Abbey Spanier LLP: 7th Circuit Clarifies Class Action Certification And Commonality, Distinguishing Dukes

By Joshua Druckerman

Imagine, for a moment, that a company told its employees that they could not record overtime hours, even if they were eligible for overtime compensation. Not exactly the nicest thing to do, right? Now imagine this company also forced its employees to work through unpaid breaks, and offered them "comp time" instead of overtime pay in return. Angry yet? What if the company also had a policy of erasing its employees' logged overtime hours? Sounds like the sort of thing that went extinct after the laissez-faire, pre-union 1920s, right? Surely, that's something we wouldn't see over three-quarters of a century later, in the "enlightened" 21st century?

Sadly, this is exactly what is alleged in Ross v. RBS Citizens [an enhanced version of this opinion is available to lexis.com subscribers]. In Ross, employees at Charter One Bank have alleged that Charter One had a company policy of doing all of those things mentioned above to avoid paying them overtime. In 2007, too!

Luckily, in this day and age, they have a remedy. Such conduct violates the Fair Labor Standards Act and the Illinois Minimum Wage Law (indeed, it's similar to the FLSA claims from personal bankers we wrote about in Winfield v. Citibank earlier this month) and the employees were able to file a class action to force Charter One to pay them the overtime they were due. They were even able to win class certification, which is typically the point at which they gain enough leverage to force a very favorable settlement.

To try to prevent this from happening, the defendants appealed the certification order, claiming that the district court didn't adequately define the classes and class claims under Federal Rule of Civil Procedure 23(c)(1)(B). This rule requires that "[a]n order that certifies a class action must define the class and the class claims, issues, or defenses." This is an uncommon avenue to challenge a class certification, as it essentially asserts that the district judge didn't write clearly or reason effectively in their certification order. And, of course, intimating such things about the judge who hears your case isn't such a great idea, really.

This sort of claim is so uncommon, in fact, that the Seventh Circuit could could only find a single prior case on this issue: Wachtel ex rel Jesse v. Guardian Life Insurance Co. of America [enhanced version], in the Third Circuit. In Wachtel, the Third Circuit interpreted the 23(c)(1)(B) requirement as essentially asking "whether the precise parameters defining the class and a complete list of the claims, issues, or defenses . . . are readily discernible from the . . . certification order itself or of an incorporated memorandum opinion." The Seventh Circuit found this interpretation persuasive, and, applying it in Ross, found that the district court's certification order and memorandum opinion were precise and specific enough to meet both 23(c)(1)(B) requirements.

Indeed, reading the Seventh Circuit's opinion, one gets the impression that the circuit court didn't think much of the defendants' 23(c)(1)(B) challenge. The court repeatedly mentioned District Judge Lefkow's "well-reasoned seventeen-page opinion" and found that it, when combined with the certification order, "leaves no doubt" as to which employees and former employees fell within the classes certified. The Seventh Circuit also disposed of the defendants' attempt to discredit the certification order by raising seven additional questions that the court "should have addressed." The court noted that the issues raised were "questions of trial strategy or proof" and that if the Rules required "a district court to list any possible method of proof . . . the length of such an order would border on the absurd."

In addition to the 23(c)(1)(B) concerns, this case joined the growing number of employment class action cases that distinguish or do not apply the Supreme Court's rulings on commonality in Wal-Mart Stores, Inc. v. Dukes. In Ross, both parties were asked to argue whether or not Dukes' interpretation of the 23(a)(2) commonality requirement would require overturning the certification order. This commonality prerequisite requires that there be "questions of law or fact common to the class," and has been interpreted to require that the plaintiff show that class members have "suffered the same injury."

The Seventh Circuit distinguished Ross from Dukes, finding that there was sufficient commonality in the class claims and injuries to support certification. In Dukes, 1.5 million Wal-Mart employees suing as a class were unable to show sufficient proof of a uniform policy of gender discrimination or commonality in the injury suffered as a result. Rather, the Dukes plaintiffs were only able to show that Wal-Mart had a policy allowing discretion in hiring and compensation decisions, which the Supreme Court noted "is just the opposite of a uniform employment practice that would provide the commonality needed for a class action."

In contrast, the overtime policy at issue in Ross was just that: a "uniform employment practice" that denied these employees their rightful overtime compensation. As a result, the Seventh Circuit declined to extend Dukes and upheld the district court's class certification.

This makes sense, both legally and intuitively. Even if the employees had been denied overtime through different methods (such as by forcing the employee to work through a break or by erasing their recorded overtime hours), all of the class members were subject to the same policy and suffered the same denial of overtime pay. I mean, if that's not "commonality," I don't know what is!

Joshua Druckerman is a second-year student at New York Law School and a member of its Law Review

Abbey Spanier Rodd & Abrams, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm

Read more articles by the attorneys of Abbey Spanier LLP.

For more information about LexisNexis products and solutions connect with us through our corporate site.