert, Justin Regus, could also be ordered to testify.

[2] Arce’s declaration supports this conclusion:

5. MASA does not use cash as a method of compensating any of its employees.

6. All MASA employees receive their compensation by check or direct deposit.

7. Gilberto Hernandez ("Mr. Hernandez") was the only employee compensated partially in cash due to his persistent demands to the company, and this was done as an exception.

(Arce Decl., ¶¶ 5-7.)