common issue goes Association’s way, Carnegie, 376 F.3d at 661
(internal quotation marks omitted) neatly identifies the array of
possible outcomes. First there is of course the possibility of a
class-wide settlement. Failing that:

Rule 23 allows district courts to devise imaginative

solutions to problems created by the presence in a

class action litigation of individual damages issues.

Those solutions include (1) bifurcating liability and

damage trials with the same or different juries;

(2) appointing a magistrate judge or special master to

preside over individual damages proceedings;

(3) decertifying the class after the liability trial

and providing notice to class members concerning how

they may proceed to prove damages; (4) creating

subclasses; or (5) altering or amending the class.
Both sides can be assured that this Court will not hesitate to
fashion one or more appropriate solutions if the need arises.

There remains the superiority prong. Courts have frequently
found that requirement met where, as here, a relatively small
amount will be recoverable by each individual plaintiff, so that

the injured parties would be unlikely to pursue their claims

individually (Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809

(1985)).

Here the individual amounts recoverable are indeed
relatively small, suggesting that many class members would not
choose to pursue their claims individually. And Association also
points out that the typical putative class member here spends a
majority of time away from home, constantly driving to far-flung

destinations. That too supports the superiority of the class

14


from the same course of conduct (TFC’s inclusion of certain
provisions in its standard lease) and are based on the same legal
theory that those provisions violate applicable federal
regulations. That clears the low hurdle of Rule 23(a) (3), which
requires neither complete coextensivity nor even substantial
identity of claims.

This Court’s June 29, 2004 memorandum order stated that
“Rockwell and MacVittie’ are the claimed proxies for all other
members of the putative class for damages relief, while
Association is (quite permissibly) in the case solely for
injunctive or declaratory relief or both.” TEC now asserts that
any claims for injunctive or declaratory relief have been mooted,
so that Association is not a proper class representative.

But TFC’s mootness argument is plainly a non-starter for
reasons that will be discussed later in this opinion. And that
in turn means that Association may serve as the class
representative for its members as to declaratory and injunctive
relief (see UAW v. Brock, 477 U.S. 274, 281-82 (1986)). As for
the other claims for relief, Rockwell remains the class
representative, and it has not been suggested at any point during

the proceedings that his interests are antagonistic to those of

7 Former co-plaintiff Patrick MacVittie was dismissed

without prejudice on August 6, 2004 by joint motion occasioned by
his bankruptcy filing. That made no difference to the case,
given the continued presence of the other two co-plaintiffs.

5


success on the merits without their having to litigate singly and
on their own, and it insulates the targeted defendants against
having to respond to other lawsuits (except by anyone who elects
to opt out under Rule 23(b)(3)) once the class action is
resolved. That latter goal (as well as the former) is best
served by employing the identical class definition for both
aspects of this action--with the opt-out rights of class members
to be limited, of course, to the Rule 23(b) (3) aspects of the
litigation (see, e.g., Allstate, 400 F.3d at 507).

This treatment is entirely in accord with the view expressed

by our Court of Appeals in Lemon v. Int’1i Union of Operating

Eng’rs Local 139, 216 F.3d 577, 581 (7 Cir. 2000):
a district court could certify a Rule 23(b) (2) class
for the portion of the case addressing equitable relief
and a Rule 23(b) (3) class for the portion of the case
addressing damages. This avoids the due process
problems of certifying the entire case under Rule
23(b) (2) by introducing the Rule 23(b) (3) protections
of personal notice and opportunity to opt out for the
damages claims.

Accord, Jefferson, 195 F.3d at 898.

Conclusion

In sum, Association and Rockwell have readily met the

criteria for class certification. Their motion for such

certification under both Rule 23(b) (2) and 23(b) (3) is therefore

granted. This action is set for a status hearing at 8:45 a.m. on

16


Monetary Relief

In addition to declaratory and injunctive relief,
Association asks for the award of money damages pursuant to 49
U.S.C. §14704(a) (2):

A carrier or broker providing transportation or service

subject to jurisdiction under chapter 135 is liable for

damages sustained by a person as a result of an act or

omission of that carrier or broker in violation of this

part.
Association also demands (1) an accounting of all transactions
involving owner-operator escrow funds, (2) the creation of a
common fund made up of all damages awarded to class members and
(3) attorneys’ fees (Prayer for Relief 9115-19). Because of the
limitation on such Rule 23(b)(2) relief identified in n.9
Association must instead satisfy the Rule 23(b) (3) criteria for
certification to pursue those remaining claims.

Rule 23(b) (3) permits certification of a class if “{t]he
court finds that questions of law or fact common to the members
of the class predominate over any questions affecting only
individual members, and that a class action is superior to other
methods for the fair adjudication of the controversy.” In common
parlance those requirements are referred to as “predominance” and
“superiority.”

As to the first of those, Amchem Prods., Inc. v. Windsor,

521 U.S. 591, 623 (1997) teaches that “[t]he Rule 23(b) (3)

predominance inquiry tests whether proposed classes are

10


opposing the class has acted or refused to act on grounds
generally applicable to the class, thereby making appropriate
final injunctive relief or corresponding declaratory relief with
respect to the class as a whole.” Much of the relief sought by
Association on behalf of its members fits that description.
Association claims that TFC has included standard provisions that
violate federal regulations in all of its leases with owner-
operators, and Association seeks declaratory and injunctive
relief to require those (and any future) leases to be brought
into compliance. Hence much of what Association seeks is
precisely what the Advisory Note to the 1996 amendment of Rule 23
described as the intended role of Rule 23(b) (2) class actions:
‘final relief of an injunctive nature or of a corresponding
declaratory nature, settling the legality of the behavior with

respect to the class as a whole” (see also Jefferson v. Ingersoll

Int'l, Inc., 195 F.3d 894, 897-98 (7 Cir. 1999)).°

For their part, Allied-TFC object to Association's effort to
invoke Rule 23(b) (2) by asserting that any potential need for
declaratory or injunctive relief has been mooted by TEC’s conduct
since the initiation of this action. Specifically they point out

(D. Mem. 24) that TFC “is currently in the process of

® Relatedly, the blanket effect of such relief is precisely
why Rule 23(b)(2) does not have a notice requirement or an opt—
out provision. As In re Alistate Ins. Co., 400 F.3d 505, 507
(7 Cir. 2005) has recently put it, class members seeking
declaratory or injunctive relief “all sink or swim together.”

7


other class members (Rosario, 963 F.2d at 1018) or that his
counsel is deficient either as to vigorousness of advocacy or
competency.

Finally, Allied-TFC contend that the commonality prong has
not been satisfied. As with typicality, the cases have not been
overly restrictive in setting out the requirements for
commonality, with the existence of a common nucleus of operative
fact usually being enough to qualify (Rosario, 963 F.2d at 1018).
But because Rule 23(b) (3) establishes the more demanding test
that common issues must predominate over questions affecting the
individual class members (a test that by definition subsumes the
issue of commonality), consideration of this element will be
deferred to the upcoming Rule 23(b) (3) analysis.

Rule 23(b

Association argues that the proposed class could be
certified under either Rule 23(b)(2) or Rule 23(b) (3). As
indicated earlier, Rule 23(b) is framed in disjunctive terms, so
that satisfaction of only one of its provisions will suffice for
class certification. That often permits considerable narrowing
of the analysis in an opinion such as this, but the scope of
relief sought here calls for consideration of both Rule 23 (b) (2)
and 23(b) (3).

Declaratory and Injunctive Relief

Under Rule 23(b) (2) a class can be certified if “the party


May 27, 2005 to discuss further proceedings in the case.

Lect, O Seratu

Milton I. Shadur
Senior United States District Judge

Date: May 23, 2005

17


Beyond that Allied-TFC interpose no objection to
Association’s contention that Rule 23(b) (2) class certification
is appropriate. And indeed such certification is sensible from
the perspective of Allied-TFC as well. Plainly TFC has an
interest in maintaining the uniformity of its standard lease
form. To the extent that its lease form is subject to legal
review, that review on a class-wide basis provides a safe harbor,
avoiding piecemeal attacks that could undermine TFC’s ability to
maintain uniformity.

In sum, this Court finds that the proposed class satisfies
the criteria for certification under Rule 23(b) (2). This
determination covers Paragraphs 2 through 6 of Association's
Prayers for Relief contained in the original Complaint, except
for this language from Paragraph 5: “and for damages, all
pursuant to 49 U.S.C. §14704(a) (2), and including pre- and post-
judgment interest, as allowed by law.”* This opinion now turns

to that language and all other claims for relief.

° Jefferson, 195 F.3d at 897-98 instructs that Rule
23(b) (2) is not an appropriate subsection for actions seeking
damages that are more than incidental. So Association’s just—
quoted effort to recover damages cannot properly be pursued under
Rule 23(b) (2). As for the first half of Paragraph 5, however,
Association requests “restitution and disgorgement of sums
unlawfully deducted from compensation in violation of 49 C.F.R.
§376.12.” That kind of equitable monetary relief, like back pay
in the Title VII context, can properly be a part of Rule 23(b) (2)
consideration, particularly when its computation is as mechanical
as it would be here (see Allstate, 400 F.3d at 507).

9


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

OWNER-OPERATOR INDEPENDENT DRIVERS

ASSOCIATION, INC., et al.,
Plaintiffs,

Vv. No. 04 C 3207
ALLIED VAN LINES, INC., et al.,
Defendants. ;

MEMORANDUM OPINION AND ORDER

This putative class action by Owner-Operator Independent
Drivers Association, Inc. (“Association”) and Rodney Rockwell?
against Allied Van Lines, Inc. (“Allied”) and TFC, Inc. (“TFC”)
has been hanging fire for a fair amount of time at the class
certification stage, because the parties’ extensive briefing has
necessitated a hard look at the criteria established by Fed. R.
Civ. P. (“Rule”) 23 in the context of the claims advanced in the
Complaint. In the past this Court had little occasion to write
on the class certification subject, for those criteria are long-
familiar and their application to specific case situations has
rarely added any substance to the corpus juris.

In this instance, however, the issues clearly call for

extended treatment. As the confusing aphorism puts it, “the

1 In the interest of simplicity, only Association will be

referred to hereafter, except where Rockwell’s individual claim
needs to be mentioned.


In support of that contention, Allied-TFC rely heavily on

Association’s Eighth Circuit loss in Association"! v. New Prime,

Inc., 339 F.3d 1001 (8 Cir. 2003), where the Court of Appeals
affirmed the denial of class certification to a group of owner-
operators alleging similar violations. Echoing the present
position of Allied-TFC, New Prime, aid. at 1012 concluded:
To make such determinations [of whether damages were
sustained], a court would be required to examine each
individual class member’s account, including offsets,
advances, and other items. Recovery for any plaintiff
would be based on individual, not common, questions of
fact.
But that approach is something of an outlier.' Several
district courts in this circuit have certified class actions in

factually analogous situations, despite the need to determine

damages individually (see, e.g., Association v. Mayflower

Transit, Inc., 204 F.R.D. 138 (S.D. Ind. 2001)). And our Court
of Appeals, while not squarely addressing the precise issue

presented here, has signaled in Carnegie v. Household Int’l,

Inc., 376 F.3d 656, 661 (7% Cir. 2004) that the existence of

of that violation (for example, the injunctive relief already
discussed) even in the absence of a proof of individual damages.

1 This opinion uses the shorthand term “Association” in
the caption of that case and the other case cited in the text in
which it was plaintiff.

12 Association also contends that New Prime is unpersuasive
for the additional reason that a key factual distinction exists:
Here, unlike in that case, TFC has not asserted any class-wide
offsets in the form of funds owed by owner-operators to TFC.

12


sufficiently cohesive to warrant adjudication by representation.”
In practical terms, “[s]atisfaction of this criterion normally
turns on the answer to one basic question: is there an essential
common factual link between all class members and the defendant

for which the law provides a remedy?” (Johns v. DeLeonardis, 145

F.R.D. 480, 484-85 (N.D. Ill. 1992)).

Allied-TFC call for a “no” answer to that question because
they say Association’s claims for monetary relief are too
individualized to be amenable to adjudication on a class-wide
basis. It is of course true that 49 U.S.C. §14704(a) (2) speaks
only of “damages sustained by a person as a result of an act or
omission” that violates the regulations. Because the existence
and quantification of such damages must ultimately be resolved on
a case-by-case basis (for example, the allegedly unlawful
treatment of funds held in escrow accounts will require an
examination of each class member’s account) rather than
established via generalized proof, Allied-TFC maintain that
individual, rather than common, issues of both law and fact

predominate. *°

10 Allied-TFC actually go further, suggesting that the

individualized issues as to damages are actually a component of
liability rather than remedy because a showing of sustained
damages is a predicate for liability. That just won’t fly. When
the statute says a carrier is “liable for damages sustained by a
person...,” it identifies the amount of any recovery rather than
liability. Liability is a function of whether or not a
“violation of this part” has occurred--an issue common to all
class members. If so, the carrier is liable for the consequences

11


implementing a new form of lease that addresses each of the
claimed deficiencies identified in the lease attached to the
Complaint” and that they do “not anticipate that [Association]
will take issue with its terms.”

On that latter score, Allied-TFC were quite predictably
mistaken: Association has objected to various provisions of the
new proposed form of lease (P. R. Mem. 10-11). But even apart
from those renewed objections, the Allied-TFC argument misses the
mark. Mooting a claim for injunctive relief is not a simple
matter of assuring the court that change is on the way. Quite to
the contrary, it is well established that “[{v]oluntary cessation
of allegedly illegal conduct does not render a case moot unless
the defendant can demonstrate that there is no reasonable
expectation that the wrong will be repeated” (Milwaukee Police
Ass'n v. Jones, 192 F.3d. 742, 747 (7th Cir. 1999) (internal
quotation marks omitted)).

Here Allied-TFC have not attempted any such demonstration,
have not proffered a copy of the new TFC standard lease
provisions that they view as exculpatory and have not given even
so much as a bland assurance that those provisions will be
applied to existing leases (as would be required to moot
Association’s claims for declaratory and injunctive relief in
their entirety). All of that renders their mootness objection to

Rule 23(b) (2) certification toothless and wholly unpersuasive.


been established that “[f]ailure to meet any one of the
requirements of Rule 23 precludes certification of a class”

(Valentino v. Howlett, 528 F.2d 975, 978 (7 Cir. 1976) (per

curiam)).
Rule 23(a

From documents produced by TFC, Association has identified
32 owner-operators who are currently under TFC leases and 82
additional owner-operators who were subject to leases with TFC at
one time or another during the four-year time frame of the
proposed class definition. Moreover, those owner-operators are
geographically dispersed (and in fact are almost constantly on
the move), which increases the impracticability of individualized

joinder (Riordan v. Smith Barney, 113 F.R.D. 60, 62 (N.D. Ill.

1986)). Taken together, those assertions plainly meet the
numerosity requirement, and Allied-TFC have not objected on that

score.

As to typicality, Rosario v. Livaditis, 963 F.2d 1013, 1018

(7% Cir. 1992), quoting De La Fuente v. Stokely-Van Camp, Inc.,

713 F.2d 225, 232 (7 Cir. 1983), explains the requirement in
simple terms:

We have previously stated that a “plaintiff's claim is
typical if it arises from the same event or practice or
course of conduct that gives rise to the claims of
other class members and his or her claims are based on
the same legal theory.”

Here it is unquestionable that all of the asserted claims arise


action device for maintaining this action. In sum, this Court
holds that considerations of judicial economy and fairness
militate strongly in favor of certification as a Rule 23 (b) (3)
class as well.**

Class Definition

With Association having demonstrated the appropriateness of
class certification under both Rule 23(b)(2) and 23(b) (3), this
opinion turns to consideration of the class definition in the
latter respect. Because as discussed earlier recovery under that
rubric would be limited to owner-operators who can show actual
damages resulting from TFC’s alleged violations (if proved, of
course), this Court has considered the possibility of carving the
Rule 23(b) (3) class down to those who make that showing. That
was the approach taken in Mayflower Transit, 204 F.R.D. at 149."

But it should be remembered that class certification cuts

both ways: It provides the class members with the benefit of any

13° Two additional objections to class certification raised

by Allied-TFC merit only brief attention at this point. They are
dealt with in the Appendix.

4 There the class was defined in these terms:

All independent truck owner-operators...who
entered into regulated leases with Mayflower,
directly or indirectly through Mayflower’s
agents, and who have each paid money into an
escrow or “cash deposit” account held by
Mayflower or its agents, and who in good
faith may assert that Mayflower unlawfully
refused to rebate the moneys deducted from
their compensation.

15


This entire subject has been relegated to this Appendix
because it is obvious that neither issue identified here needs
resolution to determine the appropriateness of class
certification. Instead those classic merits-related issues will

be deferred for another day.


3. to charge owner-operators for TFC’s public

liability insurance premiums.
Association claims that those violations warrant declaratory,
injunctive and monetary relief, and it now seeks certification of
a Rule 23 class to pursue that relief on behalf of all owner-
operators of motor vehicle equipment who after May 5, 2000° were
parties to federally-regulated leases with TEC.®

Rule 23(a) sets out the four preconditions to class action
treatment that are familiarly shorthanded as (1) numerosity,
(2) commonality, (3) typicality and (4) adequacy of
representation. Beyond that, class certification requires the
satisfaction of at least one of three additional requirements
specified in Rule 23(b). It is of course the burden of the party
seeking certification to demonstrate that the case satisfies

those requirements (Retired Chicago Police Ass'n v. City of

Chicago, 7 F.3d 584, 596 (7"* Cir, 1993)), and it has long since

5 That date reflects this Court’s July 16, 2004 memorandum
order that denied the Allied-TFC motion to impose a two-year
statute of limitations period, instead applying the catchall
four-year limitation period prescribed in 28 U.S.C. §1658(a).
Because the lawsuit was filed on May 5, 2004, the limitations
cutoff date becomes May 5, 2000.

© Association comprises approximately 40,000 owner—
operators who own or control some 66,000 trucks used to haul
property on the nation’s highways. Association regularly
represents members in lawsuits such as this one, and it is also
engaged in legislative lobbying on behalf of its members. Co-
plaintiff Rockwell is an owner-operator who entered into leases
with TFC for the years 1999, 2000 and 2002.

3


exception proves the rule (here Rule 23).% And with the
litigants’ counsel having completed their submissions, this Court
can turn to the task.?

Background for Potential Certification

TFC is an agent of Allied that transports freight in
vehicles leased from independent owner-operators. Approximately
100 such owner-operators, through Association, initiated this
action against both Allied and TFC, charging numerous violations
of the federal Truth-in-Leasing regulation at 49 C.F.R. §376
(“Regulation”). Among other things, TFC’s leases are said
impermissibly:

1. to condition any return of escrow funds on an
owner-operator’s having given at least 30 days’ notice
before its lease termination,

2. to require owner-operators to pay for a variety of

administrative and other services and

2 Pull disclosure compels this Court to acknowledge that

the bobtailed and more familiar English version of the aphorism
lends itself better to the bad pun in the text than the
aphorism’s Latin origin: Exceptio probat regulum in casibus non
exceptis, which in literal translation reads “the exception
proves the rule in cases not excepted.”

3° Again for simplicity, this opinion will use “P.”--for

plaintiffs--to refer to the Association-Rockwell submissions and
“p.”--for defendants--to refer to the Allied-TFC submissions.

4 As explained in the Appendix, for present purposes this
opinion does not go behind the Complaint’s allegations to the
merits. Accordingly the text omits such qualifiers as
“allegedly,” though this Court makes no findings as to the facts.

2


individualized issues regarding damages does not spell doom for
class certification (indeed, that is especially true where the
individualized claims are small).

Class certification in the face of individualized damages is
particularly appropriate when a common factual issue acts as a
predicate to recovery by any class member. So for example
Allstate, 400 F.3d at 508 recently observed that a proposed class
action stemming from a common employment policy “may well be
highly suitable”:

A single hearing may be all that’s necessary to

determine whether Allstate had a policy of forcing its

employee agents to quit. This issue could be decided

first and then individual hearings conducted to

determine which of the members of the class were

actually affected by the policy rather than having

decided to quit for their own reasons. Fed. R. Civ. P.

23(c) (4) (A). That would be a more efficient procedure

than litigating the class-wide issue of Allstate’s

policy anew in more than a thousand separate lawsuits.

And that is directly in line with the standard treatise on the
subject, which notes that “{clommon issues may predominate when
liability can be determined on a classwide basis, even when there

are some individualized damages issues” (Alba Conte and Herbert

Newberg, Newberg on Class Actions §4.25 (4% ed. 2002)).

In this case a common threshold factual issue--whether TFC’s
standard lease provisions violate the applicable regulations-—-
will determine the ability of any class members to recover. That
satisfies the “predominance” inquiry for Rule 23(b) (3) purposes.

As for the individual damages issues that will follow if that

13


Appendix

More than three decades ago Eisen v. Carlisle & Jacquelin,

417 U.S. 156, 177 (1974) announced that “nothing in either the
language or history of Rule 23...gives a court any authority to
conduct a preliminary inquiry into the merits of a suit in order
to determine whether it may be maintained as a class action.”
Although that admonition has attained near-gospel status in
almost innumerable cases since then, our Court of Appeals has

recently said in Szabo v. Bridgeport Machs., Inc., 249 F.3d 672,

676 (7 Cir. 2001) that Eisen does not prevent a district court

from making a preliminary inquiry into the merits of a case when
such an inquiry is necessary to determine the propriety of class
certification.

Apparently encouraged by Szabo, Allied-TFC have advanced two

merits-based contentions. First, they argue that the standard by
which TFC’s compliance with the federal regulations should be
judged is merely one of “substantial compliance.” Second, they
claim that Association should be required to show the owner-
operators’ detrimental reliance on the terms of the lease
agreement before it can recover. For its part, Association
responds to the first of those objections by arguing that “strict
compliance” is the appropriate standard and to the second by
suggesting that other courts, in similar cases, have permitted
class members to recover without a showing of detrimental

reliance.