LAVON GODFREY et al., Plaintiffs and Respondents, v. OAKLAND PORT SERVICES CORP., Defendant and Appellant.
No. A139274
First Dist., Div. Two.
Oct. 28, 2014.
230 Cal. App. 4th 1267
Chauvel & Glatt, Ronald C. Chauvel and Kenneth M. Weinfield for Defendant and Appellant.
Weinberg, Roger & Rosenfeld, David A. Rosenfeld, Theodore Franklin, Caren P. Spencer and Lisl R. Duncan for Plaintiffs and Respondents.
OPINION
BRICK, J.*—Named plaintiffs Lavon Godfrey and Gary Gilbert initiated this class action lawsuit against Oakland Port Services Corp., doing business as AB Trucking (AB). They alleged that AB did not pay its drivers for all hours worked, misclassified some drivers as nonemployee trainees and did not pay them at all, and failed to provide required meal and rest breaks. Plaintiffs sought certification of the class of drivers who performed work for AB out of its Oakland, California, facility. The trial court granted the class certification motion, and the case proceeded to a bench trial. Plaintiffs prevailed on most of their causes of action and the court awarded the class a total of $964,557.08. In a postjudgment order, the court awarded attorney fees, litigation expenses, and class representative enhancements to plaintiffs.
On appeal, AB relies primarily on the argument that federal law preempts application of California‘s meal and rest break requirements to motor carriers. AB also argues in passing that the court order granting class certification was unsupported by substantial evidence, but without addressing the evidence presented on the motion; that the court should have reserved individual determinations of damages for the claims administration process; that AB‘s drivers are expressly excluded from coverage under Industrial Welfare Commission (IWC) wage order No. 9-2001; and that the award of attorney fees and class representative enhancements should be reversed. We find no merit in AB‘s preemption or other arguments and affirm.
BACKGROUND
Class members are employees of AB who drive trucks owned by AB between the Port of Oakland and AB‘s yard, located in the general port area.
On September 20, 2010, plaintiffs filed a second amended complaint (SAC) in which they sought to represent the class of all drivers who performed work for AB out of its Oakland facility between March 28, 2004, and November 1, 2010. The SAC stated eight causes of action: (1) unfair business practices, in violation of
When plaintiffs moved for class certification on October 29, 2010, they identified the class as those drivers who performed work for AB out of the Oakland facility between March 28, 2004, and December 3, 2010. They identified five subclasses: (1) those who had not been paid for all hours worked; (2) those who were misclassified as nonemployee trainees and paid no wages; (3) those who were not paid for overtime worked; (4) those who were paid less than Oakland‘s living wage; and (5) those who had not been provided the required meal and rest breaks.1 Following a hearing, the trial court granted plaintiffs’ motion on December 3, 2010, identifying the time period defining the class to be from March 28, 2004, “through the date of notice to the class.”2
Immediately prior to trial, AB moved for reconsideration of the class certification order, seeking “modification or decertification of the class.” The court denied AB‘s motion.3
A bench trial took place over several days in February 2012. Eight drivers testified (among other witnesses)—six class members, including Godfrey and Gilbert, for plaintiffs and two drivers, who had chosen to opt out of the class, for AB.
The SOD noted that plaintiffs had dismissed the fourth cause of action, for failure to pay overtime wages, during trial. For the remaining causes of action, the court found in favor of plaintiffs on causes of action Nos. 1, 2, 3, 6, 7, and 8. It found in favor of AB on the fifth cause of action, for violation of Oakland‘s living wage ordinance, because AB did not employ enough people to be covered by the ordinance.4 The SOD awarded the class a total of $964,557.08.
The court‘s primary factual findings in the SOD were (1) AB failed to pay for all hours worked because AB‘s records showed that “it deducted one hour per day from each employee. This deduction took place, even though the driver did not receive a one hour meal period“; (2) “AB misclassified drivers who were suffered or permitted to work as non-employees, or unpaid ‘trainees.’ . . . The evidence reflected these trainees were suffered or permitted [to] work by AB and were not paid at all“; and (3) plaintiffs had “presented substantial and persuasive evidence that class members were routinely and consistently precluded by AB from taking meal periods and rest breaks.” The court then determined that these primary findings supported the derivative claims that AB had engaged in unfair competition, had failed to pay all wages owed on termination of employment, and had failed to provide accurate, itemized wage statements. The trial court also rejected AB‘s contention that the FAAAA preempts California‘s meal and rest break requirements.
On August 9, 2013, the trial court awarded plaintiffs $487,810.50 in attorney fees, $42,106.16 in litigation expenses, and $20,000 in class representative enhancements.
AB timely filed a notice of appeal on July 19, 2013.
DISCUSSION
I. Preemption
AB maintains that the FAAAA preempts California law governing meal and rest breaks as applied to motor carriers. AB‘s preemption argument does
A. Standard of Review
To the extent that we are called upon to interpret the FAAAA‘s preemption provision, discussed below, we apply a de novo standard of review. (People v. Petrilli (2014) 226 Cal.App.4th 814, 824.) To the extent that evidence is required to support AB‘s preemption argument, we review for substantial evidence. (Cellphone Termination Fee Cases (2011) 193 Cal.App.4th 298, 311.)
We also begin with a presumption that California‘s meal and rest break laws are not preempted by the FAAAA. In preemption cases “‘“‘in which Congress has “legislated . . . in a field which the States have traditionally occupied,” . . . we “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.“‘” [Citations.]’ [Citation.] This is known as the presumption against preemption, and its role is to ‘“‘provide[] assurance that “the federal-state balance” [citation] will not be disturbed unintentionally by Congress or unnecessarily by the courts.“‘” [Citation.]’ [Citations.]” (People ex rel. Harris v. PAC Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 778 (PAC Anchor).) Regulation of wages and hours is, of course, an area of traditional state regulation. (California Div. of Labor Standards Enforcement v. Dillingham Constr., N. A., Inc. (1997) 519 U.S. 316, 330–334.)
B. Meal and Rest Breaks—Legal Background
An employer must provide a meal period of not less than 30 minutes for a work period of more than five hours, unless a work period of not more than six hours will complete the day‘s work. (
A meal period is considered “‘on duty,‘” and must be counted as time worked, unless the employee is relieved of all duty. (
An employer is required to “authorize and permit” rest periods of 10 minutes for each four hours worked, unless the total daily worktime is less than three and one-half hours. (
In Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (Brinker), our Supreme Court clarified that the law allows some flexibility with respect to the timing and circumstances of meal breaks. Absent a waiver, the law “requires a first meal period no later than the end of an employee‘s fifth hour of work, and a second meal
C. The FAAAA‘s Preemption Clause
The FAAAA contains an express preemption clause: “Except as provided in paragraphs (2) and (3), a State, political subdivision of a State, or political authority of 2 or more States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . or any motor private carrier, broker, or freight forwarder with respect to the transportation of property.” (
“The FAAAA was enacted by Congress in 1994 as part of an ongoing effort to deregulate the interstate trucking industry. Pub.L. No. 103-305, 108 Stat. 1569 (codified as amended in scattered sections of . . . Title 49 of the U.S. Code).” (Villalpando v. Exel Direct Inc. (N.D.Cal., Mar. 28, 2014, No. 12-cv-04137 JCS) 2014 WL 1338297, p. *6 (Villalpando).) Deregulation of the interstate trucking industry was preceded by deregulation of air carriers in the Airline Deregulation Act of 1978 (ADA; Pub.L. No. 95-504 (Oct. 24, 1978) 92 Stat. 1705). (Morales v. Trans World Airlines, Inc. (1992) 504 U.S. 374, 378 (Morales).) The ADA also preempts state law “related to a price, route, or service of an air carrier.” (
The United States Supreme Court has decided two cases in which the meaning of “related to a price, route or service” under the FAAAA was discussed, but none involving state regulation of employees’ meal and rest breaks.7 Rowe concerned a Maine statute that required a licensed retailer of tobacco products to use a delivery service that provides a special kind of recipient-verification service. (Rowe, supra, 552 U.S. at p. 368.) The Supreme Court found that the law was preempted: “[I]t focuses on trucking and other motor-carrier services . . . , thereby creating a direct ‘connection with’ motor-carrier services.” (Id. at p. 371.)
In contrast, Dan‘s City concerned a New Hampshire law regulating the disposal of stored vehicles in which defendant towing company had disposed of plaintiff‘s car after towing it rather than allowing plaintiff to pay towing and storage charges. (Dan‘s City, supra, 569 U.S. 251.) The United States Supreme Court, noting the FAAAA preemption clause is limited to laws that relate to price, route, or service concerning the transportation of property, held that the law was not preempted because it regulated “the disposal of vehicles once their transportation—here, by towing—has ended.” (569 U.S. at p. 262.)
D. The FAAAA Does Not Preempt California Meal and Rest Break Laws
Whether the FAAAA preempts California meal and rest break requirements as applied to motor carriers is a question of first impression in California
In addition, while this case has been pending, the Ninth Circuit has specifically addressed the question of FAAAA preemption of California meal and rest break rules and concluded that the “FAAAA does not preempt” them.10 (Dilts, supra, 769 F.3d at p. 650.) Dilts resolved a split among California federal district courts, nine of which had determined that the
AB contends that the meal and rest break laws have a significant impact on prices, routes and services in the following ways:
(1) Drivers must deviate from their routes in order to find a legal place to pull over and park, changing the driver‘s route and adding to the break time itself. This acts to “deprive motor carriers of the ability to follow any route that does not offer adequate locations for stopping, or force them to take different or fewer routes.” “In essence, the laws bind motor carriers to a subset of all possible routes, in plain violation of the preemptive language. . . .”
(2) The “impact on routes . . . affects the number of deliveries a driver can make in a day.” This results in a lower level of service.
(3) “[R]educing a driver‘s work time by at least 15% per day to account for state-mandated break periods will inevitably affect the prices a motor carrier can charge, driving up the cost of a given set of deliveries because it requires more employee time and fuel to accomplish.”
AB‘s arguments here are essentially the same as the arguments made by the defendant in Dilts—arguments that the Dilts court rejected. (Dilts, supra, 769 F.3d at p. 647.) In addition, the trial court here found that “AB presented no evidence of any imposed conditions or costs, let alone rising to the level of creating ‘a significant impact’ upon its prices. No showing was made regarding the number of routes, costs of additional drivers, tractors, trailers, or other such factors that AB could have claimed it would face should it have to comply with state law. To the contrary, AB has made no showing of interference with competitive market forces within the
Further, AB‘s arguments are premised on a misreading of the regulations as requiring breaks at set times,14 ignoring the flexibility, emphasized by Brinker, that employers have in scheduling breaks. AB‘s mischaracterization of the break requirements extends to statements such as “[s]tate meal and rest break laws . . . require . . . that motor carrier services cease at certain times of the day. . . .” This improperly applies what is a mandate affecting individual workers to the operation of the business as a whole. Nothing in the meal and rest break laws suggests that all workers must take their breaks at the same time, causing a business to cease providing services or that individual workers must take their breaks at any specific time. Brinker makes clear that is not the case.
Returning to the recent Dilts decision of the Ninth Circuit, after considering essentially the same arguments made by AB here, the court concluded that California meal and rest break laws are not preempted by the FAAAA. That conclusion was reached after careful, thorough, and, we believe, correct analysis. There is no need for us to reinvent the wheel by repeating or adding to that analysis here, except to note that the meal and rest break requirements are quite different from any laws the United States Supreme Court has found preempted under the FAAAA and “the scope of the preemption must be tempered by the ‘presumption against the preemption of state police power regulations.‘” (Tillison v. Gregoire (9th Cir. 2005) 424 F.3d 1093, 1098.)
Accordingly, we are in full agreement with the Dilts summation: “Although we have in the past confronted close cases that have required us to struggle with the ‘related to’ test, and refine our principles of FAAAA preemption, we do not think that this is one of them. In light of the FAAAA preemption principles outlined above, California‘s meal and rest break laws
At oral argument, AB also invited us not to follow Dilts by arguing that its case was distinguishable, relying on footnote 2 of that opinion as well as a concurring opinion. AB‘s reliance on these passages is of no avail.
In footnote 2, the Dilts majority wrote: “We recently noted that it was an ‘open issue’ ‘whether a federal law can ever preempt state law on an “as applied” basis, that is, whether it is proper to find that federal law preempts a state regulatory scheme sometimes but not at other times, or that a federal law can preempt state law when applied to certain parties, but not to others.’ [Citation.] We need not resolve that issue here. For the reasons discussed in this section, we hold that California‘s meal and rest break laws, as generally applied to motor carriers, are not preempted. Were we to construe Defendant‘s argument as an ‘as applied’ challenge, we would reach the same conclusion and, if anything, find the argument against preemption even stronger. Plaintiff drivers work on short-haul routes and work exclusively within the state of California. They therefore are not covered by other state laws or federal hours-of-service regulations,
In a concurring opinion, Judge Zouhary wrote: “[This case is not] about FAAAA preemption in the context of interstate trucking. . . . On this record,
AB maintains that, unlike the Dilts defendants, it is involved in interstate commerce because it transports goods from the Port of Oakland. Even if we were willing to analyze AB‘s preemption challenge on an “as applied” basis,15 AB has failed to differentiate its case from Dilts in a meaningful way. It is clear from the context of Dilts that the terms “interstate” and “intrastate” are used in the footnote and concurring opinion in their purely geographical sense. The Dilts defendants did not send their drivers across state lines, and neither does AB. Nothing in Dilts suggests that the Dilts defendants did not participate in interstate commerce, despite their operations being confined geographically to California.16 Like the Dilts defendants, AB is subject to the laws of no other state with respect to the drivers in the class before us.
The Dilts defendants and AB may differ in being subject to federal hours-of-service regulations. The Federal Motor Carrier Safety Administration (FMCSA) has promulgated safety regulations governing motor carriers, including hours-of-service regulation. (
At trial, AB did not attempt to prove that its drivers were not also short-haul drivers—that was not an issue—nor has it attempted to demonstrate that the record supports that proposition on appeal. The SOD described AB‘s operations as including deliveries “in the greater San Francisco Bay Area, and, on occasion, to locations throughout California.” In its opening brief, in support of its own description of operations taking place outside of
Even if AB‘s drivers in the class were subject to federal hours-of-service regulation, compliance with California meal and rest break laws will not conflict with the federal requirements. As with the Dilts drivers, AB would not be confronted with an unworkable “patchwork” of regulation.17 We conclude that AB has not differentiated its case from Dilts. In any case, the Dilts majority made clear in footnote 2 that its decision did not rely in the intrastate nature of the defendants’ operations or on the fact that the routes were short-haul.
Our conclusion, in agreement with Dilts, that the FAAAA does not preempt California state law regarding meal and rest breaks is reinforced by our Supreme Court‘s recent decision in PAC Anchor. Although the meal and rest break claims at issue here are in different sections of IWC wage order No. 9 than the provisions at issue in PAC Anchor, we believe that the court‘s conclusion applies to them equally. We also note that although the PAC Anchor court did not rely on Dilts (and did not need to, to reach its holding), both the PAC Anchor and Dilts courts relied extensively on Californians for Safe & Competitive Dump Truck Transportation v. Mendonca (9th Cir. 1998) 152 F.3d 1184 (holding that the FAAAA does not preempt California‘s prevailing wage law when enforced against transportation companies). (PAC Anchor, supra, 59 Cal.4th at pp. 783–786; Dilts, supra, 769 F.3d at pp. 644–648.)
Hence, while the district court decision in Dilts and the federal trial courts which followed it reached a different conclusion, our holding that the FAAAA does not preempt California wage and hour regulations is entirely consistent with the jurisprudence of the United States Supreme Court, the California Supreme Court, and the Ninth Circuit.18
II. Class Certification
AB contends that the trial court erred when it certified the class because plaintiffs failed to fulfill their burden of showing that the claims of the putative class representatives were typical of those of the class as a whole, that common questions predominated over individual issues, and that it was probable that class members would come forward to prove their separate claims. In its order granting class certification, much of the evidence upon which the court relied came from AB‘s records and the deposition testimony of AB witnesses. The trial court specifically found that the proposed class was sufficiently numerous and ascertainable, that commonality was “adequately supported,” that plaintiffs’ claims were typical and that plaintiffs’ counsel could adequately represent the interests of the proposed class. The court noted that AB “does not identify any individual issues, much less argue that individual issues will predominate over common ones.”
“‘A judgment or order of the lower court is presumed correct.‘” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) AB bears the burden on appeal of affirmatively showing error. (Lennane v. Franchise Tax Bd. (1996) 51 Cal.App.4th 1180, 1189.) Despite this burden, AB, in its briefing, discusses none of the evidence presented in support of plaintiffs’ motion for certification (no evidence was submitted in opposition to the motion). Instead, AB briefly provides its own assessment of evidence presented at trial—evidence that is irrelevant to a determination of whether the trial court erred at the time of class certification.
Additionally, AB cannot show error without providing us with an adequate record. (Parker v. Harbert (2012) 212 Cal.App.4th 1172, 1178
However, plaintiffs’ motion was also based on the declarations of Godfrey and Gilbert, which they had previously filed with the trial court. The memorandum of points and authorities in support of the motion relied on these declarations extensively.19 AB failed to include these declarations when designating the clerk‘s transcript on appeal.
Accordingly, we reject AB‘s attack on the trial court‘s order certifying the class because AB has manifestly failed to affirmatively show error by accounting for all of the evidence presented in support of class certification and because the record provided by AB is inadequate for review of that evidence.
III. The Damages Award
AB contends that the evidence at trial “showed that some AB trucking drivers took meal and rest breaks which complied with California regulations, while others did not. It also showed that some were encouraged to take the requisite breaks under state law, while others were not.” AB notes the court‘s finding that “‘class members were routinely and consistently precluded by AB Trucking from taking meal periods and rest breaks,‘” but finds it significant that “this does not say that ‘all’ class members were so precluded, or that it happened most of the time.” AB asserts that the court should have reserved individual determinations of damages for a claims administration process20 rather than granting “a maximum damage award to each and every member of the plaintiff class, based upon an assumption that all of them had
We review the trial court‘s damages award for substantial evidence. (Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc. (2014) 226 Cal.App.4th 26, 43.) In order to evaluate the evidence with respect to damages, we must first understand the evidence with respect to liability.
At trial, the court heard testimony from six drivers who testified for plaintiffs and two drivers, James Francis and Erik Gaines, who testified for AB. We quote the trial court‘s findings in the SOD concerning meal and rest periods, which AB does not dispute were supported by substantial evidence:
“The Class presented substantial and persuasive evidence that class members were routinely and consistently precluded by AB from taking meal periods and rest breaks. Under the California Supreme Court‘s decision in [Brinker, supra,] 53 Cal.4th 1004, AB failed to comply with its obligation to afford drivers meal periods because Brinker holds an employer‘s duty ‘is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.’ (See Id. at p. 1040.) An employer does not satisfy its obligation if it ‘impedes’ or ‘discourages’ employees from taking an ‘uninterrupted 30-minute break.’ (Id.) An employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks. (Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 962–963 . . . .)
“The recent Brinker decision provides two examples of unlawful discouragement—a scheduling policy that makes taking breaks ‘extremely difficult’ and creating an anti-meal-break policy enforced through ridicule or reprimand. The Class established both unlawful scenarios exist here. . . .
“In addition, the evidence shows AB neither maintained, nor provided drivers, any ‘formal’ meal period policy. The first example of unlawful discouragement provided in Brinker presumes the existence of a formal meal period policy. AB does not meet the ‘provide’ standard because it provided no evidence showing drivers were, at a minimum, informed in any meaningful or consistent way that they could take a meal period, or the definition of any such meal period. As AB had no meal period policy to ‘undermine,’ and the
evidence presented shows that, beyond that, AB regularly discouraged the taking of legally protected breaks, AB has not shown it provided meal periods to the Class. “The evidence reflects AB knew drivers were stuck in line to enter the Port, once inside the Port, and in order to exit the Port, every single day. Yet it did not provide for the relief of its employees’ duties during this ‘waiting’ time. Waiting, even in a comfortable location, is ‘on-duty’ by definition: here, drivers were waiting to complete a task assigned by their employer. (See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 582.) While waiting to complete an assigned task, drivers were not free to leave to engage in personal activities. [Citation.] Instead, AB discouraged off-duty meal periods, and instructed drivers to eat while in line and ‘on-duty.’
“Despite evidence drivers did not receive meal periods as required by law, AB presented no evidence that it created or entered into written agreements between AB and drivers for on-the-job paid meal periods. AB‘s [person most qualified] on payroll and payroll processing admitted that AB automatically deducted one hour‘s pay from each driver per each shift worked based on a presumption that one hour meal periods were taken.”
As for rest breaks, the court found: “Drivers testified that AB did not authorize and permit ten minute rest breaks. Moreover, the evidence reflected AB typically encouraged drivers not to take, or prevented drivers from taking, rest breaks. AB provided no evidence of any formal policy on rest breaks. As with meal periods, there is no indication drivers were, at a minimum, informed in any meaningful or consistent way that they could take rest breaks, or the definition of any such rest breaks.”
AB‘s contention that the SOD did not apply to “all” class members and that it did not say that deprivation of meal and rest breaks happened “most of the time” is not well taken. A fair reading of the court‘s factual findings shows that with respect to the class as a whole, the court determined that AB had no policy of providing rest and meal breaks, that breaks the drivers were able to take were usually on-duty breaks, and that AB consistently discouraged or prevented the taking of off-duty breaks. The court‘s finding of liability applied to the class as a whole, and to its members individually.
As to damages, the court heard extensive testimony from Andrea Don, who presented the damages model that the court adopted in its damage award. Don prepared her model from AB‘s payroll and employment records that were produced during discovery. The model presents a damage calculation for each individual class member and Don‘s testimony detailed the assumptions
It was the court‘s finding that AB did not provide for conforming breaks and actively and consistently impeded or discouraged drivers from taking them. AB points to no substantial evidence that, despite AB‘s actions, drivers still managed to take off-duty breaks, in conformance with the requirements of IWC wage order No. 9-2001, and thus has failed to undermine the damages model upon which the court based its award. The damages model was supported by ample evidence and we conclude that substantial evidence supported the court‘s damage award.22
IV. The IWC Wage Order No. 9-2001 Exclusion Does Not Apply
AB contends that IWC wage order No. 9-2001 does not apply to it because its drivers are expressly excluded from coverage. In support of this contention, AB cites section 3(L) of the order, which provides, in relevant part: “The provisions of this section are not applicable to employees whose hours of service are regulated by: (1) The United States Department of Transportation Code of Federal Regulations, Title 49, Sections 395.1 to 395.13, Hours of Service of Drivers. . . .” (
We agree with Cicairos and reject AB‘s argument.24
V. Attorney Fees and Class Representative Enhancements
AB contends that we must set aside the award of attorney fees and class representative enhancements, but this contention is predicated entirely on our having found that the court erred, as asserted in AB‘s other arguments. Because we have found no error, we affirm the award of attorney fees and class representative enhancements.
DISPOSITION
The judgment of the trial court and its postjudgment order awarding attorney fees, litigation expenses, and class representative enhancements are affirmed. Plaintiffs are awarded their costs on appeal. The matter is returned to the trial court for an award of attorney fees on appeal.
Kline, P. J., and Richman, J., concurred.
A petition for a rehearing was denied December 1, 2014, and appellant‘s petition for review by the Supreme Court was denied February 11, 2015, S222999.