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Wednesday, April 9, 2014

Williams v. Superior Court: Court of Appeal Reverses Decertification Order In Off-the-Clock Class Action

Williams v. Superior Court (Allstate Insurance Company) (12/6/13, mod. 12/24/13) 221 Cal.App.4th 1353, concerns facts very similar to those in Jones, which I discussed recently. The plaintiff sued his employer, Allstate, alleging that he and other insurance adjusters worked off the clock, performing tasks such as logging onto their work computers, but that they “hesitated to request overtime because they did not want to be perceived as ‘bad’ employees.” Slip op. at 3. 

The trial court originally certified an “off-the-clock” class, but granted Allstate’s motion for decertification after the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes (2011) 131 S.Ct. 2541, 564 U.S. 277. Relying on evidence that not all adjusters worked off the clock and others worked only de minimis amounts of time, the trial court held that trial would result in Allstate presenting evidence of affirmative defenses to more than 200 individual claims, an unmanageable prospect. Slip op. at 6. The Court of Appeal reversed, noting as an initial matter: 
A certification motion does not invite the trial court to resolve disputed facts in a free-floating inquiry aimed at deciding the merits of the plaintiff’s claims. The trial court ordinarily must assume the claims have merit. Slip op. at 6, citing Brinker, at 1023 (resolution of merits must be postponed until after certification has been decided).  
The Court then held that Dukes’ discussion of affirmative defenses in a federal Title VII pattern and practice discrimination action did not apply to the present case. Slip op. at 8-14. In particular, the Court held that Rule 23(b)(2) of the Federal Rules of Civil Procedure, under which the Dukes plaintiffs sought certification, differs greatly from California Code of Civil Procedure section 382, which applies in state court. Slip op. at 11. In addition, although the Supreme Court in Dukes disapproved of a “trial by formula” of Wal-Mart’s statutory affirmative defenses to liability, trial by formula is permitted in state court to determine damages, and damage calculations have “little, if any, relevance at the certification stage....” Slip op. at 11-12. 
Here, the question is whether Allstate had a practice of not paying adjusters for off-the-clock time. The answer to that question will apply to the entire class of adjusters. If the answer to that question is “yes” – which is the answer the trial court initially assumed when it first certified the Off-the-Clock class, and is the answer we must presume in reviewing decertification – then, in Dukes’ phrase, that answer is the “glue” that binds all the class members. If some adjusters had more uncompensated time off the clock than other adjusters, that difference goes to damages. But differences in the amount of individual damages do not by themselves defeat class certification. 
Slip op. at 12-13 (internal citations omitted).  

Next, the Court held that Dukes’ discussion of commonality did not support decertification because the alleged commonality was the practice of adjusters working off-the-clock, and the allegation of that practice was sufficient on certification. Slip op. at 17. Allstate disputed that such a practice existed, but the Court declined to engage in an improper examination of the merits. Slip op. at 18. 

Finally, the Court reiterated that the need to prove individual damages could not defeat certification: 
It may be true that some adjusters never worked off the clock, and such adjusters were thus not injured by Allstate’s practice of adjusters working off the clock. But the existence of individuality as to damages does not defeat class certification.
Slip op. at 19. 

The opinion is available here

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