Posts belonging to Category Certification Rulings

U.S. District Judge John W. Lungstrum has denied a defendant’s motion to decertify a class of plaintiffs and refused to apply the Behrend v. Comcast Corp. decision. The defendant claimed that the plaintiff’s damages expert considered rejected theories of liability, as in the Comcast case. Judge Lungstrum’s ruling also ordered Dow to pay $1.2 billion in damages to the plaintiffs, who had alleged antitrust violations by Dow. In re Urethane Antitrust Litigation, No. 04-1616 (D. Kan. May 15, 2013) (order denying motion to decertify class) (available here).

Judge Lungstrum declined to apply Comcast, giving particular emphasis to Dow’s belated move to decertify, as the decision criticized Dow’s untimeliness in bringing its motion, “literally on the eve of trial.” Slip op. at 2. “Dow has not offered any reason why it could not have filed its motion much earlier. . . . Reconsideration of the Court’s certification order at that time or even post trial would cause severe prejudice to plaintiffs, who prepared for a long and complex trial at great expense.” Id.

In the most significant victory yet for workers and other would-be plaintiffs following the U.S. Supreme Court’s Behrend v. Comcast, 113 S. Ct. 1426 (2013), a unanimous three-judge Ninth Circuit panel has reversed a federal district court’s denial of class certification, holding that the trial court abused its discretion in concluding that individualized damages calculations precluded certification. See Leyva v. Medline Indus., Inc., ___ F.3d ___, No. 11-56849 (9th Cir. May 28, 2013) (slip opinion available here).

The plaintiff’s claims were typical of those in wage and hour class actions, with each individual employee’s damages likely to be too small to be economically feasible to support individual actions. The Leyva plaintiff sought to represent 500-plus fellow employees who worked in the warehouse of Medline Industries, a maker of medical products. Slip op. at 3. The plaintiff alleged that Medline’s policy of rounding employees’ start times according to 29-minute increments systematically resulted in off-the-clock work and that Medline improperly calculated employees’ overtime pay rates, in addition to waiting-time penalty and wage statement claims. Slip op. at 3-4.

The district court had denied certification principally because “[e]ach of the 500 putative class members are allegedly entitled to different damage awards for being ‘short-changed’ by the rounding policy and/or the [overtime calculation] policy.” Slip op. at 6. The court also found that management of the case of a class action would be too unwieldy, again because of the differences in the class members’ damages. In rejecting Central District Judge R. Gary Klausner’s reasoning, the Ninth Circuit underscored the continuing validity of a maxim many had thought imperiled by Comcast: that variations in damages cannot, alone, defeat certification. See slip op. at 7-8, citing Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975).

The decision also emphasized that “damages determinations are individual in nearly all wage-and-hour class actions” (slip op. at 7, referencing Brinker), implying that Comcast would not be allowed to indirectly eliminate what has been recognized as the only practical way of enforcing California’s workplace protections. The decision explained as follows: “Here, unlike in Comcast, if putative class members prove Medline’s liability, damages will be calculated based on the wages each employee lost due to Medline’s unlawful practices. . . . Medline’s computerized payroll and time-keeping database would enable the court to accurately calculate damages and related penalties for each claim.” Slip op. at 8-9.

The Leyva decision goes on to demonstrate how Medline had used these computerized records in its Notice of Removal, and had separately calculated each prospective class member’s potential damages. Slip op. at 9. While defendants will likely take this as a reason to avoid offering up similar calculations, the data underlying those calculations is typically available through discovery in wage-and-hour class actions.

California’s Court of Appeal continues to articulate a measured, well-reasoned class action jurisprudence, most recently by taking a second look at its own order affirming a trial court’s denial of class certification. See Faulkinbury v. Boyd & Assocs., Inc., ___ Cal. Rptr. 3d ___ (Cal. Ct. App. 2013) (slip opinion available here).

In the underlying action, the plaintiffs sued on behalf of some 4,000 fellow security guards, alleging nonpayment of overtime as well as meal and rest break violations. The trial court denied certification across the board, and on appeal the certification as to the overtime claims was granted. However, pre-Brinker, the Court of Appeal affirmed the denial of certification for the meal and rest break claims. See Faulkinbury v. Boyd & Assocs., Inc., 185 Cal. App. 4th 1363 (2010).

The California Supreme Court later granted review and held pending further decision in its landmark Brinker decision (53 Cal. 4th 1004). Upon review in light of Brinker, the Court of Appeal has now ordered that the same meal and rest break claims be certified. Increasingly, despite having been assessed as something of a draw when it was issued, Brinker is looking like a net benefit to workers seeking to enforce California’s meal and rest break statutes, with Faulkinbury vividly illustrating what workers faced both before and after Brinker.

While the court’s pre-Brinker analysis was barely indistinguishable from a rough finding on the merits (“the trial court reasonably could conclude there was insufficient evidence of classwide denial of off-duty meal breaks” (185 Cal. App. 4th at 1383)), the post-Brinker analysis focused on the plaintiff’s theory of liability, consistent with Brinker and other similarly-reasoned authority. The court found persuasive evidence that the defendant’s meal break policy “was uniformly and consistently applied to all security guard employees.” As such, citing Brinker, the court held that “‘[c]laims alleging that a uniform policy consistently applied to a group of employees is in violation of the wage and hour laws are of the sort routinely, and properly, found suitable for class treatment.’” Slip op. at 13 (internal citation omitted).

This most recent Faulkinbury decision is notable in making direct reference to and relying on Justice Werdegar’s Brinker concurrence, noting that “if an employer’s records show no meal period for a given shift, a rebuttable presumption arises that the employee was not relieved of duty and no meal period was provided, shifting the burden to the employer to show the meal period was waived.” Slip op. at 10, citing Brinker, 53 Cal. 4th at 1052 (Werdegar, J, concurring). Thus, rather than giving rise to individual questions that destroy the predominance necessary for certification because such records speak to the “why” behind missed breaks, the Werdegar concurrence, and now Faulkinbury, sensibly regards such evidence as tending to validate a plaintiff’s theory of meal break liability.

The Faulkinbury panel included Acting Presiding Justice William F. Rylaarsdam, Associate Justice Richard D. Fybel, and Associate Justice Eileen Moore. Justice Fybel wrote the unanimous opinion.

In a win for employees seeking to remedy broad, systematic employer violations of workplace protections, California’s intermediate appellate court has reversed a trial court judge’s denial of class certification. Bluford v. Safeway Stores, Inc., No. C066074 (Cal. Ct. App. May 8, 2013) (slip opinion available here). Focusing on the often-decisive predominance requirement for class certification, the unanimous three-judge panel took issue with the trial court’s findings that individual issues predominated over common issues as to the plaintiff’s meal and rest break claims and that the plaintiff failed to allege a common injury resulting from the inadequate wage statements. Holding that “[i]nsufficient evidence supports the trial court’s ruling,” the Court of Appeal found that common issues predominated as to the meal, rest and wage statement claims, and directed the trial court to certify each claim. Slip op. at 2.

The issues around certification of the meal break claim were familiar, with the plaintiff presenting evidence of a systematic, de facto policy of the defendant not providing second meal breaks after the tenth hour of a shift. Slip op. at 11-12. The Court of Appeal deemed inadequate the defendant’s proffering of three declarations from supervisors, attesting to having provided the workers under them sufficient opportunity to take second meal breaks, notwithstanding the company’s lack of any written second meal policy comparable to its written policy governing first meal breaks. Slip op. at 12-13.

As to the rest break claim, the Court of Appeal extensively considered the defendant’s proffered defense, which seemingly entailed extensive individual questions. Slip op. at 7-9. However, the Court of Appeal ruled that determining whether Safeway’s rest break policy and purported practice of including payment for rest breaks in mileage reimbursements complied with California law could be accomplished in a single, common adjudication. Slip op. at 9-10.

Safeway offered a familiar defense to certification of a wage statement class by focusing on the California Labor Code requirement (under Cal. Lab. Code § 226(e)) that there must be an “injury” coincident with a wage statement violation. However, consistent with the California Legislature’s recent clarification of the wage statement statute, the Court of Appeal reversed the trial court’s denial of certification as to the wage statement claim, noting that “‘a very modest showing will suffice.’” Slip op. at 15, citing Jaimez v. DAIOHS USA, Inc., 181 Cal. App. 4th 1286, 1306 (2010).

While this case is not currently designated as published, the Third Appellate District’s rigorously reasoned and detailed ruling as to some of the most frequently pleaded classwide claims would likely find considerable utility as a published case.