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Vazquez v. Jan-Pro Franchising Int'l, Inc.

United States Court of Appeals for the Ninth Circuit

December 18, 2018, Argued and Submitted, San Francisco, California; May 2, 2019, Filed

No. 17-16096

Opinion

 [*578]  TABLE OF CONTENTS

OVERVIEW

THE ISSUES

DEPIANTI [**4] 

I. The Factual Background

II. Massachusetts and Georgia Decisions

A. Answer by the Massachusetts Supreme Judicial

Court

B. Parallel Litigation in Georgia

C. Final Order from the District Court of

Massachusetts

III. The First Circuit's Decision

THE PRESENT CASE

I. Res Judicata and Law of the Case

II. Retroactivity

A. Dynamex Applies Retroactively Under

California Law.

B. Applying Dynamex Retroactively Is Consistent

with Due Process

III. The Merits

A. The Facts

1. The Contracts Among the Various Entities

2. The Practical Realities

B. The District Court's Decision

C. Dynamex

D. Application of Dynamex on Remand

1. There Is No Patterson Gloss to the ABC

2. Other Courts Have Considered Three-Tier

Franchise Structures in Applying the ABC

3. Prong B of the ABC Test May Be the One

Most Susceptible to Summary Judgment

i. Are Unit Franchisees Necessary to Jan-Pro's

Business?

ii. Do Unit Franchisees Continuously Work

in Jan-Pro's Business System?

iii. Does Jan-Pro Hold Itself Out as a

Cleaning Business?

CONCLUSION

 [*579]  OPINION

BLOCK, District Judge:

In this putative class action we are tasked with having to decide the applicability of a recent decision by the high court of California, Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1, 4 Cal. 5th 903, 232 Cal. Rptr. 3d 1 (Cal. 2018)—postdating the district court's decision. [**5]  Dynamex adopted the so-called "ABC test" for determining whether workers are independent contractors or employees under California wage order laws. We hold that the test does apply, vacate the lower court's grant of summary judgment dismissing the complaint, and remand for further proceedings consistent with this opinion.

OVERVIEW

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923 F.3d 575 *; 2019 U.S. App. LEXIS 13237 **

GERARDO VAZQUEZ, GLORIA ROMAN, and JUAN AGUILAR, on behalf of themselves and all other similarly situated, Plaintiffs-Appellants, v. JAN-PRO FRANCHISING INTERNATIONAL, INC., Defendant-Appellee.

Subsequent History: Rehearing granted by, Opinion withdrawn by Vazquez v. Jan-Pro Franchising Int'l, Inc., 930 F.3d 1107, 2019 U.S. App. LEXIS 21687 (9th Cir., July 22, 2019)

Rehearing, en banc, denied by, As moot, Without prejudice Vazquez v. Jan-Pro Franchising Int'l, Inc., 2019 U.S. App. LEXIS 23257 (9th Cir. Cal., Aug. 2, 2019)

Question certified by, Motion granted by Vazquez v. Jan-Pro Franchising Int'l, Inc., 2019 U.S. App. LEXIS 28814 (9th Cir. Cal., Sept. 24, 2019)

Findings of fact/conclusions of law at Vazquez v. Jan-Pro Franchising Int'l, Inc., 2019 U.S. App. LEXIS 28999 (9th Cir. Cal., Sept. 24, 2019)

Prior History:  [**1] Appeal from the United States District Court for the Northern District of California. D.C. No. 3:16-cv-05961-WHA. William Alsup, District Judge, Presiding.

Roman v. Jan-Pro Franchising Int'l, Inc., 2017 U.S. Dist. LEXIS 79967 (N.D. Cal., May 24, 2017)

CORE TERMS

franchisees, franchise, regional, district court, retroactively, entity, franchisor, hiring, merits, courts, cleaning, Prong, res judicata, wage order, parties, Plaintiffs', independent contractor, preclusion, decisions, contracts, employees, purposes, cleaning service, cases, summary judgment, due process, nonparty, Cab, retroactive application, apply retroactively

Civil Procedure, Preclusion of Judgments, Estoppel, Collateral Estoppel, Judgments, Res Judicata, Federal & State Interrelationships, Federal Common Law, Applicability, Preliminary Considerations, Jurisdiction, Diversity Jurisdiction, Evidence, Burdens of Proof, Allocation, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection, Governments, Courts, Judicial Precedent, Erie Doctrine, Case or Controversy, Constitutionality of Legislation, Inferences & Presumptions, Legislation, Effect & Operation, Retrospective Operation, Labor & Employment Law, Employment Relationships, Independent Contractors, Wage & Hour Laws, Scope & Definitions, Definition of Employees, Torts, Vicarious Liability, Employers, Franchisees & Franchisors