Co-authored by Timothy F. Haley and Noah A. Finkel
We’ve known since the Supreme Court’s 1982 decision in General Telephone Company of Southwest v. Falcon that in determining whether the prerequisites for class certification have been satisfied, a court must engage in a “rigorous analysis.” But what does that mean? According to the Second Circuit, at a minimum it means that a court must resolve material disputed facts relevant to each Rule 23 requirement before certifying a class, even where there is evidence of a common practice or policy.
Cuevas v. Citizens Financial Group [See here] involved an appeal of a district court’s order granting certification of a class of Assistant Branch Managers (“ABMs”). The plaintiffs alleged that the bank violated the New York Labor Law by classifying all ABMs as exempt from the state law’s overtime requirements. The district court [See here] found that commonality was satisfied because of company-wide documents that described the duties of the ABM position and limited ABMs from deviating from company-wide policies. It noted that the record reflected some differences among the exact daily activities of ABMs but concluded that the bank failed to submit any evidence showing that the company-wide policy documents were not an accurate representation of the general ABM responsibilities.
The district court ruled similarly with respect to the issue of predominance. In doing so, it stated that “the existence of some variation among the daily activities of putative class members does not automatically show that individual issues predominate.” It found that there was no evidence that the differences among class members are of such magnitude as to cause individual issues to predominate.
But not so fast, said the Second Circuit. It reversed and remanded the grant of class certification, holding that in determining whether Rule 23(a) prerequisites have been satisfied, a court must conduct a rigorous analysis, which can only be done if the judge resolves factual disputes relevant to each Rule 23 requirement.
The Second Circuit found that, notwithstanding the bank’s policy documents and ABM job descriptions suggesting that ABMs performed primarily the same duties company-wide, declarations submitted by the bank, if credited, suggested that ABM’s primary duties varied in respects material to whether they were exempt or nonexempt employees. It concluded that the district court erred in finding that the commonality and predominance prerequisites had been satisfied without rigorously analyzing the conflicting evidence before it and resolving the material disputed facts. In other words, a court can’t certify a class just by looking at the plaintiff’s evidence. It must analyze the defendant’s evidence too, and if the evidence of the parties is conflicting, resolve that conflict.
What does this decision mean for employers? Despite being a summary order, Cuevas is a strong indicator of a court’s obligations when presented with conflicting evidence on a Rule 23 requirement, particularly in exempt status cases arising in the Second Circuit. While noting that exempt status does not involve an “inherently individualized inquiry,” the court remarked that district courts have correctly certified such matters when they “rigorously analyzed the record, weighed the conflicting evidence, resolved material factual disputes, and determined that subsidiary questions involved in resolving exemption will be answerable through evidence generally applicable to the class.” Merely assuming the truth of Plaintiff’s evidence on class certification won’t cut it.