Ninth Circuit reverses class certification post-Dukes: Wang v. Chinese Daily News, Inc.

In October 2011, the U.S. Supreme Court granted cert. and directed the Ninth Circuit to reconsider, in light of Dukes, its 2010 opinion affirming class certification in Wang v. Chinese Daily News, Inc., 623 F.3d 743 (9th Cir. 2010).  (See this blog post.)  Supplemental briefs were filed, and the case was re-argued in July 2012.  

Last week, the Ninth Circuit issued its new opinion, Wang v. Chinese Daily News, Inc., ___ F.3d ___ (9th Cir. Mar. 4, 2013), in which it reversed the class certification order and remanded to the district court for reconsideration in light of the "entire record."

On Rule 23(a) commonality, the opinion states:

Wal-Mart is factually distinguishable from our case. Most important, the class here is much smaller. It encompasses only about 200 employees, all of whom work or worked at the same CDN office. Plaintiffs' claims do not depend upon establishing commonalities among 1.5 million employees and millions of discretionary employment decisions. Nonetheless, there are potentially significant differences among the class members.

We vacate the district court's Rule 23(a)(2) commonality finding and remand for reconsideration in light of Wal-Mart. On remand, the district court must determine whether the claims of the proposed class “depend upon a common contention ... of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S.Ct. at 2551. Plaintiffs must show “significant proof that [CDN] operated under a general policy of [violating California labor laws].” Ellis, 657 F.3d at 983 (quoting Wal-Mart, 131 S.Ct. at 2553 (alteration omitted)). However, plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is “even a single common question,” a would-be class can satisfy the commonality requirement of Rule 23(a)(2). Wal-Mart, 131 S.Ct. at 2556 (alteration and internal quotation marks omitted).

Slip op. at 10-11.

The opinion also has this unfortunate paragraph in which the panel badly mis-interprets part of Dukes:

In Wal-Mart, the Supreme Court disapproved what it called “Trial by Formula,” wherein damages are determined for a sample set of class members and then applied by extrapolation to the rest of the class “without further individualized proceedings.” Wal-Mart, 131 S.Ct. at 2561. Employers are “entitled to individualized determinations of each employee's eligibility” for monetary relief. Id. at 2560. Employers are also entitled to litigate any individual affirmative defenses they may have to class members' claims. Id. at 2561. If the district court again certifies a class under Rule 23(b)(3), it should calculate damages in light of the Supreme Court's admonitions in Wal-Mart.

Slip op. at 15. My article from the latest issue of Competition explains why this is a misreading of Dukes.  “Dukes and Common Proof in California Class Actions,” Competition (Summer 2012).  Wang is not a Title VII case, so the special statutory procedures addressed by the Supreme Court in the cited part of the Dukes opinion are inapplicable.  Employers are not "entitled to individualized determinations" of damages in an ordinary wage and hour or FLSA class action, and nothing in Dukes so held.  A rehearing petition would certainly be appropriate on this point. 

Comments

[TK]

It is binding precedent in all California federal courts though. So, even if you believe it is a misinterpretation of Dukes (which I don't), it is the law of the land now (at least this land where we work).

[Kimberly A. Kralowec]

I don't disagree that it will be cited as such in many cases, but the argument that it misinterpreted Dukes can still be advanced, which will undermine its value as a precedent over time. Also, given the loose language used in that paragraph, in many cases it will be distinguishable.

This blog is not a brief filed in a court. If I think that an opinion is wrongly decided, I will certainly point it out, especially if the opinion is a "binding precedent." There is little reason to point out errors in unpublished or non-precedential rulings.