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Harris v. Express Courier International, Inc.

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

November 16, 2018




         Now before the Court are Defendant Express Courier International, Inc., n/k/a LSO Final Mile's ("LSO") Motion for Summary Judgment (Doc. 138), Brief in Support (Doc. 139), and Statement of Facts (Doc. 140); Plaintiffs James Harris's, Rick Ketcham's, and Adam Manske's Response in Opposition (Doc. 143) and Statement of Facts in Support of Response (Doc. 144); LSO's Reply (Doc. 150); and Plaintiffs' Sur-Reply (Doc. 155). The Motion is fully briefed and ripe for resolution. After careful consideration of the briefing and the exhibits submitted in support, the Court DENIES the Motion for the reasons explained herein.

         I. BACKGROUND

         Plaintiffs are three former couriers who worked for LSO, 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. LSO does not operate cars or delivery trucks needed to complete the deliveries; instead, the couriers provide their own transportation, pick up the items to be delivered, and report to LSO to coordinate and confirm the deliveries. In Plaintiffs' view, LSO misclasslfied them as independent contractors, when they really should have been classified and paid as employees. They contend that LSO failed to pay them minimum wages and overtime compensation for all hours they worked over forty per week.

         In LSO's view, Plaintiffs, like all couriers who worked for LSO, signed Owner-Operator Agreements that placed them on notice that the company would consider them-and pay them-as independent contractors. When the lawsuit was originally filed, Plaintiffs lodged minimum-wage and overtime claims on behalf of themselves and a nationwide class of similarly-situated drivers working for LSO. The Court conditionally certified a nationwide Fair Labor Standards Act ("FLSA") collective action on September 19, 2016. Then, Plaintiffs moved under Federal Rule of Civil Procedure 23 to certify a separate class composed of LSO couriers who worked in Arkansas and allegedly suffered wage and hour violations under the Arkansas Minimum Wage Act ("AMWA") due to LSO's alleged misclassification scheme. After extensive briefing on the pending motions, followed by an in-court hearing, the Court decertified the FLSA collective action and denied Plaintiffs' motion to certify a Rule 23 class in an Order entered on November 21, 2017. See Doc. 130. After that, the only claims left in the case were the individual ones asserted by the three named Plaintiffs.

         LSO's Motion for Summary Judgment assumes for the purposes of the Motion only that Plaintiffs can successfully prove they were misclassified as independent contractors. The Motion argues that the case should nonetheless be dismissed because the Plaintiffs have failed to produce any documents that show the number of hours they worked, the deliveries they completed, or the expenses they incurred in making deliveries. Without this information, LSO contends it would be impossible for Plaintiffs to prove at trial that they were not paid a minimum hourly wage. LSO further claims that Plaintiffs did not disclose any computation of damages for each category of damages claimed, and the estimates they provided as to the number of hours they worked were either contradictory or else did not establish that they worked in excess of forty hours in a given week, such that they could not prove at trial that they were entitled to overtime compensation.

         Specifically as to Plaintiff Ketcham, LSO points out that the only way he could prove to a jury what deliveries he made on a given day is by testifying about each and every day he worked, since he admits he possesses no documents to prove his work schedule, and he admits that his particular delivery schedule often varied by the day. As to Plaintiff Manske, LSO maintains that he has offered contradictory estimates under oath about the number of hours he worked. During his deposition, he stated at one point that he worked an average of 70 hours per week, and at another point, he estimated that he worked 72-96 hours per week. LSO finds these two statements to be so inconsistent that they are patently unreasonable. In addition, LSO notes that Manske kept no records about his mileage or gas, which, to LSO, means that Manske could not establish at trial that he was paid less than the minimum wage for his services. Finally, as to Plaintiff Harris, LSO observes that he testified in his deposition that he kept a spreadsheet with a calculation of his damages, but he never produced the spreadsheet to LSO. Harris also testified that the volume of his work varied by the day and by the season, and that his expenses varied depending on the number of miles he drove and the vehicle he used. All of this signals to LSO that Harris could not plausibly estimate for a jury the number of miles he drove and hours he worked for the company.

         LSO also complains that Plaintiffs supplied it with a "damages model," (Doc. 138, pp. 139-150), on August 20, 2018, just four days before the Court's deadline for submitting dispositive motions. This model was prepared by Plaintiffs' counsel, not by a retained expert. According to LSO, the model's calculations contradict the three Plaintiffs' sworn testimony and their responses to written discovery. In essence, LSO complains that the damages model consists of assumptions about how many hours each Plaintiff worked, but those assumptions are either unsupported by any tangible evidence or else are contradicted by the Plaintiffs' own deposition testimony and/or their responses to written discovery.

         Plaintiffs dispute all of LSO's arguments and assert that they do, in fact, have documentation to support their estimates of hours, mileage, and other expenses. Plaintiffs note that they provided their tax records to LSO, and those records reflect the business mileage they claimed each taxable year. They also claim they responded to LSO's written discovery requests with reasonable estimates of the number of miles they drove and the number of hours they worked. In addition. Plaintiffs point out that LSO produced "Driver Daily Summaries," which provide some evidence of the deliveries they made, how much LSO paid them, and how many miles they drove to make these deliveries. Finally, Plaintiffs argue that LSO's characterization of their deposition testimony is "intentionally misleading" because it omits other aspects of their testimony. See Doc. 143, p. 8. Below, the Court will consider the parties' dueling arguments on summary judgment, beginning with the appropriate legal standard that must be applied when ruling on the Motion.


         The Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "[A] genuine issue of material fact exists if: (1) there is a dispute of fact; (2) the disputed fact is material to the outcome of the case; and (3) the dispute is genuine, that is, a reasonable jury could return a verdict for either party." RSBI Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 401 (8th Cir. 1995). The moving party has the burden of showing the absence of a genuine issue of material fact and that they are entitled to judgment as a matter of law, but the nonmoving party may not rest upon mere denials or allegations in the pleadings and must set forth specific facts to raise a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).

         The Court must view all evidence and inferences in a light most favorable to the nonmoving party. See McCleary v. ReliaStar Life Ins. Co., 682 F.3d 1116, 1119 (8th Cir. 2012). However, "[w]hen opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a Court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Scott v. Harris, 550 U.S. 372, 380 (2007).


         The sole issue on summary judgment is whether the Plaintiffs have marshaled enough evidence to present to a jury to create a genuine, material question of fact as to whether each Plaintiff was entitled to minimum wage compensation and/or overtime compensation under the FLSA and AMWA, [1] based on the number of hours they worked per week, the wages they were paid, and the expenses they incurred to offset their wages. LSO has not raised on summary judgment the threshold issue of whether LSO improperly classified the Plaintiffs as independent contractors. Instead, for purposes of summary judgment only, LSO has assumed that Plaintiffs were misclassified. Therefore, the briefing centers only around the quantum of proof that exists to demonstrate a material issue of fact as to LSO's liability on both the overtime and minimum-wage claims. It follows that if Plaintiffs are able ...

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