California Court Addresses Class Certification, PAGA, and Preemption in Trucking Litigation

Quick Hits

• The California Court of Appeal reversed a trial court’s denial of class certification for meal break and derivative unfair competition claims, finding that the trial court had failed to apply the burden-shifting framework established in Donohue v. AMN Services, LLC.
• The court affirmed the trial court’s denial of class certification for the rest break and expense reimbursement claims, holding that the evidence did not demonstrate a predominance of common issues or a community of interest among class members.
• The court reversed the trial court’s order striking the plaintiff’s PAGA claim on manageability grounds.
• The appellate court remanded the case for further proceedings to determine whether the PAGA claim was preempted by federal law, consistent with the Federal Motor Carrier Safety Administration’s December 28, 2018, preemption decision and subsequent federal and state appellate authority.

Background

Plaintiff Stephen Dieves, a truck driver employed for approximately nine months in 2018, brought claims against his former employers for damages and civil penalties resulting from their alleged failures to provide meal and rest breaks and reimbursement for work-related expenses, and from their alleged violations of California’s unfair competition law. Dieves also asserted a representative claim for civil penalties under PAGA. The trial court denied class certification for all claims and granted the employers’ motion to strike the PAGA claim on manageability grounds, citing the anticipated need for individual testimony from seventy-five drivers and the lack of common evidence.

Key Holdings

Class certification—meal breaks and unfair competition. The appellate court found that the trial court had erred by not applying the Donohue burden-shifting framework to the meal break claim. Under Donohue, time records showing missed, short, or delayed meal periods with no indication that premium pay was provided create a rebuttable presumption of a violation. Dieves’s evidence—including time records, expert analysis, and declarations—was sufficient to trigger this presumption. The burden then shifted to the employer defendants to show that individual issues predominated, such as voluntary choice or unrecorded breaks. The appellate court held that the trial court’s failure to apply this framework was prejudicial, requiring reversal and remand for reconsideration of class certification for the meal break and derivative unfair competition claims.

Class certification—rest breaks and expense reimbursement. The court affirmed the denial of class certification for the rest break claims, noting that the Donohue presumption does not apply to rest breaks because employers are not required to maintain rest break records. The only evidence supporting the rest break claim was Dieves’s own declaration, which did not compel a finding of predominance of common issues. Similarly, the expense reimbursement claim failed for lack of substantial evidence that personal cell phone use was required or that the reimbursement was insufficient, as most drivers reported infrequent work-related phone use and no inadequacy in reimbursement.

The PAGA claim—manageability and preemption. The trial court had struck the PAGA claim as unmanageable, relying on Wesson v. Staples (2021) 68 Cal.App.5th 746. The appellate court, however, reversed, citing the Supreme Court of California’s decision in Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.5th 582, which held that trial courts lack inherent authority to strike PAGA claims for manageability. The appellate court rejected the employers’ argument that due process concerns warranted striking the claim, finding no record basis for such a conclusion.

FMCSA preemption of meal and rest break rules. On the issue of federal preemption, the appellate court addressed the Federal Motor Carrier Safety Administration’s (FMCSA) 2018 decision preempting California’s meal and rest break rules for property-carrying commercial motor vehicle drivers. Distinguishing the decision of the California Court of Appeal in Garcia v. Superior Court (2022) 80 Cal.App.5th 63, which concluded the FMCSA’s 2018 preemption decision did not bar meal and rest period claims under California law arising from conduct that occurred prior to the decision (i.e., before December 28, 2018), the court adopted the Ninth Circuit Court of Appeals’ reasoning in Valiente v. Swift Transportation Co. of Arizona, LLC, 54 F.4th 581 (9th Cir. 2022), holding that preemption applied regardless of when the underlying conduct occurred. Nevertheless, the court remanded the issue for the trial court to determine whether the plaintiff’s PAGA claim was preempted, as preemption applies only to drivers subject to federal hours-of-service rules.

Key Takeaways

There are several key points to consider from the Court of Appeal’s recent decision:

• Courts must apply the Donohue burden-shifting framework when time records indicate missed meal breaks and no premium pay, shifting the burden to employers to show individualized issues.
• The Donohue presumption does not extend to rest break claims, as employers are not required to maintain rest break records.
• Manageability is not a valid basis for striking PAGA claims; trial courts must use case-management techniques to address complexity without abridging due process. It should be noted, however, that this case involved a version of PAGA in effect prior to the PAGA reforms enacted in July 2024. Under those PAGA reforms, a trial court may limit the scope of a PAGA claim to make the claim manageable at trial. Specifically, courts may limit the evidence the parties may present at trial, limit the scope of a PAGA claim such that the claim can be manageably tried, or consolidate or coordinate actions that allege legally or factually overlapping violations against the same employer.
• Federal preemption under the Motor Carrier Safety Act bars enforcement of California’s meal and rest break rules for covered drivers, regardless of when the alleged violations occurred, but factual determinations regarding coverage must be made by the trial court.

The appellate court’s decision underscores the importance of accurate timekeeping, proper application of legal presumptions, and careful consideration of federal regulatory developments in defending against wage and hour claims. Employers in the transportation industry may want to review their wage and hour policies, recordkeeping practices, and litigation strategies in light of evolving standards for class certification, PAGA enforcement, and federal preemption.

Ogletree Deakins’ California Class Action and PAGA Practice Group, Wage and Hour Practice Group, and Trucking and Logistics Industry Group will continue to monitor developments and will provide updates on the California, Class Action, Trucking & Logistics, and Wage and Hour blogs as additional information becomes available.

Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts