Maciel v. Flowers Foods, Inc.

Background

Jose Maciel and Maciel Distribution, Inc. sued Flowers Foods, Inc., Flowers Bakeries, LLC, and Flowers Finance, LLC. The complaint asserted four causes of action: unpaid overtime under the Fair Labor Standards Act (FLSA) for Maciel and a proposed FLSA collective; injunctive relief and restitution under California’s Unfair Competition Law (UCL); usury claims on behalf of Maciel and a proposed Usury Class; and additional UCL relief for the proposed Usury Class.

Flowers moved to dismiss, or alternatively to transfer or stay the case, under the first-to-file rule. That rule permits a court to stay or transfer a later-filed case when an earlier-filed case in another district involves substantially similar parties and issues. Flowers argued that Maciel’s counsel had filed substantially the same claims in an earlier action in the Southern District of California.

The earlier action asserted FLSA and UCL claims and other California-law claims involving people classified as independent contractors under distributor agreements or similar arrangements with Flowers. It also included a proposed group of California customers who received financing above 10 percent interest to purchase a Flowers route or territory. The earlier action had been stayed after discovery and extensive briefing, and 113 additional plaintiffs had opted into its FLSA collective action.

Analysis

The court considered the first-to-file factors: which lawsuit was filed first, whether the parties were substantially similar, and whether the issues substantially overlapped. The parties agreed that the earlier action was filed first.

As to the parties, the court found substantial similarity even though Maciel was not a named plaintiff or an opt-in FLSA collective member in the earlier action. Maciel was a member of the putative collective and class in that action. The court concluded that the FLSA collectives were identical except for the relevant time period, and that the proposed Rule 23 class in this case was identical to the earlier action’s Usury Sub-Class. The court rejected the argument that the proposed groups could not be compared because they had not yet been formally certified.

As to the issues, the court found substantial similarity because all four claims in this case were also at issue in the earlier action. The court explained that the claims did not have to be identical. The fact that the earlier action also included claims involving California employment law and the Dynamex decision did not defeat the required substantial overlap.

The court also rejected Maciel’s equitable arguments against applying the rule. It concluded that considerations of comity—respect for the other federal court’s handling of the earlier case—weighed in favor of transfer. Allowing this case to proceed separately could interfere with the earlier court’s resolution of overlapping claims and affect potential members of the earlier proposed class and collective.

Disposition

The court granted Flowers’s motion. Given the advanced status of the earlier matter, it determined that transfer was the most appropriate relief and ordered that this case be transferred to the Southern District of California. The opinion did not state that the case was dismissed.