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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
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Oct-12-2012 3:39 pm
Case Number: CGC-10-504804
Filing Date: Oct-12-2012 3:39
Filed by: WESLEY G. RAMIREZ
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MEMORANDUM OF POINTS AND AUTHORITIES
SALVATORE MINEO INDIVIDUALLY, AND ON BEHALF OF ALL et al VS. CITY
SIGHTSEEING CORPORATION, A DELAWARE et al
001003801117
Instructions:
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14ORIGINAL
JONES BOTHWELL DION & THOMPSON LLP
ELIZABETH THOMPSON (SBN 112888)
PAUL J. DION (SBN 088231) . « D
44 Montgomery Street, Suite 610 FE j Bhs Eton ia
San Francisco, CA 94104-4608 Sypngy Gf Bar Fe reece
Telephone: (415) 951-8900 oe 4 ONY
Facsimile: (415) 951-8901 ous te eve
CLERK QE THE COURT
Attorneys for Defendant and Cross-Complainant ay Deputy clerk
CitySightseeing Corporation
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
UNLIMITED JURISDICTION
SALVATORE MINEO, GINA SCHEMBARI, No. CGC-10-504804
PHILLIP THOMAS NAILS, BENJAMIN DUAX
and DAVID HAYWARD, individually and on DEFENDANT CITYSIGHTSEEING’S
behalf of all others similarly situated, MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION TO
PLAINTIFFS’ AMENDED MOTION
Plaintiffs,
arn FOR CLASS CERTIFICATION
Vv.
Date: October 26, 2012
CITY SIGHTSEEING CORPORATION. pe: 230 oO
7a .
Delaware corporation, and DOES 1 through 500, Dep ent: 302
inclusive, Trial Date: November 13, 2012
Defendants.
AND RELATED CROSS-COMPLAINT.
DEFENDANT’S MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION —_No. CGC-10-504804
TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATIONI.
I.
Il.
TABLE OF CONTENTS
INTRODUCTION AND SUMMARY OF ARGUMENT .......sssssssssessstssssssesssneeecssseeeeseens 1
ARGUMENT .....cccssssssssssssessssessseessvesseccsssessssessssessnecssecsavessucsavecsnecaneesaseansessseeaneessneesaneensaeessee
A. Certification Of A Driver Class Must Be Denied Because They Are Exempt
Overtime Under The FLSA And Have No Realistic Chance Of Recovery ...........+- 2
1, CitySightseeing Is A Motor Carrier Engaged In Interstate Commerce ............... 5
a. CitySightseeing’s Tours Onto Federal Land Constitute Interstate Travel ... 5
b. CitySightseeing’s Solicitation Of Business And Participation In Through
Ticketing Arrangements Are Activities In Interstate Commerce .............00000+ 7
2. CitySightseeing’s Drivers Engage In Activities In Interstate Commerce............. 9
B___ Due Process Considerations Mandate Denial Of Class Certification Less Than Three
Weeks Before Trial... secsesseessecssecssssseeseecnsensssesssecsessssuesueeuscsecsuseasssnsessesseeseesseesses 9
CONCLUSION Qn veesesssesssssesssscsssessssesssecssusessuccssncssusesssecnsessusesusesuscsnsesavesnuceanesaneesaneesnesesses 13
MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION TO
PLAINTIFFS’ AMENDED MOTION FOR
CLASS CERTIFICATION -i-
Case No. CGC-10-5048041 TABLE OF AUTHORITIES
2 CASES
3
4 | Accord, Chance v. Superior Court
(1962) 58 Cal.2d 275,290 .ccccseescscssescsecesesseeressseesssecsessneesseenesaeeaseseessesessecsassssesueseesssesteseesneesness 10
5
Atlantic C.L.R. Co. v. Standard Oil Co.
© | (1927) 275 U.S. 257, 268 rescssssssscccssssssssnssssnvsessssssseseeceeesssssnnnmmesseceesssnnnesseceesanssnnnnmmnsessseeseeeeeeee 4
7 Brown’s Crew Car of Wyoming LLC v. Nevada Transportation Authority
| g | (D.Nev.2009) 2009 U.S. Dist. LEXIS 39469*35-36....
|
9 | California Western Railroad, Inc. v. Capital Crossing Bank
(N.D. Ca. 2003) 303 B.R. 201, 203; 2003 Bankr. LEXIS 1892**3-4 o.oo 457
: 10
| 1" Carabini v. Superior Court
(1994) 26 Cal. App.4" 239,245...cccssssssssssussssussusssssssssssssssssssssssssssasssssssssnsssssssssssssassssessseesseeseeeee 2,9
12
Cal Pak Delivery, Inc. v. United Parcel Service, Inc.
13 | (1970 52 Cal. Apop.4! 1,12 cecccccscsscssssssssssessvsvvsssssssssesssssssssssssssssssssssssssssesesssssessssssssssssisssssssssvesee 12
14 I Cart v. Superior Court
45 | 2975) 50 Cal. App.3d 960, 973 ..coecscsseeresssreeinsereiinsseeiinnesetiiinessetinssectinmnceemeesteeeees 10,11
16 || Chao vy. First Class Coach Company
(M.D. Fla. 2001) 214 F. Supp.2d 1263, 1274.
17
City of San Jose v. Superior Court
18 | (1974) 12 Cal. 3d 447, 454 vcecccsssssssssinsissnnesneineiinsintintinsicsiasiasineiasssisnenneee 101
19
Clothesrigger, Inc. v. GTE Corportation
20 |) (1987) 191 Cal. App.3d 605........cccscssessssecsssessseecssesssneessnecssessssecsnecsueesaresnessecsessneesssearaersusersneeese 2,3
21 | Collins v. Yosemite Park & Curry Co.
(1938) 204 U.S. 518, 529 vcccccessesssssssecsesessesesseesesseesessssussesensussessesessessenucsecuesucsesacenecneaueseeseanensees 6
23 | Gibbs v. Babbitt
(4" Cir, 2000) 214 F.3d 483, 404.
Gilmer v. Alameda — Contra Costa Transit District
25 | (ND. Cal. 2010) 2010 U.S. Dist. LEXIS 3405 *33-34 cecccscccssssssssssssssssesssssssissssssssssssssssssssiee 47
Hamilton v. County of Los Angeles
27 | (1982) 131 Cal. App. 3d 982,993 ..ccccesccresceerescseersseessisessseserssiessssssssssesssecsserssessssssntenneessseessnesss 7
28 | MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION TO
PLAINTIFFS’ AMENDED MOTION FOR
CLASS CERTIFICATION -ii- Case No. CGC-10-504804Home Savings and Loan Association v. Superior Court
(1974) 42 Cal. App.3d 1006, 1010 ....c.cseessessessestesssssesssssssseeseareeseseesssnsntssseaeesecsneesnesseeseees LOLL
Klitzke v. Steiner Corporation
(9" Cir. 1997) 110 F.3d 1465, 1468.....ccsssssssssssssssssnnensnssnnsnnsnnsnnssnsnnnenssessssssseesennnensnnsensesee 3,4,7,9
Levinson v. Spector Motor Service
(1947) 33 U.S. 649, 661-62 ....cecceeccecssecssessessesseessesssesarsesecaseaveasessessessneaseeseeasssessussussseeseseasessneesesenes 2
McGhee v. Bank of America
(1976) 60 Cal. App.3d 442 ....cceccecsccssscessessesieesscseessesseessssssesessisesssessussasserssasesseasessvesesaene LD
Morris v. McComb
(1947) 332 U.S. 422, 432-35 .occecsecceescssesessrssseeseseessesesesssssuesesetssesesessesussussateseansennaneesne 2,5
Morrison v. Quality Transps. Servs., Inc.
(S.D. Fla. 2007) 474 F. Supp 2d 1303, 1310 ..cecccsccescssccsssessescssssessesseseessessssesnsseesssseeeessesseesee 4
McGhee v. Bank of America
(1976) 60 Cal. App. 3 442 ..cecccccsccccsssescsssccssessessssssesssessesssesscssessssacsseesecsecsessuteansenseneesneeaeeeneeeeets 13
Rees y. Souza’s Milk Transportation Co.
(E.D. Cal. 2007) 2007 U.S. Dist. LEXIS 91926432 w.....ccsccsssesseseseeseessessesstsssessesneeseesssesssssecsereesesee 4
Reich y. American Driver Service, Inc.,
(1994) 33 F.3d 1152, 1155-1156 o.scescseccccssssessesssssssssssessssesesasseeseeseessessesssssussaeesseaeesnsennsens 2,5,7,9
United States v. Yellow Cab Co
(1947) 332 U.S. 218 ceccecccsesrsscsssscsssesssessvecessecssessneresneessneessersseeesneesneeanecsuecsneeensesneteaneeanecennessanees 7,8
Universal Interpretive Shuttle Crop. V. Washington Metropolitan Area Transit Commission
(1968) 393 U.S. 186.
Walling v. Jacksonville Paper Co.
(1943) 317 U.S. 564, 560 .essesssveccssecssessssessesessssecsvesssseessieesseessvetssessustasecavessseessecsssteseeraseesssesssseees 4,7
CODES
16 USC § 17D o.eceseescsssessesssessecsessecssessscssecssesuesssssseeasessssesesaseanessessssecsessneesecsnsesessecssceseeesesanecseeeneesnse 6
23 USC § 402 wc eeceescessecsesseeseessessecsnecsesssecsscsnecsucssecssessecsseesecsnessecsussnecseessesesecseeesecsnessesssnsseesssessesses 6
29 CER § 782.2(8) ..secsecssecsesssecseessesssessecsesseeseessesssesseessesseessessessuesuessecsessuesuesuesseesecsuessecsessecsuesseees 4,9
MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION TO
PLAINTIFFS’ AMENDED MOTION FOR
CLASS CERTIFICATION -iii- Case No. CGC-10-504804AOCER § 390.5 .escessessesssessessessssssecssscsesssscsseensesssssecsusssssssecnessussnsessesessucsscsnecsessessnseseesssensesneessesneess 4,6
49CFR § 782.1.
49 USC § 13501 veeesssesssscsseccssesssecsssesssessusecsscesnetsusesssecsasecsusssssceasssanecanetsnecsusesusesssecsnessuensneessnsesses 2
Civil Code Section 1781(d).....cccsssesssssssesesesessssssessssesssesesesesseseseseenssneseseseensnssesesesssseseeseaesseasaeases 11
FLSA USC § 231(B)(1)..sssesssscssessssesssssessetsssecsssecssnecssseensscssnecssecessessesnesssessecssnecsusensseetaueessneensneessae 3
MEMORANDUM OF POINTS AND
AUTHORITIES IN OPPOSITION TO
PLAINTIFFS’ AMENDED MOTION FOR
CLASS CERTIFICATION -iv- Case No. CGC-10-50480427
28
I. INTRODUCTION AND SUMMARY OF ARGUMENT'
In this second and very belated motion for class certification (“Motion”), which seeks to
add a new theory of class-wide recovery, Plaintiffs operate from the breezy assumption that the
Court’s earlier order certifying an overtime class of front desk employees (“Class 1”) and an
overtime class of tour guides (“Class 2”), makes certification of three putative overtime classes —
including a driver class — a pro forma matter. According to Plaintiffs, “The fact that the Court has
already found grounds to certify the Classes for failure to pay overtime therefore the Court must
[sic], as a matter of law, now find the same justification to certify the Classes for a cause of action
under the UCL.” Plaintiffs’ Memorandum of Points and Authorities In Support Of Amended
Motion for Class Certification (“Pls. Amd. Memo”), p. 1:7-9. Defendant disagrees.
First, the Court has not ruled on the question of whether the drivers, putative Class 3, are
eligible for overtime under any theory — state or federal. At the hearing on August 30, 2012
of the first motion for class certification (“First Motion”), the Court directed counsel to submit
supplemental briefing on the question of the drivers’ ability to state a claim for overtime under
state law. Defendant and Cross-Complainant CitySightseeing Corporation (“CitySightseeing or
“Defendant”) believes that its supplemental briefing made it abundantly clear that the drivers have
no viable claim for overtime claim under California law, and that Plaintiffs do not seriously dispute
the point.
Second, Defendant will show that because the drivers are subject to the U.S. Secretary of
Transportation’s jurisdiction to regulate their qualifications and hours of service under the federal
Motor Carrier Act (“MCA”), they are exempt from overtime under the federal Fair Labor
Standards Act (“FLSA”). In the absence of a viable federal overtime claim, this Motion must be
denied as to the drivers.
' To avoid unnecessary duplication, Defendant does not reargue all of the points raised in opposition to Plaintiff's
First Motion for Certification. The focus of this memorandum is on issues that have not been fully addressed in past
memoranda of points and authorities. Defendant reserves the right to cite to and incorporate herein arguments and
evidence made in opposition to the First Motion as may be appropriate.
Defendant directs the Court’s attention to Defendant’s Supplemental Briefs re Driver Exemption From California
Overtime Law, filed on September 13, 2012 and October 3, 2012. Plaintiffs’ Opposition was filed on September
27, 2012.
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DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27
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Third, certification of a class action just two weeks before trial — which is set for November
13, 2012 in this case — is inconsistent with the fundamental due process rights of the absent class
members. This, along with other new information, also casts continued doubt on the adequacy of
Plaintiffs’ attorneys to act as class counsel.?
For all of these reasons, CitySightseeing believes the Motion must be denied.
Il. ARGUMENT
A. Certification Of A Driver Class Must Be Denied Because
The Drivers Are Exempt From Overtime Under The FLSA,
And They Have No Realistic Chance Of Recovery.
In ruling on a motion for class action, it is appropriate for the court to consider the merits of
a claim for relief to determine whether the putative class members have a realistic chance for
recovery. Carabini v. Superior Court (1994) 26 Cal.App.4th 239, 245. As Defendant will show,
CitySightseeing’s drivers have always been exempt from the overtime requirements of the FLSA
and they have no realistic chance for recovery, and denial of the Motion is amply justified.
The decision in Clothesrigger, Inc. v. GTE Corporation (1987) 191 Cal.App.3d 605, is
instructive. The plaintiffs in Clothesrigger sought to amend the definition of a previously certified
class to expand the class from a statewide to a nationwide class of plaintiffs. The court denied the
motion and the accompanying motion to amend the complaint, apparently accepting without
analysis the defendants’ contention that it would be unconstitutional to apply California laws to the
claims of nonresident plaintiffs. The court of appeal overturned the trial court and remanded the
case with the following guidance:
In deciding the motion to modify, the court should determine
whether California law may constitutionally apply to the claims of
proposed nationwide class members not residents of California. If
the court determines application of California law would be
constitutional, the court should determine whether California law
will likely apply under California choice of law rules. If the court
determines California law will likely apply, the court should certify
the nationwide class if it finds that all other requirements for
certification are satisfied.
> Plaintiffs will undoubtedly object to consideration of any matter previously ruled on in connection with the First
Motion; however, the Court has inherent authority to reevaluate its rulings and to enter new and different orders at
any time prior to entry of judgment. Le Francois y. Goel (2005) 35 Cal.4th 1094, 1107.
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DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
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Clothesrigger, 191 Cal.App.3d at 619. Although the plaintiffs in Clothesrigger were the parties
aggrieved by the trial court’s failure to analyze the applicability of state law to the putative class,
the point remains the same. Determining whether the law forming the basis of a claim for relief is
available to the plaintiffs is a fundamental question that should be decided before certifying a class
based on that law. To proceed otherwise would give rise to the possibility of certifying a class to
pursue non-existent legal rights, which would be a waste of judicial resources and a disservice to
the members of the putative class, among other things. In this case, the facts and law supporting
Plaintiffs’ FLSA claim leads inexorably to the conclusions that the drivers cannot state a claim for
overtime compensation, and that the motion to certify a driver class must be denied.
1. The Motor Carrier Exemption.
Commercial drivers who are subject to the provisions of the federal Motor Carrier Act
regarding qualifications and hours of service are exempt from the overtime requirements federal
Fair Labor Standards Act. 29 USC § 213(b)(1). The exemption applies “whenever the Secretary
[of Transportation] has the authority to regulate a driver’s hours and safety.” Klitzke v. Steiner
Corporation (9th Cir. 1997) 110 F.3d 1465, 1468 (original emphasis). Whether the Secretary in
fact exercises the authority is irrelevant: “It is not material whether such qualifications and
maximum hours of service have actually been established by the Secretary of Transportation; the
controlling consideration is whether the employee comes within his power to do so.” 29 CFR §
782.1; Klitzke v. Steiner Corporation, supra, 110 F.3d at 1469.4
The power of the Secretary of Transportation to regulate the hours and qualifications of
employees in the transportation industry extends to employees’ who: (1) are employed by a carrier
that is subject to the jurisdiction of the Secretary, and (2) engage in activities that directly affect the
operational safety of commercial vehicles in the transportation of passengers or property on public
* Tt is well-settled that a single employer cannot be subject to both the FLSA and the MCA at the same time. Morris
v. McComb (1947) 332 U.S. 422, 437-38; Levinson v. Spector Motor Service (1947) 330 U.S. 649, 661-62; Reich v.
American Driver Service, Inc. (9th Cir. 1994) 33 F.3d 1153, 1155. A motor carrier that engages in interstate
commerce is subject to the Secretary of Transportation’s jurisdiction and is exempt from the jurisdiction of the
Secretary of Labor. 49 USC § 13501; Reich, supra, 33 F.3d at 1155.
Driver’s helpers, loaders and mechanics may also be subject to the exemption. 29 CFR § 782.2(b)(2).
3
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONhighways in interstate or foreign commerce.° 29 CFR § 782.2(a). Whether commerce is interstate
or intrastate for the purposes of the MCA “has always been determined by totality of
circumstances.” Rees v. Souza’s Milk Transportation Co. (E.D. Cal. 2007) 2007 U.S. Dist. LEXIS
91926*32. “It is the nature of its commerce and not the parties to the commerce or their addresses
which determines if interstate commerce is involved. In re California Western Railroad, Inc. v.
Capital Crossing Bank (N.D. Cal. 2003) 303 B.R. 201, 203; 2003 Bankr. LEXIS 1892 **3-4.
“The question whether commerce is interstate or intrastate must be determined by the essential
character of the commerce... .” Atlantic C. L. R. Co. v. Standard Oil Co. (1927) 275 U.S. 257,
268.
A carrier’s involvement in interstate commerce is most easily established by evidence of
actual travel across state lines. “Interstate commerce means trade, traffic, or transportation in the
United States . . . between a place in a State and a place outside of such State.... 49 CFR
§ 390.5. However, a long line of authority holds that the Secretary of Transportation’s jurisdiction
also “extends to transportation solely within a state that ‘is a practical continuity of movement’” of
property or passengers in interstate commerce. Klitzke v. Steiner Corporation, supra, 110 F.3d at
1469 (quoting Walling v. Jacksonville Paper Co. (1943) 317 U.S. 564, 560). In the Klitzke case,
the Ninth Circuit held that a motor carrier “whose primary business is not transportation and whose
route is entirely intrastate, but whose deliveries include items special ordered by the carrier for
customers from out-of-state vendors,” engages in interstate commerce. Klitzke, 110 F.3d at 1467.
Similarly, a passenger motor carrier may be engaged in interstate commerce where all travel is
within the state “if it can show that it operated in the “’continuous stream of interstate commerce.’”
Id. Klitzke dealt with the movement of property, but the same principle applies to passenger
transportation. Morrison v. Quality Transps. Servs., Inc. (S.D. Fla. 2007) 474 F. Supp. 2d. 1303,
1310 (relied on in Gilmer v. Alameda -Contra Costa Transit District (N.D. Cal. 2010) 2010 U.S.
Dist. LEXIS 3405 *33-34). Even minor involvement in interstate commerce within a reasonable
period of time before jurisdiction is asserted can subject an employee to the Secretary of
© This two point analysis is widely used, but
4
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27
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Transportation’s jurisdiction. Reich v. American Driver Service, Inc.,(1994) 33 F3d at 1155-1156.
“Minor involvement” in interstate commerce can be as low as 4% of a carrier’s trips. In the
seminal case of Morris v. McComb, 332 U.S. 422, 432-35, the U.S. Supreme Court found all of the
carrier’s drivers exempt where only 4% of the company’s trips were across state lines, and where
some of its drivers did no interstate travel at all. A “reasonable period of time” in which interstate
commerce has last taken place has been deemed to be four months. Reich v. American Driver
Service, Inc., supra, 33 F.3d at 1156. The four-month rule applies to the activities of the employer,
not the individual employees. Jd. (“carrier must be shown to have engaged in interstate commerce
with a reasonable period of time”); Chao v. First Class Coach Company (M.D. Fla. 2001) 214
F.Supp.2d 1263, 1274 (relying on Reich).
2. CitySightseeing Is A Motor Carrier Engaged In Interstate Commerce.
CitySightseeing’s activities easily bring it within the jurisdiction of the Secretary of
Transportation. It is constantly engaged in interstate commerce. At the most basic level, its tours
in and through national park lands, causes the drivers effectively to leave and return to the State of
California many times per day, virtually every day of the year. Moreover, the very nature of the
tourism industry means that Defendant is engaged in interstate commerce, whether or not trips are
made out of state. California Western Railroad, Inc., supra, 303 B.R. at 203. Additionally,
CitySightseeing is party to numerous “through ticketing” ’
or other package travel arrangements,
and it is continually soliciting business from out of state. There can be no question that
CitySightseeing meets the definition of is a motor carrier engaged in interstate commerce.
a. CitySightseeing’s Tours Onto Federal Land Constitute Interstate Travel.
Approximately 75 percent of Defendant’s tours operate on, or are part of a package that
includes tours in federal park land, including Alcatraz Island, Muir Woods, the Presidio of San
7 “Through ticketing” occurs, for example, when a tourist buys a travel package that includes airfare, vouchers for
transportation between airport and hotel and tickets to visit local attractions. Chao v. First Class Coach Company,
Inc., supra, 214 F.Supp.2d. at 1272.
5
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27
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Francisco, which includes the Golden Gate Bridge Overlook, and Yosemite National Park. 8 Watts
Decl., 2. When they do so, they travel outside the state, which is the very definition of interstate
commerce. 49 CFR § 390.5. Travel from California into a national park is travel into a “distinct
sovereignty.” Collins v. Yosemite Park & Curry Co. (1938) 304 U.S. 518, 529 (transportation into
Yosemite is “no[t] transportation into California”)
At the height of the summer tourist season, Defendant runs as many as 5 regularly daily
tours to Muir Woods, 24 to or through the Presidio and the Golden Gate Overlook.? Watts Decl., J
2. In addition, 10-20 percent of Defendant’s customers buy Alcatraz tickets for use before or after
a CitySightseeing tour. Jd. These areas are all part of the National Park System (“NPS”) and,
except for Yosemite, are all in the Golden Gate National Recreation Area, which is part of the
NPS. RFJN, 9 5-9. As a result, they are constantly moving in interstate commerce.
All of CitySightseeing’s drivers must be able to drive all of the local tours, including tours
in the Golden Gate National Recreation Area, and may be assigned at any time to do so. Id.
Moreover, the NPS and the Department of Transportation (“DOT”) are jointly responsible
for highway safety in the national park system, and both impose actual regulations on tour
operators. 16 USC § 17b (NPS responsible for national parks concessionaires); Universal
Interpretive Shuttle Crop. v. Washington Metropolitan Area Transit Commission (1968) 393 U.S.
186 (NPS in exclusive control of tour buses in National Mall); 23 USC § 402 (DOT vehicle safety
guidelines applicable in federally administered areas). In order to comply with these regulations,
CitySightseeing must have a permit to conduct tours. Watts Decl., § 3 and Ex.1 thereto. Similarly,
the NPS conducts random, unannounced bus safety inspections throughout the park system. See
e.g., RFJN, Ex. 7 (inspections in Yosemite and Kings Canyon National Parks).
CitySightseeing’s constant travel between California and the several national parks
included in its tours means that it a motor carrier engaged in interstate commerce.
* It is undisputed that these are federally-owned lands. See Collins v. Yosemite Park & Curry Co. (1938) 204 U.S.
518, 523-526 (cession of Yosemite to U.S.); Williams v. West (1996) 1996 U.S. Dist. LEXIS 10654*5 (Presidio);
Request for Judicial Notice (“RFJN”), {{ 1-2, Ex. 5 (Golden Gate Bridge Overlook) and Ex. 6 (Alcatraz).
° Defendant charter tours also frequently go through or are destined for a national park area, Watts Decl.,q__.
6
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONb. CitySightseeing’s Solicitation Of Business And Participation In Through
Ticketing Arrangements Are Activities In Interstate Commerce.
At the outset, it must be emphasized that the very purpose of tourism, the essential business
in which CitySightseeing is engaged, “is itself an interstate commercial activity.” California
Western Railroad, supra, 303 B.R. at 203. That is particularly true where, as here, the
transportation involves tourists, “some of whom come from all over the United States.” Hamilton
v. County of Los Angeles (1982) 131 Cal.App.3d 982, 993 (County’s offshore vessel rescue
operations constituted interstate commerce under federal maritime law). Such transportation “can
hardly be characterized as local in character.” Id.; see also Gibbs v. Babbitt (4th Cir. 2000) 214
F.3d 483, 404 (relied on in California Western Railroad, supra, 303 B.R. at 203) (out-of-state
visitors to national parks affected interstate commerce). In fact, it is hard to find a more apt
example than tourism for the rule that a carrier can establish that it is engaged in interstate
commerce regardless of whether it transports passengers outside the state. The industry generally,
and CitySightseeing specifically, is involved in the “’the practical continuity of movement” of
property or passengers across state lines. Klitzke v. Steiner Corporation, supra, 110 F.3d at 1469;
see also Walling v. Jacksonville Paper Co., supra, 317 U.S. at 560.
Participation in the practical continuity of movement of passengers or property in interstate
commerce can be established by proof of soliciting business or by common ticketing arrangements
with other interstate travel providers. Reich v. American Driver Service, Inc., supra, 33 F.3d at
1156 (soliciting business); Gilmer v. Alameda -Contra Costa Transit District, supra, 2010 U.S.
Dist. LEXIS 3405 *33-34 (through ticketing). Thus, where a railroad contracted with passengers
to supply transportation by taxi between different train stations in Chicago, the local taxi ride was
“clearly part of the stream of interstate commerce.” United States v. Yellow Cab Co (1947) 332
U.S. 218 (overruled on other grounds);"° accord, Brown's Crew Car of Wyoming LLC v. Nevada
"° Yellow Cab was an antitrust case decided under the Sherman Act, but it has been repeatedly cited for the proposition
that prearranged ticket arrangements constitute interstate commerce for the purposes of the MCA overtime
exemption. E.g., Abel v. Southern Shuttle Services, Inc., (11th Cir. 2010) 620 F.3d 1272, 1276 (airport shuttle
service engaged in interstate commerce); Pennsylvania Public Utility Commission v. United States (D.C. Cir. 1987)
812 F.2d 8, 10-11 (interstate commerce found based on common arrangement); Charter Limousine, Inc. v. Dade
County Bd. of County Comm'rs (Sth Cir. 1982) 678 F.2d 586 (prearranged passenger airport pickups; limousine
service engaged in interstate commerce); Southerland v. St. Croix Taxicab Ass'n (3rd Cir. 1963) 315 F.2d 364, 397
7
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONTransportation Authority (D. Nev. 2009) 2009 U.S. Dist. LEXIS 39469*35-36 (motor carrier that
contracted with rail carrier to provide local transportation for rail crews engaged in interstate
commerce).
CitySightseeing is constantly in the process of soliciting business both inside and outside of
the state, and a large percentage of its business is derived from through ticketing and similar
arrangements. Watts Decl., 45. Ona yearly basis, approximately 30% of Defendant’s customers
are international travelers, primarily from the United Kingdom, Germany and Australia;
approximately 40% come from out-of-state locations in the United States; and approximately 30%
are from California. Jd. CitySightseeing actively solicits this business through tour operators,
online travel agencies such as Expedia.com, its own website and the website of London-based
CitySightseeing Worldwide, among other things. Watts Decl., 6.
Moreover, since its inception in 2007, a large percentage of its tickets are sold as part of
common or through ticketing arrangements with travel wholesalers such as Expedia, Allied TPro
and Orbitz. Watts Decl., {J 3 and 5, That percentage has increased from approximately 20% in
2007 to 30% currently. Watts Decl., 47. In addition, CitySightseeing has arrangements with other
travel businesses that allow customers to purchase tickets for other local tours through
CitySightseeing’s website and ticket offices. Watts Decl., 8. These include Blue and Gold Fleet
bay cruises, Segway tours and Go Car rentals, which offer narrated GPS guided tours in small
yellow cars. Jd. CitySightseeing also contracts directly with the Golden Gate National Recreation
Area, under the jurisdiction of the National Park Service (“NPS”), for the sale of tickets to
Alcatraz. Id., 49.
CitySightseeing’s large number of out of state travelers and its extensive “through
ticketing” arrangements easily demonstrate that it is involved in the practical continuity of
movement of passengers or property in interstate commerce and, therefore, that it is subject to the
jurisdiction of the Secretary of Transportation.
(same); Mateo v. Auto Rental Co. (9th Cir. 1957) 240 F.2d 831, 833-34 (no comprehensive contractual arrangement
with airlines; commerce purely local, not interstate).
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DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION3. CitySightseeing’s Drivers Engage In Activities In Interstate Commerce.
The second requirement for application of the MCA exemption is that the employees
“engage in activities that directly affect the operational safety of commercial vehicles in the
transportation of passengers or property on public highways in interstate or foreign commerce.”
29 CFR § 782.2(a). Defendant’s drivers meet this standard.
It is axiomatic that the activities of a driver affect the vehicle’s operational safety. The only
question is whether CitySightseeing’s drivers engage in such activities in interstate or foreign
commerce. They clearly do. All of Defendant’s drivers regularly drive routes that take them in
and out of the state, and the majority of their passengers are foreign or out-of-state tourists moving
in the stream of interstate travel. See Klitzke v. Steiner Corporation, supra, 110 F.3d at 1470. This
far exceeds the requirement that they can be subject that employee to the Secretary of
Transportation’s jurisdiction if they have “even a minor involvement in interstate commerce as a
regular part of an [their] duties.” Reich v. American Driver Service, Inc., supra, 33 F.3d at 1155.
The California Department of Public Utilities requires that CitySightseeing comply with the
United States Department of Transportation’s regulations relating to driver safety. Watts Decl., § 4.
CitySightseeing complies with those regulations. Jd. To that end, CitySightseeing requires its
drivers to complete various forms reflecting compliance with DOT regulations, including, among
others, the Certification of Compliance with Driver License Requirements, Driver Statement of
On-Duty Hours and the Previous Employer Alcohol & Drug Test Requirements. Watts Decl., | 4
and Exhibits 2, 3 and 4 thereto. Actual compliance with the DOT safety regulations supports
application of the exemption. See Chao, supra, 214 F.2d at 1268.
Because Defendant’ drivers are subject to the Secretary of Transportation’s jurisdiction,
they are exempt from the overtime provisions of the FLSA, and class certification of a driver class
must be denied. See Carabini v. Superior Court (1994) 26 Cal.App.4th 239, 245 (consideration of
merits proper to determine whether there is a realistic chance for recovery).
B. Due Process Considerations Mandate Denial Of Class Certification
Less Than Three Weeks Before Trial.
Rule 3.766(c) of the California Rules of Court specifies, in relevant part:
Upon certification of a class, or as soon thereafter as practicable,
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DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27
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the court must make an order determining:
(1) Whether notice to class members is necessary;...
(3) The time and manner of notice;
(4) The content of the notice...
Courts have long recognized the “constitutional importance of notifying absent class
members” of the pending class action. City of San Jose v. Superior Court (1974) 12 Cal.3d 447,
454, The importance of class notice has been explained as follows:
[UJntil members of the class receive notice of the action they will
not be bound by any judgment in the action. Once the composition
of the class has been determined, its members are entitled to
appropriate notice of the pendency of a class action that will affect
their interests . . . . After the members of the class have been
properly notified of the action, they are required to decide whether to
remain members of the class represented by plaintiffs’ counsel and
become bound by a favorable or unfavorable judgment in the action,
whether to intervene in the action through counsel of their own
choosing, or whether to “opt out” of the action and pursue their own
independent remedies, such as negotiation with defendants, initiation
of their own action, or intervention in some other action.
Home Savings and Loan Association v. Superior Court (1974) 42 Cal.App.3d 1006, 1010.
Accord, Chance v. Superior Court (1962) 58 Cal.2d 275, 290 (“[AJ]ll of the members of the instant
class . . . will be given notice of the pending class foreclosure action by registered mail or other
like reliable method, thereby being afforded an opportunity to decide whether to appear and argue
for any and all appropriate or available forms of redress desirable from their individual points of
view, against the named defendants.”). The California Supreme Court, which has “directed
[California courts] to rule 23 of the Federal Rules of Civil Procedure [governing class actions], has
stressed that “[n]otice is mandatory under the federal rules . . . and should be ordered as soon as
possible after the court determines the class action appropriate.” City of San Jose, supra, 12 Cal.3d
at 454, Notice to class members is especially important where, as here, individuals who would be
included as class members have stated in Declarations filed before this Court that they do not wish
to participate in this purported class action. Cartt v. Superior Court (1975) 50 Cal.App.3d 960,
973, citing Chance v. Superior Court, supra. Sixty potential class members, consisting of current
and former employees, filed declarations in Opposition to Plaintiffs’ initial Motion for Class
Certification indicating, under oath, that they “disagreed with this case proceeding as a class
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DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27
28
action” and that they “did not want to be a part of this case.” |!
In certain very unusual situations courts have limited—although never fully eliminated—
the requirement that class members be provided with direct notice of the class action. Cartt v.
Superior Court, supra, 50 Cal.App.3d 960, involved a consumer class action against Standard Oil
of California with potential class members numbering in excess of 700,000. In addition, the court
found that “the damages sought by each of the class members are paltry—a few dollars at most.”
Id at 962. Under these circumstances, the court concluded that providing personal notice to each
class member—even if that were possible—would “effectively kill” the class action due to the
costs of notification and instructed the trial court, on remand, to give alternate “consideration ...to
a meaningful notice by publication” as authorized by Civil Code Section 1781(d) relating to
consumer class actions. Jd. at 974. Contrary to Cartt, the case at bar is not a consumer class action,
involves a potential class of only 134 members whose claims are far in excess of those asserted by
the Cartt plaintiffs and where direct notice to such members could be readily accomplished.
Notice to class members, including notice of their right to opt out of this class action,
must be completed prior to the trial of this action. In Home Savings and Loan Association v.
Superior Court, supra, 42 Cal.App.3d 1006, the Superior Court granted the class plaintiffs’ motion
to postpone class notification until after determination of the case on the merits. The Court of
Appeal reversed, holding that such a procedure “fail[ed] to protect the defendant’s right to a fair
trial and due process of law [and] to protect the rights of absent members of the class.” Jd. at 1012.
The trial of this action is scheduled to commence on November 13, 2012, slightly more than two
weeks from the date of the hearing on Plaintiffs’ Amended Motion for Class Certification.
Defendant submits that there simply is not sufficient time prior to commencement of trial for
proper notice to be given to class members along with a reasonable amount of time for them to
determine their response to that notice. Crafting a proper notice to class members containing
language that is acceptable to plaintiffs and defendant will no doubt take considerable time. Any
1 See the document entitled “2011 Declarations” containing 53 declarations, filed on June 28, 2012; the Declarations
of John Terry, Spencer Carson, Mo Chkinef, Morgan Duguid-Gillars, Jamie Davenport, Jamie White, Ben Davis and
Charles Villalobos filed on June 28, 2012; and the declaration of Phillip Gray filed June 29, 2012.
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notice must be approved by the Court. City of San Jose, supra, 12 Cal.3d at 454. Time will be
needed to print and deliver the notice to potential class members. The class members should then
be permitted some reasonably sufficient time to consider their response. This time restriction alone
strongly counsels against granting Plaintiffs’ amended notice of class certification. It should also
be noted that this action has been on file since October 22, 2010, with two trial continuances. As
such, the named plaintiffs have had two full years to complete their class certification motion and
provide notice to the class. There can be no excuse for the plaintiffs’ delay to the very brink of the
continued trial date to seek class certification, especially where the delays have effectively
eliminated the possibility of any meaningful time for class members to receive proper notice of the
class action and to consider their options in response to that notice.
Defendant also respectfully suggests that these circumstances merit further evaluation of
Plaintiffs’ counsel’s suitability to serve as class counsel. See Cal Pak Delivery, Inc. y. United
Parcel Service, Inc. (1997 52 Cal.App.4th 1, 12 (“In the class action context, the Court has an
obligation to closely scrutinize the qualification of counsel. ...”) In addition to the concerns
raised above, and those raised previously,’ Defendant notes several other recent and significant
missteps by Plaintiffs’ counsel, including waiving the right to a jury trial by not posting jury fees,
attempting to conduct discovery several months after the discovery cutoff and missing the
stipulated deadline to designate expert witnesses.'> Thompson Decl., 4. Nor do these types of
errors appear to be limited to this case. Plaintiffs’ lead counsel has been sued repeatedly for
alleged malpractice, including as recently as last month. Jd., 5. The evidence before the court
" Those concerns included counsel’s failure to properly serve an additional named defendant, CitySightseeing
Worldwide, with the Summons and Complaint for almost one year, resulting in an enormous delay in getting this
case at issue; not knowing which Industrial Wage Commission (“IWC”) Wage Order applies to the Plaintiffs; not
realizing that California’s overtime laws are preempted by federal law as they apply to commercial drivers; moving
to certify a class action under the FLSA, which is impermissible as a matter of law; after prevailing on a motion to
compel further deposition testimony from Defendant’s “person most knowledgeable” failing to serve the Order
granting the Motion and or resuming the deposition; and an apparent inability or unwillingness to abide by various
tules of court. See Def. Memo. in Opposition to Ist Class Cert. Motion, pp. 9-12, and Thompson Decl., in
Opposition to 1st Class Cert. Motion, ff 4-8, filed 6/28/12.
” Defendant has formally objected to the late expert designation, while at the same time electing to designate its
expert witnesses in the event that Plaintiffs’ expert is allowed to testify at trial over Defendant's objections.
Thompson Decl., { 19-25.
12
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONstrongly suggests that the critical requirement that counsel be sufficiently qualified and
experienced to conduct class action litigation has not been established and that granting the motion
for class certification would be in error. See McGhee v. Bank of America (1976) 60 Cal.App.3d
442
Ill. CONCLUSION
Based on the foregoing points and authorities and the entire record in this case, including
the papers and exhibits filed in connection with Plaintiffs’ First Motion, Defendant respectfully
requests that this Motion be denied.
Dated: October 12, 2012 JONES BOTHWELL DION & THOMPSON LLP
5
By
¢ O Elizabeth Thompson 7
Attorneys for Defendant
CitySightseeing Corporation
13
DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804
TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Oct-12-2012 3:39 pm Case Number: CGC-10-504804 Filing Date: Oct-12-2012 3:39 Filed by: WESLEY G. RAMIREZ Juke Box: 001 Image: 03801117 MEMORANDUM OF POINTS AND AUTHORITIES SALVATORE MINEO INDIVIDUALLY, AND ON BEHALF OF ALL et al VS. CITY SIGHTSEEING CORPORATION, A DELAWARE et al 001003801117 Instructions: Please place this sheet on top of the document to be scanned. 14ORIGINAL JONES BOTHWELL DION & THOMPSON LLP ELIZABETH THOMPSON (SBN 112888) PAUL J. DION (SBN 088231) . « D 44 Montgomery Street, Suite 610 FE j Bhs Eton ia San Francisco, CA 94104-4608 Sypngy Gf Bar Fe reece Telephone: (415) 951-8900 oe 4 ONY Facsimile: (415) 951-8901 ous te eve CLERK QE THE COURT Attorneys for Defendant and Cross-Complainant ay Deputy clerk CitySightseeing Corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO UNLIMITED JURISDICTION SALVATORE MINEO, GINA SCHEMBARI, No. CGC-10-504804 PHILLIP THOMAS NAILS, BENJAMIN DUAX and DAVID HAYWARD, individually and on DEFENDANT CITYSIGHTSEEING’S behalf of all others similarly situated, MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS’ AMENDED MOTION Plaintiffs, arn FOR CLASS CERTIFICATION Vv. Date: October 26, 2012 CITY SIGHTSEEING CORPORATION. pe: 230 oO 7a . Delaware corporation, and DOES 1 through 500, Dep ent: 302 inclusive, Trial Date: November 13, 2012 Defendants. AND RELATED CROSS-COMPLAINT. DEFENDANT’S MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION —_No. CGC-10-504804 TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATIONI. I. Il. TABLE OF CONTENTS INTRODUCTION AND SUMMARY OF ARGUMENT .......sssssssssessstssssssesssneeecssseeeeseens 1 ARGUMENT .....cccssssssssssssessssessseessvesseccsssessssessssessnecssecsavessucsavecsnecaneesaseansessseeaneessneesaneensaeessee A. Certification Of A Driver Class Must Be Denied Because They Are Exempt Overtime Under The FLSA And Have No Realistic Chance Of Recovery ...........+- 2 1, CitySightseeing Is A Motor Carrier Engaged In Interstate Commerce ............... 5 a. CitySightseeing’s Tours Onto Federal Land Constitute Interstate Travel ... 5 b. CitySightseeing’s Solicitation Of Business And Participation In Through Ticketing Arrangements Are Activities In Interstate Commerce .............00000+ 7 2. CitySightseeing’s Drivers Engage In Activities In Interstate Commerce............. 9 B___ Due Process Considerations Mandate Denial Of Class Certification Less Than Three Weeks Before Trial... secsesseessecssecssssseeseecnsensssesssecsessssuesueeuscsecsuseasssnsessesseeseesseesses 9 CONCLUSION Qn veesesssesssssesssscsssessssesssecssusessuccssncssusesssecnsessusesusesuscsnsesavesnuceanesaneesaneesnesesses 13 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION -i- Case No. CGC-10-5048041 TABLE OF AUTHORITIES 2 CASES 3 4 | Accord, Chance v. Superior Court (1962) 58 Cal.2d 275,290 .ccccseescscssescsecesesseeressseesssecsessneesseenesaeeaseseessesessecsassssesueseesssesteseesneesness 10 5 Atlantic C.L.R. Co. v. Standard Oil Co. © | (1927) 275 U.S. 257, 268 rescssssssscccssssssssnssssnvsessssssseseeceeesssssnnnmmesseceesssnnnesseceesanssnnnnmmnsessseeseeeeeeee 4 7 Brown’s Crew Car of Wyoming LLC v. Nevada Transportation Authority | g | (D.Nev.2009) 2009 U.S. Dist. LEXIS 39469*35-36.... | 9 | California Western Railroad, Inc. v. Capital Crossing Bank (N.D. Ca. 2003) 303 B.R. 201, 203; 2003 Bankr. LEXIS 1892**3-4 o.oo 457 : 10 | 1" Carabini v. Superior Court (1994) 26 Cal. App.4" 239,245...cccssssssssssussssussusssssssssssssssssssssssssssasssssssssnsssssssssssssassssessseesseeseeeee 2,9 12 Cal Pak Delivery, Inc. v. United Parcel Service, Inc. 13 | (1970 52 Cal. Apop.4! 1,12 cecccccscsscssssssssssessvsvvsssssssssesssssssssssssssssssssssssssssesesssssessssssssssssisssssssssvesee 12 14 I Cart v. Superior Court 45 | 2975) 50 Cal. App.3d 960, 973 ..coecscsseeresssreeinsereiinsseeiinnesetiiinessetinssectinmnceemeesteeeees 10,11 16 || Chao vy. First Class Coach Company (M.D. Fla. 2001) 214 F. Supp.2d 1263, 1274. 17 City of San Jose v. Superior Court 18 | (1974) 12 Cal. 3d 447, 454 vcecccsssssssssinsissnnesneineiinsintintinsicsiasiasineiasssisnenneee 101 19 Clothesrigger, Inc. v. GTE Corportation 20 |) (1987) 191 Cal. App.3d 605........cccscssessssecsssessseecssesssneessnecssessssecsnecsueesaresnessecsessneesssearaersusersneeese 2,3 21 | Collins v. Yosemite Park & Curry Co. (1938) 204 U.S. 518, 529 vcccccessesssssssecsesessesesseesesseesessssussesensussessesessessenucsecuesucsesacenecneaueseeseanensees 6 23 | Gibbs v. Babbitt (4" Cir, 2000) 214 F.3d 483, 404. Gilmer v. Alameda — Contra Costa Transit District 25 | (ND. Cal. 2010) 2010 U.S. Dist. LEXIS 3405 *33-34 cecccscccssssssssssssssssesssssssissssssssssssssssssssiee 47 Hamilton v. County of Los Angeles 27 | (1982) 131 Cal. App. 3d 982,993 ..ccccesccresceerescseersseessisessseserssiessssssssssesssecsserssessssssntenneessseessnesss 7 28 | MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION -ii- Case No. CGC-10-504804Home Savings and Loan Association v. Superior Court (1974) 42 Cal. App.3d 1006, 1010 ....c.cseessessessestesssssesssssssseeseareeseseesssnsntssseaeesecsneesnesseeseees LOLL Klitzke v. Steiner Corporation (9" Cir. 1997) 110 F.3d 1465, 1468.....ccsssssssssssssssssnnensnssnnsnnsnnsnnssnsnnnenssessssssseesennnensnnsensesee 3,4,7,9 Levinson v. Spector Motor Service (1947) 33 U.S. 649, 661-62 ....cecceeccecssecssessessesseessesssesarsesecaseaveasessessessneaseeseeasssessussussseeseseasessneesesenes 2 McGhee v. Bank of America (1976) 60 Cal. App.3d 442 ....cceccecsccssscessessesieesscseessesseessssssesessisesssessussasserssasesseasessvesesaene LD Morris v. McComb (1947) 332 U.S. 422, 432-35 .occecsecceescssesessrssseeseseessesesesssssuesesetssesesessesussussateseansennaneesne 2,5 Morrison v. Quality Transps. Servs., Inc. (S.D. Fla. 2007) 474 F. Supp 2d 1303, 1310 ..cecccsccescssccsssessescssssessesseseessessssesnsseesssseeeessesseesee 4 McGhee v. Bank of America (1976) 60 Cal. App. 3 442 ..cecccccsccccsssescsssccssessessssssesssessesssesscssessssacsseesecsecsessuteansenseneesneeaeeeneeeeets 13 Rees y. Souza’s Milk Transportation Co. (E.D. Cal. 2007) 2007 U.S. Dist. LEXIS 91926432 w.....ccsccsssesseseseeseessessesstsssessesneeseesssesssssecsereesesee 4 Reich y. American Driver Service, Inc., (1994) 33 F.3d 1152, 1155-1156 o.scescseccccssssessesssssssssssessssesesasseeseeseessessesssssussaeesseaeesnsennsens 2,5,7,9 United States v. Yellow Cab Co (1947) 332 U.S. 218 ceccecccsesrsscsssscsssesssessvecessecssessneresneessneessersseeesneesneeanecsuecsneeensesneteaneeanecennessanees 7,8 Universal Interpretive Shuttle Crop. V. Washington Metropolitan Area Transit Commission (1968) 393 U.S. 186. Walling v. Jacksonville Paper Co. (1943) 317 U.S. 564, 560 .essesssveccssecssessssessesessssecsvesssseessieesseessvetssessustasecavessseessecsssteseeraseesssesssseees 4,7 CODES 16 USC § 17D o.eceseescsssessesssessecsessecssessscssecssesuesssssseeasessssesesaseanessessssecsessneesecsnsesessecssceseeesesanecseeeneesnse 6 23 USC § 402 wc eeceescessecsesseeseessessecsnecsesssecsscsnecsucssecssessecsseesecsnessecsussnecseessesesecseeesecsnessesssnsseesssessesses 6 29 CER § 782.2(8) ..secsecssecsesssecseessesssessecsesseeseessesssesseessesseessessessuesuessecsessuesuesuesseesecsuessecsessecsuesseees 4,9 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION -iii- Case No. CGC-10-504804AOCER § 390.5 .escessessesssessessessssssecssscsesssscsseensesssssecsusssssssecnessussnsessesessucsscsnecsessessnseseesssensesneessesneess 4,6 49CFR § 782.1. 49 USC § 13501 veeesssesssscsseccssesssecsssesssessusecsscesnetsusesssecsasecsusssssceasssanecanetsnecsusesusesssecsnessuensneessnsesses 2 Civil Code Section 1781(d).....cccsssesssssssesesesessssssessssesssesesesesseseseseenssneseseseensnssesesesssseseeseaesseasaeases 11 FLSA USC § 231(B)(1)..sssesssscssessssesssssessetsssecsssecssnecssseensscssnecssecessessesnesssessecssnecsusensseetaueessneensneessae 3 MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFFS’ AMENDED MOTION FOR CLASS CERTIFICATION -iv- Case No. CGC-10-50480427 28 I. INTRODUCTION AND SUMMARY OF ARGUMENT' In this second and very belated motion for class certification (“Motion”), which seeks to add a new theory of class-wide recovery, Plaintiffs operate from the breezy assumption that the Court’s earlier order certifying an overtime class of front desk employees (“Class 1”) and an overtime class of tour guides (“Class 2”), makes certification of three putative overtime classes — including a driver class — a pro forma matter. According to Plaintiffs, “The fact that the Court has already found grounds to certify the Classes for failure to pay overtime therefore the Court must [sic], as a matter of law, now find the same justification to certify the Classes for a cause of action under the UCL.” Plaintiffs’ Memorandum of Points and Authorities In Support Of Amended Motion for Class Certification (“Pls. Amd. Memo”), p. 1:7-9. Defendant disagrees. First, the Court has not ruled on the question of whether the drivers, putative Class 3, are eligible for overtime under any theory — state or federal. At the hearing on August 30, 2012 of the first motion for class certification (“First Motion”), the Court directed counsel to submit supplemental briefing on the question of the drivers’ ability to state a claim for overtime under state law. Defendant and Cross-Complainant CitySightseeing Corporation (“CitySightseeing or “Defendant”) believes that its supplemental briefing made it abundantly clear that the drivers have no viable claim for overtime claim under California law, and that Plaintiffs do not seriously dispute the point. Second, Defendant will show that because the drivers are subject to the U.S. Secretary of Transportation’s jurisdiction to regulate their qualifications and hours of service under the federal Motor Carrier Act (“MCA”), they are exempt from overtime under the federal Fair Labor Standards Act (“FLSA”). In the absence of a viable federal overtime claim, this Motion must be denied as to the drivers. ' To avoid unnecessary duplication, Defendant does not reargue all of the points raised in opposition to Plaintiff's First Motion for Certification. The focus of this memorandum is on issues that have not been fully addressed in past memoranda of points and authorities. Defendant reserves the right to cite to and incorporate herein arguments and evidence made in opposition to the First Motion as may be appropriate. Defendant directs the Court’s attention to Defendant’s Supplemental Briefs re Driver Exemption From California Overtime Law, filed on September 13, 2012 and October 3, 2012. Plaintiffs’ Opposition was filed on September 27, 2012. 1 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 Third, certification of a class action just two weeks before trial — which is set for November 13, 2012 in this case — is inconsistent with the fundamental due process rights of the absent class members. This, along with other new information, also casts continued doubt on the adequacy of Plaintiffs’ attorneys to act as class counsel.? For all of these reasons, CitySightseeing believes the Motion must be denied. Il. ARGUMENT A. Certification Of A Driver Class Must Be Denied Because The Drivers Are Exempt From Overtime Under The FLSA, And They Have No Realistic Chance Of Recovery. In ruling on a motion for class action, it is appropriate for the court to consider the merits of a claim for relief to determine whether the putative class members have a realistic chance for recovery. Carabini v. Superior Court (1994) 26 Cal.App.4th 239, 245. As Defendant will show, CitySightseeing’s drivers have always been exempt from the overtime requirements of the FLSA and they have no realistic chance for recovery, and denial of the Motion is amply justified. The decision in Clothesrigger, Inc. v. GTE Corporation (1987) 191 Cal.App.3d 605, is instructive. The plaintiffs in Clothesrigger sought to amend the definition of a previously certified class to expand the class from a statewide to a nationwide class of plaintiffs. The court denied the motion and the accompanying motion to amend the complaint, apparently accepting without analysis the defendants’ contention that it would be unconstitutional to apply California laws to the claims of nonresident plaintiffs. The court of appeal overturned the trial court and remanded the case with the following guidance: In deciding the motion to modify, the court should determine whether California law may constitutionally apply to the claims of proposed nationwide class members not residents of California. If the court determines application of California law would be constitutional, the court should determine whether California law will likely apply under California choice of law rules. If the court determines California law will likely apply, the court should certify the nationwide class if it finds that all other requirements for certification are satisfied. > Plaintiffs will undoubtedly object to consideration of any matter previously ruled on in connection with the First Motion; however, the Court has inherent authority to reevaluate its rulings and to enter new and different orders at any time prior to entry of judgment. Le Francois y. Goel (2005) 35 Cal.4th 1094, 1107. 2 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 Clothesrigger, 191 Cal.App.3d at 619. Although the plaintiffs in Clothesrigger were the parties aggrieved by the trial court’s failure to analyze the applicability of state law to the putative class, the point remains the same. Determining whether the law forming the basis of a claim for relief is available to the plaintiffs is a fundamental question that should be decided before certifying a class based on that law. To proceed otherwise would give rise to the possibility of certifying a class to pursue non-existent legal rights, which would be a waste of judicial resources and a disservice to the members of the putative class, among other things. In this case, the facts and law supporting Plaintiffs’ FLSA claim leads inexorably to the conclusions that the drivers cannot state a claim for overtime compensation, and that the motion to certify a driver class must be denied. 1. The Motor Carrier Exemption. Commercial drivers who are subject to the provisions of the federal Motor Carrier Act regarding qualifications and hours of service are exempt from the overtime requirements federal Fair Labor Standards Act. 29 USC § 213(b)(1). The exemption applies “whenever the Secretary [of Transportation] has the authority to regulate a driver’s hours and safety.” Klitzke v. Steiner Corporation (9th Cir. 1997) 110 F.3d 1465, 1468 (original emphasis). Whether the Secretary in fact exercises the authority is irrelevant: “It is not material whether such qualifications and maximum hours of service have actually been established by the Secretary of Transportation; the controlling consideration is whether the employee comes within his power to do so.” 29 CFR § 782.1; Klitzke v. Steiner Corporation, supra, 110 F.3d at 1469.4 The power of the Secretary of Transportation to regulate the hours and qualifications of employees in the transportation industry extends to employees’ who: (1) are employed by a carrier that is subject to the jurisdiction of the Secretary, and (2) engage in activities that directly affect the operational safety of commercial vehicles in the transportation of passengers or property on public * Tt is well-settled that a single employer cannot be subject to both the FLSA and the MCA at the same time. Morris v. McComb (1947) 332 U.S. 422, 437-38; Levinson v. Spector Motor Service (1947) 330 U.S. 649, 661-62; Reich v. American Driver Service, Inc. (9th Cir. 1994) 33 F.3d 1153, 1155. A motor carrier that engages in interstate commerce is subject to the Secretary of Transportation’s jurisdiction and is exempt from the jurisdiction of the Secretary of Labor. 49 USC § 13501; Reich, supra, 33 F.3d at 1155. Driver’s helpers, loaders and mechanics may also be subject to the exemption. 29 CFR § 782.2(b)(2). 3 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONhighways in interstate or foreign commerce.° 29 CFR § 782.2(a). Whether commerce is interstate or intrastate for the purposes of the MCA “has always been determined by totality of circumstances.” Rees v. Souza’s Milk Transportation Co. (E.D. Cal. 2007) 2007 U.S. Dist. LEXIS 91926*32. “It is the nature of its commerce and not the parties to the commerce or their addresses which determines if interstate commerce is involved. In re California Western Railroad, Inc. v. Capital Crossing Bank (N.D. Cal. 2003) 303 B.R. 201, 203; 2003 Bankr. LEXIS 1892 **3-4. “The question whether commerce is interstate or intrastate must be determined by the essential character of the commerce... .” Atlantic C. L. R. Co. v. Standard Oil Co. (1927) 275 U.S. 257, 268. A carrier’s involvement in interstate commerce is most easily established by evidence of actual travel across state lines. “Interstate commerce means trade, traffic, or transportation in the United States . . . between a place in a State and a place outside of such State.... 49 CFR § 390.5. However, a long line of authority holds that the Secretary of Transportation’s jurisdiction also “extends to transportation solely within a state that ‘is a practical continuity of movement’” of property or passengers in interstate commerce. Klitzke v. Steiner Corporation, supra, 110 F.3d at 1469 (quoting Walling v. Jacksonville Paper Co. (1943) 317 U.S. 564, 560). In the Klitzke case, the Ninth Circuit held that a motor carrier “whose primary business is not transportation and whose route is entirely intrastate, but whose deliveries include items special ordered by the carrier for customers from out-of-state vendors,” engages in interstate commerce. Klitzke, 110 F.3d at 1467. Similarly, a passenger motor carrier may be engaged in interstate commerce where all travel is within the state “if it can show that it operated in the “’continuous stream of interstate commerce.’” Id. Klitzke dealt with the movement of property, but the same principle applies to passenger transportation. Morrison v. Quality Transps. Servs., Inc. (S.D. Fla. 2007) 474 F. Supp. 2d. 1303, 1310 (relied on in Gilmer v. Alameda -Contra Costa Transit District (N.D. Cal. 2010) 2010 U.S. Dist. LEXIS 3405 *33-34). Even minor involvement in interstate commerce within a reasonable period of time before jurisdiction is asserted can subject an employee to the Secretary of © This two point analysis is widely used, but 4 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 Transportation’s jurisdiction. Reich v. American Driver Service, Inc.,(1994) 33 F3d at 1155-1156. “Minor involvement” in interstate commerce can be as low as 4% of a carrier’s trips. In the seminal case of Morris v. McComb, 332 U.S. 422, 432-35, the U.S. Supreme Court found all of the carrier’s drivers exempt where only 4% of the company’s trips were across state lines, and where some of its drivers did no interstate travel at all. A “reasonable period of time” in which interstate commerce has last taken place has been deemed to be four months. Reich v. American Driver Service, Inc., supra, 33 F.3d at 1156. The four-month rule applies to the activities of the employer, not the individual employees. Jd. (“carrier must be shown to have engaged in interstate commerce with a reasonable period of time”); Chao v. First Class Coach Company (M.D. Fla. 2001) 214 F.Supp.2d 1263, 1274 (relying on Reich). 2. CitySightseeing Is A Motor Carrier Engaged In Interstate Commerce. CitySightseeing’s activities easily bring it within the jurisdiction of the Secretary of Transportation. It is constantly engaged in interstate commerce. At the most basic level, its tours in and through national park lands, causes the drivers effectively to leave and return to the State of California many times per day, virtually every day of the year. Moreover, the very nature of the tourism industry means that Defendant is engaged in interstate commerce, whether or not trips are made out of state. California Western Railroad, Inc., supra, 303 B.R. at 203. Additionally, CitySightseeing is party to numerous “through ticketing” ’ or other package travel arrangements, and it is continually soliciting business from out of state. There can be no question that CitySightseeing meets the definition of is a motor carrier engaged in interstate commerce. a. CitySightseeing’s Tours Onto Federal Land Constitute Interstate Travel. Approximately 75 percent of Defendant’s tours operate on, or are part of a package that includes tours in federal park land, including Alcatraz Island, Muir Woods, the Presidio of San 7 “Through ticketing” occurs, for example, when a tourist buys a travel package that includes airfare, vouchers for transportation between airport and hotel and tickets to visit local attractions. Chao v. First Class Coach Company, Inc., supra, 214 F.Supp.2d. at 1272. 5 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 Francisco, which includes the Golden Gate Bridge Overlook, and Yosemite National Park. 8 Watts Decl., 2. When they do so, they travel outside the state, which is the very definition of interstate commerce. 49 CFR § 390.5. Travel from California into a national park is travel into a “distinct sovereignty.” Collins v. Yosemite Park & Curry Co. (1938) 304 U.S. 518, 529 (transportation into Yosemite is “no[t] transportation into California”) At the height of the summer tourist season, Defendant runs as many as 5 regularly daily tours to Muir Woods, 24 to or through the Presidio and the Golden Gate Overlook.? Watts Decl., J 2. In addition, 10-20 percent of Defendant’s customers buy Alcatraz tickets for use before or after a CitySightseeing tour. Jd. These areas are all part of the National Park System (“NPS”) and, except for Yosemite, are all in the Golden Gate National Recreation Area, which is part of the NPS. RFJN, 9 5-9. As a result, they are constantly moving in interstate commerce. All of CitySightseeing’s drivers must be able to drive all of the local tours, including tours in the Golden Gate National Recreation Area, and may be assigned at any time to do so. Id. Moreover, the NPS and the Department of Transportation (“DOT”) are jointly responsible for highway safety in the national park system, and both impose actual regulations on tour operators. 16 USC § 17b (NPS responsible for national parks concessionaires); Universal Interpretive Shuttle Crop. v. Washington Metropolitan Area Transit Commission (1968) 393 U.S. 186 (NPS in exclusive control of tour buses in National Mall); 23 USC § 402 (DOT vehicle safety guidelines applicable in federally administered areas). In order to comply with these regulations, CitySightseeing must have a permit to conduct tours. Watts Decl., § 3 and Ex.1 thereto. Similarly, the NPS conducts random, unannounced bus safety inspections throughout the park system. See e.g., RFJN, Ex. 7 (inspections in Yosemite and Kings Canyon National Parks). CitySightseeing’s constant travel between California and the several national parks included in its tours means that it a motor carrier engaged in interstate commerce. * It is undisputed that these are federally-owned lands. See Collins v. Yosemite Park & Curry Co. (1938) 204 U.S. 518, 523-526 (cession of Yosemite to U.S.); Williams v. West (1996) 1996 U.S. Dist. LEXIS 10654*5 (Presidio); Request for Judicial Notice (“RFJN”), {{ 1-2, Ex. 5 (Golden Gate Bridge Overlook) and Ex. 6 (Alcatraz). ° Defendant charter tours also frequently go through or are destined for a national park area, Watts Decl.,q__. 6 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONb. CitySightseeing’s Solicitation Of Business And Participation In Through Ticketing Arrangements Are Activities In Interstate Commerce. At the outset, it must be emphasized that the very purpose of tourism, the essential business in which CitySightseeing is engaged, “is itself an interstate commercial activity.” California Western Railroad, supra, 303 B.R. at 203. That is particularly true where, as here, the transportation involves tourists, “some of whom come from all over the United States.” Hamilton v. County of Los Angeles (1982) 131 Cal.App.3d 982, 993 (County’s offshore vessel rescue operations constituted interstate commerce under federal maritime law). Such transportation “can hardly be characterized as local in character.” Id.; see also Gibbs v. Babbitt (4th Cir. 2000) 214 F.3d 483, 404 (relied on in California Western Railroad, supra, 303 B.R. at 203) (out-of-state visitors to national parks affected interstate commerce). In fact, it is hard to find a more apt example than tourism for the rule that a carrier can establish that it is engaged in interstate commerce regardless of whether it transports passengers outside the state. The industry generally, and CitySightseeing specifically, is involved in the “’the practical continuity of movement” of property or passengers across state lines. Klitzke v. Steiner Corporation, supra, 110 F.3d at 1469; see also Walling v. Jacksonville Paper Co., supra, 317 U.S. at 560. Participation in the practical continuity of movement of passengers or property in interstate commerce can be established by proof of soliciting business or by common ticketing arrangements with other interstate travel providers. Reich v. American Driver Service, Inc., supra, 33 F.3d at 1156 (soliciting business); Gilmer v. Alameda -Contra Costa Transit District, supra, 2010 U.S. Dist. LEXIS 3405 *33-34 (through ticketing). Thus, where a railroad contracted with passengers to supply transportation by taxi between different train stations in Chicago, the local taxi ride was “clearly part of the stream of interstate commerce.” United States v. Yellow Cab Co (1947) 332 U.S. 218 (overruled on other grounds);"° accord, Brown's Crew Car of Wyoming LLC v. Nevada "° Yellow Cab was an antitrust case decided under the Sherman Act, but it has been repeatedly cited for the proposition that prearranged ticket arrangements constitute interstate commerce for the purposes of the MCA overtime exemption. E.g., Abel v. Southern Shuttle Services, Inc., (11th Cir. 2010) 620 F.3d 1272, 1276 (airport shuttle service engaged in interstate commerce); Pennsylvania Public Utility Commission v. United States (D.C. Cir. 1987) 812 F.2d 8, 10-11 (interstate commerce found based on common arrangement); Charter Limousine, Inc. v. Dade County Bd. of County Comm'rs (Sth Cir. 1982) 678 F.2d 586 (prearranged passenger airport pickups; limousine service engaged in interstate commerce); Southerland v. St. Croix Taxicab Ass'n (3rd Cir. 1963) 315 F.2d 364, 397 7 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONTransportation Authority (D. Nev. 2009) 2009 U.S. Dist. LEXIS 39469*35-36 (motor carrier that contracted with rail carrier to provide local transportation for rail crews engaged in interstate commerce). CitySightseeing is constantly in the process of soliciting business both inside and outside of the state, and a large percentage of its business is derived from through ticketing and similar arrangements. Watts Decl., 45. Ona yearly basis, approximately 30% of Defendant’s customers are international travelers, primarily from the United Kingdom, Germany and Australia; approximately 40% come from out-of-state locations in the United States; and approximately 30% are from California. Jd. CitySightseeing actively solicits this business through tour operators, online travel agencies such as Expedia.com, its own website and the website of London-based CitySightseeing Worldwide, among other things. Watts Decl., 6. Moreover, since its inception in 2007, a large percentage of its tickets are sold as part of common or through ticketing arrangements with travel wholesalers such as Expedia, Allied TPro and Orbitz. Watts Decl., {J 3 and 5, That percentage has increased from approximately 20% in 2007 to 30% currently. Watts Decl., 47. In addition, CitySightseeing has arrangements with other travel businesses that allow customers to purchase tickets for other local tours through CitySightseeing’s website and ticket offices. Watts Decl., 8. These include Blue and Gold Fleet bay cruises, Segway tours and Go Car rentals, which offer narrated GPS guided tours in small yellow cars. Jd. CitySightseeing also contracts directly with the Golden Gate National Recreation Area, under the jurisdiction of the National Park Service (“NPS”), for the sale of tickets to Alcatraz. Id., 49. CitySightseeing’s large number of out of state travelers and its extensive “through ticketing” arrangements easily demonstrate that it is involved in the practical continuity of movement of passengers or property in interstate commerce and, therefore, that it is subject to the jurisdiction of the Secretary of Transportation. (same); Mateo v. Auto Rental Co. (9th Cir. 1957) 240 F.2d 831, 833-34 (no comprehensive contractual arrangement with airlines; commerce purely local, not interstate). 8 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION3. CitySightseeing’s Drivers Engage In Activities In Interstate Commerce. The second requirement for application of the MCA exemption is that the employees “engage in activities that directly affect the operational safety of commercial vehicles in the transportation of passengers or property on public highways in interstate or foreign commerce.” 29 CFR § 782.2(a). Defendant’s drivers meet this standard. It is axiomatic that the activities of a driver affect the vehicle’s operational safety. The only question is whether CitySightseeing’s drivers engage in such activities in interstate or foreign commerce. They clearly do. All of Defendant’s drivers regularly drive routes that take them in and out of the state, and the majority of their passengers are foreign or out-of-state tourists moving in the stream of interstate travel. See Klitzke v. Steiner Corporation, supra, 110 F.3d at 1470. This far exceeds the requirement that they can be subject that employee to the Secretary of Transportation’s jurisdiction if they have “even a minor involvement in interstate commerce as a regular part of an [their] duties.” Reich v. American Driver Service, Inc., supra, 33 F.3d at 1155. The California Department of Public Utilities requires that CitySightseeing comply with the United States Department of Transportation’s regulations relating to driver safety. Watts Decl., § 4. CitySightseeing complies with those regulations. Jd. To that end, CitySightseeing requires its drivers to complete various forms reflecting compliance with DOT regulations, including, among others, the Certification of Compliance with Driver License Requirements, Driver Statement of On-Duty Hours and the Previous Employer Alcohol & Drug Test Requirements. Watts Decl., | 4 and Exhibits 2, 3 and 4 thereto. Actual compliance with the DOT safety regulations supports application of the exemption. See Chao, supra, 214 F.2d at 1268. Because Defendant’ drivers are subject to the Secretary of Transportation’s jurisdiction, they are exempt from the overtime provisions of the FLSA, and class certification of a driver class must be denied. See Carabini v. Superior Court (1994) 26 Cal.App.4th 239, 245 (consideration of merits proper to determine whether there is a realistic chance for recovery). B. Due Process Considerations Mandate Denial Of Class Certification Less Than Three Weeks Before Trial. Rule 3.766(c) of the California Rules of Court specifies, in relevant part: Upon certification of a class, or as soon thereafter as practicable, 9 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 the court must make an order determining: (1) Whether notice to class members is necessary;... (3) The time and manner of notice; (4) The content of the notice... Courts have long recognized the “constitutional importance of notifying absent class members” of the pending class action. City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 454, The importance of class notice has been explained as follows: [UJntil members of the class receive notice of the action they will not be bound by any judgment in the action. Once the composition of the class has been determined, its members are entitled to appropriate notice of the pendency of a class action that will affect their interests . . . . After the members of the class have been properly notified of the action, they are required to decide whether to remain members of the class represented by plaintiffs’ counsel and become bound by a favorable or unfavorable judgment in the action, whether to intervene in the action through counsel of their own choosing, or whether to “opt out” of the action and pursue their own independent remedies, such as negotiation with defendants, initiation of their own action, or intervention in some other action. Home Savings and Loan Association v. Superior Court (1974) 42 Cal.App.3d 1006, 1010. Accord, Chance v. Superior Court (1962) 58 Cal.2d 275, 290 (“[AJ]ll of the members of the instant class . . . will be given notice of the pending class foreclosure action by registered mail or other like reliable method, thereby being afforded an opportunity to decide whether to appear and argue for any and all appropriate or available forms of redress desirable from their individual points of view, against the named defendants.”). The California Supreme Court, which has “directed [California courts] to rule 23 of the Federal Rules of Civil Procedure [governing class actions], has stressed that “[n]otice is mandatory under the federal rules . . . and should be ordered as soon as possible after the court determines the class action appropriate.” City of San Jose, supra, 12 Cal.3d at 454, Notice to class members is especially important where, as here, individuals who would be included as class members have stated in Declarations filed before this Court that they do not wish to participate in this purported class action. Cartt v. Superior Court (1975) 50 Cal.App.3d 960, 973, citing Chance v. Superior Court, supra. Sixty potential class members, consisting of current and former employees, filed declarations in Opposition to Plaintiffs’ initial Motion for Class Certification indicating, under oath, that they “disagreed with this case proceeding as a class 10 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 action” and that they “did not want to be a part of this case.” |! In certain very unusual situations courts have limited—although never fully eliminated— the requirement that class members be provided with direct notice of the class action. Cartt v. Superior Court, supra, 50 Cal.App.3d 960, involved a consumer class action against Standard Oil of California with potential class members numbering in excess of 700,000. In addition, the court found that “the damages sought by each of the class members are paltry—a few dollars at most.” Id at 962. Under these circumstances, the court concluded that providing personal notice to each class member—even if that were possible—would “effectively kill” the class action due to the costs of notification and instructed the trial court, on remand, to give alternate “consideration ...to a meaningful notice by publication” as authorized by Civil Code Section 1781(d) relating to consumer class actions. Jd. at 974. Contrary to Cartt, the case at bar is not a consumer class action, involves a potential class of only 134 members whose claims are far in excess of those asserted by the Cartt plaintiffs and where direct notice to such members could be readily accomplished. Notice to class members, including notice of their right to opt out of this class action, must be completed prior to the trial of this action. In Home Savings and Loan Association v. Superior Court, supra, 42 Cal.App.3d 1006, the Superior Court granted the class plaintiffs’ motion to postpone class notification until after determination of the case on the merits. The Court of Appeal reversed, holding that such a procedure “fail[ed] to protect the defendant’s right to a fair trial and due process of law [and] to protect the rights of absent members of the class.” Jd. at 1012. The trial of this action is scheduled to commence on November 13, 2012, slightly more than two weeks from the date of the hearing on Plaintiffs’ Amended Motion for Class Certification. Defendant submits that there simply is not sufficient time prior to commencement of trial for proper notice to be given to class members along with a reasonable amount of time for them to determine their response to that notice. Crafting a proper notice to class members containing language that is acceptable to plaintiffs and defendant will no doubt take considerable time. Any 1 See the document entitled “2011 Declarations” containing 53 declarations, filed on June 28, 2012; the Declarations of John Terry, Spencer Carson, Mo Chkinef, Morgan Duguid-Gillars, Jamie Davenport, Jamie White, Ben Davis and Charles Villalobos filed on June 28, 2012; and the declaration of Phillip Gray filed June 29, 2012. ll DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION27 28 notice must be approved by the Court. City of San Jose, supra, 12 Cal.3d at 454. Time will be needed to print and deliver the notice to potential class members. The class members should then be permitted some reasonably sufficient time to consider their response. This time restriction alone strongly counsels against granting Plaintiffs’ amended notice of class certification. It should also be noted that this action has been on file since October 22, 2010, with two trial continuances. As such, the named plaintiffs have had two full years to complete their class certification motion and provide notice to the class. There can be no excuse for the plaintiffs’ delay to the very brink of the continued trial date to seek class certification, especially where the delays have effectively eliminated the possibility of any meaningful time for class members to receive proper notice of the class action and to consider their options in response to that notice. Defendant also respectfully suggests that these circumstances merit further evaluation of Plaintiffs’ counsel’s suitability to serve as class counsel. See Cal Pak Delivery, Inc. y. United Parcel Service, Inc. (1997 52 Cal.App.4th 1, 12 (“In the class action context, the Court has an obligation to closely scrutinize the qualification of counsel. ...”) In addition to the concerns raised above, and those raised previously,’ Defendant notes several other recent and significant missteps by Plaintiffs’ counsel, including waiving the right to a jury trial by not posting jury fees, attempting to conduct discovery several months after the discovery cutoff and missing the stipulated deadline to designate expert witnesses.'> Thompson Decl., 4. Nor do these types of errors appear to be limited to this case. Plaintiffs’ lead counsel has been sued repeatedly for alleged malpractice, including as recently as last month. Jd., 5. The evidence before the court " Those concerns included counsel’s failure to properly serve an additional named defendant, CitySightseeing Worldwide, with the Summons and Complaint for almost one year, resulting in an enormous delay in getting this case at issue; not knowing which Industrial Wage Commission (“IWC”) Wage Order applies to the Plaintiffs; not realizing that California’s overtime laws are preempted by federal law as they apply to commercial drivers; moving to certify a class action under the FLSA, which is impermissible as a matter of law; after prevailing on a motion to compel further deposition testimony from Defendant’s “person most knowledgeable” failing to serve the Order granting the Motion and or resuming the deposition; and an apparent inability or unwillingness to abide by various tules of court. See Def. Memo. in Opposition to Ist Class Cert. Motion, pp. 9-12, and Thompson Decl., in Opposition to 1st Class Cert. Motion, ff 4-8, filed 6/28/12. ” Defendant has formally objected to the late expert designation, while at the same time electing to designate its expert witnesses in the event that Plaintiffs’ expert is allowed to testify at trial over Defendant's objections. Thompson Decl., { 19-25. 12 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATIONstrongly suggests that the critical requirement that counsel be sufficiently qualified and experienced to conduct class action litigation has not been established and that granting the motion for class certification would be in error. See McGhee v. Bank of America (1976) 60 Cal.App.3d 442 Ill. CONCLUSION Based on the foregoing points and authorities and the entire record in this case, including the papers and exhibits filed in connection with Plaintiffs’ First Motion, Defendant respectfully requests that this Motion be denied. Dated: October 12, 2012 JONES BOTHWELL DION & THOMPSON LLP 5 By ¢ O Elizabeth Thompson 7 Attorneys for Defendant CitySightseeing Corporation 13 DEFENDANT’S SURREPLY IN OPPOSITION No. CGC-10-504804 TO PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION