O 1

2 3 4 5 6 7

8 United States District Court 9 Central District of California

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11 ROOSEVELT ESPINOSA et al., Case № 2:23-cv-00659-ODW (Ex)

12 Plaintiffs, ORDER RE: MOTIONS FOR

13 v. PARTIAL SUMMARY JUDGMENT

14 CEVA FREIGHT, LLC, et al., [112] [116]

15 Defendants.

16 17 I. INTRODUCTION 18 Plaintiffs, thirteen truck drivers, bring this action against Defendant CEVA 19 Freight, LLC, alleging violations of various federal, state, and municipal employment 20 laws. (Sixth Am. Compl. (“SxAC”), Dkt. No. 103.) CEVA asserts affirmative 21 defenses, including that CEVA is not Plaintiffs’ employer, and that Plaintiffs are 22 independent contractors. (Answer 22–29, Dkt. No. 105.) Three Bellwether 23 Plaintiffs—Roosevelt Espinosa, Jose Fernandez, and Manuel Guzman—now move for 24 partial summary judgment, asking the Court to dismiss CEVA’s affirmative defenses 25 and find that they are employees. (Pls.’ Mem. P. & A. ISO Mot. Summ. J. (“PMSJ”), 26 Dkt. No. 112-1.) CEVA also moves for partial summary judgment, asking the Court 27 to find that it has met at least one part of California’s three-part test for employment 28 classification, known as the “ABC test,” and that only the remaining two parts are 1 issues left for trial. (Def.’s Mem. P. & A. ISO Mot. Summ. J. (“DMSJ”), Dkt. 2 No. 116-1.) For the reasons discussed below, the Court GRANTS IN PART and 3 DENIES IN PART Bellwether Plaintiffs’ Motion and DENIES CEVA’s Motion.1 4 II. FACTUAL BACKGROUND 5 The Court derives the factual background, some of which is disputed, from the 6 parties’ Statements of Uncontroverted Facts (“SUF”), Statements of Genuine Disputes 7 and Additional Material Facts (“SGD” and “AMF”), and Responses thereto 8 (collectively, the “Statements”), in addition to the parties’ clearly and specifically 9 cited evidence. See C.D. Cal. L.R. 56-1 to 56-4. 10 A. CEVA Logistics and CEVA 11 CEVA Logistics is a global logistics network that “provides a wide range of 12 supply chain solutions for large and medium-size national and multinational 13 companies across the globe.” (Def.’s SUF (“DSUF”) 9, Dkt. No. 116-2.) It advertises 14 itself as “capable of providing global supply chain management and end-to-end 15 logistics solutions.” (DSUF 11.) CEVA Logistics maintains a website where it 16 discusses its mission and services. (Pls.’ AMF (“PAMF”) 83, Dkt. No. 130.) In 17 describing its mission, CEVA Logistics states that it is a “top 5 player in third-party 18 logistics by consistently delivering exceptional end-to-end supply chain solutions in 19 contract logistics, customs, project logistics, FVL and air, ground, and ocean freight.” 20 (Pls.’ SUF (“PSUF”) 5, Dkt. No. 112-2.) Its website indicates that it provides 21 “[p]ick-up and delivery services.” (PSUF 7.) CEVA Logistics also states that it can 22 provide transportation services, including “+1000 trained and uniformed drivers,” to 23 provide “reliable and efficient delivery services to [its] customers.” (PSUF 8–9.) 24 CEVA Logistics comprises several different companies, including Defendant 25 CEVA Freight (“CEVA”). (DSUF 7.) CEVA itself is considered a “freight 26 forwarder,” meaning it is responsible for warehousing and “final mile” fulfillment 27

28 1 Having carefully considered the papers filed in connection with the Motions, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 services for goods moving through CEVA Logistics’s system. (DSUF 12.) While the 2 parties dispute the extent to which freight forwarding services make up CEVA’s 3 overall services, it is undisputed that at least some of CEVA’s services include freight 4 forwarding. (Pls.’ SGD (“PSGD”) 15, Dkt. No. 130.) 5 B. Transition to Cargomatic 6 Before 2016, CEVA directly contracted with approximately seventy drivers, 7 including Bellwether Plaintiffs. (PSUF 19.) In late 2016 or early 2017, CEVA 8 terminated its contracts with Bellwether Plaintiffs and other drivers carrying freight 9 for CEVA in California. (PSUF 20.) CEVA then entered into a Transportation 10 Services Agreement (“TSA”) with Cargomatic, a transportation-logistics company 11 that provides drivers and equipment to freight carriers, such as CEVA, and a mobile 12 application for driver use. (SxAC ¶ 32; Decl. Aaron Kaufmann ISO PMSJ Ex. 6 13 (“TSA”), Dkt. Nos. 172-1 (sealed)2, 115-6 (unsealed).) In the TSA, CEVA agreed to 14 “make best efforts to tender to Cargomatic 90% of shipments.” (TSA ¶ 5.) In return, 15 Cargomatic agreed to “make best efforts to arrange to transport such shipments.” (Id.) 16 To do so, Cargomatic represented and warranted to CEVA that it would “contract with 17 motor carriers of property,” i.e., drivers. (Id. ¶ 2.) CEVA subsequently notified the 18 drivers with whom it previously contracted that CEVA would no longer contract with 19 them directly. (DSUF 44.) Instead, these drivers, such as Bellwether Plaintiffs, 20 would need to contract with Cargomatic independently as licensed motor carriers. (Id. 21 at 46.) 22 CEVA also notified Bellwether Plaintiffs that they “would need to have a 23 fictitious business name (‘DBA’) or company to contract with Cargomatic.” (See, 24 e.g., Decl. Jose Fernandez ISO Opp’n DMSJ (“Fernandez Decl.”) ¶ 4, Dkt. No. 133.) 25 Thus, each Bellwether Plaintiff formed a DBA and sought licenses to transport 26 commercial property. (Id.; CEVA Resp. PSGD (“CEVA Resp.”) 41, Dkt. No. 158.) 27 28 2 This document is mistakenly labeled in the CM/ECF docket text as “Exhibit 2.” 1 C. CEVA, Cargomatic, and Plaintiffs 2 Since late 2016 or early 2017, Cargomatic has continued to supply drivers for 3 CEVA’s transports, most of whom had previously contracted directly with CEVA. 4 (Def.’s SGD (“DSGD”) 72–73, Dkt. No. 139.) Under this arrangement, a CEVA 5 supply-chain specialist coordinates with a customer to schedule pickups and 6 deliveries. (DSGD 55.)3 CEVA then relies on Cargomatic to “arrange, coordinate, 7 and fulfill shipment of CEVA’s customers’ freight to its final destination.” 8 (PSGD 19.) Cargomatic, in turn, provides drivers with a smartphone application 9 (“App”) that it uses to assign freight movements, both CEVA and non-CEVA, to 10 participating drivers. (DSGD 75; see DSUF 37.) For example, since 2016, at least 11 one of the Bellwether Plaintiffs has performed non-CEVA-related deliveries assigned 12 via the Cargomatic App. (See, e.g., Decl. Juliana C. Vallier ISO Opp’n PMSJ 13 (“Vallier Decl.”) Ex. 8 (“Espinosa Dep. Tr. Excerpt”), Dkt. No. 138-11.) At issue 14 here, Cargomatic assigned Bellwether Plaintiffs to transport CEVA shipments out of 15 CEVA’s Los Angeles and Ontario locations, which average 400 to 500 shipments a 16 day. (DSGD 81; DSUF 24.) 17 Once a driver delivers a shipment, he or she submits paperwork to a CEVA 18 employee showing that the CEVA customer’s delivery was executed and accepted. 19 (DSUF 27.) While Cargomatic handles the drivers’ (and Bellwether Plaintiffs’) 20 payment, (DSUF 28), CEVA directly invoices customers and collects payment for the 21 drivers’ deliveries, (DSGD 91).4 CEVA and Cargomatic managers also have regular 22 business reviews to ensure drivers are “meeting CEVA’s operational expectations and 23 key performance indicators, including on time pickups and deliveries.” (PSUF 84.) 24 3 Although CEVA indicates that it disputes this fact, it disputes only the assertion that CEVA supply 25 chain specialists “transmit the assignments for dispatching to drivers.” (DSGD 55.) However, there is no dispute that CEVA supply chain specialists “schedule pickups and deliveries.” (Id.) 26 4 CEVA purports to dispute this fact, arguing it “[m]isstates the evidence” because “CEVA invoices and collects payment from its customers for all transportation services.” (DSGD 91.) While that 27 may be true, that does not change Bellwether Plaintiffs’ asserted undisputed fact: that CEVA 28 invoices and collects payment for delivery services as well. Therefore, the Court finds this fact is undisputed. 1 D. Procedural Posture 2 On January 27, 2023, Plaintiff Espinosa filed this action. (Compl., Dkt. No. 1.) 3 Since then, at least twelve additional Plaintiffs, including Bellwether Plaintiffs, have 4 joined. (See SxAC.) In the operative Sixth Amended Complaint, Plaintiffs allege 5 violations of the federal Fair Labor Standards Act, California labor laws, the 6 California Unfair Competition Law (“UCL”), and City of Los Angeles municipal 7 ordinances. (Id. ¶¶ 52–156.) Given the number of Plaintiffs, the Court ordered, 8 pursuant to the parties’ stipulation, that this action proceed as a bellwether trial. 9 (Order re Bellwether, Dkt. No. 73.) Plaintiffs and CEVA each selected one bellwether 10 plaintiff, with a third plaintiff selected at random. (Joint Stip., Dkt. No. 68.) 11 On May 22, 2025, the parties filed cross-motions for partial summary judgment. 12 As stipulated by the parties, the focus here is simple: “whether the three bellwether 13 Plaintiffs were improperly classified as independent contractors instead of as 14 employees.” (Joint Appl. 1, Dkt. No. 100.) 15 III. EVIDENTIARY OBJECTIONS 16 Both parties object to portions of the other’s evidence. Much of the material to 17 which they object is unnecessary to the resolution of the Motions, and the Court need 18 not resolve those objections. For similar reasons, relevance- and foundation-based 19 objections are moot in the context of summary judgment motions. Burch v. Regents 20 of Univ. of Cal., 433 F. Supp. 2d 1110, 1119 (E.D. Cal. 2006). Moreover, the Court 21 does not consider improper argument and legal conclusions in the parties’ Statements, 22 (see Scheduling & Case Management Order (“Scheduling Order”) 7–9, Dkt. No. 32), 23 so any objections on those bases are also moot. As for hearsay, a court may not grant 24 a summary judgment motion on the basis of hearsay evidence, but it may deny a 25 summary judgment motion on the basis of hearsay evidence as long as it finds that the 26 hearsay evidence would be admissible at trial. Fed. R. Civ. P. 56(e); Fraser v. 27 Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 2003). Finally, to the extent the Court 28 relies on objected-to evidence in this order without further objection, those objections 1 have been thoroughly considered and are overruled. See Burch, 443 F. Supp. 2d 2 at 1122 (proceeding with only necessary evidentiary rulings). 3 IV. LEGAL STANDARD 4 A court “shall grant summary judgment if the movant shows that there is no 5 genuine dispute as to any material fact and the movant is entitled to judgment as a 6 matter of law.” Fed. R. Civ. P. 56(a). A disputed fact is “material” where it might 7 affect the outcome of the suit under the governing law, and the dispute is “genuine” 8 where “the evidence is such that a reasonable jury could return a verdict for the 9 nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The 10 burden of establishing the absence of a genuine issue of material fact lies with the 11 moving party. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). 12 Once the moving party satisfies its initial burden, the nonmoving party cannot 13 simply rest on the pleadings or argue that any disagreement or “metaphysical doubt” 14 about a material issue of fact precludes summary judgment. Matsushita Elec. Indus. 15 v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see Celotex, 477 U.S. at 324. The 16 non-moving party must show that there are “genuine factual issues that . . . may 17 reasonably be resolved in favor of either party.” Cal. Architectural Bldg. Prods., Inc. 18 v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 19 477 U.S. at 250) (emphasis omitted). Courts should grant summary judgment against 20 a party who fails to make a sufficient showing on an element essential to her case 21 when she will ultimately bear the burden of proof at trial. Celotex, 477 U.S. at 322– 22 23. 23 In ruling on summary judgment motions, courts “view the facts and draw 24 reasonable inferences in the light most favorable” to the nonmoving party. Scott v. 25 Harris, 550 U.S. 372, 378 (2007) (internal quotation marks omitted). Thus, when 26 parties file cross-motions for summary judgment, the court “evaluate[s] each motion 27 separately, giving the nonmoving party in each instance the benefit of all reasonable 28 inferences.” A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790–91 (9th Cir. 1 2006). The court considers “each party’s evidence, regardless under which motion the 2 evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 3 2011). Conclusory, speculative, or “uncorroborated and self-serving” testimony will 4 not raise genuine issues of fact sufficient to defeat summary judgment. Villiarimo v. 5 Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002); Thornhill Publ’g Co. v. 6 GTE Tel. & Elec. Corp., 594 F.2d 730, 738 (9th Cir. 1979). Moreover, though the 7 Court may not weigh conflicting evidence or make credibility determinations, there 8 must be more than a mere scintilla of contradictory evidence to survive summary 9 judgment. Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). 10 The Court may assume that material facts claimed and adequately supported are 11 undisputed except to the extent that such material facts are (a) included in the 12 opposing party’s responsive statement of disputes and (b) controverted by declaration 13 or competent written evidence. C.D. Cal. L.R. 56-4. The Court is not obligated to 14 look any further in the record for supporting evidence other than what is actually and 15 specifically referenced. Id. 16 V. DISCUSSION 17 Both parties’ Motions concern CEVA’s Second and Third Affirmative Defenses. 18 CEVA’s Second Affirmative Defense asserts that CEVA “was not Plaintiffs’ 19 employer,” while its Third Affirmative Defense asserts that Plaintiffs were 20 independent contractors. (Answer 22.) 21 Bellwether Plaintiffs seek partial summary judgment as to both defenses on the 22 basis that CEVA is considered Bellwether Plaintiffs’ employer as a matter of law. 23 (PMSJ 1–2.) Bellwether Plaintiffs argue that in determining employment status, the 24 Court must apply the ABC test as laid out in Dynamex Operations West, Inc. v. 25 Superior Court, 4 Cal. 5th 903 (2018), and codified in California Labor Code 26 section 2775. (Id. at 13–15.) Bellwether Plaintiffs also ask the Court to find that 27 CEVA cannot prove the second prong of the ABC test. (Id. at 15–18.) 28 1 CEVA also seeks partial summary judgment and asks the Court to find the 2 converse of Bellwether Plaintiffs’ position: that the ABC test does not apply, and that 3 even if it does apply, CEVA has proven at least the second prong of the test. 4 (DMSJ 29–30.) 5 The Court addresses these issues in two parts. First, the Court examines the 6 applicable test in this matter and determines whether the ABC test must apply, or 7 alternatively whether a triable issue exists as to its applicability such that another test 8 could govern. Second, and irrespective of the answer to the first question, the Court 9 examines whether CEVA can satisfy or has satisfied the second prong of the ABC test. 10 A. Applicable Test 11 Under California law, and for purposes of California wage orders, “any worker 12 who performs work for a business is presumed to be an employee who falls within the 13 protections afforded by a wage order.” Vazquez v. Jan-Pro Franchising Int’l, 10 Cal. 14 5th 944, 948 (2021). The hiring entity can overcome this presumption, and thereby 15 establish that a worker is not an “employee,” by establishing each of the three 16 elements in the ABC test. Dynamex, 4 Cal. 5th at 956–57. To carry its burden under 17 the ABC test, a hiring entity must establish each of the following: 18 (A) that the worker is free from the control and direction of the hiring 19 entity 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 20 worker performs work that is outside the usual course of the hiring 21 entity's business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same 22 nature as the work performed. 23 24 Id. at 957 (emphasis omitted); see Cal. Lab. Code § 2775 (codifying the ABC test). 25 CEVA contends that it need not satisfy the ABC test at all. (DMSJ 17–20; 26 Opp’n PMSJ 15–17, 23–28, Dkt. No. 138.) CEVA advances two arguments. First, it 27 argues that, because Cargomatic satisfies the ABC test, the Court should not also 28 apply the test to CEVA. (DMSJ 17–20; Opp’n PMSJ 15–17.) Second, it argues that 1 the business-to-business exception, found in California Labor Code section 2776(a), 2 applies here and removes this case from Dynamex and the ABC test, instead requiring 3 analysis under the California Supreme Court’s decision in S.G. Borello & Sons, Inc. v. 4 Department of Industrial Relations, 48 Cal. 3d 341 (1989). (Opp’n PMSJ 23–28.) 5 1. Cargomatic and the ABC Test’s Applicability to CEVA 6 CEVA first argues that, because Cargomatic satisfies the ABC test, “Plaintiffs 7 should not be able to sidestep Cargomatic to apply the ABC test to another entity like 8 CEVA.” (Id. at 15–16 (emphasis omitted).) CEVA further claims that application of 9 the ABC test here, despite Cargomatic’s apparent satisfaction of the test, would lead to 10 “illogical results.” (Id. at 16–17.) 11 a. Applying the ABC test to Cargomatic and CEVA 12 The Court is unpersuaded by CEVA’s argument that the Court cannot apply the 13 ABC test here just because Cargomatic may already satisfy it. First, neither the 14 California Labor Code nor Dynamex contemplates such an exception. The California 15 Labor Code contains nine express exceptions to the ABC test. Cal. Lab. Code. 16 §§ 2776–2784. These include, among others, the business-to-business exception, id. 17 § 2776, a referral agency/service provider exception, id. § 2777, and a professional 18 services exception, id. § 2778. However, none of these exceptions include two hiring 19 entities that each satisfy the ABC test. Considering how thorough the Legislature was 20 in listing exceptions to the ABC test, the Court declines to read in another exception 21 that the Legislature did not expressly list. See Castillo v. Metro. Life Ins. Co., 22 970 F.3d 1224, 1232 (9th Cir. 2020) (“The [negative implication] canon applies only 23 when circumstances support a sensible inference that the term left out must have been 24 meant to be excluded.” (citation modified)). 25 Dynamex also does not support such an exception. The Dynamex court held 26 that “the suffer or permit to work standard must be interpreted and applied broadly.” 27 Dynamex, 4 Cal. 5th at 953. The result of such a broad interpretation is that “all 28 individual workers who can reasonably be viewed as working in the hiring entity’s 1 business” are considered employees, rather than independent contractors. Id. This 2 clear and unequivocal language does not include space for an exception where “all” 3 means “all unless the worker is already viewed as working in another hiring entity’s 4 business.” 5 Second, CEVA’s authority does not support its proposed exception. CEVA cites 6 only one California Court of Appeal case, Henderson v. Equilon Enterprises, LLC, 7 40 Cal. App. 5th 1111 (2019). (Id. at 16.) In Henderson, the plaintiff—a manager of 8 several Shell-branded gas stations—sued both the gas station operator and Shell for 9 various wage-order violations. 40 Cal. App. at 1114–15. The plaintiff asserted that 10 both the operator and Shell were equally liable under a “joint employer” theory of 11 liability. Id. at 1114. As CEVA does here, Shell asserted in Henderson that it was not 12 the plaintiff’s employer and argued that the ABC test in Dynamex should not apply. 13 Id. at 1114, 1125. The court agreed, concluding that “the ABC test in Dynamex does 14 not fit analytically with and was not intended to apply to claims of joint employer 15 liability.” Id. at 1125. Rather, the court in Dynamex “was concerned with the problem 16 of businesses misclassifying workers as independent contractors so that the business 17 may obtain economic advantages.” Id. at 1127. However, the court in Henderson 18 reasoned, those policy concerns do not exist in a “joint employer” claim because “the 19 worker is an admitted employee of a primary employer.” Id. at 1128. Rather, the 20 animating policy concern in a joint employer claim is ensuring that, where “the 21 primary employer is unwilling or no longer able to satisfy claims of unpaid wages,” 22 the worker may “look to another business entity that may be separately liable as their 23 employer.” Id. 24 Henderson is distinguishable for two reasons. First, it concerns the ABC test’s 25 application to “joint employer” claims, and Plaintiffs bring no such claims here. (See 26 generally SxAC.) Second, and more importantly, the policy concerns in Henderson 27 are wholly different from those implicated in this case. 28 1 The Ninth Circuit’s decision in Vazquez v. Jan-Pro Franchising International, 2 Inc., is instructive. 986 F.3d 1106 (9th Cir. 2021). There, the defendant—a franchisor 3 that organized commercial cleaning franchises—contracted with several third-party 4 franchisees for them to use the franchisor’s logo. Id. at 1111, 1118. The third-party 5 franchisees would then act as franchisors, selling their business plans to individual 6 franchisees. Id. Several of those individual franchisees sued the original franchisor, 7 alleging that the system was a farce and they were “direct employee[s] of” the original 8 franchisor. Id. at 1112. In the wake of Dynamex, the parties disputed whether the 9 ABC test applied to that “three-tier franchise model.” Id. at 1111. 10 To resolve this question, the Ninth Circuit looked not only to Dynamex but also 11 to Massachusetts state law, as “Dynamex embraced the Massachusetts version of the 12 [ABC] test.” Id. at 1122. The Massachusetts Supreme Judicial Court (“SJC”) had 13 concluded, before Vazquez, that “the ABC test applies to a dispute between a putative 14 employee and a hiring entity even if they are not parties to the same contract.” Id. 15 at 1124 (citing Depianti v. Jan-Pro Franchising Int’l, Inc., 465 Mass. 607, 623–24 16 (2013)). The Massachusetts SJC aptly illustrated this principle with an example 17 particularly relevant here: 18 [C]ompany A contracts with company B for services, and company B 19 enters into arrangements with third parties to perform the work it undertook under its contract with company A. We agree that ordinarily, in 20 such circumstances, company A would not be liable for misclassification 21 of the third-party workers. This is because ordinarily, in such circumstances, company B would be the agent of any misclassification. 22 However, here [plaintiff] alleges that [company A], and not [company B], 23 designed and implemented the contractual framework under which he 24 was misclassified as an independent contractor. The lack of a contract between [plaintiff] and [company A] does not itself preclude liability. 25 Where a party is the agent of misclassification, it may be directly liable 26 under [the ABC test], even where it utilizes a proxy to make arrangements with its employees. 27 28 Depianti, 465 Mass. at 624 n.17 (citation modified). 1 Just as in Depianti, Plaintiffs allege that CEVA, not Cargomatic, terminated its 2 drivers and now relies on a proxy to contract with and pay them, thereby 3 circumventing California’s labor laws. (SxAC ¶¶ 5–6.) While unproven at this 4 stage—and the Court does not accept it as true for the purposes of this decision— 5 allegations like these, and the policy concerns they implicate, lead the Court to 6 conclude that the ABC test could be applied to CEVA here even if Cargomatic 7 satisfied it. See Vazquez, 986 F.3d at 1124 (applying the ABC test in a three-tier 8 employment model). Where the court in Henderson was concerned with ensuring that 9 a plaintiff could look to another joint employer to satisfy employer liability, the ABC 10 test is concerned with preventing a putative employer from circumventing labor laws 11 by inserting a proxy between itself and the worker, just as Plaintiffs contend CEVA is 12 doing here. 13 b. “Illogical results” 14 CEVA also points to several “illogical results” that will follow if the Court 15 applies the ABC test to CEVA even if Cargomatic satisfies the test. First, CEVA 16 argues that Cargomatic already properly classified Plaintiffs as independent 17 contractors. (Opp’n PMSJ 16.) However, this is the same scenario that the Ninth 18 Circuit considered in Vazquez. 986 F.3d at 1112. There, despite an agreement 19 between the third-party franchisor and the independent franchisee-plaintiffs deeming 20 the plaintiffs to be “at all times . . . independent contractor[s],” the Ninth Circuit held 21 that the ABC test still applied to the original franchisor. Id. at 1112, 1121–22. The 22 same is true here. Even assuming Cargomatic did “properly classif[y]” Plaintiffs as 23 independent contractors, the ABC test still applies to CEVA. 24 Second, CEVA argues that “[a]pplying the ABC test to any alleged hiring entity 25 would create absurd conclusions,” such as the possibility that Plaintiffs could have 26 “several different ‘employers’ each day.” (Opp’n PMSJ 16–17.) But California courts 27 have consistently recognized that business models involving multiple employers do 28 not preclude application of the ABC test to determine the employer/employee 1 relationship. See, e.g., People v. Uber Techs., Inc., 56 Cal. App. 5th 266, 294 (2020) 2 (“The dispositive issue [in Dynamex] was not whether the defendant and its drivers 3 followed what might be viewed as a traditional employment model . . . but whether 4 the mode in which the drivers were utilized met the elements of the ABC test.”). 5 Moreover, the ABC test “does not prohibit the use of independent contractors” in the 6 shipping context. People v. Superior Ct. (Cal Cartage Transp. Express, LLC), 57 Cal. 7 App. 5th 619, 630 (2020). Considering that courts have contemplated multiple- 8 employer business models, including in the shipping context, the Court is 9 unconvinced that applying the ABC test here would lead to a result where Plaintiffs 10 would unjustly have “several different ‘employers’ each day.” (Opp’n PMSJ 16–17.) 11 Third, CEVA argues that applying the ABC test “would undermine the entire 12 shipper-broker-carrier model” established by the Federal Motor Carrier Safety 13 Administration (“FMSCA”) and “frustrate Congress’[s] intent to regulate the efficient 14 delivery of goods nationally.” (Opp’n PMSJ 17.) However, CEVA does not cite, nor 15 does the Court find, any authority for these propositions. In fact, at least one court has 16 explicitly stated that the FMCSA’s regulations do not preempt Dynamex and state laws 17 governing “when an employee relationship exists or under what terms.” W. States 18 Trucking Ass’n v. Schoorl, 377 F. Supp. 3d 1056, 1072–73 (E.D. Cal. 2019). 19 Moreover, Congress’s intent in establishing the FMSCA was not the “efficient 20 delivery of goods,” as CEVA argues, but rather “to reduce the number and severity of 21 large-truck involved crashes.” Motor Carrier Safety Improvement Act, § 4(2), Pub. L. 22 No. 106-159, 113 Stat. 1748 (1999). Congress explicitly tasked the FMCSA to ensure 23 “the highest degree of safety in motor carrier transportation.” Id. § 101. While the 24 FMSCA has adopted safety regulations that preempt certain California wage orders, 25 see Int’l Brotherhood of Teamsters, Local 2785 v. Fed. Motor Carrier Safety Admin., 26 986 F.3d 841, 845–46 (9th Cir. 2021), nothing suggests that applying the ABC test 27 here would interfere with or frustrate Congress’s intent to promote motor-carrier 28 safety, see Schoorl, 377 F. Supp. 3d at 1073 (“Dynamex’s interpretation of California 1 wage orders has, at best, only a tangential impact on safety concerns and do not 2 conflict with the federal Regulations, which do not govern when an employee 3 relationship exists or under what terms.”). 4 Therefore, the Court finds that it may apply the ABC test to CEVA even if 5 Cargomatic also satisfied test. 6 2. Business-to-Business Exception 7 CEVA also argues that the ABC test does not apply to it because Plaintiffs are 8 engaged in a business-to-business relationship with CEVA. (Opp’n PMSJ 23–28.) 9 Under California Labor Code section 2776, Dynamex and the ABC test “do not apply 10 to a bona fide business-to-business contracting relationship.” To establish the 11 exception of a business-to-business contracting relationship, the contracting business 12 (here, CEVA) must “demonstrate that [twelve elements] are satisfied.” Cal. Lab. Code 13 § 2776(a). Only where the contracting business proves all twelve elements do courts 14 apply the test articulated in Borello rather than Dynamex and the ABC test. 15 Bellwether Plaintiffs argue that this business-to-business exception cannot 16 apply here because it requires a “contracting relationship” between the contracting 17 business (here, CEVA) and the business service provider (here, Plaintiffs), and 18 Plaintiffs did not contract directly with CEVA. (Reply PMSJ 4, Dkt. No. 157.) 19 Bellwether Plaintiffs also argue that, even if the business-to-business exception could 20 apply here, CEVA lacks the evidence to prove at least three of the elements required. 21 (Id. at 4–5.) 22 a. Statutory interpretation 23 Bellwether Plaintiffs first argue that the exception does not apply because 24 “CEVA does not contract directly with Plaintiffs.” (Id. at 4.) To determine whether 25 the business-to-business exception requires a direct contracting relationship, the Court 26 “start[s], of course, with the statutory text.” Sebelius v. Cloer, 569 U.S. 369, 376 27 (2013). The Court “look[s] to legislative intent” only if there is any ambiguity in the 28 1 text of the statute. Cleveland v. City of Los Angeles, 420 F.3d 981, 989 (9th Cir. 2 2005). 3 The text of section 2776 states that Dynamex does not apply to “bona fide 4 business-to-business contracting relationships.” Section 2776(a) defines a business- 5 to-business contracting relationship, in part, as a situation where a “[business service 6 provider] contracts to provide services to [a contracting business].” Read plainly, this 7 language does not impose a requirement that the business service provider contract 8 directly with the contracting business. Instead, it requires only that the business 9 service provider enter a contract which benefits, i.e., “provide[s] services,” to the 10 contracting business. If the Legislature had intended that the business service 11 provider contract directly with the contracting business, it could have easily done so 12 by using the word, “with.” It did not. Instead, it chose to use the words “to provide 13 services to.” Thus, the Court finds that the plain language of section 2776(a) does not 14 require a direct contracting relationship. 15 The language of section 2776(b), although inapplicable here, supports that 16 section 2776 does not require a direct contracting relationship. Section 2776(b) 17 provides that, where “two bona fide businesses are contracting with one another under 18 the conditions set forth in [section 2776(a)],” the business-to-business exception does 19 not apply. Two inferences can be drawn from this provision. The first is that a 20 scenario exists under section 2776(a) where two bona fide businesses are not 21 contracting with one another. The second is that the Legislature knew how to 22 unambiguously state when businesses must contract directly with one another. As the 23 Legislature did so in section 2776(b), but not in section 2776(a), the Court 24 understands the Legislature intended different meanings in each section. See Sosa v. 25 Alvarez-Machain, 542 U.S. 692, 711 n.9 (2004) (“[W]hen the [L]egislature uses 26 certain language in one part of the statute and different language in another, the court 27 assumes different meanings were intended.”). 28 1 Admittedly, some ambiguity exists between the term itself—“business-to- 2 business contracting relationship,” § 2776—and its definition—the relationship where 3 a “(‘business service provider’) contracts to provide services to [a] . . . (‘contracting 4 business’),” § 2776(a). Thus, the Court turns to legislative intent to clarify the 5 resulting ambiguity. See Cleveland, 420 F.3d at 989. 6 The Legislative Counsel’s Digest (“Digest”) of Assembly Bill (“AB”) 2257, the 7 AB that enacted section 2775 and codified the ABC test, supports the above reading 8 that the “business service provider” need not contract directly with the “contracting 9 business.” “California courts presume that the Legislature acted with the intent and 10 meaning expressed in the Legislative Counsel’s Digest.” Sebastian Int’l, Inc. v. 11 Russolillo, 151 F. Supp. 2d 1215, 1219 (C.D. Cal. 2001) (citation modified) (citing 12 People v. Henson, 57 Cal. App. 4th 1380, 1386 (1997)). As relevant here, the Digest 13 states that “[t]he bill would revise the conditions pursuant to which business service 14 providers providing services pursuant to contract to another business are exempt” 15 from application of the ABC test. A.B. 2257, 2019–2020 Leg., Reg. Sess. (Cal. 2020). 16 Put more simply, the intent of the bill was to codify an exception to the ABC test when 17 a “business service provider[] provid[es] services pursuant to contract to another 18 business.” See id. This is consistent with the statutory text in section 2776(a). As 19 with the statutory text, the Digest’s language evinces two requirements: (1) that 20 Business A (the “business service provider”) is providing services pursuant to a 21 contract, and (2) that Business A is providing those services to Business B (the 22 “contracting business”). However, nothing in the Digest evinces a requirement that 23 Business A’s contract be directly with Business B. 24 Therefore, based on both the plain statutory language and the legislative intent 25 of section 2776, the Court finds that the business-to-business exception to the ABC 26 test can apply even where the business service provider does not contract directly with 27 the contracting business. As such, the Court rejects Bellwether Plaintiffs’ first 28 argument that the business-to-business exception does not apply on this basis. 1 b. Business-to-business exception elements 2 Bellwether Plaintiffs next argue that CEVA cannot meet three of the twelve 3 elements required for the business-to-business exception to apply. (Reply PMSJ 4–5.) 4 To determine whether a business-to-business contracting relationship exists, the 5 contracting business (here, CEVA) must establish that twelve statutorily enumerated 6 elements are satisfied. Cal. Lab. Code § 2776(a)(1)–(12). If the contracting business 7 cannot “establish any one of the criteria, the inquiry ends.” Thoma v. VXN Grp. LLC, 8 No. 2:23-cv-04901-WLH (AGRx), 2025 WL 1766337, at *17 (C.D. Cal. Mar. 11, 9 2025) (citing Lawson v. Grubhub, Inc., 665 F. Supp. 3d 1108, 1114 (N.D. Cal. 2023)).\ 10 As Bellwether Plaintiffs seek summary judgment, it is Bellwether Plaintiffs 11 who bear the initial burden to show an “absence of evidence” to support any prong of 12 the business-to-business exception. Bowerman v. Field Asset Servs. Inc., No. 3:13-cv- 13 00057-WHO, 2024 WL 218122, at *4 (N.D. Cal. Jan. 19, 2024)). Only once 14 Bellwether Plaintiffs meet that initial burden does the burden shift to CEVA to 15 “designate specific facts showing that there is a genuine issue for trial.” Id. (citation 16 modified) (quoting Pac. Gulf Shipping Co. v. Vigorous Shipping & Trading S.A., 17 992 F.3d 893, 897 (9th Cir. 2021)). 18 Bellwether Plaintiffs point only to an absence of evidence for the second, third, 19 and eighth elements. (Reply PMSJ 4–5.) The Court finds that Bellwether Plaintiffs 20 fail to meet their initial burden as to all three challenged elements. 21 The second element requires that “[t]he business provider” (here, Plaintiffs) are 22 “providing services directly to the contracting business rather than to customers of the 23 contracting business.” Cal. Lab. Code § 2776(a)(2). Bellwether Plaintiffs argue that 24 “CEVA cannot prove that Plaintiffs were ‘providing services directly to [CEVA] rather 25 than to [CEVA’s customers]’” because “CEVA admits that ‘Plaintiffs transported 26 freight . . . for CEVA’s customers.’” (Reply PMSJ 5.) This argument relies on a 27 “‘strained reading’ of section 2776.” Bowerman, 2024 WL 218122, at *7 (citing Cal 28 Cartage, 57 Cal. App. 5th at 634). CEVA could meet this element by demonstrating 1 that “[s]ervices [are] provided by [Plaintiffs] directly to [CEVA], notwithstanding that 2 those services would include moving freight belonging to [CEVA’s] customers.” Cal 3 Cartage, 57 Cal. App. 5th at 634. Thus, it is not dispositive of the second element that 4 CEVA admits that Plaintiffs carry its customers’ freight. 5 The third element requires that “[t]he contract with the business service 6 provider is in writing and specifies the payment amount, including any applicable rate 7 of pay, for services to be performed, as well as the due date of payment for such 8 services.” Id. § 2776(a)(3). Bellwether Plaintiffs contend that CEVA cannot prove 9 that “the contract with [Plaintiffs] is in writing” because “CEVA does not contract 10 with Plaintiffs.” (Reply PMSJ 4.) This argument follows the same logic as 11 Bellwether Plaintiffs’ argument above, that section 2776 requires a direct contracting 12 relationship between the business service provider and the contracting business. As 13 the Court has already concluded that Plaintiffs need not contract directly with CEVA 14 for the business-to-business exception to apply, this derivative argument also fails. 15 Moreover, the third business-to-business exception element does not require that the 16 contract be with the contracting business; it requires only that whatever contract “the 17 business service provider” has entered into be in writing. Cal. Lab. Code 18 § 2776(a)(3). 19 Finally, the eighth element requires that “[t]he business service provider 20 advertises and holds itself out to the public as available to provide the same or similar 21 services.” Id. § 2776(a)(8). Bellwether Plaintiffs argue that there is “no evidence that 22 each Plaintiff ‘advertise[d] and [held] itself out to the public as available to provide 23 the same or similar services.” (Reply PMSJ 5 (emphasis omitted).) Specifically, they 24 argue that “CEVA’s evidence that Plaintiffs occasionally worked for and were 25 available to other companies through the Cargomatic app is insufficient” to satisfy the 26 eighth element. (Id.) However, Bellwether Plaintiffs cannot deny that the record 27 contains at least some evidence they used Cargomatic for non-CEVA jobs, thus 28 providing the same or similar services to other companies. (Espinosa Dep. Tr. 1 Excerpt 212:25–214:3 (acknowledging that he was paid by Cargomatic for non-CEVA 2 work).) At this stage, the Court must draw inferences from that evidence in favor of 3 CEVA as the non-moving party here, A.C.L.U. of Nev., 466 F.3d at 790–91, and a 4 reasonable factfinder could find that Plaintiffs’ making themselves available on the 5 Cargomatic App for non-CEVA work satisfies this element. 6 Bellwether Plaintiffs rely on Lawson, in which the court found evidence that a 7 plaintiff worked for competitors, without more, was insufficient to satisfy the eighth 8 element. 665 F. Supp. 3d at 1116. But in Lawson, that plaintiff worked for 9 competitors was the only evidence offered on the issue. Here, CEVA relies not only 10 on evidence that Plaintiffs worked for non-CEVA entities, but also on evidence that 11 Plaintiffs made themselves available to other shippers on Cargomatic’s App. (Opp’n 12 PMSJ 27.) This additional fact—that Plaintiffs made themselves available on an 13 online platform—allows a reasonable trier of fact to find that Plaintiffs advertise and 14 hold themselves out to the public.5 See Bowerman, 2024 WL 218122, at *12 (finding 15 that a business’s placement on LinkedIn was sufficient evidence for a trier of fact to 16 determine that the eighth element was satisfied). 17 In summary, Bellwether Plaintiffs have failed to show an “absence of evidence” 18 as to the second, third, and eighth elements of the business-to-business exception. See 19 Bowerman, 2024 WL 218122, at *4. Consequently, there remains a genuine issue of 20 material fact as to whether the business-to-business exception applies. As the 21 business-to-business exception could apply, there is a possibility that the ABC test will 22 not govern employment determination in this matter. Considering Bellwether 23 Plaintiffs’ Motion “is premised solely on the ABC test,” (Reply PMSJ 5 n.5), the 24 Court cannot fully grant Bellwether Plaintiffs’ Motion or conclude that CEVA cannot 25 prevail on its second and third affirmative defenses. Having found that the ABC test 26 27 5 CEVA also asserts that Plaintiffs’ “motor carrier services were publicized [on] . . . a website 28 operated by the federal [Department of Transportation.]” (Opp’n PMSJ 27.) However, neither the cited SUF nor the underlying evidence support CEVA’s contention. 1 could—but may not—apply, the Court turns to the remaining issue: whether either 2 party is entitled to judgment as to Prong B of the ABC test. 3 B. Prong B of the ABC Test 4 Both parties move for summary judgment as to Prong B of the ABC test: 5 Bellwether Plaintiffs argue CEVA cannot satisfy Prong B, while CEVA argues it does 6 not have to and, in any event, it can and has. (PMSJ 18; DMSJ 29–30.) 7 Prong B of the ABC test asks whether “the person performs work that is outside 8 the usual course of the hiring entity’s business.” Cal. Lab. Code § 2775(b)(1)(B). 9 This element “reflects the distinction between workers who are truly independent 10 contractors and those whose work involves the hiring entity’s usual course of 11 business.” Vazquez, 986 F.3d at 1125. In Vazquez, the Ninth Circuit developed a 12 three-party inquiry to guide analysis of Prong B: (1) “whether the work of the 13 employee is necessary to or merely incidental to that of the hiring entity,” 14 (2) “whether the work of the employee is continuously performed for the hiring 15 entity,” and (3) “what business the hiring entity proclaims to be in.” Id. Of the three 16 ABC test prongs, Prong B “may be the one most susceptible to summary judgment.” 17 Id. However, the Court must first “determine whether summary judgment is 18 warranted on the current record.” Id. 19 CEVA asks the Court to find that it has satisfied Prong B, leaving only Prongs A 20 and C for trial. (DMSJ 30.) Specifically, CEVA argues that federal regulations define 21 the roles of CEVA and Plaintiffs here, requiring the Court to bypass the Vazquez 22 factors and find that CEVA satisfies Prong B under those regulations. (Id. at 20–22.) 23 CEVA also argues that, even if the Court does apply Vazquez, the evidence shows it 24 has met Prong B. (Id. at 22–29.) Bellwether Plaintiffs argue that under the Vazquez 25 factors, CEVA cannot satisfy Prong B. (PMSJ 13–18.) Consequently, Bellwether 26 Plaintiffs argue, because the ABC test is written in the conjunctive, CEVA cannot 27 satisfy the ABC test. (See id. at 18.) 28 1 1. FMSCA Regulations 2 In another pseudo-preemption argument, CEVA argues that because the 3 FMSCA define CEVA’s and Plaintiffs’ roles separately, the Court should bypass the 4 Vazquez factors and find that Plaintiffs’ work falls outside CEVA’s usual course of 5 business. (DMSJ 20–22.) For support, CEVA cites 49 C.F.R. § 375.103, which 6 provides the regulations’ definitions. (Id. at 20–21.) CEVA argues Plaintiffs fit the 7 definition of “[h]ousehold goods motor carrier,” and that CEVA fits the definition of 8 “shipper.” (Id.); 49 C.F.R. § 357.103. According to CEVA, because CEVA and 9 Plaintiffs have “specifically defined roles under applicable federal regulations,” 10 Plaintiffs must provide services that are different than CEVA’s and are, therefore, 11 “outside the course of CEVA’s business.” (DMSJ 21.) Thus, CEVA urges the Court to 12 find Prong B satisfied based on the regulations’ definitions, without analyzing the 13 Vazquez factors. (Id. at 22.) 14 This argument is unavailing. As an initial matter, CEVA has not cited—nor has 15 the Court found—any authority permitting a court to bypass the Vazquez factors 16 simply because a federal regulation, for convenience or clarity, provides definitions 17 that the parties might fit. Moreover, as the Court noted above, the FMSCA is a safety 18 agency. Its regulations guide motor carriers in complying with FMSCA’s safety 19 regulations; they do not delineate entities for purposes of wage and hour laws. 20 CEVA argues that if the Court does not find that CEVA satisfies Prong B by 21 virtue of the FMSCA’s definitions, it would “elevate[] California’s ABC test over and 22 above the” FMSCA’s regulations. (DMSJ 21.) However, Congress has not indicated 23 that the FMSCA’s regulations have any preclusive effect over the ABC test. It is true 24 that Congress has disapproved of certain California laws that it finds disadvantageous 25 “to motor carriers who used a large proportion of independent contractors.” People ex 26 rel. Harris v. Pac Anchor Transp., Inc., 59 Cal. 4th 772, 787 (2014) (citing 27 Congressional records). Yet it has not, as far as the Court can tell, disapproved of the 28 ABC test. Rather, as at least one other court has found, the ABC test is “not the type 1 of law Congress intended to preempt.” Cal Cartage, 57 Cal. App. 5th at 619. Instead, 2 it is a law of “general application,” id., that leaves putative employers “free to use 3 independent contractors as long as they are properly classified,” Pac Anchor, 59 Cal. 4 4th at 787. 5 Therefore, CEVA fails to demonstrate that the Court should bypass the Vazquez 6 factors and find Plaintiffs work falls outside of CEVA’s usual course of business by 7 virtue of FMSCA regulatory definitions. 8 2. Applying Prong B 9 The Court now turns to the Vazquez factors: (1) whether Bellwether Plaintiffs 10 are necessary or merely incidental to CEVA’s work; (2) whether CEVA’s business 11 model continuously relies on Bellwether Plaintiffs’ services; and (3) how CEVA 12 describes itself. Vazquez, 986 F.3d at 1125. Bellwether Plaintiffs argue that CEVA 13 cannot satisfy Prong B, while CEVA argues it can and has. (PMSJ 18; DMSJ 29–30.) 14 Evaluating “each motion separately, giving the nonmoving party in each instance the 15 benefit of all reasonable inferences,” A.C.L.U. of Nev., 466 F.3d at 790–91, the Court 16 finds no genuine issue of material fact and concludes that Bellwether Plaintiffs are 17 entitled to summary judgment on Prong B. Fed. R. Civ. P. 56(a). 18 a. Necessary or merely incidental 19 The first Vazquez factor asks whether the “putative employees were ‘necessary’ 20 or ‘incidental’ to the hiring entity’s business.” Vazquez, 986 F.3d at 1125. This 21 inquiry can be “conducted through a common-sense observation of the nature of the 22 business” or “in more economic terms.” Id. at 1125–26. For example, in a 23 common-sense analysis, courts have found that “‘floor measurers’ are necessary to the 24 business of a carpet retailer and, thus, were in the same business as the retailer.” Id. 25 at 1125–26 (citing Carpetland U.S.A., Inc. v. Ill. Dep’t of Emp. Sec., 201 Ill. 2d 351, 26 386 (2002)). Under an economic analysis, courts view putative employees as 27 necessary when the hiring entity “derive[s] [its] profits from the earnings of the 28 [putative employees],” and thus, “the work of the [putative employees is] necessary to 1 the success of the [hiring entity].” Id. at 1126 (citing O’Hare-Midway Limousine 2 Serv., Inc. v. Baker, 232 Ill. App. 3d 108, 112–13 (1992)); see also Lawson, 665 F. 3 Supp. 3d at 1120 (finding putative employees’ delivery services “necessary” to the 4 business of food delivery application company because the company “made more 5 money if drivers made more deliveries”). 6 The facts material to this factor are undisputed. CEVA is a freight-forwarder, 7 meaning that it is responsible for warehousing customer cargo and ensuring that the 8 cargo reaches the intended destination. (DSUF 15.) While the parties dispute how 9 much of CEVA’s freight movements in California Bellwether Plaintiffs perform, it is 10 undisputed that Bellwether Plaintiffs move at least some of this cargo. (PSGD 15.) 11 Furthermore, CEVA has regular meetings with Cargomatic managers to ensure 12 Bellwether Plaintiffs are “meeting CEVA’s operational expectations and key 13 performance indicators.” (PSUF 84.) 14 Under a common-sense approach, and even if viewing this undisputed evidence 15 in the light most favorable to CEVA, there is only one inference: CEVA needs drivers, 16 like Bellwether Plaintiffs, to transport its customers’ containers. Without drivers like 17 Bellwether Plaintiffs, CEVA would have no means by which to transport cargo over 18 ground and would be unable to provide “reliable and efficient delivery services to [its] 19 customers.” (PSUF 8–9.) Thus, drivers like Bellwether Plaintiffs are just as 20 necessary to CEVA’s business as “floor measurers” are to a “carpet retailer.” Vazquez, 21 986 F.3d at 1125. 22 An economic inquiry leads to the same conclusion. Similar to above, the 23 parties may dispute how much of CEVA’s profits derive from the work of Bellwether 24 Plaintiffs (and other drivers), but they do not dispute that CEVA collects some 25 payments for Bellwether Plaintiffs’ work. (DSGD 91.) It is similarly undisputed that 26 CEVA regularly performs performance reviews of Cargomatic drivers, which supports 27 the inference that a Bellwether Plaintiffs’ failure to “meet[] CEVA’s operational 28 expectations and key performance indicators” somehow impacts CEVA’s bottom line. 1 (PSUF 84.) As CEVA derives at least some portion of its profits from Bellwether 2 Plaintiffs’ labor and CEVA is not “indifferent to . . . how well [Bellwether Plaintiffs] 3 perform [their] work,” Bellwether Plaintiffs are necessary to the success of CEVA’s 4 business in an economic sense. Vazquez, 986 F.3d at 1126; see Lawson, 665 F. Supp. 5 3d at 1120–21 (finding drivers were “necessary” to the hiring entity because the entity 6 “made more money if drivers made more deliveries”). 7 CEVA suggests that Vazquez’s economic inquiry requires the factfinder to 8 determine what percentage of CEVA’s total profits come from Bellwether Plaintiffs’ 9 work. (See Opp’n PMSJ 20 (“CEVA’s success as a business neither depends on 10 Plaintiff’s business . . . nor [is it] CEVA’s primary source of profits.”).) CEVA is 11 mistaken. In Vazquez, the Ninth Circuit discussed two similar Illinois cases with 12 disparate results. In one, chauffeurs “paid a percentage of their earnings to the 13 company.” Vazquez, 986 F.3d at 1126 (citing O’Hare, 232 Ill. App. 3d at 112–13). In 14 the other, taxi drivers “paid a flat fee to lease taxicab medallions.” Id. (citing Parks 15 Cab Co. v. Annunzio, 412 Ill. 549, 552–53 (1952)). The Ninth Circuit explained that, 16 in O’Hare, the chauffeurs were necessary to the success of the limousine company 17 because the company “derived their profits from the earnings of the limousine 18 chauffeurs.” Id. (citing O’Hare, 232 Ill. App. 3d at 112–13). In other words, the 19 limousine company’s profits were directly affected by the performance, or lack 20 thereof, of the chauffeurs. By contrast, in Parks Cab, the taxi drivers were incidental 21 to the success of a medallion company because “medallion companies’ revenues were 22 not affected by how much the taxicab drivers worked.” Id. (citing Parks Cab, 412 Ill. 23 at 552–53). In other words, the medallion company’s profits were not affected by the 24 taxi driver’s performance because the taxi drivers had already paid a flat fee to the 25 medallion companies. 26 Thus, Vazquez demonstrates that under an economic inquiry, the factfinder need 27 find only that the hiring entity’s profits are or would be affected by the putative 28 employee’s performance. See id. (“Jan-Pro earns a percentage of the payments that 1 customers pay for cleaning services. Thus, unlike the medallion owners in Parks Cab, 2 Jan-Pro is not indifferent to how much work unit franchisees do or how well they 3 perform that work.”). Here, as discussed above, the undisputed evidence compels the 4 conclusion that Bellwether Plaintiffs’ work, driving CEVA customer freight, clearly 5 has at least some impact on CEVA’s profits as a freight-forwarder. 6 The authorities CEVA cites do not compel a different result. (Opp’n PMSJ 20– 7 21.) CEVA cites Guynn-Neupane v. Magna Legal Services, LLC, where the court 8 found that jury focus groups were outside the usual course of business of a litigation 9 services business. No. 19-cv-02652-VKD, 2021 WL 4481661, at *29 (N.D. Cal. 10 Sept. 30, 2021). And for good reason: a litigation services business does not need to 11 employ jury focus groups to perform its business. Id. CEVA also cites Sportsman v. 12 A Place for Rover, Inc., 537 F. Supp. 3d 1081, 1095 (N.D. Cal. 2021), analogizing 13 itself to a pet care marketplace where pet care providers, who the court found were 14 independent contractors, could advertise. (Opp’n PMS 21.) But in Sportsman, the pet 15 care marketplace was a “true marketplace,” where pet care providers could set their 16 own prices and book their own services. 537 F. Supp. 3d at 1095. Here, however, 17 CEVA sets the delivery prices, not the drivers, (DSGD 91), and also books pickup and 18 deliveries, (DSGD 55). 19 Therefore, the Court finds that the first factor weighs decisively for Bellwether 20 Plaintiffs, even when viewing the evidence in the light most favorable to CEVA. 21 b. Continuous performance 22 The second Vazquez factor asks whether the hiring entity’s “business model 23 relies on [the putative employees] continuously performing” their work. Vazquez, 24 986 F.3d at 1126–27. This factor “capture[s] the distinction between independent 25 contractor arrangements designed to evade requirements placed on employers[,] and 26 traditional contractors like electricians and plumbers[] who perform incidental 27 services for otherwise unrelated businesses.” Id. at 1126. The emphasis is on the 28 hiring entity and its business model, rather than the work each individual plaintiff 1 actually performed for the hiring entity. See Lawson, 665 F. Supp. 3d at 1121 2 (rejecting a hiring entity’s argument that the plaintiffs “each worked sporadically”). 3 There is only one fact that is material here, and it is undisputed: CEVA has 4 needed drivers like Plaintiffs to move its customers’ freight for at least nine years. 5 (See DSGD 72 (“Cargomatic began supplying Drivers for CEVA transports in 6 late 2016 or early 2017”).) This undisputed piece of evidence, even when viewed in 7 the light most favorable to CEVA, compels only one result: CEVA continuously used 8 and relied on Bellwether Plaintiffs’ services. Nine years is more than enough time to 9 establish continuity of work. It certainly is enough time to distinguish Bellwether 10 Plaintiffs from “traditional contractors like electricians and plumbers.” Vazquez, 11 986 F.3d at 1127. 12 CEVA resists this result by arguing that it relies on Cargomatic, not drivers. 13 (Opp’n PMSJ 22.) This is a distinction without a difference. CEVA relies on the 14 service that Bellwether Plaintiffs provide: driving freight. If Cargomatic were 15 removed from CEVA’s shipper/broker/driver model, CEVA would still rely on drivers 16 to move freight. In contrast, if the drivers were removed from the model, CEVA’s 17 business would suffer as it would lose the ability to move freight overground. CEVA 18 also argues that Plaintiffs had “total freedom over what jobs they chose.” (Id. 19 (emphasis omitted).) However, as noted above, this inquiry focuses on nature of the 20 service Bellwether Plaintiffs provide. Whatever freedom Bellwether Plaintiffs had to 21 choose jobs is not relevant to whether CEVA continuously used the services they 22 provided. 23 Therefore, the Court finds the second factor weighs decisively for Bellwether 24 Plaintiffs, even when viewing the undisputed evidence in the light most favorable to 25 CEVA. 26 c. How the business describes itself 27 The third Vazquez factor requires the Court, in “determining the usual course of 28 a hiring entity’s business,” to “consider how the business describes itself.” Vazquez, 1 986 F.3d at 1127. Courts “have rejected attempts by hiring entities to categorize their 2 business as merely enabling, facilitating, or coordinating services rather than 3 providing those services.” Lawson, 665 F. Supp. 3d at 1121 (citing Bowerman v. Field 4 Asset Servs., 60 F. 4th 459, 477 (9th Cir. 2023)). 5 Here, the parties do not appear to dispute that CEVA is in the “freight 6 transportation” business. (See Opp’n PMSJ 23; Reply PMSJ 6.) And CEVA seems to 7 adopt CEVA Logistics’s proclamations, such as how it “advertises itself as a provider 8 capable of providing global supply chain management and end-to-end logistics 9 solutions,” which only support this characterization. (DSUF 11; see DMSJ 28 (citing 10 CEVA Logistics’ proclamations in its SUF); DSUF 7–10; PSUF 5, 8–9.) 11 However, the parties disagree on how Bellwether Plaintiffs should be 12 characterized. CEVA argues that Plaintiffs are in the “truck driving business.” (Opp’n 13 PMSJ 23.) Even if Bellwether Plaintiffs could be characterized that way—and the 14 Court takes no position on this issue—“truck driving” is nothing if not “freight 15 transportation.” CEVA also appears to argue that CEVA and Bellwether Plaintiffs 16 must “perform the same work” to satisfy this factor. (Id.) Not so. If that were the 17 case, then the Prong B inquiry would simply ask whether the hiring entity and the 18 putative employee perform the same work. Instead, the inquiry is whether the 19 putative employee performs work outside the hiring entity’s usual course of business. 20 Cal. Civ. Code. § 2775(b)(1)(B). Thus, even assuming that Bellwether Plaintiffs are 21 properly classified as being in the “truck driving business,” the Court finds that such 22 work is not “outside” the “usual course of business” of a “freight transportation 23 service.” See Portillo v. Nat’l Freight, Inc., 606 F. Supp. 3d 72, 90–91 (D.N.J. 2022) 24 (finding that commercial truck drivers were part of a defendant’s usual course of 25 business even after accepting the characterization that defendant’s course of business 26 was “provid[ing] logistics services”). 27 28 1 d. Summary of Prong B 2 After examining all the Vazquez factors and drawing all inferences in CEVA’s 3 favor, the Court finds that Bellwether Plaintiffs operate squarely within CEVA’s usual 4 course of business—freight transportation business—for the purposes of Prong B. 5 The undisputed evidence shows that, under both a common-sense inquiry and an 6 economic inquiry, Bellwether Plaintiffs are necessary to CEVA’s business. The 7 undisputed evidence also shows that CEVA has continuously used Bellwether 8 Plaintiffs’ services, namely, truck driving. Taken together, this demonstrates that 9 Bellwether Plaintiffs are fully within CEVA’s usual course of business. Accordingly, 10 CEVA cannot satisfy Prong B of the ABC test, and Bellwether Plaintiffs are entitled to 11 partial summary judgment on this issue. And because the ABC test is written in the 12 conjunctive, such that a “finding of any prong against the hiring entity directs a 13 finding of an employer-employee relationship,” Vazquez, 986 F.3d at 1125, the Court 14 finds that CEVA cannot satisfy the ABC test. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 VI. CONCLUSION 2 The Court finds that a triable issue remains regarding whether the ABC test 3 || applies. It further finds that, if the ABC test applies, CEVA cannot satisfy Prong B of 4] the test. Therefore, the Court GRANTS IN PART Bellwether Plaintiffs’ Motion for 5 || Partial Summary Judgment as to Prong B only and DENIES the remainder of 6 || Bellwether Plaintiffs’ Motion. (Dkt. No. 112.) The Court further DENIES CEVA’s 7 || Motion for Partial Summary Judgment in its entirety. (Dkt. No. 116.) Therefore, with 8 | regards to CEVA’s second and third affirmative defenses, what remains for trial is the 9 || issue of whether the business-to-business exception applies and, if so, whether CEVA 10 || satisfies the Borello factors. The parties shall not litigate the individual elements of 11 || the ABC test. 12 13 IT IS SO ORDERED. 14 wi 15 December 3, 2025 ha Cr 16 17 OTIS D. WRIGHT, I ig UNITED STATES DISTRICT JUDGE

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