144 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com 4. Individualized Issues Preclude Certification In the less controversial section of its decision, the Dukes Court held that Rule 23(b)(2) applies only when “a single injunction or declaratory judgment would provide relief to each member of the class,” not when individuals seek an individual award of monetary damages. By its very nature, the recovery of money is central to wage and hour litigation. Plaintiffs often argue that damages may be readily quantifiable based on a sample of the employer’s pay records or that back pay calculations for a random group of class or collective members can be utilized to extrapolate the damages on a class-wide basis. Although the setting was different, the Supreme Court’s rejection in Dukes of a “Trial By Formula” approach to class litigation undermines this formulaic approach to the viability of trials in which the evidence is limited to groups of opt-ins providing representative testimony. Dukes held that such an approach not only conflicts with Rule 23(b)(2), but also prevents the employer from litigating statutory defenses to individual claims, thereby violating its right to due process. In Cruz v. Dollar Tree Stores, Inc.,728 a federal district court decertified a class in part for this reason: “In light of the Supreme Court’s rejection of [the “trial by formula“] approach, it is not clear to the Court how, even if classwide liability were established, a week-by-week analysis of every class member’s damages could be feasibly conducted.” Similarly, in Aburto v. Verizon California, Inc., another federal district court cited Dukes in denying class certification of misclassification claims, holding that whether Verizon unlawfully classified its managers as exempt is an individualized inquiry involving facts unique to each potential plaintiff.729 Thus, it is more important than ever for employers to argue that class treatment is inappropriate because the necessity of individualized inquiry into each class member’s claims could result in a series of mini-trials that would undermine the efficiency benefits that class treatment is meant to offer.730 This point also applies to decertification in FLSA cases. In particular, when courts examine whether a conditionally certified class should be decertified, typically after extensive discovery, they often require that plaintiffs set forth a trial plan explaining how the claims of the opt-in plaintiffs can be tried by collective proof. Following Dukes, the use of representative testimony to establish such proof should not suffice. In addition to rejecting the “trial by formula“ approach, Dukes held that employers are entitled to present individual defenses to each employee’s specific claim for damages, even if a violation of the statute is found. Following this 728 2011 WL 2682967 (N.D. Cal. July 8, 2011). 729 Aburto v. Verizon California, Inc., 2012 WL 10381, at *5 (C.D. Cal. Jan. 3, 2012) (“The court simply cannot conclude that all FLMs performed the same job duties, that the job duties were all clerical, or that Verizon’s restrictions on FLMs precluded ‘any exercise of independent judgment or discretion.’”). 730 See Ordonez v. RadioShack, Inc., 2014 WL 4180958, at *5 (C.D. Cal. Aug. 15, 2014). There, although the employer had a uniform rest break policy that was facially unlawful, the district court denied class certification on the grounds that in the absence of “a viable classwide method of showing whether the policy was actually implemented,” individualized issues predominated as to whether the law was actually violated. See also Campbell v. Vitran Express, Inc., 2016 WL 873009, at *3-4 (C.D. Cal. March 2, 2016) (“[L]iability does not lie purely based upon a facially defective policy. ... To [so hold] would be logically absurd and legally erroneous.”); Davidson v. O’Reilly Auto Enterprises, 968 F.3d 955, 968 (9th Cir. 2020) (finding “the mere existence of a facially defective written policy—without any evidence that it was implemented in an unlawful manner—does not constitute ‘[s]ignificant proof’ that a class of employees were subject to an unlawful practice”).
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