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Grimes v. Evergreen Recreational Vehicles, LLC

United States District Court, N.D. Indiana, South Bend Division

March 12, 2018

MATTHEW GRIMES, on behalf of himself and all others similarly situated, Plaintiffs,



         This matter is before the Court on a Motion for Class Certification filed by Plaintiff Matthew Grimes (“Grimes”) [DE 30; DE 38] regarding an action brought pursuant to the Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101. Defendants Evergreen Recreational Vehicles, LLC (“Evergreen RV”), KR Enterprises, Inc. (“KR Enterprises”), and JMA, LLC (“JMA”) (collectively, “Defendants”), oppose certification of the proposed class [DE 39], and Grimes has filed a reply in support of his motion [DE 41].


         Despite asserted attempts to obtain the necessary financing and business to continue its recreational vehicle operations, in early June 2016, Evergreen RV set into motion the permanent closure of its facilities located at 10758 County Road 2, Middlebury, Indiana 46540 (“County Road Facility”) and at 51700 Lovejoy Drive, Middlebury, Indiana 46540 (“Lovejoy Drive Facility”) [DE 38]. After being employed as a regional sales manager out of the County Road Facility since January 2011, Grimes was terminated on June 8, 2016, without written notice. Thereafter, he received a letter dated June 14th, purporting to provide him “notice” under the WARN Act [DE 38 at 6]. The letter stated that the closure of the two Evergreen RV facilities would be completed by June 24th and would affect approximately 270 employees.

         Grimes is “eager and willing” to represent himself and the other 270 Evergreen RV employees who were terminated under the same circumstances in June 2016, which he alleges was in violation of the WARN Act because Defendants failed to provide sixty days' written notice of the plant closings or mass layoffs. Grimes seeks, on behalf of himself and the class, the respective wages and benefits allowed under the WARN Act.

         In opposing class certification, Defendants contest whether KR Enterprises or JMA can be held legally responsible for any WARN Act violation under a “single employer” theory. Having said that, Defendants have not contested that approximately 270 Evergreen RV employees were terminated in June 2016 when the facilities closed, nor do they argue that the number of affected employees at each facility (or “site”) would fail to meet the threshold number required to invoke the WARN Act's notification requirements. Rather, as detailed below, Defendants allege some curable problems with respect to the proposed class definition and notice. Defendants also take exception to Grimes' ability to adequately represent the class and satisfy the typicality requirement, because he worked remotely from his home in North Carolina [DE 39-1] and was purportedly insufficiently connected to either facility.

         II. ANALYSIS

         Rule 23 of the Federal Rules of Civil Procedure governs the certification of class actions in federal court. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 344 (2011). Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate. Id. at 349. The Rule's four requirements-numerosity, commonality, typicality, and adequacy-effectively limit the class claims to those fairly encompassed by the named plaintiff's claims. Id. (citations and internal quotations omitted). If all of these prerequisites are met, a court must also find that at least one of the subsections of Rule 23(b) is satisfied.

         In this case, Grimes seeks class certification under Rule 23(b)(3). Rule 23(b)(3) applies when “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Rule 23(b)(3) class actions are designed to cover cases “in which a class action would achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results.” Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 759 (7th Cir. 2014) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (alteration omitted)). The (b)(3) “opt-out” class facilitates the vindication of “the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.” Id. (citing Amchem Prods., Inc., 521 U.S. at 617 (citation omitted)).

         “Failure to meet any of the Rule's requirements precludes class certification.” Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. 2008). The Plaintiff, as the party seeking class certification, assumes the burden of demonstrating that certification is appropriate. Trotter v. Klincar, 748 F.2d 1177, 1184 (7th Cir. 1984); Wal-Mart, 564 U.S. at 350 (“A party seeking class certification must affirmatively demonstrate his compliance with the Rule-that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.”) (emphasis in original).

         A district court has broad discretion to determine whether certification of a class action lawsuit is appropriate. Arreola, 546 F.3d at 794. The United States Supreme Court has made clear, however, that the district court is to perform a “rigorous analysis” to determine that the prerequisites of Rule 23 are satisfied when a class is to be certified because actual, not presumed, conformance with Rule 23(a) remains indispensable. Wal-Mart, 564 U.S. at 350-51 (citing Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160-61 (1982)). Frequently, that “rigorous analysis” will entail some overlap with the merits of the plaintiff's underlying claim, and this cannot be helped. Id. (noting that sometimes Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974) is mistakenly cited for the proposition that the merits of the claims for relief may not be considered in adjudicating the motion for class certification, and clarifying that such a proposition is “the purest dictum and is contradicted by other cases”). However, “[i]n conducting this analysis, the court should not turn the class certification proceedings into a dress rehearsal for the trial on the merits.” Messner v. Northshore Univ. Healthsys., 669 F.3d 802, 811 (7th Cir. 2012). But “[i]f there are material factual disputes, the court must ‘receive evidence . . . and resolve the disputes before deciding whether to certify the class.'” Id. (citation omitted).

         A. Nature of the Class Claim

         The WARN Act requires that certain employers provide sixty days' notice to employees before engaging in a plant closing[1] or mass layoff[2] at a single site of employment, as those terms are defined by the statute. 29 U.S.C. §§ 2101(a), 2102(a). If an employer fails to give notice as required under the WARN Act, a person seeking to enforce such liability has the right to sue the employer for back pay and benefits. Id. at § 2104.

         Grimes asserts a WARN Act claim against three distinct corporate entities that are named as Defendants. Defendants admit that Grimes was employed by Evergreen RV (whose principal place of business was the County Road Facility) [DE 14; DE 21], and Grimes' declaration indicates that this facility was his place of employment [DE 38], even though he worked remotely from North Carolina [DE 39-1]. Defendants also admit that KR Enterprises and JMA each have ownership interests in Evergreen RV [DE 14; DE 21]. Thus, under a “single employer” theory, Grimes blames all three Defendants[3] for terminating him and the other 270 employees by permanently closing the two Evergreen RV facilities in June 2016, without adequate notice.

         One of the arguments made by Defendants in opposing class certification, is that the proposed class action constitutes an improper “fail safe” class because its members can only be ascertained after the Court renders a decision on the merits of the “single employer” theory[4] [DE 39 at 9-10]. However, the Court finds this argument unpersuasive.

         Evergreen RV's liability under the WARN Act will come down to questions of whether it was required to provide notice under the Act to employees at either or both facilities, and if so, whether it provided such notice or had a valid defense excusing it from doing so. Whether or not KR Enterprises and JMA will also be held liable as “employers, ” see 29 U.S.C. § 2101(a)(1) (defining an employer to mean “any business enterprise”), will depend in great part on the relationship between the entities and their respective roles in making employment decisions affecting Evergreen RV employees, including the decision to close the two facilities, see 20 C.F.R. § 639.3(a). Castro v. Chicago Hous. Auth., 360 F.3d 721, 729 (7th Cir. 2004) (applying the United States Department of Labor's interpretation of “business enterprise” under 20 C.F.R. § 639.3); Young v. Fortis Plastics, LLC, 294 F.R.D. 128, 133 (N.D. Ind. 2013), modified in part sub nom. Lace v. Fortis Plastics LLC, No. 3:12-CV-363 JD, 2015 WL 1383806 (N.D. Ind. Mar. 24, 2015) (listing cases applying the DOL factors to determine the potential liability under the WARN Act to companies closely affiliated with the plaintiff's direct employer).

         Thus, there appears to be no dispute that at least one of the named Defendants- Evergreen RV-employed Grimes and the proposed class members, consisting of approximately 270 people that worked at its two Middlebury facilities. And the outstanding question of whether or not each of the Defendant entities constitutes an employer covered by the WARN Act, 29 U.S.C. § 2101(a)(1), does not necessarily bar class certification; rather, it presents a common question of law and fact that will affect the putative class. See, e.g., May v. Blackhawk Mining, LLC, 319 F.R.D. 233, 237 (E.D. Ky. 2017). In addition, the class can easily be defined by referencing the two facilities where the employees worked at or reported to, as opposed to referencing the named Defendants as their employers. See Young, 294 F.R.D. at 139; Lace v. Fortis Plastics, LLC, 295 F.R.D. 192, 206 (N.D. Ind. 2013).

         In sum, to prevail in this case, the fired Evergreen RV employees must establish that a Defendant constitutes an employer covered by the WARN Act, 29 U.S.C. § 2101(a)(1), that a plant closing or mass layoff occurred, § 2101(a)(2)-(3), and that the required notice was not provided to the employees, § 2102(a). The Court would note that the WARN Act itself indicates that class treatment may be appropriate in this type of litigation, which provides that a person may sue on behalf of himself and “for other persons similarly situated.” § 2104(a)(5).

         B. Class Certification

         Having considered the nature of the class claim, the Court now turns to Rule 23(a)'s four requirements: numerosity, commonality, typicality, and adequacy of representation. Here, Grimes initially sought to certify the following class:

Plaintiff and all former employees of Defendants: (i) who worked at or reported to one of Defendants' facilities, (ii) who were terminated from employment on or about June 8, 2016, within 30 days of that date, or in reasonable anticipation of or as the foreseeable consequence of the mass layoffs or plant closings ordered by Defendants on or about June 8, 2016, (iii) who are “affected employees” within the meaning of 29 U.S.C. § 2101(a)(5) and (iv), who have not filed a timely request to opt-out of the class.

         [DE 30-1 at 7].

         In response, Defendants argue that the proposed class too vaguely identifies the facilities at issue, and inappropriately relies on the subjective intent (or state of mind) of the employer [DE 39]. In support of its position, the defense references the classes that were re-defined and certified by this Court in Lace and Young.

         In reply, Grimes' counsel agrees that the class definition should be tailored similar to the Lace and Young classes, to read as follows:

Any and all persons who worked at or reported to a facility located at 10758 County Road 2, Middlebury, Indiana 46540 or 51700 Lovejoy Drive, Middlebury, Indiana 46540, within sixty days prior to the closing of those facilities.

         [DE 41].

         The Court agrees that use of this class definition (hereinafter “the proposed class”)

         eliminates the concerns raised by Defendants. Moreover, by identifying the class of people to whom notice would have been required under the WARN Act, the definition captures those potentially harmed, while providing a presently identifiable class of individuals for notice purposes. See Messner, 669 F.3d at 826 n.15 (“In circumstances such as these, involving minor overbreadth problems that do not call into question the validity of the class as a whole, the better course is not to deny class certification entirely but to amend the class definition as needed to correct for the ...

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