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Fochtman v. Darp, Inc.

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

January 31, 2019

MARK FOCHTMAN; CORBY SHUMATE; MICHAEL SPEARS; ANDREW DANIEL; FABIAN AGUILAR; and SLOAN SIMMS Individually, and on Behalf of All Others Similarly Situated PLAINTIFFS
v.
DARP, INC.; HENDREN PLASTICS, INC.; and JOHN DOES 1-29 DEFENDANTS

          MEMORANDUM OPINION AND ORDER

         Now pending before the Court are two motions. The first is a Motion for Class Certification (Doc. 44) filed on behalf of all Plaintiffs on September 17, 2018. The second is a Motion to Withdraw as Class Representative (Doc. 46) filed by Plaintiff Corby Shumate on October 31, 2018. Defendant DARP, Inc. ("DARP") filed a Response in Opposition to Class Certification (Doc. 47), as did Defendant Hendren Plastics, Inc. ("Hendren Plastics") (Doc. 48). Thereafter, Plaintiffs filed a combined Reply (Doc. 50) to both Defendants' Responses. Defendants did not file any response in opposition to Mr. Shumate's Motion to Withdraw as Class Representative.

         On December 14, 2018, the Court held a hearing on the pending motions. After oral argument concluded, the Court ruled from the bench, granting both the Motion for Class Certification and the Motion to Withdraw as Class Representative. This Order sets forth the bases for the Court's decisions in greater detail. In the event anything in this Order conflicts with statements made from the bench, this Order will control.

         I. BACKGROUND

         Plaintiffs filed the instant Complaint on March 9, 2018, [1] alleging violations of law arising from their participation in a residential drug rehabilitation program run by DARP, which stands for "Drug and Alcohol Recovery Program." Plaintiffs seek to represent a class of similarly-situated individuals who were ordered to attend DARP by drug courts in Arkansas and Oklahoma. State drug courts routinely allow certain individuals charged with drug crimes to participate in diversion programs, where they are given the option of completing drug and alcohol rehabilitation in lieu of imprisonment. There are a number of inpatient drug rehabilitation centers that partner with these drug courts to provide inpatient services. DARP's particular mission is "the ethic of hard work." (Doc. 44-1). To that end, DARP requires its residents to work during their time at DARP. DARP advises its residents in writing that it will "never charge... any fees or costs; however, participants are expected to work at full-time jobs knowing that they will not receive any immediate financial compensation for their work." (Doc. 44-13).

         In fact, the "Admission Agreement" that each resident signs states the following:

I understand that I will not be required to pay the D.A.R.P. Foundation any fee for the services rendered me in connection with the D.A.R.P. recovery process. I understand that I will be furnished room and board, clothing, and other necessities. I understand that participants of the D.A.R.P. Foundation receive no pay while in the program and that the money earned goes toward operation of the D.A.R.P. Foundation. This includes all overtime accrued while working and participating at D.A.R.P., for which there will be no compensation.

(Doc. 44-24).

         In a nutshell, then, DARP residents agree to forego payment of their wages in exchange for a bed to sleep in, the option to participate in AA or NA meetings, transportation to and from the job that DARP arranges for them, "healthy meals at no cost," and "basic necessities of hygiene supplies to include toothpaste, shampoo, toothbrushes, razors, etc. at no cost," (Doc. 44-13).

         The record indicates that, at some point, DARP entered into an agreement to provide resident labor to Hendren Plastics. See Doc. 21-1. According to the agreement, DARP would send its residents to Hendren Plastics to work daily shifts. The residents would clock in and out of the factory, just as non-DARP employees would, and Hendren Plastics would keep track of the hours the residents worked. The agreement affirms that DARP's "goal" in working with Hendren Plastics was "to provide a reliable work force for [the] company." Id. Accordingly, DARP residents worked at "a flat rate of $9.00 per man hour" for the first forty hours per week, and at a rate of "$13.50 an hour" for every hour worked over forty per week. Id. Under this scheme, the residents were never paid directly for their work. Instead, Hendren Plastics would calculate the hours worked at the flat rates agreed upon and then cut lump-sum checks to DARP for the residents' labor.

         The residents understood that DARP would not be paying them wages. They all signed an identical document entitled "Disclaimer of Employment Relationship," which explained that: (1) they would not receive wages or otherwise be paid during their stay at DARP; (2) they might be offered "a benefit package, gratuity/stipend" by DARP-that was "[n]ot to include any accrued overtime"-"upon successful completion" of the program; and (3) they would not be considered "employees" of DARP and had no right to claim workers' compensation or unemployment benefits. (Doc. 1-11).

         The class action Complaint contains claims concerning Defendants' alleged failure to pay minimum wages and overtime compensation under the Arkansas Minimum Wage Act ("AMWA") (Counts I and II).[2] The Motion for Class Certification (Doc. 44) requests that the Court certify a class defined as: "All individuals who were DARP participants at any time from October 23, 2014 until the present, and who worked for Hendren Plastics, Inc. in the State of Arkansas during their time at DARP." Plaintiffs further request that their counsel be appointed as class counsel and that Plaintiffs Fochtman, Spears, Daniel, Aguilar, and Simms be appointed as class representatives.[3]

         Defendants DARP and Hendren dispute whether: the purported class is sufficiently numerous to be appropriate for class certification; there are questions of law and fact common to the class; the putative class representatives have claims that are typical of those of the rest of the class; the class representatives will adequately protect the interests of the class; class issues predominate over individual issues; and a class action is a superior method of resolving this dispute, as compared to individual lawsuits. Below, the Court will consider these arguments.

         II. LEGAL STANDARD

         Pursuant to Rule 23, certifying a class action requires a two-step analysis. First, a class action may be maintained if: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a)(1)-(4). Second, a class action will be deemed appropriate if a court finds that questions of law or fact common to class members predominate over questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Fed.R.Civ.P. 23(b)(3).

         An implicit requirement for any class certification inquiry involves a court's assessment as to the ascertainability of the class. The description of a proposed class must be sufficiently definite to permit class members to be identified by objective criteria. See Sandusky Wellness Ctr., LLC v. Medtox ScL, Inc., 821 F.3d 992, 996-97 (8th Cir. 2016). "The requirement that a class be clearly defined is designed primarily to help the trial court manage the class. It is not designed to be a particularly stringent test, but plaintiffs must at least be able to establish that the general outlines of the membership of the class are determinable at the outset of the litigation." Bynum v. Dist. of Columbia, 214 F.R.D. 27, 31 (D.D.C. 2003).

         The district court retains "broad discretion in determining whether to certify a class, recognizing the essentially factual basis of the certification inquiry and ... the district court's inherent power to manage and control pending litigation." In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 616 (8th Cir. 2011) (internal quotations and citations omitted).

         III. DISCUSSION

         A. Numerosity (Rule 23(a)(1)) and Ascertainability

         The Court begins its analysis by assessing whether the class is so numerous that joinder of all members is impracticable, and, relatedly, whether the members of the class are readily ascertainable. The Eighth Circuit, "unlike most other courts of appeals, has not outlined a ... separate, preliminary requirement" of ascertainability that would require plaintiffs to demonstrate a method of identifying class members that is administratively feasible. See Sandusky Wellness, 821 F.3d at 996. Rather, the Eighth Circuit simply adheres to a rigorous analysis of the Rule 23 factors, and while it recognizes that this analysis necessarily entails that a class be "adequately defined and clearly ascertainable," the focus of this threshold inquiry is on whether the proposed class definition identifies class members by objective criteria, rather than on the administrative concerns that are already taken into account by the Rule 23(b)(3) factors of predominance and superiority. See id.

         Defendants do not dispute that the precise number of class members is either known or may be discovered fairly easily. Plaintiffs maintain there are approximately 180 former DARP residents who meet the class definition, and Defendants do not dispute that number. Instead, DARP argues that it is unclear at this time whether any of the 180 putative class members will ultimately want to remain as members of the class or will instead opt out. DARP claims "[t]his absence of clarity means Plaintiffs have not proven that members of the proposed class are sufficiently numerous to warrant certification." (Doc. 47, p. 5).

         DARP's argument above tends to demonstrate that it does not understand what the numerosity requirement of Rule 23 actually entails. In order to make a finding that a class will be so numerous that joinder will be impractical, the Court does not need to consult its crystal ball and predict how many class members will opt out and how many will remain. The numerosity requirement asks, simply, how many individuals meet the class definition. Here, the number is 180, and the class members' identities are easily ascertainable.

         DARP also attempts to muddy the waters by making a merits-based argument about numerosity. DARP contends that few, if any, of the 180 putative class members will ultimately be classified as employees under the AMWA and therefore will not be entitled to damages. Obviously, it would be improper for the Court to delve deeply into the ...


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