Davidson v. O'Reilly Auto Enters., LLC

• Decision Date: 03 August 2020
• Docket Number: No. 18-56188,18-56188
• Citation: 968 F.3d 955
• Parties: Kia DAVIDSON, individually, and on behalf of other members of the general public similarly situated, Plaintiff-Appellant, v. O'REILLY AUTO ENTERPRISES, LLC, a Delaware corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

968 F.3d 955

Kia DAVIDSON, individually, and on behalf of other members of the general public similarly situated, Plaintiff-Appellant,

v.O'REILLY AUTO ENTERPRISES, LLC, a Delaware corporation, Defendant-Appellee.

No. 18-56188

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 6, 2020 Pasadena, California

Filed August 3, 2020

IKUTA, Circuit Judge:

In this appeal from the stipulated dismissal of a putative class action, Kia Davidson claims that the district court abused its discretion in declining to extend a deadline for filing a motion for class certification. She also claims that the district court erred on the merits in declining to certify a class of employees based on her employer's written rest-break policy, which allegedly did not comply with California law. We conclude that the district court did not abuse its discretion in setting and enforcing a deadline. Nor did the court abuse its discretion in denying Davidson's motion for class certification. Because Davidson failed to offer any evidence that the written policy was applied to employees, she was unable to establish that there were questions of law or fact common to the class.

I

O'Reilly Auto Enterprises, LLC is an auto-parts retailer that operates some 520 stores in California. Between June 2016 and July 2017, O'Reilly employed Kia Davidson as a delivery specialist at one of its stores in San Bernardino, California. Toward the end of her time there, Davidson filed an action against O'Reilly on her own behalf and on behalf of a class of persons "who worked for [O'Reilly] as a non-exempt, hourly-paid employee in California within four years prior to the filing of this complaint until the date of trial."

Davidson alleged three sets of claims relevant to this appeal. First, Davidson alleged that O'Reilly violated California's rest-break requirements. A California regulation, Wage Order No. 7, provides that "[e]very employer shall authorize and permit all employees to take rest periods" and that "[t]he authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof."¹ Cal. Code Regs. tit. 8, § 11070(12)(A). Employees that work between six and eight hours are entitled to two ten-minute rest breaks, one for the first four hours and a second for the remainder. See id.² Employees that do not receive these rest breaks are entitled to increased pay in the form of a rest-break premium: "one (1) hour of pay at the employee's regular rate of compensation for each work day that the rest period is not provided." Cal. Code Regs. tit. 8, § 11070(12)(B). According to Davidson, she and other employees did not receive rest breaks and O'Reilly did not pay (or underpaid) rest-break premiums.

Second, Davidson alleged that O'Reilly failed to provide employees with wage statements that identified "the name and address of the legal entity that is the employer," as required by section 226(a)(8) of the California Labor Code. According to Davidson, O'Reilly’s wage statements were noncompliant because they listed O'Reilly’s address as "PO BOX 1156, SPRINGFIELD, MO 65801," instead of providing the street address of O'Reilly’s corporate headquarters, "233 South Patterson Avenue, Springfield, MO 65802-2298." Third, relying on these first two claims, Davidson sought civil penalties under California's Private Attorney General Act (PAGA). See Cal. Lab. Code § 2698, et seq .

Davidson served O'Reilly with a first amended complaint on June 23, 2017. At the time, the district court's local rules provided that "[w]ithin 90 days after service of a pleading purporting to commence a class action ... the proponent of [a] class shall file a motion for certification that the action is maintainable as a class action, unless otherwise ordered by the Court." C.D. Cal. Local Rule 23-3 (Dec. 1, 2013). The district court let stand the local rule's filing deadline, and so Davidson had 90 days after service—until September 21—to move for class certification.

On August 2, the parties filed a stipulation and proposed order seeking to extend the September 21 deadline by 67 days to November 28. The parties gave several reasons for requesting the extension. First, Davidson intended to move to transfer venue, and the earliest date on which she could notice a hearing was September 18, just three days before the September 21 deadline. Next, Davidson claimed she needed more time to gather evidence to support her class-certification motion. The stipulation explained that Davidson had served interrogatories, document requests, and deposition notices on O'Reilly, seeking "[t]he contact information of putative class members," the "[p]utative class member time punch and wage records," and information related to O'Reilly’s "labor policies." Davidson claimed this discovery was relevant for class certification because it would: (1) be used to interview putative class members and obtain declarations, (2) allow her to analyze time and wage records for recorded instances of potential Labor Code violations, (3) allow her to inspect O'Reilly’s policies, which will show how hours of work, non-work, and compensation are regulated, and (4) allow her to review communications showing how O'Reilly implemented its policies. According to Davidson, "the putative class would be prejudiced without this discovery at class certification" because "it bears upon the commonality and predominance of Labor Code issues among class members as a whole." The stipulation also listed procedural steps, such as providing putative class members with notice and opportunity to opt-out from the disclosure of their contact information, which would take place before discovery. The district court summarily denied the stipulation to extend the September 21 deadline.

Over the next few months, the parties engaged in discovery.³ Davidson requested multiple depositions from O'Reilly pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, which provides that entities, including corporations, must designate a knowledgeable person who can testify on the subject matter identified in a deposition notice.⁴ Davidson's Rule 30(b)(6) notices sought information on O'Reilly’s "rest period policies, policy documents, procedures, or practices." Davidson also propounded document requests and interrogatories, including a request that O'Reilly provide "the full name, identification number, position, dates of employment, last known address, and last known telephone number" for "each and every" putative class member.

In response to these requests, O'Reilly provided answers to Davidson's interrogatories, produced responsive documents, and agreed to produce persons knowledgeable about the subject matter identified in Davidson's Rule 30(b)(6) notices. O'Reilly also agreed to provide a random sampling of contact information for putative class members, after providing them with notice and an opportunity to object. Such notice is required in state class actions to protect employees’ privacy rights and is commonly referred to as a Belaire-West notice. See Belaire-West Landscape Inc. v. Superior Court , 149 Cal. App. 4th 554, 562, 57 Cal.Rptr.3d 197 (2007).

As discovery progressed, the parties again moved to extend the September 21 deadline, this time by 14 days, to accommodate their schedule for Rule 30(b)(6) depositions. The district court denied the motion, though in response to a subsequent motion, it gave Davidson an opportunity to file a supplemental brief that could incorporate the deposition testimony and any other newly discovered evidence.

On the September 21 deadline, Davidson filed her motion for class certification along with a class-action trial plan. The motion and trial plan explained Davidson's theory regarding the rest-break claim. According to the motion, each of O'Reilly’s policy documents required ten-minute rest breaks for every four hours of work but did not include the language "or major fraction thereof." Davidson argued that this omission created classwide issues, such as whether O'Reilly violated California law by failing to "authorize or permit" required rest breaks and whether O'Reilly’s "uniform written rest break policy violate[d] California law by failing to give full effect to Wage Order No. 7." The evidence presented at trial "would include the text of every iteration of O'Reilly’s written rest period policy, as well as O'Reilly’s corroborating party admissions expected in the deposition." Because the rest-break policy applied to all class members, "the common questions engendered by that policy [could] be answered by common proof." The motion was supported by Davidson's declaration stating that she "recall[ed] sometimes working a shift between 6 and 8 hours in length" but was "not aware of any rest period premiums being paid to [her]."

The motion for class certification also addressed outstanding discovery matters. Davidson stated that O'Reilly had not yet produced "all corresponding policy documents" and had not "yet been able to produce a Rule 30(b)(6) designated witness to testify in this matter as to [O'Reilly’s] rest period policies, policy documents, procedures or practices." But Davidson "expect[ed]" that O'Reilly would "provide further discovery regarding rest periods in time for supplemental briefing." Aside from this, Davidson did not state that there was a need for any additional discovery.

Along with her class-certification motion, Davidson filed a stipulated motion and proposed order that would allow her to file a supplemental brief on October 20. The motion explained that Davidson had taken two depositions just two days before she filed the class-certification motion and that one more deposition was "anticipated to occur shortly." Thus, Davidson sought an opportunity to support her motion for class certification with any newly discovered evidence. The district court granted the stipulated motion and issued an...