The Ninth Circuit recently weighed in on class action certification requirements in an employment case from the Northern District of California. The plaintiffs alleged that they were employees misclassified as independent contractors, and thus their putative employer wrongfully failed to pay them overtime compensation and reimburse them for their reasonable job-related expenses.
Unlike many other cases of this type, the fact of whether the members of the plaintiff class worked said overtime hours or reasonably incurred compensable expenses was not subject to common proof. Notwithstanding, the District Court certified the class, apparently in reliance on the established principle that “the presence of individualized damages cannot, by itself, defeat class certification.”
The Ninth Circuit reversed. The court held that the analysis employed wrongfully “mischaracterize[d] an issue of individualized liability as an issue of individualized damages.” In other words, while individualized questions as to the extent of damage will not defeat class certification, individualized questions as to the existence of damages will. The latter means that plaintiffs are “unable to provide a common method of proving the fact of injury and any liability”–and such precludes class certification. The case no doubt will be another arrow in the quiver of class action defense counsel, who will seek to characterize individualized damages issues as those going toward liability.