Posts belonging to Category Certification Rulings

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

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

In 2010, two truck drivers brought an action against their employer, Vitran Express, Inc., alleging that Vitran failed to provide its drivers legally-mandated meal and rest breaks. On November 12, 2015, Judge Klausner granted certification of the drivers’ claims. Campbell v. Vitran Express, Inc., No. CV 11-5029 RGK (SHx) (C.D. Cal. 2015) (slip op. available here). In the interim, the case had been appealed to the Ninth Circuit twice, the latter of which reversed the lower court’s grant of summary judgment in favor of the defendant, remanding the case and holding that the plaintiffs’ claims were not preempted by the Federal Aviation Administration Authorization Act (FAAAA) (previously covered on the ILJ here and here). The drivers pursued class certification on two theories: (1) the defendant implemented an unofficial policy of pressuring its drivers to forego their meal and rest breaks, and (2) the defendant’s written meal and rest break policies were facially invalid. The court granted the plaintiffs’ motion as to both theories.

First, the court found that the drivers could rely on the company’s unofficial policy of pressuring its drivers to forego their breaks, or a “policy-to-violate-the-policy” theory of liability, assuming the drivers supported the theory with enough evidence to demonstrate that such a policy existed and was applied uniformly to all class members. After reviewing the evidence submitted, the court held that the plaintiffs’ declarations, as well as declarations of thirteen fellow drivers and one dispatcher, constituted sufficient evidence that drivers were intimidated and threatened to forego meal and rest breaks for four of the five California locations. Furthermore, the defendant failed to provide any conflicting testimony that the meal and rest break practices differed among locations or supervisors. Thus, all of the evidence in the record supported a finding of a uniform, common policy of denying meal and rest breaks at each of the company’s locations.

Second, the court held that common questions predominated as to the plaintiffs’ claims that the defendant’s written meal and rest break policies were facially invalid. Vitran’s meal break policy provided that employees were entitled to a 30-minute lunch period when working five or more hours a day, but it failed to provide for a second 30-minute meal period for employees who worked 10 or more hours a day. Slip op. at 10. Similarly, Vitran’s rest break policy failed to provide a rest break for every “major fraction” of a four-hour period that drivers worked and failed to provide rest breaks in the middle of the workday “insofar as practicable.” Id. The court noted that California courts and federal courts are split on the issue of whether an allegation of a facially defective policy, without more, subjects an employer to liability—state appellate court decisions impose liability “solely on the basis of a facially defective policy,” whereas federal district courts require the employee to show that the employer “not only maintained a facially defective policy[,] but also implemented unlawful practices pursuant to the policy.” Id. Here, the court applied the recent Ninth Circuit decision, Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d 952 (9th Cir. 2013), which acknowledged that while liability may flow from a facially defective policy, courts must consider the entire record before determining the predominance question. The Campbell court then assessed all of the evidence in the record as to the allegations of facially defective meal and rest break policies, and found that the plaintiffs presented sufficient evidence to show a uniform policy that failed to comply with California’s meal and rest break requirements.

Holding that an allegation of facially defective policies was supported by substantial evidence of Vitran’s non-compliant meal and rest break practices, the court found that common questions predominated and granted class certification.

Authored By:
Bevin Allen Pike, Senior Counsel
CAPSTONE LAW APC

Earlier this month, on November 10, 2015, the United States Supreme Court heard oral argument in Bouaphakeo v. Tyson Foods, Inc., No. 12-3753 (8th Cir. Aug. 25, 2014) (slip op. available here), cert. granted, 83 U.S.L.W. 3765 (U.S. June 8, 2015) (No. 14-1146). Class action practitioners throughout the country—both plaintiff and defense attorneys—have watched this case closely because of the potentially far-reaching implications of the forthcoming opinion. The Court granted cert. to consider: (1) whether a court can disregard differences among individual class members when the plaintiff will prove liability and damages using certain statistical techniques; and (2) whether a class is certifiable despite containing a substantial number of class members who were not injured.

Originally filed in 2007, the primary issue in the case was whether Tyson properly compensated the class members, hourly employees at a Tyson meat-processing facility, for all work time. Tyson implemented a policy that compensated employees only for so-called “gang time,” when workers were present at their workstations on Tyson’s production line and the line was moving. The plaintiffs argued that this policy was illegal because it failed to compensate them for the time spent “donning and doffing” personal protective equipment before shifts, before and after lunch, and at the end of the shift. The plaintiffs also sought compensation for the time spent carrying items from their lockers to the production floor. Interestingly, Tyson categorized protective equipment items as either “unique” or “non-unique” to the food processing industry. Before February 2007, Tyson added four minutes of time to each employee’s timecard for donning and doffing time for unique items, to compensate those who worked in departments where knives were used. Then, from February 2007 to June 2010, Tyson added several minutes per day to each employee’s paycheck to compensate for pre- and post-shift walking time. The district court certified the case as a class action under Rule 23 and as a collective action under the Fair Labor Standards Act (FLSA) because the substance and basis of the state law claim and the FLSA claim were “virtually indistinguishable” in that the claims involved identical facts and similar legal theories. Slip op. at 4, fn2 (quoting Salazar v. Agriprocessors, Inc., 527 F. Supp. 2d 873, 884). The case went to trial, and the jury returned a verdict in the plaintiffs’ favor for over $2.8 million, with the final judgment exceeding $5.7 million after adding liquidated damages. The Eighth Circuit Court of Appeals affirmed the judgment, and Tyson filed a cert petition in the Supreme Court.

Before the Supreme Court, Tyson argued that the plaintiffs’ use of statistics demonstrating average donning, doffing, and walking times to help prove liability and damages was improper (brief of petitioner Tyson Foods available here). Because employees wore different protective equipment and took varying amounts of time to put it on and take it off, Tyson argued that each class member could not prove that donning and doffing activities resulted in uncompensated overtime. It contended that the usage of statistical inferences was reversible error, violated its due process rights to raise every possible defense, and warranted decertification. Tyson also argued that certification was improper because the class included large numbers of employees who had not been injured. In response, the employees argued that certification was proper, and that the record demonstrated that Tyson could have recorded donning and doffing time, but chose not to (respondent’s brief available here). The plaintiffs also argued that Tyson’s officials admitted that the vast majority of class members routinely worked six-day, 48-hour workweeks and were, therefore, eligible for overtime. Accordingly, the employees were entitled to prove the “approximate” time worked under Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), because Tyson failed to fulfill its statutory obligation to keep proper time records. The employees also argued that no rule prohibited certifying a class with some uninjured class members.

At oral argument, Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan appeared sympathetic to the employees. The gist of their questioning indicated that the Tyson’s objection to statistical and/or inferential proof of overtime entitlement was largely a self-created problem, and Tyson’s arguments against using the Mt. Clemens rule in this case were not well-taken. In addressing the issue of certifying a class with some uninjured members, several justices, including Justice Breyer, drew a distinction between certifying a class with uninjured members and paying the uninjured members after determining liability. Responding to petitioner Tyson’s argument that it could not determine who to pay and who not to pay because the jury awarded a lump sum judgment, Justice Kagan noted that Tyson had refused to bifurcate trial proceedings and, on remand, the court “is going to do something like the bifurcation that you rejected, which is . . . figure out in this highly ministerial way who worked more than 40 hours, and so who is entitled to share in the judgment.”

Ultimately, only the Court’s forthcoming opinion will end the suspense for class action practitioners. That said, most plaintiffs’ class action attorneys are cautiously optimistic that—after years of dealing with Concepcion, Dukes, and other anti-class action rulings—the Supreme Court finally may deliver a victory for employees and consumers.

Authored By:
Andrew Sokolowski, Senior Counsel
CAPSTONE LAW APC