Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-02125/USCOURTS-casd-3_05-cv-02125-6/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:0201fl FLSA: Fair Labor Standards Act (FLSA)

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5cv2125 JLS (KSC)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

FERNANDO RUIZ, individually and on 

behalf of all others similarly situated,

Plaintiff,

v.

XPO Last Mile, Inc.,

Defendant.

Case No.: 5cv2125 JLS (KSC)

ORDER GRANTING IN PART AND 

DENYING IN PART MOTION FOR 

SUBSTITUTION

(ECF No. 270)

Presently before the Court is Plaintiffs’ Motion for Substitution Pursuant to Rule 

25(c). (ECF No. 270.) Also before the Court are Defendant’s Opposition to Plaintiffs’ 

Motion for Substitution, (ECF No. 272), and Plaintiffs’ Reply in Support of Plaintiffs’ 

Motion for Substitution Pursuant to Rule 25(c), (ECF No. 274). 

Plaintiff Fernando Ruiz (Plaintiff) initially sued defendant Affinity Logistics 

Corporation (Affinity), which merged into CRT Corporation. Since the Merger, CRT 

Corporation has changed its name twice, and is now called XPO Last Mile, Inc. (XPO Last 

Mile). XPO Last Mile is a wholly owned subsidiary of XPO Logistics, Inc. (XPO 

Logistics).

Plaintiff seeks to substitute both XPO Last Mile and XPO Logistics in lieu of

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Affinity pursuant to Federal Rule of Civil Procedure 25(c). 

Rule 25(c) provides:

If an interest is transferred, the action may be continued by or against the 

original party unless the court, on motion, orders the transferee to be 

substituted in the action or joined with the original party. The motion must 

be served as provided in Rule 25(a)(3).

Affinity does not oppose substituting XPO Last Mile for Affinity Logistics, although 

it suggests that substitution is a mere formality and is unnecessary based on Rule 25. 

Affinity does, however, oppose, substituting the parent company XPO Logistics.1 

The Court agrees with Affinity that XPO Logistics should not be “substituted” for 

Affinity. By all accounts, XPO Logistics and XPO Last Mile are discrete corporations, 

even though XPO Logistics owns all of XPO Last Mile’s stock. “It is a general principle 

of corporate law deeply ‘ingrained in our economic and legal systems’ that a parent 

corporation (so-called because of control through ownership of another corporation's stock) 

is not liable for the acts of its subsidiaries.” United States v. Bestfoods, 524 U.S. 51, 61 

(1998). Of course, substituting a party under Rule 25 does not “create new relationships 

among parties to a suit[,] but is designed to allow the action to continue unabated when an 

interest in the lawsuit changes hands.” Zest IP Holdings, LLC v. Implant Direct Mfg. LLC, 

No. 10CV541-GPC WVG, 2014 WL 5606088, at *7 (S.D. Cal. Nov. 4, 2014). 

Although substituting a party into a lawsuit is not the same as determining that a 

party is liable, the principle of observing a parent and subsidiary as discrete legal entities 

counsels against joining a parent company under Rule 25(c) in this instance. In the same 

way that one who purchases stock in a corporation in most circumstances would not 

become personally liable for a judgment against that corporation, the stock owner also 

should not, for purposes of Rule 25(c), be deemed a transferee of an interest in a lawsuit 

against that corporation. If ownership of stock in a company that is potentially liable is 

 

1 As Affinity points out in its brief, “Substituting XPO Last Mile, Inc. for Affinity is as pointless as 

substituting Clark Kent for Superman—Affinity is XPO Last Mile, Inc. Nevertheless, Affinity does not 

object to Plaintiff’s request for a ‘formal substitution.’” (Opp’n, ECF No. 272, at 2.)

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enough on its own to be the type of transfer of an interest envisioned by Rule 25, the Rule 

could become a vehicle for joining investors in countless numbers of lawsuits, which 

clearly is not the purpose of Rule 25.

Through a merger, Affinity transferred its interest in this litigation to XPO Last Mile. 

Rule 25(c) presumes that the action may proceed against the original party, in this case 

Affinity, and gives the Court the option of substituting one party for another or joining a 

successor in interest. There is no indication that XPO Last Mile’s interest in this litigation 

is anything short of coextensive with its successor in interest, Affinity. Plaintiff has not 

provided an adequate reason to join XPO Logistics based on the transfer in interest from 

Affinity to XPO Last Mile. 

Accordingly, the Court GRANTS Plaintiff’s Motion with respect to XPO Last Mile 

and DENIES Plaintiff’s Motion with respect to XPO Logistics. The Clerk of the Court 

SHALL AMEND the title of this action to substitute XPO Last Mile, Inc., as the sole 

defendant in place of Affinity Logistics Corporation, as reflected in the caption of this 

Order. 

IT IS SO ORDERED. 

Dated: January 27, 2016

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