Opinion
Civil Action No: 97-2757, SECTION: "J"(3).
July 20, 2000
Before the Court is plaintiffs' Motion For Class Certification (Rec. Doc. 130). Defendants oppose the motion. The motion, set for hearing on May 17, 2000, is before the Court on briefs without oral argument.
For the following reasons, the Court GRANTS plaintiffs' motion as the members of the class satisfy the prerequisite requirements of Rule 23(a) and each of the three certification requirements of 23(b).
I. BACKGROUND
The facts essential to the resolution of the issue of class certification are as follows. In a letter dated July 2, 1985, Joe Warnke, an employee of defendant Schwegmann Giant Super Markets ("SGSM") memorialized a policy enunciated by defendant John Schwegmann Jr. in which Schwegmann employees 60 years of age or older who were supervisors for at least one year before retirement and who had over 20 years experience would be eligible for food vouchers in the amount of $216.00 a month and/or other retirement benefits such as money, life insurance, or pharmacy discount cards.
In September of 1997, plaintiffs brought this action, alleging that the food voucher plan was, in effect, a retirement plan controlled by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001,et seq., and claiming that they are vested in SGSM's retirement benefit plan and are entitled to receive the vouchers or their equivalent for life. In the alternative, plaintiffs allege breach of contract under LA. Civ. CODE art. 1927 and LA. REV. STAT. § 23:634, which make any contract forfeiting wages unlawful.
Currently, there are fifteen named plaintiffs in this suit. SGSM has identified forty employees who were actually receiving retirement benefits in the form of grocery vouchers as of February 1997, when the vouchers were terminated because SGSM sold all but two of its retail store operations. Through discovery, plaintiffs have identified 214 former SGSM employees who had both 20 years of service with SGSM and who either were receiving medical benefits or who have been identified as supervisors. of these 214 employees, plaintiffs determined with the help of former Schwegmann employees that 141 were definitely "supervisors" and identified 50 more about whom they are uncertain.
Plaintiffs have filed the present motion, moving the Court to become certified as a class. Plaintiffs seek certification for all SGSM employees (I) who were retired and receiving the grocery vouchers when SGSM stopped the program, or (2) who, although not retired or receiving the grocery vouchers, had become "vested" in the grocery vouchers program at the time SGSM stopped the program.
Defendants initially argue that plaintiffs' motion should be denied as untimely, since it was filed later than the 90 days after filing of the Complaint mandated by Local Rule 23.1(B). The Court, however, finds that good cause existed for this late filing. Although the Complaint in this matter was filed on September 3, 1997 and the Motion for Class Certification was originally filed on June 4, 1998, the Court granted plaintiffs an additional 90 days to file the motion on December 2, 1997. From March 2, 1998 until June 4, 1998, plaintiffs experienced difficulty in discovery matters with SGSM, and SGSM's counsel withdrew. Furthermore, SGSM has not alleged that it has been prejudiced by the late filing of this motion. Therefore, this ground for dismissal is denied.
To the extent defendants argue that plaintiffs seek certification for any former employee who was vested and receiving any other type of benefit, whether it be money, life insurance, or pharmacy discount cards, the Court reads plaintiffs motion as seeking certification only for those former employees who may have a right to the grocery vouchers. In the event that plaintiffs intended to seek certification for former employees who were receiving benefits other than grocery vouchers, the Court specifically refuses to include them in this order of class certification and finds that those particular plaintiffs are neither numerous enough nor have claims with sufficient similarities to warrant inclusion.
II. DISCUSSION
A class may be certified under Rule 23 only if it meets the four prerequisites found in Rule 23(a) and one of three additional requirements found in Rule 23(b). Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 623 (5th Cir. 1999). The four 23(a) prerequisites include: "(1) numerosity (a class so large that joinder of all members is impracticable); (2) commonality (questions of law or fact common to the class); (3) typicality (named parties' claims or defenses are typical of the class); and (4) adequacy of representation (representatives will fairly and adequately protect the interests of the class)." Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613 (1997). Once the prerequisites of Rule 23(a) have been satisfied, plaintiffs must show that one of the subdivisions of Rule 23(b) has also been satisfied in order to obtain class certification. Id. at 614. The three requirements of Rule 23(b) include: (1) inconsistent adjudications would result in incompatible standards of conduct or any adjudication would bear heavily upon the interests of non-parties; (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class; and (3) issues of law and fact of the class predominate issues unique to individual class members, and maintaining the class action is the superior procedural vehicle. FED. R. CIV. PROC. 23(b)(1)-(3). The burden of proof lies with plaintiffs who seek to certify a class. Ziedman v. Ray McDermott Co., 651 F.2d 1030, 1038 (5th Cir. 1981). A district court has extensive discretion in determining whether to certify a class but must conduct a reasoned and thorough analysis under Rule 23. Mullen, 186 F.3d at 624.
A. RULE 23(a)
1. Numerosity
Under Rule 23(a), a class action may be maintained if, among other things, "the class is so numerous that joinder of all members is impracticable." FED. R. CIV. PROC. 23(a)(1). "The raison d'etre of the class suit doctrine is necessity, which in turn depends upon the question of number." Garcia v. Gloor, 618 F.2d 264, 267 (5th Cir. 1980) (quoting 3B Moore, Federal Practice § 23.05, at 23-149 (2d ed. 1979)). In deciding whether an action satisfies the numerosity prerequisite, the district court should not be guided by numbers alone but rather should consider factors such as the geographical dispersion of the class, the ease with which class members may be identified, and the nature and size of each plaintiff's claim. Mullen, 186 F.3d 624-25; Ziedman, 651 F.2d at 1038.
In this case, the Court finds that "the class is so numerous that joinder of all the members is impracticable." FED. R. Civ. PROC. 23 (a)(1). The 40 former employees who were receiving retirement benefits together with the 141 allegedly "vested" former employees who had not retired certainly satisfy the numerosity requirement. See Mullen, 186 F.3d at 624-25 (finding that a class comprised of between 100 and 150 members is numerous enough to satisfy Rule 23(a)(1)); Sayers v. Yellow Freight Systems, Inc., 529 F.2d 721, 734 (5th Cir. 1976) (finding that a class consisting of 110 members was "clearly a sufficient number to meet the numerosity requirement"). Alternatively, the 40 retired employees alone satisfy the numerosity requirement. 1 Newberg on Class Actions § 3.05, at 3-25 (3d ed. 1992) (stating that any class comprised of more than 40 members "should raise a presumption that joinder is impracticable"), quoted in, Mullen, 186 F.3d at 624.
Furthermore, the nature and size of plaintiffs' individual claims also make joinder impracticable. The grocery vouchers claimed by each plaintiff totals $216.00 a month, $2,592.00 per year. Consequently, many claims are too small for a plaintiff to pursue individually. In addition, at least as to the 40 plaintiffs who were actually collecting the food vouchers, these plaintiffs are elderly and retired.
2. Commonality
The commonality prerequisite to a class certification requires that there be "common questions to the class." FED. R. CIV. PROC. 23(a)(2). "[T]he test for commonality is not demanding and is met "where there is at least one issue, the resolution of which will affect all or a significant number of the putative class members.'" Mullen, 186 F.3d at 625 (quoting Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1997)). The commonality prerequisite is "[a]imed in part at `determining whether there is a need for combined treatment and a benefit to be derived therefrom. . . .'" Id. (quoting In re Agent Orange Product Liability Litigation, 506 F. Supp. 762, 787 (E.D.N.Y. 1980)). "It is not every common question that will suffice, however; at a sufficiently abstract level of generalization, almost any set of claims can be said to display commonality." Sprague v. General Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998). Rather, common issues worthy of satisfying this prerequisite should, once resolved, advance the litigation. Id.
Here, plaintiffs satisfy the commonality prerequisite. The common factual issues center upon the three requirements to receive the food vouchers as set forth in the July 2, 1985 letter. Plaintiffs will need to show (1) that they were employed by SGSM for over 20 years, (2) that they served in a supervisory capacity for at least one year, and (3) they were at least 60 years of age. Most importantly, though, is the central legal issue of whether SGSM created an ERISA retirement plan. The disposition of that particular issue certainly would advance this litigation. Should the Court rule favorably for plaintiffs on that issue, then the claims of each of the 40 plaintiffs who were already receiving the food vouchers will essentially be resolved, since, as recipients of the vouchers, they had already been determined to have met the three requirements of the retirement plan. As for the remaining plaintiffs, the only remaining issue will be whether they were vested. If the Court rules that the food voucher program was not an ERISA plan, then all the plaintiffs will nonetheless share common legal issues as to whether plaintiffs possess a valid, enforceable contractual right to retirement vouchers and, if so, whether termination of the vouchers violated state law.
Defendants argue that the class lacks commonality because the benefits provided to each potential class member varied significantly. The benefits included life insurance, food vouchers, and discount prescription cards. As a result, numerous inconsistent determinations may be made as to damages. Furthermore, defendants argue, some plaintiffs received food vouchers who did not satisfy all three alleged requirements for the plan. Lastly, defendants suggest that the determination of whether terminating the food voucher plan violated state contract law will require individualized proof comprised largely of testimony concerning oral representations. None of these arguments are persuasive.
As previously stated, the Court construes plaintiffs' motion for class certification to include only those plaintiffs who received or were "vested" to receive grocery vouchers. As for defendants' argument that the need for individualized proof militates against commonality, the Court simply notes that some kind of individualized proof is often necessary to determine whether a particular individual qualifies as a member of the class. The fact that class members may require individualized proof of their claims does not prevent class certification.
3. Typicality
The typicality prerequisite of class certification is met when "the claims or defenses of the parties are typical of the claims or defenses of the class." FED. R. CIV. PROC. 23(a)(3). Typicality "focuses on the similarity between the named plaintiffs' legal and remedial theories and the theories of those whom they purport to represent." Mullen, 186 F.3d at 625 (quoting Lightbourn, 118 F.3d at 426). In this case, the named plaintiffs are proceeding under the same legal theories and seeking the same type of relief as is sought for the entire class — enforcement of the grocery voucher plan as an ERISA plan or under state contract law. As such, the Court finds that plaintiffs have satisfied the typicality requirement.
4. Adequacy of Representation
The final prerequisite under Rule 23(a) for class certification is a finding that "the representative parties will fairly and adequately protect the interests of the class." FED. R. CIV. PROC. 23(a)(4). The adequacy of representation prerequisite is divided into two inquiries: (1) whether the interests of the named plaintiffs differ from those of other class members; and (2) whether class counsel is qualified to serve the interests of the entire class. Georgine v. Amchem Products, Inc., 83 F.3d 610, 630 (3d Cir. 1996), aff'd, 117 S.Ct. 2231 (1997).
The Court finds that, in this case, the named plaintiffs' interests and the other class members' interests are aligned. "Differences between named plaintiffs and class members render the named plaintiffs inadequate representatives only if those differences create conflicts between the named plaintiffs' interests and the class members' interests." Mullen, 186 F.3d at 626. Such is not the case here. The named plaintiffs seek the same relief, entitlement to the grocery vouchers or the financial equivalent, under the same legal theories, ERISA and state law, as the remainder of the class. As such, no obvious conflict exists between the named plaintiffs and members of the class.
As for the second inquiry, whether class counsel is competent to serve the interests of the class, counsel for plaintiffs have filed affidavits clearly demonstrating that they posses the requisite experience to maintain this class action and that they will pursue and protect the interests of the entire class. Defendants do not contest the firm's experience or qualifications. Therefore, the Court finds that plaintiffs have satisfied this prerequisite as well.
B. Rule 23(b)
Finally, to achieve class certification plaintiffs must meet at least one of the requirements of Rule 23(b). Mullen, 186 F.3d at 623;Georgine, 83 F.3d at 630. In this case, the Court finds that plaintiffs satisfy each of the three requirements of Rule 23(b).
1. Rule 23(b)(1)
Certification under Rule 23(b)(1) is appropriate when:
the prosecution of separate actions by or against individual members of the class would create a risk of: (A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not party to the adjudications or substantially impair or impede their ability to protect their interests.
The Court finds that prosecution of separate actions concerning members of this class would, as a practical matter, create the risks of inconsistent adjudications, resulting in incompatible standards. If separate suits were brought in different courts, a risk is created that one court would find that the voucher plan was an ERISA plan, whereas another court would not. This would have the effect of creating incompatible standards of conduct for SGSM by requiring SGSM to maintain some form of the food voucher plan in the former scenario for some class members but allowing SGSM to legally forego the plan in the latter scenario. See, e.g., Specialty Cabinets Fixtures, Inc., v. American Equitable Life Ins. Co., 140 F.R.D. 474 (S.D. Ga. 1991) (certifying a class under Rule 23(b)(1) in an action to recover insurance loss due to breach of fiduciary duties).
For the same reasons as stated above, the Court further finds that proceeding with separate actions would result in adjudications which, as a practical matter, would be dispositive of the interests of other class members not a party to this action. The Court's determination of whether the food voucher program was an ERISA plan affects all persons, members or non-members, who have satisfied the criteria for the program. Resolution of this issue as to one would likely resolve the issue as to all. See Dennis v. Sawbrook Steel Castings Co., 1991 WE 260442 (S.D. Ohio 1991) (certifying a class under Rule 23(b)(1)for challenging reversion of assets in an ERISA plan).
2. Rule 23(b)(2)
Rule 23(b)(2) allows for class certification upon plaintiffs' proving that "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." FED. R. Civ. PROC. 23(b)(2). This sub-section of Rule 23 can be divided into two parts: first, the contested conduct is based upon grounds applicable to the entire class; and second, final injunctive relief is requested against the party opposing the class. Mamula v. Satralloy, Inc., 578 F. Supp. 563, 571-72 (S.D. Ohio 1984).
The Court finds that plaintiffs' class merits certification under this subsection. First, the contested conduct is SGSM's refusal to maintain the food voucher program, conduct which forms the basis for all the class members' harm. Second, class members jointly seek reinstatement of the food voucher program, injunctive relief, and an order stating that class members are legally entitled to the program, declaratory relief. See Forbush v. J.C. Penny Co., 98 F.3d 817 (5th Cir. 1993).
3. Rule 23(b)(3)
Rule 23(b)(3), as there exist "questions of law or fact common to the members of the class [which] predominate over any questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." FED. R. Civ. PROC. 23(b)(3). Under rule 23(b)(3), the Court must analyze the issues of predominance and superiority. To this end, Rule 23(b)(3) provides:
(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
1. Predominance
"In order to `predominate,' common issues must constitute a significant part of the individual cases." Mullen, 186 F.3d at 626 (quoting Jenkins v. Raymark Indust., 782 F.2d 468, 472 (5th Cir. 1986)). As the Court discussed earlier, all of the plaintiffs seek essentially the same relief, grocery vouchers or their equivalent, under the same legal theories. Plaintiffs' primary legal argument, that SGSM created an ERISA plan, is not only an overarching issue, but it also permeates each class member's claim. On the other hand, if the grocery voucher program is ultimately found not to be an ERISA plan, the issue of whether termination of the vouchers violated state contract law will predominate, especially among the 40 plaintiffs who had been receiving the vouchers.
2. Superiority
The second element under this subsection requires a court's finding that "a class action is superior to other available methods for the fair and efficient adjudication of the controversy." FED. R. Civ. PROC. 23 (b)(3). The Court finds that maintaining a class action in this matter would not present managerial complexities. There likely will be less than 200 plaintiffs; there are no unique jurisdictional, choice-of-law, or liability issues. Furthermore, the overarching ERISA claim militates strongly in favor of class certification. Resolution of that singular issue will largely determine the outcome of this dispute. It is only sensible that the issue need be resolved once and apply to the plaintiffs as a whole.
SGSM's argument that the need for individualized proof requires joinder is unpersuasive, since the type of individualized proof alleged by SGSM — determining whether each particular class member who may have been vested but had not received the vouchers has satisfied the three requirements to receive the vouchers — will usually nonetheless be needed in a class action to settle the fundamental issue of whether an individual meets the requirements of being a class member. The other type of individualized proof supporting joinder is that of proof which will arise if the Court determines that the voucher plan is not an ERISA plan and proceeds to inquire into whether each individual plaintiff has a contractual right to the vouchers, predicated on representations made to them personally by SGSM. Although the Court concedes that greater individualized proof will be needed, as for the 40 plaintiffs who were actually receiving the vouchers before they stopped, the facts and legal issues will largely be the same. As for those plaintiffs who were not receiving vouchers at the time they were ceased, the Court cannot say, at this stage of the litigation, that the evidentiary issues will be so overburdensome as to outweigh the benefits of maintaining this suit as a class action.
Accordingly, for the reasons stated above the Court finds that plaintiffs satisfy all four prerequisites of Rule 23(a) and the three requirements of Rule 23(b); therefore,
IT IS ORDERED that plaintiffs' Motion to Certify a Class should be and is hereby GRANTED and that this matter will proceed as a class action for those individuals who were SGSM employees and (1) who were retired and receiving the grocery vouchers when SGSM stopped the program, or (2) who, although not retired or receiving the grocery vouchers at the time SGSM stopped the grocery voucher program, were (i) 60 years of age or older, (ii) supervisors for at least one year before retirement, and (iii) had at least 20 years experience with SGSM.
IT IS FURTHER ORDERED that the parties submit to the Court, no later than 15 days from the entry of this order, a proposed order to direct "to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort," and any other matters under Rule 23(c). The parties shall, at the same time, submit a proposed order of trial and scheduling order pursuant to Rule 23(d).