Hargrove v. Sleepy's LLC, 090920 FED3, 19-2809

Docket Nº:19-2809
Party Name:SAM HARGROVE; ANDRE HALL; MARCO EUSEBIO, individually and on behalf of all others similarly situated, Appellants v. SLEEPY'S LLC v. I STEALTH LLC; EUSEBIO'S TRUCKING CORP.; CURVA TRUCKING LLC
Attorney:Harold L. Lichten (Argued) Benjamin J. Weber Lichten & Liss-Riordan Anthony L. Marchetti, Jr. Counsel for Appellants Marc Esterow Theo E.M. Gould Matthew J. Hank (Argued) Paul C. Lantis Jonathan L. Shaw Littler Mendelson Counsel for Appellee Peter Winebrake Winebrake & Santillo LLC 715 Twinning R...
Judge Panel:Before: AMBRO, HARDIMAN, and RESTREPO, Circuit Judges HARDIMAN, Circuit Judge, dissenting.
Case Date:September 09, 2020
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

SAM HARGROVE; ANDRE HALL; MARCO EUSEBIO, individually and on behalf of all others similarly situated, Appellants





No. 19-2809

United States Court of Appeals, Third Circuit

September 9, 2020

Argued May 27, 2020

Appeal from the United States District Court for the District of New Jersey (D.C. Civil Action No. 3-10-cv-01138) District Judge: Honorable Peter G. Sheridan

Harold L. Lichten (Argued) Benjamin J. Weber Lichten & Liss-Riordan Anthony L. Marchetti, Jr. Counsel for Appellants

Marc Esterow Theo E.M. Gould Matthew J. Hank (Argued) Paul C. Lantis Jonathan L. Shaw Littler Mendelson Counsel for Appellee

Peter Winebrake Winebrake & Santillo LLC 715 Twinning Road Counsel for Amicus Appellants The National Employment Law Project and Towards Justice

Adam G. Unikowsky Jenner & Block Counsel for Amicus Appellees Chamber of Commerce of the United States of America and New Jersey Civil Justice Institute

Before: AMBRO, HARDIMAN, and RESTREPO, Circuit Judges



We review the District Court's denial of a renewed motion for certification of a proposed class of drivers who performed deliveries on a full-time basis using one truck for mattress retailer Sleepy's LLC. The Court held that the class was not ascertainable. Hargrove v. Sleepy's LLC, No. 10-cv-01138, 2019 WL 8881823, at *5-7 (D.N.J. May 9, 2019) ("Hargrove II"). In addition to all the other requirements for class actions in Federal Rule of Civil Procedure 23, our Court requires that a Rule 23(b)(3) class also be "currently and readily ascertainable." Marcus v. BMW of N. Am.

LLC, 687 F.3d 583, 593 (3d Cir. 2012).[1] Plaintiffs must show that "(1) the class is defined with reference to objective criteria; and (2) there is a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition." Byrd v. Aaron's Inc., 784 F.3d 154, 163 (3d Cir. 2015) (internal quotation marks omitted).

We reverse the District Court's order. First, the Court should not have treated the renewed motion for class certification as a motion for reconsideration. "An order that grants or denies class certification may be altered or amended before final judgment." Fed.R.Civ.P. 23(c)(1)(C). Courts cannot graft onto that provision the heightened motion-for-reconsideration standard requiring that, in addition to satisfying the typical Rule 23 criteria, plaintiffs show there was a change in controlling law, new evidence, or a clear error. See Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). District courts should treat renewed motions for class certification as they would initial motions under Rule 23. Cf. In re Initial Pub. Offering Sec. Litig., 483 F.3d 70, 73 (2d Cir. 2007).

Second, the District Court misapplied our ascertainability case law. It was too exacting and essentially demanded that Appellants identify the class members at the certification stage. We have held that a plaintiff need not "be able to identify all class members at class certification- instead, a plaintiff need only show that 'class members can be identified.'" Byrd, 784 F.3d at 163 (emphasis omitted) (quoting Carrera v. Bayer Corp., 727 F.3d 300, 308 n.2 (3d Cir. 2013)). Appellants have met that requirement. They submitted thousands of pages of contracts, driver rosters, security gate logs, and pay statements, as well as testimony from a dozen class members stating they were required to work exclusively for Sleepy's full-time. "Affidavits, in combination with records or other reliable and administratively feasible means, can meet the ascertainability standard." City Select Auto Sales Inc. v. BMW of N. Am. Inc., 867 F.3d 434, 441 (3d Cir. 2017).

The Court focused on gaps in the records kept and produced by Sleepy's. But where an employer's lack of records makes it more difficult to ascertain members of an otherwise objectively verifiable class, the employees who make up that class should not bear the cost of the employer's faulty record keeping. To hold otherwise is in tension with the Supreme Court's decisions in Anderson v. Mt. Clemens Pottery Co., and Tyson Foods, Inc. v. Bouaphakeo, which held that employees bringing wage claims can meet their burdens of proof by "produc[ing] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference." Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036, 1040 (2016) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)). Such inferences are necessary "to fill an evidentiary gap created by the employer's failure to keep adequate records." Id. at 1047. We extend Tyson Foods and Mt. Clemens to the ascertainability determination at the class-certification stage and hold that where an employer has failed to keep records it was required to keep by law, employees can prove ascertainability by producing "sufficient evidence" to define their proposed class as "a matter of just and reasonable inference." Tyson Foods, 136 S.Ct. at 1046-47 (quoting Mt. Clemens, 328 U.S. at 687).




Factual Background


Sleepy's Delivery Services and the Proposed Class

Sleepy's was a New York-based mattress retailer.[2]Deliveries were "an integral part of its business," J.A. 78, and so it created a comprehensive delivery process to meet its customer needs. Sleepy's operated a large warehouse in Robbinsville, New Jersey, that it used to deliver mattresses. It ran 50 to 60 trucks daily, and as many as 85 to 90 each day during peak season.

Appellants (the three named plaintiffs in this proposed class action) are individuals who performed mattress deliveries for Sleepy's. To work for Sleepy's, they had to sign a standardized Independent Driver Agreement ("IDA"). Each IDA "required that the deliverers could not perform any other business while on duty with Sleepy's." J.A. 76. It states that drivers are required to "agree that while performing deliveries for Sleepy's [they] will not carry merchandise for any other business until [they] have finished the delivery manifest given to [them] by Sleepy's." J.A. 1030. However, the IDAs also state that the relationship was entered on a "non-exclusive basis" and that on any day Sleepy's did not have to request, and no carrier had to provide, delivery services for it. Id. Sleepy's enforced these provisions; in at least one instance, it penalized a driver because he made a delivery for another business while he was delivering Sleepy's product.

Some drivers in the proposed class signed IDAs on their own behalf and others signed on behalf of their corporate entity or "carrier." Appellants testified that individual drivers were required to form business entities as a condition of their employment with Sleepy's. This was true even if the business entity consisted of one driver and one truck. Appellants testified that, although there were some drivers who owned or operated two or three trucks at a time, most proposed class members operated one truck for significant stretches of time. Several drivers who operated more than one truck testified that they drove one of their trucks full time, and a relative or an associate drove the other.

Sleepy's emphasizes that the IDA did not obligate it to pay wages to a carrier's individual owners or workers. It paid each carrier for all the deliveries the carrier performed as a whole.3 Sleepy's also points out that, where carriers were not one-person limited liability companies ("LLCs"), their owners did not necessarily drive the truck, and that there were signers to IDAs who did not provide delivery services to Sleepy's on a full-time basis.

Appellants brought an employee misclassification suit and sought certification as a class of Sleepy's delivery drivers. They alleged that Sleepy's misclassified them as independent contractors; because they are actually employees of Sleepy's, it violated the New Jersey Wage Payment Law, N.J. Stat. Ann. § 34:11-4.1 et seq., by making deductions from their pay for, among other things, damage claims, uniforms, customer claims, and other fines. Also, Sleepy's allegedly violated the New Jersey Wage and Hour Law, N.J. Stat. Ann. § 34:11-56a et seq., by failing to pay Appellants overtime when they worked more than 40 hours in a week.


Sleepy's Records

Sleepy's maintained driver rosters that listed an identification code for each driver, how many trucks that driver was authorized to drive for it, and whom it authorized to drive each truck. The driver identification codes were used by Sleepy's computer software system to design daily delivery routes and assign those routes to a specific truck, including the approved driver for that truck.

Sleepy's also produced load sheets and manifests for each truck that listed the products to be delivered and listed the driver of that truck. Drivers had to provide their cell phone numbers so that they could be called during delivery. Their numbers appeared on the manifests. Sleepy's assigned each driver a two or three letter code (e.g., "5HC" for Henderson Clarke, or "5STT" for Sam Hargrove). J.A. 1123-24. If a driver operated more than one truck, Sleepy's assigned an additional number after the letter code. Typical was Plaintiff Marco Eusebio, whose driver code was "5ETC." J.A. 1123. At times he operated three trucks for Sleepy's, and his secondary trucks were assigned the codes "5ETC2" and "5ETC3." Id. The driver roster can thus be used to link each truck to a particular driver.

Sleepy's also generated in digital form "Outside Carrier Expense Detail" reports for each driver. These display the driver's identifier (which is identical to the driver...

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