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Harris v. Express Courier International, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

November 21, 2017

JAMES HARRIS; RICK KETCHAM; and ADAM MANSKE, Each Individually and on Behalf of Others Similarly Situated PLAINTIFFS
v.
EXPRESS COURIER INTERNATIONAL, INC. n/k/a LSO FINAL MILE DEFENDANT

          MEMORANDUM OPINION AND ORDER

          TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE.

         Before the Court are Defendant Express Courier International, Inc. n/k/a LSO Final Mile's ("LSO") Motion to Decertify FLSA Collective Action (Doc. 108) and Brief in Support (Doc. 109); Plaintiffs James Harris's, Rick Ketcham's, and Adam Manske's Response in Opposition (Docs. 114-115); and LSO's Reply (Doc. 118) and Notice of Supplemental Authority (Doc. 120). Also before the Court are Plaintiffs' Motion for Rule 23 Class Certification (Doc. 112) and Brief in Support (Doc. 113); LSO's Response in Opposition (Doc. 116); Plaintiffs' Reply (Doc. 117); LSO's Notice of Supplemental Authority (Doc. 121); and Plaintiffs' Notice of Supplemental Authority (Doc. 122).

         After the issues were fully briefed, the Court held a hearing on the two Motions on August 21, 2017, at which time the parties presented oral argument. The Court took the matter under advisement. Then, Plaintiffs filed another Notice of Supplemental Authority on October 9, 2017 (Doc. 127), to which LSO filed a Response (Doc. 128). LSO next filed a separate Notice of Supplemental Authority on October 26, 2017 (Doc. 129). The Court considered all supplementary authority submitted by the parties, the briefing on the two Motions, and the oral arguments made during the hearing. Now that the Motions are ripe, the Court is prepared to rule and finds, for the reasons explained in further detail below, that the Motion to Decertify FLSA Collective Action is GRANTED, and the Motion for Rule 23 Class Certification is DENIED.

         I. BACKGROUND

         Plaintiffs are former couriers of Defendant LSO, which is a company that facilitates the delivery of products for the medical, financial, and retail industries, through the work of couriers who actually perform these deliveries. LSO offers same-day, on-demand, and scheduled delivery services in ten different states. According to Plaintiffs, LSO has misclassified its couriers as independent contractors, when they really should be classified and paid as employees, and LSO has failed to pay their couriers a minimum wage and overtime compensation for all hours worked over 40 per week.

         Plaintiffs argue that they share with their fellow LSO couriers the following characteristics: (1) they were uniformly classified by LSO as independent contractors and were not paid minimum-wage and/or overtime compensation; (2) they were required to sign the same "Owner-Operator Agreement"-which specified that couriers were to be considered independent contractors-before they were permitted to make deliveries for the company; (3) they were subject to the same corporate-level policies, procedures, and training programs; (4) they were subject to a common policy of local control; and (5) they were subject to common policies regarding pay.

         For its part, LSO denies that it has wrongly classified its couriers as independent contractors. Further, LSO contends that its couriers are not similarly situated to one another, such that it would be inefficient and inappropriate to group them into a single class for collective action purposes and for class action purposes.

         On September 19, 2016, the Court conditionally certified this case as an opt-in, Fair Labor Standards Act ("FLSA") collective action, and approved Plaintiffs' proposed notice for mailing to the putative class. See Doc. 34, pp. 10-11. The conditionally-certified collective action includes:

Each individual who (a) worked for Express Courier International, Inc. ("Express"), as a driver, courier, or owner-operator any time after February 11, 2013, (b) never subcontracted any of his or her work for Express, and (c) contracted directly with Express under Express's standard "Owner-Operator Agreement."

Id. at 2.

         On April 14, 2017, after the parties engaged in at least six months of discovery related to class-certification issues, see Phase One Case Management Order, Doc. 35, p. 1, LSO filed a Motion to Decertify the FLSA Collective Action. At approximately the same time, Plaintiffs filed a Motion to Certify a Rule 23 Class Action under the Arkansas Minimum Wage Act ("AMWA"). The proposed Rule 23 class includes:

Each individual who (a) worked for Express Courier International, Inc. ("Express"), as a driver, courier, or owner-operator in Arkansas anytime after February 11, 2013, (b) never subcontracted with anyone, or otherwise never hired anyone, to perform any of his or her work for Express, and (c) contracted directly with Express under Express's standard "Owner-Operator Agreement."

(Doc. 112, p. 2).

         Below, the Court will begin its discussion by setting forth the legal standards that it must consider when ruling on the pending Motions. Next, the Court will analyze each side's arguments on the issue of decertification of the collective action. Last, the Court will consider the possible certification of a Rule 23 class.

         II. LEGAL STANDARD

         A. Motion to Decertify FLSA Collective Action

         Certifying a collective action under the FLSA is a two-step process:

The first determination is made at the so-called "notice stage." At the notice stage, the district court makes a decision-usually based only on the pleadings and any affidavits which have been submitted-whether notice of the action should be given to potential class members.
Because the Court has minimal evidence, this determination is made using a fairly lenient standard, and typically results in "conditional certification" of a representative class. If the district court "conditionally certifies" the class, putative class members are given notice and the opportunity to "opt-in." The action proceeds as a representative action throughout discovery.
The second determination is typically precipitated by a motion for "decertification" by the defendant usually filed after discovery is largely complete and the matter is ready for trial. At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives-i.e. the original plaintiffs-proceed to trial on their individual claims.

Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995), overruled on othergrounds by Desert Palace, Inc. v. Costa,5 ...


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