Contract analysis

I. Executive Summary This report covers litigation activity for the period July 1–31, 2025, in Delano v. Stonefield Logistics Group Inc., Case No. 3:25-cv-01847-RBC, pending before the Honorable Rebecca Chen of the United States District Court for the Northern District of Texas, Dallas Division, with the Honorable Timothy Farrell serving as assigned magistrate judge. The most significant development during the report

II. Case Status and Procedural Update A. Motion for Conditional Certification On July 14, 2025, Plaintiff Marcus Delano, through his counsel Claudia Hartwell of Hartwell & Brashear PLLC, filed a Motion for Conditional Certification pursuant to 29 U.S.C. § 216(b). This motion represents the most consequential procedural development in the case to date and will likely shape the trajectory of this litigation through and

III. Conditional Certification Opposition Preparation A. Brief Drafting The opposition brief is being drafted by lead associate James Underwood and working associate Devon Archer, under the direct supervision of Bernard Crawford. Drafting commenced promptly following the filing of Plaintiff's motion on July 14, 2025, and is proceeding on schedule for the August 13, 2025 filing deadline. The defense's opposition will

1. Trevor Sandoval, Vice President of Operations, Stonefield Logistics Group Inc. Mr. Sandoval's declaration will address the operational differences across SLG's fourteen distribution hubs, including variations in delivery volume, delivery type (standard parcel, oversized freight, white-glove specialty), driver autonomy in route selection and scheduling, hub-specific protocols for load assignment and dispatch, and t

2. Karen Lund, Director of Driver Relations, Stonefield Logistics Group Inc. Ms. Lund's declaration will address the differences among the three ICOA versions, including the addition of subcontracting permissions in version 2.0, the introduction of the arbitration clause and collective action waiver in version 3.0, and the range of driver independence reflected in SLG's centralized records. Ms. Lund will also testify

3. Dennis Faulkner, Hub Manager, Fort Worth (HUB-01), Stonefield Logistics Group Inc. Mr. Faulkner's declaration will provide hub-specific evidence regarding operations at the Fort Worth distribution hub, where the named plaintiff, Marcus Delano, was based. Mr. Faulkner will address Delano's performance history and work patterns, the flexibility available to drivers at HUB-01 regarding scheduling and route selection,

4. Dr. Priya Ramanathan, Corbin Risk Advisors LLC. Dr. Ramanathan's declaration will present the results of her statistical and economic analysis of driver data across all fourteen SLG hubs. The declaration will address variance in weekly hours worked, per-delivery and effective hourly compensation, route acceptance rates, route deviation frequency, and multi-platform engagement. Dr. Ramanathan's analysis draws on Ro

IV. Expert Engagement — Corbin Risk Advisors LLC Calderwood & Harkness executed an expert retention agreement with Corbin Risk Advisors LLC on May 8, 2025. Dr. Priya Ramanathan, the firm's principal, was engaged as the defense's expert in statistical and economic analysis. Dr. Ramanathan's billing rate is $550 per hour, and her associates bill at $375 per hour. These rates are consistent with market rates for experts

V. Discovery Activity A. Defendant's discovery Responses On July 21, 2025, Defendant served its Objections and Responses to Plaintiff's First Set of Interrogatories. The responses addressed twenty-five interrogatories propounded by Plaintiff's counsel, covering a broad range of topics relevant to the misclassification claims and the conditional certification motion. Key topics addressed in the interrogatories and res

VI. Arbitration Strategy Update As previously reported, Calderwood & Harkness completed an internal analysis of the enforceability of the arbitration clause and collective action waiver contained in ICOA version 3.0 on May 15, 2025. Our conclusion remains that the clause is likely enforceable under the Federal Arbitration Act and the Supreme Court's decision in Granite Harbor Systems. v. Lewis, 584 U.S. 497 (2018), w

VII. Insurance Coverage Update SLG maintains an Employment Practices Liability Insurance ("EPLI") policy through Broadleaf Insurance Company. The relevant policy details are as follows: • Carrier: Broadleaf Insurance Company • Policy Number: BIC-EPL-2024-07831 • Policy Period: January 1, 2025 – January 1, 2026 • Self-Insured Retention ("SIR"): $2,000,000 • Aggregate Policy Limit: $10,000,000 Calderwood & Harkness sub

VIII. Damages Exposure Summary The damages exposure analysis set forth below is unchanged from the prior monthly report. We will update this analysis if material developments — such as a conditional certification ruling, a change in the scope of the collective, or new information regarding Plaintiff's damages theory — warrant revision. Plaintiff's Damages Theory: Plaintiff contends that SLG's drivers were employees e

IX. Financial Summary — Billing and Budget A. Fee Summary Through July 31, 2025 The following table summarizes cumulative legal fees billed through the end of the reporting period: Note: Rounding adjustments in the billing system result in a reported cumulative total of $142,350 (per billing system reconciliation). The $25 variance reflects standard rounding conventions applied by the firm's billing platform and does

X. Key Action Items and Next Steps The following action items represent the defense team's priorities for the near-term period:

1. August 8, 2025 — Finalize Declarations. Finalize all four supporting declarations (Trevor Sandoval, Karen Lund, Dennis Faulkner, and Dr. Priya Ramanathan) for filing with the opposition brief. This includes completing legal review, incorporating any final revisions from the declarants, and obtaining executed signature pages.

2. August 13, 2025 — File Opposition Brief. File Defendant's Response in Opposition to Plaintiff's Motion for Conditional Certification, together with all supporting declarations and exhibits, in the United States District Court for the Northern District of Texas.

3. August 27, 2025 — Review Plaintiff's Reply. Review and analyze Plaintiff's reply brief upon filing. Assess whether a sur-reply is warranted and, if so, seek leave of Court to file.

4. Ongoing — Follow Up on Plaintiff's discovery Responses. Follow up with Hartwell & Brashear PLLC regarding Plaintiff's overdue discovery responses to Defendant's First Set of Interrogatories and First Set of Requests for Production of Documents (served June 23, 2025). If responses are not forthcoming after meet-and-confer efforts, evaluate the appropriateness of a motion to compel.

5. Ongoing — Continue Document Production and Privilege Review. Continue the first-round document production on a rolling basis, with priority given to documents most directly relevant to the conditional certification briefing and merits discovery.

6. Strategic Decision Needed — Arbitration Motion Timing. The defense team requests client guidance by August 15, 2025, regarding the timing of the draft Motion to Compel Individual Arbitration and Dismiss Collective Claims of ICOA v3.0 Signatories. As discussed in Section VI above, our recommendation is to defer filing until after the conditional certification ruling, but we seek the client's confirmation or alterna

7. Settlement/Mediation Posture. The Board Update Memorandum was delivered on July 25, 2025. A draft mediation position statement was prepared on July 20, 2025, at Ridgepoint's request. No mediation is currently scheduled. We recommend revisiting the settlement posture after the Court rules on the conditional certification motion, as that ruling will significantly affect the litigation dynamics and the parties' relat

8. Insurance — Continue Monitoring. Continue monitoring Broadleaf Insurance Company's coverage position. Consider preparing a supplemental submission to Broadleaf addressing the two grounds identified in the reservation of rights letter to advocate for coverage confirmation. We will coordinate with SLG's in-house legal team regarding the timing and content of any such submission.

XI. Risk Assessment Overall Risk Level: Moderate-High The defense team's assessment of the overall risk level in this matter remains at Moderate-High, consistent with prior reports. This assessment reflects a balanced evaluation of the strengths and vulnerabilities of the defense position, the procedural posture of the case, and external factors affecting the litigation trajectory. Conditional Certification Standard.

1. Arbitration clause in ICOA v3.0. Approximately 640 drivers (54% of the putative collective) signed ICOA v3.0, which contains an enforceable arbitration clause with a class and collective action waiver. Enforcement of this clause would reduce the collective by more than half and significantly diminish Plaintiff's damages exposure and litigation leverage.

2. Material hub-by-hub operational differences. SLG's fourteen distribution hubs operate with meaningful differences in delivery types, volumes, management practices, and levels of driver autonomy. These differences undermine Plaintiff's claim that all putative collective members are "similarly situated" and support an argument that individualized inquiries — rather than collective adjudication — would be necessary t

3. Evidence of driver entrepreneurial opportunity. The defense has evidence that a subset of drivers engaged with competing delivery platforms during their engagement with SLG, owned their own delivery vehicles, had the ability to set their own schedules (within the framework of available delivery windows), and exercised discretion over route selection and delivery sequencing. These factors support independent contra

1. Significant operational controls. SLG's exercise of operational controls over its drivers — including mandatory uniforms, GPS tracking, required delivery windows (7:00 AM–8:00 PM, Monday through Saturday), RouteSync dispatch assignments, the 85% minimum acceptance rate, and the near-total prohibition on subcontracting — weighs against independent contractor classification and provides Plaintiff with strong factual

2. Per-delivery pay without negotiation ability. The per-delivery compensation structure ($14.50–$38.00 per delivery), set unilaterally by SLG without any ability for individual drivers to negotiate rates, weakens the defense's entrepreneurial opportunity argument and supports Plaintiff's contention that the economic relationship between SLG and its drivers was more akin to employment than independent contracting.

3. Insurance coverage uncertainty. Broadleaf's reservation of rights creates meaningful uncertainty regarding the availability of EPLI coverage for this matter. If coverage is denied, SLG would bear the full cost of any judgment or settlement, which could be substantial.

4. Ridgepoint exit/recapitalization timeline. Ridgepoint Capital Management's potential exit or recapitalization in late 2025 or early 2026 creates additional urgency to manage the litigation trajectory proactively. An adverse conditional certification ruling, a large-scale opt-in, or an unresolved insurance coverage dispute could complicate transaction diligence and valuation. Early resolution options — including me

XII. Confidentiality Notice This memorandum constitutes a privileged and confidential attorney-client communication and attorney work product prepared by Calderwood & Harkness LLP in anticipation of litigation and for the purpose of providing legal advice to Stonefield Logistics Group Inc. and Ridgepoint Capital Management LLC in connection with Delano v. Stonefield Logistics Group Inc., Case No. 3:25-cv-01847-RBC. D