Posts belonging to Category Certification Rulings



Lubin v. Wackenhut: Decertification Order Based on Dukes Reversed by Cal. Ct. of Appeal

On November 21, 2016, the California Court of Appeal for the Second Appellate District reversed the decertification of a class of over 10,000 employees. The Court of Appeal held that the trial court should examine the plaintiffs’ theory of recovery when evaluating class certification, rather than the frequency of violations resulting from that theory. Lubin v. The Wackenhut Corporation, No. B244383, __ Cal. App. 4th __ (2nd Dist. Div. 4 Nov. 21, 2016) (slip op. available here). This is welcome news for the plaintiffs’ class action bar, as it narrows the ways in which a trial court may peek at the merits of the plaintiff’s claims at the class certification stage.

The Lubin class of security officers, employed by Wackenhut, was initially certified for Labor Code claims on the basis of on-duty meal period waivers that the security officers had signed. Following certification, the parties agreed to a statistical sampling of records to determine the merits of the class claims—specifically, to determine how many class members had signed on-duty meal waivers that did not include required revocation language. Then, the United States Supreme Court issued its ruling on Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), in which the high court cast doubt on the acceptability of using statistical sampling to prove liability in an employment class action. The defendant in Lubin moved for decertification based on Dukes, on the grounds that the agreed-upon sampling of meal break waivers would violate Dukes’ proscription of “trial by formula.” The trial court took further briefing in light of Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), and then decertified the class. The Lubin plaintiffs appealed.

The Court of Appeal, citing Brinker, held that the answer to the “ultimate question” for class certification “hinges on ‘whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.’” Slip op. at 8 (internal citations omitted). In pushing against the trial court’s application of Dukes, the Court of Appeal pointed to the clarification in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1048 (2016) (stating that Dukes does not “stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability”). Slip op. at 12. Further, the Court of Appeal criticized the trial court for examining, in its class certification analysis, the damages issue of whether employees actually experienced meal period violations. Notably, the Court of Appeal held that the trial court’s “standard requiring plaintiffs to ‘conclusively establish’ that Wackenhut had a policy that violated wage and hour laws is improper because plaintiffs’ burden at class certification is to produce substantial evidence.” Id. at 41 (emphasis in original).

With Lubin, the impact of Dukes has been reduced, and class action plaintiffs in California can now more easily certify claims based on solid theories of liability, even if the actual impact of those theories does not necessarily result in widespread damages. However, defendants may see this as a dilution of what it means to have a certified class, given that the bar has, in a sense, been lowered.

Authored by:
Jonathan Lee, Associate
CAPSTONE LAW APC

Vaquero v. Ashley Furniture: 9th Cir. Ruling Clarifies, Eases Class Certification Requirements

In June, the Ninth Circuit Court of Appeals issued a ruling that could provide a significant boon to class action plaintiffs. In Vaquero v. Ashley Furniture Industries, Inc., et al. (9th Cir. June 8, 2016) (slip op. available here), the appellate panel affirmed a district court order granting certification in a wage and hour class action. In doing so, the court considered the applicability of several United States Supreme Court opinions from recent years, finding in favor of the Vaquero plaintiffs in each instance.

The Vaquero plaintiffs were commission-only salespeople who alleged that they were required to perform additional, non-sales work without being paid the requisite minimum wage for these tasks. The lower court certified the class, and the defendant-employer appealed, citing landmark U.S. Supreme Court cases Wal-Mart Stores, Inc. v. Dukes (564 U.S. 338 (2011)) and Comcast Corp. v. Behrend (133 S. Ct. 1426 (2013)), neither of which involved wage and hour issues.

Examining the commonality requirement, which requires that plaintiffs’ claims be capable of classwide resolution, the Ninth Circuit rejected the defendants’ reliance on Dukes. The appeals court distinguished Dukes from Vaquero, pointing out that the former was a Title VII discrimination case involving millions of employees and innumerable managerial decisions across thousands of store locations, while the present case has a proposed class of 600 employees who perform the same work, and whose injury is focused and objective as compared to Dukes. Thus, the Ninth Circuit in Vaquero limited the impact of Dukes on wage and hour commonality analyses.

As for the predominance requirement (that issues of law and fact predominate over individual issues), the court again shot down the defendants’ reasoning, this time with regard to Comcast, a consumer antitrust class action where the Supreme Court found a lack of predominance because the plaintiffs used a faulty damages model and were unable to demonstrate that their damages could be determined on a classwide basis. The panel concluded that the defendants’ interpretation of Comcast—that predominance cannot be found unless damages can be determined on a classwide basis—was too broad, and instead held that the plaintiffs need only “prove that damages resulted from the defendant’s conduct” in order to prevail. Slip op. at 8. Here, there was no doubt that the class members’ injuries had been caused by the employer’s conduct, unlike in the much more attenuated context of an antitrust action in Comcast. Id. at 9.

Finally, Vaquero references the recent Supreme Court decision in Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016) (finding that representative evidence can be used to show both damages and liability) (previously covered on the ILJ here), noting that: “[t]he Supreme Court has not disturbed our precedent” and “the need for individual damages calculations does not, alone, defeat class certification.” Slip op. at 10. The Vaquero ruling not only paves the way for certification of this class of 600 Ashley Furniture employees, but will no doubt be helpful to many more California employees in the future.

Authored by: 
Robin Hall, Associate
CAPSTONE LAW APC

Falco v. Nissan: New Cert Decision Bodes Well for Plaintiffs in Auto Defect Class Actions

A recent decision by Judge Dean D. Pregerson of the Central District of California, Falco, et al. v. Nissan North America, Inc., bodes well for plaintiffs seeking to certify a car defect class action. No. CV 13-00686 (C.D. Cal. April 5, 2016) (slip op. available here) (Mr. Falco is represented by Capstone Law APC). Judge Pregerson rejected several of the auto manufacturer defendant’s most popular tropes, namely, that the plaintiffs cannot identify a “single” common defect, that most class members did not experience the defect, that the defect is not safety-related, and that the plaintiffs cannot establish a cognizable damages theory.

The Falco plaintiffs alleged that the class vehicles (various model year Nissan Pathfinder, Maxima, Quest, Altima, Xterra, and Frontier vehicles) all suffered from a defectively designed Timing Chain Tensioning System that was prone to fail prematurely and that posed a safety risk. Nissan opposed certification claiming that there was no single defect, and therefore no commonality, because Nissan had issued various iterations of the slack guide in the Tensioning System with different parts over time. Citing the Ninth Circuit’s decisions in Chamberlan v. Ford Motor Co., 402 F.3d 952 (9th Cir. 2005), and Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168 (9th Cir. 2010), the court held that “[i]n these consumer defect cases, commonality can be found in the very legal and factual question of the defect[]” where “the same defect is alleged across all class vehicles, and the assertion is supported by sufficient evidence . . . .” Slip op. at 11. Similarly, the court held that the predominance requirement was satisfied because “[t]he actual proof of common defect, or Defendant’s knowledge and subsequent actions, go to the merits of the claim, but common evidence will be used to prove the claim either way.” Id. at 19.

The district court also rejected Nissan’s claims that (1) there were individual issues regarding each class member’s knowledge about the defect based on information available on the Internet, (2) that “the vast majority [of class members] never experience a timing chain problem,” and (3) that the defect was not safety-related and was simply a “noise that consumers may not find troublesome.” Slip op. at 18. Concluding that common issues predominate, the court reasoned, “the evidence cited by Plaintiffs in their moving papers is sufficient at the this stage of the case to make out allegations common among the class as to the alleged vehicle defects, the effects of the alleged defect could have on the vehicle in terms of safety, and Nissan’s knowledge of the defect.” Id. at 19. With respect to class-wide damages, the court found that the plaintiffs sufficiently provided a common damages formula based on the average cost of repair. It noted that that class members spent money “that they would not have needed to spend had Nissan either disclosed the effect or repaired itself. Thus, return of the average cost of repair would provide restitution to these class members because they have already spent that money to repair or diagnose their vehicles.” Id. at 30. Additionally, the court stated that by receiving restitution under the fraud and breach of warranty claims, “the class would be getting the benefit of their bargain because they would be put in the same position they would have had the car not been sold with the defective timing chain system—it is the cost necessary to make the vehicles conform to the value Plaintiffs thought they were getting in the price tendered.” Id. at 31.

Nissan has sought permission to appeal Judge Pregerson’s decision pursuant to Federal Rule of Civil Procedure 23(f), which the plaintiffs have opposed. If the Falco decision stands, the opinion, together with the plaintiffs’ briefing on the motion, will provide a roadmap for rebutting defendants’ key arguments in opposition to class certification in a car defect action. 

Authored By:
Jordan Lurie, Of Counsel
CAPSTONE LAW APC

Representative “Averages” Permitted Where Employer Fails To Keep Records of Time Worked Following Tyson

On March 22, 2016, the Supreme Court affirmed a district court’s class certification decision following the $2.9 million judgment against Tyson Foods. Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S. Sup. Ct. March 22, 2016) (slip op. available here) (previously covered on the ILJ here). Tyson had been sued under the Fair Labor Standards Act of 1938 (FLSA) for failing to pay workers at a pork processing plant for time spent donning and doffing protective gear required for their jobs. Following certification as a collective action under 29 U.S.C. §216 and as a class action under Rule 23 of the Federal Rules of Civil Procedure, the jury awarded $2.9 million to the class. Tyson appealed to the 8th Circuit Court of Appeals and lost; Tyson filed a cert petition in the Supreme Court, which was granted.

In the Supreme Court, Tyson argued that the class action judgment should be reversed because the case should not have been certified. It also argued that judgment should be reversed because the plaintiffs identified no distribution mechanism that would not improperly compensate those class members who were not entitled to payment because they did not work more than 40 hours per week. The Supreme Court rejected Tyson’s bid to overturn the certification order and remanded to the district court for a determination of how the proceeds would be disbursed.

The plaintiffs’ problem, which they ultimately overcame, related to off-the-clock nature of the claims: Tyson’s time records did not demonstrate the amount of time necessary to don and doff the protective gear. Slip op. at 5. To prove damages, the Tyson plaintiffs retained Dr. Kenneth Mericle, an industrial relations expert, to conduct an observational study, which included 744 videotaped observations demonstrating that the average donning and doffing time was 18 minutes a day for employees in the cut and retrim department and 21.23 minutes per day for the kill department. A second expert, Dr. Liesl Fox, analyzed time records to identify whether or not the average donning and doffing time would result in more than 40 hours/week and by how much. Dr. Fox’s opinion was that there was $6.7 million in aggregate, uncompensated overtime. Slip op. at 7.

Tyson argued against the plaintiffs’ methods of using average donning and doffing times, since individual employees could have spent less (or more) time, and suggested a categorical rejection of using statistical evidence to approximate damages in such cases. Slip op. at 9. However, the Supreme Court rejected Tyson’s categorical argument, finding that such evidence has been used historically and often provides “the only practicable means to collect and present relevant data.” Id. at 10 (internal citations omitted). Critically, the Supreme Court relied on Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), which held that, where an employer does not maintain records of uncompensated time worked, the employee’s “just and reasonable inference” of the time worked would be accepted, with the burden then shifting to the employer to show either the actual time worked or negate the reasonableness of the inference. Slip op. at 11-12. In Tyson, as in Anderson, there were not sufficient records for the employees to rely on to establish the amount of time spent donning and doffing. Thus, “[i]n FLSA actions, inferring the hours an employee has worked from a study such as Mericle’s has been permitted by the Court so long as the study is otherwise admissible [under Fed. Rules Evid. 402 and 702].” Id. at 15.

Tyson also argued that there was no way to apportion damages, especially where the jury ultimately rejected the plaintiffs’ damages estimates, ultimately awarding a number less than half of what Dr. Fox found. Slip op. at 16. Thus, the defendant argued, there was no way to determine which class members the jury was considering when it awarded damages. The Supreme Court ultimately remanded this issue to the district court for a determination of how to separate out of the jury’s aggregate damages the individual award payments to uninjured class members, allowing Tyson to raise the same argument before the district court.

Thus, the Court affirmed, holding that plaintiffs may use statistical evidence to demonstrate class certification under Rule 23 and to prove classwide liability.

Authored by: 
Matthew Theriault, Partner
CAPSTONE LAW APC