Denying rehearing, the Ninth Circuit would not disturb its ruling allowing a Rule 23 class action to proceed on behalf of registered nurses who claimed violations of California state wage law. In a prior ruling, the appeals court had reversed a district court’s denial of class certification, finding an error of law in the district court’s determination that the named plaintiffs failed to demonstrate their injuries were typical of the proposed class. Specifically, the lower court had erred by striking the declaration of a paralegal at the class certification preliminary stage, explaining that a court may not decline to consider evidence solely on the basis that expert opinion evidence might be inadmissible at trial. Judge Bea, joined by Judges Bybee, Callahan, Ikuta, and Bennett, dissented from the denial of rehearing en banc (Sali v. Corona Regional Medical Center, November 1, 2018, per curiam).
Class action. Two named plaintiffs filed a putative class action under California law on behalf of registered nurses (RNs) employed by a medical center during the proposed class period “who (a) were not paid all wages at their regular rate of pay; (b) not paid time and a-half and/or double time for all overtime hours worked; and (c) denied uninterrupted, ‘off-duty’ meal-and-rest periods.” They moved for certification of seven classes of RNs. Denying the motion to certify the classes, the district court found that they did not satisfy all of Rule 23’s requirements.
The plaintiffs appealed only with respect to four proposed classes: (1) rounding-time class (not paid all wages due to rounding-time policy); (2) regular-rate class (not paid the correct rate for overtime, double time, and meal or rest premiums); (3) wage-statement class (not provided pay stubs compliant with Labor Code Section 226); and (4) waiting-time class (not paid wages due at termination of employment).
The Ninth Circuit then reversed the lower court’s conclusion that Rule 23(a)’s typicality requirement was not satisfied for any of the proposed classes because the two named plaintiffs failed to submit admissible evidence of their injuries. This conclusion was premised on an error of law, the appeals court panel found, because it was reached after striking the declaration of a paralegal who had reviewed time and payroll records to determine whether the plaintiffs were fully compensated. The named plaintiffs relied on this to demonstrate that their injuries were typical of the class.
Dissent. Judge Bea dissented from the court’s denial of rehearing en banc. According to the dissent, the appeals court panel had established a rule that undermines the purpose of the class certification proceeding. He argued that the court had reduced the requirements of class certification below even a pleading standard by accepting the indisputedly inadmissible expert opinion of plaintiffs’ paralegal that the plaintiffs have damages typical of the class sought to be certified. Bea pointed out that the panel’s holding that expert opinion need not be admissible at the class certification stage was not only contrary to Ninth Circuit precedent, but it put the appeals court on the wrong side of a lopsided circuit split. Four of the five other circuits to consider the issue disagree with the panel’s decision. The Second, Third, Fifth and Seventh Circuits all require expert testimony be admissible to be considered at the class certification stage. Moreover, the Sixth and Eleventh Circuits have so held in unpublished rulings. While the majority emphasized its agreement with the Eighth Circuit, the great weight of persuasive authority counsels against the holding: The class certification stage cannot be disdained as the appeals court has done here, the dissent urged.
Moreover, in the dissent’s view, the decision defied clear Supreme Court guidance. Although the Supreme Court has not directly addressed whether expert testimony must be admissible to be considered on a motion for class certification, its guidance in this area heavily favors the circuit majority rule, according to Bea, who added that the Ninth Circuit would be wise to heed the Supreme Court’s decision in Wal-Mart v. Dukes. There, before analyzing whether the plaintiffs had satisfied the various elements of Rule 23, the High Court discussed in some detail the evidentiary standard appropriate at the class certification stage. At least one other Supreme Court case counseled against the appeals court’s holding here, Comcast Corp. v. Behrend. In Behrend, the Supreme Court again discussed the evidentiary standard at the class certification standard and reaffirmed the principles emphasized in Dukes that Rule 23 demands more than a “mere pleading standard” and that a plaintiff must “affirmatively demonstrate” that he “in fact” has complied with Rule 23.
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