Hughes v. UPS Supply Chain Sols.

• Decision Date: 03 September 2021
• Docket Number: 2019-CA-1457-MR
• Parties: MARION HUGHES; JAMES A.CRUME; PHILLIP L. WESTERN; RAYMOND S. BATTS; AND TERRI A. ROGERS APPELLANTS v. UPS SUPPLY CHAIN SOLUTIONS, INC.; UNITED PARCEL SERVICE, INC.; AND DEFENDANTS JOHN DOE 1-10 APPELLEES
• Court: Kentucky Court of Appeals

MARION HUGHES; JAMES A.CRUME; PHILLIP L. WESTERN; RAYMOND S. BATTS; AND TERRI A. ROGERS APPELLANTS v. UPS SUPPLY CHAIN SOLUTIONS, INC.; UNITED PARCEL SERVICE, INC.; AND DEFENDANTS JOHN DOE 1-10 APPELLEES

No. 2019-CA-1457-MR

Court of Appeals of Kentucky

September 3, 2021

NOT TO BE PUBLISHED

APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE MITCH PERRY, JUDGE ACTION NO. 07-CI-009996

BRIEFS FOR APPELLANTS: Andrew J. Horne Louisville, Kentucky Michael D. Grabhorn Andrew M. Grabhorn Louisville, Kentucky

BRIEF FOR APPELLEES UPS SUPPLY CHAIN SOLUTIONS, INC., AND UNITED PARCEL SERVICE, INC.: C. Laurence Woods III Kyle D. Johnson Louisville, Kentucky Joseph R. Palmore, pro hac vice Samuel B. Goldstein, pro hac vice Washington, D.C.

BEFORE: JONES, LAMBERT, AND L. THOMPSON, JUDGES.

OPINION

LAMBERT, JUDGE

Marion Hughes, Raymond S. Batts, James A. Crume, Terri A. Rogers and Phillip L. Western, As Lead Plaintiffs for the Class (hereinafter "the Class") have appealed from the April 26, 2019, order of the Jefferson Circuit Court granting the motion by UPS Supply Chain Solutions, Inc., and UPS, Inc. (hereinafter "UPS"), for a judgment on the pleadings and dismissing the Unpaid Wages class claim. We affirm.

This claim has been before the Court on three earlier appeals albeit related to class certification. For the factual and procedural history underpinning the present appeal, we shall rely upon the applicable portions of our prior opinion in the third appeal, UPS Supply Chain Sols., Inc. v. Hughes, No. 2014-CA-001496-ME, 2018 WL 3602262 (Ky. App. Jul. 27, 2018):

Kentucky's Wages and Hours Act, Kentucky Revised Statutes (KRS) Chapter 337, allows a plaintiff who is not compensated by his or her employer for performing tasks which are compensable to recover payment for the time spent performing such tasks - along with liquidated damages and attorney's fees. KRS 337.385. In 2007, the appellees filed a putative class action against UPS. In their complaint, they alleged that they and other employees of UPS were required to enter workplace facilities through mandatory security checkpoints before clocking in and to exit through the security checkpoints after clocking out each day. The appellees alleged that they were not paid wages for time spent at the security checkpoints and that UPS violated Kentucky's Wages and Hours Act by failing to compensate employees for work time. The appellees filed a motion for class certification. The proposed class was defined as consisting of all nonexempt UPS employees employed in the Commonwealth during the applicable limitations period.

By order entered July 27, 2012, the circuit court denied the purported class representatives' motion for class certification. They filed a notice of appeal.

Thereafter, the purported class representatives filed a motion to amend, seeking to certify a more limited class. The new putative class was defined as all nonexempt UPS employees who worked at the following locations: Elizabethtown, Louisville, Technical & Logistics Center, and Worldport during the applicable limitations period.

By opinion and order entered October 9, 2012, the circuit court concluded that the more limited class also failed to meet the prerequisites and conditions of the rules of procedure governing class actions. Consequently, the court declined to certify the limited class. A second notice of appeal was filed. The appeals were consolidated by an order of this Court entered on November 27, 2012.

In an unpublished opinion rendered on September 6, 2013, this Court held that the circuit court had not erred by denying class certification in its order concerning the more broadly defined class. An affidavit of a UPS Security Director indicated that employees at two UPS facilities in Kentucky were not required to pass through mandatory security checkpoints yet were included in the proposed class. Since employees at these UPS facilities had not suffered an injury common to other putative class members, we concluded that class certification was improper. We affirmed the circuit court's opinion and order with respect to that appeal.

With respect to the more limited putative class, we concluded that the circuit court had erred by concluding that two prerequisites of [Kentucky Rules of Civil Procedure (CR)] 23.01 (commonality and typicality) of class certification had not been met. From our review of the record, we concluded that the security procedures and measures implemented by UPS were common to each of the identified UPS facilities. We also concluded that the putative class members had alleged a common wrong and had allegedly suffered the same injury - unpaid work time. Consequently, we rejected the circuit court's conclusion that the putative class failed to meet the commonality prerequisite of class certification.

Furthermore, we concluded that the claims of the putative class representatives and the proposed class members were based upon a substantially similar course of conduct by UPS (mandatory security procedures at the facilities) and upon the same legal theory (violation of the Kentucky Wages and Hours Act). Consequently, we rejected the circuit court's conclusion that the more limited putative class failed to meet the typicality prerequisite for class action certification.

We vacated the circuit court's order denying class certification of the more narrowly defined class and remanded the matter for further proceedings. Upon remand, we instructed the circuit court to determine whether the limited class satisfied the remaining prerequisites for class certification pursuant to two other provisions of CR 23.01 - numerosity and adequacy of representation. We instructed the circuit court to deny class certification if it concluded that the limited class failed to satisfy either the numerosity or adequacy of representation prerequisite. However, if the circuit court determined that the limited class satisfied each additional prerequisite, we instructed it to determine whether the proposed limited class fulfilled any one of three conditions set forth in CR 23.02. If the circuit court determined that the proposed limited class satisfied any one of the three conditions provided by the civil rule, we directed it to certify the proposed class. In its order remanding, the previous panel of this Court held and instructed as follows:

[W]e hold that the circuit court erred by determining that the limited class did not fulfill the prerequisites of commonality and typicality under CR 23.01(b) and (c). As the circuit court so erred, we vacate the October 9, 2012, opinion and order and remand for the circuit court to determine whether the limited class satisfies the additional prerequisites of CR 23.01(a) and (d). These prerequisites are the numerosity prerequisite of CR 23.01(a) and the adequacy of representation prerequisite of CR 23.01(d). If the circuit court concludes that the limited class fails to satisfy either prerequisite as set forth in CR 23.01(a) or (d), the circuit court shall deny class certification. Conversely, if the circuit court determines that the limited class satisfies both prerequisites of CR 23.01(a) and (d), the circuit court shall then determine if the limited class fulfills any one of the three conditions set forth in CR 23.02. If the circuit court decides that the class fails to satisfy all three conditions of CR 23.02, the class certification shall be denied. However, if the limited class satisfies at least one of the three conditions of CR 23.02, the circuit court shall certify the limited class.

2012-CA-001353-ME, 2013 WL 4779746, at *6 (Ky. App. Sept. 6, 2013).

Upon remand, UPS filed a motion for judgment on the pleadings. UPS contended that the unpaid wages claims of the proposed class members could not be pursued through a class action because the provisions of Kentucky's Wages and Hours law did not permit such actions. In support of its position, UPS relied upon dicta included in our unpublished opinion, Toyota Motor Mfg., Kentucky, Inc v. Kelley, 2012-CA-001508-ME, 2013 WL 6046079 (Ky. App. Nov. 15, 2013). In Kelley, we observed that if we were required by the facts of the case to decide whether a class action were available for claims brought under the provisions of KRS 337.385, we would conclude that it was not. We read the text of KRS 337.385(1) as a clear expression of the intent of the General Assembly not to permit class actions by employees against employers for unpaid wages.

Following a hearing conducted on August 15, 2014, the Jefferson Circuit Court denied the motion of UPS for judgment on the pleadings. The circuit court dismissed our dicta in Kelley as nonbinding. It was not persuaded that the provisions of Kentucky's Wages and Hours Act prohibit employees from pursuing relief by way of a class action. Pursuant to our instructions, the circuit court proceeded to consider whether the proposed limited class satisfied the numerosity and adequacy of representation prerequisites for class certification.

With respect to the numerosity requirement, the circuit court observed that the proposed class numbered more than 11, 000 employees working at the identified facilities. The court determined that given this large number of potential plaintiffs, joinder was impracticable. It concluded that the proposed class plainly met the numerosity prerequisite of CR 23.01.

Next, the circuit court considered whether the adequacy of representation requirement was met. The circuit court observed that there did not appear to be a conflict between the interests of the representative parties and the interests of the prospective class. It found that counsel for the putative class was qualified and could be expected to prosecute the interests of the class vigorously. Consequently, it concluded that

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