Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01116/USCOURTS-casd-3_10-cv-01116-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1446 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHARLES SMITH; HECTOR

CASAS; and BARRY NEWMAN,

individually and on behalf of all others

similarly situated,

Plaintiffs,

CASE NO. 10-CV-1116 BEN (WMC)

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFFS’

MOTION TO ENFORCE

SETTLEMENT AGREEMENT

[Docket No. 101]

vs.

CRST VAN EXPEDITED, INC. and

DOES 1 through 50,

Defendants.

Presently before the Court is Plaintiffs’ Motion to Enforce Settlement

Agreement. (Docket No. 101.) For the reasons stated below, the Motion is

GRANTED IN PART ANDDENIED IN PART. Defendant isORDERED to submit

documentation of its compliance with the Settlement Agreement, as detailed below.

BACKGROUND

This is a class action brought by truck drivers against their employer for failure

to pay minimum wages during certain stages of the company’s driver training program

(“DTP”) and related violations of California Business and Professions Code Section

17200. The class representatives are Charles Smith, Hector Casas, and Barry

Newmann, and the defendant trucking company is CRST Van Expedited, Inc.

(“CRST”). 

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The parties agreed to a proposed settlement that Judge Irma E. Gonzalez

preliminarily approved on April 23, 2012. On September 24, 2012, the parties moved

for final approval of the settlement. The settlement provided the class with a financial

benefit of more than $11,600,000. This included a non-reversionary $2,625,000 cash

payment to class members and over $9,000,000 in outstanding debt for training and

related expenses under the Driver Employment Contracts that CRST agreed to relieve. 

In addition, CRST agreed to significant changes to its policies and training program,

including a full disclosure form provided to employees prior to enrollment in the

training program, temporary employee statusfor drivers when tested by the Department

of Motor Vehicles, payment for drivers during orientation, payment by a split mile

basis rather than $50 per day for over-the-road training, and a $250 bonus for all

drivers who remain employed eight months after completion of the training program. 

On January 14, 2013, Judge Gonzalez granted the motion for final approval of class

action settlement. 

Presently before the Court is Plaintiffs’ Motion to Enforce Settlement

Agreement. (Docket No. 101.) 

DISCUSSION

The Court approved and adopted the Settlement Agreement, maintaining

jurisdiction for enforcement purposes. (Settlement Agr. ¶ XII(18).) This Court has the

authority to enforce the Settlement Agreement. See Callie v. Near, 829 F.2d 888, 890

(9th Cir. 1987). 

I. REQUEST FOR DOCUMENTATION OF COMPLIANCE WITH THE

SETTLEMENT AGREEMENT

Plaintiffs argue that they cannot determine whether CRST has implemented

several of the provisions of the Settlement Agreement. Class Counsel seeks

documentation of CRST’s compliance with the disputed provisions of the Settlement

Agreement. Class Counsel argues that although CRST agreed to provide a declaration

to Class Counsel within 30 days of the date the changes were implemented, or by June

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14, 2013, they did not receive the required declaration. 

Each disputed provision of the Settlement Agreement will be addressed in turn.

A. Collection of Debts from Settlement Class Members

Class Counsel argues that it cannot determine whether the debt forgiveness

portion of the Settlement Agreement has been implemented. The Settlement

Agreement provides:

Defendant will not enforce the alleged contractual rights it believesit has

to receive payment for training and related expenses owed by Settlement

Class Members, which Defendant estimates is an amount in excess of

$6,900,000. The amounts owed by the Settlement Class Members will

be shown on CRST’s books as satisfied, and, if notified as to any issues

related to those amounts, Defendant will confirm that the amounts owed

have been satisfied. . . . In addition, within 30 days after the Effective

Date, Defendant will notify its third-party collection agencies that the

outstanding amounts owed by the Settlement Class Members in the

approximate amount of $9,000,000 have been satisfied and that further

collection actions shall cease all collection efforts as of the Effective

Date. . . . Defendant shall cause its third-party collection agencies to

notify the credit reporting agencies that the outstanding amounts have

been satisfied and that any negative references on the credit reports of the

Contract Students arising out of those outstanding amounts shall be

removed.

(Settlement Agr. § IV.2.a.)

As evidence of its compliance with this provision of the Settlement Agreement,

CRST submits a declaration by Eric A. Baker, General Counsel of CRST. Baker

testified:

CRST ceased all collection efforts on amounts owed by Settlement Class

Members in connection with training and related expenses. CRST

considers the outstanding amounts owed in the approximate amount of

$9 million to have been satisfied. Within 30 days of February 14, 2013,

CRST notified its third-party collection agency, United Resource

Systems, Inc. that (1) all further collection actions were to cease effective

March 16, 2013, 30 days after February 14, 2013; (2) all amounts

collected fromSettlement Class Membersto satisfy debts for training and

related expenses after February 14, 2013 were to be returned; and (3) that

credit agencies were to be notified that the outstanding amounts have

been satisfied and that any negative references in the credit reports of

Settlement Class Members arising out of those amounts were to be

removed.

(Baker Decl. ¶ 4.)

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In addition, CRST submits a declaration by Michael Lammars, President of

United Resource Systems, Inc. (“URS”), which states: “At the request of CRST, URS

cancelled the collection accounts of class members in the Smith case as of March 15,

2013, and notified credit bureaus of the cancellation of these accounts.” (Lammars

Decl. ¶ 5.)

First, Class Counsel DouglasJ. Campion argues that he wastold by several class

members that collection efforts on the forgiven debt for the training expenses was still

occurring between the dates of preliminary approval and the effective date. (Campion

Decl. ¶¶ 2-3.) Whether CRST attempted to collect the forgiven debt between the date

the Court granted preliminary approval of the settlement and the February 14, 2013

effective date, however, is irrelevant. CRST did not agree to suspend its collection

efforts during this time.

Second, Class Counsel submits a declaration by Class Member William Scott

Rizzie as evidence of CRST’s alleged noncompliance. Rizzie testifiesthat on October

10, 2013, he contacted an organization that provides consumers with their creditreports

by telephone. (Rizzie Decl. ¶ 4.) During that telephone call, Rizzie allegedly learned

that a $5,285 debt to CRST was still listed on his credit report. (Id.) On October 14,

2013, he obtained a written copy of his credit report which confirmed the debt was

listed. (Id.) In addition, Rizzie testifies that he received a telephone call from a

collection agency after February 14, 2013, seeking payment for the alleged debt. (Id.

¶ 5.)

In regards to the alleged telephone call from a collection agency, CRST points

to Lammars’s declaration. Lammars testifies that URS’s records relating to Rizzie’s

collection account “indicate Mr. Rizzie contacted URS on February 19, 2013, and

advised a URS representative that he was a class member in this case, and that his debt

to CRST has been discharged by virtue of the settlement of the case. Mr. Rizzie was

advised by the URS representative that his account would be closed and removed from

the credit bureaus. On February 28, 2013, URS cleared all balances associated with

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Mr. Rizzie’s collection account, and on March 2, 2013, URS notified the credit bureaus

that Mr. Rizzie’s collection account balance was zero.” (Lammers Decl. ¶¶ 3-4.) In

addition, CRST argues that the telephone conversation took place on February 19,

2013, almost a month before CRST was required to instruct URS to stop collecting

class members’ debts.

The Court finds that there is conflicting evidence in regards to whether CRST

complied with the debtforgiveness portion ofthe Settlement Agreement. Accordingly, 

Plaintiffs’ motion seeking documentation of CRST’s compliance is GRANTED, in

regards to the collection of debt from the class members.

B. Payment of California Drivers asTemporaryEmployeesWhile

Taking the California DL 170 Driving Test

Class Counsel argues that it cannot determine whether CRST has complied with

the provision of the Settlement Agreement regarding the payment of California drivers

as temporary employees while taking the California DL 170 driving test. The

Settlement Agreement provides:

The Contract Students will be considered “temporary employees,” in

accordance with the requirements of the California Department of

Motor Vehicles (“DMV”) for Defendant to act as the DMV’s agent in

administering the DL 170 test, for the day on which they take the DL

170 test, and Defendant will pay those Contract Studentsthe California

minimum wage for all “hours worked” on that day.

(Settlement Agr. § IV.2.b.ii.)

Although CRST claimed that it had complied with this provision in its

Opposition, CRST later submitted a supplemental declaration by Baker, in which he

testified that “[a]ftersubmitting my original declaration, I wasinformed thatCRST had

not yet begun paying Contract Students the California Minimum Wage for all ‘hours

worked’ on the day they take the DL-170 commercial truck driving road test.” (Baker

Suppl. Decl. ¶ 3.) In addition, Baker testified that “[u]pon learning this, I immediately

took steps to ensure that CRST implemented the change. Specifically, I instructed

personnel at CRST to identify all Contract Students who had taken the DL-170 Test

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since May 15, 2013 and to determine the number of hours the Contract Students

worked on the[] day of the test. . . . While not all of the drivers who have taken the

DL-170 test since May 15, 2013 are entitled to compensation for six ‘hours worked’

in connection with the DL-170 test, CRST will pay those drivers the California

minimum wage rate of $8.00 per hour for 6 hours. CRST will pay Contract Student

drivers who take the test on a going forward basis the California minimum wage rate

of $8.00 per hour for all ‘hours worked’ in connection with the DL-170 test.” (Id. ¶ 4.)

Although Baker’s Supplemental Declaration evidencesCRST’s intent to comply

with this provision, CRST does not submit evidence showing that it has completed

compliance. Accordingly, Plaintiffs’ motion seeking documentation of CRST’s

compliance is GRANTED, in regards to the payment of California drivers as

temporary employees while taking the California DL 170 driving test.

C. Payment of the California Minimum Wage During CRST

Training

Class Counsel argues that CRST has failed to implement the provision of the

Settlement Agreement regarding the payment of the California minimum wage for

company orientation activities during Phase 2 of the DTP. The Settlement Agreement

provides: 

Defendant will divide the time spent in Phase 2 into two days for

qualification of the drivers under the requirements of the Federal Motor

Carrier Safety Regulations and Defendant and up to two days for

training of the drivers on Defendant’s policies and procedures. The

drivers will become Defendant’s employees at the beginning of the third

day, which is the first day of training on Defendant’s policies and

procedures. Those employees will be paid the California minimum

wage for the “hours worked” for the training on those last two days of

Phase 2 of the DTP. 

(Settlement Agr. § IV.2.b.iii.)

As evidence of its compliance with this provision, CRST points to Baker’s

declaration, which states: “CRST has divided the time spent in Phase 2 of the DTP into

two days for qualification of the drivers under the requirements of the Federal Motor

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Carrier Safety Regulations of the U.S. Department of Transportation, and two days for

training of the drivers on CRST’s policies and procedures. The driver applicants now

become employees of CRST at the beginning of the third day of Phase 2, and the driver

applicants are paid the California minimum wage for the ‘hours worked’ for the

training on those last two days of Phase 2 of the DTP. This change was implemented

by May 15, 2013.” (Baker Decl. ¶ 6.)

As evidence of CRST’s noncompliance, Class Counsel points to the Online

General Information Packet, which states that the orientation for the DTP consists of

“3 or 4 days of learning CRST policies and procedures, including a road test.” (Pope

Decl., Exh. B, at 7.) Although the Online Information Packet does not conclusively

show that driver applicants are not paid the California minimum wage for the ‘hours

worked’ for the training on the last two days of Phase 2 of the DTP, it does create a

dispute asto whether CRST complied with this provision ofthe Settlement Agreement. 

Accordingly, Plaintiffs’ motion seeking documentation of CRST’s compliance is

GRANTED, in regards to the payment of the California minimum wage for company

orientation activities during Phase 2 of the DTP. 

D. Payment of Contract Students on Mileage Basis During 

Phase 3

Class Counsel argues that CRST has failed to implement the provision of the

Settlement Agreement regarding the payment of drivers on a mileage basis during

Phase 3 of the DTP. The Settlement Agreement provides: “Defendant will pay the

Contract Students during Phase 3 of the DTP on a dispatched split mile basis rather

than $50 dollars per day.” (Settlement Agr. § IV.2.b.iv.)

As evidence of its compliance with this provision, CRST points to Baker’s

declaration, which states: “During Phase 3 of the DTP, CRST pays Contract Students

on a dispatched split-mile basis (rather than $50 per day). This change was

implemented in or about August, 2011.” (Baker Decl. ¶ 7.) Class Counsel, on the

other hand, does not submit any evidence showing that CRST has not complied with

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this provision of the Settlement Agreement. Accordingly, Plaintiffs’ motion seeking

documentation ofCRST’s compliance is DENIED, in regards to the payment of drivers

on a mileage basis during Phase 3 of the DTP.

E. Payment of $250 Bonus to Contract Students

Class Counsel argues that CRST has failed to implement the provision of the

Settlement Agreement regarding the payment of a $250 bonus to contract students. 

The Settlement Agreement provides that CRST will “pay each Contract Student who

successfully remains employed by Defendant for eight months beginning after the

Effective Date a bonus of $250.” (Settlement Agr. § IV.2.b.v.)

CRST does not argue that it has already complied with this provision of the

Settlement Agreement. Rather, CRST submits Baker’s declaration, dated October 14,

2013, in which Baker testifies that “[t]his change has been implemented, and on

October 15, 2013, CRST will begin paying the $250 bonuses to Contract Students

employed by CRST for eight months beginning after February 14, 2013.” (Baker Decl.

¶ 8.) Although Baker’s declaration evidences CRST’s intent to comply with this

provision, CRST does not submit evidence showing that it has completed compliance. 

Accordingly, Plaintiffs’ motion seeking documentation of CRST’s compliance is

GRANTED, in regards to the payment of the $250 bonus to contract students.

F. Disclosure Form

Class Counsel argues that CRST has failed to implement the provision of the

Settlement Agreement regarding the implementation of a new disclosure form. The

Settlement Agreements providesthat CRST will “implement a new disclosure formfor

Contract Student recruits, which will be provided to them by the recruiter no later than

three days before they enter the DTP.” (Settlement Agr. § IV.2.b.i.)

CRST does not argue that it has already complied with this provision. Rather,

CRST argues that it will implement a new disclosure formfor Contract Student recruits

in the near future, which will be provided to them by the recruiter no later than three

days before they enter the DTP. According to CRST, this disclosure form will notify

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Contract Student recruits that attendance at the truck driver training school is not a

condition of employment and that the drivers may attend any truck driver training

school. CRST has not shown that it has complied with this provision of the Settlement

Agreement. Plaintiffs’ motion seeking documentation of CRST’s compliance is

GRANTED, in regards to the disclosure form.

II. REQUEST TO CONDUCT DISCOVERY

Class Counsel requests permission to conduct discovery to confirm that CRST

and URS have complied with the terms of the Settlement Agreement. As discussed

above, this Court grants Plaintiffs’ motion for CRST to provide documentation that it

has complied with certain provisions of the Settlement Agreement. Class Counsel may

move to conduct discovery at a later date if the documentation provided proves to be

inadequate to determine compliance with the Settlement Agreement. Accordingly,

Class Counsel’s request to conduct discovery is DENIED WITHOUT PREJUDICE. 

III. REQUEST FOR ATTORNEYS’ FEES

Class Counsel argues that they should be awarded attorneys’ fees as a result of

having to file a motion to enforce the settlement agreement. The Settlement Agreement

provides: “[I]n any suit or court action to enforce the terms of this Agreement, the

prevailing party shall be entitled to recover attorney fees and costs.” (Settlement Agr.

§ XII(18).)

An award of attorneys’ fees at this time would be premature, because the Court

has not yet determined whether CRST has complied with the Settlement Agreement. 

The motion for attorneys’ fees is DENIED WITHOUT PREJUDICE.

CONCLUSION

For the reasons stated above, the Court GRANTS IN PART and DENIES IN

PART Plaintiffs’ Motion to Enforce Settlement Agreement and hereby FINDS and

ORDERS as follows:

1. Except as otherwise specified herein, the Court for purposes of this Order

adopts all defined terms set forth in the Joint Stipulation of Settlement;

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2. If CRST has not already done so, CRST is ordered to implement the DTP

changes by May 26, 2014 which will remain in effect not to commence until the last

date when all changes to the DTP program have been implemented by CRST to the

Court’s satisfaction;

3. CRST is ordered to provide Class Counsel with copies of the instructions

from CRST to its third-party collection agents about foregoing any collection efforts

on the $9,000,000.00 and proof thatsuch third-party collection agencies have received

and implemented such instructions by June 26, 2014; 

4. CRST is ordered to provide Class Counsel with documentation that

evidencesthird-partydebt collector’s statements and instructionsto the creditreporting

agencies that the Class Members’ credit reports should indicate the outstanding

amounts have been satisfied and that any negative references on the credit reports of

the Contract Students arising out of those outstanding amounts shall be removed by

June 26, 2014; 

5. CRST is ordered to provide Class Counsel with documentation that

evidences the disclosure form is provided to new Contract Student recruits, and proof

that it is provided by the recruiter no less than three days prior to the DTP by June 26,

2014;

6. CRSTis ordered to provide Class Counsel with documentation to establish

that the Contract Students are considered “temporary employees” on the day CRST

administers and the day on which the Contract Students take the DL 170 test, and that

such Contract Students are paid minimum wage for “all hours worked” on that day by 

June 26, 2014; 

7. CRST is ordered to provide Class Counsel with documentation to establish

that CRST has implemented the Settlement Agreement’s terms that they have divided

the Contract Students’ time into two days for qualification of the drivers under the

requirements of the Federal Motor Carrier Safety Regulations and for up to two days

for training of the drivers on Defendant’s policies and procedures by June 26, 2014;

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8. CRSTis ordered to provideClass Counsel with documentation to establish

that CRST has implemented the Settlement Agreement’s terms that the Contract

Students become CRST’s employees at the beginning of the third day, which isthe first

day of training on CRST’s policies and procedures by June 26, 2014; 

9. CRSTis ordered to provide Class Counsel with documentation to establish

thatCRST has implemented theSettlement Agreement’s terms that all driver applicants

who attend the Phase 2 of the DTP are paid the California minimum wage for the

“hours worked” for the training on those last two days of the Phase 2 of the DTP by 

June 26, 2014;

10. CRST is ordered to provide Class Counsel with documentation to establish

that CRST has implemented the Settlement Agreement’s terms that CRST is paying

each Contract Student who successfully remains employed by CRST for eight months

beginning after the Effective Date a bonus of $250.00 by June 26, 2014;

11. CRST is ordered to provideClass Counsel with documentation to establish

the date each change as required by the Settlement Agreement has first been

implemented by June 26, 2014.

12. Class Counsel’s request to conduct discovery is DENIED WITHOUT

PREJUDICE. Class Counsel may bring another request to conduct discovery after

CRST submits the documentation of compliance ordered above, if the documentation

is inadequate to show CRST’s compliance with the Settlement Agreement.

13. Class Counsel’s request for attorneys’ fees is DENIED WITHOUT

PREJUDICE. Class Counsel may bring another request for attorneys’ fees if the

Court later determines that CRST has not complied with the Settlement Agreement.

IT IS SO ORDERED.

DATED: April 30, 2014 ___________________________

HON. ROGER T. BENITEZ 

United States District Judge

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