Federal Court Dismisses All California Wage and Hour Claims From Proposed Class Action Lawsuit, SuperShuttle Commends Judge's Decision

Jan 27, 2010, 13:00 ET from SuperShuttle

PHOENIX, Jan. 27 /PRNewswire/ -- U.S. District Judge Jeffrey S. White has dismissed all claims based on California law from a pending lawsuit, which had sought to bring these claims as a state-wide class action.  The court's order, dated on December 22, 2009, is a major development that could impact many planned and pending class actions throughout California.  Judge White based his ruling on the court's lack of "subject matter" jurisdiction, noting that the plaintiffs sought damages based on practices that had already been approved by the California Public Utilities Commission ("CPUC").

"We are very pleased with Judge White's decision.  SuperShuttle's franchise-based business in California was established years ago in response to CPUC actions that specifically permitted independent contractor business models, in order to ensure the availability of safe services at the lowest cost to consumers in California," said SuperShuttle Chief Financial Officer Tom LaVoy.

Judge White dismissed all ten California law-based claims asserting violations of California's Labor Code and unfair competition law from an action brought on behalf of drivers for a nationwide airport shuttle system.  The order strips the litigation of all claims other than those based on the federal Fair Labor Standards Act ("FLSA").  Because the federal law requires plaintiffs to specifically consent to the action in writing, and provides plaintiffs with shorter limitations periods, fewer claims and less favorable methods of calculating damages, the number of claimants is greatly reduced.

The court's order relied on provisions of California law banning lawsuits on subjects addressed by CPUC regulations, if the lawsuit asks the court to "review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties."

The plaintiffs had claimed that the drivers should be treated as "employees," based on the level of control that the defendants asserted over plaintiffs' operations.  However, the court focused on CPUC regulations specifically permitting "independent" status notwithstanding control over their operations.  The CPUC has mandated such control as a means of ensuring public safety and convenience, while at the same time expressly authorizing "independent contractor" business models to ensure the availability of services at the lowest cost to consumers.  Examples cited by the court included the CPUC's General Order 158-A, and the CPUC's decision in a case involving a SuperShuttle competitor in 1996.

The court's order dismisses plaintiffs' claims for alleged violations of California laws relating to minimum wage and overtime, business expenses, deductions from "wages," "coerced" purchases, meal periods, wage statements, payroll records, and waiting time penalties, as well as plaintiffs' claim based on California's unfair competition law.  The hearing and briefing of plaintiffs' motion to certify the California-law claims as a class action have been vacated by the court.  The lawsuit will now proceed as a "collective action," reducing the size of the plaintiff pool by approximately 75%, as to the federal overtime and minimum wage claim.  SuperShuttle plans additional motions to address this remaining claim.

"SuperShuttle has aggressively enforced awards of attorneys' fees and costs resulting from successfully defending other actions brought by drivers," said LaVoy.  "We are hopeful that the court's order will help us achieve a quick resolution of the remaining claim.  However, we will certainly consider all our options if we have to file additional motions to get it dismissed, including a request that the court require the plaintiffs to pay our attorneys' fees and costs."

SOURCE SuperShuttle