Gomez v. J. Jacobo Farm Labor Contractor, Inc. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 MARISOL GOMEZ and IGNACIO CASE NO. 1:15-cv-01489 JLT-BAM OSORIO, on behalf of themselves and all 12 others similarly situated, ORDER DENYING DEFENDANT’S MOTION TO DECERTIFY CLASS 13 Plaintiffs, (Doc. 168) 14 v. ORDER DENYING DEFENDANT’S MOTION IN LIMINE TO EXCLUDE 15 J JACOBO FARM LABOR CONTRACTOR, PLAINTIFFS’ EXPERT WITNESS INC.; and DOES 1 through 20, inclusive, (Doc. 167) 16 Defendants. 17 18 This class action lawsuit involves an employment dispute with J. Jacobo Farm Labor 19 Contractor, Inc. The Court certified Plaintiff’s claim that Defendant failed to issue proper 20 itemized wage statements to its employees in violation of California law.1 (Doc. 114.) The Court 21 then modified its original certification order by also certifying Plaintiff’s claim that Defendant 22 failed to pay its employees for rest breaks in violation of California law.2 (Doc. 126.) The Court 23 further modified its order by setting the class period end date for the certified rest break class to 24 25 1 The class is defined as follows: “All individuals who were employed as a nonexempt field worker or agricultural 26 worker from September 30, 2012, to November 5, 2019, by J. Jacobo Farm Labor Contractor, Inc.” 27 2 The Court also certified Plaintiff’s derivative claims—namely, Plaintiff’s Migrant and Seasonal Agricultural Workers Protection Act of 1983 (“MAWPA”) claim, accurate itemized wage statement claim, wages upon 28 termination/resignation claim, and unfair business practices claim—because liability for these claims hinges on 1 November 5, 2019.3 (Doc. 138.) 2 Before the Court is Defendant’s Motion to Decertify and Motion in Limine to Exclude 3 Plaintiff’s Expert Witness. (Doc. 167; Doc. 168.) Defendant’s Motion to Decertify seeks 4 decertification of Plaintiff’s rest break pay claim but not the wage statement claim. Plaintiff filed 5 Opposition briefs, (Doc. 171; Doc. 172.), and Defendant filed Reply briefs. (Doc. 173; Doc. 174.) 6 The Court found the matters suitable for decision without oral arguments, and the hearing on same 7 was vacated. (Doc. 175.) For the reasons below, the Court DENIES Defendant’s Motion in 8 Limine and DENIES Defendant’s Motion to Decertify the class. 9 FACTUAL BACKGROUND 10 The original certification order includes a detailed recitation of facts relevant to the 11 certified classes. (Doc. 114 at 1-9.) The facts in the original certification order control and remain 12 unchanged. For purposes of this order, the Court will summarize additional facts relevant to 13 Defendant’s Motion to Decertify and Motion in Limine. 14 Defendant is a farm labor contractor. It employed at least 3,267 employees between 15 December 20, 2011, and January 6, 2018. Some of the employees worked as field workers. For 16 the most part, Defendant allowed the employees to decide when to take breaks and the length of 17 the breaks. A significant contingent of the class elected to forego their rest breaks by working 18 through the provided rest breaks. 19 Of Defendant’s 3,267 employees, 2,868 employees (or 87.8%) were paid on a piece-rate 20 basis at some point during their employment. Of those 2,868 piece-rate employees, 2,320 21 employees (or 80.1%) were paid with checks that did not include any payment for rest breaks. 22 Some but not all employees were paid retroactively by Defendant by check for unpaid break and 23 non-productive time. Defendant appears to have payment records identifying the employees who 24 were given retroactive “safe harbor” payments and minimum wage true ups. Defendant also 25 provided its employees with wage statements, some of which failed to include information about 26 27 3 The rest break claim and derivative claims class is defined as follows: “All individuals who have been employed, or are currently employed, by Defendant as a non-exempt “field worker” or agricultural worker, who worked on a piece 28 rate basis at any time from September 30, 2011, to November 5, 2019, and were not separately compensated for rest 1 rest breaks and rest payments. Defendant universally applied the same system and practices for 2 wage statements to all employees. 3 Defendant used a software called Datatech to process and maintain payroll records. 4 Plaintiffs designated Aaron Woolfson as an expert witness in this action to “provide structure to, 5 and analyze time keeping and payroll data” produced from Defendant’s Datatech records. (Doc. 6 168-1 at 8-9.) In his expert report, Woolfson states that the Datatech records “indicate that 100% 7 of checks dated before 2/27/2016 which involved piece-work [or approximately 2,275 checks] did 8 not have any payment for rest periods.” (Id. at 11, 15.) Woolfson’s report further states he 9 “created the damage formulas and assumptions that will transform all of Defendants data into 10 damages which [he] will present at trial.” (Id. at 13.) Defendant designated Joseph Krock as a 11 rebuttal expert to provide comment regarding “claims made by Mr. Woolfson” and “his 12 qualifications as an expert witness in matters similar to this.” (Doc. 168-1 at 237.) 13 LEGAL STANDARD 14 1. Decertification 15 District courts retain the “flexibility to address problems with a certified class as they arise, 16 including the ability to decertify.” United Steel, Paper & Forestry, Rubber, Mfg. Energy v. 17 ConocoPhillips Co., 593 F.3d 802, 809 (9th Cir. 2010). “Even after a certification order is 18 entered, the judge remains free to modify it in the light of subsequent developments in the 19 litigation.” Id. (citing General Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160 (1982)); see also 20 Rodriguez v. West Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009) (“A district court may 21 decertify a class at any time.”). In resolving a motion for class decertification, the court may rely 22 on “previous substantive rulings in the context of the history of the case,” “subsequent 23 developments in the litigation,” and “the nature and range of proof necessary to establish the class- 24 wide allegations.” Munoz v. Phh Mortg. Corp., 478 F. Supp. 3d 945, 985 (E.D. Cal. 2020) (citing 25 Arredondo v. Delano Farms Co., 301 F.R.D. 493, 502 (E.D. Cal. 2014)). The standard is the same 26 for class decertification as it is with class certification: a district court must be satisfied that the 27 requirements of Rules 23(a) and (b) are met to allow plaintiffs to maintain the action on a 28 representative basis. Marlo v. United Parcel Serv., Inc., 639 F.3d 942, 947 (9th Cir. 2011). 1 2. Rule 234 2 Under Rule 23(b)(3), a plaintiff must demonstrate “that the questions of law or fact 3 common to class members predominate over any questions affecting only individual members.” 4 Castillo v. Bank of Am., NA, 980 F.3d 723, 730 (9th Cir. 2020) (citing Mazza v. Am. Honda Motor 5 Co., Inc., 666 F.3d 581, 596 (9th Cir. 2012)). Rule 23(b)(3)’s “predominance” requirement 6 inquires into whether the class members’ interests are “sufficiently cohesive to warrant 7 adjudication by representation.” Amchem Prods. v. Windsor, 521 U.S. 591, 623 (1997). The 8 inquiry focuses on “the relationship between the common and individual issues” and “tests 9 whether proposed classes are sufficiently cohesive to warrant adjudication by representation.” 10 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir. 1998) (citing Amchem Prods., 521 U.S. 11 at 623). “[A] central concern of the Rule 23(b)(3) predominance test is whether ‘adjudication of 12 common issues will help achieve judicial economy.’” Vinole v. Countrywide Home Loans, 571 13 F.3d 935, 944 (9th Cir. 2009) (quoting Zinser v. Accufix Research Inst., 253 F.3d 1180, 1189 (9th 14 Cir. 2001)). 15 DISCUSSION 16 Defendant’s Arguments 17 Defendant argues that the class should be decertified because common questions regarding 18 Plaintiff’s rest break pay claim do not predominate over individualized inquiries. Specifically, 19 Defendant asserts that for Plaintiff to establish his rest break pay claim, he must identify the total 20 number of shifts class members worked each day, and then prove per day that Defendant failed to 21 pay its employees for rest breaks. Defendant contends that Plaintiff cannot prove this because 22 Plaintiff’s proffered evidence—specifically, Woolfson’s expert report—is unreliable for several 23 reasons. First, Woolfson’s report relies on incomplete records and weekly payroll data that cannot 24 be used to ascertain how many work shifts—and corresponding rest break violations—occurred 25 each day. Second, Woolfson’s report does not provide a calculation of damages using the 26 Datatech data it relies on. Finally, Woolfson’s report does not include any supplemental analysis 27 28 4 Defendant’s Motion to Decertify challenges only the commonality-predominance element of Rule 23(b)(3). (Doc. 1 using extrinsic non-Datatech data, such as data drawn from surveys or studies of the class that 2 Woolfson conducted independently. 3 Plaintiff’s Arguments 4 Plaintiff argues that Defendant’s Motion to Decertify should be denied because 5 Woolfson’s expert report demonstrates that common questions regarding rest break violations still 6 predominate over individual inquiries. According to Plaintiff, Woolfson’s reliance on weekly 7 payroll data does not make his report unreliable because his findings can still be used to prove that 8 class members worked shifts with mandatory rest breaks and that Defendant failed to pay its 9 employees for those rest breaks. For example, Plaintiff notes that if a weekly payroll record 10 shows that an employee worked 14 hours over a four-day stretch, then basic principles of logic 11 and math demonstrate that the employee worked at least one 3.5-hour shift on a given day and, 12 therefore, was entitled to a rest break and corresponding rest break pay. Although Woolfson’s 13 report does not indicate the exact number of shifts and violations that occurred each day, Plaintiff 14 argues that this issue ultimately goes to damages, which is no bar to class certification. 15 Furthermore, Plaintiff argues that Woolfson’s inability to show when shift-level violations 16 occurred is a result of Defendant’s own timekeeping practices. Specifically, Woolfson’s report 17 could not rely on daily payroll data drawn from Defendant’s system because Defendant did not 18 track daily time records in the first instance. 19 Discussion 20 In certifying Plaintiff’s rest break pay claim in its original order, the Court observed that 21 Section 226.7 of the California Labor Code requires employers to provide rest breaks consistent 22 with the applicable wage order. (Doc. 126 at 9.) Wage Order No. 14 requires employers of 23 agricultural workers to provide rest breaks and count authorized rest breaks “as hours worked for 24 which there shall be no deduction from wages.” 8 Cal. Code Regs. tit. 8, § 11140(12). “The wage 25 order’s requirement not to deduct wages for rest periods presumes the [employees] are paid for 26 their rest periods.” Bluford v. Safeway Inc., 216 Cal. App. 4th 864, 871 (2013) (interpreting 27 similar language in Wage Order Nos. 7 and 9, Cal. Code Regs. tit. 8, §§ 11070(12); 11090(12)). 28 This means that in a piece-rate system, authorized rest breaks “must be separately compensated” 1 and “are considered hours worked.” Bluford, 216 Cal. App. 4th at 872. Considering this 2 authority, the Court concluded that “an employer is liable for violating California’s rest break laws 3 if the employer provides a piece-rate employee with a mandated rest break but fails to pay the 4 employee for the rest break—regardless of whether the employee voluntarily works through the 5 provided rest break.” (Doc. 126 at 9.) 6 The Court thereafter certified Plaintiff’s rest break pay claim because a common question 7 existed as to “whether Defendant had a universal practice of not paying the rest period subclass for 8 mandated rest breaks.” (Id. at 11.) This question was “susceptible to generalized, class-wide 9 proof” because Defendant’s payroll practices were the same for all members of the rest period 10 subclass. (Id.) The Court further found that this common question predominated over 11 individualized inquiries because it can be answered by simply looking to Defendant’s universal 12 payroll practices, which can be objectively and quickly verified through Defendant’s payroll 13 records, among other methods. (Id.) After the Court certified Plaintiff’s rest break pay claim 14 class, Plaintiffs designated Woolfson as an expert witness to analyze Defendant’s payroll records. 15 Woolfson completed his report on Defendant’s payroll records on October 28, 2022. (Doc. 168-1 16 at 16.) 17 After reviewing Woolfson’s report, Defendant argues that Plaintiff’s rest break pay claim 18 should be decertified because Woolfson does not reliably show how Defendant’s payroll data can 19 be used to establish Defendant’s liability to the class. (Doc. 167; Doc. 168.) Considering 20 Defendant’s arguments, the issue now before the Court is whether Plaintiff’s expert report is 21 sufficiently reliable under Daubert, and if not, whether the class should be decertified on 22 commonality-predominance grounds. The Court will address each issue below in turn. 23 A. Plaintiff’s Expert Report 24 As an initial matter, the Court notes that “[i]nadmissibility alone is not a proper basis to 25 reject evidence submitted in support of class certification.” Sali v. Corona Reg’l Med. Ctr., 909 26 F.3d 996, 1006 (9th Cir. 2018). However, the Court recognizes that “in evaluating challenged 27 expert testimony in support of class certification, a district court should evaluate admissibility 28 under the standard set forth in Daubert.” Id. Because Defendant filed a Motion in Limine to 1 exclude Plaintiffs’ expert (Doc. 167), the Court will review the admissibility of the expert’s 2 testimony under the Daubert standard in addition to the arguments set forth in Defendants’ Motion 3 to Decertify (Doc. 168). 4 Under Daubert, the Court has a duty to act as a “gatekeeper” for expert testimony by 5 assessing its admissibility. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592 (1993); 6 see also Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 145, 147 (1999). This inquiry is 7 governed in part by Fed. R. Evid. 702 which provides: 8 A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: 9 (a) the expert’s scientific, technical, or other specialized knowledge will help the 10 trier of fact to understand the evidence or to determine a fact in issue; 11 (b) the testimony is based on sufficient facts or data; 12 (c) the testimony is the product of reliable principles and methods; and 13 (d) the expert has reliably applied the principles and methods to the facts of the case. 14 15 To determine the reliability of expert testimony, the Supreme Court has identified four 16 factors that a trial court may consider: “(1) whether the ‘scientific knowledge . . . can be (and has 17 been) tested’; (2) whether ‘the theory or technique has been subjected to peer review and 18 publication’; (3) ‘the known or potential rate of error’; and (4) ‘general acceptance.’” Obrey v. 19 Johnson, 400 F.3d 691, 696 (9th Cir. 2005) (quoting Daubert, 509 U.S. at 593-94). These factors, 20 however, are not exclusive. See Kumho Tire, 526 U.S. at 150 (“Daubert makes clear that the 21 factors it mentions do not constitute a definitive checklist or test.” (emphasis in the original) 22 (citation and internal quotation marks omitted)). Rather, the trial court enjoys “broad latitude” in 23 deciding how to determine the reliability of proposed expert testimony. Id. at 141-42. “[T]he test 24 under Daubert is not the correctness of the expert’s conclusions but the soundness of his 25 methodology.” Daubert v. Merrell Dow Pharms., Inc., 43 F.3d 1311, 1318 (9th Cir. 1995); see 26 also City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1044 (9th Cir. 2014). 27 Woolfson states he was retained in this matter “to provide structure to, and analyze time 28 keeping and payroll data produced by [Defendant].” (Doc. 168-1 at 8-9.) He was tasked primarily 1 with determining how many of Defendant’s paychecks contained piece-work shifts with shift 2 lengths sufficient to necessitate separate rest pay. (Doc. 171-1 at 2.) In reaching his conclusions, 3 Woolfson states he relied on his knowledge, Defendant’s Datatech payroll data, the opinions of 4 Defendant’s expert Joseph Krock, the pleadings in this case, written orders from similarly situated 5 cases, and documents identifying immunity payments under Cal. Labor Code 226.2(b). (Doc. 6 168-1 at 11-12.) Woolfson specifically incorporated the Datatech data into a set of database tables 7 in a server called Pinpoint that illustrate the workday activities of employees and the resulting 8 payroll outputs. (Id. at 12.) According to Woolfson, the database “can be used to answer nearly 9 any question that may be contemplated by the trier of fact,” including questions concerning “the 10 number of employees who experienced one or more shifts equal-to-or-greater than 3½ hours 11 where no separate rest-break-payment appears to have been paid, and the number of checks that 12 shifts occurred on.” (Id.) Woolfson purports to use two methods to determine how many 13 paychecks contained piece-work shifts with shift lengths sufficient to necessitate separate rest pay: 14 (1) the mathematical necessity method which sets a minimum number of violations for a pay 15 period, and (2) the averaging method which assumes, barring any other data, the average length of 16 a shift in a work week. (Doc. 171-1 at 2; Doc. 172 at 10.) 17 Based on his review of the Datatech data, Woolfson concludes that “no payment was made 18 for rest periods on piece-rate shifts before 2/27/2016.” (Doc. 168-1 at 12.) Woolfson further 19 concludes that although the Datatech data does not contain daily time records to determine the 20 exact length of each shift per day, the shift lengths may still be determined by “averaging the 21 number of pay period hours over the number of days worked.” (Doc. 171-1 at 4.) If the average is 22 equal to or greater than 3.5 hours, then at least one shift during that period must have been at least 23 3.5 hours and, consequently, was required to have rest break pay. (Id.) Woolfson performed this 24 method of analysis on approximately 12,398 paychecks indicating piece rate pay. (Id. at 7.) He 25 determined there were at least 3,870 shifts that lasted 3.5 hours or more and that did not include 26 rest break pay. (Id. at 7-9.) Woolfson further states this number is likely much higher when shifts 27 28 1 lasting more than 6 hours are considered.5 (Id. at 9.) Based on Defendant’s Datatech data, 2 Woolfson constructed a database that allows him to present the breadth and scope of damages at 3 trial.6 (Id. at 15; Doc. 168-1 at 13.) 4 As an initial matter, the Court notes that Defendant’s timekeeping and payroll system did 5 not keep track of daily time records during the class period. Defendant concedes this point and 6 does not attempt to rebut Plaintiff’s contention that Defendant’s failure to maintain daily time 7 records violated California law. (Doc. 173 at 14; Doc. 167 at 18.) In fact, Defendant repeatedly 8 refers to its own time keeping records as “incomplete” and “faulty.” (Doc. 173 at 14; Doc. 167 at 9 18.) Notwithstanding its inadequate time keeping system, Defendant asserts that Plaintiff failed to 10 satisfy his burden to prove his rest break pay claim because Woolfson failed to “supplement[] his 11 understanding of [Defendant’s] data through extrinsic methodology,” such as by conducting a 12 separate survey or sampling. (Doc. 167 at 17-18.) 13 The Court disagrees with Defendant’s contention that Woolfson was required to perform 14 such extrinsic analysis in this case. “In wage and hour claims, courts recognize that where the 15 employer has a statutory obligation to maintain wage records and those records are inadequate, 16 employees should not be penalized in litigation.” Rodriguez v. Taco Bell Corp., 2014 U.S. Dist. 17 LEXIS 150702, at *9 (E.D. Cal. Oct. 23, 2014) (citing Anderson v. Mt. Clemens Pottery Co., 328 18 U.S. 680, 686-88 (1946), and Hernandez v. Mendoza, 199 Cal. App. 3d 721, 727 (1988)). The 19 Court is reluctant to penalize Plaintiff for not recreating time records that Defendant should have 20 had in the first instance. At any rate, the issue before the Court is not whether Woolfson was 21 required to perform supplemental analysis using extrinsic data, but whether Woolfson’s proffered 22 5 Woolfson also concludes that the number shifts that lasted 3.5 hours or more and that did not include rest break pay 23 is likely higher when the paychecks that indicate “zero (0) days” worked or an unavailable date are considered. (Doc. 171-1 at 9-10.) While it is not clear why some paychecks for piece rate work indicate zero days worked or an 24 unavailable date, Woolfson asserts that “[o]bviously [these] employees worked at least one shift and a reasonable approach [is to] assume that there was at least one shift during this pay period.” (Id.) Woolfson further asserts that 25 the number of days worked may be determined by dividing the total number of piece-work items listed in each of these paychecks by 500.52, which is the average number of piece-work items performed per day, according to the 26 paychecks where piece-work hours, units, pay, and number of days worked are indicated. (Id. at 10-11.) Thus, for example, if a paycheck indicating zero days worked shows that 1,000 piece-work items were performed, then the 27 number of days worked would be 1.99 days. The number of hours worked indicated on the paycheck can then be divided by 1.99 to determine whether a shift of at least 3.5 hours was present, according to Woolfson’s approach. 28 1 testimony is sufficiently reliable under Daubert. Upon review, the Court finds that Woolfson’s 2 methodology is sufficiently reliable in this case. Daubert, 43 F.3d at 1318. 3 Woolfson based his testimony on the Datatech data produced by Defendant. Although 4 Defendant did not track daily time records of its employees, the Datatech data indicates the total 5 number of hours and days worked on a weekly basis. As discussed above, Woolfson used a 6 “mathematical necessity” method and an “averaging” method to determine that there were at least 7 3,870 shifts that lasted 3.5 hours or more and that did not include rest break pay. (Doc. 171-1 at 7- 8 9.) These records and the examples discussed above indicate that Woolfson’s mathematical 9 methods can be tested and are based on fundamental principles of math. Obrey, 400 F.3d at 696 10 (quoting Daubert, 509 U.S. at 593-94). Defendant’s rebuttal expert Joseph Krock also 11 acknowledged that if the average number of hours worked during a workday, based upon the 12 calculation of total hours worked divided by workdays in a week, is greater than three and a half 13 hours and no rest break pay was provided, then mathematically there must be at least one violation 14 for failure to provide rest break pay. (Doc. 172-2 at 2.) Because Woolfson determined there were 15 at least 3,870 shifts that lasted at least 3.5 hours without rest break pay using the methodology 16 described above, it follows that Krock would agree that there were at least 3,870 violations for 17 failure to provide rest break pay. (Doc. 171-1 at 7-9; Doc. 172-2 at 2.) Defendant also has not 18 submitted any evidence in its briefing showing that these 3,870 shifts were less than 3.5 hours in 19 length, or that it provided rest break pay for these shifts or any other shift “before 2/27/2016.” 20 (Doc. 168-1 at 12.) 21 Defendant’s argument that Woolfson’s report is unreliable on the ground that it fails to 22 identify shift-level violations is unavailing. Defendant has not cited any authority indicating that a 23 plaintiff can only establish a rest break pay claim by providing daily records showing shift-level 24 violations. The Court will decline to impose such a requirement in this case considering 25 Defendant’s inadequate records and Woolfson’s findings based on Defendant’s weekly payroll 26 data that Defendant regularly did not pay rest period subclass members for mandated rest breaks. 27 Additionally, Defendant has not proffered its own interpretation of the weekly payroll data to 28 show that no shifts of at least 3.5 hours in length were worked during those weeks. To the extent 1 | Defendant is arguing that a different conclusion should have been reached from Woolfson’s 2 | methodology, this argument is inapposite because “the test under Daubert is not the correctness of 3 | the expert’s conclusions but the soundness of his methodology.” Daubert, 43 F.3d at 1318. 4 | Accordingly, given Defendant’s inadequate time records and Woolfson’s mathematical methods 5 | and findings, the Court finds that Woolfson’s testimony is sufficiently reliable under Daubert in 6 | this case. Therefore, Defendant’s Motion in Limine (Doc. 167.) will be DENIED. 7 B. Commonality and Predominance 8 Defendant argues that commonality and predominance are lacking for Plaintiff's rest break 9 | pay claim under Rule 23 because “the only way Plaintiffs plan to prove class-wide proof of piece 10 |rate rest break violations is through the testimony of Woolfson,” which “must be excluded.” 11 |(Doc. 160 at 20.) Because the Court will not exclude Woolfson’s testimony as discussed above, 12 |Defendant’s stated ground for decertifying Plaintiffs rest break pay claim is ineffective. 13 | Therefore, Defendant’s Motion to Decertify (Doc. 168.) will be DENIED. 14 ORDER 15 Accordingly, the Court ORDERS: 16 1. Defendants’ Motion in Limine to Exclude Plaintiffs’ Expert Witness (Doc. 167) is 17 DENIED; and 18 2. Defendants’ Motion to Decertify Class (Doc. 168) is DENIED. 19 20 IT IS SO ORDERED. Dated: _ May 22, 2023 Charis [Tourn TED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 1]