Melvin Hensley v. Haynes Trucking, LLC

• Court: Kentucky Supreme Court
• Decided: June 14, 2018
• Docket: 2016-SC-0180
• Status: Unpublished

Opinion

RENDERED: JUNE 14, 2018 TO BE. PUBLISHED

2016-SC-000180-DG [Q) ~LI ~?/lop'( , l(IJH {ltJfM41t,DC.. .

MELVIN HENSLEY, DANNY LAINHART, APPELLANTS JAMES D. FETTERS, WILLIAM ABNEY, AND CHARLES BUSSELL ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED

ON REVIEW FROM COURT OF APPEALS V. CASE NOS. 2013-CA-000190, 2013-CA-000978, 2013-CA-000;329, AND 2013-CA-000956 FAYETTE CIRCUIT COURT NO. 10-CI-03986

HAYNES TRUCKING, LLC; AND L-M APPELLEES ASPHALT PARTNERS, LTD, D/B/A ATS CONSTRUCTION AND HARTFORD FIRE INSURANCE CO.

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

REVERSING AND REINSTATING

A group of plaintiffs, claiming for themselves and for others similarly

situated, brought'the underlying action in the trial court for backpay and

statutory damages under Kentucky's prevailing-wage law, Kentucky Revised

Statute (KRS) 337.505-550; and the trial court granted their motion to certify it

·as a class action under Kentucky Rule of Civil Procedure (CR) 23. The Court of

. Appeals vacated the _trial court's class-action certification order. On

discretionary review, we reverse the Court of Appeals' decision. We hold that class action. is available to plaintiffs seeking recovery under the state's

prevailing-wage law and that the trial court did not abuse its discretion in

certifying this lawsuit as a class action.

I. BACKGROUND. James Melvin Hensley and several other nam~d plaintiffs 1 brought this

action under CR 23 to recover back_ pay and statutory damages as authorized

by KRS 337 .505-550,2 asserting that they were not paid prevailing wages,

benefits, or overtime in connection with their employment as truck drivers for

Haynes Trucking and L-M As.phalt Partners, Ltd., d/b/a ATS Construction, on

various public-works projects. Hartford Fire Insurance Company is a party

because it was the surety for the public-works performance bonds on these I

projects.

Slightly less than a year after filing suit, Hensley moved for class

certification, .and the trial court granted ATS and Haynes's joint motion for

discovery associated with the class-certification question and issued an order

compelling discoyery depositions of the putative class representatives and set a ) briefing schedule. on the class-certification question. ATS, Haynes, and

Hartford eventually filed a joint response opposing Hensley's motion for class

1 All plaintiffs are collective~y called Hensley in this Opinion. 2 In. 2017, after Hensley performed the work that is the subject of this suit, the Kentucky General Assembly repealed KRS 337.505-550, the prevajling wage law at issue here. The new Act does not apply retroactively to eliminate these potential claims. 2017 Kentucky Laws Ch. 3 (HB3)

2 certification. The trial court then conducted a hearing on the class-certification

motion, allowing all sides to present extensive oral arguments. \ \

After the ,hearing, the trial court sustained Hensley's motion for class

certification, 3 and we reproduce below the relevant portions of the trial ~ourt's

order.

The trial court's "Findings of Fact" included: ·

1. Plaintiffs filed a Class Action Complaint alleging violations of Kentucky prevailing wage law and breach of contract against Defendants. 2. The class .is definite, and members are ascertainable. With at least 139 members, and perhaps many more, the class is so numerous that joinder of all members is impracticable. 3. Then~ are questions of law and fact common to the class. Specifically, all liability issues are common to the class, including whether the defendants were required to pay prevailing wages to truck drivers for the time spent ori the site of public works projects. 4. The claims of the representative parties are typical of the claims of the class. 5. The representative parties will fairly and adequately protect .the interests of the class. In their depositions they have show~ an appreciation of the issues in this case. Furthermore, they have come forward to speak on behalf of current employees who may fear repercussions, including loss of their employment, should they come forward individually. This additional fact enhances · their ability to represent the class. · 6, The questions of law and fact common to the members of the class predominate over any questions affecting only individual members. All legal issues are common and predominate. 7. Counsel for the Plaintiffs ... are sufficiently experienced and qualified to serve as class counsel, and have demonstrated their knowledge of the law, procedure, and the requisite ability to fairly and adequately represent the interests of the class.

3 After the trial coU:rt issued its written order granting class certification, Hartford filed a motion asking the trial court to clarify that the class certification order was entered only against Haynes and ATS. The trial court entere_d an amended order that was essentially a reproduction of its original order, but without Hartford as a defendant.

3 And its "Conclusions of Law" stated:

The requirements of CR 23.01 have been met. The Plaintiffs have demonstrated that they also satisfy each of the elements of CR 23.02(~). The prosecution of separate actions by members of the class would create a risk of inconsistent adjudications with respect ' to individual members of the class which would establish incompatible standards of conduct for the party opposing the class. This is especially so since 'there is an absence of applicable Kentucky Appellate Court rulings on Kentucky's pervading (sic) wage law.

A class action is the superior method to resolve the common issues in thi~ case. What is not common is the extent of damages, if any, each of the plaintiffs may be entitled to. However, the Court can. craft a method to resolve the individual damages determination if that is necessary. The Court hereby certifies a· class of plaintiffs as follows:

All persons who were employed by Haynes Trucking, at any time since 1995, who have not been paid prevailing wages or proper overtime but who · transported asphalt, gravel, sand and/ or other road building materials to various locations on the site of public works projects in the Commonwealth, distributed road building materials from the truck bed in a controlled manner on the site of the project, unloaded asphalt directly into paving machinery at a specific regulated rate so that such machinery could. lay asphalt concurrently on the site of the project, and/or loaded recyclable and non-recyclable materials in conjunction with other heavy machinery for removal of the same from the site of the project.

Haynes and ATS filed a timely joint notice of appeal from the class-

certification order, and Hartford .filed a separate notice of appeal of the same

order. At the Court of Appeals, Haynes, ATS, and Hartford argued that the trial

court lacked ~ubject-matter jurisdiction to rule on class certification and that

Hensley had not satisfied the legal requirements for certification under CR 23·.

A panel of the Court of Appeals concluded that Hensley had fallen short in

4_ establishing the prerequisites of CR 23 to support a class action, commonality,

and, therefore, vacated the trial court's order arid remanded the case to the

trial court for decertification of the class. In a separate concurring opinion, the

judge posited that KRS 337.550(2) does not permit class action suits at all.

Hensley then sought discretionary review in this CourJ of the decision fo

decertify the class, and we granted discretionary review.

II. ANALYSIS.

As a preliminary matter, both sides agree that federal law should guide

this Coµrt's analysis of the trial court's class-certification decision because CR

23 mirrors its federal counterpart, Federal Rules of Civil Procedure Rule (FRCP)

23. 4

A. Issues Reviewable in an Interlocutory Appeal are Limited. . This case comes to us by way of an interlocutory appeal. As we explained

in Breathitt County Bd. of Educ. v. Prater, the general rule in appellate

procedure is that only a trial court's final orders are appealable. s An exception

to this general ·rule, an interlocutory appeal is a mechanism used to address

less-than-final orders of a trial court of select issues. 6 One such issue that can

4 "It is well established that KentUcky courts rely upon Federal caselaw when interpreting a Kentucky rule of procedure that is similar to its federal counterpart." Curtis Green & Clay Green, Inc. v. Clark, 318 S.W.3d 98, 105 (Ky. App. 2010) (citing Newsome By and Through Newsome v. Lowe, 699 S.W.2d 748 (Ky. App. 1985)); see also Kurt A. Philipps, Jr., 6 Ky. Prac. R. Civ. Proc. Ann. Rule 1, Comment 2 (Aug. 2017 .update) ('The general.pattern of the [Kentucky] Rules follows quite closely the mechanical and logical arrangement of the Federal Rules of Civil Procedure. The Kentucky Rules incorporate most of the fundamental concepts implicit in the Federal Rules.") s 292 S.W.3d 883, 886 (Ky. 2009). 6 Id.; see also Baker v. Fields,_ S.W.3d _, 2018 WL 1417660 (Ky. Mar. 22, 2018).

5 ( be reviewed by interlocutory appeal is a trial court's order granting or denying

class-action certific8:tion. Specifically, .CR 23.06 states, "An order granting or ,

denying class action certification is ~ppealable within 10 days after the order is

entered."

Because of the strict parameters of interlocutory appeals, the only

question this Court may address today is whether the trial court properly

certified the Class to proceed as a class action lawsuit. We must focus our

analysis on this limited issue and in so doing scrupulously respect the

limitations of the crossover between (1) reviewing issues implicating the merits

of the case that happen to affect the class-certification· analysis .and (2) limiting

our review to the class-certification issue itself. Most imp~rtantly, "As the

certificatfon of class actions ... .is procedural, such process cannot abridge,

enlarge, or modify any substantive right of the parties."7 "The right of a litigant

to employ the class-action mech~ism .. .is a procedural right only, ancillary to

the litigation of substantive claims. "B

"Rule 23 gran~s courts no license to engage in free-ranging merits

inquiries at the certification stage. Merits questions may be considered9 to the

extent-but only to the extent-that they are relevant to determining whether'the

1 35A C.J.S. Federal Civil Procedure§ 86 (citing Ortiz v. Fibreboard Corp., 527 U;S. 815 (1999)) (emphasis added); see also Eisen v. Carlisle and Jaci/uelin, 417 U.S. 156 j . (1974). s 35A C.J.S. Federal Civil Procedure§ 86 (citing Parisi v. Goldman, Sachs & Co., 710 F.3d 483 (2d Cir. 2013)) (emphasis added). 9 The use of the word considered means exactly what it says. Merits questions may be considered, not conclusively determined.

6 Rule 23 prerequisites (or class certification are satisfied."lO Stated differently,

Rule 23 "requires a showing that questions common to the class predominate,

not that those questions will be answered, on the merits, in favor of the

class."11 Federal circuit courts have addressed the issue even more bluntly: / .

"The determination [of] whether there is a proper class does not depend on the r '

existence of a cause of action. A suit may be a proper class action, conforming

to Rule 23, and still be dismissed for failure to state a cause of action."12

Several issues obscure the focus on whether the trial court correctly

certified the class in this case. First, Haynes and ATS assert that the trial court

did not have the subject-matter jurisdiction to certify the class for those claims

that allegedly do not meet the circuit court's jurisdictional minimum dollar - ' .

amount-in-controversy,13 arguing that, consequently, all those claims must be

dismissed. Second, as the concurring opinion from the Court of Appeals

suggests, we must determine if a class-action lawsuit is even available for

Hensley to assert prevailing-wage claims as a class action. Third, Haynes and

ATS argue that prevailing-wage law has a so-called de minimis limitation that

essentially forecloses litigatfon to those whose claims are triflingly small.

10 Amgen v. Connecticut Retirement Plan & Trust Funds, 568 U.S. 455, 465-66 (2013). 11 Id. at 459.

12 Miller v. Mackey Intern., Inc.,, 452 F.2d 424, 427 (5th Cir. 1971); Kahan v. Rosenstiel, 424 F.2d 161, 169 (3rd Cir. 1970); see Esplin v. Hirschi, 402 F.2d 94 (10th Cir. 1968); Eisenv. Carlisle & Jacquelin, 391 F.2d 555 (2d Cir. 1968). ia See KRS 24A.120(1) (granting Kentucky District Courts "exclusive jurisdiction in: (1) Civil cases in which the amount in cohtroversy does not exceed ... $5,000 .... "); KRS 23A.010(1) (granting Kentucky Circuit Courts "original jurisdiction of all justiciable causes not exclusively vested in some other court....").

7 l. The trial court has subject-matter jurisdiction. Haynes and ATS argue that the trial court lacked subject-matter

jurisdiction over the claims of some of the purported class members that fail to

meet the jurisdictional minimum in controversy and, as a result, those

purported class members' claims should be dismissed. As the basis for their

argument, Haynes and ATS rely on the statement of the Court of Appeals in

Lamar v. Office of Sheriff of Daviess County that, "We are of the same opinion

with respect to our CR 23" as the United States Supreme Court's opinion in·

Zahn v. International Paper Companyi4 of FRCP 23.1s

The Court of Appeals in Lamar appears to have agreed with the U.S.

Supreme Court about its following statements in Zahn:

This distinction and rule that multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional-amount requirement for suit in the federal courts were firmly rooted in prior cases dating from 1832, and have continued to be accepted construction of the controlling statutes .... The rule has been applied to forbid aggregation of claims where none of the claimants satisfies the jurisdictional-amount... .It also requires dismissal of those litigants whose claims do not satisfy the jurisdictional-amount, even though other litigants assert claims sufficient to invoke the jurisdiction of the federal court.16

What undercuts Haynes and ATS's argument here is the fact that the U.S.

Supreme Court later held in Exxon Mobil Corp. v. Allapattah Services, Inc. that

14 414 U.S. 291, 292-95 (1973).

ls 669 S.W.2d 27, 31 (Ky. App. 1984). 16 Id. (emphasis added). What Lamar actually holds is the following: "[W]ith respect to CR 23 ... the sums of the individual claims of...respective [plaintiffs] may not be aggregated in order to meet the jurisdictional amount requirements for an action to be brought in the circuit court and be maintained as a class action where none of the individual claims is equal tO or exceeds the statutory jurisdictional amount." Id.

8 Zahn is no longer good law, having been overruled by 28 U.S.C. § 1367, the

federal statute· granting federal district courts supplemental jurisdiction over

certain claims.17

In fact, because of the enactment of 28 U.S.C. § 1367, which completely

undermines the holding in Zahn, the U.S. Supreme Court in Exxon Mobil held

that in a class-action lawsuit, once one member of the class satisfies the

jurisdictional amount-in-controversy requirement, a court may exercise

supplemental jurisdiction over claims by class mer.p.bers that, by themselves,

do not meet the jurisdictional amount-in-controversy requirement. la Simply

stated, Haynes and ATS hang their entire subject-matter jurisdiction argument

on a rule of law taken from a case that has been overruled. So their argument

on this point fails to persuade us.

We are not at liberty on interlocutory appeal to dismiss some. of the

purported plaintiffs' claims. Haynes and ATS are asserting to us a different

subject-matter jurisdiction question than the one we may answer Qn

interlocutory appeal. The question that is appropriate for us to answer on

interlocutory appeal is: Did tI:ie trial court have the requisite subject-matter

jurisdiction to certify the class? Haynes and _ATS would ask: Does the trial

11 545 U.S. 546, 566 (2005).

1s Id. at 558-59. This remains the federal common law rule. In 2005, Congress enacted the Class Action Fairness Act, which affords a federal district court subject-matter jurisdiction over a class action lawsuit that al!eges, in the aggregate, $5 million in controversy, even though no class member's claim alone would satisfy the $75,000 amount-in-controversy requirement needed to establish diversity jurisdiction in federal court. 18 A.L.R. Fed. 2d 223 (originally published in 2007, continuously updated) (citing 28 u.s.c. § 1332(d)(2)).

9 court have the requisite subject-matter jurisdiction over the claims of some of

the purported class members? As an appellate court adjud!cating this

interlocutory appeal, we can answer the first question, but we cannot answer

the second one.

The first question essentially asks if the trial court has the power to do

what it did-in this case, to certify a class action. Challenging a class-action

certification determination is a proper issue for interlocutory appeal, so

challenging the trial court's initial subject-matter jurisdiction over a claim to

make· such a determination is also a proper issue for interlocutory appeal.19

But in this case, Haynes and ATS seemingly admit that one plaintiff in this

case satisfies the jurisdictional amount-in-controversy for the trial court to

exercise subject-matter jurisdiction over that plaintiffs claim. Once a trial

court has the requisite subject-matter jurisdiction over a claim-and all it

takes is one claim-the circuit court may proceed to decide upon certification

of a class.

The second question stated above, however, is not an appropriate

determination for an interlocutory appeal challenging certification of a class.

The second question essentially asks whether the trial.court improperly

asserted subject-matter jurisdiction over some of the claims of some of the

19 "On every writ of error or appeal, the first and fundamental question is that of jurisdiction, first, of this court, and then of the court from which the record comes. This question the court- is bound to ask and answer for itself, even when not otherwise suggested, and without respect to the relation of the parties to it." Great S. Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 453 (1900).

10 plaintiffs in this case. Answering this question would be an inappropriate

extension of the iss_ues Kentucky appellate courts can reach on interlocutory

appeal. A defendant cannot challenge a trial court's subject-matter jurisdiction

_over a claim, in arid of itself, on interlocutory appeal. Opening the door to such

a challenge on interlocutory appeal today would encroach upon the very

narrow field of issues we have recognized as acceptable to present via

interlocutory appeal.

A trial court erroneously assuming subject-matter jurisdiction over a

claim in and of itself is not an immediately appealable issue. In the class-action

certification context, a trial court needs subject-matter jurisdiction over only

one claim to exercise its power and determine whether class certification is

appropriate. In this case, the trial court does have subject-matter jurisdiction

over at least one of the claims by one of the plaintiffs, as was seemingly

conceded by Haynes and ATS, because that plaintiffs asserted amount-in-

controversy satisfied the jurisdictional minimum for c~rcuit court jurisdiction.

If Haynes and ATS believe that the trial court erroneously asserted

subject-matter jurisdiction over some of the claims in this case, they are free to

raise that issue before the trial court and, if unsuccessful at the trial court·

level, ultimately in the normal appellate process. But, once, as Haynes and ATS

essentially concede, the trial court exercises proper subject-matter jurisdiction

over one of the claims in this case, the trial court has the power to proceed

with its class-action certification determination. This jurisdictional question is

the only jurisdictional question appropriate to decide on interlocutory appeal,

11 and because we have answered it in the affirmative, we proceed w_ith our

analysis.

2. KRS 337.550(2)does afford class action suits. Before we,determine whether Hensley :rp.ay certify as a class, we must

first determine whether the procedural vehicle of a class-action lawsuit is even

available. Haynes and ATS attempt to argue that this issue is not before us " '

today, and that it would be inappropriate for us to reach this issue.

But simple logic dictates that we must answer this question because

determining whether the trial court correctly certified a class necessarily

assumes that the case can proceed as a cla~s-action. In other words,

determining whether the procedural device of a class action suit is available is

a prerequisite to determining whether the case can proceed as a class-action

lawsuit. And determining whether the prevailing-wage statute allows the

procedural mechanism of a class-action lawsuit is not a determination of the

merits of this case in any way. Stated differently, this Court is only determining

if the case can proceed ~ a class action, not whether anyone is entitled to the relief sought under the prevailing-wage statute.

We begin our analysis with KRS 337.550(2):

A laborer, workman, or mechanic may by civil action recover any sum due him or her as the result of the failure of his or her employer to comply with the terms of KRS 337 .505 to 337 .550. The commissioner may also bring any legal action necessary to collect claims on behalf of any or all laborers, workmen, or mechanics .. ~.

Most recently in McCann v. Sullivan University System, Inc., we addressed the

availability of class-action lawsuits in which plaintiffs assert claims arising-

12 from statutes. 20 As applied to the circumstances of this case, Mccann stands

for the proposition that if "[t]he General Assembly did not create a special

statutory proceeding for [an] action[] brought under [KRS 337.550] ... CR 23

remains an available procedural mechanism .... "21

We recognized in McCann that "Section 116 of the Kentucky Constitution

empowers thiS Court 'to prescribe ... rules of practice and procedure for the

Court of Justice. "'22 One such rule of practice and procedure is Kentucky Rule

of Civil Procedure ("CR") 1(2), which states, "[The Kentucky Rules of Civil

Procedure] govern procedure and practice in all ac~ions of a civil nature in the

Court of Justice except for special statutory proceedings .... "

We explained that "[a] 'special statutory proceeding' is one that is ''complete

within itself having each procedural detail prescribed. m23 "In sum, this Court

determines the existence of a special statutory proceeding ,by evaluating

whether the statute in question provides for a comprehensive, wholly self-

contained process that prescribes each procedural detail of the cause of

action. "24

20 528 S.W.3d 331 (Ky. 2017). 21 Id. at 336.

22 Id. at 336. ( .

23Id. at 334 (quoting C.C. v. Cabinet for Health and Family Services, 330 S.W.3d 83, 87 (Ky. 2011)) (quoting Swift & Co. v. Campbell, 360 S.W.2d 213, 214 (Ky. 1962))). 24 McCann, 528 S.W.3d at 334 (citing Shinkle v. Turner, 496 S.W.3d 418, 420-21 (Ky. 2016); Western Kentucky Coca-Cola Bottling Co., Inc. v. Runyon, 410 S.W.3d 113, 116 (Ky. 2013); C.C., 330 S.W.3d at 87; Swift, 360 S.W.2d at 214; Brock v. Saylor, 189 . S.W-.2d 688, 689 (Ky. 1945))., -

13 Such a "comprehensive, wholly self-contained process" is completely

missing from KRS 337.550(2). While it is true that KRS 337.550(2) identifies

the "commissioner" as a party allowed to "bring any legal action necessary to

collect claims on behalf of any or all laborers, workmen, or mechanics," this is

the extent of the process outlined in KRS 337.550(2) for the commissioner's

lawsuit. Such a broad and general description of the commissioner's lawsuit

falls short of the type of process that would constitute a special statutory

proceeding to preclude access to remedies available by class-action lawsuits.

Simply because KRS 337 .550(2) allows the commissioner to bring a

lawsuit on behalf of claimants does not preclude lawsuits-even class-action

suits-by others aggrieved by alleged violations of the prevailing-wage statutes-

the two types of actions are not mutually exclusive. KRS 337 .550(2r simply

gives the commissioner the ability to bring a lawsuit on behalf of claimants.

Such a grant by itself cannot be read to suggest an intent by the legislature to

foreclose class-action lawsuits in prevailing-wage claims. To the contrary, such

grant more likely supports the importance of providing those denied the

be_nefits of the prevailing-wage statutes with alternative forms of redress.

So we hold that KRS 337.550(2) does not preclude the availability of

class-action lawsuits because KRS 337 .550(2) does not constitute a special

statutory proceeding. Therefore, "CR 23 remains an available procedural

14 /

mechanism applicable to [Hensley's] cause of action brought under KRS '.

337.[550(2)]."25

3. We do not decide today whether Kentucky law impose~ a so- called de minimis requirement. Before its repeal, Kentucky's prevailing-wage laws_ provided a robust set

of instructions for the payment of prevailing wages simiiar to federal law's

Davis-Bacon Act. 26 These laws were similar, but they were not identical.

Haynes and ATS argue that the prohibition in federal law on the payment of

prevailing wages to certain workers who spend what these parties term as a "de

minimis amount of time on the work site" automatically excludes some of the

truck drivers who seek to be a part of the class action iri this case.

Determining whether Kentucky law excludes as too trifling for litigation

the claims of a group of plaintiffs is not an appropriate consideration for this

Court on interlocutory appeal. But Haynes and ATS attempt to conjoin this

issue with reviewing the trial court's class-action certification, arguing that

determining whether Kentucky prevailing-wage law has a so-called de minimis

requirement directly affects the numerosity requirement.

No doubt numerosity would be affected if this Court were to determine

whether . the d,e minimis limitation applies in Kentucky law. For example, if this /

Court were to hold that Kentucky law allows a de minimis limit on litigable

claims, some of the purported class members would be prevented from bringing

2s McCann, 528 S.W.3d 336 (Ky. 2017).

26 40 U.S.C. § 3141, et seq.

15 suit, requiring a reevaluation of how many purported class members exist and

whether joinder of their claims is impracticable.

But we do not reach this issue for the same reason we generally limit the

scope of interlocutory appellate review-the interlocutory appeal is a device

limited in its scope.·And in this case, the interlocutory appeal mechanism

cannot be used to address whether Kentucky prevailing-wage law has a de

minimis limitation that prevents a certain group of plaintiffs from asserting a

cause of action. Deciding this issue effectively decides the merits of those

plaintiffs' claims.27

Determining whether Hensley can proceed with a class-action lawsuit is

not a determination about whether certain substantive, on-the-merits

arguments, are meritorious; rather, such a determination is whether the suit

can.proceed as a class action. The potential application of the de minimis

limitation is. a proper consideration for the trial court in determining whether

the class-certification requirements are satisfied.28 But appellate courts on

interlocutory appeal cannot reach and conclusively determine a substantive

21 "As the certification of class actions ... .is procedural, such process cannot abridge, enlarge, or modify any substantive right of the parties." See, supra fn 7. "The right of a litigant to employ the class-action mechanism .. .is a procedural right only, ancillary to the litigation of substantive claims." See, supra fn 8. 2a "Merits questipns may be considered to the extent-:but only to the extent-that they are relevant to determining whether the. Rule 23 prerequisites for class certification are satisfied." Amgen, 568 U.S. at 465-66.

16 issue t.hat reaches the merits of a case when simply reviewing the propriety of

the trial court's class-action certification determination.29

Our analysis, l~mited to reviewing the trial court's determination on class

certification, is not sufficiently broad to allow us to address potential issues of

a law directly affecting the merits of this case. Our holding on this issue is

supported by the Fifth Circuit's decision in Mims v. Stewart Title Guar. Co. 30 In

Mims, the Fifth Circuit declined to address whether the plaintiffs' allegations

stated a claim under the Real Estate Settlement Procedures Act.31 In dC?ing so,

the Mims Court stated, "We may not reach that issue because our review of an

appeal under Rule 23(f) is limited and does not permit a general inquiry into

the merits of the plaintiffs' claim."32.

ATS and Haynes here are arguing exactly what the Mims plaintiffs

argued-that the law does not afford a certain group of plaintiffs a cause of

action. And like the Mims ~ourt, we decline to address this issue because such

a determination is not within the scope of interlocutory review of a trial court's

class-certification decision.

29 "Rule 23 grants ~ourts no license to engage in free-ranging merits inquiries at the . certification stage." Amgen, 568 U.S. at 465-66. · · 30 590 F.3d 298 (5th Cir. 2009).

31 Id. at 302.

32 Id.

17 B. Class-Action Certification Analysis l. General Rules of Law for Class-Action Certijication A class action is "[a] lawsuit in which the court authorizes a single person

or a small gr~up of people to represent the interests of a larger group. "33 "The·

class action [is] an invention of equity, mothered by the practical necessity of

providing a procedural devfoe so that mere numbers would not disable large

groups of individuals, united in interest, from enforcing their equitable rights

nor gra:nt them immunity from their equitable wrongs. "34

In Kentucky, a party must fulfill the prerequisites of CR 23.01 and 23.02

to be able to maintain a class action. CR 23.01 ~tates:

Subject to [CR 23.02], one or more members of a class may sue or be sued as representative parties on behalf of all only if (a) the class is so numerous that joh1der of all members is impracticable, (b) there are questions of law or fact common to the class, (c) the claims or defenses of the representative parties are typical of the clain;is or defenses of the class, and (d) the representative parties will fairly and adequately protect the interests of the class.

The four requirements in CR 23.01 to maintaining a class action can be

summed up as numerosity, commonality, typicality, and adequacy of

representation requirements. 3 s

There is no precise size or number of class members that automatically

satisfies the numerosity requirement. 3 6 "Whether a number is so large that it

33 Black's Law Dictionary, Class Action (10th ed. 2014).

34Montgomery Ward & Co. v. Langer, 168 F.2d 182, 187 (8th Cir. 1948) (citing United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 387-89 (1922)). 35 Nebraska Alliance Realty Co. v. Brewer, 529 S.W.3d 307; 311 (Ky. App. 2017).

36Kurt A. Philipps, Jr., et al., 6 Ky. Prac. R. Civ. Proc. Ann. Rule 23.01, Comment 5 (Aug. 2017 updated).

18 would be impracticable to join all parties depends not upon any magic number

or formula, but rather upon the circumstances surrounding the case. "37 "The

substantive nature Qf the claim, the type of the class action, and the relief

requested bear on ... the necessary showing of numerosity in relation to

impracticability of joinder."38 "Practicability of joinder also depends on the size

. of the class, the ease of identifying its members and determining their

addresses, facility of making service on them, and their geographic

dispersion."39 "Impracticability does not mean impossibility. The class

representative need show only that it is extremely difficult or inconvenient to ,)

join all members of the class."40

The U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes highlighted the

focus of the 'commonality question: Whether the class plaintiffs' claims "depend

upon a common contention ... that is capable of class wide resolution-which

means that determination of its truth or falsity will resolve an issue that·is

central to the validity of each one of the claims in one stroke." 41 This Court has

also expounded on the commonality requirement: ."CR 23.01 (b) requires that

37 Id.

38 Philipps, supra fn 36 (citing Sowders v. Atkins; 646 S.W.2d 344 (Ky. 1983)). / . 39 Philipps,.supra fn 36 (citing Simpson v. Spedalty Retail 9oncepts, 149 F.R.D. 94 (M.D. N.C. 1993)). 40 Philipps, supra fn. 36 (citing Wright & Miller, Federal Practice and Procedure (2d ed.), Civil§ 1759) .. 41 131 S.Ct. 2541, 2551 (2011).

19 there must be questions of law or fact common to the class, bµt it does not

require that all questions of law or fact be common."42

.Regarding the typicality requirement, "The claims and defenses are

·considered typical if they arise from the same event, practice, or course of

conduct that gives rise to the claims of other class me~bers and if the claims

of the representative are based on the same legal theory." 43 Regarding the

adequacy of representation :requirement, "[a] cou.rt will normally look at two

criteria: (1) the representative must have common interest with the unnamed

members of the class; and (2) it must appear that the representative will

vigorously prosecute the interests of the class through qualified counsel.;'44

"[T]he representative must not have any significant interests antagonistic to or

conflicting with those of the unnamed members of the class. "45

In addition to satisfying the.requirements of CR 23.01, a party rnust

satisfy the requirements of CR 23.02 to maintain a class action. CR 23.02

states, "An action may be maintained as a class action if the prerequisites of

Rule 23.01 are satisfied, and in addition" one of three requirements is satisfied:

(a) The prosecution of separate actions by or against individual members of the class would create a risk of (i) inconsistent or varyingadjudications with respect to individual members of the class whjch would establish incompatible standards of conduct for the party opposing the class or (ii) adjudications 'With respect

42 Wiley v. Adkins; 48 S.W.3d 20, 23 (Ky. 2001). 43 Philipps, supra fn 36, Comment 7.

44Philipps, supra fn 36, Comment 8 (citing Runion v. U.S Shelter, 98 F.R.D. 313 (D.S.C. 1983); Gonzales v. Cassidy, 474 F.2d 67 (5th Cir. 1973)). 45 Philipps,. supra fn 36, Comment 8 (citing Sullivan v. Winn-Dixie Greenville, Inc., 62 F.R.'D. 370 (D.S.C. 1974)).

20 to individual members of the class which would as a practical matter be dispositive ofthe interests of the other members not parties to·the adjudications or substantially impair or impede their ability to protect their interests; or

. (b) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive r~lief or corresponding declaratory relief with respect to the class as a whole; or

(c)' The court finds that the question oflaw or fact common to the members of the class predominate over any questions affecting only individual members·, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (i) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (ii) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (iii) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (iv) the difficulties likely to be encountered in the management of a class action.

Lastly, "[t]wo other requirements not mentioned in the Rule, presuma~ly

because they are self-evident, are that a definable class must exist, and the l

representatives must be members of the class."46

2. The trial court did not abuse its discretion when certifying the class. ··

A trial court's determination as to class certification is reviewed on

appeal for an abuse of discretion. 47 Under an abuse-of-discretion standard, ' . this Court may reverse a trial court's decision only if "the trial judge's decision

was arbitrary, unreasonable, unfair, or unsupported by sound legal

46 Philipps, supra fn 36, Comment 4 (citing Wright & Miller, Federal Practice and Procedure (2d ed.), Civil § 17 59). 47 Sowders v. Atkins, 646 S.W.2d 344, 346 (Ky. 1983).

21 principles. "48 "Implicit in this deferential standard is a recognition of the

essentially factual basis of the certification inquiry and of the [trial] court's

inherent power to manage and control pending litigation."49 Importantly, "As

long as the [trial] court's reasoning stays within the parameters of [CR] 23's

requirements for certification of a class, the [trial court's] decision will not be

disturbed. "50

" How thorough the analysis in which the trial court must engage is more

difficult to pinpoint. The commentary to Kentticky's Annotated Rules of Civil

Procedure discusses the "substantial possibility" test that exists in some

jurisdictions.SI The "substantial possibility" test requires that "a plaintiff must

be able to qemonstrate there is a substantial possibility that he or she will

prevail on the merits before a court will make an affirmative determination of

the propriety of the class action."52 But the United States Supreme Court in

Dukes recently articulated a less demanding test for evaluating.class-action

certificatibn than the substantial possibility test. 53

·In Dukes, the U.S. Supreme Court held that "Rule 23 does not set forth a

mere pleading standard. A party seeking class. certification must affirmatively

demonstrate his compliance with the Rule-that is, he must be prepared to

48 Goodyear Ti.re & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000). 49 Allison v. Citgo Petroleum Corp., 151 F.3d402, 408 (5th Cir. 1998). 50 Hines v. Widnali, 334 F.3d 1253, 1255 (1 lth Cir. 2003). 51 Phillips, supra fn 36, Comment 4.

52 Id.

53 i31 S.Ct. 2541, 2551 (2011).

22 prove that there aie in fact sufficiently numerous parties, common questions of

law or fact, et.c."5 4 The Dukes Court expounded on this rule, stating,

"certification is proper only if the trial court is satisfied, after a rigorous

analysis, that the prerequisites of [Rule 23] have been satisfied. "55 "This

'rigorous analysis' standard will frequently require the trial court 'to probe

behind the pleadings before coming to rest on the certification question. '"56 "As

well, this analysis will often entail some review of the merits of the plaintiffs

underlying claim. "57

Although Kentucky has not expressly adopted this standard, this Court

"has flirted with accepting this principle, at least to the point of looking beyond

the bald aHegations in a complaint before certifying a class."58 We decline to

adopt fully the "substantial possibility" test articulated in some jurisdictions.

Rather, we will adhere to the guidance the U.S. Supreme Court in Dukes has

given on this issue. We also acknowledge that our precedent holds that "[i]t is

not necessary that there be a complete identification of facts relating to all

members of the class as long as there is a common nucleu~ of operative

facts."59

54 Id. (emphasis in original). 55 Id. (emphasis added). · 56 Philipps, supra fn 36, Comment 4 (citing Dukes, 131 S.Ct. at 2551). 57 Philipps, suprafn 36, Comment 4 (citing Dukes, 131 S.Ct. at 2551).

58 Philipps, supra fn 36, Comment 4 (citing Sowders v. Atkins, 646 S.W.2d 344 (Ky. 1983)). 59 Philipps, supra fn 36, Comment 13 (citing Wiley v. Adkins, 48 S.W.3d 20 (Ky. 2001)).

23 At bottom, the only question that is before us is: Was the trial court's \

decision to certify the class in this case "arbitrary, unreasonable, unfair, or

unsupported by sound legal principles?" After due consideration, we cannot . I '

say that it was. The trial court did not abuse its discretion when certifying the

class.

The Court of Appeals attacked-as the appellees now similarly attack-the

trial court's order in several ways. First, they suggest that the trial court failed

to conduct a "probe behind the pleadings" or a "rigorous analysis" when

conducting its class-ce~tification analysis, and as a result, they have

questioned the evidentiary support for class certification. Second, they question

compliance with some of the CR 23.01 class- ertification requirements-

specifically, numerosity, commonality, and typicality. Third, they attack the trial

court's CR 23.02(c) finding of satisfaction of the predominance and superiorify

requirements. Lastly, they question the class definition for lack of

ascertainability of the class and for other reasons.

a. "Probe behind the pleadings," "rigorous analysis," and evidentiary support. Although its oral and minimal written findings may not entirely reinforce

this conclusion, we are satisfied that the trial court did "probe behind the

pleadings" and perform a "rigorous analysis" in this case, and that its findings

are supported by the record.

The trial court allowed discovery of additional information beyond what

the pleadings· stated and conducted extensive hearings that touched both

indirectly and directly on the class-certificatjon issue. The trial court also allowed the parties to brief and orally argue the issues, in addition to

considering the submission of numerous exhibits.

The trial court's written order and oral findings are admittedly minimal.

But a trial court's brevity, in and of itself, does not make its ruling "arbitrary, . .

unreasonable, unfair, or uns-upported by sound legaI principles." The trial

court heard extensive argument and )reviewed volumes of testimony and

exhibits before deciding.

To say that the trial court's decision lacked sufficient evidentiary support

is to ignore the copious amount of discoveiy and exhibits in this case, wh.ich

includes 16 volumes of documents comprising the record. Included in these

volumes are depositions, interrogatories, document production, and other

exhibits that support the trial court's class-certification ruling. Particularly, the

record includes lists of truck drivers 'forking for Haynes and ATS during the

events in question and provides some indication as to the extent of their

involvement in the events at issue in this case.

·Additionally, the trial court did not stray beyond the CR 23 framework.

Althoµgh the trial court's written order contains conclusory statements and

minimal explanation for its findings, the trial court made all the required CR 23 1 findings. All the elements of class certification needed to be satisfied were

found to be satisfied. While the trial court's written order itself may not

evidence a "probe behind the pleadings" or "rigorous analysis," the record

shows that the trial court complied with these require~ents.

25 We are not persuaded that the trial court abused its discretion in the

way it considered its findings nor in the way the findings were stated. And

while we find no abuse of discretion by the trial court in this instance., we do

hasten to emphasize the preference for a class-certification order in which the

trial court explains itself beyond conclusory statements with limited written

support.

b. CR 23.01 Findings.

The Court of Appeals' .opinion and the appellees heavily predicate their

challenge of the trial court's CR 23.01 findings on the satisfaction of the

numerosity requirement on the number· of purported class members. But the

numerosity question does not invo.lve attempting to find that magic number

where a court can proclaim numerosity to be satisfied; rather, the numerosity

analysis must focus on the impracticability ofjoinder. This is what the rule

states: "the class is so numerous that joinder of all members is impracticable. "60

The size of the class is one consideration for the trial court to make when

considering numerosity, but it is not the only consideration.' "The substantive

nature of the cfaim, the type of the class action, and the relief requested bear

on ... the necessary showing of numerosity in relation to impracticability of

joinder."61 "Practicability of joinder also depends on the ... ease of identifying its

members and determining their addresses, facility of making. service on them,

60 CR 23.0l(a). 61 Philipps, suprafn 36 (citing Sowders v. Atkins, 646 S.W.2d 344 (Ky. 1983)).

26 and their geographic ·dispersion. "62 A trial court's finding on impracticability of \

joinder is the lynchpin of the numerosity determination.

Haynes, ATS, and Hartford rest their entire argument that numerosity

has not been satisfied on the size of the class. No attack has been made

specifically regarding the trial court's finding "tP.at joinder of all members is

impracticable," nor has any suggestion been made to refute the trial court's

finding on impracticability of joinder. The size of the class itself is only one

consideration for the trial court in determining whether joinder is

impracticable. Simple discrepancies as to the number of purported class

men:ibers does not render a trial court's finding of the satisfaction of the

numerosity prong an abuse of discretion.

The trial court correctly found commoftality to be satisfied in this case.

Dukes identifies the commonality analysis lynchpin: Whether the class

plaintiffs' claims "depend upon a common contention ... that is capable of class

wide resolution-which means that determination of its truth or falsity will

resolve an issue that is central to the validity of each one of the claims in one

stroke."63 In thi~ case, .the common contention, central fo the validity of each

.claim of each purported class member in thi,~ case, is that truck drivers who

· worked on public-works projects were not paid the prevailing wage and are

entitled to that wage.

62 Philipps; supra fn 36 (citing Simpson v. Spedalty Retail Concepts, 149 F.R.D. 94 (M.D. N.C. 1993)). 63 131 S.Ct. at 2551.

27 Haynes, ATS, and Hartford argue that too many individualized

differences among the class ·members, both factually and legally," exist to satisfy

the commonality prong. All the factual differences these parties· have alleged-

mainly, time spent on the site-do nothing to call into question satisfaction of

the common contention stated above at this point in the case.

Moreover, the trial court identified two things it would have to do to

address these factual differences. First, the trial court stated in the hearing on

Hensley's class-certification motion that a determination on the de minimis

requirement would have to be made before the conclusion of the case. Second,

the trial court correctly identified that the parties' concerns were essentiaily a

damages question, and that the trial court could "craft a method to resolve the

individual damages determination .... " At this point in the case, we can:not firid

a factual difference between the purported class members and their claims that

would destroy satisfaction of the commonality requirement.

The parties' argument that differences in each purported class member's

liability analysis preclude the satisfaction of commonality would be more well

taken if they articulated how the analysis differs among , class members.

Haynes, ATS, and Hartford seem to argue, in one respect, that the legal

analysis for finding liability on the payment of prevailing wage is different for

each purported class member. But these parties have not shown why this is

the case. For example, the parties did not argue that some truckdrivers fall

28 under a different statutory analysis than other truck drivers. 64 The parties'

simple conclusory allegation that a d~fferent legal analysis is needed to evaluate

each truck driver's claim is insufficient to prove an abuse of discretion on the

part of the trial court in certifying a class.

In general, the record shows the trial court adequately grasped the

potential differences among class members ~nd how they may affect this case

in further proceedings. We_ cannot say at this stage of the case that these

differences destroy the commonality prong.

The trial court also correctly found typicality to be satisfied. As stated,

the claims of the drivers are all based on the same legal theory-that the law

affords truck drivers on, public-works projects the right to the prevailing wage.

Additionally, the truck drivers' claims "arise from the same event, practice, or

course of conduct that gives rise to the claims of other class members"-·all

purported class members were employed by Haynes, were not paid the

prevailing wage, and were truck drivers performing the various activities

described in the class definition. We fail to see how any reasonable trial court

would not find typicality to be satisfied in this case based on those facts.

Nothing about the trial court's CR 23.01 findings can be labeled as an

abuse of discretion.

64 This is not to say class certification would be inappropriate in a scenario like that.

29 c~ CR 23. 02 .findings. As for its CR 23.02 findings, the trial court appears to have found

satisfaction of both CR 23.02(a) and (c) without specifying on which factor it

1._ predicates its conch.:i.sion. Haynes, ATS, and Hartford dispute the trial court's

findings as to predominance and superiority, i.e. CR 23.02(c), essentially

making the same argument as they did in disputing commonality and typicality,

in addition to arguing that the case is flatly unmanageable as a class action.

But all the "individualized" determinations that Haynes, ATS, and

Hartford argue the trial court would have to make simply boils down to

whether a de minimis limitation exists in Kentucky law, and if it does not, a

difference in the determination of damages. The trial court made clear that 'it

would address the de minimis limitation argument later and could fashion a

damages calculation to address those questions. Here, the predominant

question in this litigation is whether truckers working on public works projects

are entitled to the prevailing wage, and the answer to this question determines

the merits and demerits of each class member's prevailing wage entitlement.

We also fail to see how a class action in this case would not be "superior

to other available methods for the fair and efficient adjudication of the

controversy." Allowing this case to proceed as a class action consolidates all

claims by former Haynes truck drivers into _a single case, which benefits both

sides. The truck drivers do not have to bring individualized claims for

essentially the same relief, based on a common nucleus of operative facts and

30 on the same legal theory, while Haynes, ATS, and Hartford can organize their f .

defense to contest all claims against them in one litigation.

Even if we were to agree with Haynes, ATS, and Hartford that the CR

23.02(c) requirements cannot be satisfied in this case, the trial court also

found satisfaction of the CR 23.02(a) requirements. On the question of whether

the CR 23.02 requirements have been satisfie.d, the trial court need only find

the requirements of either (a), (b), or (c) are satisfied to proceed with class

certification. Neitherthe Court of Appeals nor the parties attacked the trial

court's findings·that the requirements of CR 23.02(a) have been satisfied.65 As

such, no matter our determination of the propriety of the trial court's finding of

satisfaction of CR 23.02(c), the trial court found CR 23.02(a) to have been

satisfied, which was all that was necessary to proceed with its class

certification determination. And this finding has not been challenged.

d. Class Definition Lastly, Haynes, ATS, and Hartford attack the class definition itself. We

fail to see how this class definition could be characterized as "unworkable,"

"overbroad," or "unascertainable" as they argue. The class definition identifies

exactly who is and is not included in the class and provides the trial court with

initial gui?ance as to how this lawsuit is to proceed.

65 Hartford argues that the trial court mistakenly discussed the requirements of CR 23.02(a) after citing CR 23.02(c) in its order. This mistake, Hartford argues, shows that the trial court applied the wrong legal standard in making its class certification determination. However, we view this discrepancy as merely an indication that the trial court found both CR 23.02(a) and (c) to be satisfied. That being said, the trial court could have been clearer as to what it truly meant.

31 Haynes, ATS, and Hartford use the same, continuous argument that the

differences among the members and the de minimis limitation call class

certification, including the ·class's definition, into question. But for the same

reasons we rejected this contention as it relates to the satisfaction of the

commonality and typicality prongs and CR 23.02(c), we reject this argument

again here.

· Hartford also alleg;ed that the class definition was an improper "fail-safe"

definition, as the Sixth Circuit has articulated. 66 But Hartford misunderstands

what a "fail-safe" class is. The Sixth Circuit in Randleman found an abuse of

discretion in the trial court's initial class definition, which included "[a]ll

persons who ... were entitled to receive [a certain ~nsurance rate]."67. Defining the

class in such way was improper because it "shields the putative class members

from receiving an adverse judgment: Either the class members win or, by virtue

of losing, they are not in the class and, therefore, not bound by the

judgment. "68

Essentially, a fail-safe class. is one that predicates inclusion of class

members on the ultimate finding of liability that the court must make. 'fhe

class definition in this case is not fail-safe. To be fail-safe, the definition in this

case needed to have said something akin to, "All truck drivers who are entitled

to the prevailing wage." The trial court's class definition makes no statement as

I 66 See Randleman v. Fi.delity Nat. Title Ins. Co., 646 F.3d 347 (6th Cir. 2011). 67 Id. at 350.

68 Id. at 352.

32 to whether the truck drivers are entitled to the prevailing wage, which ·is the

ultimate liability determination it must make. The current class definition only

includes those truck drivers "not... paid the prevailing wage." Such a statement

affords class membership and the ability to pursue a claim for the prevailing

wage to those truckers who were not paid the prevailing wage on the jobsite-it

does not say one way or the other whether those who pursue a claim for the

prevailing wage are entitled to that wage.

Currently, nothing about the trial court's class definition warrants

decertification.

3. Final Points

For all the reasons above, we are not convinced by the argument that the

trial court's class certification in this case was "arbitrary, unreasonable, unfair,

or unsupported by sound legal principles." Accordingly, we must conclude that

the trial court did not abuse its discretion when certifying the class in this

case.

We note at this preliminary stage of this litigation, and as this litigation

proceeds, that the trial court has several tools at hand to address the concerns

of all those involved in this litigation. The trial court can create subclasses

within the general class to address the concerns of the defendants in this

case,69 including the allegation that this case really concerns three different .

and distinct groups of drivers and that, the case is "unmanageable." If the

69 CR 23.03(7).

33 current class definition proves to be "unworkable" or "unascertainable," the

trial court can modify the class definition. 70 And, nothing prevents the trial

court from decertifying the class at any point during the proceedings if the

need so arises.71

III. CONCLUSION.

We hold that class-action lawsuits are allowed under KRS 337.550(2).

Additionally, we reverse the Court of Appeals and reinstate the trial court's

class-certification order.

All sitting. All concur.

COUNSEL FOR APPELLANTS:

William R. Garmer Jerome Park Prather Garmer and Prather, PLLC

Brent Caldwell Caldwell Law Firm, PLLC

Bryce Caldwell 401 Frederica St, Bldg B. Ste 204 Owensboro KY 42301

7o CR 23.03(3). 71 In re Prudential Securities Inc. Ltd. Partnerships Litigation, 158 F.R.D. 301 (S.D. N.Y. 1994).

34 COUNSEL FOR APPELLEES: HAYNES TRUCKING, LLC; AND ·L-M ASPHALT PARTNERS, LTD, D/B/AATS CONSTRUCTION

Robert E. Maclin III Jon Allen Woodall Brendan Reynolds Yates Masten Childers III McBrayer, McGinnis, Leslie & Kirkland, PLLC

COUNSEL FOR APPELLEE: HARTFORD INSURANCE CO. /·

La Toi D. Mayo J. Andrew Inman Littler Mendelson'; P.S.C.

Susan C. Sears

(