Campanelli v. Image First Uniform Rental Service, Inc., 4:15-cv-04456

Background

Plaintiff Kyle Campanelli, a former delivery driver for ImageFIRST of California, brought FLSA collective and California Rule 23 class claims alleging unpaid overtime and denial of meal/rest breaks. Two ImageFIRST entities (IF California and IF Healthcare) remain as defendants; a third (IF Uniform) was dismissed for lack of personal jurisdiction.
Plaintiff seeks to represent a nationwide FLSA collective and a California Rule 23 class of delivery drivers allegedly misclassified as exempt.
Defendants asserted that many putative class members signed arbitration agreements containing concerted-action/class-action waivers; they moved to stay class/collective proceedings pending the Supreme Court’s decision in Epic Systems v. Lewis (which may overrule the Ninth Circuit’s Morris decision holding such waivers unenforceable under the NLRA).
Magistrate Judge Kim granted in part plaintiff’s motion to compel discovery, overruling certain objections and permitting pre-certification class discovery except where burdens/vagueness warranted limitation; defendants sought relief from that non-dispositive order.
District court granted a partial stay of all class and collective action proceedings pending Epic, but kept discovery and adjudication of the “joint employer”/“single enterprise” issue active (plaintiff may take discovery on which ImageFIRST entities may be employers and may move for summary judgment on that issue).
The court denied defendants’ motion for relief from Magistrate Judge Kim’s orders (finding them not clearly erroneous or contrary to law), but held most discovery moot while the partial stay is in effect.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to stay class/collective proceedings pending Supreme Court decision in Epic	Stay unnecessary; defendants haven’t proven existence/enforceability of waivers; delay harms putative class	Epic may render class/collective relief unavailable for many putative members; stay avoids wasted class discovery	Partial stay granted: all class/collective proceedings stayed pending Epic except joint-employer issue
Enforceability/existence of arbitration/class-action waivers	Waivers not shown (no signed agreements attached); Morris currently makes waivers unenforceable	Many putative members signed waivers; Epic may overturn Morris making waivers enforceable	Court finds defendants’ evidence inadequate now; after Epic defendants may move on enforceability; court did not compel arbitration now
Scope of putative class: inclusion of employees of non-party ImageFIRST entities (joint-employer/single-enterprise)	Plaintiff seeks discovery and adjudication to determine which ImageFIRST entities are employers for certification	Defendants object to broad discovery regarding non-party entities and 14th Amendment due process concerns	Court permitted discovery limited to joint-employer issue during stay and set schedule for summary judgment on employer status
Relief from Magistrate Judge Kim’s discovery orders (clear error/contrary to law)	Magistrate erred in permitting discovery of certain categories and permitting pre-certification discovery	Magistrate’s rulings were correct; some objections lacked merit; most discovery now stayed and motion is moot	Motion for relief denied; magistrate’s orders not clearly erroneous or contrary to law (and largely moot given stay)

Key Cases Cited

Landis v. North American Co., 299 U.S. 248 (Sup. Ct.) (district court’s authority to stay proceedings for efficiency and fairness)
Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857 (9th Cir.) (stay pending resolution of related proceedings for judicial economy)
CMAX, Inc. v. Hall, 300 F.2d 265 (9th Cir.) (factors for granting a stay: possible damage, hardship, and orderly course of justice)
Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir.) (concerted-action waivers held unenforceable under the NLRA)
Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir.) (defendant must show clear hardship to justify stay under Landis)
United States v. Abonce-Barrera, 257 F.3d 959 (9th Cir.) (deferential standard for district review of magistrate non-dispositive orders)
Grimes v. City & County of San Francisco, 951 F.2d 236 (9th Cir.) (district court may not substitute its judgment for magistrate on non-dispositive matters)
Burdick v. C.I.R., 979 F.2d 1369 (9th Cir.) (standard for finding factual error as "clearly erroneous")
Artis v. Deere & Co., 276 F.R.D. 348 (N.D. Cal.) (pre-certification disclosure of putative class contact information is common practice)