Co-authored by Noah Finkel and Rachel Urquhart

Despite rejecting all prior opposition to collective and class action certification of a class of 2,300 cable installation technicians, on the eve of a June 6, 2011 trial, U.S. District Judge Barbara Crabb of the Western District of Wisconsin decertified both the collective and class action because the plaintiffs’ proposed trial plan revealed that the class was simply not manageable at trial.  Decertification can difficult to achieve when addressed in the abstract at the decertification stage, particularly where, as in Espenscheid v. DirectSat USA, the plaintiffs couch their claim as a “common” challenge to “a set of uniform policies and practices.”  But this case demonstrates that, when viewed in the practical light of trial management, substantial variations in how individual plaintiffs responded to numerous common policies and practices can preclude effective and efficient management of a collective trial. 

In her initial denial of DirectSat’s decertification effort, Judge Crabb concluded that the great variations in class members’ employment experiences and theories of liability could be alleviated by creating three subclasses: (1) plaintiffs denied overtime due to underreported hours between the first and last service of the day; (2) plaintiffs denied overtime for work performed before the first or after the last service of the day; and (3)  plaintiffs whose wages for nonproductive work were calculated improperly. But when later faced with plaintiffs’ trial plan to present representative testimony from 42 plaintiffs to prove the claims of 2,300 individuals, the court balked and seized on the reality that the individualized  issues bearing on claims of absent class members could not be fairly addressed through representative testimony.  The court thus departed from its earlier rulings and concluded that the case was too difficult to manage collectively. 

The court’s concerns arose in the context of a motion for reconsideration of an order denying an earlier motion to strike plaintiffs’ expert report.  In its May 12 Order granting reconsideration and striking the expert damages report, Judge Crabb noted that without an expert, plaintiffs could not establish class-wide damages.  Perhaps more significantly, plaintiffs failed to address concerns raised in the court’s May 6, 2011 order denying the motion to strike, namely that plaintiffs had not proposed any reliable method to prove that absent class members and opt-in plaintiffs performed work for which they were not properly compensated.  Plaintiffs’ failure in this regard doomed both collective and class treatment of their claims.  

Convincing a judge that a collective action should be decertified can, in some cases, be a difficult hurdle to clear.  But when presented in the more practical light of how trial will proceed, an employer may stand on much stronger ground.  In many cases, a trial by representative evidence simply is not feasible, yet the decertification review of “similarly situated” plaintiffs and fairness and procedural considerations often does not do justice to these practical concerns.  In Espenscheid, the structure developed  by Judge Crabb to allow the case to proceed collectively ultimately collapsed.  The plaintiffs repeatedly failed to develop and present a workable trial plan that would allow an efficient proceeding without depriving DirectSat of its right to litigate individualized issues essential to its defenses.   

For employers, the Espenscheid decision highlights two important points.  First, whether a case can proceed collectively depends to a significant extent on manageability, particularly manageability of trial.  Focusing on defenses and issues that will require individualized proof and/or testimony at trial and bringing those defenses to the forefront early in the litigation may cause a court to question the manageability of a case even at the conditional certification stage.  Second, even if a case is ultimately certified, an employer should not be resigned to continued certification.  When viewed from a distance the prospect of a messy and time-consuming trial may not motivate a court to deny conditional certification or even decertify a class, but as jury selection draws nearer, the practical realities of trying a collective action may cause the court, like the Espenscheid court, to change course.  In Espenscheid, DirectSat won the war through its persistent reminders to the court that collective treatment of plaintiffs’ claims was not possible and it did this even though it lost the battle at every stage along the way.   

Although the result in Espenscheid was the right one, the path to that result was far from ideal for the parties or the court, because it caused the parties to expend considerable resources.  Espenscheid and Johnson v. Big Lots Stores, Inc., 561 F.Supp.2d 567, 586 (E.D. La. 2008) (in which decertification occurred after trial evidence confirmed the class was not similarly situated) both provide compelling examples of why courts should focus on the practical implications of collective treatment at trial earlier in the life of a putative collective action.  Indeed, what may appear as “a just balance of equities” at the decertification stage may crumble when considered in the context of presenting trial evidence.