JOINT STIPULATION AND [PROPOSED] ORDER VACATING STAY AND ORDER CERTIFYING CLASSES AND SETTING FURTHER CASE MANAGEMENT CONFERENCE
SUSAN ILLSTON, District Judge.
I. INTRODUCTION
WHEREAS, on May 13, 2014, the Parties filed and this Court signed a Joint Stipulation and Proposed Order to Stay Proceedings ("Stipulation and Order")in the instant putative class action on behalf of themselves and all others similarly situated ("Cheung Action"). A copy of that Stipulation and Order is attached as Exhibit A;
WHEREAS, that Stipulation and Order provided that, a currently pending previously filed case in Sacramento Superior Court entitled Carl Adams, III, et al. v. ActionLink, LLC, et al. (the "Adams Action"), alleging violations of the California Labor Code for failure to reimburse business expenses; failure to pay overtime; waiting time penalties; Private Attorneys General Act penalties; and violations of California's Unfair Competition Law, would also be stayed in order for the Stipulation and Order to be effective;
WHEREAS, John Glugoski of Righetti Glugoski, P.C. is counsel in the earlier-filed Adams Action;
WHEREAS, since the Court signed the Stipulation and Order in this case, the parties in the Adams Action were unable to finalize and have the Sacramento Superior Court approve a stipulation to certify the claims in that case and stay those proceedings;
WHEREAS, the Stipulation and Order in the instant case provided, as a condition subsequent for the Stay of Proceedings and Certification Order in the instant Action to take effect, that there be a Stay in place in the Adams Action. Specifically, the Stipulation and Order provides:
WHEREAS, there was no joint request to stay the Adams Action that was ever submitted or granted in the Adams Action;
WHEREAS, the parties in the Adams Action reached impasse over the class notice. Adams' counsel wanted to send out a class notice during the stay period. ActionLink counsel believed such activity to be beyond the tentatively agreed to stay and in contradiction to the purpose of the stay. The parties in the Adams Action have not been able to come to agreement and do not anticipate being able to come to agreement over that issue in the Adams Action.
WHEREAS, the parties in the Adams case reached impasse over whether the class notice would go out during the stay and the Parties have not been able to come to agreement and do not anticipate being able to come to agreement over that issue in the Adams case;
WHEREAS, in light of the failure of the occurrence of a material condition subsequent to the Stay in this case, the Parties now hereby submit this Joint Stipulation and Proposed Order to Vacate the Stay and Class Certification Order in the instant case and ask the Court to set a Case Management Conference in this matter.
II. RESULTANT STIPULATION AS TO VACATING STAY AND CLASS CERTIFICATION ORDER
NOW, THEREFORE, the Parties hereby stipulate and agree to the following:
1. That the Court vacate the stay of all proceedings in the Cheung Action; and
2. That the Court vacate the class certification rulings outlined in the Court's May 13, 2014 Joint Stipulation and Order, specifically vacating the following classes and subclasses: under California Code of Procedure Section 382 and Rule 23 of the Federal Rules of Civil Procedure:
Subclass 1 means, for purposes of this Stipulation only:
As to the PAGA claim, however, for Subclass 1, the PAGA actionable period shall be from March 22, 2012.
Subclass 2 means the following, for purposes of this Stipulation only:
As to the PAGA claim, however, for Subclass 2, the PAGA actionable period shall be from March 22, 2012.
3. For the Court to set a Case Management Conference on _______________ at which time the Parties will inform the Court whether they intend to schedule an additional mediation and/or whether they will then proceed with litigating the matter, including, but not limited to setting dates for motions for class certification and setting further deadlines for the trial of the substantive claims in this case, if necessary.
ORDER
GOOD CAUSE APPEARING based on the Parties' stipulation and the failure of a condition subsequent in the parallel Adams action in state court, the Court hereby issues the following Orders:
1. The Court hereby vacates, in its entirety, the May 13, 2014 Joint Stipulation and Order; and specifically
2. The Court vacates the stay of all proceedings in the Cheung Action; and
3. The Court vacates all the class certification rulings outlined in the Court's May 13, 2014 Joint Stipulation and Order, specifically vacating the classes and subclasses noted therein; and
4. The Court hereby sets a Case Management Conference on 12/12/14 @ 3 p.m. at which time the Parties will inform the Court whether they intend to schedule an additional mediation and/or whether they will then proceed with litigating the matter, including, but not limited to setting dates for motions for class certification and setting further deadlines for the trial of the substantive claims in this case, if necessary.
IT IS SO ORDERED.
EXHIBIT A
I. INTRODUCTION
WHEREAS, Plaintiffs filed this action in the Superior Court of California for the County of Alameda on March 22, 2013, alleging violations of the California Labor Code for failure to reimburse business expenses; failure to pay all accrued vacation days; waiting time penalties; Private Attorneys General Act penalties; and violations of California's Unfair Competition Law. Thereafter, Defendant removed this action to this Court under the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d);
WHEREAS, Plaintiffs filed the instant putative class action on behalf of themselves and all others similarly situated ("Cheung Action");
WHEREAS, a previously filed case in Sacramento Superior Court is also currently pending entitled Carl Adams, III, et al. v. ActionLink, LLC, et al. (the "Adams Action"), alleging violations of the California Labor Code for failure to reimburse business expenses; failure to pay overtime; waiting time penalties; Private Attorneys General Act penalties; and violations of California's Unfair Competition Law;
WHEREAS, the claims in the Cheung Action overlap with the claims in the Adams Action;
WHEREAS, in the instant action, Plaintiffs have propounded discovery that is currently in abeyance, and
WHEREAS, the Court has set an October 31, 2014 date for Plaintiffs to file their Motion for Class Certification.
II. CONCURRENT PROCEEDINGS IMPACTING THIS LITIGATION/DEFENDANT'S FINANCIAL CONDITION
WHEREAS, Defendant is involved in a Fair Labor Standards Act collective action in the United States District Court for the Eastern District of Arkansas, entitled Beauford, et al v. ActionLink, LLC. On September 26, 2013, judgment was entered in favor of the Arkansas plaintiffs in the amount of $359,455.77, with interest of 0.11% per annum from that date accruing; and
WHEREAS, on January 15, 2014, the same Arkansas court entered judgment in favor of the Arkansas plaintiffs for $196,848.72 plus pre-judgment interest to accrue at the rate of 0.13% per annum representing an award of $193,475.50 in attorneys' fees and $3,375.22 in costs; and
WHEREAS, in addition to awarding those amounts, the Arkansas court specifically found that the Defendant may be unable to satisfy the judgments due to its financial condition. The Court noted:
See Beauford, et al v. ActionLink, LLC, No. 4:2012-cv-00139, 2014 U.S. Dist. LEXIS 5039, at *8 (E.D. Ark. Jan. 15, 2014).
WHEREAS, due to Defendant's current financial situation, it can neither defend the Cheung and Adams Actions nor offer monetary relief to resolves the actions that is acceptable to Plaintiffs; and further, if Plaintiffs were successful in these actions, Defendant contends that it could not pay any judgments; and
III. MEDIATION EFFORTS
WHEREAS, in accordance with this Court's January 24, 2014 Minute Order, on March 18, 2014, the Parties engaged in private mediation before the Honorable William Cahill. Counsel for both the Cheung Action and the Adams Action and for Defendant were present; and
WHEREAS, as a result of Defendant's current financial situation, on March 18, 2014, the Parties determined partially to resolve some of the disputed issues in the Cheung and Adams Actions by agreeing to, and to seek court approval of, the following in both the Cheung and Adams Actions, understanding that these agreements are in place only if the Court grants the Parties' joint request to stay the Cheung action and the Superior Court also grants the Parties' joint request to stay the Adams action:
The Parties believe that the federal court proceedings will not be prejudiced by this postponement, due, in large part, to the fact that Defendant is agreeing to stipulate to class certification, thus making it unnecessary for the Court to hear and determine the class certification motion, currently set for an October 31, 2014 hearing, in exchange for a temporary stay of litigation. Defendant's stipulation to class certification also obviates the need for the Parties and the Court to engage in protracted class discovery proceedings. Defendant further agrees not to attempt to settle individually with any members of the putative class during the pendency of the stay unless any members of the putative class file or threaten to file a claim or action against Defendant with any administrative agency or with any court. Defendants agree to notify class counsel if such a circumstance arises. Further, the Court has not yet set a trial date.
Defendant believes that this twelve month time period will give it the necessary time to focus on the business operations such that it may change its financial situation in a positive way and thus be able to litigate or settle this matter after the end of the stay period.
Defendant further believes that such financial turn-around can only be accomplished by a stay of both the Cheung Action and the Adams Action and will allow, at a later date, for Defendant to litigate, perhaps pay and/or mediate a settlement with Plaintiffs. Therefore, Defendant believes a stay is also in the best interests of Plaintiffs and the class members. Plaintiffs believe that the stay is in the interests of the class because it will facilitate the efficient adjudication of the claims on a class basis. In the normal course of litigation, the pursuit of class certification would be timeconsuming and give rise to transaction costs, with no certainty that the class would be certified, and this process, with a potential appeal of any order granting class certification following a court ruling, would potentially take up to a year or longer in any event. Once the stay is lifted, the parties to Cheung Action will work cooperatively along with counsel in the Adams Action to make sure that both the class notice and litigation, if necessary, of the claims will proceed in a way that avoids duplication and promotes judicial efficiency.
IV. RESULTANT STIPULATION AS TO STAY AND CLASS CERTIFICATIONS
THEREFORE, the Parties hereby stipulate and agree to the following:
1. To stay all proceedings in the Cheung Action through and including March 18, 2015; and
2. That the condition for class certification under California Code of Procedure Section 382 and Rule 23 of the Federal Rules of Civil Procedure have been met as follows:
Constitution of the following subclasses:
Subclass 1 means, for purposes of this Stipulation only:
As to the PAGA claim, however, for Subclass 1, the PAGA actionable period shall be from March 22, 2012, through the date the Court enters this stipulation to stay this action and to certify the proposed subclasses.
Subclass 2 means the following, for purposes of this Stipulation only:
As to the PAGA claim, however, for Subclass 2, the PAGA actionable period shall be from March 22, 2012, through the date the Court enters this stipulation to stay this action and to certify the proposed subclasses.
This Stipulation shall not constitute an admission by Defendant of any liability of Plaintiffs' claims or of the class members' claims in the action. Defendant agrees for purposes of this Stipulation and in exchange for the stay of the litigation and the parallel Adams Action, that Plaintiffs have met the requirements for certification of Subclass 1 and Subclass 2 as to the causes of action listed above pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure; and
3. There is a well-defined community of interest in the litigation, the proposed Subclasses are easily ascertainable, and Plaintiffs are adequate Class Representatives:
a. Numerosity: The potential members of Subclass 1 and Subclass 2, as defined, are so numerous and diversely locatedthroughout California, that joinder of all the members of Subclass 1 and Subclass 2 are impracticable and Defendant believes that it has during the Class Period employed more than 1,000 members of Subclass 1 and/or Subclass 2 in California subject to Defendant's business expense reimbursement policies and vacation pay policies. The members of Subclass 1 and Subclass 2 are dispersed throughout California. Joinder of all members of the proposed Subclasses is therefore not practicable; and further
b. Commonality: There are questions of law and fact common to the Plaintiffs and the Subclasses that predominate over any questions affecting only individual members of the Subclasses; including:
i. Whether Plaintiffs and the members of Subclass 1 incurred unreimbursed business expenses in the discharge of their duties as employees, including but not limited to expenses for operation of personal motor vehicles such as mileage, insurance, gasoline and oil, parking costs, tolls, and depreciation and maintenance of their vehicles; cellular phones and monthly cellular phone bills; and high speed internet bills, in violation of section 2802 of the California Labor Code;
ii. Whether Defendant's uniform policy of excluding the first 30 miles driven from and to the home offices of by the members of Subclass 1 in their personal vehicles on business-related trips violates section 2802 of the Labor Code;
iii. Whether Defendant's uniform policy of paying only $0.25 (or lower rate) per mile instead of the IRS mileage reimbursement rate for mileage incurred by the members of Subclass 1 in their personal vehicles on business-related trips violates section 2802 of the Labor Code;
iv. Whether Defendant's failure to fully reimburse business expenses incurred by Plaintiffs and members of Subclass 1 in the discharge of their duties violates section 17200 of California's Business and Professions Code;
v. Whether Defendant intended, suffered and/or permitted, and/or was aware and/or should have been known that Plaintiff and the members of Subclass 1 incurred such unreimbursed business expenses in the discharge of their duties as employees;
vi. Whether Defendant failed and/or refused to fully reimburse business expenses incurred by Plaintiff and the members of Subclass 1 in the discharge of their duties;
vii. Whether Defendant's failure to reimburse business expenses incurred by Plaintiff and the members of Subclass 1, fully or at all, was the result of, and/or pursuant to, a business policy or regular practice of Defendant;
viii. Whether Defendant's vacation pay and Paid Time Off forfeiture policy violated section 227.3 of the California Labor Code;
ix. Whether Defendant's policy to not pay unused but accrued vacation pay and Paid Time Off on termination violated section 227.3 of the California Labor Code;
x. Whether Defendant's failure to pay all accrued, yet unused, vacation pay and all wages due upon termination of employment of the members of Subclass 2 within the prescribed time period violated sections 201-203 of the California Labor Code;
xi. Whether Plaintiffs are entitled to restitution under section 17200 of he California Business and Professions Code; and
xii. The proper formula(s) for calculating damages, interest, and restitution owed to Plaintiff and the members of Subclass 1 and Subclass 2; and further
c. Typicality: Plaintiffs' claims are typical of the claims of both Subclasses. Certification of this case as a class action will allow those similarly situated persons to litigate their typical claims in the manner that is most efficient and economical for the parties and the judicial system; and further,
d. Adequacy of Representation: Plaintiffs are members of Subclass 1 and Subclass 2, and will fairly and adequately represent and protect the interests of the members of both of the subclasses. Plaintiffs' interests do not conflict with those of the members of Subclass I or Subclass 2. Counsel who represents Plaintiffs (i.e., John Glugoski of Righetti Glugoski, P.C.
d. Superiority of Class Action: Class action is superior to other available means for the fair and efficient adjudication of this controversy. Individual joinder of all members of Subclass 1 and Subclass 2 is not practicable, and questions of law and fact common to the members of Subclass 1 and Subclass 2 predominate over any questions affecting only individual members of Subclass 1 and Subclass 2. The Parties also stipulate that the common issues identified above predominate over any individual issues for purposes of Rule 23(b)(3).
4. This stipulation does not imply that each and every individual in the stipulated subclasses has a right to any relief. An individual's right and terms of recovery, if any, including the named Plaintiffs, will be determined at a later date through trial or settlement. The sole purpose of this Stipulation and Order is to stipulate to class certification of the referenced Subclasses and Causes of Action in exchange for a one year stay of these proceedings and the related Adams Action; and
5. The proposed stay, if approved by the Court along with the stipulation to class certification, will expire by its own terms on March 18, 2015, at which time the Parties will inform the Court whether they intend to schedule an additional mediation and/or whether they will then proceed with the process of dissemination of the class notice and setting further deadlines for the trial of the substantive claims in this case following the notice dissemination process. The lifting of the stay in March 18, 2015, shall not impact the continued certification of the subclasses for the causes of action identified herein. All pending deadlines in this case are hereby vacated, the subclasses are certified for the causes of action listed above pursuant to the Parties' agreement and stipulation, and this Action is hereby stayed until and including March 18, 2015.
ORDER
GOOD CAUSE APPEARING based on the Parties' stipulation and ActionLink's financial condition, the Court hereby issues the following Orders:
1. All proceedings in the Cheung Action are stayed through and including March 18, 2015; and
2. Class certification of the following subclasses and causes of action under Rule 23(a) and (b)(3) are hereby GRANTED pursuant to the Parties' Stipulation and this Order:
As to the PAGA claim, however, for Subclass 1, the PAGA actionable period shall be from March 22, 2012 through the date the Court enters this stipulation to stay this action and to certify the proposed subclasses.
Code Section 227.3, pursuant to Labor Code sections 2698-2699.5.
Subclass 2 consists of, for purposes of this Stipulation only:
As to the PAGA claim, however, for Subclass 2 the PAGA actionable period shall be from March 22, 2012 through the date the Court enters this stipulation to stay this action and to certify the proposed subclasses.
The named Plaintiffs Cathlene Cheung, Jeff Koenig, Christian Santos, and Scott Sobczak are hereby appointed as class representatives. Craig Ackermann, Esq. from Ackermann & Tilajef, P.C, Julian Hammond from Hammond Law, PC and John Glugoski of Righetti Glugoski, P.C, class counsel in the parallel state court Adams case, are hereby appointed as class counsel.
All pending deadlines in this Action are hereby vacated. The Parties shall file a Joint Status Update on or before March 18, 2015, regarding their plans for mediation, class notice dissemination and/or the setting of further deadlines, including a trial date, and they shall address at that point the outstanding issues related to the inter-relationship between the Cheung and the Adams cases.
IT IS SO ORDERED.
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