Earlier this month, the Ninth Circuit Court of Appeal affirmed the California district court’s order certifying a class of approximately 800 claims adjusters who alleged that Allstate denied them overtime pay, ruling the class met the commonality requirement. Jimenez v. Allstate Insurance Co., No. 12-56112 (9th Cir. Sept. 3, 2014) (slip op. available here). Stating that the use of statistical sampling testimony to show classwide liability did not contradict the U.S. Supreme Court’s ruling in Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011), the court found that it and its sister circuit courts have regularly found that statistical sampling and representative testimony are acceptable ways to show liability. Moreover, the lower court had preserved the defendant’s ability to raise any individualized defenses it might have at the damages stage, and thus the certification order did not violate its due process rights.
Claims adjuster Jimenez filed this putative class action in 2010, on behalf of all Allstate claims adjusters in California working since Sept. 29, 2006. After Allstate reclassified its California claims adjusters from exempt positions to hourly status in 2005, the plaintiffs alleged that the defendant did not pay them overtime wages or for missing meal breaks. In April 2012, U.S. District Court Judge Kronstadt certified the overtime class, ruling that if Allstate had a common practice of disregarding its own written policies and discouraging employees from reporting overtime, then the employees meet the requirements for commonality. Meal and rest break claims were denied, however, because they were too individualized.
The Ninth Circuit agreed with the lower court’s order finding that the plaintiffs had raised at least three common questions: whether the class was forced to work unpaid overtime due to the defendant’s unofficial policy of deterring employees from reporting overtime (among other reasons), whether the defendants knew or should have known that the class members were working unpaid overtime, and whether the defendants “stood idly by.” Citing Dukes, the court opined that the lower court did not abuse its discretion in determining that these three common questions contained the ‘glue’ necessary to say that ‘examination of all the class members’ claims for relief will produce a common answer to the crucial question[s]’ raised in the plaintiffs’ complaint. Slip op. at 11 (internal citations omitted). The panel also rejected Allstate’s argument that statistical sampling violates due process during the liability phase of class action proceedings. “[S]tatistical sampling and representative testimony are acceptable ways to determine liability so long as the use of these techniques is not expanded into the realm of damages.” Id. at 12.