Werner Enterprises hopes the third time is the charm.
A case that has gone up to the 8th U.S. Circuit Court of Appeals three times for a judgment whose size doesn’t even hit $1 million received a ruling Monday favorable to Werner (NASDAQ: WERN). The decision came down more than seven years after a jury ruled in favor of a group of driver trainees in a class action lawsuit and more than 13 years after the initial case was filed.
The lengthy appellate process for the case had virtually nothing to do with the original legal question brought by the hundreds of defendants, who were all Werner student drivers trained through the truckload carrier’s subsidiary, Drivers Management.
That case was originally brought by plaintiff Philip Petrone in the U.S. District Court for the Eastern District of Pennsylvania in 2011, though it ended up in the U.S. District Court for Nebraska, where Werner is headquartered. The defendants were Werner and Drivers Management.
The initial lawsuit also gained class status with a voluminous list of plaintiffs.
Petrone, a New Jersey native, enrolled in a Drivers Management program in Allentown, Pennsylvania, according to the initial complaint in 2011.
The long-ago issues, which continue to pop up in litigation today, focused on whether Werner and Drivers Management properly compensated Petrone and ultimately other members of the class for hours spent in a truck sleeper berth and break time at a rate that equated to the federal minimum wage. The case was brought under the Fair Labor Standards Act.
The jury in the case ruled in favor of Petrone and the plaintiffs and granted the precise award of $779,127. The judgment in favor of the drivers regarded break time only; the arguments on sleeper berth compensation failed.
That’s when the appeals began that ultimately led the Court of Appeals for the 8th Circuit to hear the case three times.
But the appeals process was unrelated to the issues raised by the student drivers. Rather, it focused solely on the submission of evidence and whether certain steps were taken in a timely manner.
The history looks like this:
- In May 2017, a jury ruled in favor of the defendants and awarded the class the $779,127 judgment. Werner and its Drivers Management subsidiary appealed.
- In October 2019, in the case that the appellate court refers to as “Petrone 1,” the appellate court ruled in favor of Werner/Drivers regarding certain filing deadlines not being met by the plaintiffs. It rejected the lower court decision and sent the case back to the District Court. The issues surrounding timing involved expert reports about the value of the student drivers’ time, whether those reports could be admissible because of when they were filed and whether, without them, the plaintiffs had much of a case. There also were questions about the methodology of Richard Kroon, the expert for the drivers.
- On the remand back to the District Court, the plaintiffs asked for a new trial. But the lower court ruled against that and in favor of Werner/Drivers, with the “untimely expert report” a key issue. The plaintiffs appealed to the 8th Circuit … again.
- The arguments in front of the appeals court on the second go-round again focused on timely filing and whether, if the expert reports from Kroon were not allowed, there was a basis for a new trial. The appellate court ruled in favor of Werner/Drivers and sent the case back to the lower court once again.
- The next round of proceedings at the District Court again involved questions of timing and whether deadlines had been met or breached. There were rulings on admissibility that favored the drivers but not enough to satisfy them, and they appealed to the higher court again. So did the defendants.
- The drivers’ request for a new trial throughout the appeals process repeatedly ran up against the issue of the timeliness of the expert’s report. Their appeal charges the District Court with “abuse of discretion” in its decision, including the rejection of another expert as a sort of substitute for the expert report that failed to meet deadlines.
- But the appellate court, in the recently concluded third review of the case, rejected those plaintiff arguments. It affirmed the lower court decision, which tosses out the case with prejudice, meaning no other avenues to the plaintiffs are open beyond an appeal to the full circuit court.
The end result: Werner is victorious on the third try, and the case is not going back to the District Court, unlike the first two times after an appeal to the 8th Circuit. An appeal to the full circuit is possible.
A request for comment from Werner or its attorney listed on court documents had not been responded to by publication time.
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