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Perrin v. Papa John's International, Inc.

United States District Court, E.D. Missouri, Eastern Division

June 19, 2015

WILLIAM TIMOTHY PERRIN, et al., Plaintiffs,
v.
PAPA JOHN'S INTERNATIONAL, INC., et al., Defendants.

MEMORANDUM AND ORDER

AUDREY G. FLESSING, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendants’ motion (Doc. No. 426) to stay this case pending the decision of the United States Supreme Court in Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791 (8th Cir. 2014), cert. granted, No. 1401146, 2015 WL 1278593 (U.S. June 8, 2015).[1] The Court heard argument on the motion to stay on June 16, 2015. For the reasons set forth below, the motion shall be granted, in part.

Plaintiffs brought these class and collective actions against Defendants Papa John’s International, Inc. and Papa John’s USA, Inc., asserting claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the minimum wage laws of five states (Missouri, Arizona, Florida, Illinois, and Maryland). Plaintiffs, current and former delivery drivers, allege that Defendants violated these laws by underestimating Plaintiffs’ automotive expenses for reimbursement purposes, and consequently, failing to pay them minimum wage.

Defendants require that their drivers maintain safe, legally operable, insured vehicles for making deliveries. In addition to hourly wages, Defendants reimburse their drivers for employment-related vehicle expenses. With the assistance of an industry consultant, Defendants developed a delivery-related vehicle expense reimbursement formula that compensated drivers at a flat, per-delivery rate, regardless of drivers’ actual costs-per-mile or actual miles driven.

Plaintiffs allege that Defendants’ vehicle expense reimbursement methodology underestimated Plaintiffs’ vehicle expenses and that the amount of under-reimbursement effectively reduced Plaintiffs’ wages below the applicable minimum wages.

On September 14, 2011, the Court conditionally certified the FLSA collective action based on Plaintiffs’ allegation that the drivers were similarly situated in that they were all subject to a single policy which under-reimbursed them for vehicle expenses, decreasing their hourly pay below their respective minimum wages. After discovery was conducted against the opt-in class, Plaintiffs moved to certify the five state-law classes under Federal Rule of Civil Procedure 23(b)(3). Defendants opposed certification primarily on the ground that the individualized showings of each Plaintiff’s vehicle expenses predominated over questions common to the classes. On the other hand, Plaintiffs contended that the question whether Defendants’ reimbursement formula constituted a reasonable approximation of drivers’ vehicle expenses was common to each class and is the most important issue in the case.

After careful consideration, the Court certified the five state-law classes on December 31, 2013. The Court recognized that using generalized evidence instead of individualized evidence could be troubling in some contexts, but found that it may be acceptable in this case, as Plaintiffs’ claims each depend on common questions about the reasonableness of Defendants’ policies for calculating and reimbursing vehicle expenses. The Court found that these common questions were sufficient to satisfy the commonality requirement of Rule 23, and predominated over the individualized questions regarding the measurement of damages. In certifying the classes, the Court was also mindful of the possibility that evidence could show that certain Plaintiffs had been paid minimum wage throughout the relevant time period, and that lacking any injury, those Plaintiffs may not have standing. Therefore, although the Court permitted certification, it held that “[i]f later in the litigation it becomes apparent that any of the state classes include individuals who do not have standing, the Court may decertify the class or amend the class definition.” (Doc. No. 299 at 16.)

After discovery, Defendants moved to decertify the class and collective actions, [2]asserting two main arguments: (1) that individualized issues will predominate because Plaintiffs must demonstrate that their individual vehicle expenses caused them to receive less than minimum wage, and that even if individual Plaintiffs can estimate these expenses by reasonable inference, they may not do so using group-wide averages based on statistical samples and composite evidence, as Plaintiffs purport to do here, and (2) that, even under Plaintiffs’ theory of the case, the class impermissibly contains uninjured members who lack standing because they suffered no minimum wage violation in any workweek.

In the instant motion to stay, Defendants argue that the Supreme Court’s decision in Bouaphakeo will provide controlling precedent regarding the two issues raised in their decertification motions, and that staying this case pending the Supreme Court’s decision[3]will ultimately save the parties and the Court significant time and resources.

In Bouaphakeo, the Eighth Circuit affirmed a jury verdict and a district court’s decision not to decertify class and collective actions under the FLSA and the Iowa Wage Payment Collection Law, Iowa Code 91A.1 et seq., which asserted that Tyson did not properly compensate employees for time spent donning and doffing personal protective equipment. See Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 794 (8th Cir. 2014). Tyson employed a uniform policy of paying a flat amount of “K-code” time to compensate employees for donning, doffing, and walking time, regardless of the actual time employees spent performing these tasks. Id. at 795. The plaintiffs in Bouaphakeo claimed that the K-code time was insufficient to compensate them for their donning, doffing, and walking time. Although the plaintiffs lacked records for the actual time they spent performing these tasks, they proved liability and damages by using “average donning, doffing, and walking times calculated from 744 employee observations.” Id. at 796. Specifically, the plaintiffs’ expert witness, a statistician, calculated the average donning and doffing time for different groups of employees using statistical sampling techniques. Id. at 799. Tyson argued that certification was improper because “factual differences between plaintiffs-differences in PPE and clothing between positions, the individual routines of employees, and variation in duties and management among departments” predominated, and because “evidence at trial showed that some class members did not work overtime” and would be entitled to no damages “even if Tyson under-compensated their donning, doffing, and walking.” Id. at 797. The Eighth Circuit panel rejected these arguments, over the dissent of Judge Beam. The Eighth Circuit found that the Supreme Court’s decision in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1980) (“Mt. Clemens”), supported the plaintiffs’ use of group averages to prove by “reasonable inference” their donning and doffing time, particularly where Tyson failed to track and keep records of this time. Id. at 798-800. The Eighth Circuit also found that the class could proceed, notwithstanding its inclusion of members who did not work overtime, because the jury instructions provided that those members would not be entitled to recover damages. Id. at 798.

Tyson filed a petition for a writ of certiorari, asserting two questions presented:

I. Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample.
II. Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Petition for Writ of Certiorari, Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S. June 8, 2015), 2015 WL 1285369. The Supreme Court granted ...


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