©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 117 After Brinker, California courts have extended this pro-certification rationale even further, ruling that certification should turn on whether a plaintiff’s theory is susceptible to common proof, and minimizing the individualized inquiries necessary to determine which putative class members, if any, actually experienced a violation of the Labor Code.380 Meanwhile, California appellate decisions going the other way (in the employer’s favor) either were not published or suffered the indignity of being depublished by the California Supreme Court.381 5.14.3 Some limits to use of the class device In 2014, the California Supreme Court, in Duran v. U.S. Bank,382 corrected some but not all the ways that plaintiffs in wage and hour cases had abused the class device to disadvantage employers. Duran vacated a $15 million judgment that the trial court had entered on the basis of flawed statistical sampling in a case alleging that a bank had misclassified certain employees as outside salespersons. Duran limited the circumstances in which statistical sampling can establish class-wide liability. In particular, Duran ruled that courts cannot use sampling to deprive a defendant of its due process right to present affirmative defenses as to all class members.383 Perhaps most important, Duran reaffirmed that the plaintiff bears the burden to establish that class certification is appropriate, and ruled that trial courts, before deciding whether to certify a class, must determine that a class trial would be manageable.384 The Duran plaintiffs alleged that U.S. Bank had misclassified them as “outside salespersons” to make them exempt from overtime. That exemption requires that the employee spend most of the working time making sales outside the office.385 The trial court certified a class even though declarations showed that some putative class members met this requirement while others did not.386 The trial court adopted a trial plan that took sample testimony from 20 class members plus two named plaintiffs, and then extrapolated the findings to the entire class for purposes of liability and damages.387 The trial court excluded all evidence that class members outside the sample group were in fact exempt, and concluded—based only on the sample evidence—that all class members had been misclassified.388 The trial court determined damages by extrapolating from the sample, despite a 43% margin of error, and thus awarded $15 million to the class.389 On the bank’s appeal in Duran, the Supreme Court agreed that the class should have been decertified and ordered a new trial. Duran confirmed that a defendant has a due process right to “litigate its statutory defenses to individual claims.”390 Thus, “any trial must allow for the litigation of affirmative defenses, even in a class action case where the defense touches upon individual issues.”391 If statistical sampling is to be used at all for proving liability in a class action, then it must comport with due process and use sound methodologies: (a) the sample size must be “sufficiently large to provide reliable information about the larger group,” (b) the sample must be “random” and free of “selection bias,” and (c) the approach must yield results within a “reasonable margin of error.”392 Furthermore, trial courts should evaluate any proposals for statistical sampling before certifying a class, and they must decertify classes that prove unmanageable.393 The Court of Appeal returned to this case in 2018, affirming an order denying class certification because the plaintiffs failed to show that the case was manageable as a class action.394 Agreeing with the trial court, the Court of Appeal noted that the defendant’s affirmative defenses “would appear to require a host of ‘mini-trials.’”395 There were also “multiple flaws” in the plaintiffs’ trial plan, including an inability to “use representative sampling to establish an aggregate restitution award.”396 The Court of Appeal thus concluded that the trial court had not abused its discretion in denying class certification.397 Although Duran did not reject the use of statistical sampling to establish class-wide liability, the decision makes it significantly more difficult for plaintiffs to use that approach. Duran also reaffirmed the requirement that class litigation be manageable, a requirement that California lower courts, until then, had often ignored. The decisions
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