Day v. Celadon Trucking Servs., Inc.

• Citation: 827 F.3d 817
• Decision Date: 05 July 2016
• Docket Number: No. 15-1711,15-1711
• Parties: Stuart R. Day, On behalf of themselves and all others similarly situated ; Robert Sweeten, On behalf of themselves and all others similarly situated ; Deborah McElroy, On behalf of themselves and all others similarly situated ; James White, On behalf of themselves and all others similarly situated ; Laura White, On behalf of themselves and all others similarly situated ; Carol Myers, On behalf of themselves and all others similarly situated ; Ronald Baird, On behalf of themselves and all others similarly situated ; Michael Hasler, On behalf of themselves and all others similarly situated ; Gary Ivy, Jr., On behalf of themselves and all others similarly situated ; Deborah Place, On behalf of themselves and all others similarly situated ; Randall Peters, On behalf of themselves and all other similarly situated ; Jonathan Chudy, On behalf of themselves and all other similarly situated ; Norman Evans, Jr., On behalf of themselves and all other similarly situated ; Paula Rogers, On behalf of themselves and all other similarly situated ; Samuel Lister, On behalf of themselves and all other similarly situated ; Corey Hall, On behalf of themselves and all other similarly situated ; James Roachell, On behalf of themselves and all other similarly situated ; Sonia Sexton, On behalf of themselves and all other similarly situated ; Julie Daniels, On behalf of themselves and all other similarly situated ; Lynda Tenny, On behalf of themselves and all others similarly situated ; Robert Williamson, On behalf of themselves and all others similarly situated ; Kathleen Smith, On behalf of themselves and all others similarly situated ; Connie DeNoon, On behalf of themselves and all others similarly situated ; Kimberly Brown, On behalf of themselves and all others similarly situated ; Leah Burton, On behalf of themselves and all others similarly situated ; Barbara Pitts, On behalf of themselves and all others similarly situated ; James Sanders, On behalf of themselves and all others similarly situated ; Kelly Webb, On behalf of themselves and all others similarly situated ; Jon Stark, On behalf of themselves and all others similarly situated ; Kevin Mayes, On behalf of themselves and all others similarly situated ; Sandra Luckey, On behalf of themselves and all others similarly situated ; Tod Williams, On behalf of themselves and all others similarly situated ; Karla Marina, On behalf of themselves and all others similarly situated ; Tracey Hawkins, On behalf of themselves and all others similarly situated ; James E. Browning, On behalf of themselves and all others similarly situated ; James Browning, On behalf of themselves and all others similarly situated ; Andrew Shelton, On behalf of themselves and all others similarly situated ; Michael Masters, On behalf of self and others similarly situated ; John Pitts, On behalf of self and all others similarly situated ; Keith Adcock, On behalf of self and all others similarly situated ; Timothy Hodnett, On behalf of self and all others similarly situated ; Ford Young, On behalf of self and all others similarly situated ; Merinda Uitermarket, On behalf of self and all others similarly situated ; Lindsey Powers, On behalf of self and all others similarly situated, Plaintiffs–Appellees v. Celadon Trucking Services, Inc., Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

827 F.3d 817

Stuart R. Day, On behalf of themselves and all others similarly situated ; Robert Sweeten, On behalf of themselves and all others similarly situated ; Deborah McElroy, On behalf of themselves and all others similarly situated ; James White, On behalf of themselves and all others similarly situated ; Laura White, On behalf of themselves and all others similarly situated ; Carol Myers, On behalf of themselves and all others similarly situated ; Ronald Baird, On behalf of themselves and all others similarly situated ; Michael Hasler, On behalf of themselves and all others similarly situated ; Gary Ivy, Jr., On behalf of themselves and all others similarly situated ; Deborah Place, On behalf of themselves and all others similarly situated ; Randall Peters, On behalf of themselves and all other similarly situated ; Jonathan Chudy, On behalf of themselves and all other similarly situated ; Norman Evans, Jr., On behalf of themselves and all other similarly situated ; Paula Rogers, On behalf of themselves and all other similarly situated ; Samuel Lister, On behalf of themselves and all other similarly situated ; Corey Hall, On behalf of themselves and all other similarly situated ; James Roachell, On behalf of themselves and all other similarly situated ; Sonia Sexton, On behalf of themselves and all other similarly situated ; Julie Daniels, On behalf of themselves and all other similarly situated ; Lynda Tenny, On behalf of themselves and all others similarly situated ; Robert Williamson, On behalf of themselves and all others similarly situated ; Kathleen Smith, On behalf of themselves and all others similarly situated ; Connie DeNoon, On behalf of themselves and all others similarly situated ; Kimberly Brown, On behalf of themselves and all others similarly situated ; Leah Burton, On behalf of themselves and all others similarly situated ; Barbara Pitts, On behalf of themselves and all others similarly situated ; James Sanders, On behalf of themselves and all others similarly situated ; Kelly Webb, On behalf of themselves and all others similarly situated ; Jon Stark, On behalf of themselves and all others similarly situated ; Kevin Mayes, On behalf of themselves and all others similarly situated ; Sandra Luckey, On behalf of themselves and all others similarly situated ; Tod Williams, On behalf of themselves and all others similarly situated ; Karla Marina, On behalf of themselves and all others similarly situated ; Tracey Hawkins, On behalf of themselves and all others similarly situated ; James E. Browning, On behalf of themselves and all others similarly situated ; James Browning, On behalf of themselves and all others similarly situated ; Andrew Shelton, On behalf of themselves and all others similarly situated ; Michael Masters, On behalf of self and others similarly situated ; John Pitts, On behalf of self and all others similarly situated ; Keith Adcock, On behalf of self and all others similarly situated ; Timothy Hodnett, On behalf of self and all others similarly situated ; Ford Young, On behalf of self and all others similarly situated ; Merinda Uitermarket, On behalf of self and all others similarly situated ; Lindsey Powers, On behalf of self and all others similarly situated, Plaintiffs–Appellees

v.Celadon Trucking Services, Inc., Defendant–Appellant.

No. 15-1711

United States Court of Appeals, Eighth Circuit.

Submitted: January 14, 2016

Filed: July 5, 2016

Rehearing and Rehearing En Banc Denied September 27, 2016

Counsel who presented argument on behalf of the appellant was Eric John Magnuson, of Minneapolis, MN. The following attorney(s) appeared on the appellant brief; Katherine Susan Barrett Wiik, of Minneapolis, MN, Alvin Jack Finklea, of Indianapolis, IN, and Angela Stemle Cash, of Indianapolis, IN.

Counsel who presented argument on behalf of the appellee was Abraham Bogoslavsky, of Little Rock, AR. The following attorney(s) appeared on the appellee brief; Melissa Krebs of Little Rock, AR, and John R. Meyers of Little Rock, AR.

Before MURPHY, SMITH, and BENTON, Circuit Judges.

SMITH

, Circuit Judge.

Appellees are a class of former employees (“the employees”) of non-party Continental Express, Inc. (“Continental”). The employees brought a class action lawsuit against Celadon Trucking Services, Inc. (“Celadon”), alleging that Celadon violated the Worker Adjustment and Retraining Notification (WARN) Act. The district court¹ certified the class under Federal Rule of Civil Procedure 23(b)(3)

, granted partial summary judgment in favor of the employees as to WARN Act liability, and awarded the employees damages due under the WARN Act. Celadon appeals the judgment of the district court, arguing that (1) it is not liable under the WARN Act, (2) the district court committed multiple errors on the class-certification issue, (3) the district court relied on inadmissible evidence in awarding damages to the employees, and (4) the district court erred in rejecting its good-faith defense under the WARN Act.

I. Background

Continental, based in Little Rock, Arkansas, owned and operated a commercial trucking business that serviced customers throughout the United States. On December 4, 2008, Continental and Celadon entered into a written Asset Purchase Agreement (APA). In the opening recitals, the APA states that Celadon “desires to purchase certain assets and assume certain liabilities of [Continental], and [Continental] desires to sell such assets and assign such liabilities to [Celadon] upon the terms and conditions set forth in this Agreement.” In addition to Continental's trucks and trailers, the APA lists the “Purchased Assets” as:

Agreements, contracts, commitments, leases, plans, bids, quotations, proposals, instruments, computer programs and software, data bases whether in the form of computer tapes or otherwise, related object and source codes, manuals and guidebooks, price books and price lists, customer and subscriber lists, supplier lists, sales records, files, correspondences, legal opinions, rulings issued by governmental entities, and other documents, books, records, papers, files, office supplies, furniture and fixtures, company vehicles, yellow iron equipment, equipment, yard equipment, mechanic equipment, shop equipment and data belonging to [Continental].

Celadon also purchased the right to “use the name ‘Continental Express' and variants thereof.” The APA specifically excluded certain assets from the sale, such as Continental's “cash and cash equivalents,” “customer accounts receivables,” “real estate,” and “goodwill relating to the Business other than the Purchased Assets.” The “Purchase Price” under the APA was $24.1 million.

Contemporaneous with the APA, and in accordance with section 5.7 of the APA, Continental's president and vice president executed a noncompetition agreement. The noncompetition agreement states that “Celadon has purchased the business and substantially all of the assets, including but not limited to the business name, customer business, customer lists, and driver lists, of [Continental] pursuant to the terms of [the APA.]” The noncompetition agreement further states that “Celadon intends to merge the operation of the business known as [Continental] into Celadon and [the Continental officer] is willing to enter into this Agreement as an inducement to Celadon to consummate the purchase of the business.”

At the time of the sale, Continental had 658 employees. As part of the APA, Celadon agreed to deliver to Continental a list of driver- and nondriver-employees to whom Celadon intended to offer employment. With respect to driver-employees, Celadon agreed to offer employment to all of Continental's drivers, “except those [d]rivers that fail to meet [Celadon's] standard driver employment requirements.” According to section 5.2(b) of the APA, “the [n]on-hired [d]rivers shall not be deemed to be employees of [Celadon] for any reason.” After the sale, Celadon offered employment to 201 of Continental's 658 employees. The remaining employees were terminated between December 5 and December 17, 2008. As agreed to in the APA,

[f]or a period of Fourteen (14) days immediately following the Closing Date, [Continental] shall (i) continue to employ the Non-Drivers not offered employment by [Celadon] that are listed on Schedule 5.6 and required for the transition activities and (ii) use reasonable efforts to assist [Celadon] with transition of the Business from [Continental] to [Celadon].

Under section 1.3, Excluded Liabilities , Continental and Celadon agreed that Celadon would not “assume” or “be responsible for any liabilities or obligations of [Continental] ... including, but not limited to, ... liabilities under the [WARN] Act.” In section 5.2, Employees , the parties agreed that “[Continental] shall send the notices required by the [WARN] Act and be responsible for any costs and expenses connected therewith.” The terminated employees were not sent written notice of their employment termination as required by the WARN Act. See 29 U.S.C. § 2102(a)

.

On January 16, 2009, the employees filed a class-action complaint against Celadon, seeking damages under the WARN Act. Celadon notified Continental of the complaint and invoked the APA provisions that placed WARN Act responsibility on Continental. Continental agreed that “the contract clearly says [it] [is] responsible,” and it undertook the defense on behalf of Celadon. Counsel for Continental advised Celadon that “the WARN complaint will come back to [Continental] and [the employees] will just be an unsecured creditor.” Continental agreed to answer the complaint and move to dismiss “as [it] believe [d] Celadon not to be a proper defendant.”

Pursuant to Federal Rule of Civil Procedure 23

, the employees moved to certify the following class:

All individuals who were full-time employees of [Continental's] operations in Little Rock, Arkansas, who were employed on the date of the sale to Celadon (December 4, 2008) and suffered an employment loss as

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