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Davis v. Colonial Freight Systems, Inc.

United States District Court, E.D. Tennessee, Knoxville

April 30, 2018

THEODUS DAVIS, on behalf of himself and those similarly situated, Plaintiffs,
v.
COLONIAL FREIGHT SYSTEMS, INC., et al., Defendants.

          MEMORANDUM AND ORDER

         This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court, and Standing Order 13-02.

         Now before the Court is Plaintiffs' Motion to Approve Notice and Opt-in Procedures [Doc. 93]. The parties appeared telephonically before the Court on April 11, 2018, for a motion hearing. Attorneys Justin Swidler and Travis Martinndale-Jarvis appeared on behalf of Plaintiffs. Attorneys E. Ashley Paynter, Christopher Eckhart, and Richard Hollow appeared on behalf of Defendants. Accordingly, for the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs' Motion [Doc. 93]. The Court further ORDERS the parties to meet and confer with respect to the remaining disputes as discussed below.

         I. BACKGROUND

         Plaintiffs filed a Complaint [Doc. 1] on September 20, 2016, and later filed an Amended Complaint [Doc. 61] on November 29, 2017. The Amended Complaint was filed against Defendants Colonial Freight Systems, Inc. (“Colonial”), Phoenix Leasing of Tennessee (“Phoenix”), and Ruby McBride. Plaintiffs allege that Defendants erroneously classified him and those similarly situated as independent contractors and unlawfully deducted and withheld their wages in violation of the Fair Labor Standards Act (“FLSA”). [Doc. 61 at ¶ 1]. Plaintiffs allege that Defendants required him and those who are similarly situated to attend Defendants' driver-trainee program without providing wages that were free and clear and further required them to cover the costs of Defendants' businesses, intentionally reducing their wages below the minimum wage. [Id.]. Plaintiffs also allege violations of the Truth in Leasing Act, 49 U.S.C. § 14704, against Defendants Colonial and Phoenix. [Id. at ¶ 2]. Specifically, Plaintiffs state that Defendant Colonial failed to pay the rates proscribed in the Independent Contractor Operating Agreements and that Defendant Phoenix breached its contractual obligations by failing to abide by the lease-purchase terms of the Lease Agreements. [Id. at ¶¶ 3-4].

         On March 2, 2018, the District Judge conditionally certified as a collective action two separate groups under the FLSA: the Driver-Trainee Class and the Phoenix-Lease Driver Class. [Doc. 85 at 8-14]. In addition, the District Judge certified the Phoenix-Lease Drivers as a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) with respect to the alleged violations of the Truth in Leasing Act. [Id. at 14-22].

         II. POSITIONS OF THE PARTIES

         The parties have submitted competing notice forms with respect to the FLSA collective action and the Rule 23 class action. Because the parties indicated at the hearing that they could resolve several disputes that were presented in their filings, the Court will only summarize the primary contentions between the parties: (1) methods of notice, (2) duration of opt-in period, and (3) the applicable class and collective action definitions.

         With respect to the methods of notifying individuals, Plaintiffs propose that they send two notices at different times: one notice for the collective action and one for the class action. Plaintiffs reason that the claims certified under Rule 23 are distinct from the collective action claims pursued under the FLSA. Plaintiffs insist that a hybrid notice will not benefit the class and that it will cause confusion. Plaintiffs state that many courts authorize notice to a putative FLSA collective action in advance of a decision to certify a Rule 23 class action consisting of the same individuals. In addition, Plaintiffs state that the procedures for joining and excluding members are different and contradictory. Plaintiffs explain that a hybrid notice will likely cause confusion to class members because the drivers are presumably unaware of the nuances of class and collective litigation.

         Further, Plaintiffs request that the FLSA collective action and the Rule 23 notices be sent via first-class mail, email, and through Defendant Colonial's Qualcomm system. Plaintiffs state that the messages sent via Defendant Colonial's Qualcomm system should be sent on the day of the mailing, ten days after mailing, and fifteen days after mailing the notices at 12:00 p.m., CST. In addition, with respect to the FLSA collective action, Plaintiffs request leave to send reminder notices by mail and email halfway through the notice period.

         With respect to the FLSA collective action, Plaintiffs propose an opt-in period of 120 days due to the difficulties in contacting truck drivers. Plaintiffs explain that truck drivers often spend several consecutive weeks or months on the road away from their home.

         Finally, Plaintiffs argue that the class and collective actions' definitions are not overbroad as suggested by Defendants. Plaintiffs continue that the definitions substantially mirror the language originally used in seeking certification and by the Court in granting certification. Plaintiffs have attached to the Motion their proposed FLSA notice form [Doc. 94-1], the consent to join form [Doc. 94-2], and the Rule 23 class action notice form [Doc. 94-4].

         Defendants have filed a number of objections to Plaintiffs' proposed notices. First, Defendants argue that a hybrid notice should be sent to individuals who are members of both the FLSA collective action and the Rule 23 class action and that a separate notice should be sent to individuals who are only members of the Rule 23 class action. In addition, Defendants argue that the notices should only be sent by first-class mail and that other methods, including emails, messages over the Qualcomm system, and reminders are duplicative and unnecessary.

         Further, Defendants argue that with respect to the FLSA collective action, the opt-in period should be sixty (60) days. Defendants emphasize that courts within the Sixth Circuit have repeatedly held that sixty (60) days is sufficient time to opt-in a lawsuit. Finally, Defendants argue that the notices do not properly reflect the collective and class definitions or the time periods that were certified by the Court. Defendants have attached their own notices [Docs. 98-1 and 98-2] and consent to join form [Doc. 98-3].

         III. ANALYSIS

         As mentioned above, the Court held a hearing on April 11, 2018. During the hearing, the parties agreed that there were fundamental issues that prevented them from resolving the remaining disputes. It appears to the Court that a ruling is necessary with respect to the methods of notice, the duration of the opt-in period, and the proper definitions of the class and collective actions.

         The Court will address these issues separately.

         A. ...


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