Tuesday, December 10, 2013

Four for Four on Class Cert.

Williams v. Superior Court, No. B382577 (D2d8, as modified, Dec. 24, 2013)

For the fourth time in two months, the court of appeal reverses an order denying class certification in a wage and hour case where the plaintiff’s theory of liability was that the defendant maintained an unlawful overtime policy.

This is a wage and hour class action brought by Allstate’s auto insurance claim adjusters. It appears to be pretty much indistinguishable from last week’s Jones decision. It is brought on behalf of a similar class against Farmers’ Insurance, alleging that they were required to perform uncompensated work before the beginning of their paid workday. Although the trial court initially granted certification, it later decertified the class based on the U.S. Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___ ; 131 S.Ct. 2541 (2011). The court of appeal, however, grants a writ reversing the decertification order.

The court first notes that while Dukes was based on an improper certification of a Fed. R. Civ. P. 23(b)(2) class for injunctive relief, this case presented the analogue of a Fed. R. Civ. P. 23(b)(3) class that is, on its face, about the recovery of damages. So Dukes's concern about plaintiffs using the easier standard that applies to a (b)(2) class as a back-door to get certification of what was in many key respects a money damages class wasn't implicated. Further, the court points out that Dukes holding that class treatment was unmanageable was based on Ms. Dukes’s theory of liability, which was fundamentally concerned with Wal-Mart's lack of a uniformly enforced anti-discrimination policy. It was that lack of polciy that allegedly led to widespread gender discrimination by local managers who were afforded too much discretion in hiring and promotion. Here, in contrast, Williams’s theory is that Allstate affirmatively had a company-wide policy or practice of making auto adjusters work off the clock. So decertification was not compelled by the reasoning of Dukes.

Thus, just like the recently decided Martinez, Jones, and Benton cases, the court here holds that under the California Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012) the certification inquiry needs to focus on the plaintiff’s theory of liability. If that theory is grounded in a uniform unlawful policy, class treatment is appropriate. That's the case even if, like here, the existence of the alleged policy is vehemently denied by the defendant. The class certification question is not supposed to reach the merits. By ignoring the plaintiff’s policy theory, the trial court abused its discretion by applying improper criteria in deciding to decertify the class.

Writ granted, with order to vacate the decertification order and re-certify the class.

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