Leyva v. Medline Industries: Ninth Circuit Reverses Class Cert. Denial; Comcast not a Bar to Certification

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.