Shepherd v. ASI, Ltd.

ANDREW SHEPHERD, Plaintiff, v. ASI, LIMITED, WINTON DEVELOPMENT, LLC, S&S RACING, LLC, Defendants.

No. 1:12-cv-00167-SEB-DML

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

Date: November 18, 2013

ORDER CERTIFYING CLASS ACTION

This cause comes before the Court on Plaintiff's Amended Motion for Class Certification [Docket No. 56], filed on May 6, 2013, pursuant to Federal Rules of Civil Procedure 23. For the reasons set forth below, Plaintiff's motion is GRANTED.

Factual and Legal Background

1. Facts

Defendant ASI, Limited ("ASI") was a window manufacturing company which maintained its manufacturing facility in Whitestown, Indiana. Second Am. Compl. ¶ 4.¹ Co-Defendants S & S Racing, LLC ("S & S") and Winton Development, LLC ("Winton") were Indiana-based limited liability companies that also maintained headquarters at the same Whitestown facility. ¶¶ 5-6. Plaintiff Andrew Shepherd was an ASI employee who worked at the Whitestown facility. ¶ 7.

On December 22, 2011, ASI shut down the Whitestown facility and terminated all of its employees, including Plaintiff Andrew Shepherd, without cause. See ¶¶ 8-9; Defs.' Resp. 2. None of the employees were provided advance notice of the plant closing or the lay-offs. ¶ 13. Plaintiff's current estimate is that 273 employees were affected by the terminations, see Docket No. 56 Ex. A. Although Defendants do not dispute that terminations without notice occurred, they do not agree to Plaintiff's estimate of the number of employees affected and the extent of the financial harm they incurred. See Defs.' Resp. 2-4. The terminated employees fell into several categories: union members, hourly employees, salaried employees, on-site employees, and a number of workers who, though directed from the Whitestown facility, did not report to that location for work. Id.

Upon the closing of ASI's Whitestown plant and the termination of all its employees, PNC Bank sold the company's assets. A number of the principal assets, including the manufacturing facility, were bought by Ohio Farmers' Insurance Company. Ohio Farmers' subsequently offered to rehire some, but not all, of the laid off ASI employees to positions at the reconstituted plant. Pl.'s Reply 5-6.

2. Applicable Law

Plaintiff's class action claim arises under the federal Worker Adjustment Retraining and Notification (WARN) Act of 1988, 29 U.S.C. §§ 2101-2109. Enacted as a response to the extensive economic dislocations associated with the downsizing of United States manufacturing employment in the 1970s and 1980s—dislocations which have spiked again in the aftermath of the recent recession and financial crisis—the WARN Act allows workers "to adjust to the prospective loss of employment, to seek and obtain alternative jobs and . . . to enter skill training or retraining that will allow [them] to successfully compete in the job market." See 20 C.F.R. §639.1(a) (1998); Hotel Emps. and Restaurant Emps. Int'l Union Local 54 v. Elsinore Shore Assocs., 173 F.3d 175, 182 (3d Cir. 1999). The Act's protections apply to the employees of any employer with 100 or more full-time workers and mandate that "an employer shall not order a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of such an order" to all affected employees and to state authorities. 29 U.S.C. § 2102(a). A "plant closing" under the Act occurs if there is a permanent or temporary shutdown of a single site of employment that results in employment loss for 50 or more employees during any 30-day period, 29 U.S.C. § 2101(a)(2); even if a plant does not close, a "mass layoff" triggering the Act's protections occurs when at least 50 employees—constituting at least one-third of the work force—suffer employment loss. 29 U.S.C. § 2101(a)(3). Other than through outright termination, a worker suffers "employment loss" if she is laid off for more than six months or is given a reduction of work hours of at least 50% in any six-month period. 29 U.S.C. § 2101(a)(6).

If an employer violates the WARN Act's notice requirements, its employees are entitled to back pay and benefits for each day by which the notice given fell short of the required 60 days—in addition to civil fines levied by local government units. 29 U.S.C. § 2104(a)(1)-(3). Certain exceptions to the notice requirements apply. Most notably, an employer may be excused from giving notice if, "as of the time that notice would have been required the employer was actively seeking capital or business which, if obtained, would have enabled the employer to avoid or postpone the shutdown," and if the employer reasonably believed that giving notice would imperil that effort. The Act also provides an "unforeseeable business circumstances" exception, which excuses notice where the shutdown or layoffs are caused by a sudden occurrence outside the employer's control. 29 U.S.C. § 2102(b)(2)(A).² Aggrieved employeesmay enforce the provisions of the WARN Act in any federal district court where the closing or layoffs occurred or where the employer transacts business. 29 U.S.C. § 2104(a)(5).

Plaintiff has brought suit pursuant to the WARN Act, on behalf of himself and a proposed class of similarly situated employees, seeking recovery for

an amount equal to the sum of: unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay pension and 401(k) contributions and other ERISA benefits that would have been covered and paid under the then applicable employee benefit plans had that coverage continued for that period, for sixty (60) working days following the member employee's termination, all determined in accordance with the WARN Act.

Am. Compl. 6-7.

Legal Analysis

I. The Rule 23 Standard

Federal Rules of Civil Procedure 23 allows for the aggregation of claims into class action suits when the litigation of a group of potential plaintiffs' claims en masse is a superior method of enforcing the rights of individual class members. See In re Gen. Motors Corp. Engine Interchange Litig., 594 F.2d 1106, 1128 n.33 (7th Cir. 1979). The Supreme Court has recognized that "class actions serve an important function in our system of justice," Gulf Oil Co. v. Bernard, 452 U.S. 89, 99 (1981)—namely, to "vindicate the rights of individuals who otherwise might not consider it worth the candle to embark on litigation in which the optimum result might be more than consumed by the cost." See Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 338 (1980). Because of their breadth and reach, however, class actions also present the potential for abuse, and the Federal Rules accordingly vest district courts with tight control over class actions and the discretion to enter appropriate orders governing the conduct of counsel and parties. See Fed. R. Civ. Pro. 23; Gulf Oil, 452 U.S. at 100.

Rule 23 sets forth four threshold requirements for certification of a class action. A district court may certify a class only if: "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. Pro. 23(a). In addition, the class action vehicle is appropriate only if at least one of the following factors are present: there is a risk that prosecuting the matter in separate actions will create incompatible standards of conduct binding the defendant; adjudication of separate individual claims would prejudice the interests of potential parties not joined to the suit; the defendant has acted or refused to act on grounds that apply generally to the putative class; or the court finds that "questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. Pro. 23(b).

As several courts have previously noted, "[t]he WARN Act seems particularly amenable to class litigation." Moreno v. DFG Foods, LLC, 2003 WL 21183903, at *6 (N.D. Ill. May 21, 2003) (citing Finnan v. L.F. Rothschild & Co., Inc., 726 F. Supp. 460, 465 (S.D.N.Y. 1989)). By its terms, the Act applies only to firms employing at least 100 people—a number almost always sufficient to satisfy Rule 23's numerosity requirement. See, e.g., Carrier v. JPB Enters., Inc., 206 F.R.D. 332, 334 (D. Me. 2002); Cruz v. Robert Abbey, Inc., 778 F. Supp. 605, 612 (E.D.N.Y. 1991). Moreover, actions under the Act may be well suited to class resolution on policy grounds, because they will almost always involve large numbers of similarly-situated plaintiffs whose claims may be small when taken separately but significant in the aggregate.

II. Appropriateness of Plaintiff's proposed class

A. The requirement of an identifiable and ascertainable class

Plaintiff moves that we certify the following class:

All individuals who were nominally employed by ASI, Limited ("ASI"), who worked at or reported to ASI's facility located at Whitestown, Indiana (the "Facility"), and who were terminated and/or laid off without cause on their part from their employment on or within thirty days of December 22, 2011, or thereafter, as part of, or as the reasonably expected consequence of, the mass layoff or plant closing at the Facility that occurred on or about December 22, 2011, as defined by the WARN Act, who do not file a timely request to opt out of the class.

Docket No. 56, Ex. B. As previously noted, Plaintiff has submitted a list of 273 employees that he asserts qualify for class membership under his proposed definition.³ Docket No. 56 Ex. A. Defendants contend that a large portion of these 273 employees are not eligible for relief under the WARN Act—because they were part-time employees, they worked off-site rather than at...