Fred Bowerman v. Field Asset Services, Inc. ( 2023 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FRED BOWERMAN; JULIA Nos. 18-16303
BOWERMAN, on behalf of 18-17275
themselves and all others similarly
situated, D.C. No. 3:13-
cv-00057-WHO
Plaintiffs-Appellees,
ORDER AND
v. AMENDED
OPINION
FIELD ASSET SERVICES, INC.;
FIELD ASSET SERVICES, LLC,
n/k/a XOME FIELD SERVICES,
LLC,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of California
William Horsley Orrick, District Judge, Presiding
Argued and Submitted July 20, 2021
Submission Vacated September 23, 2021
Resubmitted June 23, 2022
San Francisco, California
Filed July 5, 2022
Amended February 14, 2023
2 BOWERMAN V. FIELD ASSET SERVICES, INC.
Before: William A. Fletcher, Mark J. Bennett, and Bridget
S. Bade, Circuit Judges.
Order;
Opinion by Judge Bennett
SUMMARY *
Class Action / Attorneys’ Fees
The panel filed (1) an order denying a petition for panel
rehearing, denying on behalf of the court a petition for
rehearing en banc, and amending the opinion filed on July 5,
2022; and (2) an amended opinion reversing the district
court’s order certifying a class of 156 individuals who
personally performed work for Field Asset Services, Inc.
(“FAS”), reversing the partial summary judgment in favor of
the class, vacating the interim award of more than five
million dollars in attorneys’ fees, and remanding for further
proceedings.
FAS is in the business of pre-foreclosure property
preservation for the residential mortgage industry. Plaintiff
Fred Bowerman was the sole proprietor of BB Home
Services, which contracted with FAS as a
vendor. Bowerman alleged that FAS willfully misclassified
him and members of the putative class as independent
contractors, rather than employees, resulting in FAS’s
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
BOWERMAN V. FIELD ASSET SERVICES, INC. 3
failure to pay overtime compensation and to indemnify them
for their business expenses.
FAS first argued that the district court abused its
discretion by certifying the class, despite the predominance
of individualized questions over common ones. Under Fed.
R. Civ. P. 23(b)(3), a district court must find that common
questions of fact or law to class members predominate over
individual members’ questions before certifying a
class. The panel held that here, the class failed the
requirement because complex, individualized inquiries
would be needed to establish that class members worked
overtime or that claimed expenses were reimbursable. On
this record, the individual inquiries clearly predominated
over the common questions in the case, and the district court
abused its discretion in holding otherwise. Any common
question as to misclassification was outweighed by the
individual questions going to injury and damages. The
damages phase of this class action was far messier than
promised by plaintiffs’ counsels when the case was
certified. The plaintiffs’ evidence here was like that offered
in Castillo v. Bank of America, N.A., 980 F.3d 723 (9th Cir.
2020), where the court affirmed the district court’s denial of
class certification. The panel concluded that class
certification was improper.
Second, FAS argued that S.G. Borello & Sons, Inc. v.
Department of Industrial Relations, 769 P.2d 399 (Cal.
1989) (“Borello”), not Dynamex Operations West, Inc. v.
Superior Court, 416 P.3d 1 (Cal. 2018) (“ Dynamex”),
applied to all the class members’ claims. The panel held that
the California Court of Appeal has repeatedly limited
Dynamex’s applications to claims based on or “rooted in”
California’s wage orders. Here, the class members’ expense
reimbursement claims were not based on a California wage
4 BOWERMAN V. FIELD ASSET SERVICES, INC.
order, but on Cal. Labor Code § 2802. Nor were they
“rooted in” a California wage order, even though the class
members belatedly invoked Wage Order 16-2001 in their
class certification briefing. The panel rejected FAS’s
contention that Borello governed because the overtime
claims were “joint employment” claims to which Dynamex
did not apply. The panel held that Dynamex applied to
Bowerman’s overtime claims. The panel noted that FAS’s
joint employment argument would likely succeed were an
actual employee of a vendor suing FAS, claiming that FAS
was an employer. On remand, the district court may
consider the joint employment issue in the first instance for
class members who own or operate LLCs or corporations,
which are distinct legal entities.
Third, FAS contended that the district court erred by
granting summary judgment under Borello’s multifactor and
fact-intensive inquiry because, among other reasons, FAS
did not control the manner and means of the class members’
work. The panel first considered the expense reimbursement
claims. The panel held that Borello governed the class
members’ reimbursement claims. Under Borello, the
existence of an employment relationship is a question for the
trier of fact, and the district court erred in finding no triable
issue of material fact.
Next, the panel considered the overtime
claims. Dynamex adopted the “ABC test” to determine
employee status for purposes of wage and hour claims like
the class members’ overtime claims. The ABC test
presumptively considers all workers to be employees, and
permits workers to be classified as independent contractors
only if the hiring business shows that the worker in question
satisfies each of three conditions – A, B, and C. The panel
held that summary judgment would not be proper under parts
BOWERMAN V. FIELD ASSET SERVICES, INC. 5
A or C of the test because there were genuine disputes of
material fact – whether the vendors were free from FAS’s
control, and whether the vendors were engaged in an
independently established trade, occupation, or
business. The panel further held that summary judgment
would be proper under part B of the test, which requires that
the worker perform work that is outside the usual course of
the hiring entity’s business, but FAS failed to satisfy part
B. The facts supported the conclusion that the vendors
performed services for FAS in the usual course of FAS’s
business. This alone was dispositive of Bowerman’s
employee status under Dynamex. In addition to Dynamex
considerations, since the district court’s summary judgment
decision, Cal. Labor Code § 2776 enacted a retroactive
business-to-business exception to the ABC test, which
provides that Dynamex does not apply to a bona fide
business-to-business contracting relationship if a business
service provider contracts to provide services to another such
business. In this case, the determination of
employee/independent contractor status of the business
provider is governed by Borello if the contracting business
demonstrates that twelve criteria are satisfied. Viewing
these criteria, the panel held that there was a genuine dispute
of material fact as to whether the exception applied to FAS
and its vendors. The panel concluded that because of the
enactment of section 2776, summary judgment was no
longer warranted on the class’s overtime claims, even
though summary judgment would be proper on those claims
under Dynamex for sole proprietors like Bowerman.
The panel also held that there was a genuine dispute of
material fact as to whether the class members ever incurred
reimbursable expenses or ever worked overtime. Summary
judgment was improper because a putative employer cannot
6 BOWERMAN V. FIELD ASSET SERVICES, INC.
be liable to an entire class of putative employees for failing
to reimburse their business expenses and pay them overtime
– unless the putative employer in fact failed to do so for each
of them.
Fourth, FAS argued that the district court abused its
discretion by awarding attorneys’ fees. The attorneys’ fee
award on appeal was an interim award. The panel held that
this case presented “extraordinary circumstances” that
justified the exercise of pendent appellate jurisdiction over
the interim fee award. The panel joined a majority of sister
circuits, and held as a matter of first impression, that it could,
and would, here, exercise pendent appellate jurisdiction over
interim fee awards that are inextricably intertwined with or
necessary to ensure meaningful review of final orders on
appeal. The panel further held that the interim award of
attorneys’ fees must be vacated because the class
certification and summary judgment orders were issued in
error.
COUNSEL
Frank G. Burt (argued) and Brian P. Perryman, Faegre
Drinker Biddle & Reath LLP, Washington, D.C.; Robert G.
Hulteng and Aurelio J. Perez, Littler Mendelson PC, San
Francisco, California; Barrett K. Green, Littler Mendelson
PC, Los Angeles, California; for Defendants-Appellants.
Monique Olivier (argued), Olivier & Schreiber LLP, San
Francisco, California; Thomas E. Duckworth, Duckworth
Peters LLP, San Francisco, California; James E. Miller and
Laurie Rubinow, Miller Shah LLP, Chester, Connecticut;
Ronald S. Kravitz, Miller Shah LLP, San Francisco,
BOWERMAN V. FIELD ASSET SERVICES, INC. 7
California; James C. Shah, Miller Shah LLP, Philadelphia,
Pennsylvania; Nathan C. Zipperian, Miller Shah LLP, Fort
Lauderdale, Florida; Erika Heath, Erika Heath Attorney at
Law, San Francisco, California; for Plaintiffs-Appellees.
Aaron D. Kaufmann, Leonard Carder LLP, Oakland,
California; Catherine Ruckelshaus, National Employment
Law Project, New York, New York; George A. Warner,
Legal Aid at Work, San Francisco, California; Winifred
Kao, Asian Americans Advancing Justice-Asian Law
Caucus, San Francisco, California; for Amici Curiae
California Employment Lawyers’ Association, Legal Aid at
Work, National Employment Law Project, Asian Americans
Advancing Justice-Asian Law Caucus.
Lindsay Nako and Jocelyn D. Larkin, Impact Fund,
Berkeley, California, for Amici Curiae Impact Fund, Centro
Legal De La Raza, Disability Rights California, Housing and
Economic Rights Advocates, Law Foundation of Silicon
Valley, Lawyers’ Committee for Civil Rights of the San
Francisco Bay Area, and Public Advocates Inc.
David Mara and Jill Vecchi, Mara Law Firm PC, San Diego,
California, for Amicus Curiae Consumer Attorneys of
California.
8 BOWERMAN V. FIELD ASSET SERVICES, INC.
ORDER
The opinion filed July 5, 2022, and appearing at 39 F.4th
652, is amended by the opinion filed concurrently with this
order.
With these amendments, the panel unanimously votes to
deny the petition for panel rehearing. Judges Bennett and
Bade vote to deny the petition for rehearing en banc, and
Judge W. Fletcher so recommends. The full court has been
advised of the petition for rehearing en banc, and no judge
requested a vote on whether to rehear the matter en
banc. Fed. R. App. P. 35.
The petition for panel rehearing and rehearing en banc,
filed August 8, 2022, is DENIED. No further petitions for
panel rehearing or rehearing en banc will be entertained.
OPINION
BENNETT, Circuit Judge:
Defendant-Appellant Field Asset Services, Inc.
(“FAS”) 1 appeals the certification of a class of 156
individuals who personally performed work for FAS, the
Plaintiffs-Appellees. It also appeals the final judgment for
eleven class members under Federal Rule of Civil Procedure
54(b), after the district court granted partial summary
judgment to all the class members as to liability. Finally,
FAS appeals the accompanying interim award of more than
1
The joint motion to amend case caption is GRANTED. FAS is now
known as Xome Field Services, LLC.
BOWERMAN V. FIELD ASSET SERVICES, INC. 9
five million dollars in attorneys’ fees. We have jurisdiction
pursuant to 28 U.S.C. § 1291 and reverse and remand on all
three issues.
I. FACTS AND PROCEDURAL HISTORY
A. FAS’s Business Model
FAS is in the business of pre-foreclosure property
preservation for the residential mortgage industry. But FAS,
itself, does not perform pre-foreclosure property-
preservation services for its clients. Rather, it contracts with
vendors who perform those services. Some vendors are sole
proprietorships; others are corporations. Vendors have
varying numbers of employees, from at most a few to up to
sixty-five. Some work almost exclusively for FAS; others
perform work for multiple companies, including FAS’s
clients and competitors.
FAS exercises some control over the vendors’
completion of their work. It requires that jobs be completed
within seventy-two hours; provides detailed instructions for
particular tasks; and imposes insurance, photo
documentation, pricing, and invoicing requirements through
its Vendor Qualification Packets (“VQPs”) and work orders.
It offers training, although the parties dispute whether the
training is mandatory. And FAS monitors the vendors’ job
performance through vendor scorecards and Approved
Vendor Quality Policies (“AVQPs”), which implement a
discipline scale for vendor noncompliance with FAS’s or
FAS’s clients’ instructions. FAS classifies all its vendors as
independent contractors.
10 BOWERMAN V. FIELD ASSET SERVICES, INC.
B. The Initiation of the Lawsuit and Class Certification
Named Plaintiffs Fred and Julia Bowerman 2 sued in
2013, seeking damages and injunctive relief. Fred
Bowerman was the sole proprietor of BB Home Services,
which contracted with FAS as a vendor. The operative
complaint alleged that FAS willfully misclassified
Bowerman and members of the putative class as independent
contractors rather than employees, resulting in FAS’s failure
to pay overtime compensation and to indemnify them for
their business expenses.
The complaint also sought class certification under
Federal Rule of Civil Procedure 23(b)(3), which the district
court granted for a class defined as:
All persons who at any time from January 7,
2009 up to and through the time of judgment
(the “Class Period”) (1) were designated by
FAS as independent contractors; (2)
personally performed property preservation
work in California pursuant to FAS work
orders; and (3) while working for FAS during
the Class Period, did not work for any other
entity more than 30 percent of the time. The
class excludes persons who primarily
performed rehabilitation or remodel work for
FAS.
The parties later agreed to fix the class period as beginning
on January 7, 2009, and ending on December 20, 2016. FAS
argued that the proposed class failed Rule 23(b)(3)’s
2
The district court determined that Julia Bowerman did not fall within
the class definition. That determination is not challenged on appeal.
BOWERMAN V. FIELD ASSET SERVICES, INC. 11
predominance requirement because of the need for
individualized damages hearings if liability were found. The
district court rejected this argument, quoting our decision in
Leyva v. Medline Industries Inc., 716 F.3d 510 (9th Cir.
2013), for the proposition that “[t]he presence of
individualized damages cannot, by itself, defeat class
certification under Rule 23(b)(3).” Id. at 514.
C. Summary Judgment
In March 2017, the district court granted partial
summary judgment in favor of the class members, finding
that they had been misclassified as independent contractors
and that as a result, FAS was liable to them for failing to pay
overtime and business expenses. In making that
determination, the district court relied on California’s
common law test for distinguishing between employees and
independent contractors, as outlined in S.G. Borello & Sons,
Inc. v. Department of Industrial Relations, 769 P.2d 399(Cal. 1989). Under Borello, “the principal test of an
employment relationship is whether the person to whom
service is rendered has the right to control the manner and
means of accomplishing the result desired.” Id. at 404(citation and alteration omitted). But even though “the right
to control work details is the ‘most important’ or ‘most
significant’ consideration, . . . several ‘secondary’ indicia of
the nature of a service relationship” also bear on the
employee and independent contractor distinction. Id. For
example, Borello noted that “strong evidence in support of
an employment relationship is the right to discharge at will,
without cause.” Id. (citation and alteration omitted). It also
listed the following as secondary indicia of an employment
versus independent contractor relationship:
12 BOWERMAN V. FIELD ASSET SERVICES, INC.
(a) whether the one performing services is
engaged in a distinct occupation or
business;
(b) the kind of occupation, with reference to
whether, in the locality, the work is
usually done under the direction of the
principal or by a specialist without
supervision;
(c) the skill required in the particular
occupation;
(d) whether the principal or the worker
supplies the instrumentalities, tools, and
the place of work for the person doing the
work;
(e) the length of time for which the services
are to be performed;
(f) the method of payment, whether by the
time or by the job;
(g) whether or not the work is a part of the
regular business of the principal; and
(h) whether or not the parties believe they are
creating the relationship of employer-
employee.
Id. Borello explained that “[g]enerally, the individual
factors cannot be applied mechanically as separate tests; they
are intertwined and their weight depends often on particular
combinations.” Id. (citation and alteration omitted).
Applying this test, the district court granted partial
summary judgment on the misclassification issue because it
BOWERMAN V. FIELD ASSET SERVICES, INC. 13
was “convinced that the overwhelming evidence on the most
important factor of the [Borello] test”—that is, control—
“tip[ped] the scales clearly in favor of finding an employee
relationship.” In particular, the district court found that
“[n]o reasonable juror could review the Vendor Packets, the
work orders, the trainings, the Vendor Profiles, the
discipline, and the Vendor scorecards, and conclude [that]
any of the Vendors are independent contractors.”
Despite its conviction that the control factor supported
the class, the district court’s analysis of Borello’s secondary
factors was materially different. The district court stated that
if it “ignored the right to control analysis, and focused solely
on the secondary factors, [it] would not grant summary
judgment.” In fact, the district court found that many of the
secondary factors indicated independent contractor status,
including the parties’ intent to create an independent
contractor relationship, the class members’ opportunity for
profit or loss, and the class members’ employment of
assistants. Several of the other secondary factors implicated
genuine disputes of material fact. 3
But the district court found that FAS’s “right to control
swamp[ed] [the secondary] factors in importance, and
[some] secondary factors favor[ed] plaintiffs’ argument that
[they] are employees.” Thus, the district court granted
partial summary judgment to the class on the
misclassification issue. The district court also granted
partial summary judgment to the class on their overtime and
expense reimbursement claims, which were derivative of the
3
For example, the district court was “not sure how to evaluate” whether
FAS supplied the instrumentalities, tools, and place of work because
“[b]oth parties present[ed] evidence supporting their positions.”
14 BOWERMAN V. FIELD ASSET SERVICES, INC.
misclassification claim. In doing so, the district court
relegated the issues of “whether a particular [class member]
worked overtime on a specific day” (or ever), and “whether
a specific expense” (or any) “was reasonable and necessary”
to the damages phase of the trial, rather than the liability
phase.
D. The Bellwether Jury Trial
In July 2017, the district court held a bellwether jury trial
to determine damages for Named Plaintiff Fred Bowerman
and ten of the 156 class members. 4 The trial lasted eight
days, as the class members’ damages were neither evident
from any records detailing their overtime hours and
reimbursable expenses, nor calculable by any common
method. After the bellwether trial, FAS filed a second
motion for class decertification, which the district court
construed as a motion for leave to file a motion for
reconsideration. Although the district court denied the
motion, it acknowledged the difficulty of calculating every
class member’s damages on an individualized basis with no
method for doing so other than the class members’
individualized testimony, noting that “[t]he damages phase
4
After trial, FAS renewed its motion for judgment as a matter of law,
arguing that the verdict as to five of the eleven claimants in their personal
capacity was improper because “any expenses incurred in connection
with the businesses of [those] Five Claimants were incurred by the
corporate form, and not incurred personally by the claimant.” The
district court correctly denied the motion. Under California law, a
plaintiff can incur expenses even without ultimately paying them. See,
e.g., Cochran v. Schwan’s Home Serv., Inc., 176 Cal. Rptr. 3d 407, 412–
13 (Ct. App. 2014) (“If an employee is required to make work-related
calls on a personal cell phone, then he or she is incurring an expense for
purposes of [California Labor Code §] 2802. It does not matter whether
the phone bill is paid for by a third person, or at all.”).
BOWERMAN V. FIELD ASSET SERVICES, INC. 15
of this class action [will be] far messier than promised by
plaintiffs’ counsel when” the case was certified. 5
E. Appeal and Stay of Proceedings After the California
Supreme Court’s Decision in Dynamex
Between the district court’s summary judgment decision
and FAS’s first notice of appeal in July 2018, the California
Supreme Court decided Dynamex Operations West, Inc. v.
Superior Court, 416 P.3d 1 (Cal. 2018), which established a
different test for distinguishing between employees and
independent contractors in certain contexts, commonly
known as “the ABC test.” Id. at 34. Unlike the Borello test,
“[t]he ABC test presumptively considers all workers to be
employees, and permits workers to be classified as
independent contractors only if the hiring business
demonstrates that the worker in question satisfies each of
three conditions”:
a) that the worker is free from the control
and direction of the hirer in connection
with the performance of the work, both
under the contract for the performance of
the work and in fact; and
b) that the worker performs work that is
outside the usual course of the hiring
entity’s business; and
5
As noted above, the judgment as to the bellwether trial was certified
under Federal Rule of Civil Procedure 54(b). The district court was
referencing the difficulties in the bellwether trial that would also be
present (although obviously on a much greater scale) in the damages
phase of the trial for the remaining class members.
16 BOWERMAN V. FIELD ASSET SERVICES, INC.
c) that the worker is customarily engaged in
an independently established trade,
occupation, or business of the same
nature as that involved in the work
performed.
Id. We certified the issue of Dynamex’s retroactivity to the
California Supreme Court in Vazquez v. Jan-Pro
Franchising International, Inc., 939 F.3d 1045 (9th Cir.
2019), and held FAS’s appeal in abeyance. The California
Supreme Court held that Dynamex does apply retroactively,
Vazquez v. Jan-Pro Franchising Int’l, Inc., 478 P.3d 1207,
1208 (Cal. 2021), and we affirmed that applying Dynamex
retroactively comports with due process, Vazquez v. Jan-Pro
Franchising Int’l, Inc., 986 F.3d 1106, 1117–18 (9th Cir.
2021).
F. The Interim Award of Attorneys’ Fees
In July 2018, class counsel moved in the district court for
an award of attorneys’ fees and related expenses, with no
notice to the class members. In September 2018, the district
court issued an interim order stating that the record was “not
sufficient to tell whether all of the time plaintiffs [sought] to
have compensated for 32 time-billers was reasonably
incurred.” Accordingly, the district court ordered an in-
camera inspection of class counsel’s contemporaneous time
records. Although FAS sought access to those records, the
district court never allowed that access.
In November 2018, the district court issued an interim
fee award of $5,173,539.50. It did not “summarize the facts
or posture of the case, except to say that it include[d] novel
issues that the Ninth Circuit [would] address and that it was
aggressively defended.”
BOWERMAN V. FIELD ASSET SERVICES, INC. 17
The district court thus began by awarding the lead
counsel $3,381,540, which it justified with the following
brief explanation:
The hourly rates they seek . . . are well within
the reasonable range. The amount of time
they billed in each of the categories is also
reasonable, as lead counsel in small firms
must not only coordinate all of the work in
the case to ensure it is geared to effective
advocacy at trial but must also bear the
laboring oar on many aspects of the litigation.
The district court then awarded non-lead counsel
$1,792,138.50 (they sought $1,991,265). It justified that
decision with another brief explanation:
The contemporaneous records of plaintiffs’
counsel show that the 28 timekeepers were
performing substantive work with a
minimum of overlap. However, it is
inherently inefficient to have so many people
working on a legal project. With such a large
group, it is inevitable that information needs
to be shared, common issues discussed, and
overlapping tasks performed. I will reduce
the sum requested for the 28 timekeepers,
$1,991,265, by 10% for that inefficiency. See
Moreno v. City of Sacramento, 534 F.3d
1106, 1112 (9th Cir. 2008) (“[T]he district
court can impose a small reduction, no
greater than 10 percent—a ‘haircut’—based
on its exercise of discretion and without a
more specific explanation.”).
18 BOWERMAN V. FIELD ASSET SERVICES, INC.
The district court reserved decision on whether to apply a
multiplier.
II. STANDARDS OF REVIEW
We review the class certification for an abuse of
discretion, In re Wells Fargo Home Mortg. Overtime Pay
Litig., 571 F.3d 953, 957 (9th Cir. 2009); the grant of
summary judgment de novo, Narayan v. EGL, Inc., 616 F.3d
895, 899 (9th Cir. 2010); and the award of attorneys’ fees for
an abuse of discretion, In re Mercury Interactive Corp. Sec.
Litig., 618 F.3d 988, 992 (9th Cir. 2010).
III. DISCUSSION
FAS makes four arguments on appeal. It first maintains
that the district court abused its discretion by certifying the
class, despite the predominance of individualized questions
over common ones. Second, FAS argues that Borello, not
Dynamex, applies to all the class members’ claims, because
Dynamex does not apply to joint employment claims, or to
claims that are not based on or rooted in one of California’s
wage orders. Third, it contends that the district court erred
by granting summary judgment under Borello’s multifactor
and fact-intensive inquiry, because, among other reasons,
FAS does not control the manner and means of the class
members’ work. And fourth, FAS argues that the district
court abused its discretion by awarding interim attorneys’
fees without giving FAS access to the time records on which
the award was based, without notifying class members of
class counsel’s fee motion, without finding the facts
specially, and without providing a precise but clear
BOWERMAN V. FIELD ASSET SERVICES, INC. 19
explanation of its reasons for the award. 6 We address each
argument in turn.
A. Class Certification
Under the predominance requirement of Rule 23(b)(3), a
district court must find that “questions of law or fact
common to class members predominate over any questions
affecting only individual members” before certifying a class.
Here, the class fails that requirement because complex,
individualized inquiries would be needed to establish that
class members worked overtime or that claimed expenses
were reimbursable. On this record, those individual
inquiries clearly predominate over the common questions in
the case, and the district court abused its discretion in
holding otherwise.
We need not decide whether common evidence can
prove that FAS has a uniform policy of misclassifying its
vendors, because any common question as to
misclassification is outweighed by the individual questions
going to injury and damages. Of course, as we have
emphasized, “the presence of individualized damages
cannot, by itself, defeat class certification.” Leyva, 716 F.3d
at 514; see also Lambert v. Nutraceutical Corp., 870 F.3d
1170, 1182 (9th Cir. 2017), rev’d on other grounds, 139 S.
Ct. 710 (2019); Yokoyama v. Midland Nat’l Life Ins. Co.,
594 F.3d 1087, 1094 (9th Cir. 2010). Rule 23(b)(3)
6
FAS also argues that expenses recovered by five of the class members
in the bellwether jury trial are not recoverable because they were paid by
the class members’ businesses rather than the class members in their
personal capacities. But as explained above, supra p. 14 n.4, members
of the class can still incur expenses for purposes of section 2802 even if
their businesses ultimately pay the bill. See Cochran, 176 Cal. Rptr. 3d
at 412–13.
20 BOWERMAN V. FIELD ASSET SERVICES, INC.
“requires only that the district court determine after rigorous
analysis whether the common question predominates over
any individual questions, including individualized questions
about injury or entitlement to damages.” Olean Wholesale
Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th
651, 669 (9th Cir. 2022) (en banc). Thus, “a district court is
not precluded from certifying a class even if plaintiffs may
have to prove individualized damages at trial, a conclusion
implicitly based on the determination that such
individualized issues do not predominate over common
ones.” Id.Still, class certification is inappropriate when
“individualized questions . . . will overwhelm common
ones.” Id. (internal citation and quotation marks omitted).
When the district court initially held that predominance was
satisfied and class certification was appropriate, it
understood that individualized injury and damages
assessments would not be prohibitively cumbersome. But
the plaintiffs withdrew their expert after the district court
“raised questions about the reliability of his data and
opinions concerning an aggregate damages model.” Lacking
any sort of representative evidence, the class members were
left relying on individual testimony to establish the existence
of an injury and the amount of damages. 7 Such an approach
7
FAS’s opening brief states that “[a]ll agree that plaintiffs cannot prove,
through common evidence, that class members worked overtime hours
or that claimed expenses are reimbursable.” The class members’
answering brief does not contest that claim. The class argues only that
“[u]niform, class-wide evidence establishes that FAS’s policy and
practice is not to pay overtime, and not to reimburse the Workers for any
business expenses incurred.” But under California law, uniform
evidence that FAS won’t pay overtime wages or reimburse business
BOWERMAN V. FIELD ASSET SERVICES, INC. 21
would not necessarily have doomed class certification—so
long as common questions continued to predominate. They
did not.
As the district court recognized in its most recent order
denying FAS’s motion for class decertification, “[t]he
damages phase of this class action is far messier than
promised by plaintiffs’ counsel when” the case was certified.
The district court explained, “[b]ecause the documentary
evidence maintained by the vendors . . . [is] scant at best, . .
. [p]roof by the testimony of [individual] vendors is
necessary.”
And the individualized testimony was not a simple
matter. Plaintiffs do not dispute FAS’s assertions that “[a]ll
who testified [during the bellwether jury trial] relied on their
unaided memories as the primary or sole evidence of their
work schedules,” and that “[n]one offered time-entry data or
other contemporaneous records of hours worked,” as
confirmed by the trial record. This has resulted in a series of
mini-trials concerning the work history and credibility of
each individual class member; already, it has taken eight
days to determine damages for only eleven of the 156 class
members. The “individualized mini-trials” required to
establish liability and damages plainly distinguish this case
expenses if any are owed does not amount to evidence that FAS had a
uniform policy that required the class to work overtime or incur
reimbursable expenses. See Sotelo v. MediaNews Grp., Inc., 143 Cal.
Rptr. 3d 293, 305 (Ct. App. 2012) (explaining that a class may establish
liability by proving that an alleged employer has “a uniform policy that
requires putative class members to work overtime” (emphasis added)).
We therefore accept FAS’s representation as true. Smith v. Marsh, 194
F.3d 1045, 1052 (9th Cir. 1999) (“[O]n appeal, arguments not raised by
a party in its opening brief are deemed waived.”).
22 BOWERMAN V. FIELD ASSET SERVICES, INC.
from Olean, where the proposal for calculating damages for
each class member—though individualized—was
“straightforward.” 31 F.4th at 682 n.31.
Nor does this case resemble Tyson Foods, Inc. v.
Bouaphakeo, 577 U.S. 442 (2016). There, the defendant-
employer argued that class certification was improper
because the “necessarily person-specific inquiries into
individual work time predominate[d] over the common
questions.” Id. at 454. The Supreme Court rejected this
argument because the plaintiffs had offered common
evidence—in the form of a “representative sample”—that
“each class member could have relied on” as evidence of the
hours that he or she worked “if he or she had brought an
individual action.” Id. at 455. The class members here argue
they have common evidence too, pointing to FAS’s contracts
requiring workers to incur all business expenses and
disclaim any right to overtime pay. But unlike the
representative evidence in Tyson Foods—which would have
been sufficient, on its own, to establish the employer’s
liability to each employee at trial, id. at 459—the common
evidence here speaks only to some elements of the class
members’ claims: namely, whether they were misclassified
as independent contractors. It does not bear on whether the
class members actually worked overtime or incurred
reimbursable business expenses. It therefore carries less
weight in the predominance inquiry than the representative
evidence in Tyson Foods and the common issue it helps
resolve is outweighed by the complexity of the
individualized inquiries that remain.
The balance between common and individualized
questions in this case is also unlike the wage-and-hour class
actions in which our court has held that class certification is
appropriate, in both the lack of representative evidence
BOWERMAN V. FIELD ASSET SERVICES, INC. 23
going to liability and the complexity of the remaining
individualized questions. For example, in Ridgeway v.
Walmart Inc., 946 F.3d 1066 (9th Cir. 2020), the plaintiffs
presented common evidence that Wal-Mart was liable to all
class members for failing to pay truck drivers for time spent
on layovers, rest breaks, and inspections. Id. at 1086. The
plaintiffs also offered common evidence in support of
damages, in the form of representative sampling compiled
by an expert and testimony from representative employees.
Id. at 1087–89. In Senne v. Kansas City Royals Baseball
Corp., 934 F.3d 918 (9th Cir. 2019), too, the plaintiffs
offered representative evidence (in the form of an expert
survey, team schedules, payroll data, and testimony from the
employer and representative class members) in support of
liability and damages. Id. at 925. This representative
evidence tipped the scales in favor of common issues
predominating, even though the damages calculations would
involve some individualized inquiries. Id. at 943.
The plaintiffs’ evidence here is more like that offered in
Castillo v. Bank of America, NA, 980 F.3d 723 (9th Cir.
2020), in which we affirmed the district court’s denial of
class certification. Id. at 726–27. There, the plaintiffs
offered common evidence showing that the defendant-
employer utilized two unlawful overtime formulas in some
circumstances. Id. at 727. Nevertheless, the common issues
about the lawfulness of those formulas were outweighed by
“complicated” individualized questions about “who was
ever exposed to one or both policies, and whether those who
were exposed were harmed in a way giving rise to liability.”
Id. at 733.
In light of the complexity of the individualized questions
and the absence of any representative evidence introduced to
fill the class members’ evidentiary gap, the individual issues
24 BOWERMAN V. FIELD ASSET SERVICES, INC.
predominate over the common questions in this case. Class
certification was therefore improper. 8
B. The Proper Employment Test
1. Expense Reimbursement Claims
“Dynamex did not purport to replace the Borello standard
in every instance where a worker must be classified as either
an independent contractor or an employee for purposes of
enforcing California’s labor protections.” Cal. Trucking
Ass’n v. Su, 903 F.3d 953, 959 n.4 (9th Cir. 2018). Rather,
Dynamex was clear that it “address[ed] only” the issue of
how to distinguish between employees and independent
contractors “with regard to those claims that derive directly
from the obligations imposed by [a] wage order.” 416 P.3d
at 25. Dynamex further suggested that its holding should not
extend beyond that context, by describing the ABC test as a
“distinct standard that provides broader coverage of workers
8
In addition to Rule 23(b)(3)’s predominance requirement, Rule
23(b)(3)’s superiority requirement further requires “that a class action
[be] superior to other available methods for fairly and efficiently
adjudicating the controversy.” FAS argues that a class action is not
superior to other methods of resolving this case because the class
members have interests in individually controlling their claims, see Fed.
R. Civ. P. 23(b)(3)(A), given that they “stand to recover five- and even
six-figure awards.” The Supreme Court has explained that “[w]hile the
text of Rule 23(b)(3) does not exclude from certification cases in which
individual damages run high, the Advisory Committee [for Rule
23(b)(3)] had dominantly in mind vindication of the rights of groups of
people who individually would be without effective strength to bring
their opponents into court at all.” Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 617 (1997) (internal quotation marks and citation omitted).
Thus, even though the large damages awards the class members stand to
gain are not sufficient on their own to overcome Rule 23(b)(3)
certification, they support doing so.
BOWERMAN V. FIELD ASSET SERVICES, INC. 25
with regard to the very fundamental protections afforded by
wage and hour laws and wage orders,” given “the [Industrial
Welfare Commission’s] determination that it is appropriate
to apply a distinct and particularly expansive definition of
employment regarding obligations imposed by a wage
order.” 9 Id. at 29 (emphases added).
The California Supreme Court’s subsequent decision in
Vazquez v. Jan-Pro Franchising International, Inc., 478
P.3d 1207, affirmed that “[i]n Dynamex, [the] court was
faced with a question of first impression: What standard
applies under California law in determining whether workers
should be classified as employees or independent contractors
for purposes of the obligations imposed by California’s
9
The California Supreme Court elaborated that its holding “[found] its
justification in the fundamental purposes and necessity of the minimum
wage and maximum hour legislation in which the standard has
traditionally been embodied”:
Wage and hour statutes and wage orders were adopted
in recognition of the fact that individual workers
generally possess less bargaining power than a hiring
business and that workers’ fundamental need to earn
income for their families’ survival may lead them to
accept work for substandard wages or working
conditions. The basic objective of wage and hour
legislation and wage orders is to ensure that such
workers are provided at least the minimal wages and
working conditions that are necessary to enable them
to obtain a subsistence standard of living and to protect
the workers’ health and welfare. These critically
important objectives support a very broad definition of
the workers who fall within the reach of the wage
orders.
Dynamex, 416 P.3d at 31–32 (citations omitted).
26 BOWERMAN V. FIELD ASSET SERVICES, INC.
wage orders?” Id. at 1208 (emphasis added). It also held
that Dynamex “did not change a settled rule” like the Borello
test, as applied outside the wage order context. Id. at 1209.
Consistent with that guidance, the California Court of
Appeal has repeatedly limited Dynamex’s application to
claims based on or “rooted in” California’s wage orders. 10
See Vendor Surveillance Corp. v. Henning, 276 Cal. Rptr. 3d
458, 468–69 (Ct. App. 2021); Gonzales v. San Gabriel
Transit, Inc., 253 Cal. Rptr. 3d 681, 701–04 (Ct. App. 2019);
Garcia v. Border Transp. Grp., LLC, 239 Cal. Rptr. 3d 360,
370–71 (Ct. App. 2018).
Here, the class members’ expense reimbursement claims
are not based on a California wage order, but on California
Labor Code § 2802. 11 Nor are they “rooted in” a California
wage order, even though the class members belatedly
invoked Wage Order 16-2001 in their class certification
briefing. Wage Order 16-2001 does not “cover[] most of the
[section 2802] violations alleged,” and its provisions are not
“equivalent or overlapping” with section 2802. Gonzales,
10
In the absence of controlling authority by the California Supreme
Court, “we follow decisions of the California Court of Appeal unless
there is convincing evidence that the California Supreme Court would
hold otherwise.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876,
889 (9th Cir. 2010).
11
Assembly Bill 5 codified “the ABC test and expanded its reach to
apply to all claims under the Labor Code and the Unemployment
Insurance Code.” People v. Superior Court, 271 Cal. Rptr. 3d 570, 574
(Ct. App. 2020); see also Cal. Lab. Code § 2775(b)(1). The ABC test’s
extension “was prospective, with an effective date of January 1, 2020.”
Lawson v. Grubhub, Inc., 13 F.4th 908, 912 (9th Cir. 2021) (citing Cal.
Lab. Code § 2785(c)). Because the claims at issue in this case arise from
conduct that occurred before January 1, 2020, AB 5 does not decide the
test applicable to the expense reimbursement claims.
BOWERMAN V. FIELD ASSET SERVICES, INC. 27
253 Cal. Rptr. 3d at 702, 704. Although section 2802 covers
“all necessary expenditures or losses incurred by the
employee in direct consequence of the discharge of his or
her duties,” Cal. Lab. Code § 2802(a), Wage Order 16-2001
covers only “tools or equipment,” Cal. Code Regs. tit. 8,
§ 11160. Indeed, many expenses for which class members
sought and recovered reimbursement at trial, including
insurance, cellphone charges, dump fees, and mileage/fuel,
are covered only by section 2802—not by Wage Order 16-
2001’s “tools and equipment” provision. Thus, Borello, not
Dynamex, applies to the expense reimbursement claims.
2. Overtime Claims
Neither party disputes that the class members’ overtime
claims are based on California’s wage orders. Still, FAS
insists that Borello governs, because FAS believes the
overtime claims are “joint employment” claims to which
Dynamex does not apply.
FAS is correct that Dynamex does not apply to joint
employment claims. The California Supreme Court created
Dynamex’s ABC test to address “concerns . . . regarding the
disadvantages . . . inherent in relying upon a multifactor, all
the circumstances standard for distinguishing between
employees and independent contractors.” 416 P.3d at 35.
Those concerns include (1) “that a multifactor, ‘all the
circumstances’ standard makes it difficult for both hiring
businesses and workers to determine in advance how a
particular category of workers will be classified, frequently
leaving the ultimate employee or independent contractor
determination to a subsequent and often considerably
delayed judicial decision”; and (2) that it “affords a hiring
business greater opportunity to evade its fundamental
responsibilities under a wage and hour law by dividing its
28 BOWERMAN V. FIELD ASSET SERVICES, INC.
workforce into disparate categories and varying the working
conditions of individual workers within such categories with
an eye to the many circumstances that may be relevant.” Id.at 33–34.
Because these “reasons for selecting the ‘ABC’ test are
uniquely relevant to the issue of allegedly misclassified
independent contractors,” the ABC test does not extend to
the joint employment context, where those concerns are no
longer present. Curry v. Equilon Enters., LLC, 233 Cal.
Rptr. 3d 295, 313–14 (Ct. App. 2018). Indeed, “[i]n the joint
employment context, the alleged employee is already
considered an employee of the primary employer,” who “is
presumably paying taxes.” Id. at 313. Furthermore, “the
employee is afforded legal protections due to being an
employee of the primary employer.” Id. As a result, the
policy purpose behind Dynamex’s ABC test, i.e., “the policy
purpose for presuming the worker to be an employee and
requiring the secondary employer to disprove the worker’s
status as an employee[,] is unnecessary” in joint employment
cases, “in that taxes are being paid and the worker has
employment protections.” Id. at 313–14; see also
Henderson v. Equilon Enters., LLC, 253 Cal. Rptr. 3d 738,
753–54 (Ct. App. 2019) (holding that the ABC test also does
not apply to joint employment claims because “parts B and
C of the ABC test do not fit analytically with such claims,”
id. at 753).
But Bowerman’s claims (and those of other sole
proprietors) are not joint employment claims—they are
employee misclassification claims, like those in Dynamex.
FAS argues that the class members are “employees of their
[own] self-owned businesses.” Dynamex’s policy concerns
are equally applicable for sole proprietors like Bowerman
because they have no putative employer other than FAS to
BOWERMAN V. FIELD ASSET SERVICES, INC. 29
pay their taxes or afford them legal protections under the
California wage orders. See Ball v. Steadfast-BLK, 126 Cal.
Rptr. 3d 743, 747 (Ct. App. 2011) (“[A] sole proprietorship
is not a legal entity separate from its individual owner.”). So
Dynamex applies to Bowerman’s overtime claims.
But FAS’s joint employment argument would likely
succeed were an actual employee of a vendor suing FAS,
claiming that FAS was an employer. Notably, Plaintiffs-
Appellees’ counsel conceded at oral argument that at least
some of the class members are employed by entities other
than FAS. 12 Thus, some of the class members’ theories of
liability could depend on their ability to establish that FAS
was a joint employer. On remand, the district court may
consider the joint employment issue in the first instance for
class members who own or operate LLCs or corporations,
which are distinct legal entities. 13 See Nw. Energetic Servs.,
LLC v. Cal. Franchise Tax Bd., 71 Cal. Rptr. 3d 642, 649
(Ct. App. 2008) (LLCs); Merco Constr. Eng’rs, Inc. v.
Municipal Court, 581 P.2d 636, 639 (Cal. 1978)
(corporations).
C. Summary Judgment
1. Expense Reimbursement Claims
As explained above, Borello governs the class members’
expense reimbursement claims. Under Borello, “[t]he
12
This concession is perplexing given that class members, by definition,
cannot “work for any other entity more than 30 percent of the time.” But
we credit it, nonetheless.
13
We also leave it to the district court to determine, in the first instance,
whether any class members besides Bowerman remain parties to this
litigation on remand. Cf. Crown, Cork & Seal Co. v. Parker, 462 U.S.
345, 354 (1983).
30 BOWERMAN V. FIELD ASSET SERVICES, INC.
existence of an employment relationship is a question for the
trier of fact.” Angelotti v. Walt Disney Co., 121 Cal. Rptr.
3d 863, 870 (Ct. App. 2011). The existence of such a
relationship “can be decided by the court as a matter of law
if the evidence supports only one reasonable conclusion.”
Id. (emphases added). Such is not the case here. “At its
heart, this case involves competing, if not necessarily
conflicting, evidence that must be weighed by a trier of fact.”
Arzate v. Bridge Terminal Transp., Inc., 121 Cal. Rptr. 3d
400, 405 (Ct. App. 2011). Thus, “the trial court erred in
finding no triable issue of material fact.” Id.“As the parties and trial court correctly recognized,
control over how a result is achieved lies at the heart of the
common law test for employment.” Ayala v. Antelope
Valley Newspapers, Inc., 327 P.3d 165, 172 (Cal. 2014)
(emphasis added). The district court granted summary
judgment because it was “convinced that the overwhelming
evidence” of FAS’s control “tip[ped] the scales clearly in
favor of finding an employee relationship.” Viewing the
evidence in the light most favorable to FAS, that conclusion
was incorrect.
California law is clear that “[i]f control may be exercised
only as to the result of the work and not the means by which
it is accomplished, an independent contractor relationship is
established.” Millsap v. Fed. Express Corp., 277 Cal. Rptr.
807, 811 (Ct. App. 1991) (citation omitted). Whether a
hiring entity’s control is results-oriented or means-oriented
depends on how the factfinder, or the court on summary
judgment, defines “results.” For instance, in Alexander v.
FedEx Ground Package System, Inc., 765 F.3d 981 (9th Cir.
2014), we determined that “‘results,’ reasonably understood,
refer[red] in [the] context [of package delivery services] to
[the] timely and professional delivery of packages.” Id. at
BOWERMAN V. FIELD ASSET SERVICES, INC. 31
990. Thus, we rejected FedEx’s argument that it was
controlling only the results of its drivers’ work by mandating
a particular dress code from the drivers’ “hats down to their
shoes and socks”; by requiring them “to paint their vehicles
a specific shade of white, [to] mark them with the distinctive
FedEx logo, and to keep their vehicles ‘clean and presentable
[and] free of body damage and extraneous markings’”; and
by dictating “the vehicles’ dimensions, including the
dimensions of their ‘package shelves’ and the materials from
which the shelves [were] made.” Id. at 989 (second
alteration in original). We held that “no reasonable jury
could find that the ‘results’ sought by FedEx include[d]”
such detailed requirements, which bore no logical relation to
the “timely and professional delivery of packages.” Id. at
990.
In contrast, whether FAS’s control over the class
members’ work is means- or results-oriented should have
been left to the jury. When viewed in the light most
favorable to FAS, the instructions in FAS’s VQPs and work
orders—though detailed—are geared toward the satisfactory
completion of the class members’ job assignments. The
same can be said for the training the class members received
on following those instructions, the vendor scorecards that
monitored whether they followed the instructions, and the
AVQPs that disciplined those who did not.
The VQPs uniformly characterize the parties’
relationship as vendor-vendee, not employer-employee. In
fact, several VQPs explicitly designate or refer to the
vendors as independent contractors. Consistent with that
designation, the VQPs do not control whether a vendor
accepts a particular job, who does the work on the vendor’s
behalf, when the work gets done, or on what terms. Rather,
viewing the evidence in the light most favorable to FAS, the
32 BOWERMAN V. FIELD ASSET SERVICES, INC.
class members are free to decline FAS work orders, or to
negotiate the terms of their acceptance. And if they do
accept a work order, they are free to hire any employee or
subcontractor who can pass a background screening to
perform the work, and they are free to design their own
schedule for completing the assignment within FAS’s
seventy-two-hour deadline. Although such a short deadline
creates a tight turnaround, we reject the district court’s
conclusion that this turnaround renders “FAS’s argument
that it does not control when vendors perform work
disingenuous” and “inconsequential.” Requiring a worker
to complete a task within a desired timeframe is a
quintessential example of controlling the result of that
worker’s job performance.
As for the VQPs’ detailed instructions for particular job
assignments, FAS raises a genuine dispute of material fact
as to whether they control the results, and not the manner
and means, of the class members’ work on those
assignments. For example, one VQP’s instructions for
“Flooring” require vendors to “replace doorstops and install
shoe molding” for vinyl flooring; “replace [the] pad” for
carpet; “remove and replace [the tiles], add floor leveler, thin
set[,] and grout” for ceramic tile; and “add floor float and
install shoe mold” for laminate/wood floors. The same
VQP’s instructions for “Drywall/Paint/Wallpaper” require
vendors to “match [the] existing finish,” “re-textur[e] the
walls,” and use paint that is “a neutral color and of medium
grade or better.” And the VQP’s instructions for “Roofing”
require that the new roof “not overlay [the] existing roof”
and that it “[b]e consistent with neighborhood/ . . . HOA/ . . .
local requirements.”
Unlike the requirements in Alexander as to the drivers’
and their vehicles’ appearance, these instructions are
BOWERMAN V. FIELD ASSET SERVICES, INC. 33
directed toward the desired results of the vendors’ work, at
least when read in the light most favorable to FAS. Indeed,
the right to control results is a “broad” one, encompassing
“the right to inspect, the right to make suggestions or
recommendations as to details of the work, [and] the right to
prescribe alterations or deviations in the work,” none of
which “chang[e] the relationship from that of owner and
independent contractor.” Beaumont-Jacques v. Farmers
Grp., Inc., 159 Cal. Rptr. 3d 102, 106 (Ct. App. 2013)
(citations omitted). Thus, the district court erred by
concluding that “[n]o reasonable juror could review the
Vendor Packets, the work orders, the trainings, the Vendor
Profiles, the discipline, and the Vendor scorecards, and
conclude any of the Vendors are independent contractors.” 14
Turning, then, to the secondary factors, many tip in favor
of independent contractor status, including the parties’ intent
to create an independent contractor relationship, the class
members’ opportunity for profit or loss, and the class
members’ employment of assistants. The district court
14
In fact, in McLeod v. Field Asset Services, LLC, No. 15-00645, 2017
WL 338002 (S.D. Ala. Jan. 23, 2017), the district court granted summary
judgment to FAS on whether it controls the manner and means, or only
the results, of its vendors’ work. See id. at *5 (“In Alabama, . . . [t]he
test for determining whether a person is an agent or employee of another,
rather than an independent contractor, is whether that other person has
reserved the right of control over the means and method by which the
person’s work will be performed, whether or not the right of control is
actually exercised.” (citation omitted)). The court explained that “FAS
merely authorizing work, reviewing the quality of work, inspecting
work, reviewing photographs of work, etc. performed by [its vendor], is
not tantamount to controlling [the vendor’s] work or how [the vendor]
performed the work.” Id. “Rather,” the court held, “those aspects are
more akin to checks on the quality of the work, not control over the
manner in which such work was done.” Id.
34 BOWERMAN V. FIELD ASSET SERVICES, INC.
correctly found for FAS on all of these, and the class
members dispute only the weight—not the merits—of those
findings on appeal. Several of the other secondary factors
were, and continue to be, subject to genuine dispute,
including the exclusivity of the class members’ relationship
with FAS, whether their businesses are distinct from FAS’s
business, and whether FAS supplied their tools,
instrumentalities, and place of work. Finally, the district
court erred by finding that the VQPs contain at-will
termination provisions, which are “strong evidence of a right
to control.” Many VQPs contain no termination provision,
and the VQPs cited by the district court include a mutual
termination provision, which “may properly be included in
an independent contractor agreement, and is not by itself a
basis for changing that relationship to one of an employee.”
Arnold v. Mut. of Omaha Ins. Co., 135 Cal. Rptr. 3d 213, 220
(Ct. App. 2011); see also Varisco v. Gateway Sci. & Eng’g,
Inc., 83 Cal. Rptr. 3d 393, 398–99 (Ct. App. 2008). Thus,
the district court was right to conclude that the secondary
factors do not establish that the class members are FAS’s
employees as a matter of law, absent clear, uncontroverted
evidence that FAS controls the manner and means of their
work.
In short, the class members “exhibit[] classic evidence of
both an independent contractor and employee” under the
Borello test, which “evidence must be weighed by a trier of
fact.” Jackson v. AEG Live, LLC, 183 Cal. Rptr. 3d 394, 416
(Ct. App. 2015). Thus, summary judgment on the class
BOWERMAN V. FIELD ASSET SERVICES, INC. 35
members’ expense reimbursement claims was
inappropriate. 15
2. Overtime Claims
As explained above, Dynamex adopted the ABC test to
determine employee status for purposes of wage and hour
claims like the class members’ overtime claims. “The ABC
test presumptively considers all workers to be employees,
and permits workers to be classified as independent
contractors only if the hiring business demonstrates that the
worker in question satisfies each of three conditions”:
a) that the worker is free from the control
and direction of the hirer in connection
with the performance of the work, both
under the contract for the performance of
the work, and in fact; and
b) that the worker performs work that is
outside the usual course of the hiring
entity’s business; and
c) that the worker is customarily engaged in
an independently established trade,
occupation, or business of the same
nature as that involved in the work
performed.
Dynamex, 416 P.3d at 34.
15
We do not foreclose summary judgment in favor of an individual class
member (or FAS as to an individual class member), as the facts as to
every class member are not before us.
36 BOWERMAN V. FIELD ASSET SERVICES, INC.
Here, summary judgment would not be proper under
parts A or C of the test. Our discussion of Borello already
explained that genuine disputes of material fact underlie the
questions of (A) whether the vendors were free from FAS’s
control, and (C) whether the vendors were engaged in an
independently established trade, occupation, or business.
But summary judgment would be proper under part B of the
test. Though FAS proclaimed itself the “premier Property
Preservation, [Real Estate Owned Property] Maintenance,
and Repair Services company,” it still contends that its
vendors—those who perform those premier property
preservation, maintenance, and repair services—perform
work that is outside the usual course of FAS’s business.
Stating the proposition is alone enough to show its fatal
shortcomings.
Still, FAS insists that it satisfies part B because it “does
not itself perform preservation services,” but “coordinates
the completion of preservation services, an activity distinctly
different from the business of property preservation.” But
FAS’s own advertisements belie this contention:
FAS offers a full range of professional
services for our clients, with the goal of
reducing the time and costs involved in
recovering and maintaining properties.
Using a single point of contact, our clients
can engage us for a variety of needs inside
and outside the property. These include, but
are not limited to, the following examples of
residential real estate services: property re-
key, secure openings, debris removal, repairs,
eviction lockouts, personal property removal,
smoke detector installs, retrofit services,
BOWERMAN V. FIELD ASSET SERVICES, INC. 37
lawn maintenance, janitorial service,
winterization, pool maintenance,
rehabilitation/construction & repairs, [and]
emergency maintenance[.]
FAS’s position has also been rejected by several courts
considering analogous arguments by rideshare companies
that they “are in the business solely of creating technological
platforms, not of transporting passengers”—including the
California Court of Appeal in People v. Uber Technologies,
Inc., 270 Cal. Rptr. 3d 290, 311 (Ct. App. 2020). See also
id. at 311–14 (collecting cases). In doing so, the California
Court of Appeal considered that ridesharing companies
market themselves as on-demand ride services, actively seek
out customers for those services, make money only if those
services are provided, monitor the quality of the services,
and discipline drivers who deliver deficient services. Id. at
311–14. FAS markets itself as providing comprehensive
property preservation services, advertises to clients needing
such services, makes money only if those services are
provided, monitors the quality of those services through
vendor scorecards, and disciplines its vendors for deficient
services through AVQPs. As in Uber Technologies, “[t]hese
facts amply support the conclusion that” the vendors
“perform services for [FAS] in the usual course of [FAS’s]
business[].” Id. at 313–14.
FAS resists this conclusion by analogizing to Curry v.
Equilon Enterprises, LLC, 233 Cal. Rptr. 3d 295. The
California Court of Appeal stated (in dicta) that under
Dynamex, the managers of Shell stations were not the
employees of Shell, which leased its service stations to third-
party operators who in turn employed the managers. Id. at
314–15. The Court of Appeal accepted Shell’s argument
38 BOWERMAN V. FIELD ASSET SERVICES, INC.
that it “was not in the business of operating fueling
stations—it was in the business of owning real estate and
fuel”—and thus concluded that “there [was] not a triable
issue of fact as to the ‘B’ factor because managing a fuel
station was not the type of business in which Shell was
engaged.” Id. at 314.
The court in Uber Technologies found Curry “readily
distinguishable,” contrasting the “situation in which a
putative joint employer leases facilities to a worker’s direct
employer and has no involvement in the worker’s
employment or compensation” with the situation in which a
putative employer’s “usual course of business involves the
day-to-day task of matching riders and drivers each time a
user requests a ride, arranging for riders’ payments to be
processed, and retaining a portion of the proceeds from each
ride.” Uber Techs., 270 Cal. Rptr. 3d at 315. Like Uber
Technologies, this is not a joint employment case but a
misclassification case regarding sole proprietors like
Bowerman, and the putative employer’s business centers on
the services the plaintiffs provide. Thus, the reasoning of
Uber Technologies applies and dictates that Bowerman
performed work well within the usual course of FAS’s
business under part B of the ABC test, which is alone
dispositive of his employee status under Dynamex. See 416
P.3d at 34.
But Dynamex is not the only new development in
California employment law since the district court’s
summary judgment decision. California Labor Code § 2776
recently enacted a retroactive business-to-business
exception to the ABC test. See Cal. Lab. Code § 2785(b).
Under that exception, “the holding in Dynamex do[es] not
apply to a bona fide business-to-business contracting
relationship . . . [i]f an individual acting as a sole proprietor,
BOWERMAN V. FIELD ASSET SERVICES, INC. 39
or a business entity formed as a partnership, limited liability
company, limited liability partnership, or corporation
(‘business service provider’) contracts to provide services to
another such business.” Id. § 2776(a). Instead, “the
determination of employee or independent contractor status
of the business services provider shall be governed by
Borello, if the contracting business demonstrates that [each
of twelve] criteria [is] satisfied.” 16 Id.
16
The twelve criteria are as follows:
1) The business service provider is free from the
control and direction of the contracting business
entity in connection with the performance of the
work, both under the contract for the performance
of the work and in fact.
2) The business service provider is providing
services directly to the contracting business rather
than to customers of the contracting business.
This subparagraph does not apply if the business
service provider’s employees are solely
performing the services under the contract under
the name of the business service provider and the
business service provider regularly contracts with
other businesses.
3) The contract with the business service provider is
in writing and specifies the payment amount,
including any applicable rate of pay, for services
to be performed, as well as the due date of
payment for such services.
4) If the work is performed in a jurisdiction that
requires the business service provider to have a
business license or business tax registration, the
40 BOWERMAN V. FIELD ASSET SERVICES, INC.
business service provider has the required
business license or business tax registration.
5) The business service provider maintains a
business location, which may include the business
service provider’s residence, that is separate from
the business or work location of the contracting
business.
6) The business service provider is customarily
engaged in an independently established business
of the same nature as that involved in the work
performed.
7) The business service provider can contract with
other businesses to provide the same or similar
services and maintain a clientele without
restrictions from the hiring entity.
8) The business service provider advertises and
holds itself out to the public as available to
provide the same or similar services.
9) Consistent with the nature of the work, the
business service provider provides its own tools,
vehicles, and equipment to perform the services,
not including any proprietary materials that may
be necessary to perform the services under the
contract.
10) The business service provider can negotiate its
own rates.
11) Consistent with the nature of the work, the
business service provider can set its own hours
and location of work.
12) The business service provider is not performing
the type of work for which a license from the
Contractors’ State License Board is required,
pursuant to Chapter 9 (commencing with Section
BOWERMAN V. FIELD ASSET SERVICES, INC. 41
Viewing those criteria, there is a genuine dispute of fact
as to whether the exception applies to FAS and its vendors.
For example, one criterion is that “[t]he business service
provider [be] free from the control and direction of the
contracting business entity in connection with the
performance of the work, both under the contract for the
performance of the work and in fact.” Id. § 2776(a)(1).
Another is that “[t]he business service provider [be]
customarily engaged in an independently established
business of the same nature as that involved in the work
performed.” Id. § 2776(a)(6). As already explained at
length, FAS’s control of its vendors, as well as the
independence of the vendors’ businesses from FAS’s
business, are genuinely disputed factual issues. 17 Thus,
because of the enactment of section 2776, summary
judgment is no longer warranted on the class’s overtime
claims, even though summary judgment would be proper on
those claims under Dynamex for sole proprietors like
Bowerman.
3. All Claims
We hold above that there is a genuine dispute of material
fact as to whether the class members are employees or
7000) of Division 3 of the Business and
Professions Code.
Cal. Lab. Code § 2776(a).
17
We reject plaintiffs’ request that we rule, on appeal, that FAS, as a
matter of law, cannot invoke the business-to-business exception as to any
class member. We do not foreclose the district court from determining,
on remand, that FAS may not rely on the business-to-business exception
as to a particular class member, should the undisputed evidence as to that
class member so warrant.
42 BOWERMAN V. FIELD ASSET SERVICES, INC.
independent contractors—under Borello for the expense
reimbursement claims and under the business-to-business
exception for the overtime claims. But there is also a
genuine dispute of material fact as to whether the class
members ever incurred reimbursable expenses or ever
worked overtime. Thus, summary judgment was also
improper for the very same reason that the class certification
was: a putative employer cannot be liable to an entire class
of putative employees for failing to reimburse their business
expenses and pay them overtime unless the putative
employer in fact failed to do so for each of them.
D. Attorneys’ Fees
Under 28 U.S.C. § 1291, we have jurisdiction over final
district court decisions. The attorneys’ fee award on appeal
is an interim award. It “does not dispose of the underlying
litigation” and “does not even dispose of the issue of
attorney’s fees,” given that the district court reserved its
decision on whether to apply a multiplier. Rosenfeld v.
United States, 859 F.2d 717, 720 (9th Cir. 1988). Thus, we
consider the order nonfinal for purposes of § 1291. See id.;
Hillery v. Rushen, 702 F.2d 848, 848–49 (9th Cir. 1983)
(same); cf. Gates v. Rowland, 39 F.3d 1439, 1450 (9th Cir.
1994) (treating an interim fee award as final when it
“follow[ed] a final judgment on the merits” and “dispose[d]
of the issue of attorneys’ fees”); Finnegan v. Dir., Off. of
Workers’ Comp. Programs, 69 F.3d 1039, 1040–41 (9th Cir.
1995) (same).
Nevertheless, we hold that this case presents
“extraordinary circumstances” justifying our exercise of
pendent appellate jurisdiction over the interim fee award.
McCarter v. Ret. Plan for the Dist. Managers of the Am.
Fam. Ins. Grp., 540 F.3d 649, 653 (7th Cir. 2008). We have
BOWERMAN V. FIELD ASSET SERVICES, INC. 43
the power to exercise pendent jurisdiction over claims
“raised in conjunction with other issues properly before the
court . . . if the rulings [are] inextricably intertwined or if
review of the pendent issue [is] necessary to ensure
meaningful review of the independently reviewable issue.”
United States v. Tillman, 756 F.3d 1144, 1149 (9th Cir.
2014) (internal quotation marks omitted). That requirement
is satisfied here because FAS’s primary argument for
vacating the interim fee award is that the district court erred
by certifying the class and granting summary judgment to
the plaintiffs—issues that are not just “inextricably
intertwined” with FAS’s appeal of the class certification and
summary judgment orders; they are identical.
The plaintiffs argue that most courts “have found that
interim fee awards are not immediately appealable under the
doctrine of pendent jurisdiction,” but that can be an
oversimplification. In truth, most of the courts to have
confronted the issue in this case—whether to exercise
pendent appellate jurisdiction over an interim order that is
inextricably intertwined with an independently appealable
order—have concluded that the order is immediately
appealable under the doctrine of pendent jurisdiction,
consistent with the Supreme Court’s holding in Swint v.
Chambers County Commission, 514 U.S. 35 (1995). See id.
at 51 (implying that appellate courts should not exercise
pendent jurisdiction to review claims that are not
“inextricably intertwined with” or “necessary to ensure
meaningful review of” the final order on appeal); see also,
e.g., Thornton v. Gen. Motors Corp., 136 F.3d 450, 454 (5th
Cir. 1998) (per curiam); Sabal Trail Transmission, LLC v.
3.921 Acres of Land in Lake Cnty. Fla., 947 F.3d 1362, 1372
(11th Cir. 2020); Gilda Marx, Inc. v. Wildwood Exercise,
Inc., 85 F.3d 675, 678–79 (D.C. Cir. 1996) (per curiam). But
44 BOWERMAN V. FIELD ASSET SERVICES, INC.
see Home Builders Ass’n of Greater St. Louis v. L & L
Exhibition Mgmt., Inc., 226 F.3d 944, 951 (8th Cir. 2000).
Today we join the majority of our sister circuits, and hold as
a matter of first impression, see Knupfer v. Lindblade (In re
Dyer), 322 F.3d 1178, 1187–88 (9th Cir. 2003), that we
can—and here, will—exercise pendent appellate jurisdiction
over interim fee orders that are inextricably intertwined with
or necessary to ensure meaningful review of final orders on
appeal.
The interim award of attorneys’ fees must be vacated
because the class certification and summary judgment orders
were issued in error. See Hopkins v. City of Sierra Vista, 931
F.2d 524, 529 (9th Cir. 1991) (“Because we reverse and
remand for further proceedings on the merits, there is no
prevailing party and we must also reverse the district court’s
award of attorneys’ fees.”).
IV. CONCLUSION
Under the right circumstances, class certification and
summary judgment are useful mechanisms for the speedy
resolution of claims. But those circumstances are not present
here. We therefore REVERSE the class certification order,
REVERSE the summary judgment order, VACATE the
interim award of attorneys’ fees, and REMAND to the
district court for proceedings consistent with this opinion,
with costs awarded to FAS.