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Monday, July 11, 2011

Soderstedt v. CBIZ: Court of Appeal Affirms Denial of Class Certification

Will Soderstedt v. CBIZ Southern California, LLC (6/7/11, pub. 7/7/11) --- Cal.App.4th ----, 2011 WL 2186435, be the next case that the Supreme Court agrees to review and hold pending Harris v. Superior Court? If I were a betting man, I would have to say yes.

CBIZ is a public accounting firm. The plaintiffs sought to represent a class of individuals who: "(1) assisted certified public accountants in the practice of public accountancy, (2) worked as associates or senior associates in the assurance or tax lines of service, (3) were not licensed by the State of California as certified public accountants during some or all of this time period, and (4) were classified as exempt employees." Slip op. at 1. As in the recent 9th Circuit case of Campbell v. PricewaterhouseCoopers (blogged here), the plaintiffs alleged that they were not licensed as CPAs and could not be deemed exempt professionals.

The trial court (Los Angeles Superior, Judge Fahey) denied the plaintiffs' motion for class certification. "More particularly, the trial court ruled that there was no competent evidence of numerosity; the representatives' declarations were insufficient to show adequacy of representation; while common issues existed, they did not predominate; and class treatment would not be superior." Slip op. at 4. The Court of Appeal affirmed, finding that the trial court did not abuse its discretion in denying cert.

First, the Court held that substantial evidence supported the trial court's finding that common issues did not predominate. Slip op. at 7. Specifically, the Court held that application of the administrative exemption turns on individualized evidence. Slip op. at 8.
Addressing the disputed elements of the administrative exemption, the evidence showed individual differences in whether Associates and Senior Associates perform non-manual work directly related to management policies or general business operations.


The evidence likewise showed that Associates and Senior Associates regularly exercised varying levels of discretion and independent judgment, depending on a number of factors including their level of experience and the nature of the engagement.


Finally, the evidence established that the level of general supervision provided to Associates and Senior Associates varied depending on the individuals involved and the type of engagement, as well as the location of the CBIZ office.
Slip op. at 9. T he Court held that this evidence was sufficient to support the trial court's ruling. Slip op. at 10.

The Court also held that the trial court did not employ improper criteria in denying certification and that substantial evidence supported the trial court's findings that the plaintiffs failed to submit competent evidence of numerosity, adequacy of representation, and superiority. Slip op. at 14-16.

The opinion is available here.

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