Summary
bifurcating trial and determining first whether Wal-Mart had a pattern or practice of not paying overtime
Summary of this case from Charbonneau v. Mortg. Lenders of Am. L.L.C.Opinion
Civil No. 98-802-KI
January 9, 2002
Sean Donahue, Donahue Associates, Portland, Oregon, James M. Piotrowski, Nevin, Herzfeld Benjamin, Boise, ID, Attorneys for Plaintiffs.
David G. Hosenpud, Rudy A. Englund, Lane Powell Spears Lubersky, LLP, Portland, Oregon, Gregory S. Muzingo, Wal-Mart Stores, Inc., Bentonville, Arkansas, Attorneys for Defendant.
OPINION AND ORDER
Before the court is the motion for class certification (#103) by plaintiffs Carolyn Thiebes and Betty Alderson. For the reasons set forth below, I deny the motion.
BACKGROUND
Plaintiffs are former employees of defendant Wal-Mart Stores, Inc. ("Wal-Mart"). They bring this action alleging that Wal-Mart has a policy and practice of not paying its workers required overtime wages, encouraging or requiring its workers to work "off the clock," and altering employee time records in order to reduce its obligation to pay overtime wages. Plaintiffs allege that they and other hourly workers at Wal-Mart were not paid for their overtime work and that Wal-Mart failed to maintain accurate and complete records in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). Plaintiffs further allege that Wal-Mart's failure to pay overtime wages and its alteration of time keeping records violate Oregon wage laws, including ORS 652.120, 652.140, 652.610, and 653.045. Finally, plaintiffs allege state common law claims for breach of contract, conversion, quantum meruit and unjust enrichment, and breach of the covenant of good faith and fair dealing.
Initially as the sole plaintiff, Carolyn Thiebes commenced this lawsuit against Wal-Mart in June 1998 alleging various state law claims. On August 31, 1998, Thiebes moved for certification of the case as a class action. After Wal-Mart filed its opposition, plaintiff withdrew her motion. On November 5, 1998, plaintiffs filed a First Amended Complaint, which added Betty Alderson as a plaintiff and a claim for alleged failure to pay overtime compensation, pursuant to the FLSA.
In December 1998, plaintiffs again moved for class certification under Rule 23 of the Federal Rules of Civil Procedure as to their state law claims. Plaintiffs also moved the court to permit the case to proceed as a FLSA collective action on behalf of similarly situated Wal-Mart employees.
In an Order dated December 1, 1999, I granted plaintiffs' motion to proceed as a FLSA collective action, for purposes of notice and discovery only. I also denied, with leave to renew, plaintiffs' motion for class certification of plaintiffs' state law claims. Plaintiffs were granted permission to renew their motion for class certification after the time had closed for persons to opt in to the collective action.
During a telephone conference on February 11, 2000, I adopted Wal-Mart's proposed notice of the FLSA collective action. Plaintiffs proceeded to send notices by mail to 15,507 present and former hourly employees of Wal-Mart in the state of Oregon. Plaintiffs also posted the notices in Wal-Mart stores located in Oregon.
I acknowledge plaintiff's representation that the notices were returned as undeliverable to approximately 3,000 addresses.
The court has received numerous Notices of Filing Consents to Join by plaintiffs, accompanied by hundreds of consent forms completed by Wal-Mart employees. The latest group of consents (in which three employees joined the collective action) was filed on December 17, 2001. My best estimate is that approximately 425 individuals have filed consents to join the collective action.
In the motion for class certification that is currently before me, plaintiffs again move for certification of this suit as a class action, pursuant to Fed.R.Civ.P. 23(a) and (b)(3). Specifically, plaintiffs seek permission for the case to proceed "as to claims made under the laws of the State of Oregon, on behalf of a class consisting of all present and former hourly employees of Wal-Mart Stores, Inc. employed in the State of Oregon within the appropriate limitations period."
DISCUSSION
Rule 23 allows suits to go forward as class actions only if:
[T]he class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class [and] [t]he court finds that the questions of law or fact common to the members of the class 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.P. 23(a) and (b)(3).
A court may certify a class only if it is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Hanon v. Dataproducts Corp., 976 F.2d 497, 509 (9th Cir. 1992). The party seeking class certification bears the burden of proving each of the elements of Rule 23.
In my Opinion dated December 1, 1999 (the "Opinion"), I provided the following explanation for why I denied the motion for class certification that was before me at that time:
At this time, I decline to certify a class under Rule 23 for a number of pragmatic reasons. First, I believe it would be difficult to fashion an effective notice to prospective class members that explains their opportunity to opt in to the FLSA collective action as well as their choice to opt out of the class action.
Second, it would be prudent to defer certifying a class action to see how many employees do, in fact, choose to opt in to the collective action. At that point, I will be best equipped to determine if joinder is impracticable and, thus, whether a class action may be appropriate. Likewise, at that juncture, the variety of workers and their experiences at Wal-Mart can be ascertained and I will be better able to determine if the named plaintiffs are adequate class representatives. Third, Wal-Mart has expressed its intent to move against some, if not all, of plaintiffs' state law claims and it should have an opportunity to do so before the proposed class action is certified. Finally, I make the general observation that, while plaintiffs have articulated a unifying theory of why hourly workers throughout Oregon may have not been paid all of the overtime pay that they were due (and that such a theory is sufficient to find that hourly employees are similarly situated for purposes of FLSA), plaintiffs have not demonstrated that a class action is the superior method for resolving the numerous state law claims (with varying elements) that they have pled. Plaintiffs' motion for class certification is denied.
Opinion, pp. 6-7 (emphasis added).
In support of their current motion, plaintiffs assert that "[e]ach of the `pragmatic reasons' the Court found to require denial of the motion at that time has been addressed or may be addressed at the present time. None of those reasons provides any basis for denial of Plaintiffs' motion at the present time." Plaintiff's Memorandum In Support, p. 2. I disagree with this assessment by plaintiffs and find that, in fact, it has been prudent to defer a final ruling on the issue of class certification until after the FLSA opt-in process concluded. In short, the number of employees that have opted into the FLSA collective action, especially when compared to the number of potential claimants, demonstrates that the requirements for class certification have not been met.
A key prerequisite to the certification of a class action is that the putative class is so numerous that joinder of all members is impracticable. Fed.R.Civ.P. 23(a).
Notwithstanding plaintiffs' argument that I should use a figure in excess of 15,000 individuals to apply this standard, I believe the appropriate figure on which to focus is the 425 individuals who decided to opt into the collective action. The fact that such a small percentage of the employees opted-in is telling (by plaintiffs' calculations, the percentage is 2.7%) and cautions against a finding that joinder is impracticable, especially in light of the fact that the notice of the FLSA collective action included a description of plaintiffs' theory of the case that is the same as their basis for liability under the state law claims:
Plaintiffs, who are former hourly employees of defendant Wal-Mart Stores, Inc., ("Wal-Mart") in Oregon, commenced this lawsuit alleging that Wal-Mart has a policy and practice of not paying its workers required overtime wages, encouraging or requiring its workers to work "off-the-clock," and altering employee time records in order to reduce its obligation to pay overtime wages. Plaintiffs allege that they and other hourly workers at Wal-Mart were not paid for their overtime work and that Wal-Mart failed to maintain accurate and complete records in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). Plaintiffs further allege that Wal-Mart's actions violate Oregon wage and hour laws. Wal-Mart denies all of the plaintiffs' allegations of wrong doing.
Notice of Collective Action Lawsuit, pp. 1-2.
In addition to my concern that certification of the proposed class would bring in many more employees than those who believe they were actually aggrieved by Wal-Mart's alleged conduct, I remain unconvinced that a class action is the superior method for resolving the numerous state law claims, as mandated by Rule 23(b)(3). As I will discuss with the parties at the upcoming status conference, it is not yet clear what economies of scale exist in the context of either a FLSA collective action or a Rule 23 class action for the adjudication of the federal and state wage and hour claims asserted by plaintiffs. Such claims strike me as inherently individualistic, especially in regard to any determination of an employee's damages. Regardless, given the overlap between the federal and state claims, in terms of liability determinations, any efficiencies that are developed in the context of the FLSA collective action will carry over to the state claims.
CONCLUSION
The motion for class certification (#103) by plaintiffs Carolyn Thiebes and Betty Alderson is DENIED.
IT IS SO ORDERED.