Coleman v. Estes Express Lines, Inc.

• Decision Date: 19 July 2010
• Docket Number: Case No.: CV 10-2242 ABC (AJWx)
• Citation: 730 F.Supp.2d 1141
• Parties: Bradford COLEMAN, individually, and on behalf of other members of the general public similarly situated, and as an aggrieved employee pursuant to the Private Attorneys General Act ("PAGA"), Plaintiff, v. ESTES EXPRESS LINES, INC., a Virginia Corporation, Estes West, a business entity form unknown, G.I. Trucking Company, and Does 2 through 10, inclusive, Defendants.
• Court: U.S. District Court — Central District of California

730 F.Supp.2d 1141

Bradford COLEMAN, individually, and on behalf of other members of the general public similarly situated, and as an aggrieved employee pursuant to the Private Attorneys General Act ("PAGA"), Plaintiff,

v.ESTES EXPRESS LINES, INC., a Virginia Corporation, Estes West, a business entity form unknown, G.I. Trucking Company, and Does 2 through 10, inclusive, Defendants.

Case No.: CV 10-2242 ABC (AJWx).

United States District Court,

C.D. California.

July 19, 2010.

Mark P. Estrella, Miriam L. Schimmel, Robert E. Byrnes, Sue Jin Kim, Initiative Legal Group APC, Payam Shahian, Strategic Legal Practices APC, Los Angeles, CA, for Plaintiff.

David L. Terry, David L. Woodard, Poyner Spruill LLP, Charlotte, NC, Sarah N. Drechsler, Timothy M. Freudenberger, Carlton Disante & Freudenberger LLP, Irvine, CA, for Defendants.

ORDER RE: PLAINTIFFS' MOTION FOR ORDER REMANDING MATTER TO STATE COURT

AUDREY B. COLLINS, District Judge.

Pending before the Court is Plaintiff Bradford Coleman's Motion for Order Remanding Matter to State Court, filed on April 23, 2010. Defendants Estes Express Lines, Inc. ("Estes Express"), and Estes West d/b/a G.I. Trucking Co. (collectively "Defendants"), opposed on May 24, 2010,and Plaintiff replied on June 1, 2010. The Court ordered the parties to submit supplemental briefs, which they filed on July 2, 2010, and July 12, 2010. The Court heard oral arguments on July 19, 2010. After considering the case file, extensive briefing, and arguments in this matter, the Court GRANTS Plaintiff's motion and REMANDS this case to Los Angeles Superior Court where it was originally filed.

BACKGROUND ¹

Plaintiff was employed by Estes Express and Estes West (dba G.I. Trucking) as a "Pickup & Delivery Driver" (or "P & D" Driver) from approximately October 2004 through September 10, 2009. (First Amended Compl. ("FAC") ¶ 22.) Plaintiff filed his First Amended Complaint in Los Angeles Superior Court on February 25, 2010, styled as a class action. Plaintiff's two proposed classes are an "unpaid wage" subclass comprised of "[a]ll non-exempt or hourly paid employees who worked for Defendants in California within four years prior to the filing" of the complaint, and a "non-compliant wage statement" subclass comprised of "[a]ll non-exempt or hourly paid employees of Defendants who worked in California and received a wage statement within one year prior to the filing" of the complaint. (FAC ¶ 17.)

In his original complaint, Plaintiff had named only Estes Express as a defendant, but on March 10, 2010, he filed a notice with the Superior Court that he was replacing one of his Doe Defendants in the First Amended Complaint with Estes West. In the amended complaint, Plaintiff alleged that both Estes Express and Estes West violated myriad California wage and hour statutes, including: California Labor Code sections 510 and 1198 (unpaid overtime); Labor Code sections 226.7 and 512(a) (unpaid meal period premiums); Labor Code section 226.7 (unpaid rest break premiums); Labor Code sections 201 and 202 (untimely payment of wages upon termination); Labor Code section 204 (untimely payment of wages during employment); Labor Code § 226(a) (non-compliant wage statements); California Business and Professions Code section 17200; and the Private Attorneys General Act (California Labor Code sections 2698 et seq.). Specifically, Plaintiff alleged:

• First claim: "Plaintiff and class members consistently worked in excess of eight (8) hours in a day, in excess of twelve (12) hours in a day, and/or in excess of forty (40) hours in a week" and, that during this period, "Defendants willfully failed to pay all overtime wages owed to Plaintiff and class members." (FAC ¶¶ 43-44.) The remedies requested are "unpaid overtime compensation, as well as interest, costs and attorneys' fees" and civil penalties of $100 for each employee per pay period for the first violation and $200 for each employee per payperiod for each violation thereafter. ( Id. ¶¶ 46-47.)

• Second claim: "Defendants willfully required Plaintiff and class members to work during meal periods and failed to compensate Plaintiff and class members for work performed during meal periods." ( Id. ¶ 57.) The remedies requested are "one additional hour of pay at the employees' hourly rate of compensation for each work day that the meal period was not provided," civil penalties, costs and attorney's fees. ( Id. ¶¶ 60-61.)

• Third claim: "Defendants willfully required Plaintiff and class members to work during rest periods and failed to compensate [them] for work performed during rest periods." ( Id. ¶ 67.) The remedies sought are "one additional hour of pay at the employee's regular hourly rate of compensation for each work day that the rest period was not provided," civil penalties, and costs and attorney's fees. ( Id. 70-71.)

• Fourth claim: "Defendants willfully failed to pay Plaintiff and class members who are no longer employed by Defendants their wages, earned and unpaid, either at the time of discharge, or within seventy-two (72) hours of their leaving Defendant's employ." ( Id. ¶ 74.) The remedies sought are "the statutory penalty wages for each day they were not paid, up to a thirty (30) day maximum," civil penalties, and costs and attorney's fees. ( Id. ¶¶ 76-78.)

• Fifth claim: "Defendants willfully failed to pay Plaintiff and class members all wages due to them, within any time period permissible by California Labor Code section 204." ( Id. ¶ 83.) The remedies sought are those "available for violations of California Labor Code section 204," civil penalties, and costs and attorney's fees. ( Id. ¶¶ 84-85.)

• Sixth claim: "Defendants have intentionally and willfully failed to provide employees with complete and accurate wage statements." ( Id. ¶ 88.) The remedies sought are "the greater of ... actual damages caused by Defendants' failure to comply ... or an aggregate penalty not exceeding four thousand dollars per employee," injunctive relief to ensure compliance with wage reporting laws, civil penalties, and costs and attorney's fees. ( Id. ¶ ¶ 91-93.)

• Seventh claim: Defendants' alleged acts violated California Business & Professions Code sections 17200. ( Id. ¶ 97.) The remedy sought is "restitution of the wages withheld and retained by Defendants during a period that commences four years prior to the filing of [the] complaint." ( Id. ¶ 99.)

The complaint does not limit the number of violations and provides only that the time frame to assess violations is the four-year period for the unpaid wages sub-class and one-year period for the non-compliant wage statements sub-class provided in the class definitions. Nor did Plaintiff limit the amount of damages he is seeking for the class, other than to allege that "[t]he amount in controversy for each class representative, including claims for compensatory damages and pro rata share of attorney's fees, is less than $75,000." ( Id. ¶ 1.)

According to Defendants, Estes Express acquired G.I. Trucking in 2005. (2d Gerczak Decl. ¶ 3.) Before that time, G.I. Trucking was registered as a corporation with the state of California. (Plaintiff's 1st Request for Judicial Notice, Ex. A.). After the acquisition, G.I. Trucking became Estes West, dba G.I. Trucking, and it assumed the identity of a "wholly-owned subsidiary" of Estes Express, although it operated as an "internal regional division" ofEstes Express, just like the other regional divisions of the Southeast, Southwest, Northeast, and Upper Midwest. (Opp'n 17.)

Since the acquisition, Estes Express has owned 100% of Estes West. (2d Gerczak Decl. ¶ 3.) As Estes Express's Director of Human Resources explains, Estes Express exercises significant control over the employment-related policies and practices of Estes West. For example, Estes Express directs "every aspect of the payroll function in California, including establishing pay periods, pay days and pay rates for all employees in California and elsewhere in the Estes West region." ( Id.) Estes Express decides whether Estes West employees are exempt or non-exempt, based on job functions determined by Estes Express. ( Id.) Estes Express also sets policies and determines and controls the procedures for Estes West employees to take meal and rest breaks. ( Id.) It determines the content and form of paychecks and the timing of final paychecks upon termination. ( Id.)

Since the acquisition, Estes Express laid off all but one former G.I. Trucking employee and there is currently one payroll employee in California, who reports directly to Estes Express management and has no authority to determine pay practices or to vary from policy and practices set by Estes Express. ( Id.) Instead, the Payroll Manager and the Human Resources Department for Estes Express in Virginia have the exclusive responsibility for enforcing payroll policy and ensuring payroll obligations are met for Estes West employees. ( Id.) Paychecks for Estes West employees are drafted by Estes Express. ( Id.) In the end, Estes West "has no ability to independently set policy, make payroll decisions, to vary from decisions and policy set by Estes Express or even to cut payroll checks for California employees." ( Id.)

Moreover, Estes West's employee policies are controlled by Estes Express, such as the content of Estes West's employee handbook and selection of benefits and the administration of benefit plans. ( Id. ¶ 4.) Estes Express decides all benefit plan amendments, elimination of benefits, and the nature and scope of benefits, such as vacation, sick leave, and holiday pay. ( Id.) The Estes West job descriptions are set by Estes Express, and when layoffs at Estes West were necessary, Estes Express decided all selection criteria, selected the positions to be eliminated, and set all severance benefits. ( Id.) Although Estes West has no independent human resources or benefits department, it has a "regional human resources manager" who reports to Estes Express's Director of Human Resources. ( Id...