Montoya v. CRST Expedited, Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

___________________________________

)

JUAN CARLOS MONTOYA, )

on behalf of himself and )

all others similarly situated, )

)

Plaintiff, )

)

v. ) Civil Action

) No. 16-10095-PBS

CRST EXPEDITED, INC. and )

CRST INTERNATIONAL, INC., )

)

Defendants. )

___________________________________)

MEMORANDUM AND ORDER

September 6, 2019

Saris, C.J.

INTRODUCTION

Juan Carlos Montoya, a long-haul truck driver, alleges that

Defendants CRST Expedited, Inc. and CRST International, Inc.

underpaid their drivers, misled drivers regarding the costs of

driver training, and imposed excessive charges to recoup those

costs in violation of the federal Fair Labor Standards Act, 29

U.S.C. § 201 et seq. (“FLSA”), and Iowa law. Montoya brings

claims under the FLSA (Count I), Iowa wage law (Count II), the

Iowa Consumer Frauds Act (Count III), and Iowa usury law (Count

IV). The Court has certified a collective action under the FLSA

and three Rule 23 classes for the state-law claims (Docket No.

131). The parties now cross-move for partial summary judgment.

Defendants seek summary judgment in part on Counts II, III, and

IV, and move to narrow the scope of Count I. Montoya moves for

summary judgment as to liability on Counts I, II, and III. After

hearing, the Court ALLOWS IN PART and DENIES IN PART CRST’s

motion for summary judgment (Docket No. 146) and ALLOWS IN PART

and DENIES IN PART Montoya’s motions for summary judgment

(Docket Nos. 150 and 153).

BACKGROUND

Unless otherwise noted, the following facts are undisputed.

I. CRST’s Business Model

CRST Expedited, Inc., CRST International, Inc., and the

North American Driver Training Academy (“NADTA”) are part of a

family of companies that provide trucking services across North

America. CRST International, Inc. is a shared services company

which provides management services to other CRST companies,

while CRST Expedited, Inc. is a long-haul truck carrier which

trains people who have never driven a truck before

(collectively, “CRST”). NADTA is CRST’s own truck driver

training school. CRST is incorporated in Iowa and headquartered

in Cedar Rapids, Iowa. CRST’s human resources and payroll

functions are conducted out of Cedar Rapids. CRST is a

profitable company.

CRST uses a team-driving approach in which two drivers are

assigned to each truck. The United States Department of

Transportation (“DOT”) regulations specify that a driver may

only drive during a period of fourteen consecutive hours after

coming on duty following ten consecutive hours off duty. See 49

C.F.R. § 395.3(a). A driver may drive a total of eleven hours

during the fourteen-hour period. Id. Under a team-driver

approach, driver A drives or performs other work duties while

driver B is off duty and resting in the sleeper berth or

passenger seat. After driver A has exhausted his on-duty or

driving time, the drivers switch and this cycle continues until

the truck gets from its origin to its destination. Thus, the

team-driver approach allows CRST “to run goods all the way

across the country in half the time it takes either a solo team

. . . or a company that only assigns one driver to the truck”

without violating DOT regulations. Docket No. 151-5 at 12:12-25.

Team driving is “very arduous.” Docket No. 151-2 at 65:5.

Drivers are in close contact with another person for a long

period of time, they do not have much privacy, the truck is in

close-to-continuous motion, and the drivers typically go home

only once every three weeks or so (whereas, for other trucking

companies, drivers can be home at least every week). CRST has

difficulty recruiting experienced truck drivers. CRST also has a

high employee turnover rate of approximately 160% per year,

i.e., for every one hundred truck driving jobs CRST needs to

fill each year, it must hire one hundred and sixty drivers.

Docket No. 151- 2 at 73:12-73:24. To ensure that it has a

sufficient supply of drivers, CRST operates a driver training

program. This program only trains drivers who have the intention

of becoming employees with CRST. Without the driver training

program, CRST likely could not operate as currently configured

because it would not have a large enough supply of experienced

drivers willing to do team-driving.

II. Recruitment

CRST recruits drivers from across the country. CRST’s

advertisements and recruiting materials advertise “sponsored” or

“covered” truck driver training to receive a commercial driver’s

license (“CDL”) and job placement. One advertisement states: “No

experience? No Problem! Get paid to train. In as little as three

weeks of sponsored training at an approved CRST facility, you’ll

be on the road, traveling the country, as a professional truck

driver.” Docket No. 151-7 at 1. Another states: “See the country

on our dime. And we’ll even cover training.” Docket No. 151-7 at

6. In 2013, Montoya received a handwritten postcard from a CRST

recruiter which stated in part: “Free CDL training & sign on

bonuses!” Docket No. 148-4.

When a potential driver expresses interest in the CRST

program, the company sends the individual a welcome packet. The

welcome packet states that CRST “has opportunities for everyone,

including: Individuals who need training in order to obtain a

Class A CDL.” Docket No. 151-9 at 1. Under the heading “Summary

of Benefits of Driving for CRST Expedited” the packet states,

“CRST will pay the fee for your CDL license – CDL A permit and

CDL A License.” Id. at 4. Additionally, it states:

CRST will pre-pay all your school expenses – CRST will

pre-pay your tuition and as long as you work for CRST

for 10 months, you will not have to repay that

tuition! CRST will also prepay your transportation,

lodging, physical, and drug-screen. After you have

been employed for 6 weeks, you repay these expenses

over time as a payroll deduction of $40 per week.

Id. The packet does not disclose the cost of tuition, repayment

terms, or the required non-competition provision if a student

does not drive with CRST for ten months.

Under the heading “How to Get Your Class A CDL With CRST,”

the welcome packet lays out two ways for new drivers to pay for

training: (1) “Company-sponsored training to get your CDL with

an [sic] 10-month contract” or (2) “Prepayment plan to get your

CDL with no contract and a higher starting rate of pay.” Id. at

5. The packet describes the first option as follows:

If you need to obtain your class A CDL, but lack the

funds to do so, we offer an outstanding company-

sponsored training program. With no credit checks! In

return, we ask that you work for CRST Expedited for

ten months. At the end of ten months, you are free to

stay or leave, it’s that simple. You will sign an

[sic] 10-month contract and be what we call a

“contract” student. CRST will not deduct the cost of

your training from your paychecks.

Id. The packet proceeds to list payroll deductions drivers

should expect if they choose this option, including the cost of

the bus ticket to school, the DOT-required physical and drug

screen, lodging, and a $50 processing fee. The packet explains

that the items listed are “paid for by CRST up front,”

“[p]aycheck deductions will begin after your sixth week of

employment with CRST,” and “total payroll deductions will not

exceed $40 per week for all of these items combined.” Id. With

respect to the second, prepayment option, the packet explains

that the student pays $6,500 prior to starting driver school and

“[i]n return, [the driver does] not have to sign any contract

and . . . will start driving at a higher rate of pay than a

contract student.” Id.

III. Driver Training Program

CRST requires most prospective hires to complete its four-

phase driver training program.1 As an overview, Phase 1 consists

of a two-to-three day course for drivers to receive their

commercial learner’s permits (for those who do not already have

1 Drivers who have already obtained a CDL and have recent and relevant

driving experience are not required to participate in the driver training

program or sign the pre-employment agreement and driver employment contract.

Drivers who obtained training elsewhere and have a CDL but do not have recent

driving experience, are required to go through a refresher course, and sign

the pre-employment agreement and driver employment contract. For example,

Montoya obtained a CDL in 2012, but at the time of his application to CRST in

2014 he did not have recent driving experience. He was still required to sign

the pre-employment agreement but only had to participate in a two-week

refresher course rather than the three-week driver training school before

continuing on to Phase 2.

one) and then approximately two-and-a-half more weeks of school

to earn their CDLs. During Phase 2, drivers attend a CRST-run

orientation at a CRST facility, conducted by CRST employees. The

orientation, which lasts two-and-a-half to three-and-a-half

days, covers CRST policies and procedures, including a road

test. Drivers are not compensated for time spent in either Phase

1 or Phase 2. Upon successful completion of Phases 1 and 2, CRST

puts the driver on payroll, which initiates Phase 3. Phase 3

consists of approximately twenty-eight days of team-driving

where a new driver is matched with a “lead driver” who has at

least six months of driving experience. When the lead driver

determines that the student driver is ready, the student driver

advances to Phase 4 and is matched with a co-driver. Phase 4

consists of an additional (approximately) nine months of team-

driving under contract with CRST. Overall, from November 11,

2013 through March 31, 2017, 25,796 drivers started Phase 1 and

only 5,360 drivers completed Phase 4 of the driver training

program.

A. Phase 1: Driver Training School

Before a driver starts Phase 1, CRST initiates several

hiring checks pursuant to DOT and internal hiring guidelines,

including a motor vehicle check, an employment history check,

and a criminal background check. Drivers then attend Phase 1

training at either the CRST-affiliated NADTA in Cedar Rapids,

Iowa, or at an independent certified driver training school with

whom CRST partners. Drivers are most frequently sent to NADTA.

Regardless of whether the prospective drivers attend NADTA

or the independent driver training schools, CRST recruiters

arrange for and pay to transport drivers to Phase 1 training.

CRST also provides and pays for drivers’ housing during Phase 1.

As explained in the CRST welcome packet, in order to go through

a driver training program, whether NADTA or the independent

driver training schools, prospective drivers must bring with

them a driver’s license, social security card, immigration

documentation, if applicable, “employment documentation,” a

voided check for direct payroll transfers, and an original birth

certificate or passport. Docket No. 151-9 at 6.

1. Phase 1 Content

To receive a CDL in any state, a driver must test for and

obtain a commercial learner’s permit, hold the learner’s permit

for a minimum of fourteen days, and then take the test for the

CDL. Although states may develop their own tests for commercial

learner’s permits and licenses, the Federal Motor Carrier Safety

Administration sets the minimum standards for testing

requirements. The training provided to drivers during Phase 1 is

designed to provide them with the knowledge and skills needed to

meet the federal CDL testing requirements. Student drivers

receive essentially the same training at any good driving

school.

CRST has developed its own curriculum for Phase 1 which is

used at NADTA. The classroom training at NADTA includes lessons

on federal and state regulations; compliance, safety, and

accountability; safe operations; tractor and trailer knowledge;

inspections; defensive driving; and personal safety. Phase 1

also includes behind-the-wheel training in which students

practice the concepts learned in the classroom. This includes

inspections; basic control of equipment; backing, proper set-

ups, turns, shifting, coupling and uncoupling; defensive

driving; and driving in rural, city, and interstate conditions.

CRST shares this curriculum with the driver training schools and

“strongly encourage[s]” them to use it. Docket No. 151-2 at

42:23-43:11.

2. Independent Driver Training Schools

Independent driver training schools provide training to any

driver who wishes to obtain a CDL, not just those individuals

seeking employment with CRST. However, CRST has entered into

agreements with the schools that address payment, training

requirements, hiring, and employment requirements for CRST-

affiliated student drivers. CRST’s standard agreement with the

driver training schools states that the schools will provide a

training program with “[c]lassroom and skill facilities,

including the training equipment, approved by CRST,” and medical

providers to administer the DOT-required drug tests and physical

examinations. Docket No. 151-14 at 1. Under the heading “Non-

Competition,” the agreement provides that “[t]he School

understands that upon completion of CRST’s in-house orientation

program, the graduating students will be subject to an [sic] 10-

month employment contract.” Docket No. 151-14 at 3. The

agreement states that the schools also “agree that Students

referred to the School[s] by CRST will not be subject to

solicitation by other motor carriers interviewing Students at

the School[s] for potential truck driving jobs.” Docket No. 151-

14 at 4. The agreement also provides that “Students not meeting

the minimum hiring standards set by CRST shall be brought to the

attention of the School Manager, who will dismiss the students

from the School.” Docket No. 151-14 at 7.

As to fees, CRST will only pay the driver training schools

for “completed” students, i.e., those who have successfully

completed the training program, obtained a Class A CDL,

“[a]rrived at a CRST Orientation facility,” and “[s]uccessfully

passed the CRST road and written tests, drug test . . . ,

agility test, and, further, meet the CRST hiring standards and

job description.” Docket No. 151-14 at 2. The amount that CRST

pays driver training schools per “completed” student driver

ranges from $1,400 to $2,500. Since December 2013, the amount

CRST pays NADTA per student has ranged from $1,450 to $2,150.

3. Pre-Employment Agreement

At the beginning of Phase 1, at both NADTA and the

independent driver training schools, student drivers sign a pre-

employment driver training agreement, which governs Phases 1 and

2 of the program. The pre-employment agreement states that

student drivers are not employees and will not be paid for

Phases 1 and 2. It also states that if the driver satisfies the

preliminary requirements for training, CRST will pay, on behalf

of the driver, subject to repayment conditions, “(a) the tuition

charged by the Educational Facility for Student to attend Phase

1, (b) Student’s Lodging Cost, (c) Student’s Transportation

Cost; and (d) Student’s DOT physical and drug screen.”2 Docket

No. 151-15 ¶ 9. Additionally, if the student driver

successfully completes Phase 1, CRST will advance the lodging

costs and transportation costs for the student driver to attend

Phase 2. Student drivers are notified in the pre-employment

agreement that the amount advanced by CRST in Phases 1 and 2

“will equal or exceed the sum of $2,000.” Id. ¶ 11(a).

2 The lodging cost charged to each driver is an “average” cost of lodging

and does not change based on the actual cost for lodging at that particular

training location, except for drivers who attend training in California. See

Docket Nos. 151-8, 151-43.

The pre-employment agreement provides that if the driver is

dismissed or withdraws from the training program during Phases 1

or 2, then he owes the costs advanced by CRST subject to an

interest rate “equal to the lesser of 1.5% per month [18% per

year] or the maximum rate permitted by applicable federal and

state usury laws.” 3 Id. ¶ 11(b).

Additionally, student drivers learn in the pre-employment

agreement that they will be required to sign a driver employment

contract before Phase 3 in order to be employed by CRST. The

pre-employment agreement provides that if the driver does not

complete the ten-month period of employment required by the

driver employment contract (i.e., Phases 3 and 4 of the driver

training program), then the driver will owe and immediately must

pay to CRST: $6,500 for the driver training school,4 plus the

amounts advanced by CRST on behalf of the driver for the DOT

physical and drug screen, lodging costs, and transportation

3 If the student driver attended Phase 1 at NADTA, then the “tuition” the

driver owes to CRST is $4,700. If the student driver attended Phase 1 at an

independent driver training school, then CRST does not attempt to collect any

tuition from the student, only the other training-related expenses advanced

by CRST.

4 Montoya refers to this fee as “tuition” but CRST denies that the $6,500

is “tuition” to attend the driver training schools. The $6,500 differs from

the $4,700 charged as “tuition” to students who drop out of NADTA before

Phase 3. Once student drivers sign the driver employment contract – whether

they attended NADTA or an independent driver training school – they are

charged $6,500 for training in addition to other expenses if they do not

complete Phases 3 and 4.

costs incurred during Phase 1.5 This total sum owed is subject to

the same interest provision in the pre-employment agreement.

Prospective drivers do not appear to receive a copy of the

actual driver employment contract at the time they have to sign

the pre-employment agreement.

Finally, the pre-employment agreement prohibits the driver

training school from giving to any student or third party any

information related to a student driver’s grades, transcripts,

or completion of the training until CRST gives the school

written notification that the student driver fulfilled his

obligations to CRST, including paying all debt owed. For

example, if an employer calls to verify the education of a

driver who has completed Phase 1 but has not paid CRST the

amounts owed, then CRST will not verify their education. It also

will not verify the education status of someone who has

completed Phase 2 but has not yet signed a driver employment

contract with CRST or paid off his debt to CRST. If the driver

attends training at NADTA, one of the graduation requirements is

that he sign the driver employment contract on the last day of

Phase 1. NADTA will not provide a driver with a certificate of

5 Previously, the driver employment contract was eight months long and

charged student drivers $3,950 plus expenses and interest if they did not

complete the four-phase program. The contract term was increased from eight

months to ten months and from $3,950 to $6,500 on October 27, 2014. These

changes were based on an internal analysis by CRST which determined its cost

per student to get a contract student through its entire four-phase driver

training program was $6,509.

graduation unless he has either signed a driver employment

contract with CRST or paid off the debt owed to NADTA for the

driver training school.6 The parties dispute how much time a

student driver has to review the pre-employment agreement at the

driver training school before he must decide whether to sign.

4. Other Phase 1 Paperwork

During Phase 1 student drivers must also sign an assignment

of wages and payroll deduction agreement authorizing CRST to

deduct $40 per week from future wages and a release agreement

authorizing CRST to request background information from a

consumer reporting agency.

Student drivers who need to obtain commercial learner’s

permits begin Phase 1 in Iowa where they attend a Sunday night

welcome meeting. At the meeting, permit students complete the

pre-employment agreement and a change of domicile form, and must

also sign a letter confirming, “that __________ has accepted

employment as a truck driver for CRST Expedited, Inc., subject

to specific requirements outlined on the attached domicile

form,” which include obtaining a Class A CDL license,

“[s]uccessfully completing CRST’s driver orientation course,”

6 Similarly, if a driver fails to complete Phases 3 or 4 and has not paid

off his debt to CRST, the company will not verify the driver’s successful

completion of driver training school to a prospective employer or allow a

driver to obtain a certificate verifying his completion of driver training

school. CRST has instituted legal action against other employers in the

trucking industry that have attempted to hire drivers who have completed

Phase 1 and/or Phase 2 with CRST but have either not paid off the debt they

owe, or not completed their ten-month employment term.

and passing the DOT physical and drug test. Docket No. 151-20 at

1-2.

B. Phase 2: CRST Orientation

After Phase 1, drivers attend CRST’s orientation, which is

held at a CRST facility, in order to be hired by CRST. Nearly

all drivers who complete Phase 2 are hired. For example, from

November 11, 2013 through March 31, 2017, of the 13,127 drivers

who completed Phase 2 training, 13,037 began employment with

CRST. Drivers are not paid for the time they spend in

orientation, but CRST advances the costs of housing and

transportation for Phase 2.

1. Phase 2 Content

Phase 2 is held primarily in a classroom. The orientation

program is always run by CRST employees who use the same

materials at every training facility. The orientation is two-

and-a-half to three-and-a-half days long depending upon the

driver’s experience. During the additional day of the three-and-

a-half-day orientation, new drivers receive more extensive

safety training on topics like hours of service, wellness, and

whistleblowing. Approximately 70% of drivers attend the three-

and-a-half-day version.

The parties dispute how much of the Phase 2 content is

CRST-specific as opposed to universally applicable in the

trucking industry. Generally, the orientation consists of new

hire paperwork; DOT physicals and drug screenings; information

about pre-trip inspections and trip planning; the CRST-specific

“Smith System” for driving; training on the Whistleblower Act;

training on hours of service and use of the system employed by

CRST to log hours; an agility test; briefings from CRST

departments regarding hazardous materials, wage rates, safety,

customer service, driver benefits and payroll, and student lead

driver expectations; training on employment policies; and

issuances of employee ID cards and other employment documents.

During orientation, all drivers are also given a new hire

packet with health insurance information and acknowledgements

regarding CRST employment policies, including a document

entitled “Employee Acknowledgements” requiring an “Employee

Signature.” Docket No. 151-31. The driver handbook states: “You

begin your career at CRST with an orientation program

emphasizing safety.” Docket No. 151-32. It also states: “We are

pleased you have become part of our corporation. It is our

belief that you will find your employment/contracting with this

company to be challenging and rewarding . . . .” Docket No. 151-

32.

2. Driver Employment Contract

If a driver attends Phase 1 at NADTA, then he must sign a

driver employment contract as a condition of graduation. Other

drivers sign the contract at orientation. The term of employment

under the contract is ten months.

The contract contains the same payment provisions for

amounts owed as the pre-employment agreement.7 The contract

states that the driver acknowledges CRST advanced, in accordance

with the pre-employment agreement, “the payment of certain

tuition, lodging, transportation and other expenses and fees

incurred by” the driver during Phases 1 and 2. Docket No. 151-25

¶ 7. CRST will deduct up to $40.00 per week from the driver’s

paycheck as repayment to CRST for these advances. These

deductions will continue throughout the driver’s employment term

until the driver “pays in full the principal amount plus

interest accruing at the rate equal to the lesser of 1.5% per

month or the maximum rate permitted by applicable federal and

state usury laws.” Id. at ¶ 7(a).

Additionally, the driver employment contract states that if

the driver breaches or is terminated, then the driver will owe

and immediately must pay to CRST: (i) $6,500, (ii) the amounts

advanced by CRST not yet repaid via paycheck deductions, and

(iii) interest “at a rate equal to the lesser of 1.5% per month

7 However, during the transition from the eight-month/$3,950 contract to

the ten-month/$6,500 contract in October of 2014, some individuals, including

Montoya, may have signed the old pre-employment agreement but the new driver

employment contract.

or the maximum rate permitted by applicable federal and state

usury laws.” Id. at ¶ 7(b).

The driver employment contract signed by most students also

contains a non-competition provision which prohibits drivers

from working for any CRST competitor within the continental

United States during the ten-month term of the contract, unless

the driver pays off the full amount of his debt.8 If the driver

repays the debt, the covenant not to compete immediately lapses.

When drivers who are still under contract to CRST attempt to

find work with other trucking companies, CRST “notif[ies]

carriers who are conducting DOT mandated employment

verifications of the existence of the contract,” and has

commenced litigation against competing carriers who hire student

drivers. Docket No. 151-13 at No. 56.

3. Other Phase 2 Paperwork

During orientation, drivers also sign a contingent offer of

employment and complete standard employment paperwork, including

a Form 1-9. The contingent offer reads: “CRST International

offers to employ you as an Over-the-Road Driver provided the

following conditions are met . . . .” Docket No. 151-26. Drivers

8 The only states where the driver employment contracts do not include

the non-competition provision are California and Oklahoma. See Docket No.

159-8 ¶ 177; see also Docket No. 159-4 at 119:6-14; Docket No. 151-56 (driver

employment contracts by state). Between January 2014 and December 2017,

approximately 7,618 drivers signed contracts without the non-competition

provision whereas approximately 16,369 individuals signed contracts with the

restrictive covenants. See Docket No. 159-8 ¶ 178; see also Docket No. 151-

57.

also sign additional forms authorizing payroll deductions for

amounts advanced by CRST. Drivers also sign international driver

acknowledgements/authorizations forms and direct deposit forms

for future paychecks.

C. Phases 3 and 4: Team-Driving

Upon successful completion of orientation, CRST puts

drivers on payroll, which initiates Phase 3. Phase 3 is

approximately twenty-eight days of team driving, where a student

driver is matched with a “lead driver” who has at least six

months of driving experience. When the lead driver determines

that the student driver is ready to advance to Phase 4, the

student driver is matched with a co-driver for the remainder of

the employment term.

1. Time Logs

During Phases 3 and 4, drivers log their time in four

different categories according to DOT regulations: (1) driving

time, (2) on-duty time, (3) sleeper berth time, and (4) off-duty

time. All time spent at the controls of a commercial motor

vehicle is considered driving time. On-duty time is time a

driver is working, or is required to be ready for work, except

driving time. This includes waiting for dispatch, conducting

pre- and post-trip inspections, fueling the truck, and loading

and unloading it. On-duty time also includes time drivers spend

attending mandatory safety events and taking DOT-required drug

tests. Only time spent in the sleeper berth may be recorded as

sleeper berth time. And a driver is off-duty when he is relieved

of all duties and responsibilities, such as during meals,

breaks, and showers. A driver may also log up to two hours in

the passenger seat as off-duty time if it immediately precedes

or follows eight consecutive hours in the sleeper berth (other

time spent in the passenger seat is considered on-duty). Drivers

sometimes log more than eight hours in the sleeper berth during

a 24-hour period.

2. Wage Rates and Payroll

CRST pays drivers during Phases 3 and 4 using a split-

mileage formula. Under the formula, drivers are paid a certain

rate-per-mile for half the total mileage covered by the team

during a trip. For example, if a team drove 1,000 miles, each

driver would be paid for 500 miles at his specific mileage rate,

regardless of whether one driver worked more on-duty and driving

hours than his co-driver. The split-mileage rates vary based on

a driver’s length of experience and whether he is a student

driver or not. A new student driver without driving experience

starts Phase 3 at $0.25 per split mile and works his way up to

$0.26 after three months and $0.32 after six months of driving

experience.

3. Deductions

During Phases 3 and 4, CRST makes various deductions from

drivers’ paychecks. In Phase 3, CRST deducts $50 for each

physical examination or drug screen test, a $50 processing fee,

and approximately $27 if a driver chooses to purchase a “map

pack” from CRST containing an atlas and a tire gauge.9 During

both Phases 3 and 4, drivers may request pay advances. CRST

deducts a $4 wire charge from a driver’s pay for each advance.

Beginning in Phase 4, CRST makes deductions from drivers’

paychecks for the costs of housing and transportation provided

during Phases 1 and 2. These deductions can total hundreds of

dollars. For example, opt-in plaintiff Hollingsworth had a total

of $255 deducted for transportation and $500 for housing.

Similar amounts were deducted from opt-in plaintiff Fogarty’s

paychecks. If a driver does not complete Phase 4, CRST deducts

the remaining amounts owed even if the deductions exceed $40,

including the $6,500 training expenses, to the extent possible.

IV. Debt Collection

To the extent that amounts owed to CRST cannot be repaid

via deductions from a driver’s last paycheck, or if he drops out

of the training program before Phase 3, CRST initiates a post-

9 The parties dispute exactly how much is deducted for the map pack. CRST

contends that it deducts $30 per map pack, paid in four installments of $7.50

each. Johnson and Fogarty had $27 and $24 deducted for the map pack,

respectively.

employment collections process.10 The post-employment collection

process for CRST and NADTA is handled by CRST International

Inc.’s collections department in Cedar Rapids, Iowa. CRST sends

two letters to drivers prior to sending their accounts to a

third-party debt collector. The collection letters state that

there are two ways to avoid further collection efforts:

(1) return to work for CRST and fulfill the remainder of the

contract or (2) pay the amount due.

The first letter states that CRST will not release the

driver’s diploma and school records until it receives payment in

full. The letter gives the driver two weeks, after which it

states that CRST “may TURN THIS ACCOUNT OVER TO OUR COLLECTION

AGENCY. This may affect your current and future credit rating.”

Docket No. 151-42. Both letters state: “If you cannot pay off

the full amount of the loan at this time, we would be willing to

accept monthly payments at 18% interest if you comply with the

Restrictive Term as stated in your Driver Employment Contract.”

Docket No. 151-42.

10 If a driver attends Phase 1 at NADTA but does not begin Phase 3 with

CRST, then CRST/NADTA seeks reimbursement for the advances and a $4,700

tuition fee. If a driver attends Phase 1 at an independent driver training

school but drops out before Phase 3, then the driver owes CRST for amounts

advanced and any tuition CRST paid to the school on the driver’s behalf. For

any drivers who begin Phase 3 but do not complete the employment term, CRST

seeks to collect any remaining balances for the advances and a $6,500

training fee, regardless of where the driver attended Phase 1 driver

training.

The pre-employment agreement, driver employment contract,

and collection letters all reference interest accruing on the

debts owed; however, a CRST employee responsible for collecting

debt from student drivers states that he has never collected

interest on any account he had worked on.

PROCEDURAL HISTORY

Montoya filed suit against CRST on January 21, 2016 on

behalf of himself and all other similarly situated individuals.

In March 2016, CRST moved to dismiss under Federal Rule of Civil

Procedure 12(b)(6) or to transfer to the Northern District of

Iowa under 28 U.S.C. § 1404(a) (Docket No. 7). Defendants relied

primarily upon a forum-selection clause in the driver employment

contract which fixes venue in Cedar Rapids, Iowa. After some

discovery and a hearing, the Court denied Defendants’ motion to

dismiss or transfer. See Montoya v. CRST Expedited, Inc., 285 F.

Supp. 3d 493, 501 (D. Mass. 2018).

Montoya’s first amended complaint raises four causes of

action: violation of the Fair Labor Standards Act, 29 U.S.C.

§ 201 et seq. (Count I); violation of the Iowa Wage Payment

Collection Law, Iowa Code § 91A.1 et seq., the Iowa minimum wage

law, Iowa Code § 91D.1, and Iowa Admin. Code § 875-35.2(91A)

(Count II); violation of the Iowa Private Right of Action for

Consumer Frauds Act, Iowa Code § 714H.1 et seq. (Count III); and

violation of Iowa usury laws, Iowa Code § 535.2 (Count IV).

Montoya moved for conditional certification of a collective

action pursuant to 29 U.S.C. § 216(b) with respect to the FLSA

claims (Count I). He also moved for class certification under

Federal Rule of Civil Procedure 23 for the Iowa law claims

(Counts II-IV). On May 24, 2018, this Court certified the

following four classes:

Collective Action under the FLSA: all individuals who

have participated as contract drivers in any phase of

CRST’s Driver Training Program, at any time since

December 22, 2013.

Iowa Wage Law Class: all individuals who have

participated as contract drivers in Phase 1 or Phase 2

of CRST’s Driver Training Program in Iowa at any time

since January 21, 2014.

Iowa Consumer Fraud Class: all individuals who have

participated as contract drivers in any phase of

CRST’s Driver Training Program at any time since

January 21, 2014 and faced training-related wage

deductions and/or collections.

Iowa Usury Law Class: all individuals who have signed

pre-employment contracts and/or driver employment

contracts with CRST that provided for an interest rate

on amounts owed at a rate higher than the maximum

lawful rate of interest determined by the Iowa

Superintendent of Banking (ranging between 3.5 percent

and 7.25 percent per annum) at any time since January

21, 2006, who received a collection letter, and who

did not complete Phase 4 of the Driver Training

Program.

See Montoya v. CRST Expedited, Inc., 311 F. Supp. 3d 411, 419-27

(D. Mass. 2018). The parties have completed fact discovery,

other than discovery of FLSA opt-in plaintiffs, experts, and

class damages, and now cross-move for partial summary judgment.

CRST moves for summary judgment on Counts II, III, and IV, and

to narrow the scope of the FLSA claim in Count I (Docket No.

146). Montoya moves for summary judgment as to CRST’s liability

for certain practices related to Counts I, II, and III (Docket

Nos. 150 and 153).

LEGAL STANDARD

Summary judgment is appropriate when “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 factual

dispute precludes summary judgment if it is both genuine and

material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247–48 (1986). An issue is “genuine if the evidence about the

fact is such that a reasonable jury could resolve the point in

the favor of the non-moving party,” and “[a] fact is material if

it has the potential of determining the outcome of the

litigation.” Farmers Ins. Exch. v. RNK, Inc., 632 F.3d 777, 782

(1st Cir. 2011) (quotation omitted). “[C]onclusory allegations,

improbable inferences, and unsupported speculation” are

insufficient to create a genuine issue of material fact to

survive summary judgment. See Sullivan v. City of Springfield,

561 F.3d 7, 14 (1st Cir. 2009) (quotation omitted).

When ruling on a motion for summary judgment, a court views

the facts “in the light most favorable to the nonmovant,” and

draws all reasonable inferences “in that party’s favor.” Ameen

v. Amphenol Printed Circuits, Inc., 777 F.3d 63, 68 (1st Cir.

2015) (quotation omitted). When parties cross-move for summary

judgment, a court evaluates each motion “separately, drawing

inferences against each movant in turn.” Lawless v. Steward

Health Care Sys., LLC, 894 F.3d 9, 21 (1st Cir. 2018) (quotation

omitted).

The moving party is responsible for “identifying those

portions of [the record] which it believes demonstrate the

absence of a genuine issue of material fact.” Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). It can meet this burden

“either by offering evidence to disprove an element of the

plaintiff’s case,” if the defendant is the moving party, “or by

demonstrating an ‘absence of evidence to support the non-moving

party’s case.’” Rakes v. United States, 352 F. Supp. 2d 47, 52

(D. Mass. 2005) (quoting Celotex, 477 U.S. at 325). If the

moving party shows the absence of a disputed material fact, the

burden shifts to the non-moving party to “set forth specific

facts showing that there is a genuine issue for trial.”

Anderson, 477 U.S. at 256 (quoting Fed. R. Civ. P. 56(e)). A

court denies summary judgment “if the nonmoving party adduces

competent evidence demonstrating the existence of a genuine

dispute about a material fact.” Theriault v. Genesis HealthCare

LLC, 890 F.3d 342, 348 (1st Cir. 2018).

DISCUSSION

I. Counts I and II: FLSA and Iowa Wage Claims

A. Are Drivers Employees of CRST During Phases 1 and 2?

The parties agree that student drivers are employees of

CRST during Phases 3 and 4 of the training program. Both parties

cross-move for summary judgment as to whether the drivers are

“employees” under the FLSA and Iowa wage law during Phases 1 and

2 of the training.

1. Legal Standard

Under the FLSA employers must pay employees a minimum

hourly wage for all hours worked. See 29 U.S.C. § 206(a). The

FLSA defines “employee” as “any individual employed by an

employer.” Id. § 203(e)(1). To “employ” is “to suffer or permit

to work.” Id. § 203(g). These broad definitions are intended to

be “comprehensive enough” to include “working relationships,

which prior to [the FLSA], were not deemed to fall within an

employer-employee category.” Rutherford Food Corp. v. McComb,

331 U.S. 722, 729 (1947) (citing Walling v. Portland Terminal

Co., 330 U.S. 148, 150 (1947)). “Without doubt [the FLSA] covers

trainees,” but not all trainees are “employees” under the FLSA.

Portland Terminal, 330 U.S. at 151; see also Walling v.

Nashville, C. & St. L. Ry., 330 U.S. 158, 159 (1947) (companion

case).

In the seminal case of Portland Terminal, the Supreme Court

considered whether the plaintiffs, who participated in a free,

seven-to-eight-day, practical training course for prospective

railroad yard brakemen, were “employees” under the FLSA. See 330

U.S. at 150. The Court emphasized that the trainees did not

displace regular employees; their training impeded, rather than

expedited, the railroad’s business; there was no expectation or

understanding of compensation; there was no guarantee of

employment; and the training they received “most greatly

benefit[ted] the trainees” rather than the railroad. Id. at 149-

53. The Court suggested that, had the “trainees taken courses in

railroading in a public or private vocational school, wholly

disassociated from the railroad, it could not reasonably be

suggested that they were employees of the school within the

meaning of the [FLSA].” Id. at 152-53. Because the railroad

received no “immediate advantage” from the trainee’s work, the

Court concluded that the trainees were not employees under the

FLSA. Id. at 153. In so deciding, the Court was cognizant “that

such a holding may open up a way for evasion of the law,” but

did not find in that case that the “arrangements were either

conceived or carried out in such a way as to violate either the

letter or the spirit of the minimum wage law.” Id.

Since then, the Supreme Court has further elaborated that

the “test of employment under the [FLSA] is one of ‘economic

reality.’” Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S.

290, 300-01 (1985) (affirming that “associates” who worked for a

religious foundation and received in-kind benefits such as food,

clothing, and shelter in exchange for their services for the

foundation’s commercial activities, were employees under the

FLSA despite their vehement protests that they were not

employees and did not expect compensation).

The First Circuit has not directly addressed what factors

to consider in determining whether a trainee is an employee

under the FLSA. See Ballou v. Gen. Elec. Co., 433 F.2d 109, 111-

12 (1st Cir. 1970) (holding that journeymen were not entitled to

compensation for attending a required training program outside

of work hours under the Portal–to–Portal Act of 1947, 29 U.S.C.

§§ 251–62 because of their “status as students”); see also

Bienkowski v. Northeastern Univ., 285 F.3d 138, 141-42 (1st Cir.

2002) (concluding under the Portal-to-Portal Act that

probationary employees were not entitled to compensation for

taking a course to become certified emergency medical

technicians). The First Circuit has simply stated that under

Portland Terminal, “employers who furnished training to

potential employees [are] not required under the FLSA to

compensate trainees for time spent in the training program,” but

has not provided guidance for when potential employees are

employees under the FLSA. Bienkowski, 285 F.3d at 141. So the

Court looks to other sources for guidance.

Relying on Portland Terminal, the United States Department

of Labor (“DOL”) has identified six criteria for determining

whether a trainee is an “employee” under the FLSA:

1. The training, even though it includes actual

operation of the facilities of the employer, is

similar to that which would be given in a vocational

school.

2. The training is for the benefit of the trainees.

3. The trainees do not displace regular employees, but

work under close observation.

4. The employer that provides the training derives no

immediate advantage from the activities of the

trainees; and on occasion his operations may actually

be impeded.

5. The trainees are not necessarily entitled to a job

at the conclusion of the training period.

6. The employer and the trainees understand that the

trainees are not entitled to wages for the time spent

in training.

See U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter, 2001

WL 1558755, at *1-2 (Jan. 30, 2001) (citing Portland Terminal,

330 U.S. 148). The Department applies the criteria strictly, so

that only if all six criteria apply are trainees not employees

under the FLSA. See U.S. Dep’t of Labor, Wage & Hour Div., Field

Operations Handbook, ch. 10b11 (2017).11

11 Although the Field Operations Handbook is non-binding, the Court may

consider it as persuasive authority. See Newman v. Advanced Tech. Innovation

Corp., 749 F.3d 33, 37 (1st Cir. 2014).

Nevertheless, courts have rejected a rigid application of

the six criteria, deeming them “relevant but not conclusive” as

to whether trainees are employees under the FLSA. Reich v.

Parker Fire Prot. Dist., 992 F.2d 1023, 1026-27 (10th Cir.

1993); see also Solis v. Laurelbrook Sanitarium & Sch., Inc.,

642 F.3d 518, 526 n.2 (6th Cir. 2011) (“While the Court’s

recitation of the facts [in Portland Terminal] included those

that resemble the [DOL’s] six factors, the Court gave no

indication that such facts must be present in future cases to

foreclose an employment relationship.” (internal citation

omitted)). Instead, courts look to the totality of the

circumstances of the training relationship. See, e.g., Boucher

v. Shaw, 572 F.3d 1087, 1091 (9th Cir. 2009).

Many courts have held that the principal inquiry is whether

the trainee or putative employer is the “primary beneficiary” of

the training program. See Velarde v. GW GJ, Inc., 914 F.3d 779,

785 (2d Cir. 2019); Benjamin v. B & H Educ., Inc., 877 F.3d

1139, 1147 (9th Cir. 2017); Harbourt v. PPE Casino Resorts Md.,

LLC, 820 F.3d 655, 659 (4th Cir. 2016); Glatt v. Fox Searchlight

Pictures, Inc., 811 F.3d 528, 536 (2d Cir. 2016); Schumann v.

Collier Anesthesia, P.A., 803 F.3d 1199, 1203, 1209–10 (11th

Cir. 2015); Solis, 642 F.3d at 529; McLaughlin v. Ensley, 877

F.2d 1207, 1209 & n.2 (4th Cir. 1989). But see Nesbitt v. FCNH,

Inc., 908 F.3d 643, 647 (10th Cir. 2018) (declining to apply the

primary beneficiary test because assessing the six criteria

already “relies on the totality of the circumstances and

accounts for the economic reality of the situation”).

By assessing “(1) the benefits of [the] relationship to the

individual, (2) the benefits derived from that relationship by

the putative employer, and (3) the expectations of the parties,”

the primary beneficiary test “seeks to assess the relative

dominance in the relationship between host institution and the

individual claiming employee status.” Velarde, 914 F.3d at 785.

The six criteria are still, of course, relevant to the analysis

and guide the inquiry but the primary beneficiary test is best

able to “capture[] . . . [the] economic realities in the

student/employee context.” Benjamin, 877 F.3d at 1147; see also

Velarde, 914 F.3d at 785 (“[T]he goal of the primary beneficiary

test is to balance flexibly the benefits received by the student

and the economic realities of the student-entity

relationship . . . .”). The Court flexibly considers both the

six DOL factors and the primary beneficiary test to determine

whether student drivers are employees in Phases 1 and 2.

2. Phase 1 Analysis

Most of the DOL’s factors militate in favor of finding that

the student drivers are not employees under the FLSA. The

content of the training provided in Phase 1 is similar to

training given in a vocational school (factor one). It includes

both classroom and behind-the-wheel training, with an eye

towards covering the knowledge and skills students need to pass

a CDL exam. The topics covered have broad applicability in the

industry and are addressed at any good driver training school.

While NADTA creates its own curriculum, the fact that CRST sends

drivers to both NADTA and independent driving training schools

indicates that the content of Phase 1 is geared towards

acquiring a CDL.

The training is for the benefit of the student drivers

(factor two). The CDL that a student driver tests for at the

conclusion of Phase 1 is not CRST-specific and is transferable

to other commercial trucking jobs. See Harbourt, 820 F.3d at 660

(recognizing “the importance of the transferability of the

training received when balancing who -- employer or trainee --

benefitted most from the training”).

The student drivers do not perform work that would

otherwise be performed by employees and do not displace regular

employees (factor three). While Phase 1 produces a qualified and

valuable labor pool for CRST to draw from, the training does not

provide an “immediate advantage” to CRST (factor four). See

Petroski v. H & R Block Enter., LLC, 750 F.3d 976, 980–81 (8th

Cir. 2014); Reich, 992 F.2d at 1028; Donovan v. Am. Airlines,

Inc., 686 F.2d 267, 271-72 (5th Cir. 1982); Otico v. Haw.

Airlines, Inc., 229 F. Supp. 3d 1047, 1051 (N.D. Cal. 2017).

As for the expectations of the students, the pre-employment

agreement contains clear language such that student drivers

understand that they will not receive compensation for Phase 1

and CRST does not consider them employees at that time (factor

six). Cf. Am. Airlines, 686 F.2d at 269 n.3 (“An employee cannot

waive FLSA benefits so this agreement is material only insofar

as it shows the expectations of trainees.”).

Only one factor supports a finding that the student drivers

are employees during Phase 1 – that they are entitled to

employment at the conclusion of the training program (factor

five). The welcome packet states that CRST “train[s] students to

become professional drivers” and “[i]f you need to obtain your

class A CDL, but lack the funds to do so, we offer an

outstanding company-sponsored training program. . . . In return,

we ask that you work for CRST Expedited for ten months.” Docket

No. 151-9 at 5. The pre-employment agreement, which students

sign at the beginning of Phase 1, lists non-exclusive

preconditions for students to become employees with CRST,

including executing the driver employment contract and

successfully completing Phases 1 and 2. See Docket No. 151-15

¶¶ 4-5. The agreement reminds students that CRST requires

students to work for ten months in order to pay off training

expenses. Additionally, CRST requires students to bring

employment documents to Phase 1 and sign an assignment of wages

and payroll deduction form during Phase 1. Students that attend

Phase 1 at NADTA must sign the driver employment contract as a

condition of graduation. Drivers who need commercial learner’s

permits before testing for their CDLs sign not only the pre-

employment agreement, but also a change of domicile form and a

letter stating: “This letter is to confirm that __________ has

accepted employment as a truck driver for CRST Expedited, Inc.,

subject to specific requirements . . . .” Docket No. 151-20 at

1-2. The letter confirms that the company puts drivers through

Phase 1 in order for them to work for CRST.

The question of whether Phase 1 students are employees is

closer under the “primary beneficiary” test. The team-driving

approach CRST uses to transport goods produces a high employee

turnover rate and makes it difficult to recruit experienced

truck drivers. Through the driver training program, CRST ensures

it has a sufficient supply of drivers for the team-driving

model, which allows it to deliver goods across the country in

half the time it takes a solo driver. To put pressure on the

student drivers to accept employment, CRST withholds a student’s

driving school diploma until he either fulfills a ten-month

driving contract with CRST or pays the debt owed to CRST for

advances during Phase 1. Without the driver training program,

CRST likely could not operate as currently configured because it

“would be completely changing the business model.” Docket No.

151-2 at 67:6-21. It greatly benefits from the training program.

A “dilemma arises” where, as here, both the student and the

employer obtain significant benefits from the training.

Schumann, 803 F.3d at 1211. CRST relies heavily on American

Airlines to support its argument that its Phase 1 students are

not employees. There, prospective flight attendants participated

in a free, 4-to-5 week training program that included both

knowledge generally applicable to all airlines and American

Airlines-specific procedures and policies. See Am. Airlines, 686

F.2d at 269. A “major part” of the training was “devoted to

meeting the Federal Aviation Administration (FAA) requirements

applicable to all flight attendants.” Id. The Fifth Circuit,

affirming judgment for the airline, found that, “[a]lthough

training benefits American by providing it with suitable

personnel, the trainees attend school for their own benefit, to

qualify for employment they could not otherwise obtain,” and

that “American did not receive immediate benefit from the

trainees’ activities” because they could not be “productive”

until after training. Id. at 272.

Montoya points to the recent decision by the Fourth Circuit

in Harbourt to argue that CRST received the primary advantage.

In that case, in response to the legalization of gambling in

Maryland, the defendant-casino planned to begin offering table

games as soon as the state allowed. See Harbourt, 820 F.3d at

657. However, the casino needed to hire approximately 830 new

dealers by opening day. See id. The casino developed a free,

twelve-week “dealer school” in conjunction with a local

community college and began advertising employment

opportunities. Id. The casino authored all course materials,

casino employees provided all course instruction, the course

material was casino-specific, and attendees completed employment

forms during the training. Id. at 657-68. In reversing the

district court’s dismissal of the FLSA claims, the Fourth

Circuit rejected the argument that the casino could not be the

primary beneficiary of the training because trainees did not

perform work for the casino during the school. See id. at 659-

61. The court “specifically recognized the importance of the

transferability of the training received” and highlighted that

the training was specific to the casino and arguably not

transferable. Id. at 660.

Montoya argues here that because CRST withholds diplomas

until student drivers either work for ten months or pay off

their debt, the education received in Phase 1 is not

transferable. However, the content in Phase 1 is the kind of

general, educational information a driver would receive in any

driver training school. While CRST develops its own curriculum,

independent driver training schools are not required to use it,

and the goal of the training is to have students pass their

licensing exams or refresh their safe driving knowledge. That

training is easily transferable.

Montoya stresses that unlike the free training provided in

American Airlines or Harbourt, Phase 1 is not a stand-alone

vocational program nor a free pre-employment training program in

which trainees may choose whether to work for the company or a

competitor. Through its non-competition provision and debt

collection practices, CRST creates economic pressure that forces

student drivers into its employ. Because CRST has economic

dominance in the relationship, Montoya argues, it is the primary

beneficiary. While the degree of CRST’s economic leverage over

students is troubling, the caselaw, and the First Circuit’s

holdings in Ballou and Bienkowski interpreting a similar

statute, support CRST’s argument that despite its economic

dominance, providing prospective employees with training that is

valuable and transferable does not convert students in Phase 1

into employees under the FLSA.

3. Phase 2 Analysis

The DOL’s factors in Phase 2 weigh in favor of a

determination that the drivers are employees. Most importantly,

much of the training in Phase 2 is unique to CRST (factor one).

While some is federally mandated, the content of Phase 2 differs

markedly from the education provided in Phase 1 to prepare

drivers to test for their CDLs.

CRST argues that Phase 2 benefits the drivers because most

of the content of orientation provides drivers with knowledge

and skills that are generally applicable to the trucking

industry (factor two). CRST’s manager for orientation estimates

that approximately two-thirds to three-quarters of content

during Phase 2 is universally applicable compared to only about

one-quarter to one-third that is specific to CRST. CRST’s own

color-coded orientation schedule belies this assertion. Of the

three-and-a-half-day orientation, more than half is dedicated to

administrative requirements, hiring-related information, CRST

guest speakers providing company-specific information, and other

CRST-specific trainings. See Docket No. 151-32 at 7. Most of the

remaining time is spent in federally required training, and

driver qualification tests. The content of the orientation bears

little resemblance to a general vocational or educational

program and is much more akin to standard employee on-boarding.

Although drivers derive some benefit from the further training

they receive, they do not gain an additional certification or

diploma that would be easily transferable.

Certain factors weigh against employee status. The drivers

still do not displace regular workers (factor three) and,

because they do not perform work for CRST, provide no immediate

advantage (factor four). But CRST treats drivers as employees

during Phase 2 orientation (factor 5). Both drivers and CRST

expect that anyone who attends the orientation will drive for

CRST. The driver handbook, which all drivers are given during

orientation, begins with a letter from Mike Gannon, President of

CRST International, which states:

Welcome to CRST. It gives me great pleasure to welcome

you, the professional driver, to the Gold Team!

...

You begin your career at CRST with an orientation

program emphasizing safety.

...

In closing, it is with great pride I welcome you to a

company I have called home for over 25 years. You have

chosen a financially stable company that is an

industry leader in providing expedited transportation.

Docket No. 151-32 at 2. A few pages later the handbook states,

“[w]e are pleased you have become a part of our corporation.”

Id. at 5; see also Julian v. Swift Transp. Co., 360 F. Supp. 3d

932, 942 (D. Ariz. 2018) (noting that internal manuals referring

to “[n]ewly hired” individuals weighed in favor of finding

drivers were employees and not “merely job applicants”). During

orientation, drivers sign the driver employment contract (if

they have not done so already), a contingent offer of

employment, standard employment paperwork, and a deduction

authorization form. Drivers must also sign a form containing

employee acknowledgements that requires an “Employee Signature.”

While drivers are not promised compensation for orientation,

CRST has presented “no credible evidence that a person who

completed the training was not subsequently hired,” which

suggests that drivers should be considered employees from the

beginning of Phase 2. See McLaughlin v. Ensley, 877 F.2d 1207,

1210 (4th Cir. 1989).

The primary beneficiary of Phase 2 is CRST. CRST derives a

great benefit teaching drivers CRST specific-policies without

compensation. The orientation does not impede CRST’s business

and provides an express lane for getting drivers on the road.

Arguing that drivers are not employees in Phase 2, CRST again

cites to the pre-employment training program in American

Airlines. What distinguishes Phase 2 from the training program

in that case is the economic reality of the relationship between

student drivers and CRST. While training was free for flight

attendants in American Airlines, and the airline provided free

meals and housing, in this case drivers have already incurred

significant debt for educational services by Phase 2. They must

complete Phase 2 in order to begin paying their debt back for

Phase 1 through an employment contract. Based on the undisputed

facts in the record, drivers in the FLSA collective action are

“employees” under the FLSA for Phase 2.

4. Iowa Wage Laws (Count II)

Under the Iowa Wage Payment Collection Law (“IWPCL”), Iowa

Code § 91A et seq., an employer is obligated to pay “all wages

due its employee.” Id. § 91A.3. Iowa’s Minimum Wage Law, Iowa

Code § 91D.1, provides that “[e]very employer, as defined in the

[FLSA] . . . shall pay to each of the employer’s employees, as

defined in the [FLSA] . . . the state hourly wage,” which

currently is the same as the federal minimum wage ($7.25 per

hour). Iowa wage law looks to caselaw interpreting the FLSA.

Cf. Bouaphakeo v. Tyson Foods, Inc., 564 F. Supp. 2d 870, 883

(N.D. Iowa 2008) (“[T]he FLSA may be used to establish an

employee’s right to a certain amount of wages under the IWPCL

and an employer’s violation of the IWPCL for not paying all

wages due its employees.” (quotation omitted)). Therefore, the

drivers who are part of the Iowa wage class are not employees

during Phase 1 and are employees during Phase 2 under Iowa wage

law.

B. Does CRST’s Compensation System in Phases 3 and 4

Violate the FLSA? (Count I)

Both parties move for summary judgment with respect to

certain deduction and payment practices during Phases 3 and 4 of

the driver training program. Montoya claims, and CRST contests,

that (1) the deductions from drivers’ pay are unlawful, (2)

CRST’s post-employment collection from drivers violates the

FLSA, (3) sleeper-berth time and other off-duty time is

compensable, and (4) CRST’s split-mile formula results in

minimum wage violations.

1. Deductions from Drivers’ Pay

The FLSA requires employers to provide employees’ wages, in

cash or facilities, “free and clear” of improper deductions and

kickbacks to the employer. 29 C.F.R. § 531.35. Employers are

prohibited from charging employees expenses “if such expenses

would drive the employee’s pay below minimum wage.” United

States v. Gordon, 852 F.3d 126, 139 n.14 (1st Cir. 2017). “The

only statutory exception to this requirement is set forth in 29

U.S.C. § 203(m), which allows an employer to count as wages the

reasonable cost ‘of furnishing [an] employee with board,

lodging, or other facilities . . . .’” Arriaga v. Fla. Pac.

Farms, L.L.C., 305 F.3d 1228, 1235 (11th Cir. 2002) (quoting 29

U.S.C. § 203(m)). DOL regulations define “reasonable cost” as

used in § 203(m) to be “not more than the actual cost to the

employer of the board, lodging, or other facilities,” 29 C.F.R.

§ 531.3(a), and to “not include a profit to the employer or to

any affiliated person,” 29 C.F.R. § 531.3(b). Reasonable

deductions for board, lodging, or other facilities may lower an

employee’s cash wages below the minimum wage. See Rivera v. Peri

& Sons Farms, Inc., 735 F.3d 892, 897 (9th Cir. 2013).

“Facilities ‘primarily for the benefit or convenience of

the employer’ do not count as ‘other facilities’ [under

§ 203(m)] and are not included in the wage calculation.” Id.

(quoting 29 C.F.R. § 531.3(d)(1)). Therefore, “[a]n employer may

not deduct from employee wages the cost of facilities which

primarily benefit the employer if such deductions drive wages

below the minimum wage.” Arriaga, 305 F.3d at 1236. “This rule

cannot be avoided by simply requiring employees to make such

purchases on their own, either in advance of or during the

employment.” Id.

DOL regulations provide “a list of facilities found . . .

to be primarily for the benefit [or] convenience of the

employer,” which includes tools of the trade and uniforms. 29

C.F.R. § 531.3(d)(2). “[E]xpenses which are primarily for the

benefit of the employee, and therefore constitute other

facilities, include: meals; dormitory rooms; housing;

merchandise from company stores such as ‘food, clothing, and

household effects’; and fuel, electricity, water and gas

‘furnished for the noncommercial personal use of the employee.’”

Arriaga, 305 F.3d at 1236 (quoting 29 C.F.R. § 531.32(a)).

Certain costs “categorically are either for the benefit of the

employee or the employer,” while others are “more nuanced” and

fact-specific. Id. at 1243. The dividing line is “whether the

employment-related cost is a personal expense that would arise

as a normal living expense.” Id. If a normal expense, then it

may qualify as “other facilities” and the cost may be deducted

from employee wages, even if it drives pay below the minimum

wage.

a. Loans for Phase 1

As an initial matter, CRST argues that § 203(m) does not

apply to deductions for loans or advances drivers incur while

students in Phases 1 and 2. See U.S. Dep’t of Labor, Wage & Hour

Div., Opinion Letter, 2004 WL 3177896, at *1 (Oct. 8, 2004)

(“[W]here an employer makes a loan or an advance of wages to an

employee, the principal may be deducted from the employee’s

earnings even if such deduction cuts into the minimum wage . . .

due the employee under the FLSA.”); see also Field Operations

Handbook, ch. 30c10(b). However, trainees are not employees in

Phase 1, so any loan CRST provides to students in Phase 1 for

lodging, transportation, tests, the $50 processing fee, etc., is

not a loan from an employer to an employee. CRST may not deduct

these loans from drivers’ wages to the extent they bring wages

below minimum wage. See Arriaga, 305 F.3d at 1236.

This includes the $6,500 training fee CRST seeks to deduct

from employees’ final paychecks if they do not complete the ten-

month employment term. This training fee -- or “tuition” -- was

not furnished by an employer to an employee. The training

expense cannot be deducted from an employee’s final paycheck to

the extent it brings pay below minimum wage. See Gordon v. City

of Oakland, 627 F.3d 1092, 1093 n.1 (9th Cir. 2010) (“The City

conceded at oral argument that it would have violated the

minimum wage provisions of the FLSA had it . . . withheld [the

employee’s] entire final paycheck in satisfaction of her debt

[for training].”); Heder v. City of Two Rivers, 295 F.3d 777,

778-79, 782-83 (7th Cir. 2002) (holding an employee was entitled

to at least minimum wage for his final two pay periods, which

the city had previously withheld as payment for training costs

and other liquidated damages when he did not complete his

employment term).

b. Wire Charges

CRST deducts $4 anytime a driver requests a pay advance.

These deductions do not qualify as “other facilities” under

§ 203(m) and are not properly counted towards wages. See Field

Operations Handbook, ch. 30c10(b) (“Deductions for interest or

administrative costs on the loan or advance are illegal to the

extent that they cut into the minimum wage or overtime pay.”).

While CRST argues that the $4 wire charge benefits the employee

who requests a pay advance, the charge is an administrative

cost. Thus the $4 wire charges are unlawful deductions to the

extent they reduce drivers’ pay below minimum wage.

c. Drug Test and Physical Exam Charges

Some drivers are subject to drug tests and physical screens

during Phase 2. CRST argues that because the tests are required

by federal law, they are primarily for the benefit of the

driver’s future employment.12 A DOL opinion letter differentiates

between drug tests required prior to an offer of employment and

those required to continue employment:

It is our position that an employer may not require an

employee to pay for the cost of obtaining a physical

that is required by the employer for the employee to

continue employment if doing so cuts into any

statutorily-required minimum wage . . . . We also

consider the time spent in obtaining such a physical

examination as compensable hours of work.

U.S. Dep’t of Labor, Wage & Hour Div., Opinion Letter, 2001 WL

1558768, at *4 (Feb. 16, 2001). Because drivers are employees

during Phase 2 orientation, such tests are for the benefit of

the employer, not a pre-employment or normal living expense.

Therefore, CRST may not deduct the costs of drug screens or

physicals from driver pay to the extent they cut into minimum

wage. See Moodie v. Kiawah Island Inn Co., 124 F. Supp. 3d 711,

720 (D.S.C. 2015) (holding that medical testing was primarily

for the benefit of the employer when prospective employees were

requires to undergo testing in order to obtain their visas).

12 See 49 C.F.R. § 382.301 (requiring an employer to receive a negative

pre-employment drug test result before letting a driver operate a commercial

motor vehicle); Id. § 391.41 (requiring drivers to be “medically certified as

physically qualified” to operate a commercial motor vehicle).

d. Map Pack

Montoya objects to deductions taken for the map pack

drivers may purchase from CRST during Phase 2. Tools of the

trade are considered to be for the benefit or convenience of the

employer, so the employer violates the FLSA “in any workweek

when the cost of such tools purchased by the employee cuts into

the minimum . . . wages required to be paid under the Act.”

Arriaga, 305 F.3d at 1237 n.10. CRST responds that a driver is

not required to purchase a map pack or bring his own atlas and

tire gauge to use while on the job because each truck is

equipped with a GPS system.

Regardless, a tire gauge and atlas are “tools of the trade

which will be used in or are specifically required for the

performance of the employer’s particular work.” 29 C.F.R.

§ 531.35. They are used primarily for the benefit of CRST, are

not normal living expenses, and their cost cannot be deducted

from drivers’ pay to the extent it reduces pay below the minimum

wage.

e. Transportation to Phase 2

CRST books and pays for transportation for drivers to

attend Phase 2, which it then deducts from drivers’ paychecks

during Phases 3 and 4. Transportation expenses are primarily for

the benefit of the employer and therefore not considered “other

facilities” under § 203(m) “where such transportation is an

incident of and necessary to the employment.” 29 C.F.R.

§ 531.32; see also Field Operations Handbook, ch. 30c03(a)(3)

(“[T]ransportation which is an incident of or necessary to the

employment is not an ‘other facility.’”).

Transportation to centralized locations to begin CRST’s

onboarding process in Phase 2 is “an incident of and necessary

to the employment.” Even though the transportation expense

occurs prior to the employment relationship, CRST may not avoid

the expense if it is primarily for its benefit. See Arriaga, 305

F.3d at 1242 n.17 (“Such a position would permit employers to

avoid expenses primarily for their benefit simply by making them

a requirement of employment, which would allow an end-run around

the FLSA.”). “Transportation costs -- aside from regular

commuting costs -- are nothing like board or lodging” and would

normally not be considered “other facilities.” Id. at 1242; see

also Shultz v. Hinojosa, 432 F.2d 259, 267 (5th Cir. 1970) (“We

conclude that as used in the statute, the words ‘other

facilities’ are to be considered as being in pari materia with

the preceding words ‘board and lodging.’”). But cf. Castellanos-

Contreras v. Decatur Hotels, LLC, 622 F.3d 393, 402-03 (5th Cir.

2010) (holding that company was not required to reimburse

inbound travel expenses for workers with H-2B visas). This is

not an ordinary commuting expense that a worker would incur in

daily life. Therefore, transportation costs to the Phase 2

orientation are not “other facilities” under § 203(m) and cannot

be deducted to the extent they lower drivers’ pay below minimum

wage.

f. Lodging During Phase 2

Section 203(m) allows an employer to count as wages the

reasonable cost of furnishing an employee with board, lodging,

or other facilities. “Lodging, like meals, is ordinarily

considered for the benefit and convenience of the employee.”

Field Operations Handbook, ch. 30c03(a)(2). DOL regulations

provide that to claim a wage credit for lodging, an employer

must ensure that:

1. The lodging is regularly provided by the employer

or similar employers, 29 C.F.R. § 531.31;

2. The employee voluntarily accepts the lodging, 29

C.F.R. § 531.30;

3. The lodging is furnished in compliance with

applicable federal, state, or local law, 29 C.F.R.

§ 531.31;

4. The lodging is provided primarily for the benefit

of the employee rather than the employer, 29 C.F.R.

§ 531.3(d)(1); and

5. The employer maintains accurate records of the

costs incurred in furnishing the lodging, 29 C.F.R.

§ 516.27(a).

Balbed v. Eden Park Guest House, LLC, 881 F.3d 285, 288–89 (4th

Cir. 2018). Montoya argues that CRST should not be able to claim

a wage credit for lodging because it was not provided primarily

for the benefit of the drivers, and CRST did not maintain

accurate records of the costs involved. However, “while it may

be to the employer’s advantage to provide such facilities at or

near the worksite, courts have consistently taken the view that

the employer may take a wage credit when the facilities are

primarily for the benefit or convenience of the employee.” Field

Operations Handbook, ch. 30c03(a)(2). Providing lodging near

Phase 2 is a convenience afforded to the drivers and is covered

by § 203(m).

However, there is a factual dispute as to whether the costs

are “reasonable.” The welcome packet alerts student drivers that

the average cost of housing during Phases 1 and 2 is $150 per

week. CRST asserts that it charges $160 per week for facilities

outside of California and $165 per week for lodging in

California, which are the averages for lodging and not the

actual costs. The $160 rate is an average, and not the actual

cost of lodging, across CRST’s training locations. However, it

does not appear that CRST actually charges $160 per week. For

example, opt-in plaintiff Ronnie Fogarty was placed in an Iowa

hotel for three weeks during training, which charged CRST a

total of $1096.16 for those nights. CRST deducted $525 from

Fogarty’s wages and, when he did not complete his employment

term, sent him a collection letter for the remaining $575.13 The

13 Montoya authorized $320.00 be deducted from his wages for housing

costs. When he left employment with CRST during Phase 3, the company demanded

$320.00 for housing costs.

cost exceeds what drivers anticipated being charged, calling

into question both reasonableness and voluntariness. While

reasonable lodging costs may be counted as “wages” under

§ 203(m), this fact dispute precludes summary judgment on the

issue.14

2. Post-Employment Collections

Montoya argues that CRST’s post-employment collection of

outstanding debt from a driver violates the FLSA as an unlawful

deduction or “kick-back.” “The wage requirements of the [FLSA]

will not be met where the employee ‘kicks-back’ directly or

indirectly to the employer . . . the whole or part of the wage

delivered to the employee.” 29 C.F.R. § 531.35. Montoya asserts

that collecting training, housing, and other expenses from

drivers after they leave employment with CRST violates the

FLSA’s requirement to pay wages “free and clear.” See Stein v.

HHGREGG, Inc., 873 F.3d 523, 535 (6th Cir. 2017) (“[I]t would be

unlawful for an employer to require an employee to return wages

already ‘delivered to the employee.’”).

The collection of pre-employment expenses incurred during

Phase 1 is not an unlawful kickback. See Gordon, 627 F.3d at

1093, 1096 (upholding a policy requiring police officers to

repay a portion of their training costs if they voluntarily left

14 Montoya also asserts that CRST did not meet the record keeping

requirement, but there is no evidence in the record to support this

assertion.

the city’s employment before completing five years of service,

as long as the city also paid them minimum wage). CRST may

recoup advances made to students for Phase 1 pursuant to the

contract.

3. Sleeper Berth

Both parties agree that eight hours of sleeping time in the

sleeper berth is not compensable. They dispute whether time

spent not sleeping in the sleeper berth is compensable under the

FLSA.

As background, drivers in Phases 3 and 4 can be on the road

for multiple weeks during one trip. Time logs of Montoya and the

opt-in plaintiffs indicate that some student drivers were

confined to sleeper berths for long hours at a time. For

example, Raymond Hollingsworth was in the sleeper berth for an

average of 14.35 hours a day during a thirty-six day stretch of

driving. Because of the nature of the team-driving model, CRST

requires a second driver to be physically present to begin

driving when the first driver has exhausted his driving or on-

duty time under DOT regulations. The second driver, by nature of

the job, cannot leave the truck while it is in motion and must

remain with or near the truck on long-haul trips across the

country. For CRST’s business model, the drivers are engaged to

wait during non-sleeping time in the sleeper berth and other

“off-duty” time and must be compensated to wait.

DOL regulations address compensation during wait time,

sleep time, and travel time. See 29 C.F.R. §§ 785.14-.17,

785.20-.23, 785.33-.41. The DOT designation of “on-duty” and

“off-duty” time do not govern whether time is compensable under

the FLSA.

Montoya urges the Court to rely on § 785.22(a), a generally

applicable regulation, to set an 8-hour cap on non-compensable

sleep time in the berth:

Where an employee is required to be on duty for 24

hours or more, the employer and the employee may agree

to exclude bona fide meal periods and a bona fide

regularly scheduled sleeping period of not more than 8

hours from hours worked, provided adequate sleeping

facilities are furnished by the employer and the

employee can usually enjoy an uninterrupted night’s

sleep.

In interpreting this regulation, courts have split on whether

long-haul truck drivers are “on duty for 24 hours or more.”

Compare Petrone v. Werner Enters., Inc., No. 8:11CV401, 2017 WL

510884, at *10 (D. Neb. Feb. 2, 2017) (holding sleeper berth

time is not compensable merely because the driver is away from

home but rather the Court must determine factually whether

drivers are “continuously on duty”), and Nance v. May Trucking

Co., No. 3:12-cv-01655-HZ, 2014 WL 199136, at *8 (D. Or. Jan.

15, 2014) (finding that an employee in a sleeper berth is not on

call and therefore is off-duty), aff’d in relevant part, 685 F.

App’x 602 (9th Cir. 2017), with Julian, 360 F. Supp. 3d at 952

(holding that “truck drivers, just like all other employees, are

subject to § 785.22 when they are on duty for 24 hours or more,”

so defendant carrier was “entitled to deduct no more than eight

hours per day as time [drivers] were allowed to sleep”), and

Browne v. P.A.M. Transp., Inc., No. 5:16-CV-5366, 2018 WL

5118449, at *2-4 (W.D. Ark. Oct. 19, 2018) (same).

CRST argues that the Court should rely on § 785.41 which

provides:

Any work which an employee is required to perform

while traveling must, of course, be counted as hours

worked. An employee who drives a truck . . . or an

employee who is required to ride therein as an

assistant or helper, is working while riding, except

during bona fide meal periods or when he is permitted

to sleep in adequate facilities furnished by the

employer.

(emphasis added). Unlike § 785.22, this regulation expressly

applies to truck drivers, but it specifies that an employee is

“working while riding” except during meal periods or when

“permitted to sleep.” While § 785.41 does not cap the amount of

time an employee is “permitted to sleep,” when it is read in

connection with § 785.22(a), a bona fide sleeping period would

appear to be eight hours. Accordingly, under the regulations,

other than the eight hours in the sleeper-berth when drivers are

permitted to sleep, and meal times, the DOL regulations provide

employees are “working.”

This interpretation is buttressed by the regulations

governing whether waiting time is “time worked.” An employee is

“engaged to wait” or on-duty when “waiting is an integral part

of the job.” Id. § 785.15. An employee is waiting to be engaged

and off-duty when he “is completely relieved from duty” and the

periods of time “are long enough to enable him to use the time

effectively for his own purposes.” Id. § 785.16. For example, a

truck driver is not “off-duty” if he is “engaged to wait” during

activities like loading and unloading. Id. Moreover, this

interpretation is consistent with the “FLSA’s usual rule . . .

that an employer must pay an employee for all time the employee

is required to spend at a worksite, even sleep time.” Giguere v.

Port Res. Inc., 927 F.3d 43, 47 (1st Cir. 2019) (citing 29

C.F.R. § 785.7).

In response, CRST argues that the Court should defer to the

DOL’s Wage and Hour Division (“WHD”) interpretation of the

regulatory scheme. WHD recently issued an opinion letter

addressing “whether the time spent in a truck’s sleeper berth is

compensable.” U.S. Dep’t of Labor, Wage & Hour Div., Opinion

Letter, 2019 WL 3345452, at *1 (Jul. 22, 2019). In the scenario

presented, a motor carrier regularly employed drivers to provide

over-the-road long-haul trucking services. Id. In an example

workweek, a particular driver spent 55.84 hours driving and

49.96 hours in the sleeper berth. Id. The WHD noted that three

prior opinion letters from the division “interpreted 29 C.F.R.

§ 785.41 in conjunction with §§ 785.15-.16 and §§ 785.21-.22 to

mean that while sleeping time may be excluded from hours worked

where ‘adequate facilities’ were furnished, only up to 8 hours

of sleeping time may be excluded in a trip 24 hours or longer,

and no sleeping time may be excluded for trips under 24 hours.”

Id. at *2.

The WHD “concluded that this interpretation is

unnecessarily burdensome for employers.” Id. at *3. Instead, it

adopted an interpretation of § 785.41 in which all time “in a

sleeper-berth is presumptively non-working time that is not

compensable.” Id. In doing so, the opinion letter reasoned that

the regulations “draw a clear distinction between on-duty

sleeping time [29 C.F.R. §§ 785.20-.22],” and “non-working time

when the employer permits the employee to sleep in adequate

facilities [29 C.F.R. § 785.41].” Id.

The WHD’s opinion letter is unpersuasive because the agency

was addressing a situation where the drivers were permitted to

sleep, on average, seven hours during a twenty-four hour period.

The WHD did not address the situation presented here where some

student drivers spent time in the sleeper berth that is

substantially more than a normal sleep period. Moreover, even if

the opinion were to provide that drivers could be relegated to a

sleeper berth for long periods of time without pay, the only

reason the agency provides for its flip-flop is that its prior

interpretation was “unnecessarily burdensome for employers.” Id.

Because the FLSA was designed to protect workers, see 29 U.S.C.

§ 202(a), such reasoning does not support deference to the

opinion, see Barrentine v. Ark.-Best Freight Sys., Inc., 450

U.S. 728, 739 (1981). Additionally, the opinion letter does not

address whether this new interpretation is consistent with its

regulations requiring that wait time is compensated. See

generally Kisor v. Wilkie, 139 S. Ct. 2400, 2416 (2019) (“We

have recognized in applying Auer v. Robbins, 514 U.S. 452

(1997)] that a court must make an independent inquiry into

whether the character and context of the agency interpretation

entitles it to controlling weight.”).

Therefore, Montoya’s motion is allowed and CRST’s motion is

denied with respect to compensation for sleeper berth time in

excess of eight hours.

4. Split-Mileage Formula

Montoya argues that CRST’s split-mileage formula results in

drivers’ pay falling below the federal minimum wage based on all

hours spent driving and “on-duty.” Under the FLSA, employers may

pay on a “piecework basis,” so long as their employees “receive

at least the equivalent of the minimum hourly rate.” 29 C.F.R.

§ 776.5. Paying drivers based on a split-mileage formula is

itself not an FLSA violation as long as CRST pays drivers

minimum wage for all hours worked. To the extent it does not do

so, as a matter of law, CRST has violated the FLSA.

C. Does the Court have Personal Jurisdiction Over CRST

With Respect to the Opt-In Plaintiffs? (Count I)

Relying on the Supreme Court’s decision in Bristol-Myers

Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), CRST asks

the Court to dismiss the claims advanced by opt-in plaintiffs

Fogarty, Hollingsworth, and Johnson if the Court grants summary

judgment for CRST on the Iowa wage, usury, and consumer fraud

claims. Because the Court does not grant summary judgment for

CRST on these claims, the Court does not address the issue of

personal jurisdiction.

Moreover, CRST has waived this objection. Before filing an

answer to Montoya’s complaint, CRST moved to dismiss pursuant to

Federal Rule of Civil Procedure 12(b)(6), but not 12(b)(2).

“Rule 12 of the Federal Rules of Civil Procedure provides for

strict waiver with respect to certain specified defenses,

including the defense of lack of personal jurisdiction.” Pilgrim

Badge & Label Corp. v. Barrios, 857 F.2d 1, 3 (1st Cir. 1988).

“[P]ersonal jurisdiction may be acquired in a number of ways,

including voluntary appearance,” so defendants who file a motion

to dismiss without objecting to personal jurisdiction have “in

effect, consented to the court’s jurisdiction.” Id. While an

intervening change in the law may excuse waiver, see United

States v. Bauzó-Santiago, 867 F.3d 13, 24 (1st Cir. 2017), the

Supreme Court’s holding in Bristol-Myers was a “straightforward

application . . . of settled principles of personal

jurisdiction,” and not an intervening change in law, 137 S. Ct.

at 1783–84.

II. Count III: Iowa Consumer Frauds Act Claims

Montoya’s consumer fraud claims encompass a long list of

allegedly unfair or deceptive acts or practices. Montoya’s “core

theory” is that “CRST misled drivers about the true costs of the

Driver Training Program.” Montoya, 311 F. Supp. 3d at 425. The

parties cross-move for summary judgment with respect to

Montoya’s consumer fraud claims. Montoya argues that he is

entitled to judgment that certain of CRST’s practices violate

Iowa’s Consumer Frauds Act as a matter of law. CRST argues that

Montoya cannot prove, as a matter of law, certain elements of

his claims or, in the alternative, that his claims are preempted

by the Federal Aviation Administration Authorization Act

(“FAAAA”) and barred by the statute of limitations.

A. Legal Standard

The Private Right of Action for Consumer Frauds Act, Iowa

Code § 714H.1 et seq., provides:

A person shall not engage in a practice or act the

person knows or reasonably should know is an unfair

practice, deception, fraud, false pretense, or false

promise, or the misrepresentation, concealment,

suppression, or omission of a material fact, with the

intent that others rely upon the unfair practice,

deception, fraud, false pretense, false promise,

misrepresentation, concealment, suppression, or

omission in connection with the advertisement, sale,

or lease of consumer merchandise . . . .

Id. § 714H.3(1). Any “consumer who suffers an ascertainable loss

of money or property as the result of a prohibited practice or

act . . . may bring an action at law to recover actual damages.”

Id. § 714H.5(1). To succeed on his consumer fraud claim, a

plaintiff must show that he (1) suffered an ascertainable loss

of money or property, (2) as a result of, (3) a prohibited

practice or act. See McKee v. Isle of Capri Casinos, Inc., 864

N.W.2d 518, 532-33 (Iowa 2015) (finding proof of “an

ascertainable loss of money or property” necessary to sustain a

claim under the Act).

To succeed on his claim, Montoya must also show “an

ascertainable loss of money or property as a result of a

prohibited practice or act.” Iowa Code § 714H.5(1) (emphasis

added). “[T]he phrase ‘as a result of’ can be naturally read

simply to impose the requirement of a causal connection.” Brown

v. La.-Pac. Corp., 820 F.3d 339, 348–49 (8th Cir. 2016) (cleaned

up). It “requires merely factual causation” not proximate or

legal cause. Id. at 349. “To determine whether the defendant in

fact caused the plaintiff’s harm,” Iowa courts apply a “but-for”

test. Garr v. City of Ottumwa, 846 N.W.2d 865, 869 (Iowa 2014).

Plaintiff must also show that CRST engaged in a prohibited

act or practice. The Iowa Supreme Court has recognized that the

Consumer Frauds Act is “designed to infuse flexible equitable

principles into consumer protection law so that it may respond

to the myriad of unscrupulous business practices modern

consumers face.” State ex rel. Miller v. Vertrue, Inc., 834

N.W.2d 12, 34 (Iowa 2013) (quotations and citations omitted).

“Deceptive and unfair practices are distinct lines of inquiry.”

Id. at 33 (quotation omitted). “Deception” is “an act or

practice that is likely to mislead a substantial number of

consumers as to a material fact or facts.” Iowa Code § 714H.2.

“To ascertain whether a practice is likely to mislead in the

consumer protection context, courts typically evaluate the

overall or ‘net impression’ created by the representation.”

Vertrue, 834 N.W.2d at 34. “A solicitation may be likely to

mislead by virtue of the net impression it creates even though

the solicitation also contains truthful disclosures. . . . A

misleading impression created by a solicitation is material if

it involves information that is important to consumers and,

hence, likely to affect their choice of, or conduct regarding, a

product.” Id. (quoting FTC v. Cyberspace.Com LLC, 453 F.3d 1196,

1200-01 (9th Cir. 2006)). Deception occurs primarily at the

formation stage of the contract. Vertrue, 834 N.W.2d at 34.

An “unfair practice” is “an act or practice which causes

substantial, unavoidable injury to consumers that is not

outweighed by any consumer or competitive benefits which the

practice produces.” Iowa Code §§ 714H.2, 714.16. Unfairness

occurs primarily with respect to the substance or performance of

a contract. Vertrue, 834 N.W.2d at 34.

B. Prohibited Practices

Montoya argues that (1) CRST’s advertising and recruitment

communications contain misrepresentations and omissions of

material facts which constitute deceptive practices, and

(2) CRST’s requirement that students sign a restrictive covenant

barring employment with a competitor in an unlimited geographic

area for the lesser of ten months or until the student’s debt of

$6,500 or more is paid off constitutes an unfair practice. CRST

responds that even if Montoya has shown unfair or deceptive

practices, his claims must still fail as a matter of law because

he cannot prove causation or ascertainable loss.

1. Misrepresentations About Driver Training Program

a. Dropout Rate

Montoya argues that CRST’s failure to disclose its high

dropout rates at any point during the advertising or recruitment

process constitutes a deceptive practice. Cf. Parks v. Persels &

Assocs. LLC, 509 B.R. 345, 357 (D. Kan. 2014) (holding failure

to discuss low success rate for debt settlement clients was a

breach of fiduciary duty). Between November 22, 2013 and March

31, 2017, approximately 25,796 drivers started the driver

training program, but only 5,360 completed Phase 4. The welcome

packet makes no representations about success rates or

graduation rates, so the omission of this information is not

materially misleading. The Court denies Montoya’s motion for

summary judgment as to this practice.

b. Sponsored Tuition

Montoya also argues that CRST’s characterization of the

driver training program as “sponsored” in the welcome packet and

other advertising is deceptive and misleading because it

suggests that CRST is prepaying tuition to the driver training

schools, and that a driver only needs to repay tuition if he

does not work for ten months.15 The welcome packet, which is sent

to every prospective driver, states: “CRST will pre-pay all your

school expenses – CRST will pre-pay your tuition and as long as

you work for CRST for 10 months, you will not have to repay

tuition!” Docket No. 151-9 at 4. The packet also states: “If you

need to obtain your class A CDL, but lack the funds to do so, we

offer an outstanding company-sponsored training program. With no

15 Montoya no longer appears to be pressing his theory about CRST

advertising “free” training, as he admitted he did not believe the postcard

that advertised “free” training to be true when he joined CRST’s training

program.

credit checks! In return, we ask that you work for CRST

Expedited for ten months.” Id.

By saying that “tuition” is prepaid by CRST, the company

leaves the misleading impression that a driver will have to

repay only the cost of tuition to a driver training school, plus

expenses for lodging, etc. if he does not work for ten months.

In reality, the tuition to the driver training schools is

somewhere in the range of $1,400 to $2,500.16 The $6,500 fee that

CRST charges to drivers who do not complete the ten-month

employment term is based on a calculation of total costs to CRST

for Phases 1 through 4.

CRST argues that student drivers were essentially told that

they would owe $6,500 if they failed to complete the ten-month

contract because the prepay option requires prospective students

to pay $6,500 upfront for the training. However, the welcome

packet’s statement about CRST prepaying “tuition” is deceptive

because it is likely to mislead consumer-students that the

actual tuition for driver training school is $6,500. The

misleading information is material because it involves

information, namely the cost of attending a commercial driving

16 The amount CRST has paid independent driver training schools ranges

from $1,400 to $2,500 per student who completes Phase 1 training; the amount

CRST has paid NADTA ranges from $1,450 to $2,150. See Docket No. 159 ¶ 33. If

a student attends Phase 1 with NADTA but does not sign the driver employment

contract, CRST seeks to collect $4,700 in training expenses. For drivers who

sign the contract but do not complete the ten-month employment term, CRST

seeks to collect $6,500 which “includes, but is not limited to, tuition costs

charged by the Phase 1 educational facilities.” Docket No. 159 ¶ 33.

school, that is important to consumers in choosing whether to

accept the advance from CRST. Leaving drivers with the

impression that it loaned them $6,500 for the cost of driver

training school, when in fact the cost was thousands of dollars

lower, is a deceptive practice in violation of Iowa’s consumer

frauds act. Cf. 16 C.F.R. § 254.7 (requiring private vocational

schools to disclose to prospective students the cost of the

program’s tuition); Manley v. Wichita Bus. Coll., 701 P.2d 893,

899-901 (Kan. 1985) (affirming jury finding that college

violated Kansas Consumer Protection Act because it intentionally

concealed, suppressed, or omitted a material fact with regard to

the college’s tuition refund policy).

In response, CRST argues that Montoya cannot prove some

ascertainable loss based on the misrepresentations on a class-

wide basis. See Goins v. JBC & Assocs., P.C., 352 F. Supp. 2d

262, 275 (D. Conn. 2005) (holding that the threat of debt

collection does not give rise to an ascertainable loss). The

Consumer Frauds Act defines “actual damages” as “all

compensatory damages proximately caused by the prohibited

practice or act that are reasonably ascertainable in amount” and

expressly excludes “damages for . . . mental distress.” Iowa

Code § 714H.2. The consumer class includes “[a]ny driver who

repaid training-related expenses through wage deductions and/or

was subject to collections efforts for such costs.” Montoya, 311

F. Supp. 3d at 425. Any driver who had a portion of his paycheck

deducted for the $6,500 training cost or repaid some portion of

the cost during collections has suffered an “ascertainable loss”

which can be measured on a class-wide basis.

Montoya argues that class members who did not repay the

debt were nevertheless harmed by incurring baseless debt and

receiving threatening collections letters. One Court has held

that

[i]ncurring a debt, or even believing that one has

incurred a debt, has far-reaching practical

implications for individuals. It could affect the way

an individual saves money or applies for loans. An

individual might feel obligated to report that debt

when filling out job applications, credit

applications, court documents, or other financial

records that require self-reporting of existing

liabilities.

Stein, 873 F.3d at 535. While the real-life effects of debt can

produce ascertainable losses in some circumstances, Montoya has

not sufficiently demonstrated how he plans to show ascertainable

losses on a class-wide basis without relying on actual

deductions and collections of money. In sum, the Court allows

Montoya’s motion for summary judgment with respect to liability

for the misrepresentation of the amount of tuition for those

drivers who repaid tuition expenses through either wage

deductions or as a result of collection efforts.17

17 In the briefing, Montoya suggests that one class-wide remedy may be

cancellation of the debt. That issue has not been adequately briefed.

c. The Non-Competition Provision

Finally, Montoya argues that the welcome packet is

misleading because it fails to describe the material terms of

the driver employment contract that students will need to sign

in order to have their training expenses covered by CRST. While

the company tells prospective drivers that it will advance the

cost of tuition for driver training school as long as drivers

complete a ten-month employment term with CRST, it does not

disclose that the employment contract contains a non-competition

provision. The pre-employment agreement states that students

will be required to sign the driver employment contract in order

to fulfill the terms of their tuition advance, but CRST never

provides the students with a copy of the contract. The pre-

employment agreement lays out other requirements in the driver

employment contract, such as the repayment provision if a driver

does not complete his ten-month employment term, but students

are not aware of the scope or terms of the non-competition

provision in the driver employment contract until the end of

Phase 1 or the beginning of Phase 2.

Montoya argues that the prospective drivers, as consumers

of educational services, are misled as to a material term of the

tuition advanced by CRST, and then are forced to accept a term

of employment or incur substantial debt. Montoya contends that

this omission would likely cause a substantial number of

consumers to decline to pursue training in Iowa.

CRST responds that Montoya could not have been deceived by

the company’s failure to disclose the non-competition provision

because disclosing that the employment contact requires a ten-

month term of employment effectively discloses the non-

competition provision. However, a ten-month commitment is not

equivalent to a non-competition provision. The Court concludes

that this omission is material because it is “likely to affect a

consumer’s conduct or decision with regard to a product or

service.” Rahmani, 472 N.W.2d at 258. Only after a student has

been transported to a training facility (with a one-way bus

ticket), completed training for his CDL, and already incurred

debt for tuition, lodging, etc., does CRST discloses the non-

competition provision which applies until the employee pays back

the loan. The failure to disclose an essential term of the

employment contract to students before they become consumers of

CRST’s educational services, and incur significant debt, is

deceptive in violation of the Consumer Frauds Act.

Montoya contends that the non-competition provision is

itself an unfair practice as a matter of law and not

enforceable.18 While this may be true, the certified class only

18 Generally, an employer does not offer or sell consumer merchandise to

an employee. See Manning v. Zuckerman, 444 N.E.2d 1262, 1264 (Mass. 1983)

(declining to extend the private right of action in the Massachusetts

includes drivers who have had wages deducted or are subject to

collection actions. Montoya has not demonstrated how he will

prove an ascertainable loss on a class-wide basis resulting from

the non-competition provision. Because ascertainable loss is an

element of Montoya’s consumer frauds claim, the Court denies

Montoya’s motion for summary judgment as to the non-disclosure

of the non-competition provision of the pre-employment stage.

CRST’s motion for summary judgment on this particular practice

is allowed with respect to the class claim.19

C. FAAAA Preemption

CRST argues that it is entitled to summary judgment because

Montoya’s consumer fraud claims are expressly preempted by the

FAAAA. The FAAAA’s express preemption clause provides that all

state laws “related to a price, route, or service of any motor

carrier . . . with respect to the transportation of property”

are preempted. 49 U.S.C. § 14501(c)(1). Decisions interpreting

parallel language in the Airline Deregulation Act of 1978

(“ADA”), 49 U.S.C. § 41713(b)(1), inform interpretations of the

FAAAA’s preemption clause. See Rowe v. N.H. Motor Transp. Ass’n,

Consumer Protect Act to cover unfair or deceptive acts committed by an

employer with respect to an employee). Therefore, the Court declines to apply

the Iowa Consumer Frauds Act to the employer-employee relationship between

CRST and drivers. To the extent Montoya argues that the non-competition

provision is still unfair, the Court declines to rule under the Consumer

Frauds Act.

19 In his Amended Complaint, Montoya did not request an injunction against

enforcing the non-competition provisions on behalf of the class. See Docket

No. 90 at 25-27.

552 U.S. 364, 370 (2008). The phrase “related to” “embraces

state laws having a connection with or reference to carrier

rates, routes, or services, whether directly or indirectly.”

Dan’s City Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013)

(quotations and citations omitted). However, Ҥ 14501(c)(1) does

not preempt state laws affecting carrier prices, routes, and

services ‘in only a tenuous, remote, or peripheral . . .

manner.’” Id. at 261 (quoting Rowe, 552 U.S. at 371). “[T]he

breadth of the words ‘related to’ does not mean the sky is the

limit.” Id. at 260. Furthermore, the “FAAAA formulation contains

one conspicuous alteration [from the ADA] -- the addition of the

words ‘with respect to the transportation of property,’” and

this phrase “massively limits the scope of preemption ordered by

the FAAAA.” Id. at 261 (quotation omitted); see also 49 U.S.C. §

13102(23)(B).

Montoya’s claims are not preempted because they relate to

training potential drivers, not CRST’s transportation of

property. See Dan’s City, 569 U.S. at 261-62, 266 (holding that

claims brought under the New Hampshire Consumer Protection Act

were not preempted by the FAAAA because the unfair conduct

alleged – the storage and disposal of a car - was not

“sufficiently connected to a motor carrier’s service with

respect to the transportation of property to warrant

preemption”). “The FAAAA’s focus on prices, routes, and services

shows that the statute is concerned with the industry’s

production outputs, and seeks to protect them from state

regulation.” Bedoya v. Am. Eagle Express Inc., 914 F.3d 812, 821

(3d Cir. 2019), cert. docketed, No. 18-1382 (May 2, 2019). The

motor carrier industry’s output –- the service it provides –- is

the “transportation of property from origin to destination.” Id.

Although state laws that regulate industry inputs –- labor,

capital, and technology –- “may impact costs and may in turn

affect prices charged and services provided to customers,” the

FAAAA does not preempt these kinds of regulations and laws. Id.

at 822; see also Tobin v. Fed. Express Corp., 775 F.3d 448, 456

(1st Cir. 2014) (describing the ADA preemption “dividing line”

as “between state laws that regulate ‘how [a] service is

performed’ (preempted) and those that regulate how an airline

behaves as an employer or proprietor (not preempted)” (quoting

DiFiore v. Am. Airlines, Inc., 646 F.3d 81, 87–88 (1st Cir.

2011))).

CRST argues that the Supreme Court’s holding in American

Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), controls here. In

Wolens, the Supreme Court held that a claim by a consumer

against an airline under the Illinois Consumer Fraud Act was

preempted by the ADA due to the “potential for intrusive

regulation of airline business practices inherent in state

consumer protection legislation typified by the [Illinois]

Consumer Fraud Act.” Id. at 227–28. CRST argues that because the

Iowa Consumer Frauds Act is the same in material respects to the

Illinois Consumer Fraud Act, Montoya’s consumer fraud claims are

preempted by the FAAAA. Wolens is inapplicable here. In Wolens

the alleged misrepresentation dealt directly with the price of

airline tickets and frequent flyer services the airline provided

to consumers; here it deals with the way in which a company

trains prospective employees.

State law prohibiting alleged unfair and deceptive

practices as to driver training programs for students who are

seeking a CDL may have “indirect effects” on CRST’s trucking

service, but the impact is “tenuous, remote, or peripheral.”

DaSilva v. Border Transfer of MA, Inc., 227 F. Supp. 3d 154, 157

(D. Mass. 2017) (Saris, J.) (quoting Rowe, 552 U.S. at 370-71).

Montoya’s consumer fraud claims related to Phase 1 students are

not preempted by the FAAAA.

D. Statute of Limitations

CRST argues that Montoya’s claims are barred by the Iowa

Consumer Frauds Act’s statute of limitations. The Act provides

that a claim must be brought within two years of the last event

giving rise to the cause of action, or within two years of the

discovery of the violation, whichever is later. Iowa Code §

714H.5(5). “The discovery rule tolls the statute of limitations

until the plaintiff has discovered the fact of the injury and

its cause or by the exercise of reasonable diligence should have

discovered these facts.” Hallett Constr. Co. v. Meister, 713

N.W.2d 225, 231 (Iowa 2006) (quotation omitted). Therefore, an

action accrues when a plaintiff has knowledge of all of the

facts he “needed to know to be charged with a duty to

investigate to determine the existence of a cause of action

against defendant.” Franzen v. Deere & Co., 377 N.W.2d 660, 664

(Iowa 1985).

Montoya’s claim concerning the misleading information about

sponsored tuition in the welcome packet is not barred by the

statute of limitations.20 While Montoya filed his complaint on

January 21, 2016, more than two years since he received his

welcome packet in June 2013, his claim did not accrue then.

Montoya would not have known, or had reason to suspect, that the

real cost of tuition was not $6,500 at that time. Montoya’s

claim is therefore timely.

In sum, the Court allows Montoya’s motion for summary

judgment on the claim that CRST violated the Act by materially

misleading drivers as to the true cost of tuition advanced by

the company. The amount of “ascertainable loss” caused by the

20 The statute of limitations also does not bar Montoya’s claims based on

the non-competition provision. Montoya did not become aware of the non-

competition provision until he was presented with the driver employment

contract in October 2014, within the two-year statute of limitations period.

See Docket No. 151-25 at 1.

misrepresentation of the amounts deducted or collected for

training expenses will proceed to trial.

III. Count IV: Usury

CRST moves for summary judgment on Montoya’s usury claim,

arguing that because it neither contracted for nor collected

interest at a usurious rate, it did not violate Iowa’s usury

law. Montoya asserts that a defendant violates Iowa’s usury law

when it seeks a usurious interest rate, even if the contracts do

not provide for a usurious rate and the driver does not actually

pay interest at the usurious rate. During the relevant time

period, the maximum lawful rate of interest which could be

provided for in a written agreement under Iowa law ranged from

3.5% to 7.25% per annum. The pre-employment agreement and driver

employment contract provided for interest at 18% or the maximum

applicable by law. CRST then sought 18% interest in its debt

collection letters.

Iowa Code § 535.4 states that “[n]o person shall, directly

or indirectly, receive in money or in any other thing, or in any

manner, any greater sum or value for the loan of money, or upon

contract founded upon any sale or loan of real or personal

property, than is in this chapter prescribed.” To succeed on his

usury claim, Montoya must prove four elements: (1) a loan of

money, (2) an understanding between the parties that the

principal shall be repaid, (3) the exaction of greater profit on

the loan than is allowed by law, and (4) an intention to violate

the law. See Kaiser Agric. Chems., Inc. v. Peters, 417 N.W.2d

437, 441 (Iowa 1987).

There is no dispute that the first and second elements of a

usury claim are present in the transactions. There was an

advance of money for housing, transportation, and other

expenses, and an understanding that the principal would be

repaid. As to the third element, CRST points out that there is

no evidence in the record that it collected and received

interest at a usurious rate, i.e., extracted a profit in

violation of law. However, “a creditor need not actually receive

the amount charged in excess of the statutory ceiling to violate

the statute.” Id. Montoya’s claim is not foiled if CRST did not

actually collect interest.

As to the final element, the “required intent under the

fourth element of usury is ‘simply to charge a rate of interest

which exceeds the maximum permitted.’” Id. at 442 (quoting CBS

Real Estate of Cedar Rapids, Inc. v. Harper, 316 N.W.2d 170, 172

(Iowa 1982)). “A charge must be communicated to the debtor.”

George A. Fuller Co. of Tex. v. Carpet Servs., Inc., 823 S.W.2d

603, 605 (Tex. 1992); see also Kaiser, 417 N.W.2d at 442

(interpreting whether a usurious interest rate had been

“charged” to the debtor). CRST charged Montoya a usurious

interest rate of 18% when it sent him the collection letter

stating: “If you cannot pay off the full amount of the loan at

this time, we would be willing to accept monthly payments at 18%

interest if you comply with the Restrictive Term as stated in

your Driver Employment Contract.” Docket No. 151-42. Montoya

appears to have met each element of his usury claim.

In response, CRST argues that Montoya cannot succeed on his

usury claim because the pre-employment agreement and driver

employment contract were not contracts for a usurious rate, as

stated in the Iowa Code. Both contracts authorized interest on

amounts owed at “the lesser of 1.5 per month [18% per year] or

the maximum rate permitted by applicable federal and state usury

laws.” Docket No. 151-33 at 2 (emphasis added). The Iowa Supreme

Court has found a violation of the usury law where the interest

charged exceeded the legal maximum even in the absence of an

applicable contract containing a usurious rate. See Kaiser, 417

N.E. 2d at 441. Additionally, Iowa Code prohibits contracting

for a usurious rate, either “directly or indirectly.” Iowa

Code § 535.5; see also Doggett v. Heritage Concepts, Inc., 298

N.W.2d 310, 312 (Iowa 1980) (“Section 535.4 prohibits the

imposition of usurious rates directly ‘or indirectly.’”).

Accordingly, under the Iowa Code, CRST may not contract for a

legal rate and then charge a usurious one in a collection

effort. However, the fact that the contract did not contain a

usurious rate at its inception may mean that the loan contract

itself cannot be invalidated, even if the Court cancels the

usurious interest rate. See Kaiser, 417 N.W. 2d at 442. The

usury class is limited to those individuals who received

collections letters demanding 18% interest. Therefore, CRST’s

motion for summary judgment with respect to Count IV is denied.

IV. Conclusion

After this long-haul opinion, the case stands here:

Counts I and II: As to the FLSA claims and the Iowa wage

law claims, both Montoya’s and CRST’s motions for summary

judgment are allowed in part and denied in part. As a matter of

law, student drivers are employees under the FLSA and Iowa wage

law during Phase 2, but not Phase 1.

The following deductions from drivers’ pay during Phases 3

and 4 are unlawful under the FLSA to the extent they bring pay

below minimum wage: $4 wire charges, drug tests and physicals

conducted in Phase 2, the map pack, and transportation to Phase

2. Post-employment collection of advances or loans for tuition

and other expenses made to students before and during Phase 1 is

permissible (subject to limitations under Iowa usury law). There

remain issues for trial as to whether the lodging costs during

Phase 2 were reasonable and whether the split-mileage formula

results in FLSA violations.

Sleeper berth time in excess of eight hours must be counted

towards hours worked.

Count III: CRST’s motion for summary judgment on Montoya’s

consumer fraud claims is allowed in part and denied in part, as

is Montoya’s motion for summary judgment as to liability for

certain of CRST’s practices. Montoya’s claims are neither

preempted by the FAAAA nor barred by the Iowa Consumer Frauds

Act’s statute of limitations. The omission of the drop-out rate

from recruiting and advertising materials is not a prohibited

practice. Failing to disclose the non-competition provision in

the driver employment contract is a prohibited practice under

the Consumer Frauds Act. However, Montoya’s claim that the non-

competition provision is itself a violation fails as matter of

law because he is unable to demonstrate how he will prove

ascertainable loss on a class-wide basis. Misleading a driver

that he needs to prepay only the “tuition” advanced by the CRST

if he does not work ten months is a prohibited practice under

the Consumer Frauds Act, and the amount of “ascertainable loss”

caused by the misrepresentation -- based on deductions and

collections -- will require a trial.

Count IV: CRST’s motion for summary judgment on Montoya’s

usury claim is denied.

ORDER

For the reasons stated above, CRST’s motion for summary

judgment (Docket No. 146) is ALLOWED IN PART and DENIED IN PART

and Montoya’s motions for summary judgment (Docket Nos. 150 and

153) are ALLOWED IN PART and DENIED IN PART.

SO ORDERED.

/s/ PATTI B. SARIS

Hon. Patti B. Saris

Chief United States District Judge