134 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com In other words, while it is appropriate for the trial court to examine the evidence closely to determine if the relevant class certification requirements have been met (e.g., predominance of common issues), the court may not deny class certification on the ground that the class claims ultimately lack substantive merit.689 However, as discussed in more detail below, courts must make necessary factual and legal inquiries regardless of whether they overlap with the merits, in order to ascertain whether the claims alleged are amenable to resolution on a class-wide basis.690 B. Class Certification in Exempt Misclassification Cases It is well established that “class actions will not be permitted where there are diverse factual issues to be resolved, despite the existence of common questions.”691 In the 2003 decision Lockheed Martin Corp. v. Superior Court,692 the California Supreme Court explained the plaintiffs’ burden in moving for class certification: Plaintiffs’ burden on moving for class certification, however, is not merely to show that some common issues exist, but, rather, to place substantial evidence in the record that common issues predominate. As we previously have explained, this means “each member must not be required to individually litigate numerous and substantial questions to determine his [or her] right to recover following the class judgment; and the issues which may be jointly tried, when compared to those requiring separate adjudication, must be sufficiently numerous and substantial to make the class action advantageous to the judicial process and to the litigants.693 689 See Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1025 (2012) (“Presented with a class certification motion, a trial court must examine the plaintiff’s theory of recovery, assess the nature of the legal and factual disputes likely to be presented, and decide whether individual or common issues predominate. To the extent the propriety of certification depends upon disputed threshold legal or factual questions, a court may, and indeed must, resolve them”); Bartold v. Glendale Fed. Bank, 81 Cal. App. 4th 816, 829 (2000) (“when the merits of the claim are enmeshed with class action requirements, the trial court must consider evidence bearing on the factual elements necessary to determine whether to certify the class”); Hendershot v. Ready to Roll Transportation, 228 Cal. App. 4th 1213, 1223 (2014) (finding that the trial court had improperly denied class certification based on the merits of defendant’s affirmative defense that most of the proposed class members had entered into settlement agreements, and that therefore the class did not meet the numerosity requirement). 690 Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011) (citing Gen. Telephone Co. of S.W. v. Falcon, 457 U.S. 147 (1982)); see also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (holding the district court erred by failing to conduct a “rigorous analysis” of the merits to determine whether the plaintiffs had established commonality under Rule 23); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 318 (3d Cir. 2008) (class certification requires “thorough examination” of factual and legal allegations; “rigorous analysis may include a preliminary inquiry into the merits” and consideration of “the substantive elements of the plaintiffs’ case in order to envision the form that a trial on those issues would take”); In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 691 F.2d 1335, 1342 (9th Cir. 1982) (affirming denial of class certification, where “any theory on which [plaintiffs] might rely [to prove the allegations of the complaint] would raise predominantly individual questions”). 691 Clausing v. San Francisco Unified Sch. Dist., 221 Cal. App. 3d 1224, 1233 (1990). 692 29 Cal. 4th 1096 (2003). 693 Id. at 1108 (2003); see also Newell v. State Farm Gen. Ins. Co., 118 Cal. App. 4th 1094 (2004) (class certification inappropriate even though insurer had uniform policy for evaluating earthquake claims, because individual liability for each policy holder would require examination of numerous individualized factors); Frieman v. San Rafael Rock Quarry, 116 Cal. App. 4th 29, 40-41 (2004) (class certification denied for nuisance claims against a quarry arising from blasting noise where liability varied from one homeowner to another based on a “myriad of different factors”).
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