Ninth Circuit Reverses Denial of Class Certification in Meal Period Case

In United Steel Workers Intern. Union v. ConocoPhillips Co., 2010 WL 22701, ___ F.3d ___ (C.A.9 (Cal.), 2010), the United Steel Workers union ("USW") and three of its members filed a class action against ConocoPhillips, alleging that it failed to provide the required meal periods. Plaintiffs alleged that the class members could not leave their units during their meal breaks and were subject to interruptions to which they must respond, so that their meal periods were “on duty” and should be compensated.

Plaintiffs moved for class certification. On March 16, 2009, the district court denied class certification without prejudice. The district court held that although plaintiffs had demonstrated the existence of three of the four Rule 23(a) prerequisites to class certification -- numerosity, commonality, and typicality -- plaintiffs failed to satisfy the “adequate representation” requirement. Specifically, the district court held that due to counterclaims then pending against USW, “USW's interests [we]re not properly aligned with those of the class” and that because then-class counsel also represented USW, “it could not adequately represent the interests of the class.”

The class representative obtained new counsel unrelated to USW, USW successfully moved for Rule 12(b)(6) dismissal of all pending counterclaims against it, and plaintiffs renewed their motion for class certification. The district court again denied class certification, holding that the plaintiffs had satisfied all four requirements of Rule 23(a), but failed to satisfy any of the three provisions of Rule 23(b). With respect to Rule 23(b)(3), the so-called “predominance” requirement, the court held that “if Plaintiffs’ ‘on duty’ theory is rejected ... the Court will be faced with a case ... requiring individualized trials on each class member's meal period claims,” and “a class action w[ould] not be the superior method of resolving this suit.” The court ultimately held that “this problem ... is an insurmountable barrier to class certification,” and therefore “decline[d] to certify the class under Rule 23(b)(3)."

The Ninth Circuit reversed:

Critically, the district court did not hold that plaintiffs' actual legal theory (what the district court referred to as “Plaintiffs’ ‘on duty’ theory of liability”) was one in which common issues of law or fact did not predominate over individual questions. Instead, the district court treated plaintiffs' actual legal theory as all but beside the point, holding that because “there can be no assurances that [plaintiffs] w[ould] prevail on this theory,” (emphasis added), the district court's predominance inquiry would instead focus on the question whether plaintiffs “actually missed meal breaks,” an admittedly individualized inquiry. By refusing to analyze plaintiffs’ “on duty” argument as the basis for its predominance inquiry because “there c[ould] be no assurances that they w[ould] prevail on this theory,” the district court ignored Ninth Circuit precedent and ultimately abused its discretion.

“In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met[,]” and “nothing in either the language or history of Rule 23 ... gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974) (quotation marks and citation omitted). Although certification inquiries such as commonality, typicality, and predominance might properly call for some substantive inquiry, “[t]he court may not go so far ... as to judge the validity of these claims.” Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir.2003). “[N]either the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies [Rule 23].” Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir.1975).

Here, the district court not only “judge[d] the validity” of plaintiffs’ “on duty” claims, it did so using a nearly insurmountable standard, concluding that merely because it was not assured that plaintiffs would prevail on their primary legal theory, that theory was not the appropriate basis for the predominance inquiry. But a court can never be assured that a plaintiff will prevail on a given legal theory prior to a dispositive ruling on the merits, and a full inquiry into the merits of a putative class's legal claims is precisely what both the Supreme Court and we have cautioned is not appropriate for a Rule 23 certification inquiry. See Eisen, 417 U.S. at 177-78, 94 S.Ct. 2140; Cummings v. Connell, 316 F.3d 886, 896 (9th Cir.2003)(noting that “this circuit does not favor denial of class certification on the basis of speculative conflicts”); Staton, 327 F.3d at 954; Moore v. Hughes Helicopters, Inc.,708 F.2d 475, 480 (9th Cir.1983) (holding that “it is improper to advance a decision on the merits to the class certification stage”).

Slip op. at 5. I think the District Court pretty clearly got it wrong, and the Ninth Circuit got it right.