Fred Bowerman v. Field Asset Services, Inc. ( 2022 )

\FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FRED BOWERMAN; JULIA Nos. 18-16303
BOWERMAN, on behalf of themselves 18-17275
and all others similarly situated,
Plaintiffs-Appellees, D.C. No.
3:13-cv-00057-
v. WHO
FIELD ASSET SERVICES, INC.; FIELD
ASSET SERVICES, LLC, n/k/a Xome OPINION
Field Services, LLC,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of California
William Horsley Orrick, District Judge, Presiding
Argued and Submitted July 20, 2021
Submission Vacated September 23, 2021
Resubmitted June 23, 2022
San Francisco, California
Filed July 5, 2022
Before: William A. Fletcher, Mark J. Bennett, and
Bridget S. Bade, Circuit Judges.
Opinion by Judge Bennett
2 BOWERMAN V. FIELD ASSET SERVICES
SUMMARY *
Class Action / Attorneys’ Fees
The panel reversed the district court’s class certification
order of a class of 156 individuals who personally performed
work for Field Asset Services, Inc. (“FAS”), reversed the
partial summary judgment in favor of the class, vacated the
interim award of more than five million dollars in attorneys’
fees, and remanded for further proceedings.
FAS is in the business of pre-foreclosure property
preservation for the residential mortgage industry. Plaintiff
Fred Bowerman was the sole proprietor of BB Home
Services, which contracted with FAS as a vendor.
Bowerman alleged that FAS willfully misclassified him and
members of the putative class as independent contractors,
rather than employees, resulting in FAS’s failure to pay
overtime compensation and to indemnify them for their
business expenses.
FAS first argued that the district court abused its
discretion by certifying the class, despite the predominance
of individualized questions over common ones. Under Fed.
R. Civ. P. 23(b)(3), a district court must find that common
questions of fact or law to class members predominate over
individual members’ questions before certifying a class. The
panel held that the class members could not establish FAS’s
liability for failing to pay overtime wages or to reimburse
expenses by common evidence. The panel reversed the class
certification because the class members failed to
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
BOWERMAN V. FIELD ASSET SERVICES 3
demonstrate that FAS’s liability was subject to common
proof. Even if class members needed to prove only that they
were misclassified as independent contractors to establish
FAS’s liability by common evidence, class certification
would still be improper under Rule 23(b)(3) because the
class members failed to show that “damages are capable of
measurement on a classwide basis.” Comcast Corp. v.
Behrend, 569 U.S. 27, 34 (2013). Even under a narrow
interpretation of Comcast Corp., the class members cannot
establish predominance. Nor have the class members shown
that damages can be determined without excessive difficulty.
FAS first argued that the district court abused its
discretion by certifying the class, despite the predominance
of individualized questions over common ones. Under Fed.
R. Civ. P. 23(b)(3), a district court must find that common
questions of fact or law to class members predominate over
individual members’ questions before certifying a class. The
panel held that the class members could not establish FAS’s
liability for failing to pay overtime wages or to reimburse
expenses by common evidence. The panel reversed the class
certification because the class members failed to
demonstrate that FAS’s liability was subject to common
proof. Even if class members needed to prove only that they
were misclassified as independent contractors to establish
FAS’s liability by common evidence, class certification
would still be improper under Rule 23(b)(3) because the
class members failed to show that “damages are capable of
measurement on a classwide basis.” Comcast Corp. v.
Behrend, 569 U.S. 27, 34 (2013). Even under a narrow
interpretation of Comcast Corp., the class members cannot
establish predominance. Nor have the class members shown
that damages can be determined without excessive difficulty.
4 BOWERMAN V. FIELD ASSET SERVICES
Second, FAS argued that S.G. Borello & Sons, Inc. v.
Department of Industrial Relations, 769 P.2d 399 (Cal.
1989) (“ Borello”), not Dynamex Operations West, Inc. v.
Superior Court, 416 P.3d 1 (Cal. 2018) (“ Dynamex”),
applied to all the class members’ claims. The panel held that
the California Court of Appeal has repeatedly limited
Dynamex’s applications to claims based on or “rooted in”
California’s wage orders. Here, the class members’ expense
reimbursement claims were not based on a California wage
order, but on Cal. Labor Code § 2802. Nor were they “rooted
in” a California wage order, even though the class members
belatedly invoked Wage Order 16-2001 in their class
certification briefing. The panel rejected FAS’s contention
that Borello governed because the overtime claims were
“joint employment” claims to which Dynamex did not apply.
The panel held that Dynamex applied to Bowerman’s
overtime claims. The panel noted that FAS’s joint
employment would likely succeed were an actual employee
of a vendor suing FAS, claiming that FAS was an employer.
On remand, the district court may consider the joint
employment issue in the first instance for class members
who own or operate LLCs or corporations, which are distinct
legal entities.
Third, FAS contended that the district court erred by
granting summary judgment under Borello’s multifactor and
fact-intensive inquiry because, among other reasons, FAS
did not control the manner and means of the class members’
work. The panel first considered the expense reimbursement
claims. The panel held that Borello governed the class
members’ reimbursement claims. Under Borello, the
existence of an employment relationship is a question for the
trier of fact, and the district court erred in finding no triable
issue of material fact.
BOWERMAN V. FIELD ASSET SERVICES 5
Third, FAS contended that the district court erred by
granting summary judgment under Borello’s multifactor and
fact-intensive inquiry because, among other reasons, FAS
did not control the manner and means of the class members’
work. The panel first considered the expense reimbursement
claims. The panel held that Borello governed the class
members’ reimbursement claims. Under Borello, the
existence of an employment relationship is a question for the
trier of fact, and the district court erred in finding no triable
issue of material fact.
Next, the panel considered the overtime claims.
Dynamex adopted the “ABC test” to determine employee
status for purposes of wage and hour claims like the class
members’ overtime claims. The ABC test presumptively
considers all workers to be employees, and permits workers
to be classified as independent contractors only if the hiring
business shows that the worker in question satisfies each of
three conditions – A, B, and C. The panel held that summary
judgment would not be proper under parts A or C of the test
because there were genuine disputes of material fact –
whether the vendors were free from FAS’s control, and
whether the vendors were engaged in an independently
established trade, occupation, or business. The panel further
held that summary judgment would be proper under part B
of the test, which requires that the worker perform work that
is outside the usual course of the hiring entity’s business, but
FAS failed to satisfy part B. The facts supported the
conclusion that the vendors performed services for FAS in
the usual course of FAS’s business. This alone was
dispositive of Bowerman’s employee status under Dynamex.
In addition to Dynamex considerations, since the district
court’s summary judgment decision, Cal. Labor Code § 2776enacted a retroactive business-to-business exception to the
ABC test, which provides that Dynamex does not apply to a
6 BOWERMAN V. FIELD ASSET SERVICES
bona fide business-to-business contracting relationship if a
business service provider contracts to provide services to
another such business. In this case, the determination of
employee/independent contractor status of the business
provider is governed by Borello if the contracting business
demonstrates that twelve criteria are satisfied. Viewing
these criteria, the panel held that there was a genuine dispute
of material fact as to whether the exception applied to FAS
and its vendors. The panel concluded that because of the
enactment of section 2776, summary judgment was no
longer warranted on the class’s overtime claims, even
though summary judgment would be proper on those claims
under Dynamex for sole proprietors like Bowerman.
The panel also held that there was a genuine dispute of
material fact as to whether the class members ever incurred
reimbursable expenses or ever worked overtime. Summary
judgment was improper because a putative employer cannot
be liable to an entire class of putative employees for failing
to reimburse their business expenses and pay them overtime
– unless the putative employer in fact failed to do so for each
of them.
Fourth, FAS argued that the district court abused its
discretion by awarding attorneys’ fees. The attorneys’ fee
award on appeal was an interim award. The panel held that
this case presented “extraordinary circumstances” that
justified the exercise of pendent appellate jurisdiction over
the interim fee award. The panel joined a majority of sister
circuits, and held as a matter of first impression, that it could,
and would, here, exercise pendent appellate jurisdiction over
interim fee awards that are inextricably intertwined with or
necessary to ensure meaningful review of final orders on
appeal. The panel further held that the interim award of
attorneys’ fees must be vacated because the class
BOWERMAN V. FIELD ASSET SERVICES 7
certification and summary judgment orders were issued in
error.
COUNSEL
Frank G. Burt (argued) and Brian P. Perryman, Faegre
Drinker Biddle & Reath LLP, Washington, D.C.; Robert G.
Hulteng and Aurelio J. Pérez, Littler Mendelson P.C., San
Francisco, California; Barrett K. Green, Littler Mendelson
P.C., Los Angeles, California, for Defendants-Appellants.
Monique Olivier (argued), Olivier Schreiber & Chao LLP,
San Francisco, California; Thomas E. Duckworth,
Duckworth Peters LLP, San Francisco, California; James E.
Miller, Shepherd Finkelman Miller & Shah LLP, Chester,
Connecticut; for Plaintiffs-Appellees.
8 BOWERMAN V. FIELD ASSET SERVICES
OPINION
BENNETT, Circuit Judge:
Defendant-Appellant Field Asset Services, Inc.
(“FAS”) 1 appeals the certification of a class of 156
individuals who personally performed work for FAS, the
Plaintiffs-Appellees. It also appeals the final judgment for
eleven class members under Federal Rule of Civil Procedure
54(b), after the district court granted partial summary
judgment to all the class members as to liability. Finally,
FAS appeals the accompanying interim award of more than
five million dollars in attorneys’ fees. We have jurisdiction
pursuant to 28 U.S.C. § 1291 and reverse and remand on all
three issues.
I. FACTS AND PROCEDURAL HISTORY
A. FAS’s Business Model
FAS is in the business of pre-foreclosure property
preservation for the residential mortgage industry. But FAS,
itself, does not perform pre-foreclosure property-
preservation services for its clients. Rather, it contracts with
vendors who perform those services. Some vendors are sole
proprietorships; others are corporations. Vendors have
varying numbers of employees, from at most a few to up to
sixty-five. Some work almost exclusively for FAS; others
perform work for multiple companies, including FAS’s
clients and competitors.
1
The joint motion to amend case caption is GRANTED. FAS is
now known as Xome Field Services, LLC.
BOWERMAN V. FIELD ASSET SERVICES 9
FAS exercises some control over the vendors’
completion of their work. It requires that jobs be completed
within seventy-two hours; provides detailed instructions for
particular tasks; and imposes insurance, photo
documentation, pricing, and invoicing requirements through
its Vendor Qualification Packets (“VQPs”) and work orders.
It offers training, although the parties dispute whether the
training is mandatory. And FAS monitors the vendors’ job
performance through vendor scorecards and Approved
Vendor Quality Policies (“AVQPs”), which implement a
discipline scale for vendor noncompliance with FAS’s or
FAS’s clients’ instructions. FAS classifies all its vendors as
independent contractors.
B. The Initiation of the Lawsuit and Class Certification
Named Plaintiffs Fred and Julia Bowerman 2 sued in
2013, seeking damages and injunctive relief. Fred
Bowerman was the sole proprietor of BB Home Services,
which contracted with FAS as a vendor. The operative
complaint alleged that FAS willfully misclassified
Bowerman and members of the putative class as independent
contractors rather than employees, resulting in FAS’s failure
to pay overtime compensation and to indemnify them for
their business expenses.
The complaint also sought class certification under
Federal Rule of Civil Procedure 23(b)(3), which the district
court granted for a class defined as:
2
The district court determined that Julia Bowerman did not fall
within the class definition. That determination is not challenged on
appeal.
10 BOWERMAN V. FIELD ASSET SERVICES
All persons who at any time from January 7,
2009 up to and through the time of judgment
(the “Class Period”) (1) were designated by
FAS as independent contractors;
(2) personally performed property
preservation work in California pursuant to
FAS work orders; and (3) while working for
FAS during the Class Period, did not work for
any other entity more than 30 percent of the
time. The class excludes persons who
primarily performed rehabilitation or
remodel work for FAS.
The parties later agreed to fix the class period as beginning
on January 7, 2009, and ending on December 20, 2016. FAS
argued that the proposed class failed Rule 23(b)(3)’s
predominance requirement because of the need for
individualized damages hearings if liability were found. The
district court rejected this argument, quoting our decision in
Leyva v. Medline Industries Inc., 716 F.3d 510 (9th Cir.
2013), for the proposition that “[t]he presence of
individualized damages cannot, by itself, defeat class
certification under Rule 23(b)(3).” Id. at 514.
C. Summary Judgment
In March 2017, the district court granted partial
summary judgment in favor of the class members, finding
that they had been misclassified as independent contractors
and that as a result, FAS was liable to them for failing to pay
overtime and business expenses. In making that
determination, the district court relied on California’s
common law test for distinguishing between employees and
independent contractors, as outlined in S.G. Borello & Sons,
Inc. v. Department of Industrial Relations, 769 P.2d 399BOWERMAN V. FIELD ASSET SERVICES 11
(Cal. 1989). Under Borello, “the principal test of an
employment relationship is whether the person to whom
service is rendered has the right to control the manner and
means of accomplishing the result desired.” Id. at 404(citation and alteration omitted). But even though “the right
to control work details is the ‘most important’ or ‘most
significant’ consideration, . . . several ‘secondary’ indicia of
the nature of a service relationship” also bear on the
employee and independent contractor distinction. Id. For
example, Borello noted that “strong evidence in support of
an employment relationship is the right to discharge at will,
without cause.” Id. (citation and alteration omitted). It also
listed the following as secondary indicia of an employment
versus independent contractor relationship:
(a) whether the one performing services is
engaged in a distinct occupation or
business;
(b) the kind of occupation, with reference to
whether, in the locality, the work is
usually done under the direction of the
principal or by a specialist without
supervision;
(c) the skill required in the particular
occupation;
(d) whether the principal or the worker
supplies the instrumentalities, tools, and
the place of work for the person doing the
work;
(e) the length of time for which the services
are to be performed;
12 BOWERMAN V. FIELD ASSET SERVICES
(f) the method of payment, whether by the
time or by the job;
(g) whether or not the work is a part of the
regular business of the principal; and
(h) whether or not the parties believe they are
creating the relationship of employer-
employee.
Id. Borello explained that “[g]enerally, the individual
factors cannot be applied mechanically as separate tests; they
are intertwined and their weight depends often on particular
combinations.” Id. (citation and alteration omitted).
Applying this test, the district court granted partial
summary judgment on the misclassification issue because it
was “convinced that the overwhelming evidence on the most
important factor of the [Borello] test”—that is, control—
“tip[ped] the scales clearly in favor of finding an employee
relationship.” In particular, the district court found that
“[n]o reasonable juror could review the Vendor Packets, the
work orders, the trainings, the Vendor Profiles, the
discipline, and the Vendor scorecards, and conclude [that]
any of the Vendors are independent contractors.”
Despite its conviction that the control factor supported
the class, the district court’s analysis of Borello’s secondary
factors was materially different. The district court stated that
if it “ignored the right to control analysis, and focused solely
on the secondary factors, [it] would not grant summary
judgment.” In fact, the district court found that many of the
secondary factors indicated independent contractor status,
including the parties’ intent to create an independent
contractor relationship, the class members’ opportunity for
profit or loss, and the class members’ employment of
BOWERMAN V. FIELD ASSET SERVICES 13
assistants. Several of the other secondary factors implicated
genuine disputes of material fact. 3
But the district court found that FAS’s “right to control
swamp[ed] [the secondary] factors in importance, and
[some] secondary factors favor[ed] plaintiffs’ argument that
[they] are employees.” Thus, the district court granted
partial summary judgment to the class on the
misclassification issue. The district court also granted
partial summary judgment to the class on their overtime and
expense reimbursement claims, which were derivative of the
misclassification claim. In doing so, the district court
relegated the issues of “whether a particular [class member]
worked overtime on a specific day” (or ever), and “whether
a specific expense” (or any) “was reasonable and necessary”
to the damages phase of the trial, rather than the liability
phase.
D. The Bellwether Jury Trial
In July 2017, the district court held a bellwether jury trial
to determine damages for Named Plaintiff Fred Bowerman
and ten of the 156 class members. 4 The trial lasted eight
3
For example, the district court was “not sure how to evaluate”
whether FAS supplied the instrumentalities, tools, and place of work
because “[b]oth parties present[ed] evidence supporting their positions.”
4
After trial, FAS renewed its motion for judgment as a matter of
law, arguing that the verdict as to five of the eleven claimants in their
personal capacity was improper because “any expenses incurred in
connection with the businesses of [those] Five Claimants were incurred
by the corporate form, and not incurred personally by the claimant.” The
district court correctly denied the motion. Under California law, a
plaintiff can incur expenses even without ultimately paying them. See,
e.g., Cochran v. Schwan’s Home Serv., Inc., 176 Cal. Rptr. 3d 407, 412–
13 (Ct. App. 2014) (“If an employee is required to make work-related
14 BOWERMAN V. FIELD ASSET SERVICES
days, as the class members’ damages were neither evident
from any records detailing their overtime hours and
reimbursable expenses, nor calculable by any common
method. After the bellwether trial, FAS filed a second
motion for class decertification, which the district court
construed as a motion for leave to file a motion for
reconsideration. Although the district court denied the
motion, it acknowledged the difficulty of calculating every
class member’s damages on an individualized basis with no
method for doing so other than the class members’
individualized testimony, noting that “[t]he damages phase
of this class action [will be] far messier than promised by
plaintiffs’ counsel when” the case was certified. 5
E. Appeal and Stay of Proceedings After the California
Supreme Court’s Decision in Dynamex
Between the district court’s summary judgment decision
and FAS’s first notice of appeal in July 2018, the California
Supreme Court decided Dynamex Operations West, Inc. v.
Superior Court, 416 P.3d 1 (Cal. 2018), which established a
different test for distinguishing between employees and
independent contractors in certain contexts, commonly
known as “the ABC test.” Id. at 34. Unlike the Borello test,
“[t]he ABC test presumptively considers all workers to be
employees, and permits workers to be classified as
calls on a personal cell phone, then he or she is incurring an expense for
purposes of [California Labor Code §] 2802. It does not matter whether
the phone bill is paid for by a third person, or at all.”).
5
As noted above, the judgment as to the bellwether trial was
certified under Federal Rule of Civil Procedure 54(b). The district court
was referencing the difficulties in the bellwether trial that would also be
present (although obviously on a much greater scale) in the damages
phase of the trial for the remaining class members.
BOWERMAN V. FIELD ASSET SERVICES 15
independent contractors only if the hiring business
demonstrates that the worker in question satisfies each of
three conditions”:
(a) that the worker is free from the control
and direction of the hirer in connection
with the performance of the work, both
under the contract for the performance of
the work and in fact; and
(b) that the worker performs work that is
outside the usual course of the hiring
entity’s business; and
(c) that the worker is customarily engaged in
an independently established trade,
occupation, or business of the same
nature as that involved in the work
performed.
Id. We certified the issue of Dynamex’s retroactivity to the
California Supreme Court in Vazquez v. Jan-Pro
Franchising International, Inc., 939 F.3d 1045 (9th Cir.
2019), and held FAS’s appeal in abeyance. The California
Supreme Court held that Dynamex does apply retroactively,
Vazquez v. Jan-Pro Franchising Int’l, Inc., 478 P.3d 1207,
1208 (Cal. 2021), and we affirmed that applying Dynamex
retroactively comports with due process, Vazquez v. Jan-Pro
Franchising Int’l, Inc., 986 F.3d 1106, 1117–18 (9th Cir.
2021).
F. The Interim Award of Attorneys’ Fees
In July 2018, class counsel moved in the district court for
an award of attorneys’ fees and related expenses, with no
notice to the class members. In September 2018, the district
16 BOWERMAN V. FIELD ASSET SERVICES
court issued an interim order stating that the record was “not
sufficient to tell whether all of the time plaintiffs [sought] to
have compensated for 32 time-billers was reasonably
incurred.” Accordingly, the district court ordered an in-
camera inspection of class counsel’s contemporaneous time
records. Although FAS sought access to those records, the
district court never allowed that access.
In November 2018, the district court issued an interim
fee award of $5,173,539.50. It did not “summarize the facts
or posture of the case, except to say that it include[d] novel
issues that the Ninth Circuit [would] address and that it was
aggressively defended.”
The district court thus began by awarding the lead
counsel $3,381,540, which it justified with the following
brief explanation:
The hourly rates they seek . . . are well within
the reasonable range. The amount of time
they billed in each of the categories is also
reasonable, as lead counsel in small firms
must not only coordinate all of the work in
the case to ensure it is geared to effective
advocacy at trial but must also bear the
laboring oar on many aspects of the litigation.
The district court then awarded non-lead counsel
$1,792,138.50 (they sought $1,991,265). It justified that
decision with another brief explanation:
The contemporaneous records of plaintiffs’
counsel show that the 28 timekeepers were
performing substantive work with a
minimum of overlap. However, it is
inherently inefficient to have so many people
BOWERMAN V. FIELD ASSET SERVICES 17
working on a legal project. With such a large
group, it is inevitable that information needs
to be shared, common issues discussed, and
overlapping tasks performed. I will reduce
the sum requested for the 28 timekeepers,
$1,991,265, by 10% for that inefficiency. See
Moreno v. City of Sacramento, 534 F.3d
1106, 1112 (9th Cir. 2008) (“[T]he district
court can impose a small reduction, no
greater than 10 percent—a ‘haircut’—based
on its exercise of discretion and without a
more specific explanation.”).
The district court reserved decision on whether to apply a
multiplier.
II. STANDARDS OF REVIEW
We review the class certification for an abuse of
discretion, In re Wells Fargo Home Mortg. Overtime Pay
Litig., 571 F.3d 953, 957 (9th Cir. 2009); the grant of
summary judgment de novo, Narayan v. EGL, Inc., 616 F.3d
895, 899 (9th Cir. 2010); and the award of attorneys’ fees for
an abuse of discretion, In re Mercury Interactive Corp. Sec.
Litig., 618 F.3d 988, 992 (9th Cir. 2010).
III. DISCUSSION
FAS makes four arguments on appeal. It first maintains
that the district court abused its discretion by certifying the
class, despite the predominance of individualized questions
over common ones. Second, FAS argues that Borello, not
Dynamex, applies to all the class members’ claims, because
Dynamex does not apply to joint employment claims, or to
claims that are not based on or rooted in one of California’s
wage orders. Third, it contends that the district court erred
18 BOWERMAN V. FIELD ASSET SERVICES
by granting summary judgment under Borello’s multifactor
and fact-intensive inquiry, because, among other reasons,
FAS does not control the manner and means of the class
members’ work. And fourth, FAS argues that the district
court abused its discretion by awarding interim attorneys’
fees without giving FAS access to the time records on which
the award was based, without notifying class members of
class counsel’s fee motion, without finding the facts
specially, and without providing a precise but clear
explanation of its reasons for the award. 6 We address each
argument in turn.
A. Class Certification
Under the predominance requirement of Rule 23(b)(3), a
district court must find that “questions of law or fact
common to class members predominate over any questions
affecting only individual members” before certifying a class.
Here, the class fails that requirement because it cannot
establish by common evidence either FAS’s liability, or
damages stemming from that alleged liability, to individual
class members.
FAS’s opening brief states that “[a]ll agree that plaintiffs
cannot prove, through common evidence, that class
members worked overtime hours or that claimed expenses
are reimbursable.” The class members’ answering brief does
6
FAS also argues that expenses recovered by five of the class
members in the bellwether jury trial are not recoverable because they
were paid by the class members’ businesses rather than the class
members in their personal capacities. But as explained above, supra
p. 13 n.4, members of the class can still incur expenses for purposes of
section 2802 even if their businesses ultimately pay the bill. See
Cochran, 176 Cal. Rptr. 3d at 412–13.
BOWERMAN V. FIELD ASSET SERVICES 19
not contest that claim.7 Accepting it as true, then, see United
States v. Baldon, 956 F.3d 1115, 1126 (9th Cir. 2020), the
class members cannot establish FAS’s liability for failing to
pay overtime wages or to reimburse business expenses by
common evidence.
We need not decide whether common evidence can
prove that FAS has a uniform policy of misclassifying its
vendors. FAS’s liability to any class member for failing to
pay them overtime wages or to reimburse their business
expenses would implicate highly individualized inquiries on
whether that particular class member ever worked overtime
or ever incurred any “necessary” business expenses. Cal.
Lab. Code § 2802(a). Under such circumstances, class
certification is improper. Cf. Sotelo v. MediaNews Grp.,
Inc., 143 Cal. Rptr. 3d 293, 303–06 (Ct. App. 2012)
(affirming denial of class certification because there was no
common evidence that individual plaintiffs worked
overtime), disapproved of on other grounds by Noel v.
Thrifty Payless, Inc., 445 P.3d 626 (Cal. 2019); Wilson v. La
Jolla Grp., 276 Cal. Rptr. 3d 118, 134–35 (Ct. App. 2021)
7
Nor does the answering brief contest FAS’s assertions that “[a]ll
who testified [during the bellwether jury trial] relied on their unaided
memories as the primary or sole evidence of their work schedules,” and
that “[n]one offered time-entry data or other contemporaneous records
of hours worked,” as confirmed by the trial record. The class argues only
that “[u]niform, class-wide evidence establishes that FAS’s policy and
practice is not to pay overtime, and not to reimburse the Workers for any
business expenses incurred.” But uniform evidence that FAS won’t pay
overtime wages or reimburse business expenses if any are owed does not
amount to evidence that FAS had a uniform policy that required the class
to work overtime or incur reimbursable expenses. See Sotelo v.
MediaNews Grp., Inc., 143 Cal. Rptr. 3d 293, 305 (Ct. App. 2012)
(explaining that a class may establish liability by proving that an alleged
employer has “a uniform policy that requires putative class members to
work overtime” (emphasis added)).
20 BOWERMAN V. FIELD ASSET SERVICES
(affirming denial of class certification in part because there
was no common evidence that individual plaintiffs incurred
reimbursable business expenses).
The class members resist this conclusion by relying on
the established principle that “the presence of individualized
damages cannot, by itself, defeat class certification.” Leyva,
716 F.3d at 514; see also Lambert v. Nutraceutical Corp.,
870 F.3d 1170, 1182 (9th Cir. 2017), rev’d on other grounds,
139 S. Ct. 710 (2019); Yokoyama v. Midland Nat’l Life Ins.
Co., 594 F.3d 1087, 1094 (9th Cir. 2010); Blackie v.
Barrack, 524 F.2d 891, 905 (9th Cir. 1975). In doing so,
they mischaracterize an issue of individualized liability as an
issue of individualized damages.
In Castillo v. Bank of America, NA, 980 F.3d 723 (9th
Cir. 2020), the plaintiff also argued that Rule 23(b)(3)
certification was proper because “all of the alleged
individualized inquires [were] mere questions of damages
(and not liability).” Id. at 731. We disagreed, distinguishing
between the calculation of damages and the existence of
damages in the first place. As we explained, “[t]he issue
[was] not that [the plaintiff was] unable to prove the extent
of the damages suffered by each individual plaintiff at this
stage.” Id. at 732. “Instead, it [was] that [the plaintiff had]
been unable to provide a common method of proving the fact
of injury and any liability.” Id. (emphases added). We thus
affirmed the district court’s denial of class certification,
holding that “[i]ndividual differences in calculating the
amount of damages will not defeat class certification where
common issues otherwise predominate . . . , [but] if the
plaintiffs cannot prove that damages resulted from the
defendant’s conduct, then the plaintiffs cannot establish
predominance.” Id. at 730 (emphases added) (quotation
marks, citation, and brackets omitted). Because the same
BOWERMAN V. FIELD ASSET SERVICES 21
“general rule goes to the crux of the issue on appeal here,”
we reverse the class certification because the class members
failed to demonstrate that FAS’s liability is subject to
common proof. Id.
Furthermore, even if the class members needed to prove
only that they were misclassified as independent contractors
to establish FAS’s liability by common evidence, class
certification would still be improper under Rule 23(b)(3) for
yet another reason—the class members’ failure to show “that
‘damages are capable of measurement on a classwide basis,’
in the sense that the whole class suffered damages traceable
to the same injurious course of conduct underlying the
plaintiffs’ legal theory.” Just Film, Inc. v. Buono, 847 F.3d
1108, 1120 (9th Cir. 2017) (quoting Comcast Corp. v.
Behrend, 569 U.S. 27, 34 (2013)). We recently reaffirmed
that Rule 23(b)(3) permits “the certification of a class that
potentially includes more than a de minimis number of
uninjured class members” because it “requires only that the
district court determine after rigorous analysis whether the
common question predominates over any individual
questions, including individualized questions about injury or
entitlement to damages.” Olean Wholesale Grocery Coop.,
Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 669 (9th Cir.
2022) (en banc). Thus, “a district court is not precluded from
certifying a class even if plaintiffs may have to prove
individualized damages at trial, a conclusion implicitly
based on the determination that such individualized issues
do not predominate over common ones.” Id.Even under our narrow interpretation of Comcast Corp.
v. Behrend, 569 U.S. 27, the class members cannot establish
predominance. As already explained, the class members
cannot show by common evidence that individual class
members would be entitled to overtime wages or to expense
22 BOWERMAN V. FIELD ASSET SERVICES
reimbursement if found to be employees. Thus, the class
members cannot show that the whole class suffered damages
traceable to their alleged misclassification as independent
contractors.
Nor have the class members shown that damages can be
determined without excessive difficulty. To the contrary, the
district court conceded in its most recent order denying
FAS’s motion for class decertification that “[t]he damages
phase of this class action [will be] far messier than promised
by plaintiffs’ counsel when” the case was certified. As the
district court explained, “[b]ecause the documentary
evidence maintained by the vendors . . . [is] scant at best, . . .
[p]roof by the testimony of [individual] vendors is
necessary.” As it turns out, using the individual testimony
of self-interested class members to calculate the overtime
hours they worked and the business expenses they incurred
isn’t easy. Rather, such an approach has predictably caused
the “excessive difficulty” that Comcast and our later
decisions interpreting Comcast have sought to avoid. Just
Film, Inc., 847 F.3d at 1121. Already, it has taken eight days
to determine damages for only eleven of the 156 class
members.
Thus, because the class members have not necessarily
suffered damages traceable to their alleged misclassification,
and because they have not presented a method of calculating
damages that is not excessively difficult, they have failed to
satisfy Comcast’s simple command that the case be
“susceptible to awarding damages on a class-wide basis.”
BOWERMAN V. FIELD ASSET SERVICES 23
569 U.S. at 32 n.4. That failure provides an independent
basis for reversing the class certification. 8
B. The Proper Employment Test
1. Expense Reimbursement Claims
“Dynamex did not purport to replace the Borello standard
in every instance where a worker must be classified as either
an independent contractor or an employee for purposes of
enforcing California’s labor protections.” Cal. Trucking
Ass’n v. Su, 903 F.3d 953, 959 n.4 (9th Cir. 2018). Rather,
Dynamex was clear that it “address[ed] only” the issue of
how to distinguish between employees and independent
contractors “with regard to those claims that derive directly
from the obligations imposed by [a] wage order.” 416 P.3d
at 25. Dynamex further suggested that its holding should not
extend beyond that context, by describing the ABC test as a
“distinct standard that provides broader coverage of workers
with regard to the very fundamental protections afforded by
8
In addition to Rule 23(b)(3)’s predominance requirement, Rule
23(b)(3)’s superiority requirement further requires “that a class action
[be] superior to other available methods for fairly and efficiently
adjudicating the controversy.” FAS argues that a class action is not
superior to other methods of resolving this case because the class
members have interests in individually controlling their claims, see Fed.
R. Civ. P. 23(b)(3)(A), given that they “stand to recover five- and even
six-figure awards.” Although the Supreme Court has explained that “the
text of Rule 23(b)(3) does not exclude from certification cases in which
individual damages run high,” it has also explained that “the Advisory
Committee [for Rule 23(b)(3)] had dominantly in mind vindication of
the rights of groups of people who individually would be without
effective strength to bring their opponents into court at all.” Amchem
Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (internal quotation
marks omitted). Thus, even though the large damages awards the class
members stand to gain are not sufficient on their own to overcome Rule
23(b)(3) certification, they support doing so.
24 BOWERMAN V. FIELD ASSET SERVICES
wage and hour laws and wage orders,” given “the [Industrial
Welfare Commission’s] determination that it is appropriate
to apply a distinct and particularly expansive definition of
employment regarding obligations imposed by a wage
order.” 9 Id. at 29 (emphases added).
The California Supreme Court’s subsequent decision in
Vazquez v. Jan-Pro Franchising International, Inc.,
478 P.3d 1207, affirmed that “[i]n Dynamex, [the] court was
faced with a question of first impression: What standard
applies under California law in determining whether workers
should be classified as employees or independent contractors
for purposes of the obligations imposed by California’s
wage orders?” Id. at 1208 (emphasis added). It also held
that Dynamex “did not change a settled rule” like the Borello
9
The California Supreme Court elaborated that its holding “[found]
its justification in the fundamental purposes and necessity of the
minimum wage and maximum hour legislation in which the standard has
traditionally been embodied”:
Wage and hour statutes and wage orders were adopted
in recognition of the fact that individual workers
generally possess less bargaining power than a hiring
business and that workers’ fundamental need to earn
income for their families’ survival may lead them to
accept work for substandard wages or working
conditions. The basic objective of wage and hour
legislation and wage orders is to ensure that such
workers are provided at least the minimal wages and
working conditions that are necessary to enable them
to obtain a subsistence standard of living and to protect
the workers’ health and welfare. These critically
important objectives support a very broad definition of
the workers who fall within the reach of the wage
orders.
Dynamex, 416 P.3d at 31–32 (citations omitted).
BOWERMAN V. FIELD ASSET SERVICES 25
test, as applied outside the wage order context. Id. at 1209.
Consistent with that guidance, the California Court of
Appeal has repeatedly limited Dynamex’s application to
claims based on or “rooted in” California’s wage orders. 10
See Vendor Surveillance Corp. v. Henning, 276 Cal. Rptr. 3d
458, 468–69 (Ct. App. 2021); Gonzales v. San Gabriel
Transit, Inc., 253 Cal. Rptr. 3d 681, 701–04 (Ct. App. 2019);
Garcia v. Border Transp. Grp., LLC, 239 Cal. Rptr. 3d 360,
370–71 (Ct. App. 2018).
Here, the class members’ expense reimbursement claims
are not based on a California wage order, but on California
Labor Code § 2802. 11 Nor are they “rooted in” a California
wage order, even though the class members belatedly
invoked Wage Order 16-2001 in their class certification
briefing. Wage Order 16-2001 does not “cover[] most of the
[section 2802] violations alleged,” and its provisions are not
“equivalent or overlapping” with section 2802. Gonzales,
253 Cal. Rptr. 3d at 702, 704. Although section 2802 covers
“all necessary expenditures or losses incurred by the
employee in direct consequence of the discharge of his or
10
In the absence of controlling authority by the California Supreme
Court, “we follow decisions of the California Court of Appeal unless
there is convincing evidence that the California Supreme Court would
hold otherwise.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876,
889 (9th Cir. 2010).
11
Assembly Bill 5 codified “the ABC test and expanded its reach to
apply to all claims under the Labor Code and the Unemployment
Insurance Code.” People v. Superior Court, 271 Cal. Rptr. 3d 570, 574
(Ct. App. 2020); see also Cal. Lab. Code § 2775(b)(1). The ABC test’s
extension “was prospective, with an effective date of January 1, 2020.”
Lawson v. Grubhub, Inc., 13 F.4th 908, 912 (9th Cir. 2021) (citing Cal.
Lab. Code § 2785(c)). Because the claims at issue in this case arise from
conduct that occurred before January 1, 2020, AB 5 does not decide the
test applicable to the expense reimbursement claims.
26 BOWERMAN V. FIELD ASSET SERVICES
her duties,” Cal. Lab. Code § 2802(a), Wage Order 16-2001
covers only “tools or equipment,” Cal. Code Regs. tit. 8,
§ 11160. Indeed, many expenses for which class members
sought and recovered reimbursement at trial, including
insurance, cellphone charges, dump fees, and mileage/fuel,
are covered only by section 2802—not by Wage Order 16-
2001’s “tools and equipment” provision. Thus, Borello, not
Dynamex, applies to the expense reimbursement claims.
2. Overtime Claims
Neither party disputes that the class members’ overtime
claims are based on California’s wage orders. Still, FAS
insists that Borello governs, because FAS believes the
overtime claims are “joint employment” claims to which
Dynamex does not apply.
FAS is correct that Dynamex does not apply to joint
employment claims. The California Supreme Court created
Dynamex’s ABC test to address “concerns . . . regarding the
disadvantages . . . inherent in relying upon a multifactor, all
the circumstances standard for distinguishing between
employees and independent contractors.” 416 P.3d at 35.
Those concerns include (1) “that a multifactor, ‘all the
circumstances’ standard makes it difficult for both hiring
businesses and workers to determine in advance how a
particular category of workers will be classified, frequently
leaving the ultimate employee or independent contractor
determination to a subsequent and often considerably
delayed judicial decision”; and (2) that it “affords a hiring
business greater opportunity to evade its fundamental
responsibilities under a wage and hour law by dividing its
workforce into disparate categories and varying the working
conditions of individual workers within such categories with
an eye to the many circumstances that may be relevant.” Id.
at 33–34.
BOWERMAN V. FIELD ASSET SERVICES 27
Because these “reasons for selecting the ‘ABC’ test are
uniquely relevant to the issue of allegedly misclassified
independent contractors,” the ABC test does not extend to
the joint employment context, where those concerns are no
longer present. Curry v. Equilon Enters., LLC, 233 Cal.
Rptr. 3d 295, 313–14 (Ct. App. 2018). Indeed, “[i]n the joint
employment context, the alleged employee is already
considered an employee of the primary employer,” who “is
presumably paying taxes.” Id. at 313. Furthermore, “the
employee is afforded legal protections due to being an
employee of the primary employer.” Id. As a result, the
policy purpose behind Dynamex’s ABC test, i.e., “the policy
purpose for presuming the worker to be an employee and
requiring the secondary employer to disprove the worker’s
status as an employee[,] is unnecessary” in joint employment
cases, “in that taxes are being paid and the worker has
employment protections.” Id. at 313–14; see also
Henderson v. Equilon Enters., LLC, 253 Cal. Rptr. 3d 738,
753–54 (Ct. App. 2019) (holding that the ABC test also does
not apply to joint employment claims because “parts B and
C of the ABC test do not fit analytically with such claims,”
id. at 753).
But Bowerman’s claims (and those of other sole
proprietors) are not joint employment claims—they are
employee misclassification claims, like those in Dynamex.
FAS argues that the class members are “employees of their
[own] self-owned businesses.” Dynamex’s policy concerns
are equally applicable for sole proprietors like Bowerman
because they have no putative employer other than FAS to
pay their taxes or afford them legal protections under the
California wage orders. See Ball v. Steadfast-BLK, 126 Cal.
Rptr. 3d 743, 747 (Ct. App. 2011) (“[A] sole proprietorship
is not a legal entity separate from its individual owner.”). So
Dynamex applies to Bowerman’s overtime claims.
28 BOWERMAN V. FIELD ASSET SERVICES
But FAS’s joint employment argument would likely
succeed were an actual employee of a vendor suing FAS,
claiming that FAS was an employer. Notably, Plaintiffs-
Appellees’ counsel conceded at oral argument that at least
some of the class members are employed by entities other
than FAS. 12 Thus, some of the class members’ theories of
liability could depend on their ability to establish that FAS
was a joint employer. On remand, the district court may
consider the joint employment issue in the first instance for
class members who own or operate LLCs or corporations,
which are distinct legal entities. 13 See Nw. Energetic Servs.,
LLC v. Cal. Franchise Tax Bd., 71 Cal. Rptr. 3d 642, 649
(Ct. App. 2008) (LLCs); Merco Constr. Eng’rs, Inc. v.
Municipal Court, 581 P.2d 636, 639 (Cal. 1978)
(corporations).
C. Summary Judgment
1. Expense Reimbursement Claims
As explained above, Borello governs the class members’
expense reimbursement claims. Under Borello, “[t]he
existence of an employment relationship is a question for the
trier of fact.” Angelotti v. Walt Disney Co., 121 Cal. Rptr.
3d 863, 870 (Ct. App. 2011). The existence of such a
relationship “can be decided by the court as a matter of law
if the evidence supports only one reasonable conclusion.”
12
This concession is perplexing given that class members, by
definition, cannot “work for any other entity more than 30 percent of the
time.” But we credit it, nonetheless.
13
We also leave it to the district court to determine, in the first
instance, whether any class members besides Bowerman remain parties
to this litigation on remand. Cf. Crown, Cork & Seal Co. v. Parker,
462 U.S. 345, 354 (1983).
BOWERMAN V. FIELD ASSET SERVICES 29
Id. (emphases added). Such is not the case here. “At its
heart, this case involves competing, if not necessarily
conflicting, evidence that must be weighed by a trier of fact.”
Arzate v. Bridge Terminal Transp., Inc., 121 Cal. Rptr. 3d
400, 405 (Ct. App. 2011). Thus, “the trial court erred in
finding no triable issue of material fact.” Id.“As the parties and trial court correctly recognized,
control over how a result is achieved lies at the heart of the
common law test for employment.” Ayala v. Antelope
Valley Newspapers, Inc., 327 P.3d 165, 172 (Cal. 2014)
(emphasis added). The district court granted summary
judgment because it was “convinced that the overwhelming
evidence” of FAS’s control “tip[ped] the scales clearly in
favor of finding an employee relationship.” Viewing the
evidence in the light most favorable to FAS, that conclusion
was incorrect.
California law is clear that “[i]f control may be exercised
only as to the result of the work and not the means by which
it is accomplished, an independent contractor relationship is
established.” Millsap v. Fed. Express Corp., 277 Cal. Rptr.
807, 811 (Ct. App. 1991) (citation omitted). Whether a
hiring entity’s control is results-oriented or means-oriented
depends on how the factfinder, or the court on summary
judgment, defines “results.” For instance, in Alexander v.
FedEx Ground Package System, Inc., 765 F.3d 981 (9th Cir.
2014), we determined that “‘results,’ reasonably understood,
refer[red] in [the] context [of package delivery services] to
[the] timely and professional delivery of packages.” Id. at
990. Thus, we rejected FedEx’s argument that it was
controlling only the results of its drivers’ work by mandating
a particular dress code from the drivers’ “hats down to their
shoes and socks”; by requiring them “to paint their vehicles
a specific shade of white, [to] mark them with the distinctive
30 BOWERMAN V. FIELD ASSET SERVICES
FedEx logo, and to keep their vehicles ‘clean and presentable
[and] free of body damage and extraneous markings’”; and
by dictating “the vehicles’ dimensions, including the
dimensions of their ‘package shelves’ and the materials from
which the shelves [were] made.” Id. at 989 (second
alteration in original). We held that “no reasonable jury
could find that the ‘results’ sought by FedEx include[d]”
such detailed requirements, which bore no logical relation to
the “timely and professional delivery of packages.” Id.
at 990.
In contrast, whether FAS’s control over the class
members’ work is means- or results-oriented should have
been left to the jury. When viewed in the light most
favorable to FAS, the instructions in FAS’s VQPs and work
orders—though detailed—are geared toward the satisfactory
completion of the class members’ job assignments. The
same can be said for the training the class members received
on following those instructions, the vendor scorecards that
monitored whether they followed the instructions, and the
AVQPs that disciplined those who did not.
The VQPs uniformly characterize the parties’
relationship as vendor-vendee, not employer-employee. In
fact, several VQPs explicitly designate or refer to the
vendors as independent contractors. Consistent with that
designation, the VQPs do not control whether a vendor
accepts a particular job, who does the work on the vendor’s
behalf, when the work gets done, or on what terms. Rather,
viewing the evidence in the light most favorable to FAS, the
class members are free to decline FAS work orders, or to
negotiate the terms of their acceptance. And if they do
accept a work order, they are free to hire any employee or
subcontractor who can pass a background screening to
perform the work, and they are free to design their own
BOWERMAN V. FIELD ASSET SERVICES 31
schedule for completing the assignment within FAS’s
seventy-two-hour deadline. Although such a short deadline
creates a tight turnaround, we reject the district court’s
conclusion that this turnaround renders “FAS’s argument
that it does not control when vendors perform work
disingenuous” and “inconsequential.” Requiring a worker
to complete a task within a desired timeframe is a
quintessential example of controlling the result of that
worker’s job performance.
As for the VQPs’ detailed instructions for particular job
assignments, FAS raises a genuine dispute of material fact
as to whether they control the results, and not the manner
and means, of the class members’ work on those
assignments. For example, one VQP’s instructions for
“Flooring” require vendors to “replace doorstops and install
shoe molding” for vinyl flooring; “replace [the] pad” for
carpet; “remove and replace [the tiles], add floor leveler, thin
set[,] and grout” for ceramic tile; and “add floor float and
install shoe mold” for laminate/wood floors. The same
VQP’s instructions for “Drywall/Paint/Wallpaper” require
vendors to “match [the] existing finish,” “re-textur[e] the
walls,” and use paint that is “a neutral color and of medium
grade or better.” And the VQP’s instructions for “Roofing”
require that the new roof “not overlay [the] existing roof”
and that it “[b]e consistent with neighborhood/ . . . HOA/ . . .
local requirements.”
Unlike the requirements in Alexander as to the drivers’
and their vehicles’ appearance, these instructions are
directed toward the desired results of the vendors’ work, at
least when read in the light most favorable to FAS. Indeed,
the right to control results is a “broad” one, encompassing
“the right to inspect, the right to make suggestions or
recommendations as to details of the work, [and] the right to
32 BOWERMAN V. FIELD ASSET SERVICES
prescribe alterations or deviations in the work,” none of
which “chang[e] the relationship from that of owner and
independent contractor.” Beaumont-Jacques v. Farmers
Grp., Inc., 159 Cal. Rptr. 3d 102, 106 (Ct. App. 2013)
(citations omitted). Thus, the district court erred by
concluding that “[n]o reasonable juror could review the
Vendor Packets, the work orders, the trainings, the Vendor
Profiles, the discipline, and the Vendor scorecards, and
conclude any of the Vendors are independent contractors.” 14
Turning, then, to the secondary factors, many tip in favor
of independent contractor status, including the parties’ intent
to create an independent contractor relationship, the class
members’ opportunity for profit or loss, and the class
members’ employment of assistants. The district court
correctly found for FAS on all of these, and the class
members dispute only the weight—not the merits—of those
findings on appeal. Several of the other secondary factors
were, and continue to be, subject to genuine dispute,
including the exclusivity of the class members’ relationship
with FAS, whether their businesses are distinct from FAS’s
14
In fact, in McLeod v. Field Asset Services, LLC, No. 15-00645,
2017 WL 338002 (S.D. Ala. Jan. 23, 2017), the district court granted
summary judgment to FAS on whether it controls the manner and means,
or only the results, of its vendors’ work. See id. at *5 (“In Alabama, . . .
[t]he test for determining whether a person is an agent or employee of
another, rather than an independent contractor, is whether that other
person has reserved the right of control over the means and method by
which the person’s work will be performed, whether or not the right of
control is actually exercised.” (citation omitted)). The court explained
that “FAS merely authorizing work, reviewing the quality of work,
inspecting work, reviewing photographs of work, etc. performed by [its
vendor], is not tantamount to controlling [the vendor’s] work or how [the
vendor] performed the work.” Id. “Rather,” the court held, “those
aspects are more akin to checks on the quality of the work, not control
over the manner in which such work was done.” Id.
BOWERMAN V. FIELD ASSET SERVICES 33
business, and whether FAS supplied their tools,
instrumentalities, and place of work. Finally, the district
court erred by finding that the VQPs contain at-will
termination provisions, which are “strong evidence of a right
to control.” Many VQPs contain no termination provision,
and the VQPs cited by the district court include a mutual
termination provision, which “may properly be included in
an independent contractor agreement, and is not by itself a
basis for changing that relationship to one of an employee.”
Arnold v. Mut. of Omaha Ins. Co., 135 Cal. Rptr. 3d 213, 220
(Ct. App. 2011); see also Varisco v. Gateway Sci. & Eng’g,
Inc., 83 Cal. Rptr. 3d 393, 398–99 (Ct. App. 2008). Thus,
the district court was right to conclude that the secondary
factors do not establish that the class members are FAS’s
employees as a matter of law, absent clear, uncontroverted
evidence that FAS controls the manner and means of their
work.
In short, the class members “exhibit[] classic evidence of
both an independent contractor and employee” under the
Borello test, which “evidence must be weighed by a trier of
fact.” Jackson v. AEG Live, LLC, 183 Cal. Rptr. 3d 394, 416
(Ct. App. 2015). Thus, summary judgment on the class
members’ expense reimbursement claims was
inappropriate. 15
2. Overtime Claims
As explained above, Dynamex adopted the ABC test to
determine employee status for purposes of wage and hour
claims like the class members’ overtime claims. “The ABC
15
We do not foreclose summary judgment in favor of an individual
class member (or FAS as to an individual class member), as the facts as
to every class member are not before us.
34 BOWERMAN V. FIELD ASSET SERVICES
test presumptively considers all workers to be employees,
and permits workers to be classified as independent
contractors only if the hiring business demonstrates that the
worker in question satisfies each of three conditions”:
(a) that the worker is free from the control
and direction of the hirer in connection
with the performance of the work, both
under the contract for the performance of
the work, and in fact; and
(b) that the worker performs work that is
outside the usual course of the hiring
entity’s business; and
(c) that the worker is customarily engaged in
an independently established trade,
occupation, or business of the same
nature as that involved in the work
performed.
Dynamex, 416 P.3d at 34.
Here, summary judgment would not be proper under
parts A or C of the test. Our discussion of Borello already
explained that genuine disputes of material fact underlie the
questions of (A) whether the vendors were free from FAS’s
control, and (C) whether the vendors were engaged in an
independently established trade, occupation, or business.
But summary judgment would be proper under part B of the
test. Though FAS proclaimed itself the “premier Property
Preservation, [Real Estate Owned Property] Maintenance,
and Repair Services company,” it still contends that its
vendors—those who perform those premier property
preservation, maintenance, and repair services—perform
work that is outside the usual course of FAS’s business.
BOWERMAN V. FIELD ASSET SERVICES 35
Stating the proposition is alone enough to show its fatal
shortcomings.
Still, FAS insists that it satisfies part B because it “does
not itself perform preservation services,” but “coordinates
the completion of preservation services, an activity distinctly
different from the business of property preservation.” But
FAS’s own advertisements belie this contention:
FAS offers a full range of professional
services for our clients, with the goal of
reducing the time and costs involved in
recovering and maintaining properties.
Using a single point of contact, our clients
can engage us for a variety of needs inside
and outside the property. These include, but
are not limited to, the following examples of
residential real estate services: property re-
key, secure openings, debris removal, repairs,
eviction lockouts, personal property removal,
smoke detector installs, retrofit services,
lawn maintenance, janitorial service,
winterization, pool maintenance,
rehabilitation/construction & repairs, [and]
emergency maintenance[.]
FAS’s position has also been rejected by several courts
considering analogous arguments by rideshare companies
that they “are in the business solely of creating technological
platforms, not of transporting passengers”—including the
California Court of Appeal in People v. Uber Technologies,
Inc., 270 Cal. Rptr. 3d 290, 311 (Ct. App. 2020). See also
id. at 311–14 (collecting cases). In doing so, the California
Court of Appeal considered that ridesharing companies
market themselves as on-demand ride services, actively seek
36 BOWERMAN V. FIELD ASSET SERVICES
out customers for those services, make money only if those
services are provided, monitor the quality of the services,
and discipline drivers who deliver deficient services. Id.at 311–14. FAS markets itself as providing comprehensive
property preservation services, advertises to clients needing
such services, makes money only if those services are
provided, monitors the quality of those services through
vendor scorecards, and disciplines its vendors for deficient
services through AVQPs. As in Uber Technologies, “[t]hese
facts amply support the conclusion that” the vendors
“perform services for [FAS] in the usual course of [FAS’s]
business[].” Id. at 313–14.
FAS resists this conclusion by analogizing to Curry v.
Equilon Enterprises, LLC, 233 Cal. Rptr. 3d 295. The
California Court of Appeal stated (in dicta) that under
Dynamex, the managers of Shell stations were not the
employees of Shell, which leased its service stations to third-
party operators who in turn employed the managers. Id. at
314–15. The Court of Appeal accepted Shell’s argument
that it “was not in the business of operating fueling
stations—it was in the business of owning real estate and
fuel”—and thus concluded that “there [was] not a triable
issue of fact as to the ‘B’ factor because managing a fuel
station was not the type of business in which Shell was
engaged.” Id. at 314.
The court in Uber Technologies found Curry “readily
distinguishable,” contrasting the “situation in which a
putative joint employer leases facilities to a worker’s direct
employer and has no involvement in the worker’s
employment or compensation” with the situation in which a
putative employer’s “usual course of business involves the
day-to-day task of matching riders and drivers each time a
user requests a ride, arranging for riders’ payments to be
BOWERMAN V. FIELD ASSET SERVICES 37
processed, and retaining a portion of the proceeds from each
ride.” Uber Techs., 270 Cal. Rptr. 3d at 315. Like Uber
Technologies, this is not a joint employment case but a
misclassification case regarding sole proprietors like
Bowerman, and the putative employer’s business centers on
the services the plaintiffs provide. Thus, the reasoning of
Uber Technologies applies and dictates that Bowerman
performed work well within the usual course of FAS’s
business under part B of the ABC test, which is alone
dispositive of his employee status under Dynamex. See
416 P.3d at 34.
But Dynamex is not the only new development in
California employment law since the district court’s
summary judgment decision. California Labor Code § 2776
recently enacted a retroactive business-to-business
exception to the ABC test. See Cal. Lab. Code § 2785(b).
Under that exception, “the holding in Dynamex do[es] not
apply to a bona fide business-to-business contracting
relationship . . . [i]f an individual acting as a sole proprietor,
or a business entity formed as a partnership, limited liability
company, limited liability partnership, or corporation
(‘business service provider’) contracts to provide services to
another such business.” Id. § 2776(a). Instead, “the
determination of employee or independent contractor status
of the business services provider shall be governed by
Borello, if the contracting business demonstrates that [each
of twelve] criteria [is] satisfied.” 16 Id.
16
The twelve criteria are as follows:
1) The business service provider is free from the
control and direction of the contracting business
entity in connection with the performance of the
38 BOWERMAN V. FIELD ASSET SERVICES
work, both under the contract for the performance
of the work and in fact.
2) The business service provider is providing
services directly to the contracting business rather
than to customers of the contracting business.
This subparagraph does not apply if the business
service provider’s employees are solely
performing the services under the contract under
the name of the business service provider and the
business service provider regularly contracts with
other businesses.
3) The contract with the business service provider is
in writing and specifies the payment amount,
including any applicable rate of pay, for services
to be performed, as well as the due date of
payment for such services.
4) If the work is performed in a jurisdiction that
requires the business service provider to have a
business license or business tax registration, the
business service provider has the required
business license or business tax registration.
5) The business service provider maintains a
business location, which may include the business
service provider’s residence, that is separate from
the business or work location of the contracting
business.
6) The business service provider is customarily
engaged in an independently established business
of the same nature as that involved in the work
performed.
7) The business service provider can contract with
other businesses to provide the same or similar
BOWERMAN V. FIELD ASSET SERVICES 39
Viewing those criteria, there is a genuine dispute of fact
as to whether the exception applies to FAS and its vendors.
For example, one criterion is that “[t]he business service
provider [be] free from the control and direction of the
contracting business entity in connection with the
performance of the work, both under the contract for the
performance of the work and in fact.” Id. § 2776(a)(1).
Another is that “[t]he business service provider [be]
customarily engaged in an independently established
services and maintain a clientele without
restrictions from the hiring entity.
8) The business service provider advertises and
holds itself out to the public as available to
provide the same or similar services.
9) Consistent with the nature of the work, the
business service provider provides its own tools,
vehicles, and equipment to perform the services,
not including any proprietary materials that may
be necessary to perform the services under the
contract.
10) The business service provider can negotiate its
own rates.
11) Consistent with the nature of the work, the
business service provider can set its own hours
and location of work.
12) The business service provider is not performing
the type of work for which a license from the
Contractors’ State License Board is required,
pursuant to Chapter 9 (commencing with Section
7000) of Division 3 of the Business and
Professions Code.
Cal. Lab. Code § 2776(a).
40 BOWERMAN V. FIELD ASSET SERVICES
business of the same nature as that involved in the work
performed.” Id. § 2776(a)(6). As already explained at
length, FAS’s control of its vendors, as well as the
independence of the vendors’ businesses from FAS’s
business, are genuinely disputed factual issues. 17 Thus,
because of the enactment of section 2776, summary
judgment is no longer warranted on the class’s overtime
claims, even though summary judgment would be proper on
those claims under Dynamex for sole proprietors like
Bowerman.
3. All Claims
We hold above that there is a genuine dispute of material
fact as to whether the class members are employees or
independent contractors—under Borello for the expense
reimbursement claims and under the business-to-business
exception for the overtime claims. But there is also a
genuine dispute of material fact as to whether the class
members ever incurred reimbursable expenses or ever
worked overtime. Thus, summary judgment was also
improper for the very same reason that the class certification
was: a putative employer cannot be liable to an entire class
of putative employees for failing to reimburse their business
expenses and pay them overtime unless the putative
employer in fact failed to do so for each of them.
We reject plaintiffs’ request that we rule, on appeal, that FAS, as
17
a matter of law, cannot invoke the business-to-business exception as to
any class member. We do not foreclose the district court from
determining, on remand, that FAS may not rely on the business-to-
business exception as to a particular class member, should the undisputed
evidence as to that class member so warrant.
BOWERMAN V. FIELD ASSET SERVICES 41
D. Attorneys’ Fees
Under 28 U.S.C. § 1291, we have jurisdiction over final
district court decisions. The attorneys’ fee award on appeal
is an interim award. It “does not dispose of the underlying
litigation” and “does not even dispose of the issue of
attorney’s fees,” given that the district court reserved its
decision on whether to apply a multiplier. Rosenfeld v.
United States, 859 F.2d 717, 720 (9th Cir. 1988). Thus, we
consider the order nonfinal for purposes of § 1291. See id.;
Hillery v. Rushen, 702 F.2d 848, 848–49 (9th Cir. 1983)
(same); cf. Gates v. Rowland, 39 F.3d 1439, 1450 (9th Cir.
1994) (treating an interim fee award as final when it
“follow[ed] a final judgment on the merits” and “dispose[d]
of the issue of attorneys’ fees”); Finnegan v. Dir., Off. of
Workers’ Comp. Programs, 69 F.3d 1039, 1040–41 (9th Cir.
1995) (same).
Nevertheless, we hold that this case presents
“extraordinary circumstances” justifying our exercise of
pendent appellate jurisdiction over the interim fee award.
McCarter v. Ret. Plan for the Dist. Managers of the Am.
Fam. Ins. Grp., 540 F.3d 649, 653 (7th Cir. 2008). We have
the power to exercise pendent jurisdiction over claims
“raised in conjunction with other issues properly before the
court . . . if the rulings [are] inextricably intertwined or if
review of the pendent issue [is] necessary to ensure
meaningful review of the independently reviewable issue.”
United States v. Tillman, 756 F.3d 1144, 1149 (9th Cir.
2014) (internal quotation marks omitted). That requirement
is satisfied here because FAS’s primary argument for
vacating the interim fee award is that the district court erred
by certifying the class and granting summary judgment to
the plaintiffs—issues that are not just “inextricably
42 BOWERMAN V. FIELD ASSET SERVICES
intertwined” with FAS’s appeal of the class certification and
summary judgment orders; they are identical.
The plaintiffs argue that most courts “have found that
interim fee awards are not immediately appealable under the
doctrine of pendent jurisdiction,” but that can be an
oversimplification. In truth, most of the courts to have
confronted the issue in this case—whether to exercise
pendent appellate jurisdiction over an interim order that is
inextricably intertwined with an independently appealable
order—have concluded that the order is immediately
appealable under the doctrine of pendent jurisdiction,
consistent with the Supreme Court’s holding in Swint v.
Chambers County Commission, 514 U.S. 35 (1995). See id.
at 51 (implying that appellate courts should not exercise
pendent jurisdiction to review claims that are not
“inextricably intertwined with” or “necessary to ensure
meaningful review of” the final order on appeal); see also,
e.g., Thornton v. Gen. Motors Corp., 136 F.3d 450, 454 (5th
Cir. 1998) (per curiam); Sabal Trail Transmission, LLC v.
3.921 Acres of Land in Lake Cnty. Fla., 947 F.3d 1362, 1372
(11th Cir. 2020); Gilda Marx, Inc. v. Wildwood Exercise,
Inc., 85 F.3d 675, 678–79 (D.C. Cir. 1996) (per curiam). But
see Home Builders Ass’n of Greater St. Louis v. L & L
Exhibition Mgmt., Inc., 226 F.3d 944, 951 (8th Cir. 2000).
Today we join the majority of our sister circuits, and hold as
a matter of first impression, see Knupfer v. Lindblade (In re
Dyer), 322 F.3d 1178, 1187–88 (9th Cir. 2003), that we
can—and here, will—exercise pendent appellate jurisdiction
over interim fee orders that are inextricably intertwined with
or necessary to ensure meaningful review of final orders on
appeal.
The interim award of attorneys’ fees must be vacated
because the class certification and summary judgment orders
BOWERMAN V. FIELD ASSET SERVICES 43
were issued in error. See Hopkins v. City of Sierra Vista, 931
F.2d 524, 529 (9th Cir. 1991) (“Because we reverse and
remand for further proceedings on the merits, there is no
prevailing party and we must also reverse the district court’s
award of attorneys’ fees.”).
IV. CONCLUSION
Under the right circumstances, class certification and
summary judgment are useful mechanisms for the speedy
resolution of claims. But those circumstances are not present
here. We therefore REVERSE the class certification order,
REVERSE the summary judgment order, VACATE the
interim award of attorneys’ fees, and REMAND to the
district court for proceedings consistent with this opinion,
with costs awarded to FAS.