By Carlyn Kolker
(Reuters) - A recent decision from the 9th Circuit Court of
Appeals undoing the class action certification of a wage dispute
at a Chinese-language newspaper signals how Dukes v. Wal-Mart is
calling into question a host of employment class action cases.
The opinion is "a very defense-minded ruling," Gerald
Maatman, an attorney at Seyfarth Shaw who defends companies in
employment litigation, told Reuters.
"The 9th Circuit is known as probably the most
employee-friendly circuit in the United States and here is an
instance where the 9th Circuit is overturning a liability award
and a class certification," said Maatman. "It demonstrates the
power of Dukes."
Courts have been "reluctant" to apply the Wal-Mart decision
to wage-and-hour cases, he said, and this decision signals a new
embrace of it.
The case was brought in March 2004 by current and former
employees of the Chinese Daily News, claiming that the Los
Angeles-based news organization failed to pay them for overtime
and to fairly compensate them for meal and rest breaks.
The plaintiffs were certified as a class action of about 200
employees and the plaintiffs won more than $2.5 million in
damages at trial in 2006. Chinese Daily News appealed to the 9th
Circuit, which affirmed the decision in September 2010. But
after the Supreme Court's decision in the Wal-Mart case in June
2011, which curtailed plaintiffs' ability to sue as a group,
Chinese Daily News appealed to the high court. The Supreme Court
vacated the 9th Circuit's decision and remanded it to the
On Monday, the same three-judge panel that initially
affirmed the class-action certification instead remanded it back
to the district court to reconsider the question of class
certification. The appellate panel, citing the Wal-Mart
decision, vacated U.S. District Judge Consuelo Marshall's
certification of the class under Rule 23(a)(2). That rule is the
linchpin of many class action certifications, and in the
Wal-Mart case, the Supreme Court raised the bar for plaintiffs
to use it.
In addition, the 9th Circuit vacated the portion of the
district court's certification of the class regarding meal and
rest breaks. Since the trial court ruling, the California
Supreme Court decided in Brinker Restaurant Corp v. Superior
Court that employers don't have to ensure workers take their
"I'm delighted with the result," said Michael Berger of
Manatt, Phelps & Phillips in Los Angeles, who represents Chinese
As the case goes back to the district court, says Berger,
there are "major issues that need to be dealt with."
In addition to the certification and meal break issues, the
trial court must address how it calculates monetary damages, if
it gets to that stage, said Berger. In its opinion, the 9th
Circuit noted that the Supreme Court warned against the process
of using a sample set of class members to determine damages and
then applying it to the whole class.
"I think overall, the biggest impact is that plaintiffs need
to be more open to the concept of bifurcating the damages phase
from the liability phase, and being more creative in proposals
to assess damages on a classwide basis," said Brendan Donelon,
an attorney in Kansas City, Missouri, who represents plaintiffs
in wage-and-hour cases around the country.
Della Barnett, an attorney with the Impact Fund who
represents the employees, and Randy Renick of law firm Hadsell
Stormer Richardson & Renick did not return calls for comment.
The case is Wang v. Chinese Daily News, U.S. Court of
Appeals for the Ninth Circuit, No. 08-55483.
For the plaintiffs: Della Barnett of the Impact Fund and
Cordelia Dai and Randy Renick of Hadsell Stormer Richardson &
For Chinese Daily News: Michael Berger, Benjamin Shatz,
Yi-Chin Ho and Andrew Satenberg of Manatt, Phelps & Phillips.
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