Goro v. Flowers Foods, Inc.

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8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

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11 SIMON GORO, an individual; TONY Case No.: 17-CV-2580 TWR (JLB)

RUSSELL, an individual; REY PENA, an

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individual; JOSE PENA, an individual; ORDER (1) GRANTING IN PART

13 JEFF BELANDER, an individual; and AND DENYING IN PART

GUISEPPE ZIZZO, an individual, DEFENDANTS’ MOTION FOR

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PARTIAL SUMMARY JUDGMENT,

Plaintiffs,

15 (2) DENYING AS MOOT

v. PLAINTIFFS’ MOTION TO SEAL,

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(3) GRANTING IN PART AND

FLOWERS FOODS, INC., a Georgia

17 DENYING IN PART DEFENDANTS’

corporation; FLOWERS BAKING CO.

RENEWED MOTION TO SEAL,

18 OF CALIFORNIA, LLC, a California

AND (4) DIRECTING PARTIES TO

limited liability company; FLOWERS

19 FILE A JOINT STATUS REPORT

BAKING CO. OF HENDERSON, LLC, a

20 Nevada limited liability company; and

(ECF No. 182, 191, 209)

DOES 1 through 100, inclusive,

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Defendants.

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24 Presently before the Court is the Motion for Partial Summary Judgment (“MPSJ,”

25 ECF No. 182) filed by Defendants Flowers Foods, Inc. (“FF”); Flowers Baking Co. of

26 California, LLC (“FBC California”); and Flowers Baking Co. of Henderson, LLC (“FBC

27 Henderson”), as well as Plaintiffs Simon Goro, Tony Russell, Rey Pena, Jose Pena, Jeff

28 Belander, and Guiseppe Zizzo’s Opposition to (“MPSJ Opp’n,” ECF No. 190) and

1 Defendants’ Reply in Support of (“Reply,” ECF No. 197) the Motion for Partial Summary

2 Judgment. Also pending before the Court are Plaintiffs’ Motion to Seal (“Pls.’ Mot. to

3 Seal,” ECF No. 191) certain exhibits filed in support of their Opposition and Defendants’

4 Renewed Motion to Seal (“Defs.’ Renewed Mot. to Seal,” ECF No. 209) certain documents

5 filed in support of Mr. Russell’s motion for partial summary judgment, which Plaintiffs

6 oppose (“Sealing Opp’n,” ECF No. 210). The Court held a hearing on Defendants’ Motion

7 for Partial Summary Judgment and Plaintiff’s Motion to Seal on November 4, 2021. (See

8 ECF No. 218.) Having carefully considered the Parties’ arguments and evidence and the

9 relevant law, the Court GRANTS IN PART AND DENIES IN PART Defendants’

10 Motion for Partial Summary Judgment, DENIES AS MOOT Plaintiffs’ Motion to Seal,

11 and GRANTS IN PART AND DENIES IN PART Defendants’ Renewed Motion to Seal.

12 DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

13 I. Background

14 A. Undisputed Material Facts

15 “[FF] is the parent holding company of numerous operating subsidiaries.” (ECF No.

16 216 (“Jt. Stmt.”) ¶ 1.) “[FBC California] and its successors [FBC Henderson] . . . and

17 Flowers Baking Co. of Modesto, LLC [(“FBC Modesto”)]. . . are wholly owned

18 subsidiaries of [FF].” (Id. ¶ 2.) “Flowers Bakeries, LLC is the sole member of [FBC]

19 California, [FBC] Henderson, and [FBC] Modesto.” (Id.) “In turn, [FF] is the sole member

20 of Flowers Bakeries, LLC.” (Id.)

21 “Plaintiffs contracted with [FBC California] or its successor, [FBC Henderson],” (id.

22 ¶ 3), which “is located in Henderson, Nevada.” (Id. ¶ 4.) “Pursuant to Plaintiffs’

23 Distributor Agreements (“DA”), they are not required to personally service their

24 geographic territories, although they remain obligated to ensure service of their territories

25 pursuant to the DA and its related attachments.” (Id. ¶ 6.)

26 “Pursuant to the DA and the obligations it places on parties, Plaintiffs used vehicles

27 they either leased or purchased at their own expense.” (Id. ¶ 7.) “Plaintiffs typically use

28 vehicles with a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds

1 to deliver products.” (Id. ¶ 5.) “However, Plaintiffs also use their personal vehicles at

2 times for services . . . [,] and these vehicles weigh less than 10,001 pounds.” (Id. ¶ 5.)

3 B. Relevant Procedural Background

4 Plaintiffs initiated this action in the Superior Court of California, County of San

5 Diego, on November 27, 2017. (See generally ECF No. 1-2.) Generally alleging that

6 Defendants had misclassified them as independent contractors rather than employees,

7 Plaintiffs asserted claims for (1) failure to compensate for all hours worked; (2) failure to

8 pay overtime premium pay; (3) waiting-time penalties; (4) failure to provide accurate wage

9 statements; (5) failure to provide meal periods; (6) unlawful deductions from wages;

10 (7) failure to indemnify for necessary expenditures; and (8) violations of California’s

11 Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq. (See generally

12 id.) After answering Plaintiffs’ complaint, (see generally ECF No. 1-3), Defendants

13 removed to this Court based on diversity jurisdiction. (See generally ECF No. 1.)

14 On March 22, 2018, Plaintiffs filed their first amended complaint, adding a ninth

15 claim for enforcement of the California Private Attorney General Act (“PAGA”), Cal.

16 Labor Code §§ 2698 et seq. (See generally ECF No. 17.) Defendants moved to dismiss

17 Plaintiffs’ PAGA cause of action on April 12, 2018, (see ECF No. 22), and also filed an

18 answer to Plaintiffs’ First Amended Complaint. (See generally ECF No. 23.) While their

19 motion to dismiss was still pending, the Parties filed cross-motions for partial summary

20 judgment on November 16, 2018. (See generally ECF Nos. 78, 81.) On January 8, 2019,

21 the Honorable Janis L. Sammartino granted Defendants’ motion to dismiss Plaintiffs’

22 PAGA cause of action and denied as moot the pending motions for partial summary

23 judgment. (See generally ECF No. 92.)

24 Plaintiffs filed their operative Second Amended Complaint on January 15, 2019,

25 adding additional allegations to support their PAGA cause of action. (See generally No.

26 95.) On January 29, 2019, Defendants answered. (See generally ECF No. 98.)

27 Mr. Russell moved for partial summary judgment as to Defendants’ first affirmative

28 defense—i.e., that Defendants were never his employers—on February 15, 2019. (See

1 generally ECF No. 99.) Defendants filed their own motion for partial summary judgment

2 as to six of Plaintiffs’ causes of action on March 12, 2019. (See generally ECF No. 104.)

3 After Judge Sammartino took the cross-motions for partial summary judgment under

4 submission, (see generally ECF No. 135), Defendants moved to stay this action pending

5 resolution of the following issues: (1) whether the “ABC” test articulated in Dynamex

6 Operations West v. Superior Court, 4 Cal. 5th 903 (2018), applies retroactively; and

7 (2) whether the Federal Aviation and Administration Authorization Act (“F4A”) preempts

8 prong “B” of the ABC test. (See generally ECF No. 141.) On January 24, 2020, Judge

9 Sammartino stayed this action pending the California Supreme Court’s decision in Vazquez

10 v. Jan-Pro Franchising International, Inc., No. S258191 (Cal. filed Sept. 26, 2019), and

11 denied without prejudice the Parties’ cross-motions for partial summary judgment. (See

12 generally ECF No. 166.)

13 On September 25, 2020, this action was transferred to the undersigned. (See

14 generally ECF No. 167.) After Plaintiffs informed the Court that the California Supreme

15 Court had issued a decision in Vazquez, (see generally ECF No. 168), the Court lifted the

16 stay, (see generally ECF No. 169), and requested a Joint Status Report from the Parties.

17 (See generally ECF No. 170.)

18 Before the ordered deadline for the Joint States Report, Mr. Russell again moved for

19 summary judgment as to Defendants’ first and thirty-second (F4A preemption) affirmative

20 defenses. (See generally ECF Nos. 171, 172.) About a month later, Defendants filed the

21 instant Motion for Partial Summary Judgment. (See generally ECF No. 82.)

22 Following a hearing on Mr. Russell’s motion for partial summary judgment on

23 September 9, 2021, (see ECF Nos. 205, 207), the Court granted Mr. Russel’s motion and

24 dismissed Defendants’ first and thirty-second affirmative defenses as to Mr. Russell. (See

25 generally ECF No. 206.) Specifically, the Court concluded that (1) the ABC classification

26 test applied to all of Mr. Russell’s employment law claims because his claims for expense

27 reimbursement and waiting time penalties related to the California Industrial Welfare

28 Commission’s (“IWC”) wage orders, (see id. at 13–17); (2) neither the F4A nor the Federal

1 Trade Commission (“FTC”) Franchise Rule or Lanham Act, 15 U.S.C. §§ 1051 et seq.,

2 preempted the application of the ABC test, (see id. at 17–21); and (3) Defendants failed to

3 raise a genuine issue of material fact that Mr. Russell performed work that is outside the

4 usual course of Defendants’ business under Prong B of the ABC test. (See id. at 21–28.)

5 In light of that ruling, the Court requested additional briefings from the Parties regarding

6 the impact, if any, of that ruling on the instant Motion for Partial Summary Judgment. (See

7 ECF No. 211; see also ECF No. 214 (“Pls.’ Supp. Br.”), ECF No. 215 (“Defs.’ Supp. Br.”).)

8 II. Legal Standard

9 Under Federal Rule of Civil Procedure 56, a party may move for summary judgment

10 as to a claim or defense or part of a claim or defense. Fed. R. Civ. P. 56(a). Summary

11 judgment is appropriate where “the movant shows that there is no genuine dispute as to

12 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.

13 P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Although materiality is

14 determined by substantive law, “[o]nly disputes over facts that might affect the outcome of

15 the suit . . . will properly preclude the entry of summary judgment.” Anderson v. Liberty

16 Lobby, Inc., 477 U.S. 242, 248, (1986). A dispute is “genuine” only “if the evidence is

17 such that a reasonable jury could return a verdict for the nonmoving party.” Id. When

18 considering the evidence presented by the parties, “[t]he evidence of the non-movant is to

19 be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.

20 The initial burden of establishing the absence of a genuine issue of material fact falls

21 on the moving party. Celotex, 477 U.S. at 323. The moving party may meet this burden

22 by “identifying those portions of ‘the pleadings, depositions, answers to interrogatories,

23 and admissions on file, together with the affidavits, if any,’ which it believes demonstrate

24 the absence of a genuine issue of material fact.” Id. “When the party moving for summary

25 judgment would bear the burden of proof at trial, ‘it must come forward with evidence

26 which would entitle it to a directed verdict if the evidence went uncontroverted at trial.’”

27 C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000)

28 (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)).

1 Once the moving party satisfies this initial burden, the nonmoving party must

2 identify specific facts showing that there is a genuine dispute for trial. Celotex, 477 U.S.

3 at 324. This requires “more than simply show[ing] that there is some metaphysical doubt

4 as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

5 586 (1986). Rather, to survive summary judgment, the nonmoving party must “go beyond

6 the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories,

7 and admissions on file,’ designate ‘specific facts’” that would allow a reasonable fact finder

8 to return a verdict for the non-moving party. Celotex, 477 U.S. at 324; see also Anderson,

9 477 U.S. at 248. Accordingly, the non-moving party cannot oppose a properly supported

10 summary judgment motion by “rest[ing] upon mere allegations or denials of his pleading.”

11 Anderson, 477 U.S. at 256.

12 III. Analysis

13 Through the instant Motion for Partial Summary Judgment, Defendants seek

14 summary adjudication in their favor as to Plaintiffs’ overtime claims, meal and rest break

15 claims, and PAGA claims.1 (See generally ECF No. 189-7 (“Mem.”) at 9–23.)

16 A. Overtime and Meal and Rest Break Claims

17 Defendants contend that Plaintiffs’ overtime claims must be dismissed as exempted

18 by IWC Wage Order No. 1,2 (see Mem. at 9–15), and that their meal and rest break claims

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1 Defendants also contend that Plaintiffs’ reimbursement claims must be rejected to the extent they seek

21 to recover expenses associated with vehicle purchases or rentals, (see Mem. at 17–18), and that the ABC

test is preempted by the F4A, the FTC Rule, and the Lanham Act. (See id. at 23–28.) Plaintiffs concede

22 that they are not seeking to recover expenses associated with the purchases or rentals of their vehicles,

(see MPSJ Opp’n at 6 n.1; ECF No. 221 (“Tr.”) at 51:6–10), and Defendants withdrew their franchise

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exemption argument at the hearing. (See Tr. at 50:18–22.) The Court also previously concluded that the

24 ABC Test is not preempted by the F4A, the FTC Rule, or the Lanham Act. (See ECF No. 206 at 17–21.)

The Court therefore considers only Defendants’ challenges to Plaintiffs’ overtime, meal and rest break,

25 and PAGA claims.

26 2 Pursuant to IWC Wage Order No. 1, employees whose hours of service are regulated by the United

States Department of Transportation (“DOT”) are exempt from California’s overtime law. See Cal. Code

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Regs. § 11010(3)(A)(2) (“The provisions of this section are not applicable to employees whose hours of

28 service [are regulated by] . . . The United States Department of Transportation Code of Federal

1 are preempted by the hours-of-service regulations promulgated by the Federal Motor

2 Carrier Safety Administration (“FMCSA”) in 2018. (See id. at 15–17.) To obtain summary

3 adjudication in their favor on either of these claims, Defendants bear the burden of

4 establishing that there is no genuine dispute of material fact that Plaintiffs transported

5 property in interstate commerce. See, e.g., Watkins v. Ameripride Servs., 375 F.3d 821,

6 825 (9th Cir. 2004) (concluding that the plaintiff would “not [be] entitled to overtime pay

7 in California” if he “was engaged in transporting property in interstate commerce”);

8 California’s Meal and Rest Break Rules for Commercial Motor Vehicle Drivers, 83 Fed.

9 Reg. 67,470 (Dec. 28, 2018) (FMCSA determination that federal law preempts California’s

10 meal and rest break rules as applied to drivers operating property-carrying commercial

11 motor vehicles in interstate commerce).

12 “To determine whether or not [Plaintiffs] w[ere] engaged in inter-state commerce,

13 [the Court] must examine the character of the shipments [they were] charged with

14 delivering, and the intent of the shippers as to the ultimate destination of the goods.” See

15 Watkins, 375 F.3d at 825 (citing Klitzke v. Steiner Corp., 110 F.3d 1465, 1469 (9th Cir.

16 1997)).3 “The inter-state or intrastate character of the shipment is determined only after

17 considering the entire panoply of ‘facts and circumstances surrounding the

18 transportation.’” Id. (quoting Steiner, 110 F.3d at 1469). “[T]ransportation within a single

19 state is still considered in ‘interstate commerce’ if it forms part of a ‘practical continuity of

20 movement’ across state lines from a point of origin to its final destination.” Sturm v. CB

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hours of service for drivers of commercial motor vehicles operating in interstate commerce. See 49 C.F.R.

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§§ 390.5 (“Commercial motor vehicle means any self-propelled . . . motor vehicle used on a highway in

24 interstate commerce to transport passengers or property when the vehicle . . . [h]as a gross vehicle weight

rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536

25 kg (10,001 pound) or more, whichever is greater[.]”), 395.1 (“The rules in this part apply to all motor

carriers and drivers[.]”), 395.3 (providing maximum driving time for property-carrying vehicles).

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3 The Ninth Circuit has recognized that, because “[t]he FLSA contains a similar exemption [to that found

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in the IWC Wage Order], . . . [f]ederal case law interpreting the FLSA exemption is . . . instructive in

28 determining whether [a driver] was sufficiently engaged in interstate commerce to bring him within the

1 Transp., Inc., 943 F. Supp. 2d 1102, 1113 (D. Idaho 2013) (quoting 29 C.F.R.

2 § 782.7(b)(1)); see also Watkins, 375 F.3d at 825 (“[E]ven intrastate deliveries can be

3 considered part of interstate commerce if the property in question was originally delivered

4 from out-of-state and the intrastate route is merely part of the final phase of delivery.”

5 (citing Steiner, 110 F.3d at 1469)).

6 Because the record is replete with genuinely disputed material facts, the Court

7 DENIES Defendants’ Motion for Partial Summary Judgment. The determination as to

8 whether Plaintiffs are engaged in interstate commerce is a highly factual inquiry, see

9 Watkins, 375 F.3d at 825 (citing Steiner, 110 F.3d at 1469), and the Parties purportedly

10 could agree to only a handful of undisputed material facts, none of which is particularly

11 pertinent to the interstate commerce determination. (See generally Jt. Stmt.) Critically,

12 for example, the Parties dispute to whom the shipper (i.e., the producing bakery) ultimately

13 “intends” to deliver its products. (Compare ECF No. 182-59 (“Rich Decl.”) ¶ 9 (end

14 consumer), with ECF No. 190-2 (“Ex. A”) 126:3–128:1, ECF No. 190-8 (“Ex. G”) at

15 28:5–31:23 (FBC Henderson’s Fontana, California distribution center, which is where title

16 transfers from the producing bakery to the ordering bakery).) Further, Defendants’

17 authorities are distinguishable because none of them involve subsidiaries or subsequent

18 transfers of title en route to the end customer. Cf. Foxworthy v. Hiland Dairy Co., 997

19 F.2d 670, 671–72 (10th Cir. 1993) (employee delivery driver (1) ordered milk and cheese

20 products from the defendant’s Arkansas plant that were transported to a distribution center

21 in Oklahoma for delivery to the defendant’s Oklahoma customers, and (2) collected empty

22 crates from the Oklahoma customers for transport back to the Arkansas plant); Shew v.

23 Southland Corp. (Cabell’s Dairy Div.), 370 F.2d 376, 378 (5th Cir. 1966) (“The parties

24 stipulated that transportation of such out-of-state items constituted transportation of goods

25 in interstate commerce within the meaning of the Fair Labor Standards Act.”); Ruiz v.

26 Affinity Logistics Corp., No. 05CV2125 R (CAB), 2006 WL 3712942, at *6 (S.D. Cal.

27 Nov. 9, 2006) (the defendant, the plaintiff driver’s employer, was contracted to deliver

28 appliances for a national chain that ordered its appliances from manufacturers located

1 throughout the United States and that retained title of the appliances from the

2 manufacturers through home delivery); McGuiggan v. CPC Int’l, Inc., 84 F. Supp. 2d 470,

3 473, 482–83 (S.D.N.Y. 2000) (uncontested facts showed that the New York plaintiffs and

4 the defendant’s New York customers called orders into the defendant’s New Jersey bakery,

5 which delivered the orders to the New York warehouse where the plaintiffs picked up the

6 products for delivery). Finally, neither Party has addressed the factors enumerated by the

7 Interstate Commerce Commission, see Policy Statement—Motor Carrier Interstate

8 Transportation—From Out-of-State Through Warehouses to Points in Same State, 8

9 I.C.C.2d 470, 473 (I.C.C. Apr. 27, 1992), which—although not compulsory—other courts

10 in this Circuit have found beneficial in evaluating the shipper’s intent. See, e.g.,

11 Villalpando v. Exel Direct Inc., No. 12-CV-04137-JCS, 2015 WL 5179486, at *30 (N.D.

12 Cal. Sept. 3, 2015); Montoya v. 3PD, Inc., No. CV-13-8068-PCT-SMM, 2015 WL

13 1469752, at *5–8 (D. Ariz. Mar. 31, 2015); Ruiz, 2006 WL 3712942, at *4–7.

14 For all these reasons, Defendants have failed to carry their burden of establishing

15 that there is no genuine dispute of material fact as to whether Plaintiffs’ deliveries were

16 part of a “practical continuity of movement” across state lines. Accordingly, the Court

17 DENIES Defendants’ Motion for Partial Summary Judgment. See, e.g., Villalpando, 2015

18 WL 5179486, at *32.

19 B. PAGA Claims

20 Defendants argue that Plaintiffs’ PAGA claims as a whole must be dismissed

21 because they are “unmanageable” in light of the multitude of individualized determinations

22 that are required. (See Mem. at 18–22.) Defendants also contend that Plaintiffs’ PAGA

23 claims based on alleged violations of California Labor Code section 204 must be dismissed

24 because that provision was not included in Plaintiffs’ PAGA notice letter. (See Mem. at

25 19.)

26 1. Manageability

27 Defendants challenge the “manageability” of Plaintiffs’ PAGA claims. (See

28 generally Mem. at 18–22.) Plaintiffs respond that there is no manageability requirement,

1 (see MPSJ Opp’n at 24–25), and, in any event, their claims are manageable and should not

2 be dismissed. (See id. at 26–29.)

3 As an initial matter, “[f]ederal district courts applying California law have split on

4 whether courts possess inherent authority to strike PAGA claims as unmanageable.”

5 Wesson v. Staples Off. Superstore, LLC, 68 Cal. App. 5th 746, 283 Cal. Rptr. 3d 846, 857

6 n.10, reh’g denied (Sept. 27, 2021). “Cases finding courts lack inherent authority have

7 generally concluded that a manageability requirement would be inconsistent with PAGA’s

8 purposes.” Id. (citing Zackaria v. Wal-Mart Stores, Inc., 142 F. Supp. 3d 949, 959 (C.D.

9 Cal. 2015)). The California Court of Appeal for the Second District, however, recently

10 “conclude[d] that courts have inherent authority to ensure that a PAGA claim will be

11 manageable at trial—including the power to strike the claim, if necessary—and that this

12 authority is not inconsistent with PAGA’s procedures and objectives, or with applicable

13 precedent.” See id. at 857. Nonetheless, the Court of Appeal cautioned that courts “should

14 not lightly strike even procedurally challenging claims.” See id. at 862. This Court “must

15 follow [Wesson] unless [the Court] finds convincing evidence that the state’s supreme court

16 likely would not follow it.” Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir.

17 2007). Consequently, while there may not be a manageability requirement, the Court “may

18 strike a [PAGA] claim that cannot be rendered manageable.” See Wesson, 68 Cal. App.

19 5th at 859 (emphasis added).

20 The Court therefore proceeds to analyze the manageability of Plaintiffs’ PAGA

21 claims. It is Defendants who bear the burden of establishing that Plaintiffs’ PAGA claims

22 will be unmanageable at trial. See, e.g., Mays v. Wal-Mart Stores, Inc., No. CV 18-02318-

23 AB (KKX), 2018 WL 6264992, at *9 (C.D. Cal. Nov. 1, 2018) (“[Although] the Court

24 acknowledges that there might be circumstances under which it would be inappropriate to

25 allow a PAGA claim to proceed on a representative basis, [the defendant] has not yet

26 established that is the case here.”). Defendants raise the following concerns as to the

27 manageability of Plaintiffs’ PAGA claims: (1) the expense reimbursement claims will

28 require individualized inquiries into whether expenses were incurred and their

1 reasonableness, (see Mot. at 21); (2) the unlawful deduction claims will require

2 individualized inquiries into whether the deductions were authorized in writing, (see id.);

3 (3) the meal and rest break claims will require individualized inquiries—on a daily basis—

4 into whether enough hours were worked to require a break (or breaks) and whether the

5 authorized break (or breaks) were taken, (see id.); and (4) the overtime claims also will

6 require individualized inquiries into the number of hours worked on a daily basis.4 (See

7 id.)

8 At this stage, the Court is not yet persuaded that Plaintiffs’ PAGA claims will be

9 unmanageable at trial. First, Defendants have not challenged all of Plaintiffs’ PAGA

10 claims. For example, Plaintiffs’ PAGA claims also seek penalties for Defendants’

11 (1) deductions from Plaintiffs’ pay for certain fees, (see SAC ¶ 72(e)); (2) failure to provide

12 all wages due upon termination under sections 201 through 203 of the California Labor

13 Code, (see SAC ¶ 72(f)); and (3) failure to provide accurate wage statements pursuant to

14 section 206 of the California Labor Code. (See SAC ¶ 72(g).) Defendants therefore appear

15 to concede that certain of Plaintiffs’ PAGA claims are manageable. See, e.g., Brown v.

16 Am. Airlines, Inc., No. CV 10-8431-AG (PJWX), 2015 WL 6735217, at *4 (C.D. Cal.

17 Oct. 5, 2015) (granting in part motion to strike as to PAGA claims based on overtime

18 violations for “manageability issues” but denying in part motion as to PAGA claims based

19 on inaccurate wage statements).

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4 Defendants also contend that the PAGA claims are unmanageable because two multifactorial tests—the

22 ABC test and the Borello test—are required to determine whether Plaintiffs were properly classified as

independent contractors, (see Mem. at 19–21); however, the Court already has determined that the ABC

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test applies to all of Mr. Russell’s labor law claims and that Defendants failed to rebut the presumption

24 that Mr. Russell is an employee under Prong B. (See ECF No. 206 at 21–28.) Accordingly, no

individualized inquiries should be necessary as to the classification issue for the remaining Plaintiffs and

25 PAGA group members. To the extent that Defendants contend that Borello applies to Plaintiffs’ PAGA

claims because they “are necessarily based on a statute,” (see Defs.’ Supp. Br. at 2), this a question of first

26 impression that the Court declines to address on the Parties’ limited briefing at this time. In any event,

there is an argument that the PAGA claims, like Plaintiffs’ UCL claims, are derivative, see, e.g., Varsam

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v. Lab’y Corp. of Am., 120 F. Supp. 3d 1173, 1180 (S.D. Cal. 2015), and, therefore, that the ABC test

28 applies. (See ECF No. 206 at 16–17.) Defendants therefore fail to establish at this juncture that the PAGA

1 Second, while the Parties have identified approximately 400 distributors working for

2 FBC Henderson and FBC Modesto, (see ECF Nos. 220-1, 220-2), it is unclear how many

3 of these distributors may ultimately be part of the PAGA Representative Action Group.

4 Even assuming that individualized determinations are required as to certain of Plaintiffs’

5 PAGA claims, the number of individualized inquiries—and, therefore, their

6 manageability—is necessarily dependent on the number of employees in the PAGA

7 Representative Action Group.

8 Third, it is not clear that all of the issues Defendants identify will require the Court

9 to engage in individualized inquiries. As for the classification of Plaintiffs, whether the

10 ABC test or Borello test applies is a pure question of law, and the application of the proper

11 test may involve minimal individual determinations if the Court reaches the same

12 conclusion as it did with respect to Mr. Russell. (See ECF No. 206 at 21–28; cf. generally

13 Defs.’ Supp. Br.) Some of the other “issues” Defendants raise—such as the expenses the

14 Distributors claim to have incurred and whether the Distributors authorized the allegedly

15 illegal deductions in writing, (see Mem. at 21)—should have been “resolved by the parties

16 during the discovery process.” See Mays, 2018 WL 6264992, at *8. Accordingly, “the

17 parties can resolve [some, if not] most[,] of the [purportedly] individual inquiries without

18 court intervention.” See id.

19 Ultimately, the Court concludes that Defendants have failed to meet their burden of

20 establishing that Plaintiffs’ PAGA claims are unmanageable for trial at this stage in the

21 litigation. Defendants may renew their argument as this case approaches trial. See, e.g.,

22 Ortiz v. Amazon.com LLC, No. 17-CV-03820-JSW, 2020 WL 5232592, at *2 (N.D. Cal.

23 Sept. 2, 2020) (“[T]he Court . . . concludes it is appropriate to require Plaintiff to offer a

24 trial plan before making a ruling about whether it should exercise its inherent authority and

25 strike the PAGA claim as unmanageable.”).

26 2. PAGA Claims Based on Violations of Section 204

27 Before commencing a PAGA action, “[t]he aggrieved employee or representative

28 shall give written notice . . . by certified mail to the employer of the specific provisions of

1 this code alleged to have been violated, including the facts and theories to support the

2 alleged violation.” See Cal. Lab. Code § 2699.3(a)(1)(A). A plaintiff cannot assert a

3 PAGA claim under a provision that is not included in the PAGA notice. See, e.g.,

4 Hernandez v. Houdini, Inc., No. SACV161825DOCJCGX, 2017 WL 8223987, at *11

5 (C.D. Cal. Mar. 21, 2017); Shann v. Durham Sch. Servs., L.P., 182 F. Supp. 3d 1044, 1047

6 (C.D. Cal. 2016).

7 It is undisputed that Plaintiffs’ PAGA notice letter did not invoke California Labor

8 Code section 204, (see generally ECF No. 182-25), and Plaintiffs do not oppose dismissal

9 of their PAGA claims based on violations of that provision. (See generally MPSJ Opp’n;

10 Tr. at 5:5–17.) The Court therefore GRANTS IN PART Defendants’ Motion for Partial

11 Summary Judgment and DISMISSES Plaintiffs’ PAGA claims to the extent they are

12 premised on violations of section 204.

13 MOTIONS TO SEAL

14 I. Legal Standard

15 A party seeking to seal a judicial record bears the burden of overcoming the strong

16 presumption of access. Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th

17 Cir. 2003). “[T]he presumption of access is not rebutted where documents which are the

18 subject of a protective order are filed with the court as attachments to summary judgment

19 motions’ and . . . ‘to retain any protected status for documents attached to a summary

20 judgment motion, the proponent must meet the compelling reasons standard and not the

21 lesser good cause determination.” Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172,

22 1177 (9th Cir. 2006) (internal quotation marks omitted) (quoting Foltz, 331 F.3d at 1135).

23 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure

24 and justify sealing court records exist when such ‘court files might have become a vehicle

25 for improper purposes,’ such as the use of records to gratify private spite, promote public

26 scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon

27 v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)) (citing Valley Broadcasting Co. v.

28 U.S. Dist. Ct. for Dist. Nev., 798 F.2d 1289, 1294 (9th Cir. 1986)). “The mere fact that the

1 production of records may lead to a litigant’s embarrassment, incrimination, or exposure

2 to further litigation will not, without more, compel the court to seal its records.” Id.

3 (citing Foltz, 331 F.3d at 1136).

4 II. Analysis

5 A. Plaintiffs’ Motion to Seal

6 Plaintiffs sought to file under seal two exhibits—Exhibits C and D in support of their

7 Opposition, which are “class member lists”—produced by Defendants and designated

8 “CONFIDENTIAL” pursuant to the then-operative Protective Order entered in this action,

9 ECF No. 19. (See Mot. to Seal at 1; ECF No. 191-1 (“Markley Decl.”) ¶¶ 4–5.) At the

10 hearing, the Court expressed concern with the public disclosure of certain information,

11 including the PAGA participants’ names and contact information. (See Tr. at 16:8–15; see

12 also Gunderson v. Alta Devices, Inc., No. 19-CV-08017-BLF, 2021 WL 4461569, at *4

13 (N.D. Cal. Sept. 29, 2021) (granting motion to seal “exhibits that contain personally

14 identifying information of Class members”); Hernandez v. Wells Fargo Bank, N.A., No. C

15 18-07354 WHA, 2020 WL 6020593, at *8 (N.D. Cal. Oct. 12, 2020) (noting that putative

16 class members’ “contact information and addresses [should] be redacted”)). The Parties

17 therefore agreed to file a redacted version of the exhibits, which Plaintiffs filed on

18 November 12, 2021. (See generally ECF No. 220.) Accordingly, the Court DENIES AS

19 MOOT Plaintiffs’ Motion to Seal (ECF No. 191).

20 B. Defendants’ Renewed Motion to Seal

21 In support of his Motion for Partial Summary Judgment, Mr. Russell previously

22 lodged under seal twenty-two documents designated by Defendants as

23 “CONFIDENTIAL” under the Stipulated Protective Order in this action. (See generally

24 ECF No. 172.) Because no showing had been made that there existed compelling reasons

25 to file those documents under seal, the Court denied without prejudice the motion and

26 allowed Defendants to file a renewed motion. (See ECF No. 206 at 28–29.)

27 Presently before the Court is Defendants’ Renewed Motion to Seal, which was filed

28 pursuant to the Court’s September 21, 2021 Order and which Mr. Russell opposes in part.

1 In their Renewed Motion to Seal, Defendants concede that the following documents may

2 be filed publicly in their entirety: Exhibits D, F, L, W, X, Y, Z, AA, BB, CC, DD, EE, JJ,

3 and NN, (see Defs.’ Renewed Mot. to Seal at 1–2), but request that “the documents’

4 confidentiality designations under the protective order . . . remain in force and effect.” (See

5 id. at 3.) As for the remaining exhibits, Defendants urge that Exhibits I, M, and N be sealed

6 in their entirety because they contain “internal financial information,” as do those portions

7 of Exhibit EE (13:17–19:25, 34:1–41:25, 55:1–59:25, 72:1–74:14, and 110:1–111:12) and

8 Mr. Russell’s memorandum (3:19–20, 5:3–5, 5:12–14, 5:17–19, page 5 n.4, 6:2–5,

9 6:12–14, 618–19, 6:20–21, 624–7:3, 11:23–25, and 14:10–12) discussing those exhibits.

10 (See Defs.’ Renewed Mot. to Seal at 4–6.) Defendants also argue that Exhibits J, O, and

11 T, as “external accounting reports,” must be sealed in their entirety, along with page 64

12 line 6 through 65 line 25 of Exhibit EE and page 5 at lines 6 through 8 and page 6 at lines

13 6 through 8 of Mr. Russell’s memorandum, (see Defs.’ Renewed Mot. to Seal at 6–7), and

14 that Exhibits H and K, as “supplier and product agreements,” must also be sealed in their

15 entirety. (See Defs.’ Renewed Mot. to Seal at 7–8.)

16 Mr. Russell does not object to the public filing of Exhibits D, F, L, W, X, Y, Z, AA,

17 BB, CC, DD, JJ, and NN, or to the filing under seal of Exhibits H, J, K, O, T, and Exhibit

18 EE at page 5 at lines 6 through 8 and page 6 at lines 6 through 8. (See Sealing Opp’n; ECF

19 No. 212 (“Sealing Reply”) at 1 n.1.) Mr. Russell does object, however, to the continuing

20 confidentiality designation under the Protective Order of any documents filed publicly, (see

21 Sealing Opp’n at 5–6), and to the sealing of Exhibits I, M, and N and those portions of

22 Exhibit EE and Mr. Russell’s memorandum discussing them. (See id. at 3–5.) Specifically,

23 Mr. Russell contends that Exhibits I, M, and N have already been publicly filed in Bruers

24 v. Flowers Foods, Inc., Case No. 8:18-CV-1442 JLS (ADS) (C.D. Cal. filed July 10, 2019),

25 ECF No. 65. (See Sealing Opp’n at 4; see also ECF No. 210-1 (“Markley Decl.”) Ex. 2.)

26 Defendants counter that, “[t]he fact some (but not all) of these documents were ordered

27 filed over objection in a different matter does not change the binding nature of the

28 Protective Order and Federal authority on the present issue.” (See Sealing Reply at 2.)

1 The Court finds that Defendants already have filed publicly in Bruers pages 1

2 through 6 of Exhibit I; Exhibit M in its entirety; and page 18 line 1 through page 19 line

3 25, page 38 line 1 through page 41 line 25, and page 72 line 1 through page 74 line 14 of

4 Exhibit EE.5 As to these exhibits, “however confidential [they] may have been beforehand,

5 subsequent to publication [they] w[ere] confidential no longer.” See Gambale v. Deutsche

6 Bank AG, 377 F.3d 133, 144 (2d Cir. 2004). Whether “[t]he genie is out of the bottle,” see

7 id., or “the cat is out of the bag.” See id. at 144 n.11, “[t]he information is publicly available

8 on the [Central District] docket, which generally moots any later attempt to seal the

9 documents from public view.” See Al Otro Lado, Inc. v. Wolf, No. 17CV2366-BAS(KSC),

10 2020 WL 2097598, at *5 (S.D. Cal. May 1) (citing Kamakana, 447 F.3d at 1184; Constand

11 v. Cosby, 833 F.3d 405, 410 (3d Cir. 2016); Gambale, 377 F.3d at 144), adopted, 2020 WL

12 5422784 (S.D. Cal. Sept. 10, 2020); see also Doe No. 1 v. Reed, 697 F.3d 1235, 1238 (9th

13 Cir. 2012) (“Th[e] relief [Defendants seek] is no longer available because the [exhibits] are

14 now available to the public.”); WAG Acquisition, LLC v. Flying Crocodile, Inc., No. 2:19-

15 CV-1278-BJR, 2021 WL 2778578, at *10 (W.D. Wash. July 2, 2021) (“A request to seal

16 information that was publicly disclosed involves ‘an inherent logical dilemma’ in that

17 ‘information that has already entered the public domain cannot in any meaningful way be

18 later removed from the public domain.’” (quoting Victory Sports & Entm’t LLC v. Pedraza,

19 No. 2:19-cv-00826-APG-NJK, 2019 WL 2578767, at *2 (D. Nev. June 24, 2019))). The

20 Court therefore DENIES Defendants’ Renewed Motion to Seal as to pages 1 through 6 of

21 Exhibit I; the entirety of Exhibit M; and page 18 line 1 through page 19 line 25, page 38

22 line 1 through page 41 line 25, and page 72 line 1 through page 74 line 14 of Exhibit EE.

23 Further, because the purpose of the Protective Order is to protect “confidential . . .

24 information . . . from public disclosure” and “extends only to the limited information or

25

26 5 Although Mr. Russell did not append those portions of Vandy Davis’ deposition that were publicly filed

in Bruer, the Court may take judicial notice of the docket and filings in that action. See, e.g., United States

27

v. Raygoza-Garcia, 902 F.3d 994, 1001 (9th Cir. 2018) (“A court may take judicial notice of undisputed

28 matters of public record, which may include court records available through PACER.” (citing Fed. R.

1 items that are entitled to confidential treatment under the applicable legal principles[,]”

2 (see, e.g., ECF No. 19 ¶ 1), the protections of the Protective Order do not apply to those

3 documents that have already been disclosed to the public on the docket of Bruger or to

4 those documents that “Defendants now agree can be filed publicly,” i.e., Exhibits D, F, L,

5 W, X, Y, Z, AA, BB, CC, DD, JJ, and NN. (See Defs.’ Renewed Mot. to Seal at 1–2.)

6 Accordingly, the Court DENIES Defendants’ Motion to Seal to the extent it seeks to

7 maintain the confidentiality designations of publicly filed exhibits under the Protective

8 Order in this action.

9 Having reviewed pages 7 through 10 of Exhibit I; Exhibits H, J, K, N, O, T, and EE

10 in their entirety; and Mr. Russell’s memorandum, the Court concludes that Defendants

11 have met their burden as to filing pages 7 through 10 of Exhibit I and Exhibits H, J, K, O,

12 N, and T under seal in their entirety. The Court therefore GRANTS Defendants’ Renewed

13 Motion to Seal as to those specific documents. Although there exist compelling reasons to

14 file under seal these underlying exhibits, the Court concludes that the quotations from,

15 references to, and discussions of these exhibits in Mr. Davis’s Deposition (Exhibit EE) and

16 Mr. Russell’s memorandum may be filed publicly. The Court therefore DENIES

17 Defendants’ request to file under seal excerpts from Mr. Russell’s memorandum and Mr.

18 Davis’s Deposition (Exhibit EE). Accordingly, Mr. Russell SHALL FILE PUBLICLY

19 his memorandum; a version of Exhibit I redacting pages 7 through 10; and Exhibits D, F,

20 L, W, X, Y, Z, AA, BB, CC, DD, EE, JJ, and NN in their entirety. The Clerk of Court

21 SHALL FILE UNDER SEAL in their entirety Exhibits H, I, J, K, O, and T, which were

22 previously lodged under seal at ECF Nos. 219-2, 219-3, 219-4, 219-5, 219-8, and 219-9.

23 CONCLUSION

24 In light of the foregoing, the Court GRANTS IN PART AND DENIES IN PART

25 Defendants’ Motion for Partial Summary Judgment (ECF No. 182). Specifically, the Court

26 GRANTS Defendants’ Motion as to Plaintiffs’ PAGA claims premised on violations of

27 section 204 of the California Labor Code but DENIES the remainder of Defendants’

28 Motion. The Parties SHALL FILE a Joint Status Report within one (1) week of the

1 electronic docketing of this Order addressing the status of this litigation and proposing a

2 ||schedule of pretrial dates and deadlines.

3 The Court also DENIES AS MOOT Plaintiffs’ Motion to Seal (ECF No. 191), and

4 ||GRANTS IN PART AND DENIES IN PART Defendants’ Renewed Motion to Seal

5 || (ECF No. 209). As discussed above, see supra pages 14—17, within three (3) days of the

6 || electronic docketing of this Order, Mr. Russell SHALL FILE PUBLICLY an unredacted

7 || version of his memorandum (ECF No. 173-23); a version of Exhibit I (ECF No. 173-4)

8 ||redacting pages 7 through 10; and Exhibits D, F, L, W, X, Y, Z, AA, BB, CC, DD, EE, JJ,

9 NN in their entirety (ECF Nos. 173-1—2, 173-7, 173-12—-22). The Clerk of Court

10 || SHALL FILE UNDER SEAL in their entirety Exhibits H, I, J, K, O, and T, which were

11 previously lodged under seal at ECF Nos. 173-3/219-2, 173-4/219-3, 173-5/219-4, 173-

12 || 6/219-5, 173-10/219-8, and 173-11/219-9, respectively.

13 IT IS SO ORDERED.

14 || Dated: December 3, 2021

15 | Odd (3 (re

16 Honorable Todd W. Robinson

United States District Judge

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