The Seventh Circuit today affirmed the Rule 23(b)(3) certification of two classes of bank employees alleging state overtime violations. Ross v. RBS Citizens, dba Charter One and Citizens Financial Group. No. 10-3848 (January 27, 2012). The district court had certified a class of non-exempt tellers subject to an unofficial policy of denying them overtime pay, and a class of branch managers misclassified as exempt, as the majority of their time was spent on non-exempt work. The opinion addressed two questions: 1) whether the class certification order “define[d] the class and the class claims, issues, or defenses” as required by Rule 23(c)(1)(B), and; 2) whether the classes satisfied Rule 23(a) commonality requirement as enunciated in the Dukes v. Wal-Mart case.
The panel held that the “exact contours of Rule 23(c)(1)(B)” was an issue of first impression in the circuit. It identified three purposes to be served by the subsection: facilitating interlocutory review of the order, ensuring that class members have notice of the effect of the order, and permitting the parties and the court to prepare a trial plan. Following an earlier decision by the Third Circuit, it held that the proper inquiry was “whether the precise parameters defining the class and a complete list of the claims, issues, or defenses to be treated on a class basis are readily discernible from the text either of the certification order itself or of an incorporated memorandum opinion.” Slip Op. at 9. Reviewing for abuse of discretion, the court held that the district court’s order satisfied this standard and that seven questions identified by the defendant as omitted were “merely issues of trial strategy or proof.”
The panel also concluded that the classes met the Dukes requirement for commonality. It noted that the classes were far smaller (non-exempt class was approximately 1100) and that no proof of subjective intent was required. It further held that plaintiffs’ declarations (96 hourly and 24 manager) demonstrated unofficial policies of denying overtime. It concluded that no individualized assessment of job duties was required for the manager class.
Finally, in an interesting footnote, the court rejected defendant’s argument that it had “a statutory right to present its affirmative exemption defenses on an individualized basis.” Slip Op. at 17 n.17. The court noted that the Dukes ruling only applied to claims for equitable damages under Rule 23(b)(2).
Categories: Class Actions of Interest